Lettenmaier v. Lube Connection, Inc.

162 N.J. 134, 741 A.2d 591 (1999)
  • Opinion Date: December 1, 1999

CONSUMER FRAUD ACT; DAMAGES; JURISDICTIONAL LIMIT—The Special Civil Part may award full attorneys’ fees under the Consumer Fraud Act even if doing so would cause the total award to exceed its jurisdictional limitation.

A car owner sued a repair company alleging negligence and common law fraud in connection with maintenance work done on the car. The owner also alleged violation of the Consumer Fraud Act and sought treble damages not to exceed the jurisdictional limit of the court (which was $10,000) plus attorneys’ fees, and costs of suit. The lower court entered an order of default and a final judgment was entered in the car owner’s favor in the amount of $9,240 ($3,080 trebled). The owner then sought attorneys’ fees. Although the owner sought a greater amount, the lower court capped the fee award at the difference between the underlying award and the $10,000 jurisdictional limit, or $760. In doing so, it noted that the car owner was entitled to more in attorneys’ fees but concluded that such fees are an element of the “amount in controversy” for jurisdictional purposes. The car owner then moved for reconsideration, seeking full recovery of its attorneys’ fees, which by then were growing as a result of the repair company’s motion to set aside the default judgment. The lower court would not raise the award above the jurisdictional limit. The Appellate Division affirmed, concluding that the costs awardable in addition to the jurisdictional limit do not include consumer fraud counsel fees. The matter was then appealed to the New Jersey Supreme Court. That Court held that the Consumer Fraud Act broadly distinguishes between damages and non-damages. “The damages are the ‘ascertainable loss’ ... that is to be trebled. ... The non-damages are reasonable attorney’s fees, filing fees, and reasonable costs of suit.” The Legislature did not specifically state that counsel fees are costs; nonetheless, it implicitly recognized counsel fees as a compenent of fees and costs outside the class of damages. Under the Court’s Rules, attorneys’ fees are generally allowable as “taxed costs.” A different statute authorized the Court Clerk of the Special Civil Part to include an award of counsel fees in the taxed costs, even where there is no other authorizing authority, and the Court saw no reason why counsel fees awarded under a different statute should be treated differently under the two statutes. According to the Court, “a majority of the out-of-state cases which have addressed the issues have held that counsel fees, not otherwise characterized, are to be considered as costs” because they are separate and distinct from the underlying statutory violation and are incurred to remedy the harm already done. Further, limiting attorneys’ fees to the jurisdictional ceiling would discourage private attorneys from bringing cases, especially in a court of limited jurisdiction. “Finally, allowing attorneys’ fees beyond the jurisdictional limit encourages parties to bring meritorious claims and to further the statutory goal of eradicating consumer fraud.” Even if attorneys’ fees are not costs under the Court Rules, they are not “necessarily part of the amount in controversy.” Only the monetary damages that a plaintiff claims were sustained as a result of the defendant’s actions are to be included in the jurisdictional “amount in controversy.” According to the Court, “[t]he amount of claimed monetary damages is the only amount that a litigant can calculate at the beginning of the litigation when determining whether or not file in the Special Civil Part. What amount of counsel fees will be incurred as a result of the twists and turns of litigation is not ascertainable at that point.”