R.C. SEARCH CO., INC. VS. HOWARD SILVER(L-3453-09, L-0496-12, L-6942-14, ESSEX COUNTY AND STATEWIDE)
A-4512-14T1
| N.J. Super. Ct. App. Div. | Dec 4, 2017Background
- 34 Label leased three adjoining properties to Richard Cecere and his company R.C. Search: an Office (1993), a Garage (1996), and a Restaurant under a 99-year Ground Lease (2002). Only the Office and Garage leases contained attorney-fee provisions; the Ground Lease did not.
- Beginning in 2007 R.C. Search and Cecere withheld rent and restaurant expenses alleging overcharges; 34 Label sued for possession and back rent. The trial court granted possession; this was affirmed on appeal.
- In 2009 Cecere and R.C. Search sued 34 Label and others for overcharging; all their claims were dismissed, and in March 2011 the trial court entered judgment for 34 Label for unpaid rents and taxes/expenses (the March 2011 Judgment). The court denied 34 Label's fee application.
- On appeal this court affirmed the judgment but reversed the denial of fees for the Office and Garage leases, remanding for calculation of attorney's fees incurred in pursuing back rent and defending against plaintiffs’ rent-withholding claims.
- On remand Judge Mitterhoff reviewed detailed billing affidavits, found rates reasonable, eliminated some hours as unreasonable and excluded fees tied only to the Office, Restaurant, and third-party defendants where inappropriate, and ultimately awarded Cecere $86,276.72 in fees (Garage share). Cecere moved for reconsideration and lost.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the fee award was supported by admissible evidence | Cecere: court failed to explain deductions and relied on inadequate evidence; requested plenary hearing | 34 Label: fees established by detailed affidavit; plenary hearing unnecessary | Court: affidavits sufficed; judge explained reductions; no plenary hearing required (discretionary) |
| Proper allocation of fees between Cecere and R.C. Search and across properties | Cecere: majority of fees should be borne by R.C. Search or excluded as related to Restaurant/Office | 34 Label: fees related to defending against Office claims justified allocation to Garage collection effort | Court: allocation was proper and followed appellate remand instructions; included fees related to claims used to withhold Garage rent |
| Application of res judicata or preclusion to fees for matters previously adjudicated | Cecere: judge misapplied res judicata to include fees for matters already decided | 34 Label: fee recovery limited to allowed claims per remand; judge excluded inappropriate fees | Court: no misapplication; judge excluded fees for Office/Restaurant where improper and applied remand direction correctly |
| Proportionality of fees to recovery on Garage claim | Cecere: awarded fees are disproportionate to the small monetary recovery on Garage | 34 Label: complexity and breadth of litigation justify awarded fees | Court: award not excessive given length/complexity; goal is reasonable (not strictly proportional) |
Key Cases Cited
- McGowan v. O'Rourke, 391 N.J. Super. 502 (App. Div.) (standard of appellate review for fee awards)
- Packard-Bamberger & Co. v. Collier, 167 N.J. 427 (appellate disturbance of fee awards only for clear abuse of discretion)
- Westfield Centre Serv., Inc. v. Cities Serv. Oil Co., 172 N.J. Super. 196 (App. Div.) (fees may be proved by detailed affidavit unless plenary hearing required)
- Litton Indus., Inc. v. IMO Indus., Inc., 200 N.J. 372 (reasonableness and non-excessiveness guide fee awards)