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Hudson View Gardens, L.L.C. v. Reyes

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


October 15, 2008

HUDSON VIEW GARDENS, L.L.C., PLAINTIFF-RESPONDENT,
v.
LINA REYES, DEFENDANT-APPELLANT.

On appeal from the Superior Court of New Jersey, Law Division, Hudson County, Docket No. LT-3675-06.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued September 23, 2008

Before Judges Parker and Yannotti.

Defendant Lina Reyes appeals from a judgment for possession entered by the trial court on April 23, 2007 in favor of plaintiff Hudson View Gardens, L.L.C. For the reasons that follow, we affirm.

I.

Defendant is a tenant in a multi-dwelling building in Weehawken. In 2004, 989 Blvd. East, L.L.C. owned the premises. Defendant's rent was $884 per month. In February 2005, the owner notified defendant that the rent would be increased from $884 to $919.36 per month, as of April 1, 2005. Plaintiff became owner of the property on October 3, 2005. On February 27, 2006, plaintiff provided written notice to defendant that the monthly rent would be increased to $956.13, as of April 1, 2006.

On February 28, 2006, plaintiff commenced a summary dispossess action in the Special Civil Part, seeking defendant's removal from the leased premises, on the ground of non-payment of rent from October 2005 to February 2006. The action was docketed as LT-3675-06. In its complaint, plaintiff alleged that rent in the amount of $1,090.24 per month was due and owing, along with late fees in the amount of $50 per month. Plaintiff also sought $500 for damage to the premises.

The matter was scheduled for trial on March 23, 2006; however, plaintiff requested a one-week adjournment and the matter was re-scheduled for March 30, 2006. Defendant did not appear on that date and a default judgment was entered for plaintiff. Thereafter, a warrant for defendant's removal from the premises was issued.

On May 8, 2006, defendant moved to vacate the default judgment and stay the eviction. Defendant's motion was heard on May 16, 2006. Although defendant had stated in her motion that her rent was $919.36 per month, defendant's attorney informed the court that, on July 13, 2004, the Weehawken Rent Leveling Board (WRLB) had reduced the rent to $442 as a result of a "diminishment of services."

Defendant's counsel argued that the rent had remained $442 per month because the former owner of the premises had never petitioned the WRLB to reinstate the full amount of the rent. Counsel noted, however, that the former owner had increased the rent to $919.36 per month as of April 1, 2005, and defendant had paid that amount. Counsel asserted that the landlord had "pressured" defendant to pay that amount and "the landlord -- that landlord . . . may owe [defendant] a refund[.]"

In response, plaintiff's attorney asserted that in 2005, the former owner had filed a statement with the WRLB which indicated that defendant's rent was $1,090.24 per month. Plaintiff's counsel also asserted that defendant had made a partial payment for October 2005, but no additional rental payments were made through May 2006.

The judge entered an order on May 16, 2006, which stayed all further proceedings in the matter and directed defendant to deposit $6,868.19 with plaintiff's attorney to be held in escrow. The deposit represented seven months of rent at $919.36 per month, plus the balance due for October 2005.

The judge suggested that plaintiff's counsel obtain a decision from the WRLB addressing the amount of rent due on the premises as of October 2005. The judge adjourned the matter to May 31, 2006. On that date, the judge vacated the default judgment and dismissed plaintiff's complaint. The judge did not issue an order regarding the $6,868.19 that plaintiff's attorney was holding in escrow.

On June 1, 2006, plaintiff filed a motion with the WRLB for a determination as to the amount of rent due for defendant's unit. On June 8, 2006, defendant filed a cross-motion seeking a reduction in rent due to the "diminishment of services." She alleged that there were certain deficiencies in the unit. She also alleged that parking had not been provided in the previous eight months.

The cross-motions were scheduled to be considered by the WRLB at its June 2006 meeting; however, the WRLB adjourned the motions to October 17, 2006. Defendant did not appear on the return date, and her application was dismissed for lack of prosecution. The WRLB did, however, consider plaintiff's motion.

In a resolution dated October 26, 2006, which memorialized its decision, the WRLB stated that in July 2004, it had reduced defendant's rent due to a "diminishment of services." The WRLB found that the basis for the prior rent abatement no longer existed, and the Board restored the rent to its full amount as of June 1, 2006. The Board found that "[t]he maximum monthly base rent as of that date, until the next annual rent increase, shall be $956.13."

On December 1, 2006, plaintiff filed a three-count complaint again seeking defendant's removal from the premises. This action was docketed as LT-18798-06. In count one of the complaint, plaintiff sought possession of the premises on the ground of non-payment of rent for the period after June 1, 2006. In count two, plaintiff asserted a claim for $500 for damage to the leased premises. In count three, plaintiff sought defendant's removal from the premises on the ground of habitual late payment of rent.

Another judge heard the matter on January 9, 2007. The judge filed a letter opinion dated February 21, 2007. The judge noted that plaintiff had withdrawn counts two and three of its complaint. Therefore, the action was limited to plaintiff's demand for possession on the ground of non-payment of rent in the period from June 2006 through February 2007.

The judge found that he was bound by the WRLB's October 2006 determination that rent for the subject premises was $956.13 per month as of June 1, 2006. The judge found that defendant owed rent in the amount of $8,605.17, less the security deposit of $947.47, for a total of $7,657.70. The judge did not award plaintiff late fees. The judge also denied plaintiff's application for an award of attorney's fees and court costs.

In his letter opinion, the judge stated that it was his understanding that plaintiff's counsel was holding $6,868.19 pursuant to the order entered in the first action on May 16, 2006. For that reason, the judge stated that he would dismiss the complaint. The judge added, however, that the parties should advise him if they are unable to agree upon the actual amount of rent due through February 2007.

By letter dated February 21, 2007, plaintiff's attorney advised the court that she was holding $6,868.19 in escrow pursuant to the court's May 16, 2006 order, and the monies were for the rent due in the period from October 2005 through May 2006. Counsel asserted that the unpaid rent and late fees for this period totaled $7,294.06.

Counsel explained that $435 remained due for October 2005. She said that rent in the amount of $919.36 per month was due for November 2005 through March 2006, and rent in the amount of $956.13 per month was due for April and May 2006. Counsel added that defendant also owed late fees of $50 per month. Counsel therefore asserted that, after applying the $6,868.19 that she was holding in escrow, $425.87 remained due and owing for October 2005 through May 2006.

Plaintiff's counsel additionally stated that, for the period covered by count one of the complaint, from June 2006 to February 2007, defendant owed $956.13 per month in rent, along with late fees of $50 per month, for a total of $9,055.17. Counsel said that defendant had paid $2,138.53 to her attorney and that amount apparently was being held in escrow.

Plaintiff's counsel therefore asserted that the following sums were due and owing: $425.87 for the period from October 2005 to May 2006; and $9,055.17 for the period from June 2006 to February 2007, less the $2,138.53 that defendant had paid to her attorney, and the $947.47 security deposit, for a balance of $6,395.04.

Defendant's counsel responded with a letter dated March 2, 2007. Counsel asserted that rent in the period from June 2006 through March 2007 was $919.36 per month because plaintiff had not provided defendant with a notice of rent increase after the WRLB's October 26, 2006 decision. He therefore stated that, for the period from June 2006 through March 2007, the amount of rent due was $9,193.60. Defendant's attorney also claimed that rent for the period from October 2005 through May 2006 was only $442 per month, and the total amount due for this period was $3,536. Defendant sought credit for the $6,868.19 that was being held in escrow by plaintiff's counsel, and the $947.47 security deposit, for a total credit of $4,279.66. Counsel therefore asserted that only $4,913.94 was due and owing as of March 2007.

The judge filed another letter opinion dated April 9, 2007. The judge noted that the complaint in this matter only covered the alleged non-payment of rent for the period from June 2006 through April 2007. The judge refused to consider whether defendant had made any overpayments of rent in the period prior to June 2006, noting that defendant could seek any such overpayments in a separate action for damages. The judge found that, based on the WRLB's October 26, 2006 decision, rent for the period at issue was $956.13 per month.

The judge further found that defendant had been properly notified that rent would be increased to $956.13. Plaintiff had issued that notice before the WRLB's decision of October 26, 2006, which restored the rent retroactive to June 1, 2006. The judge concluded that plaintiff was not required to issue a new notice of rent increase after the WRLB's decision.

The judge therefore determined that rent in the amount of $15,019.95 was due for the period from June 2006 through April 2007, less the $947.47 security deposit, for a balance of $14,072.48. The judge stated that unless that amount was paid in full by April 12, 2007, a judgment for possession would be entered for plaintiff.

Plaintiff's attorney responded in a letter dated April 16, 2007. Counsel again stated that $482.87 remained due and owing for the period from October 2005 through May 2006. Counsel also stated that the following amounts were due for the period from October 2005 through April 2007:

Rent June 2006-April 2007: $10,517.43

Late Fees: 300.00

Attorney's Fees: 350.00

Court Costs: 28.00

Balance October

2005-May 2006: 482.87

Total: $11,678.30

Counsel asserted that defendant had only deposited $4,780.65 with her attorney. She added that, after applying defendant's security deposit and the $4,780.65 being held in escrow, $5,949.31 remained due and owing to plaintiff.

The judge issued a letter opinion dated April 17, 2007. The judge stated that he agreed with plaintiff's calculation of the amount of rent due, with the exception of the $482.87 claimed for the period from October 2005 through May 2006. The judge deleted that amount because he had made clear in his prior opinion that he was only considering the amounts due after June 1, 2006.

The judge therefore found that defendant owed rent, late fees, attorney's fees, and court costs in the amount of $11,195.43, and a judgment for possession would be entered on April 23, 2007 unless he was informed that the amount owed by defendant had been paid in full. On April 23, 2007, the judge informed the parties by letter that, because he was not advised that payment had been made, a judgment for possession had been entered on that date.

Defendant's attorney wrote to the court on April 27, 2007, and stated that the judge erred by entering the judgment. Counsel asserted that he had released $4,237.24 to plaintiff's counsel and, with the $6,868.19 that plaintiff's counsel was holding in escrow, plaintiff had been paid in full. Defendant's counsel also argued that the judge erred by adding late fees as "additional rent." He asserted that the Weehawken rent control ordinance did not allow for the imposition of late fees as "additional rent."

The judge responded in a letter dated April 30, 2007. He stated that defendant had not fully paid the amount that he found to be due and owing because defendant sought to apply the $6,868.19 that was being held by plaintiff's counsel. Those funds related to the amounts allegedly due for October 2005 to May 2006, which was prior to the time covered by the complaint. The judge reiterated that he would not consider any claim for the period before June 2006.

Thereafter, a warrant was issued for defendant's removal from the premises. On May 3, 2007, defendant again sought a stay of her eviction. The court stayed defendant's removal from the premises until May 10, 2007.

On May 10, 2007, the judge rejected defendant's contention that late fees were not permitted by the Weehawken rent control ordinance. The judge also re-affirmed his finding that $11,195 was the amount due and owing for the period from June 2006 through April 2007. The judge stayed the judgment of possession pending appeal but required defendant to pay $956.13 per month in rent while the stay was in effect.

II.

Defendant first argues that the judge erred because he failed to give her a credit for the alleged overpayments of rent made in the period from October 2005 to May 2006. We disagree.

As we stated previously, plaintiff's action for summary dispossession relates to the non-payment of rent for the period from June 2006 through April 2007. It is undisputed that, in its October 26, 2006 resolution, the WRLB found that the rent on defendant's unit was $956.13 per month, as of June 1, 2006. Moreover, it is undisputed that, although defendant's attorney was holding some rental payments in escrow, plaintiff has not received any rent from defendant for the period from June 2006 through April 2007.

Therefore, as the judge found in his April 17, 2007 letter opinion, defendant owed rent for the period from June 2006 to April 2007, at a monthly rate of $956.13, for a total of $10,517.43. The judge's finding on this issue is binding on appeal because it is supported by sufficient credible evidence. Rova Farms Resort, Inc. v. Investors Ins. Co., 65 N.J. 474, 484 (1974) (citing Fagliarone v. Twp. of No. Bergen, 78 N.J. Super. 154, 155 (App. Div.), certif. denied, 40 N.J. 221 (1963)).

Defendant argues, however, that the judge erred by failing to credit her with overpayments of rent she allegedly made in the period from October 2005 through May 2006. Defendant's contention fails because these alleged overpayments do not relate to the time frame covered by the pleadings in this case.

Indeed, the alleged overpayments were made pursuant to the order entered on May 16, 2006, in plaintiff's first summary dispossess action, which was docketed as LT-3675-06. The monies paid by defendant, and held in escrow by plaintiff's attorney, were for rent allegedly due in the period from October 2005 to May 2006.

We are convinced that, in these circumstances, the judge correctly confined his decision to the rent allegedly due for the period at issue in this case, specifically June 2006 through April 2007. The judge did not preclude defendant from seeking a return of any alleged overpayments. The judge stated that defendant could pursue the claim in a separate action. We note that, although more than a year has passed since the judge's decision, defendant has not taken any steps to seek a refund of those alleged overpayments in a separate action.

Defendant maintains that our decision in Chau v. Cardillo, 250 N.J. Super. 378 (App. Div. 1990), required the judge to consider her alleged overpayments of rent for October 2005 to May 2006 in determining the amount of rent due and owing from June 2006 through April 2007. Again, we disagree.

In Chau, the plaintiff-landlord took title to the leased premises in May 1988. Id. at 380. At the time, the defendant's monthly rental was $623. Ibid. The defendant sought a determination from the Hoboken Rent Leveling Board (HRLB) regarding the rent that could be legally charged for the apartment. Ibid. On October 30, 1989, the HRLB issued a determination reducing defendant's rent from June 1988 through October 1989. Id. at 381. The defendant demanded credit for the overpayments and stopped paying rent on November 1, 1989. Ibid.

On January 15, 1990, the plaintiff commenced a summary dispossess action, seeking the defendant's removal from the premises on the ground of non-payment of rent. Id. at 382. The defendant argued that, when the plaintiff filed the complaint, she did not owe any rent. Ibid. We agreed, stating that:

[t]he exhibits submitted in defendant's appendix reflect that from June 1, 1988 through October 31, 1989 defendant made rental payments totaling $9,060 when, according to the calculations of the Board, she should have paid rent of only $7,591. Thus, assuming the Board's calculations were correct, as of November 1, 1989 defendant was entitled to a credit of $1,469, or slightly more than three months rent. The inescapable conclusion to be drawn from these facts is that, as of January 15, 1990 when the complaint was filed, defendant did not owe rent to the plaintiff. [Ibid.]

We added that the HRLB's decision "was entitled to a presumption of correctness.". Id. at 384 (citing Park Tower Apts., Inc. v. Bayonne, 185 N.J. Super. 211, 222 (Law Div. 1982)). We stated that the landlord was required to exhaust his administrative remedies before challenging the HRLB's decision in a court of law. Ibid. (citing Glynn v. Park Tower Apts., Inc., 213 N.J. Super. 357, 362-63 (App. Div. 1986)). We stated that:

[t]he plaintiff landlord . . . did not exhaust his administrative remed[ies] prior to institution of this dispossess action. Therefore, until plaintiff succeeds in that administrative process, or reverses the Board's decision in subsequent litigation, plaintiff is charged with the presumptive validity of the Board's decision concerning the fair rental value of defendant's apartment. [Id. at 385.]

We are convinced that Chau does not apply here. There are several reasons for this conclusion. The Chau case did not involve two summary dispossess actions, each covering separate and distinct time periods. In this case, the alleged overpayments of rent were made pursuant to an order entered in the first action. Furthermore, when plaintiff commenced this action, defendant undoubtedly owed plaintiff rent for June 2006 through November 2006. Moreover, nothing in Chau precludes a trial court from requiring the tenant to seek return of overpayments of rent, for a period prior to that covered by the pleadings, in a separate action for damages.

We therefore conclude that the judge did not err by refusing to credit defendant with the alleged overpayments of rent made before the period covered by plaintiff's complaint, and by finding that any such overpayments must be sought in a separate action for damages. We accordingly affirm the judge's finding that defendant owed rent in the amount of $10,517.43 for the period from June 2006 through April 2007.

III.

We turn to defendant's contention that the judge erred by including late fees and attorney's fees as "additional rent" that was owed to plaintiff.

Section 4 of defendant's lease agreement*fn1 provides in pertinent part that rent is due on or before the first day of each month, and a late fee of $50 will be charged as "additional rent" for each payment that is not received by the fifth day of the month. In addition, section 8(a) of the lease provides that the tenant may be evicted if rent is not paid when it is due. Section 8(b) states that, if the landlord retains an attorney with respect to the eviction of the tenant, the tenant agrees to pay specified counsel fees and court costs, "and [the] same shall be considered rent[.]"

Defendant argues that Weehawken's rent control ordinance does not permit a landlord to charge late fees and attorney's fees as "additional rent." Defendant notes that, under Weehawken's ordinance, a landlord may only charge the base rent, along with annual increases, which are limited to four percent. Defendant therefore contends that plaintiff may not impose any charges as "additional rent" if the resulting increase in rent exceeds the four percent permitted by the ordinance.

The judge found, however, that Weehawken's ordinance does not, by its terms, preclude a landlord from imposing late fees and counsel fees incurred in an eviction proceeding as "additional rent," and that such fees are not subject to the four percent limitation on annual increases. We disagree with the judge's conclusion.

Our decision in Ivy Hill Park Apts. v. Sidisin, 258 N.J. Super. 19 (App. Div.) certif. denied, 130 N.J. 397 (1992), is instructive on this issue. In that case, the lease provided that the tenant would be obligated to pay for damage caused by the tenant to the premises. Id. at 20-21. The tenant's rent was $302.39 per month. Id. at 21. The landlord asserted that $1,640 was required to repair certain damage caused by the tenant. Ibid. According to the lease, that amount became due as "additional rent" along with the next month's rental payment. Ibid. When the tenant failed to pay that amount, the landlord commenced a summary dispossess action pursuant to N.J.S.A. 2A:18-61.1a. Id. at 20.

We held that the "additional rent" for damages to the leased premises was not authorized by Newark's rent control ordinance. Id. at 21. The ordinance generally defined "rent" to mean the consideration paid for the use and occupancy of the leased space. Ibid. The ordinance limited increases in "rent" to either four or five percent in any consecutive twelve-month period, depending upon the nature of the leased space. Id. at 22. We concluded that the ordinance did not permit collection of damages as "rent." Id. at 23.

We noted that, in the lease, the landlord had characterized the damages as "additional rent." We stated our reluctance "to permit [the landlord] to establish jurisdiction under N.J.S.A. 2A:18-61.1a by characterizing certain damages as rent and in the same proceeding to deny that the charge sought to be enforced is rent under the rent control ordinance." Id. at 22. We noted that "the landlord ha[d] imposed an increase from one month to another of approximately 600%, in default of which the tenant has been dispossessed." Id. at 23.

In our view, the same conclusion applies in this case. Under the terms of defendant's lease, the landlord has denominated late fees, counsel fees and court costs as "additional rent." Having done so, the landlord cannot then deny that the total amount of "rent" imposed upon the tenant is not subject to the limitations on rent increases set forth in the Weehawken ordinance.

It would certainly be permissible for Weehawken to exclude late fees, counsel fees and court costs from the four percent cap imposed on annual rent increases; however, the ordinance does not expressly provide for such exclusions. Although the judge stated on the record that it was his understanding that the WRLB had taken the position that late fees and counsel fees were not subject to the four percent cap, there is no competent evidence in the record to support the judge's statement.

Therefore, we conclude that the judge erred by including $300 in late fees, $350 in attorney's fees, and the $28 in court costs, in the total amount of rent due and owing from defendant for the period from June 2006 through April 2007. The error does not, however, warrant reversal of the judgment for possession.

As we stated previously, the judge correctly found that defendant owed rent in the amount of $10,517.43 for the period from June 2006 through April 2007. Because defendant failed to pay that amount by the deadline established by the court, the judge properly issued the judgment of possession for plaintiff.

We therefore affirm the judgment of possession. We vacate the stay of the judgment previously entered by the trial judge. We remand the matter to the trial court to amend the judgment to reflect the exclusion of late fees, attorney's fees, and costs and to effect defendant's orderly removal from the leased premises.

Affirmed and remanded for further proceedings in conformity with this opinion.


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