A state appeals court on Wednesday ordered further review of more than $166,000 in receivership fees awarded to New Jersey firm Greenbaum, Rowe, Smith & Davis, issuing an “admonition [that] has been repeated time and again” to trial courts that don’t put reasons for their rulings on the record.
The two-judge Appellate Division panel said a remand was necessary to determine whether the award, based on a $300 hourly rate, was reasonable, because two lower court judges did not fully explain their reasoning.
The case involves a business dispute between two Paterson business partners, Nader Ghatas and Mamdoh Hana, who ran a day care facility and laundromat controlled by a joint business entity, according to the court.
Ghatas sued Hana, for reasons that were not spelled out in the ruling by Appellate Division Judges Clarkson Fisher Jr. and Thomas Sumners Jr.
A Passaic County Superior Court judge appointed a lawyer at Iselin-based Greenbaum Rowe to act as a receiver, take control of the businesses and property, and determine whether the business should continue to operate or be liquidated. The Greenbaum Rowe attorney, the ruling said, concluded that the businesses should be liquidated, but both Ghatas and Hana objected. The trial judge agreed to let the businesses to continue operating, but allowed the Greenbaum Rowe attorney to continue to act as the receiver, control the businesses, and collect fees.
Eventually, Greenbaum Rowe in late 2016 was awarded $166,106 in fees, and both Ghatas and Hana were held responsible for paying those fees. The judge issuing that order, not identified by the Appellate Division, is documented in the judiciary’s civil case database as Thomas J. LaConte.
Ghatas appealed the fee award, though Hana didn’t participate in the appeal.
The appeals court in Wednesday’s unpublished decision said it was hampered by the fact that there was no record to justify the amount of fees. There were no oral arguments or opinion for the appeals court to determine whether the fees were justified, the panel said.
“No one—not the parties and not this court—can properly function or proceed without some understanding of why a judge has rendered a particular ruling,” the court said in the per curiam decision.
The panel cited the state Supreme Court’s 1980 ruling in Curtis v. Finneran. There, the court said that the absence of a trial judge’s rationale “constitutes a disservice to the litigants, the attorneys and the appellate court.”
“[T]his admonition has been repeated time and again,” Fisher and Sumner said.
“The parties and this court are entitled to the judge’s reasons for entering the orders under review,” they continued. “We should not be put in the position of guessing or assuming what the judge … might have been thinking.
“And we are not enticed by the receiver’s invitation to exercise original jurisdiction,” the appeals court said.
However, the appeals court said there are “legitimate concerns” about the fees awarded. The receiver, the appeals court said, could have appointed a business administrator to monitor the businesses’ financial activities, presumably at a lower hourly rate.
“This, however, is not the time or place to closely analyze these fee applications,” the panel said.
Ghatas was represented by Michael De Marco, of De Marco & De Marco in North Haledon. He did not return a call seeking comment.
Greenbaum Rowe associate Irene Hsieh represented the firm. She declined to comment on the decision.