Seigelstein v. Shrewsbury Motors, Inc.

• Decision Date: 29 July 2020
• Docket Number: DOCKET NO. A-3801-18T2
• Citation: 236 A.3d 1004,464 N.J.Super. 393
• Parties: Nina SEIGELSTEIN, on behalf of herself and all others similarly situated, Plaintiff-Appellant, v. SHREWSBURY MOTORS, INC., d/b/a Shrewsbury Volkswagen and Jeff Anderson, Defendants-Respondents.
• Court: New Jersey Superior Court — Appellate Division

464 N.J.Super. 393

236 A.3d 1004

Nina SEIGELSTEIN, on behalf of herself and all others similarly situated, Plaintiff-Appellant,

v.SHREWSBURY MOTORS, INC., d/b/a Shrewsbury Volkswagen and Jeff Anderson, Defendants-Respondents.

DOCKET NO. A-3801-18T2

Superior Court of New Jersey, Appellate Division.

Argued February 5, 2020

Decided July 29, 2020

Andrew R. Wolf, North Brunswick, argued the cause for appellant (The Wolf Law Firm LLC, and Christopher Joseph Mc Ginn, attorneys; Andrew R. Wolf and Christopher Joseph Mc Ginn, on the briefs).

Steven M. Richman, Princeton, argued the cause for respondents (Clark Hill PLC, attorneys; Steven M. Richman and Boris Brownstein, of counsel and on the brief).

Before Judges Koblitz, Gooden Brown and Mawla.

The opinion of the court was delivered by

GOODEN BROWN, J.A.D.

Plaintiff Nina Seigelstein appeals from a March 27, 2019 Law Division order, "grant[ing] in part and den[ying] in part," her attorneys' application for fees in connection with a class action lawsuit against a car dealership, Shrewsbury Motors, Inc. d/b/a Shrewsbury Volkswagen, and its principal, Jeff Anderson, collectively defendants. The judge reduced the billable hours as well as the requested hourly rates and applied a lower contingency fee enhancement percentage than requested by plaintiff's attorneys (Class Counsel). On appeal, plaintiff only challenges the hourly rate reduction. Because we agree that the judge mistakenly exercised her discretion, we reverse.

On October 30, 2015, plaintiff filed a class action complaint alleging defendants violated the New Jersey Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -20, and the New Jersey Truth-in-Consumer Contract, Warranty and Notice Act (TCCWNA), N.J.S.A. 56:12-14 to -18, in the sale and leasing of motor vehicles "by charging unlawful fees and failing to itemize the documentary fees charged to [p]laintiff and all those similarly situated." See R. 4:32-1; R. 4:32-2. Among other things, the complaint sought "reasonable attorney's fees and costs pursuant to the CFA at [N.J.S.A.] 56:8-19 and/or TCCWNA at [N.J.S.A.] 56:12-17."

After defendants filed a notice of appeal as of right from the March 16, 2016 order denying arbitration, see R. 2:2-3, the parties engaged in extensive settlement negotiations, including participation in the Appellate Division's Civil Appeals Settlement Program (CASP). Negotiations ultimately resulted in the execution of a comprehensive class action settlement agreement on August 30, 2017, and, following confirmatory discovery, an amended final class action settlement agreement on November 30, 2017.

In pertinent part, the final agreement addressed Class Counsel's "entitlement" to reasonable attorneys' fees and costs as follows:

Subject to the [c]ourt's [f]inal [a]pproval of this [f]inal [s]ettlement [a]greement, Shrewsbury Motors, Inc. shall pay the reasonable attorneys' fees and costs of Class Counsel to be determined by settlement or fee petition. ... [T]he [p]arties will attempt to reach an agreement on the amount of attorneys' fees and costs. If such an agreement is reached, then, subject to [c]ourt approval within ten ... days of the [e]ffective [d]ate, Shrewsbury Motors, Inc. shall pay the amount awarded, pursuant to [c]ourt approval. If such an agreement is not reached, Shrewsbury Motors, Inc. agrees to pay the amount of attorneys' fees and costs awarded by the trial court on any fee petition within ten ... days of the [c]ourt's determination of same. Defendants shall be given proper notice of such fee applications and afforded the opportunity to file objections to the amount of the reasonable attorneys' fees and costs sought by Class Counsel. While [d]efendants may file objections to the amount of reasonable attorneys' fees and costs sought by [C]lass [C]ounsel if an agreement on an amount of attorneys' fees and costs is not reached, [d]efendants agree and shall not object to Class Counsels' entitlement to their reasonable attorneys' fees and costs.

After the parties failed to reach an agreement on the amount of attorneys' fees, on June 4, 2018, plaintiff moved for final approval of the class action settlement,¹ which included a request for approval of attorney's fees and costs in the amount of $161,634.50 and $774.25, respectively, through June 1, 2018.² In detailed supporting certifications submitted by the lead attorneys, Andrew R. Wolf and Christopher J. McGinn, Class Counsel asserted they had expended a combined total of 273.7 hours on the litigation at their respective law firms. For the Wolf Law Firm LLC, hourly rates were listed as follows: Andrew R. Wolf at $765; Henry P. Wolfe at $625; Bharati S. Patel at $550; Andrew W. Li at $525; Kelly Samuels Thomas at $365; Matthew S. Oorbeek at $360; Mariel Mercado at $250; and a paralegal at $165. For the Law Office of Christopher J. McGinn, Christopher J. McGinn's hourly rate was listed as $500.

Wolf's and McGinn's certifications identified several New Jersey state and federal cases where the court had approved their current and comparable prior hourly rates. Additionally, Wolf, who was admitted to the New Jersey bar in 1995, averred that to date, he had "been certified as [C]lass [C]ounsel in 121 cases, many of which have involved claims brought under the [CFA] and the [TCCWNA]." McGinn, who was admitted to the New Jersey bar in 2002, certified that he "concentrate[d his] practice in the area of consumer protection law," and had "been appointed as [C]lass [C]ounsel in forty-eight class actions."

Further, Wolf submitted the biographies of the other attorneys in his firm who worked on the case, as well as a 2018 certification from Lawrence H. Shapiro, a 2015 certification from John E. Keefe, Jr., and a 2009 certification from Allyn Z. Lite. Shapiro, a partner in Ansell Grimm & Aaron, PC with a practice devoted predominantly to "commercial litigation," confirmed that Class Counsel's hourly rates in this case were "consistent with the rates charged by other [law] firms throughout New Jersey and in Monmouth County by attorneys with similar experience, skill and reputation in handling such matters." Keefe, "a co-managing member of ... Keefe Bartels[, LLC]" with "extensive experience ... handling complex litigation, including consumer and other class action cases," certified in an unrelated contested fee application that Class Counsel's rates were "consistent with the rates charged ... throughout New Jersey for attorneys with similar experience, skill and reputation," and "were recently approved for [his] firm" in several cases. Finally, Lite, then a "senior member of ... Lite DePalma Greenberg & Rivas, LLC" specializing "in complex plaintiffs-oriented litigation," opined as Wolf's "expert ... to assist the [c]ourt" in an unrelated fee application that "Class Counsel has long and deep experience in the class action arena" and, "[g]iven that experience and credentials of those lawyers, their rates [were] reasonable" and "comparable to ... others who prosecute [and defend] class actions in the state and federal courts in New Jersey."

Additionally, Wolf submitted a September 26, 2014 oral decision rendered by Judge James Hely awarding attorneys' fees and costs to his firm in a contested fee application in an unrelated individual consumer fraud case, pointing out that Judge Hely specifically found that Class Counsel were "in a field which requires very, very specific knowledge" and "[v]ery few attorneys would be able to take a case like this ... and know what to do with it." Without leave of court, plaintiff later submitted supplemental support for Class Counsel's fee application consisting of a transcript of a July 27, 2018 unopposed award of counsel fees to the Wolf firm by Judge Ana C. Viscomi in a class action settlement captioned "Harris v. General Motors Financial Co., Inc., MID-L-3170-15." In accepting the hourly rate, Judge Viscomi "reviewed the [dated] submissions of other practitioners that [spoke] to the hourly rates," and noted that "the hourly rates [were] approved most recently in both Federal District Courts for the District of New Jersey as well as other Superior Courts."

Defendants opposed the counsel fee application, noting "[t]he fee amount represent[ed] approximately [forty-five percent] of the total monetary recovery for the settlement class." Among other things, defendants objected to Class Counsel's hourly rates. Defense counsel certified that the hourly rates of Class Counsel's lead attorneys were "unreasonably high, and somewhat misleading" because "th[e] case involved claims against a single automobile dealership, ... focusing on the finite issue of whether or not a documentary fee was properly categorized." Defense counsel asserted that "[the] case was not actively litigated beyond the [c]ourt's denial of [d]efendants' [m]otion to [c]ompel [a]bitration," and "[t]here was no written discovery exchanged" other than the brief confirmatory discovery conducted "pursuant to the ... settlement agreement." Thus, according to defense counsel, "given the facts and circumstances of the ... case," Class Counsel's lead attorneys "were both redundantly involved in much of the same work," resulting in an excessive "combined effective rate" of $1265 per hour. By comparison, defense counsel pointed out that "Steven Richman, a New Jersey-based attorney representing [d]efendants ... with [thirty-eight] years of experience in commercial litigation, including class actions, provided services in this matter at an hourly rate of $450/hour." Defense counsel also objected to the supplemental submission, characterizing Judge Viscomi's decision as "irrelevant," and citing Shelton v. Restaurant.com, Inc., No. 10-824, 2016 WL 7394025, at *4-7, 2016 U.S. Dist. LEXIS 176785, at *12-18 (D.N.J. Dec. 21, 2016), "in which the Wolf[ ] firm's fees were significantly reduced" by a federal district court judge.

On September 14, 2018, following oral argument, the judge entered an order granting final approval of the...