JAMES B. BISHOP v. PANAS AUTO, INC.

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(NOTE: The status of this decision is Unpublished.)

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-4573-07T24573-07T2

JAMES B. BISHOP,

Plaintiff-Appellant,

v.

PANAS AUTO, INC., d/b/a

PANAS AUTO BODY and ED PANAS,

individually,

Defendants-Respondents.

_________________________________


Argued March 24, 2009 - Decided

Before Judges Fuentes, Gilroy and Chambers.

On appeal from Superior Court of New Jersey,

Law Division, Passaic County, Docket No.

L-1177-06.

Douglas J. Kinz argued the cause for appellant.

Mark I. Silberblatt argued the cause for

respondents (Bisceglie & DeMarco, attorneys;

Mr. Silberblatt, on the brief).

PER CURIAM

Plaintiff James Bishop was a successful litigant in an civil action suit against defendants Panas Auto, Inc., d/b/a Panas Auto Body and Ed Panas individually, brought in part under the New Jersey Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -20. Plaintiff appeals from a part of the order entered by the Law Division limiting the award of attorney fees and costs to $13,370, and $492 respectively.

Plaintiff argues that the trial court erred in the exercise of its discretion by demonstrating bias in defendants' favor, and utilizing a mechanical approach to determine the award of counsel fees, in derogation of the principles established by our Supreme Court in Furst v. Einstein Moomjy, Inc., 182 N.J. 1 (2004) and Rendine v. Pantzer, 141 N.J. 292 (1995). We agree with plaintiff's position and reverse.

These are the salient facts. Plaintiff is the owner of a classic 1936 Chevrolet automobile. In August 1997, plaintiff entered into an oral agreement with defendant Ed Panas, as the owner of Panas Auto, Inc, to restore and repair the car. Plaintiff paid defendant $500 as an initial payment.

According to Panas's deposition testimony, he agreed to perform the work for a total cost of $7,000. Plaintiff contends that Panas never mentioned $7,000 as the cost for the entire job. Instead, plaintiff claims that Panas told him that he could not estimate the cost until after he sandblasted the vehicle. It is undisputed, however, that defendant never provided plaintiff with a written estimate or agreement. Defendant testified that he never gave plaintiff an estimate because he never asked for one.

On November 3, 1997, plaintiff paid defendant an additional $3,000 after he completed the sandblasting. Plaintiff believed this payment represented a 50% deposit of the total $6,000 required to finish the work. The car remained in defendant's possession for the next several years. During this time, Panas performed some work on the car, but had little contact with plaintiff. In March 2000, approximately three years after plaintiff had paid defendant the $3,000, plaintiff's wife informed defendant that the vehicle had been sold and a truck would be sent to pick it up. This never occurred.

Two years later, on October 16, 2002, plaintiff's wife returned to defendant's shop to pick up the car. Panas refused to permit Mrs. Bishop to take the car unless she or plaintiff signed the following release:

The above referenced vehicle was stored at Panas Auto, Inc. from March 17, 2000 to October 15, 2002 (a total retail storage cost of $23,575.00) [$25 per day]. The owner, JAMES BISHOP, has elected to remove said vehicle from Panas Auto facility on 10-15-2002 in "AS IN" [sic] condition.

By signing this document, the owner, JAMES BISHOP, hereby agrees to hold harmless and indemnify Panas Auto, Inc., its officers, employees, agents, independent contractors and representatives from any and all liability for any property damage, loss or expenses related to the above referenced vehicle.

Panas admitted at trial that he decided to imposed the $25 daily storage charge only when Mrs. Bishop refused to sign the release. He further admitted that he never advised plaintiff that he was imposing a storage of $25 per day after Mrs. Bishop left his shop. After several attempts at settling the dispute through the intervention of counsel from both sides proved fruitless, plaintiff filed a civil action against defendants on March 6, 2006, seeking replevin, common law compensatory and punitive damages, and relief under the CFA.

Defendants filed a responsive pleading and a counterclaim for storage charges in the amount of $56,250. The court dismissed defendants' counterclaim on plaintiff's motion for summary judgment. Thereafter, the parties entered into a consent agreement turning possession of the car over to plaintiff. The matter then proceeded to trial where plaintiff proceeded with his replevin action, common law wrongful detention of the car, and two claims under the CFA based on defendant's unconscionable commercial practices and a violation of the Auto Body Repair Regulations.

At trial, plaintiff sought $17,250 in damages under his claim for replevin for loss of the use of the car at a rate of $10 per day. The jury found for plaintiff on all three counts awarding him $3,500 for the fraud charges and $500 for the replevin claim. The court trebled the damages pursuant to the CFA, N.J.S.A. 56:8-19, for a total damage award of $11,000.

Plaintiff's counsel made a formal request for attorney's fees and court costs, pursuant to N.J.S.A. 56:8-19. In his certification in support of the motion, counsel sought fees for 101.8 hours expended, billed at an hourly rate of $325 for a total of $33,085 plus $1,231.20 in court costs.

At the conclusion of the hearing to consider plaintiff's application for counsel fees, the trial judge made the following statements regarding defendant Ed Panas:

He's a simple person, hardworking person, a person who immigrated to this country from Poland, went to Lincoln Tech, became a became a mechanic and created a business with him and his wife.

. . . .

I have to tell you, you know, I know that there was a violation and I know that the award that the jury came back with had to be trebled. Okay? I'll be honest with you I didn't like it. This man this man is being punished. He's being punished. He got nothing for the work he did.

. . . .

And, you know, I looked at I looked at Mr. Panas this is not a deceitful man who the Consumer Fraud Act is designed to punish.

. . . .

I am faced with the fact that all the jury gave that money back, there were and I mean this, I mean that there were technical violations of the Consumer Fraud Act in that Mr. Panas did not prepare[] the correct paperwork. You didn't get that written estimate, the statute is clear, you don't have it. The work fell within the purview of the Consumer Fraud Act and I ruled at the end of the case, I believe that's what happened, that there was a violation of the Consumer Fraud Act. And that was because poor Mr. Panas didn't prepare the estimate. And I know your client looked for it and asked for it and asked for it, but at that point I think he was over his head. And the fact that he was charging he wanted to charge for storage but didn't have a written statement of what the daily charge would be was also a violation of the Consumer Fraud Act.

. . . .

And I'll say one thing one other thing because I want this to be clear because I'm going to put a decision on the record and you know, the appellate court may very well be looking at what happens here. I will tell you point blank, having presided over this trial, if I could figure out a way to give you no legal fees I would do it. That's how strong I feel, I wouldn't do it. This tempest in a teapot should never have gotten so out of hand.

Defense counsel did not object to plaintiff's counsel's hourly rate of $325 as unreasonable; the trial judge also found counsel's hourly rate reasonable and warranted by his professional training and experience. The trial judge then gave the following explanation as to the method he used in determining the amount of the award:

The total monetary claims that were presented the jury was . . . $17,250 for loss of of the use of the car. In addition to that if you added the $3,500 that the jury awarded the total would have been $20,750. What the jury awarded was $4000.

. . . [T]he defense has indicated that an analysis of the legal fees presented by [plaintiff's counsel] show $8,157.50 that are attributable to the replevin action.

In addition, what I have done is I have calculated the amount of time that [plaintiff's counsel] put i[n] for the trial of this matter.

. . . .

. . . I came up with 43.9 hours. In any event, . . . what I am going to do is of the total amount sought, $20,750, the amount received was $4,000 which was 19 percent. I took 19 percent of 43.9 hours and I came up with 8.34 hours times $325, the amount of [$]2,710 hours pre-trial. There was 57.9 hours, the defense indicates 25.1 hours for replevin which would be 32. the difference would be 32.8 hours. So pre-trial I'm awarding 32.8 hours times $325 is $10,660 for pre-trial, $2,710 for trial for a total cost of $13, 370 in fees.

The total amount sought was $33,084, the fees awarded for what plaintiff himself called a tempest in a teapot was $13,370 which is 40 percent. The total costs were $1,231 times 40 percent is $492.40. When added to the $13,370 my math comes up with fees and costs of $13,862. So not only does Mr. Panas now have an award against him of $11,000, that now is being augmented by $13,862 attorney's fees and costs.

Against this backdrop, we now address plaintiff's arguments. The seminal case for determining reasonable attorney fees under a fee-shifting statute is Hensley v. Eckerhart, 461 U.S. 424, 103 S. Ct. 1933, 76 L. Ed.2d 40 (1983). In Hensley, the Supreme Court rejected "a mathematical approach comparing the total number of issues in the case with those actually prevailed upon." Id. at 435 n. 11, 103 S. Ct. at 1940, 76 L. Ed. 2d at 52.

The Court instead adopted the "lodestar" approach, requiring the reviewing court to first determine the amount of hours reasonably expended, then multiply those hours by a reasonable hourly rate. Ibid. Through this analysis, a court should disallow from the fee demand "any excessive, redundant and otherwise unnecessary time expended during the litigation." Silva v. Autos of Amboy, Inc., 267 N.J. Super. 546, 556 (App. Div. 1993) (citing Hensely, supra, at 434, 103 S.Ct. at 1940, 76 L.Ed. 2d at 51). This analysis is not, of course, result neutral. Under this approach, a court may modify the amount of the award to reflect the results obtained. Ibid.

Our Supreme Court adopted the Hensley approach in Rendine, supra, (an employment action under the Law Against Discrimination) and Furst, supra., (a cause of action under the CFA). Both of these cases confirmed the "lodestar" amount as the starting point, and reiterated that "a trial court should decrease the lodestar if the prevailing party achieved limited success in relation to the relief he had sought . . . [though] there need not be proportionality between the damages recovered and the attorney-fee award itself." Furst, supra, 182 N.J. at 23, (citing Rendine, supra, 141 N.J. at 336).

In determining the reasonableness of the fee requested, a reviewing court must consider the factors in R.P.C. 1.5(a):

(1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;

(2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;

(3) the fee customarily charged in the locality for similar legal services;

(4) the amount involved and the results obtained;

(5) the time limitations imposed by the client or by the circumstances;

(6) the nature and length of the professional relationship with the client;

(7) the experience, reputation, and ability of the lawyer or lawyers performing the services;

(8) whether the fee is fixed or contingent.

[Furst, supra, 182 N.J. at 22.]

Here, the trial judge failed to adhere to these principles, employing instead a variation of the mechanistic approach expressly repudiated by the Court in Hensley. In this light, we are compelled to remand this matter for the court to reconsider plaintiff's application for counsel fees applying the standards articulated by our Supreme Court in Furst. Because both the court and defense counsel found plaintiff's counsel's hourly rate reasonable, the only aspect of the loadstar analysis left for the court to determine is the amount of hours reasonably attributable to the prosecution of the CFA claim, including, of course, time spent in pretrial preparation.

Finally, we are compelled to address plaintiff's argument concerning bias. The fee-shifting provision in the CFA serves a clear and laudable public policy purpose. As the Court in Furst succinctly stated:

In a consumer fraud action, the Legislature has recognized that the right of access to the courts is meaningless unless the injured party has the resources to launch a suit. Fee-shifting provides an incentive to competent counsel to undertake high-risk cases and to represent victims of fraud who suffer relatively minor losses.

[Furst, supra, 182 N.J. at 34.]

With these public policy concerns in mind, the Legislature adopted the following fee-shifting statute:

Any person who suffers any ascertainable loss of moneys or property, real or personal, as a result of the use or employment by another person of any method, act, or practice declared unlawful under this act or the act hereby amended and supplemented may bring an action or assert a counterclaim therefor in any court of competent jurisdiction. In any action under this section the court shall, in addition to any other appropriate legal or equitable relief, award threefold the damages sustained by any person in interest. In all actions under this section, including those brought by the Attorney General, the court shall also award reasonable attorneys' fees, filing fees and reasonable costs of suit.

[N.J.S.A. 56:8-19 (Emphasis added).]

Applying these statutory provisions to the facts here, plaintiff is entitled to an award of counsel fees on that part of his cause of action brought under the CFA, as a matter of law. The CFA does not provide an exemption or a relaxation of this fee-shifting provision based on a judicial determination that defendant's conduct involved only a mere "technical violation" of the Act, or because of a defendant's good character. Thus, the statements made by the reviewing judge here concerning both of these issues were irrelevant and improper.

We vacate that part of the trial court's order entered on April 18, 2008, awarding plaintiff $13,370 in counsel fees and $492 in costs. We remand for reconsideration based on the principles of law discussed here.

Reversed and remanded. We do not retain jurisdiction.


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A-4573-07T2

July 8, 2009