MELISSA LEMA v. BTS HOLDINGS, LLC

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                                APPROVAL OF THE APPELLATE DIVISION
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                                                          SUPERIOR COURT OF NEW JERSEY
                                                          APPELLATE DIVISION
                                                          DOCKET NO. A-3465-16T1

MELISSA LEMA,

           Plaintiff-Appellant,

v.

BTS HOLDINGS, LLC,
and CRAIG LAX,

           Defendants-Respondents,

and

HAMID ABASSI,

           Defendant.


                    Argued September 20, 2018 – Decided January 18, 2019

                    Before Judges Alvarez, Nugent, and Reisner.

                    On appeal from Superior Court of New Jersey, Law
                    Division, Essex County, Docket No. L-7097-14.

                    Richard A. McOmber argued the cause for appellant
                    (McOmber & McOmber, PC, attorneys; Richard A.
                    McOmber, Christian V. McOmber, Matthew A. Luber,
            Elizabeth A. Matecki, and Kaitlyn R. Grajek, of counsel
            and on the briefs).

            Kenneth D. McPherson, Jr. and Jessica CM Almeida
            argued the cause for respondents (Waters, McPherson,
            McNeill, PC, attorneys; Kenneth D. McPherson, Jr., of
            counsel and on the brief; Jessica CM Almeida, on the
            brief).

PER CURIAM

      After a four-day trial, a jury awarded plaintiff Melissa Lema $5000

payable by defendant BTS Holdings, LLC (BTS) on her retaliatory discharge

Law Against Discrimination (LAD) complaint, as well as $2982.59 in lost

wages. See  N.J.S.A. 10:5-1 to -49. After Lema rested, the court dismissed the

claims against the company's owner, Craig Lax, as well as the count seeking

punitive damages. The trial judge thereafter allowed Lema's counsel $57,054 in

fees and $5367 in costs. Counsel had sought $360,588 in fees and $8282.56 in

costs. The court also denied Lema's two applications for recusal. We affirm.

      We glean the facts from the trial testimony. Lema was hired in July 2014

by BTS's manager Younes Sabin1 as a part-time night shift dispatch operator for

BTS's livery service.




1
  The record spells Sabin's name in multiple ways. We hereafter adopt the
spelling in defendant's brief.
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      The conduct at issue occurred when Lema interacted in September 2014

with an independent contract driver, Hamid Abassi. Abassi spent approximately

two hours talking to her through the office transom window. Lema was working

a day shift instead of her usual night shift and was on her lunch break. She and

Abassi talked about a social media application (app) on her phone, which they

both used, and Abassi attempted to contact her using the app. He then sent Lema

two stock photos of women and a photo of himself, and also sent her heart

emojis. There was conflicting testimony about Lema's social messaging skills,

and the fact that she did not block Abassi on their mutual social media app.

Lema said Abassi at some point afterwards entered the office, touched her

shoulder, and stood behind her and whispered in her ear, "Oh, it's okay. I

understand, it's all about life." Another dispatcher was present in the office that

day, whom Lema claimed was in charge of the office. Lax testified the other

dispatcher was neither a manager nor a supervisor.

      On September 25, Abassi called the office during Lema's shift to tell her

that he missed her. At that point, Lema spoke with Sabin about Abassi. She did

not provide him with the videos that she alleged she had taken showing Abassi

standing at the office window partition speaking to her. Nor did she show him

Abassi's communications through the social app.


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      On September 26, 2014, Sabin texted Lema that she should not come into

work. When she called, Sabin told her that she was not needed and was being

fired for watching pornography while in the office.

      Lema claimed that she sent Sabin copies of the four short videos and a

screen shot from her social app depicting her communications with Abassi. She

said that Sabin told her it was Lax's decision to terminate her. Sabin had left

BTS's employ a year before trial and lived in Israel. Lema said Lax was in the

office the day she complained to Sabin, however, he testified that during that

week he was not in the office as it was a religious holiday. Abassi's contract

with BTS ended shortly after Lema was terminated, as a result of a complaint

from a woman passenger.

      Lax denied being involved in the decision, claiming he was not even in

the office when Sabin terminated Lema. The company continued to use only

one operator per shift, as it had except for the short period when Lema worked

for the company. Lema's complaint against defendants was filed October 2,

2014, literally days after her termination.

      The videos Lema took of Abassi and the text messages were unavailable

because Lema gave her phone to her brother. The parties agreed that any claim




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for lost wages would be limited to a ninety-day period.           After Lema's

termination, she obtained another job, within ninety days, at equal salary.

      In discovery, Lema had provided the names of doctors and hospitals where

she had been treated for injuries she alleged resulted from the incident with

Abassi. No corroborating documentation was provided. During deposition,

Lema said she was briefly hospitalized because of Abassi's conduct, however,

that treatment turned out to have been for issues entirely unrelated to her

employment at BTS.

      The judge was aware of the fact the medical treatment was for a condition

unrelated to the litigation. Prior to trial, the judge conducted a settlement

conference in chambers. Shortly thereafter, counsel filed a motion for the judge

to recuse herself, alleging she had made disparaging comments regarding Lema

and otherwise was biased against Lema and her counsel.

      The judge dismissed Lema's count against Lax because Lema's statement

that Sabin told her Lax made the decision was simply not a sufficient basis to

hold him in the case. Lax denied having even been aware of Lema's termination

until after it happened. The judge concluded that no hearsay exception would

make Lema's statement admissible substantive evidence that he participated in

the decision.


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      Although not entirely clear, Lema argued that Lax was aware of the firing

because Sabin had reported Lema as having watched pornography in the office,

and that Lax directed Sabin to fire her for that reason. Other than a confused

answer in deposition or answers to interrogatories regarding the point, there was

no evidence of that occurring.     The judge dismissed the punitive damage

complaint because, as she put it, this was a "garden variety" case in which the

offending conduct was minimal. She opined that something more than simply

terminating Lema was required before defendant could be held accountable for

punitive damages.

      The judge decided the issue of counsel fees in a seventeen-page written

decision.   In that same decision, she also touched upon counsel's recusal

motions, which had by then been made twice. The judge considered the recusal

motions to be without foundation as they were based on statements she made

taken out of context. Furthermore, the comments about the weaknesses in

Lema's case took into account some of the real shortcomings in Lema's proof,

such as her false assertion that she was treated for mental health problems as a

result of the incident at BTS.

      With regard to Lema's application for $360,600 in fees and for $8282.56

in costs, the court said generally that the application was excessive because


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Lema's complaint was "relatively straightforward" and did not require, for

example, the four lawyers who were present throughout the four-day trial. We

need not repeat at length the judge's step-by-step consideration of the supporting

documentation presented.

      The judge did specifically reject the notion that the attorney's fee should

be proportionate to the amount of damages the jury awarded but took into

account Lema's degree of success. In her view, Lema had limited success and

was not seeking injunctive relief or institutional improvement, but only mo ney

damages. The jury's verdict rejected the notion that Abassi's actions "actually

caused her any distress." Lema limited her wage claim to a three-month period.

The matter was neither difficult nor complicated, and the judge therefore

reduced Lema's proposed lodestar of $240,392 to $135,843, adjusted by sixty

percent to $54,337.     She added a five percent contingency enhancement,

appropriate in light of the nature of the case, bringing the total award to $57,054.

Because she discounted some of the costs and expenses which she viewed as

excessive, such as a copy charge of $1825, she reduced that amount to $5367.

      Now on appeal, Lema, raises the following points:

            [POINT I].
            The Trial Court Erred When it Dismissed Plaintiff's
            Retaliation Claim Against Defendant Craig Lax


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            [POINT II].
            The Appellate Division Should Reinstate Plaintiff's
            Claim for Punitive Damages

                  1.    The Trial Court Refused to Acknowledge
                  Key Testimony that Went to the Heart of
                  Plaintiff's Claim for Punitive Damages
                  2.    The Retaliatory Conduct at Issue Here Was
                  Engaged In by "Upper Management"
                  3.    The Retaliatory Conduct Was Wantonly
                  Reckless or Malicious

            [POINT III].
            The Trial Court Erred in Denying Plaintiff's Motion For
            Recusal of the Trial Judge, Who Subsequently
            Demonstrated a Clear Bias Against Plaintiff and her
            Counsel throughout the Trial

            [POINT IV].
            The Trial Court's Fee-Award Ruling is Erroneous.

                  1.    Plaintiff's Fees and Costs Were Reasonable
                  2.    After Slashing Plaintiff's Counsel's
                  Lodestar Amount by $104,590, The Court
                  Erroneously Issued Another 60% Downward
                  Departure Due to Plaintiff's "Minimal Success"
                  At Trial

                                        I.

      Lema hoped to impose liability on Lax through statements allegedly made

by Sabin to her. Lax, called as a witness for Lema in her case in chief, testified

to the contrary that he did not learn that Lema had been terminated until after it

had occurred. He was equivocal about Sabin's reasons for the termination—but


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testified unequivocally that because of Lyft and Uber, no second dispatcher

replaced her. Lax also testified that Abassi was terminated after Lema sued.

The judge found, and we agree, that this record simply does not support personal

liability on the part of Lax. Lema also claimed that Lax and Sabin were upper

management, the retaliatory action was engaged in by upper management, and

therefore supported a claim for punitive damages. We do not agree.

      In order to establish entitlement to an award of punitive damages under

the LAD, a terminated employee must establish both actual participation in, or

willful indifference to, wrongful conduct on the part of upper management and

proof that the conduct is especially egregious. See Rendine v. Pantzer,  141 N.J.
 292, 313-14 (1995).    Lema simply failed to establish those two necessary

elements. Even if Sabin was the general manager, and therefore within the

definition of upper management, Abassi's conduct was simply not so egregious

such that punitive damages are warranted. The behavior involved one episode,

Abassi's few attempts at contact and an alleged unwanted touching on the

shoulder. He was an independent contractor. This is not the type of egregious

conduct that under Rendine establishes a basis for punitive damages. Ibid. This

was not the type of retaliation that could be considered to be either wantonly




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reckless or malicious. Id. at 314 (citing Nappe v. Anschelewitz, Barr, Ansell &

Bonello,  97 N.J. 37, 49 (1984)).

                                        II.

      We consider Lema's arguments regarding the court's failure to recuse itself

to be so lacking in merit as to not warrant discussion in a written opinion. R.

2:11-3(e)(1)(E). By that decision we do not endorse the judge's demeanor

towards counsel, arguably less than ideal, albeit triggered by counsel's less than

ideal conduct during the course of the trial. The judge exhaustively explained

her off-the-record comments, made in the hopes of reaching a settlement, as

triggered by the weaknesses in Lema's case, and she also indicated to defense

counsel the weaknesses in their case.          If anything, the judge was equally

impolitic to both attorneys.

                                        III.

      "Under the LAD and other state fee-shifting statutes, the first step in the

fee-setting process is to determine the 'lodestar': the number of hours

reasonably expended multiplied by a reasonable hourly rate."           Rendine v.

Pantzer,  141 N.J. 292, 334-35 (1995).

            In our view, the trial court's determination of the
            lodestar amount is the most significant element in the
            award of a reasonable fee because that function requires
            the trial court to evaluate carefully and critically the

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            aggregate hours and specific hourly rates advanced by
            counsel for the prevailing party to support the fee
            application.

            [Id. at 335.]

"Trial court[s] should not accept passively the submissions of counsel to support

the lodestar amount":

            Compiling raw totals of hours spent, however, does not
            complete the inquiry. It does not follow that the amount
            of time actually expended is the amount of
            time reasonably expended. In the private sector,
            "billing judgment" is an important component in fee
            setting. It is no less important here. Hours that are
            not properly billed to one's client also are not properly
            billed to one's adversary pursuant to statutory authority.
            Thus, no compensation is due for nonproductive time.
            For example, where three attorneys are present at a
            hearing when one would suffice, compensation should
            be denied for the excess time.

            [Ibid. (quoting Copeland v. Marshall,  641 F.2d 880,
            891 (DC. Cir. 1980)).]

      Furthermore, as Lema points out in her brief, "the Court may increase the

fee 'to reflect the risk of nonpayment in all cases in which the attorney's

compensation entirely or substantially is contingent on a successful outcome.'"

(citing Rendine,  141 N.J. at 337). Also, to the extent that the trial judge

suggested that failure to settle this litigation would be considered in assessing

fees, we disapprove of that approach.         "Bad faith and assertion of an


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unreasonable position is properly considered in awarding a counsel fee, but

failure to settle disputed claims is not in itself a permissible consideration in

assessing a fee." Diehl v. Diehl,  389 NJ Super. 443, 455 (App. Div. 2006).

      Lema argues that the "fees and costs were reasonable" and that "after

slashing plaintiff's counsel's Lodestar amount by $104,590, the court

erroneously issued another 60% downward departure due to plaintiff's 'minimal

success' at trial." (alterations in original). In response, BTS argues that "[i]n

reaching its decision on Plaintiff's application, the Trial Court followed Rule

4:42-9(b), outlining applications for attorney's fees." BTS also relied on Stoney

v. Maple Shade Twp.,  426 N.J. Super. 297 (App. Div. 2012), which states:

            If a court decides that the lodestar fee should be
            reduced, it may either "attempt to identify specific
            hours that should be eliminated, or it may simply reduce
            the award to account for the limited success". . . . "[T]he
            decision as to the method to be used rests in the
            equitable discretion of the court."

            [Id. at 319.]

      It is inexplicable to us how the amounts requested were accumulated given

the factual circumstances behind the claim. We see no reason why there should

have been so many attorneys present in the courtroom during the course of the




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trial.2 That seems to be entirely unnecessary duplication of effort in a fairly

straightforward case. Lema's counsel called two witnesses.         Defendants had

offered Lema substantially more than she recovered by way of settlement. The

court took this appropriate consideration into account in making the allowance.

See Best v. C&M Door Controls, Inc.,  200 N.J. 348, 354 (2009) (holding that

under certain fee-shifting statutes, "a trial judge may take into account a

plaintiff's unreasonable rejection of an offer of judgment in calculating plaintiffs

award[.]"). This issue does not warrant further discussion.

      Affirmed.




2
  Counsel elected to divide the oral argument presentation on Lema's behalf
between two attorneys.
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