NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-4508-19
ASAP REALTY, INC.,
Plaintiff-Respondent,
v.
YOSEF BIRNBOIM AND JUDY BIRNBOIM,
Defendants-Appellants/ Third-Party Plaintiffs,
STEVEN A. ZUCKER,
Third-Party Defendant. _________________________
Argued May 18, 2022 – Decided June 20, 2022
Before Judges Gilson, Gooden Brown and Gummer.
On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. L-4365-17.
Abraham Borenstein argued the cause for appellants (Borenstein, McConnell & Calpin, PC, attorneys; Abraham Borenstein and Bradley M. Arlen, on the briefs).
Andrew R. Turner argued the cause for respondent (Turner Law Firm, LLC, attorneys; Andrew R. Turner, of counsel and on the brief).
PER CURIAM
This appeal arises out of disputes concerning a home-renovation project.
The homeowners, Yosef and Judy Birnboim (the Birnboims or defendants),
appeal from a March 3, 2020 final judgment that awarded the contractor, ASAP
Realty, Inc. (ASAP or plaintiff) $149,378.96 in damages, attorneys' fees, and
costs. Following a trial, a jury found that ASAP was owed $77,917.95 for the
renovation work done under the contract. The jury also found that ASAP had
committed violations of regulations issued under the Consumer Fraud Act
(CFA), N.J.S.A. 56:8-1 to -227, but the Birnboims had suffered no ascertainable
loss from those violations. The jury, therefore, awarded no damages to the
Birnboims.
Following the jury verdict, the trial court awarded ASAP fees and costs
of $71,461.01 under Rule 4:58-2 because the Birnboims had rejected an offer of
judgment before trial. The court also denied the Birnboims' request for fees and
costs under the CFA.
A-4508-19 2 On appeal, the Birnboims argue (1) the damage award to ASAP should be
vacated because the jury found that ASAP had violated the CFA; (2) they were
entitled to attorneys' fees as a matter of law on their CFA claims; and (3) the
fees awarded to ASAP must be vacated because that award was inconsistent with
the fee-shifting policy in the CFA. We reject the Birnboims' first and third
arguments and affirm the jury's verdict on the breach-of-contract claim in favor
of ASAP and the order awarding attorneys' fees to ASAP under the offer-of-
judgment rule. We are constrained to reverse the order denying fees to the
Birnboims on their CFA claims and remand that issue for a determination of the
reasonable amount of fees related to the CFA claims.
I.
To avoid confusion, we initially clarify what constitutes a violation of the
CFA, as compared to a failure to comply with CFA regulations. "To prevail on
a CFA claim, a plaintiff must establish three elements: '1) unlawful conduct by
defendant; 2) an ascertainable loss by plaintiff; and 3) a causal relationship
between the unlawful conduct and the ascertainable loss.'" Zaman v. Felton,
219 N.J. 199, 222 (2014) (quoting Bosland v. Warnock Dodge, Inc., 197 N.J.
543, 557 (2009)). Unlawful conduct generally involves an affirmative act of
fraud or a violation of administrative regulations promulgated under the CFA.
A-4508-19 3 Scibek v. Longette, 339 N.J. Super. 72, 78 (App. Div. 2001). Thus, a failure to
comply with CFA regulations may fulfill the first required element of a CFA
claim.
The Birnboims contend that ASAP "violated" the CFA when ASAP did
not comply with certain CFA regulations. That assertion is inaccurate. A failure
to comply with CFA regulations does not mean that ASAP caused any
ascertainable loss to the Birnboims. Ascertainable loss is a necessary element
to prevail on a CFA claim. Accordingly, we will make that distinction in
analyzing the arguments on this appeal.
II.
We set forth the relevant facts from the record, including the evidence
submitted during trial. In November 2012, the Birnboims purchased a home in
East Orange for $339,180 (the Home). Four years later, they decided to
substantially renovate the Home. In 2016, they entered a contract with ASAP.
The contract was dated March 24, 2016 and was signed by the Birnboims on
April 15, 2016 (the Contract).
The Contract stated that ASAP would renovate the Home by adding a
second floor and roof, as well as increasing the foundation and square footage
of the Home as described in "architectural drawings" supplied by an architect
A-4508-19 4 hired by the Birnboims. The Contract also generally described the work to be
done, which included work on the kitchen, bathrooms, windows, siding,
plumbing, heating and cooling system (HVAC), electrical system, laundry room,
staircase, foyer, doors, porch, deck, basement, driveway, and garage doors.
The Contract provided a breakdown of "estimated costs," which totaled
$440,445. The payments for the work were to be made in seven installments
based on the progress of the renovations. The Contract also stated that the
Birnboims could request changes or additional work. If changes were requested,
change orders were to be in writing and signed by the Birnboims and ASAP.
Concerning additional work, the Contract stated: "Any changes or additions to
the scope of work will be invoiced separately and payment will be due upon
presentation of invoice."
Renovations on the Home began in May 2016 and were substantially
completed by December 2016. During that time, the Birnboims paid six of the
Contract's installment payments totaling $375,065.42.
While the renovations were being done, the Birnboims regularly
communicated with the owner of ASAP, Steven Zucker. Those communications
were primarily done via text messages and emails. As the renovation was
progressing, the Birnboims requested additional work. No written change orders
A-4508-19 5 were prepared or signed by the Birnboims. Instead, ASAP prepared and
submitted seven invoices between July 2016 and December 2016. Each invoice
described the additional work done and itemized the cost of the additional
materials and labor. The total additional costs itemized in the invoices amounted
to $50,835.30. There was also an additional charge of $10,000 for a "hip roof."
Before January 2017, the Birnboims did not send any written objection to any
of the invoices, nor did they claim that the additional work had not been
authorized. They also did not request written change orders or complain about
the lack of change orders.
Towards the end of the renovation project, the Birnboims refinanced the
Home. In connection with that refinancing, the Home was appraised in
December 2016. The day before the appraisal was to be conducted, the
Birnboims sent ASAP a text message stating, in part: "the appraiser is coming
tomorrow (10 am), so the front landing needs to be done today. If you need to
get extra guys or whatever needs to be done to make sure it is complete, please
do so." The Home, with its improvements, was appraised at $777,000. In
January 2017, the Birnboims obtained a loan for $507,500 and gave the lender
a mortgage in that amount on the Home.
A-4508-19 6 On December 14, 2016, ASAP sent the Birnboims a final statement for all
the renovation work. The statement requested a final payment of $92,526.20,
consisting of $65,379.58 due on the original contract price; $10,000 for the "hip
roof;" $48,135.30 for additional work reflected in six invoices; and $30,988.68
in credits.1
On January 22, 2017, Yosef Birnboim sent ASAP an email responding to
the final statement. The Birnboims agreed that they owed the final contract
installment of $65,379.58, claimed additional credits of $29,545.63, and
disputed $30,891.35 of the additional work itemized in the invoices.
Accordingly, the Birnboims stated that they owed $32,089.21 of the $92,526.20
ASAP was seeking. Yosef Birnboim also stated:
Please let me know if you have any questions, we are more than happy to review everything with you. We have a great relationship, and want to make sure that that continues and you are clear & understanding with everything that we put together.
We really appreciated our conversation the other night, that you were willing to go through all of the items with us. We want to continue to work together to resolve everything. [2]
1 The statement listed invoice numbers one and three through seven. Invoice number two requested that payment be submitted directly to another contractor. 2 After the litigation commenced, Yosef Birnboim submitted a certification describing his January 22, 2017 email as part of ongoing settlement negotiations. A-4508-19 7 Thereafter, the parties did not resolve their differences over the final
statement. In June 2017, ASAP sued the Birnboims, asserting claims for breach
of contract, a book account, and unjust enrichment. ASAP sought damages of
$92,526.20, as reflected in its final statement to the Birnboims.
The Birnboims responded by filing an answer, affirmative defenses,
counterclaims, and a third-party complaint against Zucker. The counterclaims
included allegations that ASAP had violated the CFA and regulations issued
under the CFA known as the Home Improvement Practices (HIP) regulations,
N.J.A.C. 13:45A-16.1 to -16.2.
Once litigation was joined, the parties engaged in several years of
discovery and motion practice. The parties also filed several motions for
summary judgment. In March 2018, ASAP filed a motion for partial summary
judgement for $32,089.21, the amount the Birnboims had acknowledged they
owed ASAP in their January 2017 email to Zucker. The Birnboims opposed that
motion. The trial court denied the motion in a May 1, 2018 order.3
3 The May 1, 2018 order also dismissed the third-party complaint against Zucker. However, the claims against Zucker were reinstated in a December 18, 2019 order. A-4508-19 8 In October 2018, the Birnboims moved for summary judgment on their
claims that ASAP and Zucker had failed to comply with the CFA HIP
regulations and thereby had "violated the CFA." ASAP opposed that motion.
Initially, the trial court granted partial summary judgment to the Birnboims but
shortly thereafter vacated that ruling. Specifically, on December 13, 2018, the
trial court issued an order finding that ASAP and Zucker had "violated the CFA."
On January 3, 2019, however, the trial court issued an amended order that
eliminated the finding that ASAP and Zucker had violated the CFA. The court
stated that its January 3, 2019 order superseded its December 18, 2018 order.
In February 2019, ASAP served and filed an offer of judgment stating that
it would be willing to accept $25,000 in full resolution of the claims in the
matter. The Birnboims declined that offer and served and filed their own offer
of judgment, offering to accept $45,000 to resolve all the claims.
A jury trial was conducted over ten days in July 2019. Seven witnesses
testified: Zucker; the Birnboims; Thomas Tracey, a Township construction
official who testified about the issuance of certificates of occupancy for the
Home; Ryan Mariman and Gene Metzker, employees of an organization
involved in home demolition who testified about salvaging material from the
renovation project at the Home; and Donald Fiore, an architect who testified as
A-4508-19 9 an expert about the construction documents concerning the Home's renovation
project. The parties also submitted over 170 exhibits into evidence.
After hearing all the evidence, the jury announced its verdict on July 26,
2019. In rendering its verdict, the jury answered a series of questions on a
verdict sheet. The jury found that the Birnboims had breached their contract
with ASAP and that ASAP was entitled to $77,917.95 for the work under the
original contract and the additional work. The jury also found that ASAP had
not complied with the CFA's HIP regulations by failing to (1) have change orders
agreed to in writing; (2) construct the improvements consistent with industry
standards; (3) deliver an HVAC system as called for in the Contract; (4) provide
the quality of workmanship called for in the Contract; and (5) fix items on a
punch list given to ASAP by the Birnboims. After answering those questions,
the jury went on to find that the Birnboims had not suffered any damages
resulting from that conduct. In addition, the jury found that Zucker had not
violated the CFA or its regulations and returned no causes on all claims asserted
against Zucker in his individual capacity.
On August 12, 2019, the trial court filed an order of judgment, which (1)
entered a judgment in favor of ASAP for $77,917.95, plus costs; (2)
acknowledged that ASAP had "violated" the CFA, but the jury had also
A-4508-19 10 determined that the Birnboims had suffered no damages as a result; and (3)
dismissed with prejudice the counterclaims and third-party complaint.
In August 2019, ASAP filed a motion to amend the final judgment to
include an award of attorneys' fees under the offer-of-judgment rule. Shortly
thereafter, the Birnboims moved to vacate the order of judgment and compel a
new trial or, in the alternative, to amend the final judgment. The Birnboims also
sought an award of attorneys' fees in their favor. After hearing arguments on
those motions, the trial court (1) denied the Birnboims' motion for a new trial
and attorneys' fees; and (2) granted ASAP's motion for attorneys' fees in
accordance with the offer-of-judgment rule. The court explained the reasons for
those decisions on the record on November 15, 2019.
In granting attorneys' fees to ASAP, the trial court allowed it to file a
supplemental certification and allowed the Birnboims to respond. On March 3,
2021, the trial court analyzed ASAP's fee request and defendants' opposition on
the record. The court then issued a final judgment awarding ASAP a total
judgment of $149,378.96, consisting of $77,917.95 in damages, $64,840 for
attorneys' fees, and $6,621.01 for costs. The judgment also stated that interest
would accrue on that amount in accordance with Rule 4:58 until the judgment
was satisfied. The Birnboims now appeal from that final judgment.
A-4508-19 11 III.
On appeal, the Birnboims make three arguments, contending (1) because
ASAP was found to have violated the CFA, it cannot recover contract damages;
(2) the trial court erred in not awarding them attorneys' fees on their CFA claim;
and (3) public policy requires that the award of attorneys' fees to ASAP be
vacated because the jury found ASAP violated the CFA. These are legal issues,
and we review them de novo as questions of law. Manalapan Realty, L.P. v.
Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995).
The Birnboims are not challenging the sufficiency of the evidence
supporting the jury verdict. Instead, they argue that, as a matter of law, a
contractor who violates regulations under the CFA or commits an unlawful act
under the CFA cannot recover damages. Moreover, the Birnboims are not
challenging the attorneys' fees award on the basis that the time spent or hourly
rates were unreasonable. Instead, they argue that, as a matter of law, if a
contractor violates a CFA regulation or commits an unlawful action under the
CFA, the contractor cannot recover attorneys' fees and the homeowner is
required to be awarded fees. Considering the evidence presented at trial, the
jury verdict, and the governing law, we (1) affirm the jury's breach-of-contract
award to ASAP; (2) reverse and remand the issue of an award of attorneys' fees
A-4508-19 12 to the Birnboims related to their CFA claims; and (3) affirm the award of
attorneys' fees to ASAP under the offer-of-judgment rule.
1. The CFA.
We begin with an overview of the CFA to put the Birnboims' arguments
in context. The CFA was enacted to protect consumers against loss resulting
from fraud by persons engaged in the sale of goods and services. Scibek, 339
N.J. Super. at 77. It is to be applied broadly given the statute's remedial purpose
and is to be liberally construed in favor of consumers. Lettenmaier v. Lube
Connection, Inc., 162 N.J. 134, 139 (1999); Scibek, 339 N.J. Super. at 78. One
of the principal aims of the CFA is to promote "truth and fair dealing in the
market place." Feinberg v. Red Bank Volvo, Inc., 331 N.J. Super. 506, 512
(App. Div. 2000).
As already noted, to "prevail on a CFA claim, a plaintiff must establish
three elements: '1) unlawful conduct by defendant; 2) an ascertainable loss by
plaintiff; and 3) a causal relationship between the unlawful conduct and the
ascertainable loss.'" Zaman, 219 N.J. at 222 (quoting Bosland, 197 N.J. at 557).
An unlawful practice includes a violation of administrative regulations
promulgated under the CFA. Scibek, 339 N.J. Super. at 78.
A-4508-19 13 The CFA authorizes the Attorney General to promulgate rules and
regulations, a violation of which "gives rise to a discrete category of CFA
violations." Perez v. Professionally Green, LLC, 215 N.J. 388, 400 (2013); see
also N.J.S.A. 56:8-4; Cox v. Sears Roebuck & Co., 138 N.J. 2, 17 (1994).
Violations of the HIP regulations are deemed to be violations of the CFA. Allen
v. V & A Bros., Inc., 208 N.J. 114, 129 (2011). The CFA regulations governing
home-improvement contractors require that all changes in the terms and
conditions of a home-improvement contract be in writing, which must be
"signed by all parties." N.J.A.C. 13:45A-16.2(a)(12).
2. The Damage Award to ASAP.
Generally, a contractor who "substantially perform[s]" the contract is
entitled "to recover the contract price less . . . a fair allowance to the owner to
make good the defects." R. Krevolin & Co. v. Brown, 20 N.J. Super. 85, 89
(App. Div. 1952) (quoting Reese v. Kline Bldg. & Constr. Co., 8 N.J. Misc. 296,
297 (1930)); see also Power-Matics, Inc. v. Ligotti, 79 N.J. Super. 294, 303
(App. Div. 1963). "Substantial performance is compliance in good faith with
all important particulars of the contract." Jardine Ests., Inc. v. Donna Brook
Corp., 42 N.J. Super. 332, 337 (App. Div. 1956).
A-4508-19 14 A jury verdict, including an award of damages, is "cloaked with a
'presumption of correctness.'" Cuevas v. Wentworth Grp., 226 N.J. 480, 501
(2016) (quoting Baxter v. Fairmont Food Co., 74 N.J. 588, 598 (1977)). "The
presumption of correctness that attaches to a damages award is not overcome
unless a defendant can establish, 'clearly and convincingly,' that the award is 'a
miscarriage of justice.'" Ibid. (first quoting Baxter, 74 N.J. at 596; and then
quoting R. 4:49-1(a)).
The jury verdict on ASAP's contract claim was clear: the Birnboims
breached the contract and owed ASAP $77,917.95. The Birnboims argue that
the verdict in favor of ASAP should be vacated because the jury also found that
ASAP had violated the CFA. We reject that argument as applied to the facts of
this case.
There are factual circumstances where a technical violation of the CFA,
even without proof of ascertainable loss, can preclude recovery by a merchant
or contractor. See Scibek, 339 N.J. Super. at 85. In Scibek, we held that a car
dealer was not entitled to be paid for car repairs it had performed because the
dealer violated regulations under the CFA. Id. at 82, 85. Significantly, however,
we explained that the car dealer's "violation of the [CFA] created the climate for
the dispute that ultimately developed . . . [because] failure to provide a written
A-4508-19 15 estimate and obtain a written authorization placed the cost of [the car dealer's]
services in doubt." Id. at 82.
Moreover, we rejected a "mechanical and rigid" rule precluding a
contractor from any recovery due to a technical CFA violation. Ibid.
Accordingly, we explained it would be inappropriate to preclude a recovery
where the consumer has obtained the benefit of his bargain and attempts to use the [CFA] as a sword rather than a shield. Where, for example, there is no dispute as to the work authorized to be done and the agreed upon price, it seems highly unfair to deny the repairman any affirmative right to recover merely because of a technical, inadvertent violation of the Act's prescriptions.
[Ibid.]
There was no argument, and no basis in the record to argue, that ASAP's
original contract with the Birnboims was inconsistent with the CFA. Instead,
one of the principal arguments at trial was that the additional work was not
memorialized in written, signed change orders. In response to several questions
on the verdict sheet, the jury stated that ASAP violated the CFA and its
regulations. The jury also clearly found, however, that the Birnboims suffered
no damages resulting from ASAP's violations. Given that verdict, there is
nothing inconsistent with the jury awarding ASAP contract damages and,
A-4508-19 16 separately, finding that ASAP had technically violated the CFA, but those
violations resulted in no damages.
ASAP had affirmative claims based both on breach of contract and unjust
enrichment. The Birnboims asserted the CFA violations as an affirmative
defense. The jury clearly rejected that affirmative defense when it found that
the Birnboims had breached the contract and awarded ASAP damages.
3. The Birnboims' Claim for Attorneys' Fees.
We generally review an award of attorneys' fees under an abuse of
discretion standard. Garmeaux v. DNV Concepts, Inc., 448 N.J. Super. 148, 155
(App. Div. 2016). "Where such fees are authorized[,] the decision to award or
deny attorney's fees rests within the sound discretion of the trial court." Desai
v. Bd. of Adjustment of Town of Phillipsburg, 360 N.J. Super. 586, 598 (App.
Div. 2003). "However, where the issue is whether a rule of law precludes an
award of fees, our review is de novo." Van Horn v. Van Horn, 415 N.J. Super.
398, 409 (App. Div. 2010) (citing Manalapan Realty, 140 N.J. at 378).
Moreover, whether the Birnboims can recover attorneys' fees under
N.J.S.A 56:8-19 involves the application of established facts to that statute. See
Perez, 215 N.J. at 398-99. Accordingly, it is a mixed question of law and
established facts that we, as an appellate court, review de novo. Ibid.
A-4508-19 17 The CFA authorizes an award of attorneys' fees to a claimant who "suffers
any ascertainable loss of moneys or property, real or personal," caused by an
"act" or "practice" prohibited by the CFA. N.J.S.A. 56:8-19; see also Perez, 215
N.J. at 391. When a claimant proves an ascertainable loss, the CFA mandates
an award of attorneys' fees because it states, "the court shall also award
reasonable attorneys' fees, filing fees and reasonable costs of suit." N.J.S.A.
56:8-19; see also Cox, 138 N.J. at 24.
When a private claimant proves an unlawful act under the CFA, but no
ascertainable loss, an award of attorneys' fees depends on whether there was a
bona fide claim of an ascertainable loss. See Perez, 215 N.J. at 403; Weinberg
v. Sprint Corp., 173 N.J. 233, 253 (2002); see also Cox, 138 N.J. at 24-25. Our
Supreme Court has explained that "a consumer-fraud plaintiff can recover
reasonable attorneys' fees, filing fees, and costs if that plaintiff can prove that
the defendant committed an unlawful practice, even if the victim cannot show
any ascertainable loss and thus cannot recover treble damages." Cox, 138 N.J.
at 24.
To be entitled to attorneys' fees, the party must plead a claim of
ascertainable loss that can survive a motion for summary judgment, directed
verdict, or involuntary dismissal. Perez, 215 N.J. at 403-04; Pron v. Carlton
A-4508-19 18 Pools, Inc., 373 N.J. Super. 103, 113 (App. Div. 2004). In that regard, the Court
has explained:
[A claimant] with a bona fide claim of ascertainable loss that raises a genuine issue of fact requiring resolution by the factfinder would be entitled to seek also injunctive relief when appropriate, and to receive an award of attorneys' fees, even if the plaintiff ultimately loses on his [or her] damage claim but does prove an unlawful practice under the [CFA]. The [CFA]'s remedial purposes are promoted thereby and the Legislature's requirement of ascertainable loss for a private cause of action is respected.
[Weinberg, 173 N.J. at 253.]
If the issue of ascertainable loss is dismissed before it gets to the
factfinder, the CFA claimant is not entitled to attorneys' fees. See Perez, 215
N.J. at 405, 408 (affirming denial of attorneys' fees based on an involuntary
dismissal of the CFA claim because no prima facie showing was made on the
issue of ascertainable loss); Weinberg, 173 N.J. at 240 (affirming denial of
attorneys' fees when the issue of ascertainable loss was dismissed on summary
judgment). If, however, the issue of ascertainable loss is presented to the jury,
but the jury finds no ascertainable loss, a claimant is entitled to an award of
attorneys' fees. See Scibek, 339 N.J. Super. at 86; Branigan v. Level on the
Level, Inc., 326 N.J. Super. 24, 31 (App. Div. 1999); BJM Insulation & Constr.,
Inc. v. Evans, 287 N.J. Super. 513, 517-18 (App. Div. 1996). In that latter
A-4508-19 19 situation, the award of attorneys' fees is mandatory. See Cox, 138 N.J. at 24;
Scibek, 339 N.J. Super. at 86.
Because the issue of ascertainable loss was presented to the jury, the
Birnboims are entitled to some award of attorneys' fees even though the jury
also determined that they had suffered no ascertainable loss. The amount of
those fees, however, rests with the discretion of the trial court. Branigan, 326
N.J. Super. at 31. An award of fees under N.J.S.A. 56:8-19, just like any fee
award, is "guided by those principles that run consistently through our caselaw
when courts address the appropriate quantum of fees allowable pursuant to
various fee-shifting statutes." Ibid. "Thus, along with other factors, [the court]
must look at the level of success achieved in the litigation." Ibid. See also
Rendine v. Pantzer, 141 N.J. 292, 334-35 (1995); JHC Indus. Servs., LLC v.
Centurion Cos., Inc., 469 N.J. Super. 306, 316 (App. Div. 2021) (setting forth
the factors to be considered in awarding attorneys' fees). Consequently, the
Birnboims are entitled to attorneys' fees incurred in proving the violations of the
CFA regulations; they are not entitled to fees for defending the contract claim
because the jury rejected their defenses on that claim. We, therefore, remand
the issue of the Birnboims' request for fees and costs related only to their CFA
claims.
A-4508-19 20 4. The Fee Award to ASAP.
The trial court awarded fees and costs to ASAP under the offer-of-
judgment rule. R. 4:58. The trial court also rejected the Birnboims' argument
that a fee award was inconsistent with the jury's finding that ASAP had violated
the CFA.
"The offer-of-judgment rule permits a party to offer to take a monetary
judgment or to allow judgment to be taken against it for a sum certain. " Best v.
C&M Door Controls, Inc., 200 N.J. 348, 356 (2009) (citing R. 4:58-3). "The
fundamental purpose of the rule is to induce settlement by discouraging the
rejection of reasonable offers of compromise." Ibid. "That goal is achieved
through the imposition of financial consequences (the award of fees and costs)
where a settlement offer turns out to be more favorable than the ultimate
judgment." Ibid. (citing Firefreeze Worldwide Inc. v. Brennan & Assocs., 347
N.J. Super. 435, 441 (App. Div. 2002)).
Rule 4:58-1(a) and (b) provide generally for the making and accepting of
an offer of judgment. Rule 4:58-2 sets forth the consequences of the non-
acceptance of an offer by a claimant and Rule 4:58-3 sets forth the consequences
of the non-acceptance of an offer from a party who is not a claimant. Rule 4:58-
2(a) explains that if the offer is not accepted and the party making the offer
A-4508-19 21 obtains a money judgment in an amount that is 120% or more of the offer,
"excluding allowable prejudgment interest and counsel fees," the offeror shall
be allowed reasonable attorneys' fees.
Rule 4:58-3(c) goes on to state:
No allowances shall be granted if (1) the claimant's claim is dismissed, (2) a no-cause verdict is returned, (3) only nominal damages are awarded, (4) a fee allowance would conflict with the policies underlying a fee-shifting statute or rule of court, or (5) an allowance would impose undue hardship.
In construing Rule 4:58-3(c), our Supreme Court has held that an
employer cannot recover counsel fees under the offer-of-judgment rule in a case
involving claims under the Conscientious Employee Protection Act, N.J.S.A.
34:19-1 to -14, and the Prevailing Wage Act, N.J.S.A. 34:11-56.25 to -56.47.
Best, 200 N.J. at 352, 354. The Court explained that because neither statute
allowed an employer to recover counsel fees, awarding the employer a fee under
the offer-of-judgment rule would be contrary to the policies underlying those
statutes and was, therefore, precluded by Rule 4:58-3(c). Id. at 358-60.
We do not read Best as establishing a mechanical rule that requires the
denial of fees under the offer-of-judgment rule when there is another fee-shifting
statute involved. Instead, the question is whether an award of fees would
conflict with the fee-shifting statute. As already discussed, the CFA allows an
A-4508-19 22 award of attorneys' fees to a consumer in certain circumstances. ASAP was
awarded attorneys' fees in connection with an offer of judgment on its
affirmative claims for a recovery under the Contract. Accordingly, Rule 4:58-2
controls.
The jury award was greater than 120% of the $25,000 offer of judgment
made by ASAP before trial. To the extent that the Birnboims relied on CFA
violations as an affirmative defense, the jury rejected that defense. It was only
in the context of considering the Birnboims' affirmative claims under the CFA
that the jury found technical CFA violations but no ascertainable loss. Given
that verdict, we discern no conflict with the policies underlying the CFA's fee-
shifting provision in allowing ASAP a fee on its prevailing contract claim.
In short, the holding in Best is not applicable to the facts of this case where
ASAP prevailed on its contract claims and recovered fees under those claims.
The jury awarded the Birnboims no recovery under their CFA claim.
Consequently, the award of fees under the offer-of-judgment rule in this case
does not conflict with nor is it contrary to the policies underlying the CFA.
Accordingly, we find no legal error or abuse of discretion in the trial court's
decision to grant ASAP a reasonable fee award.
A-4508-19 23 Affirmed in part, reversed in part, and remanded. We do not retain
jurisdiction.
A-4508-19 24