Borough of Englewood Cliffs v. Thomas J. Trautner

SYLLABUS

This syllabus is not part of the Court’s opinion. It has been prepared by the Office

of the Clerk for the convenience of the reader. It has been neither reviewed nor

approved by the Court and may not summarize all portions of the opinion.

Borough of Englewood Cliffs v. Thomas J. Trautner (A-19-24) (089406)

Argued March 17, 2025 -- Decided May 7, 2025

FASCIALE, J., writing for a unanimous Court.

The Court considers a challenge brought by plaintiff Borough of Englewood

Cliffs (the Borough) to sanctions imposed by the trial court, which found that the

Borough filed a complaint and an amended complaint in bad faith to harass, delay,

and cause malicious injury to its former attorneys and a builder. Specifically, the

Borough argues that it is immunized from the award of reasonable litigation costs

and attorney fees by New Jersey’s Frivolous Litigation Statute (FLS), N.J.S.A.

2A:15-59.1, and the doctrine of sovereign immunity.

Following the Court’s 2015 order requiring judicial oversight of municipal

housing obligations to preclude exclusionary development, the Borough filed an

action seeking a declaration that it had discharged its constitutional affordable

housing obligations. A builder intervened and opposed the motion, and the Borough

retained several attorneys as counsel. After assessing the weaknesses of the

Borough’s case, the attorneys urged the Borough to settle. The Borough declined

that advice and went to trial, but did not prevail. Thereafter, the Borough settled

with the builder. The Borough Council passed a Resolution censuring the mayor for

pursuing “needless” litigation against the “accurate” warnings of the attorney

defendants. The Resolution also praised the attorney defendants. Thereafter, a

municipal election occurred during which some new Borough Council members

were elected. Under the newly constituted Council, the Borough filed a separate suit

against the attorneys and the builder. That action led to this appeal.

Defendants demanded in writing that the Borough withdraw its complaint and

amended complaint against them. They described in detail the frivolous nature of

the Borough’s pleadings and warned that if the Borough failed to withdraw the

complaints, they would file motions to dismiss and seek sanctions. Despite those

warnings, the Borough forged ahead.

Thereafter, defendants filed motions to dismiss for failure to state a claim

pursuant to Rule 4:6-2(e). The trial judge granted those motions and entered

multiple orders dismissing the Borough’s pleadings with prejudice. Defendants also

1

moved for sanctions, and the judge awarded them attorney fees and costs, finding

that the Borough acted in bad faith to harass, delay, and cause malicious injury by

filing its frivolous pleadings. In total, the Borough was ordered to pay $216,484.45.

The Appellate Division affirmed, concluding, as relevant to the appeal before

the Court, that “a public entity is not immune from the sanctions that can be imposed

under the FLS.” 478 N.J. Super. 426, 441, 451 (App. Div. 2024). The Court granted

certification. 259 N.J. 323 (2024).

HELD: Municipalities and municipal corporations, as defined by N.J.S.A. 1:1-2,

that engage in frivolous litigation are subject to sanctions under the FLS. The

Supreme Court of the United States has recognized “that municipalities, unlike

States, do not enjoy a constitutionally protected immunity from suit,” Jinks v.

Richland County, 538 U.S. 456, 466 (2003), and neither the FLS nor any other

substantive law in New Jersey has immunized municipalities from FLS liability for

filing frivolous pleadings like the Borough was found to have filed here.

1. Enacted in 1988, the FLS serves both a punitive purpose, to deter frivolous

litigation, and a compensatory purpose, to reimburse the party that has been

victimized by the party bringing the frivolous litigation. The FLS has multiple

sections. N.J.S.A. 2A:15-59.1(a)(1) provides that “[a] party who prevails in a civil

action, either as plaintiff or defendant, against any other party may be awarded all

reasonable litigation costs and reasonable attorney fees, if the judge finds . . . that a

complaint, counterclaim, cross-claim or defense of the nonprevailing person was

frivolous.” (emphasis added). N.J.S.A. 2A:15-59.1(b) explains the circumstances

under which a judge may find that “a complaint, counterclaim, cross-claim or

defense of the nonprevailing party was frivolous.” (emphasis added). Reading those

provisions in harmony, the Court finds that the Legislature used the terms

“nonprevailing person” and “nonprevailing party” interchangeably in the FLS to

advance its dual purposes, contrary to the Borough’s argument that it is not a

“nonprevailing person” within the meaning of the statute. Further, the Borough

would be both a “party” and a “person” under the statute. N.J.S.A. 1:1-2 defines

“person” to include “corporations,” and it defines a municipality as a “municipal

corporation,” which includes, under the same definition, “cities, towns, townships,

villages and boroughs.” Thus, as a plaintiff who filed frivolous pleadings, the

Borough is not only “any other party” but also a “person” under N.J.S.A. 2A:15-

59.1(a)(1). The Court parts ways with the Appellate Division to the extent it held

otherwise. See 478 N.J. Super. at 442. (pp. 11-16)

2. The Court explains why the Borough’s arguments about the 1995 amendments,

which added two sections to the FLS, are unavailing: the Legislature added to the

FLS the entirety of subsection (a)(2), which applies to public entities, and the phrase

“or public entity” in subsection (c) specifically to address nonparty municipalities

2

who are victimized by defending “present or former employees” against frivolous

litigation, not to provide immunity to municipalities that engage in frivolous

litigation themselves. The Court also explains that a case in which the Chancery

Division held that the Division of Youth and Family Services (DYFS) may not be

sanctioned under the FLS does not advance the Borough’s position because DYFS

was an executive branch agency, not a municipality. (pp. 17-21)

3. Turning to the doctrine of sovereign immunity, the Court explains that, although

the Appellate Division framed the issue as “[w]hether a State and its agencies and

political subdivisions are immune from the FLS,” 478 N.J. Super. at 438, the focus

in this case is on whether the doctrine of sovereign immunity immunizes

municipalities, such as the Borough, from liability under the FLS for engaging in

frivolous litigation. It is well-recognized that states have enjoyed state sovereign

immunity in federal courts under the Eleventh Amendment of the U.S. Constitution.

But “municipalities, unlike States, do not enjoy a constitutionally protected

immunity from suit.” Jinks, 538 U.S. at 466. Although the Eleventh Amendment

pertains to state sovereign immunity in federal court, it is well-established that states

enjoy sovereign immunity from suit in their own courts and may define the scope of

that immunity. And municipal immunity is a concept distinct from sovereign

immunity under state law as well. (pp. 21-23)

4. In Willis v. Department of Conservation & Economic Development, the Court

explained that judicially created immunity protected municipalities from liability

when carrying out governmental functions. 55 N.J. 534, 540-41 (1970). In response

to Willis, the Legislature enacted the New Jersey Tort Claims Act (TCA), which

addressed the immunity of public entities, including certain circumstances in which

immunity is waived, in negligence actions -- not municipalities engaging in

frivolous litigation. This case arises from a context entirely outside the TCA, and

judicially created municipal immunity, to the extent it still exists, serves no barrier

to holding the Borough liable under the FLS. The Borough’s actions here were not

the official conduct that judicially created municipal immunity existed to insulate.

Indeed, as opposed to insulating municipalities from filing bad faith claims, the

purpose of the FLS is to deter such conduct. The Legislature has not exempted

municipalities from the FLS, and no other substantive law immunizes them either.

(pp. 23-26)

AFFIRMED AS MODIFIED.

JUSTICES PATTERSON, PIERRE-LOUIS, WAINER APTER, and NORIEGA

join in JUSTICE FASCIALE’s opinion. CHIEF JUSTICE RABNER and

JUSTICE HOFFMAN did not participate.

3

SUPREME COURT OF NEW JERSEY

A-19 September Term 2024

089406

Borough of

Englewood Cliffs,

Plaintiff-Appellant,

v.

Thomas J. Trautner, Albert Wunsch,

800 Sylvan Avenue, LLC, and

Chiesa Shahinian & Giantomasi, PC,

Defendants-Respondents,

and

Jeffrey R. Surenian,

Joseph Mariniello, Jr.,

Jeffrey R. Surenian and Associates,

LLC, and Mariniello & Mariniello, PC,

Defendants.

On certification to the Superior Court,

Appellate Division, whose opinion is reported at

478 N.J. Super. 426 (App. Div. 2024).

Argued Decided

March 17, 2025 May 7, 2025

Scott D. Salmon argued the cause for appellant Borough

of Englewood Cliffs (Jardim Meisner Salmon Sprague &

Susser, attorneys; Scott D. Salmon, Tracy L. Lucas, and

John J. Zunin, of counsel and on the briefs).

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A. Matthew Boxer argued the cause for respondents

Thomas J. Trautner and Chiesa Shahinian & Giantomasi,

PC (Lowenstein Sandler, attorneys; A. Matthew Boxer,

Peter Slocum, and Julie A. Minicozzi, on the briefs).

Albert H. Wunsch, III, respondent, argued the cause on

their own behalf.

Ezra D. Rosenberg argued the cause for amicus curiae

American Civil Liberties Union of New Jersey (American

Civil Liberties Union of New Jersey Foundation,

attorneys; Ezra D. Rosenberg, Rebecca Uwakwe, and

Jeanne LoCicero, on the brief).

Phoenix N. Meyers, Deputy Attorney General, argued the

cause for amicus curiae Attorney General of New Jersey

(Matthew J. Platkin, Attorney General, attorney; Sookie

Bae-Park, Assistant Attorney General, of counsel, and

Brett Haroldson and Eric Intriago, Deputy Attorneys

General, on the brief).

JUSTICE FASCIALE delivered the opinion of the Court.

In this appeal, plaintiff Borough of Englewood Cliffs (the Borough)

challenges an award of reasonable litigation costs and attorney fees awarded

against it pursuant to N.J.S.A. 2A:15-59.1, New Jersey’s Frivolous Litigation

Statute (FLS). We determine whether the FLS, or alternatively, the doctrine of

sovereign immunity, immunizes the Borough, which the trial judge found filed

a complaint and an amended complaint in bad faith to harass, delay, and cause

malicious injury to its former attorneys and a builder, from that award of

sanctions.

2

We hold that municipalities and municipal corporations, as defined by

N.J.S.A. 1:1-2, that engage in frivolous litigation are subject to sanctions under

the FLS. The Supreme Court of the United States has recognized “that

municipalities, unlike States, do not enjoy a constitutionally protected

immunity from suit,” Jinks v. Richland County, 538 U.S. 456, 466 (2003), and

neither the FLS nor any other substantive law in New Jersey has immunized

municipalities from FLS liability for filing frivolous pleadings like the

Borough was found to have filed here.

We therefore affirm the Appellate Division’s judgment as modified.

I.

In 2015, this Court entered an “order requiring judicial oversight of

municipal housing obligations to preclude exclusionary development

schemes.” See In re Declaratory Judgment Actions, 446 N.J. Super. 259, 264

(App. Div. 2016) (detailing the events that led to such oversight and the order

released in accompaniment to In re Adoption of N.J.A.C. 5:96 & 5:97, 221

N.J. 1 (2015)), aff’d as modified, 227 N.J. 508 (2017). In the wake of that

order, the Borough filed an action seeking a declaration that it had discharged

its constitutional affordable housing obligations (the Affordable Housing

Litigation). A property developer, 800 Sylvan Avenue, LLC (Sylvan)

3

intervened in the Affordable Housing Litigation, opposed the Borough’s

requested relief, and separately filed an action for a builder’s remedy.

In the Affordable Housing Litigation, the Borough retained as counsel

Thomas J. Trautner of Chiesa Shahinian & Giantomasi, PC (together, CSG),

Albert Wunsch, III, and Jeffrey R. Surenian and Jeffrey R. Surenian and

Associates, LLC (together, Surenian) (collectively, attorney defendants). 1

After assessing the weaknesses of the Borough’s case, the attorney defendants

urged the Borough to settle. The Borough declined that advice and went to

trial, but did not prevail. Thereafter, the Borough settled with Sylvan.

The Borough Council subsequently passed Resolution 20-132 censuring

the mayor for pursuing “needless” litigation against the “accurate” warnings of

the attorney defendants. The Resolution also praised the attorney defendants.

It resolved: “The Council supports the actions of attorneys Surenian, Wunsch,

Trautner and Mariniello and finds that they have been appropriate,

professional and ethical.” Thereafter, a municipal election occurred during

which some new Borough Council members were elected. Under the

leadership of the newly constituted Council, the Borough filed a separate suit

against the attorney defendants and Sylvan (collectively, defendants), asserting

1

The Borough also retained and sued Joseph Mariniello, Jr. and Mariniello &

Mariniello, PC (together, Mariniello), but they did not seek fees or costs and

are not parties to this appeal.

4

claims of professional malpractice, breach of contract, unjust enrichment, civil

conspiracy, and aiding and abetting. That action led to this appeal.

Defendants demanded in writing that the Borough withdraw its

complaint and amended complaint against them. They described in detail the

frivolous nature of the Borough’s pleadings and warned that if the Borough

failed to withdraw the complaints, they would file motions to dismiss and seek

sanctions. Despite those warnings, the Borough forged ahead.

Thereafter, defendants filed motions to dismiss for failure to state a

claim pursuant to Rule 4:6-2(e). The trial judge granted those motions and

entered multiple orders dismissing the Borough’s pleadings with prejudice. In

entering those orders, the judge provided a written opinion underscoring

Resolution 20-132’s express statement that “[t]he Borough has acknowledged

that the [attorney defendants] handled the litigation with knowledge, skill and

diligence” and explaining that “the record is replete with evidence that the

Borough” disregarded the legal advice of counsel that cautioned against

proceeding to trial. The Borough did not appeal from those orders.

Pertinent to this appeal, defendants filed motions under the FLS seeking

sanctions against the Borough for all reasonable litigation costs and attorney

fees. Applying the FLS, the judge found “the Borough, a municipality, body

politic and a corporation to be a non-prevailing party” and determined that an

5

award of FLS sanctions against the Borough was not prohibited. The judge

then stated:

[T]he court finds [the Borough] acted in bad faith. . . .

[T]he court concludes the sole purpose of the litigation

was to harass, delay and cause malicious injury to

[Sylvan] particularly, as well as the attorney

defendants.

....

The court is left to conclude that the Borough finds it

appropriate to waste taxpayers’ dollars in pursuit of

harassing, frivolous and malicious lawsuits in which it

seeks to delay the implementation of the builder’s

remedy and construction of affordable housing; and to

incur legal fees . . . .

[(emphases added).]

The judge awarded attorney fees and costs to CSG, Surenian, and Sylvan, and

costs to Wunsch, who was not eligible for attorney fees because he represented

himself. In total, the Borough was ordered to pay $216,484.45.

The Borough appealed to the Appellate Division, which affirmed in a

published opinion. Borough of Englewood Cliffs v. Trautner, 478 N.J. Super.

426 (App. Div. 2024). Pertinent to the legal question presented in this appeal,

the appellate court concluded that “a public entity is not immune from the

sanctions that can be imposed under the FLS.” Id. at 441. It then upheld the

sanctions. Id. at 451. After briefing in the Appellate Division, Surenian and

6

the Borough entered into a partial stipulation of dismissal. Thus, Surenian is

not a party to this appeal.

We granted the Borough’s petition for certification, which challenged

only the award of sanctions. 2 259 N.J. 323 (2024). We also granted motions

to appear as amici curiae filed by the American Civil Liberties Union of New

Jersey (ACLU) and the Attorney General of New Jersey (AG). Following oral

argument, Sylvan and the Borough entered into a partial stipulation of

dismissal. The remaining defendants are therefore only CSG and Wunsch.

II.

The Borough makes two primary arguments. First, it contends that the

plain text of the FLS renders “public entities,” who engage in frivolous

litigation, statutorily immune from liability. The Borough acknowledges that,

under the statute, “a party who prevails in a civil action . . . against any other

party may be awarded all reasonable litigation costs and reasonable attorney

fees, if the judge finds . . . that a complaint, counterclaim, cross-claim or

defense of the nonprevailing person was frivolous.” (quoting N.J.S.A. 2A:15-

2

In its petition for certification, the Borough explained that it had decided

“only to appeal the one issue identified and voluntarily with dr[ew] and

waive[d] its right to seek certification on all other issues.” Accordingly, the

Borough has left unchallenged the Appellate Division’s affirmance of the trial

judge’s findings that the Borough acted in bad faith to harass, delay, and cause

malicious injury by filing its frivolous pleadings.

7

59.1(a)(1)). But the Borough argues it is not a “person” or “party.” Instead,

the Borough maintains that it is a “public entity”: a category distinct from a

“party” or “person” under the FLS. Interpreting language added to the FLS in

1995 -- subsection (a)(2), which discusses public entities, and the addition of

“or public entity” to subsection (c), which now applies to “[a] party or public

entity seeking an award under the” FLS -- the Borough asserts that the

Legislature differentiated between “public entity,” “party,” and “person.”

Accordingly, the Borough argues that because the phrase “public entity” is

absent from sections N.J.S.A. 2A:15-59.1(a)(1) and (b), it is statutorily

immunized from liability. Second, as a “public entity,” the Borough asserts

that state sovereign immunity insulates it from liability for engaging in

frivolous litigation, which the Legislature has not expressly waived in the FLS.

CSG and Wunsch argue that the plain text of N.J.S.A. 2A:15-59.1(a)(1)

authorizes sanctions against any nonprevailing party who pursues frivolous

civil litigation, including the Borough. They assert that N.J.S.A. 1:1-2 defines

“person” in part to include “corporations,” and it defines “municipality” and

“municipal corporation” to include “cities, towns, townships, villages and

boroughs.” Thus, they argue the Borough is a nonprevailing “party” and a

“person” subject to the FLS. As to N.J.S.A. 2A:15-59.1(a)(2) and (c), CSG

and Wunsch maintain that those amendments authorize a “public entity” to

8

obtain reasonable litigation costs and attorney fees when required to defend a

“present or former employee” who has been victimized by frivolous litigation,

even if the “public entity” is not a “party” in that litigation. CSG and Wunsch

assert that those amendments therefore do not statutorily immunize

municipalities from FLS liability. Finally, they emphasize that municipalities

do not enjoy sovereign immunity from liability under the FLS.

At oral argument, the AG took no position on whether the FLS applies to

a municipality. Rather, the AG relies on the text of the FLS and the doctrine

of sovereign immunity in asserting that the State cannot be liable under the

FLS. Along those lines, the AG points out that “there are already judicial

remedies to deter public entities from engaging in the type of frivolous

litigation that the [FLS] targets,” such as the availability of malicious

prosecution and malicious abuse of process claims. Finally, even if the FLS

applies to “some public entities,” such as municipalities, the AG argues that

the State cannot be subject to sanctions under the FLS “based on the doctrine

of sovereign immunity.”

The ACLU argues the FLS applies to all litigating parties. The ACLU

urges this Court to interpret the FLS as a whole, rather than focus on the single

reference to “person” in N.J.S.A. 2A:15-59.1(a)(1). The ACLU asserts that the

text of the FLS holds all “nonprevailing parties” to the same standard, and that,

9

under the FLS, the singular reference to “nonprevailing person” is synonymous

with “party.”

III.

We review questions of statutory interpretation de novo. Wiggins v.

Hackensack Meridian Health, 259 N.J. 562, 574 (2025). To do so, “we look to

the Legislature’s intent as expressed in the statute’s plain terms.” Ibid. “There

is no more persuasive evidence of legislative intent than the words by which

the Legislature undertook to express its purpose . . . .” Fuster v. Township of

Chatham, 259 N.J. 533, 547 (2025) (omission in original) (quoting Perez v.

Zagami, LLC, 218 N.J. 202, 209-10 (2014)). “We ascribe to the statutory

words their ordinary meaning and significance and read them in context with

related provisions so as to give sense to the legislation as a whole.”

DiProspero v. Penn, 183 N.J. 477, 492 (2005) (citations omitted); see also

N.J.S.A. 1:1-1 (stating that statutory “words and phrases shall be read” in

context “and shall, unless inconsistent with the manifest intent of the

legislature or unless another or different meaning is expressly indicated, be

given their generally accepted meaning, according to the approved usage of the

language”). “If the plain language of a statute is clear, our task is complete.”

Savage v. Township of Neptune, 257 N.J. 204, 215 (2024). “[I]f there is

ambiguity in the statutory language that leads to more than one plausible

10

interpretation, we may turn to extrinsic evidence, ‘including legislative history,

committee reports, and contemporaneous construction.’” DiProspero, 183 N.J.

at 492-93 (quoting Cherry Hill Manor Assocs. v. Faugno, 182 N.J. 64, 75

(2004)).

IV.

In 1988, the Legislature enacted the FLS. Toll Bros., Inc. v. Township

of West Windsor, 190 N.J. 61, 67 (2007). Since its inception, the FLS has

served two purposes. Ibid. First, the FLS “serves a punitive purpose, seeking

to deter frivolous litigation.” Ibid. (quoting Deutch & Shur, P.C. v. Roth, 284

N.J. Super. 133, 141 (Law Div. 1995)). Second, the FLS “serves a

compensatory purpose, seeking to reimburse ‘the party that has been

victimized by the party bringing the frivolous litigation.’” Ibid. (quoting

Deutch & Shur, 284 N.J. Super. at 141); see also Maureen E. Garde, New

Jersey’s Frivolous Claims Statute -- Taking a Closer Look, 23 Seton Hall L.

Rev. 153, 157-83 (1992) (analyzing the origins and legislative history of the

FLS).

To resolve the narrow legal question of whether the FLS -- or,

alternatively, sovereign immunity -- immunizes the Borough from paying all

reasonable litigation costs and attorney fees for filing its frivolous complaint

and amended complaint, we begin with the text of the FLS as originally

11

enacted in 1988, keeping in mind those important punitive and compensatory

purposes.

A.

The FLS has multiple sections. N.J.S.A. 2A:15-59.1(a)(1) provides:

A party who prevails in a civil action, either as plaintiff

or defendant, against any other party may be awarded

all reasonable litigation costs and reasonable attorney

fees, if the judge finds at any time during the

proceedings or upon judgment that a complaint,

counterclaim, cross-claim or defense of the

nonprevailing person was frivolous.

[(emphases added).]

The Borough made defendants parties when it filed a complaint against

them. And defendants prevailed in the civil action by successfully obtaining

orders dismissing the Borough’s complaint with prejudice. Thus, each

defendant is a “party” as that term is utilized in N.J.S.A. 2A:15-59.1(a)(1).

The Borough also fits within the term “any other party.” Indeed, the Borough

is the plaintiff.

The Borough contends that to be responsible for litigation costs and

attorney fees under the FLS, N.J.S.A. 2A:15-59.1(a)(1) requires that a judge

find “that a complaint, counterclaim, cross-claim or defense of the

nonprevailing person was frivolous.” (emphasis added). The Borough’s

12

argument that it is not a nonprevailing “person” is misplaced for several

reasons.

First, rather than focus on only one word (“person”) in the first section

of the FLS, we read statutory words in context with related provisions “to give

sense to the legislation as a whole.” DiProspero, 183 N.J. at 492; see also

N.J.S.A. 1:1-1 (stating that statutory “words and phrases shall be read” in

context). Context provides meaning. Norman J. Singer & Shambie Singer,

2A Sutherland Statutory Construction § 46:5 (7th ed. 2024) (“[E]ach part or

section of a statute should be construed in connection with every other part or

section to produce a harmonious whole.”). “Where one section of an act deals

with a subject in general terms and another deals with a part of the same

subject in a more detailed way, the two always should be harmonized.”

Williams v. State Parole Bd., 255 N.J. 36, 47 (2023) (alterations omitted)

(quoting Norman J. Singer & J.D. Shambie Singer, 2A Sutherland Statutory

Construction § 47:11 at 336 (7th ed. 2022)).

Thus, we read together N.J.S.A. 2A:15-59.1(a)(1), which requires a

judge to find that a “nonprevailing person” generally must engage in frivolous

litigation, and N.J.S.A. 2A:15-59.1(b)(1) and (2), which require a judge to

make specific findings that a “nonprevailing party” engaged in frivolous

litigation. Harmonizing those two provisions, as Williams and those

13

applicable canons of statutory interpretation instruct, provides context to the

FLS and “give[s] sense to the legislation as a whole.” DiProspero, 183 N.J. at

492. For example, N.J.S.A. 2A:15-59.1(b)(1) and (2) provide:

b. In order to find that a complaint, counterclaim,

cross-claim or defense of the nonprevailing party was

frivolous, the judge shall find on the basis of the

pleadings, discovery, or the evidence presented that

either:

(1) The complaint, counterclaim, cross-claim or

defense was commenced, used or continued in

bad faith, solely for the purpose of harassment,

delay or malicious injury; or

(2) The nonprevailing party knew, or should have

known, that the complaint, counterclaim, cross-

claim or defense was without any reasonable

basis in law or equity and could not be supported

by a good faith argument for an extension,

modification or reversal of existing law.

[(emphases added).]

Reading the general findings referenced in N.J.S.A. 2A:15-59.1(a)(1)

together and in harmony with the required specific findings that a judge must

make under N.J.S.A. 2A:15-59.1(b)(1) and (2) shows that the Legislature used

the terms “nonprevailing person” and “nonprevailing party” interchangeably in

the FLS to advance its dual purposes, supporting our conclusion that the

Borough is subject to FLS liability. Both terms target the same activity that

leads to liability under the FLS.

14

Indeed, in N.J.S.A. 2A:15-59.1(a)(1), the statute says that costs and fees

may be awarded “if the judge finds . . . that a complaint, counterclaim, cross-

claim or defense of the nonprevailing person was frivolous.” (emphasis

added). Later, in providing what qualifies as frivolous, section (b) addresses

what is required “[i]n order to find that a complaint, counterclaim, cross-claim

or defense of the nonprevailing party was frivolous.” (emphasis added). Thus,

because the sections refer to one another and both refer to the actor asserting

the complaint, cross-claim or defense, the text of the FLS as a whole

demonstrates that “nonprevailing person” and “nonprevailing party” are

interchangeable. Further, in section (a)(1), although the statute uses

“nonprevailing person” to describe the actor asserting the frivolous claim, it

also says that a prevailing “party” may be awarded costs and fees “against any

other party,” again demonstrating the interchangeable nature of the two words

as used in the FLS. (emphasis added). Harmonizing the sections of the FLS

reveals that the Legislature intended for the FLS to deem a “party” liable for

asserting a frivolous claim and that, as utilized in the FLS, a “nonprevailing

person” is a “nonprevailing party.”

Second, although the FLS is unambiguous when read in harmony and as

a whole, the legislative history provides additional support for harmonizing the

statute’s use of “party” with its use of the word “person.” The Sponsor’s

15

Statement that accompanied the bill later enacted as the FLS, for example, also

uses “nonprevailing party” interchangeably with “nonprevailing person” to

describe the same actor -- the asserter of the frivolous claim:

The purpose of this bill is to allow a party who

prevails in a civil suit to recover reasonable attorney

fees and litigation costs from the nonprevailing person

if the judge finds that the legal position of the

nonprevailing person was not justified and was

commenced in bad faith solely for the purpose of delay

or malicious injury, or that the nonprevailing party

knew or should have known that the action was without

any reasonable basis in law or equity.

[Sponsor’s Statement to A. 1316 (L. 1988, c. 46)

(emphases added).]

Third, even if there was a meaningful difference between “nonprevailing

person” and “nonprevailing party,” the Borough would be both a “party” and a

“person” under the statute. N.J.S.A. 1:1-2, entitled “Words and phrases

defined,” which the Borough agrees applies, defines “person” to include

“corporations.” And it further defines a municipality as a “municipal

corporation,” which includes, under the same definition, “cities, towns,

townships, villages and boroughs.” (emphasis added). Thus, as a plaintiff

who filed frivolous pleadings, the Borough is not only “any other party” but

also a “person” under N.J.S.A. 2A:15-59.1(a)(1). We part ways with the

appellate court to the extent it held otherwise. See Trautner, 478 N.J. Super. at

442.

16

Fourth, the Borough’s arguments about the 1995 amendments are

unavailing. The amendments added two sections to the FLS. Those

amendments simply give a municipality under certain circumstances the right

to recover sanctions under the FLS even if it is not a party to the litigation.

N.J.S.A. 2A:15-59.1(a)(2) provides:

When a public entity is required or authorized by law

to provide for the defense of a present or former

employee, the public entity may be awarded all

reasonable litigation costs and reasonable attorney fees

if the individual for whom the defense was provided is

the prevailing party in a civil action, and if there is a

judicial determination at any time during the

proceedings or upon judgment that a complaint,

counterclaim, cross-claim, or defense of the

nonprevailing party was frivolous.

[(emphases added.)]

And relatedly, N.J.S.A. 2A:15-59.1(c) provides:

c. A party or public entity seeking an award under this

section shall make application to the court which heard

the matter. The application shall be supported by an

affidavit stating in detail:

(1) The nature of the services rendered, the

responsibility assumed, the results obtained, the

amount of time spent by the attorney, any

particular novelty or difficulty, the time spent

and services rendered by secretaries and staff,

other factors pertinent in the evaluation of the

services rendered, the amount of the allowance

applied for, an itemization of the disbursements

for which reimbursement is sought, and any other

factors relevant in evaluating fees and costs; and

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(2) How much has been paid to the attorney and

what provision, if any, has been made for the

payment of these fees in the future.

[(emphasis added.)]

The Legislature added to the FLS the entirety of subsection (a)(2), which

applies to public entities, and the phrase “or public entity” in subsection (c)

specifically to address nonparty municipalities who are victimized by

defending “present or former employees” against frivolous litigation, not to

provide immunity to municipalities that engage in frivolous litigation

themselves. The plain language of the 1995 amendments does not immunize

municipalities, such as the Borough. Although we need not look to extrinsic

evidence given the plain language, the Sponsor’s Statement supports our

interpretation.

This bill would allow a municipality to recover

legal costs incurred in defending a police officer against

a frivolous complaint. The proliferation of these

complaints in recent years has made the cost of

defending against them a significant municipal budget

item.

Municipalities are required by [N.J.S.A. 40A:14-

155] to provide for the defense of their police officers

against certain complaints. However, the law intended

to discourage frivolous lawsuits, [N.J.S.A. 2A:15-

59.1], permits only a party to such a suit to petition for

the recovery of costs. This bill would also permit a

municipality which defends its police officer against a

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frivolous action to seek reimbursement of its legal

costs.

[Sponsor’s Statement to A. 1012 (L. 1995, c. 13).]

The Senate Community Affairs Committee further explained that the purpose

of the amendments was to allow a public entity to recover costs under the FLS

when it is not itself a party: “Because public entities that provide for the

defense of their employees are not actually a party to the litigation, current law

prohibits them from recovering costs and attorney fees.” S. Cmty. Affs.

Comm. Statement to A. 1012/S.1399 and 1290 2 (Oct. 13, 1994). Thus, we

reject the notion that the 1995 amendments evince a legislative intent to

immunize entities like the Borough from FLS liability for engaging in

frivolous litigation.

Also, N.J.S.A. 2A:15-59.1(c) simply provides the mechanism for

seeking a FLS award after a judge makes the requisite findings under N.J.S.A.

2A:15-59.1(a)(1) and (b)(1) or (2). Accordingly, to receive an award under the

FLS, “[a] party who prevails in a civil action . . . against any other party,” or a

nonparty “public entity” who defends a “present or former employee” against

frivolous litigation must apply “to the court which heard the matter” and

support that application with an affidavit complying with N.J.S.A. 2A:15-

59.1(c)(1) and (2).

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Finally, the Borough urges us to reject the analysis from In re K.L.F.,

275 N.J. Super. 507, 511 (Ch. Div. 1993) (finding that the FLS applies “to the

State and all agencies and political subdivisions thereof”) and to instead adopt

the holding in DYFS v. P.M., 301 N.J. Super. 80, 82 (Ch. Div. 1997) (rejecting

the reasoning of K.L.F. and holding that the Division of Youth and Family

Services (DYFS) may not be sanctioned under the FLS). The Appellate

Division also addressed those cases, agreeing with K.L.F. that “a public entity

is not immune from the sanctions that can be imposed under the FLS.”

Trautner, 478 N.J. Super. at 441. Those trial court opinions are not binding or

dispositive and go beyond our narrow holding as to the liability of the Borough

in this case.

For example, in reaching different conclusions about whether DYFS, an

executive branch agency rather than a municipality, can be sanctioned under

the FLS, K.L.F. and P.M. analyzed N.J.S.A. 2A:15-60, which bars costs in

“actions[s] brought by the state, or the governor, or any person for the use of

the state.” The judge in K.L.F. found that the FLS “supersedes N.J.S.A.

2A:15-60 and operates as an implied modifier of the latter and is, therefore,

controlling.” 275 N.J. Super. at 522. In P.M., the judge harmonized N.J.S.A.

2A:15-60 and the FLS and concluded that DYFS was not subject to the FLS.

301 N.J. Super. at 90, 94-95. But unlike K.L.F. and P.M., which dealt with

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sanctions against DYFS, a state agency, we deal with whether a municipality

(here, the Borough) is subject to the FLS. In addition, at oral argument, the

Borough expressly waived reliance on N.J.S.A. 2A:15-60, and we therefore

need not consider the interplay (if any) between N.J.S.A. 2A:15-60 and a

municipality. Thus, any reference to K.L.F. and P.M. is misplaced.

In summary, the text and purpose of the FLS do not immunize the

Borough from FLS liability for filing frivolous pleadings.

B.

We now turn to the question of whether the Borough is immune under

the doctrine of sovereign immunity. The Appellate Division framed the issue

as “[w]hether a State and its agencies and political subdivisions are immune

from the FLS.” Trautner, 478 N.J. Super. at 438. Our focus in this case,

however, is on whether the doctrine of sovereign immunity immunizes

municipalities, such as the Borough, from liability under the FLS for engaging

in frivolous litigation. We therefore do not reach the AG’s separate request

that we “[c]larify that the State is [i]mmune from FLS [l]iability.”

The Eleventh Amendment states that “[t]he Judicial power of the United

States shall not be construed to extend to any suit in law or equity, commenced

or prosecuted against one of the United States by Citizens of another State, or

by Citizens or Subjects of any Foreign State.” U.S. Const. amend. XI. “It is

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well-recognized that states have enjoyed state sovereign immunity in federal

courts under the Eleventh Amendment” of the U.S. Constitution. Royster v.

State Police, 439 N.J. Super. 554, 566 (App. Div. 2015), aff’d as modified, 227

N.J. 482 (2017). “[T]he States’ immunity from suit is a fundamental aspect of

the sovereignty which the States enjoyed before the ratification of the

Constitution.” Ibid. (alteration in original) (quoting Alden v. Maine, 527 U.S.

706, 713 (1999)). But “municipalities, unlike States, do not enjoy a

constitutionally protected immunity from suit.” Jinks, 538 U.S. at 466; see

also Monell v. Dep’t of Soc. Servs., 436 U.S. 658, 690 n.54 (1978) (“Nor is

there any basis for concluding that the Eleventh Amendment is a bar to

municipal liability. Our holding today is, of course, limited to local

government units which are not considered part of the State for Eleventh

Amendment purposes.” (citations omitted)). Professor Fred Smith explains:

The Supreme Court has identified at least two reasons

for this delineation. The first is the language of the

Eleventh Amendment. . . . The second reason is

sovereign immunity’s historical roots. . . . Because

states, not local governments, have this historical status

as sovereigns, the Court has found that only states are

entitled to sovereign immunity.

[Fred Smith, Local Sovereign Immunity, 116 Colum. L.

Rev. 409, 423 (2016) (emphasis added).]

Those legal principals notwithstanding, the Eleventh Amendment is

inapplicable to this state court action: “[a]lthough the Eleventh Amendment

22

pertains to state sovereign immunity in federal court, it is well-established that

states enjoy sovereign immunity from suit in their own courts and may define

the scope of that immunity.” Royster, 439 N.J. Super. at 567. New Jersey

“courts have long recognized that an essential and fundamental aspect of

sovereignty is freedom from suit by private citizens for money judgments

absent the State’s consent.” Allen v. Fauver, 167 N.J. 69, 73-74 (2001). “[A]

state may voluntarily waive its sovereign immunity,” but “[a]n effective

waiver requires ‘a clear and unequivocal statement of the Legislature.’”

Royster, 227 N.J. at 494 (quoting Allen, 167 N.J. at 77).

And, although the federal Eleventh Amendment does not control here,

municipal immunity is a concept distinct from sovereign immunity under state

law as well. See Richard P. Cushing, A Survey of Municipal Immunity in

New Jersey, 3 Seton Hall L. Rev. 416, 417 (1972) (“The doctrine of municipal

immunity, although often confused with its sister doctrine, sovereign

immunity, has a separate and distinct history.”).

When abrogating sovereign immunity in tort, this Court commented on

the “liability of counties and municipalities, whose so-called ‘governmental’

activities were in other jurisdictions accorded the State’s immunity on the

thesis that such activities were performed as agents of the State itself.” Willis

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v. Dep’t of Conservation & Econ. Dev., 55 N.J. 534, 539 (1970). Disagreeing

with those other jurisdictions regarding tort liability, the Court observed:

We have long entertained all types of tort actions

against counties and municipalities, and when relief is

refused, it is upon the basis of substantive principles of

law we think should apply and not upon the proposition

that those agencies are immune from suit. Again, it

should be noted that the Legislature has not

disapproved the doctrine that municipal corporations

are suable in tort matters, nor, with one [inapplicable]

exception, the rules of substantive law applied to them.

[Ibid.]

Willis nevertheless emphasized

that the State will not be held liable for legislative or

judicial action or inaction, or administrative action or

inaction of a legislative or judicial cast, nor generally

with respect to decisions calling for the exercise of

official judgment or discretion. . . . In [the cited] cases,

we invoked the same limitation with respect to the

liability of municipal corporations.

[Id. at 540-41 (citations omitted).]

Judicially created immunity afforded to the exercise of official judgment or

discretion thus protected municipalities from liability when carrying out

governmental functions. Ibid.; Visidor Corp. v. Borough of Cliffside Park, 48

N.J. 214, 224 (1966) (noting that the Court’s recognition of such immunity

“serves to protect municipalities against endangering financial demands and to

permit their governing bodies to govern conscientiously for the public interest,

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as they find it, without the fears and burdens of litigating such demands”);

Amelchenko v. Borough of Freehold, 42 N.J. 541, 550 (1964) (“Public

officials must be free to determine [the general method of handling

snowstorms] without fear of liability either for themselves or for the public

entity they represent. It cannot be a tort for government to govern.”).

In response to Willis, the Legislature enacted the New Jersey Tort

Claims Act (TCA). L. 1972, c. 45 (codified as amended at N.J.S.A. 59:1-1 to

:12-3). In the TCA, the Legislature addressed negligence actions -- not

municipalities engaging in frivolous litigation. See generally ibid. It imposed

statutory immunity, id. at :2-1(a) (“a public entity is not liable for an injury”);

and then waived that immunity in certain circumstances, see, e.g., id. at :2-2

(rendering public entities “liable for injury proximately cause by an act or

omission of a public employee within the scope of his employment”). The

Legislature also permitted the award of “costs ordinarily allowable in the

private sector” and “reasonable attorney’s fees” to a successful claimant in an

action against a public entity or employee. Id. at :9-5.

This case arises from a context entirely outside the TCA, and judicially

created municipal immunity, to the extent it still exists, serves no barrier to

holding the Borough liable under the FLS. First, there is no historical

analogue to immunizing a municipality from sanctions when it initiates

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frivolous litigation. Second, doing so would be contrary to public policy and

would undermine the basis for judicially created municipal immunity, which

insulated municipalities so they could govern without fear of litigation. See

Visidor, 48 N.J. at 224; Amelchenko, 42 N.J. at 550. Here, the Borough’s

actions were neither “legislative . . . nor . . . the exercise of official judgment

or discretion,” Willis, 55 N.J. at 540, but rather, were in direct contravention to

Resolution 20-132. That is not the type of official conduct that judicially

created municipal immunity existed to insulate. Indeed, as opposed to

insulating municipalities from filing bad faith claims, the very purpose of the

FLS is to deter such conduct. See Toll Bros., Inc., 190 N.J. at 67. Thus, the

Legislature has not exempted municipalities from the FLS, and like the Willis

Court, we find that no other substantive law immunizes them either. See 55

N.J. at 539.

V.

Our holding respects the dual purposes of the FLS -- to deter frivolous

litigation and compensate parties that have been victimized by the party

bringing such an action. Filing a complaint and an amended complaint in bad

faith to harass, delay, or cause malicious injury subjects the Borough to FLS

liability. Given that the text of the FLS provides no statutory immunity to

26

municipalities or municipal corporations, and because no other substantive law

immunizes them in New Jersey, the Borough is liable under the FLS.

The judgment of the Appellate Division is affirmed as modified.

JUSTICES PATTERSON, PIERRE-LOUIS, WAINER APTER, and

NORIEGA join in JUSTICE FASCIALE’s opinion. CHIEF JUSTICE

RABNER and JUSTICE HOFFMAN did not participate.

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