A-0CHAPEL EQUITIES, LLC v. SUBWAY REAL ESTATE CORP / v. RAVI PATEL

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

CHAPEL EQUITIES, LLC,

Plaintiff-Appellant,

v.

SUBWAY REAL ESTATE CORP.,

Defendant/Third-Party

Plaintiff-Respondent,

v.

RAVI PATEL,

Third-Party Defendant-

Respondent.

______________________________________

Submitted August 5, 2015 Decided August 25, 2015

Before Judges Reisner and Espinosa.

On appeal from the Superior Court of New Jersey,

Law Division, Camden County, Docket No. L-3853-12.

Lee M. Herman, attorney for appellant.

Fisher Zucker, LLC, attorneys for respondent

Subway Real Estate Corp. (Jeffrey Zucker and

Frank A. Reino, on the brief).

PER CURIAM

Plaintiff Chapel Equities, LLC (landlord) appeals from a December 13, 2013 order awarding $19,056.15 in counsel fees and costs to Subway Real Estate Corp. (tenant). We affirm, substantially for the reasons stated by the trial judge in his oral opinions issued on November 22, 2013, and May 2, 2014.1

The underlying facts are undisputed and can be summarized as follows. Landlord and tenant entered into a commercial lease setting an annual rent of approximately $29,629.80. The lease provided that in the event of default, the tenant's liability would be limited to one year's rent. The lease also provided that in the event of litigation, the prevailing party would be entitled to counsel fees and costs. The landlord filed suit claiming that the tenant had failed to pay rent for an extended period of time and seeking approximately $78,000 in damages. The tenant invoked the damages-limitation clause of the lease and offered to pay $29,629.80. The landlord refused the offer and insisted on pursuing its claim for the higher amount.

At court-annexed arbitration, the arbitrator accepted the tenant's construction of the lease and awarded the landlord only $29,629.80, the amount the tenant had already offered to pay, instead of the $78,000 the landlord sought in the litigation. The award was confirmed by the court, after which the tenant filed a motion for counsel fees pursuant to the lease. Reasoning that, in the context of this litigation, the tenant was the prevailing party, the trial judge ordered the landlord to pay the tenant's counsel fees.2

The construction of a lease is a legal issue as to which our review of the trial court's decision is de novo. Kieffer v. Best Buy, 205 N.J. 213, 222-23 (2011). So long as a fee award is legally permissible under the lease, the trial court's decision to award fees is entitled to tremendous deference, and will not be disturbed on appeal except in the rarest of circumstances. Rendine v. Pantzer, 141 N.J. 292, 317 (1995).

The threshold issue in determining whether an attorneys' fee award is reasonable is whether the party seeking the fee prevailed in the litigation. Singer v. State, 95 N.J. 487, 494, cert. denied, 469 U.S. 832, 105 S. Ct. 121, 83 L. Ed. 2d 64 (1984). Because the focus should be on the ultimate results achieved through the litigation, a two-pronged test has been established to determine when a party seeking fee shifting has been a prevailing party. Ibid. The first part of the Singer test requires "[a] party [to] demonstrate that his lawsuit was causally related to securing the relief obtained; a fee award is justified if [the party's] efforts are a 'necessary and important' factor in obtaining the relief." Ibid. The first prong requires a factual causal nexus between the pleading and the relief ultimately received. Ibid.

The second part of the Singer test requires the party seeking attorneys' fees to show that "the relief granted had some basis in law." Ibid.

[N. Bergen Rex. Transp. v. Trailer Leasing Co., 158 N.J. 561, 570-71 (1999) (alterations in original).]

Applying that test, we agree with the trial judge that the tenant was the prevailing party. The central issue in the arbitration was whether the landlord was entitled to $78,000 in damages, or whether the tenant was entitled to pay only the $29,629.80 it had already offered. The arbitrator accepted the tenant's position as to the amount owed and rejected the landlord's claim. Moreover, the relief granted to the tenant - limiting the damages to one year of rent - was based on the plain language of the lease. Consequently, the trial court correctly awarded fees to the tenant. Ibid.

Affirmed.

1 With the parties' agreement, the case was temporarily remanded to the trial court to issue a statement of reasons for the amount of the fee award.

2 The amount of the fee award is not at issue on this appeal.