SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
A-1381-93T5
JESSE ROSENBLUM,
Plaintiff-Appellant/
Cross-Respondent,
vs.
BOROUGH OF CLOSTER,
Defendant,
Third Party Plaintiff/Respondent,
vs.
MIELE SANITATION COMPANY,
Third Party Defendant,
Respondent/Cross-Appellant.
Argued October 11, 1995 - Decided November 13, 1995
Before Judges Michels, Villanueva and Kimmelman.
On appeal from Superior Court of New Jersey,
Law Division, Bergen County.
Corinne M. Mullen argued the cause for
appellant/cross-respondent (Ms. Mullen,
attorney, of counsel and on the brief).
James A. Farber argued the cause for
respondent Borough of Closter (DeCotiis,
Fitzpatrick & Gluck, attorneys; Judy A.
Verrone, of counsel and on the brief).
Kathryn A. Gilbert argued the cause for
respondent/cross-appellant Miele Sanitation
Company (Ms. Gilbert, attorney, of counsel
and on the brief).
The opinion of the court was delivered by
VILLANUEVA, J.A.D.
Plaintiff Jesse Rosenblum appeals from orders in two actions
awarding attorney fees against him pursuant to the frivolous
litigation statute, N.J.S.A. 2A:15-59.1 (the Statute). The
actions were consolidated on the applications for attorney fees.
Miele Sanitation Company (Miele) cross appeals from the denial of
his motion for attorney fees pursuant to the Statute in one of
the actions.
The first action, referred to as the "land transfer" action,
was brought against all interested parties and challenged the
transfer of land by the Borough of Closter (Borough or Closter)
to Joseph Miele and Gloria Miele (the Mieles). Although the land
was zoned for residential purposes, plaintiff alleged that the
Mieles purchased it for use in an industrial waste operation.
The court dismissed this complaint as woefully late and upon
Closter's motion, granted Closter frivolous litigation fees of
$4,331.21. On appeal, the Appellate Division affirmed both the
dismissal of plaintiff's underlying complaint and the award of
attorney fees to Closter against plaintiff and, upon Closter's
motion, awarded it attorney fees of $1,500 and disbursements of
$471.53 pursuant to the Statute for plaintiff's frivolous appeal.
Subsequently, the Supreme Court granted plaintiff's petition for
certification and "summarily remanded [the matter] to the
Appellate Division for reconsideration [of the attorney fee
award] in light of McKeown-Brand v. Trump Castle Hotel and
Casino,
132 N.J. 546 (1993)." The Appellate Division again
affirmed, and the Supreme Court denied certification.
The second action is referred to as the "garbage contract"
action. Under an agreement dated June 12, 1991, incorporating
the settlement of a prior dispute between Miele and Closter,
Miele agreed to provide solid waste transfer station services to
Closter for two years at a fixed rate for all waste types,
notwithstanding the fact that Miele's cost to dispose of
Closter's bulky waste might exceed the fixed rate charged to
Closter. In this action, although plaintiff sought to set aside
the contract, he sued only the Borough, deliberately omitting
Miele as a defendant, allegedly because of a pending defamation
suit brought by Miele against him. The garbage contract
complaint alleged that the Borough's acceptance of a new contract
with Miele "is injurious to the taxpayers of Closter . . .
[because] the new contract forgives any funds or interest due the
Borough from the prior contract." Plaintiff sought to have "the
new contract, in that portion which forgives funds due the
Borough on the prior contract" declared invalid and sought to
require the Borough to recoup such funds.
Prior to agreeing to this settlement, Closter considered the
alternatives of pursuing legal action to recoup from Miele
approximately $42,000 in alleged overpayments, as well as
performing solid waste disposal services itself. Closter
rejected these alternatives on three grounds. First, after
thorough study of the matter, including a public hearing at which
time plaintiff's objections were considered, Closter decided that
it would not be cost effective to conduct its own solid waste
disposal services because of the costs associated with the
acquisition of additional facilities, the purchase of necessary
equipment and the prohibitive costs of hiring of personnel.
Second, when Closter had offered the new contract for bid in
the preceding November, there were no bidders. A rebid failed to
elicit any response. As Borough Councilman Farber explained:
So our alternative was to either negotiate
with Mr. Miele, who was the only contractor
that was interested, or to start buying our
own facilities, our own equipment, to do the
work ourselves. The Council has made a
policy decision that it is better to
negotiate with Mr. Miele - which they feel is
a good contract - and anyway, I feel it's a
good contract.
Third, given the uncertainty of prevailing in a recoupment
action against Miele, the Borough decided that legal action was
inadvisable.
At the outset, we must examine the background of the
relationship that existed between plaintiff and Miele when
plaintiff initiated this complaint to determine why plaintiff
filed suit to set aside the garbage contract, failed to name
Miele as a party to the action either at the outset or upon
receipt of Closter's answer noting this deficiency and conducted
lengthy and aggressive discovery against Miele and Closter, yet
permitted his complaint to be dismissed with prejudice for
failure to answer one Interrogatory.
As plaintiff has reiterated in numerous certifications and
briefs, for three and one-half years he and Miele were embroiled
in a libel actionSee footnote 1 filed by Miele against plaintiff as the
result of articles plaintiff published in his "community
newsletter," the Informed Citizen in Closter (I.C.I.C.).
After Miele initiated the libel suit, plaintiff filed
numerous complaints and court actions implicating Miele,
including the land transfer and garbage contract cases and a
challenge to Miele's farmland assessment and demand for rollback
taxes.See footnote 2 Additionally, plaintiff challenged a Department of
Environmental Protection permit issued to Miele and lodged
numerous complaints against him and his company with local,
county, state and federal agencies for incidents dating back to
mid-1988.See footnote 3 Finally, plaintiff's own certification attests to
his enmity for Miele: "Not only is Miele the Borough Bully, who
was found guilty of criminally assaulting Rosenblum and Hoppe
(and hijacking their vehicle to subsequently claim a trespass),
but a totalitarian Big Brother."
Plaintiff's putative purpose for commencing the garbage
contract action and pursuing what he has consistently
characterized as a "public interest" action was to compel the
Borough to "recover an overcharge approximating $42,000 from
Miele." When the case initially came on for trial on July 7,
1992, the trial judge declared a mistrial because of plaintiff's
failure to prepare his case. Despite the trial judge's warning
that plaintiff faced a difficult burden of proof, plaintiff
vigorously continued to pursue the garbage contract action,
engaging in extensive discovery with reference to both Closter
and Miele for the next twenty months.See footnote 4 However, when plaintiff
spent seven months opposing a trial court order requiring him to
answer one Interrogatory propounded by Miele -- including filing
at least three motions in the Law Division and six interlocutory
motions in the Appellate Division, which were all denied -- the
trial court sanctioned plaintiff's conduct. It also awarded
Closter fees pursuant to R. 4:17-5(d), which are not the subject
of this appeal.
As a justification for filing the law suit, plaintiff has
asserted that Closter's decision to settle the overcharge dispute
with Miele was detrimental to the interests of Borough taxpayers,
but nonetheless he sued only Closter. The basis of plaintiff's
action was a conclusory allegation of "chicanery and corruption
between Miele and Closter officials, including the $42,000
overcharge by Miele on the garbage contract." Closter asserted
in its answer that it had exercised its judgment pursuant to
N.J.S.A. 59:2-3 and 59:3-2 and that plaintiff had failed to join
an indispensable party, Miele, without whom the action could not
proceed. See R. 4:28-1(a).
Closter filed a third party complaint against Miele, not
because it doubted the wisdom of the settlement, but because it
then could still pursue its claim of overcharges against Miele in
the event the settlement was set aside by the court. This was a
required pleading under R. 4:30A; otherwise, Closter would have
been barred by the entire controversy doctrine from later
pursuing this claim.
At least as early as August 1992, plaintiff was aware that
even if he succeeded in having the Borough recoup the entire
$42,000, that amount would have been reduced by Closter's legal
fees which at that point were by plaintiff's own calculations
approximately $29,000. Ultimately, plaintiff's persistence in
pursuing this "public interest" lawsuit cost Closter almost
$38,000See footnote 5 to defend.
On October 27, 1992, plaintiff was ordered to answer Miele's
Supplemental Interrogatory No. 1 within twenty days and if he
failed to do so, "plaintiff's complaint against Defendant
[Borough of Closter] and the third party complaint against third
party defendant shall be dismissed without prejudice; said
dismissal to be effective on the twentieth (20th) day following
the day of this Order without further notice." By order dated
March 19, 1993, the court, pursuant to R. 4:23-5(a)(2), converted
the October 27, 1992, order of dismissal without prejudice into a
dismissal with prejudice for plaintiff's failure to comply with
the discovery.
Closter subsequently filed a motion in the garbage contract
action seeking attorney fees and litigation costs pursuant to the
Statute in the amount of $32,882.23.See footnote 6 On September 24, 1993,
the trial court granted Closter's motion.
The Mieles originally made no application for attorney fees
in the land transfer case, but instead made one motion for fees
pursuant to the Statute for both actions at the conclusion of the
garbage contract case. On October 21, 1993, the trial court
awarded the Mieles attorney fees pursuant to the Statute against
plaintiff in the amount of $4,271.75 for the land transfer case.
However, it denied Miele's request for attorney fees of $9,012.50
for the garbage contract case because "Miele Sanitation Company
was not named as a direct Defendant by Plaintiff Jesse
Rosenblum."
Plaintiff challenges the award of attorney fees to the Mieles in the land transfer case.
Sometime in 1988, Joseph Miele proposed that the Borough consider a sale of certain Borough-owned land. After extensive public hearings, the Mayor and Council adopted resolutions authorizing the sale of the property. After rejecting two private bids (one from Miele and one from plaintiff herein), the Borough offered the property at a public sale. It received only one bid, that of the Mieles for $126,000, which was found to be in order and accepted by the Borough.
More than two years later, plaintiff filed a verified complaint in lieu of prerogative writs seeking to rescind the sale to the Mieles, which named both Closter and the Mieles as defendants. The trial court dismissed the complaint as woefully late, and awarded frivolous litigation fees to Closter in the amount of $4,331.21, both of which orders were upheld on appeal.
Upon the Mieles' application for attorney fees pursuant to the Statute, the trial court properly decided that its original finding as to the frivolous nature of the complaint was the law of the case. Khoudary v. Salem County Bd. of Social Servs., 281 N.J. Super. 571, 575 (App. Div. 1995). The judge noted: "I have already made substantial findings about the nature of [plaintiff's] behavior with respect to this case and how egregious it was." At the hearing, plaintiff offered no evidence to indicate that his claims against the Mieles were any different
than those he asserted against Closter, nor could there have been
any such evidence since all defendants were equally affected by
plaintiff's frivolous complaint. The trial court properly
awarded the Mieles' attorneys $4,271.75 for the filing of this
frivolous complaint.
We, therefore, affirm the trial court's order awarding
frivolous litigation fees to the Mieles in the land transfer
case.
Plaintiff also challenges the award of attorney fees to Closter in the garbage contract action.
Citizens should have ready access to all branches of government, including the judiciary. McKeown-Brand v. Trump Castle Hotel & Casino, supra, 132 N.J. at 561-62 (citing Iannone v. McHale, 245 N.J. Super. 17, 27 (App. Div. 1990)). Unless a litigant knows, or should know, that a complaint is without reasonable basis, N.J.S.A. 2A:15-59.1a(2), he or she should not be deterred from filing a complaint which challenges the action of a public entity or public official. We do not suggest, however, that a citizen who questions a governmental decision not to pursue a claimed overcharge without considering purported valid reasons therefor should be subject to frivolous litigation fees for filing a complaint against all indispensable parties to compel governmental action.
However, when a plaintiff deliberately fails to name an indispensable party even after immediately being specifically
informed of this deficiency, see R. 4:28-1(a), and continues
extensive discovery for twenty months for a cause of action that
clearly cannot succeed, that plaintiff is subject to being
assessed attorney fees under the Statute.
Plaintiff's claim could not have been adjudicated without
the presence of Miele in this suit. See Iannone v. McHale,
supra, 245 N.J. Super. at 30-31 (holding that the candidate whose
election is challenged is a necessary party to an action seeking
to nullify the election results). Moreover, considering
plaintiff's actions on an objective basis, Khoudary v. Salem
County Bd. of Social Servs.,
260 N.J Super. 79, 88 (App. Div.
1992) (citing Iannone v. McHale, supra, 245 N.J. Super. at 29),
no reasonable person would believe that he or she could rescind a
party's contract without joining that party in the action. See
Fagas v. Scott,
251 N.J. Super. 169, 189 (Law Div. 1991) (holding
that a claim is frivolous or groundless where no rational
argument can be advanced in its support, or it is not supported
by any credible evidence, or a reasonable person could not have
expected its success, or it is completely untenable).
Plaintiff's reliance on McKeown-Brand to shield him from
application of the Statute is misplaced. McKeown-Brand v. Trump
Castle Hotel & Casino, supra,
132 N.J. 546. In that case, the
Supreme Court specifically stated that the Statute cannot be
applied against attorneys or parties who rely on their attorneys.
Id. at 557-558. Except with respect to a discovery matter,See footnote 7
plaintiff acted pro se. He did not rely upon the advice of any
attorney until the applications for frivolous litigation attorney
fees were made.
There are two instances in which, if the judge finds "on the
basis of the pleadings, discovery, or the evidence presented"
that "a complaint, counterclaim, cross-claim or defense of the
nonprevailing person was frivolous," the Statute authorizes an
award of reasonable attorney fees and litigation costs to a
prevailing party. N.J.S.A. 2A:15-59.1. The first is where the
"complaint, counterclaim, cross-claim or defense was commenced,
used or continued in bad faith, solely for the purpose of
harassment, delay or malicious injury." N.J.S.A. 2A:15-59.1b(1).
The second justification exists where the judge determines that
"[t]he non-prevailing party knew, or should have known, that the
[pleading] was without any reasonable basis in law or equity and
could not be supported by a good faith argument for an extension,
modification or reversal of existing law." N.J.S.A. 2A:15-59.1b(2).
Here, the trial court expressly determined that plaintiff's
garbage contract complaint was frivolous under the latter
circumstance, i.e., that it lacked a reasonable basis. In
awarding frivolous litigation fees the trial judge found that
there was not a scintilla of evidence that the Borough's actions
were arbitrary, capricious or fraudulent. He found instead that
plaintiff simply opposed the settlement and therefore sued "these
people [to] run up a bill that's $32,000 in an effort to save him
49 [sic]."
Procedural rules are not abrogated or abridged by
plaintiff's pro se status. This point was emphasized by this
court in Tuckey v. Harleysville Ins. Co.,
236 N.J. Super. 221,
224 (App. Div. 1989), when we stated:
Litigants are free to represent themselves if
they so choose, but in exercising that choice
they must understand that they are required
to follow accepted rules of procedure
promulgated by the Supreme Court to guarantee
an orderly process. Such litigants are also
presumed to know, and are required to follow,
the statutory law of this State.
The judge found here that "plaintiff, though not a lawyer,
is not unfamiliar with the legal system in this county and this
state." The judge pointed out that "this plaintiff engaged in
serious and aggressive discovery" in "litigation [which] from the
beginning [was] frivolous" and "was filed without any hope of a
serious recovery." Realistically, "no reasonable person could
have expected its success." Having so determined, there was no
need for the trial court to decide the issue of plaintiff's bad
faith.
There is absolutely no evidence that the Borough acted
arbitrarily, capriciously or fraudulently. It merely acted in a
manner with which plaintiff disagreed. Moreover, Closter
consistently maintained that the settlement was reached after it
gave due consideration to other alternatives, i.e., pursuing
legal action to recoup any overcharge and undertaking its own
solid waste disposal services, but rejected those alternatives as
uncertain and too costly.
Although the trial court offered plaintiff the opportunity
to have a hearing on the issue of his state of mind, plaintiff
declined. Plaintiff has never indicated that he was unaware that
he could not obtain relief without suing Miele nor that he was
unfamiliar with the law that municipal action cannot be reversed
unless it was arbitrary, capricious or unreasonable.
Contrary to plaintiff's argument that the trial court
concluded that plaintiff's litigation was frivolous because it
had been dismissed for failure to provide discovery, plaintiff's
complaint was deemed frivolous because it lacked any reasonable
basis in law or in equity. More precisely, plaintiff failed to
articulate how or why Closter's actions were arbitrary,
capricious or fraudulent. He allegedly believed that his
judgment was better for Closter than was the collective judgment
of its elected officials. What makes plaintiff's filing of the
complaint even more egregious is that relief was impossible,
since he deliberately failed to name an indispensable party.
There is ample evidence to support a reasonable inference,
as Closter argues, that plaintiff's enmity for Miele provided the
initial impetus for this lawsuit and was the driving force behind
its continuance. Unfortunately, Closter was the vehicle that
plaintiff used to carry out this vendetta. Not only was
plaintiff's complaint initiated without any basis in law or in
equity, it was continued for twenty months during a period when
plaintiff knew or should have known, using either a subjective or
objective standard, that there was no legal or equitable basis
for it.
Plaintiff's complaint was frivolous under N.J.S.A. 2A:15-59.1b(2) and, therefore, we find it unnecessary, as did the trial
court, to determine whether it was also frivolous under N.J.S.A.
2A:15-59.1b(1). We affirm the trial court's order awarding
attorney fees and litigation costs to Closter.
In the garbage contract case, Miele Sanitation Company cross-appeals from the order which denied it frivolous litigation attorney fees solely because plaintiff did not name Miele as a direct defendant.
The garbage contract case cannot be viewed in a vacuum but must be assessed against the backdrop of the extensive history between the parties. When plaintiff initiated the complaint, he did not mention Miele except by reference, calling it a "solid waste transfer station facility." Plaintiff had told the court at oral argument that he did not specifically name Miele because of Joseph Miele's pending defamation action, discussed supra, and plaintiff's fear that including Miele in this action would have been used against plaintiff in the libel case. However, since
plaintiff's complaint dealt solely with a specific transaction
between Closter and Miele and because the relief sought required
Closter to recoup funds allegedly due to it from Miele, Closter
set forth as a separate defense that Miele was an indispensable
party and joined Miele by third party complaint.
Thereafter, plaintiff fully litigated and participated in
reciprocal discovery with Miele. It was Miele, for example,
which had plaintiff's complaint stricken for plaintiff's failure
to answer one Interrogatory propounded by Miele. It was only
when the issue of frivolous litigation attorney fees was
addressed that plaintiff raised the defense that Miele was not
named a direct defendant and therefore should not be awarded
frivolous litigation attorney fees. The trial judge indicated in
his oral opinion that, but for the narrow construction of the
McKeown-Brand case, he would have awarded attorney fees to Miele.
Plaintiff now seeks to use his intentional failure to name a
necessary and indispensable party to bar Miele from relief under
the Statute. It is tortured logic to permit plaintiff to fully
participate in reciprocal discovery with Miele and in every other
aspect of the legal proceeding, and then be able to hide behind
the defense that he did not name Miele as a party to the
proceeding. Plaintiff knew of the legal standard of proof (which
he never denied), yet chose to completely ignore it in his
attempt to destroy Miele's contract rights.
It would be contrary to the legislative intent in adopting
the Statute, and inherently unfair, to permit plaintiff to escape
from having attorney fees assessed against him despite discovery
because plaintiff deliberately did not name Miele. Without
question, Miele has suffered the hardship of the frivolous
litigation instituted by plaintiff.
A plaintiff initiating a law suit is not immune from
frivolous litigation sanctions simply by scrupulously avoiding
naming an indispensable party to the suit. The plaintiff who
deliberately fails to name an indispensable party to a frivolous
law suit can reasonably expect the named defendant to make a
third party complaint against the indispensable party,
particularly where, as here, no relief can be obtained without
that party. R. 4:28-1(a).
The Statute indicates that fees may be awarded to "[a] party
who prevails . . . against any other party." N.J.S.A. 2A:15-59.1a. The relief that plaintiff sought was to rescind Miele's
contract. Regardless of the fact that plaintiff deliberately did
not join Miele as a direct defendant, Miele was a party and Miele
prevailed against plaintiff who was unsuccessful in attempting to
set aside Miele's contract.
The Legislature clearly intended to have a party compensated
for defending frivolous litigation, whether or not he, she or it
was deliberately omitted as a direct defendant. Therefore, Miele
is entitled to recover attorney fees from plaintiff pursuant to
the Statute for defending the garbage contract action.
Because we have all the necessary information to determine
the reasonable attorney fees incurred by Miele, and plaintiff has
never questioned the reasonable value thereof, we exercise
original jurisdiction in this matter, R. 2:10-5, and determine,
based upon Miele's attorney's certification of services, the
amount payable by plaintiff to Miele for attorney fees in the
garbage contract case to be $9,012.50.
We affirm the two orders awarding attorney fees and costs.
We remand to the trial court to enter an order awarding Miele
$9,012.50 against plaintiff.
Footnote: 1 The libel action was filed in June 1988 and concluded in plaintiff's favor in December 1991. Footnote: 2 The Tax Court invalidated farmland status for 1991 but declined to impose rollback taxes. Footnote: 3 The record indicates that plaintiff made at least 128 complaints, either in newspaper articles or letters to various people and entities, including governmental agencies, regarding Miele. The governmental agencies included three municipalities, as well as the Bergen County Soil Conservation District, Bergen County Utilities Authority, Bergen County Prosecutor, Bergen County Board of Taxation, Attorney General of New Jersey, New Jersey Department of Agriculture, New Jersey Department of Environmental Protection, New Jersey Division of Taxation, United States Environmental Protection Agency, United States Army Corps of Engineers, United States Fish and Wildlife Service and the Federal Bureau of Investigation. Footnote: 4 Plaintiff deposed Harry Lampman, Closter DPW Superintendent, and Joseph Miele; he attempted to depose Councilman Bruce Litt, but was precluded by a protective order granted to Closter; he also attempted to depose Loretta Castano, Borough Clerk, and Harold Benel, Closter's Building Inspector, but relented when Closter objected as to relevancy. Further, he demanded and reviewed voluminous Borough documents. Footnote: 5 This amount was reduced by approximately $5,000 by virtue of two awards of attorney fees to Closter as a result of plaintiff's frivolous conduct on certain other issues in this matter. Footnote: 6 This amount did not include the attorney fees incurred as a result of plaintiff's frivolous opposition to discovery, for which Closter received an earlier award. Footnote: 7 Actually, plaintiff had been advised by an attorney to answer this one Interrogatory despite his defense of the Shield Law and First Amendment privilege. This attorney, who specializes in this area of the law, advised plaintiff that those defenses were inapplicable to our discovery rules and had advised him to answer the Interrogatory. Despite the attorney's correct advice, plaintiff persisted for seven months in his refusal to answer the Interrogatory.