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Fotios Padazopulos v. Khalid Qureshi and Bergen County Board of Social Services


May 4, 2011


On appeal from the Superior Court of New Jersey, Law Division, Special Civil Part, Bergen County, Docket No. SC-002385-09.

Per curiam.


Argued March 22, 2011

Before Judges Payne and Hayden.

Plaintiff Fotios Padazopulos appeals from a Special Civil Part Order of August 11, 2009, dismissing his complaint for a return of a security deposit and one month's rent. After reviewing the record and applicable law in light of the contentions advanced on appeal, we remand for a trial against the landlord only.

From March 2006 until July 2008 plaintiff received welfare benefits from the Bergen County Board of Social Services (the "Board"). In June 2006, plaintiff leased an apartment on a month-to-month basis from Khalid Qureshi ("the landlord"). The Board paid the security deposit directly to the landlord on behalf of plaintiff and also paid plaintiff's rent each month. In February 2007, the landlord notified plaintiff that his lease would be ending on May 31, 2007. Plaintiff moved in July 2007; the exact date of the move is in dispute.

After plaintiff moved, the landlord did not send him an accounting or return the security deposit. The Board wrote the landlord and requested that he return the security deposit to the Board. When the landlord claimed that the damage to the apartment exceeded the security deposit, the Board did not pursue the matter.

On July 1, 2009, plaintiff filed a complaint in Small Claims Court against his former landlord and the Board for return of a security deposit and one month's rent. He also requested statutory penalties for violation of the provisions of the Security Deposit Act (SDA), N.J.S.A. 46:8-19 to -26. In his complaint, plaintiff alleged that he had vacated the apartment on July 2, 2007, but the landlord had failed to refund the July rent or the security deposit to him or to the Board. Plaintiff alleged a financial loss because the Social Security Administration reimbursed the Board for the security deposit and the rent out of funds he would otherwise have received.

The case was tried as a bench trial. The judge took testimony solely on the issue of payment of the security deposit and rent. Plaintiff testified that he had received a lump sum disability payment from the Social Security Administration with an amount deducted to repay the Board for the funds used for him. The Board presented a social worker familiar with the plaintiff's case. According to the social worker, the Board expected to be reimbursed for any money paid to or for plaintiff when his disability claim was approved. As of the date of the hearing, the social worker did not know of any reimbursement to the Board on plaintiff's behalf.

The judge dismissed the case on the ground that the money for the rent and security deposit had been paid by the Board, not by plaintiff. The judge held that because plaintiff had not contributed to the security deposit and rent "out of his pocket," getting the security deposit and rent would constitute a windfall to plaintiff. We disagree.

As a welfare recipient, plaintiff was obligated upon receiving a nonrecurring earned or unearned lump sum payment to repay any assistance received to date. N.J.A.C. 10:90-3.18(c). The welfare caseworker acknowledged that the Board expected to receive this reimbursement. Thus, although the Board paid the security deposit and the rent to the landlord, plaintiff was obligated to repay that money to the Board. Id. While plaintiff may owe the Board the funds provided to him or paid on his behalf, we do not discern that this debt is a bar to an action against the landlord.

The SDA requires landlords to provide a prompt accounting of any damages to leased premises and return any portion of the security deposit not needed for damages to the tenant, by providing in pertinent part:

Within 30 days after the termination of the tenant's lease . . . the owner . . . shall return by personal delivery, registered or certified mail the sum so deposited plus the tenant's portion of the interest or earnings accumulated thereon, less any charges expended in accordance with the terms of the . . . lease . . . to the tenant . . . . The interest or earnings and any such deductions shall be itemized and the tenant . . . notified thereof by personal delivery, registered or certified mail.

[N.J.S.A. 46:8-21.]

In order to prove a claim under the Security Deposit Act, a former tenant need show only "the existence and subsequent termination of a landlord--tenant relationship, the receipt of a security deposit by the landlord, and the failure of the landlord to return the deposit moneys." Veliz v. Meehan, 258 N.J. Super. 1, 5 (App. Div. 1992) (citing Carter v. Sandberg, 189 N.J. Super. 42, 47 (Cty. Ct. 1983)). Once a tenant has proven these facts, the burden shifts to the landlord to prove compliance with the SDA. Id. at 6.

The Security Deposit Act "applies facially to the termination of all leases . . . ." Veliz, supra, 258 N.J. Super. at 6. We can discern nothing in the SDA to suggest that the SDA does not apply to a landlord-tenant relationship where a third party supplied the security deposit. If the tenant owes the Board money for providing the security deposit and rent, that obligation cannot interfere with the tenant's rights under the SDA.*fn1 As we previously stated, "[i]n every case, the landlord is obligated to return the security deposit within thirty days or explain in writing why he or she is not doing so." Ibid.

Here the undisputed facts show the following. A landlord-tenant relationship existed until July 2007, when it was terminated. A security deposit had been paid on the tenant's behalf. The landlord did not return the security deposit. Thus, the necessary requisites for plaintiff to maintain a claim under the SDA existed. Veliz, supra, at 4. The burden then shifted to the landlord to provide evidence that he had complied with the SDA. Id. at 6. In this case, the trial judge failed to recognize plaintiff's right to bring a case under the SDA against the landlord. Thus, we remand the matter for a full hearing against the landlord on the SDA and overpayment of rent claims.

On the other hand, while the SDA creates a cause of action against the landlord, it does not create a cause of action against the Board. Plaintiff has not provided any basis for proceeding against the Board under the SDA or any other law, and we can perceive none. Moreover, he has not advanced any basis for the Board being liable to him for the July rent. Simply put, we find that plaintiff's complaint, while stating a claim against the landlord, fails to state a claim against the Board. Although the trial court dismissed on other grounds, we will uphold the dismissal against the Board for failure to state a claim.

Affirmed in part; reversed in part; remanded for further proceedings consistent with this opinion. We do not retain jurisdiction.

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