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NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
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 ...