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Bernstein v. Shulman

April 1, 2010


On appeal from the Superior Court of New Jersey, Law Division, Special Civil Part, Essex County, Docket No. DC-19848-08.*fn1

Per curiam.


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 ...

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