Court Opinion

ID: 4450714
Source: CourtListenerOpinion
Date Created: 2019-10-28 14:06:44.321603+00
Date Added: 2024-06-11T15:03:53.721389
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NOT FOR PUBLICATION WITHOUT THE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-3813-17T4

ASCENTIUM CAPITAL LLC,

          Plaintiff-Respondent,

v.

A&A MANAGEMENT SYSTEMS
LIMITED LIABILITY COMPANY,
and ALI R. MAZANDARANI,

          Defendants/Third-Party
          Plaintiffs-Appellants,

and

HELIOS ENERGY GROUP LLC,
and JARED KUNISH,

     Third-Party Defendants.
________________________________

                    Argued May 21, 2019 – Decided October 28, 2019

                    Before Judges Rothstadt and Gilson.

                    On appeal from the Superior Court of New Jersey,
                    Law Division, Bergen County, Docket No. L-1419-16.
            Vafa Sarmasti argued the cause for appellants
            (Sarmasti PLLC, attorneys; Vafa Sarmasti, on the
            briefs).

            Robert L. Hornby argued the cause for respondent
            (Chiesa Shahinian & Giantomasi PC, attorneys;
            Robert L. Hornby and Ryan Patrick O'Connor, on the
            brief).

      The opinion of the court was delivered by

ROTHSTADT, J.A.D.

      Defendants A&A Management Systems (AMS) and its principal, Ali R.

Mazandarani, appeal from the Law Division's January 23, 2018 order granting

plaintiff Ascentium Capital LLC summary judgment and from a March 16,

2018 order denying reconsideration.         The parties' dispute arose from

agreements under which plaintiff financed AMS's purchase of a co-generation

system from third-party defendant, Helios Energy Group, LLC (Helios),

through its salesperson, third-party defendant, Jared Kunish. Helios delivered

the equipment for the system but never had it installed.1

      In moving for summary judgment, plaintiff relied on a "hell or high

water" clause contained in paragraph four of each of the parties' financing

1
   On March 30, 2018, Helios and Kunish were dismissed from the action
without prejudice due to lack of prosecution under Rule 1:13-7.

                                                                     A-3813-17T4
                                      2
agreements.     It stated in bold and conspicuous lettering: "YOUR

OBLIGATION TO MAKE PAYMENTS AND PAY OTHER AMOUNTS

DUE HEREUNDER IS ABSOLUTE AND UNCONDITIONAL AND NOT

SUBJECT TO ABATEMENT, REDUCTION OR SET-OFF FOR ANY

REASON        WHATSOEVER.            THIS     IS   A    NON-CANCELABLE

AGREEMENT."

      In opposition, defendants asserted that that clause did not bar their

claims because Kunish and Helios acted as plaintiff's agent and they

fraudulently failed to install the equipment. Moreover, defendants averred that

despite that provision, they should have been relieved of any obligation to pay

plaintiff because plaintiff imperfectly executed its internal policies to

safeguard against vendor fraud.

      In awarding summary judgment to plaintiff, the motion judge rejected

defendants' contentions and enforced the "hell or high water" clause, entered

judgment in plaintiff's favor, and awarded attorneys' fees.        On appeal,

defendants contend that the motion judge did not correctly apply the summary

judgment standard, failed to recognize that plaintiff breached its "duty to

protect [its] borrowers from vendor fraud," improperly dismissed their

counterclaim for damages under the New Jersey Consumer Fraud Act (CFA),

                                                                      A-3813-17T4
                                      3
N.J.S.A. 56:8-1 to -211, and awarded damages and attorneys' fees that were

excessive.

      Having considered defendants' arguments in light of the record and the

applicable law, we affirm the two orders under appeal as we conclude

defendants' contentions are without merit, except as to the motion judge's

award of attorneys' fees that we now vacate and remand for reconsideration.

                                          I.

      The pertinent facts and the parties' factual contentions taken from the

motion record, are viewed in a light most favorable to defendant, W.J.A. v.

D.A., 210 N.J. 229, 237 (2012), and are summarized as follows. Plaintiff was

in the nationwide business of financing companies' purchases or leasing of

equipment. As part of the total amount that plaintiff provided to its customers,

plaintiff financed up to forty percent for soft costs, such as installation and

consulting fees. Helios was in the business of selling energy systems and

related equipment to its customers so they could generate their own energy and

not be dependent upon public utilities.

      A few months before Kunish sold a co-generation system to AMS,

Helios established a relationship with plaintiff.    Under plaintiff's internal

ranking system, it approved Helios as a "Tier 3" vendor. As a "Tier 3" vendor,

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                                      4
in any transaction involving a Helios customer, plaintiff would not release

funds to Helios until the equipment was on site and the customer notified

plaintiff that the funding could be released. According to John Scott Linton,

plaintiff's Vice President of Sales, although it was not unusual for some

vendors to act as if plaintiff was the vendor's financing arm, plaintiff had no

control over those representations being made.

      Kunish first approached Mazandarani in 2014 and proposed that Helios

install a solar co-generation system for AMS. Kunish represented that AMS

could lease the system for a period of five years through Helios's in-house

leasing company, and that once the lease payments concluded, AMS would

only be responsible for monthly energy costs. Kunish also told AMS that lease

payments would not begin until the system was installed and operational.

      Mazandarani agreed to Kunish's proposal and completed Helios's

"Commercial Credit Application" on behalf of AMS, as well as plaintiff's

"Commercial Credit Application." One week later, Mazandarani learned that

Helios and plaintiff had approved AMS's applications.

      On October 1, 2014, "Kunish and [plaintiff] presented AMS with"

documents on plaintiff's letterhead for AMS's signature, which plaintiff

required relative to AMS's leasing of the equipment being supplied by Helios.

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                                     5
These documents consisted of an "Authorization to Perform Verbal

Verification," an "Equipment Finance Agreement No. 2141980" (Agreement

#1), an "Authorization for Pre-Authorized Payments," and a "Delivery and

Acceptance    Certificate."     Mazandarani     signed   Agreement     #1,    the

"Authorization for Pre-Authorized Payments," and the "Delivery and

Acceptance Certificate," and he executed a personal guaranty of Agreement

#1.   The next day, AMS paid an initial payment of $2130.86 to plaintiff.

Plaintiff later secured repayment by filing a UCC-1 financing statement,

establishing a lien on the leased equipment.

      According to Mazandarani, when he signed Agreement #1 there was no

"Schedule A" attached to it describing the equipment, despite the reference to

the schedule in the upper-right corner of the agreement. "Schedule A" was to

be a copy of Helios's invoice, breaking down the prices for the equipment,

LED lighting, a ten-year maintenance contract, labor for installation, and a fee

for project management and consulting, which totaled $46,169.00. According

to Linton, plaintiff typically did not provide customers with the vendor's

invoice from the "Schedule A" information, as it was up to the vendor to

provide that information to its customer.      Before signing the agreement,

Mazandarani did not ask plaintiff or Kunish for the "Schedule A" information.

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                                      6
        On October 3, 2014, plaintiff's representative called Mazandarani to

verify that the system had been "delivered and installed."        During the

conversation, plaintiff's representative asked if AMS had "received everything

yet."    Mazandarani answered "[y]eah," and authorized plaintiff to "release

payment to the vendor and start [AMS's] agreement." Plaintiff then "paid the

entire amount" owed by AMS to Helios and commenced its electronic

withdrawal of monthly lease payments from AMS's account, as previously

authorized by Mazandarani.     However, unbeknownst to plaintiff, although

AMS received all of the equipment from Helios, the system had not been

installed.

        In March 2015, Kunish informed Mazandarani that the cost of the

project and equipment went over budget and that additional funds had to be

secured, which would increase AMS's lease payments. Plaintiff provided the

additional funds pursuant to a new set of agreements that Mazandarani signed.

The second set of documents included plaintiff's form "Equipment Finance

Agreement No. 2152350" (Agreement #2) that also referenced a "Schedule A,"

which Mazandarani claimed was not attached at the time of signing. They also

included plaintiff's "Authorization for Pre-Authorized Payments" form and

                                                                      A-3813-17T4
                                     7
"Delivery and Acceptance Certificate."      In addition, Mazandarani signed a

personal guaranty of Agreement #2.

      The "Schedule A," which was intended to accompany Agreement #2

listed miscellaneous equipment, including a generator, two heat exchangers, a

UPS battery, backup systems, and installation costs, totaling $8400.00. In

connection with Agreement #2, AMS paid an initial payment of $567.20.

Plaintiff filed another UCC-1 financing statement concerning the equipment

listed in Agreement #2. However, Mazandarani claims AMS never received

the equipment listed.

      On March 26, 2015, plaintiff's representative called Mazandarani to

verify that the equipment subject to Agreement #2 had been "delivered and

installed," and to obtain his authorization for the release of funding to Helios.

On that call, Mazandarani confirmed that he had "received everything from the

vendor" and that "everything . . . is completed." Plaintiff's representative then

asked Mazandarani if he knew "the completion date," to which Mazandarani

responded, "in a few days, hopefully." The representative evidently misheard

him and asked, "[y]ou said a few days ago?"            Mazandarani responded

affirmatively. Based on that authorization, plaintiff commenced withdrawals

from the AMS account, as provided for in the signed documents.

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                                      8
      In October 2015, although Helios had still not completed installation of

the co-generation system, Mazandarani realized that plaintiff had been

withdrawing lease payments from an AMS bank account that he claimed was

not monitored regularly. AMS stopped the withdrawals and "demanded the

return of the money" taken based on its understanding that the lease payments

were not to begin until the system was operational.

      After Mazandarani stopped plaintiff's automatic withdrawals, AMS

ceased making payments and plaintiff declared AMS to be in default under the

two agreements.    Plaintiff demanded possession of its collateral but AMS

refused to relinquish it to plaintiff.2 Plaintiff then demanded "the accelerated

balance, plus interest, expenses and late charges" under Agreement #1 for a

total of $43,942.07, and "the accelerated balance, plus interest, expenses and

late charges" under Agreement #2 for a total of $9246.93. 3 Defendants did not

make any payments in response to plaintiff's demands.

2
  Although AMS later offered to relinquish the equipment, plaintiff was not
seeking recovery of the equipment because it believed it had no value.
3
   Due to AMS's default and the default of AMS's neighbor on a similar
transaction involving Helios, plaintiff terminated its relationship with Helios.

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                                      9
      Plaintiff filed its complaint in 2016 seeking compensatory damages in

the amount of $53,189.00, title and possession of the equipment, and attorneys'

fees and costs. AMS and Mazandarani filed an answer, counterclaim, and a

third-party complaint against Helios and Kunish, sought a declaration that the

two agreements with plaintiff were "void and/or unenforceable," and

demanded damages under the CFA, and for conversion, unjust enrichment, and

negligence. Plaintiff filed an answer to the counterclaims and a week later

filed a notice of motion for summary judgment. A Law Division judge denied

the motion on September 30, 2016, because it was premature as discovery had

not been commenced.

      After completion of discovery, plaintiff filed a second motion for

summary judgment on November 16, 2017.           Oral argument was held on

January 11, 2018, before a different judge.

      In support of its motion, plaintiff argued that defendants were parties to

a fully integrated agreement that plaintiff had performed under the agreement

by providing the funding to Helios, and therefore, plaintiff was entitled to

summary judgment for defendants' default and breach of the contract. Plaintiff

also argued that the absence of "Schedule A" when Mazandarani signed the

agreements was not material, as the agreements were loans and the amounts

                                                                       A-3813-17T4
                                     10
due on the loans were listed on the face of the documents. Plaintiff asserted

that it was entitled to counsel fees under paragraph nine of both agreements

and its attorneys included copies of their bills to plaintiff in support of its

application for an award of fees and costs.

      Defendants argued that the "hell or high water" clauses in the

agreements could not constitute an absolute defense to fraud in the

inducement, and that        plaintiff   acquiesced to    Helios's   and   Kunish's

representations that plaintiff was a part of Helios. Defendants contended that

"soft costs" should not be awarded because plaintiff's internal policy

disallowed it.    Defendants also argued that plaintiff's failure to include

"Schedule A" in either of the agreements constituted fraud. Defendants did not

raise any objection to plaintiff's application for counsel fees.

      In his January 23, 2018 order, the motion judge granted summary

judgment in favor of plaintiff and awarded counsel fees. Attached to the order

was a rider with eleven bullet points explaining why he granted plaintiff the

relief it was seeking. Among the reasons stated were that defendants presented

no evidence that there was "any relationship between Kunish [or] Helios and

[p]laintiff," that the two agreements specifically disclaimed any principal-

agent relationship between plaintiff and any other party, defendants and

                                                                          A-3813-17T4
                                        11
plaintiff never had any direct interactions, and any fraud or misrepresentation

was attributable solely to Kunish or Helios.

      The motion judge also found that defendants had knowledge of "what

equipment [they were] to receive," as a result of their "communications with

Kunish leading up to [the a]greements" and that the absence of "Schedule A"

was not material.   He also found that AMS "ratified the [a]greements" by

allowing monthly payments to be withdrawn from its bank account. The judge

ruled that the "hell or high water" clauses were enforceable, regardless of

whether the agreements were characterized as leases or loans. He also found

that plaintiff had "no legal obligation" to protect defendants from fraud

irrespective of their internal "fraud prevention guidelines." Finally, the judge

awarded plaintiff attorneys' fees as provided for in the two agreements.

      Defendants filed a motion for reconsideration on February 12, 2018.

The judge denied the motion on March 16, 2018, after concluding defendants

"raise[d] issues already argued" and that the parties' agreements did not limit

defendants' obligation to only include "the 'hard' elements of the transaction."

This appeal followed.

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                                     12
                                          II.

      We review a grant of summary judgment de novo, using the same

standard that governed the motion court's decision. RSI Bank v. Providence

Mut. Fire Ins. Co., 234 N.J. 459, 472 (2018); see also Davis v. Brickman

Landscaping, Ltd., 219 N.J. 395, 405 (2014). Under that standard, summary

judgment will be granted when "the competent evidential materials submitted

by the parties," viewed "in the light most favorable to" the non-moving party,

show that there are no "genuine issues of material fact" and that "the moving

party is entitled to summary judgment as a matter of law." Grande v. Saint

Clare's Health Sys., 230 N.J. 1, 23-24 (2017) (quoting Bhagat v. Bhagat, 217
N.J. 22, 38 (2014)); accord R. 4:46-2(c). "An issue of material fact is 'genuine

only if, considering the burden of persuasion at trial, the evidence submitted

by the parties on the motion, together with all legitimate inferences the refrom

favoring the non-moving party, would require submission of the issue to the

trier of fact.'" Grande, 230 N.J. at 24 (quoting Bhagat, 217 N.J. at 38). We

owe "no special deference" to the motion court's legal analysis or its

interpretation of a statute. RSI Bank, 234 N.J. at 472; see also Hitesman v.

Bridgeway, Inc., 218 N.J. 8, 26 (2014).

                                                                       A-3813-17T4
                                     13
                                          III.

      We begin our de novo review by considering defendants' contention that

the motion judge's limited findings of fact and conclusions of law—his eleven

bullet points—demonstrated that he applied the wrong standard by not drawing

all legitimate inferences in favor of defendants as the non-moving parties. We

agree that the motion judge's statement of reasons is an imperfect example of

what is required under Rule 1:7-4 because "[n]aked conclusions do not satisfy

the purpose of [the Rule]. Rather, the trial court must state clearly its factual

findings and correlate them with the relevant legal conclusions." Curtis v.

Finneran, 83 N.J. 563, 570 (1980), see also Gnall v. Gnall, 222 N.J. 414, 428

(2015). However, because appeals are taken from judgments and not "reasons

given for the ultimate conclusion," Do-Wop Corp. v. City of Rahway, 168 N.J.
191, 199 (2001), and because our review is de novo, we are not persuaded that

either a remand or reversal is warranted. Ellison v. Evergreen Cemetery, 266
N.J. Super. 74, 78 (App. Div. 1993) ("[A]n order or judgment will be affirmed

on appeal if it is correct, even though the judge gave the wrong reasons for

it."). Although we reach the same conclusion as the motion judge in response

to plaintiff's motion, except as to an award of counsel fees and costs, we do so

for the reasons expressed below.

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                                     14
                                          A.

      We turn first to defendants' contention that the motion judge incorrectly

determined in his first three bullet points that there was no agency relationship

between plaintiff and Kunish or Helios, despite the plain language of the two

agreements.    Moreover, defendants state that if there was no agency

relationship, the judge incorrectly concluded that plaintiff was entitled to

payment as it allowed Kunish and Helios to hold themselves out as plaintiff's

partner. According to defendants, plaintiff should have been estopped from

denying this relationship and from recovering against defendants. We find no

merit to these arguments.

      Agency that is not express or implied can be established through

evidence of "apparent authority" to act on behalf of another. See Sears Mortg.

Corp. v. Rose, 134 N.J. 326, 343-44 (1993). However, it only "arises when a

principal 'acts in such a manner as to convey the impression to a third party

that the agent has certain power which he may or not possess.'" Lobiondo v.

O'Callaghan, 357 N.J. Super 488, 497 (App. Div. 2003) (quoting Rodriguez v.

Hudson Cty. Collision Co., 296 N.J. Super. 212, 220 (App. Div. 1997)).

"Liability will be imposed upon the principal . . . where the actions of a

principal have misled a third party into believing that a relationship of

                                                                        A-3813-17T4
                                     15
authority existed."   Ibid. (emphasis added) (quoting Rodriguez, 296 N.J.

Super. at 221).

      The question is "whether the principal has by [its] voluntary act placed

the agent in such a situation that a person of ordinary prudence, conversant

with business usages and the nature of the particular business, is justified in

presuming that such agent has authority to perform the particular act in

question . . . ." Ibid. (quoting Legge, Indus. v. Kushner Hebrew Acad., 333
N.J. Super. 537, 560 (App. Div. 2000)). "[A] court must examine the totality

of the circumstances to determine whether an agency relationship existed even

though the principal did not have direct control over the agent." AMB Prop.,

LP v. Penn Am. Ins. Co., 418 N.J. Super. 441, 454 (App. Div. 2011) (quoting

Sears Mortg. Corp, 134 N.J. at 338).

      A party relying on the apparent authority of an agent must establish:

            (1) that the appearance of authority has been created
            by the conduct of the alleged principal and it cannot
            be established alone and solely by proof of [conduct
            by] the supposed agent; (2) that a third-party has
            relied on the agent's apparent authority to act for a
            principal; and (3) that the reliance was reasonable
            under the circumstances.

            [Ibid. (alteration in original) (quoting Mercer v.
            Weyerhaeuser Co., 324 N.J. Super. 290, 318 (App.
            Div. 1999)).]

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                                       16
      In this case, defendants failed to establish the first factor because they

did not identify any voluntary conduct by plaintiff that would have given the

impression that Kunish or Helios was acting on its behalf. Although plaintiff

was aware that some vendors chose to present plaintiff as their "financing

arm," there was no evidence that plaintiff had any control over this behavior.

Additionally, the representations were belied by all documents provided to

defendants that identified plaintiff as a separate entity, including the two

agreements that clearly stated in paragraph five in bold and conspicuous

lettering:   "NEITHER THE SUPPLIER NOR ANY OTHER PARTY IS

SECURED PARTY'S AGENT."             For that reason, defendants also cannot

establish the third factor that their belief Kunish or Helios acted on behalf of

plaintiff was reasonable.4

      Defendants' unreasonable belief that there was an agency relationship

also defeats their claim that plaintiff should be estopped from denying that

Kunish or Helios was its agent. Agency by estoppel, as argued by defendants,

is different than apparent authority. See Estate of Cordero ex rel. Cordero v.

4
   Defendants' reliance on a no-longer-extant Helios website, which listed
plaintiff as an "Investment Partner," is unavailing. The website also listed as
investment partners, other well-known financial companies such as Goldman
Sachs and Morgan Stanley. It would be unreasonable for defendants to believe
that those companies were also part of the "financing arm" of Helios.

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                                     17
Christ Hosp., 403 N.J. Super. 306, 315 n.3 (App. Div. 2008). See also Atl.

Guar. & Title Ins. Co. v. McDevitt, 105 N.J. Eq. 570, 571-72 (Ch. 1930)

(holding that "where one of two innocent [parties] must suffer" from fraud of a

third-party, loss should be sustained by the one whose conduct made the fraud

possible). Under the theory of estoppel, an otherwise innocent party can be

held liable for another's actions if the injured party "make[s] a detrimental

change in position because the transaction is believed to be on the person's

account."   Restatement (Third) of Agency § 2.05 (Am. Law. Inst. 2006).

Liability will be imposed only "if (1) the [otherwise innocent] person

intentionally or carelessly caused such belief, or (2) having notice of such

belief and that it might induce others to change their positions, the person did

not take reasonable steps to notify them of the facts." Ibid.

      The doctrine applies "when the person against whom estoppel is asserted

has made no manifestation that an actor has authority as an agent," usually due

to a "failure to use reasonable care, either to prevent circumstances that

foreseeably led to the belief, or to correct the belief once on notice of it." Id.

at cmt. c. "The principal's failure to use care enables the agent, or an actor

who purports to be an agent, to misrepresent the agent's authority or to

                                                                         A-3813-17T4
                                      18
masquerade as an agent."      Id. at cmt. d.   "If the third party's [belief] is

unreasonable," however, that "party should not recover." Ibid.

      Applying that doctrine here, while plaintiff was aware that some vendors

made representations similar to defendants and did not attempt to prevent such

behavior, for the reason already discussed, it was not reasonable for defendants

to rely upon any representation made by Kunish or Helios that contradicted the

documents that defendants signed and delivered to plaintiff.

                                       B.

      Next, we address defendants' challenge to the motion judge's finding in

his fifth bullet point that AMS was aware of the equipment it was to receive.

According to defendants, that finding was incorrect and in any event, AMS

bargained for a co-generation system from Helios and not just the equipment

that was delivered.

      We conclude that even if the judge was wrong, defendants' contention in

this regard did not establish a material issue of fact. While AMS did contract

for a system, it is undisputed that plaintiff only made payment to Helios once it

received verbal verification that the equipment was "delivered and installed."

Defendants were in the best position to make that determination and provided

verification in accordance with its agreement with plaintiff. Plaintiff was not

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                                     19
under any obligation beyond waiting for defendants' verification before

releasing funds to Helios.

                                          C.

      Defendants next challenge the motion judge's sixth bullet point, finding

that defendants ratified their "[a]greements with [p]laintiff."     Defendants

concede that they authorized the payments to be made in October 2014, but

were only notified "as of March[] 2015 . . . that the [co-generation] system

would work." Under these circumstances, we conclude defendants' contention

is meritless.

      Other than their arguments about an agency relationship between

plaintiff and Kunish or Helios, defendants offer no legal support for their

argument that the discovery of that fraud somehow rescinded the ratification of

their agreements with plaintiff through Mazandarani verifying "delivery and

installation" of the system and AMS allowing payments to be made from its

account. When a party to a contract is confronted with knowledge of fraud, "if

by his conduct he affirms the contract, he cannot be heard to say that he did

not 'voluntarily' or 'intentionally' relinquish his right to call off the deal."

Merchs. Indem. Corp. v. Eggleston, 37 N.J. 114, 131 (1962) (quoting

Massachusetts Accident Co. v. Stone, 127 N.J. Eq. 97, 100 (1940)).

                                                                       A-3813-17T4
                                     20
Defendants knew the equipment was not installed and failed to take any action.

To the extent defendants had any right to "call off the deal," they took no

action for a prolonged period thereby giving up that right.

                                          D.

      We turn our attention now to defendants' argument about the motion

judge's "penultimate point," that plaintiff was under no duty to protect

defendants from Kunish's or Helios's fraudulent conduct, and that if plaintiff

followed its own internal guidelines completely, it might have prevented

defendants' loss. They argue that the "hell or high water" provisions in their

agreements should not be enforced because plaintiff voluntarily assumed a

duty to protect defendants through issuing internal security policies.

Defendants concede there is no legal support for their position and argue that

the "[r]esolution of this first-impression issue should have awaited the creation

of a complete and nuanced record at a plenary trial."

      In support of their argument, defendants rely upon Litton's deposition

testimony that plaintiff's internal procedures were designed to protect plaintiff

and its customers. Notably, Litton explained that plaintiff's policies were to

insure "first and foremost" that plaintiff was protected and that it was not

entering into transactions that would "blow up in [its] face" by "accepting

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                                     21
deals that are fraudulent [and] could potentially . . . cause a customer to not

want to pay us."

      We conclude that Litton's testimony did not establish any factual issues

that prevented summary judgment from being awarded, as it did not establish

plaintiff was negligent. Plaintiff neither owed nor assumed any legal duty to

protect defendants from Kunish's or Helios's actions.

      "To recover under a negligence theory, it is paramount that a defendant

first owe the plaintiff a duty." Kernan v. One Wash. Park Urban Renewal

Assocs., 154 N.J. 437, 445 (1998); see also Globe Motor Car v. First Fidelity,

273 N.J. Super. 388, 393 (Law Div. 1993) ("Generally, to establish a

negligence claim there must be a finding that the defendant owed some duty to

the party complaining and a breach of that duty."). The question of whether

one party owes a duty to another is a question of law that has "traditionally

been the responsibility of the courts." Hopkins v. Fox & Lazo Realtors, 132
N.J. 426, 439 (1993) (citing Kelly v. Gwinnell, 96 N.J. 538, 552 (1984)).

            Whether a person owes a duty of reasonable care
            toward another turns on whether the imposition of
            such a duty satisfies an abiding sense of basic fairness
            under all of the circumstances in light of
            considerations of public policy. That inquiry involves
            identifying, weighing, and balancing several factors --
            the relationship of the parties, the nature of the
            attendant risk, the opportunity and ability to exercise

                                                                       A-3813-17T4
                                     22
            care, and the public interest in the proposed solution.
            The analysis is both very fact-specific and principled;
            it must lead to solutions that properly and fairly
            resolve the specific case and generate intelligible and
            sensible rules to govern future conduct.

            [Davis v. Devereux Found., 209 N.J. 269, 293 (2012)
            (quoting Hopkins, 132 N.J. at 439).]

      The relationship between defendants and plaintiff as debtor and creditor

did not give rise to any duty being owed by plaintiff to defendant. We have

recognized that the interests of the parties on the opposite side of a loan

transaction are inherently adversarial. United Jersey Bank v. Kensey, 306 N.J.

Super. 540, 553 (App. Div. 1997). While the lender wishes to obtain the

greatest security and the highest interest rate, the borrower seeks to obtain the

greatest amount of money at the lowest cost.         See ibid.    "[I]t would be

anomalous to require a lender to act as a fiduciary for interests on the opposite

side of the negotiating table because their respective positions are essentially

adversarial." Ibid. (citations omitted) (holding that the plaintiff had no duty to

disclose to defendant appraisals, valuing assets at significantly less than the

amount at which defendant purchased them). "[I]mposing a duty on a bank

that would obligate it to be responsible for its depositor's financial affairs

would be impractical as a matter of public policy." Globe Motor, 273 N.J.

Super. at 394.

                                                                         A-3813-17T4
                                      23
      Courts have recognized three contexts in which a duty may arise: where

the parties have a fiduciary relationship; where special circumstances

necessarily imply the presence of "trust and confidence"; and contracts which

are "intrinsically fiduciary" in nature. United Jersey Bank, 306 N.J. Super. at

551 (quoting Berman v. Gurwicz, 189 N.J. Super. 89, 93-94 (Ch. Div. 1981)).

Absent egregious circumstances involving a lender's "gross acts of misconduct

and deceit," id. at 554, or where "the lender encourage[s] the borrower to

repose special trust or confidence in its advice, thereby inducing the borrower 's

reliance," id. at 555, there is no added duty to a borrower when a lender

"simply [takes] appropriate steps on its own behalf" to protect itself in the

transaction. Rzepiennik v. U.S. Home Corp., 221 N.J. Super. 230, 238 (App.

Div. 1987).

      There is no evidence that any of those circumstances exist in this matter.

We are not persuaded otherwise by defendants' contentions about the

formulation and implementation of plaintiff's policies relating to its internal

assessments of vendors in transactions in which plaintiff is supplying the

financing. The motion judge correctly concluded that there was no duty that

was owed by plaintiff to defendants.

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                                       24
                                      IV.

      Defendants also argue that the amount the motion judge awarded as

damages was in excess of what was owed by them to plaintiff. Defendants

correctly contend that the motion judge did not "expressly address" their

arguments when he awarded $53,189.00 to plaintiff for compensatory

damages, although defendants did not raise an objection to the amount sought

by plaintiff on summary judgment.

      According to a certification filed by plaintiff in support of its motion,

$43,942.07 was demanded as due and owing as of February 1, 2017, under

Agreement #1, "plus accruing interest," based upon defendants' failure to make

any payments beginning on October 1, 2015. As to the second agreement,

plaintiff certified that $9246.93 was owed.5 After entry of that judgment,

defendants moved for reconsideration, arguing that the amount fixed by the

motion judge was incorrect and, as already noted, the judge denied their

motion.

5
  A January 27, 2016 statement, attached to plaintiff's supporting certification,
indicated the balance owed was $46,460.64 on the first agreement, calculated
as the total scheduled payments $58,075.80, less $11,615.16 in payments
through October 1, 2015. As to the second agreement, the same type of
records stated that defendants owed $9863.30 based upon total scheduled
payments of $11,166, less payments made of $1302.70.

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                                     25
      Defendants again argue that because Mazandarani only confirmed the

delivery of the equipment and its payment, and because Helios never installed

the equipment, Mazandarani never authorized the portion of the amount

financed that was attributable to Helios's soft costs. For that reason, plaintiff

was only entitled to be paid $25,075 on the first agreement and $1000 on the

second, less payments it made under both agreements that totaled $14,138.46,

leaving a balance owed of $11,936.54. We disagree.

      At the outset, we observe that because defendants never raised any issue

about the amount being claimed by plaintiff in response to the summary

judgment motion, we do not consider the matter properly raised before us.

"Filing a motion for reconsideration does not provide the litigant with an

opportunity to raise new legal issues that were not presented to the court in the

underlying motion." Medina v. Pitta, 442 N.J. Super. 1, 18 (App. Div. 2015).

We will not address on appeal an issue that defendant did not properly raise in

the trial court. See Nieder v. Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973).

Even if we did, defendants' contention that Mazandarani's authorization for the

release of funds by plaintiff to Helios was limited to the cost of the equipment

is without any merit, especially in light of the authorization that did not limit

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                                     26
the amount to be released, and AMS's monthly repayments towards the total

amount owed.

                                        V.

     Defendants'    next   contention    challenges   the   dismissal   of   their

counterclaim, seeking damages under the CFA against plaintiff. In the motion

judge's decision, he found the undisputed facts that neither Mazandarani nor

anyone else from AMS met with or had any contact with anyone representing

plaintiff and that any false promises or misrepresentation was committed by

Kunish or Helios.

     On appeal, defendants maintain that the record supports a finding that

plaintiff employed "unconscionable commercial practices" in violation of the

CFA. We disagree.

     The CFA provides, in relevant part:

           The act, use or employment by any person of any
           unconscionable commercial practice, deception, fraud,
           false pretense, false promise, misrepresentation, or the
           knowing, concealment, suppression, or omission of
           any material fact with intent that others rely upon such
           concealment, suppression or omission, in connection
           with the sale or advertisement of any merchandise or
           real estate, or with the subsequent performance of
           such person as aforesaid, whether or not any person
           has in fact been misled, deceived or damaged thereby,
           is declared to be an unlawful practice.

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                                    27
            [N.J.S.A. 56:8-2.]

"Sale" in the CFA is defined to "include any sale, rental or distribution, offer

for sale, rental or distribution or attempt directly or indirectly to sell, rent or

distribute." N.J.S.A. 56:8-1(e).

      The CFA applies to claims by business entities as well as consumers.

Hundred E. Credit Corp. v. Eric Shuster Corp., 212 N.J. Super. 350, 354-57

(App. Div. 1986); see also Dreier Co. v. Unitronix Corp., 218 N.J. Super. 260

263-64, 273 (App. Div. 1986) (applying the CFA to a business's purchase,

after finding that the plaintiff's company "had no knowledge or expertise in the

computer field and . . . relied upon [the defendants] to provide a system to

meet [the] plaintiff's particular needs," and therefore, the plaintiff was "just as

vulnerable to unconscionable business practices as a private consumer").

      Here, there was no evidence that plaintiff employed any unconscionable

commercial practice. Therefore, in order for defendants to have succeeded on

their CFA claim they had to establish the agency relationship between plaintiff

and Kunish or Helios, which the motion judge and we have found to not exist.

Without such evidence, defendant's CFA claim was not viable and the motion

judge properly dismissed the counter-claim with prejudice.

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                                      28
                                         VI.

      Finally, we address defendants' challenge to the motion judge's award of

$31,362.50 in attorneys' fees to plaintiff under "[p]aragraph [nine] of both

[a]greements" that, as the judge found, "permit a counsel fee award to

[p]laintiff if same was incurred, reasonable and necessary to collect the

moneys owed under the [a]greements." On appeal, defendants argue that the

judge provided no reason for the amount of attorneys' fees awarded. Plaintiff

argues that it was clearly entitled to attorneys' fees by contractual agreement,

that their request for such fees was unopposed during the summary judgment

proceedings, and that the fees are not excessive.

      On appeal, we will disturb the award "only on the rarest of occasions,

and then only because of a clear abuse of discretion." Litton Indus., Inc. v.

IMO Indus., Inc., 200 N.J. 372, 386 (2009) (quoting Packard-Bamberger & Co.

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

      We agree with the motion judge and plaintiff that under the two

agreements, plaintiff was entitled to an award of attorneys' fees and costs.

However, merely attaching copies of its bills for the judge's consideration did

not satisfy plaintiff's obligation to support its application with information the

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                                      29
judge needed in determining whether the fees incurred were reasonable under

Rule 4:42-9.

      Although "New Jersey disfavors the shifting of attorneys' fees . . . 'a

prevailing party can recover those fees if they are expressly provided for by

statute, court rule, or contract.'" Id. at 385 (quoting Packard-Bamberger, 167
N.J. at 440) (citing N. Bergen Rex Transp., Inc. v. Trailer Leasing Co., 158
N.J. 561, 569 (1999)). "When the fee-shifting is controlled by a contractual

provision, the provision should be strictly construed in light of our general

policy disfavoring the award of attorneys' fees." Ibid. (citing N. Bergen, 158

N.J. at 570).

      If the provision does indeed provide for an award of attorneys' fees, a

court must analyze whether the requested award is reasonable. See id. at 386.

"The reasonableness of attorney's fees is determined by the court considering

the factors enumerated in [Rule] 4:42-9(b). That rule incorporates the factors

stated in R.P.C. 1.5." McGowan v. O'Rourke, 391 N.J. Super. 502, 508 (App.

Div. 2007). In order to enable a court to make that determination, the Rule

requires in "all applications for the allowance of fees shall be supported by an

affidavit of services addressing the factors enumerated in [RPC] 1.5(a)." R.

4:42-9(b).

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                                     30
      Upon the filing of the required affidavit, the court must first determine

"whether the party seeking the fee prevailed in the litigation," and second, the

court must "calculate the 'lodestar,' which is that number of hours reasonably

expended . . . multiplied by a reasonable hourly rate." Litton Indus., Inc., 200
N.J. at 386 (first quoting N. Bergen, 158 N.J. at 570; and then quoting Furst v.

Einstein Moomjy, Inc., 182 N.J. 1, 21 (2004)). In calculating the lodestar,

courts are required to consider:

            (1) the time and labor required, the novelty and
            difficulty of the questions involved, and the skill
            requisite to perform the legal service properly;

            (2) the likelihood, if apparent to the client, that the
            acceptance of the particular employment will preclude
            other employment by the lawyer;

            (3) the fee customarily charged in the locality for
            similar legal services;

            (4) the amount involved and the results obtained;

            (5) the time limitations imposed by the client or by the
            circumstances;

            (6) the nature and length of the professional
            relationship with the client;

            (7) the experience, reputation, and ability of the
            lawyer or lawyers performing the services;

            (8) whether the fee is fixed or contingent.

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                                     31
            [Id. at 387 (quoting R.P.C. 1.5(a)).]

A proportionality analysis may be required "in cases in which the fee requested

far exceeds the damages recovered," however, "[t]he ultimate goal is to

approve a reasonable attorney's fee that is not excessive." Id. at 387-88.

      Once a court makes a determination as to the reasonableness and amount

of an applicant's fees and costs, it must set forth its findings in an oral or

written decision as required under Rule 1:7-4 to allow for meaningful appellate

review. See S.N. Golden Estates, Inc. v. Cont'l Cas. Co., 317 N.J. Super. 82,

91 (App. Div. 1998).

      Here, although paragraph nine of both agreements established plaintiff's

entitlement to an award of fees and costs under the circumstances, neither

plaintiff's counsel nor the motion judge followed the requirements of our rules.

Although plaintiff's attorneys certified that they incurred $68,461.35 in

attorneys' fees and costs, they did not file any certification that comported with

Rule 4:42-9(b) and R.P.C. 1.5. The motion judge made no findings about the

reasonableness of the fees once he determined that plaintiff was entitled to an

award of fees under the agreements.

      Under these circumstances and despite defendants' failure to object to

the fee application in its opposition to plaintiff's summary judgment motion,

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                                      32
we are constrained to remand the award of fees for reconsideration, after the

submission of an affidavit of services that complies with the Rule 4:42-9(b)

and defendant is given an opportunity to respond.     Thereafter, the motion

judge is to issue a decision that comports with Rule 1:7-4. The remand must

be complete within thirty days.

      Affirmed in part and remanded in part for further proceedings consistent

with our opinion. We do not retain jurisdiction.

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