On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-9555-09.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted September 27, 2012
Before Judges Simonelli and Koblitz.
Plaintiffs Dong Hyun Lee (Lee) and L&K Dental, P.A. (L&K)*fn1 appeal from the August 26, 2011 Law Division order, which denied their motion for reconsideration of the July 6, 2011 final judgment requiring plaintiffs to pay defendant Transnational Communications International (TNCI) frivolous litigation sanctions in the amount of $20,948.50.*fn2 We affirm.
The record reveals the following. TNCI claimed that plaintiffs owed $1,931.78 for telephone and internet services TNCI rendered to L&K. Plaintiffs never paid TNCI; instead, on October 30, 2009, they filed a complaint against TNCI and other defendants, alleging a violation of the FDCPA, the CFA, and the intentional infliction of emotional distress.
TNCI filed a motion to dismiss pursuant to Rule 4:6-2(e) for failure to state a claim on which relief could be granted. In a March 19, 2010 order, plaintiffs voluntarily dismissed the FDCPA and intentional infliction of emotion distress claims against TNCI, and Judge De La Cruz denied TNCI's motion as to the CFA claim.
Thereafter, in a March 26, 2010 letter, TNCI advised plaintiffs that the CFA claim was frivolous and interposed in bad faith, and the complaint violated N.J.S.A. 2A:15-59.1 and Rule 1:4-8 "because [it] was presented for an improper purpose, such as to harass, cause unnecessary delay, and/or cause a needless increase in the cost of litigation." TNCI demanded that plaintiffs dismiss the CFA claim with prejudice within twenty-eight days. TNCI also stated that it would not seek frivolous lawsuit sanctions if plaintiffs dismissed the CFA claim with prejudice and the parties exchanged mutual releases.
Plaintiffs did not dismiss the CFA claim; instead, they filed an amended complaint adding claims against TNCI for breach of contract and breach of fiduciary duty. On December 10, 2010, TNCI filed a summary judgment motion to dismiss the amended complaint. In a January 25, 2011 written opinion and order, Judge De La Cruz granted the motion and dismissed the amended complaint with prejudice. The judge found that Lee lacked standing as to the breach of contract claim because he had signed the contract with TNCI in his capacity as president of L&K; L&K's breach of contract claim lacked merit because it had received telephone and internet services from TNCI for four months and did not pay for them; the CFA claim lacked merit because plaintiffs received services from TNCI, did not pay for them, and thus could not demonstrate an ascertainable loss; and TNCI owed no fiduciary duty to plaintiffs because they had a clearly contractual relationship and there was no special agency relationship.
On January 28, 2011, TNCI filed a motion for frivolous litigation sanctions. On February 10, 2011, plaintiffs filed a cross-motion for frivolous lawsuit sanctions. In an April 5, 2011 written opinion and order, Judge De La Cruz denied TNCI's motion without prejudice, finding it was premature, and denied plaintiffs' cross-motion with prejudice.
On May 13, 2011, TNCI filed a second motion for frivolous litigation sanctions, seeking $20,402.50 for attorneys fees and $967.38 for costs incurred since the March 26, 2010 letter. Plaintiffs did not challenge the reasonableness of the fee TNCI sought or dispute that TNCI complied with Rule 1:4-8(b).
In a July 1, 2011 written opinion and order, Judge De La Cruz granted TNCI's motion. The judge found that the March 26, 2010 letter was a "safe harbor letter" that complied with Rule 1:4-8(b), and plaintiffs should have withdrawn the CFA claim because they suffered no ascertainable loss and TNCI had offered to settle the claim. In determining the reasonableness of the fee TNCI sought, the judge analyzed TNCI's attorney's affidavit of services and billing records, and applied R.P.C. 1.5 and the principles set forth in Rendine v. Pantzer, 141 N.J. 292 (1995). The judge found the $20,402.50 fee was reasonable, and the tasks TNCI's counsel performed "were necessitated by plaintiffs and plaintiffs' counsel due to the frivolity and worthlessness of their claims and applications during the course of this litigation[;]" however, she reduced the costs to $546. She concluded that plaintiffs' claims were "baseless," and the fees and costs TNCI incurred were "reasonable and . . . necessary to address the frivolous, relentless and meritless claims presented by plaintiffs."
On July 26, 2011, plaintiffs filed a motion for reconsideration, raising new arguments -- that TNCI had not provided a safe harbor letter as to the breach of contract and breach of fiduciary duty claims; TNCI failed to demonstrate it incurred fees and costs for the CFA claim; and TNCI's counsel's improper conduct "poisoned and tainted the proceedings."*fn3 Judge De La Cruz denied the motion, concluding that "[n]othing submitted causes [the] court to disturb the July 1, 2011 relief, as required by [Rule] 4:49-2." This appeal followed.
"A trial judge's decision to award attorney's fees pursuant to Rule 1:4-8 is addressed to the judge's sound discretion, and will be reversed on appeal only if it 'was not premised upon consideration of all relevant factors, was based upon consideration of irrelevant or inappropriate factors, or amounts to a clear error in judgment.'" McDaniel v. Man Wai Lee, 419 N.J. Super. 482, 498 (App. ...