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THE LAW OFFICES OF GOLD, ALBANESE, BARLETTI & VELAZQUEZ v. JERSEY CITY MUNICIPAL UTILITIES AUTHORITY

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


December 1, 2010

THE LAW OFFICES OF GOLD, ALBANESE, BARLETTI & VELAZQUEZ, PLAINTIFF-APPELLANT,
v.
JERSEY CITY MUNICIPAL UTILITIES AUTHORITY, ITS AGENTS, SERVANTS, AND/OR EMPLOYEES, EXECUTIVE DIRECTOR THOMAS KANE, CHAIRMAN HOWARD JACKSON, COMMISSIONER MARGARET DOYLE, COMMISSIONER GEORGE KELLY, COMMISSIONER KATHLEEN HARTYE, COMMISSIONER EILEEN GAUGHAN, FIRST ALTERNATE COMMISSIONER WILLIAM MACCHI, SECOND ALTERNATE COMMISSIONER JANET GAITA, INDIVIDUALLY AND IN THEIR OFFICIAL CAPACITIES AS COMMISSIONERS OF THE JERSEY CITY MUNICIPAL UTILITY AUTHORITY, DEFENDANTS-RESPONDENTS.

On appeal from Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-5270-05.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted November 3, 2010 - Decided

Before Judges Parrillo and Espinosa.

The law firm of Gold, Albanese, Barletti & Velazquez (Gold or plaintiff) appeals from a Law Division order denying its application for attorney's fees associated with its litigation against defendant Jersey City Municipal Utilities Authority (JCMUA) seeking payment of outstanding bills for legal services. We affirm.

This is the third time this dispute over legal fees between Gold and the JCMUA has come before this court. The salient facts were briefly summarized in our recent unpublished opinion, Law Offices of Gold, Albanese, Barletti & Velazquez v. Jersey City Municipal Utilities Authority, Docket No. A-5849-07 (App. Div. July 24, 2009) (Gold II), certif. denied, 200 N.J. 548 (2009):

In short, the dispute arises from two agreements for the performance of legal services by Gold that were reached in June 2004. The Authority authorized the retention of Gold by resolution. Each agreement contained a provision that acknowledged that the parties were unable to "anticipate the amount of legal services that may be required under [the] Agreement." A pre-approved amount of fees was allocated to each agreement with a total pre-approved amount of $115,000. [slip op. at 2.]

Gold filed a complaint against the JCMUA on October 20, 2005, for unpaid legal fees in the amount of $162,551.53, representing $64,213.55 due on the balance of the professional services contract*fn1 executed pursuant to the Local Public Contracts Law, N.J.S.A. 40A:11-1 to -51, and $98,337.98 in excess of the pre-approved amount of fees under the agreement. On summary judgment, the Law Division found the JCMUA was obligated to pay only $64,213.55. On appeal, we reversed and remanded for further proceedings, including discovery to determine the proper amount Gold was entitled to recover. Law Offices of Gold, Albanese, Barletti & Velazquez v. Jersey City Mun. Utils. Auth., Docket No. A-0875-06 (App. Div. Mar. 13, 2008) (slip op. at 9) (Gold I).

Following a bench trial, the Law Division entered judgment in favor of Gold for the $98,537.98 sum in dispute and, in addition, for $74,797.82 in counsel fees pursuant to N.J.S.A. 59:9-5. On appeal, we affirmed the former award on unjust enrichment grounds, but reversed and remanded for a "full and fair consideration of plaintiff's application for attorney's fees pursuant to N.J.S.A. 59:9-5, consistent with the applicable principles set forth in Furey v. County of Ocean, 287 N.J.

Super. 42, 46 (App. Div.), certif. denied, 144 N.J. 379 (1996)." Gold II, supra, slip op. at 7. On remand, the Law Division judge denied Gold's application for attorneys' fees, finding no entitlement "under N.J.S.A. 59:9-5 or any other statute or law":

I specifically find that N.J.S.A. 59:9-5 is not applicable to this matter because N.J.S.A. 59:1-4 and relevant case law provide that claims against public entities that sound in contract are not governed by the New Jersey Tort Claims Act, N.J.S.A. 59:1-1, et seq. N.J.S.A. 59:1-4 provides that: "[n]othing in this act shall affect liability based on contract or the right to obtain relief other than damages against the public entity or its employees." To consider Plaintiff's application for counsel fees pursuant to N.J.S.A. 59:9-5, when this statute does not govern the instant matter, would be inconsistent with the holding in Furey since doing so would prove inconsistent with the statute's purpose and the Legislature's intent that the awarding of such fees serve the public interest.

Here, the instant matter is not based upon negligence, loss or destruction of property or any other type of "tort liability." This is a case for the collection of legal fees from a former public entity client for legal services performed by Plaintiff, and this dispute sounds clearly in contract. For the foregoing reasons, I find that the Tort Claims Act does not govern this case and N.J.S.A. 59:9-5 is not applicable.

I further find that no other statute or law would provide for the granting of attorney's fees to Plaintiff. Rule 4:42-9 sets forth limited actions in which an award of attorney's fees are permissible, but the instant action does not fall within the purview of this Rule.

We agree.

The basic approach and philosophy regarding the allowance of counsel fees in New Jersey is "that sound judicial administration is best advanced if litigants bear their own counsel fees." State, Dep't of Envtl. Prot. v. Ventron Corp., 94 N.J. 473, 504 (1983). Following this "strong policy disfavoring shifting of attorneys' fees[,]" North Bergen Rex Transport, Inc. v. Trailer Leasing Co., 158 N.J. 561, 569 (1999), "unless legal fees are authorized by statute, court Rule, or contract, they are not recoverable." Satellite Gateway Commc'ns, Inc. v. Musi Dining Car Co., 110 N.J. 280, 285 (1988).

Rule 4:42-9(a) states the general rule that "[n]o fee for legal services shall be allowed in the taxed costs or otherwise . . . ." The rule then enumerates eight exceptions in which attorney fees may be awarded: (1) in a family action; (2) out of a fund in court; (3) in a probate action; (4) in an action for the foreclosure of a mortgage; (5) in an action to foreclose a tax certificate or certificates; (6) in an action upon a liability or indemnity policy of insurance; (7) as expressly provided in the court rules; and (8) in all cases where counsel fees are permitted by statute. R. 4:42-9(a)(1)-(8).

The instant action for breach of contract or unjust enrichment arising under the Local Public Contracts Law does not fall into any of the exceptions listed in Rule 4:42-9(a)(1)-(8). Simply stated, there is no court rule or statute that permits an attorney fee in this matter. Gold's contention to the contrary, N.J.S.A. 59:9-5, the fee shifting provision of the Tort Claims Act, N.J.S.A. 59:1-1 to 59:12-3, is not applicable to claims, such as the present one, for unpaid legal services rendered pursuant to a public services contract. See N.J.S.A. 59:1-4; see also Ramapo Brae Condo. Ass'n v. Bergen Cty. Hous. Auth., 328 N.J. Super. 561, 576 (App. Div. 2000) (noting that breach of contract claims do not fall under the Tort Claims Act), aff'd, 167 N.J. 155 (2001); Slocum v. Borough of Belmar, 233 N.J. Super. 437, 438-40 (Law Div. 1989) (holding that an action for injunctive relief requiring a township to set its future beach fees at a level that generates revenue to match expenses did not fall under the Tort Claims Act because it was "not an action for negligence, loss or destruction of property or any other type of 'tort liability'" and instead "could be classified as equitable relief for defendant's unjust enrichment.").

In Furey, supra, we reviewed a trial court's denial of attorneys' fees under N.J.S.A. 59:9-5 in a wrongful death and survival action against Ocean County and its road foreman. 287 N.J. Super. at 43-46. In that context, we held that a contingency fee arrangement would not preclude an award of attorneys' fees under the Tort Claims Act. Id. at 46. While noting that the fee-shifting provision's "'underlying policy as to damages . . . is to reimburse an injured claimant to the full extent of his present and projected economic loss[,]'" id. at 44 (quoting Report of the Attorney General's Task Force on Sovereign Immunity, 238 (1972)), we also recognized that trial judges, in the exercise of their discretion, "must also show an appreciation of the fact that when dealing with a governmental entity, whether insured or not, the cost is ultimately borne by the public." Id. at 46.

Furey, unlike here, involved tort liability of a governmental entity. As noted, N.J.S.A. 59:9-5 has no application to actions "based on contract or the right to obtain relief other than damages against the public entity or one of its employees." N.J.S.A. 59:1-4. Gold's argument, to the contrary, relies exclusively on the prefatory language of N.J.S.A. 59:1-1, describing "[a]n Act concerning claims against the State and other public entities relating to tort and contract . . . and establishing . . . Title 59 of the New Jersey Statutes. Claims Against Public Entities. L. 1972, c. 45." (emphasis added). It is clear, however, that the underscored language refers to Title 59 as a whole, which is comprised of two distinct subtitles: the New Jersey Tort Claims Act, N.J.S.A. 59:1-1 to 59:12-3, and the New Jersey Contractual Liability Act, N.J.S.A. 59:13-1 to -10. See, e.g., Allen v. Fauver, 167 N.J. 69, 75 (2001) ("The legislative response to the issue of abrogation of sovereign immunity for tort and contract liability came in 1972 in the form of the Tort Claims Act . . . and the Contractual Liability Act . . . ."); N.J. Educ. Facilities Auth. v. Gruzen P'ship, 125 N.J. 66, 69 (1991) ("The Legislature responded by enacting the Tort Claims Act . . . and the Contractual Liability Act . . . ."). Obviously, the fee-shifting provision of N.J.S.A. 59:9-5 is part of the Tort Claims Act and therefore has no applicability to actions other than those contained therein. Having no basis in any statute, rule or case law, Gold's application for attorney's fees was properly denied by the Law Division.

Affirmed.


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