THOMAS TWEER, et al. v. JOHN HILL AGENCY, et al.
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
DOCKET NO. A-1521-04T11521-04T1
THOMAS TWEER and
ROBERT TWEER, Individually,
and d/b/a/ HOBBY LOBBY
MARINE, a New Jersey Partnership,
JOHN HILL AGENCY, a New
Jersey Corporation, and
BENJAMIN J. KEOGH,
Submitted September 21, 2005 - Decided
Before Judges Wecker and Graves.
On appeal from Superior Court of New Jersey, Law
Division, Ocean County, L-3818-01.
DiRienzo & DiRienzo, attorneys for appellants
(Joseph DiRienzo, Sr. and Joseph DiRienzo, Jr.,
on the brief).
White and Williams, attorneys for respondents
(Michael O. Kassak and Robert E. Campbell, on the
In their complaint, plaintiffs Thomas Tweer and Robert Tweer, individually, and as the owners of Hobby Lobby Marine, a New Jersey Partnership, alleged that defendants negligently procured insurance for their property, and negligently advised them that the coverage was adequate to protect plaintiffs from loss. Plaintiffs sought to recover unreimbursed property damages after a fire caused damage to their property which exceeded the limits of the insurance policy produced by defendants. Following a jury trial, a judgment was entered in favor of plaintiffs in the amount of $50,844.49. Plaintiffs appeal from an order denying their application for counsel fees. We affirm.
In their counsel fee application to the trial court, plaintiffs argued that their case was similar to a legal malpractice action involving the breach of a fiduciary duty. They also argued that it makes no difference whether the fiduciary is an attorney or an insurance broker, because "there is no higher duty than that triggered by a fiduciary relationship":
There does not appear to be any case in New Jersey or elsewhere regarding the availability of attorney's fees as damages for an insurance broker's breach of a fiduciary duty. However, New Jersey permits the award of attorney's fees in a legal malpractice action involving the breach of a fiduciary duty, reasoning that the defendant's former client has suffered damages in the amount of those fees as a consequence of defendant's breach of a fiduciary duty. See Saffer v. Willoughby, 143 N.J. 256, 269-72 (1996). Applying this reasoning, there is no meaningful difference between an insurance broker's fiduciary relationship and an attorney's fiduciary relationship that would justify a different measure of damages.
In a written decision, the trial court denied plaintiffs' counsel fee application, reasoning as follows:
I can find no authority to distinguish this case from that of a normal professional malpractice action, which does not recognize the award of counsel fees to a successful party.
At this time, the appellate courts of this state have only recognized an award of attorneys fees, as compensatory damages, in legal malpractice cases, Saf[f]er v. Willoughby, 143 N.J. 256 (1996), or when an attorney acting as a fiduciary breaches a duty to a client arising out of the attorney-client relationship, Packard-Bamberger & Co. v. Collier, 167 N.J. 427 (2001). Although the subject matter of this claim involved insurance, it was not founded upon a dispute over payment of a policy. There is no statute which permits the payment of counsel fees to a successful claimant in this type of case founded upon professional negligence.
Thus, I am forced to conclude that there is no basis for the award of counsel fees to the prevailing party.
New Jersey has a strong public policy against the shifting of counsel fees to the opposing party. The Court "has embraced that policy by adopting the 'American Rule,' which prohibits recovery of counsel fees by the prevailing party against the losing party." In re Estate of Vayda, 184 N.J. 115, 120 (2005) (citation omitted). Generally, R. 4:42-9 sets forth the limited exceptions where, in the absence of either a statute or contract, fee shifting is allowed. Ibid. The Court has also permitted a successful plaintiff to recover counsel fees in cases "involving claims against attorneys (for malpractice, misconduct, or malfeasance by way of a breach of fiduciary duty), or when an executor or trustee has committed 'the pernicious tort of undue influence.'" Id. at 123. "[T]he fact that a person owes another a fiduciary duty, in and of itself, does not justify an award of fees unless the wrongful conduct arose out of an attorney-client relationship." Id. at 122 (citation omitted). Thus, as stated by Judge Marlene Lynch Ford, there is no basis for an award of counsel fees in this case.
October 4, 2005