April 1, 2010
LYNN BERNSTEIN, PLAINTIFF-APPELLANT,
MICHAEL SHULMAN AND CAROL SHULMAN, DEFENDANTS-RESPONDENTS.
On appeal from the Superior Court of New Jersey, Law Division, Special Civil Part, Essex County, Docket No. DC-19848-08.*fn1
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued February 24, 2010
Before Judges Sabatino and Newman.
Appellant Lynn Bernstein ("the tenant") seeks reversal of certain aspects of a March 27, 2009 order of the Special Civil Part entered in two consolidated actions between the tenant and her landlords, respondents Michael Shulman and Carol Shulman ("the landlords"). The Special Civil Part's order denied the tenant's claim for relocation assistance under N.J.S.A. 2A:18-61.1g and N.J.S.A. 2A:18-61.1h, and her other claims for affirmative relief, but also denied the landlords' claim for unpaid rent and directed the landlords to return the tenant's security deposit.
For the reasons set forth in this opinion, we affirm the Special Civil Part's order except with respect to the tenant's claims for relocation assistance and for a doubling of the security deposit refund pursuant to N.J.S.A. 45:8-21.1. As to those discrete issues, we vacate the order and remand for further proceedings.
The record is unusually complicated and extensive for a residential tenancy matter. We summarize the facts and procedural history most germane to our analysis.
At the relevant times, the tenant resided in a basement apartment in the Township of Montclair, pursuant to a written lease with the landlords. In May 2006, the tenant moved into the apartment and began to pay $1,050 per month in rent.
Long before the tenant moved in, the landlords had applied for a variance with the Township Zoning Board of Adjustment in May 1998 to expand the nonconforming use of the premises, including the construction of a basement apartment. The variance was denied. Despite the denial of the variance, the landlords created the basement apartment and advertised it for rental. The tenant apparently was unaware of the apartment's illegality when she moved into it in 2006.
In April 2007, severe rain storms ravaged the Montclair area and caused the basement apartment to be flooded. The tenant was forced to evacuate the apartment during the storm. Initially, she resided in a room provided by the landlords. She then was temporarily sheltered by the Red Cross. While the tenant was out of the apartment, she was apparently the victim of a carjacking, in which both of her legs were injured and which resulted in one of her legs being placed in a cast. These leg injuries apparently impeded the tenant's ability to gain access to the basement apartment, given the change of elevation. The tenant was also concerned that there were continuing mold and leakage problems within the apartment as a result of the flooding.
Although her personal property remained in the apartment until May 2008, the tenant never returned to reside in the apartment. Instead, as she testified, she was "leaving [her] belongings in there to protect [her] rights."
After the storm, both state and local inspectors went to the premises to inspect for damage. As a result of those inspections, the local authorities determined that the basement apartment had been constructed in violation of Montclair ordinances and was therefore illegal. A report to this effect was forwarded from the municipal zoning officer to the landlords on June 27, 2007. The report alerted the landlords of the violations of the ordinance, and instructed them to dismantle the basement apartment in which the tenant had previously been living.
The tenant withheld rent beginning in May 2007. She testified that she did so because she believed that the apartment was illegal.
In June 2007, the landlords commenced an action against the tenant in the Landlord-Tenant docket of the Special Civil Part ("the first landlord-tenant action") for summary dispossession, alleging nonpayment of rent under N.J.S.A. 2A:18-61.1(a). See Shulman v. Bernstein, No. LT-15313-07. After a default, several hearings were conducted in LT-15313-07 before a judge who was then hearing landlord-tenant cases ("the first Landlord-Tenant judge"). The landlords eventually voluntarily dismissed their complaint.*fn2
In July 2007, in response to the report of violation from the municipality, the landlords disconnected the stove and capped off the gas line in the basement. They also removed the refrigerator. These actions rendered the apartment uninhabitable, thereby abating the violation of the ordinance but also precluding a legal occupancy by the tenant.
The landlords again attempted to obtain summary dispossession in a new complaint ("the second landlord-tenant action"), this time under N.J.S.A. 2A:18-61.1(e), on the grounds that the tenant had violated the terms of the lease by not residing in the apartment. That second case, LT-3510-07, was adjudicated by a different Landlord-Tenant judge ("the second Landlord-Tenant judge") in March 2008. The second Landlord- Tenant judge ruled that the landlords were not entitled to summary dispossession because the apartment was illegal and because the landlords had not offered the tenant relocation assistance.
In rendering his ruling, the second Landlord-Tenant judge wrote an extensive, thirteen-page decision dated March 12, 2008. In that opinion, the second Landlord-Tenant judge concluded that "before any judgment for possession will issue, the landlord must comply with the provisions of N.J.S.A. 2A:18-61.1(g) and (h), as interpreted by Miah v. Ahmed, 179 N.J. 511 (2004)." However, the second Landlord-Tenant judge also decided to "leave the parties to pursue their remedies in an independent plenary action." The judge further noted that "whether any 'set[-]off' should be permitted for unpaid rent or the equitable equivalent [from an award of relocation assistance] is a matter for consideration in any later independent plenary action," and not to be addressed in the summary dispossession action.
In the course of his decision, the second Landlord-Tenant judge relied in part upon testimony from the Montclair zoning enforcement officer, in which the officer attested that "renewed occupancy would make the apartment illegal as an expansion of a non-conforming use and the violation would not be considered abated."
The landlords did not further pursue summary dispossession relief in light of the second Landlord-Tenant judge's opinion. Instead, they brought an action for collection of unpaid rent in the Special Civil Part. Their third lawsuit, DC-29138-07, initially resulted in a default against the tenant, as the landlords had made service at the address of the basement apartment where she no longer resided.
On May 8, 2008, as yet unaware of the default entered against her in DC-29138-07, the tenant brought her own separate action in the Special Civil Part, seeking relocation expenses under N.J.S.A. 2A:18-61.1g and N.J.S.A. 2A:18-61.1h, and other monetary relief. See Bernstein v. Shulman, No. DC-19848-08 (Law Div.). That same month, the tenant removed her personal property and returned the keys to the apartment to the landlords.
The tenant successfully vacated the default in the landlords' action in DC-29138-07. She then moved before the judge handling the Special Civil Part docket ("the Special Civil Part judge") to consolidate the two cases.*fn3
During oral argument on the tenant's motion to consolidate and amend, she brought to the attention of the Special Civil Part judge the second Landlord-Tenant judge's written opinion. The tenant offered a copy of the written decision to the court, but the Special Civil Part judge declined to give it consideration.
The tenant did acknowledge to the Special Civil Part judge that she had "returned possession [of the apartment to the landlords] after [the second Landlord-Tenant judge] made his decision[.]" The tenant also maintained that she had left her personal property in the apartment up until that point to protect her rights.
The Special Civil Part judge granted the tenant's motion to consolidate the two matters. He also granted the tenant's motion to amend in part, allowing her to continue her claim for relocation expenses, to add a claim for double damages on her security deposit, and to add a claim for a violation of the implied warranty of habitability.
The Special Civil Part judge denied the tenant's attempt to amend her complaint to include a claim under the Consumer Fraud Act ("CFA"), N.J.S.A. 56:8-1 to -20. The judge further held that the tenant's alleged damages, in the absence of the CFA count, did not surmount the monetary jurisdictional threshold that would require transfer of the case to the Law Division. That ruling was without prejudice to the possibility that ensuing discovery might show that the jurisdictional limit had, in fact, been reached and that the case should be transferred.
The Special Civil Part judge heard and denied a motion for reconsideration by the tenant on January 12, 2009. Again, the judge held that the CFA was not implicated in the dispute.
After attempts at mediation failed, the parties initially appeared for trial in the Special Civil Part on February 24, 2009.
In the meantime, the tenant had moved before the Special Civil Part judge to have the landlords sanctioned for failure to timely answer her interrogatories.*fn4 On the first listed trial date, the tenant petitioned the court for an adjournment, informing the court of the pending discovery motion in the case, and also asserting that she was feeling ill. The court apparently informed the tenant that her motion to adjourn was out of time, but, nevertheless, adjourned the trial until March 9, 2009.
On March 9, 2009, the landlords' counsel was himself ill, and he requested an adjournment, which was also granted.
The trial was finally convened in the Special Civil Part on March 23, 2009. The parties stipulated that the apartment had been declared illegal by inspectors in June 2007, and that the landlords had subsequently abated the violations, removing the stove and capping the gas line the next month.
The tenant testified that she had not paid rent from May 2007 through May 2008 because, "[the first Landlord-Tenant judge] ruled [that] there was no rent due on an illegal apartment, therefore I would not pay it."
The Special Civil Part judge heard testimony from the parties*fn5 and also several other witnesses, including a Township code official*fn6 and a fire inspector. However, the judge disallowed the tenant presentation of a CD-ROM, which she claimed contained pictures of her damaged personal property. The tenant represented to the court that she had provided a copy of the CD-ROM to the landlords, and that she wanted to provide a copy to the court as well. Counsel for the landlords asserted during this exchange that he had been unable, apparently due to technical difficulties, to open the CD-ROM and view the pictures. Although the judge did not allow the CD-ROM to be played in court, he did permit the tenant, as an alternative, to read into the record a description of the allegedly damaged property, as listed in her answer to the landlords' interrogatories.
The tenant again attempted at trial to provide the Special Civil Part judge with a copy of the second Landlord-Tenant judge's written opinion, asserting that the Landlord-Tenant judge had "ruled on many of these same issues already." The Special Civil Part judge once again declined the tenant's overture, responding:
[It's a] [d]ifferent trial, [the Landlord-Tenant judge is] a different finder of fact. If there was a plea -- if this were -- had that been a criminal matter and there was a plea, or any other matter, it might be admissible here. But you say he ruled on similar questions or the same questions, it was -- I don't know what the proffer was. I wasn't there.
The Special Civil Part judge advised the tenant that the nature of the respective actions was different, in that the previous cases in the Landlord-Tenant court had been for possession, while the instant action in the Special Civil Part was about rent due and other monetary relief.
In an oral opinion on March 27, 2009, the Special Civil Part judge denied the landlords' claim for unpaid rent because of the illegality of the premises. At the same time, the judge also denied the tenant's affirmative claim for relocation assistance and for double damages on her security deposit. Instead, the Special Civil Part judge awarded only a return of the security deposit itself, without any penalty. The judge further denied the tenant's claim for property damage because her proofs were not sufficient. A corresponding order was issued by the Special Civil Part judge on March 27, 2009. The tenant appeals that order; the landlords have not cross-appealed.
In her appeal, the tenant, who is pro se, essentially contends that: (1) the Special Civil Part judge erred by failing to honor the factual findings and conclusions of the second Landlord-Tenant judge, particularly as to her reasons for not re-occupying the apartment and her entitlement to relocation assistance; (2) the Special Civil Part judge's denial of relocation assistance is contrary to law and should be reversed; (3) her claims under the CFA should not have been rejected; (4) her property damage claims should have been granted and the court should have allowed her to present a CD-ROM disc evidencing that alleged damage; (5) she was statutorily entitled to a doubling of the refund of her security deposit; (6) the court erred in not sanctioning the landlords for discovery violations; (7) the court should have extended discovery and adjourned the trial; and (8) the court erroneously declined to allow her to call Mr. Shulman as a witness in her own case.
We begin our analysis by examining the critical issue of relocation assistance and the significance to that issue of the second Landlord-Tenant judge's unappealed factual findings and legal conclusions.
N.J.S.A. 2A:18-61.1h(a) provides, in pertinent part, that "[i]f a residential tenant is displaced because of an illegal occupancy in a residential rental premises pursuant to [N.J.S.A. 2A:18-61.1(g)(3)], and the municipality in which the rental premises is located has not enacted [a corresponding] ordinance pursuant to [N.J.S.A. 2A:18-61.1g], the displaced residential tenant shall be entitled to reimbursement for relocation expenses from the owner in an amount equal to six times the monthly rental paid by the displaced person." (Emphasis added). Where a municipality has enacted a relocation assistance ordinance,*fn7 a companion statutory provision in N.J.S.A. 2A:18-61.1g(a) provides that a tenant who receives a notice of eviction, in such circumstances of an illegal rental unit, "shall be considered a displaced person and shall be entitled to relocation assistance in an amount equal to six times the monthly rental paid by the displaced person." (Emphasis added). "[T]he owner-landlord of the structure shall be liable for the payments of relocation assistance pursuant to this section [N.J.S.A. 2A:18-61.1g(a)]." Ibid. To create an added incentive for compliance by landlords and the abatement of illegal conditions, a municipality may also authorize, by ordinance, in addition to the payment of relocation assistance, a separate fine payable to the municipality for the "zoning or housing code violation for an illegal occupancy[.]" N.J.S.A. 2A:18-61.1g(c). Such fines may include amounts up to six times the monthly rental paid by the displaced person, i.e., the same amount owed by the landlord to the tenant for relocation assistance. Ibid.
In Miah v. Ahmed, 179 N.J. 511 (2004), the Supreme Court delineated the legislative policies underlying these remedial statutory provisions. Among other things, the Court noted that "[i]llegal apartments, which often take the form of impermissible attic, basement, and garage units, pose significant fire, health, and safety risks that extend well beyond the premises." Id. at 524 (emphasis added). "By equipping [displaced] residents with funds to relocate, [the statute] is designed to protect evicted tenants from the hardships of displacement while facilitating municipal efforts to weed out illegal apartments." Id. at 525. Given these strong remedial policies, the Court in Miah strictly construed the language of the statute to require landlords in such circumstances of proven illegality to pay relocation assistance "equal to" (rather than "up to") six times the monthly rent, even if such an amount exceeds the displaced tenant's actual relocation expenses. Id. at 525-26.
The Court in Miah recognized that displaced tenants reciprocally may owe their landlords money for past-due rent or other sums. See McQueen v. Brown, 342 N.J. Super. 120, 129 (App. Div. 2001), aff'd, o.b., 175 N.J. 200 (2002) (holding that a landlord's failure to obtain a certification of occupancy for a rental unit does not allow a tenant to reside there rent-free). Even so, the Court held that a landlord's ability to set off those amounts owed by the tenant from the mandatory relocation assistance payments due from the landlord "depends on the equities present." Miah, supra, 179 N.J. at 527. The Court concluded that, at least in an action arising under [N.J.S.A. 2A:18-61.1h] where no municipal ordinance pertains, the landlord is not entitled to such a setoff, and instead must "advance his claim against the tenant in an independent plenary action[.]" Ibid.
The present scenario is one in which the tenant initially vacated the apartment based upon a temporary condition unrelated to the apartment's illegality, i.e., the severe flooding in April 2007. The flood damage alone would not entitle the tenant to relocation assistance. However, after inspectors examined the premises following the flood, they discovered that the landlord had built and rented the basement apartment--despite the prior denial of a requested variance--in violation of the local ordinances. At that point, the unit was declared illegal and the tenant could no longer lawfully reside there.
We do not read the relocation statutes, particularly in light of the public policies underscored by the Supreme Court in Miah, so narrowly as to disentitle a tenant to an award of relocation assistance in such circumstances, provided that the proofs reflect that a prime reason why the tenant did not move back into the premises was the finding of illegality. The same would be true if a tenant were initially forced to leave because of a fire or because of insects or vermin, and the illegality of the unit was thereafter ascertained and the tenant was unable to move back.
The pivotal factual question here, therefore, is whether the main reason that the tenant never resumed occupancy of the basement apartment was its illegality, notwithstanding the potential mold problems stemming from the flood and the tenant's own physical limitations after her unrelated injuries from an assault. Stated differently, would the tenant necessarily have continued to stay out of the apartment for independent personal reasons if the illegality of the unit had not been discovered?
This pivotal factual question was already decided in the tenant's favor after the trial before the second Landlord-Tenant judge. Although we have not been supplied with the trial transcripts from that proceeding,*fn8 the written opinion of the second Landlord-Tenant judge reflects that the judge considered testimony in that eviction proceeding from several witnesses, including at least the tenant herself, the landlords,*fn9 and the code enforcement officer for the Township. Based upon those proofs, the second Landlord-Tenant judge expressly and unambiguously found that the "main reason" that the tenant did not return to the premises was the discovery of the premises' illegality under the local ordinances:
The defendant [the tenant] testified that she did not return for several reasons. She believed that there was a substantial mold problem after the flooding. The defendant also claims that she was the subject of an unrelated violent assault that left her disabled and physically unable to access the apartment.
However, the main reason she did not return was that she discovered the apartment was illegal. After speaking with township code enforcement officials, she understood that physically residing in the property would violate the township zoning code. She testified that she would vacate the premises and remove her remaining possessions after receiving relocation assistance. [(Emphasis added).]
In a similar vein, the second Landlord-Tenant judge pointedly found that the tenant's own conduct was not the "primary cause" of her inability to re-occupy the premises:
In the present matter, the nature of the illegal apartment is such that it has not been and apparently cannot be abated in a fashion that would reasonably allow the tenant to resume occupancy and physically reside at the property. It further appears that the illegality of the apartment was not the fault of the tenant. Her conduct was not the primary cause for the eviction. [(Emphasis added).]
The second Landlord-Tenant judge rendered several important conclusions of law. The judge held, similar to the first Landlord-Tenant judge, that the basement apartment was in violation of local ordinances, a conclusion that the landlords do not presently contest. The second Landlord-Tenant judge also rejected the landlords' legal argument that they were not obligated to offer the tenant relocation assistance under the statutes, and that they were entitled to a judgment of possession under N.J.S.A. 2A:18-61.1(e) for failure to re-occupy, notwithstanding the absence of such an offer. The court reasoned that the landlords' position, as a matter of law, was contrary to the Supreme Court's guidance in Miah and the terms of pertinent statutes:
The Supreme Court in Miah v. Ahmed succinctly stated that: "tenants who are evicted from an illegal apartment are entitled to a lump-sum payment calculated at six times the monthly rent." Miah, [supra,] 179 N.J. at 522-23. If a judgment for possession was entered in this matter, the court would be evicting the tenant from an illegal apartment. Under Miah, the defendant [the tenant] is entitled to relocation assistance. [Ibid.]
The existence of separate grounds for eviction is irrelevant and immaterial in this matter. The decision in Miah cannot reasonably be read to permit the court to evict a tenant in a summary dispossess action without relocation payments merely because other grounds for eviction are also present. Such a reading would be contrary to the goal of the legislature to "protect evicted tenants from the hardships of displacement while facilitating municipal efforts to weed out illegal apartments."
Miah, [supra,] 179 N.J. at 525. [(Emphasis added).]
The second Landlord-Tenant judge did recognize the potential right of the landlords for a setoff for unpaid rent or other sums due, consistent with McQueen, supra. However, that judge specifically reserved the issue of the landlords' equitable entitlement to such a setoff as "a matter for consideration in any later independent plenary action."*fn10
As a result of these findings of fact and conclusions of law, the second Landlord-Tenant judge directed that:
Before any judgment for possession will issue, the landlord must comply with the provisions of N.J.S.A. 2A:18[-61.1g and -61.1h] as interpreted by Miah v. Ahmed, 179 N.J. 511 (2004). If [the landlords do] not comply with these obligations, the court will dismiss the summary dispossess action and leave the parties to pursue their remedies in a independent plenary action. Counsel for [the landlords] will submit an order in conformance with this opinion. A hearing will be scheduled to review compliance with this decision at the request of either party.
Despite this ruling, the landlords subsequently did not "comply with" the relocation assistance statutes. They did not further pursue the summary dispossession action. Nor did they, or the tenant, request the hearing invited by the second Landlord-Tenant judge. Moreover, the landlords did not appeal any of the second Landlord-Tenant judge's rulings.
Several of these critical issues were subsequently relitigated in the Special Civil Part. After declining the tenant's request to consider and rely upon the second Landlord-Tenant judge's opinion, the Special Civil Part judge, in essence, conducted his own hearing. That hearing included testimony from several of the same witnesses who had testified previously. Following that hearing, the Special Civil Part judge made two pivotal determinations that are in conflict with the determinations of the second Landlord-Tenant judge.
First, the Special Civil Part judge did not adopt the second Landlord-Tenant judge's explicit finding that the tenant did not resume living in the apartment because the unit had been declared illegal. Instead, the Special Civil Part judge noted testimony*fn11 from the tenant in the trial before him that: as a result of the lack of habitability of the premises ensuing from the flood which occurred in April, she removed herself from the premises in May 2007.
There was a landlord-tenant action with regard to possession of the premises, which is the relief in the Landlord-Tenant [c]court. However, there never was a judgment of possession, and due to matters which really were not relevant to this matter, but [the tenant] testified that she was unable to physically use the apartment, but her personalty remained therein until May 2008 when the keys were returned and her personal property, furniture, clothing[,] and other personal property were removed.
And that seemed to be consistent with the testimony of both [the landlord] and [the tenant]. And that would be my finding of fact. [(Emphasis added).]
In two later portions of his oral ruling, the Special Civil Part judge essentially repeated his findings about the tenant's state of mind, albeit conditioned with the words "perhaps" and "maybe":
And the [c]court, after hearing the arguments placed on the record, and as a --making the finding of fact that the tenant in [and] of herself due to other, and perhaps as was discussed on Monday, [reasons] irrelevant to the case at bar, but it made it physically impossible for the tenant to be in the premises herself, but maintained the premises for her personal possessions. . . . .
In this case the plaintiff had already moved from the apartment. Again, maybe for reasons not relating to the tenancy or otherwise, but in fact it is a finding of this [c]court that she in any event had removed herself. Although her personalty remained there, she was living elsewhere. [(Emphasis added).]
The Special Civil Part judge treated his factual findings about the tenant's motivations as dispositive of his legal conclusion that, contrary to the prior finding of the second Landlord-Tenant judge, the tenant was not entitled to any payment of relocation assistance. In essence, the Special Civil Part judge reasoned that, since he found that the tenant did not return to the premises for her own personal reasons, she cannot receive relocation assistance under N.J.S.A. 2A:18-61.1g and -61.1h, as construed in Miah: But in any event, having removed [her]self from the premises, the [c]court therefore is denying the plaintiff's [the tenant's] request for relocation assistance.
The purpose of the relocation assistance statute is to assist a displaced tenant in finding a new apartment to move to.
The [c]court finds that the Miah case is distinguishable from this case because the tenant in Miah was still living in the apartment when he received the eviction notice from the landlord.
The Special Civil Part judge reiterated in his bench ruling that he was not obligated to reach the same conclusion about entitlement to relocation assistance as the Landlord-Tenant Court had. The Special Civil Part judge underscored that the relief sought in those prior cases--summary dispossession--was different from the monetary damages sought by the opposing parties in the consolidated Special Civil Part actions:
Now, there were landlord-tenant cases pursuant to LT 35170-07 and LT 13544-08. Those cases, however, were dismissed. There were no judgments of possession based upon the fact that the apartment had not been registered.
See also R. 6:3-4(a) (specifying the limited scope of summary dispossession actions, which cannot be "joined with any other cause of action").
We are therefore presented here with a scenario of multiple inconsistent judicial determinations. The second Landlord-Tenant judge found that the "main reason" that the tenant did not move back into the premises was the fact that the apartment had been declared illegal; the Special Civil Part judge found to the contrary. In addition, the second Landlord-Tenant judge ruled that the landlords' eviction proceeding was flawed because the tenant was entitled to and had not received an offer of relocation assistance; the Special Civil Part judge held that the tenant was not entitled to such relocation assistance. These disparate findings cannot be reconciled.
As a general matter, the law disfavors inconsistent judicial determinations. Our Supreme Court has "struggled to avoid inconsistent adjudications whenever feasible in the interests of justice. Consistency in the results of decided cases fosters the credibility--and acceptability--of the justice system. Inconsistency, on the other hand, ultimately engenders loss of confidence in the administration of justice." Crispin v. Volkswagenwerk, A.G., 96 N.J. 336, 353 (1984) (Handler, J., concurring) (citing City of Hackensack v. Winner, 82 N.J. 1 (1980); Hinfey v. Matawan Reg'l Bd. of Educ., 77 N.J. 514 (1978)). To avoid such undesirable inconsistencies, the law had developed two preclusionary doctrines: (1) claim preclusion (otherwise known as "res judicata") and (2) issue preclusion (otherwise known as "collateral estoppel"). See Restatement (Second) of Judgments at § 17 (1982).
On appeal, the tenant urges that the Special Civil Part erred in according no significance to the contrary earlier determinations by the second Landlord-Tenant judge. Perhaps because the tenant is a pro se litigant, the tenant's brief on appeal did not clearly specify which branch of preclusionary doctrine she was invoking. The landlords' brief on appeal elected to treat the tenant's argument as solely one of res judicata, not collateral estoppel. The landlords argue that res judicata does not apply here because the Landlord-Tenant court did not have jurisdiction to award either party monetary relief, whereas the Special Civil Part has broader jurisdiction.
We agree with the landlords that principles of res judicata do not control the present circumstances. The Landlord-Tenant court's denial to the landlords, on two separate occasions, of the remedy of dispossession did not foreclose either the tenant or the landlords seeking monetary relief thereafter in the Special Civil Part. In fact, the second Landlord-Tenant judge's written opinion specifically envisioned that the parties could "pursue their remedies in an independent plenary action," including consideration of whether the landlords would be entitled to any equitable setoff from their statutory obligation to provide relocation assistance. See also Miah, supra, 179 N.J. at 527-28 (reserving for an "independent plenary action" in the Special Civil Part, after a summary dispossess action, a landlord's claims that might reduce its monetary obligations to a displaced tenant).
We are also mindful of the case law that instructs, although not without criticism,*fn12 that the judgment in a summary dispossession action has no res judicata effect. See Moyano v. Williams, 267 N.J. Super. 213, 218 (Law Div. 1993); Azar v. Jabra, 167 N.J. Super. 543, 552 (Cty. Dist. Ct. 1979). That would mean, for example, that the landlords would not have been precluded from, as they did here, bringing successive actions for summary dispossession against the tenant even though the tenant had prevailed in the previous eviction case. Unlike collateral estoppel, "'[t]he application of res judicata doctrine requires substantially similar or identical causes of action and issues, parties, and relief sought." Moyano, supra, 267 N.J. Super. at 217 (emphasis in original)(quoting Culver v. Ins. Co. of N. Am., 115 N.J. 451, 460 (1989)).
The inapplicability of res judicata here does not, however, end a fair appellate inquiry into the potential legal consequences of the second Landlord-Tenant judge's ruling. We must also logically consider the potential impact of the doctrine of issue preclusion, or collateral estoppel, with respect to discrete findings of fact and conclusions of law rendered in that earlier proceeding.
The doctrine of collateral estoppel requires that: (1) the discrete issue to be precluded is "identical" to an issue decided in a prior proceeding; (2) the issue was "actually litigated" in the prior proceeding; (3) the court in the prior proceeding issued a "final judgment on the merits"; (4) the determination of the issue was "essential" to the prior judgment; and (5) the party against whom the doctrine is asserted was a "party to or in privity with" a party to the earlier proceeding. Hennessey v. Winslow Twp., 183 N.J. 593, 599 (2005) (quoting In re Estate of Dawson, 136 N.J. 1, 20-21 (1994)). The doctrine sensibly deters judge-shopping and forum-shopping, and discourages the waste of resources by the parties, witnesses, and the judiciary. See Nat'l Treasury Employees Union v. IRS, 765 F.2d 1174, 1177 (D.C. Cir. 1985) (citing Federated Dep't Stores, Inc. v. Moitie, 452 U.S. 394, 401, 101 S.Ct. 2424, 2429, 69 L.Ed. 2d 103, 111 (1981)).
All five of the elements of collateral estoppel are present here, at least with respect to the discrete determinations by the second Landlord-Tenant judge that: (1) the "main reason" the tenant did not return to the premises was their illegality, and (2) his conclusion that the landlords were legally obligated to offer the tenant relocation assistance, under Miah and under N.J.S.A. 2A:18-61.1g and -61.1h.
First, the factual issue of the tenant's primary reason for not re-occupying the premises that was decided by the second Landlord-Tenant judge is identical to the same state-of-mind assessment that was pivotal to the Special Civil Part judge's subsequent analysis. Although there were certainly additional issues to be decided in both cases, the prime motivation of the tenant's failure to return to the apartment was a common issue in both cases. Likewise, the second Landlord-Tenant judge's determination that the landlords' dispossession action was flawed--because they had not offered the tenant relocation assistance--corresponds with the same issue of law as to relocation assistance that was thereafter decided adversely to the tenant by the Special Civil Part judge.*fn13
As to the second element of collateral estoppel--actual litigation of the issues in question--the record before us likewise supports the tenant's request to honor the second Landlord-Tenant judge's rulings. The second Landlord-Tenant judge's written opinion confirms that his opinion followed a trial, at which the parties, and at least one Township official, testified. By all indications, this was a plenary proceeding, not a non-evidential oral argument on a motion day. The extensive nature of the second Landlord-Tenant judge's written opinion bespeaks that the issues were actively and hotly contested in that court. We also note that the judge's opinion carefully delineates the competing positions of both adversaries.
Third, the second Landlord-Tenant judge's decision operated as a final judgment on the merits, one which could have been appealed by the landlord. See Twp. of Bloomfield, supra, 253 N.J. Super. at 557-58. At the end of the opinion, the second Landlord-Tenant judge specifically invited the landlords to cure the judicially-declared defect in their eviction action by complying with their relocation assistance obligations under N.J.S.A. 2A:18-61.1g and -61.1h, and under Miah. The landlords chose not to do so, thereby converting the Landlord-Tenant judge's decision into a final and appealable disposition. The judge directed counsel for the landlords' to "submit an order in conformance with this opinion," but no such formal order was ever entered. Under the circumstances, the apparent absence of an implementing order does not vitiate the finality of the court's March 12, 2008 decision.
Fourth, we are satisfied that the discrete rulings of the second Landlord-Tenant judge, upon which the tenant relies, were essential to that prior judge's analysis. The reasons behind the tenant's failure to move back into the apartment were a crucial part of the court's rejection of the landlord's claim for possession on the grounds of non-occupancy under N.J.S.A. 2A:18-61.1(e). Equally essential was the second Landlord-Tenant judge's discrete finding that the tenant was entitled to relocation payments under the applicable law, as the landlords' failure to tender those payments effectively nullified their eviction case.
Fifth and finally, it is easily shown here that the parties against whom collateral estoppel is being asserted, i.e., the landlords, are the very same landlords who litigated the two summary dispossession actions against the same tenant.
For these reasons, all five requisite elements of collateral estoppel are present here, and we reject the contrary arguments presented on that issue in the landlords' supplemental letter brief that we invited at oral argument. Nevertheless, the analysis is not complete without also examining equitable considerations.
Collateral estoppel is applicable in a broad range of cases, regardless of whether the precluding action involved "'a different claim or cause of action.'" Figueroa v. Hartford Ins. Co., 241 N.J. Super. 578, 584 (App. Div. 1990) (quoting N.J. Mfrs. Ins. Co. v. Brower, 161 N.J. Super. 293, 297 (App. Div. 1978)). The Supreme Court has identified a series of factors to be considered when determining whether to apply the doctrine of collateral estoppel as an equitable matter. These factors include: "'conservation of judicial resources; avoidance of repetitious litigation; and prevention of waste, harassment, uncertainty[,] and inconsistency.'" Olivieri v. Y.M.F. Carpet, Inc., 186 N.J. 511, 523 (2006) (quoting Pace v. Kuchinsky, 347 N.J. Super. 202, 216 (App. Div. 2002)). The Supreme Court has also noted:
Those factors disfavoring preclusion include: the party against whom preclusion is sought could not have obtained review of the prior judgment; the quality or extent of the procedures in the two actions is different; it was not foreseeable at the time of the prior action that the issue would arise in subsequent litigation; and the precluded party did not have an adequate opportunity to obtain a full and fair adjudication in the prior action. [Ibid.]
Because we have not been supplied with the transcripts from the trial before the second Landlord-Tenant judge, we are not in an ideal position to evaluate, in the first instance, the comparative equities of applying or not applying collateral estoppel in this scenario. We cannot tell, for instance, whether the landlords' counsel was curtailed in any way in examining the witnesses at that earlier proceeding, or whether counsel was placed under any misapprehension by the Landlord-Tenant judge about the potential consequences of an adverse decision in favor of the tenant. We also cannot tell whether counsel was practically limited, by time constraints or otherwise, in the proofs that could be adduced. We strongly suspect that no such inequities or constraints were present.
Even so, out of an abundance of caution, we shall remand this portion of the analysis to be decided by the Special Civil Part in the first instance. The Special Civil Part shall have the discretion to order the parties, on whatever terms and cost-shifting that may be appropriate, to procure transcripts of the Landlord-Tenant proceedings to undertake that fuller equitable analysis. If, hypothetically, the Special Civil Part concurs with our preliminary sense that collateral estoppel can and should be equitably applied here, it should then turn to the issues of monetary set-off that were specifically reserved for future consideration in the second Landlord-Tenant judge's written opinion.
We therefore remand the relocation assistance issues to the Special Civil Part for further consideration in light of this opinion, and we vacate the extant order denying such affirmative relief to the tenant. Issues of set-off shall abide the outcome of the remand. Likewise, issues concerning whether refund of tenant's security deposit should be doubled under N.J.S.A. 46:8-21.1 should also abide the remand, pending a further assessment by the trial court as to the overall propriety of the landlord's actions and a definitive fixing of the actual date that the tenancy lawfully ended, a date which triggers the thirty-day period under the statute for a return of the balance due. See Kang in Yi v. Re/Max Fortune Props., Inc., 338 N.J. Super. 534, 538 (App. Div.), certif. denied, 169 N.J. 610 (2001).
We briefly address the remainder of the issues raised by the tenant on appeal. On the whole, we are satisfied that those issues lack sufficient merit to warrant extended discussion, see Rule 2:11-3(e)(1)(E), and that the Special Civil Part's rejection of the tenant's claims in that regard should be affirmed. We only make some limited observations on each of these issues.
The tenant argues that the Special Civil Part wrongfully dismissed the claims for enhanced damages and other relief under the Consumer Fraud Act, N.J.S.A. 56:8-1 to -20. We disagree.
The CFA limits private causes of action for consumer fraud to instances where a plaintiff can "'allege each of three elements: (1) unlawful conduct by the defendants; (2) an ascertainable loss on the part of the plaintiff; and (3) a causal relationship between the defendant's unlawful conduct and the plaintiff's ascertainable loss.'" Dabush v. Mercedes-Benz USA, LLC, 378 N.J. Super. 105, 114 (App. Div.), certif. denied, 185 N.J. 265 (2005) (quoting N.J. Citizen Action v. ScheringPlough Corp., 367 N.J. Super. 8, 12-13 (App. Div.), certif. denied, 178 N.J. 249 (2003)).
The term "ascertainable loss" is not defined in the CFA, but our Supreme Court has ascribed to it the common notion of "ascertain," i.e., "to make (a thing) certain; establish as a certainty; determine with certainty . . . [.]" Thiedemann v. Mercedes-Benz USA, LLC, 183 N.J. 234, 248 (2005) (quoting Webster's Third New International Dictionary 126 (1981)). Although the loss does not have to have been paid out-of-pocket by the consumer, it still must be "quantifiable or measurable." Ibid. The evidence of loss must not be "hypothetical or illusory." Ibid.
Here, the tenant contends that she suffered an "ascertainable loss" under the CFA, essentially because some of her belongings were damaged by the flooding of the apartment.
However, that flooding has nothing to do with the landlords' unlawful and allegedly-deceptive conduct in renting out an illegal apartment. The tenant fails to show the required nexus between the unlawful consumer practice and her tangible losses to sustain a cause of action under the CFA.
Moreover, the Supreme Court has urged courts to "interpret the scope of the broad language of the CFA so as not to impose conflicting duties or duplicative financial obligations on the regulated party." Lemelledo v. Beneficial Mgmt. Corp. of Am., 150 N.J. 255, 273 (1997) (citing 49 Prospect St. Tenants Ass'n v. Sheva Gardans, Inc., 227 N.J. Super. 449, 467 (App. Div. 1988)). Such duplication of remedies is presented here. The wrongful act of the landlords was renting an apartment that was in violation of the municipal codes. The private remedy established for such a violation is provided by the Legislature through relocation assistance under N.J.S.A. 2A:18-61.1g and -61.1h. The relocation statutes further provide both a private right of action and the possibility of a municipal fine under subsection (c). N.J.S.A. 2A:18-61.1g(c). Such a more-specific regulatory scheme, developed for the landlord-tenant context, fundamentally accomplishes the legislative intent of the CFA of combating under-enforcement of fraud regulation, as identified by the Supreme Court. Lemelledo, supra, 150 N.J. at 268-69.
There is no logic or fairness in overlaying a CFA remedy here where a tenant already has a generous statutory remedy of relocation assistance potentially available to her.
We therefore affirm the trial court's dismissal of the tenant's CFA claims.
The tenant has also appealed the Special Civil Part's dismissal of her claims for property damage. As part of that argument, she contends that the trial judge erred in not providing the technical computer facilities to present her CDROM depicting the property damage. We need not reach the latter issue, because the tenant's claims for damage to her property, which she unilaterally left behind in the apartment for about thirteen months, fails as a matter of law.
"When a tenancy has been terminated by lawful eviction, the landlord has no duty to care for property that the former tenant has left behind." Banks v. Korman Assocs., 218 N.J. Super. 370, 372 (App. Div. 1987). However, in a case where a landlord agrees to allow the tenant to leave her property behind, he "create[s] a gratuitous bailment because [the] landlord received no consideration for keeping the [property] for [the] tenant. Our courts have said that a gratuitous bailee is liable to the bailor only for bad faith or gross negligence." Id. at 372-73 (emphasis added).
In addition, under the pertinent statute:
[a] landlord of commercial or residential property, in the manner provided by [this section], may dispose of any tangible goods, chattels, manufactured or mobile homes or other personal property left upon a premises by a tenant after giving notice as required by [N.J.S.A. 2A:18-73] only if the landlord reasonably believes under all the circumstances that the tenant has left the property upon the premises with no intention of asserting any further claim to the premises or the property and:
a. A warrant for removal has been executed and possession of the premises has been restored to the landlord; or
b. The tenant has given written notice that he or she is voluntarily relinquishing possession of the premises.
The provisions of [this section] shall not apply to the disposal of tenant property left on nonresidential rental property if there is a lease in effect which has been duly executed by all parties which contains specific terms and conditions for the disposal of tenant property.
[N.J.S.A. 2A:18-72 (emphasis added).]
The statute further establishes a standard of reasonable care for such abandoned property storage. See N.J.S.A. 2A:18-75.
In the present case, the record reflects that landlords were informed informally that the tenant was leaving her property behind, but they were never granted the statutory written notice by the tenant that she did not intend to claim the property at a later date. The situation bespeaks the gratuitous bailment situation such as in Banks. The landlords would, at best, have been subject to the gross negligence/bad faith standard that was applied in Banks.
Here, the tenant did not supply proofs of gross negligence or bad faith arising from the property damage. Although her personal belongings may have been damaged by the water from the storm, the landlords did not cause the storm, and there is no lay or expert witness testimony that they could have completely prevented the water seepage. In fact, there is evidence that the landlords took steps to protect the tenant's property from destruction, including a hand-painted chest, which, the tenant testified that the landlords "tried to be nice [about] and move it out of the water."
We further reject the tenant's arguments that she is entitled to reversal because the Special Civil Part judge: (1) denied her motion to sanction the landlords or to dismiss the landlords' claims and defenses because of inadequate or untimely discovery responses, and (2) also denied the tenant's application to adjourn the trial and extend discovery. The judge's discovery rulings were well within the ambit of permissible discretion. Abtrax Pharms. v. Elkins-Sinn, Inc., 139 N.J. 499, 517 (1995); Cavallaro v. Jamco Prop. Mgmt., 334 N.J. Super. 557, 570-72 (App. Div. 2000). Likewise, we defer to the trial judge's sound discretion, see N.J.R.E. 611, in declining to permit the tenant to call Mr. Shulman as a witness in her case-in-chief, particularly since the tenant was allowed to cross-examine him during the landlords' own presentation of proofs.
For the reasons we have stated, the final judgment of the Special Civil Part is affirmed in part, vacated in part, and remanded for further proceedings concerning the issues of relocation assistance, collateral estoppel, set-off, and the potential doubling of the security deposit. We do not retain jurisdiction.