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Rivera v. Salerno Duane


July 2, 2010


On appeal from the Superior Court of New Jersey, Law Division, Morris County, Docket No. L-1017-04.

Per curiam.


Submitted May 25, 2010

Before Judges Carchman and Parrillo.

In this appeal, we consider for the second time the quantum of counsel fees to be awarded as a result of a judgment for damages under the New Jersey Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to - 184, as well as a judgment under Truth-in-Consumer Contract, Warranty and Notice Act (TCCA), N.J.S.A. 56:12-14 to - 18. As to the CFA claim, plaintiff Evelyn Rivera was awarded damages in the amount of $17.90, which were trebled under the CFA to $53.70; as to the TCCA claim, plaintiff was awarded a total of $400 representing an award of $100 for four separate violations of that statute.

In the first application for fees, the judge, believing that the application was uncontested*fn1, awarded plaintiff $20,240 in fees together with $719.69 in costs. On defendant Salerno Duane, Inc.'s motion for reconsideration, the judge vacated her prior order and denied any fees. On appeal, we concluded that the denial of any fees under the CFA and TCCA was erroneous, and we remanded for reconsideration of the fee awards both for the trial and the ensuing appeal.*fn2

On remand, plaintiff sought $20,240 for trial fees in addition to costs as well as $27,268.20 for fees incurred on the appeal, or total fees of $47,508.20. Two different judges considered the discrete applications. Judge Dumont awarded counsel fees for the initial Law Division proceedings in the amount of $2134 together with $600 in costs, while Judge Wilson awarded $650 to the trial counsel and $5,200 for appellate counsel for the appeal.*fn3 In both instances, the judges considered, among other factors, the limited success achieved by plaintiff on two of the nine counts of her complaint as well as the issue of the "reasonableness" of the fees. Plaintiff appeals, and we affirm.

We describe the facts as set forth in Rivera I:

The underlying lawsuit arises from plaintiff's purchase in April 1998 of a used Toyota Corolla from Dependable Motors, a small used car dealership in Somerset. The car was sold "as is" with no warranties and plaintiff paid $9,000, financed through defendant, Dependable's finance agent. Soon thereafter, plaintiff experienced some difficulties with the car and sometime after 2001 discovered from a CARFAX report that the car supposedly had been involved in an accident in February 1998, a fact not disclosed to her at the time of purchase.

On April 7, 2004, plaintiff sued defendant and Chrysler Financial Corporation (Chrysler),*fn4 as well as unknown persons and corporations, in a nine-count complaint alleging: violations of the [CFA] (Count One); violations of the [TCCA], (Count Two); misrepresentation or common law fraud (Count Three); equitable fraud (Count Four); breach of contract under the Uniform Commercial Code, N.J.S.A. 12A:2-101 to -725 (Count Five); failure to deal in good faith (Count Six); DaimlerChrysler's liability under theories of agency or respondeat superior (Count Seven); unjust enrichment (Count Eight); and finally, DaimlerChrysler's liability under the Federal Trade Commission (FTC) Holder Rule (Count Nine). The statutory consumer fraud count (Count One) was based in part on allegations that defendant overcharged plaintiff for registration and title fees. The [TCCA] count (Count Two) alleged statutory violations by defendant by not properly itemizing the actual registration and title fees in the initial sales document or Retail Buyer's Order; failing to provide plaintiff with a used car buyer's guide; failing to provide plaintiff with a copy of a written warranty; and by failing to provide her with a copy of the used car lemon law notice.

Following discovery, the parties filed a series of summary judgment motions. On April 29, 2005, the trial court granted plaintiff partial summary judgment on part of Counts One and Two. On August 5, 2005, DaimlerChrysler was effectively dismissed from the case when the trial court granted its motion for partial summary judgment and ordered defendant to indemnify DaimlerChrysler for any adverse judgment.

On August 30, 2005, the trial court granted summary judgment to defendant on part of Count One and Counts Three through Nine, and also granted summary judgment to plaintiff on part of Count Two. In its final order of November 23, 2005, clarifying all previous orders, the trial court granted judgment to plaintiff on Count One in the amount of $17.90, which was then trebled under the CFA to $53.70, and also granted judgment to plaintiff on Count Two in the amount of $400.00, $100.00 each for four violations of the [TCCA], for a total judgment against defendant of $453.70, in addition to reasonable attorney's fees and costs upon proper application.

[Rivera I, supra, No. A-5822-05T1 (slip op. at 2-4.]

In Rivera I, we recognized that fees were mandated by N.J.S.A. 56:8-19 and N.J.S.A. 56:12-17. Although such fees must be awarded, we recognized that while proportionality between the award and counsel fees is not required, a disproportionate fee award required careful scrutiny. We said:

In fact, the Supreme Court in Szczepanski v. Newcomb Med. Ctr., 141 N.J. 346 (1995), "decline[d] to construe New Jersey's fee-shifting statutes to require proportionality between damages recovered and counsel-fee awards even if the litigation, as in this case, vindicates no rights other than those of the plaintiff." Id. at 366. Instead, the Court made clear that the trial judge's responsibility to carefully review the fee request "is heightened in cases in which the fee requested is disproportionate to the damages recovered":

In such cases the trial court should evaluate not only the damages prospectively recoverable and actually recovered, but also the interest to be vindicated in the context of the statutory objectives, as well [as] any circumstances incidental to the litigation that directly or indirectly affected the extent of counsel's efforts. Based on that evaluation, if the court determines that the hours expended "exceed those that competent counsel reasonable would have expended to achieve a comparable result, a trial court may exercise its discretion to exclude excessive hours from the lodestar calculation."

[Szczepanski, supra, 141 N.J. at 366-67 (quoting Rendine v. Pantzer, 141 N.J. 292, 336 (1995)).]

We further recognized that both RPC 1.5(a)(4) and "limited success" were relevant factors in assessing the quantum of fees. Rivera I, supra, No. A-5822-05T1 (slip op. at 10-11).

On appeal, plaintiff asserts that the judges erred in their respective awards. Plaintiff focuses primarily on the issue of proportionality and the considerations of the judges of the limited recovery. As we have noted, the issue of consideration of the limited recovery here and the expansive application for fees was addressed in Rivera I. We have carefully reviewed the record and conclude that plaintiff's arguments are without merit. R. 2:11-3Ie)(1)(E).

We add the following additional comment. Among other arguments, plaintiff claims that failure to succeed on all claims is not a factor the court can consider in determining a fee award. Plaintiff cites Twp. of W. Orange v. 769 Assocs., LLC, 198 N.J. 529, 544 (2009); New Jerseyans for a Death Penalty Moratorium v. N.J. Dept. of Corrs., 185 N.J. 137, 153-54 (2005); and Silva v. Autos of S. Amboy, Inc., 267 N.J. Super. 546, 558 (App. Div. 1993), in support of her argument. These cases utilize the approach adopted in Hensley v. Eckerhart, 461 U.S. 424, 435-36, 103 S.Ct. 1933, 1940-41, 76 L.Ed. 2d 40, 52 (1983), which held that a litigant's failure to achieve success on each count does not warrant a mechanical reduction of the fee and rejected an approach that would reduce the fee by the proportion of successful claims. However, contrary to plaintiff's position, a judge may consider that plaintiff did not succeed on all claims. While the judge may not adjust the fee by the number of successful claims, the judge may adjust the fee based on the results achieved. Id. at 434, 103 S.Ct. at 1940, 76 L.Ed. 2d at 51; see also Twp. of W. Orange, supra, 198 N.J. at 544; New Jerseyans, supra, 185 N.J. at 153-54; Silva, supra, 267 N.J. Super. at 559-60. "[T]he most critical factor is the degree of success obtained." Hensley, supra, 461 U.S. at 436, 103 S.Ct. at 1941, 76 L.Ed. 2d at 52. We conclude that Judge Dumont did not err in considering that, despite bringing a nine-count complaint, which included claims for fraud and misrepresentation, that plaintiff was only partially successful on her CFA and TCCA claims.

We affirm substantially for the reasons set forth in Judge Dumont and Judge Wilson's written statement or reasons of July 31, 2008 and March 19, 2009, respectively.


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