Party Who Seeks Fees Must Show Non-Prevailing Party Acted in “Bad Faith”

In re Estate of Gallegan, A-4256-17T4 9 (N.J. Super. Ct. App. Div. June 26, 2019).

Ralph A. Gallegan died testate, leaving his estate to seven of his nine children. He owned two parcels of real estate in New Jersey.  The estate administrator filed a complaint for instruction regarding the real property.  One of decedent’s sons, Thomas, filed a counterclaim.

The trial court granted the plaintiff’s summary judgment motion, dismissing the counterclaim. The court also awarded attorney fees and costs to the plaintiff.

Thomas appealed. The appellate court determined that a proper analysis requires a court to view the evidence in the light most favorable to the non-movant, and the non-movant in this case disputed the facts as set forth by the plaintiff.  Since there was a dispute as to a material fact, the appellate court determined summary judgment was not appropriate and remanded to the trial court.

The appellate division also reversed and remanded the award of attorney fees, which the trial court ordered Thomas to pay pursuant to Rule 1:4-8.  Because that award was made against a party, N.J.S.A. 2A:15-59.1 was implicated.  The Appellate Division noted that the trial court made no finding that Thomas acted in bad faith as is required in Ferolito v. Park Hill Association, 408 N.J. Super. 401, 408 (App. Div. 2009).  “‘[T]he burden of proving that the non-prevailing party acted in bad faith’ is on the party who seeks fees and costs pursuant to N.J.S.A. 2A:15-59.1.” Gallegan, at *11-12.