September 8, 2010
SOVEREIGN BANK, PLAINTIFF-RESPONDENT,
CALLIE LASCH AND VINCENT ROGGIO, DEFENDANTS-APPELLANTS, AND CALLIE LASCH, THIRD-PARTY PLAINTIFF,
MONDO DEVELOPMENT CORP. AND MONDO PALLON, THIRD-PARTY DEFENDANTS.
On appeal from Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-519-05.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted: May 12, 2010
Before Judges Payne and C.L. Miniman.
Defendants Callie Lasch and Vincent Roggio appeal from a November 21, 2008, judgment in favor of plaintiff Sovereign Bank (Sovereign) in the amount of $182,444.41 for principal, interest, late fees, post-judgment interest, attorneys' fees, and costs due under a promissory note, business loan agreement, and commercial guaranty. We affirm.
On December 17, 2003, Lasch and Sovereign entered into a Business Loan Agreement pursuant to which Sovereign agreed to lend Lasch $100,000. Lasch simultaneously executed and delivered to Sovereign a Promissory Note wherein she promised to pay Sovereign the principal sum of $100,000 plus interest on or before May 15, 2004. Roggio, Lasch's husband, executed a Commercial Guaranty the same day, in which he personally guaranteed payment of Lasch's indebtedness to Sovereign. Among many other provisions, the Promissory Note and Business Loan Agreement each included a "Right of Setoff" clause that gave Sovereign the authority to deduct the amount due on May 15, 2004, from Lasch's accounts at Sovereign. The Promissory Note and Business Loan Agreement also permitted Sovereign to recover attorneys' fees and costs associated with collection proceedings.
On June 4, 2004, Lasch and Sovereign executed a Note Modification Agreement, which Roggio again guaranteed. In its first recital, the Note Modification Agreement stated that on December 17, 2003, Lasch obtained from Sovereign "a Time Loan evidenced by a Promissory Note in the sum of One Hundred Thousand and 00/100 Dollars ($100,000.00) (the 'Principal Amount') bearing the same date (the 'Note')." The second recital stated the Promissory Note's requirement that Lasch repay $100,000 plus interest on May 15, 2004, and make all required monthly interest payments. The third and fourth recitals stated: "Whereas, the outstanding principal balance owing on the Note as of June 3, 2004, is Zero and 00/100 Dollars ($0.00) (the 'Outstanding Balance');*fn1 and Whereas at the request of [Lasch] and in agreement of [Sovereign] the Note will be modified." Based on these recitals, Lasch and Sovereign agreed to extend the "Time Loan" maturity date to December 15, 2004, "on which date all principal, accrued unpaid interest, and fees if any, shall be due and payable in full." The Note Modification Agreement also affirmed Roggio's status as the personal guarantor of Lasch's indebtedness to Sovereign.
Consistent with the terms of these documents, Lasch made monthly interest-only payments on the fifteenth day of each month from January to November 2004. However, the principal sum was not paid when due. On December 22, 2004, Lasch's loan was referred to John Giangrossi, relationship manager for a portfolio of defaulted commercial loans for Sovereign. The loan was forwarded to Sovereign's in-house counsel for the purpose of instituting collection litigation. Sovereign thereafter filed suit on or about January 31, 2005, against Lasch and Roggio seeking judgment for the amount due.*fn2
In 2007 when discovery was proceeding, defendants' attorney sent notices in lieu of subpoenas to various individuals, including Stacy Carbone, a Vice President of Sovereign. Carbone is the former manager of Sovereign's Red Bank branch and was living in Florida in 2007 and at the time of trial. Roggio believed her testimony was "critical to this case." On or about September 29, 2008, Lasch and Roggio, no longer represented by counsel,*fn3 sent a letter to Sovereign's counsel setting forth a list of documents to be produced and employees they wished to depose that Sovereign had "agreed to produce for trial." Carbone was on this list. On October 8, 2008, Sovereign's counsel informed Lasch and Roggio that Carbone's deposition would be taken on October 13. However, on October 14, Sovereign's counsel informed Lasch and Roggio that the deposition was postponed because Carbone had work-related issues. Trial was scheduled for October 20, 2008.
When Roggio raised the issue of Carbone's availability on the day scheduled for trial, Sovereign's counsel informed the judge that Carbone was no longer a bank employee and he had no ability to compel her to appear. He informed the judge of the various efforts he made to arrange for Carbone's deposition. The following day, Sovereign's counsel reiterated Carbone's lack of responsiveness to his requests. Roggio explained that he did not pursue Carbone himself because he relied on the alleged promises and guarantees of Sovereign's counsel that Carbone would be available. Sovereign's counsel then, with court permission, stepped outside the courtroom and called Carbone on his cell phone. During the ensuing conversation, Carbone told Sovereign's counsel that she would only be available Thursday, October 30. The case then moved forward without Carbone's testimony.
After pre-trial proceedings, during which the judge bifurcated the jury trial on the auto loan,*fn4 the case was heard without a jury on October 23, 2008. At this point, Sovereign's records showed that Lasch and Roggio owed $150,378.97, consisting of $100,000.00 in principal, $43,259.03 in unpaid accrued interest, and $7119.94 in late fees. Giangrossi testified that no principal payments on the loan were ever made. Regarding the recital in the Note Modification Agreement stating the loan balance was $0.00, Giangrossi explained that he was not present when the agreement was signed and the reference to a zero balance in the recital was a typographical error. When the loan was referred to him, Giangrossi determined the amount due based on Sovereign's screen system; a printout from the screen reflecting the amount Lasch and Roggio owed was introduced into evidence.
Lasch also testified at the trial. She believed that the $100,000 principal amount was repaid sometime between May 2004 and June 2004 after Roggio's account "was offset to do so." Lasch admitted that she had no documents demonstrating that the loan was repaid in full by her between May and June 2004. Consistent with his wife's testimony, Roggio testified that the loan was paid off sometime between May 17, 2004, and June 2004. He stated that he and Lasch "only found this out when [Sovereign's counsel] sent us this exhibit this week, and that triggered our memory. And we made inquiries to make certain that our memory was correct, that it is correct." Roggio nonetheless admitted that he never received a notification from the bank stating that the loan had been paid in full.
The judge rendered an oral decision after the parties' summations. The judge found Lasch and Roggio jointly and severally liable in the amount of $150,378.97. The judge also found that Sovereign could recover attorneys' fees pursuant to the note's provisions and requested Sovereign to submit a certification as to the proper amount.
On or about November 4, 2008, Sovereign filed a notice of motion for an award of attorneys' fees and costs and entry of judgment. Sovereign also filed a certification in support of the motion, attesting to the quantum of fees sought. Sovereign submitted a supplemental certification on or about November 17, 2008.*fn5 On November 21, 2008, the court, over defendants' opposition, granted Sovereign's motion and awarded $29,670.00 in fees and $1498.92 in costs for a total of $31,168.92. The court also entered a final judgment against Lasch and Roggio, holding them jointly and severally liable for $182,444.41. This amount consisted of: $150,378.97 in principal, accrued interest to October 23, 2008, and late charges; $30.91 per day in post-judgment interest pursuant to Rule 4:42-11, totaling $896.52; and the aforementioned $31,168.92 in fees and costs.
Defendants filed a notice of appeal on January 5, 2009. They raised a variety of evidentiary issues, asserted that the judge abused her discretion in denying a continuance to permit them to depose Carbone, and contended that the judge abused her discretion in awarding post-judgment interest, attorney's fees and costs.
On March 11, 2010, we sua sponte ordered the appeal dismissed without prejudice as to Lasch only because she filed a bankruptcy petition on October 20, 2009, which operated as an automatic stay of the proceedings as against her pursuant to 11 U.S.C.A. § 362. We further ordered that any party was permitted to move to reinstate the appeal as to Lasch if the case had not been disposed of or if the Bankruptcy Court lifted the stay. Finally, we ordered that the appeal as to Roggio would proceed.
Our scope of review of the issues raised in this appeal is very limited. With respect to evidentiary issues, "[a]s a general rule, admission or exclusion of proffered evidence is within the discretion of the trial judge whose ruling is not disturbed unless there is a clear abuse of discretion." Dinter v. Sears, Roebuck & Co., 252 N.J. Super. 84, 92 (App. Div. 1991). See also Hisenaj v. Kuehner, 194 N.J. 6, 12 (2008) (review of evidential ruling is limited to examining the decision for abuse of discretion); Brenman v. Demello, 191 N.J. 18, 31 (2007) (determination of admissibility of evidence is reviewed for palpable abuse of discretion). Reversal is warranted only in cases of a clear abuse of discretion. Purdy v. Nationwide Mut. Ins. Co., 184 N.J. Super. 123, 130 (App. Div. 1982).
A trial court decision will constitute a clear abuse of discretion where "the 'decision [was] made without a rational explanation, inexplicably departed from established policies, or rested on an impermissible basis.'" United States v. Scurry, 193 N.J. 492, 504 (2008) (quoting Flagg v. Essex County Prosecutor, 171 N.J. 561, 571 (2002)). However, if a judge makes a discretionary decision, but acts under a misconception of the applicable law, we need not defer; instead, we must adjudicate the controversy in the light of the applicable law in order that a manifest denial of justice be avoided. State v. Steele, 92 N.J. Super. 498, 507 (App. Div. 1966); Kavanaugh v. Quigley, 63 N.J. Super. 153, 158 (App. Div. 1960).
With respect to a refusal to grant a continuance to depose a witness, "[t]he granting of a continuance is a matter exclusively within the province and sound discretion of the trial judge and should not be upset unless it appears from the record that defendant suffered manifest wrong or injury." In re Elizabeth Educ. Ass'n, 154 N.J. Super. 291, 299 (App. Div. 1977) (citation omitted), certif. denied, 77 N.J. 492 (1978); see also State v. Gallegan, 117 N.J. 345, 354 (1989) (ordinarily, adjournments committed to the discretion of the trial court). A trial court's refusal to continue a trial is reviewed for an abuse of that discretion. See Schweizer v. MacPhee, 130 N.J. Super. 123, 127 (App. Div. 1974) (stating the proposition of law that reversal of discretionary decisions only follows in cases of clear abuse of that discretion).
As to an award of attorneys' fees and post-judgment interest, a fee award is committed to the discretion of the trial judge and is thus reviewed for an abuse of that discretion. Packard-Bamberger & Co. v. Collier, 167 N.J. 427, 443-44 (2001). "'[F]ee determinations by trial courts will be disturbed only on the rarest of occasions, and then only because of a clear abuse of discretion.'" Id. at 444 (quoting Rendine v. Pantzer, 141 N.J. 292, 317 (1995)).
The court's award of post-judgment interest pursuant to Rule 4:42-11(a) is similarly reviewed for an abuse of discretion. Baker v. Nat'l State Bank, 353 N.J. Super. 145, 174 (App. Div. 2002); see also Musto v. Vidas, 333 N.J. Super. 52, 74 (App. Div.) (reviewing an award of pre-judgment interest for an abuse of discretion), certif. denied, 165 N.J. 607 (2000). Although Rule 4:42-11(a) instructs that post-judgment interest shall run from the date of judgment, trial courts are vested with the discretion to vary the award in the interests of equity. Id. at 173 (citing Interchange State Bank v. Rinaldi, 303 N.J. Super. 239, 264 (App. Div. 1997)). The trial court's award of post-judgment interest is, therefore, reviewed for an abuse of discretion. Schweizer, supra, 130 N.J. Super. at 127.
When a party does not object to an alleged trial error, the court's decision is reviewed for plain error. R. 2:10-2; Fitzgerald v. Stanley Roberts, Inc., 186 N.J. 286, 317-18 (2006). "Under that standard, the issue is whether the [decision] had the 'clear capacity for producing an unjust result.'" Fertile v. St. Michael's Med. Ctr., 169 N.J. 481, 493 (2001) (quoting State v. Melvin, 65 N.J. 1, 18 (1974); citing Rule 2:10-2); accord Tartaglia v. UBS PaineWebber Inc., 197 N.J. 81, 128 (2008); Kvaerner Process, Inc. v. Barham-McBride Joint Venture, 368 N.J. Super. 190, 201 (App. Div. 2004). See also Pressler, Current N.J. Court Rules, comment 2 on R. 2:10-2 (2010) ("Plain error" is error "clearly capable of producing an unjust result.").
Roggio first argues that the trial court improperly admitted extrinsic evidence to vary the terms of the Note Modification Agreement. He contends that the trial judge erred in disregarding the "clear language" of the agreement that the outstanding balance on the loan was zero. Roggio claims that instead of "harmoniz[ing] the payment provisions to provide a rational meaning to the language, the [c]court chose . . . to rewrite the agreement to abrogate the parties' stated recognition that no money was due" on the Promissory Note as of June 3, 2004. Roggio then claims that he provided the only rational explanation as to why the Note Modification Agreement recited a zero balance, namely, that Sovereign exercised its right of setoff as provided in the Promissory Note and Business Loan Agreement. Roggio concludes that his and Lasch's testimony in this respect and statements allegedly made by Carbone that the loan had been paid off "negate the speculative assumption that the statement of amount due as of June 3, 2004 was a typographical error."
After detailing why the adduced evidence supports the judgment, Sovereign argues that Giangrossi's testimony that the error was typographical was not the sole basis on which the trial court found that an amount was still outstanding. It asserts that Roggio cannot now complain of Giangrossi's testimony about a typographical error, because Roggio and Lasch elicited that testimony at trial. Regarding the payment history, Sovereign contends that it submitted the document, not to vary the terms of the Note Modification Agreement, but rather, to demonstrate which payments were made and which were outstanding. Sovereign concludes that Roggio's "rational explanation" of the zero-balance recital is in fact irrational because the plain terms of the Note Modification Agreement "show quite differently."
In her oral decision on October 23, 2008, the judge began by reviewing the witnesses' testimony and the documentary evidence. She then found that Lasch and Roggio signed for the loan and were responsible for the loan. The judge also found that payments were made on the loan. In analyzing the zero-balance recital in the Note Modification Agreement, the judge cautioned that the statement could not be taken out of context and the entire agreement must be examined. After reading the other recitals and terms of the agreement into the record, the judge found that the zero-balance recital was a typographical error and "[t]here would be no reason for Ms. Lasch and Mr. Roggio to go to the bank on June 4th, 2004 and sign a modification if the loan was paid. And I find as a fact that it was not." The judge then noted that there was no evidence that the loan was repaid, except for defendants' testimony that they "must have paid it." Instead, "[a]ll the evidence set forth by [Sovereign] shows that the note was not paid." This included the interest-only payments and the printout showing the $100,000 outstanding balance. Based on all the evidence, the judge concluded that Lasch was responsible for the entire amount of the note, as was Roggio as the guarantor. They were held jointly and severally liable.
At its core, Roggio's argument is that the trial judge erred when she examined evidence other than the zero-balance recital in concluding that the recital was a typographical error, the loan was not repaid, and they were liable for the balance due. Generally, "the parol evidence rule prohibits the introduction of evidence that tends to alter an integrated written document." Conway v. 287 Corporate Ctr. Assocs., 187 N.J. 259, 268 (2006). However, that general rule no longer applies where the agreement itself is ambiguous. Then, parol evidence is admissible to determine the intent of the parties. Id. at 268-69.
Here, the Loan Modification Agreement was clearly ambiguous. Preparing and executing such an agreement after a loan has been paid in full renders the entire document a nullity immediately. There is simply no reason for anyone to sign such a document. Thus, resort to parol evidence was required to construe the agreement and resolve the ambiguity in the recital. In any event, Roggio and Lasch elicited the testimony from Giangrossi; they cannot complain of it now. Harris v. Peridot Chem. (N.J.), Inc., 313 N.J. Super. 257, 296 (App. Div. 1998) (trial errors induced by party claiming error generally cannot support reversal on appeal).
Moreover, the trial judge discredited defendants' testimony about the loan being repaid, a credibility determination to which we must defer. Monogram Credit Card Bank of Ga. v. Tennesen, 390 N.J. Super. 123, 126 (App. Div. 2007) (quoting State v. Locurto, 157 N.J. 463, 474 (1999)). By finding defendants not credible, the court properly interpreted the Note Modification Agreement in light of the other evidence, including the parties' conduct, such as Lasch's interest-only payments after the agreement was executed. That evidence fully supported the judge's fact-finding that the loan remained unpaid at the time of trial.
Roggio's second argument is that the trial judge abused her discretion in barring statements attributed to Carbone as inadmissible hearsay. During Roggio's testimony, Sovereign's counsel asked him to specify the date on which the loan was allegedly paid in full. The following exchange then took place:
MR. ROGGIO: I can't give you the exact date, because when I went into the bank the other day, the person I spoke to who was familiar with this situation --
MR. MANNING: Your Honor, we're getting into hearsay, and I don't think --
THE COURT: We have a lot of hearsay in here. I don't understand about Ms. Carbone. Wasn't that hearsay? There's an objection. You can't tell us what somebody else told you.
Roggio contends on appeal that the person to whom he was referring was Carbone and her statements were admissible as vicarious admissions binding on Sovereign pursuant to N.J.R.E. 803(b)(4). He argues that the judge's "erroneous disallowance of Ms. Carbone's out of court statements obviated the need for plaintiff to produce . . . witnesses to rebut the claim that Mr. Roggio's account balances were applied to the outstanding loan amounts."
Sovereign argues that Lasch and Roggio have misinterpreted the foregoing testimony because the testimony does not actually identify Carbone. According to Sovereign, "Roggio was not attempting to testify to what Carbone told him because she was not employed by Sovereign 'the other day.'" Sovereign also contends that, even if the trial court did preclude Roggio from testifying as to what Carbone said about payment of the loan, the error did not constitute reversible plain error because Lasch had previously testified that Carbone confirmed payment of the Promissory Note.
Under N.J.R.E. 803(b)(4), "[a] statement offered against a party which is . . . a statement by the party's agent or servant concerning a matter within the scope of the agency or employment, made during the existence of the relationship" is not excluded by the hearsay rule. This rule "sanctions the admissibility of admissions made by agents, employees, or representatives at any time prior to termination of the agency, employment, or representative relationship when the admissions related to matters within the performance duties of the agent, representative, or employee." Biunno, Current N.J. Rules of Evidence, comment 4 on N.J.R.E. 803(b) (2009). The statements need not be made "while the agent is actually technically engaged in his agency duties to be admissible." Ibid.
Any statement made by Carbone at "the bank the other day" was not admissible under the rule because Lasch had not been employed by Sovereign for more than a year. Additionally, any abuse of discretion in excluding this testimony was harmless. When asked whether the loan was paid off, Lasch testified she was "told by Stacey Carbone that the loan had been paid off and that there was a new loan." On cross-examination, Lasch further testified that Carbone told her and Roggio that "there would be a new note to be signed for $100,000." Roggio made no proffer of his testimony respecting Carbone's statement and thus has not established any prejudice from the judge's ruling precluding his testimony in this respect.
We are satisfied the trial judge did not abuse her discretion in sustaining the objection to the hearsay testimony, because her decision did not rest on an impermissible basis. Scurry, supra, 193 N.J. at 504. Even if the judge did abuse her discretion, there was no prejudicial error.
Roggio next asserts that Sovereign failed to establish a proper foundation to admit certain records under the business- records exception to the hearsay rule, and the judge, therefore, improperly admitted the documents. Roggio specifically challenges exhibits P-5 (the screen printout) and P-6 (the payment history). Roggio contends that Giangrossi was not competent to testify as to how the documents were prepared or if they were made in the regular course of business, because he was not from the bank department that generated the data. Roggio claims that the documents were not issued in the regular course of business before inception of this suit and are "nothing more than the work product of a post-default 'relationship manager' in preparation for trial." Roggio therefore concludes that, even though they did not object at trial, it was plain error for the court to accept the exhibits into evidence.
After carefully reviewing the record in light of the written arguments advanced by the parties, we conclude that the issues presented by Roggio do not warrant extended discussion in this opinion. R. 2:11-3(e)(1)(E), and affirm admission of these two documents into evidence. We add briefly that the business-records exception does not apply only to documents created before a controversy arises. Carmona v. Resorts Int'l Hotel, Inc., 189 N.J. 354, 380 (2007).
Giangrossi identified P-5 as a "screen snapshot" of the amount due on the account, which he retrieved from the computer records. He stated that the information contained in the printout was prepared by a person who had knowledge of its contents and was inputted at or near the time that the Promissory Note was made in December 2003. Giangrossi further testified that it was Sovereign's regular practice to make such records and records like the printout were kept in the ordinary course of Sovereign's business activities. Giangrossi then testified as to the contents of the printout. Exhibit P-5 was admitted into evidence without objection. This was an adequate foundation under N.J.R.E. 803(c)(6).
Exhibit P-6 is a summary of Lasch's payment history. The exhibit shows that Lasch made eleven payments from January 2004 to November 2004 on the fifteenth of each month in amounts ranging from $402.78 to $495.14. The exhibit also shows the amount of interest that accrued each month and the total interest accrued as of October 20, 2008, which equaled $43,254.80. Giangrossi testified during cross-examination that exhibit P-6 was a payment history on the Promissory Note that he prepared and gave to counsel. He testified as to the document's contents. On redirect examination, Giangrossi reiterated that he prepared the exhibit from the screen system available at Sovereign. This, too, was an adequate foundation under N.J.R.E. 803(c)(6).
N.J.R.E. 803(c)(6) does not require testimony of the custodian or other qualified witness as a condition for admission of the business record; rather, the required foundation may be laid by proof that would satisfy a trial judge in a hearing under N.J.R.E. 104(a). N.J.R.E. 803(c)(6) (Supreme Court Committee Comment). However, "[i]f the purpose for which the record was prepared was the anticipation of or the use in litigation, it should be subjected to special scrutiny for trustworthiness." Ibid. (citing Palmer v. Hoffman, 318 U.S. 109, 111-16, 63 S.Ct. 477, 479-82, 87 L.Ed. 645, 648-51 (1943)). Because P-6 was prepared from P-5, it was clearly trustworthy. Even were it not, no objection was made at trial, and its admission was not plainly erroneous. R. 2:10-2. Computer-generated business records are not subject to any special evidentiary requirements. Biunno, Current N.J. Rules of Evidence, comment 2 on N.J.R.E. 803(c)(6) (2009) (citing Carmona, supra, 189 N.J. at 380).
Roggio contends that the judge impermissibly considered a letter dated December 2, 2004, sent by defendants' former counsel to Sovereign. In the letter, defendants' former counsel references the loan number (#0050948822-18) and a previous letter in which Sovereign proposed a settlement of the loan through payment of $100,503.48 by December 15, 2004. Former defense counsel stated he was authorized counter-offer to reduce the settlement amount by $20,000 for the damages Lasch suffered as a result of Sovereign's negligence in dealing with the car loan. The judge accepted the letter into evidence for the limited purpose of establishing the loan number to which counsel was referring. Roggio claims the trial judge's consideration of the letter for that sole purpose was "disingenuous" and violated N.J.R.E. 408. Roggio concludes that the trial judge "plainly erred in basing its finding of liability, in whole or part, upon the contents of [former counsel's] letter."
In response, Sovereign points out that N.J.R.E. 408 allows introduction of settlement negotiations for a purpose other than proving liability. Sovereign argues that the letter shows that six months after the alleged payment of the loan, defendants were claiming entitlement to a $20,000 set-off and made no claim of actual payment. Sovereign also claims that the letter was properly offered to impeach defendants' oral testimony of payment, and hence there was no violation of N.J.R.E. 408. Finally, Sovereign claims that even if the trial court erred in admitting the letter, it was not plain error because the other evidence supported the ruling.
Sovereign introduced the December 4, 2004, letter during cross-examination of Roggio. Roggio recognized the letter and testified as to its contents. Despite the letter and the statements therein, Roggio maintained that the loan had been paid off six months earlier. During her oral opinion, the trial judge discussed the letter, noting that she was "not using that note to talk about settlement negotiations" but could "consider what was said in that note." She then described the letter's contents. Later in the opinion, she again examined the letter. She noted that she was "reviewing it for the purposes of noting that [defendants' former counsel] mentioned a commercial line of credit, a commercial loan, and he puts [loan] numbers in two parts of his letter. Both of those numbers comport with the numbers for the Bank."
N.J.R.E. 408 governs the admissibility of settlement offers and negotiations. The rule states:
When a claim is disputed as to validity or amount, evidence of statements or conduct by parties or their attorneys in settlement negotiations, with or without a mediator present, including offers of compromise or any payment in settlement of a related claim, shall not be admissible to prove liability for, or invalidity of, or amount of the disputed claim. Such evidence shall not be excluded when offered for another purpose; and evidence otherwise admissible shall not be excluded merely because it was disclosed during settlement negotiations.
Importantly, "[t]he rule permits the use of evidence arising out of settlement negotiations for purposes other than proving liability or the amount of damages." N.J.R.E. 408 Supreme Court committee comment.
The transcript of Roggio's cross-examination demonstrates that the letter was not introduced to prove liability. Rather, Sovereign introduced the letter in an attempt to contradict and rebut Roggio's testimony that the loan had been repaid. Introduction of the letter on this premise was therefore consistent with N.J.R.E. 408. The transcript of the judge's decision evinces a similar conclusion in that the judge stated multiple times that she was not considering the letter for liability purposes, but rather for other purposes.
Furthermore, even if the judge impermissibly considered the letter as evidence of liability, there was no plain error. The other evidence adduced at trial established liability on the part of Lasch and Roggio. This included the Promissory Note, the Business Loan Agreement, the Note Modification Agreement, the computer screen printout, and Giangrossi's testimony. Therefore, consideration of the settlement offer as proof of liability would not have prejudiced defendants and was therefore not "clearly capable of producing an unjust result." Pressler, Current N.J. Court Rules, comment 2 on R. 2:10-2 (2010).
In Roggio's second point on appeal, he claims that the trial judge abused her discretion in refusing to grant a reasonable continuance to obtain the deposition of Carbone. Roggio states that Sovereign's counsel advised defendant that he would produce Carbone for a deposition and they reasonably relied on his representations. Roggio reasons that based on this representation, the critical nature of Carbone's testimony to their case, and the absence of juror commitments in this non-jury case, the judge "should have exercised her discretion to allow a reasonable amount of time for the parties to conduct a telephonic deposition of Ms. Carbone to be used at trial." He concludes that the trial judge "had no rational reason for refusing a reasonable continuance" and her decision constituted reversible error.
Sovereign asserts that the judge did not abuse her discretion in refusing to grant a continuance for several reasons. First, defendants were represented for over three years before counsel withdrew, and their counsel did not take any depositions during that period. Second, defendants, while acting pro se from March 2008 through trial, did not attempt to take any depositions "until after the discovery end date." Third, defendants "made no effort to secure Ms. Carbone's testimony through their own efforts," instead relying on the attempts at accommodation made by Sovereign's counsel. Sovereign also claims that defendants testified to what they contend Carbone would have said, specifically, that the Promissory Note was paid off and the Note Modification Agreement was actually a new note; therefore, they were not prejudiced by Carbone's absence.
Under Rule 4:36-3(b), "[a]n initial request for an adjournment for a reasonable period of time to accommodate a scheduling conflict or the unavailability of . . . a witness shall be granted if made timely in accordance with this rule." Such a request "should be made as soon as the need is known but in no event, absent exceptional circumstances, shall such request be made later than the close of business on the Wednesday preceding the Monday of the trial week." R. 4:36-3(b). "Requests made after the specified time will be granted only in exceptional circumstances[.]" Pressler, Current N.J. Court Rules, comment 3.2 on R. 4:36-3(b) (2010).
A continuance should generally be granted for legitimate reasons, including the unavailability of a necessary witness. State v. Tsetsekas, 411 N.J. Super. 1, 12 (App. Div. 2009).
"However, every rule has its limits. Postponement requests must be considered, in part, in light of preparation efforts. If they are not, parties will have no incentive to prepare." Ibid. (internal quotations and citation omitted).
Defendants first raised the issue of a continuance on October 20, 2008, the date the trial was scheduled to begin. This request was clearly made outside the time period permitted by Rule 4:36-3(b). Moreover, Roggio has not pointed to any exceptional circumstances excusing defendants' delay in making the request that would allow them to obtain a continuance despite the lateness of their request. Indeed, the only facts Roggio cites in support of his argument are the statements of Sovereign's counsel regarding his attempts at accommodating their desire to depose Carbone. Defendants' failure to comply with Rule 4:36-3(b) cannot be excused.
The precepts outlined in Tsetsekas, supra, 411 N.J. Super. at 12, serve as a second basis for rejecting Roggio's arguments. This case was pending for more than three and one-half years before it finally went to trial, discovery expired on November 4, 2006, and defendants were represented by counsel until May 9, 2008. Even though Roggio should not be penalized for counsel's failure to secure Carbone's deposition, Kosmowski v. Atlantic City Medical Center, 175 N.J. 568, 575 (2003), he himself failed to secure Carbone's testimony in the five and one-half months he was acting pro se between counsel's dismissal and the trial date. Defendants knew of the allegedly critical nature of Carbone's testimony, yet instead of personally attempting to obtain her testimony, they relied on the efforts of Sovereign's counsel. Their failure to prepare for trial justifies the judge's denial of their request for a continuance. Tsetsekas, supra, 411 N.J. Super. at 12.
Based on the foregoing, it is clear that the judge did not abuse her discretion in refusing to grant Lasch and Roggio a continuance. Although she did not cite Rule 4:36-3(b) or Tsetsekas, supra, 411 N.J. Super. at 12, in denying defendants' request, her decision was consistent with the relevant law and therefore rested on a permissible basis. As such, her decision was not an abuse of discretion. Scurry, supra, 193 N.J. at 504.
In his final argument, Roggio challenges the awards to Sovereign of attorneys' fees and costs and post-judgment interest as not justified by the documentation Sovereign submitted. Roggio states that Sovereign's counsel failed to indicate "what portion of each invoice represented charges for defense of the counterclaim." He argues that by accepting "summary invoices with no itemization of the services performed and the time expended," the court "could not possibly have made a determination of the reasonableness of the charges" under Rule of Professional Conduct 1.5(a). Roggio also claims that the award of post-judgment interest was inappropriate because the judgment provided that post-judgment interest began accruing on October 23, 2008, before the judgment had been entered. Defendants' second claimed error is that the post-judgment interest rate in 2008 was 5.5%, which equates here to $22.97 per day, not the $30.91 per day awarded by the court. Roggio, therefore, seeks vacation of both awards.
Sovereign contends that the trial court awarded fees and calculated post-judgment interest correctly. Sovereign urges rejection of Roggio's argument that the award of fees was improper due to Sovereign's alleged failure to submit full invoices because "the law does not require them." Citing Rule 4:42(9)(b) and Rendine, supra, 141 N.J. 292, Sovereign asserts that it submitted the requisite information, including identities and experience levels of attorneys, specific services provided, hours expended by each attorney, and relevant billing periods. Sovereign, therefore, concludes that Roggio's arguments "are completely unfounded in both law and fact." Sovereign similarly argues that the award of post-judgment interest was correct because the court entered a judgment from the bench on October 23 and the interest rate set by the court was consistent with Rule 4:42-11(a)(iii).
On November 4, 2008, counsel filed a certification in support of Sovereign's motion for award of attorneys' fees and costs. Counsel certified that his firm had a fee agreement with Sovereign at a flat rate of $230 per hour, which was a reduction from counsel's standard rate of $340 per hour. Counsel explained the fees incurred as seen in invoices or time sheets for ten individual months between November 2006 and November 2008. Counsel specified the names and titles of attorneys, specific number of hours worked, miscellaneous expenses incurred, and character of work performed. Appendix A to the certification included nine invoices sent to Sovereign.
The trial judge placed an oral decision on the record, explaining that Sovereign sought payment for 129 hours of work at a rate of $230 per hour, for a total of $29,670, plus $1498.92 in expenses. The judge stated that, while the invoices counsel submitted to Sovereign were not detailed, the attorney did submit an affidavit explaining each invoice in detail. The judge noted that counsel reduced the total fees incurred by twenty percent, which was his estimation of the proper allocation between the case that settled and the case that went to trial. After reviewing the affidavit, the judge "conclude[d] that the fees requested are fair and reasonable and adequately explained." A total amount of $31,168.92 was awarded. The judge also entered an order memorializing this award and finalizing the judgment. This order included an award of $30.91 per day in post-judgment interest pursuant to Rule 4:42-11, for a total of $896.52.*fn6
We have examined the record and the judge's decision and conclude that the fee award complied in all respects with controlling Supreme Court law. See Litton Indus., Inc. v. IMO Indus., Inc., 200 N.J. 372, 386 (2009) (the test for reasonable attorneys' fees in contract cases is that used in other attorneys' fee-award cases; requesting party must establish that suit was causally related to securing the relief obtained and a fee award will be justified if the party's efforts were necessary and important in obtaining relief); Furst v. Einstein Moomjy, Inc., 182 N.J. 1, 25 (2004); (application should be sufficiently detailed to allow a trial court to determine the nature of the work performed, who performed the work, the reasonableness of the hourly rate, and the hours expended); Rendine, supra, 141 N.J. at 336-37 (same).
Last, we consider Roggio's claim that the award of post-judgment interest was in error. Rule 4:42-11(a) governs awards of post-judgment interest. The rule states in pertinent part:
Except as otherwise ordered by the court or provided by law, judgments, awards and orders for the payment of money, taxed costs and counsel fees shall bear simple interest as follows:
(ii) For judgments not exceeding the monetary limit of the Special Civil Part at the time of entry, regardless of the court in which the action was filed: commencing January 2, 1986 and for each calendar year thereafter, the annual rate of interest shall equal the average rate of return, to the nearest whole or one-half percent, for the corresponding preceding fiscal year terminating on June 30, of the State of New Jersey Cash Management Fund (State accounts) as reported by the Division of Investment in the Department of the Treasury.
(iii) For judgments exceeding the monetary limit of the Special Civil Part at the time of entry: in the manner provided for in subparagraph (a)(ii) of this Rule until September 1, 1996; thereafter, at the rate provided in subparagraph (a)(ii) plus 2% per annum.
This judgment clearly exceeds the monetary limit of the Special Civil Part. The Publisher's Note immediately following Rule 4:42-11 lists the annual rates; for the 2008 calendar, the annual rate was 5.5%, plus the two-percent increase. Pressler, Current N.J. Court Rules, Publisher's Note on R. 4:42-11(a) (2010).
"[T]he rule indicates that interest normally shall run from the date of judgment," and a trial court may in its discretion vary the award in the interests of equity. Baker, supra, 353 N.J. Super. at 173. In Baker, we held that the trial court did not abuse its discretion in ordering interest to accrue from the date of the jury verdict because the rules provided the court with latitude to deviate from them and a consent order was entered that made the compensatory damages award in the case enforceable with an award of interest from the date of the verdict. Id. at 174. In so ruling, we rejected the appellant's argument that interest should not have started accruing until the verdict was memorialized in the subsequent court order. Id. at 173-74.
Even if there were some error in the award of post-judgment interest, Roggio was not prejudiced. The applicable rate under Rule 4:42-11(a) was 7.5%, and the pre-judgment rate of interest on the promissory note was 8.5%. Roggio was not prejudiced by a reduction of the interest due between October 23, 2008, and the date of judgment.