July 30, 2010
ALLIANCE FOR DISABLED IN ACTION, INC., A NEW JERSEY NOT-FOR-PROFIT CORPORATION, PLAINTIFF-APPELLANT,
RENAISSANCE ENTERPRISES, INC., A NEW JERSEY CORPORATION, DEFENDANT-RESPONDENT, AND RENAISSANCE VILLAGE I, A CONDOMINIUM, A NEW JERSEY NOTFOR-PROFIT CORPORATION, RENAISSANCE TERRACE, INC., A NEW JERSEY CORPORATION, AND THE RENAISSANCE AT NORTH BRUNSWICK MASTER ASSOCIATION, A NEW JERSEY NOT-FOR-PROFIT CORPORATION, DEFENDANTS.
ALLIANCE FOR DISABLED IN ACTION, INC., A NEW JERSEY NOT-FOR-PROFIT CORPORATION, PLAINTIFF-RESPONDENT/ CROSS-APPELLANT,
RENAISSANCE ENTERPRISES, INC., A NEW JERSEY CORPORATION, DEFENDANT-APPELLANT/CROSS-RESPONDENT, AND RENAISSANCE VILLAGE I, A CONDOMINIUM, A NEW JERSEY NOTFOR-PROFIT CORPORATION, RENAISSANCE TERRACE, INC., A NEW JERSEY CORPORATION, AND, THE RENAISSANCE AT NORTH BRUNSWICK MASTER ASSOCIATION, A NEW JERSEY NOT-FOR-PROFIT CORPORATION, DEFENDANTS.
On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-10853-98.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued: April 28, 2010
Before Judges Axelrad, Sapp-Peterson and Espinosa.
These appeals and cross-appeals arise out of a judgment entered after a bench trial in favor of plaintiff, Alliance for Disabled in Action, Inc. ("Alliance"), requiring defendant Renaissance Enterprises, Inc. ("Renaissance") to renovate several units in order to bring them into compliance with New Jersey's Barrier Free Subcode and for related relief (A-1573-08T2), and a judgment entered awarding statutory attorney's fees to Alliance as the prevailing party (A-1456-08T2). We address these two appeals, which are calendared back-to-back, in a single opinion.
This case has a lengthy history but we recite only those facts and procedural history relevant to this appeal. On October 20, 1998, Alliance, a non-profit corporation that advocates for disabled persons, filed a putative class action complaint*fn1 against Renaissance, a real estate developer of a large residential condominium project in North Brunswick known as Renaissance Village ("the Village"),*fn2 alleging violation of New Jersey's Law Against Discrimination ("NJLAD"), N.J.S.A. 10:5-1 to -49, contending, in part, that the design and construction of 135 ground floor units in the Village, contained in l5 buildings, did not comply with the State's Barrier Free Subcode, N.J.A.C. 5:23-7.1 to -7.31 ("subcode").*fn3 In its complaint, Alliance included allegations that the doors to the bedrooms, bathrooms and walk-in closets were not sufficiently wide to accommodate wheelchair access, that cabinetry beneath the bathroom sink was not designed to be removable, that grab bars could not be installed alongside the toilets and that the kitchen counter tops were not mounted at the proper fixed height or designed to be adjustable. Alliance sought to enjoin further construction, rental or sale of the units until there was compliance and an order bringing the project into conformity with the subcode.
Renaissance had received construction permits for these units from January l993 through January l997. Alliance apparently learned the first ten buildings did not comply with barrier-free standards before the last five buildings were completed. There were meetings between representatives of the parties commencing in late l997 addressing the non-conformities, pursuant to which Renaissance completed the constructed buildings. Relative to the issues raised in Alliance's cross-appeal, Renaissance claimed an agreement was reached that if it made the forty-five units in buildings ll-l5 as accessible as possible, those units would not be subject to litigation, which Alliance disputed.
On February 21, 2001, the trial court granted Renaissance's motion for partial summary judgment on the grounds the buildings were exempt from compliance with the subcode and Alliance's complaint was barred by the statute of limitations. We reversed on both of these grounds and remanded, 371 N.J. Super. 409 (App. Div. 2004), and the Supreme Court affirmed without opinion, 185 N.J. 339 (2005).*fn4
By orders of January 11 and February 9, 2006, our court and the Supreme Court, respectively, referred to the trial court the issue of Alliance's counsel fees on appeal.
There was a three-day bench trial in March 2007 before a different judge, after which judgment was entered on October 10, 2008.*fn5 The issues remaining in the case involved accessibility of walkways leading to the individual units and the interiors of the units. At trial, Renaissance did not dispute there were violations in buildings 1-10 and Alliance was entitled to some remedial relief. It disputed, however, the extent of work required and some of the estimates proposed by Alliance's expert. Renaissance was willing to perform the work and, at the outset of trial, expressed through counsel a willingness to take care of any of the clubhouse and related exterior work the court determined was necessary for compliance. Renaissance further did not object to the creation of a trust fund for deposit of costs for future remediation of units whose current owners did not desire the work, but questioned some of the parameters.
The court found Alliance had proved an entitlement to retrofit up to 135 units in certain particulars to bring them into compliance with the subcode. The court directed Renaissance to perform the work for certain specific items and directed that Renaissance hire contractors to perform the work for other specific items with an additional 35% charge for overhead, profit, contingency and insurance (OPCI). The court designated valuations for each function, with the estimated value for the work, including those items to be performed by an outside contractor with the 35% OPCI markup, totaling about $1.5 million. A substantial number of renovations requested by Alliance were limited to buildings 1-10, reducing by 45 the number of units affected. In the event the individual unit owners were unwilling to consent to the retrofitting, Renaissance was directed to pay the amount of money involved into a trust fund to be established by Alliance with independent trustees administering the fund, formed "for the purposes of providing funds at low interest to disabled persons, to permit such persons to acquire appropriate housing, and to hire appropriate professionals to assure compliance with barrier-free construction throughout New Jersey."*fn6 The court further ordered the appointment of a Special Master to oversee all aspects of the remediation, with which both parties concurred, and they subsequently agreed on a person who was an expert in the subcode.
On July 20, 2008, Alliance filed its fee petition. By letter opinion of September 29, 2008 and order of January 21, 2009,*fn7 the court awarded Alliance $173,267.50 in attorneys' fees and $15,000 in costs, totaling $188,267.50, as the prevailing party pursuant to NJLAD.
Renaissance filed an appeal of the October 10, 2008 judgment, designated as A-1573-08T2, challenging the court's rulings regarding the use of outside contractors and the 35% OPCI adjustment to the expert's cost estimates. Alliance cross-appealed, challenging several trial rulings. Specifically, it argues: (1) Renaissance waived the defense of an agreement with respect to buildings 11 through 15 because it did not plead that as an affirmative defense; (2) there was no evidence Alliance agreed to permit Renaissance to construct buildings 11 through 15 in partial violation of the subcode, i.e., substantial compliance; and (3) even if there were such an agreement, Renaissance breached it. Alliance thus argued error by the trial court in not requiring Renaissance to make certain renovations in buildings 11-15.
Alliance appealed the January 21, 2009 order, designated as A-l456-08T3, arguing the court erred in: (1) deducting specific hours rather than just considering whether the aggregate number of hours claimed was reasonable; (2) making improper or incorrect deductions; (3) rejecting Alliance's principal counsel's requested hourly rate and, in doing so, failing to recognize the time frame of counsel's previous request, ignoring the mandate to apply current rates and inappropriately considering the absence of a retainer or fee agreement; (4) denying Alliance's request to adjust and enhance the lodestar; and (5) not taking into account the costs Alliance incurred upon remand and failing to explain the court's reduction of costs requested for work done prior to the first appeal.*fn8 After reviewing the record in light of the contentions advanced, we reverse on Renaissance's appeal and affirm on Alliance's cross-appeal (A-l573-08T2), and affirm on Alliance's appeal (A-l456-08T2) with the exception of a modification of the cost award.
The following individuals testified at trial for Alliance: its current Executive Director, Ethan Ellis, the Executive Director from August l998 to March 2003, Deborah Bain, and the former Executive Director, Dennis Crocker. Alliance also presented the videotaped deposition of Robert Jankowicz, who the parties stipulated was an expert in engineering, general construction, accessible construction and construction costs estimating. Renaissance presented the testimony of its former project manager and current "builder" Larry Rubin and its Construction Supervisors Boris Flider and Yuri Tayman. It did not retain its own expert because it believed Jankowicz's report, including the cost estimates as they were presented, to be reasonable.
The following testimony was adduced at trial. The plans for the units at the Village were prepared by a licensed architect, and incorrectly stated that the project was exempt from the subcode. Nevertheless, the plans were approved by North Brunswick Township's construction official. Accordingly, Renaissance began constructing the units in l994 in accordance with the plans and, upon completion, Certificates of Occupancy were issued by the township.
In late 1997, before the last five buildings were completed, Rubin became aware, through Alliance, that the first ten buildings of the Village did not comply with the subcode. He testified that he attended a meeting at that time with Renaissance and Alliance representatives, including Frank Dolan, Alliance's former engineer*fn9 and David Popiel, Alliance's attorney. Following the meeting, Rubin began conversing with Dolan about how, and to what extent, both the finished and unfinished elements of the project could be brought into compliance. Rubin testified he informed Dolan at the outset he had been unaware the subcode was required for the complex and Renaissance "would try to do what [it] could to retrofit the units to try to make them as adaptable as possible."
Renaissance also asked Dolan to review plans of the next phase of the project for compliance with the subcode and altered its plans accordingly.
Rubin related that he and Dolan discussed the exact modifications to be made to the exterior and interior of the units. He testified he reached an agreement with Dolan to "try to make [buildings ll-l5] as adaptable as possible and on the exterior of the buildings make them accessible where we could." Although admitting there was no formal or written agreement, Rubin testified to his understanding that, if Renaissance complied with Dolan's requests and made the units in buildings ll-l5 as accessible as possible given the stage of construction, and agreed the subcode would apply to all other Renaissance construction, he did not expect the units would be the subject of litigation.
By letter of January l2, l998, Dolan informed Popiel that about twenty percent of the units under construction could not have accessible entranceways due to "siting and elevating differences." In an April 22, l998 letter, Dolan informed Popiel of his discussions with Rubin as to the modifications to be made to the interiors and exteriors of the units in buildings ll-l5 but noted that if all the suggested modifications were accomplished, the units would not be completely compliant but would be "a great deal more useable by persons with disabilities." Rubin testified that Renaissance told Dolan it would try to accommodate those recommendations and that Renaissance had substantially complied with the agreement, although he admitted Renaissance did not do everything that Dolan recommended.
Jankowicz stated in his July 26, 2006 report that an agreement had been reached with Renaissance regarding buildings ll-l5 requiring it to "retrofit those buildings which could still have accessible entrances built." He noted, however, there were continuing violations and provided a cost estimate for corrective action. Jankowicz testified in the de bene esse deposition that the total cost was $1,597,218, excluding OPCI. When asked what would happen to his estimate if OPCI costs were included, he stated they would increase, claiming that he "normally would have added another 35 percent" to the costs in the report. The resulting estimate totaled $2,156,244.
Rubin testified that Renaissance had the ability to perform the work Jankowicz felt would bring the complex into compliance. There was no cross-examination by Popiel regarding that statement. Jankowicz made no conclusions with respect to what entity should perform the work, and there was no testimony by any other witnesses regarding Renaissance's ability to perform the renovations. Nor did Alliance make any explicit or implicit request either during trial or in its post-trial brief*fn10 that Renaissance be compelled to hire outside contractors to perform the renovations.
We address Alliance's cross-appeal first (A-1573-08T2), challenging evidentiary rulings and the court's finding with respect to an agreement between Rubin and Dolan requiring substantial compliance of the units in buildings 11-15 and excusing Renaissance from making some of the renovations recommended by Jankowicz relative to those units.
The court credited the testimony of Jankowicz and found Alliance had sustained its burden of proving there was a failure by Renaissance to comply with barrier-free construction standards as to certain aspects of the construction. In its written findings*fn11 the court stated:
Third: the Alliance and the Village entered into negotiations and discussions over years regarding barrier-free construction. Clearly, the Village, through Mr. Rubin, relied on representations allegedly made by Dr. Dolan, plaintiff's engineer. While a contract was not reached as to all issues, an understanding was reached as to some. The court rejects the argument that, assuming a contract, the Village breached it by failing to conform fully to the subcode. This court will not ignore good faith reliance.
Fourth: the argument that the Village never pled an affirmative defense that a formal contract had been entered into is rejected, especially when the proponent of that argument relies on a doctrine ("cy pres") originating in trust and estates environment, seldom analogized to construction disputes. More to the point, the Alliance was not prejudiced by testimony about these understandings. Mr. Rubin, the manager of the project, stated unambiguously that there was never a contract.
The court required the remediation of a variety of items, including the clubhouse ramp and landing and the exteriors and interiors of all 135 units. The majority of these units were in buildings 1-10, although there was remedial work ordered in buildings ll-l5.*fn12 Many of Jankowicz's costs were not disputed and were accepted in full by the court. The court provided detailed explanations for excluding certain units and for the reduction in costs. The opinion and order provided with specificity the work and costs.
We discern no abuse of discretion in the court's ruling that Renaissance did not waive the defense of an agreement. R. 2:11-3(e)(1)(E). Alliance's challenge to the court's findings respecting the agreement pertaining to buildings 11-15, Renaissance's good faith compliance and substantial completion as to a variety of items, and the exclusion of certain remedial work and costs pertaining to those units is also without merit. Findings by a trial court are binding on appeal when supported by adequate, substantial, and credible evidence. Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974). We will not disturb the "factual findings and legal conclusions of the trial judge unless we are convinced that they are so manifestly unsupported by or inconsistent with the competent, relevant and reasonably credible evidence as to offend the interests of justice." Ibid. While we may exercise our original fact finding jurisdiction in cases where the record below is insufficient, we do so "sparingly and in none but a clear case where there is no doubt about the matter." Ibid.
The judge articulated a cogent, detailed explanation for his findings respecting Renaissance's obligations to remediate the units and the costs attributable to such work, which were amply supported by the record. His analysis and conclusion that, although there was never a formal agreement, the parties had reached an understanding with respect to some issues involving buildings ll-l5 was reasonably based on sufficient credible evidence. The judge's subsequent decision to not require certain renovations in the units in those buildings was logically based on that conclusion, and also amply supported by the record and explained with particularity. Similarly, the judge's rejection of Alliance's argument that Renaissance breached the alleged agreement was based on evidence in the record suggesting that Renaissance was only expected to make those units as accessible as possible and that not all of Dolan's recommendations were feasible. To the extent the judge found that Renaissance did not substantially comply with renovations that it had agreed to make or which were reasonable under the circumstances, the judge ordered remediation.
We turn now to Renaissance's appeal. The court established a division of labor for the exterior and interior work to be performed at the Village. It ordered that Renaissance would be responsible for all exterior work, the replacement of all levered external door hardware, all required interior retrofitting in the units it owned and rented out, and all construction involving required widening of the interior doorways, reorienting bathroom doors to reverse their swing, and installing a flexible hose with shower head in the bathrooms. The court ordered that all other interior work be done by outside contractors of Renaissance's choice, which included providing wall reinforcements and relocating the sink and toilet in the bathrooms of the units not owned by Renaissance and completing major kitchen renovations. The court further directed an additional 35% OPCI adjustment to Jankowicz's cost estimate in connection with the work to be performed by the outside contractors. The court also directed the appointment of a Special Master to supervise all work at Renaissance's expense.
Alliance concedes it made no explicit request of the court for outside contractors to perform the remedial work at the Village, and the trial court did not articulate any explanation as to why Renaissance could not perform all of the renovations itself or any rationale as to its division of labor on the record or in its opinion.
"[A]n articulation of reasons is essential to the fair resolution of a case." Schwarz v. Schwarz, 328 N.J. Super. 275, 282 (App. Div. 2000). The court is also required by Rule l:7-4(a) to find the facts and state its conclusions of law. "Failure to perform that duty 'constitutes a disservice to the litigants, the attorneys and the appellate court.'" Curtis v. Finneran, 83 N.J. 563, 569-70 (l980) (quoting Kenwood Assocs. v. Bd. of Adj. of Englewood, l4l N.J. Super. 1, 4 (App. Div. l976)). "Naked conclusions" are insufficient to satisfy the rule. Curtis, supra, 83 N.J. at 570. "Rather, the trial court must state clearly its factual findings and correlate them with the relevant legal conclusions." Ibid.
Not only was the court remiss in failing to explain its reasons but such decision was arbitrary and without any support in the record. Rubin testified that Renaissance "certainly can do the work" and there was no testimony, evidence or even suggestion to the contrary. The record does not support Alliance's argument that the court's rationale of the division of labor can be inferred from the evidence that there was mistrust of Renaissance. The failure to build in accordance with the subcode was not based on Renaissance's ignorance nor its unwillingness to comply but, rather, was based on its reliance on its design professionals and the code enforcement officials who approved the plans for the complex. Moreover, the court expressly found Renaissance acted in good faith in substantially complying with most of Dolan's recommendations. In addition, as the Special Master would be overseeing all the renovations, Alliance's argument that Renaissance's "unreliability" and "incentive to sacrifice quality and costs" as justifying the court's division of labor is untenable. We also find unpersuasive and without basis Alliance's suggestion that the court intended that the independent contractors perform the "heavy lifting" items. There was no testimony as to degrees of difficulty of the various renovations. Moreover, the distinction in assignments was only made as to units owned by others; it is internally inconsistent and illogical that the judge would have permitted Renaissance to perform the remedial work in the units it owned if there was any merit to the foregoing arguments advanced by Alliance.
In view of our conclusion that the judge's ruling on this issue must be reversed, there is no need to address the balance of the arguments raised by Renaissance in this appeal. As Renaissance would be permitted to perform all the retrofitting determined by the court were it allowed to do so by the unit owners, the 35% OPCI adjustment ceases to be an issue. Accordingly, any money to be deposited by Renaissance into the trust fund is based solely on the costs determined in the court's opinion without the additional 35% charge.
We now turn to Alliance's appeal of the fee award (A-1456-08T2). Alliance's petition for attorneys' fees sought an hourly rate of $450 for Popiel, who at the time of the petition had been practicing law for thirty-four years, and $100 for his intern, second year law student Carol Armenti. It contended the rates were reasonable considering Popiel's experience and extensive background in architectural barriers litigation and consistent with the rates generally charged by attorneys with similar specialized practices as certified to by three practitioners. Alliance sought compensation for 744.6 hours for professional services rendered from November l997 through August 2008, consisting of 645.9 hours for Popiel and 98.7 hours for Armenti, totaling a lodestar fee of $300,525. Alliance also sought costs of $38,523.72. In support of the petition, Popiel submitted voluminous itemized timesheets along with invoices and receipts pertaining to the costs.
Alliance then sought a l0% upward adjustment of its requested lodestar, resulting in an adjusted figure of $330,577.50. Citing "the unmitigated risks of representation, the significance and public importance of the relief obtained" and Renaissance's purported "vigorous and prolonged resistance," Alliance also sought a l00% enhancement of the lodestar, resulting in a total fee request of $661,155. Renaissance asserted that both the number of hours claimed and Popiel's suggested hourly rate were unreasonable and excessive. It also opposed any enhancement to the lodestar amount.
In a lengthy written opinion of September 29, 2008 and order of January 21, 2009, the court determined Popiel and Armenti were entitled to hourly rates of $350 and $75, respectively, and the reasonable hours expended by Popiel and Armenti were 473.9 and 98.7, respectively, resulting in a fee award of $173,267.50. The court declined to award any enhancement to the lodestar. The court awarded Alliance $15,000 towards its costs. Thus, the aggregate of attorneys' fees and costs that Renaissance was directed to pay Alliance was $188,267.50.
On appeal, Alliance argues the court made improper fee deductions prior to considering the reasonableness of Popiel's aggregate hours. Specifically, it urges that, if the aggregate hours were reasonable, the court should not have made any deductions for individual tasks because any seemingly excessive time was balanced by tasks that were handled more expeditiously than anticipated. Alliance also takes issue with certain specific deductions and requests we exercise original jurisdiction to remedy the alleged errors.*fn13 Alliance further contends that in rejecting Popiel's requested hourly rate, the court failed to recognize the time frame of counsel's previous request, ignored the mandate to apply current rates, and inappropriately considered the absence of a retainer or fee agreement. Alliance also asserts legal error by the court in failing to adjust the lodestar award and denying enhancement of the lodestar. Based on our review of the record and written and oral arguments, we do not find any of these arguments to be persuasive. We affirm substantially for the reasons set forth by the trial judge in his comprehensive letter opinion with the exception of our modifying the costs award.
"[F]ee determinations by trial courts will be disturbed only on the rarest occasions, and then only because of a clear abuse of discretion." Rendine v. Pantzer, 141 N.J. 292, 317 (l995); Shore Orthopaedic Group, LLC v. Equitable Life Assurance Soc'y of the U.S., 397 N.J. Super. 614, 623 (App. Div. 2008), aff'd, l99 N.J. 310 (2009). "[A]buse of discretion is demonstrated if the discretionary act was not premised upon consideration of all relevant factors, was based upon consideration of irrelevant or inappropriate factors, or amounts to a clear error in judgment." Masone v. Levine, 382 N.J. Super. 181, 193 (App. Div. 2005).
In order to ensure fairness and provide the necessary predicate for a meaningful review, the trial court must analyze the relevant factors and provide its reasons for the amount of awarded fees, taking the factors of RPC 1.5(a) into account.*fn14
R.M. v. Supreme Court of N.J., 190 N.J. 1, 11-12 (2007).
The judge found that Alliance was clearly the prevailing party, having succeeded on a significant issue, which entitled it to an award of a reasonable attorney's fee as part of the costs. N.J.S.A. l0:5-27.1. The judge defined the scope of his inquiry, initially noting in his written decision that, for this case which commenced in l998, he was asked to determine a reasonable fee "for the underlying discovery phase, together with two aspects of the case brought before the Appellate Division (including an appeal of a trial court judgment dismissing the complaint in favor of defendant) and one petition filed in the Supreme Court of this State."
The judge then performed the two-step process necessary to establish a reasonable fee, first calculating the "lodestar," defined as "the number of hours reasonably expended multiplied by a reasonable hourly rate," Rendine, supra, 141 N.J. at 334-35, and then determining whether upward adjustment of that fee was warranted to compensate counsel for the risks of undertaking complex and difficult litigation for which no compensation may ever be recovered, id. at 337.
In his written decision, the judge expressly noted the warning in Rendine, supra, that "[t]rial courts should not accept passively the submissions of counsel to support the lodestar amount" and that the amount of time actually expended by an attorney is not necessarily equivalent to the time reasonably expended. 141 N.J. at 335. After appropriately scrutinizing Alliance's fee application, the judge exercised his discretion and deducted hours from time spent performing various legal tasks, explaining in each instance his reason for doing so. In accordance with Rendine, supra, the judge also reduced time he found to be "excessive, redundant, or otherwise unnecessary" in arriving at what he determined to be the number of hours reasonably expended under the facts of the case. See ibid.
Alliance contends the court erred when it evaluated and reduced the attorney hours claimed for individual tasks without first considering whether the total hours claimed were reasonable given the success Alliance achieved. According to Alliance, it would be unfair to penalize attorneys for spending excessive time on certain tasks when the aggregate amount of time is reasonable and thus the attorney must have performed other tasks unusually expeditiously. Alliance cites Rendine for its proposition that in determining the lodestar, courts must first evaluate the aggregate number of hours spent on a case and, if the total time spent appears to be reasonable, the inquiry should end. In doing so, Alliance refers specifically to the Court's statements that in setting the lodestar, the judge must "evaluate carefully and critically the aggregate hours . . . advanced . . . to support the fee application," id. at 335 (emphasis added), and if the surrounding circumstances demonstrate that the hours expended, taking into account the damages prospectively recoverable, the interests to be vindicated, and the underlying statutory objectives, exceed those that competent counsel reasonably would have expended to achieve a comparable result, a trial court may exercise its discretion to exclude excessive hours from the lodestar calculation. [Id. at 336. See also Szczepanski v. Newcomb Med. Ctr., 141 N.J. 346, 366-67 (1995).]
We are not persuaded that either of these cases say, or even suggest, that trial courts should merely view the aggregate hours in isolation and somehow try to determine whether or not the total time expended is reasonable and that they are precluded from specifically reviewing and excluding excessive, redundant or unnecessary hours expended merely because the overall number of hours may seem at first blush not to be excessive. Alliance has taken the cited statements out of context. After directing the trial court to critically evaluate the "aggregate hours" as part of the lodestar determination, the Court admonished judges not to passively accept counsel's submissions because "[c]ompiling raw totals of hours spent . . . does not complete the inquiry [as] [i]t does not follow that the amount of time actually expended is the amount of time reasonably expended." Rendine, supra, 141 N.J. at 335 (citing Copeland v. Marshall, 641 F.2d 880, 891 (D.C. Cir. 1980)). The Court required the submission of a detailed presentation of billable hours so the trial court could review and analyze how many hours were spent in what manner, e.g., pretrial discovery, settlement negotiations, by which level of attorney, in order to fully understand the nature of the services for which compensation was sought. Id. at 337. See also R. 4:42-9(b) (stating that "all applications for the allowance of fees shall be supported by an affidavit of services addressing the factors enumerated by RPC 1.5(a)."). It also expressly sanctioned the denial of compensation for nonproductive time, such as having three attorneys present at a hearing when one would suffice*fn15 and the exclusion of hours not reasonably expended because they are excessive, redundant, or otherwise unnecessary, clearly signaling an intent for the trial court to look beyond the stated aggregate hours into the details of the fee petition. See Rendine, supra, 141 N.J. at 335; see also Furst v. Einstein Moomjy, Inc., 182 N.J. 1, 22 (2004) (Reiterating that a "court must not include excessive and unnecessary hours spent on the case in calculating the lodestar."). The Court held similarly in Szczepanski, supra, stating:
[W]e reiterate the concern that we expressed in Rendine, supra, that a trial court should carefully and closely examine the lodestarfee request to verify that the attorney's hours were reasonably expended. l4l N.J. 334-337 . . . . Fee-shifting cases are not an invitation to prolix or repetitious legal maneuvering. Courts should consider the extent to which a defendant's discovery posture, or a plaintiff's, has caused any excess expenses to be incurred. Courts reviewing fee allowances should assess what legal services reasonably competent counsel would consider as required to vindicate the protected legal or constitutional rights. Neither the tortoise nor the hare should be the model for compensation. [141 N.J. at 366.]
The other quoted statement relied on by Alliance pertained to a discussion about whether, in awarding fees, it is necessary for such fees to be in an amount that is proportionate to the results obtained. The Court rejected a strict proportionality rule but concluded there could be specific cases in which the aggregate number of hours expended, and thus the fees sought, were so disproportionate to the results obtained as to warrant the exclusion of unnecessary hours from the lodestar calculation. Rendine, supra, 141 N.J. at 336. In other words, if after calculating the reasonable lodestar amount, the fee award is nevertheless extremely disproportionate to the result, then the trial court must take an even closer look at the billing details to ensure that unnecessary hours were not expended. The Court further elaborated on this concept in Szczepanski, supra, as follows:
The trial court's responsibility to review carefully the lodestar 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 reasonably would have expended to achieve a comparable result, a trial court may exercise its discretion to exclude excessive hours from the lodestar calculation." [Rendine, supra,] 141 N.J. at 336 . . . . [141 N.J. at 366-67.]
Another reason we reject Alliance's argument is that, as a practical matter, it lends itself to a vague standard that runs counter to the Court's articulated goal of providing clear standards for fee awards. See Rendine, supra, 141 N.J. at 334 ("Our objectives in this murky area of counsel-fee awards are clarity, simplicity, and finality, to the extent they are attainable."). For example, Alliance contends the trial court should have, in essence automatically, awarded it compensation for every single hour its attorney and legal intern spent on the case based on the supposition that because its litigation spanned ten years, and the case went up on appeal and ended in trial, the entire 744.6 hours expended "is significantly less than what experience suggests is reasonable for such a prolonged contest." Alliance's assertion, however, is not self-evident. For example, a review of the billing statements indicates that no pleadings were filed between October 25, 2002 and February l0, 2005, and there was little, if any, work performed during this period. Under Alliance's proposition, we query whether it would have been less entitled to compensation for the total number of hours expended by counsel if 600 of the hours were expended in just one year. Moreover, what would happen if a majority of the time were spent on claims that were dismissed? The aggregate hours spent cannot be viewed in a vacuum. A trial judge cannot assess the reasonableness of the aggregate hours spent in a case without looking at the billing detail.
Alliance next challenges most of the deductions made by the trial court for various reasons. Alliance takes issue with deductions for time expended on unsuccessful motions and spent in connection with the first appeal attributable, in part, to a related case and research and claims the allowance for work on the fee petition was unreasonably low. Alliance also characterizes some of the deductions as arising out of the trial court's mistake of fact, contending the court miscalculated, arriving at an erroneously high amount, the hours of appellate argument preparation and those attributed to pretrial work. As noted in the court's opinion, Renaissance made specific objections to Popiel's time records, which focused the court's inquiry on certain types of activities and the quantum of time spent. The court then evaluated Popiel's submissions and, within its discretion, deducted that which it determined was excessive, unnecessary or inappropriate for compensation. We are satisfied the court had legal basis for rejecting compensation for hours spent on unsuccessful motions, which it might have considered to be unnecessary or counterproductive. See Yueh v. Yueh, 329 N.J. Super. 447, 467 (App. Div. 2000).
We further note that Alliance acknowledges it spent considerable time in its fee petition in addressing the issue of fee enhancements for public interest law firms and responding to the court's analysis in H.I.P. v. K. Hovnanian at Mahwah VI, Inc., because that is an issue important to Popiel's employer, the Community Health Law Project ("CHLP"). See 291 N.J. Super. 144 (Law Div. 1996). However, as previously noted in our opinion, the trial court expressly rejected the H.I.P. court's conclusion that public interest firms should not be eligible for substantial fee enhancements, denying the enhancement on other grounds, and thus that topic is not an issue in this case. Accordingly, the court correctly concluded that the amount of time expended by Popiel on the fee petition was excessive and should not all be shifted to Renaissance.
We appreciate that determining a reasonable fee is not a mathematically precise exercise and may require, to some extent, a "big-picture" determination by the trial court of what is a reasonable amount of time to spend on specific matters and, ultimately, on the case overall. See Furst, supra, 182 N.J. at 22-23 ("Whether the hours the prevailing attorney devoted to any part of a case are excessive ultimately requires a consideration of what is reasonable under the circumstances."); see also Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 720 (5th Cir. 1974); R.M., supra, 190 N.J. at 11. We also acknowledge that the trial judge is in the best position to evaluate Alliance's fee application. See Packard-Bamberger & Co., Inc. v. Collier, 167 N.J. 427, 447 (2001). Based on our review of the record, we are satisfied the judge understood Popiel's submission and appropriately evaluated it and acted within his discretion in making the deductions and concluding that compensation was not appropriate on the total hours expended.
Not only did the judge carefully and critically evaluate the aggregate hours advanced by Alliance to support the fee application, but he also did so with regard to the specific hourly rates. See Rendine, supra, 141 N.J. at 335. The judge looked at the experience level for Popiel and, after considering the average rates for comparable counsel as contained in the certifications presented by Alliance and adjusting them to the Central Jersey market, had a rational basis to assign Popiel an hourly rate of $350. See id. at 337. The judge did not ignore the Court's instruction in Rendine, supra, to base the hourly rate on current rates rather than those in effect when the services were performed and to also take into account the delay in payment, ibid. He then exercised his discretion to include, as a factor in his analysis of the assigned hourly rate, the fact that it was unreasonable for Popiel to increase his billing rate by 50% in a six-year period.*fn16 Even if the judge misspoke when he referenced the fact that this was "a novel situation in which there is no retainer and no fee agreement," it does not appear the judge reduced the rate based on the fact CHLP is a non-profit public interest firm, as he made clear in the enhancement discussion of his opinion that CHLP's profit status had no effect on his decision. See Glaser v. Downes, 126 N.J. Super. 10, 16 (App. Div. l973) (appeals are taken from judgments, not opinions), certif. denied, 64 N.J. 513 (1974). We are not convinced the court's $100 per hour adjustment made to Popiel's assigned hourly rate and its conclusion that an hourly rate of $350 was fair and realistic for the overall work performed on the case was unreasonable and a clear abuse of discretion in light of the information Popiel provided, his experience and skill, and the relevant market.
In essence, Alliance requested a ll0% multiplier, phrased in terms of a l0% adjustment to the lodestar for the results obtained and another l00% multiplier as a fee enhancement. Alliance first contends the trial court's failure to explicitly address its request for the l0% adjustment was a legal error that calls for de novo review. We disagree. The court expressly recognized that the lodestar may be enhanced or reduced based on a number of factors, including a plaintiff's overall success as compared with the relief sought. See R.M., supra, 190 N.J. at 10-12; Furst, supra, l82 N.J. at 21-23; Rendine, supra, 141 N.J. at 336. Based on its downward adjustment to Alliance's raw lodestar request and its conclusion that "[t]he substantial award made in this case represents fair and reasonable compensation for attorneys representing a plaintiff on two appeals, through a three-day trial," it is apparent the court did not find the amount of time expended to be unreasonably low in relation to the results obtained by Alliance.
Alliance next contends the trial court erred in declining to award any enhancement of the lodestar, apparently suggesting that Rendine makes an enhancement virtually automatic to a prevailing party. In Rendine, supra, the Court directed trial judges to consider "whether a case was taken on a contingent basis, whether the attorney was able to mitigate the risk of nonpayment in any way, and whether other economic risks were aggravated by the contingency of payment." Id. at 339 (citation and quotation omitted). The Court additionally directed trial judges to consider the likelihood of success, including "the inherent strength of the prevailing party's claim," as well as the result achieved and the extent of its significance for the public interest. Id. at 340-4l. As the risk of losing constitutes an economic disincentive to representing plaintiffs on a contingent basis in discrimination-related cases and such plaintiffs may not be able to afford representation otherwise, enhancement of the lodestar is warranted to ensure that attorneys will take risky but potentially meritorious cases. Ibid.
The Court set the range of the contingency enhancement in "typical contingency cases at between twenty and thirty-five percent of the lodestar," with a general range of five to fifty percent. Id. at 343. The Court admonished that "[s]uch enhancements should never exceed one-hundred percent of the lodestar," with an enhancement of that magnitude reserved for the "rare and exceptional case" in which there was no mitigation of the risk of nonpayment, no prospect for payment of a percentage of a large damages award, and a significant result of broad public interest. Ibid.However, "[n]owhere does the [Rendine] Court say a fee enhancement multiplier must be awarded in every case." Gallo v. Salesian Soc'y, Inc., 290 N.J. Super. 616, 660 (App. Div. l996). See also DePalma v. Bldg. Insp. Underwriters, 350 N.J. Super. 195, 220 (App. Div. 2002) (affirming trial court's decision to deny enhancement as a reasonable exercise of discretion despite entirely contingent fee and the fact that "success was hardly a sure thing").
Alliance also contends the court's denial of a fee enhancement was based primarily on the judge's misinterpretation of the rationale for fee enhancement set forth in Rendine. Alliance correctly notes that in its opinion the court expressed difficulty in finding counsel as the primary motivator for enhancements under Rendine and incorrectly considered, to some extent, that Alliance made no showing of difficulty in obtaining counsel. In Rendine, supra, the Court declined to condition contingency enhancements on a plaintiff's proof of difficulty in finding an attorney since this condition was "insufficiently related" to the reason for contingency enhancements, assuring a reasonable fee for the prevailing party. 141 N.J. at 341. It explained:
Whether counsel is readily available to a plaintiff by virtue of the prospect of receiving a substantial contingent fee out of the recovery, or difficult to retain because the claim seeks only equitable relief, the justification for enhancement is the same: The recognition that in either case the lodestar amount is not a reasonable fee to be charged to the non-prevailing party because it does not reflect the risk of nonpayment. The [American Bar Association's] knowledge that contingency enhancements are awarded in litigation instituted under fee-shifting statutes surely will increase the availability of attorneys to prosecute those claims, but proof by a plaintiff of difficulty in hiring an attorney is not and should not be a prerequisite to contingency enhancement under New Jersey's fee-shifting statutes. [Ibid.]
In the context of the trial court's entire opinion, however, it is not clear that such finding was the basis for the denial of a fee enhancement to Alliance. The court denied an enhancement because the trial was short, although the overall case was long, and it lacked a vigorous defense from Renaissance, and essentially found this to be a routine case for Popiel. Moreover, in concluding the fee award of $173,267.50 was reasonable without any enhancement, the court properly considered Alliance's strong likelihood of success when it noted, for example, that the only issue at trial was the scope of noncompliance, i.e., the extent and costs of the renovations, not the fact of noncompliance itself, which was admitted by Renaissance.
We are mindful of the Supreme Court's assumption in Rendine, supra, that as a result of the establishment of guidelines the need for appellate supervision of future counsel fee awards under fee-shifting statutes will be infrequent, id. at 345, and of our limited standard of review, i.e., that such fee determinations "will be disturbed only on the rarest occasions, and then only because of a clear abuse of discretion," id. at 317. Under the standards set out in Rendine and its progeny, we are satisfied the $173,267.50 lodestar fee awarded Alliance satisfied the reasonable fee award policy of the NJLAD. We are also satisfied that under all the circumstances the reduction of the hours and hourly rate in the requested lodestar, the denial of any upward adjustment or enhancement of the fee by a multiplier, and the resulting fee award were reasonable exercises of the trial judge's discretion in which we will not intervene.
We last consider Alliance's argument that the court erred with respect to its award of costs in two ways: (l) by failing to consider the costs incurred on remand; and (2) by failing to explain its reason for reducing the costs for work performed pre-appeal. Based on our review of the record, we are persuaded by Alliance's arguments and in the interests of finality exercise original jurisdiction, R. 2:10-5, and modify the cost award.
The trial court stated in its opinion that Alliance sought "an award of more than $19,900. Much of those costs involve payments made to Mr. Jankowicz, plaintiff's construction expert.*fn17 The court will award plaintiff $15,000 towards its costs." In addition to a breakdown of time and costs, Popiel included summary sheets with his fee application, all of which are contained in the appendix. The sheet involving work performed prior to the first appeal listed the accrued costs as $19,913.74 ("initial costs"), which is similar to the request cited by the trial court. Popiel requested $523.68 in costs related to the May 2005 Supreme Court argument and $18,086.30 in post-remand costs (collectively "post-remand costs"). Thus, the total requested costs amount was $38,523.72, approximately double that cited by the trial court. The court makes no mention of the post-remand costs. Nor does it provide any explanation for not compensating Alliance for the full amount of the documented initial costs. Alliance represents that Renaissance did not oppose the request for costs. Renaissance has not responded to this argument in its responsive appellate brief. We thus modify the court's January 21, 2009 order to reflect an award of the full costs claimed ($38,523.72).
Affirmed on both of Alliance's appeals with the exception of modification of the costs award on appeal (A-1456-08T2). Reversed on Renaissance's appeal (A-1573-08T2).