A week after hearing arguments on whether lawyers who represent themselves pro se in collections actions should be awarded counsel fees, the state Supreme Court said leave to appeal in the case had been improvidently granted.
The court on Wednesday granted a request by Kern Augustine Conroy & Schoppmann, a Bridgewater firm that is defending its award of fees.
Partner Robert Conroy had argued that the issue of whether pro se law firms should be awarded counsel fees was not properly briefed below and there was no record for the court to consider.
The only issues addressed by the Appellate Division, he says, were whether counsel fees in general should be awarded in collections cases, whether they should have been made available in this case in particular and the propriety of the 16 percent prejudgment interest rate awarded by the trial judge.
In their respective rulings, the trial judge and the Appellate Division said Kern Augustine should be awarded counsel fees, even though the firm was acting pro se. Conroy says that is now the rule, even though the Appellate Division ruling was unpublished. "It’s as close as you get to being the controlling law in this state," he says.
Conroy, during oral arguments on April 30, said the firm deserved the fees it was awarded to compensate for the valuable time its attorneys expended.
The case dates to the late 1990s, when Mercer County, through the state’s Green Acres program, acquired 88 acres of E. Bruce DiDonato’s property adjacent to a county park for $900,000 and bought development rights for $44,000.
The county granted DiDonato an easement in 1997 so he could use his 50-by-2,000-foot dirt driveway. But DiDonato was not told that it was a limited-use, rather than exclusive, easement, allowing neighbors to use the driveway to access the park.
DiDonato erected a gate and fence, and laid down gravel on the driveway, but later was told that the county did not have authority to grant an exclusive easement. He sued, seeking an order for the county to sell him the driveway, void the sale of the developmental rights and fees, and other relief.
During the litigation, DiDonato enlisted the services of several firms, including Kern Augustine. In 2002, DiDonato replaced the firm with new counsel, Morgan Lewis & Bockius.
That year, Kern Augustine filed a suit seeking more than $140,000 in fees for work done in the two years since DiDonato retained it.
Superior Court Judge Neil Shuster held the fee request in abeyance pending a resolution of the easement litigation. After that settled in 2006, DiDonato made an offer of fees that Kern Augustine rejected, claiming it was at that point due more than $500,000, including interest.
After court-ordered mediation failed, the parties asked Shuster to settle certain legal issues that would help bring the sides closer together.
Shuster ruled in 2007 that Kern Augustine’s retainer agreement’s interest rate — 2 percent per month — was not enforceable and that a commercially reasonable rate would be applied. The firm was entitled to costs associated with pursuing the fees in court but not fees incurred while withdrawing from the easement case, he held.
Shuster retired and the case was eventually transferred to Superior Court Judge Mary Jacobson, who ruled after hearing additional testimony.
In July 2011, Jacobson awarded Kern Augustine $305,058, consisting of $105,777 for fees incurred in the litigation against DiDonato, $102,138 in fees and costs for the collection suit and $97,142 in prejudgment interest.
DiDonato appealed, but Appellate Division Judges Ariel Rodriguez, Jack Sabatino and Victor Ashrafi affirmed, finding Jacobson’s decision was supported by the evidence.
DiDonato’s lawyer, Glenn Cochran, asked the court during oral arguments to overturn the $102,138 counsel fee award, and issue a rule that says pro se law firms cannot collect counsel fees when they sue former clients for unpaid debts.
"Why should lawyers be singled out for this preferential treatment?" asked Cochran. The courts, he said, "should treat every pro se litigant equally. Draw a bright-line rule saying there can be no pro se attorney fees in any context."
The justices asked extensive questions of both attorneys, but gave no indication that they had second thoughts about having agreed to hear the case.
Cochran, who runs a firm in Princeton, declines to comment.