SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
A-4705-94T2
DEBORAH T. PORITZ, ATTORNEY
GENERAL OF STATE OF NEW JERSEY,
and NEW JERSEY STATE BOARD OF
EXAMINERS OF MASTER PLUMBERS,
Plaintiff-Respondent,
-v-
ARNOLD STANG, individually, and
trading as ARNIE'S PLUMBING &
HEATING,
Defendant-Appellant.
_____________________________________________________
Argued February 7, l996 - Decided March 6,
1996
Before Judges Long and Brochin.
On appeal from Superior Court, Chancery
Division, Sussex County.
Charles Kannebecker argued the cause for
appellant (Weinstein, Schneider & Kannebecker,
attorneys).
Ressie L. Fuller, Deputy Attorney General,
argued the cause for respondent (Deborah T.
Poritz, Attorney General, attorney; Andrea M.
Silkowitz, Assistant Attorney General, of
counsel; Ms. Fuller, on the brief).
The opinion of the court was delivered by
LONG, P.J.A.D.
The primary issue before us is whether the term "costs" as
used in N.J.S.A. 45:l-25 includes investigative fees or whether it
is limited to the kinds of items routinely assessed as court costs,
for example, witness fees and printing costs. We think the more
inclusive interpretation of the statute is the correct one and that
investigative fees are within its contemplation.
For the purposes of this analysis, the facts of the case need
not be detailed. It is sufficient to say that defendant was
investigated by the State Board of Examiners of Master Plumbers and
found to have engaged in the unlicensed practice of plumbing.
After a bench trial he was fined $2500 and assessed $7308 in
investigative expenses. Defendant challenges only the latter,
contending that the statute precludes assessment of investigative
costs. Alternatively, he argues that even if the statute allows
such costs, the State failed to prove the amount and reasonableness
of what was incurred.
N.J.S.A. 45:l-25 provides:
Any person violating any provision of an act
or regulation administered by a board shall,
in addition to any other sanctions provided
herein, be liable to a civil penalty of not
more than $2,500.00 for the first offense ...
[and] the payment of costs for the use of the
State. (emphasis added).
Defendant, citing U.S. Pipe & Foundry Co. v. United Steelworkers of
America,
37 N.J. 343, 355 (1962), argues that "costs" is a term of
art and
comprise principally certain statutory
allowances, amounts paid the clerk in fees,
and various other specified disbursements of
counsel including sheriff's fees, witness
fees, deposition expenses and printing costs.
See also Fagas v. Scott, 251 N.J. Super. 169, 207 (Law Div. 1991), ("litigation costs" include xeroxing, messenger services, filing fees, and postage "because they are of the type [of costs] that an
attorney would normally bill a fee-paying client.") Underpinning
this argument is the principle that ordinarily, "all litigants must
bear the cost of enforcing their rights through litigation." Van
Horn v. City of Trenton,
80 N.J. 528, 533 (1979).
According to defendant, if the Legislature had intended an
exception to this rule and wished to include investigative fees
within the scope of "costs" in N.J.S.A. 45:l-25, it knew how to do
so and would have done so explicitly as it has in other statutes.
See Velli v. Rutgers Casualty Ins. Co.,
257 N.J. Super. 308, 312
(App. Div.), certif. denied,
130 N.J. 597 (1992). For example,
N.J.S.A. 39:6A-34 provides that the demanding party "shall be
assessed court costs and other reasonable costs ... including
attorney's fees [and] investigation expenses." Likewise, N.J.S.A.
56:8-l4.l entitles county and municipal offices of consumer affairs
to "reasonable costs ... including investigative and legal costs."
While this argument is appealing, it fails to account for the
decision of our Supreme Court in In re Polk License Revocation,
90 N.J. 550 (l982). There, the Court affirmed the trial judge's
assessment of investigative fees pursuant to N.J.S.A. 45:l-25, the
statute under review here, against a defendant who violated the
laws regulating the practice of medicine.
To be sure, the specific issue raised here was not directly
addressed in Polk. However, the court plainly accepted
investigative fees as a component of statutory costs in its
analysis of the pro-ration issue before it. In rejecting the
attack on the imposition of "investigatory costs," the Court
observed that N.J.S.A. 45:l-25 is "the statutory provision
authorizing imposition of such costs." Polk, 90 N.J. at 577
(emphasis added).
Fourteen years have passed since Polk. During that period,
the Legislature has amended N.J.S.A. 45:l-25 once without changing
the words "costs for the use of the State" or otherwise delimiting
the meaning those words were given in Polk. Where statutory words
have received a judicial construction, the Legislature is deemed to
have used them in the sense thus ascribed to them. In re Keogh-Dwyer, 45 N.J. ll7, 120 (l965). The Legislature is presumed to be
thoroughly conversant with the judicial construction placed on its
enactments. This is especially so where the statute has been
amended in other particulars, as is the case here, without a change
in the phraseology construed in the judicial decision. Quaremba v.
Allan,
67 N.J. 1, 14 (l975). Applying these principles, we are
satisfied that the trial judge properly construed N.J.S.A. 45:l-25
as including investigative fees.
It is here that we part company from him. We are not
satisfied that he had before him an adequate record to undertake
the kind of analysis required in determining the amount of
investigative fees to be assessed. In our view, the approach to be
utilized is analogous to that involved in the awarding of counsel
fees. First, a record must be developed as to the actual hours
expended on the investigation, keeping in mind that actual time
expended does not necessarily equate with reasonable time. See
Copeland, 64l F.2d 880, 891 (D.C. Cir. 1980) ("[N]o compensation is
due for nonproductive time. For example, where three attorneys are
present at a hearing when one would suffice, compensation should be
denied for the excess time.")
Second, the judge must determine the reasonableness of the
hourly rate employed. This will depend on the rate prevailing in
the community for similar work. Copeland, supra, 641 F.
2d at 892;
Argila v. Argila,
256 N.J. Super. 484, 491 (App. Div. 1992). The
community here is that of government investigations. Because
government investigators are salaried and not hourly wage earners,
the method by which the hourly rate has been determined by the
agency must be set forth with specificity. Only by analyzing a
detailed breakdown of how the rate was calculated can the judge
determine its rationality.
After multiplying the hours by the rate, the judge will have
to assess the overall reasonableness of the costs by considering
the expected return to the State and the interest to be vindicated.
See Rendine v. Pantzer,
141 N.J. 292, 336 (1995). Here, for
example, the potential penalty was $2500 (this was a first offense)
for which nearly three times that amount in investigative costs
were incurred. The judge must determine whether this ratio is an
acceptable one.
In terms of the interests to be vindicated, protection of the
public is the polestar. Thus, for example, a greater investigative
fee would be justified as reasonable to remove a grossly negligent
surgeon from practicing than might be the case where a real estate
appraiser or a landscape architect, who was performing adequate
services, is alleged to have misrepresented his license status.
In the final analysis, after determining what investigative
costs actually were incurred, the judge must weigh and balance the
State's interests in vindicating the statutory scheme and in
protecting the public, against a defendant's interest in being
assessed only an objectively reasonable amount of investigative
fees in connection with a violation.
In this case, that kind of analysis was not performed because
no evidence was produced on some of these issues. Because we have
clarified the nature of the inquiry for the first time in this
opinion, we reverse and remand the case to the trial judge for
further proceedings. We leave it to him to determine what
proceedings are appropriate to establish a record adequate to
undergird the required analysis.
Affirmed in part; reversed and remanded in part.