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N.J.S.A. 2A:15-59.1. We reverse."> Original Wordprocessor Version

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NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-4907-04T14907-04T1 KEITH LANZI, Plaintiff-Respondent, v. EDWARD BUCCI and EDWARD BUCCI BUILDERS, INC., Defendants-Appellants, and JOSEPH POLIZIANA and MERCER WALL SYSTEMS, Defendants. ________________________________

Submitted January 24, 2006 - Decided June 21, 2006 Before Judges Coburn and Collester. On appeal from Superior Court of New Jersey, Law Division, Cumberland County, L-0224-02. Gordon C. Strauss, attorney for appellants. Randy C. Redden, attorney for respondent. PER CURIAM Defendant Edward Bucci and Edward Bucci Builders, Inc. appeal from the denial of sanctions pursuant to R. 1:48(b)(1) and counsel fees pursuant to N.J.S.A. 2A:15-59.1. We reverse. Bucci is a home builder who entered into an agreement with Poliziana and Mercer Wall Systems for
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installation of exterior improvements on a home he was building. Poliziana subcontracted to Lanzi, who completed the work. Bucci Builders paid Poliziana and Mercer pursuant to its agreement. Plaintiff was not paid for all the work he performed and demanded payment from Bucci Builders, who refused to pay. Plaintiff Lanzi filed his complaint on February 19, 2002, against Joseph Poliziana, trading as Mercer Wall Systems, as well as Edward Bucci and Edward Bucci Builders, alleging breach of contract for failure to compensate him for stucco work performed on a Princeton residence. Only the Bucci defendants filed an answer denying liability for payment and a counterclaim alleging the complaint was frivolous and seeking counsel fees and sanctions. Poliziana and Mercer Wall Systems did not respond and filed for Chapter 13 bankruptcy. Subsequently, the Bucci defendants moved for dismissal of the complaint pursuant to R. 4:23-5 for failure of plaintiff to answer interrogatories. This motion was granted on August 2, 2002. A month later on September 3, 2002, the Bucci defendants sought sanctions against plaintiff's counsel pursuant to R. 1:4-8(b)(1) and for payment of their counsel fees by plaintiff pursuant to N.J.S.A. 2A:15-59.1. Lanzi then filed his answers to interrogatories and his complaint, restored on October 11, 2002. At the same time the trial judge denied the Bucci defendants' motion for fees and sanctions "at this stage of the proceeding." When the matter was called for trial on January 5, 2004, plaintiff's counsel moved for a voluntary dismissal. Defense counsel objected to a dismissal on grounds that a dismissal would extinguish his counterclaim for sanctions and attorney's fees. However, the trial judge granted a voluntary dismissal and dismissed both the complaint and counterclaim with prejudice. The Bucci defendants appealed and we reversed the dismissal of their counterclaim with prejudice. Furthermore, we exercised our original jurisdiction under R. 2:10-5 to reinstate the counterclaim and issued a direction that the Bucci defendants could seek relief by a post-judgment motion. After the Bucci defendants moved for sanctions pursuant to R. 1:4-8(b)(1) and counsel fees pursuant to N.J.S.A. 2A:15-59.1, the trial judge denied the application after review of Lanzi's interrogatory answers, the allegations in the complaint, the argument of Lanzi both at mediation and during oral argument on defendants' motion. She concluded that there was no showing of bad faith and that since there was a factual dispute as to a contractual relationship, she could not conclude that the complaint was without any reasonable basis in law or equity. A review of Lanzi's interrogatory answers supports the claim of the Bucci defendants that the complaint was frivolous. He gave the following response to the question as to how the Bucci defendants knew or should have known that plaintiff was entitled to receive payment:

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Edward Bucci attended a meeting between himself, Keith Lanzi and Joseph Poliziana in which the parties agreed that Lanzi would perform the work. In addition, Edward Bucci attended the job site on various occasions, and was aware that Lanzi was performing the work. Noticeably, the answer does not assert specific facts as to how the Bucci defendants knew or should have known that plaintiff was entitled to be paid by them. In a response to a question regarding the second count of the complaint alleging "the Bucci defendants intentionally, recklessly, carelessly and/or negligently forwarded payment for the work to the defendants Joseph Poliziana and Mercer Wall Systems," plaintiff answered: Lanzi informed Edward Bucci that he previously dealt with defendant Joseph Poliziana and had difficulty being paid. Lanzi had requested that defendant Edward Bucci forward payment directly to him. Once again the answer does not state a claim of privity of contract between plaintiff and the Bucci defendants. Assuming plaintiff requested that payment be made to him directly, the Bucci defendants had no obligation to do so. In response to an interrogatory concerning plaintiff's allegations in the complaint that Bucci and Poliziana were engaged in a joint venture, he responded: Joseph Poliziana and Edward Bucci originally entered into an agreement in which Joseph Poliziana and Mercer Wall Systems would perform the work. Later, Poliziana and Bucci agreed that Lanzi would perform the work that Poliziana had contracted to perform. Clearly the answer does not support the allegation of a joint venture. Furthermore, in response to defendants' inquiry as to any written or oral contract, plaintiff attached only an invoice to Mercer Wall, a fax transmittal from Bucci Builders giving job site directions to Poliziana, and plaintiff's handwritten calculations indicating a balance due to him of $15,250. N.J.S.A. 2A:15-59.1 provides that a non-prevailing party must pay reasonable counsel fees when that party continues an action while knowing or being charged with knowing that the complaint was without reasonable basis in law or equity and failing to dismiss it. Moreover, while N.J.S.A. 2A:15-59.1 does not apply to sections against an attorney, Dziubek v. Shumann, 275 N.J. Super. 428, 440 (App. Div. 1994), R. 1:4-8 states that sanctions, including payment of an opposing party's counsel fee, may be imposed against an attorney who initiates and pursues frivolous litigation. Port-O-Sun Corp. v. Teamsters, 363 N.J. Super. 431, 439 (App. Div. 2003). The rule provides: (a) Effect Of Signing, Filing or Advocating a Paper. The signature of an attorney or pro se party constitutes a certificate that the signatory has read the pleading, written motion
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or other paper. By signing, filing or advocating a pleading, written motion or other paper, an attorney or pro se party certifies that to the best of his or her knowledge, information and belief, formed after an inquiry reasonable under the circumstances: (1) the paper is not being presented for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation; (2) the claims, defenses and other legal contentions therein are warranted by existing law or by a non-frivolous argument for the extension, modification or reversal of existing law or the establishment of new law; (3) the factual allegations have evidentiary support or, as to specifically identified allegations, they are either likely to have evidentiary support or they will be withdrawn or corrected if reasonable opportunity for further investigation or discovery indicates insufficient evidentiary support; ... If the pleading, written motion or other paper is not signed or is signed with the intent to defeat the purpose of this rule, . . . any adverse party may also seek sanctions . . . In dealing with the standard to be applied in determining whether the litigation is frivolous within the meaning of the rule, we have stated that, [T]he term "frivolous" has been accorded a restrictive interpretation under the frivolous lawsuit statute, McKeown-Brand v. Trump Castle Hotel & Casino, 132 N.J. 546, 561-63 (1993), where the term has been limited to claims or defenses made in bad faith, solely for the purpose of harassment, delay or malicious injury or without any reasonable basis in law or equity. [Trocki Plastic Surgery Center v. Bartkowski, 344 N.J. Super. 399, 406 (App. Div. 2001).] Plaintiff's interrogatory answers demonstrate that there was no factual or legal basis for his complaint against defendant and that there was no good faith basis in maintaining and pursuing the action. The motion judge erred by focusing on plaintiff's allegations in the complaint, at the mediation proceeding or during oral argument, as well as considering plaintiff's self-serving certification filed after the Bucci defendants sought relief and sanctions in the post-judgment application. We reverse the order of dismissal and remand to the trial court to award counsel fees and costs against plaintiff and/or his attorney within twenty days after receipt of an updated affidavit of services from counsel for the Bucci defendants. Reversed.

(continued) (continued)

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