NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court."
Although it is posted on the internet, this opinion is binding only on the
parties in the case and its use in other cases is limited. R.1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-2062-15T3
KATHARINE LAI,
Plaintiff-Appellant,
v.
SAM SHIMONI and
AIR-O-MATIC INC.,
Defendants-Respondents.
____________________________
Submitted May 10, 2017 – Decided June 6, 2017
Before Judges Simonelli and Carroll.
On appeal from the Superior Court of New
Jersey, Law Division, Middlesex County, Docket
No. L-3123-15.
Katharine Lai, appellant pro se.
Meister Seelig & Fein LLP, attorneys for
respondents (Jeffrey Schreiber, on the brief).
PER CURIAM
Plaintiff Katharine Lai appeals from two December 4, 2015 Law
Division orders, which denied her motion for reconsideration of
an October 30, 2015 order that denied her motion to enter default
against defendants Sam Shimoni (Shimoni) and Air-O-Matic Inc.
(AOMI),1 and granted defendants' cross-motion to dismiss the
complaint and for sanctions. Lai also appeals from the January
13, 2016 judgment entered against her in the amount of $11,620.80
for frivolous lawsuit sanctions. We affirm.
We derive the following facts from the record. Fantastic
Realty Co., Inc. (Fantastic) owned property located at 308 Raritan
Avenue in Highland Park (the property) from July 23, 2001, to
January 2, 2004, and re-acquired ownership on October 25, 2007.
Lai previously owned the property, but was merely the property
manager at all times relevant to this matter.
On August 16, 2012, Fantastic, as landlord, and AOMI, as
tenant, through their respective agents Lai and Shimoni, entered
into a lease agreement for AOMI to rent two parking garage spaces
at the property for a term of five years at the rate of $100 per
month. Lai did not dispute that AOMI timely made all rent payments
to Fantastic. On January 30, 2015, Golden Eagle Foundation, Inc.
(Golden Eagle) acquired the property from Fantastic. Plaintiff
advised AOMI to make all future rent payments to Golden Eagle,
which Lai did not dispute occurred. Sometime thereafter, Lai
demanded that AOMI pay $200 per month, alleging it was using
1
We shall sometimes collectively refer to Shimoni and AOMI as
defendants.
2 A-2062-15T3
additional parking spaces. AOMI refused to pay the additional
amount, as it was not required under the lease.
On May 29, 2015, Lai filed a pro se complaint against Shimoni
and AOMI, alleging fraud, negligence, violations of the New Jersey
Law Against Discrimination (LAD), N.J.S.A. 10:5-1 to -49, and the
Americans With Disabilities Act (ADA), 42 U.S.C.A. § 12101, based
on sex, age, national origin, disability, and discriminatory
negligence. Lai also alleged violations of 42 U.S.C.A. § 1981,
and 42 U.S.C.A. § 1983. Lai did not dispute that she served a
copy of the summons and complaint on defendants' former attorney,
not defendants. The record does not reveal that the attorney had
the authority or agreed to accept service on defendants' behalf.
In September 2015, Lai filed a motion to enter default against
defendants. On September 24, 2015, defendants' then-attorney sent
Lai a notice pursuant to Rule 1:4-8 and N.J.S.A. 2A:15-59.1,
stating the complaint was frivolous, demanding it be withdrawn
within twenty-eight days, and advising that defendants would seek
sanctions if Lai failed to withdraw (the safe harbor notice). On
October 14, 2015, defendants filed a cross-motion to dismiss the
complaint with prejudice pursuant to Rule 4:6-2(e) for failure to
state a claim upon which relief may be granted.
In an October 30, 2015 order and written opinion, the court
denied Lai's motion, finding that defendants were not served with
3 A-2062-15T3
the summons and complaint. The court granted defendants' cross-
motion, finding that Lai lacked standing to sue because she did
not own the property, she failed to plead sufficient facts to
support any of her claims, and no cause of action existed for
negligent discrimination.
Lai did not appeal from the October 30, 2015 order. Instead,
she filed a motion for reconsideration. In a December 4, 2015
order and written opinion, the court denied the motion based on
Lai's failure to provide legal or factual reasons that warranted
reconsideration. The court reiterated that plaintiff lacked
standing to sue because she did not own the property and could not
represent a corporation under the applicable Rules of Court.
Defendants filed a cross-motion for sanctions pursuant to
Rule 1:4-8 and N.J.S.A. 2A:15-59.1. In a separate December 4,
2015 order and written opinion, the court granted the cross-motion,
finding as follows:
Lai's motion [for reconsideration was]
utterly devoid of merit. There was no
reasonable or rational basis to reconsider the
court's prior decision. Moreover, the motion
[was] procedurally defective because it
fail[ed] to state the matters or controlling
decisions which were overlooked.
The [c]ourt finds that the application
is frivolous and warrants sanctions under Rule
1:4-8(a)(1). From the papers submitted, the
[c]ourt finds that . . . Lai is a sophisticated
and experienced litigant who is attempting to
4 A-2062-15T3
manipulate the court system with the filing
of frivolous motions and claims.[2] In this
case, the property is apparently owned by a
corporation and not by . . . Lai. Yet, she
persists to make claims in her own name and
without an attorney representing the
corporation.
The court directed defendants' attorney to submit a certification
of services.
Defendants' attorney submitted a certification of services
requesting fees in the amount of $11,620.80. The certification
complied with Rules of Professional Conduct 1.5(a) (R.P.C. 1.5(a))
and was supported by the attorney's billing statements. In her
opposition, Lai did not dispute that she received the safe harbor
notice, and did not challenge the reasonableness of the hours
defendants' attorney claimed he expended, the hourly rates, or the
amount sought. She merely argued that defendants' attorney failed
to produce a signed retainer agreement or defendants' cancelled
checks showing payment. On January 13, 2016, the court entered
judgment against Lai in the amount of $11,620.80. This appeal
followed.
"[T]he decision to grant or deny a motion for reconsideration
rests within the sound discretion of the trial court." Pitney
2
In support of their motion for frivolous lawsuit sanctions,
defendants presented evidence that plaintiff filed numerous pro
se complaints in State and federal court.
5 A-2062-15T3
Bowes Bank, Inc. v. ABC Caging Fulfillment, 440 N.J. Super. 378,
383 (App. Div. 2015). "Reconsideration should be used only where
'1) the [c]ourt has expressed its decision based upon a palpably
incorrect or irrational basis, or 2) it is obvious that the [c]ourt
either did not consider, or failed to appreciate the significance
of probative, competent evidence.'" Ibid. (quoting Capital Fin.
Co. of Delaware Valley, Inc. v. Asterbadi, 398 N.J. Super. 299,
310 (App. Div.), certif. denied, 195 N.J. 521 (2008)). Thus, we
will not disturb a trial court's reconsideration decision unless
it represents a clear abuse of discretion. Ibid. (citing Hous.
Auth. of Morristown v. Little, 135 N.J. 274, 283 (1994)). An
abuse of discretion "arises when a decision is 'made without a
rational explanation, inexplicably departed from established
policies, or rested on an impermissible basis.'" Flagg v. Essex
Cnty. Prosecutor, 171 N.J. 561, 571 (2002) (quoting Achacoso-
Sanchez v. Immigration & Naturalization Serv., 779 F.2d 1260, 1265
(7th Cir. 1985)). There was no abuse of discretion in the denial
of the motion for reconsideration.
Lai makes no comprehensible argument warranting reversal of
the denial of her motion for reconsideration. Like this appeal,
her motion for reconsideration was devoid of any factual or legal
basis for reconsideration. We are satisfied that the court
6 A-2062-15T3
appropriately exercised its discretion to deny reconsideration and
discern no basis to disturb that decision.
We also discern no basis to reverse the grant of frivolous
lawsuit sanctions. We review a trial's judge's award of attorney's
fees pursuant to Rule 1:4-8 for abuse of discretion. McDaniel v.
Man Wai Lee, 419 N.J. Super. 482, 498 (App. Div. 2011). We will
reverse a judge's decision to award attorney's fees pursuant to
Rule 1:4-8 "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.'"
Ibid. (quoting Masone v. Levine, 382 N.J. Super. 181, 193 (App.
Div. 2005)). There was no abuse of discretion in the grant of
frivolous lawsuit sanctions.
A party may apply for frivolous litigation sanctions by
"describ[ing] the specific conduct alleged to have violated" the
rule against frivolous litigation. R. 1:4-8(b)(1). Prior to
making such an application, the party seeking sanctions must
provide the other party with a notice that must:
(i) state that the paper is believed to
violate the provisions of [Rule 1:4-8], (ii)
set forth the basis for that belief with
specificity, (iii) include a demand that the
paper be withdrawn, and (iv) give notice,
except as otherwise provided herein, that an
application for sanctions will be made within
a reasonable time thereafter if the offending
7 A-2062-15T3
paper is not withdrawn within 28 days of
service of the written demand.
[R. 1:4-8(b)(1).]
Defendants complied with Rule 1:4-8(b)(1).
The court may award "reasonable" expenses and attorney's fees
to the prevailing party on a motion for frivolous lawsuit
sanctions. R. 1:4-8(b). In order to establish reasonableness,
the moving party's attorney must submit an affidavit of services
that complies with R.P.C. 1.5(a). The affidavit of services must
also include "a detailed statement of the time spent and services
rendered by paraprofessionals, a summary of the paraprofessionals'
qualifications, and the attorney's billing rate for
paraprofessional services to clients generally[,]" and a statement
as to how much the client had paid, and "what provision, if any,
has been made for the payment of fees to the attorney in the
future." R. 4:42-9(b) and (c). There is no requirement that an
attorney submit a signed retainer agreement or proof of his
client's payment. Defendants' attorney's certification of
services complied with Rule 4:42-9(b) and (c), and Lai did not
dispute the reasonableness of the hours the attorney claimed he
expended, the hourly rates, or the amount sought.
Litigation is considered frivolous when it is "commenced,
used or continued in bad faith, solely for the purpose of
8 A-2062-15T3
harassment, delay or malicious injury" or if the party "knew, or
should have known, that the complaint, counterclaim, cross-claim
or defense was without any reasonable basis in law or equity and
could not be supported by a good faith argument for an extension,
modification or reversal of existing law." N.J.S.A. 2A:15-
59.1(b). A motion for sanctions under Rule 1:4-8 will be denied
where the pleading party had an objectively reasonable and good
faith belief in the merit of the claim. See First Atl. Fed. Credit
Union v. Perez, 391 N.J. Super. 419, 433 (App. Div. 2007); K.D.
v. Bozarth, 313 N.J. Super. 561, 574-75 (App. Div.), certif.
denied, 156 N.J. 425 (1998); Pressler & Verniero, Current N.J.
Court Rules, comment 2 on R. 1:4-8 (2017). However, litigation
may become frivolous, and therefore sanctionable, by continued
prosecution of a meritless claim, even if the initial pleading was
not frivolous. DeBrango v. Summit Bancorp, 328 N.J. Super. 219,
227-28, 230 (App. Div. 2000). This is because the "requisite bad
faith or knowledge of lack of well-groundedness may arise during
the conduct of the litigation." United Hearts, L.L.C. v. Zahabian,
407 N.J. Super. 379, 390 (App. Div.), certif. denied, 200 N.J. 367
(2009) (citations omitted). In such cases, the party seeking
sanctions would only be entitled to fees and/or costs incurred
from the time the litigation became frivolous, rather than from
9 A-2062-15T3
the beginning of the litigation. DeBrango, supra, 328 N.J. Super.
at 230.
The litigation in this case was clearly frivolous. Lai lacked
standing to sue defendants, and she knew or should have known that
her claims had no reasonable basis in law or equity and could not
be supported by a good faith argument for an extension,
modification, or reversal of existing law. N.J.S.A. 2A:15-
59.1(b). Lai's claims were frivolous, and therefore sanctionable.
Even if Lai had an initial objectively reasonable and good
faith belief in the merits of her claims, the litigation became
frivolous, and therefore sanctionable, when she continued
prosecuting meritless claims by moving for reconsideration.
Accordingly, the court properly granted defendants' motion for
frivolous lawsuit sanctions, and properly entered judgment in the
undisputed amount of $11,620.80.
Affirmed.
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