STOCKTON LAND COMPANY, LLC VS. BUSINESS DEVELOPMENT & MANAGEMENT CORP. (C-000111-14, OCEAN COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE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-3112-15T1

STOCKTON LAND COMPANY, LLC,

Plaintiff-Respondent,

v.

BUSINESS DEVELOPMENT & MANAGEMENT
CORP., JEFFREY S. WILSON, ARNOLD B.
WILSON, ADRIENNE DODI, DONNA BETAR,
and GREG BETAR,

Defendants,

and

MERRICK WILSON,

Defendant-Appellant.
_______________________________________

Submitted December 12, 2017 – Decided July 25, 2018

Before Judges Carroll and Leone.

On appeal from Superior Court of New Jersey,
Chancery Division, Ocean County, Docket No.
C-000111-14.

Merrick Wilson, appellant pro se.

David B. Venino, attorney for respondent.

PER CURIAM
 Defendant Merrick Wilson appeals the March 18, 2016 order

granting David B. Venino counsel fees for his representation of

plaintiff Stockton Land Company, LLC in this partition action

concerning Block 1095, Lot 16 in Lakewood Township, New Jersey

(the property). We reject Merrick's arguments, but vacate and

remand to correct a mathematical error.

I.

The following facts are taken from plaintiff's complaint and

the trial court orders and oral opinion. In 1925, Abe Wilson

acquired title to the property. Wilson died intestate in 1927,

and was survived by four children named Michael Wilson, Sarah

Lakritz, Gerald Wilson, and Benjamin Wilson. Each of the children

received an undivided 25% interest in the property.1

Plaintiff acquired title to the undivided 25% interest in the

property possessed by Michael by purchasing it in October 2013

from his widow's heirs, Roberta Rosenberg and Ronald Wilson.

Plaintiff acquired title to the undivided 25% interest in the

property possessed by Sarah by purchasing it in September and

October 2013 from her heirs Arlene B. Kruzer, Lillian E. Lakritz,

Howard S. Lakritz, and Sheldon R. Lakritz.

1
Because the parties, their predecessors in title, and the
attorneys often have the same last names, we refer to them by
their first names.

2 A-3112-15T1
 Plaintiff acquired title to two-thirds of the undivided 25%

interest in the property owned by Gerald in the following manner.

On the death of Gerald's widow, the 25% interest was inherited

one-third by each of her two children named Glen I. Niesen and Don

D. Wilson, and one-twelfth each by four grandchildren named Gary

Niesen, Jay S. Niesen, Sherri Johnson, and Jeff L. Niesen. Glen

conveyed his 8.33% interest in the property to plaintiff in January

2014. Gary, Jay, Sherri, and Jeff conveyed their combined 8.33%

interests to plaintiff in April 2014. However, Donald conveyed

his 8.33% interest to defendant Business Development & Management

Corp. (BDM) in January 2008.

Benjamin's 25% interest passed through his widow to their

four children, defendants Jeffrey S. Wilson, Arnold B. Wilson,

Adrienne Dodi, and Merrick B. Wilson, who each obtained an

undivided 6.25% interest in the property.

As a result of all these transactions, plaintiff owned an

undivided 66.66% interest in the property while the remaining

owners had an undivided 33.33% interest: 8.33% by BDM, and 6.25%

each by Jeffrey, Arnold, Adrienne, and Merrick.

In its complaint dated June 6, 2014, plaintiff initiated an

action "for the purpose of effecting a fair and equitable partition

of the" property. Plaintiff named as defendants all the remaining

3 A-3112-15T1
owners.2 "In order to effect partition," plaintiff requested that

the property be sold at a public vendue and that the net proceeds

be divided among the parties according to their respective

interests in the property. Plaintiff also asked "[f]or the

awarding of counsel fees pursuant to R. 4:42-9(a)(2)."

Merrick filed a pro se answer and counterclaim. His

counterclaim asserted that plaintiff's concealment of material

information violated the New Jersey Consumer Fraud Act, N.J.S.A.

56:8-1 to -20. The trial court dismissed his counterclaim with

prejudice on December 5, 2014.

During the litigation, plaintiff acquired the interests in

the property of BDM, Jeffrey, and Arnold, totaling 20.83%, giving

plaintiff a total undivided interest in the property of 87.5%.

Merrick recorded a deed in which Adrienne conveyed to him for $500

her 6.25% interest in the property, giving him the remaining

undivided 12.5% interest.

On May 4, 2015, the trial court granted an order for partial

summary judgment and for sale of the property. The court found

that the property was a 60' by 120', vacant, non-conforming

building lot, that it was "of such size and dimension that an

2
Plaintiff also named as defendants Donna Betar and Greg Betar,
who held a judgment against Merrick. After Merrick had the Betars'
judgment vacated, plaintiff dismissed the Betars from this action.

4 A-3112-15T1
actual partition of the same cannot be made without great prejudice

to the owners thereof," and "that partition of the premises can

only be accomplished by sale pursuant to" N.J.S.A. 2A:56-2. The

court ordered that the property be sold by the sheriff at a public

vendue to the highest bidder, and the proceeds divided among the

parties with interests in the property. The court reserved the

issue of counsel fees until final disposition.

The property was sold by the sheriff for $117,000. After

deducting costs, fees, and commission, the sheriff deposited

$111,513.50 into the court's trust fund.

David B. Venino filed a motion for award of counsel fees and

distribution of proceeds. He certified he was "the attorney for

plaintiff in the [partition] action," and that "[p]laintiff's

attorney has expended 89.6 hours in the conduct of this

litigation," including 10.2 hours when his father "Richard O.

Venino, Jr. appeared on my behalf." David further certified that

because "my billing rate to the plaintiff is higher than the

lodestar rate for this geographic area, I will use the lodestar

rate of $250.00 per hour in calculating the total fee" of $22,400.

He certified $956.08 in expenses were or would be expended in the

prosecution of the partition action. Thus, he requested $23,356.08

in legal fees and expenses. He certified that "the legal fees and

expenses incurred by the plaintiff as set above were directly

5 A-3112-15T1
related to the prosecution of the within action and are in

compliance with RPC 1.5(a)."

On March 10, 2016, opposition was filed by Roberta Rosenberg,

Ronald, Arlene, Lillian, Howard, Sheldon, and Glen (the Rosenberg

plaintiffs), plaintiffs in a consolidated action Rosenberg et al.

v. Stockton Land Co., LLC & Richard Venino, Jr.. They contended

that they were induced to sell their combined 58.33% interest in

the property to plaintiff based upon misrepresentations by Richard

individually and on behalf of plaintiff, and that the purchase

price was so far below the fair market value as to be

unconscionable. The Rosenberg plaintiffs opposed distribution and

the award of counsel fees, including any fees for plaintiff's

opposition to Merrick's counterclaim.

Merrick opposed only the award of counsel fees. He alleged

Richard was the principal owner of plaintiff, and he and his son

operated out of the same office with the same fax number.

On March 18, 2016, the trial court held a hearing, at which

David appeared as plaintiff's counsel and Richard appeared in

response to the Rosenberg plaintiffs. In its oral opinion, the

court indicated Richard was the managing partner and general

counsel of plaintiff. Reviewing the submissions on counsel fees,

the court found "that $200 is an appropriate [hourly] fee given

the geographic area and this area of practice." The court was

6 A-3112-15T1
"satisfied that 96 hours is the appropriate amount of time spent"

and was "reasonable." The court found 90% of the hours "were

expended in support of the partition action," versus Merrick's

counterclaim. The court calculated that "96 hours" multiplied by

$200 was a "$19,200 fee. Ninety percent of that is $17,280 plus

the $956 in costs. That's $18,236."3

In its March 18, 2016 order, the trial court found "that

plaintiff had expended or incurred expenses and legal fees in the

conduct and prosecution of the [partition] action for which it is

entitled to contribution," "that the aggregate amount expended or

incurred by the plaintiff in maintaining this action, including

legal fees as detailed in the certification submitted by the

plaintiff's attorney in support of this motion, is $18,236.00,"

and "that there is due to David B. Venino, Esq., as attorney for

the plaintiff," $18,236.00 which the court ordered be paid out of

the trust fund.

The trial court awarded $200.42 to Merrick for taxes he paid

on the property. From the balance in the trust fund, the court

ordered that Merrick be paid $11,634.64, representing his 12.5%

interest in the property, and that plaintiff be paid $27,150.88,

3
The trial court misapprehended the number of hours as "96 hours,"
as David certified to only "89.6 hours." 89.6 hours multiplied
by $200 is $17,920. Ninety percent of $17,920 is $16,128, which
plus $956 in costs would total $17,084.

7 A-3112-15T1
representing its uncontested 29.17% interest in the property. The

court ordered that the remaining $54,291.86, representing

plaintiff's 58.33% interest in the property being contested by the

Rosenberg plaintiffs, be held by the trust fund until further

order of the court. Merrick filed an appeal contesting the trial

court's award of counsel fees.

II.

Rule 4:42-9(a)(2) "permits a court, in its discretion, to

award attorney's fees from a fund in court." Porreca v. City of

Millville, 419 N.J. Super. 212, 224-25 (App. Div. 2011).

We view Rule 4:42-9(a)(2) as encompassing, in
essence, a two-step process. First, the court
must determine as a matter of law whether
plaintiff is entitled to seek an attorney fee
award under the fund in court exception as
articulated in [Henderson v. Camden Cty. Mun.
Util. Auth., 176 N.J. 554 (2003)]. If the
court determines plaintiff has met the
threshold, it then has the "discretion" to
award the amount, if any, it concludes is a
reasonable fee under the totality of the facts
of the case.

[Id. at 227-28 (quoting R. 4:42-9(a)(2)).]

We review the matters of law de novo, and review the ultimate

issue of the award fees for a clear abuse of discretion. Id. at

224; see Rendine v. Pantzer, 141 N.J. 292, 317 (1995) ("fee

determinations by trial courts will be disturbed only on the rarest

8 A-3112-15T1
occasions, and then only because of a clear abuse of discretion").

We must hew to our standards of review.

III.

Merrick argues the trial court erred by awarding counsel fees

because New Jersey courts generally hold each litigant responsible

for paying his own legal expenses and costs of suit. "In the

field of civil litigation, New Jersey courts historically follow

the 'American Rule,' which provides that litigants must bear the

cost of their own attorneys' fees." Innes v. Marzano-Lesnevich,

224 N.J. 584, 592 (2016). "[O]ur court rules evince New Jersey's

strong public policy against shifting counsel fees, and provide,

'[n]o fee for legal services shall be allowed in the taxed costs

or otherwise, except' in eight enumerated circumstances." Ibid.

(citation omitted) (citing R. 4:42-9(a)).

"One exception to that rule is that attorneys' fees may be

awarded from a 'fund in court.'" Henderson, 176 N.J. at 564

(quoting R. 4:42-9(a)(2)). Rule 4:42-9(a)(2) provides in

pertinent part: "Out of a fund in court. The court in its

discretion may make an allowance out of such a fund, but no

allowance shall be made as to issues triable of right by a jury."

"'Fund in court' is a term of art that embraces equitable

principles." Henderson, 176 N.J. at 564 (citing Sarner v. Sarner,

38 N.J. 463, 468 (1962), and Sunset Beach Amusement Co. v. Belk,

9 A-3112-15T1
33 N.J. 162, 168 (1960)). "The 'fund in court' exception generally

applies 'when it would be unfair to saddle the full cost upon the

litigant for the reason that the litigant is doing more than merely

advancing his own interests.'" Porreca, 419 N.J. Super. at 225

(quoting Henderson, 176 N.J. at 554). "Accordingly, 'when

litigants through court intercession create, protect or increase

a fund for the benefit of a class of which they are members, in

good conscience the cost of the proceedings should be visited in

proper proportion upon all such assets.'" Ibid. (quoting Sarner,

38 N.J. at 469). "This exception is generally invoked when the

litigation 'produces a tangible economic benefit for a class of

persons that did not contribute to the cost of the litigation.'"

Ibid. (quoting Henderson, 176 N.J. at 564).

We have ruled that a partition action which results in funds

paid into court for distribution to persons with an interest in

the property creates a "fund in court" from which counsel fees may

be awarded. Baird v. Moore, 50 N.J. Super. 156, 176 (App. Div.

1958). In Baird, the plaintiff brought an action for the partition

of a property held as tenants in common with an estate. Id. at

160-61. We upheld "the power of the trial court to have awarded

counsel fees out of the proceeds of the sale of the property."

Id. at 176. We rejected the argument that there was no "fund in

court" within the meaning of R.R. 4:55-7(b), the predecessor to

10 A-3112-15T1
Rule 4:42-9(a)(2). Ibid. (citing Katz v. Farber, 4 N.J. 333, 344

(1950)). Similarly, where the "[p]laintiffs sued to partition a

tract of commercial real estate in which they owned a 1/12

interest," the Chancery Court found "no question of the

jurisdiction of this court to award counsel fees and disbursements

to the plaintiffs" out of the sale proceeds. Lipin v. Ziff, 53

N.J. Super. 443, 445 (Ch. Div. 1959). Citing Katz, Baird, and

Lipin, Judge (later Justice) Pashman ruled that "[t]here can be

no doubt that the proceeds of the partition represent a fund in

court within the purview of R.R. 4:55-7(b)." Smith v. Smith, 78

N.J. Super. 28, 35 (Ch. Div. 1963). Accordingly, we rule that the

trial court was authorized to award attorney fees to plaintiff

under Rule 4:42-9(a)(2).

Merrick argues that plaintiff did not incur legal expenses

for the protection, preservation, enhancement, and common benefit

of the premises and instead acted in self-interest. To the

contrary, plaintiff's partition action resulted in the sale of a

small, vacant property whose ownership was divided between many

people, making use or sale difficult for almost ninety years. The

partition action created a fund from the sale proceeds which could

be distributed to the class of owners, including plaintiff and

Merrick. As plaintiff purchased the majority interest in the

property before it filed the action, partition primarily served

11 A-3112-15T1
its own interests. Nonetheless, the partition action "redound[ed]

to the benefit of others as well," particularly Merrick, so "it

would be unfair to saddle the full cost upon" plaintiff, as it "is

doing more than merely advancing [it]s own interests." Henderson,

176 N.J. at 564 (quoting Sunset Beach, 33 N.J. at 168).

Therefore, the trial court had the authority to award counsel

fees from the fund in court created by the partition action.

Moreover, 87.5% of the money used to pay the counsel fees came

from plaintiff's share of the partition proceeds, with only 12.5%

from Mercer's share, so the splitting of fees was proportional to

the benefit received.

IV.

Merrick argues that plaintiff's attorneys cannot recover

counsel fees because they were essentially acting in a pro se

capacity for their own behalf and benefit. Specifically, Merrick

claims that plaintiff was solely owned by Richard, that David as

Richard's son may have had an interest in plaintiff, and that

David and Richard share the same office and same fax number, even

though they claim to be sole practitioners.4

4
Merrick also asserts David bid $1000 for the property at the
sheriff's sale. Any such bid was unsuccessful, as the property
was sold to an independent buyer. It is also irrelevant, as the
partition action in fact created a fund in court of over $110,000,
and David served as plaintiff's attorney in that partition action.

12 A-3112-15T1
 Merrick cites cases which have "reject[ed] counsel fee awards

to attorneys who represent themselves." Segal v. Lynch, 211 N.J.

230, 264 (2012). Those cases note that "'[t]o compensate an

attorney for his lost hours would confer on the attorney a special

status over that of other litigants who . . . are appearing pro

se,'" and would run counter to "preference for encouraging all

litigants to engage the services of independent counsel." Id. at

262-63 (quoting Alpert, Goldberg, Butler, Norton & Weiss, PC v.

Quinn, 410 N.J. Super. 501, 546 (App. Div. 2009), and citing Kay

v. Ehrler, 499 U.S. 432, 437-38 (1991)).

David and Richard were not litigants, and they were not

representing themselves. The litigant was plaintiff Stockton Land

Company, LLC. David was representing plaintiff, with help from

Richard. Even if they shared a law practice, they would still be

representing plaintiff, a limited liability company.

A limited liability company is a separate legal entity that

"has the capacity to sue and be sued in its own name." N.J.S.A.

42:2C-5; see N.J.S.A. 42:2B-11(b) (1998). "A limited liability

company is an entity distinct from its members." N.J.S.A. 42:2C-

4(a). One purpose of those statutes was to enable members and

managers of LLCs to have the "'limited liability afforded to

shareholders and directors of corporations.'" Kuhn v. Tumminelli,

366 N.J. Super. 431, 439 (App. Div. 2004) (citation omitted).

13 A-3112-15T1
 An attorney who represents an LLC is not representing himself.

"[A]n organization is not comparable to a pro se litigant because

the organization is always represented by counsel, whether in-

house or pro bono, and thus, there is always an attorney-client

relationship." Kay, 499 U.S. at 436 n.7. "[T]he law takes

seriously the formal line between a corporation and a natural

person, even when the corporation is, in effect, a one-person

firm." Nat'l Sec. Counselors v. CIA, 811 F.3d 22, 25, 31 (D.C.

Cir. 2016). "Even a lawyer for an organization he founded and

runs must fulfill his professional lawyering responsibilities to

that organization. He may not merely serve his own preferences,

moods, or tastes. He is legally and ethically required to be

loyal to client interests, as distinct from his own." Id. at 30.

Thus, an LLC or "a corporation with a legal identity distinct

from the attorney who represents it in litigation is eligible to

recover attorney's fees," even if its attorney is a founder, owner,

head, or in-house counsel. Id. at 25, 29-33. That the attorney's

relationship to the organization is not "arms-length" does not

"defeat the eligibility of" the organization for counsel fees.

Id. at 32; see Bond v. Blum, 317 F.3d 385, 398-400 (4th Cir. 2003)

(awarding counsel fees to an LLC represented by one of its

members). Thus, the trial court could award counsel fees to

plaintiff for its representation by David, aided by Richard.

14 A-3112-15T1
 For the same reasons, Merrick cannot show prejudice from the

alleged failure of David's certification to state whether he was

in-house or outside counsel for plaintiff, or had an ownership

interest in plaintiff. See RPC 1.5(a)(6) (requiring such

certifications to state "the nature and length of the professional

relationship with the client"); see also R. 4:42-9(b). Merrick

has shown no basis to ignore the separate legal entity of the LLC.

V.

Merrick argues the trial court should not have awarded counsel

fees because Richard concealed material information from the

persons who sold their interest in the property to plaintiff. 5

Merrick relies on the allegations in his counterclaim, and in the

Rosenberg action. He claims "the Rosenberg [p]laintiffs have set

forth prima facie showing based upon undisputed record facts that

the transaction was unconscionable, and cannot be enforced."

Merrick also asserts plaintiff's request for attorney fees "is not

made with clean[] hands as required by [] the Court to grant in

equity." However, the trial court dismissed Merrick's

5
The allegedly concealed information included that: water and
sewer connections were only 200 feet from the property; a well and
septic system could be used on the property; houses 200 feet away
had high values; the property was grandfathered from lot-size
requirements; a small single family home could have been built on
the property; and Don, without revealing he did not own the entire
property, received a $60,000 offer for the property in 2008.

15 A-3112-15T1
counterclaim with prejudice. Moreover, the court had not

adjudicated the claims of the Rosenberg plaintiffs at the time of

the fee award in the partition action. Therefore, the allegations

of misrepresentation had not been substantiated.6

Furthermore, the trial court was not required to rule on the

Rosenberg plaintiffs' separate action before awarding counsel fees

in the partition action. The two actions had different parties

and concerned different issues. The Rosenberg plaintiffs' action

was brought by persons who sold their interests to plaintiff before

the partition action was filed. The partition action was brought

against persons who had not sold their interests to plaintiff.

Whether Richard concealed information from the persons who

previously sold their interests to plaintiff was a separate issue

from the partition of the interests of persons who had not sold

their interests to plaintiff. The alleged concealment was revealed

to the other parties in the partition action by Merrick's answer,

and was not alleged to have caused their subsequent sale of their

interests to plaintiff or Merrick.

6
Indeed, Merrick's appeal was dismissed as interlocutory, but was
reinstated only after the trial court severed the Rosenberg
plaintiffs' action. Plaintiff represents the trial court
subsequently granted it summary judgment in the Rosenberg
plaintiffs' action.

16 A-3112-15T1
 Most importantly, the parties to the partition action,

particularly Merrick, benefitted from the partition action as it

created a fund in court. Thus, it was not an abuse of discretion

to require the parties to the partition action to pay their share

of the fees for creating that fund, regardless of whether the

Rosenberg plaintiffs could show concealment in their separate

action.

VI.

Merrick argues David's certification failed to apportion

attorney fees between the partition action, the response to

Merrick's counterclaim, and the response to the distinct lawsuit

brought by the Rosenberg plaintiffs. However, the trial court

expressly performed that allocation and awarded counsel fees only

for the 90% of the hours which "were expended in support of the

partition action." Merrick does not show any error on that

calculation, or identify anything in the certification indicating

David sought fees for any time spent defending the action by the

Rosenberg plaintiffs.

We note apportionment is required only for "'independent

claims,'" not for claims that "are factually and legally

interrelated." Silva v. Autos of Amboy, Inc., 267 N.J. Super.

546, 555 (App. Div. 1993) (quoting and distinguishing 49 Prospect

St. Tenants Ass'n v. Sheva Gardens, 227 N.J. Super. 449, 470 (App.

17 A-3112-15T1
Div. 1988)). In contesting the partition action, Merrick relied

heavily on the concealment allegations in his counterclaim and the

Rosenberg plaintiffs' action. Thus, Merrick is in a poor position

to critique the trial court's apportionment. See EnviroFinance

Grp., LLC v. Envtl. Barrier Co., 440 N.J. Super. 325, 343-44 (App.

Div. 2015).

VII.

Merrick argues that legal fees should not be awarded because

the sale price of the property was not representative of its real

market value. Merrick notes he presented to the trial court a

proposed contract under which he would sell the property to a

buyer for $130,000. However, the property was not Merrick's to

sell, as he owned only a small undivided interest in the property.

The record is silent whether the buyer would have been willing to

pay more than $117,000 if he had to purchase numerous small

undivided interests in the property from multiple owners.

In any event, this is really a challenge to the partition

order itself, which Merrick did not appeal. The trial court chose

to order a public sale, rather than "[a] private sale (infrequently

ordered) [which] is accomplished by a contract of sale being

submitted for court approval." William A. Dreier, Paul A. Rowe,

& Andrea J. Sullivan, Guidebook to Chancery Practice in New Jersey

§ II.C (9th ed. 2014). Accordingly, the proposed contract is

18 A-3112-15T1
irrelevant to the issue of whether counsel fees should have been

awarded for the public sale.

Merrick's remaining claims lack sufficient merit to warrant

discussion. R. 2:11-3(e)(1)(E).

VIII.

As previously noted, the trial court misapprehended the

number of hours as "96 hours." In fact, David certified to only

"89.6 hours." Applying the trial court's methodology, 89.6 hours

multiplied by $200 is $17,920. Ninety percent of $17,920 is

$16,128, which plus $956 in costs would total $17,084. However,

the court awarded David $18,236, which was $1152 too much. This

miscalculation also mistakenly reduced by $1152 the balance in the

court's trust fund, and thus decreased the dollar amounts paid

under the partition to Merrick reflecting his 12.5% share of that

balance, paid to plaintiff reflecting its uncontested 29.17%

share, and kept in the trust fund representing plaintiff's then-

contested 58.33% share.

Accordingly, we vacate the dollar amounts of counsel fees and

partition shares contained in the March 18, 2016 order, and remand

for entry of an order or an amended order awarding David $17,084

in counsel fees and costs, requiring David to repay $1152 into the

trust fund, awarding 12.5% of the $1152 to Merrick, awarding 29.17%

of the $1152 to plaintiff, and disposing of the remaining 58.33%

19 A-3112-15T1
of the $1152 based on any further orders of court about the trust

fund, with any accrued interest allocated based on the same

percentages.

We reject plaintiff's claim that Merrick waived his challenge

to the award of counsel fees by not seeking a stay of the trial

court's order paying out the fees. A stay is generally unavailable

when the harm can "be redressed adequately by monetary damages."

Crowe v. De Gioia, 90 N.J. 126, 133 (1982). Moreover, Merrick's

acceptance of his share of the partition also did not waive his

right to challenge the counsel fees, as those are separate issues.

Vacated in part and remanded. We do not retain jurisdiction.

20 A-3112-15T1