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Community Realty Management, Inc. for Wrightstown Arms Apartments v. Harris

July 20, 1998

COMMUNITY REALTY MANAGEMENT, INC., FOR WRIGHTSTOWN ARMS APARTMENTS, PLAINTIFF-RESPONDENT,
v.
NEDRA HARRIS, DEFENDANT-APPELLANT.



The opinion of the court was delivered by: Coleman, J.

Argued January 5, 1998

On certification to the Superior Court, Appellate Division.

This appeal involves summary proceedings to dispossess a tenant for non-payment of rent. The appeal focuses on the adequacy of procedures to protect pro se tenants. Two significant issues raised are whether the trial court abused its discretion in failing to vacate a consent judgment for possession pursuant to Morristown v. Little, 135 N.J. 274 (1994), and whether Burlington County's summary dispossess procedures adequately protect pro se tenants.

The trial court refused to vacate the judgment for possession and the Appellate Division affirmed in an unreported decision. We granted certification, 151 N.J. 74 (1997), and now reverse.

I. Defendant Nedra Harris resides in Wrightstown Arms Apartments, a Section 8 housing development constructed under the National Housing Act, 42 U.S.C.A. § 1437, to provide low-income housing. As the owner, Community Realty Management, Inc. (Community) receives federal subsidies enabling it to provide housing at reduced rents, but obligating it to comply with federal housing regulations.

Harris rents an apartment at Wrightstown Arms where she resides with her two minor children. She entered into a lease with Community for a term commencing April 19, 1993 and terminating March 31, 1994. Although Harris and Community did not execute a new lease at the expiration of the one year term, the original lease provided that "after the initial term ends, the Agreement will continue for successive terms of one month each unless automatically terminated as permitted by paragraph 23 of this Agreement." Thus, Harris remained in the apartment as a month-to-month tenant under the same terms of the original lease.

When Harris failed to pay her monthly rent of $133 on June 1, 1995, Community served Harris with a Notice to Quit. The Notice stated that Harris's tenancy was terminated effective June 22, 1995, and advised her that Community would seek eviction proceedings if she remained in the premises after June 22. On June 20, 1995, Community received a letter from Harris stating that she would be unable to pay her rent until Friday, June 23, 1995. On June 22, 1995, Community nonetheless filed a complaint for summary dispossess for non-payment of rent based on N.J.S.A. 2A:18-61.1a. The complaint alleged $236.50 in back rent, representing $133 for June rent, $31 in prior late charges, $30 in late charges for non-payment of June rent, $17.50 in damages, and $25 in contract costs. The complaint also requested $125 in attorney's fees and $18 in court costs for a total of $379.50.

On July 14, 1995, the return date of the summary dispossess proceeding, Harris appeared in court without the assistance of an attorney. The trial court gave the following general instructions to litigants prior to the docket call:

I should explain to you, ladies and gentlemen, that the procedure will be I will call the list and then we will take a recess so that the cases where both parties are present there will be an opportunity for the folks to speak with one another and then we'll recall the list to see which matters actually have to be tried and then try them. After I finish calling the list I will explain the principles in a general way that apply to the landlord and tenant law . . . .

Following the docket call, the court gave further instructions regarding non-payment cases:

In the case of nonpayment of rent the legislature has said that the tenant must pay the rent on time and in full, and if the tenant doesn't the landlord's entitled to a judgment for possession.

It's important for you to realize that we're all adults here, and we realize when rent is not paid usually it's because a person has run into a difficult situation . . . . So, there's no moral criticism or we're not saying people are bad persons, but on the other hand, I have no choice but to enter a judgment for possession.

The court also informed the tenants that

Some folks may be in a position where certain agencies may be able to provide assistance, and through the Department of Consumer Affairs . . . there are representatives from both the Welfare Board and emergency services who can talk to people who may feel . . . that they may be qualified for some assistance.

Thereafter, the court recessed. During the recess, Harris informed Community's attorney, Robert Weishoff, that she was unable to pay the back-due monies. Weishoff, in turn, informed the court clerk who entered a judgment for possession. Harris told the clerk she would make the full payment within eleven days. Eleven days later, on July 25, Harris paid the $379.50 demanded in the complaint as well as July rent of $133 plus $109 in late charges, totaling $621.50. She then signed a consent agreement staying the issuance of a warrant for removal until December 31, 1995. The agreement was a hardship stay pursuant to N.J.S.A. 2A:42-10.6.

On November 3, 1995, Community sent Harris a letter stating: "On July 25, 1995 through the Burlington County Superior Court of New Jersey a consent order was entered staying the order of removal until December 31, 1995. This letter is a reminder that per that order on December 31, 1995 you are to vacate the premises." When Harris failed to vacate the apartment by December 31, 1995, Community obtained a warrant for her removal on January 3, 1996, with an execution date of January 12, 1996. Represented by counsel for the first time, Harris filed an order to show cause, seeking to vacate the judgment for possession.

The trial court conducted an evidentiary hearing on January 12, 1996. At the hearing, Harris testified that she spoke with Weishoff at the summary dispossess proceedings while the court was in recess. Although Weishoff did not remember speaking with Harris, he stated in an unsworn statement that he always follows the same procedure. First, he calls the tenants who are present to counsel's table. Then, he informs them that if they pay the money they owe by 4:30 p.m., their cases will be dismissed. He also informs the tenants that if they do not have the money they owe, they can attempt to negotiate a deal with the landlord and memorialize their agreement in writing. In particular, he stated that he advises tenants to utilize the form of consent order promulgated by the Burlington County Court, a copy of which has not been provided to us.

Weishoff also stated that he tells tenants that if they are unable to pay and are not able to negotiate an agreement with the landlord, they will have eleven days to post the rent before a lockout. In response to the trial court's requested explanation of the meaning of a lockout, Weishoff explained that a lockout occurs when a judgment for possession has been entered and a landlord petitions the court for a warrant of removal. The Special Civil Part then gives the warrant to a constable who serves it on the tenant. Seventy-two hours later, the constable is directed to lock out the tenant.

Weishoff also stated that he informs tenants that they may be eligible to receive funds from public agencies. He stated that he explains the terms of a hardship stay to tenants, including that all back monies must be paid, all future rent must be paid on the first calendar day of the month, the landlord's property may not be destroyed, and the tenant may not disturb the peace and quiet of the neighborhood. Finally, Weishoff stated that he calls each tenant over to counsel's table individually and informs the tenant of the amount he or she owes, including late charges. He then asks the tenant if he or she has the money at that time. If the tenant says no, he tells the tenant that the landlord will take a judgment for possession that day.

Describing her recollection of the conversation with Weishoff, Harris stated, "I told him I didn't have all the money right then and there. He said I have eleven days to get it -- to get it together so I left." Harris stated that she gave her name to the court clerk indicating that she would make payment within eleven days. Thereafter, the court clerk noted a judgment for possession by writing "7-14-95-J" on the court list.

Harris also explained that on July 25, 1995, eleven days after the judgment for possession was entered by the clerk, she went to the clerk's office to remit payment. It is undisputed that while Harris was there, the clerk called Weishoff's office to determine the amount due. Weishoff's paralegal informed the clerk that Harris owed $621.50 as of that day, representing an additional $242 that included Harris's July rent of $133 plus $109 late fees for June and July. Harris paid the $621.50 and received a receipt. The receipt given by the court clerk informed Harris to go to Weishoff's office to sign a consent agreement staying the warrant of removal.

Harris went to Weishoff's office and met with a paralegal, Denise Yanzuk, who regularly prepares hardship stays. Yanzuk prepared Harris's consent order to stay the warrant of removal. At trial, Yanzuk testified that when a tenant comes into the office she normally shows the order to the tenant and goes "through paragraph by paragraph and, basically, read[s] it to them or explain[s] each paragraph." Additionally, Yanzuk, explained that when a tenant asks about what happens at the end of a hardship stay, she responds that "they're on a order to -- a court order to pay the rent and at the end of the stay they'll go back on their normal lease unless they are notified otherwise by the complex." When asked whether she told Harris that she would go back on her lease at the end of the stay period, Yanzuk stated, "[n]o, I would not say you will go back on your lease. I don't have the authority to say that."

Based on her conversation with Yanzuk, Harris testified that she believed that once six months had passed under the stay and she had met all the required conditions thereunder, her probationary period would be up and she would be able to remain in the apartment. Accordingly, she signed the consent order staying the warrant of removal until December 31, 1995. The trial Judge and Weishoff also signed the order.

At the Conclusion of the evidentiary hearing, the trial court refused to vacate the judgment for possession; the court did, however, stay the warrant of removal until March 1, 1996. Based in part on the trial Judge's personal knowledge of eviction proceedings rather than on the record in this case, the court concluded that the Landlord/Tenant Court adequately informs tenants of their right to pay monies owed by 4:30 p.m. The trial Judge stated:

I've heard it myself. The Court says to everybody who's sitting there, if you don't have the money by 4:30 today a judgment for possession will be entered. And I'm satisfied after having heard the argument that the procedure under these circumstances is adequate to protect the rights of the tenant if the tenant's paying attention. . . . And I find as a fact that [Harris] understood that day that she did not have all that was due and that the Court did inform those people present that the money would have to be paid by 4:30 [p.m.] or a judgment would be entered.

The trial court further found that the terms of the July 25 consent order were clear. Therefore, the court concluded that Harris should have understood that the order merely stayed the warrant of removal, neither renewing her lease nor permitting her to remain in the premises. Furthermore, the court determined that Little, supra, was inapplicable to Harris's case because to find otherwise "would in effect be characterizing every low-income family as 'exceptional' to trigger the operation of Rule 4:50-1." Moreover, the court noted that Community is not a public housing authority and to apply Little in this case "would be simply to say that the Supreme Court has told landlords that if you grant a hardship stay to a tenant who is a low income person where the rent is being somehow subsidized . . . you are stuck with that tenant for as long as you own the building."

Harris appealed, and the Appellate Division stayed the warrant of removal pending Disposition of the appeal. On September 30, 1996, the Appellate Division affirmed in an unpublished opinion. The panel concluded that Rule 4:42-1(d) allows settlement of litigation by the entry of a consent judgment. Although the panel recognized that that procedure presents certain risks for pro se tenants, the court concluded that those risks do not warrant placing every pro se settlement on the record. The court also found that Community was not required to present evidence that the rent was unpaid, due, and owing before the trial court could enter a consent judgment in a summary dispossess action.

The Appellate Division further concluded that although the Tenant Hardship Act, N.J.S.A. 2A:42-10.6, grants the trial court the power to stay an eviction for up to six months, the statute has not been interpreted to restrict the court's power to grant further relief pursuant to Rule 4:50-1(f) in exceptional circumstances. The Appellate Division found that the facts that Harris has two children, ages five and six, works and earns $123 every fifteen days, and receives $371 in welfare do not satisfy the exceptional circumstance requirement of Rule 4:50-1(f) because there are many households that fall within those circumstances.

On October 4, 1996, a warrant of removal was issued with an execution date of October 10, 1996. On October 8, 1996, Camden Regional Legal Services filed a petition for certification on behalf of Harris. On October 10, 1996, the Appellate Division stayed the judgment and warrant of removal pending Disposition of the petition that was granted July 11, 1997. Consequently, the warrant has not been executed.

II. Harris and amicus, Legal Services of New Jersey, argue that Burlington County Landlord/Tenant Court's eviction procedures violate the law and are unfair to pro se tenants. Specifically, Harris asserts that the eviction proceedings are contrary to the law because (1) landlords do not have to plead and prove "good cause," a requirement for eviction under the Anti-Eviction Act, N.J.S.A. 2A:18-61.1, or provide an affidavit to evict pro se tenants; (2) the court permits judgments for possession to be entered without first requiring the landlord to establish the court's jurisdiction; (3) the court does not require the submission of a form of judgment or order containing "the recital that all parties have in fact consented to the entry of judgment or order in the form submitted" as required by Rule 4:42-1(d) and (e); and (4) the court clerk enters judgments for possession against pro se tenants without an affidavit required by Rule 6:6-3(b).

Harris also argues that the court's procedures are inherently unfair to pro se tenants. First, Harris contends that at the eviction proceeding on July 14, 1995, the court failed to inform tenants that they had until 4:30 p.m. that day to pay the landlord all rent due and owing. Second, the court permits the landlord's attorney to explain court procedures and the meaning of court terms to pro se tenants. Third, the court clerk directs pro se tenants to go to the office of their adversary and sign consent orders regarding stays of warrants of removal. Harris maintains that it is unfair for the clerk not to explain to pro se tenants that they have a right to apply for relief from the judgment for possession.

Harris insists that because she did not understand the meaning of the terms "judgment for possession" or "hardship stay" she could not have consented to a judgment. Even assuming there was some degree of consent, Harris urges this Court to invalidate the judgment because Weishoff incorrectly advised her regarding the amount necessary to avoid a judgment for possession. Finally, Harris argues that the judgment for possession entered against her was invalid and that the lower courts erred in refusing to vacate the judgment for possession under Little.

In response, Community alleges that it acted in good faith and complied with all applicable regulations when evicting Harris. Community rejects defendant's argument that Weishoff improperly instructed Harris regarding the amount due and maintains that all the fees and charges demanded in its complaint were proper. Additionally, Community argues that the consent judgment for possession was proper because Harris fully understood her rights and chose to seek a hardship stay. Community maintains that Harris's situation is unexceptional and distinguishable from the circumstances in Little.

III. The current summary dispossess procedures allow a landlord to obtain a judgment for possession in three ways: (1) by default judgment, R. 6:6-3(b); (2) by judicial decree after a trial, R. 6:6-4; or (3) by consent, R. 4:42-1(d), made applicable to the Special Civil Part by Rule 6:6-1.

As noted previously, the present case involves two consent judgments. A consent judgment has been characterized as being both a contract and a judgment[;] it is not strictly a judicial decree, but rather in the nature of a contract entered into with the solemn sanction of the court. A consent judgment has been defined as an agreement of the parties under the sanction of the court as to what the decision shall be. Fidelity Union Trust Co. v. Union Cemetery Ass'n, 136 N.J. Eq. 15, 25-26 (Ch. 1944), aff'd o.b. 137 N.J. Eq. 455 (E. & A. 1946). A consent judgment has equal adjudicative effect as one entered after trial or other judicial determination. Pope v. Kingsley, 40 N.J. 168, 173 (1963). As such, a consent judgment may only be vacated in accordance with R. 4:50-1. Middlesex Concrete, etc., Corp. v. Carteret, 35 N.J. Super. 226, 235 (App. Div. 1955); Stawicky v. Stawicky, 12 N.J. Super. 72, 78-79 (App. Div. 1951).

[Stonehurst at Freehold v. Township Comm. of Freehold, 139 N.J. Super. 311, 313 (Law Div. 1976).]

Thus, for a consent judgment to be valid, like a contract, the parties' consent must be knowing and informed. Johnson & Johnson v. Charmley Drug Co., 11 N.J. 526, 538-39 (1953). There must be the proverbial "meeting of the minds." In the area of landlord/tenant law, when a question arises concerning the validity of an agreement between landlord and tenant, trial courts are directed to "generally favor the tenant rather than the landlord." Carteret Properties v. Variety Donuts, Inc., 49 N.J. 116, 127 (1967) (citations omitted); see 447 Associates v. Miranda, 115 N.J. 522, 529 (1989) (stating courts should liberally construe Anti-Eviction Act and utilize it to ensure that evictions are based on reasonable grounds); see also Jijon v. Custodio, 251 N.J. Super. 370, 372 (Law Div. 1991) (stating Anti-Eviction Act should be liberally construed and all doubts resolved in tenant's favor). In addition, the "entry of a consent judgment is inappropriate and the judgment itself is unenforceable when the agreement it encompasses or the relief it grants is illegal." First National State Bank v. Gray, 232 N.J. Super. 368, 372 (Law Div. 1989), overruled on other grounds by State v. Cruse, 275 N.J. Super. 324 (App. Div. 1994); Stonehurst, supra, 139 N.J. Super. at 314; Midtown Properties, Inc. v. Township of Madison, 68 N.J. Super. 197, 206-08 (Law Div. 1961), aff'd, 78 N.J. Super. 471 (App. Div. 1963). When the foregoing principles are applied to the present case, the two consent judgments are problematic in several respects.

-A- First, we address whether the consent judgment for possession complied with the required court procedures. When defendant admitted that she could not pay the $379.50 demanded by Community by 4:30 p.m. on July 14, the court clerk entered judgment for possession. We will treat separately whether that sum was the proper amount due. In any event, when a tenant consents to a judgment for possession, Rule 4:42-1(d) authorizes the court to enter a consent judgment or order without the signatures of all counsel of record and parties pro se who have filed a responsive pleading or who have otherwise entered an appearance in the action, provided the form of judgment or order contains the recital that all parties have in fact consented to the entry of the judgment or order in the form submitted. (Emphasis supplied).

On the return date of the summary dispossess proceedings, the clerk entered a consent judgment for possession by noting "7-14-95-J" on the court list. No form of judgment or order was ever entered, as required by the Rule, or ...


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