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Mae Realty L.L.C. v. MacDowell

May 29, 2009

MAE REALTY L.L.C., A LIMITED LIABILITY COMPANY OF THE STATE OF NEW JERSEY AND SUBLIMINAL RECORDS, INC., PLAINTIFFS-RESPONDENTS,
v.
AL MACDOWELL, DEFENDANT-APPELLANT.



On appeal from the Superior Court of New Jersey, Law Division, Hudson County, L-408-07.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted April 21, 2009

Before Judges Winkelstein, Fuentes and Chambers.

Following a proof hearing, the trial court entered a July 1, 2008 final judgment against defendant, awarding plaintiffs $84,980 for past-due rent; $2278.16 for past-due sewer charges; and $15,000 as the amount due on unpaid loans. The court also awarded plaintiffs possession of the premises known as Unit 10, 193-199 Hackensack Plank Road, Weehawken. On appeal, defendant raises the following arguments for our consideration:

I. THE LOWER COURT ERRED IN LEVYING SANCTIONS AGAINST DEFENDANT FOR FAILURE TO ANSWER INTERROGATORIES BECAUSE DEFENDANT DID NOT RECEIVE THE REQUEST FOR INTERROGATORIES, AND MADE A GOOD-FAITH EFFORT TO REMEDY THE PROBLEM, WHICH PLAINTIFFS REJECTED.

II. THE LOWER COURT ERRED IN FAILING TO VACATE THE DEFAULT JUDGMENT, BECAUSE DEFENDANT DID NOT RECEIVE PROPER SERVICE BY MAIL OF THE NOTICE OF MOTION, CAUSING HIM TO FAIL TO OPPOSE THE MOTION OR TO APPEAL.

III. THE LOWER COURT ERRED BY AWARDING PLAINTIFFS DAMAGES REPRESENTING RENT AND SEWER CHARGES, BECAUSE DEFENDANT WAS UNDER NO AGREEMENT TO PAY RENT.*fn1

In light of the procedural and factual history and controlling law, we reject defendant's arguments and affirm. Because the final judgment was entered following a proof hearing after defendant had been defaulted as a result of failing to answer interrogatories, we set forth in some detail both the factual and procedural aspects of the case.

Plaintiff Mae Realty is the owner of 193-199 Hackensack Plank Road in Weehawken. Defendant Al MacDowell is a musician. He entered into an agreement with plaintiff Subliminal Records to "write and produce new and original tracks." The agreement between Subliminal and defendant, captioned "Studio/Producer Agreement," was reduced to writing on March 20, 2002, and was amended by written agreement of February 6, 2003. Subliminal was to provide an engineer and pay for the costs of producing the records, and defendant and Subliminal would then divide the revenue (the royalties) generated by the records.

As part of the agreement, Mae Realty, which is a limited liability company, verbally agreed to lease Unit 10 of 193-199 Hackensack Plank Road (the premises) to defendant for $1300 per month, for use as a recording studio. The building in which the studio was located was a commercial building; defendant was prohibited from living in it.

The agreement between plaintiffs and defendant provided that Subliminal would pay rent to Mae Realty for the premises, and defendant would reimburse Subliminal for the rent from the royalties generated from the records defendant produced. Mae Realty would pay the "first couple of months rent" until the royalties were produced or defendant could "get the money elsewhere" to pay the rent. If the royalties were insufficient to pay the rent, rents would nevertheless accrue, and, according to Eric Morillo, plaintiffs' chief operating officer, defendant would "be responsible for paying every single cent back."

In addition, in 2003, Subliminal loaned defendant $5000 to purchase "things for his recording studio," such as carpet and whatever else defendant required to "get[] his recording studio set up." Later, from December 2005 through May 2006, Subliminal advanced an additional $10,000 to defendant for "services defendant was to perform" in connection with his recording business, to be repaid to Subliminal on demand in the event defendant failed to provide such services. Defendant failed to perform the required services, and plaintiffs demanded repayment of the $10,000.

On November 17, 2006, Agueda Chavez, Subliminal's office manager, sent two letters to defendant addressed to 193 Hackensack Plank Road, Unit 10, Weehawken. The letters advised defendant that he had violated his agreement with both Subliminal and Mae Realty, both to pay royalties and to pay rent for the premises. The letters were hand-delivered, as well as sent by certified and regular mail. The certified mail was returned from the postal service as unclaimed. The letters referred to a July 2005 notice Subliminal had given defendant to vacate the premises by July 1, 2006, because of defendant's failure to pay rent. The letters further informed defendant that despite repeated requests by Subliminal to defendant to stop using the premises for residential purposes, he continued "to unlawfully and improperly use the premises" for that purpose.

The letters further informed defendant that as of November 1, 2006, he owed $61,100 in past-due rent; $228 in sewer charges; and he had failed to repay the $5000 advanced to him in 2003. In the second letter, Subliminal advised defendant that he had failed to repay the $10,000 Subliminal had advanced to him between December 2005 and May 2006 for recording services he failed to provide.

On January 22, 2007, plaintiffs filed the instant complaint against defendant, seeking damages and defendant's removal from the premises. Plaintiffs subsequently filed an amended complaint on April 10, 2007, which plaintiffs had personally served on defendant at "193-199 Hackensack Plank Road Unit 10[,] Weehawken" on April 25, ...


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