NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court."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-1178-17T1
HUGO SANTOS,
Plaintiff-Appellant,
v.
PAULA LINHARES,
Defendant-Respondent. ________________________________
Argued October 30, 2018 – Decided November 19, 2018
Before Judges Gilson and Natali.
On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Union County, Docket No. FM-20-1700-16.
Mario Apuzzo argued the cause for appellant.
Charles F. Vuotto, Jr. argued the cause for respondent (Starr, Gern, Davison & Rubin, PC, attorneys; Charles F. Vuotto, Jr., of counsel and on the brief).
PER CURIAM After three days of trial in this contentious matrimonial litigation, the
parties entered into a consent final Judgment of Divorce (JOD), which
incorporated a Marital Settlement Agreement (MSA). The JOD resolved all
issues between the parties except the amount of counsel fees, if any, that plaintiff
Hugo Santos was obligated to pay defendant Paula Linhares, and the allocation
of costs for the parties' joint accounting experts and mediator.
Pursuant to the JOD, the parties agreed that the court would resolve the
outstanding disputes by considering the certifications of counsel and the part ies'
briefs. After evaluating those submissions, Judge Lisa F. Chrystal issued a
September 28, 2017 order and comprehensive written opinion granting
defendant's fee application in the amount of $72,514.09 and directing plaintiff
to pay 60% of the experts' and mediator's fees with defendant bearing
responsibility for the remaining 40%. Plaintiff appeals the September 28, 2017
order. We affirm.
In her written opinion, Judge Chrystal considered the factors under Rule
5:3-5(c).1 In considering the financial circumstances of the parties, the court
1 The Rule 5:3-5(c) factors are: "(1) the financial circumstances of the parties; (2) the ability of the parties to pay their own fees or to contribute to the fees of the other party; (3) the reasonableness and good faith of the positions advanced by the parties both during and prior to trial; (4) the extent of the fees incurred
A-1178-17T1 2 noted that plaintiff's trial testimony regarding his salary "was not always
credible" and his business "always had significantly more value than [he]
admitted." The court also considered the parties' disparate income and assets
and concluded that plaintiff had the greater ability to pay a fee award.
The court determined that plaintiff's litigation conduct was unreasonable,
at times not advanced in good faith, and caused defendant to incur fees
unnecessarily. Specifically, the court noted that during the litigation, plaintiff
misrepresented his income and the value of his company. In addition, the court
considered the amount of fees incurred by the parties for their present and former
counsel and acknowledged it had previously denied defendant's request for
attorney's fees.
As to the "degree to which fees were incurred to enforce existing orders
or to compel discovery," the court explained that defendant was forced to file a
motion to enforce plaintiff's court-ordered pendente lite support obligations.
Finally, the court stated that plaintiff failed to comply with at least one other
court order and submit required documents to facilitate settlement.
by both parties; (5) any fees previously awarded; (6) the amount of fees previously paid to counsel by each party; (7) the results obtained; (8) the degree to which fees were incurred to enforce existing orders or to compel discovery; and (9) any other factor bearing on the fairness of an award." A-1178-17T1 3 On appeal, plaintiff argues that the court abused its discretion because the
award of counsel fees and allocation of expert costs were manifestly
unreasonable, and the court's factual findings were contrary to the evidence. We
disagree and affirm the September 28, 2017 order for the reasons stated in Judge
Chrystal's thorough written decision. We offer only the following brief
comments.
The decision to award counsel fees "rests in the discretion of the trial
court," Addesa v. Addesa, 392 N.J. Super. 58, 78 (App. Div. 2007) (citing R.
5:3-5(c)), and will be disturbed "only on the 'rarest occasion,' and then only
because of clear abuse of discretion." Strahan v. Strahan, 402 N.J. Super. 298,
317 (App. Div. 2008) (quoting Rendine v. Pantzer, 141 N.J. 292, 317 (1995)).
In determining whether court exercised reasonable discretion, we consider
whether the "decision is 'made without a rational explanation, inexplicably
departed from established policies, or rested on an impermissible basis.'" Flagg
v. Essex Cty. Prosecutor, 171 N.J. 561, 571 (2002) (quoting Achacoso-Sanchez
v. Immigration & Naturalization Serv., 779 F.2d 1260, 1265 (7th Cir. 1985)).
With respect to a court's factual findings, reversal is warranted only when
those findings are "so manifestly unsupported by or inconsistent with the
competent, relevant and reasonably credible evidence as to offend the interests
A-1178-17T1 4 of justice." Rova Farms Resort, Inc. v. Inv'rs Ins. Co. of Am., 65 N.J. 474, 484
(1974) (internal citation omitted). However, a court's "interpretation of the law
and the legal consequences that flow from established facts are not entitled to
any special deference." Manalapan Realty v. Twp. Comm. of Manalapan, 140
N.J. 366, 378 (1995).
Substantively, a Family Part's counsel fee award is governed by Rule 5:3-
5(c). See Gotlib v. Gotlib, 399 N.J. Super. 295, 314 (App. Div. 2008) ("Rule
4:42-9(a)(1) authorizes the award of counsel fees in a family action on a final
determination pursuant to R[ule] 5:3-5(c)."). The court must discuss the support
for its decision to award or deny counsel fees, but is not necessarily required to
"specifically enumerat[e] every factor." Reese v. Weis, 430 N.J. Super. 552,
586 (App. Div. 2013). Further, "applications for the allowance of fees shall be
supported by an affidavit of services addressing the factors enumerated by [New
Jersey Rules of Professional Conduct (RPC)] 1.5(a)." R. 4:42-9(b).
For purposes of awarding counsel fees, bad faith relates to the party's
conduct during the litigation. Mani v. Mani, 183 N.J. 70, 95 (2005). The
purpose of an award of fees against a "bad faith" litigant "is to protect the
innocent party from unnecessary costs . . . ." Yueh v. Yueh, 329 N.J. Super.
447, 461 (App. Div. 2000).
A-1178-17T1 5 After thoroughly reviewing the record in light of these legal principles and
the applicable standard of review, we are satisfied the court did not abuse its
discretion and that the September 28, 2017 order was supported by substantial,
competent and credible evidence in the record. With respect to the financial
circumstances of the parties and their ability to pay, the court relied on the
parties' updated case information statements and joint expert's analysis that
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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-1178-17T1
HUGO SANTOS,
Plaintiff-Appellant,
v.
PAULA LINHARES,
Defendant-Respondent. ________________________________
Argued October 30, 2018 – Decided November 19, 2018
Before Judges Gilson and Natali.
On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Union County, Docket No. FM-20-1700-16.
Mario Apuzzo argued the cause for appellant.
Charles F. Vuotto, Jr. argued the cause for respondent (Starr, Gern, Davison & Rubin, PC, attorneys; Charles F. Vuotto, Jr., of counsel and on the brief).
PER CURIAM After three days of trial in this contentious matrimonial litigation, the
parties entered into a consent final Judgment of Divorce (JOD), which
incorporated a Marital Settlement Agreement (MSA). The JOD resolved all
issues between the parties except the amount of counsel fees, if any, that plaintiff
Hugo Santos was obligated to pay defendant Paula Linhares, and the allocation
of costs for the parties' joint accounting experts and mediator.
Pursuant to the JOD, the parties agreed that the court would resolve the
outstanding disputes by considering the certifications of counsel and the part ies'
briefs. After evaluating those submissions, Judge Lisa F. Chrystal issued a
September 28, 2017 order and comprehensive written opinion granting
defendant's fee application in the amount of $72,514.09 and directing plaintiff
to pay 60% of the experts' and mediator's fees with defendant bearing
responsibility for the remaining 40%. Plaintiff appeals the September 28, 2017
order. We affirm.
In her written opinion, Judge Chrystal considered the factors under Rule
5:3-5(c).1 In considering the financial circumstances of the parties, the court
1 The Rule 5:3-5(c) factors are: "(1) the financial circumstances of the parties; (2) the ability of the parties to pay their own fees or to contribute to the fees of the other party; (3) the reasonableness and good faith of the positions advanced by the parties both during and prior to trial; (4) the extent of the fees incurred
A-1178-17T1 2 noted that plaintiff's trial testimony regarding his salary "was not always
credible" and his business "always had significantly more value than [he]
admitted." The court also considered the parties' disparate income and assets
and concluded that plaintiff had the greater ability to pay a fee award.
The court determined that plaintiff's litigation conduct was unreasonable,
at times not advanced in good faith, and caused defendant to incur fees
unnecessarily. Specifically, the court noted that during the litigation, plaintiff
misrepresented his income and the value of his company. In addition, the court
considered the amount of fees incurred by the parties for their present and former
counsel and acknowledged it had previously denied defendant's request for
attorney's fees.
As to the "degree to which fees were incurred to enforce existing orders
or to compel discovery," the court explained that defendant was forced to file a
motion to enforce plaintiff's court-ordered pendente lite support obligations.
Finally, the court stated that plaintiff failed to comply with at least one other
court order and submit required documents to facilitate settlement.
by both parties; (5) any fees previously awarded; (6) the amount of fees previously paid to counsel by each party; (7) the results obtained; (8) the degree to which fees were incurred to enforce existing orders or to compel discovery; and (9) any other factor bearing on the fairness of an award." A-1178-17T1 3 On appeal, plaintiff argues that the court abused its discretion because the
award of counsel fees and allocation of expert costs were manifestly
unreasonable, and the court's factual findings were contrary to the evidence. We
disagree and affirm the September 28, 2017 order for the reasons stated in Judge
Chrystal's thorough written decision. We offer only the following brief
comments.
The decision to award counsel fees "rests in the discretion of the trial
court," Addesa v. Addesa, 392 N.J. Super. 58, 78 (App. Div. 2007) (citing R.
5:3-5(c)), and will be disturbed "only on the 'rarest occasion,' and then only
because of clear abuse of discretion." Strahan v. Strahan, 402 N.J. Super. 298,
317 (App. Div. 2008) (quoting Rendine v. Pantzer, 141 N.J. 292, 317 (1995)).
In determining whether court exercised reasonable discretion, we consider
whether the "decision is 'made without a rational explanation, inexplicably
departed from established policies, or rested on an impermissible basis.'" Flagg
v. Essex Cty. Prosecutor, 171 N.J. 561, 571 (2002) (quoting Achacoso-Sanchez
v. Immigration & Naturalization Serv., 779 F.2d 1260, 1265 (7th Cir. 1985)).
With respect to a court's factual findings, reversal is warranted only when
those findings are "so manifestly unsupported by or inconsistent with the
competent, relevant and reasonably credible evidence as to offend the interests
A-1178-17T1 4 of justice." Rova Farms Resort, Inc. v. Inv'rs Ins. Co. of Am., 65 N.J. 474, 484
(1974) (internal citation omitted). However, a court's "interpretation of the law
and the legal consequences that flow from established facts are not entitled to
any special deference." Manalapan Realty v. Twp. Comm. of Manalapan, 140
N.J. 366, 378 (1995).
Substantively, a Family Part's counsel fee award is governed by Rule 5:3-
5(c). See Gotlib v. Gotlib, 399 N.J. Super. 295, 314 (App. Div. 2008) ("Rule
4:42-9(a)(1) authorizes the award of counsel fees in a family action on a final
determination pursuant to R[ule] 5:3-5(c)."). The court must discuss the support
for its decision to award or deny counsel fees, but is not necessarily required to
"specifically enumerat[e] every factor." Reese v. Weis, 430 N.J. Super. 552,
586 (App. Div. 2013). Further, "applications for the allowance of fees shall be
supported by an affidavit of services addressing the factors enumerated by [New
Jersey Rules of Professional Conduct (RPC)] 1.5(a)." R. 4:42-9(b).
For purposes of awarding counsel fees, bad faith relates to the party's
conduct during the litigation. Mani v. Mani, 183 N.J. 70, 95 (2005). The
purpose of an award of fees against a "bad faith" litigant "is to protect the
innocent party from unnecessary costs . . . ." Yueh v. Yueh, 329 N.J. Super.
447, 461 (App. Div. 2000).
A-1178-17T1 5 After thoroughly reviewing the record in light of these legal principles and
the applicable standard of review, we are satisfied the court did not abuse its
discretion and that the September 28, 2017 order was supported by substantial,
competent and credible evidence in the record. With respect to the financial
circumstances of the parties and their ability to pay, the court relied on the
parties' updated case information statements and joint expert's analysis that
plaintiff's average annual pre-tax cash flow from 2012 to 2016 was $180,000,
and that defendant's average pre-tax income was approximately $53,000 per
year.
As to the court's finding that plaintiff acted in bad faith, the record
confirms that plaintiff failed to comply with a pendente lite order and forced
defendant to incur counsel fees to file an enforcement motion, yet still remained
$11,000 in arrears in his child support and related obligations at the time of trial.
Plaintiff also failed to comply with a case management order and did not submit
documents that would have assisted in settlement, such as an intensive
settlement conference (ISC) questionnaire. The court's finding of bad faith was
further supported by plaintiff's conduct throughout litigation where he failed to
report accurately his income and the value of his business, causing extensive
litigation to develop facts that were ultimately stipulated.
A-1178-17T1 6 The court's conclusion that defendant owed her current counsel
$72,514.09 in fees, while plaintiff had a balance of only $9,000 in legal fees,
despite having retained multiple attorneys, was fully supported by the parties'
post-trial submissions. Additionally, while neither party prevailed entirely in
the JOD, our review of the record confirms that defendant achieved significant
success with respect to her request for alimony.
Likewise, the court's Rule 5:3-5(c) analysis supports the allocation of
costs for the parties' joint accounting experts and mediator. In determining a
cost allocation, a court may consider the Rule 5:3-5(c) factors, including the
parties' ability to pay and their good faith. Platt v. Platt, 384 N.J. Super. 418,
429 (App. Div. 2006). The court's allocation of costs, directing plaintiff to pay
60% of the experts' and mediator's fees and defendant to pay the remaining 40%,
is consistent with its Rule 5:3-5(c) findings and is therefore neither arbitrary nor
manifestly unreasonable.
Plaintiff's claim that the trial court failed to conduct a proper RPC 1.5(a)
analysis to determine the reasonableness of defendant's attorney's fee is equally
without merit. After considering counsel's certification, which contained a
thorough explication of the RPC 1.5(a) factors, the court determined defendant's
primary counsel's hourly rate was reasonable and awarded defendant $72,514.09
A-1178-17T1 7 in counsel fees, even though she incurred a total of $124,777.09 in fees and
requested an award of $100,000. As the court based its decision on counsel's
detailed certification, and plaintiff failed to make specific challenges to
counsel's invoices, we conclude there was substantial, credible evidence to
support the court's conclusion. See Addesa, 392 N.J. Super. at 79 (finding
counsel fees claimed by the defendant to be reasonable based on the detailed
certification submitted by counsel).
To the extent we have not directly addressed the balance of the plaintiff's
arguments, we find them to lack sufficient merit to warrant discussion in a
written opinion. R. 2:11-3(e)(1)(E).
Affirmed.
A-1178-17T1 8