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Schoffer Enterprises v. Delos Insurance Co.


May 14, 2010


On appeal from Superior Court of New Jersey, Law Division, Atlantic County, Docket No. L-195-08.

Per curiam.


Submitted April 13, 2010

Before Judges Lihotz and Ashrafi.

Defendant Delos Insurance Company appeals from an order denying, without prejudice, its motion for attorney's fees and costs following a successful application for summary judgment in the underlying coverage dispute with plaintiff, Schoffer Enterprises. After reviewing the arguments presented in light of the record and applicable law, we dismiss the appeal.

The facts of the underlying action were set forth in our prior opinion and will not be restated. Schoffer Enters. v. Delos Ins. Co., No. A-3378-08 (App. Div. April 8, 2010) (slip op. at 2-5). For the purposes of this matter, we provide only a brief summary.

On January 11, 2008, Schoffer filed a Law Division complaint seeking indemnification from United Heating and Sheet Metal (UHSM) for injuries suffered by a UHSM employee on Schoffer's premises in 2004, allegedly incurred during the loading and unloading of a truck. In 2005, the employee filed an action for damages against Schoffer. Schoffer then initiated an action against UHSM. After learning Delos was the automobile insurance carrier covering the UHSM vehicle, Schoffer added Delos as a party to the litigation and dismissed UHSM from the suit. Afterward, Schoffer resolved the employee's suit by consenting to the entry of an $800,000 judgment and subrogated the claim for the purpose of "pursuing [its] claim for coverage against [Delos]." The judgment amount was satisfied by Schoffer's general liability insurance carrier.

Schoffer contended the third-party's injuries resulted from "use of the vehicle," and thus were properly covered by Delos as the automobile insurance carrier. Delos argued it had no responsibility because the proximate cause was the negligent maintenance of Schoffer's property. On cross-motions for summary judgment, the court granted Delos's motion and denied Schoffer's. We affirmed on appeal in an unreported opinion. Schoffer, supra, slip op. at 10.

While Schoffer's appeal on the merits was pending, Delos filed a motion before the Law Division seeking an award of attorney's fees and costs, pursuant to Rule 1:4-8, asserting the underlying litigation was frivolous. Alternatively, Delos's couched its request as proper under Rule 4:42-9, as it was the successful party in an insurance coverage dispute.

Rule 1:4-8(a) permits a prevailing party to seek sanctions against an adversary who violates the requirement that "claims, defenses, and other legal contentions" contained in every signed "pleading, written motion or other paper" are "warranted by existing law or by a non-frivolous argument for the extension, modification, or reversal of existing law." See R. 1:4-8(a)(2). The contents of a motion for such sanctions are set forth in section (b)(1), and the motion must be "filed with the court no later than 20 days following the entry of final judgment." R. 1:4-8(b)(2).

Also, Delos argued that the entry of summary judgment allows it to seek fees as a "successful claimant," pursuant to Rule 4:42-9(a)(6), which provides, "[n]o fee for legal services shall be allowed in the taxed costs or otherwise, except . . .

[i]n an action upon a liability or indemnity policy of insurance, in favor of a successful claimant."

The trial judge denied Delos's motions without prejudice. Although the trial court stated no reasons for its conclusions, we presume the judge believed Schoffer's appeal had divested the trial court of jurisdiction. See R. 2:9-1 (providing that the ordinary effect of the filing of a notice of appeal is to suspend a trial court's jurisdiction to act further in the matter). Delos appealed.

"'Our rules . . . prohibit direct appeal unless final judgment has been entered disposing of all issues as to all parties.'" Shimm v. Toys from the Attic, Inc., 375 N.J. Super. 300, 303 (App. Div. 2005) (quoting Hudson v. Hudson, 36 N.J. 549, 553 (1962)). The Law Division's order denying Delos's motion without prejudice makes clear it is not a final determination, which is directly appealable. R. 2:2-3(a)(1). Accordingly, we decline to determine the merits of Delos's claims. See R. 2:2-4; 2:5-6 (allowing leave to appeal from an interlocutory order in the interest of justice).

We add this final comment. Parties must avoid piecemeal litigation. Here, the better course was for Delos to move before us for dismissal of Schoffer's appeal as interlocutory or for a temporary remand, pursuant to Rule 2:9-1(a), which would allow the counsel fee issue to be determined by the trial court and then, if necessary, to be added to Schoffer's appeal as a cross-appeal. New Jersey Mfrs. Ins. Co. v. Prestige Health Group, LLC, 406 N.J. Super. 354, 358 (App. Div. 2009); Shimm, supra, 375 N.J. Super. at 304. In that way, all issues would have been determined in one appeal.

Appeal dismissed.


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