XCALIBUR COLLECTIONS, LLC VS. ANDREW J. KARCICH (L-1632-15, BURLINGTON COUNTY AND STATEWIDE)
A-1411-18T2
N.J. Super. Ct. App. Div.Jun 9, 2020Background
- Plaintiffs (Xcalibur Collections and Andrea Loiacono) sued attorney Andrew Karcich for allegedly defamatory letters he sent to eBay while he represented third parties (J.P. and V.P.) in a related small-claims matter.
- Karcich had filed a counterclaim in the underlying small-claims case; that counterclaim caused the matter to be transferred out of small-claims. The underlying case later settled.
- Karcich was dismissed as counsel for J.P. and V.P., then plaintiffs filed a second amended complaint against him alleging defamation; Karcich moved to dismiss based on the litigation privilege.
- The motion judge (and this Court in Karcich I) held the litigation privilege applied and dismissed plaintiffs’ complaint; Karcich then moved for sanctions and fees under Rule 1:4-8 and N.J.S.A. 2A:15-59.1.
- After discovery orders and warnings that plaintiffs’ claim was frivolous, plaintiffs failed to comply with discovery; the motion judge awarded $5,653.62 in sanctions to Karcich.
- Plaintiffs appealed contesting frivolousness/good faith, abuse of discretion, entitlement to fees where defendant is an attorney, and the applicability of Shimm; the Appellate Division affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the complaint was frivolous and warranted sanctions under Rule 1:4-8 / N.J.S.A. 2A:15-59.1 | Complaint was filed in good faith and not frivolous | Complaint was barred by the litigation privilege and warnings made it frivolous to continue | Court held claim was frivolous; sanctions were appropriate given litigation-privilege dismissal and ignored warnings/discovery failures |
| Whether the judge abused discretion in awarding fees | Judge misapplied standards and improperly awarded fees | Judge considered relevant factors and warnings; no abuse of discretion | No abuse of discretion; review deferential and legal conclusions reviewed de novo showed correctness |
| Whether defendant, an attorney, was self-represented and thus barred from recovering attorney fees (Segal/Alpert) | Karcich effectively represented himself; so no recoverable attorney fees | Karcich was represented by two attorneys from his firm; fees are recoverable for those attorneys | Court rejected plaintiffs’ belated argument; found Karcich had counsel and award (reduced to reflect firm attorneys’ work) was proper |
| Whether Shimm barred the sanctions motion while an appeal (Karcich I) was pending | Shimm requires denying or remanding fee motions filed below when an appeal is pending | Karcich moved to dismiss/remand in the first appeal and this Court denied that motion; Shimm thus inapplicable | Court found Shimm inapplicable because defendant sought relief in the prior appeal and the Appellate Division denied dismissal/remand; trial court could decide sanctions post‑appeal |
Key Cases Cited
- Occhifinto v. Olivo Constr. Co., 221 N.J. 443 (N.J. 2015) (standard of review for sanctions awards)
- Flagg v. Essex Cty. Prosecutor, 171 N.J. 561 (N.J. 2002) (definition and contours of abuse of discretion)
- McKeown-Brand v. Trump Castle Hotel & Casino, 132 N.J. 546 (N.J. 1993) (frivolous litigation construed narrowly)
- Belfer v. Merling, 322 N.J. Super. 124 (App. Div. 1999) (when a claim is deemed frivolous)
- Wyche v. Unsatisfied Claim & Judgment Fund of N.J., 383 N.J. Super. 554 (App. Div. 2006) (good-faith belief in merits defeats sanctions)
- Segal v. Lynch, 211 N.J. 230 (N.J. 2012) (self-represented litigant cannot recover attorney’s fees for own work)
- Shimm v. Toys From the Attic, Inc., 375 N.J. Super. 300 (App. Div. 2005) (discussion of piecemeal appeals and timing of fee motions)
- Alpert, Goldberg, Butler, Norton & Weiss, P.C. v. Quinn, 410 N.J. Super. 510 (App. Div. 2009) (authority on fee recovery issues for attorneys/firm representation)