Court Opinion

ID: 4173513
Source: CourtListenerOpinion
Date Created: 2017-06-01 14:12:52.370003+00
Date Added: 2024-06-11T14:38:46.091661
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NOT FOR PUBLICATION WITHOUT THE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-4001-15T3

DORIS GAMBRELL and EUGENE
GAMBRELL,

        Plaintiffs-Respondents,

and

FALGUNI PATEL, individually and
on behalf of herself and others
similarly situated,

        Plaintiff-Appellant,

v.

HESS CORPORATION, INC.,

        Defendant-Respondent.

_________________________________________________

              Submitted May 2, 2017 – Decided June 1, 2017

              Before Judges Yannotti, Fasciale and
              Sapp-Peterson.

              On appeal from Superior Court of New Jersey,
              Law Division, Middlesex County, Docket No. L-
              7761-12.

              The Wolf Law Firm, LLC, attorneys for
              appellant Falguni Patel (Matthew S. Oorbeek,
          Andrew R. Wolf and Henry P. Wolfe, on the
          briefs).

          Wilentz, Goldman & Spitzer P.A., attorneys for
          respondent Hess Corporation, Inc. (Brian J.
          Molloy, of counsel and on the brief; Daniel
          J. Kluska, on the brief).

PER CURIAM

     Plaintiff Falguni Patel, individually and on behalf of a

class of similarly-situated persons, appeals from an order of the

Law Division dated April 29, 2016, which denied a motion by The

Wolf Law Firm, LLC (Class Counsel) for a supplemental award of

attorneys' fees. We affirm.

     This appeal arises from the following facts. On October 29,

2012, Superstorm Sandy struck New Jersey and caused extensive

damage. In the immediate aftermath of the storm, Hess Corporation,

Inc. (Hess) made efforts to supply its retail stations with

gasoline. According to Hess, it made an error while transferring

gasoline to delivery trucks and some of the fuel sold to customers

at three of Hess' stations was all or part diesel fuel, but

mislabeled as regular gasoline.

     Customers who purchased the mislabeled fuel reported that

they had problems with or damage to their vehicles. Hess thereupon

issued a press release acknowledging the error. It agreed to pay

customers for the losses, which included the amounts they spent

to purchase the fuel, towing costs, lost wages, and the cost to

                                  2                        A-4001-15T3
rent replacement vehicles. In some cases, Hess agreed to provide

customers with gift cards. Hess' total payments to these purchasers

exceeded $1 million.

     Doris   and   Eugene   Gambrell   (the   Gambrells)   purchased   the

mislabeled gasoline at one of the three affected Hess stations,

and thereafter notified Hess that they had problems with their

vehicle. The Gambrells retained Class Counsel, and on November 21,

2012, filed a complaint against Hess seeking relief on their own

behalf and on behalf of a class of other Hess customers who were

similarly situated. The Gambrells sought compensation for the

damages sustained as a result of the purchase and use of the

mislabeled gasoline.

     The Gambrells asserted claims under the New Jersey Motor Fuel

Retail Sales Act, N.J.S.A. 56:6-1 to -32; the Consumer Fraud Act,

N.J.S.A. 56:8-1 to -204; and the Truth in Consumer Contract,

Warranty and Notice Act (TCCWNA), N.J.S.A. 56:12-14 to -18. They

also asserted claims for breach of contract and the negligent or

reckless destruction of property. On December 4, 2012, an amended

complaint was filed, which added Patel as a named plaintiff.

     The parties thereafter engaged in limited discovery. Hess

took depositions of the three named plaintiffs, as well as Patel's

sons. In addition, Hess produced about 9000 documents in response

to plaintiffs' requests. Most of the documents related to files

                                   3                             A-4001-15T3
that   Hess   had    generated      about    customers     who     purchased    the

mislabeled fuel. Neither party retained an expert. Patel asserts

that there were disputes about the production of records related

to the Gambrells' prior lawsuit against Hess, but Hess states that

the disputes were not significant.

       In February 2014, the attorneys for the parties participated

in a mediation session. After a full day of negotiations, the

attorneys reached an agreement on the terms of a settlement. Class

Counsel drafted a memorandum of understanding, which the attorneys

for the parties signed before leaving the mediator's office.

       It appears that a short time later, the Gambrells decided

that   they   did    not    want   to   proceed   with   the     settlement,    and

indicated that they were going to continue to prosecute their own

claims against Hess. Class Counsel filed a motion for leave to

withdraw as counsel for the Gambrells, and Hess filed a motion to

enforce the settlement with them.

       The trial court granted Class Counsel's motion, and Class

Counsel continued as the attorney for Patel. The court also granted

Hess' motion and enforced its settlement with the Gambrells.

       Thereafter,    the    parties    engaged   in     limited    discovery    to

determine the number of class members, the number of vehicles

involved, and the effect that the sale of Hess' retail gas stations

to Speedway, LLC (Speedway) would have on the settlement. In

                                         4                                A-4001-15T3
addition, the parties attended another session with the mediator

to address certain outstanding issues.

      On April 15, 2015, the parties entered into a settlement

agreement that resolved the claims under TCCWNA. Hess agreed it

would not object to Patel's application for preliminary approval

of the settlement or certification of the putative class. The

agreement stated that the class would consist of 583 persons who

purchased the mislabeled fuel at one of three Hess filling stations

in   New   Jersey,   and   relief   would   pertain   to   645   qualified

transactions.

      The agreement also stated that the settling class members

would receive gift cards totaling $125 to $425, which could be

redeemed at any Hess or Speedway retail outlet. In addition, Hess

would pay $9151 to the Gambrells, and $12,849 to Patel to resolve

their individual claims and recognize their efforts on behalf of

the class.

      The agreement further provided that Class Counsel could file

an initial application for attorneys' fees and costs no later than

sixteen days before the date scheduled for the final approval of

the settlement. The agreement stated that Hess would be afforded

an opportunity to object to the application, but it would not

object to the award of "reasonable" attorneys' fees and costs.

                                     5                             A-4001-15T3
      Thereafter, Hess provided Class Counsel with a sample of the

gift cards that it would issue to the settling class members.

Class Counsel objected to the form of the card, and demanded that

the cards specifically state that they are accepted at all Hess

and Speedway retail locations. Hess refused the demand and Class

Counsel raised this issue with the mediator, who determined that

the settlement agreement did not require Hess to issue special

cards to the settling class members.

     Patel then filed a motion for preliminary approval of the

settlement, and on June 10, 2015, the trial court granted the

motion. Class Counsel later filed a motion seeking final approval

of the settlement, and an application for the award of attorneys'

fees in the amount of $310,536.50, with an enhancement of twenty-

five to fifty percent. Class Counsel also sought costs of $7830.53.

Hess opposed the fee application.

     On September 30, 2015, Judge Travis L. Francis entered an

order granting final approval of the settlement. The judge reduced

the number of hours for which Class Counsel should be compensated,

and found that the hourly rates upon which Class Counsel was

seeking compensation were reasonable. The judge refused to apply

a fee enhancement because the case did not involve any novel legal

issues, Hess had conceded liability, and the matter did not involve

any issue of significance to the public. The judge noted that Hess

                                 6                          A-4001-15T3
had acknowledged its error in mislabeling the fuel and had paid

more than $1 million to affected customers without litigation. The

court awarded Class Counsel $274,576.50 in attorneys' fees, and

the full amount of the costs requested, for a total of $282,407.03.

     The court's order of September 15, 2015, permitted Class

Counsel to submit a supplemental fee application for additional

attorneys' fees and costs incurred after July 31, 2015, the date

of the last entry addressed by the court's award. The order stated,

however, that Hess could oppose the application.

     In accordance with the agreement, Hess issued 640 gift cards

in the total amount of $78,375 to settling class members. In

addition, Hess paid Patel $12,849 and the Gambrells $9151. Hess

also paid $2500 for the fees and expenses of the settlement

administrator. Hess' payments totaled $102,875.

     In February 2016, Class Counsel filed a supplemental fee

application, seeking additional attorneys' fees in the amount of

$42,556.50 and costs of $957.51, which were incurred from July 31,

2015, to February 16, 2016. Hess opposed the application.

     On April 29, 2016, Judge Francis filed a written opinion and

order which denied the supplemental application for attorneys'

fees, but awarded Class Counsel costs in the amount of $957.51.

In his opinion, Judge Francis found that Class Counsel had already

been "generously awarded" more than $282,000. The judge stated

                                 7                          A-4001-15T3
that the time entries in the supplemental application did not

reflect time expended to benefit the class and the settlement.

     The judge found that, under the circumstances, the hours

expended by Class Counsel exceeded "what was necessary." The judge

wrote:

          The claims asserted by the [p]laintiffs in
          this    action   were   not    novel   issues.
          Significantly, Hess Corporation admitted to
          the mistaken sale of diesel fuel to customers
          in its efforts to supply the public with
          gasoline in the wake of Superstorm Sandy. Hess
          subsequently agreed, without the need for
          litigation, to reimburse hundreds of customers
          more than $1 million for their losses. Hess
          has   been   generally   cooperative  in   the
          resolution of this matter. The matter was
          settled after the parties signed a Memorandum
          of Understanding during a mediation session
          on February 27, 2014, over two years ago.
          Plaintiffs and [d]efendant signed the Class
          Action Settlement Agreement, effective as of
          April 15, 2015, over a year ago.

     The judge noted that many of the entries in the application

related to correspondence with the mediator or the settlement

administrator. The judge commented that such correspondence was

anticipated, and the time that Class Counsel devoted to these

matters was "subsumed by the amount previously awarded." The judge

added that Class Counsel would not be awarded fees for any work

related to preparing the briefs for the final approval hearing and

to attendance at the hearing. The judge noted that Hess did not

oppose final approval of the settlement but opposed the initial

                                8                          A-4001-15T3
fee application. The judge found that these time entries also were

subsumed in the amount of attorneys' fees previously awarded. This

appeal followed.

     On appeal, Patel argues the trial court erred by not granting

the application for supplemental attorneys' fees. Patel argues

that Class Counsel is entitled to the additional fees. She further

argues    that    this    court     should       approve     the   supplemental      fee

application and apply Class Counsel's current rates.

     We   are     convinced      that   the      trial     court's   denial     of   the

supplemental      fee    application       was    not    a   mistaken   exercise       of

discretion       and   Patel's     arguments       on    that   issue   are     without

sufficient       merit    to     warrant     extended        discussion.   R.     2:11-

3(e)(1)(E).       We    affirm    the   trial      court's      order   denying      the

application substantially for the reasons stated by Judge Francis

in his written opinion dated April 26, 2016. We add the following

brief comments.

     A trial court's decision on an application for the award of

attorney's fees is reviewed for an abuse of discretion. Rendine

v. Pantzer, 141 N.J. 292, 317 (1995). An appellate court will set

aside a trial court's fee award "only on the rarest of occasions,

and then only because of a clear abuse of discretion." Grubbs v.

Knoll, 376 N.J. Super. 420, 430 (App. Div. 2005) (quoting Packard-

Bamberger & Co. v. Collier, 167 N.J. 427, 444 (2001)).

                                           9                                    A-4001-15T3
       Under the fee-shifting statutes, "the first step in the fee-

setting process is to determine the 'lodestar': the number of

hours reasonably expended multiplied by a reasonable hourly rate."

Rendine, supra, 141 N.J. at 334-35. "Hours are not reasonably

expended    if   they    are        excessive,    redundant,    or    otherwise

unnecessary." Id. at 335 (quoting Rode v. Dellarciprete, 892 F.2d

1177, 1183 (3d Cir. 1990)).

            [I]f the specific circumstances incidental to
            a counsel-fee application demonstrate that the
            hours expended, taking into account the
            damages    prospectively   recoverable,    the
            interests to be vindicated, and the underlying
            statutory objectives, exceed those that
            competent counsel reasonably would have
            expended to achieve a comparable result, a
            trial court may exercise its discretion to
            exclude excessive hours from the lodestar
            calculation.

            [Id. at 336.]

       The court must then determine a reasonable hourly rate based

on prevailing market rates in the relevant community, and apply

that rate to the lodestar. Id. at 337 (citing Rode, supra, 892

F.2d at 1183). The court also may increase the fee to reflect the

risk   of   nonpayment   "in        all   cases   in   which   the   attorney's

compensation     entirely      or    substantially     is   contingent     on    a

successful outcome." Ibid.

       Here, Judge Francis found that additional fees should not be

awarded to Class Counsel for the time devoted to the matter after

                                          10                             A-4001-15T3
July 31, 2015, because Class Counsel had already been generously

compensated with the award of counsel fees in the amount of

$274,576.50, and additional fees would not be reasonable under the

circumstances. The record supports that determination.

      As Judge Francis pointed out in his opinion, Hess admitted

its mistake in mislabeling the fuel shortly after learning of the

error,   and   Hess    reimbursed     affected   customers     in   an    amount

exceeding $1 million without the need for litigation. Hess' total

payments in this case were $102,875, which includes the gift cards

issued to settling class members, the amounts paid to the Gambrells

and   Patel,   and     the    fees    and   expenses    of    the   settlement

administrator.

      Moreover,      the     record   shows   that     Hess   was   generally

cooperative and resolved this litigation without the need for

extensive discovery. The case did not involve any issue of genuine

public importance. In addition, the time that Class Counsel devoted

to corresponding with the settlement administrator and preparation

for the final approval hearing should have been anticipated, and

was subsumed within the attorneys' fees previously awarded.

      On appeal, Patel argues that Class Counsel is entitled to be

compensated for the hours devoted to the litigation after July 31,

2015, because the prior award did not include fees for this period.

However, Class Counsel is only entitled to a reasonable fee for

                                      11                                 A-4001-15T3
the litigation, not all counsel fees sought. Based on our review

of the record, we are convinced that the trial court properly

determined    that     the   award   of     additional      fees   would    not    be

reasonable under the circumstances.

       Patel further argues that the trial court's September 30,

2015 order granting final approval to the settlement agreement

suggested that Class Counsel would be compensated for any time

expended after July 31, 2015. We disagree. The order only indicated

that Class Counsel could seek additional fees. The order did not

guarantee that additional fees would be awarded. Indeed, the order

expressly provided that Hess could object to any supplemental fee

application.

       Patel also argues that the trial court erred by failing to

award    Class   Counsel     fees    for    the    time    devoted   to    the    fee

applications. The record shows, however, that the court included

time for the preparation of the initial fee application (9.9 hours)

in the first award. Because the judge denied the supplemental fee

application, Class Counsel was not entitled to be compensated for

the time devoted to that application.

       In addition, Patel contends the trial court effectively re-

wrote the settlement agreement, which allowed Class Counsel to

seek    supplemental    attorneys'     fees.       Patel   recognizes      that   the

settlement    agreement      specifically         allows   the   trial    court    to

                                       12                                   A-4001-15T3
eliminate any attorneys' fees that it found to be unreasonable.

Patel argues, however, that the trial court's refusal to award

attorneys' fees for the time devoted to the case after July 31,

2015, was unreasonable and contrary to the terms of the settlement

agreement. Again, we disagree. As we have explained, the judge's

determination     was    supported    by     the   record,   and     it   is   not

inconsistent     with    the    settlement      agreement,   which    expressly

recognizes that the court may only award attorneys' fees that are

reasonable.

     In   view   of     our    decision,   we   need   not   consider     Patel's

contention that, rather than remand the matter to the trial court,

we should grant the supplemental fee application and apply Class

Counsel's current hourly rates.

     Affirmed.

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