The issue presented by this appeal is whether the “amount in controversy” that determines the jurisdictional limit of the Special Civil Part under Rule 6:1 — 2(a)(1) includes counsel fees. We conclude that the “amount in controversy” in a Special Civil Part action excludes counsel fees that are not capable of being cаlculated when the action is commenced.
Plaintiff is a homeowners association in Ortley Beach that imposes dues, fees and beach assessments upon members to conduct its operations. Defendant owns eight residences that are subject to these assessments. Plaintiffs by-laws provide that a member who fаils to pay an assessment is subject to late fees, interest and “reasonable attorneys’ fees.”
In the spring of 2000, plaintiff imposed an assessment of $1,000 per unit to fund the purchase of a beach area adjoining its members’ residences and roads. As the owner of eight units, defendant’s total assessment was $8,000. Defendant failed to pay any of the assessment.
Plaintiff brought this action in the Special Civil Part to collect the unpaid $8,000 assessment as well as late fees, interest and attоrneys’ fees. When the action was brought, the jurisdictional limit of the Special Civil Part was $10,000.
By the time summаry judgment was granted, plaintiffs attorneys’ fees exceeded $2,000. After initially entering judgment in the full amount of plaintiffs damages, including all attorneys’ fees, the trial court sent а letter questioning whether it had authority to enter judgment for an amount in excess of the $10,000 Special Civil Part jurisdictional limit. Plaintiffs attorney briefed the issue, and the court subsequently issued a letter opinion which concluded that the attorneys’ fees plaintiff had incurred in pursuing the action were encompassed by the Speciаl Civil Part’s $10,000 jurisdictional limit. Accordingly, the court entered an amended final judgment for $10,000 plus costs.
By enactment of chapter 405 of the Laws of 1983, the Legislature abolishеd the former County District Court and transferred that court’s functions, powers and duties to the Superior Court. L. 1983, c. 405, § 1 and 3 (codified as N.J.S.A.
When this action was commenced, Rule 6:1 — 2(a)(1) provided that matters cognizable in Special Civil Part include:
Civil actions seeking legal relief when the amount in controversy does not exceed $10,000.
In addition, Rule 6:1 -2(c) provides:
Where the amount recoverable on a claim exceeds the monetary limit of the Special Civil Part ..., the party asserting thе claim may waive the excess over the applicable limit and recover a sum not exceeding the limit plus costs.
In Lettenmaier v. Lube Connection, Inc., 162 N.J. 134,
they cannot, as a matter of logic, be included in the jurisdictional “amount in controversy.” That phrase can refer only to the monetary damages that a plaintiff claims were sustained as a result of the defendant’s actions, plus trebling. The reason is obvious. The amount of claimed monetary damages is the only amount that a litigant can calculate at the beginning of the litigation when determining whether or not to file in the Special Civil Part. What аmount of counsel fees will be incurred as a result of the twists and turns of litigation is not ascertainable at that point. Those fees will accrue as the case proceeds and will indeed not even be calculable until the judgment is entered. Thus, for example, a plaintiff expecting a quick and inexpensive adjudiсation of his or her consumer complaint may incur hefty fees as a result of a hard fought defense by a well-heeled defendant or, as here, in defense оf motions to vacate a default. Thus, the jurisdictional calculation of “amount in controversy”, which can only be made at the outset, should not include counsel fees, even if they are not technically costs.
If this is not the rule, plaintiffs with consumer claims of $2500 or $3000 will be required to file in the Superior Court,with its complex discоveiy and calendar delay, in order to be assured that counsel fees will be paid after treble damages. Such a state of affairs would confound the purposes behind the Special Civil Part Rules, which are designed to provide “a streamlined structure and practice for the inexpensive and expeditious disposition of the many relatively minor ... cases which make up the vast bulk of litigation in this state.”
[Id. at 143-44,741 A.2d 591 (citations omitted).]
Although the Court’s holding in Lettenmaier involved only counsel fee awards under the Consumer Fraud Act, the seсond rationale for this holding is equally applicable to any case in which the amount of potential counsel fees cannot be calculated at the time a plaintiff decides whether to file a complaint in the Special Civil Part. This rationale does not turn on the language or policies of the Consumer Fraud Act but rather on the Court’s interpretation of its own rules in light of considerations of efficient judicial administration and fairness to litigants. Therefore, we perceive no reason why the Court’s holding in Lettenmaier that the “amount in controversy” under Rule 6:l-2(a)(l) excludes counsel fees that cannot be calculated when an action is filed should be confined to actions under the Consumer Fraud Act.
As in Lettenmaier, when plaintiff filed this collection action, it had mo way of knowing whether its claim would be resolved quickly, thus generating minimal legal feеs or, as it turned out, would require more protracted proceedings. In fact, plaintiff initially incurred only $224 in attorneys’ fees and costs in obtaining a default judgment. It was оnly after defendant successfully moved to vacate the default judgment that plaintiff incurred additional attorneys’ fees that resulted in a total liability in excess оf $10,000. Thus, it is just as true in this case as in Lettenmaier that “the jurisdictional calculation of ‘amount in controversy,’ which can only be made at the outset, should not include сounsel fees.” Id. at 143,
Therefore, we reverse and remand for entry of an amended judgment which includes the full amount of reasonable attorneys’ fees plaintiff incurred in this action.
Notes
By an amendment to Rule 6:1 — 2(a)(1), which became effective on September 3, 2002, this jurisdictional limit was raised to $15,000. Pressler, Current NJ. Court Rules, comment on A. 6:1 (2003).