On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. DC-31532-10.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Axelrad and Sapp-Peterson.
In this landlord-tenant appeal, following a bench trial in Special Civil Part, Judge Melvin L. Gelade found there was no settlement agreement, the tenant was not responsible for the full cost of replacing the cost of the carpet, the landlord was not responsible for double damages, and the tenant was entitled to seven percent interest on the security deposit that the landlord had not placed in an interest-bearing escrow account for the one-year period of the lease. Accordingly, the court entered judgment in the tenant's favor for $804.56, plus costs of suit, and dismissed the landlord's counterclaim. The tenant appeals, arguing she was entitled to statutory double damages for wrongful withholding of her security deposit with seven percent interest calculated up until the date she received payment of her security deposit. The landlord filed a cross-appeal, challenging the court's preliminary ruling that no settlement was reached as against the weight of the evidence, and asserting as arbitrary and erroneous the court's decision not to award her the entire amount of the itemized damages. We affirm on the appeal and cross-appeal.
On or about December 15, 2010, the tenant filed a complaint to recover double her security deposit, seeking $4708. The landlord answered the complaint, asserting affirmative defenses of accord and satisfaction and settlement, and filed a counterclaim for $234.65 for damages in excess of the retained security deposit. Following a three-day trial, on May 10, 2011, the court entered judgment for the tenant in the amount of $804.56, plus costs of suit, and dismissed the landlord's counterclaim. Both parties filed motions to reconsider, which the court denied by order of June 24, 2011.
On the first day of trial, the court heard the testimony of both parties' attorneys with respect to a disputed settlement agreement. On June 16, 2010, through counsel, the parties entered into an agreement in a prior eviction case, which allowed the tenant to remain in the apartment until August 31, 2010, conditioned on the payment of rent. It is undisputed the move occurred on schedule. On September 3, 2010, the tenant's attorney sent the landlord a letter requesting the return of the tenant's $1650 security deposit. On September l6, 2010, the landlord's attorney responded by fax that the repairs to the apartment, itemized with attached receipts, exceeded the amount of the security deposit. The expenses totaled $1899.65 as follows: painting, spackling, replacing a broken mirror in the bathroom, replacing broken wood on the swing set and repairing the swing, replacing ceiling panels on the basement ceiling from water damage ($350); cost of new mirror ($49.99); cost of drop ceiling panels ($35.27); excessive soiling of kitchen cabinets and stove beyond the normal cleaning of the apartment ($157.50); and repairing the wood floor and replacing the carpeting due to heavy soiling and burn marks ($1306.89). After crediting one percent interest to the security deposit ($16.50), the excess due was $234.65, which the landlord's attorney requested be remitted. The tenant's attorney ignored the letter.
Both attorneys testified about a phone conversation they had on or about October 4, 2010. The landlord's attorney testified she said her client would be willing to forego collection of the $234.65 if the tenant would be willing to accept the security deposit as payment for the repairs. According to the landlord's attorney, her adversary responded, "it sounds good to me. And he - he agreed to that settlement."
The tenant's attorney, however, testified he viewed the call as an "invitation for  further negotiations." He commented that he thought it might be beneficial for his client to settle, but said he had no opportunity to consult with her. He testified that "[i]t [was] simply not with [her] consent."
The landlord's attorney faxed a letter confirming the phone conversation "in which we agreed that the security deposit . . . of $1665.00 will satisfy any and all repairs . . . as the result of your client's tenancy . . . [and] your client will not challenge the legitimacy of the expenditures . . . . With this letter, our respective clients' relationship . . . is concluded." The tenant's attorney confirmed receiving the letter and not responding in writing. He testified that "[b]y that time [he] had spoken to [his] clients" who "were not interested in settling" and "wanted to contest the security deposit and damages." He felt the parties "were still in negotiations."
In November, the tenant's attorney phoned the landlord's attorney again demanding the security deposit, and received the written response that the case had been settled as reflected in the October 4 letter. The tenant's attorney called and said he had spoken with his client, who was "not interested in settling." This lawsuit followed.
The judge was not convinced the facts demonstrated the case had been settled. Although the judge found the tenant's attorney told his adversary during their phone call that the proposed settlement sounded good to him, he did not represent that he had his client's authority to settle. The judge commented that the tenant' attorney was remiss in not following through after receipt of the October 4 letter, and while his actions "could have been clearer,  they were not an equivocal acceptance of the settlement on the 4th of October[,]" presumably because he did not have his client's authorization to settle. As the judge was not satisfied there was a sufficient ...