Plaintiff, Law Offices of Rajeh A. Saadeh, LLC, filed a lawsuit against its clients, defendants Barbara Hutton and James Hutton, for the legal work it performed for them for a collection matter, for which they failed to pay its fees. While the trial court entered a default judgment against defendants for the amount of the unpaid legal fees, it awarded the plaintiff law firm only a fraction of the requested counsel fees. The issue in Law Offices of Rajeh A. Saadeh, LLC v. Hutton, 2025 N.J. Super. Unpub. LEXIS 185 (App. Div. Feb. 5, 2025) was whether the trial court mistakenly exercised its discretion in awarding only a fraction of the requested counsel fees.
According to the retainer agreement entered into between the defendants and the plaintiff law firm, the agreement provided that the law firm would be entitled to recover the costs of collection in the event that legal process was necessary to collect the amount outstanding for fees incurred. In this case, defendants failed to pay plaintiff $4,939.20 for legal services performed. The plaintiff law firm sent a fee arbitration pre-action notice to defendants informing them of their right to request a fee arbitration regarding the owed fees. When the defendants did not respond, plaintiff filed a complaint for the payment of its fees. Again, defendants failed to respond and the plaintiff requested that the court enter a default.
In its fee application, the law firm sought the amount of fees owed $4,939.20 (incurred in the collection matter) plus $2,010.00 in legal fees for its work pursuing the owed fees, $115.50 in expenses and disbursements, and $660.00 in anticipated fees. The plaintiff law firm submitted a certification of services to support its application.
However, the trial court awarded only a fraction of the fees requested. The court awarded plaintiff $363.00 in counsel fees, $115.00 in costs but no fees for any “anticipatory” fees. The trial court denied almost the entirety of plaintiff’s counsel fee application because the fee application used “blocked billed” time entries. The court found that was improper.
This decision was appealed to the Appellate Division. The Court noted that the trial court did conduct the appropriate analysis to determine whether the number of hours were reasonably expended, as well as the specific hourly rates claimed. Here, the attorney’s hourly rate of $330.00 was found reasonable. However, the trial court found four of the listed time entries unreasonable, striking almost all of the time because of the “block billing.” The court struck 5 hours and 54 minutes of the 7 hours plaintiff spent on the matter.
Block billing is a method by which each lawyer would enter the total daily time spent working on a case, rather than itemizing the time expended on specific tasks. It is essentially a summary of the activities performed rather than detailing every task.
While the trial court found that methodology of billing was improper, the Appellate Division disagreed. It found that such billing should be upheld as reasonable if the listed activities reasonably correspond to the number of hours billed. It did note that some of the entries were vague and that may be a reason to exclude certain hours but it would not be a reason to exclude the entire entry.
The Appellate Division found that “[t]he more appropriate approach would be to look at the entire block, compare the listed activities and the time spent, and determine whether the hours reasonably correlate to all of the activities performed.” The Court did note that plaintiff listed each task performed in the block entry.
Thus, the Appellate Division concluded that the fee award here was a result of a mistaken exercise of the Court’s discretion. It vacated the fee award made to plaintiff and remanded the matter back to the trial court to consider anew its determination as to the amount of counsel fees plaintiff was entitled.
