January 5, 2010
AMICA INSURANCE COMPANY, PLAINTIFF-RESPONDENT,
KENNETH L. BARRETT, AMANDA YEAGER, A MINOR, SEAN YEAGER, A MINOR, DECEASED, BRIAN YEAGER, CHRISTOPHER SPALDING, MICHAEL S. SIMPSON, SMT, INC., FRANCISCO ARCINA AND AMERICAN URBAN, DEFENDANTS, AND STEPHANIE ADDIE YEAGER, DEFENDANT-APPELLANT.
On appeal from Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-3148-06.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued December 15, 2009
Before Judges Grall and LeWinn.
Plaintiff Amica Insurance Company filed an action for judgment declaring that Amica had no obligation to provide defendant Stephanie Addie Yeager personal injury protection benefits or to defend and indemnify her on claims arising from her operation of a car insured by Amica. Defendant filed an answer and counterclaim seeking a judgment declaring Amica's responsibility under a policy issued to defendant Kenneth L. Barrett. On cross-motions for summary judgment, the trial court entered judgment in favor of defendant but denied her request for counsel fees pursuant to Rule 4:42-9(a)(6). The court subsequently denied motions for reconsideration filed by both parties. Defendant appeals.
The denial of fees and costs was apparently based solely upon the court's determination that Amica acted in good faith. The court's brief decision does not indicate consideration of any other legal or equitable principle.
"[A] trial court's decision to award or withhold counsel fees [is reviewed] for abuse of discretion." Myron Corp. v. Atl. Mut. Ins. Corp., 407 N.J. Super. 302, 309 (App. Div.), certif. granted, ___ N.J. ___ (2009); see Rendine v. Pantzer, 141 N.J. 292, 317 (1995). Because the exercise of judicial discretion requires the court to "take account of the law applicable to the particular circumstances of the case and be governed accordingly," State v. Madan, 366 N.J. Super. 98, 110 (2004) (internal quotations omitted), our review requires a decision from the trial court that includes adequate factual findings and conclusions of law. See Rosenberg v. Bunce, 214 N.J. Super. 300, 304 (App. Div. 1986).
If the trial court does not "state clearly its factual findings and correlate them with the relevant legal conclusions," Curtis v. Finneran, 83 N.J. 563, 570 (1980), "we can only speculate about the reasons for a trial court's decision." Rosenberg, supra, 214 N.J. Super. at 304.
The question of defendant's entitlement to fees is governed by well-established principles. When fees are available pursuant to Rule 4:42-9(a)(6), they are awarded on "[t]he theory . . . that one covered by a policy is entitled to the full protection provided by the coverage, and that benefit should not be diluted by the insured's need to pay counsel fees in order to secure its rights under the policy." Liberty Vill. Assocs. v. West American Ins. Co., 308 N.J. Super. 393, 406 (App. Div.), certif. denied, 154 N.J. 609 (1998); Sears Mortgage Corp. v. Rose, 134 N.J. 326, 356 (1993). Nonetheless, when Rule 4:42-9(a)(6) applies there are no bright-line rules. An award of fees is not mandatory, Enright v. Lubow, 215 N.J. Super. 306, 313 (App. Div.), certif. denied, 108 N.J. 193 (1987), and proof of bad faith on the part of the insurer is not essential to recovery of fees, Liberty Vill., supra, 308 N.J. Super. at 406. Instead, there are several equitable considerations that "must govern" the court's exercise of discretion. Enright, supra, 215 N.J. Super. at 313. They include: "(1) the insurer's good faith in refusing to pay the demands; (2) excessiveness of plaintiff's demands; (3) bona fides of one or both of the parties; (4) the insurer's justification in litigating the issue; (5) the insured's conduct in contributing substantially to the necessity for the litigation on the policies; (6) the general conduct of the parties; and (7) the totality of the circumstances." Ibid. (citations omitted).
After review of the trial court's oral opinion, we cannot determine whether the trial court considered the foregoing principles or simply based its decision on the erroneous assumption that proof of Amica's bad faith was essential. Accordingly, we reverse and remand so that the trial court can reach a decision based upon a full consideration of the principles governing the exercise of its discretion in light of the particular circumstances of this case.
Reversed and remanded. We do not retain jurisdiction.
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