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Capital Finance Co. of Delaware Valley, Inc. v. Asterbadi

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


December 4, 2008

CAPITAL FINANCE COMPANY OF DELAWARE VALLEY, INC., PLAINTIFF-RESPONDENT,
v.
MAUREEN BELL ASTERBADI, DEFENDANT-APPELLANT, AND PNC BANK, AND BOTOOL M. HILNI, DEFENDANTS.

On appeal from the Superior Court of New Jersey, Chancery Division, Cape May County, Docket No. C-100-05.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued November 5, 2008

Before Judges Fuentes and Gilroy.

Defendant Maureen Bell Asterbadi*fn1 appeals from the December 14, 2007 order entered on cross-motions to enforce litigant's rights. This is the second appeal in this matter. The prior procedural history and the statement of facts are contained in the trial court's reported decision, Capital Fin. Co. v. Asterbadi, 389 N.J. Super. 219 (Ch. Div. 2002) and in our opinion, affirming in part and reversing in part, Capital Fin. Co. v. Asterbadi, 398 N.J. Super. 299 (App. Div.), certif. denied, 195 N.J. 521 (2008). We again affirm in part; reverse in part; and remand the matter for further proceedings consistent with this opinion.

For the purpose of this opinion, it is sufficient to state that plaintiff, Capital Finance Company of Delaware Valley, Inc., via a judicial sale to collect on a judgment entered against defendant's husband only, succeeded to the husband's interest as tenant by the entirety in a single-family home in Stone Harbor (the Property). Capital Fin. Co., supra, 398 N.J. Super. at 304-05. Plaintiff filed an action seeking to compel a partition of the Property. Id. at 306.

The trial court determined that plaintiff and defendant possessed title to the Property as tenants in common, with a right of survivorship measured against the lives of defendant and her husband; denied plaintiff's request for partition; granted plaintiff's request seeking to compel defendant to account for her use and possession of the Property; directed plaintiff and defendant to establish a fair rental value for the Property; directed plaintiff to account to defendant for payments of real estate taxes, municipal assessments and insurance premiums; and granted plaintiff's request to inspect the Property on reasonable notice to defendant. Id. at 306. In addition, the trial court ordered plaintiff to contribute toward the second mortgage on the Property, but denied defendant's request that plaintiff contribute toward the first mortgage. Id. at 306-07.

On appeal, we affirmed the trial court's determinations that: the parties hold title to the Property as tenants in common, with a right of survivorship measured against the lives of defendant and her husband, id. at 309; defendant's continued occupancy constitutes a constructive ouster of plaintiff, id. at 312; and defendant is to account to plaintiff for her use and possession of the Property (one-half) based on the imputed fair rental value of the Property, id. at 311-12. However, we reversed the trial court's ruling pertaining to the first mortgage indebtedness and determined that plaintiff was obligated to account to defendant for its share of the principal and interest paid thereon. Id. 312-13. Concerning plaintiff's obligation to account to defendant for payments that defendant made to preserve the parties' interest in the Property, we stated:

A cotenant who has paid operating and maintenance expenses of the property is entitled to an accounting for a pro-rata share from the other cotenants, regardless of who[m] is in possession. Esteves v. Esteves, 341 N.J. Super. 197, 201-02 (App. Div. 2001). Operating and maintenance expenses include, but are not limited to, charges such as taxes, mortgage, interest, and necessary repairs essential to the maintenance of the capital value of the property. Baird v. Moore, 50 N.J. Super. 156, 169 (App. Div. 1958). "[O]n principle, the mere fact of possession by the cotenant making advances for the benefit of the common estate should not preclude reimbursement by contribution from the cotenants sharing in the benefits by the preservation of the common property." Id. at 165-66. [Capital Fin. Co., supra, 398 N.J. Super. at 311.]

In describing the maintenance expenses for which plaintiff must account to defendant, we stated that defendant was entitled to an offset against the imputed rental value of the Property for any payments "made to preserve the Property, including payments made on both mortgages, as well as taxes, insurance, and repairs." Id. at 312 (emphasis added).

While the prior appeal was pending, plaintiff filed a motion seeking to enforce litigant's rights, contending that defendant had not filed an accounting for the 2005-2006 year as previously directed by the trial court. Defendant cross-moved, seeking an order compelling plaintiff to indemnify her from penalties imposed by the New Jersey Department of Environmental Protection (DEP) because of plaintiff's removal of sand from the Property. Argument on plaintiff's motion centered on the accounting that defendant served on plaintiff after defendant received plaintiff's motion to enforce litigants rights.

Under the accounting, defendant estimated the imputed gross seasonal rental value for the Property at $58,300. Defendant sought to deduct from that rental value the amounts paid for seasonal supplies, general maintenance and repairs of $12,389 (the Expenses);*fn2 utilities of $2,248.29; and taxes and insurance of $15,367.44, for a net rental value of $28,295.27. Accordingly, defendant sought approval of paying plaintiff one-half of the net figure, or $14,147.63.*fn3

Plaintiff challenged the accounting, contending that the Expenses claimed by defendant were general occupancy expenses, not the necessary repairs needed for preservation of the Property. Plaintiff argued that only defendant should bear the cost of the Expenses. Alternatively, plaintiff contended that even if some of the Expenses claimed were necessary for preservation of the Property, defendant failed to comply with the terms of the trial court's order of March 16, 2006, directing "that the parties shall, other than in an emergency, obtain consent from each other before effecting any alterations or capital repairs to the [P]roperty." Thus, plaintiff asserted that defendant owed an additional $6,437.37 under the 2005-2006 accounting.*fn4

On November 30, 2007, the trial judge, without the benefit of our prior opinion, rendered an oral decision, which, among other matters: 1) accepted plaintiff's accounting and determined defendant owed an additional $6,437.37 for her use and possession of the Property for the 2005-2006 season; 2) determined that defendant, as the tenant in occupancy, is responsible for all "ordinary and necessary occupational expenses" and that defendant was not entitled to the $12,389 credit for the Expenses; and 3) directed plaintiff to indemnify and hold defendant harmless from all fines and penalties of the DEP. A confirming order was entered on December 14, 2007.

As framed by defendant, "[t]he only issue presented by virtue of this appeal is whether or not it was appropriate for the trial judge to rule that all ordinary and customary expenses of occupancy shall be the exclusive obligation of the party in possession, at present, [defendant]." Defendant argues that the Expenses were "reasonable and necessary expenses attendant to maintenance of the [P]roperty and keeping the [P]roperty in a rentable condition." Defendant contends that because of the "construct" created by the trial judge, she is renting the Property while paying one-half of the imputed fair rental value to plaintiff; and therefore, she should "be permitted to deduct reasonable and necessary expenses associated with maintaining the [P]roperty." We disagree.

We previously held that defendant's continued occupancy of the Property constitutes a constructive ouster of plaintiff. Id. at 312. We concluded that as the tenant in occupancy, while defendant is accountable for one-half of the imputed rental value of the Property to plaintiff, she is entitled to a credit for plaintiff's pro-rata share of the "[o]perating and maintenance expenses includ[ing], but [] not limited to, charges such as taxes, mortgage, interest, and necessary repairs essential to the maintenance of the capital value of the Property." Id. at 311. We further described the necessary repairs as those needed "to preserve" the Property. Id. at 312. In applying that standard against the Expenses, we conclude that defendant is not entitled to an accounting for the following items: window air conditioners, kitchen supplies, bedding and sheets, a trash can, clothes pins and battery for fire alarm, outside grill, grill cover, plants and flowers, plumbing charges, carpet cleaning, weed control, and beach tags, totaling $2,215.26. Although these items may be necessary expenses to rent the Property to a third party, they are not necessary to maintain or preserve the capital value of the Property.

Defendant claims that the balance of the Expenses for painting, replacement of a window, repair of a screen door and replacement of blinds, totaling $10,173.74, were incurred as a result of an act of vandalism that occurred at the Property and were necessary to preserve the Property. This issue requires a remand for the trial court to ascertain the exact nature of each of those items and the reason therefore. If any of those items represent expenses necessary to maintain or preserve the capital value of the Property, defendant is entitled to a credit from plaintiff for one-half of such costs, unless the item or items were incurred in violation of the trial court's order of March 16, 2006, requiring defendant to provide advance notice to plaintiff, except on an emergency basis. The issue of whether defendant had sufficient time to first give plaintiff notice of the repairs or whether they needed to be made on an emergency basis without notice is to be resolved by the trial court on remand.

Affirmed in part; reversed in part; and remanded to the trial court for further proceedings consistent with this opinion.


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