NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court."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-4440-13T3 A-2284-14T1 A-2299-14T1
TANGIBLE SECURED FUNDING, INC., (Substituted for Plaintiff General Electric Credit Corporation),
Plaintiff-Respondent,
v.
IMAGING CENTER OF ORADELL, LLC, JOHN M. MAVROUDIS, THOMAS DINARDO, and JOSEPH F. BELASCO,
Defendants,
and
MICHAEL J. MAVROUDIS,
Defendant-Appellant,
IMAGING CENTER OF ORADELL, LLC,
Third-Party Plaintiff,
NORTH MOUNTAIN HEALTHCARE, LLC, and GE HEALTHCARE,
Third-Party Defendants. _______________________________ TANGIBLE SECURED FUNDING, INC.,
IMAGING CENTER OF ORADELL, LLC, THOMAS DINARDO, and JOSEPH F. BELASCO,
JOHN M. MAVROUDIS and MICHAEL J. MAVROUDIS,
Defendants-Appellants,
Third-Party Defendants. _______________________________
ANNE MAVROUDIS and JOHN MAVROUDIS,
Plaintiffs-Appellants,
GENERAL ELECTRIC CAPITAL CORPORATION and the SHERIFF OF BERGEN COUNTY,
Defendants-Respondents.
2 A-4440-13T3 _______________________________________________________________
Submitted January 31, 2017 – Decided June 23, 2017
Before Judges Reisner and Rothstadt.
On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket Nos. L-825-11 and L-2249-13.
Mavroudis Law, LLC, attorneys for appellants (John M. Mavroudis, Philip L. Guarino and Michael D. Camarinos, on the briefs).
Pfund McDonnell, PC, attorneys for respondent Bergen County Sheriff's Office (Michael A. Augello, Jr., on the brief).
Respondent Tangible Secured Funding, Inc. has not filed a brief.
Respondent General Electric Capital has not filed a brief.
PER CURIAM
These three appeals, which we have consolidated for purposes
of writing one opinion, all relate to Tangible Secured Funding,
Inc.'s (Tangible) pursuit of the satisfaction of a judgment
previously entered in its predecessor's favor against Michael J.
Mavroudis and John M. Mavroudis. We affirmed the judgment in an
earlier opinion. See Gen. Elec. Capital Corp. v. Imaging Ctr. of
Oradell, LLC., No. A-3001-11 (App. Div. June 12, 2013) (slip op.
3 A-4440-13T3 at 11-12). Michael1 now appeals (A-4440-13) from the Law
Division's May 22, 2014 denial of his application for a statutory
exemption for household goods and furniture, N.J.S.A. 2A:26-4. He
and John also appeal (A-2284-14) from the court's award of
$1,433,496.10 in counsel fees and costs in the action underlying
the judgment. John and his wife, Anne Mavroudis, appeal (A-2299-
14) from a $67,219.93 counsel fee and cost award in a separate
action they filed against Tangible seeking to exclude certain
personal property – a painting – from being levied upon by the
Bergen County Sheriff.2
We affirm the denial of the statutory exemption sought by
Michael, but vacate and remand the counsel fee awards in the
remaining matters for the reasons that follow.
The material facts as gleaned from the various motion records
are not in dispute and can be summarized as follows. The Law
Division entered the underlying judgment in 2012 against Michael,
1 In order to avoid confusion created by the parties' common surname, we refer to them by their first names. 2 We previously considered that matter as well in an earlier opinion, in which we rejected Anne's and John's challenge to "a November 1, 2013 order finding them in contempt for violating two court orders and, as a sanction, requiring them to pay $10,000 and [Tangible]'s counsel fees and costs. We affirm[ed] in all respects except with regard to the $10,000 sanction, which we reverse[d] and remand[ed]." Mavroudis v. Tangible Secured Funding Inc., No. A-1118-13T1 (App. Div. June 14, 2016) (slip op. at 2).
4 A-4440-13T3 John, and others for in excess of $2.5 million as a result of
defendant, Imaging Center of Oradell, LLC's (ICO), breach of an
equipment lease between it and Tangible's predecessor, General
Electric Capital Corp. (GECC), and based upon Michael's and John's
status as guarantors of ICO's performance. See Gen. Elec. Capital
Corp., supra, slip op. at 1-5. The court also determined that,
based on the provisions of the parties' agreements, GECC was
entitled to attorneys' fees, but it could not fix the amount due
to deficiencies in the information supplied by GECC's counsel.3
After the entry of the judgment, the court issued a writ of
execution, and the Office of the Bergen County Sheriff levied on
what it determined to be Michael's assets4 and scheduled a sale.
Michael filed an objection to the levy and an election of
exemptions, asserting he was entitled to two $1,000 exemptions,
one for household goods and furniture under N.J.S.A. 2A:26-4, and
3 In the ensuing appeal, in addition to affirming the entry of the judgment, we remanded for consideration of the open issue of counsel fees and costs. Id. at 16. 4 In 2014, when Tangible sought to have the Bergen County Sheriff levy on personal property in Michael's home, a dispute arose about the property's ownership between Tangible, Michael's former wife Vanessa, and two entities that claimed ownership to a car and certain items located in Michael's and Vanessa's former marital home. The Law Division released the property claimed by the two entities from the levy and dismissed Vanessa's action without prejudice to her filing a separate action. Vanessa never pursued the claim.
5 A-4440-13T3 another for personal property under N.J.S.A. 2A:17-19. The sale
took place, and the next day the court considered the issue of the
exemptions. At the hearing, Michael asserted that the property
in the house belonged to his former wife under their property
settlement agreement.5 After considering Michael's and the Bergen
County Sheriff's positions, the court granted the exemption for
the personal property, but refused to grant Michael an additional
exemption for household goods and furniture. The court entered
its May 22, 2014 order memorializing its decision, and Michael
filed his appeal from that order.
Later in 2014, Tangible's attorneys filed a motion for an
order fixing the amount of the counsel fees and costs awarded in
the 2012 judgment against Michael and John and for the same relief
for services rendered through June 2014, without prejudice to
future applications for fees incurred after that date. Tangible
filed a separate motion to fix the amount of fees that the court
awarded in its November 1, 2013 order finding John and Anne in
contempt for attempting to alienate the painting. In support of
its fee applications, Tangible's attorneys submitted
5 On January 7, 2014, the Family Part entered a final judgment of divorce that incorporated their property settlement agreement. The settlement agreement stated that "[h]usband and [w]ife agree that all personal property in the marital home shall be the property of the [w]ife."
6 A-4440-13T3 certifications, detailing the tasks performed, and an expert
report asserting the work done was reasonable. The submission
included billing records for work performed by Arlene N. Gelman,
Esq., and Daniel P. Jackson, Esq., who were attorneys admitted in
other jurisdictions. Gelman was eventually admitted to New Jersey
pro hac vice, but Jackson never made application for admission.
The Mavroudises' attorney and John filed certifications in
opposition to Tangible's motions. Both matters were scheduled for
oral argument, which the court held on November 21, 2014.6
At oral argument, the Mavroudises argued it was inappropriate
for the court to award fees generated by attorneys practicing law
in New Jersey without a license. They noted that Gelman and
Jackson billed for services that were performed before Gelman was
admitted pro hac vice and Jackson never sought admission pro hac
vice. Additionally, they claimed the hourly rates were
unreasonable, and, in any event, Tangible was not entitled to
post-judgment attorneys' fees, as the parties' agreements did not
contain a provision for payment of post-judgment collection fees
or costs. As to the counsel fee application relating to the action
filed by John and Anne, they argued that the work performed
6 The application was considered by a different Law Division judge than the one who denied Michael's application for the second exemption.
7 A-4440-13T3 relating to the pursuit of an unsuccessful action in New York
should not be considered by the court.
On December 5, 2014, the court entered an order, accompanied
by a statement of reasons, awarding Tangible attorneys' fees and
costs incurred in the action filed by Anne and John in the amount
of $74,486.93 to be paid by Anne and John, "jointly and severally."
On December 15, 2014, the court amended its order, reducing the
fees and costs awarded to $67,219.93.
In its statement of reasons, the court relied upon a rate for
Tangible's attorneys' fees that was established by another judge
in a separate action involving the same parties. The other judge
relied upon his "experience as a former practicing attorney and
current judge in Bergen County" to determine that the proper rate
to be applied was "$400 per hour for the lead counsel, and $300
per hour for associate counsel," rather than the hourly rate in
excess of that sought by counsel. Based on the other judge's
assessment, the court here determined that it should apply the
same rate and that the adjusted full amount should be awarded
based on the amount involved - the $2,503,551.90 judgment - and
that "Tangible prevailed in every action arising in this case."
As to John's and Anne's argument that the New York action was
unnecessary, the court stated "Tangible filed that action in New
York in order to preclude [the] transfer[ of] any money to the
8 A-4440-13T3 [plaintiffs] after the sale of the painting." Although "[t]he New
York action was ultimately dismissed due to the pending New Jersey
action . . . , the New York action was required, despite the
ultimate results." Finally, the court stated Tangible's attorneys
are experts in their respective fields, and due to plaintiffs'
conduct, Tangible was forced to act quickly, which required senior
attorneys most familiar with the matter to do work that would
typically be delegated to associates.
On December 8, 2014, the court entered an order, accompanied
by a statement of reasons, awarding Tangible attorneys' fees and
costs in the amount of $1,433,496.10 to be paid by Michael and
John, "jointly and severally." On January 13, 2015, it entered a
supplemental order, removing language from the prior order that
required Michael and John to pay the award within seven days.
In determining the reasonableness of the fees expended by
Tangible's counsel, the court did not comment on the Mavroudises'
argument regarding the award of fees for services performed by
attorneys not admitted to practice in New Jersey. In its
consideration of the reasonableness of the rate charged by
Tangible's counsel, the court again relied upon the fee award made
by the other judge in the separate action and again reduced the
rate sought by Tangible's counsel. Finally, the court rejected
the Mavroudises' argument that post-judgment collection fees could
9 A-4440-13T3 not be awarded, relying on what the court perceived to be a
"[p]ublic policy [that] require[s] attorneys['] fees and costs be
awarded post-judgment . . . due to the Mavroudises' litigation
tactics," and the language of the guaranty that required "the
defaulting party to pay attorney[s'] fees and costs," which the
court believed encompassed a default in the payment of the 2012
judgment.7
Michael, John, and Anne filed appeals from these attorneys'
fees awards.
We begin our review by considering Michael's argument that
he was entitled to a $1,000 exemption pursuant to N.J.S.A. 2A:26-
4, and conclude it is without sufficient merit to warrant
discussion in a written opinion.8 R. 2:11-3(e)(1)(E). Suffice it
to say, the statute he relies upon states "[h]ousehold goods and
7 The clause in the guaranty stated: "Undersigned does hereby further guarantee to pay upon demand . . . attorneys['] fees and expenses which may be suffered by you by reason of [c]ustomer's default or default of the undersigned." 8 Michael also raises an issue about the court not adjudicating his last minute argument that the property being levied upon belonged to his ex-wife, Vanessa. As the judge made clear at the hearing, it was not going to consider the amended objection submitted by Michael that morning and proceeded to consider only the exemption issue. As the issue of Vanessa's ownership was not properly raised before the court, we choose not to consider it on appeal for the first time. See Nieder v. Royal Indem. Ins. Co. 62 N.J. 229, 234 (1973). We only observe that Vanessa chose not to pursue her claim as noted supra.
10 A-4440-13T3 furniture not exceeding $1,000.00 in value of a person shall be
exempt from attachment." N.J.S.A. 2A:26-4 (emphasis added).
Contrary to Michael's argument, however, his property was never
subjected to the pre-judgment attachment of property that N.J.S.A.
2A:26-4 addresses, as compared to post-judgment execution and
levy. Compare N.J.S.A. 2A:17-19 (addressing exemption governing
post-judgment executions), and Borromeo v. DiFlorio, 409 N.J.
Super. 124, 136 (App. Div. 2009), with N.J.S.A. 2A:26-4, Pomeroy
v. Simon, 17 N.J. 59, 65 (1954), and In re Estate of Balgar, 399
N.J. Super. 426, 439-40 (Ch. Div. 2007).
Next, we consider the Mavroudises' challenge to the court's
counsel fee awards. On appeal, they argue that there was no basis
to award fees and costs for Tangible's attorneys' services and
fees should not have been awarded for services rendered by
attorneys who were not admitted to practice in New Jersey. In
addition, they contend Michael should not have been charged for
fees incurred in an action in which he was never involved and that
the court erred in awarding post-judgment attorneys' fees and
costs. They also argue that the fees billed were unreasonable or
unnecessary. In the action filed by John and Anne, they contend
that the court did not focus on the contempt matter, but rather
matters stemming from the 2012 judgment. Moreover, they assert
Tangible's research costs were excessive, and that the court erred
11 A-4440-13T3 in awarding fees for work following the November 1, 2013 contempt
order. Also, they argue the New York action was unnecessary, the
hourly rates were not customary, and work was not properly
delegated.
We review fee awards for an abuse of discretion. Rendine v.
Pantzer, 141 N.J. 292, 317 (1995). Fee determinations made by
trial courts "will be disturbed only on the rarest occasions."
Ibid. See also Packard-Bamberger & Co. v. Collier, 167 N.J. 427,
444 (2001).
Applying the abuse of discretion standard, and after
considering the Mavroudises' and Tangible's contentions in light
of the record and our review of the applicable legal principles,
we conclude that the counsel fee award in both actions was a
misapplication of the court's discretion. We vacate and remand
for reconsideration.
The party seeking attorneys' fees bears the burden of proving
they are entitled to an award and that the fees sought are
reasonable. Green v. Morgan Props., 215 N.J. 431, 455 (2013).
When considering an award of legal fees, we are mindful that under
the "American Rule," generally, each party is required to pay its
own attorney[s'] fees and other litigation costs. Rendine, supra,
141 N.J. at 322. For that reason, attorneys' fees are only
recoverable "if they are expressly provided for by statute, court
12 A-4440-13T3 rule, or contract." Litton Indus., Inc. v. IMO Indus., Inc., 200
N.J. 372, 385 (2009) (quoting Packard-Bamberger, supra, 167 N.J.
at 440). Accordingly, prevailing parties to a contract action may
seek attorneys' fees where the underlying contract includes a fee-
shifting provision. Id. at 386. Such contractual provisions
will, however, be strictly construed in light of the general policy
disfavoring counsel fee awards. See N. Bergen Rex Transp., Inc.
v. Trailer Leasing Co., 158 N.J. 561, 570 (1999).
We have held that contractual agreements to pay attorneys'
fees must expressly provide for post-judgment collection services
if they are to be enforceable. See Hatch v. T & L Assocs., 319
N.J. Super. 644, 649 (App. Div. 1999). The obligation to pay
attorneys' fees for post-judgment collection efforts has to be
clear and specifically provided for. Ibid. Unless the agreement
is express as to the obligation for post-judgment collection
efforts, we will not construe it as imposing that obligation.
Ibid.
Attorneys' fees can only be recovered for services rendered
by attorneys admitted to practice in New Jersey, those admitted
pro hac vice, and those "preparing for a proceeding in which the
lawyer reasonably expects to be so admitted and is associated in
that preparation with a lawyer admitted to practice in this
jurisdiction." RPC 5.5. "Recovery of compensation for legal
13 A-4440-13T3 services by one not authorized to practice law will not be
permitted . . . ." Slimm v. Yates, 236 N.J. Super. 558, 564 (Ch.
Div. 1989). "The 'no recovery for unauthorized practice' rule
also applies to out-of-state attorneys practicing in New Jersey
in violation of Court Rules." Mitchels, New Jersey Attorney
Ethics, 981 (2017) (citing Appell v. Reiner, 81 N.J. Super. 229,
241 (Ch. Div. 1963), rev'd on other grounds, 43 N.J. 313 (1964)).
The calculation of attorneys' fees requires the trial court
to determine the lodestar, the "number of hours reasonably expended
by the successful party's counsel in the litigation, multiplied
by a reasonable hourly rate." Litton, supra, 200 N.J. at 386.
The trial court must "evaluate carefully and critically the
aggregate hours . . . advanced by counsel for the prevailing party
to support the fee application." Rendine, supra, 141 N.J. at 335.
The court should "exercise its discretion to exclude" from the
lodestar calculation hours found to be "excessive, redundant, or
otherwise unnecessary," Id. at 335-36 (quoting Rode v.
Dellarciprete, 892 F.2d 1177, 1183 (3d Cir. 1990)), and it should
award fees only if the party prevailed in the underlying action.
Litton, supra, 200 N.J. at 386. A party will be considered
prevailing, "if they succeed on any significant issue in litigation
which achieves some of the benefit the parties sought in bringing
suit." R.M. v. Supreme Court of N.J., 190 N.J. 1, 9-10 (2007)
14 A-4440-13T3 (quoting Hensley v. Eckerhart, 461 U.S. 424, 433, 103 S. Ct. 1933,
1939, 76 L. Ed. 2d 40, 50 (1983)). The party seeking fees must
then "establish that the 'lawsuit was causally related to securing
the relief obtained; a fee award is justified if [the party's]
efforts are a necessary and important factor in obtaining relief.'"
Litton, supra, 200 N.J. at 386 (alteration in original) (quoting
N. Bergen, supra, 158 N.J. at 570).
Applying these guiding principles, we take issue with the
scope of the fee awards to the extent they included matters in
which a party was not involved or went beyond the appropriate time
frame. Also, the fee awards here were improper to the extent they
included fees for services rendered by an attorney – Jackson –
who was never admitted to practice in this state. The appropriate
time period for the action in which John and Michael were found
liable terminated with the entry of the judgment, as there was no
contractual provision allowing for post-judgment collection
efforts, regardless of their alleged bad faith.9 In the same vein,
9 We observe that the security agreement signed by ICO sets forth obligations as to collateral and provides the "[o]bligor shall reimburse [c]ompany for any expenses incurred by [c]ompany in protecting or enforcing its rights under this [a]greement before and after judgment, including, without limitation, reasonable attorney[s'] fees and legal expenses." (Emphasis added). However, Tangible did not assert any breach of obligation stemming from the security agreement nor did the judge rely on that agreement in making her award.
15 A-4440-13T3 the award of counsel fees for services rendered after the entry
of the November 1, 2013 contempt order should not have been made
by the court in the action filed by John and Anne. If additional
fees were being sought after the entry of the order, at a minimum,
they would have had to be the subject of an additional application.
Additionally, a person can be responsible for counsel fees in an
action only to the extent he or she was a party. The counsel fee
award therefore must also be vacated to the extent it imposed on
one of the Mavroudises an obligation to pay for fees in any action
in which he or she was not a party.10
The order of the Law Division denying Michael the second
exemption he claimed is affirmed; the awards of counsel fees in
both of the remaining actions are vacated and remanded for
reconsideration.
Affirmed in part, vacated and remanded in part. We do not
retain jurisdiction.
10 In its certification, Tangible lists five actions that were related, yet tangential to the judgment for which it was awarded attorneys' fees. For example, Tangible billed for tasks completed in relation to John's bankruptcy proceeding (this action did not involve Michael), an action commenced by John and his wife Anne regarding ownership of personal property (this action did not involve Michael), and an action commenced by two entities asserting ownership interest in personal property at John's residence (this action involved non-judgment debtors).
16 A-4440-13T3