SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
A-3434-96T1
THOMAS G. DUNN, Mayor of the
City of Elizabeth,
Plaintiff,
and
THE CITY OF ELIZABETH,
Plaintiff-Respondent,
and
JEWISH EDUCATIONAL CENTER, a non-
profit corporation of the State of
New Jersey, ROBERT and REBECCA
HEIZLER, GINO and BIAGIA TERRANA,
STEVEN and AVIVA SINGFER, EDWARD
and CHAVVAH SCHWARTZ, JOSEPH and
SANDRA WALDMAN, FRANK and GLADYS
AGUIRRE, EMIL and SHIRLEY HYMAN,
JOSEPH and DEBORAH ORATZ, WILLIAM
and IDA HASHKOWITZ, IRWIN and EDITH
BRUCK, ARTHUR and HELENE SCHEUER,
STANLEY GUTOWSKI, JOSEPH and BELLE
LAVA, JULES and ANN BROTSKY, PETER
and JOYCE PUGLESE, BEN and MYRA
GREENBLATT, VICTOR and MIMI COHEN,
ARTHUR and REDA RIFKIN, LEONARD and
SARAH SAUSEN, MARTIN and SHEILA
NASHOFER, SHIRLEY SAUSEN, SHALOM
and CHARLOTTE RAKOVSKY, DAVID and
MARILY CHESLOW, JOSEPH and HELENE
WENGER, JOSEPH and MOLLY ROTHSTEIN,
LOENARD and ANNETTE LAUER, MICHAEL
and GERALDINE BERGMAN, CYRIL IAN and
EDNA ALEXANDER, MOSHE and CHERYL
ABRAMOWITZ, AVRAHAM and RIVKA
PINSKER, GORDON and YANINA HAAS,
HOWARD and HADASSA GOLDSMITH, SHELDON
and JANICE WEINREB, LOUIS and SYLVIA
SCHNEIDER, RONALD and RIVKA GROSS,
MATTHEW and AMY TROOP, NEIL and MAVIS
ROSENSTEIN, HOBART and AHUVA SPITZ,
JOSEPH and HANNA GOLDBERG, MARK and
ZILPAH NULMAN, DANIEL and DEBORAH
SHEINBEIN, NICHOLAS and GLADYS RIVERO,
GETTY and RENEE KRUL, HERBERT and BETH
RUSS, and MARY KENNEDY, GLEN and LISA
BOND; LEONARD and LAUREN ALBUQUERQUE;
THOMAS and MARY NOONAN; SOLOMON
GALIMIDI; JAMES and ROSE KEENAN;
NELSON and MONICA CEDENO; IRVING and
EVA GOLDSTONE; STEVEN and KAREN
OSTROVE; SEYMOUR and PHYLLIS BRUCK;
MOHAMMAD and BIBI HANIFF; DAVID and
FAIGE HORNING; AL and MIRIAM REISMAN;
KENNETH and SUSAN MANDEL; JOHN and
CAROL CASCIO; PETER and JOYCE
PUGLESE; JACQUELINE KOPLOWITZ; LOUIS
and LAURA FLEISCHMAN; JONATHAN and
BELA WAYNE; and VINCENT SCULT, ET UX,
Plaintiffs/Intervenors,
v.
STATE OF NEW JERSEY, DEPARTMENT OF
HUMAN SERVICES; ALAN J. GIBBS,
COMMISSIONER OF THE DEPARTMENT OF
HUMAN SERVICES; and SOCIAL,
EDUCATIONAL, RESIDENTIAL AND
VOCATIONAL PROGRAMS OF NEW JERSEY,
INC., a non-profit corporation,
Defendants,
and
PETER MORIELLO and SAMUEL LACHS,
Defendants-Appellants.
Argued February 10, 1998 - Decided June 15, 1998
Before Judges Pressler, Wallace and Carchman.
On appeal from Superior Court of New Jersey, Law
Division, Union County.
Robert Brotman argued the cause for appellants (Mr.
Brotman, of counsel and on the joint brief).
Raymond T. Bolanowski, First Assistant City Attorney,
argued the cause for respondent (William R. Holzapfel,
City Attorney, attorney; Mr. Bolanowski, on the brief).
The opinion of the court was delivered by
CARCHMAN, J.S.C., temporarily assigned.
Defendants Peter Moriello and Samuel Lachs owned real estate
located at 637 Livingston Road, in City of Elizabeth (plaintiff
or City). Defendant Social, Educational, Residential and
Vocational Programs of New Jersey, Inc. (SERV), contracted to
purchase this property for the purpose of converting it to use as
a group home for eight emotionally disturbed teenagers. Funding
was to be provided by defendant State of New Jersey, Department
of Human Services.
After initially approving the plan and issuing a building
permit and after the necessary renovations were nearly completed,
the City issued a stop work order. The City, together with the
intervenors, who are neighbors or parents of students enrolled in
a school near the site, sought to terminate the project. SERV
and Moriello countered by alleging violations of the Fair Housing
Amendments Act (FHAA),
42 U.S.C.A.
§§3601 to -3619, and the Law
Against Discrimination (LAD), N.J.S.A. 10:5-1 to -42.
After a trial, the trial judge found FHAA and LAD violations
and awarded declaratory and injunctive relief, as well as damages
to Moriello; no damages or other relief were awarded to Lachs.See footnote 1
On appeal, Moriello challenges the trial court's refusal to
consider the damages he incurred during the twenty-one month
period between conclusion of the trial and the court's rendering
of the decision. Moriello and Lachs also challenge the denial of
their request for counsel fees.See footnote 2
We conclude that Moriello is entitled to the damages he
sustained not only to the time of trial but also to the time of
the court's decision. We reject the view that the trial judge's
delay in rendering a decision tolled Moriello's damage claim. We
further conclude that as a "prevailing party," Moriello was
entitled to an award of counsel fees. As to Lachs, while he,
too, was a "prevailing party," because he appeared pro se, he is
not eligible for an award of counsel fees.
Because some understanding of the underlying facts is
relevant to Moriello's damage claim, we briefly summarize the
facts developed at trial. This dispute arose as a result of a
proposal by the New Jersey Department of Human Services to fund
the purchase of a property to be used as a group home to house
emotionally disturbed adolescents. Moriello served as a general
contractor for construction of a single-family dwelling on the
property and obtained a building permit from plaintiff at the
commencement of the project. After entering into a contract with
SERV for his sale to it of the premises, he secured a remodeling
permit. Moriello proceeded with the modifications in reliance on
the permit and had completed approximately ninety-eight percent
of the work when plaintiff issued the stop work order and,
thereafter, refused to issue a certificate of occupancy. Because
he was not permitted to complete the work, he suffered
substantial financial damages.
The City brought an action to enjoin Moriello from
completing the project. In challenging the purchase, plaintiffs
and intervenors raised a number of issues including a violation
of various provisions of the Municipal Land Use Law, N.J.S.A.
40:55D-66.1 and -66.2. SERV, and later Moriello, filed a
counterclaim challenging, among other things, the validity of the
stop work order and alleging violations of the FHAA and LAD. The
issues having been joined, the matter was tried from December 5,
1994 to February 16, 1995 and consumed twenty trial days.
On November 12, 1996, the trial judge rendered his decision.
In his eighty-two page comprehensive opinion, the trial judge
found in favor of Moriello, Lachs and SERV. He invalidated
certain zoning ordinance amendments designed to retaliate against
the project, found certain provisions of the zoning ordinance
unconstitutional and found that plaintiffs had violated both
Moriello's and SERV's rights under the FHAA and LAD. He
concluded that Moriello was an "aggrieved person" under both
statutes and awarded MorielloSee footnote 3 damages of $84,788.86,
representing taxes, insurance, loan interest and utilities on the
property from September 16, 1991 (the date of issuance of the
stop work order) through November 30, 1994 (the eve of trial).
In addition to the group home, SERV had contracted with Moriello
to purchase condominium units on Newark Avenue. Damages of
$19,200 for the loss of the fair rental income were awarded to
Moriello. The judge commented:
In setting damages, I cannot go beyond the
trial date, because it would neither be fair
to [Moriello] or to the City for anyone to
benefit or suffer the consequences of the
time it took for the court to decide the
matter.
Finally, SERV was awarded counsel fees of $35,000, while
Moriello and Lachs were denied fees because "that falls within
the court's discretion."
Moriello moved for reconsideration as to damages and both
Moriello and Lachs moved for reconsideration of attorneys' fees.
Moriello alleged that his damages on the Livingston Road house
continued to accrue from December 1994 through November 12, 1996,
when the court rendered its decision. He asserted that he paid
property taxes in the amount of $8,862 during this time. He
explained that in his experience as a builder for over twenty-five years in the City, the City did not make partial assessments
on construction until the certificate of occupancy was issued,
and he confirmed this practice with the City's tax assessor.
Nevertheless, at the conclusion of the trial, the City "imposed a
partial added assessment on this property based upon the building
being substantially complete." Moriello believed that this
constituted "further retaliation" against him. Moriello also
claimed interest expenses in the amount of $51,486.75 from
January 1, 1995, through November 12, 1996.
The judge denied the motion for continuing damages, stating
that an award for damages accrued after the trial "would have
imposed upon the city a liability occasioned solely by this
court's delay in rendering its decision. I felt that to be
unfair to impose upon any litigant."
Regarding counsel fees, the judge found that "property
owners are not necessarily aggrieved parties" under FHAA, since
their interests are different from the interests of the disabled
prospective residents whom the FHAA protects. He reasoned that
since SERV represented the disabled, SERV was entitled to counsel
fees. He also declined to award counsel fees to Moriello and
Lachs reasoning that the City was a public entity and, thus, the
taxpayers would ultimately be burdened with the obligation. He
noted that the $35,000 he awarded to SERV for counsel fees was "a
very modest figure . . . not anywhere near a full fee." "I chose
not to go further to award fees to either [Moriello or Lachs]
simply because I felt I had then reached the total that . . .
fairly should be imposed upon the taxpayers of the City." This
appeal followed.
penalize the damaged party for the delay. It was not the court
but rather plaintiff that caused the damage in the first place.
Thus, if the issue were to be resolved solely on equitable
principles, the equities would favor Moriello, not plaintiff. We
have alluded to denial of damages caused by delay in a different
context in Gimello v. Agency Rent-A-Car Sys., Inc.,
250 N.J.
Super. 338, 367 (App. Div. 1991), where we rejected a similar
argument. As in Gimello, Moriello acted promptly in pursuing his
legal remedies and prevailed. Plaintiff, even though a public
entity, should not benefit from any delay not caused by Moriello.
There is, however, a more fundamental reason for not denying
Moriello his post-trial, pre-decision damages. Litigation, by
its very nature, is a long and time-consuming process. Not only
is delay an accepted part of the litigation process, delay is
built into the process itself. For example, our court rules
provide for a minimum discovery period of 150 days, R. 4:24-1, a
time which is extended routinely. A more practical consideration
is that crowded court calendars delay trials for months and even
years. Although efforts are constantly made to reduce such
delay, where litigation is complex and sophisticated, as here,
there will inevitably be delay at some stage of the litigation
process. And where complex litigated matters are tried without a
jury before a judge, there must be a realistic expectation that
the trial judge may reserve decision in order to fully absorb the
testimony, review exhibits and prepare a comprehensive decision
which, as here, fulfills the judicial mandate to make
comprehensive findings of fact and conclusions of law. R. 1:7-4.
All the while, of course, the trial judge has other trial and
administrative responsibilities as well.See footnote 4
Moriello's damages continued past the trial. R. 4:42-7
provides:
If damages are to be determined in respect of
any continuing cause or action, they shall be
determined to the time of the trial or
assessment.
[Emphasis added]
The rule itself contemplates circumstances where damages
continue. Where such damages continue, there can be no final
assessment until the decision is rendered.
In Leslie Blau Co. v. Alfieri,
157 N.J. Super. 173, 210
(App. Div.), certif. denied sub nom., Leslie Blau Co. v. Reitman,
77 N.J. 570 (1978), plaintiff's damages were dependent on future
rents being received. We adopted a rule permitting damages for a
breach of contract for payments in installments, holding that the
plaintiff was entitled to recover only the installments past due.
Ibid. However, a judgment for past due installments
"establish[es] the liability of defendant under the contract, as
fully as if this were done by declaratory judgment; and on the
principle of res judicata this will facilitate recovery on other
installments as they fall due." Ibid. (quoting City of Hampton,
Va. v. United States,
218 F.2d 401, 405 (4th Cir. 1955)).
Moriello moved to re-open the proceedings and requested the
trial judge to consider testimony regarding additional damages.
The motion was denied. It is not clear from the trial judge's
decision on this application whether he was barring any future
claim by Moriello for these additional damages. We assume that
was not the case, and Moriello's alternative was to file a
separate action for these damages. Such a result does not serve
anyone's interests, certainly not the litigants' nor the
judiciary's.
We conclude that the appropriate course of action was to re-open the record for additional proofs as to damages. We note
that liability had been determined, and it appears that the
proofs required to establish such damages are minimal. The
appropriate remedy now is a remand to the trial court to consider
proofs and fix those damages accruing subsequent to the trial
date.See footnote 5
application for attorneys' fees, urging that they were
"prevailing parties," and there were no special circumstances
warranting denial of such an award.
The trial judge offered two reasons for denying the counsel
fees requests of Lachs and Moriello. First, he found that
"property owners are not necessarily aggrieved parties under the
[FHAA]," since "[t]heir interests are quite different than the
interests of" the prospective disabled residents, whom SERV
represented. Second, the judge declined counsel fees to Lachs
and Moriello because "the public treasury in the final analysis .
. . bears that cost."
We disagree. Property owners are aggrieved persons, with
standing to maintain an action and recover damages under the
FHAA, a conclusion reached by the trial judge in his initial
opinion: "I find that Mr. Moriello is an aggrieved person under
the [LAD] and the [FHAA]." Plaintiff argues that Lachs and
Moriello were not "primary" or "direct victims" of the
deprivation of housing rights. However, Moriello and Lachs
cannot be classified as aggrieved persons for the purpose of
entitlement to bring an action and collect damages, while at the
same time be denied that status for the purpose of a counsel fee
award.
42 U.S.C.A.
§3613(a)(1)(A) authorizes an aggrieved person
to commence a civil action under the FHAA.
42 U.S.C.A.
§3602(i)(1) defines an aggrieved person as any person who "claims
to have been injured by a discriminatory housing practice." See
Havens Realty Corp. v. Coleman,
455 U.S. 363,
102 S. Ct. 1114,
71 L. Ed.2d 214 (1982) (a plaintiff has standing under the Fair
Housing Act if plaintiff suffered injury as a result of
defendant's actions). In Growth Horizons, Inc. v. Delaware Cty.,
Pa.,
983 F.2d 1277, 1282 n.6 (3rd Cir. 1993) (citations omitted),
the court explained that an aggrieved person under section 3602
"does not necessarily have to be the person discriminated
against."
Developers are aggrieved persons under section 3602, with
standing to bring an action under the Act. See, e.g., Hovsons
Inc. v. Township of Brick,
89 F.3d 1096, 1100 n.2 (3rd Cir. 1992)
(determining that a developer of a nursing home could pursue a
claim under the FHAA). In Franklin Bldg. Corp. v. City of Ocean
City,
946 F. Supp. 1161 (D.N.J. 1996), the court rejected the
argument that plaintiff builder lacked standing because it was
not within the class of persons which the FHAA intended to
protect. The court explained that plaintiff had standing because
it alleged that "defendants discriminated on the basis of
handicap" and it "suffered economic injury as a result of this
discrimination. To require more [] to confer standing would
transform the standing inquiry into a judgment on the merits."
Id. at 1166. An aggrieved party who is successful in his civil
action under the FHAA is a prevailing party for purposes of
reimbursement of attorneys' fees. See United States v. Security
Management Co., Inc.,
96 F.3d 260 (7th Cir. 1996).
42 U.S.C.A.
§3613(c)(2) authorizes an attorney's fee to a
prevailing party; under section 3602(o) the term "prevailing
party" has the same meaning as under section 1988 of this
title.See footnote 6 To qualify as a prevailing party under section 1988,
"[a] party must demonstrate that his lawsuit was causally related
to securing the relief obtained," and "had some basis in law."
Singer v. State,
95 N.J. 487, 494, cert. denied sub nom., New
Jersey v. Singer,
469 U.S. 832,
105 S. Ct. 121,
83 L. Ed.2d 64
(1984). The United States Supreme Court defined a prevailing
party as one who succeeds on a significant issue, thereby
achieving some of the benefit sought in the litigation. Texas
State Teachers Ass'n v. Garland Independent School Dist.,
489 U.S. 782, 791-92,
109 S. Ct. 1486, 1493,
103 L. Ed.2d 866, 877
(1989) and Hensley v. Eckerhart,
461 U.S. 424, 433,
103 S. Ct. 1933, 1939,
76 L. Ed.2d 40, 50 (1983). See also, J.H.R. v.
Board of Educ. of Tp. of East Brunswick,
308 N.J. Super. 100,
112-14 (App. Div. 1998).
We must distinguish between the claims of Moriello and
Lachs. As to Lachs, even though he is an "aggrieved person" and
ultimately a "prevailing party," there is a bar to an award of
counsel fees which he cannot overcome. Plaintiff is correct that
Lachs is not entitled to a counsel fee under the FHAA because he
represented himself. In Kay v. Ehrler,
499 U.S. 432, 438,
111 S.
Ct. 1435, 1438,
113 L. Ed.2d 486, 493 (1991), the Court denied a
counsel fee under U.S.C.A. § 1988 to a pro se litigant, who was
also an attorney, explaining: "The statutory policy of
furthering the successful prosecution of meritorious claims is
better served by a rule that creates an incentive to retain
counsel in every such case." We find no reason why the same rule
should not apply to applications under section 3613 (1)(2). We
agree that no counsel fees should be awarded to Lachs.
We now focus our attention on Moriello's claim. There is no
question that Moriello suffered economic loss and was a
prevailing party. He obtained significant declaratory and
injunctive relief and damages in accordance with the FHAA and the
LAD in the judgment resulting from his counterclaim.
As Moriello argues, "a prevailing plaintiff `should
ordinarily recover an attorney's fee unless special circumstances
would render such an award unjust.'" Hensley v. Eckerhart,
supra, 461 U.S. at 429, 103 S. Ct. at 1937, 76 L. Ed.
2d at 28
(quoting S. Rep. No. 94-1011, at 4 (1976)). We have followed
this mandate, awarding counsel fees to a prevailing party under
section 1988 as a matter of course in the absence of special
circumstances. Hunter v. Trenton Hous. Auth.,
304 N.J. Super. 70, 74 (App. Div. 1997) (FHAA and LAD action against housing
authority for permission to build a wheelchair ramp at
plaintiff's front door); Stockton v. Rhulen,
302 N.J. Super. 236,
241 (App. Div. 1997) (civil rights action against the State
Racing commission to invalidate licensing requirement that owners
and trainers purchase insurance from a specific company and
agent); African Council v. Hadge,
255 N.J. Super. 4, 12 (App.
Div. 1992) (civil rights action against a township to obtain a
permit to march in the street); Gregg v. Township Comm. of
Hazlet,
232 N.J. Super. 34, 37-38 (App. Div. 1989) (civil rights
action against township committee for denial of due process in
consideration of plaintiffs' application for a rent increase).
In Gregg, supra, we rejected the same argument advanced by
plaintiff here:
Although the award of fees is
discretionary, it was clearly the intent of
Congress in passing section 1988 that fees be
awarded as a matter of course. . . . [F]ees
should be the rule rather than the exception
and the special circumstances exception
should be applied only in unusual cases.
Thus, a trial judge's discretion in denying a
fee is quite limited.
[232 N.J.Super. at 37-38 (citations
omitted).]
The only special circumstances cited by the trial judge were that
Moriello was not a direct or primary victim of the unlawful
discrimination, and that the plaintiff is a public entity.
Section 3613 does not limit counsel fee awards to direct or
primary victims.
There is a more important consideration for awarding fees
here to Moriello. Not only has he suffered damages as a direct
result of plaintiff's unlawful discrimination, but an award of
fees furthers the policy of both the FHAA and LAD. The fee-sharing provision provides an impetus to sellers and developers
to participate in projects such as this group home. The
development or sale of property for a group home or other similar
enterprise is a project fraught with emotion and volatility.
Invariably, it raises political issues within the community
affected by the home's presence. Sellers and developers must be
assured that if they are prepared to incur the legal costs
inevitable in such a process and if a party engages in acts
violative of the FHAA or LAD, the legal costs of such battle will
not be ultimately borne by the seller or developer. Moriello and
Lachs are, in their words, "willing sellers," without which there
is "no sale" and no opportunity to eradicate housing
discrimination.
Plaintiff's status as a public entity is not a special
circumstance warranting denial of an award. We have consistently
rejected this reasoning and awarded counsel fees against public
entities. In Hunter v. Trenton Hous. Auth., supra,
304 N.J.
Super. 70, we emphasized that "the fact that the party to be
charged is a taxpayer-supported state agency" was not a defense
to the prevailing party's claim for counsel fees. Id. at 75 n.5.
Accordingly, as to Lachs, we affirm the determination
denying his counsel fees. As to Moriello, we reverse and remand
for a hearing to determine a) damages from the time of trial to
the time of decision, and b) counsel fees. We do not retain
jurisdiction.
Footnote: 1Lachs' name appeared on the deed but only as an accommodation to secure financing that he provided to Moriello. Footnote: 2Plaintiff did not appeal the decision of the merits of Moriello's claims. Footnote: 3Lachs had no damages independent of Moriello. Footnote: 4Even though not part of this record, it is a matter of public record (of which we take judicial notice, N.J.R.E. 201 (b)(3); N.J.R.E. 202(b)) that during the time period in question here, the trial judge, by appointment of Chief Justice Wilentz was chairing the Assignment Judges' Budget Committee. This was during the transitional period as the State assumed fiscal responsibility for the State court system. As such, the trial judge was required to preside over extended judicial budget hearings, as well as appear before the Legislature during judiciary budget hearings. All of these responsibilities, in addition to his numerous other judicial responsibilities, apparently contributed to the delay. Footnote: 5We will not exercise original jurisdiction as there is a discrepancy in Moriello's damage figures. He claims $64,111.93 in additional damages, but only certifies to $60,349.45. There is also a pending tax appeal that may impact on these damages. Footnote: 6 42 U.S.C.A. §1988, the Civil Rights Attorney's Fee Awards Act, does not define the term "prevailing party" but, like section 3613(c)(2), provides that, in a civil rights action, "the court, in its discretion, may allow the prevailing party, other than the United States, a reasonable attorney's fee as part of the costs."