On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-2192-10.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Waugh and St. John.
Defendants MLZ Corporation, LLC (MLZ), and its principal Michael Zimmermann appeal from the order of the Law Division denying their motions for an award of counsel fees against plaintiff Thomas J. Mallon and his attorneys Randall L. Tranger and Michael D. Halbfish. We affirm.
On April 30, 2010, Mallon filed suit against MLZ, Zimmermann, and others with respect to damage caused by groundwater leaking into the basement of his residence, which had been built by MLZ and Zimmermann. Earlier litigation against MLZ and Zimmermann brought by prior owners of the residence had been settled and dismissed with prejudice.
In June 2010, MLZ and Zimmermann served a frivolous litigation notice on Mallon pursuant to Rule 1:4-8, demanding that the complaint be dismissed. The notice asserted that Mallon's claim was barred by the doctrine of res judicata because of the dismissal with prejudice of the suit filed by his predecessors in title and was not otherwise well founded in fact or law. A second notice was served in November, premising the demand for dismissal on the additional ground that Mallon's suit was barred by the applicable statute of limitations. Mallon declined to withdraw the complaint in response to either notice.
MLZ and Zimmermann moved for summary judgment, arguing that Mallon's claims were barred by both res judicata and the statute of limitations. Following the argument on March 18, 2011, the motion judge delivered an oral decision in which he found that Mallon's claims against MLZ and Zimmermann were not barred by res judicata. However, the judge concluded that the claims were barred by the statute of limitations. He entered an order of dismissal with prejudice.
On March 31, 2011, MLZ and Zimmermann filed a motion seeking sanctions by way of counsel fees against Tranger and Halbfish, pursuant to Rule 1:4-8, and against Mallon, pursuant to N.J.S.A. 2A:15-59.1. The motion was argued before a different judge on May 27, 2011. The second judge denied the motion in an oral decision. She entered an appropriate order the same day. This appeal followed.*fn1
On appeal, MLZ and Zimmermann argue that the second judge erred in refusing to award counsel fees. Mallon, Tranger, and Halbfish argue that the judge did not abuse her discretion because they had a good faith belief that Mallon's claim was legally and factually viable.
As a general proposition, the parties in civil litigation must bear their own counsel fees, even if they are the prevailing party. There are exceptions to the general rule, as set forth in Rule 4:42-9. They include fee shifting ...