November 1, 2009
A couple of the neatest things about representing the consumer in a construction case are (1), because of the home improvement practice regulations and the per se consumer fraud claims they engender, you seldom find a case where attorney’s fee shifting is not an important consideration, and (2), the fee shifting1 doesn’t stop when you win, but keeps on going until the client is paid. The controlling case is Tanksley v. Cook, 360 N.J.Super. 63, 821 A.2d 524 (App.Div.2003), which provides for award of attorney’s fees expended in post-judgment discovery.
The defendant in Tanksley v. Cook was not a contractor, but a used car dealer. After a bench trial in a Consumer Fraud Act (CFA) matter, plaintiff recovered treble damages from the defendant based on a claim of defective transmission and brakes. The case went to appeal from a post-judgment order in the Law Division denying plaintiff’s counsel fees incurred in post-judgment collection efforts. The Appellate Division reversed, holding that the mandatory award of “reasonable attorneys’ fees, filing fees and reasonable costs of suit” under N.J.S.A. 56:8-19 should include fees and costs incurred in satisfying the judgment.
Tanksley v. Cook is the first New Jersey case in which the courts had occasion to rule on the issue of fee-shifting in the context of process to enforce judgments or in supplementary proceedings (R. 4:59). The ruling implies the need for strategic planning by plaintiff’s counsel whenever a consumer fraud judgment may be obtained, so that the opportunity to shift post judgment fees and costs is not squandered.
In order to do right by the consumer plaintiff, counsel will want to be familiar with the interplay between Rule 4:42-1 which spells out the form of a judgment, and Rule 4:42-9, which speaks to counsel fees. Rule 4:42-1 provides that while a judgment or order shall not contain a recital of the pleadings or the record of prior proceedings, it shall, however, include (among other things) a designation of the subject of the judgment or order (i.e., Summary Judgment Dismissing Complaint, Order Modifying Alimony), and a separate numbered paragraph for each separate substantive provision of the judgment or order. R. 4:42-1(1), (4). The related Rule 4:42-9 requires that an allowance of counsel fees permitted by statute be included in the judgment, rather than in a separate order. R. 4:42-9(a)(8), (d).
The informed practitioner will try to shape the judgment so that it explicitly states an allowance of pre-judgment counsel fees pursuant to the CFA, the right to future post-judgment counsel fees pursuant to the CFA, and the designation of the subject of the judgment should if possible include the words Consumer Fraud (i.e, Summary Judgment for Consumer Fraud), all by way of setting up the anticipated application for post-judgment fees and costs. What plaintiff is trying to avoid is the lack of clear direction to the court who will hear his later motion for fees, or the chance of a dispute concerning the nature of the claim on which the judgment was entered.
Note that the Rules are vague regarding motions for post-judgment counsel fees. Resist the inclination to move to add fees onto your original judgment by amendment under Rule 4:49-2 or Rule 1:7-4(b), since the same would be in the nature of a motion for rehearing or reconsideration which must be served not later than 20 days after service of the judgment or order upon all parties by the party obtaining it. Instead, the judgment creditor must make a motion for a separate, second judgment (order) for the amount of fees and costs incurred in collection, citing Rule 4:42-9(a)(8) and the CFA itself as the authoritative source for the application, and this is what Tanksley v. Cook seems to indicate.2
fn/1 Remember, the provisions for treble damages and counsel fees under CFA are independent of each other, and as to counsel fees, ‘the Consumer Fraud Act makes no distinction between ‘technical’ violations and more ‘substantive’ ones.’ Roberts v. Cowgill, 316 N.J. Super. 33 , 45 (App. Div. 1998) (quoting BJM Insulation & Constr., Inc. v. Evans, 287 N.J. Super. 513 , 517-18 (App. Div. 1996)). Once you prove a bona fide claim of ascertainable loss related to the CFA violation that raises a genuine issue of fact requiring resolution by the fact finder, you trigger the fee-shifting provision of the CFA, even if the plaintiff ultimately loses on the damage claim. Weinberg v. Sprint Corp., 173 N.J. 233 , 253 (2002). See also Thiedemann v. Mercedes-Benz, U SA, 183 N.J. 234 , 247 (2005). If you can establish a CFA violation apart from the breach of contract, regardless of whether the violation caused actual damages, your plaintiff is entitled to an award of reasonable counsel fees.
fn/2 Rule 4:42-9(c) requires that all applications for the allowance of fees state how much has been paid to the attorney and what provision, if any, has been made for the payment of fees to the attorney in the future. Presumably, this Rule also applies to post-judgment applications.