January 13, 2011
ARNALDO BATISTA AND CARLOS FIGUEIREDO AS HIS A/I/F, PLAINTIFFS-RESPONDENTS,
EXCLUSIVE STORES LTD. AND NAISHEDH MEHTA, DEFENDANTS-APPELLANTS.
On appeal from the Superior Court of New Jersey, Law Division, Essex County, L-3787-07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued January 3, 2011
Before Judges Lisa and Reisner.
Defendants Exclusive Stores Ltd. (Exclusive) and Naishedh Mehta appeal from an August 20, 2009 judgment in favor of plaintiffs Arnaldo Batista and Carlos Figueiredo, and from a February 19, 2010 order denying defendants' motion to vacate the judgment. We affirm, substantially for the reasons set forth by Judge Vena in his Statement of Proceedings in Lieu of Transcript, dated February 19, 2010.
These are the most pertinent facts. On October 16, 2000, Batista and Exclusive entered into a commercial lease for a five-year term, commencing on November 1, 2000, and ending on October 30, 2005. The lease committed the tenant to paying a total of $416,697 as rent according to the following formula:
LEASE YEAR ANNUAL BASE RENT MONTHLY RENT 1 $80,400 $6700 2 $80,400 $6700 3 $83,616 $6968 4 $85,288 $7107 5 $86,993 $7250
The lease also contained a provision obligating defendants to pay a percentage of the property taxes.
On November 3, 2000, Mehta signed a notarized personal guaranty for the lease.
Defendants paid the agreed-upon monthly rent of $6700 for seven months, from November 2000 to May 2001. They then decreased their rental payments to $6000 per month for seven months, from June 2001 to December 2001. Their payments fell to $5000 for four months, from January 2002 to April 2002, and increased to $5250 for thirty-four months, from May 2002 to February 2005. After one payment of $5000 in March 2005, they made payments totaling $5650 each month in irregular multiple deposits from April 2005 until November 2005. No payments were made in December 2005 or January 2006. Exclusive vacated the premises on January 31, 2006. Because the lease expired in October 2005, Exclusive was a holdover tenant for the months of November 2005, December 2005 and January 2006.
After the tenant vacated the property, Batista's counsel sent a letter to Stanley Young, the attorney who had represented Mehta in negotiating lease. The letter asserted that defendants held over for three months after the expiration of the lease, did not provide the requisite 120 days notice prior to vacating, and owed plaintiffs a total of $73,069.85. There is no evidence that Young replied to the letter or asserted any claim that the lease had been modified.
Plaintiffs filed suit against defendants on May 9, 2007. A four-day jury trial resulted in a favorable verdict for plaintiffs. On August 20, 2009, Judge Vena entered a judgment of $141,725.33 against defendants, who filed this appeal on September 30, 2009.
On December 9, 2009, while the appeal was pending, defendants filed a motion for a remand to permit them to file a Rule 4:50 motion in the trial court based on alleged newly discovered evidence. In a certification supporting the motion, Mehta asserted that he originally attempted to contact Young immediately after he was served with the complaint. He then learned that his former counsel was terminally ill. In June 2008, Mehta again reached out to Young and left a message on Young's answering machine that was never returned. Young died in July 2008.
Mehta asserted that after the unfavorable jury verdict was returned, he remembered the name of an attorney who might be able to help him access Young's old files. He then contacted Ronald Roth's New York-based law office, which employed Elizabeth Downs, a former part-time clerical assistant to Young. Mehta asked Downs if there was anything in Young's file referencing rent reductions, and she provided him with a letter dated November 28, 2001, from Fausto Simoes, plaintiff's attorney in the initial lease negotiations.
The letter was dated November 28, 2001, and was addressed to Young, Mehta's counsel. It reads in pertinent part:
This letter confirms our telephone conversation where my client agrees to reduce the base rent to $5000 from December 2001 until July 2002 (9 months).
All other terms and conditions of the lease shall remain in effect. The above is condition [sic] upon your client paying the November rent forthwith.
Please confirm if the above is acceptable to your client.
On January 8, 2010, we granted the motion for a limited remand. On February 19, 2010, Judge Vena heard argument on defendant's motion to vacate the judgment. He denied the motion on the following grounds: (1) there was no clear and convincing evidence of perjury; (2) the trial testimony challenged by defendants was not willfully false; (3) the newly produced evidence would not have changed the results of the trial; and (4) defendants failed to show that the letter could not have been discovered by reasonable diligence in time to be used at trial.
In relevant part, Rule 4:50-1 permits a party to file a motion to vacate a judgment based on "newly discovered evidence which would probably alter the judgment or order and which by due diligence could not have been discovered in time to move for a new trial" and "fraud (whether heretofore denominated intrinsic or extrinsic)." R. 4:50-1(b), (c). We will not disturb the trial court's decision to grant or deny a Rule 4:50 motion absent a clear abuse of discretion. Hous. Auth. of Morristown v. Little, 135 N.J. 274, 283 (1994).
The requirement that the moving party act with appropriate diligence applies to a motion based on fraud under subsection (c) as well as to a motion based on subsection (b):
[A] party seeking to be relieved from the judgment must show that the fact of the falsity of the testimony could not have been discovered by reasonable diligence in time to offset it at the trial or that for other good reason the failure to use diligence is in all the circumstances not a bar to relief. [Shammas v. Shammas, 9 N.J. 321, 330 (1952).]
See also Pavlicka v. Pavlicka, 84 N.J. Super. 357, 366 (App. Div. 1964). "Moreover, 'newly discovered evidence' does not include an attempt to remedy a belated realization of the inaccuracy of an adversary's proofs." DEG, LLC v. Fairfield, 198 N.J. 242, 264 (2009).
In this case, defendants waited until they received an unfavorable verdict, and more than two years after the complaint was filed, before seeking a copy of their former attorney's file. We agree with Judge Vena that they failed to act with reasonable diligence. We also agree that the alleged letter*fn1 would not have changed the outcome of the trial.
By its terms, the lease required that any modifications be in writing and signed by both parties. Defendants produced no proof that they accepted the offer extended in the alleged letter and they produced no signed writing confirming a lease modification. Cf. Oscar v. Simeonidis, 352 N.J. Super. 476, 486 (App. Div. 2002). Defendants also failed to prove that they actually paid the November rent immediately, which was a condition of the offer. The November rent due was $6700; defendants paid only $6000. Moreover, their subsequent rent payments were in amounts inconsistent with the alleged offer stated in the letter.
Finding no abuse of discretion in Judge Vena's decision to deny the Rule 4:50 motion, we affirm the August 20, 2009 judgment and the February 19, 2010 order on appeal.