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Bandazian Salons, L.L.C. v. Lor-Yvonne Associates

September 15, 2008

BANDAZIAN SALONS, L.L.C., PLAINTIFF-RESPONDENT,
v.
LOR-YVONNE ASSOCIATES, DEFENDANT-APPELLANT.



On appeal from Superior Court of New Jersey, Law Division, Special Civil Part, Bergen County, Docket No. DC-16360-05.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Telephonically Argued August 26, 2008

Before Judges A. A. Rodríguez and Lihotz.

This matter arises from a commercial tenancy dispute. Defendant-landlord Lor-Yvonne Associates appeals from the denial of its motion for an award of attorney's fees, following entry of judgment against plaintiff-tenant Bandazian Salons, L.L.C.

Defendant argues the parties' lease required payment of the attorney's fees incurred in the litigation to enforce the agreement's terms. The trial judge denied defendant's post-judgment motion. This appeal followed.

On June 15, 1999, the parties executed a lease agreement, whereby defendant leased a fully-equipped beauty salon to plaintiff for a term of three years, with an option to renew at the expiration of the initial term. Plaintiff exercised the option and vacated the premises on May 31, 2005.

After plaintiff's departure, defendant discovered plaintiff had altered the premises without authorization, contrary to the lease provisions. Defendant retained plaintiff's $5,000 security deposit. Plaintiff filed a special civil part action to recover $6,462.05, representing its security deposit and overpaid rent. Defendant filed a counterclaim seeking damages of $15,000, consisting of $13,158.05 in repair and restoration costs and $1,841.95 of unpaid rent.*fn1

Following a bench trial,*fn2 defendant was awarded $6,150 for damages to restore the premises and $1,754.28 for past rent. Plaintiff was awarded $1,132 in excess rent paid during the last month of its tenancy.

Defendant filed a post-trial motion for payment of counsel fees incurred in the action. The unopposed motion was denied. The trial court reviewed the motion and stated:

Although the Lease provides for counsel fees and same was set forth in the Complaint of the Landlord/Counterclaimant; there is no record that same was pursued at the time of Trial. Additionally and more importantly; it was the determination and final factual finding of this Court that BOTH the Landlord and the Tenant prevailed on some of their claims; and did not prevail on some of their claims. Therefore, it is the ultimate finding of this Court that neither party fully prevailed on their claims and therefore[,] it would be inequitable to award attorney['s] fees on behalf of the Landlord pursuant to the terms of the Lease.

On appeal, defendant argues the court erred in concluding "that both the Landlord and the Tenant prevailed on some of their claims and did not prevail on some of their claims." Rather, defendant focuses its argument on the fee-shifting clauses of the lease, maintaining that the terms of the lease require an award of attorney's fees.

Generally, "'fee determinations by trial courts will be disturbed only on the rarest of occasions, and then only because of a clear abuse of discretion.'" Packard-Bamberger & Co. v. Collier, 167 N.J. 427, 444 (2001) (quoting Rendine v. Pantzer, 141 N.J. 292, 317 (1995)). Additionally, "a trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference." Manalapan Realty v. Twp. Comm., 140 N.J. 366, 378 (1995); Lobiondo v. O'Callaghan, 357 N.J. Super. 488, 495 (App. Div.), certif. denied, 177 N.J. 224 (2003).

Defendant identifies two lease provisions that purportedly support its claim for an award of counsel fees. First, paragraph 13, which contains the indemnification clause. The paragraph provides the tenant will indemnify the landlord if it is liable for "fines, penalties, cost, suits, proceedings, liabilities, damages, claims and actions" resulting from the tenant's negligence "in connection with the Demised Premises." In such instance, the landlord may recover payment of defense costs including reasonable attorney's fees. The indemnification provision applies solely to ...


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