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Grubbs v. Knoll4/15/2005
use its discretion by reducing the counsel fee award under the CFA against the remaining defendants by one-third of the amount that plaintiff received from a settling defendant. Id. at 210-11. Nothing in Cogar divests the trial judge of discretion in fashioning an equitable apportionment of counsel fees to be paid by Chapman upon the settlement of the CFA claims against Stevens.
The trial judge did not err in ruling that Chapman was not jointly and severally liable for all of the Knolls' compensatory damages, including attorney's fees.
VI.
The Knolls contend that the trial judge erred in denying their motion for an enhancement of the fee award.
In denying the Knolls' request for a fee enhancement, the court ruled as follows:
Additionally, while I've found that there's very little difference between the policy in the Consumer Fraud Act and the policy of making the plaintiff whole in Saffer, that principle does not also apply necessarily through enhancement of a fee in a legal malpractice case. And that['s] ... just what I'm left with by reason of the settlement made by the plaintiffs with two of the ... three groups of defendants.
The attorneys should receive fair and reasonable compensation for their services but not a fee enhancement under these circumstances.
And also, in making that finding I did carefully review the material pertaining to the condition of the Sanders' law firm and considered that in making this decision.
"New Jersey has a strong policy against the shifting of counsel fees." In re Niles, supra, 176 N.J. at 293 (citing Packard-Bamberger & Co. v. Collier, supra, 167 N.J. at 440). That policy is reflected in our state's adherence to the so-called "American Rule," which "prohibits recovery of counsel fees by the prevailing party against the losing party," except for the few situations specifically permitted by statute, by our Supreme Court through case law or court rule, or by contract. Id. at 294; Packard-Bamberger, supra, 167 N.J. at 440; In re Farnkopf, supra, 363 N.J. Super. at 395. The three-fold purpose of the "American Rule" is to provide unrestricted access to the courts for all persons, ensure equity by not penalizing parties for exercising their right to litigate a dispute, and allow for administrative convenience. In re Niles, supra, 176 N.J. at 294 (citing In re Estate of Lash, supra, 169 N.J. at 43 (Verniero & LaVecchia, JJ., dissenting)).
In Saffer v. Willoughby, supra, 143 N.J. at 272, the Supreme Court created an exception to the "American Rule" applicable to legal malpractice cases, holding that "a negligent attorney is responsible for the reasonable legal expenses and attorney fees incurred by a former client in prosecuting the legal malpractice action" because those fees and expenses are "consequential damages that are proximately related to the malpractice." The rationale of Saffer was thereafter extended to claims against attorneys for intentionally violating fiduciary duties. Packard-Bamberger, supra, 167 N.J. at 442-43. The Court emphasized that the exception from the "American Rule" set forth in Saffer and Packard-Bamberger was "warranted to 'assure that the client be placed in as good a position as if the attorney had performed properly.'" Niles, supra, 176 N.J. at 297 (quoting Packard-Bamberger, supra, 167 N.J. at 443).
The Knolls acknowledged that neither Saffer nor Packard-Bamberger authorizes the enhancement of a prevailing malpractice plaintiff's legal fees through the use of a multiplier. In arguing that the trial judge should have granted an enhancement of the fee award, the Knolls instead rely upon Rendine v. Pantzer, supra, wh
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