The opinion of the court was delivered by: Justice Hoens
(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized.)
Moses Segal v. Cynthia Lynch and Linda A. Schofel
Argued April 25, 2012 -- Decided August 2, 2012
HOENS, J., writing for a majority of the Court.
In this appeal, the Court considers the nature and extent of fees that may be recovered from a litigant in a matrimonial dispute by an individual who has been appointed to serve as a parenting coordinator.
Plaintiff Moses Segal and defendant Cynthia Lynch, who is not a party to this appeal, had a common-law marriage in Canada as a result of which they had two children. Segal and Lynch separated in 2001. Thereafter, Lynch and the children moved to New Jersey. In 2006, Segal commenced litigation against Lynch in New Jersey for joint custody and extended parenting time. Utilizing the framework of the Parenting Coordinator Pilot Program, the court appointed respondent Linda A. Schofel to serve as a parenting coordinator in the parties' custody dispute. The court's order, dated April 5, 2007, which followed the form that was included in the pilot program's Implementation Guidelines, set forth a variety of provisions governing the parties and the parenting coordinator, including the mechanism by which grievances against the parenting coordinator could be raised and resolved. The Guidelines contain other provisions, including the requirement that the parenting coordinator use a retainer agreement to set forth fees and expenses, the manner in which disputes about payment of the parenting coordinator's fees are to be addressed, and additional details governing the grievance procedure.
Schofel has a master's degree in social work and is also a New Jersey licensed attorney. In accordance with the requirements of the Guidelines, she presented her proposed retainer agreement to Segal and Lynch; both signed the agreement on May 7, 2007. A series of disputes between Segal and Schofel erupted that culminated in numerous orders issued by the trial court, four of which form the basis for the issues now before this Court. The disputes centered on fees Schofel charged for her work as a parenting coordinator, fees she sought for the time she spent compiling her response to grievances that Segal raised about her work as the parenting coordinator, fees she requested in connection with Segal's demands that she appear and participate in discovery, fees she sought for her involvement in a dispute about Segal's attempt to depose other members of her law firm, and counsel fees awarded to her by the trial and appellate courts.
On December 19, 2007, the trial court issued an order requiring Segal to show cause why an order should not be entered to (1) mandate that Segal "pay all presently due and owing invoices" from Schofel; (2) continue Schofel as parenting coordinator; and (3) grant such "further and additional relief as the Court may deem just and equitable . . . ." On April 14, 2008, the court issued an order resolving the dispute about the outstanding parenting coordinator fees and the grievances. The order denied Segal's request for a hearing, found that Segal's grievances were without merit, and ordered Segal to pay $45,433.52 to Schofel, representing $12,128.95 owed for her services as the parenting coordinator and $33,304.57 for her time spent responding to the grievances. A June 24, 2008, order denied Segal's request to compel members of Schofel's law firm to produce documents and to compel depositions of three of the four members of that firm. In addition, the court granted the law firm counsel fees, citing as its authority Rule 4:23-1(c), and denied Segal's counsel fee motion. On June 26, 2008, the court issued an order providing for Schofel's appearance at a deposition and requiring that Segal advance her a retainer in the amount of $2,600. That order also granted Schofel's request for counsel fees relating to the motion to compel the production of documents.
Segal moved for reconsideration of the June 24, 2008 order. The law firm, appearing pro se, and acting through Schofel, opposed reconsideration and cross-moved for counsel fees. On October 28, 2008, relying in part on Rule 4:23-1(c), the court denied Segal's reconsideration motion and awarded the law firm fees in the amount of $1,096 for Schofel's time spent responding to that motion. On November 25, 2009, the court entered an order reducing the $45,433.52 debt owed to a judgment.
Segal appealed from the trial court's orders of April 14, 2008, June 24, 2008, June 26, 2008, and October 28, 2008. The Appellate Division, in a published decision, affirmed the orders awarding fees to Schofel in all respects. Segal v. Lynch, 417 N.J. Super. 627 (App. Div. 2011). Schofel moved before the Appellate Division for an award of attorney's fees incurred in connection with her successful defense of the appeal. On March 17, 2011, the Appellate Division granted Schofel's motion. The Supreme Court granted certification. 207 N.J. 190 (2011).
HELD: The judgment of the Appellate Division is affirmed to the extent that it affirmed the trial court's April 14, 2008, order awarding fees to Schofel for her work as a parent coordinator in responding to the grievances and to the extent that it affirmed the trial court's rejection of Segal's argument that he was entitled to an evidentiary hearing on his grievances; in all other respects the judgment of the Appellate Division is reversed.
1. The Parenting Coordinator Pilot Program Guidelines do not directly address the question that is before the Court. The retainer agreement, although it could have been more precise, made clear that the parties would pay for time expended in preparing reports to the court. Because the response to the grievances was in part necessitated by the issuance of the court's Order to Show Cause, it was akin to a report to the court of the kind contemplated by the retainer agreement. In addition, in an email exchange, Schofel notified Segal of her position with respect to her right to be compensated. That exchange of emails estops Segal to deny that he agreed to pay for Schofel's time spent in responding to his grievance. The language Segal used in his email falls squarely within the ambit of an equitable estoppel analysis. In addition, the trial court eventually considered and rejected every one of Segal's grievances as completely meritless. In that context, the Court could have exercised its inherent power to sanction a party for behavior that is vexatious, burdensome and harassing. The compelling circumstances presented in this record would have supported the award on that alternate ground. (pp. 26-35)
2. Rule 4:23-1(c) is not a source of authorization to courts to award fees as a sort of generally available sanction for discovery violations. Although it is a mandatory award, it is limited in its scope. None of the limited grounds that Rule 4:23-1 designates as being a permissible support for an award was presented as the basis on which Schofel sought, and on which the court awarded, fees. For this reason, the Court reverses the awards of fees included in the orders entered on June 24, 2008, June 26, 2008, and October 28, 2008, to the extent that they were grounded on an application of the authority embodied in Rule 4:23-1(c). On the other hand, the grant of a fee to Schofel for the time she spent attending her own deposition was permitted under the circumstances. The time Schofel spent being deposed fell not only within the ambit of her response to the grievances, but was squarely addressed in her retainer. The Court sees no ground on which to conclude that the trial court erred in making that award. (pp. 35-39)
3. The Court sees no reason to treat Schofer any more indulgently than every other pro se litigant. Just as others who appear in New Jersey courts seeking justice are not compensated for the value of the time they expend in that effort, so too is Schofel prohibited from being paid for the time she spent appearing on her own behalf. In addition, the Court perceives no basis on which to conclude that attorneys who represent themselves are entitled to be paid for their time when all other litigants who choose to represent themselves would be denied such compensation. The Court reaches no different result to the extent that Schofel performed the work on behalf of the other lawyers in her law firm. Similarly, the work that she performed on appeal was work that she prosecuted through self-representation and not compensable under the circumstances. (pp. 39-48)
4. The Court rejects Segal's assertion that he was entitled to a hearing on the subject of his grievances. The Guidelines merely afford a party who has an unresolved grievance against a parenting coordinator the opportunity to request one. In addition, a plenary hearing is only required if there is a genuine, material and legitimate factual dispute. Nothing in Segal's submissions to the court demonstrated that there was a factual dispute that would warrant testimony or that would require resolution in a plenary hearing. The Court discerns no error in the trial court's conclusion that Segal did not demonstrate any ground on which to be afforded an evidentiary hearing. (pp. 48-50)
The judgment of the Appellate Division is AFFIRMED in part and REVERSED in part.
JUSTICE ALBIN filed a separate opinion, DISSENTING in part and CONCURRING in part, stating that the doctrine of equitable estoppel cannot be invoked to bar Segal from challenging the legality of Schofel's charging for costs related to her response to his grievances.
CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, PATTERSON, and JUDGE WEFING (temporarily assigned) join in JUSTICE HOENS's opinion. JUSTICE ALBIN filed a separate opinion, dissenting in part and concurring in part.
On certification to the Superior Court, Appellate Division, whose opinion is reported at 417 N.J. Super. 627 (2011).
JUSTICE HOENS delivered the opinion of the Court.
In this appeal, we consider the nature and extent of fees that may be recovered from a litigant in a matrimonial dispute by an individual who has been appointed to serve as a parenting coordinator. More specifically, we address the circumstances under which and the basis upon which a litigant who raises a grievance against the parenting coordinator may be called upon to answer for fees incurred by the parenting coordinator in responding to a grievance; in resisting discovery demands relating to the grievance; in participating in discovery about the grievance; in pursuing enforcement of a fee award in the trial court; and in participating in the appellate process.
Plaintiff Moses Segal and defendant Cynthia Lynch, who is not a party to this appeal, had a common-law marriage in Canada as a result of which they had two children together. In 2001, Segal and Lynch separated, and the Superior Court of Ontario, Canada, awarded Lynch a significant sum as court-ordered support. Thereafter, Lynch and the children moved to New Jersey. In 2006, Segal commenced litigation against Lynch in New Jersey for joint custody and extended parenting time.
Utilizing the framework of the Parenting Coordinator Pilot Program that had been approved by this Court on March 5, 2007, Judge Thomas L. Weisenbeck appointed respondent Linda A. Schofel to serve as a parenting coordinator in the parties' custody dispute. The court's order, dated April 5, 2007, which followed the form that was included in the pilot program's Implementation Guidelines, set forth a variety of provisions governing the parties and the parenting coordinator.
The order, in particular, included sections concerning the mechanism by which grievances against the parenting coordinator could be raised and resolved. In paragraph thirteen, it provided:
A person having a complaint or grievance shall discuss the matter with the Parenting Coordinator in person in an attempt to resolve it before pursuing it in any other manner. If the issue remains unresolved, the aggrieved party shall submit a written letter detailing the complaint or grievance to the Parenting Coordinator with a copy to the other party, both attorneys (if any), and to the attorney for the child(ren) if one is in place. The Parenting Coordinator shall within thirty (30) days provide a written response to both parties and the attorneys. The Parenting Coordinator at his/her discretion may schedule a meeting or conference call with the attorneys or with the attorneys and the parties in an effort to resolve the complaint. In situations where the grievance or complaint is not resolved by this process a hearing may be requested of the court by the dissatisfied party to address the issues that have been raised and make a final determination.
Other provisions governing the parties and the parenting coordinator, including the requirement that the parenting coordinator use a retainer agreement to set forth fees and expenses, the manner in which disputes about payment of the parenting coordinator's fees are to be addressed, and additional details governing the grievance procedure, are found in the Guidelines.
Schofel has a master's degree in social work and is also an attorney licensed to practice in New Jersey. In accordance with the requirements of the Guidelines, she presented her proposed retainer agreement to Segal and Lynch. That agreement included, among other things, Schofel's description of her role and an explanation of her fees. It provided, in relevant part:
Written and Oral Reports and Appearance in Court:
At the completion of the meetings, the Parenting Coordinator may submit written reports to the parties and their attorneys describing any conflicts and the Parenting Coordinator's recommended resolutions. The Parenting Coordinator may also report to the Court, the parties and their attorneys as to the parental compliance with and parental attitudes about any element of the Parenting Plan as amended by agreement or recommended by the Parenting Coordinator. Copies of all reports to the Court shall also be sent to the parties and their attorneys.
If either party wants the Parenting Coordinator to testify on any matter, he or she must file a motion and show good cause in the motion. The Parenting Coordinator should be provided with a copy of the motion. The Parenting Coordinator will not testify at deposition or at trial unless by Court Order. If a subpoena is issued, the party who issues the subpoena shall be responsible for the costs prior to and including the appearance time.
The parties agree to pay the firm of Newman, McDonough, Schofel & Giger, P.C. the sum of $5,000 as an initial joint retainer, against which Ms. Schofel will bill her hourly rate for parent coordination work of $325.00. Unless otherwise ordered by the Court, each party will be responsible for one half of the retainer and all accrued fees. This retainer will be used to pay for fees for services that will be charged as follows:
4. For time spent preparing notes, recommendations or reports for the parties, the attorneys and/or the Court, the charge will be $325.00 per hour
Notwithstanding the above, the Parenting Coordinator reserves the right to assess costs disproportionately, if in the sole discretion of the Parenting Coordinator she determines either of the parties is abusing the process, or she determines the costs should be disproportionate for any other appropriate reason. Ms. Schofel will inform the parties in writing of her reasons and decision prior to any disproportionate assessment of costs.
Should either or both of the parties not pay the Firm, Ms. Schofel shall have the right to cease all work on this case until the balance is paid in full. In addition, on behalf of the Firm, to whom the fees are owed, Ms. Schofel may bring an Order to Show Cause, on notice to the parties and counsel (if any), for a judgment against the party who has not paid his/her share of Ms. Schofel's outstanding fees.
Both Segal and Lynch signed the retainer agreement on May 7, 2007.
In the months that followed, a series of disputes between Segal and Schofel erupted that culminated in numerous orders issued by the trial court, four of which form the basis for the issues now before this Court. Each of the orders related to whether Schofel was entitled to be awarded fees. More specifically, the disputes centered on fees Schofel charged for her work as a parenting coordinator, fees she sought for the time she spent compiling her response to grievances that Segal raised about her work as the parenting coordinator, fees she requested in connection with Segal's demands that she appear and participate in discovery, fees she sought for her involvement in a dispute about Segal's attempt to depose other members of her law firm, and counsel fees awarded to her by the trial and appellate courts.
Although the orders to some extent include decisions on more than one of these overlapping disputes, for purposes of clarity, our recitation of the facts will be divided in accordance with the essential subjects now at issue on appeal.
Grievances Against the Parenting Coordinator
Within ten days after the retainer agreement was executed, a dispute arose between the parties over an approaching trip to Florida involving Segal and the couple's son. Lynch wanted to know the airline and flight number that Segal would be using and Segal refused to disclose these details, asserting that he was not required to do so based on a court order. Schofel thought Lynch's request was reasonable and, being uncertain about the existence of a court order, she made a written inquiry to the court on May 17, 2007. The following day, counsel for Segal also wrote to the court voicing his objection to Schofel's inquiry. Separately, Segal and his counsel called upon Schofel to recuse herself from continued service as the parenting coordinator. When she did not do so, counsel advised her that he believed he would be forced to proceed by way of motion to secure her removal.
The dispute concerning whether Schofel should resign or be removed from service as the parenting coordinator and the reasons that Segal believed supported his objections to her remaining in that role continued. Included in that dispute was counsel's further letter contending that Schofel had made premature recommendations, had inappropriately contacted the court, and had denied Segal due process. On May 31, 2007, Schofel responded in a letter that quoted the termination and grievance procedure that was found in paragraph thirteen of the court's April 5, 2007, order appointing her.
For the next two months, Schofel continued to act as the parenting coordinator. The record reflects that she assisted the parties in trying to resolve several disagreements concerning weekend visitation, baseball and cheerleading activities, their son's permitted access to his cell phone, the children's camp and tutoring schedules, and vacation plans for the children in August. During the same time, counsel for Segal advised Schofel through exchanges of emails about a variety of concerns, including charges that Schofel had failed to schedule conferences, was wasting Segal's money, was requesting that the parties engage in communications in contravention of a court order, and was making recommendations that were both contrary to those made by a forensic psychologist and in blatant violation of the Guidelines.
On August 10, 2007, counsel for Segal notified Schofel in writing that "Mr. Segal is exercising his rights under the grievance procedures such that he hereby demands a meeting with you and with me present to discuss the various issues he has with your service as the Parenting Coordinator." Further correspondence was exchanged about the location of the meeting and whether Schofel should meet with Segal alone or with his attorney. Thereafter, on August 17, counsel for Segal sent Schofel a letter setting forth his terms for the meeting. That letter advised that "Mr. Segal agrees to meet with you first to discuss the issues and if you cannot resolve same then Mr. Segal, through counsel, will submit a letter to you detailing the grievance wherein you will respond within 30 days in writing to same."
Although Segal and Schofel met to discuss his grievances on August 27, Schofel described the meeting in her letter to counsel for both parties as leaving her uncertain about the substance of his grievances. Schofel wrote that Segal "did not share what his concerns were. Rather, he stated that he came to listen to what I had to say." On August 31, 2007, Segal's attorney responded by contending that Schofel was aware of Segal's concerns because they had been raised throughout the time of her service in emails and in personal discussions.
On October 14, 2007, Segal sent Schofel an email in which he requested a meeting about Schofel's billing. The two then engaged in an exchange of communications concerning whether it was appropriate for Segal's attorney to be included in such a meeting if Lynch's attorney was not also present. It does not appear from the record that such a meeting ever took place.
On November 12, 2007, Segal sent Schofel an email that became the basis for the matter now before this Court. In that email, Segal listed twenty separate grievances that he had against Schofel. The following day, Schofel replied via email that she would send her response within the next thirty days. A week later, Schofel again emailed Segal. She reiterated that she intended to respond, but advised him that, in accordance with the terms of the retainer agreement relating to disproportionate assessment of costs, she believed he and not Lynch should be billed for the time it would take her to respond to the grievances. Her email further commented that in her view, responding to the grievances would be "a major undertaking, at considerable cost."
In a November 25 response, Segal agreed that Lynch should not pay fees relating to the grievances, and advised, "[i]n addition, if any court, any other governing body, or any governing committee believes at the end of the day that I should pay you to respond to my grievance about your services, then I will pay it." The following day, Schofel responded, "Fair enough. Just so you know, I will charge you for the time it takes for me to respond to your grievance letter." Furthermore, she quoted the language concerning pay disputes found in the Guidelines and advised that she planned to follow that procedure with respect to the outstanding dispute about her parenting coordinator fee if they were not able to resolve it amicably. She commented as well that she had not yet brought the pre-existing fee dispute to the court's attention because she did not want to "prejudice [Segal] in the eyes of the Court."
On December 9, counsel for Segal advised the court in writing about the pre-existing parenting coordinator fee dispute. He asserted that Schofel was refusing to discuss the matter with Segal and he requested that the court direct her to address the issue with Segal directly before approaching the court. Schofel's December 14 letter to the court in response outlined the steps she had taken in an effort to resolve the dispute about parenting coordinator fees. On December 19, consistent with the Guidelines, the court issued an order, returnable January 4, 2008,*fn1 requiring Segal to show cause why an order should not be entered to (1) mandate that Segal "pay all presently due and owing invoices" from Schofel; (2) continue Schofel as parenting coordinator; and (3) grant such "further and additional relief as the Court may deem just and equitable .. . ."
On January 3, 2008, in advance of the return date for the Order to Show Cause, Schofel sent counsel for both parties her certification in response to the grievances that Segal had raised on November 12, 2007. The certification, spanning eighty-nine pages, responded individually to each of the twenty grievances and appended more than 200 pages of supporting exhibits. On February 15th, Segal filed a certification with the court in response to the Order to Show Cause, listing his reasons why Schofel should be removed as the parenting coordinator and why he should not have to pay for her services. His response also included requests that the court conduct a hearing on the grievances and that the fee dispute be referred to the attorney fee arbitration system for resolution. Shortly thereafter, counsel for Segal transmitted to Schofel his client's proposed resolution of the issues of the outstanding parenting coordinator bills and the grievances. Segal proposed that Schofel pay him a sizeable sum and forgo receiving any payment from him. Schofel rejected his demand the following day.
On April 14, 2008, the court issued an order that resolved the dispute
about the outstanding parenting coordinator fees and the grievances.
That order denied Segal's request for a hearing, denied Segal's
request that the dispute be sent to a Fee Arbitration Committee, found
that Segal's grievances were
without merit, denied Segal's request to remove Schofel*fn2
as the parenting coordinator, and ordered Segal to pay
$45,433.52 to Schofel, representing $12,128.95 owed as of January 30,
2008, for her services as the parenting coordinator and $33,304.57 for
her time spent responding to the grievances. The latter sum
represented less than the full amount of Schofel's outstanding
invoices, the court having declined to award her $6,467.50 for
services that should have been performed instead by support staff.
The April 14, 2008, order was accompanied by a lengthy and detailed written opinion addressing each of the grievances individually and setting forth the basis for each of the court's findings. In relevant part, the court set forth the reasoning behind the decision that Schofel was entitled to be awarded fees for her time spent responding to the grievances, explaining:
Defendant also argues that neither the Court's April 5, 2007 Order nor Ms. Schofel's retainer agreement contains any language that would support Ms. Schofel's billing of fees for her responses to grievances filed by either party. The Court, however, notes that Ms. Schofel's retainer agreement specifically states that she will charge the parties for "time spent preparing ...