Katherine Feliciano v. Jeffrey N. Faldetta

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-1301-12T3

KATHERINE FELICIANO,

Plaintiff-Respondent/
Cross-Appellant, APPROVED FOR PUBLICATION

February 21, 2014
v.
APPELLATE DIVISION
JEFFREY N. FALDETTA,

Defendant-Appellant/
Cross-Respondent,

and

JENNY GONZALEZ,

Defendant.

__________________________________

Argued November 7, 2013 – Decided February 21, 2014

Before Judges Grall, Waugh, and Nugent.

On appeal from the Superior Court of New
Jersey, Law Division, Cumberland County,
Docket No. L-0132-09.

Stephen A. Rudolph argued the cause for
appellant/cross-respondent (Rudolph & Kayal,
attorneys; Mr. Rudolph, on the briefs).

Daniel E. Rosner and Edward J. Tucker argued
the cause for respondent/cross-appellant
(Rosner & Tucker P.C., attorneys; Mr. Rosner
and Mr. Tucker, of counsel and on the
brief).
 Mark W. Davis argued the cause for amicus
curiae New Jersey Association of Justice
(Stark & Stark, attorneys; Mr. Davis, on the
brief).

The opinion of the court was delivered by

WAUGH, J.A.D.

Defendant Jeffrey Faldetta appeals the Law Division's award

of counsel fees under Rule 4:58-2, which governs the

consequences of a failure to accept an offer of judgment.

Plaintiff Katherine Feliciano cross-appeals, arguing that the

trial judge should have calculated the fees at a higher hourly

rate and enhanced the lodestar amount after it was established.

We affirm.

I.

We discern the following facts and procedural history from

the record on appeal.

On March 7, 2007, while driving in rainy weather, the motor

vehicle owned by defendant Jenny Gonzalez and driven by Faldetta

struck the vehicle driven by Feliciano. As a result of the

accident, Feliciano alleged that she suffered permanent injuries

to her neck and lower back, with permanent residuals including

muscle damage.

Feliciano filed a personal injury action against Faldetta

and Gonzalez in February 2009. Gonzalez was subsequently

granted summary judgment, dismissing the claim against her on

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the basis that Faldetta was not her agent at the time of the

accident. Faldetta moved for summary judgment in April 2010,

arguing that Feliciano's alleged injuries failed to satisfy the

verbal threshold established by N.J.S.A. 39:6A-8(a). The motion

was denied in May.

In June, Feliciano served and filed an offer to take

judgment in the amount of $15,000, as permitted by Rule 4:58-1.

Faldetta rejected the offer. Following a three-day trial in May

2012, the jury returned a verdict in favor of Feliciano,

determining that she had suffered permanent injuries and

awarding her $50,000 in damages for pain and suffering.

On July 3, Feliciano filed a motion seeking attorney's

fees, litigation expenses, and interest pursuant to Rule 4:58-2.

In support of the motion, Feliciano filed certifications by the

two attorneys who had worked on the case. They sought a total

of $62,780 in legal fees. Faldetta filed a brief in opposition,

arguing that the fees were unwarranted, excessive, and

unreasonable.

On September 18, the trial judge issued a written decision

explaining his reasons for awarding $42,230 in counsel fees,

$6,831.09 in litigation expenses, and $6,998.67 in interest. On

the same day, the trial judge entered judgment against Faldetta

for $109,185.27. This appeal and cross-appeal followed.

3 A-1301-12T3
 II.

On appeal, Faldetta argues that (1) Rule 4:58 is

unconstitutional because it treats plaintiffs more favorably

than defendants, (2) the trial judge failed to consider that the

award created undue hardship for Faldetta because the insurance

policy covering the Gonzalez vehicle had a policy limit of

$50,000, (3) the award was duplicative because Feliciano's

attorneys were entitled to a contingent fee, and (4) the trial

judge erred in determining the hourly rate and the hours spent

on which the award was based. Feliciano argues in the cross-

appeal that the judge should have (1) chosen higher hourly rates

and (2) awarded an enhanced fee under the principles set forth

in Rendine v. Pantzer, 141 N.J. 292, 340-42 (1995).

Because the issue of the constitutionality of Rule 4:58 was

not raised in the trial court, we decline to consider it on

appeal. Nieder v. Royal Indem. Ins. Co., 62 N.J. 229, 234

(1973) (quoting Reynolds Offset Co. v. Summer, 58 N.J. Super.

542, 548 (App. Div. 1959), certif. denied, 31 N.J. 554 (1960));

see also State v. Robinson, 200 N.J. 1, 20-22 (2009). In

addition, Faldetta failed to give notice to the Attorney

General, as required by Rule 2:5-1(h) if the constitutionality

of a state "enactment" is challenged. See R.M. v. Supreme

4 A-1301-12T3
Court, 185 N.J. 208, 213 (2005) (noting that the Supreme Court

was represented by Attorney General in constitutional challenge

to Rule 1:20-9).

We take the same position with respect to the argument that

the trial judge erred by failing to consider and apply the

provision in Rule 4:58-2(b) that "[n]o allowances shall be

granted pursuant to paragraph (a) if they would impose undue

hardship." Although the issue of who would pay the fee award

was mentioned during oral argument, there was nothing in the

opposition to the motion, particularly certifications,

concerning Faldetta's financial position. In addition, it is

not clear whether Faldetta has a viable Rova Farms1 claim against

the carrier who defended the action and declined the offer of

judgment. If he does, the carrier would be required to pay the

judgment, including the fees and expenses awarded under Rule

4:58-2. If it is determined that Faldetta has no such claim, he

has the option of seeking relief from that portion of the

judgment under Rule 4:50, at which time he would be required to

provide the financial information he failed to provide in

opposition to the motion.

1
Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J.
474 (1974).

5 A-1301-12T3
 We reject Faldetta's argument that the counsel fee award is

duplicative because plaintiff's attorneys are also entitled to a

contingent fee of one-third of the amount of the judgment. His

argument assumes that plaintiff's counsel is entitled to both

the contingent fee and the fees awarded under Rule 4:58-2. That

assumption is, in our opinion, inconsistent with the wording of

the rule, which provides that "the claimant shall be allowed"

costs of suit, legal fees, and interest. To hold that the

contingent fee must be deducted from the fee award under the

rule would provide a windfall to Faldetta at the expense of

Feliciano. Her attorneys are entitled to the fee awarded

pursuant to Rule 4:58-2 for the work done after the offer of

judgment was rejected and fair compensation from their client

for the period prior to that.2

Finally, we turn to the issue of the quantum of fees

awarded. Faldetta takes issue with the trial judge's acceptance

of the hours submitted by Feliciano's attorneys and the hourly

rate applied to those hours. Feliciano argues that the judge

set the hourly rates too low and erred in declining to award a

fee enhancement.

2
There may be a dispute between Feliciano and her attorneys as
to the amount of any additional compensation sought by her
attorneys. If there is such a dispute, it can be resolved
through fee arbitration pursuant to Rule 1:20A-3 or suit
following compliance with Rule 1:20A-6.

6 A-1301-12T3
 Rule 4:58-2 "accords [the] judge no discretion regarding

whether or not to award attorney's fees and costs of suit in an

offer of judgment case." Wiese v. Dedhia, 188 N.J. 587, 592

(2006). The amount of the assessment, however, is

discretionary. Packard-Bamberger & Co. v. Collier, 167 N.J.

427, 444 (2001). "We will disturb a trial court's determination

on counsel fees only on the 'rarest occasion,' and then only

because of clear abuse of discretion." Strahan v. Strahan, 402

N.J. Super. 298, 317 (App. Div. 2008) (quoting Rendine, supra,

141 N.J. at 317).

In calculating the amount of reasonable attorney's fees,

courts determine the "lodestar," defined as the "number of hours

reasonably expended" by the attorney, "multiplied by a

reasonable hourly rate." Furst v. Einstein Moomjy, Inc., 182

N.J. 1, 21 (2004); Rendine, supra, 141 N.J. at 334-35. "The

court must not include excessive and unnecessary hours spent on

the case in calculating the lodestar." Furst, supra, 182 N.J.

at 22. The court is required to make findings on each element

of the lodestar fee. Ibid.; R.M. v. Supreme Court, 190 N.J. 1,

11 (2007) (citing Hensley v. Eckerhart, 461 U.S. 424, 434, 103

S. Ct. 1933, 1940, 76 L. Ed. 2d 40, 51 (1983)).

The trial judge carefully reviewed both the hours requested

and the hourly rates sought. He found that the time spent by

7 A-1301-12T3
the attorneys was reasonable, that the hours were not

duplicative, and that they had not been increased to inflate the

fees. He declined to accept the requested hourly rates for the

two attorneys, $500 for trial counsel and $400 for the other

attorney. Although he did not apply the hourly rates urged by

Faldetta, he described them as more in line with the relevant

legal community. He chose hourly rates of $350 and $250,

respectively. We see no "clear abuse of discretion" in the

judge's determination of the hourly rate or the number of hours

eligible for reimbursement, which find adequate support in the

record.

Finally, the judge determined that a fee enhancement was

not appropriate in this case. Here, the judge did not explain

his reasons with the same degree of detail as required by

Rendine and subsequent case law. We, nevertheless, agree with

his conclusion that a fee enhancement was not required in this

case. We note that the purpose of the fee-shifting provisions

of Rule 4:58 is to encourage settlement rather than to provide

an incentive for representation of plaintiffs in certain types

of cases. Rendine, supra, 141 N.J. at 341-42. That is one

reason why the fee award is limited to the period after the

refusal to accept an offer of judgment. Even if the judge had

the discretion to enhance the fees, he was not required to do so

8 A-1301-12T3
and our review of the record convinces us that he did not abuse

any such discretion in declining to do so. The fee awarded was

fair and reasonable under the circumstances of this case.

Affirmed.

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