March 13, 2012
DARETTE BENTON, PLAINTIFF-APPELLANT,
ARTHUR FULOP, DEFENDANT-RESPONDENT.
On appeal from Superior Court of New Jersey, Law Division, Civil Part, Union County, Docket No. DC-023660-10.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted February 16, 2012
Before Judges Fuentes and Graves.
Plaintiff Darette Benton (tenant) appeals from a Special Civil Part order dismissing her complaint against defendant Arthur Fulop (landlord). The tenant sought double the amount of her security deposit with interest in accordance with the provisions of the Rent Security Deposit Act (Act), N.J.S.A. 46:8-19 to -26. The matter was tried on February 14, 2011.
On appeal, the tenant argues that the trial court erred "by limiting her ability to present proofs" and by "entering judgment without sufficient factual support in the record for the deductions made by the landlord against the security deposit." After examining the record and applicable law in light of these contentions, we reverse and remand for a new trial.
The parties were the only witnesses to testify. During the trial, it was established that in 1998, the tenant paid a security deposit to the landlord in the amount of $1575, which was never deposited into an interest-bearing account at a financial institution as required by N.J.S.A. 46:8-19. After the tenant vacated the apartment on July 6, 2005, her security deposit was not returned. In a letter dated August 3, 2005, the landlord explained that the security deposit "in the amount of $1,575.00" was applied to his costs and expenses, which he itemized as follows:
July 2005 rent: $1,205.00 Carpet cleaning: $180.00 Removal of sofa & misc. items $50.00 3 light fixtures & door locks $131.70 Installation for above $75.00 TOTAL $1,641.70 The tenant testified that "none of [the information in the landlord's letter] was true." Nevertheless, she was not afforded an opportunity to cross-examine the landlord or to present testimony regarding any of the deductions from her security deposit. After reviewing the landlord's itemized deductions from the security deposit, the court entered a judgment in favor of the landlord:
"This is to inform that your security amount of 1575 was applied towards the following: July 2005 rent 1205, carpet cleaning 180; removal of sofa 50; three light fixtures and door locks." There's nothing unreasonable about this.
[THE TENANT]: But Your Honor, that's not true. There [were no] ceiling fixtures.
THE COURT: So therefore since the money added up to more than the security . . . there was no money due you.
[THE TENANT]: Yes, there was, Your Honor. He never put it in the bank.
THE COURT: Well, I'm sorry; this case is over; it's dismissed. There's no monies due.
The Act requires a landlord to return a tenant's security deposit together with accrued interest within thirty days after the termination of the lease, less any charges expended in accordance with the lease and any rent that was due and owing when the lease was terminated. N.J.S.A. 46:8-21.1. "Any deductions the landlord makes must be 'itemized,' and notice must be forwarded to the tenant." Reilly v. Weiss, 406 N.J. Super. 71, 80 (App. Div. 2009) (quoting N.J.S.A. 46:8-21.1). If a landlord violates the Act by failing to return the monies that the tenant is entitled to receive, then the tenant is entitled to recover "double the amount of said moneys, together with full costs of any action and, in the court's discretion, reasonable attorney's fees." N.J.S.A. 46:8-21.1.
We have previously found that when a landlord fails to place a tenant's security deposit in an interest-bearing account, the tenant is entitled to the return of the deposit "and the interest that should have been earned thereon." Penbara v. Straczynski, 347 N.J. Super. 155, 161 (App. Div. 2002). We have also held "that the statutory penalty imposed for failure to return a tenant's security deposit within the prescribed thirty-day period is double the net amount 'wrongfully withheld,' not double the amount of the initial deposit." Id. at 160 (citing Kang In Yi v. Re/Max Fortune Properties, Inc., 338 N.J. Super. 534, 539 (App. Div. 2001)). Consequently, when there is a dispute regarding a landlord's right to retain a security deposit, the court must afford both parties a full and fair opportunity to present their proofs before determining whether the security deposit, or any portion of it, was wrongfully withheld. Unfortunately, that did not happen here.
The order dismissing the tenant's complaint is reversed because she was not afforded an opportunity to cross-examine the landlord and to otherwise present her proofs. See State v. Nelson, 330 N.J. Super. 206, 215 (App. Div. 2000) (stating that "cross-examination is routinely regarded as the most effective means of challenging the credibility of a witness and thereby discovering the truth"). We also find there is insufficient evidence in the record to support the trial court's determination that there was "nothing unreasonable" about the landlord's deductions from the security deposit; and the court further erred by failing to credit the tenant with interest that should have accrued on her security deposit.
Reversed and remanded for a new trial.
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