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Hillcrest Garden, Inc. v. Victorian Florist, Inc.

A-0492-09T1 (N.J. Super. App. Div. 2010) (Unpublished)

ATTORNEYS FEES — Even if an agreement would award attorneys fees to a party in a fixed amount or as a percentage of the judgment received, the reasonableness of those attorneys fees must still be determined by the court and an affidavit of services may still be required.

An individual signed a personal guaranty which among other things, said: “In the event it becomes necessary to refer this account to an attorney for collection, I/we agree to pay all costs of collection including reasonable attorney’s fees of 25% of the then unpaided [sic] balance due.” Following suit, the lower court returned an executed judgment against the guarantor in the amount of the obligation, but did not include the 25% counsel fee. The judgment creditor’s attorney, “thinking the omission had been inadvertent, contacted the court’s chambers and learned the omission was deliberate.” At that attorney’s request, the lower court “entered an amended order which noted that the request for counsel fees had been denied because no affidavit of services had been submitted.” With that new Order in hand, the judgment creditor appealed. The basis for its appeal was that “when a request for counsel fees is made in a collection matter ..., premised on a contractual provision calling for a flat percentage counsel fee, no affidavit of services is required.” Essentially, the judgment creditor was contending that, in such a case, “the function of a court is merely the ministerial one of entering the mathematically correct sum.”

The Appellate Division disagreed, holding that the lower court “remains ultimately responsible in all situations to determine that the required fee is reasonable under the entirety of the circumstances” and “is not relieved of that responsibility because of preprinted language contained in a business form.” Essentially, a party seeking an award of counsel fees must establish, to the court, that those fees are reasonable.

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