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The New Jersey Towing Act (N.J.S.A. 56:13-15(a-b) provides that a motor vehicle that is towed without the consent of its owner or operator may not be towed to or stored at a storage facility unless the facility "has a business office open to the public between 8 a.m. and 6 p.m. at least five . . . days a week, excluding holidays."

The Act also requires towing companies to "provide reasonable accommodations for after-hours release of stored motor vehicles."

One tow truck operator has now learned this law the costly way.

On a Thursday in March 2018, Malek Saadeh parked a vehicle in a privately owned parking lot. He returned Friday at 5:50pm to retrieve his vehicle. He discovered that it had been towed by Majestic Towing & Transport Inc., d/b/a Majestic Towing & Recovery and Majestic Towing (Majestic).

Saadeh called Majestic to inquire regarding retrieving his vehicle. An employee of Majestic informed him that he would not be permitted to retrieve the vehicle until the following Monday at 9:00am as they do not release vehicles after 5:00pm or during the weekend.

Saadeh retrieved the vehicle the following Monday, ultimately paying Majestic a fee of $346 to release the vehicle, which fee included charges for storing the vehicle over the weekend.

Subsequently, on April 20, 2020, Saadeh filed a lawsuit in Superior Court in Middlesex County alleging that Majestic's conduct constituted violations of the Towing Act and the New Jersey Consumer Fraud Act. The suit sought treble damages, punitive damages, and attorneys' fees.

Majestic conceded that the business hours at the location were from 9am to 5pm, in violation of the Towing Act, however, they argued that there were disputed issues of material fact regarding the identity of the person with whom Saadeh had spoken when he called Majestic on Friday, and whether he would have been able to retrieve the vehicle on Saturday.

At oral arguments, the trial judge granted partial summary judgment to Saadeh on Majestic's liability for violating the Towing Act, and directed him to submit his affidavit of damages and counsel fees.

Subsequently, Saadeh's counsel requested a fee award of $21,334, "plus an upward adjustment" to the extent allowed by Rendine v. Pantzer.

The attorney certified that the requested fee was "comparable or lower than the fee customarily charged in the locality for similar legal services given her experience and education" and averred that "the fee was a hybrid contingency-hourly arrangement." Counsel further explained that while "the questions involved" in the matter "were neither novel nor difficult," the fees were nevertheless incurred because of "the defendants' unreasonable positions regarding their own palpable, undisputed fraud." Counsel supported the application with itemized statements documenting the time both she and her colleague spent on plaintiff's case.

On April 12, 2022, the judge entered an order granting Saadeh a judgment in the amount of $9,617, consisting of: (1) $1,039, or three times his ascertainable loss; (2) $1,732 in punitive damages, or five times the award of compensatory damages; (3) $346 in restitution; and (4) $6,500 in attorneys' fees. 

Although the counsel fee award was significantly less than the amount requested, no explanation accompanied the order other than the following brief statement: "The court finds that reasonable attorney's fees, filing fees and reasonable cost of suit amount to a total of $6,500."

Saadeh appealed to the Appellate Division that his award of fees was insufficient.

Judges Gooden Brown and Mitterhoff agreed, in a written ruling released today.

The Towing Act was enacted to protect individuals from "predatory towing practices," such as "charging unwarranted or excessive fees, particularly in connection with towing vehicles from private parking lots which do not display any warnings to the vehicle owners or operators, or overcharging persons for towing services provided under circumstances where the person has no meaningful opportunity to withhold consent. 

The Towing Act makes breach of its provisions a violation of the CFA. Pisack v. B & C Towing, Inc.

Turning to the counsel fee award, any person who suffers any ascertainable loss of moneys as a result of a Towing Act violation may bring an action to recover threefold the damages sustained and reasonable attorneys' fees, filing fees and reasonable costs of suit, as well as any other appropriate legal or equitable relief as determined by the court. As our Supreme Court has explained, an award of treble damages and attorneys' fees is mandatory if a consumer-fraud plaintiff proves both an unlawful practice under the CFA and an ascertainable loss.

We generally do not set aside an award of attorneys' fees except on the rarest occasions, and then only because of a clear abuse of discretion. Garmeaux v. DNV Concepts.

However, in order to perform our review, we must be provided with adequate reasons for the trial judge's determinations. Gormley v. Gormley.

Trial judges are under a duty to make findings of fact and to state reasons in support of their conclusions." Romero v. Gold Star Distrib., LLC.

Here, in setting the fee award, the judge stated only that he "found that reasonable attorney's fees, filing fees and reasonable cost of suit amount to a total of $6,500." However, our Supreme Court has made it clear that a trial court must analyze the Rendine factors in determining an award of reasonable counsel fees and then must state its reasons on the record for awarding a particular fee.

Nothing in the record shows the judge considered the requisite factors. Therefore, we are constrained to reverse and remand the matter for a determination of a reasonable fee award consistent with the principles governing the award of attorneys' fees set forth in our cases and reiterated herein, and a clear articulation of factual findings correlated to the relevant legal principles.

The Appellate Division sent the matter back to the Superior Court for this determination.

The winning attorneys are Rajeh A. Saadeh and Lindsay A. McKillop Esq. of The Law Office of Rajeh A. Saadeh, LLC.

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Anonymous said...

That's some way to teach them business ethics.
Wish someone should challenge some of the unscrupulous Lakewood towing operators.

Anonymous said...

Just want to correct that it was not a privately owned lot - it was a public parking lot. North Plainfield Community Center’s parking lot.