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Superior Court of New Jersey, Appellate Division.

ASHLEY POLAND, Plaintiff–Respondent, v. JONATHAN SANDVILLE, Defendant–Appellant.

DOCKET NO. A–1796–12T1

    Decided: March 20, 2014

Before Judges Sabatino and Hayden.

This is defendant Jonathan Sandville's second appeal from an October 1, 2010 Special Civil Part order, which, among other relief, granted counsel fees to plaintiff Ashley Poland in the amount of $9849 pursuant to the Security Deposit Act (SDA), N.J.S.A. 46:8–19 to –26.   For the reasons that follow, we affirm.

As the factual background to this appeal is fully set forth in our prior opinion, Poland v. Sandville, No. A–1177–10 (App.Div. July 26, 2012), we need not repeat it here.   We note only the material facts relevant to this appeal.

Plaintiff rented an apartment from defendant that became uninhabitable due to flooding and mold infestation.   After plaintiff vacated the apartment, defendant withheld her security deposit.   Plaintiff filed a complaint seeking the return of her security deposit and damages pursuant to the SDA, which included double the security deposit, attorney's fees, and costs.   The trial judge determined that plaintiff was constructively evicted, and that the $1425 security deposit should have been returned to plaintiff, less $500 for an unpaid utility bill, which defendant requested in his counterclaim.   The judge ordered defendant to pay plaintiff $1850, double the net amount of $925, and ordered plaintiff's counsel to submit an affidavit of services to determine an award for counsel fees.

Plaintiff's fee application proceeded unopposed as defendant mistakenly believed plaintiff was seeking only the standard attorney's fee listed in a Special Civil Part order.   The judge issued an order awarding plaintiff a counsel fee of $9849, the full amount requested.

In the first appeal, we affirmed the trial judge's substantive findings of constructive eviction and the return of the security deposit.  Poland, supra, (slip op. at 7–9).   We remanded solely on the issue of counsel fees for defendant to file an opposition and the judge to issue a statement of reasons for the award.  Id. (slip op. at 9–10).   After considering defendant's opposition, the trial judge issued a thorough written opinion, again granting the full requested amount.   This appeal followed.

The essence of defendant's current appeal is that the $9849 counsel fee award was an abuse of judicial discretion because the fee is unreasonably disproportionate to the underlying damages of $1850, and it does not take into account that defendant prevailed on his counterclaim for the $500 utility bill.   We find these contentions unpersuasive.

The decision to grant attorney's fees pursuant to the SDA lies within the discretion of the trial judge.   See N.J.S.A. 46:8–21.1(c).  A counsel fee decision will be disturbed “ ‘only on the rarest of occasions, and then only because of a clear abuse of discretion.’ ”  Packard–Bamberger & Co. v. Collier, 167 N.J. 427, 444 (2001) (quoting Rendine v. Pantzer, 141 N.J. 292, 317 (1995)).   An abuse of discretion only arises when the trial judge's “ ‘decision [was] made without a rational explanation, inexplicably departed from established policies, or rested on an impermissible basis.’ ”  United States v. Scurry, 193 N.J. 492, 504 (2008) (alteration in original) (quoting Flagg v. Essex Cnty. Prosecutor, 171 N.J. 561, 571 (2002)).

The New Jersey legislature enacted the SDA “ ‘to protect tenants from overreaching landlords who seek to defraud tenants by diverting rent security deposits to their own use.’ ”  Reilly v. Weiss, 406 N.J.Super. 71, 83 (App.Div.2009) (quoting Jaremback v. Butler Ridge Apartments, 166 N.J.Super. 84, 87 (App.Div.1979)).   The SDA provides that in an action by a tenant to recover a security deposit, “the court upon finding for the tenant ․ shall award recovery of double the amount of said moneys, together with full costs of any action and, in the court's discretion, reasonable attorney's fees.”   N.J.S.A. 46:8–21.1(c).

The first step in determining the fee award is calculating the “lodestar,” which is a reasonable hourly rate for counsel's services multiplied by the number of hours reasonably expended.  Walker v. Giuffre, 209 N.J. 124, 130–31 (2012) (citing Rendine, supra, 141 N.J. at 334–35).   Additionally, Rule 4:42–9(b) requires counsel to submit “an affidavit of services addressing the factors enumerated by RPC 1.5(a),” as well as “a recitation of other factors pertinent in the evaluation of the services rendered[.]”  If the court determines that the hours expended “ ‘exceed those that competent counsel would have expended to achieve a comparable result, a trial court may exercise its discretion to exclude excessive hours from the lodestar[.]’ ”  Packard–Bamberger, supra, 167 N.J. at 446 (quoting Rendine, supra, 141 N.J. at 336).

When the fee request “far exceeds the damages recovered, ‘the trial court should consider the damages sought and the damages actually recovered.’ ”   Litton Indus., Inc. v. IMO Indus., Inc., 200 N.J. 372, 387 (2009) (citing Packard–Bamberger, supra, 167 N.J. at 446).   Indeed, when the damages are disproportionately less than the fees sought, “the court must consider that fact in determining the overall reasonableness of the attorney's fee award.”   Id. at 387–88 (citing Packard–Bamberger, supra, 167 N.J. at 446).

Strict proportionality is not a requirement in statutory fee-shifting;  rather, proportionality is one relevant factor to be considered as to the overall reasonableness of the fee.   See Walker, supra, 209 N.J. at 132;  Szczepanski v. Newcomb Med. Ctr., 141 N.J. 346, 366 (1995) (rejecting strict proportionality for fee-shifting statutes as the public interest is served by successful prosecution, and the awards “assure that counsel for [plaintiffs] will receive reasonable compensation for services reasonably rendered to effectuate the [statute's] objectives”).

We are convinced that the trial judge did not abuse her discretion in finding that plaintiff's counsel's hours and rates were reasonable under Rule 4:42–9(b) and Rendine, supra, 141 N.J. at 334–38.   The judge thoroughly analyzed counsel's affidavit of services and properly determined that counsel's fees were reasonable and warranted under the circumstances.   Notably, the judge pointed to counsel's almost twenty years of experience in landlord-tenant practice in determining that the hourly rate was reasonable.   The judge appropriately determined that the hours expended were necessary given the motion practice involved, the frequent court appearances, the numerous adjournment discussions, and the time preparing for trial.   Nothing in the record demonstrates that plaintiff's counsel's hours “exceed[ed] those that competent counsel reasonably would have expended to achieve a comparable result [.]”  Rendine, supra, 141 N.J. at 336.

Furthermore, the trial judge expressly considered that the fee award was greater than the damages, as required by Packard–Bamberger, supra, 167 N.J. at 446, and, nonetheless, determined that the fee award was reasonable.   She found that proportionality was not required because the overriding public policy behind the SDA was to “prevent landlords from unjustly retaining the security deposits of their tenants and promote the effective assistance of counsel for purposes of such prevention” by making plaintiff whole after successfully prosecuting such a claim.   See Szczepanski, supra, 141 N.J. at 366.   Based on our review of the record, we find no abuse of discretion to warrant interference with her decision to award the requested fees.   See Packard–Bamberger, 167 N.J. at 444.

We reject defendant's completely unsupported contention that plaintiff and her attorney entered into a “sham retainer agreement.”   Defendant's argument is entirely unfounded as nothing in the record demonstrates that plaintiff's counsel “charge[d] an hourly rate or other fee which [plaintiff] understands [she] will not be obligated to pay.”   See Specialized Med. Sys., Inc. v. Lemmerling, 252 N.J.Super. 180, 187 (App.Div.1991), certif. granted, 127 N.J. 565 (1992), appeal dismissed, 142 N.J. 443 (1995).

Finally, defendant argues that the court erred by awarding all requested counsel fees because defendant succeeded on his counterclaim for the unpaid utility bill.   Again, we disagree.

Fee shifting statutes generally limit fee awards to prevailing parties, defined as those who “ ‘succeed on any significant issue in litigation [that] achieves some of the benefit the parties sought[.]’ ”  Szczepanski, supra, 141 N.J. at 355 (alteration in original) (quoting Hensley v. Eckerhart, 461 U.S. 424, 433, 103 S.Ct. 1933, 1938, 76 L. Ed.2d 40, 50 (1983)).   To determine if a party prevails, courts apply a two-part test:  (1) there must be “a factual causal nexus between plaintiff's litigation and the relief ultimately achieved[;]” and (2) “it must be shown that the relief ultimately secured by plaintiffs had a basis in law.”  Singer v. State, 95 N.J. 487, 495 (citing Nadeau v. Helgemoe, 581 F.2d 275, 280–82 (1st Cir.1978)), cert. denied, 469 U.S. 832, 105 S.Ct. 121, 83 L. Ed.2d 64 (1984).

Further, “when a substantial portion of a claim sought is ultimately rejected, that circumstance should be considered ․ to determine a reasonable award of attorneys' fees.”  N. Bergen Rex Transp. v. Trailer Leasing Co., 158 N.J. 561, 573–74 (1999).   Yet, “ ‘the fee award should not be reduced simply because the plaintiff failed to prevail on every contention raised in the lawsuit.’ ”   New Jerseyans for a Death Penalty Moratorium v. N.J. Dep't of Corr., 185 N.J. 137, 154 (2005) (quoting Hensley, supra, 461 U.S. at 435, 103 S.Ct. at 1940, 76 L. Ed.2d at 52)).

The trial judge properly applied the test articulated in Singer, supra, 95 N.J. at 495, and determined plaintiff sufficiently prevailed.   First, the judge determined that plaintiff's suit was causally related to securing the relief obtained — recovering the security deposit — and explained why plaintiff's expended efforts were a necessary and important factor in obtaining that relief.   Second, the judge determined that plaintiff's relief had a basis in law, i.e., it was predicated upon a right provided in the SDA. Plaintiff achieved more than “only partial or limited success” that would warrant a reduction of the fee award under Rendine, supra, 141 N.J. at 336.   Furthermore, the time spent at trial addressing the unpaid utility bill was insignificant compared to the time spent addressing plaintiff's substantive claims.

In sum, after carefully reviewing the record, we find no clear abuse of discretion, and we decline to disturb the trial court's award of counsel fees.   See Rendine, supra, 141 N.J. at 317.

The remainder of defendant's arguments are merely attempts to re-litigate the issues of constructive eviction and back rent that we previously decided.   Poland, supra, No. A–1177–10 (slip op. at 7–9).   We decline to address these contentions as they are without sufficient merit to warrant a discussion.   R. 2:11–3(e)(1)(E).



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