On appeal from the Superior Court of New Jersey, Law Division, Passaic County, Docket No. L-4874-08.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued: September 27, 2012 -
Before Judges Axelrad, Nugent and Haas.
In this personal injury case, plaintiff Elliot Rojas appeals the involuntary dismissal of his claims for damages against defendants Glenn Peterson, the rent receiver for the property on which he fell, and Washington Mutual Bank (WaMu), the mortgagee of the property. We reverse and remand as to Peterson, but affirm as to WaMu.
Plaintiff filed a negligence complaint on November 20, 2008, against
Rifky Rubenstein, 208-210 Parker Corp., Peterson, and WaMu,*fn1
seeking compensation for the injuries he suffered as a result
of the failure to repair a dangerous condition that existed on the
property of his apartment. Peterson filed an answer and cross-claim
against the co-defendants. In lieu of an answer, WaMu filed a motion
to dismiss, which was denied in March 2009. WaMu then filed an answer.
The remaining defendants, Rubenstein and 208-210 Parker Corp., did not
file an answer.
WaMu moved for summary judgment, seeking dismissal of plaintiff's claims and Peterson's cross-claim. On February 1, 2011, the court denied the motion with respect to dismissal of plaintiff's claims, but granted summary judgment in favor of WaMu, dismissing Peterson's cross-claim. Peterson also filed a motion to dismiss plaintiff's complaint, which was denied on February 4, 2011.
The case proceeded to trial on March 15, 2011. At the close of plaintiff's case, the court granted Peterson's and WaMu's motions for involuntary dismissal, or alternatively, a directed verdict, by orders of March 29, 2011. On June 17, 2011, the court entered a final default judgment against Rubenstein and 208-210 Parker Corp. in the amount of $797,264.57. This appeal ensued.
This case arises from injuries plaintiff suffered when he lost his balance and fell down the common staircase of his apartment after leaning on a loose banister. The following witnesses testified at trial: plaintiff; Dr. Kim Sloan, an orthopedic surgeon; Effram Sanchez, a neighbor; defendant Peterson; Anthony Shupenko, Jr., a board certified structural and building inspection engineer who performed an inspection on the property; and Jonathan Ettman, counsel to WaMu. Plaintiff also sought to present Michael Pratico, Jr. as an expert in the field of rent receivership, but the judge barred his testimony.
Plaintiff lived in an apartment on Parker Avenue in Passaic, beginning in the summer of 2002 or 2003. He testified that in late 2005, while Rubenstein was the landlord, the condition of the apartment began to deteriorate. There were defects in the roof, which caused substantial water damage; major electrical problems; decaying floor supports; raw sewage; and both the bathtub and toilet were stopped up. Plaintiff testified he complained, to no avail, to Rubenstein and the City of Passaic officials (the City) about the loose banister on the staircase.
On February 16, 2005, 208-210 Parker Corp. borrowed $730,000 from WaMu, secured by a mortgage on the apartment building. The borrower defaulted, and on November 3, 2005, WaMu filed a foreclosure complaint against 208-210 Parker Corp. and its guarantor, Rubenstein, demanding possession of the property. On June 22, 2006, final judgment in foreclosure was entered against the borrower and in favor of WaMu.
During the foreclosure proceedings, WaMu moved to have a rent receiver appointed to manage the property. On January 9, 2006, Judge Margaret Mary McVeigh entered an order appointing Peterson as the rent receiver. The order provided that Peterson take charge of and manage the mortgaged premises, and demand and collect the rent from the tenants. The order further authorized Peterson "to keep said premises insured against loss, damage by fire, or public liability and to repair and to pay taxes, assessments and water and sewer rents thereon, and otherwise to do all things necessary for the due care and proper management of the mortgaged premises[.]" Additionally, the court ordered that Peterson or any party in interest "apply to this Court for further or other instructions and for further power necessary to enable the Receiver properly to fulfill his duties as Receiver[.]"
Ettman, WaMu's attorney, sent several emails to Peterson giving him contact information for the property manager and Rubenstein's attorney, information about two tenants and their leases, and asking him if he had informed the tenants of his appointment and collected rent.
Peterson then prepared a letter to the tenants dated February 2, 2006, informing them that he had been appointed the rent receiver and that their rent payments should be made to him. Peterson went to the building on three separate occasions to hand deliver the letter to the tenants, and for those tenants he could not reach, he taped it to their doors. The letter was silent with respect to property repairs and maintenance.
Peterson did not personally conduct an inspection of the building, but he was alerted through his contractor and the Housing Authority that the condition was "horrendous," there were "sagging floors and sagging walls[,]" and sewage was "seeping from a cracked pipe in the basement[.]" However, Peterson testified he did not have enough money in his receivership account to make major repairs and he did not apply for assistance through the court. Peterson also testified that some tenants stopped paying rent. He did not take any action to compel rent payment nor did he inquire why they were not paying; he was concerned such efforts would make the situation worse because of potential habitability defenses spreading to the other tenants.
In February 2006, due to non-payment of outstanding water charges, there was a threat to turn off water service to the building. Peterson testified that at that time, he did not have money on hand to pay the bill because he did not expect to receive the first month's rent from the tenants until March 1. Peterson contacted Ettman, explained the situation, and asked if WaMu would be willing to pay the outstanding balance of $952.56. Ettman advised Peterson by letter of February 10, 2006 that after failed attempts to contact Rubenstein and the property manager about the problem, "WaMu [was] willing to pay the outstanding water bill to maintain service at the [p]roperty."
WaMu paid a total of $1,057.66 to the Passaic Valley Water Commission on March 7, 2006.
Ettman testified that WaMu did not pay other bills relating to the property. WaMu did, however, obtain forced-placed insurance on the property to protect against hazards, and redeemed a tax sale certificate because "[i]t was a tax lien on the property which would have impaired [its] first priority position[.]"
In March 2006, the Passaic Fire Prevention Bureau notified Peterson about fire code violations on the property. Peterson hired a contractor, John R. Saffioti, LLC, and paid $850 to fix the code violations. At that time, Peterson also received a notice from the Housing Authority advising it was withholding housing assistance payments due to longstanding building violations that had not been fixed by the owner. Peterson testified he "made a determination [he] couldn't afford to address" the deficiencies.
In May 2006, Peterson was served with municipal complaints for building code violations. He responded by filing an order to show cause, seeking a declaration that he was immune from liability by virtue of his status as a court-appointed rent receiver. Acknowledging that "the building is in horrendous condition[,]" Peterson certified he only had $15,799.93 in his account and his contractor had advised him that a new owner would need to spend between $100,000 and $200,000 in repairs, so "plainly and simply, [he did] not ...