February 25, 2011
DIDON ENTERPRISES, LLC, PLAINTIFF-APPELLANT,
WILLIAM OSBORNE, JR., DEFENDANT-RESPONDENT.
On appeal from Superior Court of New Jersey, Law Division, Special Civil Part, Sussex County, Docket No. DC-4348-09.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted February 8, 2011 - Decided Before Judges Yannotti and Skillman.
Respondent has not filed a brief.
Beginning in early 2004, defendant conducted a part-time automobile repair business in a single automobile bay rented for $700 per month from plaintiff, which owns a garage. Defendant did not have a written lease. Defendant rented the bay from one of plaintiff's principals, Donald Piscitelli, with whom defendant had a friendly and very informal relationship.
In addition to renting the bay from Piscitelli, defendant also repaired cars for him. Defendant was not generally paid for this repair work. Instead, the value of the repairs was deducted from his rent. Plaintiff did not issue any written statements to defendant regarding his rental obligations and the offsets against those obligations for the automobile repair work.*fn1
In 2008, Piscitelli told defendant that the bay he had been renting was going to be rented to another person and that plaintiff would rent him another bay in a different part of the garage for the same $700 per month. Although the bay defendant had been renting had heat, electricity, and water, the new bay defendant was assigned did not have these utility services. However, Piscitelli told defendant he could make whatever improvements were required to extend these services to the new bay and that the cost of those improvements would be deducted from his rent. According to defendant, his agreement to move into the new bay at the same rent he had paid for his old bay was conditioned upon completion of those improvements.
Shortly thereafter, another one of plaintiff's principals, Diane Swanson, assumed responsibility for management of the garage. Swanson rescinded the authorization Piscitelli had given defendant to do the work required to extend utility services to his new bay and said she would have the repairs performed by her contractor. However, Swanson never had those repairs performed. As a result, defendant was not able to use his new bay for repairing cars and was only able to use it for storage. Sometime in the spring of 2009, defendant stopped paying plaintiff rent and vacated the premises at the end of July of that year.
Subsequently, plaintiff brought this action for what it claimed was $7200 of unpaid rent. However, it reduced that claim at trial to $5700. Defendant asserted a counterclaim against plaintiff for breach of its agreement to make the improvements required to provide utility service to his new bay.
After a bench trial, the trial court found in an oral opinion that
neither party had presented satisfactory evidence to establish the
claims asserted in the complaint and counterclaim. In reaching this
conclusion, the court relied upon the informality of the relationship
between Piscitelli and defendant and the absence of any written record
of defendant's rental payments or the offsets for the car repair work
performed. The court also found that the parties' understanding at the
time defendant was assigned the new auto bay was that he "was going to
have a facility which was substantially the same, if not identical, in
terms of its accessories, heat, electric, [and] water" as the bay that
he had been renting from 2004 to 2008.
In addition, the court found, as an alternative basis for its decision, that for "the period of time of approximately February or March of 2008 through July of 2009 . . . the landlord by its own admission failed to effectuate repairs to the premises, to deliver a proper quantum of electrical service to the unit, failed to provide running water to the unit, failed to provide heat to the unit . . . in a full reasonable spectrum that the defendant is entitled to," and therefore, defendant was entitled to a 35% reduction of his $700 per month rent for that period of time, which together with the credits to which he was entitled for the auto repair work he performed, would totally offset any rental obligation to plaintiff.
On appeal, plaintiff presents the following arguments:
I. THE TRIAL COURT ERRED IN HOLDING THAT THE DEFENDANT, A COMMERCIAL TENANT, WAS ENTITLED TO RENT ABATEMENT DUE TO THE PROPERTY'S DISREPAIR.
A. THE TRIAL COURT ERRONEOUSLY APPLIED A COVENANT OR WARRANTY OF HABITABILITY TO A COMMERCIAL
PROPERTY IN GRANTING THE DEFENDANT AN ABATEMENT OF RENT.
B. THE TRIAL COURT IMPERMISSIBLY GRANTED THE DEFENDANT AN ABATEMENT OF RENT FOR A KNOWN CONDITION OF THE PROPERTY.
C. DEFENDANT'S RESORT TO HOLDING OVER HIS TENANCY AND WITHHOLDING THE RENT IS NOT A REMEDY AUTHORIZED BY LAW.
II. THE TRIAL COURT ERRED IN REFUSING TO IMPOSE DAMAGES DUE TO THE INFORMALITY OF THE RENTAL AGREEMENT.
A. THERE IS NO BASIS IN LAW FOR THE TRIAL COURT'S REFUSAL TO IMPOSE DAMAGES SIMPLY BECAUSE THE PARTIES' ARRANGEMENT WAS "INFORMAL."
We reject these arguments and affirm substantially for the reasons set forth in Judge McGovern's March 11, 2010 oral opinion. The judge's factual findings are adequately supported by the evidence in the record, see Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974), and provide a sufficient foundation for the judgment of no cause of action.
No further discussion of plaintiff's arguments is required.
R. 2:11-3(e)(1)(E). We only note that plaintiff argues that the trial court erred in finding an implied warranty of habitability applicable to a commercial tenancy. However, apart from such a warranty, a landlord and commercial tenant may agree that the tenant's obligation to pay rent is conditioned upon the landlord performing certain repairs. See Westrich v. McBride, 204 N.J. Super. 550, 554-57 (Law Div. 1984). Defendant testified that this was in essence his agreement with the plaintiff. Furthermore, it is undisputed those repairs were not performed, which limited the use defendant was able to make of the auto bay and thus justified the reduction in his rent that the trial court recognized as an alternative basis for its decision.