On appeal from the Superior Court of New Jersey, Law Division, Morris County, Docket No. L-3511-08.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted February 29, 2012
Before Judges Sapp-Peterson and Ostrer.
In this counsel fee dispute, defendant, Callallo, Inc., a Morristown restaurant owned by Lawrence Berger, an attorney, appeals from a final judgment entered in favor of plaintiff, the law firm, Ravin Greenberg, P.C. (Ravin Greenberg), in the amount of $21,115.50. Defendant argues the judgment should be reversed because plaintiff failed to show that its fees were reasonable and necessary. We affirm.
In 2002, defendant engaged plaintiff to represent it in connection with a Chapter 11 reorganization under the United States Bankruptcy Code, 11 U.S.C.A. §§ 1101--1174. Defendant filed an application with the bankruptcy court, dated July 11, 2002, for leave to retain plaintiff as counsel in its bankruptcy proceeding. The application stated defendant was to be represented by Morris Bauer, a member of Ravin Greenberg, and whose billing rate at the time was $290.
Prior to representing Callallo, plaintiff represented various other Berger-owned entities, providing both pre-confirmation and post-confirmation bankruptcy services. At no time during their almost ten-year relationship did plaintiff and Berger ever enter into a retainer agreement, nor did they do so in the present matter.
Defendant's bankruptcy confirmation occurred in November 2005. Prior to confirmation, plaintiff applied to the bankruptcy court and received approval for its pre-confirmation fees. From November 2005 to February 2007, defendant accrued $23,612.50 in legal fees. By letter dated February 26, 2008, plaintiff notified defendant of its right to request fee arbitration on its unpaid balance of $51,921.47, which included post-confirmation fees and unpaid pre-confirmation fees. Defendant did not seek arbitration, and in November 2008, plaintiff filed a complaint for the $51,921.47 due.
In April 2010, Judge W. Hunt Dumont granted plaintiff partial summary judgment for $26.306.01, which represented the pre-confirmation fees previously awarded by the bankruptcy court. Plaintiff's post-confirmation fees were the subject of a bench trial in March 2011 before a different judge.
On the first day of trial, the trial court heard testimony from Bauer, who appeared at the court's direction. Although Bauer's appearance was at the direction of the court, defendant objected, arguing that it prepared a defense based on plaintiff's representation that Bauer would not be utilized as a witness at trial. In response, the judge offered defendant the opportunity to depose Bauer, which defendant declined. The judge concluded, "I'm here to find the truth. . . . I can suspend the rules when and if the interest of justice require[s it] and I find that in this case[,] for whatever reason, the interest of justice require[s] it."
Bauer testified that he was appointed counsel to represent defendant in bankruptcy proceedings following the court's approval and entry of a July 23, 2002 retention order. He explained that it was not the firm's customary practice to execute a retainer agreement with the client. Rather, "[t]he application for the retention as part of a Chapter 11 case was viewed by Ravin Greenberg as being the retainer agreement." He testified that he filed fee applications every three to four months with the court and that he "kept good control of [his] records and what were the outstanding receivables." He was shown an exhibit marked P-2, the print out of services billed to defendant. He did not specifically recognize the document but testified that he would complete handwritten time sheets and then give it to his secretary who in turn would input the information into the system. He testified that his written notes would generally be prepared "the night of the day that [he] did the services, or the following morning they would have been written up on time sheets." He explained that when he subsequently filed a fee application a print-out of the entries put into the system would be prepared. He testified that he followed the same billing practices for his representation of defendant in connection with post-confirmation matters. Exhibit P-2 was moved into evidence without objection.
Bauer also testified that nine out of ten times there was always post-confirmation work to be done on behalf of a client.
He had no specific recollection of the actual work performed post-confirmation, but testified that from his time entries for that period of time he would be able to glean that he did the work. Under cross-examination, he was questioned regarding the circumstances of his appearance in court. He was not, however, questioned about the work he performed on behalf of defendant.
On the second day of trial, plaintiff rested. Defendant called no witnesses and did not move to introduce any exhibits. The attorneys then presented closing arguments to the court. Defense counsel argued plaintiff had engaged in duplicative billing, charging defendant for services provided to Pazzo Pazzo, another Berger-owned entity. In addition, the defense maintained that "it's nearly impossible to tell which services were rendered in connection with the bankruptcy, which services were rendered for Pazzo Pazzo, which services were rendered in connection with . . . any other specific issue." Plaintiff's counsel ...