NEW JERSEY MANUFACTURERS INSURANCE COMPANY v. DENNIS A. FOSTER et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-2552-05T22552-05T2

NEW JERSEY MANUFACTURERS

INSURANCE COMPANY,

Plaintiff-Respondent/

Cross-Appellant,

v.

DENNIS A. FOSTER and

NANCY L. FOSTER,

Defendants-Appellants/

Cross-Respondents.

________________________________________________________________

 

Submitted March 14, 2007 - Decided April 11, 2007

Before Judges Fuentes and Baxter.

On appeal from the Superior Court of New Jersey, Chancery Division, Atlantic County, Docket No. C-111-05.

Westmoreland Vesper & Quattrone, attorneys for appellants/cross-respondents (R. C. Westmoreland, on the brief).

Archer & Greiner, attorneys for respondent/ cross-appellant (Stephen M. Fogler, on the brief).

PER CURIAM

Defendants Dennis and Nancy Foster appeal from a December 9, 2005 judgment, following a bench trial, requiring them to specifically perform their obligations to sell a parcel of land to plaintiff, New Jersey Manufacturers Insurance Company (NJM), as provided in a July 24, 2003 agreement of sale. NJM filed a cross-appeal challenging an award of counsel fees in its favor in the amount of $55,000, rather than the $89,375.21 it had sought.

On appeal, defendants contend the court erred in finding that the agreement of sale was not terminated when the closing did not occur sixty days after the end of the due diligence period; that the July 24, 2003 agreement of sale was not an "option" agreement; that the agreement of sale did not contain a time-of-the-essence closing date of March 24, 2004; that NJM had "clean hands" notwithstanding evidence demonstrating that during the sixteen months of active negotiation between the parties of new terms and conditions, NJM was not prepared or able to close on the purchase of the property from defendants because of problems related to acquiring the other parcels needed for the construction of NJM's new office campus facility; that NJM did not violate covenants of good faith and fair dealing implicit in all contracts; that NJM did not breach the contract when it failed to close on the property within the prescribed time; that a contract for the sale of land that contained no settlement date was nonetheless enforceable; and in awarding legal fees to plaintiff despite plaintiff being at least equally responsible for the ensuing litigation. The trial judge issued a comprehensive oral opinion on November 30, 2005, in which he thoroughly analyzed the facts and reached proper conclusions of law respecting specific performance of the contract. We affirm the December 9, 2005 judgment respecting specific performance (paragraphs one to four) for the reasons stated by the judge in his thorough and well-reasoned oral opinion of December 9, 2005. Defendants' arguments to the contrary lack sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(A), (E).

II.

Defendants argue that the court abused its discretion when it ordered them to pay any counsel fees. Plaintiff cross-appeals on this issue, arguing that the trial court abused its discretion in arbitrarily reducing the amount of costs and counsel fees to be reimbursed to plaintiff. After the court ruled that defendants were obligated to convey the property to plaintiff, and had violated their contractual obligations under the July 24, 2003 contract, plaintiff filed an application for $89,375.21 in attorneys' fees, pursuant to Article 15.1 of the contract. That provision of the contract provides:

15.1 If Seller breaches any of the provisions of this Agreement, Buyer may exercise any and all remedies granted in this Agreement or available at law or in equity including, without limitation, recovery of any and all damages incurred from Seller and the right to obtain an order specifically enforcing performance of Seller's obligations under this Agreement (including without limitation the obligation to close title hereunder) against Seller; and Buyer shall be entitled to attorneys' fees and the costs of litigation.

The court found that plaintiff had established a right to the award of attorneys' fees under the contract, and concluded that the amount of attorneys' fees requested by plaintiff was reasonable. The judge stated:

I'm satisfied, on the face of things, that the hourly rate [NJM's counsel] has requested, both for his work and the work of other people in his office, is a reasonable amount given his experience and expertise. I'm satisfied, on the face of things, that the hours described within the certification and the billing records are accurate. There's no reason, on the face of things, to question them.

Nonetheless, the court determined that equitable considerations required some reduction in the amount of counsel fees to be awarded. The judge stated:

[I]n the most general sense, I don't see any reason to question the reasonableness or propriety of the billing question. Having said that, I think it is one thing to conclude that the fee may be reasonable in terms of the relationship between [counsel] and his client, it may be reasonable in light of the hourly rate charged and the actual hours incurred, and it's another thing to say that it's reasonable within the expectations of the parties to this contract, and I'm not convinced that I should award fees in the full amount that is requested because I don't know that it's appropriate to conclude that the amount charged here, even though it may be something appropriately charged by New Jersey Manufacturers, is something that the defendants would have foreseen as being a potential charge that they would be facing as a part of this litigation.

There's an interesting backdrop to this, and that is that this particular property is one of several pieces that involves a substantial development in which New Jersey Manufacturers is engaged. This property is a small part of that, and while I believe I noted in my original decision each of the parties has some very substantial interest in the matter, the financial interests of New Jersey Manufacturers is much more substantial than that of the defendants, at least in absolute dollar terms, all of which is to say that it strikes me that it's appropriate to limit the fee that can be recovered by New Jersey Manufacturers simply because of the -- of all the circumstances presented and what would be the reasonable expectations of the parties.

. . . .

[I]t seems to me, given all the circumstances, that the defendants would not reasonably have anticipated being charged with a fee in this amount in the event that they did not prevail in this litigation, although I'll acknowledge that is an interesting problem and one that may very well be subject to appellate court review.

As a result, the court reduced the amount of attorneys' fees and awarded plaintiff $55,000 of the $89,375.21 he had requested.

Counsel fee determinations by trial courts "will be disturbed only on the rarest occasions, and then only because of a clear abuse of discretion." Rendine v. Pantzer, 141 N.J. 292, 317 (1995). This is because trial courts are "in the best position to weigh the equities and arguments of the parties . . . ." Packard-Bamberger & Co. v. Collier, 167 N.J. 427, 447 (2001).

Here, despite having found that Article 15.1 of the contract clearly entitled plaintiff to recovery of its fees, and that the amount requested was reasonable, both in terms of the rate charged and the amount of work performed, the court nonetheless decided to reduce the amount of costs and attorneys' fees to be awarded plaintiff. The judge did so after concluding that "the defendants would not reasonably have anticipated being charged with a fee in this amount in the event that they did not prevail in this litigation." After noting that "some limitation" was appropriate, the judge observed that imposing such limitation was "a somewhat arbitrary exercise."

A court should not rewrite a contract to make a different or better deal for a party than that party has made for itself. City of Orange Twp. v. Empire Mortgage Servs., Inc., 341 N.J. Super. 216, 224 (App. Div. 2001). The provisions of the contract, including Article 15.1, were negotiated between the parties with the assistance of counsel. The trial court based its decision to reduce the costs and fees to be awarded on its assumption that defendants did not likely consider the possibility that they would have to pay counsel fees as high as $89,375.21 if they did not prevail in the litigation. Defendants were given the opportunity to object to plaintiff's application for fees and costs, and nothing in their certification suggested that they did not anticipate having to pay the full award of counsel fees that was deemed reasonable in light of the number of hours expended and the hourly rate charged. Stated differently, there was no evidence presented of what defendants expected with respect to the extent of their obligation to reimburse NJM if the court were to decide that counsel fees should be awarded. We agree with plaintiff that the conclusions drawn by the trial court about defendants' expectations were speculative.

Having found that the contract permitted plaintiff to recover its costs and "reasonable" attorneys' fees, and having determined that the rates charged and work performed by plaintiff's counsel were reasonable, the court's decision to reduce the award of counsel fees in the absence of any proof of what defendants expected with respect to their potential exposure under Article 15.1, constituted an abuse of discretion. Accordingly, paragraph 5 of the December 9, 2005 judgment is hereby modified to provide that plaintiff is entitled to recover the full amount of its costs and fees incurred in connection with the trial of this matter.

Affirmed in part, reversed in part, and remanded for the entry of an order requiring defendants to pay the full amount of plaintiff's costs and fees totaling $89,375.21.

 

We recognize the Supreme Court's comprehensive recent opinion in R.M. v. Supreme Court of N.J., ____ N.J. ____ (2007), establishing a methodology for the award of counsel fees in the context of fee-shifting statutes. We are satisfied here, however, that the provisions of the contract govern, and establish the relevant standard for our review of the Law Division's decision.

(continued)

(continued)

8

A-2552-05T2

April 11, 2007