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Date: January 11, 2017

$100K Cut In Atty Fees Upheld In NJ Consumer Fraud Suit

For immediate release

By Jeannie O’Sullivan

Law360, New York (January 11, 2017, 5:28 PM EST) — The New Jersey Appellate Division on Wednesday upheld a roughly $100,000 cut to an attorneys’ fees award in a consumer fraud row, ruling that the award was proportionate to the plaintiff’s limited jury award in the case.

The three-judge panel’s ruling dealt a blow to Alan Riccardi, who had requested $116,000 in counsel fees after winning $4,500 in a fraud suit he filed after buying a home and discovering that it had structural defects and other damages.

A Gloucester County Superior Court jury sunk most of his claims against the seller, but found that the defendant violated the state’s Consumer Fraud Act. After analyzing the billing entries, the court awarded counsel fee and cost awards of $7069.12 related to the claims against the seller and $8269.12 stemming from default judgments against contractors and a brokerage agency that Riccardi also sued.

When a “stark disparity” exists between attorneys’ fees sought and those awarded, the panel noted, the award should be carefully reviewed by the appeals court to ensure reasonableness. Per that review, the panel found that the request had received the appropriate scrutiny, according to the opinion.

“The court limited recovery for the attorneys’ fees to those related to the CFA claim based upon a verdict which found that defendants violated one provision of the CFA while finding no cause for action on the remaining claims. Although Riccardi prevailed on the CFA claim and, therefore, qualified for statutory fee-shifting, due to the very limited success attained, the court reduced the fees recoverable pursuant to [rules of professional conduct for attorneys],” the panel said.

The panel cited the Appellate Division’s 2005 decision in Grubbs v. Knoll, which found that in the case of fee request and award disparities, a trial court’s responsibility to carefully review the lodestar fee request is heightened. Considerable factors include not only damages recoverable and actually recovered but also interest to be vindicated and any circumstances of the litigation that directly or indirectly affected the counsel’s efforts, the opinion said.

The lodestar should be decreased “if the prevailing party achieved limited success in relation to the relief he had sought,” the opinion said.

In the instant case, the court employed the appropriate considerations under the state’s rules for professional conduct for attorneys, the opinion said. Those considerations included time and labor, novelty and difficulty of the questions involved, and the required skill of the attorneys, along with the comparable fees, circumstantial time limitations, the amount involved and the results achieved, among other things.

“As such, we discern no clear abuse of discretion,” the panel said.

At the heart of the litigation was a $215,000 residential property in Pitman, New Jersey, that Riccardi bought from Joseph Bruno and his investment company National Financial LLC.

Prior to the purchase, the home was damaged in a fire and Bruno hired Robbie Conley Architect LLC and Eastwood Contracting LLC for the repair and renovations, according to the opinion. After the work was completed, the home was listed for sale by real estate broker Neil Vogel and his company, All-Ways Agency.

Riccardi filed suit against Bruno, the architect, the contractor, the broker and a home inspector after discovering that the home was riddled with problems, including mold, burned and fractured joists, a previous oil leak, asbestos and damaged foundation walls, the opinion said.

The case against Bruno and his company went to trial, and Riccardi obtained default judgments against the home inspector, Vogel and his company and Eastwood Contracting LLC for failure to answer the complaint, the opinion said. The claims against Robbie Conley Architect LLC were dismissed by summary judgment because Riccardi failed to provide an affidavit of merit, according to the opinion.

Representatives for the parties didn’t immediately respond to requests for comment on Wednesday.

Judges Carmen Alvarez, Carol E. Higbee and Thomas V. Manahan sat on the panel for the Appellate Division.

Riccardi is represented by Stephen Guice.

Bruno is represented by Robert J. Incollingo.

Neil Vogel and All-Ways Agency are represented by Ralph Gerstein.

The case is Alan Riccardi v. Joseph Bruno et. al., case number A-4762-14T2, in the New Jersey Appellate Division.

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