Court Opinion

ID: 4431154
Source: CourtListenerOpinion
Date Created: 2019-08-20 19:53:00.935189+00
Date Added: 2024-06-11T14:51:05.096653
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                APPROVAL OF THE APPELLATE DIVISION

                                   SUPERIOR COURT OF NEW JERSEY
                                   APPELLATE DIVISION
                                   DOCKET NOS. A-1406-16T1
                                                A-1457-16T1

WILLIAM F. BRUNT, JR.,

      Plaintiff-Respondent,

v.                                    APPROVED FOR PUBLICATION

BOARD OF TRUSTEES, POLICE &                June 18, 2018
FIREMEN'S RETIREMENT SYSTEM
IN THE DIVISION OF PENSIONS &            APPELLATE DIVISION
BENEFITS, STATE OF NEW JERSEY;
HANK SCHWEDES; CHERYL CHIANESE
and BERNARDINE BROZENA,

      Defendants-Respondents,

and

THE TOWNSHIP OF MIDDLETOWN IN
THE COUNTY OF MONMOUTH; and
HELEN ALFANO,

     Defendants-Appellants.
_______________________________

WILLIAM F. BRUNT, JR.,

      Plaintiff-Respondent,

v.

BOARD OF TRUSTEES, POLICE &
FIREMEN'S RETIREMENT SYSTEM
IN THE DIVISION OF PENSIONS &
BENEFITS, STATE OF NEW JERSEY;
HANK SCHWEDES; CHERYL CHIANESE
and BERNARDINE BROZENA,

      Defendants-Appellants,
and

THE TOWNSHIP OF MIDDLETOWN IN
THE COUNTY OF MONMOUTH; and
HELEN ALFANO,

     Defendants-Respondents.
________________________________

         Argued April 9, 2018

         Before Judges Ostrer and Rose.

         Reargued telephonically May 31, 20181 –
         Decided June 18, 2018

         Before Judges Sabatino, Ostrer and Rose.

         On appeal from Superior Court of New Jersey,
         Law Division, Monmouth County, Docket No.
         L-1573-16.

         Michael L. Collins argued the cause for
         Township of Middletown and Helen Alfano,
         appellants in A-1406-16 and respondents in
         A-1457-16 (Archer & Greiner, PC, attorneys;
         Brian M. Nelson, of counsel; Kira S. Dabby
         and Michael L. Collins, on the brief).

         Jeffrey   S.   Ignatowitz,   Deputy  Attorney
         General, argued the cause for Board of
         Trustees, Police and Firemen's Retirement
         System, appellant in 1457-16 and respondent
         in A-1406-16 (Gurbir S. Grewal, Attorney
         General,   attorney;   Daniel   F.  Thornton,
         Deputy Attorney General, on the brief).

         Larry S. Loigman argued the cause          for
         respondent William F. Brunt., Jr.

1
  The appeal was re-argued at the court's request to add Judge
Sabatino.

                                2                         A-1406-16T1
      The opinion of the court was delivered by

ROSE, J.S.C. (temporarily assigned).

      The    issue    in    these     back-to-back          appeals,     which       we

consolidate for purposes of this opinion, is whether the trial

court erred in granting counsel fees to plaintiff, William F.

Brunt, Jr., who prevailed in a Law Division action to enforce an

agency decision.        Because we adhere to the so-called American

Rule, requiring litigants to bear their own litigation costs

regardless of who prevails, we reverse.

      We    summarize      the   facts       and     procedural       history     most

pertinent to this appeal.           In June 2014, plaintiff retired from

the   Township   of     Middletown    ("Middletown")          Police     Department

while serving as interim deputy chief.                When plaintiff's pension

calculation failed to include his increased deputy chief salary,

plaintiff     successfully       challenged           the     error     before       an

administrative law judge ("ALJ").                  Middletown was not aware of

the hearing and, as such, did not participate.                        The Board of

Trustees of the Police and Firemen's Retirement System ("Board")

subsequently adopted the ALJ's decision.

      However,   by     correspondence        dated     May    2,     2016,     Cheryl

Chianese, the Board's Retirement and Beneficiary Services Bureau

Chief, advised plaintiff's counsel that additional adjustments

to plaintiff's final salary required an updated certification

                                         3                                    A-1406-16T1
from    Middletown,     so     that      the     Board    could    process      his

recalculated   pension       benefits.         Chianese's   letter   stated,     in

pertinent part:

                As I previously advised in 2014, your
           concerns should have been addressed directly
           to Middletown Township before filing an
           appeal with the Board of Trustees.        We
           cannot comment on behalf of [plaintiff's]
           employer and can only calculate a benefit
           based on the salary that is remitted to the
           Division    of    Pensions    and   Benefits
           [("Division")] by the employer.

                A review of [plaintiff's] membership
           file has revealed there have not been
           additional pension contributions, or salary
           reported to the Division as of today's date.
           If you have knowledge that the employer will
           be remitting retroactive salary information,
           we will be happy to recalculate the benefit.

       Two days later, plaintiff filed an order to show cause and

complaint in lieu of prerogative writs in the Law Division,

naming as defendants the Board and its agents or employees, Hank

Schwedes, Bernardine Brozena, and Chianese ("State Defendants"),

and    Middletown     and    its   payroll        supervisor,     Helen    Alfano

("Middletown    Defendants").            In      essence,    plaintiff     sought

enforcement    of   the      Board's     adoption    of     the   ALJ's   initial

decision granting plaintiff's recalculated pension.

       Joined by the Middletown Defendants, the State Defendants

moved to dismiss the complaint.              Following oral argument on July

20, 2016, the court denied the motion, and granted plaintiff's

                                         4                                A-1406-16T1
order to show cause seeking enforcement of the agency decision.

In doing so, the court ordered defendants to include plaintiff's

final paycheck in its recalculation, and provide plaintiff with

an   accounting     of   the   recalculation     of   his   benefits     within

fifteen days of completion.2           The motion judge also reserved

decision   regarding     plaintiff's       application   for   counsel    fees,

permitting the parties to brief the issue of whether fees were

"awardable in the instant situation."3

      On   August   8,   2016,   Chianese      advised   plaintiff     of    the

Board's recalculation of his pension benefits.                 On August 31,

2016, the trial court entered an order awarding counsel fees to

plaintiff in the amount of $4,492.

2
  After plaintiff filed his complaint, and Middletown thus became
aware of his claim, Middletown submitted four certifications to
the Board, reflecting in its pension calculation plaintiff's
position as interim chief.    The certifications were revised to
correct errors, including pension deductions.       See N.J.A.C.
17:2-6.1(e) ("Before an application for retirement may be
processed, the Division must receive . . . a completed
Certification of Service and Final Salary form from the employer
setting forth the employment termination date, and the salaries
reported for contributions in the member's final year of
employment.")
3
  According to his merits brief, "Plaintiff did not seek counsel
fees in the underlying controversy, which required appearances
before the . . . Board . . . and an appeal to the Office of
Administrative Law . . . .    Plaintiff believed that his salary
in an interim position was pensionable, consistent with the
governing regulations, but it may have been a good faith dispute
that led [the Board] and [Middletown] to arrive at a different
conclusion."

                                       5                               A-1406-16T1
       In his written statement of reasons, the motion judge cited

plaintiff's          unsuccessful       "two-year        pursuit        to   correct       the

miscalculation          of     its    retirement        award[,]"        and      determined

defendants          were     uncooperative        in    recalculating            plaintiff's

pension award until he filed the present action.                               Although the

judge    acknowledged          the    limitations       of     the    American     Rule,    he

quoted    the        Court's       decision   in       Masse     v.     Public     Employees

Retirement          System,    87     N.J.    252,      259-61        (1981),     "liberally

constru[ing]" statutory pension provisions in favor of public

employees.          The motion judge concluded "justice would not be

served"        if     plaintiff        were    to       bear     the      counsel        fees.

Specifically, he said, "A determination to the contrary would

have     the    effect        of     discouraging       any     litigation        over     the

calculation of retirement benefits."

       Following oral argument on November 18, 2016, the judge

denied the Middletown Defendants' motion for reconsideration.

In doing so, he referenced Justice Albin's dissenting opinion in

In the Matter of the Estate of Folcher, 224 N.J. 496, 519-20

(2016), to support his own finding that "it would be inequitable

for plaintiff who had served the municipality with distinction

for decades [to] be burdened with additional legal fees by the

need to bring this action."

                                              6                                     A-1406-16T1
    Defendants appeal the award of counsel fees, arguing there

is no legal basis for the award.                Based on the record before us,

we agree.

    Our      review   of     a    trial   court's       order    on     a    motion      for

reconsideration is limited, but it will be set aside if its

entry   is   based    on   a     mistaken       exercise   of    discretion.             See

Granata v. Broderick, 446 N.J. Super. 449, 468 (App. Div. 2016)

(citing Fusco v. Bd. of Educ. of City of Newark, 349 N.J. Super.

455, 462 (App. Div. 2002)).            A court abuses its discretion "when

a decision is 'made without a rational explanation, inexplicably

departed      from    established           policies,       or     rested          on    an

impermissible basis.'"             Pitney Bowes Bank, Inc. v. ABC Caging

Fulfillment, 440 N.J. Super. 378, 382 (App. Div. 2015) (quoting

Flagg   v.   Essex    Cty.       Prosecutor,      171   N.J.     561,       571   (2002)).

Thus, reconsideration should be granted, for example, in those

cases in which the court had based its decision "upon a palpably

incorrect . . . basis."            Fusco, 349 N.J. Super. at 462 (quoting

D'Atria v. D'Atria, 242 N.J. Super. 392, 401 (Ch. Div. 1990)).

    Despite     the    significant        discretion       trial      courts      have   in

awarding recoverable attorneys' fees, "such determinations are

not entitled to any special deference if the judge 'misconceives

the applicable law, or misapplies it to the factual complex.'"

Porreca v. City of Millville, 419 N.J. Super. 212, 224 (App.

                                            7                                     A-1406-16T1
Div. 2011) (quoting Kavanaugh v. Quigley, 63 N.J. Super. 153,

158 (App. Div. 1960)).

       Further,       "we    need      not       defer        to   a     trial      court's

interpretation of the law."                 In re Estate of F.W. v. State of

N.J., Div. of Youth and Family Servs., 398 N.J. Super. 344, 355

(App. Div. 2008) (citing Manalapan Realty, LP v. Twp. Comm. of

Manalapan, 140 N.J. 366, 378 (1995)).                      Thus, we undertake a de

novo   review     when      analyzing       questions         of   law   raised      in    an

application to approve a fee request.

       Having     long-adhered        to     the     American        Rule,   New     Jersey

generally disfavors the shifting of fees where they are not

expressly authorized.            See, e.g., Innes v. Marzano-Lesnevich,

224 N.J. 584, 592 (2016) (citing Litton Indus., Inc. v. IMO

Indus., Inc., 200 N.J. 372, 404 (2009)); N. Bergen Rex Transp.,

Inc. v. Trailer Leasing Co., 158 N.J. 561, 569 (1999).                             As noted

by our Supreme Court, "The purposes behind the American Rule are

threefold:      (1)     unrestricted         access      to    the     courts      for    all

persons;    (2)    ensuring      equity       by   not     penalizing        persons      for

exercising      their    right    to    litigate       a      dispute,    even     if    they

should lose; and (3) administrative convenience."                             Innes, 224

N.J.   at   592    (quoting      In    re    Niles    Trust,       176   N.J.    282,     294

(2003)).        Rather, counsel fees are recoverable "if they are

expressly provided for by statute, court rule, or contract."

                                             8                                     A-1406-16T1
Packard-Bamberger & Co., Inc. v. Collier, 167 N.J. 427, 440

(2001); see also R. 4:42-9 ("No fee for legal services shall be

allowed" except for the eight actions expressly stated in the

Rule.).

    Here, the award of counsel fees for plaintiff's success on

his prerogative writs action was not appropriate pursuant to any

statutory provision, or subsection of Rule 4:42-9.                 Instead, the

motion    judge    relied   on   equitable    principles,     including       those

espoused by Justice Albin in his dissenting opinion in Folcher.

There,    the     decedent's     wife    engaged   in   fraud     and   forgery,

impacting other beneficiaries of her deceased husband's estate.

Folcher, 224 N.J. at 505.               Under such circumstances, Justice

Albin posited that the decedent's wife should have been liable

for attorneys' fees to the prevailing parties for her "egregious

misconduct."       Id. at 521.     The Court's majority, however, found

the wife's confidential relationship with her husband did not

create    a     fiduciary   relationship      between   the     wife    and     her

husband's remaining beneficiaries.            Id. at 513; see In re Niles

Trust, 176 N.J. at 299 (creating an exception for attorneys'

fees "limited to cases in which an executor's or a trustee's

undue influence results in the development or modification of

estate    documents     that      create     or    expand   the     fiduciary's

beneficial interest in the estate").

                                         9                              A-1406-16T1
     No such fiduciary relationship or fraud is alleged in the

present case.      Even assuming defendants were uncooperative in

their efforts to effectuate the ALJ's decision, plaintiff did

not allege fraud in their handling of his pension claim.

     Moreover, unlike discrete statutes permitting an award of

counsel fees to successful litigants in certain administrative

matters, the Legislature has not delegated such authority in

pension cases.     Compare N.J.S.A. 34:19-5 (allowing counsel fees

under the Conscientious Employee Protection Act, N.J.S.A. 34:19-

1   to    -8,    from    an   "employer,"     defined     as     including

"municipalities"        and   "agenc[ies]";        N.J.S.A.      34:11B-12

(permitting fees from an      "employer," defined as "the State, any

political subdivision thereof, and all public offices, agencies,

boards or bodies," pursuant to the Family Leave Act, N.J.S.A.

34:11B-1 to -16); N.J.S.A. 10:5-27.1 (permitting the recovery of

"a reasonable attorney's fee as part of the cost" against an

offending    employer,   including    municipalities,    under    the   Law

Against     Discrimination,   N.J.S.A.    10:5-1   to   -42);    see    also

Balsley v. N. Hunterdon Reg'l Sch. Dist. Bd. of Educ., 117 N.J.

434, 443, 446-47 (1990) (holding the Commissioner of Education

lacked express statutory authority to award counsel fees to a

prevailing party in an education-discrimination matter).

                                     10                           A-1406-16T1
    We are not persuaded, therefore, that the trial court's

liberal construction of statutory pension provisions applies to

the award of counsel fees here.      The judge's reliance on Masse

in this regard is misplaced because that case did not address a

fee-shifting statute.

    Because we find no legal basis for the award of counsel

fees, we are constrained to reverse the motion judge's orders

awarding fees and denying the Middletown Defendants' motion for

reconsideration.   In light of our decision, we need not reach

defendants' remaining claims.

    Reversed.

                                11                        A-1406-16T1