September 19, 2011
MORT'S FAMILY GROUP, L.L.C., PLAINTIFF-APPELLANT,
YAN HUANG AND BI JIN LI AS PERSONAL GUARANTORS FOR MR. SUSHI, INC., DEFENDANTS-RESPONDENTS.
On appeal from Superior Court of New Jersey, Law Division, Bergen County, Docket No. DC-020218-10.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted August 24, 2011
Before Judges Simonelli and Espinosa.
Plaintiff landlord, Mort's Family Group, L.L.C., appeals from a judgment entered in favor of defendant tenants, arguing that the trial court erred in finding the tenants were not responsible for the cost of restoring twenty-year old HVAC units at the end of their lease.
Plaintiff is the landlord and owner of a shopping center in Lincoln Park. Defendant Mr. Sushi, Inc. (d/b/a Mr. Sushi) leased certain floor space in the shopping center to operate a Japanese restaurant. Defendants Yan Huang and Bi Jin Li were personal guarantors for Mr. Sushi, Inc. The lease agreement was dated November 30, 1998, and had a term of ten years.
Section 5.6A of the lease agreement provides that the tenant "covenants and agrees, at its own cost and expense, at all times during the Term [of the lease] to . . . [k]eep, replace and maintain in good order, condition and repair the Premises and each and every part thereof . . . including, without limitation, any air conditioning units and systems; heating units and systems . . . ."
Section 7.3 of the lease agreement is entitled "Surrender of Premises" and provides that upon termination, Tenant shall quit and surrender the Premises broom-clean, in good condition and repair (reasonable wear and tear and damage by Acts of God, fire or standard extended covered period excepted), together with all alterations, additions and improvements which may have been made in, on or to the Premises, except movable furniture or unattached movable trade fixtures put in at the sole expense of Tenant provided however, that Tenant shall ascertain from Landlord at least thirty (30) days before the end of the Term whether Landlord desires to have the Premises or any part thereof restored to the condition in which it was originally delivered to Tenant, and if Landlord shall so desire, then Tenant, at its own cost and expense, shall restore the same before the end of the Term.
Defendants vacated the leased premises in February 2009, after the term of the lease expired. There were conversations between the parties regarding certain repairs plaintiff required and efforts by defendants to complete such repairs. In July 2009, William Smith, an employee of plaintiff, sent defendants a letter identifying three items that plaintiff asserted defendants had failed to correct:
1. Defendants modified the sprinkler heads and had failed to restore them to their original condition at ten feet apart.
2. Defendants made multiple holes in the roof to provide ventilation for cooking equipment and had improperly closed the roof openings.
3. The three four-ton HVAC units were not operable, and defendants were required to restore the units to a safe and operable condition.
Smith testified that the minimum amount required to restore the sprinkler heads was $1,250. Hayden Building Maintenance, a roofing contractor, provided both parties with an estimate of $867 to correct the roofing condition. Smith testified that Quantum Air Conditioning had provided an estimate in February 2009 that the three units would require an investment of approximately $10,850 to restore them to operating condition.
Plaintiff applied defendant's security deposit of $8,959 to the cost of these repairs and brought suit, demanding the balance of $13,030 for the repairs defendants failed to make. Defendants filed an answer and counterclaim in which they sought $17,918, double their deposit, pursuant to N.J.S.A. 46:8-21.1.
A trial was conducted before Judge Robert C. Wilson, J.S.C. Judge Wilson determined that because the lease in question was a commercial rather than a residential lease, it was not subject to the Security Deposit Act. The court found further that defendants were responsible for the repairs to the roof at a cost of $867 and for restoring the sprinkler system to its original condition, a cost of $1,250. However, the court rejected plaintiff's claim that defendants were responsible for repairing the HVAC units to a safe and operable condition:
The Court does not find that the Tenant is responsible for the wear and tear of the building fixture which is the HVAC system, those three four[-]ton units being over 20 years old. The Tenant no[t] having taken any action to harm them nor any notice by the Landlord during the term to the Tenant to repair them, nor any notice to the Tenant until sometime in July that there may have been a defect.
Also P-6*fn1 as was submitted and received into evidence by the Plaintiff specifically states that: "Due to the age of the units, our professional suggestion would be to replace all three units."
The evidence being clear that the units are just old and worn out. Landlord's reliance on Section 5.6, the repair provision, is misplaced, as it was for the purpose of keeping the demised premises in repair during the tenancy, not to make capital improvements to the property to a [sic] 20-year-old air conditioning units.
The Court does not find that the Plaintiff has carried the burden to show the Defendant is responsible to replace or repair these units.
The court therefore entered judgment in favor of defendants in the amount of $7,043.84, the amount of the security deposit less the cost of the repairs that it deemed to be defendants' responsibility. Judge Wilson also declined to award counsel fees to either party because neither had prevailed on all issues.
The sole issue raised by plaintiff's appeal is that the trial court erred in holding that defendants were not responsible for the "investment" of approximately $10,850 to restore the HVAC units to operating condition. Plaintiff argues that the court misinterpreted the contract between the parties.
Although plaintiff acknowledges that defendants are not responsible for "reasonable wear and tear," it contends that this exception is inapplicable if plaintiff elects to require defendants to restore the premises to its original condition. We disagree.
The interpretation or construction of a contract is generally a question of law. We "read the document as a whole in a fair and common sense manner[,]" Hardy ex. rel. Dowdell v. Abdul-Matin, 198 N.J. 95, 103 (2009), and "do not supply terms to contracts that are plain and unambiguous, nor do we make a better contract for either of the parties than the one which the parties themselves have created." Maglies v. Estate of Guy, 193 N.J. 108, 143 (2007); Petersen v. Twp. of Raritan, 418 N.J. Super. 125, 133 (App. Div. 2011).
As previously noted, Section 7.3 provides that the tenant must surrender the Premises broom-clean, in good condition and repair (reasonable wear and tear and damage by Acts of God, fire or standard extended covered period excepted), together with all alterations, additions and improvements which may have been made in, on or to the Premises, except movable furniture or unattached movable trade fixtures put in at the sole expense of Tenant provided however, that Tenant shall ascertain from Landlord at least thirty (30) days before the end of the Term whether Landlord desires to have the Premises or any part thereof restored to the condition in which it was originally delivered to Tenant, and if Landlord shall so desire, then Tenant, at its own cost and expense, shall restore the same before the end of the Term.
Reading this section in a "fair and common sense manner," we agree with Judge Wilson that defendants' obligation to surrender the premises in good condition was subject to reasonable wear and tear. If plaintiff's interpretation were correct, a simple request to restore the premises to its original condition would vitiate the "reasonable wear and tear" exception to the tenant's obligations. Further, we think the more reasonable interpretation of the language relied upon by plaintiff, "whether Landlord desires to have the Premises or any part thereof restored to the condition in which it was originally delivered to Tenant" is that it applies to "all alterations, additions and improvements which may have been made in, on or to the Premises" by the Tenant. Therefore, we affirm, substantially for the reasons articulated by Judge Wilson in his oral opinion.