Court Opinion

ID: 9943875
Source: CourtListenerOpinion
Date Created: 2024-02-26 15:07:09.160831+00
Date Added: 2024-06-11T13:49:33.889973
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE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-0688-22

TYRONE S. HENRY, SR.,
individually and as
administrator of the Estate
of TYRONE S. HENRY, JR.,

          Plaintiffs,

and

ATLANTICARE REGIONAL
MEDICAL CENTER,

          Plaintiff/Intervenor-
          Appellant,

v.

SANTOSH S. BHOWMIK, CURE
AUTO INSURANCE, and THE
NEW JERSEY PROPERTY
LIABILITY INSURANCE
GUARANTY ASSOCIATION,

     Defendants-Respondents.
_______________________________

                   Argued February 6, 2024 – Decided February 26, 2024

                   Before Judges Smith and Perez Friscia.
           On appeal from the Superior Court of New Jersey, Law
           Division, Atlantic County, Docket No. L-6636-14.

           Matthew Richard Major argued the cause for appellant
           (Wilson, Elser, Moskowitz, Edelman & Dicker LLP,
           attorneys; Matthew Richard Major and Mark R.
           Vespole, on the briefs).

           William Leon Brennan argued the cause for respondent
           CURE Auto Insurance (Brennan & Sponder, attorneys;
           William Leon Brennan, on the brief).

PER CURIAM

      Plaintiff-intervenor AtlantiCare Regional Medical Center (AtlantiCare)

appeals from the September 15 and October 24, 2022 Law Division orders,

granting in part its motion for attorneys' fees and costs from defendant Cure

Auto Insurance Guarantee Association (CURE) and awarding $22,200.12. We

affirm.

                                     I.

      This matter returns before us to address the motion judge's award of

attorneys' fees, pursuant to Rule 4:42-9(a)(6), after the underlying personal

injury protection (PIP) benefits dispute resolved by settlement with CURE's

payment of $80,000 to AtlantiCare. In our prior decision, we detailed the

underlying relevant facts and procedural history regarding the automobile

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accident which resulted in Tyrone S. Henry, Jr.'s (Tyrone)1 death, and affirmed

the award of PIP benefits to plaintiff Tyrone S. Henry, Sr., his father,

individually and as the administrator of the Estate. See Henry v. Bhowmik, No.

A-3331-15 (App. Div. Feb. 8, 2018) (slip op. at 1-15). We therefore only recite

the most salient facts here.

                   On January 31, 2014, Tyrone sustained serious
            injuries after an automobile driven by defendant
            Santosh Bhowmik struck him as he walked across an
            intersection in Pleasantville. Tyrone ultimately died
            from his injuries on February 8, 2014, after first
            incurring substantial medical treatment bills at
            AtlantiCare. . . . At the time of the accident, Tyrone
            lived in Ocean City with his cousin, Chanel Pitt, who
            owned an automobile that CURE insured.

                  On December 8, 2014, plaintiff filed a complaint
            in the Law Division, Atlantic County, against
            defendants, Bhowmik, CURE, and The New Jersey
            Property Liability Insurance Guaranty Association
            (PLIGA). In relevant part, the complaint sought to
            recover PIP benefits from CURE, or alternatively, from
            PLIGA, for the injuries and subsequent death of
            Tyrone.

                  On January 8, 2015, PLIGA filed an answer with
            cross-claims denying the material allegations of the
            complaint. On January 28, 2015, CURE filed an answer
            with counterclaims and cross-claims, denying the
            complaint's allegations and seeking a declaration that
            the CURE insurance policy at issue was void, and thus,

1
  For clarity, and intending no disrespect, we refer to the decedent by his first
name.
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                                       3
            PLIGA was liable to plaintiff for PIP benefits. At that
            time, CURE had already filed a separate declaratory
            judgment action against Pitt in Cape May County in
            November 2014, seeking to void her insurance policy
            for material misrepresentations in failing to disclose all
            household members as of her March 2, 2012 policy
            renewal.

            [Id. at 3-6.]

      On July 6, 2015, the Estate moved before the Atlantic County judge for

summary judgment, seeking PIP benefits from CURE or PLIGA, which was

denied. Id. at 3. On reconsideration, the judge concluded the Estate was entitled

to PIP benefits from CURE as Tyrone was an innocent third party. Id. at 5-6.

On April 1, 2016, after the Estate settled its personal injury action against

Bhowmik, AtlantiCare was permitted to intervene to pursue its PIP benefits

claim against CURE for Tyrone's medical expenses from treatment. Id. at 6.

CURE appealed the order awarding PIP benefits, which we affirmed. Id. at 2,

15. On June 15, 2018, the Supreme Court denied certification. Henry v.

Bhowmik, 233 N.J. 482 (2018).

      On September 10, 2020, prior to the completion of discovery, CURE filed

an offer of judgment, pursuant to Rule 4:58-1, for $79,436.47. A couple months

later, AtlantiCare moved for partial summary judgment as a successful claimant

entitled to attorneys' fees under Rule 4:42-9(a)(6), which the motion judge

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granted on January 8, 2021. The judge reserved decision on the amount of the

award until final adjudication of the medical bills.

      On September 13, 2021, following extensive discovery regarding the

usual, customary, and reasonable charges for services provided and after the

matter was listed for trial, a settlement was reached. In October, AtlantiCare

filed a motion to compel CURE "to reimburse AtlantiCare its reasonable

attorneys' fees and costs incurred in connection with AtlantiCare's efforts to

recover PIP benefits."    Matthew Major, Esq., a member of Wilson, Elser,

Moskowitz, Edelman & Dicker, LLP (Wilson Elser), represented AtlantiCare.

Major certified to the legal services provided to AtlantiCare between February

2016 and September 2021. Prior to his association with Wilson Elser, Major

certified to representing AtlantiCare at two other law firms. Major certified "the

total award for attorneys' fees and costs requested [wa]s $414,011." Major did

not indicate the outstanding amount billed for legal services.

      On November 22, 2021, Major filed a supplemental certification

comporting with the requirements of Rule 4:42-9 and addressed the attorneys'

fees paid by AtlantiCare. Major provided, "AtlantiCare has paid a grand total

of $30,000 in attorneys' fees. Any amount of attorneys' fees recovered in excess

of what AtlantiCare has already paid towards attorneys' fees would go to Wilson

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                                        5
Elser. AtlantiCare is not responsible for any additional attorneys' fees if there

is no amount recovered."

      On May 13, 2022, the judge heard argument and adjourned the motion for

the submission of the retainer agreements and further argument. On June 17,

AtlantiCare supplemented its motion with a certification from its Vice President

and General Counsel (General Counsel) and included copies of the retainer

agreements. General Counsel certified:

            4. Pursuant to the agreements, AtlantiCare has paid a
            grand total of $30,000 in attorneys' fees. Any amount
            of attorneys' fees recovered in excess of what
            AtlantiCare has already paid towards attorneys' fees
            would go to Wilson Elser.           AtlantiCare is not
            responsible for any additional attorneys' fees if there is
            no amount recovered.

            5. Pursuant to the agreements, AtlantiCare has also
            paid all of the costs which total $16,411. AtlantiCare
            is solely responsible for all costs including any unpaid
            costs that may remain outstanding.

      After argument, on September 15, the judge awarded AtlantiCare $46,411

for attorneys' fees and costs and issued a comprehensive and well-reasoned

forty-eight-page written decision. The judge found the retainer agreements did

not afford the possibility of an attorneys' fee recovery beyond the contracted for

"capped" flat fee of $30,000. Thereafter, Major provided a letter submission

clarifying the amounts AtlantiCare paid, excluding the funds attributable to the

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                                        6
appeal. On October 24, the judge issued a revised order amending the award to

$6,555 for attorneys' fees and $15,645.12 in costs.

      On appeal, AtlantiCare argues: "[b]y capping AtlantiCare's attorneys' fee

award at $30,000[], the [judge] failed to consider the undisputed fact that

AtlantiCare and Wilson Elser properly modified the retainer agreement such that

Wilson Elser would be entitled to 'any amount of attorneys' fees recovered in

excess of $30,000[].'" In opposition, CURE argues: the "four corners of the

retainer agreements control[]"; the explicit provisions of the three retainer

agreements govern and were not modified; and AtlantiCare has waived

challenging the judge's finding that the fees requested were excessive and

against "what the [r]ules in the case law contemplate."

                                       II.

      "We review the trial court's award of fees and costs in accordance with a

deferential standard." Hansen v. Rite Aid Corp., 253 N.J. 191, 211 (2023). "A

reviewing court should not set aside an award of attorneys' fees except 'on the

rarest occasions, and then only because of a clear abuse of discretion.'"

Garmeaux v. DNV Concepts, Inc., 448 N.J. Super. 148, 155 (App. Div. 2016)

(quoting Rendine v. Pantzer, 141 N.J. 292, 317 (1995)). Only when a court's

determination of fees was based on "irrelevant or inappropriate factors, or

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                                       7
amounts to a clear error in judgment," should the reviewing court intervene. See

Masone v. Levine, 382 N.J. Super. 181, 193 (App. Div. 2005) (citing Flagg v.

Essex Cnty. Prosecutor, 171 N.J. 561, 571 (2002)).

      A court may award counsel fees "[i]n an action upon a liability or

indemnity policy of insurance, in favor of a successful claimant." R. 4:42-

9(a)(6). Permitting reimbursement of attorneys' fees reflects "[t]he theory . . .

that one covered by a policy is entitled to the full protection provided by the

coverage, and that benefit should not be diluted by the insured 's need to pay

counsel fees in order to secure its rights under the policy." Liberty Vill. Assocs.

v. W. Am. Ins. Co., 308 N.J. Super. 393, 406 (App. Div. 1998). To effect that

theory, "[a] successful insured is presumptively entitled to attorney 's fees and

need not establish that the insurer acted in bad faith or arbitrarily in declin ing a

claim." All State Ins. Co. v. Sabato, 380 N.J. Super. 463, 473 (App. Div. 2005).

The well recognized purpose of the rule is to discourage insurance companies

from unjustifiably refusing to defend or indemnify their insureds. See Myron

Corp. v. Atl. Mut. Ins. Corp., 407 N.J. Super. 302, 310 (App. Div. 2009), aff'd,

203 N.J. 537 (2010).

      Despite the presumption in favor of reimbursement, "the trial judge has

broad discretion as to when, where, and under what circumstances counsel fees

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                                         8
may be proper and the amount to be awarded." Iafelice ex rel. Wright v. Arpino,

319 N.J. Super. 581, 590 (App. Div. 1999). In considering an award under Rule

4:42-9(a)(6), a judge may consider the following factors:

            (1) the insurer's good faith in refusing to pay the
            demands; (2) excessiveness of plaintiff's demands; (3)
            bona fides of one or both of the parties[;] (4) the
            insurer's justification in litigating the issue; (5) the
            insured's conduct in contributing substantially to the
            necessity for the litigation on the policies[;] (6) the
            general conduct of the parties[;] and (7) the totality of
            the circumstances.

            [Enright v. Lubow, 215 N.J. Super. 306, 313 (App. Div.
            1987) (internal citations omitted).]

      Pursuant to Rule 4:42-9(b) "all applications for the allowance of fees shall

be supported by an affidavit of services addressing the factors enumerated by

[Rule of Professional Conduct (RPC)] 1.5(a)." A party seeking attorneys' fees

must establish reasonableness under the factors. Seigelstein v. Shrewsbury

Motors, Inc., 464 N.J. Super. 393, 405 (App. Div. 2020). Regardless of the

source authorizing fee shifting, the same reasonableness test governs. Litton

Indus., Inc. v. IMO Indus., Inc., 200 N.J. 372, 386 (2009). Further, "[a]ll

applications for the allowance of fees shall state how much had been paid to the

attorney . . . and what provision, if any, has been made for the payment of fees

to the attorney in the future."     R. 4:42-9(c).     "[F]ee determinations are

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                                        9
discretionary decisions by trial courts" which "we . . . rarely disturb" absent

"clear error of law." JHC Indus. Servs., LLC v. Centurion Companies, Inc., 469

N.J. Super. 306, 312 (App. Div. 2021); accord Packard Bamberger & Cos. v.

Collier, 167 N.J. 427, 444 (2001).

                                      III.

      AtlantiCare was a successful claimant. AtlantiCare's argument that the

judge abused his discretion by "capping AtlantiCare's attorneys' fee award at

$30,000," and failing to consider that AtlantiCare's retainer agreements were

modified entitling Wilson Elser to attorneys' fees in excess of the fees paid is

unavailing. The judge's detailed and cogent written decision belies AtlantiCare's

contention that the judge "ignored, without either explanation or rational basis,

the affidavits submitted by AtlantiCare and Wilson Elser, which clearly

evidence that the retainer agreement[s] w[ere] modified to allow recovery

above."

      The judge specifically considered         and   heavily quoted     Major's

"[s]upplemental [c]ertification in further support of" AtlantiCare's motion. The

judge recited Major's certified statement that AtlantiCare "paid a grand total of

$30,000 in attorneys' fees, and any amount of attorneys' fees recovered in excess

of what AtlantiCare already paid towards attorneys' fees would go to Wilson

                                                                           A-0688-22
                                      10
Elser." Further, the judge correctly noted Major "acknowledged AtlantiCare

[wa]s not responsible for any additional attorneys' fees if there [wa]s no amount

recovered." He referenced the June 2022 supplemental "later submission" of the

retainer agreements provided and incorporated Major's third certification, noting

"[o]n August 4, 2022, counsel updated the amount of attorney[s' fees] and costs

requested. The final amount sought, as of August 4, 2022, was $453,116[]." We

observe Major's second supplemental certification, which the judge clearly

reviewed, referenced General Counsel's June 15, 2022 certification in support

of the attorneys' fee request.    Thus, AtlantiCare's argument that the judge

completely "disregard[ed]" that the attorneys' fees agreement was modified, as

supported by the certifications, is unavailing.

      The judge's opinion demonstrates he considered the certifications of both

Major and General Counsel. The judge was unpersuaded that the agreement was

altered to provide a revised fee. The judge acknowledged precedent case law

and found that although AtlantiCare's "attorneys . . . s[ought] fees and costs

above an amount [paid and] agreed to in the three non-contingent fee retainer

agreements," the agreements did not "afford the possibility of any recovery

beyond the amount contracted to the law firms." The record well supports the

judge's finding that the agreements were not modified to permit a greater fee

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recovery than contractually provided. Thus, we discern no abuse of discretion.

See Flagg, 171 N.J. at 571.

      Indeed, an attorney may be compensated for fees in an amount greater

than the fees paid by the client. However, as the judge correctly observed, in

addressing whether an award may "exceed the fee payable" under a fee

agreement, our Supreme Court elucidated "a prevailing party can collect

reasonable counsel fees even though he is not otherwise obligated to pay them

to his counsel, at least if the attorney and client understand their retainer

agreement to so permit." Szczepanski v. Newcomb Med. Ctr., 141 N.J. 346, 358

(1995) (quoting Specialized Med. Sys., Inc. v. Lemmerling, 252 N.J. Super. 180,

187 (App. Div. 1991), certif. granted, 127 N.J. 565 (1992), appeal dismissed per

stipulation, 142 N.J. 443 (1995)). We agree that the record does not support that

AtlantiCare's agreement was altered to permit an excess fee recovery.

      An award of attorneys' fees under Rule 4:42-9(a)(6) is discretionary and

not mandatory. The judge, in declining to award attorneys' fees more than set

forth in the agreements, considered the Enright factors, applied Rule 4:42-9

considerations, and analyzed the eight factors under RPC 1.5(a). In addressing

the Enright factors regarding the insurer's good faith, the amount demanded, and

the justification for the litigation, the judge reasoned: "the litigation here was

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                                       12
with regard to CURE's effort to find or obtain a reasonable amount for the

hospital's reimbursement"; AtlantiCare initially demanded over $378,000 from

CURE for medical bills with a PIP policy limit of $250,000; AtlantiCare settled

for $80,000; the settlement was one year after CURE had filed an offer of

judgment for $79,436.47; the settlement was "21% of the amount originally

demanded"; and "each party pursued their respective interests in good faith."

      Specifically, considering RPC 1.5(a) factors one, four, and eight, the

judge found the dispute was "not a complex or novel set of circumstances" and

was a "straight forward PIP matter," "the amount recovered" was relevant, and

the agreement was a "flat fee arrangement in an amount found to be mutually

reasonable." The judge's determination to award "the attorneys' fees and costs

paid," because awarding "any higher amount, on this record . . . would be

tantamount to imposing punitive damages on CURE rather than reimbursement

of attorney[s'] fees," is sufficiently supported. We need not further address the

judge's detailed reasoning for the fees ordered as CURE conceded at the first

oral argument that the "$30,000 that AtlantiCare did pay for attorneys' fees . . .

should be reimbursed."

      Lastly, the judge's October 24, 2022 order revised the award to $6,555 in

attorneys' fees and $15,645.12 in costs after Major clarified by letter that

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                                       13
$23,454 in fees and $765.88 in costs was attributable to appellate work . The

judge correctly adjusted the award, as he had previously found he could not

"consider or award attorney's fees for professional services conducted before the

Appellate Division." See Tarr v. Bob Ciasulli's Mack Auto Mall, Inc., 390 N.J.

Super. 557, 570 (App. Div. 2007) ("In the absence of a referral from the

appellate court to the trial court, the trial court has no such authority to award

such fees." (citing R. 2:11-4)). Having found the judge's findings were not an

abuse of discretion and the revised award was commensurate with the amounts

AtlantiCare paid pursuant to the retainer agreement, we discern no reason to

disturb the judge's order.

      Affirmed.

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                                       14