NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-3450-19T1
A-3452-19T1
B.B.,
Plaintiff-Appellant,
v.
APPROVED FOR PUBLICATION
S. BRADLEY MELL, KIMBERLY November 23, 2020
RUGGLES MELL, W.H. MELL
APPELLATE DIVISION
ASSOCIATES, INC.,
GULFSTREAM CM, LLC,
GULFSTREAM GM, LLC, and
AERO CARE SERVICES, LLC,
Defendants,
______________________________
LOMURRO, MUNSON, COMER,
BROWN & SCHOTTLAND, LLC,
Respondent.
______________________________
Argued November 10, 2020 – Decided November 23, 2020
Before Judges Fisher, Gilson and Moynihan.
On appeal from the interlocutory orders of the Superior
Court of New Jersey, Law Division, Essex County,
Docket No. L-7200-19.
Bruce H. Nagel argued the cause for appellant (Nagel
Rice, LLP, attorneys; Bruce H. Nagel, of counsel and
on the brief; Diane E. Sammons, and Michael J.
Paragano, on the brief).
Christina Vassiliou Harvey argued the cause for
respondent (Lomurro, Munson, Comer, Brown &
Schottland, LLC, attorneys; Richard Lomurro, of
counsel and on the brief; Nicholas Pantages, and Angel
Falcon, on the brief).
The opinion of the court was delivered by
FISHER, P.J.A.D.
In this interlocutory appeal, we consider whether or to what extent defense
counsel in a civil action is entitled to be paid from funds that were the subject
of a prejudgment attachment. Concluding that the statutes and rules governing
attachments and equitable principles do not support the payment of fees from
the attached funds, we reverse the orders under review.
In putting this issue in perspective, we note that there is no dispute that,
over the course of five months from July to December 2017, defendant S.
Bradley Mell engaged in sexual relations with plaintiff B.B., who was then
fifteen-years old. That illicit and unlawful relationship was eventually
discovered and led to Mell's arrest in May 2018; a year later, Mell pleaded guilty
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to state and federal crimes 1 arising from his victimization of B.B., and he is
presently serving a seven-year federal prison term in Pennsylvania.
B.B. commenced this civil action for damages in October 2019 and
quickly sought a prejudgment writ of attachment of Mell's assets. After
receiving opposition and considering counsel's argument, the judge entered an
order on January 3, 2020, that denied an attachment of Mell's property but
directed the payment of forty percent of funds due Mell from defendants
Gulfstream CM, L.L.C., and Gulfstream GP, L.L.C. (collectively, Gulfstream)
into an account held by Tompkins, McGuire, Wachenfeld & Barry, Gulfstream's
attorneys. After a dispute about the order's scope, the judge entered another four
days later, this time granting B.B.'s application for a writ of attachment "against
any and all of Bradley Mell's assets and income including but not limited" to the
buyout, future retirement distributions, and other money due him from
Gulfstream and defendant Aero Care Services, L.L.C., including from the sale
of Mell's jet. This January 7, 2020 order further directed Mell to "account for
any and all" funds he had either received or would receive from W.H. Mell
1
Mell pleaded guilty in the state matter to endangering the welfare of a child,
N.J.S.A. 2C:24-4(a)(1), and in the federal matter to receipt of child pornography,
18 U.S.C. § 225A(a)(2), and travel with the intent to engage in illicit sexual
conduct, 18 U.S.C. §2423(b).
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Associates, Gulfstream, and Aero Care, and all amounts received through the
sale of any other property. He was also ordered to account for and pay into the
Tompkins account any and all asset transfers made by him in his individual
capacity or as a trustee over "the last three years." The order lastly enjoined and
restrained Mell from any other transfers, encumbrances or hypothecation of any
assets held in his individual or trustee capacity. 2
This prompted another dispute, resulting in an order entered on January
23, 2020, that vacated the January 3 and 7, 2020 orders but that was otherwise
identical to the January 7, 2020 order except: the income from Gulfstream was
directed to be paid into the trust account of B.B.'s attorneys; and the proceeds
of the sale of property or any other asset transfer made by Mell as a trustee were
not to be deposited into any trust account.
Soon after, Mell successfully moved for a modification of the existing
restraints to permit the payment of his legal fees to Lomurro, Munson, Comer,
Brown & Schottland (Lomurro), his attorneys in this civil action. The judge's
March 16, 2020 order invited Mell's submission of a proposed order that would
modify the January 23, 2020 attachment order, as well as an itemization of
2
Mell and his ex-wife later moved for reconsideration of this last provision,
prompting the judge to enter an order on March 16, 2020, that modified the
language of the injunction in a way not presently relevant.
A-3450-19T1
4
Lomurro's "fair and reasonable legal fees." Following Mell's submission to the
trial judge, B.B. filed opposition, sought a stay, and soon moved in this court
for leave to appeal the March 16, 2020 order. On April 9, 2020, the judge
entered an order compelling the payment of $26,026.50 to Lomurro from B.B.'s
attorney's trust account. 3 On April 13, 2020, the judge granted a stay of the
April 9, 2020 order pending our disposition of B.B.'s motion for leave to appeal
the March 16, 2020 order. B.B. then moved for leave to appeal the April 9, 2020
trial court order.
On May 7, 2020, we granted both motions for leave to appeal, stayed both
orders under review, consolidated the two interlocutory appeals, and imposed
an accelerated briefing schedule.
In appealing, B.B. argues that the trial judge erred in: (1) "allowing
[Mell], an admitted sexual abuser, and his attorney[,] priority over a victim" as
to the property attached; (2) allowing relitigation of the attachment order; (3)
rushing to the fee determination without discovery; (4) failing to properly
analyze the fee applications in the manner required by Rendine v. Pantzer, 141
N.J. 292 (1995); and (5) determining the trial court was the proper forum for
3
Around this time, Lomurro sought to be relieved as Mell's counsel. That
motion was granted on May 21, 2020.
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fixing the amount of fees sought by Lomurro. Because we agree with B.B.'s
first argument, we reverse both orders under review without reaching the other
four arguments.
To explain, we need only briefly review the significance of the
attachment, the absence of any counsel-fee exception to an attachment, and the
overpowering equities that favor rejection of the claim of Mell and his former
attorney to the payment of fees from the attached funds.
To start, prejudgment attachment is an extraordinary remedy. Russell v.
Fred G. Pohl Co., 7 N.J. 32, 39 (1951). An attachment is also a legislative
creature and its availability is "not to be enlarged beyond the plain meaning and
understanding of its terms." Id. at 41. B.B. convinced the trial court that she
was entitled to this extraordinary remedy, and the January 2020 orders that
granted this relief are not in question in these appeals. So, we proceed with our
analysis of the issues with that understanding.
In this State, as a general matter, the creditor "who levies first" has priority
"over all nonlevying judgment creditors," New Brunswick Savings Bank v.
Markouski, 123 N.J. 402, 413 (1991), let alone all unsecured creditors. By
obtaining a writ of attachment, a creditor or claimant also takes priority over
creditors that later levy, unsecured creditors, and claimants that join in the
A-3450-19T1
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attachment proceeding as permitted by Rule 4:60-15(e),4 even before the party
obtaining the writ has yet to obtain a judgment against the defendant. See
Pulaski Sav. & Loan Ass'n v. Aguiar, 174 N.J. Super. 42, 49 (Ch. Div. 1982).
As explained in plain language by one commentator, a plaintiff in a pending tort
action – when compared to other creditors – is "the low person on the totem
pole," but that plaintiff's place rises on the pole above other unsecured creditors
and claimants, and others who later levy, on obtaining a prejudgment
attachment. Rhonda Wasserman, Equity Renewed: Preliminary Injunctions to
Secure Potential Money Judgments, 67 Wash. L. Rev. 257, 283-84 (1992); see
also Wolfson v. Bonello, 270 N.J. Super. 274, 287 (App. Div. 1994). So, as a
general matter, by obtaining an attachment in this action in January 2020, B.B.'s
as-yet undetermined unliquidated claim for damages gained priority over any
unsecured creditors, like Lomurro.
But this position on the creditor-claimant totem pole is not permanently
fixed. While N.J.S.A. 2A:26-8 declares that a prejudgment attachment "shall
4
The rules applicable to such an action allow for the assertion of claims by
persons having liquidated or unliquidated claims against the defendant, R. 4:60-
15(a), while also recognizing that these later-appearing claimants "shall
participate, in proportion to but not in excess of their respective judgments
against the defendant . . . after the payment of costs and charges directed by
court order to be paid therefrom and after payment of the plaintiff's judgment
and costs, if any," R. 4:60-15(e) (emphasis added).
A-3450-19T1
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bind the attached goods and chattels, rights and credits, moneys and effects of
defendant attached from the time of its execution" until entry of judgment, it
also recognizes that this secure position remains fixed to the attached property
"unless" property is "released . . . during the pendency of the action." This
language can only mean that a court retains the authority to release property
from the reach of the attachment in appropriate circumstances not otherwise
identified in the statutory scheme. Although it is not clear whether this statutory
authorization was part of the trial judge's thinking when entering the orders
under review – the judge cited no authorities and based his rulings solely on his
"belie[f] that everyone should get paid" and that Lomurro "is certainly entitled
to eat" – the effect of his ruling was to "release" $26,026.50 from the attached
funds for the benefit of Mell and Lomurro. 5
5
We digress to note that the record contains numerous references to Mell's great
wealth. It is also alleged that, prior to his incarceration, Mell engaged in a
number of steps to insulate his assets, steps that included the sale of a jet and
the marital home in Bedminster that alone were valued at over $6,000,000; it is
not clear to us what, if anything, has happened to his home on Nantucket. At
the same time – allegedly in an apparent attempt to avoid liability to B.B. – Mell
allegedly told B.B. that he had placed $500,000 in an escrow account for her
benefit. He also allegedly advised her that he had dissipated $483,000 of that
fund, and that he had arranged to allocate other income or assets into trusts for
his children, making them "crazy wealthy." At oral argument, we were informed
that the funds held in trust through the January 23, 2020 attachment order, which
came from payments owed Mell by Gulfstream, amount now to the relatively
A-3450-19T1
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Even though not otherwise explained by the judge, we are required to
consider whether there was a legal or equitable basis to "release" that part of the
attached funds for Mell and Lomurro's benefit. Neither the statutory attachment
provisions nor our case law defines what a court should consider when
determining whether to "release" funds that have already been attached. In one
case – decided prior to the enactment of the current attachment statutes – the
right to a release of attached funds was found when another party possessed a
clear and prior right to the attached property. See Russell, 7 N.J. at 41-42
(recognizing the greater interest existing in a party who had been validly
assigned the property by the debtor prior to the attachment). So guided, we
conclude that N.J.S.A. 2A:26-8 provides a court with the authority, in an
appropriate circumstance, to protect a previously-arising, more equitable claim
than that possessed by the party obtaining the writ of attachment. No such right
was established by Mell or Lomurro here. Far from it.
The fees in question were incurred during these proceedings, long after
the tortious conduct that prompted B.B.'s suit and pursuit of a writ of attachment.
small approximate amount of $238,000. The judge's order had the disturbing
consequence of releasing nearly ten percent of what B.B. had been able to locate
and secure by the time these appeals were filed with the possibility that, if left
unchecked, additional portions of the attached funds might also be used by Mell,
who is presently self-represented, to retain new counsel.
A-3450-19T1
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Mell and Lomurro clearly have no greater or prior equitable right that would
entitle them to a "release" of approximately ten percent of the attached funds in
the proceedings in which they energetically sought to avoid the creation of that
very fund. In fact, we see no equities at all that favor the payment of these fees
from the fund. What could be more inequitable than to allow Mell to have his
debt to Lomurro paid from the funds attached for the benefit of the victim of his
crimes? We are reminded of the old equitable maxim that "a man must be just
before he is generous." In re Estate of Passoff, 359 N.J. Super. 112, 118 (Ch.
Div. 2002) (quoting Horton v. Bamford, 79 N.J. Eq. 356, 381-82 (Ch. 1911));
see also Sweney v. Carroll, 118 N.J. Eq. 208, 215 (Ch. 1935). Mell has an
obligation – as yet unquantified – to B.B.; the argument that Mell should be
entitled to pay his expenses, such as counsel fees, in resisting that obligation
should fall on deaf ears. Mell cannot be generous with his funds – particularly
when they have been lawfully attached – by honoring other debts, when he has
yet to be "just" to B.B.
Lomurro lastly argues in this appeal that the orders under review may be
sustained because, in these proceedings, Mell has a right to counsel which the
attachment would otherwise unduly or inequitably hamper. On this point,
Lomurro chiefly relies on Rule 4:60-10(c). That reliance is misplaced.
A-3450-19T1
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The attachment rules generally outline in detail the procedures to be
followed in actions in which a writ of attachment is sought. Rule 4:60-10, to
which Lomurro refers, in large measure presupposes circumstances in which the
writ of attachment has issued ex parte or when the defendant has yet to appear,
neither of which circumstance occurred here. Specifically, Lomurro relies on
subsection (c) of that rule; that subsection, however, states only that "[a]
defendant who appears in the action and defends the same may move against the
attachment or levy at any time before final judgment[.]" R. 4:60-10(c). Lomurro
argues that this subsection somehow guarantees a defendant in such an action
not only a right to counsel but the right to have counsel fees paid from attached
funds as well, when the subsection mentions neither "counsel" nor "fees."
Nothing expressed in the attachment statutes, N.J.S.A. 2A:26-1 to -16, or
the attachment rules, R. 4:60-1 to -19, gives this defendant any greater rights
than would be possessed by any other civil litigant. And these authorities do
not implicitly suggest that the defendant whose funds were validly attached has
a right to have counsel fees paid from the attached funds absent some compelling
equitable claim.
To be sure, the applicable statutes allow for exceptions from attachment.
See, e.g., N.J.S.A. 2A:26-4 (declaring exempt from attachment "[h]ousehold
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goods and furniture not exceeding $1,000.00 in value"); N.J.S.A. 2A:26 -5
(recognizing that the attachment exempts, in some circumstances, "[w]ages or
other compensation for labor or services," as well as a nonresident's "personal
property in this state" when the claim was asserted by "a nonresident creditor"
when "such property is exempt from liability by the law of the state of which
the debtor and creditor are residents"). Another exception arises in the limited
circumstance recognized by the Supreme Court of the United States in Luis v.
United States, 136 S. Ct. 1083 (2016). There, the divided Court6 narrowly found
a Sixth Amendment deprivation when the government brings an attachment
action against a criminal defendant to freeze untainted funds 7 as the means of
ensuring payment of restitution expected to be ordered once the defendant is
convicted. That circumstance is not present in this case. Mell was prosecuted
6
Justice Breyer wrote an opinion so holding that was joined by the Chief Justice
and Justices Ginsburg and Sotomayor. Justice Thomas concurred in the
judgment for different reasons. Justice Kennedy filed a dissenting opinion that
was joined by Justice Alito. Judge Kagan filed a separate dissenting opinion.
7
The Court found no such limitation when a government seeks forfeiture of
property tainted by its connection with the defendant's alleged crimes. Id. at
1089-90; see also Caplin & Drysdale, Chartered v. United States, 491 U.S. 617,
626 (1989) (holding that the criminally accused "has no Sixth Amendment right
to spend another person's money for services rendered by an attorney, even if
those funds are the only way that that defendant will be able to retain the attorney
of . . . choice").
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and convicted before this action was even commenced. No Sixth Amendment
interest attached here.
There is also no reason to believe that the Supreme Court's concerns in
Luis are applicable when it is not the government but the victim of the crime
that seeks a writ of attachment that might interfere with the criminal defendant's
ability to retain counsel. In construing the reach of the Supreme Court's majority
opinion, Vermont's highest court held that Luis was limited to finding a
constitutional infringement on pre-prosecution attachment when sought and
obtained by the government, not a private party. Estate of Lott v. O'Neill, 165
A.3d 1099, 1105-06 (Vt. 2017). The Vermont court concluded it would be
"perverse" if crime victims were required to "subsidize the criminal defense
costs of the accused" by being compelled to forgo the ability to collect some of
their damages from the accused. Id. at 1106.
We not only embrace this sentiment, but our holding is further buttressed
by the fact that the circumstances are far different from Lott, where the
defendant had not been convicted by the time of the attachment. Id. at 1101.
Mell has been convicted and presently sits in a federal penitentiary for having
victimized B.B. Concerns about his ability to defend himself in the criminal
prosecutions are simply not present here. In short, we find nothing about the
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Court's holding in Luis that would suggest some limitation on the reach of an
attachment when the attachment was obtained by the crime victim against the
assets of the perpetrator whether commenced before, during or after the criminal
prosecution.
We lastly find it inequitable to allow Mell access or use of attached funds
when there remains a dispute about whether he has identified all his assets and
whether he has other assets that have yet to be attached. B.B. argues that she
has been stonewalled in seeking discovery about Mell's assets and his transfer
of assets.8 Until Mell makes a full disclosure, there is no reason to conclude he
lacks other assets available to pay his attorneys and no reason to allow – or even
consider – an invasion of the attached funds for that purpose.
And, so, we decline the invitation to find for Mell a legal or equitable right
to the payment of his counsel fees – incurred in a civil action brought by his
victim – from funds that have been attached for his victim's benefit. In
reversing, we conclude that B.B. has a higher priority to the attached funds than
Mell or Lomurro, that nothing in the statutes or rules governing attachment
actions creates an exception from attachment for a defendant's counsel fees, and
8
At oral argument, we invited additional submissions about other parts of the
trial court record and learned that in April 2020, Mell's responsive pleading was
stricken for failure to provide discovery.
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that neither Mell nor Lomurro has demonstrated an equitable right to the
attached funds greater than B.B.'s right to the security provided by the
attachment.
The March 16 and April 9, 2020 trial court orders are reversed.
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