SOON JA KANG et al. v. SOON JA KANG and CHUK WOOK KANG

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-2042-04T52042-04T5

SOON JA KANG and CHUK WOOK KANG,

Plaintiffs-Appellants/

Cross-Respondents,

v.

JONG CHEUL YOO and J.M. GENERAL

CONSTRUCTION COMPANY,

Defendants-Respondents/

Cross-Appellants.

____________________________________________________

 

Submitted April 18, 2007 - Decided May 11, 2007

Before Judges Parker, C.S. Fisher and Messano.

On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. BER-L-3180-02.

Michael S. Kimm, attorney for appellants/ cross-respondents.

Kim & Bae, attorneys for respondents/cross-appellants (B.J. Kim, of counsel; William J. Volonte, of counsel and on the brief).

PER CURIAM

As plaintiffs Soon Ja Kang and Chuk Wook Kang were about to close title on a two-family home in Palisades Park in May 2001, they hired defendants Jong Cheul Yoo and J.M. General Construction Company to perform renovations. In this suit, plaintiffs asserted that defendants violated the Consumer Fraud Act (the Act), N.J.S.A. 56:8-1 to -20, by failing, among other things, to complete certain renovations. Following a trial, the jury determined that defendants violated the requirements of the Act, but that plaintiffs suffered no ascertainable loss.

The structure in question consisted of a basement and first floor, which constituted the main part of the house, and an apartment on the second floor. Based on the parties' discussions, defendant Jong Cheul Yoo (Yoo) provided plaintiffs with a document entitled "Estimate," which briefly stated prices for the renovation work listed. According to the testimony of plaintiff Soon Ja Kang (Soon Ja), a total price of $56,700 was mentioned at this time.

After additional discussions, Yoo submitted a "Proposal" dated June 7, 2001, which called for a purchase price of $90,000. Soon Ja testified that the Proposal, which was signed by both parties, was based upon a blueprint that Yoo had prepared. Unfortunately, the testimony does not cogently explain what the blueprint revealed and neither party has included this blueprint in the record on appeal. The parties also agreed that if there was any work to be performed beyond the terms of the Proposal, a contract for that additional work would be prepared and agreed upon.

Plaintiffs closed title on June 13, 2001, and defendants began work two days later. By the end of July, defendants had completed the work on the second-floor apartment, which plaintiffs thereafter occupied.

Soon Ja testified that not long after completion of the apartment, Yoo told her he was losing money on this job. He demanded that plaintiffs buy the supplies needed and pay more than $90,000 to complete the work. Following that, Yoo increased the purchase price to $100,000 and later sought an additional $8,000. Soon Ja testified that she "want[ed] to maintain a good relationship, so [she] paid" the additional sums and also spent $33,000 on supplies for the renovation work.

On the other hand, defendants asserted that the price increased because Soon Ja continually changed and upgraded the renovations. Although she denied this, Soon Ja did acknowledge during cross-examination that Yoo created an additional entranceway, installed cabinets in the basement playroom, created a laundry room, demolished a brick staircase on the second floor, constructed an outside stairway to the basement, and installed crown molding throughout the entire first floor; none of those items was included in the "Proposal."

Soon Ja testified that because of the escalating purchase price she had her son draft a contract covering "all the extra charges," which both parties signed on September 5, 2001. This document stated that construction would "be based on the Blue Print," that "details of the Construction are mentioned on the Proposal sheet," and that "[a]ny detail job not mentioned . . . should be discussed with the owner prior to processing." This document also listed the "Total Contract Amount" as $113,000, indicated that plaintiffs had already made payments of $40,000, $30,000, $5,000, and $5,000, and acknowledged that $33,000 was still owed and would be paid in installments of $8,000, $10,000 and $15,000. And the document set a completion date of September 30, 2001 and declared that Yoo would be "responsible for any and all loss [or] damage" if construction was not timely and fully completed.

Notwithstanding the stated consequences for Yoo's failure to comply with the September 5, 2001 agreement, defendants continued to work on the property beyond the passage of the completion date. By the beginning of 2002, plaintiffs occupied all floors of the residence, although some rooms in the main part of the house remained unfinished. According to Soon Ja, however, fewer and fewer employees arrived to work on the house. By sometime in February 2002, only one employee would arrive "every two, every three days," and soon no workers at all appeared.

In her testimony, Soon Ja described the work she claims went unfinished when defendants stopped returning to the site. She testified that she paid another contractor $50,000 to fix what defendants allegedly did wrong and do the work that defendants allegedly failed to do. The trial judge later struck this portion of her testimony, finding Soon Ja unqualified to testify as to the reasonableness of the cost of this additional construction work.

Plaintiffs' counsel read a portion of Yoo's deposition testimony, in which Yoo asserted that he had completed "[a]lmost everything . . . excluding the driveway" and that Soon Ja fired him before he could finish.

After hearing this and other testimony, the jury concluded that the form of defendants' home improvement contract violated the Act; but the jury also found that defendants did not engage in any unconscionable commercial practices and did not breach the contract, and that plaintiffs suffered no ascertainable loss. Plaintiffs moved for an award of counsel fees in the amount of $56,787.50, and sought the entry of judgment notwithstanding the verdict and other relief. Defendants cross-moved for judgment notwithstanding the verdict, seeking a dismissal of the claim asserted against Yoo. The judge awarded plaintiffs only $4,172.50 in fees and denied the remainder of the relief sought by the parties.

Plaintiffs argue the following points on appeal:

I. THE LAW DIVISION ERRED IN VACATING THE DEFAULT JUDGMENT WHICH WAS ENTERED AFTER REPEATED WARNINGS INCLUDING A SPECIFIC WARNING BY [THE] CIVIL PART[] PRESIDING JUDGE [].

II. THE MOTION JUDGE ERRED IN MECHANICALLY DENYING PLAINTIFFS' MOTION TO SUPPLEMENT EXPERT MATERIALS AND EFFECTIVELY PRECLUDING THE EXPERT FROM TESTIFYING AT TRIAL.

III. THE TRIAL COURT ERRED IN DENYING A DIRECTED VERDICT ON LIABILITY AND DAMAGES BASED UPON THE OVERWHELMING EVIDENCE OF DEFENDANTS' FRAUDULENT BUSINESS PRACTICES.

IV. THE TRIAL COURT ERRED IN NUMEROUS EVIDENTIARY AND PROCEDURAL RULINGS WHICH CUMULATIVELY CAUSED THE JURY TO MISUNDER-STAND, MISAPPLY THE LAW AND ANNOUNCE AN UNJUST VERDICT.

V. THE TRIAL COURT'S MECHANICAL DECIMATION OF PLAINTIFFS' FEE APPLICATION WAS PALPABLY ERRONEOUS UNDER SETTLED PRINCIPLES OF THE CONSUMER FRAUD ACT.

In their cross-appeal, defendants argue:

I. THE LAW DIVISION ERRED IN NOT DISMISSING MR. YOO INDIVIDUALLY FROM THE CASE.

We find that the arguments contained in plaintiffs' Points III and IV, and the arguments contained in defendants' Point I, are without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E). For the reasons that follow, we also reject plaintiffs' Points I and II, but agree that the counsel fee award -- the subject of plaintiffs' Point V -- must be revisited.

I

Plaintiffs contend that the trial judge erred in vacating a default judgment that was entered against defendants shortly before the original trial date.

The record reveals that the trial judge permitted defendants' prior attorney to be relieved as counsel on September 12, 2003; the same order required defendants to appear in court on September 29, 2003 -- what had been the scheduled trial date -- for a status conference. When defendants failed to appear, an order was entered on October 9, 2003, which struck defendants' answer, entered default and scheduled a proof hearing for October 17, 2003. Based on the evidence adduced at the proof hearing, the judge found that defendants suffered losses in the amount of $116,600, which was trebled; as a result, on November 7, 2003, judgment was entered against defendants in the amount of $349,800.

Plaintiffs thereafter pursued execution on this judgment. A motion for a turnover of funds in January 2004 finally roused defendants, and, with new counsel, defendants opposed the turnover motion and cross-moved for relief from the November 7, 2003 default judgment.

In considering such a motion, a judge must determine whether one or more of the grounds contained in R. 4:50-1 is present and whether the movant has asserted a meritorious defense to the claim. Such a motion is to be indulged, and treated with great liberality, and an appellate court will not disturb the judge's decision absent an abuse of discretion. Mancini v. EDS, 132 N.J. 330, 334 (1993); Regional Constr. Corp. v. Ray, 364 N.J. Super. 534, 540-41 (App. Div. 2003).

The judge's conclusion that defendants had established excusable neglect in failing to appear for the September 29, 2003 status conference was well established. Yoo asserted that he speaks little English and had depended "completely upon my lawyer," who had successfully moved to be relieved and left him without counsel. He also asserted that he was unaware of the conference because his former attorney sent the September 12, 2003 order to his former address, thus causing a lengthy delay in its receipt. The record also supported defendants' claim of a meritorious defense.

Although the motion judge regrettably failed to comply with R. 1:7-4(a) by providing neither an oral nor a written decision, we nevertheless affirm the March 5, 2004 order that granted the motion to vacate because the "great liberality" and the judge's need to "tolerate every reasonable ground for indulgence . . . to the end that a just result is reached," Marder v. Realty Constr. Co., 84 N.J. Super. 313, 319 (App. Div.), aff'd, 43 N.J. 508 (1964), compelled the granting of relief in this case. Indeed, the judge would have abused his discretion if he had ruled otherwise.

II

Plaintiffs contend that the denial of their motion to provide supplemental expert reports from Sonnie Son, the contractor plaintiffs hired to complete the work Yoo allegedly failed to complete, constituted an abuse of discretion. We disagree.

R. 4:17-4(e) mandates that if an expert report is requested in an interrogatory

the answering party shall annex to the interrogatory an exact copy of the entire report or reports rendered by the expert or physician. The report shall contain a complete statement of that person's opinions and the basis therefor; the facts and data considered in forming the opinions; the qualifications of the witness, including a list of all publications authored by the witness within the preceding ten years; and whether compensation has been or is to be paid for the report and testimony and, if so, the terms of the compensation.

If an answering party later obtains information that renders an interrogatory answer incomplete or inaccurate, it must serve an amended answer on the propounding party no later than twenty days prior to the discovery end date:

Amendments may be allowed thereafter only if the party seeking to amend certifies therein that the information requiring the amendment was not reasonably available or discoverable by the exercise of due diligence prior to the discovery end date. In the absence of said certification, the late amendment shall be disregarded by the court and adverse parties.

[R. 4:17-7.]

A trial court's decision on a motion to supplement answers to interrogatories after the discovery end date will not be set aside absent an abuse of discretion. Rivers v. LSC Partnership, 378 N.J. Super. 68, 80 (App. Div.), certif. denied, 185 N.J. 296 (2005); Ponden v. Ponden, 374 N.J. Super. 1, 3 (App. Div. 2004), certif. denied, 183 N.J. 212 (2005).

By way of their interrogatories, defendants requested that plaintiffs identify their expert witnesses, and provide a statement of the subject matter, and the facts and opinions to which the experts would testify; the request also sought a copy of any reports. In response, plaintiffs identified Son as their expert and said that "[a]s stated in plaintiff counsel's January 16, 2003, letter to defendants' counsel, Mr. Son's profession is a general contractor and renovator; as such he will testify to defendants' grossly defective workmanship; defendants' incomplete services; and defendants' excessive pricing." Plaintiffs provided what they represented was the only written report received from Son, which actually consisted of two documents, one dated September 10, 2002, and the other dated January 10, 2003. Both were in chart format and listed the work that Son had performed, including the price charged for each job. Read liberally, Son's charts constituted an attempt to distinguish between the work that Yoo allegedly never performed from the work that he allegedly improperly performed or only partially completed. None of these documents -- whether viewed separately or collectively -- constituted the type of expert report required by R. 4:17-4(e).

Discovery ended on May 1, 2003. On June 11, 2003, in the midst of the parties' attempt to schedule Son's deposition, defense counsel was provided with what plaintiff's counsel referred to as a "supplement" to Son's prior report. Like Son's earlier writings, this "supplement" was also in chart format and did not possess the characteristics required by R. 4:17-4(e).

On June 18, 2003, plaintiffs' counsel served yet another "supplement" from Son, which consisted of a narrative of those deficiencies in plaintiffs' property that Son concluded were, "based on [his] training and experience" and "to a reasonable degree of certainty," "faulty, improper, and inadequate." Defendants advised that they would object at trial to Son's testimony and to plaintiffs' use of the report because it was not submitted prior to the discovery end date.

Defendants' response prompted plaintiffs to file, on August 6, 2003, a motion for leave to supplement their answers to interrogatories with Son's reports of May 20, 2003, and June 10, 2003. Plaintiffs argued, among other things, that defendants knew since January 2003 that plaintiffs intended to call Son as an expert, that defendants would not suffer any prejudice, and that the two supplemental reports "were merely elaborations upon the initial disclosure from a non-professional-court-witness, who is a Korean-speaking home renovation contractor."

By order dated August 22, 2003, the court denied plaintiffs' motion, reasoning that "neither good cause nor exceptional circumstances exist to permit the exchange of supplemental discovery to occur." We find no abuse of discretion in this ruling. The motion was filed more than three months after the close of discovery and less than two months prior to the scheduled trial date. It was, thus, incumbent on plaintiffs to demonstrate that exceptional circumstances precluded the earlier submission of the expert report. Bender v. Adelson, 187 N.J. 411, 428 (2006); Rivers v. LSC Partnership, supra, 378 N.J. Super. at 80. Their motion failed to meet this standard.

Interestingly, the motion's denial occurred shortly before the adjournment of the trial date caused by defense counsel's successful motion to be relieved, and prior to the additional delays generated by the default judgment that followed. As we have indicated, defendants later successfully moved to vacate the default judgment. Despite the action's revival, and the delays caused by defendants' failure to attend to its obligations in this matter, plaintiffs never again sought relief from the discovery end date. It is fair to conclude that had plaintiffs later moved for leave to amend their answers to interrogatories with Son's later reports, the court may very well have granted the motion. At the very least, because of the absence of a trial date, the motion would not have been judged by the exceptional circumstances standard. See Ponden, supra, 374 N.J. Super. at 10. Inexplicably, plaintiffs never again sought relief from the discovery end date even though the trial did not occur until more than one year after the denial of plaintiffs' earlier motion.

Shortly before trial, defendants moved to limit Son's testimony, arguing that his early reports memorialized only a net opinion. The judge, however, was never given an opportunity to rule on that motion because it was withdrawn when plaintiffs indicated that Son would not be called as a witness, as the following colloquy on October 25, 2004 unmistakably reveals:

MR. VOLONTE [COUNSEL FOR DEFENDANTS]: There will be a motion in limine on the issue of the admissibility of the expert witness. There was an [o]rder limiting the discovery in this matter. The only report that's in the case is a January 16, 2003 report that's mirrored in the [a]nswers to [i]nterroga-tories. And I respectfully submit that it's a net opinion and that the opinion of the expert cannot be admitted before the [c]ourt.

MR. KIMM [COUNSEL FOR PLAINTIFFS]: We're not offering it, Judge. . . . It's a moot point.

MR. VOLONTE: You're not offering that expert?

. . . .

MR. KIMM: We're not offering Mr. [Son] as an expert, Judge.

MR. VOLONTE: Or offering him as a fact witness?

. . . .

THE COURT: Is he going to testify?

MR. KIMM: No. [Soon Ja is] going to testify as to what [Son] did and what the opinion -- the estimate she [was] provided, but he -- he's the other guy who finished the -- the house. We will not offer him as an expert, Judge.

MR. VOLONTE: Okay. Are you going to offer him as a witness, at all?

MR. KIMM: No.

MR. VOLONTE: Then my motion is moot, Your Honor.

Plaintiffs contend that they decided not to call Son as a witness because the trial judge had previously excluded Son's May and June 2003 reports. The record does not support that contention.

When defendants argued in their in limine motion that Son ought not be permitted to testify as an expert, plaintiffs chose not to argue to the contrary even though plaintiffs had previously maintained that the information contained in the later reports was essentially the same as contained in the reports provided prior to the discovery end date. If that contention is accurate, the August 22, 2003 order should have had no bearing on Son's ability to provide expert testimony. Plaintiffs cannot have it both ways; they cannot argue that the August 22, 2003 order was inconsequential because the later reports merely represented a repackaging of the earlier timely expert reports, but then argue that this order precluded Son from testifying as an expert.

Moreover, plaintiffs never put these questions to the test because they chose not to call Son as a witness, which short-circuited the ruling sought by defendants. As a result, they cannot now argue that they were prejudiced by the earlier barring of the subsequent reports.

III

Plaintiffs contend that the trial court erred in awarding only $4,172.50 in counsel fees and costs.

The Act provides that a plaintiff is entitled to recover reasonable attorneys' fees, filing fees and costs of suit whenever a practice made unlawful by the Act is proven. N.J.S.A. 56:8-19. Even though the jury's findings did not result in a monetary award in plaintiffs' favor, the jury did find that defendants engaged in an unlawful practice and, thus, plaintiffs were entitled to an award of fees and costs. Cox v. Sears Roebuck & Co., 138 N.J. 2, 24-25 (1994); Roberts v. Cowgill, 316 N.J. Super. 33, 45 (App. Div. 1998). In that circumstance, the standards enunciated in Rendine v. Pantzer, 141 N.J. 292, 322-23 (1995) apply, and the award entered must be based on the "'lodestar,' which equals the 'number of hours reasonably expended [by the attorney] multiplied by a reasonable hourly rate.'" Furst v. Einstein Moomjy, Inc., 182 N.J. 1, 21 (2004) (quoting Rendine, supra, 141 N.J. at 335).

The lodestar determination requires, as held in Furst, supra, 182 N.J. at 21-22, that the trial court consider the factors set forth in RPC 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.

The court must also consider the reasonableness of the time billed by the attorney, as a party is not entitled to counsel fees for excessive and unnecessary hours. Furst, supra, 182 N.J. at 22-23.

A court must also consider whether the award should be decreased because the plaintiff "achieved limited success in relation to the relief he had sought." Id. at 23. While a court may decrease the award if the plaintiff did not fully succeed, it need not be influenced by the amount of damages that the plaintiff may have received, as "there need not be proportionality between the damages recovered and the attorney-fee award itself." Ibid.

And the court must decide whether the attorney is entitled to a fee enhancement if the attorney worked under a contingency agreement. Ibid. "In determining and calculating a fee enhancement, the court should consider the result achieved, the risks involved, and the relative likelihood of success in the undertaking." Ibid.

Here, plaintiffs claimed that their fees and costs totaled $57,661.50 ($874 in costs and $56,787.50 in counsel fees based on an hourly rate of $350 per hour). Of that amount, plaintiffs' counsel certified that plaintiffs had paid $16,000. The trial judge denied plaintiffs' request for an award in the full amount and instead awarded $4,172.50, reasoning that the matter was

not unusual or novel and required very little input outside the documentary evidence. Counsel made no attempt to provide evidence from an expert, which could have . . . very easily . . . been done, and chose to call only his client to substantiate her case.

The court concluded that $175 per hour was "the customary charge in this region" and noted that "plaintiffs only prevailed on the issue of consumer fraud." The judge also added that plaintiffs had not provided "evidence as to the agreement for fees, i.e., contingent or hourly rate, nor has the attorney submitted copies of any billings with the client," although the motion papers submitted by plaintiffs did include documents fitting that description.

On appeal, plaintiffs argue that the award was unsupported by "any analysis or explanation" and "indefensible" in light of the "extensive motion practice; extensive discovery; collateral proceedings necessitated by defendants' own defaults in this case; and a full trial." Defendants contend that the award "was proper and almost generous, given that no result at all was obtained for the clients."

We conclude that we cannot adequately review these contentions because the judge mistakenly failed to explain how it arrived at the award, as required by R. 1:7-4(a). The judge did not fully explain how he determined that $175 constituted a reasonable hourly rate, and he did not explain how he arrived at the total award of $4,172.50. Counsel's billing statements revealed that 162.25 hours were expended during his representation of plaintiffs in this matter. We intimate no view as to whether that figure represented a reasonable amount of time to be expended by counsel in this case, but we observe that the court's award of $4,172.50, when divided by the hourly rate of $175 adopted by the judge, reflects that the judge only awarded fees based on a total expenditure of time of 23.84 hours. It seems inconceivable that plaintiffs' counsel could have conducted discovery, filed and opposed various motions, participated in the proof hearing, and prepared and tried this case in only 23.84 hours. Perhaps, we could assume the judge awarded an amount significantly lower than the award sought because plaintiffs did not succeed on all of their claims, and did not achieve an award of damages, but the judge gave no explanation as to how he computed the amount ultimately awarded in light of such a finding. Accordingly, the matter must be remanded for additional findings.

The orders under review are affirmed with the exception of the order of December 21, 2004. We vacate that part of the December 21, 2004 order that relates to the award of counsel fees, and we remand for reconsideration of plaintiffs' application for fees and for findings on the issues relevant to an award of fees and costs under the Act. We do not retain
jurisdiction.

We lastly find defendants' contention that an award of the fees and costs sought by plaintiffs would amount to an unconstitutional taking without just compensation to be without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).

(continued)

(continued)

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A-2042-04T5

May 11, 2007