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Matthew Schwede and Meghan Wood v. Societa Madonna Building Fund

January 31, 2012

MATTHEW SCHWEDE AND MEGHAN WOOD, PLAINTIFFS-APPELLANTS.
v.
SOCIETA MADONNA BUILDING FUND, DEFENDANT-RESPONDENT.



On appeal from the Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-2291-10.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted January 18, 2012

Before Judges Payne and Reisner.

Plaintiffs Matthew Schwede and Meghan Wood rented an apartment in Hoboken from the predecessor to defendant, Societa Madonna Building Fund, for $650 per month, signing a lease that commenced on May 1, 1991. On February 27, 1998, counsel to the building's owner requested a rent calculation for all apartments in the building in which plaintiffs resided. A response was issued to counsel and to each resident by Carole McLaughlin, the Division Chief of the Hoboken Division of Rent Leveling & Stabilization. The letter from McLaughlin, dated March 23, 1998, and addressed to Wood stated:

At the request of your landlord, through his Attorney, this office has completed an Update of the Legal Base Rent for your apartment.

This update confirms that your correct Base Rent should be $491.00 and you should begin paying this amount effective April 1, 1998. Your landlord has been notified and is in agreement. The Rent Control Ordinance has a two year limitation on rebates for overcharges in rent. Since you have resided in this apartment more than two years, you are not entitled to a rebate of any overcharges but your rent has been rolled back.

By letter dated March 30, 1998, Wood was informed that a revised calculation brought the legal base rent to $493 per month. Plaintiffs did not challenge the applicability of the two-year limitation on actions for rebates administratively or through a legal action in court.*fn1 Indeed, they did nothing.

On April 26, 2010, slightly more than twelve years after plaintiffs had been informed of the rent overcharge, they filed an action in the Law Division in which they alleged that defendant had "grossly misrepresented" the amount of rent owed on plaintiffs' apartment, resulting in overpayments of $16,563, and that plaintiffs were entitled to a refund in that amount. In an additional count, plaintiffs claimed that defendant's conduct constituted a violation of the Consumer Fraud Act, N.J.S.A. 56:8-1 to -195, and that plaintiffs were therefore entitled to trebled damages of $49,689 and attorney's fees.

Defendant filed an answer to the complaint and a counterclaim, dated June 28, 2010, in which it asserted that plaintiffs' action was governed by the six-year statute of limitations set forth in N.J.S.A. 2A:14-1, that it was filed twelve years after the action accrued, and as such it was frivolous. As a consequence, defendant demanded reimbursement of attorney's fees pursuant to N.J.S.A. 2A:15-59 and Rule 1:4-8. The detailed "safe harbor" letter and demand that the pleading be withdrawn within twenty-eight days, required by Rule 1:4-8 (b)(1), was sent the same day.

On August 12, 2010, defendant moved for summary judgment, which was granted in the absence of any opposition. Plaintiffs sought reconsideration and cross-moved for summary judgment in their favor. Although the judge granted reconsideration, she again granted summary judgment to defendant and denied plaintiffs' cross motion. Additionally, upon defendant's application, the judge awarded attorney's fees to defendant in the amount of $4,475.

Plaintiffs have appealed, raising the same arguments that were presented to the motion judge.

On appeal, plaintiffs first argue that counsel for the defendant should have been disqualified as the result of his violation of RPC 1.8(k)*fn2 and 1.11.*fn3 The argument was based on the unsupported assertion that counsel had served as the attorney for the Hoboken Rent Leveling Board "for at least the last five years."

However, contrary to plaintiffs' allegation, the record establishes that counsel was not serving as a governmental lawyer for Hoboken in 1998 when plaintiffs were informed of the legal rent for their apartment or in 2010 when their suit was filed.*fn4 Moreover, plaintiffs have identified no act on the part of counsel that was adverse to the interests of the Hoboken Division of Rent Leveling & Stabilization, which was not a party to plaintiffs' litigation and ...


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