DONALD SALAAM v. BOARD OF EDUCATION OF THE CITY OF IRVINGTON, ESSEX COUNTY

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

 

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION

DOCKET NO. A-5592-11T4

 

DONALD SALAAM,

 

Petitioner-Respondent/ Cross-Appellant,

 

v.

 

BOARD OF EDUCATION OF THE CITY OF IRVINGTON, ESSEX COUNTY,

 

Respondent-Appellant/ Cross-Respondent.

 

 

 

 

Submitted January 28, 2014 Decided

 

Before Judges Reisner and Carroll.

February 4, 2014

 

On appeal from the Commissioner of

Education, Agency Docket No. 659-11/10.

 

Hunt, Hamlin & Ridley, attorneys for appellant/cross-respondent Board of

Education of the City of Irvington, Essex County (Raymond L. Hamlin, of counsel and on the brief; Rasheedah R. Terry, on the brief).

 

John J. Hoffman, Acting Attorney General, attorney for appellant/cross-respondent Commissioner of Education (Angela L. Velez, Deputy Attorney General, on the brief).

 

Caruso Smith Edell Picini, attorneys for respondent/cross-appellant (Steven J. Kaflowitz, on the brief).

 

PER CURIAM

Petitioner Donald Salaam is employed as a teacher by respondentIrvingtonBoardofEducation(Board). OnAugust31,

2008,SalaamwaschargedintheIrvingtonMunicipalCourtwith

 

the petty disorderly persons offense of harassment, N.J.S.A.

 

2C:33-4(c),forallegedly having inappropriatecontact with a femalestudent. Salaamwasrepresentedinthemunicipalcourt action bythelawfirmof TimothySmith&Associates,LLC. Following numerous courtappearances,thechargewasultimately dismissed by theState on October 29, 2009.

Salaam then sought reimbursement from the Board for his

legalfeesandcosts totaling$33,405.38 expended in thedefense of themunicipalcourtcomplaint,pursuanttoN.J.S.A.18A:16-

 

6.1. TheBoarddidnotrespondtothisrequest. Consequently, on November 15, 2010,SalaampetitionedtheCommissionerof Education(Commissioner)forreimbursement. OnDecember13,

2010,thematterwastransmittedtotheOfficeofAdministrative

 

Law (OAL) as a contested case.

 

On February 17, 2012,a hearing was held on thefee dispute beforeAdministrativeLawJudgeBarryE.Moscowitz. Salaam's leadattorney,TimothySmith (Smith),wasthesole witness to testifyat the hearing. In acomprehensivetwelve-pageInitial Decision datedMay 16,2012,the ALJ orderedthat theBoard reimburseSalaamatotalof$18,755.28forthereasonablefees

 

andcostsattributabletoSmith'sservices. Feesrelatingto Smith'sassociatesweredisallowedbecausetheydidnottestify or submitcertifications thatwould permitadeterminationasto whethertheir fees werereasonable.

Following the filing of exceptions by both parties, the

 

CommissioneradoptedtheALJ'sInitialDecisiononJune25,

 

2012. TheBoardnowappealsthecounselfeeaward,andSalaam cross-appeals that portionofthefinalagencydecision that denied reimbursement for services rendered by Smith's associates. Havingconsideredtheparties'argumentsinlight of the record and applicable legal standards, we affirm.

Our scope of review of an administrative agency's final

 

determinationislimited. InreCarter,191N.J.474,482

 

(2007). Weaccorda"strongpresumptionofreasonableness"to the agency's exercise of its statutorily delegated

responsibilities. CityofNewarkv.NaturalRes.Council,82

 

N.J.530,539,cert.denied,449 U.S. 983,101 S. Ct. 400,66L.

 

Ed.2d245(1980). Theburdenofshowingtheagency'saction

 

was arbitrary, unreasonable, or capricious rests upon the

 

appellant. SeeBaronev.Dep'tofHumanServs.,Div.ofMed.

 

Assistance&HealthServs.,210N.J.Super.276,285(App.Div.

 

1986),aff'd, 107 N.J.355(1987).

Thereviewing court"shouldnotdisturb anadministrative agency'sdeterminationsorfindings unless there is a clear showingthat (1) the agency did not follow the law; (2) the decisionwasarbitrary,capricious,orunreasonable;or(3)the

decision was not supported by substantial evidence." Inre

 

Virtua-WestJerseyHosp.VoorheesforaCertificateofNeed,194

 

N.J.413,422(2008);seealsoCircusLiquors,Inc.v.Governing

 

BodyofMiddletownTwp.,199N.J.1,9-10(2009). Nevertheless,

 

an appellate court is "in no way bound by the agency's interpretationofastatuteoritsdeterminationofastrictly

legalissue." MayflowerSec.Co.v.BureauofSec.,64N.J.85,

 

93 (1973).

 

Essentially this appeal requires us to determine (1)

whetherSalaamwasentitledtoreimbursementbytheBoardofhis reasonablecounselfeesandcostspursuanttoN.J.S.A.18A:16-

 

6.1;and,ifso,(2)theextenttowhichthefeeschargedby Smithandhisassociatesconstituted reasonablefees subject to reimbursement under thestatute.

N.J.S.A. 18A:16-6.1, provides for indemnification in

 

criminal and quasi-criminalactions:

 

Shouldanycriminal orquasi-criminalaction beinstitutedagainstanysuchpersonfor any such act or omission andshould such proceedingbedismissedorresult in afinal dispositioninfavorofsuchperson,the boardofeducationshallreimbursehimfor

the cost ofdefending suchproceeding, including reasonable counsel fees and expensesoftheoriginalhearingortrial andallappeals. No employeeshallbe entitled to be held harmlessor have his defensecostsdefrayedasa result of a criminal or quasi-criminalcomplaint filed againsttheemployee by or on behalf of the board of education.

 

TheBoardfirstarguesthatSalaamdidnottestifyatthe OALhearing,andthatheotherwisefailedtoestablishhis burden todemonstrate thattheconductcomplained of in the municipal courtactionaroseoutof and inthecourseofhis duties as ateacher.We disagree.

InBowerv.Bd.ofEduc.ofE.Orange,149N.J.416(1997),

 

the Supreme Court provided guidanceas to when a board of educationemployeeisentitledtoindemnificationforcounsel fees andexpensesincurredin thedefenseofcriminalcharges. Public school teacher Paul Bower was indicted on charges allegingthesexualabuseofhisstudentsinthebathroom

adjacenttothekindergartenclassroomduringschoolhours. Id.

 

at 419, 421. The charges were dismissed and he sought indemnificationfromtheEastOrangeBoardofEducationforhis

criminal defense costs. Id. at 419. Bower's claim for

 

indemnification was based on N.J.S.A. 18A:16-6.1, which the

 

court found refers back to N.J.S.A. 18A:16-6. Id. at 423

 

(citation omitted). The Court held "indemnification is

mandatory," under N.J.S.A. 18A:16-6, "if the charges are

 

dismissedorresultinafavorablefinaldispositionandifthe

'act or omission'on whichthecriminalchargesarepredicated arisesoutofandin thecourseof theperformance of theduties of employment." Id.at 419.

 

The applicablestandard is that there be "proof by a preponderance of theevidence that theacton whichthecharges arepredicatedaroseoutofandinthecourseofperformanceof

thedutiesofemployment." Id.at434. Thechargesagainst

 

Bowerarosefromhisassistanceto studentswhoused theschool lavatory. Because all charges were dismissed before trial,the Courtfoundthere wasnootherevidence to refute thatthe allegationsarose from theconduct of his employment.

Inthepresentcase,themunicipalcourtcomplaintandthe

 

underlyingdiscovery were introducedin evidence at theOAL hearing. Weconcludethattheproofsadequatelyestablished thatthechargearoseoutofSalaam'semployment,andthatthe

CommissionerproperlyappliedtheCourt'sholdinginBowerwhen

 

it determined:

 

Petitionerhereseeks reimbursement for legalfeesand costsexpendedinthedefense of acriminalcomplaintfiledagainsthimin theIrvingtonMunicipalCourtallegingthat he assaulteda15-yearoldgirlin his classroom. Such criminal complaintwas ultimatelydismissed by thecourt. The CommissionernotesthatN.J.S.A.18A:16-6.1

requiresaboardto reimburse itsemployees forreasonablecounselfees andexpenses incurred in defending against certain criminal actions. If the requisite statutory standard issatisfied, such indemnification is mandatory, N.J.S.A.

18A:16-6.1, readin conjunctionwith the complementary provisions of theimmediately preceding statutory section, N.J.S.A.

18A:16-6, sets forth atwo-prongedtest for determiningwhether boardemployeesare entitled to indemnificationinthis regard, i.e.,1)theunderlyingcriminalaction must be dismissed or result in a final dispositioninfavorof theemployee,2)any actoromissionuponwhichthecriminal charge is based must arise out of and during thecourseof theemployee'sperformanceof the dutiesandresponsibilities of his position.

 

Here,thereisnodisputethatthe firstprongoftherequisitetest was satisfied by thedismissalof thecomplaint against respondent by the Irvington MunicipalCourt. Astothesecondprong, withthedismissal of thecomplaint thereis no proofonthis recordthatrespondent engaged in untoward conduct against any child. Rather,theonlyundisputedconduct existingin thismatteris thatthealleged events took placeat school,during school hours, while respondent wasengaged in performinghisduties as ateacher. Consequently, the allegedbehavior on which the criminal complaintwaspredicatedarose outofandinthecourseoftheperformance of theduties ofrespondent'semployment (See [Bower, supra, 149 N.J. at 416]), thereby satisfying the criteria which entitles petitioner to indemnification pursuant to the terms of N.J.S.A.18A:16-6.

Accordingly,reimbursement to Salaam was mandated under the statute,leavingopenonlytheissueofthereasonablenessof the legal fee awarded for our consideration.

Afterestablishingthatthepartyseekingfeesisentitled

 

torecover,areasonablefeemustbedetermined. Inorderto determine areasonable attorneyfee,thestartingpointis the determinationofthe"lodestar,"whichequalsthe"numberof hoursreasonablyexpendedmultipliedbyareasonablehourly

rate." Rendinev.Pantzer,141N.J.292, 335 (1995).

 

The trial court's determination of the lodestaramountis themostsignificant element in the award of areasonable fee becausethatfunctionrequiresthetrial courttoevaluatecarefullyandcritically the aggregate hours and specific hourly ratesadvancedbycounselfor theprevailing party to supportthe fee application.

 

[Ibid.]

 

Guidelineshavebeendevelopedforevaluating thelodestar. "[A] trialcourtmayexcludehours from thelodestar calculation if in itsviewthe hours expended exceed 'thosethat competent counselreasonably wouldhaveexpendedto achieve acomparable result,' in the context of 'the damages prospectively recoverable,theintereststobevindicated,andtheunderlying

statutoryobjectives.'" Szczepanskiv.NewcombMed.Ctr.,141

 

N.J.346,355(1995)(quotingRendine,supra,141N.J.at336).

 

The trial court should exclude hours that are unnecessary.

"Hours are not reasonably expended if they are excessive,

 

redundant,orotherwiseunnecessary." Rendine,supra,141N.J.

 

at335(quotingRodev.Dellarciprete,892 F.2d 1177,1183(3d

 

Cir. 1990)).

 

Turningtothelodestarcalculation,thefirststepinthe calculationconsidersthenumberofhoursthatwere"reasonably"

devoted to the matter. Rendine, supra, 141 N.J. at 334-35.

 

However, "trial courts should not accept passively the submissionsofcounseltosupportthelodestaramount...."

Id.at335. Thus,"[i]tdoesnotfollowthattheamountoftime

 

actuallyexpendedistheamountoftimereasonablyexpended."

 

Id.(emphasisadded)(citingCopelandv.Marshall,641 F.2d 880,

 

891 (D.C.Cir.1980)). The"determinationneednotbe unnecessarily complexor protracted,butthetrial courtshould satisfy itself that the assigned hourly rates are fair, realistic, and accurate, or should make appropriate

adjustments." Rendine,supra, 141 N.J.at 337.

 

Here,theALJexpresslyemployedtheframeworkestablished

 

in Rendine for determining the reasonableness of attorney's

 

fees, and determined Smith's reasonable counsel fees and expenses to be $17,650and$1105.28, respectively. He reasoned:

In this case, Smithsubmitted contemporaneously recorded timerecordsthat fullysupportedthecalculationof hours expendedbyallattorneyswhoparticipated

in themunicipal courtproceeding. In addition,thehourlyrateSmithchargedis one that wouldbe charged by an adequately experiencedattorney possessedof average skillandordinary competence. Therefore,I CONCLUDEthat thetotaltimeSmith expended andthehourlyrate hechargedwere reasonable.

 

Noneoftheotherattorneyswhoappear in thetime records,however,testifiedor submitted certifications. Without their testimonyor certification,Icannot assess theirexperienceandcomparetheir ratesto theratesprevailingin the communityfor similar servicesby lawyers ofreasonably comparable skill, experience, and reputation. Therefore,ICONCLUDE thata preponderance of theevidence does notexist that thehourlyratestheychargedwere reasonable.

 

In its final decision, the Commissioner adopted the ALJ's methodologyand conclusions.

In itsreplybrief,theBoard acknowledgesthat"theALJ citedthecorrect fee-settingstandard." TheBoardargues, however,that(1)the$33,405.38billsubmittedbytheSmith firm for a municipal court matter that wasultimately dismissed wasunreasonable;(2)theALJerredwhenhedenied theBoardthe opportunitytointroduce intoevidenceanindependentexpert report asto thereasonablenessof theattorney'sfees;and (3) the Smith firmbilledat ahigherrate thanattorneys who participatein the NewJerseyEducationAssociation(NJEA)legal servicesprogram,ofwhichSalaamwasamember.Becausewefind

that the Commissioner'sfinaldetermination wassupportedby substantialcredible evidenceintherecord,werejectthese arguments,and decline to disturb the fee award.

AttheOALhearing,Smithtestifiedthatheisacertified

 

criminaltrialattorneywiththirteenyears'experience,and thathenormallycharges$250perhour. AlthoughSalaamwas onlychargedwithapettydisorderlypersonsoffense,hefaced the collateral consequence of loss of his employment if convicted. Asaresult,itwasnecessarytoretainaprivate investigator tointerview witnesses,and to filemotions in the municipal courtto obtaindiscoveryfromtheBoard andfrom the Division of Youth andFamilyServices. Further,Smithexplained thatsometwentytrial noticeswere issuedbythe court,thathe hadtopreparefor trialonnumerousoccasions,andthathemade sixteencourtappearancesbeforethecomplaintagainstSalaam wasultimatelydismissed. Smith'sbillingrecordsshowedthat he personallyexpended70.6 hours onSalaam'sbehalf,which when multipliedbyhis $250hourlybillingratevalidated the$17,650 counselfeeaward.

WerejecttheBoard'sargumentthattheCommissionererred in awarding a higher hourly ratethanthat allowed by theNJEA legalservicesprogramthroughwhichSalaamprocured Smith's representation. TheNJEAlegalfundallowedpaymentofSmith's

fees at a "volume discount rate" of $142 to $145 per hour.

 

However, as noted, N.J.S.A. 18A:16-6.1 mandates the

 

reimbursementof"reasonable"counselfees. AstheALJaptly stated,thefactthatathird-partyfinancesthedefensedoes not relieve theBoard of its statutory obligation to pay those reasonablefees. WeagreewiththeALJthatthepurposesand policiesofthestatuteareadvancedbyallowingaschool employeetorelyuponhisunion'sinsurancepolicy as ameansto fund hislegalrepresentation,and thereby"protecthimself from thepotentiallyruinousdefensecosts,"which in turn"cannot inure to the benefit oftheBoard."

WealsofindnoabuseofdiscretionintheALJ'sdecision to preclude theBoard'sbelatedattemptto introduceexpert opinionevidencewith respecttothereasonableness of Smith's fee. AstheALJnoted,thefirstscheduledhearingdatewas November15,2011,whichwasadjournedattheBoard'srequest duetotheunavailabilityoftheBoardAdministrator. The hearingwasrescheduled forDecember30, 2011, but was again adjourned duetotheAdministrator's unavailability. TheBoard neverrepresentedthatitplannedtoofferanexpertwitness, nordiditproduceanexpertreportuntilFebruary10,2012.

UnderN.J.A.C.1:1-10.4(e),discoverymustbecompletednolater

 

thantendaysbefore"thefirstscheduledevidentiaryhearing."

Here theBoardfirstproffereditsexpertreportsubstantially afterthe discoveryenddate,whichaffordedSalaaminsufficient opportunityto counterit beforethe February 17, 2012 hearing, or,alternatively,wouldhaveresultedinadditionaldelayto meetthisnewevidence. Notablyalso, sincetheBoard failedto raisethisissuein itsexceptionsfortheCommissioner's consideration, we deem it waived.

Finally,as to Salaam'scross-appeal,theCommissioner did notactarbitrarilyin disallowing thefees chargedby Smith's associates. Sincethey neithertestified norsubmittedany affidavitsofservices,therewassimplynocompetentevidence in therecordtoestablishthereasonablenessoftheirservices or their hourly billingrates.

Affirmed.