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Atlantic Souvenirs, Vanina's v. South Jersey Gas Company

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


February 1, 2011

ATLANTIC SOUVENIRS, VANINA'S ICE CREAM, COLLECTOR'S WORLD, LEELA IMPORTS/NEXT GENERATION, CITY OF SOUVENIRS, AND MARIO'S PIZZA, PLAINTIFFS-APPELLANTS,
v.
SOUTH JERSEY GAS COMPANY, DEFENDANT, AND KIELY CONSTRUCTION COMPANY, DEFENDANT-RESPONDENT.

On appeal from Superior Court of New Jersey, Law Division, Special Civil Part, Monmouth County, Docket No. DC-024936-08.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted November 16, 2010

Before Judges Carchman and Waugh.

Plaintiffs Atlantic Souvenirs, Vanina's Ice Cream, Collector's World, Leela's Imports/Next Generation, City of Souvenirs, and Mario's Pizza (collectively Atlantic), businesses located or previously located on the 1500 block of the Boardwalk in Atlantic City, appeal the order of the Special Civil Part awarding sanctions in the amount of $2,377.50 to defendants South Jersey Gas Company (South Jersey) and J.F. Kiely Construction Company (Kiely). We affirm.

I.

We discern the following facts and procedural history from the record. On December 24, 2008, Atlantic filed a complaint in the Special Civil Part in Monmouth County against South Jersey and Kiely, seeking damages for economic loss resulting from defendants' nearby construction activities on the Atlantic City Boardwalk. Kiely filed an answer and a cross-claim for contribution and indemnification against South Jersey.

Kiely filed a notice of motion for summary judgment on March 24, 2009. South Jersey filed a cross-motion for summary judgment, seeking indemnification from Kiely. Atlantic opposed Kiely's motion.

Counsel appeared for the scheduled trial date on April 13, 2009. However, Atlantic's designated trial counsel, Gary S. Newman, did not appear, sending two associates to represent his clients in his absence. The trial judge referred the case to mandatory mediation. After the parties failed to reach a settlement, counsel reported back to the judge.

The two associates appearing for Atlantic were unprepared for trial and did not have their clients in court. They requested an adjournment. One associate explained that Newman was out of state and had expected the matter to settle. Kiely and South Jersey opposed the adjournment request, and sought dismissal of the complaint based on Atlantic's inability to proceed. The trial judge then contacted Newman by telephone and discussed Atlantic's request for an adjournment on the record.*fn1

Newman explained that he was observing Passover with his family and had advised his clients not to appear for the April 13, 2009 trial date, based on his good faith belief that the matter would settle during mediation. The judge agreed to adjourn the trial, but only on the condition that Newman would pay defense counsels' fees and expenses for appearing that day.

The trial was adjourned to April 27, 2009. On April 22, Kiely and South Jersey filed motions for attorneys' fees and sanctions pursuant to Rule 1:2-4. South Jersey sought reimbursement for fees, travel time and expenses in the amount of $1,345.10. Kiely sought similar reimbursement in the amount of $1,034.40.

Atlantic opposed both motions. Included in the opposition was a certification by Newman in which he stated that he was out of state for Passover on the trial date. He explained that he did not request an adjournment prior to trial because one of the defendants had expressed an interest in settling the case. He further stated that defendant was to contact his associate regarding settlement. Newman did not, however, specify which defendant expressed an interest in settling. However, according to Newman, that "defendant" did not follow through on contacting his associate regarding settlement.

Despite the fact that his firm had not been contacted by either defendant to discuss settlement prior to trial, Newman decided not to have his clients appear, "hoping the case would resolve" because "[he] had a good faith belief there was a desire on the part of Defendants to resolve the matter." Newman also argued that, in any event, defendants were only entitled to reimbursement for travel time and expenses on April 13, and not for time spent in court or trying to settle the case.

The case was tried on April 27, 2009, and the judge ruled in favor of defendants. She entered an order of dismissal, prepared by counsel from South Jersey, on May 27, 2009. The order made no reference to the pending fee applications.

On August 3, 2009, Kiely's attorney wrote to the judge inquiring about the status of the fee motions, which the Special Civil Part had not scheduled for hearing. The motions were subsequently scheduled for December 11, 2009, but then adjourned.

On February 23, 2010, counsel and the trial judge held a telephonic oral argument of the motions. The judge issued an oral decision on that date, imposing sanctions against Newman & Denburg, LLC, pursuant to Rule 1:2-4. An implementing order was entered on March 12, 2010, awarding $1,345.10 to South Jersey and $1,032.40 to Kiely.

Newman filed an appeal of the sanctions order on behalf of his law firm. The judge supplemented her reasons in a July 22, 2010 letter. South Jersey subsequently settled and has not participated in the appeal.

II.

On appeal, Newman asserts that the trial judge abused her discretion in conditioning the adjournment of the trial on his agreement to pay defense counsels' fees. He also maintains that the fee order violated Rule 4:42-9(d), prohibiting separate fee orders, because the order imposing the sanctions was entered nearly ten months after entry of the May 27, 2009 order dismissing Atlantic's claims with prejudice.

A trial court's award of attorney's fees should not be disturbed unless it constitutes a clear abuse of discretion. Shore Orthopaedic Grp., LLC, v. Equitable Life Assurance Soc'y, 397 N.J. Super. 614, 623 (App. Div. 2008), aff'd, 199 N.J. 310 (2009). Further, the court may award reasonable attorney fees when authorized to do so by rule or statute. Id. at 623-24. A basis to award attorney's fees exists under Rule 1:2-4, which provides:

(a) Failure to Appear. If without just excuse or because of failure to give reasonable attention to the matter, no appearance is made on behalf of a party on the call of a calendar, on the return of a motion, at a pretrial conference, settlement conference, or any other proceeding scheduled by the court, or on the day of trial, or if an application is made for an adjournment, the court may order any one or more of the following: (a) the payment by the delinquent attorney or party or by the party applying for the adjournment of costs, in such amount as the court shall fix, to the Clerk of the Court made payable to "Treasurer, State of New Jersey," or to the adverse party; (b) the payment by the delinquent attorney or party or the party applying for the adjournment of the reasonable expenses, including attorney's fees, to the aggrieved party; (c) the dismissal of the complaint . . . .

The imposition of sanctions pursuant to Rule 1:2-4(a) as a condition of adjournment is not only an appropriate action by a trial court, but is preferable to dismissal of the matter as a sanction for counsel's failure to appear. State v. Audette, 201 N.J. Super. 410, 414-15 (App. Div. 1985); Bayne v. Johnson, 403 N.J. Super. 125, 145 (App. Div. 2008), certif. denied, 198 N.J. 312 (2009) (holding no abuse of discretion occurred in trial court's award of attorney's fees and travel expenses when adjournment was necessary due to defendants' failure to appear).

While a request for an adjournment for religious reasons would have been understandable, Newman never requested such an adjournment. Instead, he sent attorneys who were not prepared for trial and failed to notify his adversaries that no trial could take place that day.

Newman's failure to either appear, request an adjournment, or send associates prepared for trial provided a basis for the imposition of sanctions under Rule 1:2-4(a). We find no abuse of discretion in the judge's decision to condition the adjournment on the payment of counsel fees to opposing counsel. The imposition of counsel fees was a less drastic sanction than dismissal of Atlantic's claims, an available sanction under Rule 1:2-4. The amount of fees was reasonable.

We find no merit in Newman's arguments that the trial judge erred by awarding fees in a separate order. We find them to be totally without merit and not warranting extended discussion in a written opinion. R. 2:11-3(e)(1)(E).

We add only that the sanction was actually imposed at the time of the April 13 adjournment. Counsel for defendants made timely motions to establish the amount of the fees, which motions were filed prior to trial. It was not Kiely's fault that the Special Civil Part failed to schedule the motions in a timely manner. This is not a case in which defendant's motions for fees should be denied as untimely. Cf. Czura v. Siegel, 296 N.J. Super. 187 (App. Div. 1997) (affirming trial court's denial of defendant's motion for fees as untimely when made almost eight months after plaintiff's complaint was dismissed).

Affirmed.


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