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Machulsky v. Lilliston Ford


December 31, 2009


On appeal from the Superior Court of New Jersey, Law Division, Cumberland County, Docket No. L-437-04.

Per curiam.


Argued October 26, 2009

Before Judges Lisa and Baxter.

This class action under the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -184, returns to us after a remand to the trial court. In our prior opinion, we held that an intervenor could be eligible for an incentive award or stipend. Machulsky v. Lilliston Ford, Inc., No. A-2987-06T5 (App. Div. July 21, 2008) (slip op. at 13). We outlined the criteria to be considered and remanded to the trial court for a determination. Id. at 14. We also found deficient the trial court's award of a $7000 counsel fee to intervenor's counsel. This was because intervenor's counsel requested $32,505, and the judge failed to make findings supporting the award rendered. Id. at 13-14.

Because of the retirement of the first judge, the matter came before a different judge on remand. After considering the arguments of counsel, the judge awarded the intervenor a $1000 stipend, and awarded his counsel a fee of $25,415, plus costs of $2569.52, for services rendered in the trial court in the underlying action. Neither party appeals from those awards.

The intervenor does appeal, however, from the judge's refusal to award any fees for services rendered in the remand proceedings and for services rendered in the prior appellate proceedings. The judge considered those matters beyond the scope of the remand as set forth in our earlier opinion.

The judge erred in this regard. We rendered our prior decision on July 21, 2008. At the time we rendered our decision, intervenor's counsel had properly not yet applied for a fee for services rendered in connection with the appeal. Our rules provide that such an application shall be "made by motion . . . filed within 10 days after the determination of the appeal." R. 2:11-4 (emphasis added). Intervenor's counsel timely filed his application with this court on July 30, 2008.

The application was unopposed in this court. Rather than make the determination, we issued an order on September 2, 2008 (filed with the Clerk of the Appellate Division on September 5, 2008), directing as follows: "The application for counsel fees is referred to the trial judge for disposition. R. 2:11-4." This order was entered pursuant to the authority contained in the last sentence of Rule 2:11-4. Because we had remanded the other fee issue to the trial court, we deemed it appropriate that all fee issues could be considered at one time in one forum.

The trial judge's determination that he lacked jurisdiction to consider appellate counsel fees was erroneous in light of our order, entered pursuant to the authority conferred to this court by Rule 2:11-4 to refer the issue to a trial judge in appropriate circumstances. The trial judge's determination that consideration of appellate fees was outside the scope of a remand because it was not mentioned in our opinion was also erroneous because, as we stated, an appellate fee application cannot even be submitted until after the appeal is decided, which is then done by motion.

With respect to services rendered by intervenor's counsel in the remand proceedings, such services are encompassed within the fee-shifting provisions of the CFA. Courier News v. Hunterdon County Prosecutor's Office, 378 N.J. Super. 539, 547 (App. Div. 2005); Tanksley v. Cook, 360 N.J. Super. 63, 66-67 (App. Div. 2003). And, of course, the trial court was the proper forum for consideration of that fee application because the services were rendered in the remanded trial court proceedings.

In the present appeal, intervenor asks us to reverse the trial judge's refusal to entertain those fee applications. However, in lieu of a further remand, intervenor also urges that we exercise original jurisdiction with respect to the remand fees, and also exercise the jurisdiction which we inherently possess regarding the appellate fees, to bring this matter to a conclusion as expeditiously as possible. We agree in both respects.

As we noted, Lilliston Ford did not oppose the appellate counsel fee request intervenor filed in the immediate aftermath of our prior opinion. Intervenor's petition sought $12,599 in fees for services rendered in the Appellate Division and $1231.13 as reimbursement for costs. The petition sets forth the expenditure of 63.4 hours at an hourly rate of $325 for partners and $135 for an associate. In light of the hours expended by each participant, the total fee request was $12,599. Costs were itemized in the total amount of $1231.13. Thus, the total request was for $13,830.13. No fee enhancement above the lodestar amount was requested.

Our review of the itemized statement of services totaling 63.4 hours leads us to the inescapable conclusion that it is fraught with inaccuracies. The notice of appeal was filed on February 7, 2007. The itemized statement contains entries on four dates from January 31, 2007 through March 9, 2007, totaling 4.5 hours. These entries were for drafting the notice of appeal and case information statement, some items of correspondence, and receipt of transcripts and forwarding copies to all parties.

Appellant's brief was filed on April 20, 2007, followed by Lilliston Ford's brief on May 23, 2007, after which appellant filed a reply brief on June 4, 2007. However, the itemized statement contains no entries during this period when briefs were being written by both parties. The next entry on the itemized statement is for November 19, 2007, long after all briefs had been completed. Thus, the itemized statement tells us nothing about the hours expended, and whether expended by a partner or the associate, in preparation of the initial brief and reply brief.

Oral argument was conducted on November 28, 2007. Between November 19 and November 27, 2007, the itemized statement contains entries for six dates, totaling 48.2 hours. The work described includes such things as "Preparation for practice for oral argument," "Draft argument and prepare to argue," "Legal research; refine argument," "Meeting . . . to prepare for oral argument; critique," and "Meeting . . . and have run through oral argument." Spending more than forty-eight hours in the week preceding oral argument to prepare for oral argument is obviously excessive.

Then, on the day of oral argument, 6.2 hours are entered. This reflects two attorneys, each expending 3.1 hours to attend oral argument. The remaining 4.5 hours were devoted to preparing the appellate fee application on July 28, 2008.

We obviously cannot accept this itemized statement as accurate. It is equally obvious that intervenor's counsel performed services in preparing both briefs, although the itemized statement contains no entry for those services.

The result achieved by intervenor was entirely favorable. The hourly rates charged are within the reasonable range of those charged by counsel with the expertise and experience of intervenor's counsel in class action litigation. The issue involved in the appeal (a stipend and fee award for an intervenor) was a novel and somewhat complex one. These circumstances weigh in favor of a positive response to the fee application. However, the noted deficiencies in the itemized statement of services inhibit our ability to determine the number of hours actually spent by each member of the firm for intervenor's counsel. From our review of the entire case file, we estimate that forty hours is a reasonable allowance. We multiple these hours by the average rate charged between partners and the associate, namely $230. We accordingly render a fee award of $9200, plus $1231.13 as reimbursement for costs, for a total award of $10,431.13 for services rendered in the Appellate Division.

A review of the remand proceedings reveals that Lilliston Ford continued to argue that no appellate or remand fees should be allowed to intervenor because it was intervenor who appealed his $7000 fee award. Thus, according to Lilliston Ford, the appeal on the fee issue and in the resulting remand proceedings could provide no further benefit to the class and therefore could not warrant an obligation on Lilliston Ford's part to pay for the services under the fee-shifting provisions of the CFA. Lilliston Ford has provided no authority for this argument in the trial court or before us. We find the argument unpersuasive. If a party is entitled to fee shifting under a remedial statute, it stands to reason that all court proceedings dealing with not only the award of a fee but the amount fall within the scope of coverage. Otherwise, the salutary purposes of fee shifting would be severely undercut.

The certifications submitted to the trial court in the remand proceedings by Donald M. Doherty, Jr. assert that he expended 22.9 hours in those proceedings. The services are generally described as 17.2 hours for "all legal research, drafting, file review and coordination of the file materials with the certification and the brief, and editing," and, in a later certification, 5.7 hours for "responding to the opposition." However, no itemization of services appears in the record that has been furnished to us. Mr. Doherty requests his $325 hourly rate, plus a 35% enhancer, which would result in a total fee before enhancement of $7442.50, and after a 35% enhancement, $10,047.37.

Because an itemized statement of services has not been furnished by the party seeking the award from us (rather than through a further remand), we must base our determination on the record that we have. Without itemization, we do not accept at face value the number of hours asserted. Nevertheless, our review of the remand documents that have been furnished to us and the transcript of the remand hearing support the conclusion that intervenor's counsel did expend time and effort. We also recognize the excellent result achieved, in more than tripling the fee initially awarded for trial court services. All things considered, including the inadequacy of the record furnished to us by intervenor's counsel and the appropriateness of bringing this matter to a conclusion, we exercise original jurisdiction, see R. 2:10-5, and award $3500, including costs, for services rendered in the remand proceedings. Based upon the information available to us, we deem this a reasonable sum.

In conclusion, the portion of the February 27, 2009 order which "awards no fees or costs for the appeal, nor any fees or costs relating to the post-remand work performed" is reversed. For the reasons stated, judgment is hereby entered in favor of intervenor against Lilliston Ford for counsel fees and costs as follows: $10,431.13 in connection with the prior appeal, and $3500 in connection with the remand proceedings.



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