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REAL ESTATE

CONSUMER FRAUD ACT

09-3-3144 Brown v. Lopez, Law Div. (Hudson County) (Sarkisian, J.S.C.) (29 pp.) In this action arising out of plaintiff's attempts to prevent a foreclosure on her two-family house, the court finds that defendant Lopez, a real estate broker, engaged in a series of affirmative acts - including misrepresenting to her that they were to be 50-50 partners in the ownership of her home and that he would arrange financing to rehabilitate the property, have it renovated, and then refinance it and pay off the liens and he instead prepared and convinced her to enter into a contract that gave him 100% ownership and assessed against plaintiff the entire cost of the renovations and rehabilitation resulting in her having a negative equity and receiving no proceeds from the closing - which constitute an unconscionable commercial practice and omissions of material fact with the intent that plaintiff rely on them, all in violation of the Consumer Fraud Act, but that defendants Carracio and Velasco, who loaned defendant the money to make the renovations, did not violate the CFA, as they never met or contacted plaintiff. The court finds that plaintiff suffered an ascertainable loss as a result of Lopez's violation of the CFA of $51,915.38, which it trebles, and award plaintiff $155,746.14. [Filed March 10, 2014]

LANDLORD/TENANT

RESIDENTIAL AND COMMERCIAL REAL ESTATE 34-2-5595 Arias and Padilla v. Elite Mortgage Group, App. Div. (Reisner, P.J.A.D.) (12 pp.) This case concerns the legal status of a Trial Period Plan (TPP) Agreement issued to plaintiffs under the federal Home Affordable Mortgage Program (RAMP). The issue is novel in New Jersey. Relying on Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547 (7th Cir. 2012), and the line of cases following Wigod, we concluded that the TPP Agreement was a unilateral offer pursuant to which the bank promised to give plaintiffs a loan modification, provided they complied fully and timely with their obligations under the Agreement. Those obligations included timely submission of the lower payments required of them during the trial period. We found that summary judgment was properly granted, because plaintiffs failed to make timely or complete payments during the trial period.

COMMERCIAL LEASE AGREEMENT/LANDLORD/TENANT LAW 27-2-2095 Puccini Foods LLC v. Abbott Industries Inc ., App. Div. (per curiam) (24 pp.) In this action alleging constructive eviction, in which defendant-landlord counterclaimed, alleging that plaintiff defaulted on its rent obligations and other duties under the commercial lease which provided for plaintiff to lease seven parcels constituting portions of a building at various times and subject to different terms and conditions, the panel affirms the dismissal of the constructive eviction claim, finding that, even though the trial judge's ruling did not resolve numerous factual disputes, there is sufficient credible evidence to support the trial court's determination that, even assuming the truth of the majority of plaintiff's interference claims, plaintiff failed to prove that defendant's interference with its use and enjoyment of the premises was significant enough to constitute constructive evidence - since, inter alia, a threatened lock-out is not sufficient to support a constructive eviction claim, even if defendant barred plaintiff's access to some of the parcels, it was at most a partial eviction, the leaking un-repaired skylight dampened only 100 square feet, and the un-removed debris was left by plaintiff's own subtenant - and plaintiff had waived its constructive eviction claim by not vacating the premises within a reasonable period of time where plaintiff claimed it was constructively evicted in mid-February but it did not vacate until July.

COMMERCIAL LEASE AGREEMENT/LANDLORD/TENANT LAW

27-2-3149 Cablevision of Oakland LLC v. CK Bergen Holdings LLC , App. Div. (per curiam) (13 pp.) Plaintiff leased office space from defendant pursuant to a lease that provided for an initial 20-year lease term and subsequent extensions. The lease specified that the rent for the extensions was to be the fair market value at the time, as determined by appraisers appointed by the parties, and if no agreement could be reached, the two would appoint a third "whose decision would be final." If they could not agree on the third, as occurred here, the third would be appointed by the court. Cablevision filed its motion in aid of litigants rights after defendant rejected the figure put forth by the third appraiser and refused to execute the lease amendment. Defendant appeals the court's grant of plaintiff's motion enforcing litigant's rights. The panel affirms substantially for the reasons set forth below, adding that the municipalities named in the lease were only examples of municipalities within the specified 20-mile radius of the property and the third appraiser's reference to comparables outside the named municipalities was not barred by the lease; and that the court is not empowered to review that appraiser's decision for an error of law or a misinterpretation of the parties' lease but only for fraud, corruption or similar wrongdoing.

COMMERCIAL LEASE AGREEMENT LANDLORD/TENANT LAW

27-2-3251 Centennial Village Apartments v. Carstarphen , App. Div. (per curiam) (6 pp.) Defendant applied to rent an apartment at the Section 8 federally subsidized residential apartment complex operated by plaintiff indicating on her application that she employed. Six months later, she was advised that an apartment was available. At the time she signed her lease, she did not advise plaintiff that she was no longer employed. Five days after she moved in she requested an adjustment in her rent because she was no longer employed. Plaintiff then sent her a notice terminating her tenancy and filed a complaint for possession, alleging that she violated the lease by providing false information on her rental application. Defendant appeals from a judgment of possession. The panel reverses, finding that under applicable federal regulations, plaintiff had to give the tenant written notice of lease termination stating the reasons for the action with enough specificity to enable the tenant to prepare a defense and a failure to do so deprives the trial court of jurisdiction to issue a judgment of possession, and here, the trial court lacked jurisdiction because the termination notice specified that plaintiff had submitted false information on her rental application but the information included therein was correct at that time, and plaintiff did not provide notice that it was evicting defendant because she was obligated to advise that she was unemployed at the time she signed the lease and failed to do so.

SECTION 8 LEASE TERMINATION

LANDLORD/TENANT LAW 27-3-2116 666 Grove, L.L.C. v. Shields , Law Div., Special Civil Part, Essex Co. (Fast, J.S.C.) (6 pp.) The complaint in this summary action for possession alleged that defendant failed to sign a lease with an increase in rent. The increase was from defendant's prior lease, which provided for a monthly rent of $257.50, to the proposed lease with a proposed monthly rent of $695. The apartment is subject to the local rent-control ordinance, which would limit an increase to 3 percent ($265.22). When plaintiff's counsel advised the court that the prior lease was prepared by defendant's son as the former owner and was a "sweetheart" lease and therefore should be disregarded as a sham lease, the court sua sponte raised the issue of whether the court has the right to supersede the ordinance and determine a fair market rent. The tenant here is seeking protection of the Anti-Eviction Act, and the landlord is therefore entitled to the determination of whether the lease is the result of an arm's length transaction. Based on the extremely low, below market, rent and the relationship of the parties to the prior lease (mother and son), the court finds the lease entered into by defendant with her son, was not an arm's length lease and the current owner is not bound by the terms thereof. The issue of the proper rent must first be addressed by the Rent Control Board. The complaint is dismissed, without prejudice to the rights of the plaintiff to propose another lease to the tenant, consistent with the determination of the board. [Decided Nov. 14, 2013.]

Section 8 NON-PAYMENT OF RENT

LANDLORD/TENANT LAW 27-2-3088 New Brunswick UAW v. Fennie , App. Div. (per curiam) (6 pp.) Plaintiff, which operates a federally-subsidized Section 8 rental building, appeals from the dismissal of its Special Civil Part complaint for eviction of defendant for non-payment of rent, filed after a dispute between the parties resulted in defendant not executing the documents required for her annual recertification for Section 8 housing until a day or two after the deadline which, plaintiff alleges, resulted in a lapse in her subsidy for one month. Plaintiff filed a summary dispossess action for defendant's failure to pay the full market rent for that month. The panel disagrees with the judge's finding that the case was not one for non-payment of rent and remands the matter, saying that the court must consider if the parties' strained relationship impeded defendant's timely recertification, and if the court concludes that the one-month gap in her subsidy resulted from her own conduct, then it must consider whether there are means of curing the breach which do not thwart federal housing objectives.

SECURITY DEPOSIT

LANDLORD/TENANT LAW 27-2-2329 Barnes v. DeLaura, App. Div. (per curiam) (11 pp.) This appeal involves a claim by a tenant that her landlord wrongfully failed to return her security deposit, and a counterclaim by the landlord contending that the tenant had caused damage to the apartment to an extent exceeding the security deposit. After a trial in the Special Civil Part, the judge found that the landlord's testimony was more credible than the tenant's on most of the issues, and awarded the landlord a net judgment of $3,858. The tenant now appeals. The appellate panel affirms the trial court's decision in favor of the landlord, but modifies the judgment amount to $1036.40. The judgment is reduced by $2821.60 ($1121.60 for the wear and tear to the carpet and cabinet, plus $1700 for the paint and walls because during the trial the judge unequivocally announced that he was not going to award any recovery for those particular items). The panel rejects the tenant's argument that the landlord violated the Security Deposit Act and wrongfully withheld her money. The tenant is not entitled to a refund of any portion of her deposit, nor to statutory doubled damages or counsel fees, because the landlord proved at trial that the amount of damages to the apartment exceeded the amount of the deposit.

SECURITY DEPOSIT (Continued)

LANDLORD/TENANT LAW 27-2-2446 Morris v. Friske , App. Div. (per curiam) (5 pp.) Defendants appeal the judgment for $2431 entered against them pursuant to the Security Deposit Act in this action filed after they failed to return the security deposit posted by the tenants to whom they had rented their home within 30 days of expiration of the lease and failed to provide a timely written notice explaining the reasons for withholding the $3600 deposit. The panel affirms, substantially for the reasons expressed below, finding that the judge made clear and precise factual findings based on credibility determinations and consideration of the evidence presented and there is no basis on which to disturb his factual determinations, and the judge did not err by admitting testimony from plaintiff, to whom two of the tenants had assigned their rights to obtain the deposit, regarding her personal knowledge regarding the conditions of the premises and her attempts to obtain the deposit after the tenants vacated.

ATTORNEY FEE RECOVERY

27-2-3294 Poland v. Sandville, App. Div. (per curiam) (10 pp.) In this landlord/tenant dispute in which defendant landlord has been ordered to pay plaintiff $1850 pursuant to the Security Deposit Act, defendant appeals from the Special Civil Part’s grant of $9849 in attorney fees to plaintiff. The panel affirms, concluding that the judge did not abuse her discretion in finding that plaintiff’s counsel’s hours and rates were reasonable under Rule 4:42-9(b) under the circumstances, including counsel’s almost 20 years of experience in landlord-tenant matters, the frequent court appearances, the numerous adjournment discussions, and the time preparing for trial, or in concluding that proportionality between the fees and the recovery was not required because the overriding public policy behind the SDA was to prevent landlords from unjustly retaining security deposits and promoting the effective assistance of counsel by making plaintiff whole after successfully prosecuting her claim. Nor did the judge err in awarding all requested fees despite defendant having prevailed on his counterclaim for an unpaid utility bill since the judge properly determined that plaintiff sufficiently prevailed and the time at trial spent addressing the unpaid bill was insignificant compared to the time spent addressing plaintiff’s substantive claims.

WRONGFUL LOCKOUT

LANDLORD/TENANT LAW 27-2-1556 Adams v. Rubano, App. Div. (per curiam) (6 pp.) A judgment in the amount of $6,700 was entered in favor of plaintiff and against defendant, following a bench trial in the Special Civil Part. Defendant appeals the judgment. Plaintiff rented an apartment from defendant in May 2011. On December 14, 2011, defendant locked plaintiff out of the apartment. Plaintiff filed a complaint alleging defendant wrongfully locked him out of his apartment and kept his personal property. Plaintiff sought $6,700, the claimed value of the items removed from the premises. The appellate panel affirms the judgment, finding there was sufficient evidence to support the findings of the trial court on both the issue of liability and damages. The evidence was largely testimonial and involved questions of credibility. Plaintiff was found to be credible, and his testimony established that not only did defendant wrongfully lock plaintiff out of his apartment, but also defendant removed and kept his property. Once liability was found, plaintiff was entitled to recover the damages allowed under N.J.S.A. 2A:39-8. There was sufficient proof in the record to substantiate that plaintiff's damages were at least $6,700.

CONSUMER PROTECTION 09-2-5902 Estate of Anker Holt v. Wayside Residence, Inc., App. Div. (per curiam) (12 pp.) Defendant Pamela Berg appealed from a judgment entered after a jury verdict finding that defendants Michael Berg, Pamela Berg, and Wayside Residence, Inc. violated the New Jersey Consumer Fraud Act and from the order which denied defendants' motion for a new trial and/or judgment notwithstanding the verdict. Plaintiff Lisa Kristiansen, administratrix of Anker Holt's estate, filed a complaint against defendants alleging they misappropriated the decedent's funds while the decedent resided at the Wayside Retirement Center, which defendants owned and operated. Michael pled guilty to third-degree theft by deception and agreed to pay $39,629.93 in restitution. The jury found defendants violated the CFA and plaintiff proved an ascertainable loss proximately caused by that violation. Michael and Pamela committed consumer fraud which proximately caused the decedent an "ascertainable loss" of $35,000 individually. In addition, Wayfair committed consumer fraud which proximately caused plaintiff damages of $70,000. The trial judge trebled defendants' damages pursuant to the CFA and credited the restitution amount. The judge entered judgment in the amount of $65,370.07 against Michael and Pamela individually, and $170,370.07 against Wayside. Pamela maintained that the judge erred by failing to grant her trial motion for an involuntary dismissal and her motion for a new trial. Pamela argued that she did not commit an affirmative act constituting unlawful practice under the CFA because she was living out of the state and was not involved In the management of the Retirement Center during the years the decedent resided there. An employee testified otherwise. The appellate panel affirmed. There was sufficient evidence to support a judgment in plaintiffs favor, that Pamela committed an affirmative act of depositing checks and had oversight of the Retirement Center's banking, which facilitated the misappropriation of the decedent's funds and constituted an unlawful practice under the CFA. The jury was free to weigh the conflicting testimony of Pamela and the employee and ultimately reject Pamela's testimony.