JOSEPH CAROZZA, M.D v. BANK OF AMERICA, N.A

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-2938-07T22938-07T2

JOSEPH CAROZZA, M.D.,

Plaintiff-Respondent,

v.

BANK OF AMERICA, N.A.,

Defendant-Appellant.

____________________________________

 

Argued September 29, 2008 - Decided

Before Judges Wefing, Parker and LeWinn.

On appeal from Superior Court of New Jersey,

Law Division, Special Civil Part, Essex County,

No. DC-24437-06.

Daniel Barros argued the cause for appellant

(Sodini & Spina, attorneys; Mr. Barros, on

the brief).

Joseph Carozza, respondent, argued the

cause pro se.

PER CURIAM

Defendant Bank of America appeals from a trial court order denying its motion for counsel fees and costs. After reviewing the record in light of the contentions advanced on appeal, we affirm.

On April 24, 2006, the New York State Department of Taxation and Finance issued to defendant a Tax Compliance Levy in the amount of $52,379.47 against plaintiff. The levy specified four accounts plaintiff had maintained in defendant's branches located in New York State but by the time the levy was issued, plaintiff had closed those accounts and opened two accounts with defendant's West Orange branch. Upon receipt of the levy, defendant froze those two accounts, which held approximately $49,000 between them.

Plaintiff contended that a levy issued by New York State was ineffective with respect to an account maintained in New Jersey. By May 25, defendant had determined that plaintiff's position was correct, and it restored to plaintiff's account the funds it had previously frozen. In the interim, it had assessed plaintiff's accounts with various charges, primarily overdraft fees. Defendant declined to reverse those charges.

In August 2006, plaintiff, acting pro se, filed a complaint in the Special Civil Part, seeking reimbursement for the expenses he had incurred in connection with the bank honoring this out-of-state levy. In his complaint, plaintiff alleged three theories of recovery: breach of contract, breach of fiduciary duty, and tortious conduct. In October, counsel for defendant wrote to plaintiff, outlining defendant's position that there was no merit to the complaint and informing plaintiff that if he did not dismiss his complaint within twenty-eight days, defendant would seek counsel fees and costs at the conclusion of the litigation under N.J.S.A. 2A:15-59.1 and Rule 1:4-8. Plaintiff did not withdraw his complaint, and the matter continued.

In January 2007, defendant moved for summary judgment, contending that it had acted in accordance with the depositor's agreement that it asserted governed these accounts. When defendant was unable to produce the signature cards plaintiff had signed when he opened these accounts, the trial court denied defendant's motion.

The matter proceeded to trial, by which time defendant had located the signature cards. The matter was heard as a bench trial and took less than one day. Only two witnesses testified: plaintiff and a representative of defendant. At the conclusion of the trial, the court entered judgment for defendant. Defendant then moved for an award of counsel fees and costs. It appeals from the trial court order denying its motion. The trial court appended to its order the following statement of reasons:

The court finds that def[endant] failed to establish that the lawsuit was filed for purposes of harassment. The court further finds, based on its review of the trial transcript, that p[lain]t[if]f was making a good faith argument for the modification of existing law or the establishment of new law.

We note first the standard governing our review of this matter. An award or denial of counsel fees generally rests within the sound discretion of the trial court, and our review is limited to a determination of whether the trial court here abused its discretion when it determined that fees should be denied. Shore Orthopaedic Group, LLC v. Equitable Life Assur. Soc'y, 397 N.J. Super. 614, 626 (App. Div.), certif. granted on other grounds, 195 N.J. 523 (2008); K.D. v. Bozarth, 313 N.J. Super. 561, 574-75 (App. Div.), certif. denied, 156 N.J. 425 (1998).

Rule 1:4-8 provides that attorney fees may be awarded by a court to a prevailing party against attorneys or litigants proceeding pro se for pursuing frivolous claims. The rule defines frivolous claims as claims presented for an improper purpose, "such as to harass or to cause unnecessary delay or needless increase in the cost of litigation," R. 1:4-8(a)(1), or claims that are not "warranted by existing law or by a non-frivolous argument for the extension, modification, or reversal of existing law or the establishment of new law[.]" R. 1:4-8(a)(2).

Claims for counsel fees against pro se litigants for pursuing frivolous litigation are governed by Rule 1:4-8 because such litigants are regarded as lawyers for purposes of the rule. Trocki Plastic Surgery Ctr. v. Bartkowski, 344 N.J. Super. 399, 405 (App. Div. 2001), certif. denied, 171 N.J. 338 (2002); In re Farnkopf, 363 N.J. Super. 382, 397 (App. Div. 2003).

The trial court gave two reasons for denying defendant's application: that plaintiff did not file suit for the purpose of harassing defendant and that he had put forth a good faith argument to modify or extend existing law. We have carefully reviewed the transcript of the bench trial, and we fully concur in the conclusion of the trial court that plaintiff's suit was not motivated by purposes of harassment. Plaintiff felt he had been ill-served by the bank, to his financial detriment, and he sought to be made whole, not to cause harm to defendant.

Whether a party has made a good faith argument for modification or extension of existing law is measured by an objective standard of "reasonableness." Wyche v. Unsatisfied Claim and Judgment Fund, 383 N.J. Super. 554, 560-61 (App. Div. 2006) (noting that "[a]n award of attorneys fees is not warranted where the plaintiff had a reasonable, good faith belief in the merits of the action.") (citation omitted).

In its fee application to the trial court, and in its argument to us, defendant stresses that plaintiff, in his complaint, asserted a breach of contract although he testified that he did not know the terms of the contract he thought breached. Defendant notes also that plaintiff asserted a breach of fiduciary duty although the law has been settled that the relationship between a depositor and his bank is that of debtor-creditor. All Am. Auto Salvage v. Camp's Auto Wreckers, 146 N.J. 15, 24 (1996); Lor-Mar/Toto, Inc. v. 1st Const. Bank, 376 N.J. Super. 520, 536 (App. Div. 2005). It also notes that in his testimony, plaintiff was unable to posit a duty of care that he alleged the bank had breached. These failures, defendant argues, demonstrate that plaintiff's complaint was frivolous, entitling it to an award of fees.

Our review of plaintiff's testimony convinces us that plaintiff's claim, in essence, was that defendant should have established more promptly than it did that an out-of-state levy was ineffective to reach his account in New Jersey. If it had acted more promptly, he argued, he would not have incurred the extensive charges the bank imposed upon him.

Although such a claim asserts that the bank's actions did not comport with the reasonable standard of banking practice and thus would require the testimony of an expert, we are unable to conclude that it was so wholly baseless that an award of counsel fees would be in order.

The order under review is affirmed.

 

As we have indicated, plaintiff was proceeding pro se. His direct "testimony" consisted of his narrative of what had occurred. When he completed that narrative account, he was cross-examined by defendant's attorney.

For reasons which do not appear from the record before us, defendant's motion for summary judgment and the bench trial were heard by two different judges. When defendant sought an award of counsel fees and costs, its application was heard by the judge who heard the original summary judgment motion, not the judge who presided at the bench trial. The judge directed defendant to present a transcript of the trial, which the judge reviewed before ruling on the request for fees and costs.

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A-2938-07T2

November 24, 2008