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Nhu Thi Do v. Phuong Trong Nguyen

August 24, 2012


On appeal from the Superior Court of New Jersey, Law Division, Atlantic County, Docket No. L-3326-08.

Per curiam.


Argued May 23, 2012

Before Judges Lihotz and Waugh.

Plaintiff Nhu Thi Do appeals from a judgment entered following a bench trial, awarding defendant Phuong Trong Nguyen damages on his counterclaim. We affirm in part, and reverse and remand in part.

The parties' dispute centers on their rights and obligations regarding a four-story mixed-use property located on South Virginia Avenue in Atlantic City (the building). Plaintiff's complaint alleged breach of contract and constructive eviction. Defendant filed an action to eject plaintiff from a commercial unit on the first floor of the building. The two matters were consolidated and the subject of a three-day bench trial. The record on appeal contains none of the trial court pleadings or exhibits, including written agreements or documents evincing disputed transactions and contractual obligations. These facts are taken from the trial testimony.

Defendant purchased the building from his aunt on October 21, 2007. Loan Nguyen,*fn1 defendant's mother, lived in the building and sought to develop a business and rental units. Loan converted the ground floor into a restaurant known as Far Saigon, which ultimately was owned and operated by Loan and two partners. The upper floors of the building housed apartments. Following closing, defendant returned to his home in Virginia and allowed Loan to negotiate the apartment leases, collect rents, determine and pay expenses, hire contractors, and generally manage the building.

In 2006, prior to defendant's purchase of the building, Loan approached plaintiff about purchasing an ownership interest in the building through a partnership. On October 15, 2006, plaintiff and defendant executed a partnership agreement, pursuant to which plaintiff tendered $5000 to Loan as the down payment for a 25% ownership interest in the building and partnership. The one page agreement required plaintiff to satisfy the balance of the agreed $80,000 purchase price within twelve months. When she supplied the down payment, Loan provided a list, which plaintiff believed recorded the building's tenants and their monthly rental obligations, totaling $5070. Plaintiff paid the $75,000 balance to defendant on October 12, 2007. Closing took place thereafter, and the recorded deed reflected plaintiff's ownership interest.*fn2

In August 2007, Loan offered plaintiff the opportunity to buy her interest in the restaurant. Plaintiff agreed and purchased Loan's interest along with the interest of one other business partner, the furnishings, fixtures, name, and equipment. Plaintiff began operating the restaurant in August 2007. By October 2009, plaintiff purchased the remaining partner's interest in the restaurant.

Plaintiff also executed a six-year lease agreement with defendant to rent the building's first floor, housing the restaurant. Commencing on August 1, 2007, plaintiff agreed to pay $1400 per month plus a proportionate share of the utilities.

In November 2007, Loan commenced renovations to the building's second-floor apartment. Thereafter, "almost every day[,]" "from November to December[,]" noise from the construction was present and "customer[s] were making faces at the dust coming down on them." Two additional witnesses on behalf of plaintiff verified the existence of the construction noise. On December 27, 2007, plaintiff was forced to close the restaurant when the water was shut off for plumbing repairs to an upstairs apartment. On two separate days during the apartment repairs, water leaked into the kitchen. Plaintiff also testified water leaked from the roof down the restaurant's walls when it rained, causing a "flood in the kitchen."

Beginning on December 29, 2007, plaintiff sent a series of letters to defendant describing defects with the premises. The first letter described the leaking roof. Correspondence sent on March 31, 2008, informed defendant that plaintiff "would not have the ability to continue to pay rent if all these problems [continued to] exist and [she could] not open up the restaurant." In letters dated May 26 and June 11, 2008, plaintiff again asked defendant to hire a licensed contractor to make the necessary repairs to resolve the water leaks. Defendant did not respond to any of these requests.*fn3

Plaintiff temporarily ceased the restaurant operations on January 14, 2008 and relocated to California. The parties stipulated plaintiff's last rental payment was made in March 2008. She allowed another individual to operate the restaurant sometime between January and February 2008, then began negotiations with a Jimmy Chaung, who was interested in taking over the business. Chaung discovered the mercantile license was not in plaintiff's name and unsuccessfully attempted to obtain a health inspection approval.

David Lee, a friend of plaintiff and Loan, testified on behalf of plaintiff, explaining he kept an eye on the restaurant property in plaintiff's absence, following her move to California. On August 2008, Lee also photographed a bathroom enclosure, refrigerator/freezer, range hood, discarded toilet, and used mattress left in the restaurant's kitchen. Lee photographed water damage, fungus, mold, and mildew found in the kitchen, as well as six ceiling tiles that collapsed into the kitchen ...

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