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Megan Burns and Joseph Nieves v. Hoboken Rent Leveling & Stabilization Board

February 6, 2013


On appeal from the Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-474-11.



Telephonically Argued December 19, 2012

Before Judges Messano*fn1 , Lihotz and Ostrer.

Cathy C. Cardillo argued the cause for respondents Megan Burns and Joseph Nieves (Ms. Cardillo, of counsel and on the brief). Respondent Hoboken Rent Leveling & Stabilization Board has not filed a brief. The opinion of the court was delivered by LIHOTZ, J.A.D.

Defendant Bloomfield 206 Corporation (Bloomfield) appeals from the denial of its motion to vacate a stipulation of dismissal filed by plaintiffs Megan Burns and Joseph Nieves in this prerogative writ action (PWA). Plaintiffs are tenants in a building owned by Bloomfield. Plaintiffs initially filed the PWA to challenge an upward modification of plaintiffs' rent granted by defendant, the Hoboken Rent Leveling & Stabilization Board (the Board), because it permitted consideration of rent decontrols claimed by Bloomfield. In the course of the litigation, plaintiffs and the Board agreed to dismiss the PWA. Bloomfield was not made a party to the stipulation and objected to the voluntary dismissal. Bloomfield also sought to file a proposed cross-claim against the Board, seeking remand to reconsider the permissible base rent calculation in light of recently adopted amendments to the municipal rent ordinance.

Although we conclude the trial judge's denial of Bloomfield's motion to vacate the stipulation of voluntary dismissal was error because the stipulation failed to conform to requirements set forth in Rule 4:37-1(a), the error was harmless as the judge considered and granted plaintiffs' cross-motion to dismiss the PWA with prejudice, pursuant to Rule 4:37-1(b). Accordingly, we affirm the order dismissing this action with prejudice.

These facts are taken from the motion record. Plaintiffs reside in a rent-controlled apartment in a building owned by Bloomfield. After learning the property was subject to the municipal rent-control ordinance, plaintiffs "decided to inquire whether or not [their] rent was legal, and filed for a Legal Rent Calculation on May 26, 2010."

On June 28, 2010, a Hoboken Rent Regulation Officer issued a "Legal Rent Calculation," which showed the legal base monthly rent for plaintiffs' apartment, as of May 1, 2007, was $669, not the $1,550 charged by Bloomfield pursuant to their lease. Bloomfield appealed from that determination to the Board, arguing the issued rent calculation omitted three applicable vacancy decontrols, which, if applied, would increase plaintiffs' lawful base rent.*fn2 Plaintiffs filed opposition to Bloomfield's appeal, asserting the rent control officer and the Board arbitrarily allowed Bloomfield to apply vacancy decontrols in violation of the municipal rent ordinance and, specifically, erred in permitting the use of late-filed vacancy decontrol certificates, some of which were as many as fifteen to twenty years old. After its review, the Board concluded Bloomfield was entitled to credit for one additional vacancy decontrol, but denied use of the other two. The Board recalculated plaintiffs' base rent as $944 per month. As required by the municipal rent ordinance, the Board approved a resolution stating its findings, which was mailed to the parties. Bloomfield did not file an appeal from the Board's final determination.

Plaintiffs filed this PWA against the Board and Bloomfield, alleging the Board's grant of decontrols violated the municipal rent ordinance, various court directives and orders, and the Board's own regulations. Plaintiffs sought to "overturn the [Board's] ultra vires grant of decontrols, and restore their rent to that actually defined by 'clear and unambiguous' language of the [o]rdinance." They contended the Board should restore the June 28, 2010 legal base rent determination made by the rent regulation officer.

Also, using the initial June 28, 2010 rent calculation, plaintiffs filed a separate complaint alleging Bloomfield violated New Jersey's Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -195. Plaintiffs sought return of the excess rents paid, treble damages, attorney fees and costs.*fn3 Calculation of plaintiffs' damages in the CFA action is dependent on the amount of the legal base rent, as calculated by the Board, which formed plaintiffs' challenge in this PWA action.

While these legal actions were pending, the City of Hoboken adopted and the Mayor approved Ordinance No. Z-88 (Z-88), entitled, "An Ordinance Amending Certain Provisions of Chapter 155 of the City Code, Entitled 'Rent Control.'" Z-88 allowed landlords to more easily obtain vacancy decontrols and limited the extent to which a tenant could collect rental overcharges.

Z-88's adoption resulted after numerous lawsuits (including a class action) had been filed, and after a City Council subcommittee, appointed to provide recommendations, identified numerous substantive and procedural deficiencies in the legislative and regulatory controls of residential rents existing in Hoboken's Rent Regulation Office and the Board. However, the adoption of Z-88 was not the end of the controversy. A citizens' group successfully certified a referendum petition, resulting in a court order staying Z-88's operation until the presentation of a public question seeking the ordinance's repeal. Voters rejected the referendum in the general election so that Z-88 was implemented as the law governing rent control in Hoboken. It is undisputed the ordinance became effective on March 31, 2011.

Once the adoption of Z-88 was established, and the referendum to repeal was rejected, Bloomfield requested plaintiffs' challenge to the rent calculation be ...

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