June 24, 2010
EMANUEL NEEDLE, PLAINTIFF-APPELLANT,
BYRAM COVE, INC., PAUL BURKE AND ESTATE OF PAUL BURKE, DEFENDANTS-RESPONDENTS.
On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. L-7429-05.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued January 20, 2010
Before Judges Carchman, Parrillo and Lihotz.
Plaintiff Emanuel Needle appeals from a series of orders granting summary judgment in favor of defendant Byram Cove, Inc. (Byram) and defendant Estate of Paul Burke. The genesis of this litigation arises from a claim made by Byram against plaintiff for the cost of removing a dangerous tree that threatened the safety of residents who resided in the Byram community as well as for the recovery of assessments and dues owed by plaintiff. While Byram's action in the Special Civil Part sought recovery in the amount of $3,795 including the tree removal costs as well as past-due assessments and dues, as a result of an action commenced by plaintiff*fn1 and the extensive litigation that followed as a result, fees and costs have been generated resulting in a judgment against plaintiff in the amount of $86,158.25. We affirm in part and reverse and remand in part.
We set forth the expansive procedural history and facts adduced from the record. Byram, a corporation, was created in 1947 as a community of summer homeowners. The community is currently comprised of a group of eight families owning individual lots, and who are entitled, by deed, to use certain property owned by Byram in Hopatcong. Plaintiff was the owner of a summer home located in the Byram community. He served as president of Byram for over thirty years until 2004. In 1977, while plaintiff was Byram's president, registered agent, and maintained the registered office, Byram's corporate charter was voided for non-payment of taxes. Barry M. Epstein, the current president and counsel to Byram, succeeded plaintiff as president in 2004.
Byram, from its inception, was and continues to be governed by written bylaws, which mandate that all owners shall be members of the association and authorize, among other things, the collection of annual assessments or dues. Under the bylaws, unpaid assessments and dues are subject to interest and fines. During the period relevant to this appeal, the annual dues were $1,500 per year. Additionally, the bylaws provide that the members are liable for any legal fees incurred by Byram if legal action is required to enforce the provisions of the bylaws. Pursuant to the bylaws, Byram is responsible for construction and maintenance of common sidewalks which provide access to the homes within the community and to the waterfront area which abuts the community. The members of the community are obligated to remediate any dangerous conditions on their property that create a danger to the common walkways.
In 2004, Byram notified plaintiff of a dangerous tree located on his property that threatened the safety of community members using a common walkway. Plaintiff failed to remove the tree, and Byram hired an outside contractor, on August 23, 2005, who determined the tree was dangerous and removed it. The cost was $795.
Plaintiff paid for neither his 2004 to 2006 assessments nor the removal of the tree. While Byram adopted new bylaws, they did not change the underlying obligation to pay dues and assessments. These new bylaws prompted plaintiff to refuse to make the appropriate payments and on June 20, 2005, he wrote "I also note your selective efforts to enforce the valid (pre-constitution) rules and regulations of the group" and "[a]ccordingly, I have deferred (and not refused) making a remittance until my concerns regarding the alleged Constitution are resolved." The record is devoid of the status of the new bylaws but as noted, according to Byram, they did not change the members' underlying payment obligation.
On September 16, 2005, plaintiff sued Byram and Paul Burke*fn2 , a former co-president and member of Byram, in the Law Division alleging Burke and various John Does who "belong to and associate as officers, directors and members of the defendant, Byram Cove" trespassed onto his property and "maliciously and willfully caused a tree on plaintiff's property to be destroyed and removed." In addition to plaintiff's allegations of trespass and property damage, his complaint alleged defendants "wrongfully attempted to impose restrictions on plaintiff's property rights without plaintiff's consent," maliciously prosecuted the plaintiff, defamed him, and invaded his right of privacy. Plaintiff did not serve Byram with this complaint until 2006. Byram filed its complaint against plaintiff in the Special Civil Part on December 1, 2005, seeking to collect dues owed by plaintiff and the costs of removing the tree from plaintiff's property. After the filing of answers and counterclaims, on plaintiff's motion, the two actions were consolidated in the Law Division on March 3, 2006.
On September 26, 2006, defendants served plaintiff with interrogatories and document requests. When plaintiff finally responded in January 2007, he declined to produce any documents, repeatedly objecting to such requests as vague, overly broad, and unduly burdensome. On July 25, 2007, Wilentz Goldman & Spitzer (Wilentz) substituted in as counsel for Byram. Byram was and continued to be represented by Epstein who brought the case with him from his former law firm.
On September 6, 2007, the Law Division judge ordered specific discovery and extended the discovery period until November 9, 2007. After being noticed for a deposition, plaintiff failed to appear. These scheduled depositions presaged a series of events that gave rise to many of the issues raised on this appeal.
On November 20, 2007, Byram and the Estate filed a joint motion to suppress plaintiff's testimony based on his failure to appear at his scheduled deposition. By a December 7, 2007 order, the judge granted plaintiff thirty days to submit to a deposition, stating: "plaintiff Needle's deposition [will] be taken within thirty days or his testimony will be suppressed at trial." His written order barred plaintiff not only from offering testimony at trial but "by way of certification or affidavit in connection with any motion for summary judgment." The parties scheduled plaintiff's deposition for December 17, 2007. On December 14, 2007, plaintiff received by fax a "supplemental subpoena" from counsel for the Estate of Paul Burke asking for records including those concerning plaintiff's disbarrment proceedings.*fn3 On December 17, 2007, plaintiff appeared for his deposition, refused to be sworn and then left without testifying. According to the deposition transcript, plaintiff contended there was a conflict of interest with Epstein representing Byram as the Wilentz firm previously represented plaintiff in his disbarrment proceedings, therefore the deposition must be conducted solely by the attorney for the Estate, and Estate's counsel would also be tainted if Mr. Epstein discussed the disbarrment proceedings with him. The parties attempted to contact the judge, but he was unavailable. Rather than participate in the deposition with discovery conducted by the Estate, plaintiff refused to participate, and no deposition was taken that day.
On December 18, 2007, counsel for Byram wrote to plaintiff and offered to reschedule the aborted deposition, noting that plaintiff still had nearly two weeks to comply with the December 7, 2007 order. On January 14, 2008, plaintiff filed a motion to vacate the December 7, 2007 order and to disqualify Wilentz as counsel for Byram. Byram cross-moved to estop plaintiff from disclaiming ownership of the subject property as he had transferred title of the property to his children in July 2006. The judge granted Byram's motion and denied plaintiff's motion, concluding that there was no conflict in Epstein continuing to represent Byram. In granting defendants' motion, the judge noted that plaintiff had not only failed to disclose the transfer, but in his various pleadings, he alleged that he owned the property. Plaintiff moved before us for interlocutory relief from this order, which we denied.
The procedural morass escalated as on June 20, 2008, Byram and the Estate moved for summary judgment. Plaintiff claims that he was not served with the motion papers until he received them on July 25, 2008. Defendant contends plaintiff was served with the motion on June 20, 2008, and plaintiff acknowledged actual receipt of the motion on July 1, 2008. In fact, the motion was served upon plaintiff by courier, to which he responded by email on July 1, 2008, stating that he was on a cruise in the North Sea and would not return until "7/24" and requested that opposing counsel "consent to adjourn this motion until 8/1 or later so I can have the opportunity to review and appear in Court for oral argument. I would appreciate your contacting the Court and arranging for this adjournment." The Law Division subsequently granted the adjournment of defendants' pending motion for summary judgment to August 15, 2008. On August 15, 2008, after a four-week adjournment (sought by the defendants at plaintiff's request), both summary judgment motions were heard and granted in full by the judge. Plaintiff failed to appear. The judge noted that plaintiff "has not appeared" and the "matter was previously adjourned to this date at plaintiff's request and that his latest request for an adjournment has been denied since the original trial date in this matter was, is Monday, this coming Monday." The judge adopted the "defendant's Statement of Facts and Conclusions of Law" and noted:
The fact of the matter is that Mr. Needle's testimony has been suppressed by the Court for failure to submit to depositions. So that at this point in time at trial he cannot testify as to any of the facts he asserts, and that it appears that beyond any of his testimony that he has not presented any documentation in support of his position and that, therefore, there are no contrary facts existing in this matter and, therefore, I'm going to grant the Motion for Summary Judgment on behalf of the Estate of Paul Burke and the Motion for Summary Judgment on behalf of the defendant Byram Cove, Inc., and I believe that that closes it.
The order granting summary judgment in favor of Byram awarded it damages totaling $72,481.75 plus additional costs and legal fees to be submitted via an updated supplemental affidavit. On August 21, 2008, after submission of the supplemental affidavit,*fn4 the court entered an amended order in the amount of $86,158.25.
Plaintiff filed a motion pursuant to Rule 4:49-2 for reconsideration of the orders granting summary judgment. The motion was denied on September 26, 2008. On October 20, 2008, plaintiff filed a motion pursuant to Rule 4:50-1 to vacate the judgment entered in favor of Byram on new grounds - Byram's corporate status. On October 31, 2008, while plaintiff's motion to vacate was pending, plaintiff filed his notice of appeal with this court. At argument on November 21, 2008, plaintiff claimed:
I had discovered from the Secretary of State's Office that the defendant Byram Cove had lost its charter over thirty-one years ago to do any business in the State of New Jersey. I attached a copy of the Certification I received on October 20th and I immediately filed this Motion [to vacate] once I had that.
Following argument, a different judge denied plaintiff's motion to vacate the judgment as the Law Division lacked jurisdiction due to plaintiff's filing the notice of appeal. The judge told the plaintiff "you're forum shopping" and refused to rule on plaintiff's motion to vacate as "I can't even rule on this for the simple reason that this is seeking me to vacate an Order of [the motion judge]. Before that you asked for a Motion for Reconsideration which was denied by [the motion judge]" and noted that decision was on appeal. In ruling, the judge stated:
The underlying basis of these claims is that plaintiff recently discovered that Byram Cove forfeited its corporate charter by failing to pay taxes.
As a result, plaintiff argues defendant has no standing in the Court, therefore, the entire litigation should be dismissed. Defendant counterclaimant Cove refused Needle's claims in their opposing Memo contending that plaintiff had knowledge of any alleged lack of corporate status as plaintiff was Acting President of Byram Cove for over twenty-five years.
Additionally, plaintiff failed to plead defendant's lack of corporate [status] as an affirmative defense and, furthermore, despite there being a Special Civil history with the matter plaintiff's Complaint was filed in the Superior Court. The cases were consolidated into one Law Division matter and, therefore, the appropriate jurisdiction is the same.
In the matter at hand, plaintiff . . . filed a Notice of Appeal with the Appellate Division [on] October 30, 2008 seeking the same relief sought presently before the Court. Where the Notice of Appeal has been filed with the Appellate Court the Court shall not rule on these matters. The Court will not rule on these matters, however, I will grant a stay of any post-judgment proceedings pending final determination of the appeal. The plaintiff must post a supersedeas bond in the amount of $86,000 in the form required by Rule 2:9-6.
On November 28, 2008, plaintiff filed a "motion to enforce litigant's rights." Defendant filed its opposition to plaintiff's motion and cross-moved to dismiss the untimely appeal. We denied all pending motions and ordered a temporary remand to the Law Division to hear plaintiff's motion to vacate regarding Byram's corporate status.
On March 27, 2009, after argument, a third judge denied plaintiff's motion to vacate. She noted the limited nature of "what the Appellate Division is asking this Court to address [namely] the new argument being brought by plaintiff that due to the fact that Byram Cove Inc. had its corporate charter revoked in 1977, it is without standing to bring suit" and therefore the judgment should be vacated. She found "there's no dispute that the charter was forfeited for not paying taxes while [plaintiff] was president of the corporation." In denying the plaintiff's motion, she said:
First, the Court finds that there is no basis for seeking reconsideration of an order denying reconsideration of an order which is the procedure status as presented to the Court.
Second, even if such a motion were allowed, it appears from the prior orders of this Court, that Mr. Needle's certification in support of this motion is not something that may be considered by this Court because it does relate to the summary judgment motion and its strictly (phonetic) prohibited (phonetic) in submitting a certification in connection with a summary judgment motion.
Third, even if the Court were to consider Mr. Needle's certification in support of his motion seeking reconsideration of reconsideration of the August 15th, 2008 order, the Court finds that the motion should be denied based upon the doctrine of laches. Mr. Needle was the president of Byram Cove in 1977 when the corporate charter lapsed (phonetic) whether or not he did in fact receive the revocation about the corporate charter, he knew as president of the corporation that he had not been paying taxes. There is no suggestion anywhere in this record that the corporate charter was revoked in error and in fact taxes had been paid. So, it was within Mr. Needle's knowledge that the corporation was no longer valid. That is 32, 33 years ago and accordingly the court finds that the doctrine of laches which is rarely invoked, does apply to this case.
Next, the Court finds that . . . the plaintiff's motion should be denied based upon estoppel for coming to this Court with unclean hands. Again, the plaintiff was the . . . president of the corporation he had some fiduciary [duties] to the corporation, he allowed the corporate charter to lapse, it appears he didn't tell any (phonetic) --that information that the Court can rely upon, but it is undisputed that under his leadership the corporation failed to pay corporate taxes and the charter lapsed.
The Court finds and Mr. Needle acknowledged that the failure of the entity Byram Cove, Inc. to maintain its corporate status does not effect in anyway, any of the relief that was granted by the Court on August 15, 2008 in connection with Mr. Needle's affirmative claim against Byram Cove, the entity - the unincorporated entity. Accordingly, any legal fees that were awarded in connection with the affirmative claim cannot be disturbed in anyway by the revocation of the corporate charter. So, a portion of the August 15th, 2008 whereas (phonetic) the following (phonetic) . . . the August 21, 2008 order remains valid.
This appeal followed.
On appeal, plaintiff argues: 1) Byram is not entitled to a judgment because it is a "defunct" corporation; 2) the motion judge erred in sanctioning plaintiff for failure to appear for depositions; 3) the motion judge erred in granting summary judgment; 4) the motion judge erred in not ordering Byram's counsel to withdraw; 5) the motion judge erred in awarding fees against plaintiff; and 6) the motion judge erred by entering judgment in excess of the jurisdiction of the Special Civil Part.
We have carefully reviewed the record and conclude that with the exception of the issue of Byram's corporate status, and the issue of the granting of legal fees, plaintiff's arguments are without merit. R. 2:11-3(e)(1)(E).
We recognize that we are generally reluctant to uphold judgments where the judge's findings are based on incorporation by reference of defendant's asserted facts, but here, plaintiff filed no opposition, and even on appeal, offers nothing in the record to suggest a factual dispute as to the amounts claimed. We do, however, address certain disputed legal arguments raised by plaintiff.
We note a consistency in the factual circumstances giving rise to these arguments. Plaintiff refused to be sworn or participate in a deposition;*fn5 he failed to appear on the adjourned return date of a motion for summary judgment; he belatedly challenged the status of counsel; and he belatedly challenged the status of Byram. He notes, for example, that he did "appear" for his deposition but as the record reveals, while he was physically present, he refused to be sworn and respond to questions, not by the allegedly disqualified attorney, but by the attorney for the Estate. In this regard, the deposition transcript is enlightening as counsel agreed "not to ask any questions about any disbarrment." Still, plaintiff refused to be sworn or deposed because counsel "refused to leave the deposition." Furthermore, the motion judge did not act precipitously in barring plaintiff's testimony if he failed to submit to a deposition within thirty-days.
Plaintiff's failure to appear on the adjourned return day of the motion for summary judgment, an adjournment that was secured by defendants on his behest, remains unexplained other than "he was not available that day."
Even the issue of the status of the corporate charter, an issue we discuss, infra, reflects an event that took place in 1977, and plaintiff first raised on a motion to set aside the judgment in 2008. This pattern of delay and obfuscation is apparent.
We now address the issue of the corporate charter. Plaintiff contends that his motion to vacate should have been granted as "Byram has no legal rights to use the Courts of New Jersey or otherwise carry on its business" citing N.J.S.A. 14A:12-1(g), 14A:12-9(1) and In re Delaware River & A.R. Co., 76 N.J.L. 163 (Sup. Ct. 1908), and therefore Byram "has no standing or capacity and therefore the litigation and judgment should have been voided."
N.J.S.A. 14A:12-1(1)(g), provides that a corporation may be dissolved "[a]utomatically by a proclamation of the Secretary of State repealing or revoking a certificate of incorporation for nonpayment of taxes or for failure to file annual reports[.]" However, "New Jersey law provides that a dissolved corporation continues its corporate existence and may carry on business insofar as it is necessary to wind up its affairs." Info. Sys. Servs., Inc. v. Platt, 598 Pa. 78, 83 (2008) (citing N.J.S.A. §14A:12-9(1) (Effect of Dissolution)). In addition, N.J.S.A. §14A:12-9(2)(e), provides, that "the corporation may sue and be sued in its corporate name and process may issue by and against the corporation in the same manner as if dissolution had not occurred" subject to the provisions of subsection 14A:12-9(1),*fn6 and except as otherwise provided by court order. See also Lancellotti v. Md. Cas. Co., 260 N.J. Super. 579, 583 (App. Div. 1992) (explaining that "[a] dissolved corporation exists . . . to prosecute and defend suits").
The dissolution is not irrevocable as New Jersey law permits a corporation, such as Byram, that has been dissolved for failure to pay taxes to be reinstated. "Upon such payment [of the sum in lieu of taxes and penalties] the Secretary of State shall issue his certificate entitling the corporation to continue its business and franchises." N.J.S.A. 54:11-5; Higi v. Elm Tree Village, 114 N.J. Super. 88, 91 (1971) (noting that "[a] Governor's proclamation does not entirely destroy a corporation named in it, but merely suspends the powers of the corporation until there has been compliance with N.J.S.A. 54:11-5, which permits reinstatement upon payment of the delinquent taxes.") (citing J.B. Wolfe, Inc. v. Salkind, 3 N.J. 312 (1949)); 2-15 NJ Corporations and Other Business Entities §15.03 ("Corporations may be reinstated upon filing the past due annual reports or tax returns and paying all past due fees, penalties, taxes and interest. Reinstatement is retroactive to the date of forfeiture.").
Plaintiff's contention that the forfeiture of Byram's corporate status required the Law Division to vacate the summary judgment motions as it did not have the capacity to sue is not supported by the express statutory language under N.J.S.A. 14A:12-9(2)(e), granting such corporations the capacity to sue.
The issue of defendant's status and its rights to prosecute an action against plaintiff is complicated by the unique circumstances presented here. As we have previously noted, plaintiff served as the president of defendant, during the period of time it failed to pay taxes or file reports with the Secretary of State. In fact, he served not only as the president but according to the certification that he presented on his motion to vacate the judgment based on newly discovered evidence, he served as the registered agent of defendant with his office serving as the registered office of the corporation.
N.J.S.A. 14A-4.1(1) requires every corporation to maintain a registered agent and registered office. The registered agent shall serve as the agent for service upon the corporation, N.J.S.A. 14A:4-2(1), and service of any notice shall be at the registered office, N.J.S.A. 14A:4-2(2). According to plaintiff's certification, he first learned of the 1977 charter revocation in 2008, despite the fact that he was charged, as the registered agent maintaining the registered office, with such knowledge at the time of the revocation. While he relies on the statutory construct, he provides no explanation for the circumstances that would belie such knowledge.
In her opinion denying plaintiff relief on his motion to vacate the judgment, the motion judge relied on the doctrines of laches and unclean hands. Although not discussed, we also consider the application of the doctrine of equitable estoppel to be an appropriate basis for not barring Byram from proceeding.
The elements of equitable estoppel were recently reiterated in Lopez v. Patel, 407 N.J. Super. 79 (App. Div. 2009):
To establish a claim of equitable estoppel, the claiming party must show that the alleged conduct was done, or representation was made, intentionally or under such circumstances that it was both natural and probable that it would induce action, Further, the conduct must be relied on, and the relying party must act so as to change his or her position to his or her detriment. [Id. at 92 (quoting Miller v. Miller, 97 N.J. 154, 163 (1984)).]
Even though an equitable doctrine, it applies with equal force to actions at law. Highway Trailer Co. v. Donna Motor Lines, Inc., 46 N.J. 442, 449, cert. denied, 385 U.S. 834, 87 S.Ct. 77, 17 L.Ed. 2d 68 (1966).
In applying the doctrine to the late invocation of a defense that would bar relitigating the issue of proximate cause, we observed that "[o]ur courts have not looked favorably upon [litigants] who sit on their rights and then surprise the court and the [other party] at the eleventh hour with an affirmative defense that disposes of  claims." Lopez, supra, 407 N.J. Super. at 91. In Lopez, we recognized that the doctrine had been applied to prevent the belated application of statutory rights such as the statute of limitations. Id. at 92 (citing White v. Karlsson, 354 N.J. Super. 284 (App. Div.), cert. denied, 175 N.J. 170 (2002)).
Here, the elements enunciated in Miller and Lopez have been established. The fact of Byram's status was never revealed by plaintiff; even if he denies knowledge, his status as president, registered agent and his address as the registered office reasonably impute such knowledge to him; Byram's status was unknown to Epstein or the corporation; in both defending and instituting the Special Civil Part action, Byram relied on its bona fides; and three years into the litigation, the defense*fn7 was first raised to Byram's detriment. Plaintiff claims a lack of knowledge. In Clark v. Judge, 84 N.J. Super. 35 (Ch. Div. 1964), aff'd o.b., 44 N.J. 550 (1965), Justice (then Judge) Pashman, in describing the elements of equitable estoppel, referred to a party's concealment of the relevant facts and stated, the "[f]acts [must be] known to the party allegedly estopped, or at least the circumstances must be such that knowledge of them can be necessarily imputed to him." Id. at 54 (emphasis added). We have described plaintiff's longstanding relationship with Byram. His belated "knowledge" of facts that would bar Byram from even instituting the cause of action are too late to afford the intended relief.
We recognize that by applying estoppel to the unique circumstances here, two critical policies are in conflict. We have expounded on the first - the intolerance of delay in raising a defense that would bar the cause of action. The second is a recognition that a corporation whose charter has been revoked has limited access to our courts to enforce its rights. We recognize that although barred, such corporations do have the right under appropriate circumstances to sue and be sued. See N.J.S.A. 14A:12-9(2)(e); Lancellotti, supra, 260 N.J. Super. at 583. However, it is in a state of dissolution and purportedly winding down its affairs. N.J.S.A. 14A:12-9(1) (providing that "[e]xcept as a court may otherwise direct, a dissolved corporation shall continue its corporate existence but shall carry on no business except for the purpose of winding up its affairs . . . .").
As we previously noted, corporations subject to charter revocations for non-payment of taxes or filing annual reports may be "reinstated and entitled to all its franchises and privileges. Upon such payment [of the sum in lieu of taxes and penalties] the Secretary of State shall issue his certificate entitled the corporation to continue its business and franchises." N.J.S.A. 54:11-5.
At oral argument, defendant represented that the taxes have been paid and application has been made to the Secretary of State for reinstatement of the corporate charter. Such practice is consistent with the provisions of N.J.S.A. 54:11-5.
We deem it appropriate under the circumstances to reconcile these two conflicting policies, and accordingly, we invoke original jurisdiction, R. 2:10-5, and order that while we affirm the judgment below, no further action may be taken on the judgment by way of enforcement until such time as the charter is reinstated by the Secretary of State.
We now address the issue of damages, specifically counsel fees. Judgment was originally entered in the amount of $72,481.75. According to the record on appeal, this amount was derived from a June 19, 2008 certification filed by Barry M. Epstein, Esq. detailing the damages as $795.00 - Removal of the tree $6,000.00 - Annual Assessments owed for calendar years 2004-2007 $4,787.00 - Special Assessment for improvements to common tennis court $300.00 - 5% fine on unpaid Annual
Assessments (does not include the Tennis Court Assessment) $1,140.00 - Interest at 12% per annum on unpaid Annual Assessments (does not include the Tennis Court Assessment) $59,012.50- Attorneys' fees (not including fees incurred in connection with the current motion) $447.25 - Litigation costs Thereafter, a supplemental certification was filed, which is not included in the record, and the damages were increased to $86,158.25. We can only assume that the increased amount represented additional counsel fees. We fail to discern anything in the record that reflects an assessment of the bona fides of the original award of $59,012.50 in fees and the presumably supplemental award of an additional $13,676.50 in fees for a total fee award of $72,689.
We recognize that the awards here resulted from a default proceeding, yet we consider it incumbent on the trial judge to assess the bona fides of a fee claim even if it results in the first instance from a contract award or a default. The amount of the judgment exclusive of fees is $13,469.25.
When an award of fees is contractually authorized, the award does not mechanically encompass the full fee charged, but is limited to those reasonable in the circumstances. N. Bergen Rex Transport, Inc. v. Trailer Leasing Co., 158 N.J. 561, 570-74 (1999). The initial question to be answered in determining whether a counsel fee award is reasonable is whether the party seeking the fee prevailed in the litigation. Id. at 570; Litton Indus., Inc. v. IMO Indus., Inc., 200 N.J. 372, 386 (2009); Twp. of West Orange v. 769 Assocs., LLC, 198 N.J. 529, 544 (2008) (stating that it is the proportionate success, determined by comparing the amount involved and the results obtained, or the ultimate substantive outcome of a case, that is of significance in determining reasonableness of awarding counsel fees). See also Mason v. City of Hoboken, 196 N.J. 51, 73 (2008) (including as a factor to consider whether the lawsuit was causally related to securing the relief obtained) (citing Singer v. State, 95 N.J. 487, 495, cert. denied, 469 U.S. 832, 105 S.Ct. 121, 83 L.Ed. 2d 64 (1984)); Packard-Bamberger & Co. v. Collier, 167 N.J. 427, 444 (2001) ("'a fee award is justified if [the party's] efforts are a necessary and important factor in obtaining the relief.'") (quoting N. Bergen Rex Transp., Inc., supra, 158 N.J. at 570); Mason, supra, 196 N.J. at 73 (finding that a counsel fee award is reasonable if the relief ultimately secured by plaintiffs had a basis in law).
Thereafter, the judge must make a determination as to reasonableness.
We find no error in the underlying claims for $13,469.25 and we affirm as to that portion of the judgment. We do not take issue with defendant's position that it is entitled to a contract fee award under the bylaws for fees incurred in enforcing the bylaws nor do we determine that the full amount claimed should not be the ultimate award; however, the record is devoid of any analysis of the fees claimed, and we consider such review critical to any such award. We remand to the Law Division for further review as to the quantum of fees.
Affirmed in part; reversed in part and remanded for proceedings consistent with this opinion. We do not retain jurisdiction.