RICKY EMERY OUAFFO KAMDEN v. KENNETH LIEBLICH, et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-3226-04T13226-04T1

RICKY EMERY OUAFFO KAMDEN,

Plaintiff-Appellant,

v.

KENNETH LIEBLICH and DENA LIEBLICH

(H/W),

Defendants-Respondents,

and

GLORIA ZATSTKO REALTORS,

Defendant.

___________________________________

 

Submitted October 24, 2005 - Decided

Before Judges Lintner and Gilroy.

On appeal from the Superior Court of New Jersey, Law Division, Middlesex County,

L-9310-03.

Burns, Lebrocq, Wolfe, attorneys for appellant (Michael R. Speck, on the brief).

Epstein Arlen & Raia, attorneys for respondents (Daniel N. Epstein, of counsel and on the brief).

PER CURIAM

Plaintiff, Ricky Emery Ouaffo Kamden, appeals from an order denying him attorney's fees. We affirm. This appeal arises from a residential real estate dispute between plaintiff buyer and defendants, Kenneth and Dena Lieblich, sellers. The parties entered into a contract for the sale of a residence located at 111 Johnson Street in Highland Park for $335,000. Upon execution of the contract, plaintiff deposited $33,500. However, the sale was eventually cancelled by plaintiff in accordance with the mortgage contingency when he failed to obtain a mortgage loan. Defendants refused to return plaintiff's deposit.

Plaintiff filed a multi-count complaint naming defendants and Gloria Zatstko Realtors (real estate agency) seeking return of the deposit, both consequential and punitive damages, sanctions, attorney's fees, interest, costs and other unspecified equitable remedies. In addition to asserting that defendants violated the New Jersey Consumer Fraud Act, plaintiff's complaint alleged that both the real estate agency and defendants breached the contract, committed bad faith, made material and fraudulent misrepresentations concerning the condition of the property, were unjustly enriched, committed theft and theft by deception, used fraudulent and deceptive practices, and violated the Planned Real Estate Development Full Disclosure Act, N.J.S.A. 45:22A-21.

On April 8, 2004, plaintiff filed an Offer of Judgment, R. 4:58-1, for $30,000, "[i]n an effort to amicably settle the matter." On November 3, 2004, the parties participated in mandatory non-binding contract dispute arbitration, R. 4:21A-1(a)(3). The arbitrator found defendants 100% liable and awarded plaintiff $33,500. On December 2, 2004, defendants filed an Offer of Judgment in the amount of $33,500. On December 6, 2004, plaintiff accepted defendants' Offer of Judgment and filed a notice indicating that he would accept payment in the amount of the $33,500 "for all claims in the above matter." On December 27, 2004, plaintiff's case was administratively dismissed pursuant to R. 4:21A-6(b). On December 29, 2004, plaintiff filed a motion seeking counsel fees pursuant to R. 4:58.

At oral argument before the motion judge, it was revealed that after plaintiff accepted defendants' Offer of Judgment, defendants' counsel prepared and forwarded a release to plaintiff's counsel. When plaintiff's counsel failed to respond, defendants' attorney attempted without success to contact plaintiff's attorney by telephone. Plaintiff's counsel indicated that he had a difficult client and that he did not want to bother with releases. He further indicated that his concern was to obtain a judgment to enable access to the funds held in an interest bearing escrow account. Defendant's attorney responded, stating that he had no objection to plaintiff's request for entry of a judgment.

During the argument, the judge referred to attorney's fees, stating that he did not believe that R. 4:58-2 permits plaintiff to get anything more than the offer of judgment he accepted. Plaintiff's counsel responded:

That's as it regards Counsel fees. I understand, Your Honor. I mean, I made the motion. Your Honor will make your decision. I was more concerned, coming here today, to get the judgment. Whatever Your Honor's decision on that, is Your Honor's decision. I, quite frankly, wasn't even really here to argue that.

The judge then directed that an order be submitted, stating:

The offer of judgment, having been accepted, it is on this 4th day of February 2005, ordered that plaintiff . . . is entitled to the sum of . . . $33,500 held in the Attorney trust account . . . together with all accumulated interest, in full satisfaction of this claim.

The order submitted denied counsel fees to plaintiff.

On appeal, plaintiff asserts that the Offer of Judgment rule requires that defendants pay counsel fees and cost. We disagree. R. 4:58-1 provides in pertinent part:

Except in a matrimonial action, any party may, at any time more than 20 days before the actual trial date, serve upon any adverse party, without prejudice, and file with the court, an offer to take judgment in the offeror's favor, or as the case may be, to allow judgment to be taken against the offeror, for a sum stated therein or for property or to the effect specified in the offer (including costs). If at any time on or prior to the 10th day before the actual trial date the offer is accepted, the offeree shall serve upon the offeror and file a notice of acceptance with the court. The making of a further offer shall constitute a withdrawal of all previous offers made by that party. An offer shall not, however, be deemed withdrawn upon the making of a counter-offer by an adverse party but shall remain open until accepted or withdrawn as is herein provided. If the offer is not accepted on or prior to the 10th day before the actual trial date or within 90 days of its service, whichever period first expires, it shall be deemed withdrawn and evidence thereof shall not be admissible except in a proceeding after the trial to fix costs, interest and attorney's fee. The fact that an offer is not accepted does not preclude a further offer within the time herein prescribed in the same or another amount or as specified therein. (emphasis added)

R. 4:58-2, effective September 1, 2004, provides:

If the offer of a claimant is not accepted and the claimant obtains a verdict or determination at least as favorable as the rejected offer or, if a money judgment, in an amount that is 120% of the offer or more, excluding allowable prejudgment interest and counsel fees, the claimant shall be allowed, in addition to costs of suit: (a) all reasonable litigation expenses incurred following non-acceptance; (b) prejudgment interest of eight percent on the amount of any money recovery from the date of the offer or the date of completion of discovery, whichever is later, but only to the extent that such prejudgment interest exceeds the interest prescribed by R. 4:42-11(b), which also shall be allowable; and (c) a reasonable attorney's fee, which shall belong to the client, for such subsequent services as are compelled by the non-acceptance, such fee to be applied for within 20 days following entry of final judgment and in accordance with R. 4:42-9(b). (emphasis added)

There are several reasons why plaintiff is not entitled to counsel fees. First and foremost, plaintiff's acceptance of defendants' counteroffer represented a withdrawal of his former offer. Under R. 4:58-1 acceptance of a counteroffer constitutes a withdrawal of the first offer. It is an elementary tenet of contract law that an offeree's counteroffer serves as a rejection of the original offer, which is considered withdrawn when the counteroffer is accepted by the offeror. Restatement (Second) of Contracts 39(2) (1979).

Secondly, R. 4:58-2 allows claimants to obtain attorney's fees if their offer to take judgment is not accepted and they obtain a favorable verdict or disposition. However, where unliquidated damages are claimed, no allowance for attorney's fees will be granted unless the amount recovered is in excess of 120%. Here, plaintiff's amended multi-count complaint sought unliquidated consequential and punitive damages. Although plaintiff ultimately settled for the deposit retained by defendants, a liquidated amount, at the time he entered into the settlement he still had a viable action for unliquidated damages. Even if it could be said that the $30,000 Offer of Judgment remained after plaintiff accepted defendants' counteroffer, the amount plaintiff accepted did not amount to 120% of $30,000. Because defendant's counteroffer was made after the September 2004 amendment to R. 4:58-2, plaintiff was bound by the amendment. See Shimm v. Toys From the Attic, Inc., 375 N.J. Super. 300, 304 (App. Div. 2005).

Finally, plaintiff never obtained a favorable "verdict or determination" necessary to be eligible for attorney's fees on his contractual claim. R. 4:58-2. Instead, the complaint was dismissed because plaintiff failed to comply with R. 4:21A-6(b)(1), (2) and (3). Following mandatory non-binding arbitration, a party is required to file either (1) a rejection of the award and demand for trial de novo with the civil case manager within thirty days of the arbitration award; (2) a consent order detailing a settlement and providing for dismissal of the action or for entry of judgment within fifty days of the arbitration award; or (3) a motion to confirm the arbitration award and enter judgment within fifty days of the arbitration award. R. 4:21A-6(b)(1), (2) and (3). Failure to file in accordance with these parameters results in an automatic dismissal.

 
Plaintiff neither filed a consent judgment nor moved for a judgment confirming the arbitration award. Simply stated, plaintiff's complaint was administratively dismissed and he never obtained a "favorable determination" as contemplated by R. 4:58-2.

Affirmed.

We cannot tell from the appendix whether codefendant, Gloria Zatstko Realtors, filed an answer or was served. In any event, codefendant is not a party to this appeal and, therefore, we refer to Kenneth and Dena Lieblich as defendants.

The Automatic Case Management System recorded that an Order of Dismissal was entered at the court's initiative pursuant to R. 4:21A-6.

(continued)

(continued)

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A-3226-04T1

October 28, 2005