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Richardson v. UN Empress Properties

April 7, 2010

DAVID RICHARDSON AND LISA RICHARDSON, PLAINTIFFS-APPELLANTS,
v.
UN EMPRESS PROPERTIES, LLC; JOSEPH UMBACH; LOUIS DELAURA; AND EMERALD HOLDING CO., DEFENDANTS, AND EMPRESS HOUSE CONDOMINIUM ASSOCIATION, INC., AND JOSE NODAR, DEFENDANTS-RESPONDENTS.



On appeal from the Superior Court of New Jersey, Law Division, Passaic County, Docket No. L-3297-07.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued March 3, 2010

Before Judges Stern and Sabatino.

This case involves an action for monetary damages brought by tenants in a condominium unit. The tenants, plaintiffs David and Lisa Richardson, appeal from the Law Division's entry of an order granting summary judgment dismissing their complaint against defendants, Jose Nodar ("Nodar") and the Empress House Condominium Association.

Plaintiffs reside in a multi-unit building in Paterson, known as Empress House Condominiums. Pursuant to a written "purchase and subscription agreement"--essentially a lease/purchase agreement--entered into in December 1995 between plaintiffs and the unit owner, UN Empress Properties, LLC ("UN Empress" or "the LLC"), plaintiffs pay a monthly fee for their use and occupancy of the unit. The monthly fees can be applied by plaintiffs towards an agreed-upon price for their eventual purchase of the unit. Under that agreement, UN Empress served as plaintiffs' landlord. The record indicates that most of the condominium units in the building were owned at the relevant times by UN Empress.

The record further indicates that defendant Nodar owned a controlling interest in UN Empress. Nodar testified at his deposition that he had another co-investor in the LLC, Joseph Umbach, but that Umbach had no role whatsoever in operating the property. Nodar also was the sole officer in defendant Empress House Condominium Association ("the Condominium Association").

Various problems arose with the maintenance and condition of plaintiffs' unit, particularly issues of water infiltration. It appears that the problems at issue were specific to plaintiffs' unit and did not concern the premises' common areas. Pursuant to legal advice, plaintiffs began making their monthly payments to their attorney's escrow account because the landlord had not made the repairs. Meanwhile, plaintiff David Richardson was elected president of the Empress House Tenants Association ("the Tenants Association").

Plaintiffs' withholding of their monthly payments prompted the landlord to bring a summary dispossession action against them in the Special Civil Part. In response, plaintiffs asserted that the landlord had breached the warranty of habitability. The Special Civil Part scheduled a hearing to address the habitability issues, pursuant to Marini v. Ireland, 56 N.J. 130 (1970). The Marini hearing was adjourned at the request of counsel for the landlord, and plaintiffs consequently did not come to court on the original scheduled date. However, a representative of the landlord*fn1 did appear that day, and the court inadvertently entered a judgment of possession in plaintiffs' absence.*fn2

When plaintiffs learned of this mistake, they successfully applied to the court to have the dispossession order stayed, on the condition that any unpaid rent would be paid out of their security deposit. Nevertheless, the sheriff posted a lock-out notice and plaintiffs were temporarily removed from their unit in error. They were restored to the premises the next day and still reside there. Plaintiffs contended that Nodar personally orchestrated the lockout. They suggested that he acted in retaliation for their withholding of rent, their complaints about the unit's condition, and David Richardson's leadership in the Tenants Association.

Understandably upset about being wrongfully evicted--even temporarily--and by the continued need for repairs in their unit, plaintiffs filed an action for compensatory and punitive damages in the Law Division. The complaint named several defendants: UN Empress; Nodar; the Condominium Association; Umbach; an individual named Louis DeLaura (asserted in the complaint to be the "owner of the subject premises"); and Emerald Holding Co. (asserted in the complaint to be "an owner or operator of the subject premises").

Plaintiffs were unable to effect service of process on Umbach, DeLaura, and Emerald Holding Co., and the court accordingly entered an order administratively dismissing the complaint, without prejudice, against those defendants pursuant to Rule 1:13-7. Meanwhile, UN Empress was dissolved*fn3 and thereby became judgment-proof. Because plaintiffs could not effect service upon UN Empress as a dissolved corporation, their claims against it were likewise administratively dismissed. These dismissals left Nodar and the Condominium Association as the sole remaining defendants.

Plaintiffs sought to impose personal liability upon Nodar based upon principles of piercing the corporate veil. They asserted that Nodar acted "personally and individually... and not on behalf of Empress House Properties[,] LLC." Therefore, argued plaintiffs, "even if Mr. Nodar was acting on behalf of the entity, it would be appropriate to pierce the corporate veil."

To support their veil-piercing theory, plaintiffs noted that at various times Nodar orally stated to them and to others that he was the "owner" of the property, even though the legal owner was the corporate LLC, UN Empress. Plaintiffs further note that some of the legal documents (i.e., notices to quit and the eviction complaint filed in the Special Civil Part) prepared by the landlord's then-attorney*fn4 had typed "Jose Nodar" as the landlord and not the LLC. Plaintiffs also drew significance from the fact that rent checks that ...


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