Posted on April 20, 2009 by Robert A. Epstein

Appellate Division Explores Counsel Fee Awards and Requests for Oral Argument on Motions

 We have previously blogged on the issues of counsel fee awards and a trial court's decision to grant or deny a party's request for oral argument on a pending motion.  Two of these prior postings can be found here and here.  Both of these issues framed the Appellate Division's recent unpublished opinion in Bove v. Bove, found here. 

The parties at issue were divorced on June 28, 2001 and three children were born of the marriage (two adult sons and a 16-year old daughter).  A supplemental Judgment of Divorce established that the Wife would have sole physical custody and the parties would share joint legal custody.  Additionally, the Husband was required to create trust funds for the children's college expenses and to be responsible for 80% of the daughter's college tuition.

The Wife sought to enroll the daughter in a private high school, informing the Husband that she could not pay for any part of private school tuition, that she was taking the daughter to open houses and that she asked for the Husband's "thoughts on the matter."  The Husband responded in a letter that he would not contribute to tuition prior to college and was displeased that the issue was broached with their daughter before him.  Nevertheless the Wife moved forward with the process and, when the Husband sought to have the Wife confirm in writing that she would not seek contribution from him for high school tuition, she refused.  The Wife also contended that the Husband was using the college trust funds for non-college expenses, as defined by the supplemental JOD, and the Husband contended that the Wife ignored, and then hedged, on his timely requests for vacation with the children. 

The Husband filed an application for an order regarding the issues of vacation, pre-college tuition for their daughter, and the definition of "college expenses" as set forth in the supplemental JOD.  He also sought counsel fees.  The trial court entered an order on March 28, 2008 allowing the Husband to take the daughter on the scheduled vacation outside of the United States.  As the wife had only previously submitted an opposing certification as to the vacation issue, she waited until the date of oral argument to submit an opposition to the remaining issue.  In his subsequent reply, the Husband added that the Wife had also recently sold investment property, the proceeds from which should be used to reimburse the Husband for counsel fees.  He filed a certification of services with his application pursuant to R. 4:42-9. 

The trial court later informed the parties that it would decide on the remainder of the Husband's motion on the papers, to which both parties objected and the Wife responded by filing a brief that failed to contest the Husband's claim regarding her sale of the investment property.  In finding for the Husband on his motion, the trial court also granted him $5,000 in counsel fees pursuant to R. 5:3-5(c)(3), (7) and (9).  In this regard, the trial court specifically found that the Wife could not make unilateral decisions and then refuse to sign a proposed consent order, as well as seek payment for things not covered by the supplemental JOD. 

The Wife filed a motion for reconsideration of the trial court's order stating, as to the counsel fees issue, that the Court erred by failing to make findings regarding bad faith by the Wife and the parties' mutual ability to pay.  The Husband filed a cross-motion and, as part of same, again sought counsel fees.  The trial court again chose to decide the motion on the papers, despite the Wife's request for oral argument.  As to the issue of counsel fees, the trial court affirmed its award again in reliance on R. 5:3-5(c) - as to (c)(3) that the Wife's position as to the daughter's enrollment in private school was unreasonable and her doing so despite the Husband's contrary view was deemed bad faith; as to (c)(7) that the Husband had prevailed on his motion; and as to (c)(9) that the Wife had resisted the vacation request without a sufficient basis.  The trial court rejected the Wife's argument that the fees award was inappropriate because it did not consider the parties' ability to pay because the Wife had failed to provide any financial information and, additionally, found that she had the ability to pay based on the proceeds received from sale of the investment property.  The court then granted the Husband a $1,000 in counsel fees, finding that the Wife's reconsideration application lacked merit. 

On appeal, the Appellate Division affirmed the initial grant of $5,000 in counsel fees on the Husband's first application.  In so holding, the Appellate Division considered N.J.S.A. 2A:34-23, which requires a court to "consider the factors set forth in the court rule on counsel fees, the financial circumstances of the parties, and the good or bad faith of either party."  The Appellate Division then referenced certain factors laid out in R. 5:3-5(c), including whether the party seeking fees is in financial need; whether the party against whom fees are sought has the ability to pay; the good or bad faith of either party in pursuing/defending the action; the nature and extent of the services rendered; and the reasonableness of the fees sought.

In light of these factors, the Appellate Division noted that the responsibility to provide information as to financial circumstances rests with the parties.  Interestingly, it supported this notion by referencing how a court may dismiss a party's pleadings when a Case Information Statement is not properly submitted pursuant to R. 5:5-2.  As the trial court only had the Husband's financial-related information to rely on, as the Wife had failed to rebut his assertions, the Appellate Division found that the trial court had not abused its discretion in rendering the award. 

As to the fee award granted to the Husband on the Wife's motion for reconsideration, the Appellate Division analyzed whether the Wife acted reasonably and in good faith under R. 5:3-5(c).  It noted that, where both parties litigate in good faith, fees are not awarded unless the parties exhibit unequal economic positions and, where one party acts in bad faith, such economic positions carry little relevance because the award becomes a protection for the "innocent party" and a "punish[ment]" for the "guilty party."  Further, the Appellate Division stated that a finding of bad faith is not required.  Rather, it concluded that only the good faith of the parties' positions should be considered, referencing the definition of "good faith" in Black's Law Dictionary as, "a state of mind consisting in . . . honesty in belief and purpose . . . ." With these legal principles in mind, the Appellate Division affirmed the trial court's finding that the Wife had acted "without good faith," and had the ability to pay the $1,000 counsel fee award to the Husband. 

Finally, the Appellate Division held that the trial court erred in not holding oral argument on the Wife's motion for reconsideration pursuant to R. 5:5-4.  It noted that, while the grant of oral argument is discretionary, a strong presumption exists favoring oral argument on motions other than "calendar matters and routine discovery applications."  Nevertheless, the Appellate Division declined to remand the matter because it found that doing so would only increase the parties' expenses and add nothing more to an "already ample record" in light of the trial court "evidential[ ] aware[ness] of the issues and familiar with the parties' arguments."  
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Posted on April 2, 2009 by Eric S. Solotoff

IF I WIN, DO I GET COUNSEL FEES? - ANOTHER PERSPECTIVE

Apple Sulit-Peralejo, a partner in our Atlantic City office blogged earlier today regarding counsel fees and bad faith. 

Often counsel fee decisions come down to findings of bad faith and the case law certainly is replete with references to bad faith.  However, when Court Rule 5:3-5(c) was revised about 10 years ago, the standard was relaxed such that bad faith was no longer necessary, but rather, the "reasonableness" of the positions became the standard.  Or did it?  Reading the cases, such as the one cited in Apple's post. a lot of time was spent on the issue of bad faith.

That said, when you see large counsel fee awards, it is usually after a trial.  In my experience, though few cases are tried (about 1 to 2%), when cases get tried, it is because one party's conduct or the positions that the took were so absurd that a finding of bad faith is almost inevitable.

Earlier this week, after a 5 day trial that took place over the better part of a year, my client was awarded $40,000 in legal fees.  In this case, she was the parent of primary residence in the parties' divorce agreement.  She told her ex-husband that she was going to move to Monmouth County from Hudson County with the parties' child, to live with her fiance'.  The husband made a motion for custody, essentially seeking to preclude our client from moving with her child.  The case law is pretty clear that the custodial parent can move within the state of NJ.  After we cited that in our brief in opposition to the motion, he concocted a new argument that he was the de facto custodial parent and the trial followed on this issue.  During the trial we were able to prove that his claim was bogus and that for a very short period of time post divorce when he had the child more than 50% of the time, it was because he violated the Agreement and refused to return the child.  This conduct as well as his lies were simply unreasonable.  Similarly, the Court found that he was actively trying to remove our client from the child's life.  This too was unreasonable.

In another trial that took place last summer, despite the fact that our client had a greater income and greater assets (she had certain exempt assets) than her husband,  he was ordered to pay $25,000 toward my client's fees after a 6 day trial.  Why?  He sought alimony and his position was bogus.  In reality, he earned more than our client until the deterioration of the marriage and then he essentially refused to work as he had.  He also took absurd position as to issues where the law and facts made the result a certainty.  In addition, he conduct throughout the matter was bad.

Last year, after another 5 day custody trial, the Court awarded my client $81,000 out of about $90,000 in legal and expert fees because of her husband's "extreme bad faith."  In this case, despite an adverse expert report, no expert of his own and no real evidence, he forced this custody trial.  His only basis for his position, other than his unyielding and unbending personality, was his claim that the children wanted to spend more time with him.  That said, one reason for this was that he was improperly involving the children in the litigation.  He insisted that the children be interviewed despite the fact that (1) the joint expert said that it would be harmful for the children to speak to the Court; (2) the joint expert conceded that the kids would state that the children wanted to spend more time with the father, but that that was not in their best interests, and (3) the fact that I stipulated that the kids would say whatever he said they would say.  He couldn't do any better than my stipulation but he still forced the kids to meet with the judge.  There were certainly ancillary issues where the husband took unreasonable positions which he forced to be tried and lost. 

In another case, after a 10 1/2 day trial, my client was awarded $100,000 in legal fees and $60,000 in expert fees after a finding of bad faith.  In fact, the Court cited at least 10 reasons that fees were merited, citing bad conduct, discovery abuses, taking bad positions, financial manipulations, making false claims, etc.  This case was tried because despite a $400,000 difference in income and a 16+ year marriage, he refused to pay alimony.  In fact, he never tried to settle the case.  In fact, much of the case revolved around the fact that the accounts receivable in his business increased $150,000 in the 6 months between when my client said she wanted a divorce and when she filed.  Of course, he claimed that his income, which had been steadily rising was down too.  This was even though his billings were up by about $100,000 in that year and his expenses down about $100,000.  Almost every position was absurd. 

Interesting, at the recent argument of the appeal on that case, his attorney argued that the fee award was "piling on".  I remarked that I did not know that the standing had been changed to "piling on."

In another trial about 2  1/2 s ago, my client was awarded $50,000 in legal fees.  Again, bad faith was found.  The husband in that case was incapable of being truthful on any issue or fact.  On top of that, he was trying to enforce a mediation agreement signed by neither party, followed by neither party, and containing factual representations provided by him regarding the exemption of assets that was fraudulent.  Similarly fraudulent was the fact that the single largest asset was never disclosed.

What is the common denominator in each of these large fee awards after trial?  One party's conduct and/or positions advanced was outrageous.  The bottom line is that though reasonableness may be the standard, in those 1 to 2% of cases that get to trial, you will probably see bad faith by one of the parties.
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Posted on June 2, 2008 by Eric S. Solotoff

THE MCGREEVEY BATTLE ROYALE

I have eagerly awaited the news accounts each day of the ongoing saga of the former first family of the State of New Jersey. 

While by all accounts, there is some exceptional lawyering going on, one cannot help to think that this is a case that should have been settled or that one or more of the parties is using the trial to settle personal vendettas. 

Thankfully for the parties' child, they settled custody and parenting issues.  However, as the judge admonished at points in the case, their daughter is going to be able to read all about her parents' divorce by just typing hers and their names into Google.  And for what?

 While their marital lifestyle was perhaps unusual from the common folk, in both financial and other ways, at the end of the day, this was a short marriage. The testimony from both as reported suggests that there was no savings and few assets.  The disputes as to alimony seem absurd because even if there was a viable claim, how much could it have been for.  The legal and experts fees had to have exceeded the claim. 

Again, I don't know all of the facts and only know what I read.  However, I always tell my clients that you don't want to spend $10 in legal fees to get $5 back.  I wonder at the end of the day whether the battling McGreeveys will have done just that.  If so, that is good for no one - even the lawyers.  Moreover, I hope that the trial was not a vehicle for either to get the last of their 15 minutes of fame while at the same time, preventing parties with real issues from getting their day in court.

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Posted on March 14, 2008 by Eric S. Solotoff

A Funny Thing Happened on the Way to Court ... or Not

In a recent unreported Appellate Division decision, the Court decided that a trial court judge abused his discretion by sanctioning the defendant's attorney for failure to appear at an Early Settlement Panel, where his client, the other party and opposing counsel had appeared.  At first this may appear to be odd result but the facts of the case make it more clear why the result is just - and that a little courtesy by all involved could have prevented what turned into this debacle.

This case was pending in Middlesex County.  On the day in question, there had been extensive rainstorms and a portion of a major traffic artery in the New Brunswick area, was closed. Defendant's attorney was caught in the resulting traffic jam so at approximately 9:30 a.m. he called his office and had them contact the chambers of the presiding judge of the Family Part to advise of the delay. As counsel did not have plaintiff's counsel's cell phone number, and, believing the judge's staff would advise her of the delay, he did not call opposing counsel's office. When by 10 am, the traffic issues had not improved, defendant's counsel called the presiding judge's chambers directly and asked that the matter be rescheduled.  The judge's law clerk granted this request and counsel returned to his office.  No one, however, told plaintiff's counsel.


After 10:00 a.m., she called defendant's counsel's office and was told that he was running late. Shortly thereafter, she called again and was told that he had been released by the judge and was on his way back to his office. Plaintiff's counsel called a third time and actually spoke to defendant's counsel - requesting that he return to the Courthouse.  When he refused, she made a application to another judge (the presiding judge was out that day), for counsel fees.  

 The judge noted that he had spoken to the presiding judge's secretary "after the call," and knew counsel was stuck in traffic, however, he noted that the "only people that can grant an adjournment o[n] a matter that's set down for an ESP is either [the presiding judge], who's not here, his secretary . . . or me, the ESP judge." The judge determined defendant's counsel's excuse for his non-appearance was "inadequate," and he granted the application for counsel fees in the amount of $1100. 

The Appellate Division, however, held that the trial judge failed to properly follow the procedures governing a contempt citation, and that defendant's counsel's behavior was, under the circumstances, not contumacious or without just excuse.  The Order for fees was reversed.

The moral of this story is that all could have been avoided with a healthy dose of courtesy and communication all around.  Defendant's counsel should have called his adversary's office or had his staff do it - both to advise of the delay and then of the adjournment.  Moreover, if the traffic had abated by then, he could have returned to the Courthouse where everyone was waiting.  Plaintiff's counsel could have been more understanding of the problem caused by extreme weather conditions coupled with the fact that someone in the presiding judge's chambers had granted the adjournment.  Perhaps there could have been better communication by the Court staff that granted the adjournment so that the rest of the people waiting would not have waited as long. 

We should not lose sight that courtesy to our client's,  their spouses and opposing counsel - especially is unique circumstances, is required.  It would not be surprising if events of that day cost each party more than the $1,100 in dispute.  And it may have all be avoided with just a little more courtesy and communication. 

For a copy of the case click here.

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