NORWOOD-JEB L.L.C. v. NORTH RIVER MEWS ASSOCIATES L.L.C.

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

 

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-5718-10T1

NORWOOD-JEB, L.L.C.,

Plaintiff-Respondent/

Cross-Appellant,

v.

NORTH RIVER MEWS ASSOCIATES,

L.L.C., CRESSKILL RESIDENTIAL

COMMUNITIES, L.L.C., CRESSKILL

RESIDENTIAL COMMUNITIES III,

L.L.C. and FRED A. DAIBES,

Defendants-Appellants/

Cross-Respondents,

and

TENAKILL DEVELOPERS, L.L.C., and

BOILING SPRINGS SAVINGS BANK,

Defendants.

________________________________________

October 28, 2013

 

Argued January 16, 2013 - Decided

 

Before Judges Sapp-Peterson and Nugent.

 

On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-1449-06.

 

Stephen P. Sinisi argued the cause for appellants/cross-respondents (Law Offices of Stephen P. Sinisi, attorneys; Mr. Sinisi and Michael I. Lubin, on the brief).

 

Helen Davis Chaitman argued the cause for respondent/cross-appellant (Becker & Poliakoff, LLP, attorneys; Ms. Chaitman, Peter W. Smith, and Julie Gorchkova, on the brief).

PER CURIAM

This matter returns to us after a bench trial following our remand. The case stems from a complex real estate transaction in which plaintiff, Norwood-Jeb, L.L.C., the seller, agreed to sell approximately eighteen and one-half acres of land to defendant, North River Mews Associates, L.L.C., the original buyer, for $6,500,000, and for additional consideration upon the occurrence, within five years of closing, of any one of certain defined events. The events involved post-contractual or post-sale development approvals that would increase the value of the land. Four such events were defined in the parties' agreement, and a fifth in the deed conveying the property. When the fifth event allegedly occurred, neither North River Mews, its assignee, a subsequent owner, or the man who was the principal of those entities would pay the additional purchase price to plaintiff. Rather, they disputed that they had agreed to the fifth event, and they also disputed that it had occurred. Following a seven-day bench trial, the court entered judgment in favor of plaintiff for $1,740,000 plus interest, counsel fees, and costs. The other parties appealed. Plaintiff cross-appealed. We affirm.

I.

Plaintiff once owned more than eighteen acres of land (the Property) in the Borough of Cresskill. In September 1999, plaintiff agreed in an "Amended And Restated Agreement Of Sale" (the Agreement) to sell the Property to defendant North River Mews (North River) for $6,500,000.1 The purchase price was based in part on development restrictions in a Borough ordinance. The ordinance approved a planned unit residential development on the Property with different types of housing units to be built on three tracts, designated as Tracts I, II, and III. This appeal involves Tract III only.

Plaintiff was willing to sell the Property for $6,500,000 only if development of Tract III were restricted to senior citizen rental units. Plaintiff believed the Property was worth more if condominium units could be built on Tract III. North River represented that Tract III was so restricted. Article 1.3 of the Agreement, entitled "Additional Purchase Price," stated:

(a) Buyer represents to Seller that the Borough of Cresskill has adopted an ordinance (the "Ordinance") authorizing the establishment of a planned unit residential development of approximately eighteen (18) acres (the "PURD") permitting the development on the Property of the following ("Development"):

 

. . . .

 

(iii) The construction of sixty (60) independent senior citizen housing units restricted to residents fifty-five (55) years of age and older (the "Tract III Project"), to be located on the southern side of the Property ("Tract III")[.]

 

North River represented explicitly that the Tract III units would be rental units only:

(b) Buyer further represents to Seller that all of the residential units to be constructed as part of . . . the Tract III project will be marketed to the public on a rental basis. Buyer acknowledges that Seller has agreed to the Purchase Price in reliance on the foregoing representation.

The parties agreed that if an "Ownership Event" were to occur within five years after the closing date, North River would pay plaintiff an additional sum equal to $20,000 times the number of residential units subject to the ownership event. They defined "Ownership Event" in Article 1.3(d) of the Agreement as: (1) subdividing the tract to create separate tax lots for each residential unit; (2) recording a master deed to create a horizontal property regime; (3) recording a master deed to create a condominium; or (4) recording a master register or master declaration creating a cooperative.

To conditionally secure payment of the additional purchase price, the Agreement's Article 1.3(f) required North River to either provide a letter of credit to plaintiff that would be effective for five years, or agree to a

deed restriction . . . in form and substance satisfactory to Seller in its sole and absolute discretion, which prohibits any event which is deemed to be an Ownership Event hereunder for a period of five (5) years unless Buyer pays to Seller an amount equal to the Aggregate Subsequent Payments

[the absolute discretion clause].

If Norwood elected to have the deed restricted, then its principal, Fred A. Daibes, was required to personally guarantee the additional purchase price. The Agreement stated in Article 1.3(g) that the terms of Article 1.3 would survive closing. Closing was conditioned on North River receiving preliminary site plan approval from the Borough's planning board (the Board). On February 22, 2000, the Board granted preliminary and final site plan approval for development on Tract III of a senior housing facility consisting of sixty residential units.

During the next two months, plaintiff and North River amended the Agreement twice. Plaintiff agreed, among other things, to loan North River $1,000,000 repayable at a specified interest rate as purchase money financing.

On May 19, 2000, five days before closing, plaintiff's attorney sent a copy of the proposed deed to North River's attorney, Mark Sokolich. The deed included as restrictions not only the four ownership events that were in the Agreement, but a fifth restriction that was not in the Agreement. Neither Sokolich nor his clients made any comments or complaints about any provision of the proposed deed.

On May 23, 2000, the day before closing, plaintiff agreed to finance $48,559.91 of North River's carrying costs and the parties executed a third amendment to the Agreement, increasing the amount financed by plaintiff to $1,048,559.91.

On May 24, 2000, before closing occurred, Daibes, as North River's managing member, assigned North River's rights under the Agreement to defendant Cresskill Residential Communities, L.L.C. (CRC), who accepted the assignment through its president, Daibes. At closing, Norwood delivered the deed to CRC and CRC accepted it. The deed stated in pertinent part:

(a) In furtherance of the terms of Section 1.3 of that certain Amended and Restated Agreement of Sale dated September 23, 1999 by and between the Grantor, as seller, and North River Mews Associates, L.L.C. (predecessor-in-interest to Grantee), as buyer, the Grantee, its successors and/or assigns, are prohibited from undertaking or causing to be undertaken the following actions (each an "Ownership Event") with respect to Tract I, Tract II and/or Tract III (hereinafter referred to individually as a "Restricted Property" and collectively as the "Restricted Properties") for a period of five (5) years from the date hereof (hereafter referred to as the "Restricted Period") unless the Grantee, its successor and/or assigns, shall pay to the Grantor, its successor and/or assigns, the additional consideration set forth in paragraph (b) below:

 

(i) subdividing any or all of the Restricted Properties to create separate tax lots for each residential living unit to be constructed thereon;

 

(ii) recording with the Bergen County Clerk a master deed which creates a horizontal property regime pursuant to [N.J.S.A.] 46:8A-1 et seq. (or any successor statute) with respect to any or all of the Restricted Properties;

 

(iii) recording a master deed with the Bergen County Clerk which creates a condominium pursuant to [N.J.S.A.] 46:8B-1 et seq. (or any successor statute) with respect to any or all of the Restricted Properties;

 

(iv) recording with the Bergen County Clerk a master declaration and/or master register which creates a cooperative pursuant to [N.J.S.A.] 46:8D-1 et seq. (or any successor statute) with respect to any or all of the Restricted Properties; or

(v) taking any other action which would permit individual residential occupants of all or any part of all or any of the Restricted Properties to be vested with any fee ownership or proprietary leasehold estate therein.

 

(b) Grantee, its successors and/or assigns, shall not undertake and/or cause to be undertaken any Ownership Event with respect to all or any of the Restricted Properties during the Restricted Period unless and until the Grantee, its successors and/or assigns, shall have paid to the Grantor, its successors and/or assigns, an amount equal to the product of (i) the number of individual residential lots, condominium units, cooperative apartments or other units created by the Ownership Event multiplied by (ii) $ 20,000.00.

 

(c) The foregoing restrictions shall be binding upon the Grantee, its successors and/or assigns, and shall run with the land until the expiration of the Restricted Period.

As required by the Agreement, Daibes signed a "Deed Guaranty." The guaranty began:

The Deed is subject to a certain restriction whereby the Obligor's and its successors' and/or assigns['] right to market any residential units constructed or to be constructed upon, or any residential lots subdivided or to be subdivided from the property conveyed by the Deed, is contingent upon the payment from the Obligor, its successor or assigns, to you of certain sums of money more specifically described in the Deed . . . .

 

Daibes then guaranteed "that every Obligation will be paid when it is due, no matter what may happen," and represented that his guaranty covered "all of the Obligations arising out of the Deed." The deed restriction and Daibes' guaranty extended for five years from the date of closing, through May 24, 2005.

In March 2002, CRC, through Daibes, conveyed its interest in the property to Cresskill Residential Communities III, L.L.C. (CRC III). Daibes was the managing member of CRC III. In March 2003, without notifying plaintiff, CRC III applied to the Board for modification of the 2000 site plan approval. CRC III sought to increase the number of units on Tract III and to market them as condominiums. On April 2, 2003, the Borough's governing body approved an amendment to its Planned Unit Residential Development Zone Ordinance. The amendment changed the definition of "Independent Senior Housing" from "[m]ulti-family housing designed for persons over fifty-five (55) years of age" to "[r]ental or condominium multi-family housing designed for persons over fifty-five (55) years of age." The amended ordinance also permitted the development of ninety independent senior housing units. The minutes of the meeting include statements by the Borough's mayor that "the builder came to us and suggested it be changed to senior citizen condos," and that the units would be sold at prices ranging from $200,000 to $240,000.

On April 22, 2003, the Board approved CRC III's application and authorized development of "a senior residence facility of [eighty-seven] units." The Board noted that "[t]he project is for condominiums for senior citizens 55 years or older." Daibes did not notify plaintiff that the Board had approved the expanded project.

Six months later, on October 3, 2003, Daibes wrote to plaintiff's managing member, Graham Jones, and offered to pay plaintiff $100,000 in exchange for plaintiff's release of "the restriction." Daibes explained that he wanted to sell Tract III to a developer who intended to market the units as condominiums, but it was "remote" that the units could be completed and sold before the restriction expired. Daibes did not mention the Board's approval of the modified site plan.

On the same day, CRC III, through Daibes, contracted to sell Tract III to Kara Homes Development, LLC (Kara). On October 20, 2003, plaintiff rejected Daibes' offer, and a month later Kara terminated its contract with CRC III. Daibes subsequently tried, unsuccessfully, to sell Tract III to another developer.

On May 16, 2005, eight days before the deed restriction expired, CRC III sold Tract III to defendant Tenakill Developers, Inc., for $6,500,000, the amount previously paid by CRC for the entire Property. To induce Tenakill to purchase Tract III, and the title company not to except the five existing deed restrictions from its title insurance policy, CRC, CRC III, and Daibes signed a certificationthat neither they nor their predecessors had "undertaken any action . . . that would constitute an 'Ownership Event,' as defined in said Deed, during the five (5) year period of said restriction, scheduled to expire on May 26, 2005"; and CRC III would "indemnify and hold harmless First National Title Insurance Company and Tenakill Developers, L.L.C. from any and all claims arising out of the above." Defendant Boiling Springs Savings Bank financed the purchase and recorded a mortgage as a first lien on Tract III. Later in 2005, plaintiff's managing member, Jones, learned that the Board had approved CRC III's modified site plan. In February 2006, plaintiff demanded payment of the additional purchase price. When Daibes refused to pay, plaintiff commenced this lawsuit.

Plaintiff filed its complaint on February 17, 2006, alleging that North River, CRC, CRC III, and Daibes (defendants) breached the fifth deed restriction by obtaining the 2003 site plan approval to develop eighty-seven condominium units. Asserting that an ownership event had occurred, plaintiff sought $1,740,000 in damages based on an additional $20,000 for each of the eighty-seven units approved by the Board in 2003. Plaintiff also asserted causes of action against Tenakill and Boiling Springs for intentional interference with contract and equitable lien; and a cause of action against Daibes, personally, for fraud.

The trial court dismissed plaintiff's complaint on summary judgment. Plaintiff appealed. We affirmed the grant of summary judgment in favor of Tenakill and Boiling Springs, but reversed as to the other defendants. Norwood-Jeb, L.L.C. v. N. River Mews Assocs., L.L.C., No. A-1259-07 (App. Div. April 15, 2009) (slip op. at 2). In our opinion, we summarized the trial court's reasons for granting summary judgment to North River, CRC, CRC III, and Daibes:

With respect to [North River, CRC, CRC III, and Daibes], the trial court ruled that plaintiff was not entitled to rely upon deed restriction (v), which was the basis of plaintiff's suit. According to the trial court, only deed restrictions (i) through (iv) survived the closing because only those restrictions were contained within the contract of sale. The trial court also ruled that even if the parties had agreed to the placement of deed restriction (v) within the deed, it would be unenforceable because the contract required that all modifications be in writing and signed by the parties. In addition, the trial court ruled that even if the deed restriction were properly placed within the deed and survived the closing, no ownership event had occurred which would trigger the enhanced purchase price. Finally, the trial court ruled that Daibes could not be held personally liable under his guaranty.

 
[Id. at 16.]

 

We disagreed with the trial court's analysis,holding: (1) whether the Agreement between CRC and plaintiff was modified by CRC's acceptance of the deed containing the expansive fifth restriction was a factual issue to be resolved by a jury; (2) it was "illogical to conclude that [the fifth deed restriction] did not survive the closing under merger by deed when it did not exist until the deed itself was prepared"; and (3) whether the Board's 2003 approval of the modified site plan constituted an ownership event triggering the increased purchase price was a factual question to be resolved by a jury. Id. at 19-21.

Following a seven-day trial in which Daibes, Jones, their attorneys, municipal officials, and others who had once had dealings concerning Tract III testified, the court issued a comprehensive written opinion and entered judgment in favor of plaintiff. The court found Jones' testimony credible, and Daibes' testimony incredulous, particularly his testimony that he was unaware of the fifth deed restriction. The court determined that the fifth deed restriction was not a modification of the Agreement, but "was entirely consistent overall with the parties' intentions, as embodied in all three writings: the Agreement, the Deed and the Deed Guaranty." Noting that the parties vested plaintiff with the right to draft the closing documents, and that Daibes and CRC had the opportunity to review the closing documents, the court concluded that the deed was an expression of their intent and agreement.

The court also found that even if the deed constituted a modification of the Agreement, the parties had bargained for it, Daibes likely acquiescing to the fifth restriction in consideration of plaintiff financing his carrying costs. Having determined that the fifth deed restriction was consistent with the parties' intentions and enforceable, the court determined that CRC III and Daibes violated the restriction by obtaining approval to build eighty-seven condominium units on Tract III. The court explained:

[Plaintiff] has established by a preponderance of the credible evidence that the Defendants' actions within the five years post-closing did trigger their contracted obligation to pay [plaintiff] an additional monetary remedy for the units, pursuant to the Additional Purchase Price provisions of the Agreement. That conclusion is reached considering, among other evidence, the approval of the Defendants' []modified site plan application . . ., Mr. Daibes' 2003 $100,000 offer presented to Mr. Jones in the midst of the five-year window without divulging all of the current activities the Defendants had been engaged in regarding the subject Tract III, and combined with all of Defendants' other actions contrary to the rental representation which significantly increased the value of Tract III. Defendants' sheer and clear failure to raise any timely objection given due notice of the Deed language renders a reasonable and plain conclusion that the final Deed was violated and that the rental representation made by Defendants to Plaintiff was breached.

 

The Court awarded plaintiff the increased purchase price of $20,000 per unit, for a total of $1,740,000, and found Daibes personally liable based on the guaranty. The court subsequently awarded plaintiff $782,841.62 for contractual attorney's fees and costs, as well as $291,271.21 for pre-judgment interest. Defendants appealed. Plaintiff cross-appealed, contending the fee award was inadequate.

II.

Our review of a trial judge's decision following a bench trial is limited by well-settled legal principles. Sebring Assocs. v. Coyle, 347 N.J. Super. 414, 424 (App. Div.), certif. denied, 172 N.J. 355 (2002). "We are not to review the record from the point of view of how we would have decided the matter if we were the court of first instance." Ibid. Rather, "we will defer to a trial court's factual findings, particularly those influenced by the court's opportunity to assess witness testimony firsthand." Willingboro Mall, Ltd. v. 240/242 Franklin Ave., L.L.C., 215 N.J. 242, 253 (2013). In view of such deference, a trial court's "[f]indings [of fact] . . . are considered binding on appeal when supported by adequate, substantial and credible evidence." Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974); see also Sager v. O.A. Peterson Constr., Co., 182 N.J. 156, 163-64 (2004). We owe no special deference, however, to a trial court's conclusions of law. Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J 366, 378 (1995).

With those principles in mind, we turn to defendants' challenge to the trial court's finding that the fifth deed restriction was consistent with the parties' intentions as reflected in the Agreement, the deed, and Daibes's guarantee. Defendants argue that the trial court made several mistakes in reaching that conclusion.

First, defendants assert that the court erroneously relied on only part of the absolute discretion clause, which stated the deed restriction would be "in form and substance satisfactory to Seller in its sole and absolute discretion, which prohibits any event which is deemed to be an Ownership Event hereunder" (emphasis added). Defendants maintain the court ignored in its entirety the underlined language.

Defendants also argue that the trial court erroneously found "defendants knew and somehow understood that the five restrictions in the deed reflected their intentions as set forth in the four restrictions in the Agreement because they had the right to review the deed and accepted it." Defendants insist "[t]he only fair conclusion the evidence supports was that plaintiff unilaterally and without negotiation, agreement or forewarning modified the definition of ownership event to include another restriction which greatly enlarged and expanded the term and enhanced defendants' potential liability to pay an additional purchase price."

We begin our analysis by recognizing that a deed restriction is considered a contract and "thus must be analyzed in accordance with the principles of contract interpretation, which include a determination of the intention of the parties as revealed by the language used by them." Cooper River Plaza East, LLC v. Briad Group, 359 N.J. Super. 518, 527 (App. Div. 2003); see also Hagaman v. Bd. of Educ. of Woodbridge, 117 N.J. Super. 446, 451 (App. Div. 1971) ("In determining the meaning of a deed, prime consideration is the intent of the parties."). To discover intent, courts must consider the contract's terms and its purpose within the context of the surrounding circumstances. See Cooper River, supra, 359 N.J. Super. at 527. And if the deed is one of several writings that form part of the same transaction, all of the writings must be interpreted together as one instrument. Lawrence v. Tandy & Allen, Inc., 14 N.J. 1, 6 (1953).

Nevertheless, as a general rule, "following acceptance of a deed by the purchaser, respective rights and liabilities of the parties thereto are to be determined solely by the deed." Eileen T. Quigley, Inc. v. Miller Family Farms, Inc., 266 N.J. Super. 283, 294 (App. Div. 1993). Courts presume that, once the deed has been accepted, it expresses "the ultimate intent of the parties with regard to so much of the contract as it purports to execute." Campbell v. Heller, 36 N.J. Super. 361, 367 (Ch. Div. 1955).

Here, contrary to defendants' argument, the credible evidence supported the trial court's factual finding that the fifth deed restriction "was entirely consistent overall with the parties' intentions, as embodied in all three writings." No one disputed that the original $6,500,000 purchase price for the Property was based on the zoning restriction of Tract III to sixty senior citizen housing units that would be marketed on a rental basis. The Agreement provided explicitly that "Buyer acknowledges that Seller has agreed to the Purchase Price in reliance on the foregoing representation." Nor does anyone credibly dispute that plaintiff would have insisted on a higher purchase price had Tract III been zoned for development of eighty-seven condominium units when the parties entered into the Agreement. In other words, the $6,500,000 purchase price was based on the restricted use and marketability of the Tract III units. As Jones testified at trial, Tract III had two potential values: one if it was developed for rental purposes, another if it was developed for condominium ownership. The intent of the deed restrictions was to secure for plaintiff the increased purchase price if, within five years of closing, the units to be billed on Tract III were marketed as condominiums rather than rental units.

Defendants do not dispute that they accepted the deed from plaintiff. In arguing that the trial court erroneously determined that the fifth deed restriction reflected the parties' intent, they rely, implicitly, on Daibes's testimony that he was unaware of the fifth deed restriction; and, explicitly, on the testimony of the attorney retained to represent Daibes at closing, who claimed he did not read all of the closing documents. The trial court rejected Daibes's testimony and was critical of the attorney's testimony. Although defendants acknowledge our standard of review concerning factual and credibility determinations by the trial court, they in essence ask us to disregard it. We decline to do so.

The trial court determined that Daibes's testimony was "most astonishing, incredible and unsupported." That determination is amply supported by the record. There was also sufficient credible evidence in the record to support the court's finding "that the subject final Deed is only three pages long and it is implausible and unreasonable to conclude that [d]efendants had not read it or could not have read it."

Perhaps more significantly, the documentary evidence and the parties' dealing supports the court's conclusion that the fifth deed restriction embodied the intent of the parties. Defendants emphasize certain facts to demonstrate that the trial court erred in its decision. For example, defendants criticize the court for relying on the provision in the absolute discretion clause that the deed would contain a restriction "in form and substance satisfactory to seller in its sole and absolute discretion," but ignoring the remainder of the clause that states, "which prohibits any event which is deemed to be an ownership event hereunder for a period of five years." Defendants also point to Daibes's closing attorney's testimony that he did not pay much attention to the deed. But those arguments ignore the remainder of the trial court's decision, including its references to indisputable evidence that Daibes represented to plaintiff that sixty Tract III units would be marketed as rental units. It was abundantly clear from the cumulative testimony of the ten trial witnesses that the parties knew Tract III would significantly increase in value if units could be marketed as condominiums.

James Demetrakis, the attorney who originally represented Daibes, testified unequivocally about Daibes's representations and their consequences:

The contract as originally written, envisioned that the project would be a rental project. I negotiated that. And that was the intention. Mr. Jones . . . said what would happen if you changed your mind and you went to develop this property as condominiums. It was the intention to pay more money if the property was going to be developed as condominiums.

 

So, while I don't know what Mr. Jones would have said, the intention was to pay more money if the property was to be developed as condominiums. And that is the reason the language was put in that if there was a change . . . within five years could we put a limitation at that time for five years that there would be additional consideration due.

Contrary to defendants' contention, the trial court considered the entirety of the documentary evidence, the overwhelming testimony that established the circumstances under which defendants would pay the increased purchase price to plaintiff, and defendants' failure to object to the deed restrictions intended to secure the increased purchase price. The fifth deed restriction was, as the trial court found, entirely consistent with the parties' intent. The court's decision was supported by the evidence.

Defendants next allege that the court erred by allowing Jonathan Stark, the attorney who represented plaintiff and drafted the Agreement of Sale and closing documents, to testify about the parties' intentions concerning the terms of the Agreement. Defendants' argument on this point is without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E). We add only the following comments.

To support their argument, defendants cite only two questions answered by Stark. One was whether the word "'hereunder' [in the absolute discretion clause] would eliminate the seller's sole and absolute discretion to draft the deed restrictions"; the other, "what [was] your purpose . . . in including this language" (emphasis added). Read in context, the examples cited by defendants do not demonstrate that Stark gave unduly prejudicial testimony about the intentions of all of the parties, as distinguished from his purpose in drafting the agreement. And even if the trial court erred in permitting the testimony, the error was harmless. R. 2:10-2. In view of the overwhelming evidence that the parties agreed defendants would pay an additional purchase price if they could market Tract III units as condominiums, Stark's testimony could hardly have been said to "prejudice a substantial right" of defendants. R. 1:7-5.

Lastly, defendants argue they did not violate the fifth deed restriction. That restriction precluded them from "taking any other action which would permit individual residential occupants of all or any part of all or any of the Restricted Properties to be vested with any fee ownership or proprietary leasehold estate therein." Defendants assert that neither the Borough's amended ordinance nor the Board's approval of the development of eighty-seven condominiums on Tract III could create condominiums. Defendants reason that because individuals can be "vested with any fee ownership or proprietary leasehold estate therein" in condominiums only after a master deed is filed, and not when an ordinance is enacted or a site plan approved permitting development of condominium units on a parcel of land, the Board's approval of eighty-seven condominiums on Tract III did not violate the fifth deed restriction. Similarly, defendants argue that Daibes's "marketing" of Tract III as an approved condominium project did not violate the fifth deed restriction.

We previously rejected similar arguments. When the trial court granted the summary judgment that plaintiff appealed, we recognized the trial court had ruled that

plaintiff was not entitled to summary judgment because, as a matter of law, no ownership event within the scope of deed restriction (v) had occurred. The trial court held that passage of the Planning Board resolution approving the modified site plan was not an ownership event for purposes of the deed restriction because it did not permit individuals to be vested with any fee ownership or proprietary leasehold estate. In our judgment, this was a factual question to be resolved by a jury.

 

[Norwood-Jeb, L.L.C., supra, slip op. at 20-21.]

 

We explained that the fifth deed restriction "did not, by its terms, require that individuals be vested with fee ownership during the five-year period but encompassed the preliminary, but necessary, steps to permit that vesting to occur. If the Planning Board had not approved the modified site plan application, that individual vesting would not have been possible." Id. at 21. We also pointed out that the scope of the restriction was evidenced by Daibes's guarantee, which "referred to the restriction encompassing a right to market the properties for individual ownership," ibid., and that Daibes's offer of $100,000 to have plaintiff release the restriction was evidential as to Daibes understanding that his attempt to market the property for condominiums "fit within the scope of the restriction." Id. at 21-22.

Those were factual issues, not questions of law as defendants appear to argue. The trial court resolved those factual issues in favor of plaintiff. The court explained:

[Plaintiff] has established by a preponderance of the credible evidence that the Defendants' actions within the five years post-closing [period] did trigger their contracted obligation to pay Norwood an additional monetary remedy for the units, pursuant to the Additional Purchase Price provisions of the Agreement. That conclusion is reached considering, among other evidence, the approval of the Defendants' []modified site plan application . . ., by way of Resolution 1192, Mr. Daibes' 2003 $100,000 offer presented to Mr. Jones in the midst of the five-year window without divulging all of the current activities the Defendants had been engaged in regarding the subject Tract III, and combined with all of Defendants' other actions contrary to the rental representation which significantly increased the value of Tract III.

The trial court's factual determinations were supported by credible evidence in the record.

III.

We turn now to the parties' contentions concerning the trial court's award of counsel fees and costs. The parties do not dispute that the Agreement entitled the prevailing party to recover reasonable attorney's fees and costs. Accordingly, plaintiff submitted a fee application requesting $966,612.84 in fees and costs, and later sought an additional $15,169.50 in fees incurred in drafting the original fee application. The court awarded $782,841.62. Both parties challenged the award.

A litigant can recover attorney's fees if the recovery is authorized under the terms of a contract, by a court rule, or by statute. Packard-Bamberger & Co. v. Collier, 167 N.J. 427, 440 (2001). The fees must be reasonable. Our courts have discussed the reasonableness of counsel fees in a variety of cases. See Litton Indus. v. IMO Indus., Inc., 200 N.J. 372 (2009) (breach of contract action); Packard-Bamberger & Co., supra, 167 N.J. 427 (attorney misconduct case); Rendine v. Pantzer, 141 N.J. 292 (1995) (fee-shifting statute); Kellam Assocs., Inc. v. Angel Projects, LLC, 357 N.J. Super 132 (App. Div. 2003) (contractual provision in lease); Scullion v. State Farm Ins. Co., 345 N.J. Super 431 (App. Div. 2001) (suit to recover personal injury protection benefits under automobile insurance policy); Yueh v. Yueh, 329 N.J. Super 447 (App. Div. 2000) (matrimonial action). "When the fee-shifting is controlled by a contractual provision, the provision should be strictly construed in light of our general policy disfavoring the award of attorneys' fees." Litton Indus., supra, 200 N.J. at 385.

The method for determining what is a reasonable fee is calculating the lodestar the number of hours reasonably expended multiplied by a reasonable hourly rate. Packard-Bamberger & Co., supra, 167 N.J. at 445. The Supreme Court has emphasized the trial court s role in determining the lodestar:

In our view, the trial court s determination of the lodestar amount is the most significant element in the award of a reasonable fee because that function requires the trial court to evaluate carefully and critically the aggregate hours and specific hourly rates advanced by counsel for the prevailing party to support the fee application.

 

[Rendine, supra, 141 N.J. at 335.]

 

Guidelines have been developed for evaluating the lodestar. "[A] trial court may exclude hours from the lodestar calculation if in its view the hours expended exceed 'those that competent counsel reasonably would have expended to achieve a comparable result,' in the context of 'the damage prospectively recoverable, the interests to be vindicated, and the underlying statutory objectives.'" Szczepanski v. Newcomb Med. Ctr., Inc., 141 N.J 346, 355 (1995) (quoting Rendine, supra, 141 N.J. at 336). Moreover, proportionality between fee awards and damage recoveries is not required, "although the amount of damages awarded is a material factor in setting a reasonable counsel fee." Ibid.

A court should also evaluate the conduct of the parties. "Fee-shifting cases are not an invitation to prolix or repetitious legal maneuvering. Courts should consider the extent to which a defendant s discovery posture, or a plaintiff s, has caused any excess expenses to be incurred." Id. at 366.

The trial court should exclude hours that are unnecessary. "Hours are not reasonably expended if they are excessive, redundant, or otherwise unnecessary." Rendine, supra, 141 N.J. at 335 (quoting Rode v. Dellarciprete, 892 F.2d 1177, 1183 (3d Cir. 1990)). And administrative tasks "should come under firm overhead and should not be billed to the client as paralegal (or attorney) [time]." Blakey v. Continental Airlines, Inc., 2 F. Supp. 2d 598, 605 (D.N.J. 1998). "Purely clerical or secretarial tasks should not be billed at a paralegal rate, regardless of who performs them." Ibid. (quoting Missouri v. Jenkins, 491 U.S. 274, 288 n. 10, 109 S. Ct. 2463, 2472, 105 L. Ed. 2d 229, 243 (1989).

Finally, the court should consider the factors enumerated in Rule of Professional Conduct 1.5(a). See Litton Indus., supra, 200 N.J. at 387.

When a party appeals from a trial court's order awarding counsel fees, we review the award under an abuse-of-discretion standard. See Rendine, supra, 141 N.J. at 317. "[F]ee determinations by trial courts will be disturbed only on the rarest occasions, and then only because of a clear abuse of discretion." Ibid. Having reviewed the trial court's fee award and its rationale for awarding it, we do not find this to be one of those rarest of occasions where we should disturb the fee award because of a clear abuse of discretion.

Defendants assert, as a general proposition, that the 2,500 hours expended by plaintiff's attorneys was patently excessive. They make three specific arguments. First, the court did not deduct all of the fees billed by plaintiff's "second chair," Peter W. Smith, Esq., even though the court ruled that Mr. Smith's trial preparation and attendance were unnecessary; the court did not sufficiently reduce the fee award for time billed by attorneys who did not appear at trial, and by paraprofessionals in the firm that represented plaintiff; and, the court should have reduced the time plaintiff's firm spent in preparing for trial, because they had fully prepared once before when the trial was initially scheduled.

Plaintiff responds that the court deducted more for Smith's trial time than Smith actually billed for attending trial. Plaintiff points to itemized billing for Smith's trial time totaling $21,343.50; not the $42,718 by which the court reduced their fee request. Plaintiff surmises the court's deduction was based on defendants' opposition to the fee application. The opposition, according to plaintiff, included an assertion that Smith had billed for $42,718 for his trial attendance, an assertion that was inaccurate. Plaintiff also suggests that a review of the billing records demonstrates the inaccuracy of the amount the defendant's assert Smith spent preparing for trial.

Plaintiff argues there is no basis for defendants' conclusory assertion that non-trial attorneys and paraprofessionals spent excessive time working on plaintiff's case. Finally, plaintiff argues defendants' argument that plaintiff's attorneys twice prepared for trial has no basis in fact. Plaintiff points out that the first trial was scheduled to take place in March 2007, and the second trial took place more than three years later, in 2010. Plaintiff maintains that all of the trial preparation was entirely necessary.

In support of its cross-appeal, plaintiff argues the trial court abused its discretion by declining to award $15,770.38 for its work in preparing its fee application, and further abused its discretion by disallowing more than $41,000 in expenses and more than $60,000 for technical support during trial. Plaintiff also alleges the court abused its discretion by reducing its fee application for Smith's trial time, considering that he was primarily responsible for trial preparation and conducted the examination of seven witnesses. Plaintiff asserts the trial court also failed to take into consideration the fact that plaintiff's law firm discounted its fees by ten percent.

We are unpersuaded by defendants' argument that the trial judge did not sufficiently reduce plaintiff's fee application for Smith's trial preparation and participation. As far as Smith's trial time is concerned, defendants do not dispute in their reply brief plaintiff's itemization of the time Smith actually spent at trial.

Moreover, though defendants assert now, as they did before the trial court, that Smith billed $119,250 for trial preparation, defendants make no attempt to allocate the time
Smith spent in the months before trial between matters related to trial preparation and non-trial matters. The record simply does not reflect that defendant billed in excess of $100,000 exclusively for preparing for trial.

We are also unpersuaded by defendants' general allegation that plaintiff's attorneys should have spent less time preparing for trial after having prepared for trial three years earlier. Defendants' argument is supported by nothing more than speculation. Defendants have not pointed to any unnecessary, duplicative work performed in preparation for the first trial that was unnecessary to repeat during preparation for the second trial. Significantly, defendants have cited no authority to support their speculative general assertion. The trial court was aware of the argument because defendants raised it in their opposition to plaintiff's fee application. Nothing in the record suggests that the trial court did not consider the argument, and nothing suggests that the trial court somehow abused its discretion by overlooking plaintiff's unnecessary, duplicative efforts when it prepared for trial a second time.

Plaintiff's argument that the trial court abused its discretion is also unavailing. Plaintiff's arguments concerning the trial court's disallowance of certain expenses and disbursements, and expenses for technical support, amount to little more than second-guessing the trial court's discretionary decisions. The trial court referred to plaintiff's technological trial preparation as "overkill," particularly in view of the numerous documents admitted into evidence at trial, and plaintiff's providing to the court "a formidable trial binder with [an] easy to find index that contained all of the exhibits being discussed." We discern no basis for concluding that the trial court clearly abused its discretion by disallowing the expenses. Additionally, the trial court was in a far better position than we are to determine whether it was necessary to have two attorneys present during the trial.

Plaintiff also contends that the court abused its discretion by not including in the award the amount of fees plaintiff incurred for preparing and filing the fee application. Generally, such fees are recoverable. See Tanksley v. Cook, 360 N.J. Super. 63, 67 (App. Div. 2003). Nevertheless, bearing in mind that "[t]he ultimate goal is to approve a reasonable attorney's fee that is not excessive," Litton Indus., supra, 200 N.J. at 388, we cannot conclude that this is one of the rarest of occasions where the court clearly abused its discretion by awarding "only" $782,841.62. Id. at 386.

IV.

We have considered the parties' remaining arguments and find them to be without sufficient merit to warrant further discussion in a written opinion. R.2:11-3(e)(1)(E).

Affirmed.

1 The Agreement was an amended and restated version of a September 1998 contract that had been terminated.