NOT FOR PUBLICATION WITHOUT THE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-3028-16T2
MASTERS AT KNOB HILL
CONDOMINIUM ASSOCIATION, INC.,
Plaintiff-Appellant,
v.
SEAN M. LALLJEE,
Defendant-Respondent.
________________________________________
Submitted February 27, 2018 – Decided June 6, 2018
Before Judges Carroll and DeAlmeida.
On appeal from Superior Court of New Jersey,
Chancery Division, Monmouth County, Docket No.
F-001113-16.
Ansell Grimm & Aaron, PC, attorneys for
appellant (Breanne M. DeRaps and David J.
Byrne, on the brief).
The Boyer Law Firm, attorneys for respondent
(Michele T. Boyer, on the brief).
PER CURIAM
Plaintiff Masters at Knob Hill Condominium Association, Inc.
("the Association") appeals from an order of the Chancery Division
awarding it attorney's fees and costs in this foreclosure action.
Plaintiff argues that the court erred when it determined the amount
of attorney's fees awarded. We reverse and remand for a new
determination of the amount of attorney's fees to be awarded to
plaintiff.
I.
Plaintiff is a residential condominium association
responsible for the management of the common elements of a
condominium complex in Manalapan. Defendant Sean M. Lalljee owns
a residential unit at the complex. Defendant concedes that he did
not fulfill his responsibility under the governing documents of
the Association to pay common expense assessments on his unit.
Pursuant to the New Jersey Condominium Act, N.J.S.A. 46:8B-1 to -
38, the unpaid assessments constitute liens on defendant's unit
in favor of the Association.
Plaintiff recorded liens against Lalljee's unit with the
Clerk of Monmouth County for unpaid common expense assessments on
the following dates and in the following amounts: (1) March 29,
2009, $5,258.95; (2) November 14, 2011, $3,571.04; and (3) May 1,
2013, $5,759.47. The liens, totaling $14,589.46, secured amounts
including assessments, late charges, and other fees through the
end of 2013.
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In 2014, a bankruptcy petition filed by defendant was
discharged. Some, but not all, of the debts memorialized in the
liens were discharged.
On January 13, 2016, the Association filed a complaint in the
Chancery Division to foreclose on the portion of the liens not
discharged in the bankruptcy. Defendant filed an Answer on or
about March 9, 2016.
Attempts to settle the matter were unsuccessful. Plaintiff
contends defendant rebuffed settlement offers, and attempts by the
Association's Board President to resolve the matter without
incurring significant attorney's fees. Defendant, on the other
hand, contends that he was willing to pay the assessments that
were in arrears, but plaintiff was unable to provide a precise
payoff amount. The record contains several communications from
plaintiff setting the payoff amount at divergent amounts.
Plaintiff filed three motions prior to trial. The first, to
strike defendant's defenses and suppress his answer without
prejudice pursuant to Rule 4:23-5, was denied when defendant
provided discovery responses before the return date of the motion.
The second, for partial summary judgment, was denied because a
certification supporting the motion was not forwarded to the court.
Plaintiff's third motion, for reconsideration of its motion for
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partial summary judgment, was returnable on the day after trial.
As a result, the motion was not heard by the trial court.
On September 15, 2016, the parties and counsel appeared for
trial. They resolved the matter that day. Defendant agreed to
acknowledge and pay the amount of the open assessments secured by
the liens and recognize the Association's right to an award of
reasonable attorney's fees and costs incurred in collecting the
assessments. The total amount of common expense assessments
recovered by plaintiff was $1,715.67, with interest.
On October 12, 2016, the Association, pursuant to Rule 4:42-
9, submitted its attorney's fee affidavit seeking $31,627.50 in
attorney's fees, and $1,618.96 in costs. The attorney's fees
sought were charged by two firms. Stark & Stark, P.C. ("Stark")
represented the Association through March 2015, resulting in
attorney's fees of $5,274.50, and costs of $677.87. Among other
things, Stark prepared and recorded liens, engaged in settlement-
related actions, including communicating with defendant, and
drafting proposed payment agreements.
The Association retained Ansell, Grimm & Aaron P.C.
("Ansell") in March 2015. Ansell represented the Association from
the preparation and filing of the foreclosure complaint through
entry of final judgment. Ansell's representation of the
Association resulted in attorney's fees of $26,353, and costs of
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$941.09. Some of the attorney's fees charged by Ansell were for
set amounts for identified tasks, as agreed upon by the Association
and Ansell. The remaining fees were based on an hourly rate.
On November 4, 2016, the trial court awarded all of the costs
sought, $1,618.96, but only $11,274.50 in attorney's fees.
On February 27, 2017, the court entered a final judgment of
foreclosure memorializing plaintiff's entitlement to $1,715.67 in
common expense assessments, with interest, and $12,893.46 in
attorney's fees and costs.
This appeal followed.
II.
Although New Jersey generally disfavors the shifting of
attorney's fees, a prevailing party may recover attorney's fees
if expressly provided by statute, court rule, or contract.
Packard-Bamberger & Co. v. Collier, 167 N.J. 427, 440 (2001)
(citing North Bergen Rex Transp., Inc. v. Trailer Leasing Co., 158
N.J. 561, 564 (1999) and Dep't of Envtl. Prot. v. Ventron Corp.,
94 N.J. 473, 504 (1983)). Rule 4:42-9(a)(8) permits the award of
attorney's fees "[i]n all cases where attorney's fees are permitted
by statute."
The Condominium Act authorizes the award of attorney's fees
as follows:
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[t]he association shall have a lien on each
unit for any unpaid assessment duly made by
the association for a share of common expenses
. . . together with interest thereon and, if
authorized by the master deed or bylaws, late
fees, fines and reasonable attorney's fees.
[N.J.S.A. 46:8B-21(a).]
Defendant does not dispute that plaintiff, having prevailed
in its foreclosure action with respect to delinquent common expense
assessments on his unit, is entitled by statute and the governing
documents of the Association to reasonable attorney's fees. The
only issue before us is the quantum of the attorney's fees awarded.
In calculating the amount of reasonable attorney's fees, "an
affidavit of services addressing the factors enumerated by RPC
1.5(a)" is required. R. 4:42-9(b); Township of W. Orange v. 769
Assocs., LLC, 198 N.J. 529, 542 (2009). RPC 1.5(a) sets forth the
factors to be considered when determining an attorney's fee award.
The rule provides:
(a) A lawyer's fee shall be reasonable. The
factors to be considered in determining the
reasonableness of a fee include the following:
(1) The time and labor required, the novelty
and difficulty of the questions involved, and
the skill requisite to perform the legal
service properly;
(2) the likelihood, if apparent to the
client, that the acceptance of the particular
employment will preclude other employment by
the lawyer;
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(3) the fee customarily charged in the
locality for similar legal services;
(4) the amount involved and the results
obtained;
(5) the time limitations imposed by the
client or by the circumstances;
(6) the nature and length of the professional
relationship with the client;
(7) the experience, reputation, and ability
of the lawyer or lawyers performing the
services;
(8) whether the fee is fixed or contingent.
[RPC 1.5.]
Courts determine the "lodestar," defined as the "number of
hours reasonably expended" by the attorney, "multiplied by a
reasonable hourly rate." Litton Indus., Inc. v. IMO Indus., Inc.,
200 N.J. 372, 386 (2009) (citing Furst v. Einstein Moomjy, Inc.,
182 N.J. 1, 21 (2004)). "The court must not include excessive and
unnecessary hours spent on the case in calculating the lodestar."
Furst, 182 N.J. at 22 (citing Rendine v. Pantzer, 141 N.J. 292,
335-36 (1995)). We afford trial courts "considerable latitude in
resolving fee applications . . . ." Grow Co. v. Chokshi, 424 N.J.
Super. 357, 367 (App. Div. 2012). Such "'determinations by trial
courts will be disturbed only on the rarest of occasions, and then
only because of a clear abuse of discretion.'" Packard-Bamberger,
167 N.J. at 444 (quoting Rendine, 141 N.J. at 317).
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Here, the trial court reviewed each of the factors set forth
in RPC 1.5. The court found both the fixed fees charged by Ansell,
and the hourly rates charged by both firms to be reasonable. The
court determined, however, that the proportionality of the amount
of attorney's fees sought to the amount of the assessments
recovered from defendant warranted a reduction in the fees awarded.
The court explained its rationale: "I've considered all the . . .
RPCs, and . . . you comply with that, but it kind of shocks the
[conscience] when I'm asked to – to give a fee of [fifteen] times
the amount" recovered. This is the only factor on which the trial
court relied in reducing the attorney's fee award.
To calculate the fee, the trial court allowed the entire
amount sought for services provided by Stark, $5,274.50. With
respect to the $26,353 in attorney's fees sought for services
provided by Ansell, however, the court allowed only $6,000. This
amount was determined not by eliminating excessive or unwarranted
hours from Ansell's affidavit. In fact, the court made no finding
that any particular action taken by the Ansell firm was
unreasonable or unwarranted. Instead, the trial court appears to
have selected a dollar figure it determined to be reasonable
without explaining how it reached that figure.
We rejected this approach to determining attorney's fees in
The Glen Section I Condo. Assoc. v. June, 344 N.J. Super. 371
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(App. Div. 2001). In that case, the trial court, acting without
an affidavit of services, held that
I do [not] know of anyone that would pay $7000
in attorney's fees to collect a judgment on
slightly over $2,800. It is not reasonable.
I can only, therefore, and will only award
counsel fees reasonably related to what should
have been done in this case. That fee that
I'm allowing is the sum of $1000, which I
believe adequately compensates counse[l].
[Id. at 382.]
Finding that this reasoning "clearly contravene[s] the purpose of"
Rule 4:42-9, we remanded the matter "for a determination of
reasonable attorney's fees based upon the proper submission of an
affidavit of services." Ibid.
Although a court may consider the damages recovered by a
prevailing party when determining an attorney's fee award, a
reduction in attorney's fees may not be justified merely by
comparing the amount of damages recovered to the amount of
attorney's fees sought. Our Supreme Court requires a more nuanced
analysis. As explained in Rendine,
if the specific circumstances incidental to a
counsel-fee application demonstrate that the
hours expended, taking into account the
damages prospectively recoverable, the
interests to be vindicated, and the underlying
statutory objectives, exceed those that
competent counsel reasonably would have
expended to achieve a comparable result, a
trial court may exercise its discretion to
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exclude excessive hours from the loadstar
calculation.
Similarly, a trial court should reduce the
loadstar fee if the level of success achieved
in the litigation is limited as compared to
the relief sought. "If . . . a plaintiff has
achieved only partial or limited success, the
product of hours reasonably expended on the
litigation as a whole times a reasonable
hourly rate may be an excessive amount. This
will be true even where the plaintiff's claims
were interrelated, nonfrivolous, and raised in
good faith."
[141 N.J. at 336 (quoting Hensley v.
Eckerhart, 461 U.S. 424, 436 (1983)).]
With respect to the first circumstance addressed in Rendine,
the trial court must consider the hours expended, the damages
reasonably recoverable, the interests to be vindicated, and the
underlying statutory objectives. The trial court did not examine
these factors. We note the legislative intent when enacting
N.J.S.A. 46:8B-21(a), a factor overlooked by the trial court. The
Chancery Division describe the statute as follows:
[t]he legislative scheme for collection of
assessments for maintenance charges against
individual unit owners is a recognition that
such charges are the financial life-blood of
the Association. They are conceptually akin
to the right of a municipality to levy and
collect real estate taxes. The legislature
clearly did not intend that the necessary
income stream be reduced by the payment of
"reasonable attorneys fees" incurred in the
process of collection of the charges.
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[Park Place E. Condo. Ass'n v. Hovbilt, Inc.,
279 N.J. Super. 319, 323-24 (Ch. Div. 1994).]
Any attorney's fees not paid by defendant will be borne by the
other owners of units at the Association's condominium complex.
In addition, to the extent that attorney's fee awards are
reduced in actions to collect common expense assessments, the
statutory incentive for unit owners to pay assessments in a timely
fashion is weakened. These considerations must be weighed by the
trial court, along with the likelihood that common expense
assessments might often be relatively small when compared to the
cost of employing counsel to collect them. Reductions in
attorney's fees awards based on the small amount of assessments
collected may have the unintended, and negative consequence of
encouraging the accumulation of large amounts of delinquent
assessments prior to an Association's initiation of legal action.
In addition, as the Court noted in Rendine, "a trial court
may exercise its discretion to exclude excessive hours from the
loadstar calculation" where appropriate. 141 N.J. at 336. Here,
the trial court did not excise hours from the attorney's fee
application, but simply reduced the Ansell attorney's fee award
to a round number the court found reasonable.
We also agree with plaintiff that it was an abuse of the
trial court's discretion to, without explanation, award the entire
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amount of attorney's fees incurred for services by the Stark firm,
but to reduce the fees incurred for services by Ansell. The court
must "evaluate carefully and critically the aggregate hours"
expended by each firm and eliminate those that "are excessive,
redundant, or otherwise unnecessary." Rendine, 141 N.J. at 335.
With respect to plaintiff's level of success achieved, the
appropriate analysis is to compare the relief sought by plaintiff
to the relief obtained. The Association initiated its foreclosure
action to obtain a final judgment of foreclosure with a set amount
due from defendant if he wished to avoid foreclosure. Plaintiff
was completely successful in obtaining that relief. A comparison
of the amount of attorney's fees incurred to the amount of damages
awarded, standing alone, to determine the level of a prevailing
party's success has been rejected by our Supreme Court.
Szczepanski v. Newcomb Med. Ctr., 141 N.J. 346, 366 (1995) ("We
decline to construe New Jersey's fee-shifting statutes to require
proportionality between damages recovered and counsel-fee awards
even if the litigation . . . vindicates no rights other than those
of the plaintiff.").
Reversed and remanded for a determination consistent with
this opinion of reasonable attorney's fees to be awarded to
plaintiff.
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