Lettenmaier v. Lube Connection, Inc.

Citations: 316 N.J. Super. 319; 720 A.2d 393; 1998 N.J. Super. LEXIS 459

Court: New Jersey Superior Court Appellate Division; November 13, 1998; New Jersey; State Appellate Court

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In a consumer fraud action, the plaintiff was awarded $9,240.00 in actual and treble damages, along with an initial request for $35,686.00 in counsel fees. However, her request for counsel fees exceeding the $10,000 jurisdictional limit of the Special Civil Part was denied, resulting in an award of only $760.00 for counsel fees, which was the difference between her total damages and the limit. The court upheld this limitation, citing N.J.S.A. 56:8-19, which allows for recovery of actual damages, treble damages, and "reasonable attorney’s fees," but is constrained by R. 6:1-2(a)(1), which caps jurisdictional relief at $10,000. Additionally, R. 6:1-2(c) permits parties to waive claims exceeding the limit but states that counsel fees do not fall under the "costs" exempt from the jurisdictional cap. The court distinguished this case from others, noting that the issue was not whether N.J.S.A. 56:8-19 supersedes other statutes regarding costs but rather the jurisdictional limits imposed by the Special Civil Part. The plaintiff’s reliance on precedent cases was deemed misplaced, as they did not address the specific jurisdictional constraints at issue in her case.

On appeal, the seller contended that the trial judge improperly transferred the case to circumvent the jurisdictional limit. The court concurred, stating that, under N.J.S.A. 56:8-19, a statutory penalty must be aggregated with actual damages when assessing the county district court's jurisdictional limit. The court determined that total damages, including statutory penalties, should remain within this limit, leading to the vacation of the original judgment and a remand for a new judgment within jurisdictional confines. Although the court indicated that $750 in counsel fees should be awarded, it did not provide a justification for this decision.

In the case of Wisser v. Kaufman Carpet Co., the court addressed similar issues within the Small Claims Section. The plaintiff was awarded treble damages and reasonable attorney fees under the Consumer Fraud Act, resulting in a total judgment that exceeded the $1,000 jurisdictional limit. The court examined whether punitive damages and attorney fees could be classified as recoverable costs under the jurisdictional cap and concluded they could not. It emphasized that total recovery in the small claims division for compensatory damages, punitive damages, and reasonable attorney fees could not surpass $1,000. The court reiterated that this limitation does not undermine the legislative intent to promote access to legal representation in consumer fraud cases, which are often minor for individuals but significant for community welfare. Consequently, cases with substantial potential counsel fees should be pursued in courts with more comprehensive discovery capabilities, rather than in small claims court.

Federal courts have established that attorney fees awarded under state law can be included in the amount in controversy for removal jurisdiction in diversity actions. In *Garcia v. General Motors Corp.*, the court rejected the argument that such fees should be considered mere costs, affirming that they are part of the claim's value. This principle is supported by other cases, including *Suber v. Chrysler Corp.* and *Lauchheimer v. Gulf Oil*, which also recognize that legal fees may contribute to the jurisdictional amount if they are recoverable as damages.

However, a contrasting opinion emerged in *Bittner v. Tri-County Toyota, Inc.*, where attorney fees under Ohio’s Consumer Sales Practices Act were deemed costs and excluded from the jurisdictional limit. Further clarification is provided in *Gardynski-Leschuck v. Ford Motor Co.*, which states that legal fees may count towards the jurisdictional amount if the prevailing party is entitled to them as damages.

In the matter at hand, Judge Ashrafi referenced *Wisser* in his ruling concerning the Special Civil Part, indicating that the rationale applied there should similarly govern this case. He concluded that the total recovery, including attorney fees, could not exceed $10,000 within the jurisdiction of the Special Civil Part. The plaintiff was given the option to accept this limit or transfer the case to the Law Division for potentially greater recovery under the New Jersey Consumer Fraud Act. Ultimately, the court affirmed that consumer fraud counsel fees are not included in the jurisdictional amount, distinguishing between taxed costs and counsel fees. Additionally, *Garcia* stated that in class actions, the damages and counsel fees of all plaintiffs can be aggregated to meet the jurisdictional requirement, although this has faced criticism in subsequent rulings.