November 21, 2011
HOUSING AUTHORITY OF THE CITY OF BAYONNE, PLAINTIFF-APPELLANT,
ADIB HANNA AND AWATIF HANNA, DEFENDANTS-RESPONDENTS.
On appeal from the Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-3239-09.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued October 18, 2011
Before Judges Reisner and Simonelli.
Plaintiff Housing Authority of the City of Bayonne (BHA) appeals from a final judgment dated September 1, 2010, which entered a judgment of no cause of action following a jury verdict and dismissed the complaint with prejudice. We affirm.
We derive the following facts from the trial record. In 1992, defendant Adib Hanna*fn1 loaned $5000 to his brother, Moshir Hanna, to purchase property located on Kennedy Boulevard in Bayonne (the property). Following the purchase, defendant and his family resided in one apartment located on the property. Moshir placed defendant's name on the deed to the property in order to ensure repayment of the loan. After Moshir repaid defendant in full, on January 1, 2000, they executed a "contract of sale," whereby defendant agreed to transfer his interest in the property to Moshir. On July 31, 2000, Moshir met with his attorney in order to have defendant's name formally removed from the deed. The attorney's office notes of that meeting confirm that Moshir would be the sole owner of the property, and the attorney would prepare a deed transferring defendant's interest in the property to Moshir. Moshir and defendant believed that defendant's name had been removed from the deed. However, the attorney unexpectedly died without having filed a new deed.
In 2000, 2001, 2002, and 2003, defendants submitted applications to the BHA for low income public housing, and represented that they had no assets and owned no real property. They listed the property as their residence and Moshir as their landlord.
On December 1, 2003, defendants signed a lease with the BHA for an apartment located in Bayonne. In their 2004 through 2007 applications for continued occupancy, defendants represented that they did not have any assets or own real property, and did not dispose of any assets for less than fair market value during the prior two years.
The lease permitted the BHA to evict defendants if they made a misrepresentation of any material fact in the application for housing, or in any statements submitted to the BHA. In 2007, after receiving an anonymous tip that defendant owned the property, the BHA discussed the matter with him. Defendant thereafter executed a deed in May 2008, conveying his interest in the property to Moshir. In June 2008, the BHA notified defendant that his ownership interest in the property rendered him ineligible for public housing, and it would seek to terminate the lease due to his misrepresentation of ownership. The BHA told defendant to vacate the apartment and surrender the keys in order to avoid legal action.
Defendants did not vacate the apartment. On August 28, 2008, the BHA served a notice to quit and demand for possession.
The BHA subsequently filed a complaint, seeking a judgment of possession. The BHA alleged that defendants "knowingly and fraudulently misrepresented to [the BHA] that they did not own any real property by certifying that they were tenants residing at real property owned solely by . . . [Moshir]." In an amended complaint, the BHA sought damages for breach of contract, negligent misrepresentation, intentional/fraudulent misrepresentation, fraud, and unjust enrichment. The BHA sought damages of $73,949, representing fair market value rent for the period of defendants' tenancy.
At trial, the judge instructed the jury on the elements of fraud and the BHA's burden to prove each element by clear and convincing evidence. The judge also instructed the jury as follows:
If you find that a reasonable person would have considered the representation important in deciding whether to proceed with the transaction or that the defendant knew that the plaintiff considered the fact important and would rely on it and you find that the plaintiff's . . . belief of the representation was a substantial factor in this decision to engage in the transaction, your verdict would be for the plaintiff and your attention would then turn to the nature and extent of plaintiff's damages.*fn2
The judge then instructed the jury on the BHA's claim for eviction and damages for breach of contract, and the BHA's burden to prove these claims by a preponderance of the evidence. Neither party objected to any of the jury instructions, and they raise no challenge to the instructions on appeal.
The judge also utilized the following verdict sheet, to which no one objected:
1. Has the Plaintiff proven by clear and convincing evidence that the Defendants fraudulently concealed or misrepresented Adib Hanna's ownership interest in 561-563 Kennedy Boulevard, Bayonne, NJ?
YES_____ NO_____ VOTE____ If you answered "Yes" to Question #1, please proceed to Questions #2, 3 and 4.
If you answered "No" to Question #1, please proceed to Question #3.
2. Has the Plaintiff established by a preponderance of the evidence a statutory basis for eviction of the Defendants?
YES_____ NO_____ VOTE____
3. Has the Plaintiff established by clear and convincing evidence that it is entitled to recover monetary damages from the Defendants?
YES_____ NO_____ VOTE____ If you answered "Yes" to Question #3, please proceed to Question #4.
If you answered "No" to Question #3, please proceed to Question #5.
4. Set forth the amount of damages to be awarded to the Plaintiff.
5. Do you find by a preponderance of the evidence that Defendants materially breached their lease with the Plaintiff such that the Plaintiff is entitled to compensatory damages?
YES_____ NO_____ VOTE____
6. Set forth the amount of damages to fairly and reasonably compensate Plaintiff.
The jury answered "Yes" to question one, and "No" to questions two, three and five. Because the jury had answered "No" by a vote of five to one on question two, the judge polled the jury regarding its vote, stating, "I'm going to ask each of you if you agree or disagree with the vote on question number two." Each juror responded that he or she agreed with the "No" vote.
Defendants submitted a proposed judgment, which stated that the jury had returned a verdict in their favor, and sought the entry of a judgment of no cause of action and dismissal of the complaint with prejudice. The BHA objected to the proposed judgment, arguing that the jury's verdict "creates an anomalous and inherently inconsistent conclusion and result . . ." and "the jury's findings are inconsistent." The BHA submitted a proposed judgment. The judge entered judgment consistent with defendants' proposed order. This appeal followed.
On appeal, the BHA argues that the verdict was inconsistent, and that the jury's finding that defendants committed fraud entitled it to possession and damages, thus rendering questions two and three unnecessary. The BHA also argues that the judge erred in failing to poll the jury on question two in accordance with Rule 1:8-10.
Following the filing of the appeal, the BHA filed a motion for reconsideration to amend the judgment pursuant to Rule 4:49-2.*fn3 The BHA submitted a proposed order, which essentially sought to mold the verdict to enter judgment in its favor for eviction and damages of $104,213. The judge denied the motion, finding that in its answer to question one, the jury concluded that defendants misrepresented an ownership interest in the property but either did not intend to defraud the BHA, the BHA did not reasonably rely on the misrepresentation, and/or the BHA was not harmed. He, thus, concluded that the judgment was not palpably incorrect or irrational, and entered an order on March 18, 2011, memorializing his decision.
The BHA did not amend its appeal to include the March 18, 2011 order. As such, defendants argue in this appeal that we lack jurisdiction. Defendants also argue that the BHA did not preserve the issue of an inconsistent verdict for our review because it did not ask the judge to instruct the jury to resume deliberations or move for a new trial. We disagree with these arguments. The BHA appeals from the judgment, to which it objected based on an inconsistent verdict. Thus, this appeal is properly before us.
We conclude that the verdict was not inconsistent. To establish fraud, a plaintiff must prove the following five elements by clear and convincing evidence: "(1) a material misrepresentation of a presently existing or past fact; (2) knowledge or belief by the defendant of its falsity; (3) an intention that the other person rely on it; (4) reasonable reliance thereon by the other person; and (5) resulting damages." Gennari v. Weichert Co. Realtors, 148 N.J. 582, 610 (1997). A plaintiff who has established fraud or misrepresentation is not automatically entitled to damages; rather damages must be proved by a preponderance of the evidence. Armel v. Crewick, 71 N.J. Super. 213, 218 (App. Div. 1961).
By answering "Yes" to question one, the jury found that the BHA proved by clear and convincing evidence that defendant fraudulently concealed or misrepresented his ownership interest in the property. This verdict, however, did not automatically entitle the BHA to damages or eviction. In accordance with the jury instructions, the jury then had to consider the nature and extent of the BHA's damages, and whether the BHA proved damages and its right to eviction by a preponderance of the evidence. Questions two and three, therefore, were necessary for the jury to perform its function. By answering "No" to questions two and three, the jury found either that the BHA suffered no damages, or failed to meet its burden of proof for damages and eviction. Accordingly, there is nothing inconsistent in the jury's verdict.
We also reject the BHA's contention, raised for the first time at oral argument before us, that the jury's verdict on questions two, three, and five was against the weight of the evidence. It is well-settled that "[i]n both civil and criminal actions, the issue of whether a jury verdict was against the weight of the evidence shall not be cognizable on appeal unless a motion for a new trial on that ground was made in the trial court." R. 2:10-1.
Finally, we discern no abuse of discretion in the method of polling the judge utilized, and are satisfied that the jurors' answers on the poll were given in such a manner as to leave no doubt that they each answered "No" to question two. See Ragusa v. Lau, 199 N.J. 276, 279 (1990); Current N.J. Court Rules, comment to Rule 1:8-10 (2011).