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Smith v. Hillside Village

United States District Court, D. New Jersey

September 11, 2017

SANDRA SMITH, Plaintiff,


          KEVIN McNULTY. U.S.D.J.

         The defendant, Hillside Village, filed two state court actions against its elderly, disabled tenant, Sandra Smith: one for damages, and one to evict her. It lost both, and the State appellate court stated that it "expected" Hillside to repair the apartment and restore her tenancy "promptly." Hillside has not done so. Now, the tenant sues under federal law to restore her tenancy, and for damages. Because Ms. Smith did not have a full and fair opportunity to litigate her federal claims in the prior actions, and because the equities do not entitle Hillside to repose, its motion to dismiss the tenant's federal court complaint on res judicata grounds is denied.

         I. Background [1]

         Ms. Smith, 78 years old at the time of the events in suit, occupied a rent-controlled apartment in Hillside's building for some 51 years.[2] She lived alone, and in her later years developed a psychological disorder that caused her to hoard materials, resulting in severe clutter. In addition, structural damage to the apartment contributed to the municipal authorities' declaring it to be unsanitary and uninhabitable.

         Hillside immediately filed an action under the wrong statute, New Jersey's Unlawful Detainer Act (the Detainer Matter), seeking eviction and possession on three days' notice. Procedural confusion ensued. The judge, improvising, directed Hillside to file a landlord-tenant action (the LT Matter), a summary proceeding, in which possession issues would be heard; he kept the Detainer Matter open for the purpose of later hearing Hillside's claims for damages. Both cases were tried. Ultimately, Hillside lost both. The Detainer action failed at trial on the merits. On appeal from the LT action, the Appellate Division reversed the judgment of possession in Hillside's favor and stated that it "expected" Hillside would repair the apartment and restore Smith's tenancy "promptly."

         Hillside did not repair the apartment or restore Smith's tenancy. Shortly after the Appellate Division affirmance, Smith filed this federal court action, seeking possession of the premises. This action, under the Fair Housing Act Amendments, is based on Hillside's refusal to accede to Smith's August 2015 proposal for a reasonable accommodation of her disability, consisting of mental health treatment and an agreement for monitoring of her apartment by an outside agency.

         Hillside now invokes equity, in the form of res judicata. This court, it says, must save it from Ms. Smith's vexatious assertion of claims she should have pursued earlier. Although the summary LT Action for possession would not have permitted counterclaims, Hillside says, leave to bring a counterclaim for possession could have been sought in Hillside's unsuccessful Detainer action for damages.

         A. The Detainer Matter, DC-10607-IS: Phase 1

         Prior to this federal litigation, on July 24, 2015, Hillside filed in Special Civil Part, Bergen County, an action (the "Detainer Matter") against Smith by Order to Show Cause. (Hillside Village v. Sandra Smith, Docket no. DC-10607-15 (N.J.Super. Ct, Law Div., Special Civil Part, Bergen Co.))

         The complaint in the Detainer Matter alleged that on July 17, 2015, an officer of the Ridgefield Bureau of Fire Prevention went to inspect the apartment after receiving a report of an odor of gas. Inspectors, code enforcement officials, inspectors, and representatives of Hillside found appalling conditions within. The complaint cites destruction of the kitchen cabinets, holes in the ceiling, and likely insect and rodent infestation. The inspectors "red-tagged" the apartment as unfit for occupancy, and issued a letter and order to correct to Hillside.

         Ms. Smith was removed from the premises. Hillside had counsel serve on Ms. Smith a 3-day Notice to Quit with demand for possession.

         The Detainer Matter complaint sought a judgment of possession of Smith's apartment pursuant to New Jersey's Unlawful Detainer statute, N.J. Stat. Ann. § 2A:39-1 et seq., and an injunction against Smith's returning to the apartment except to recover personal property. (See Detainer Cplt., passim.) On July 24, 2015, both parties, by counsel, appeared before the Hon. Joseph R. Rosa, Jr., J.S.C. on an order to show cause in the Detainer Matter. Ms. Smith's counsel argued, and Judge Rosa agreed, that an action under the Unlawful Detainer statute was not an appropriate shortcut; Smith, as a longtime tenant, was entitled to the protections of the anti-eviction provisions of New Jersey law.

         What was required, Judge Rosa said, was a landlord/tenant action citing statutory grounds for eviction. [See Detainer Tr. 5:4-10, 8:18-9:1) He told Hillside's counsel he would have to file an eviction complaint. (Id. 12:25-13:18) Counsel for Hillside agreed to "go downstairs and file this as an LT" (landlord/tenant) action, based on the existing Notice to Quit. (Id. 13:19-21)

         Counsel for Hillside expressed concern that such an LT proceeding would take too long. Judge Rosa reassured him that he had no vacation plans for August and that "I'll just put this on the DC calendar because it'll wind up being moved by the time - we can have the tenancy done a long time before this [i.e., the Detainer Matter] comes up." (Detainer Tr. 12:23-13:3) Judge Rosa thus predicted that "you'll have [Smith] evicted and locked out even though she's out already" in the LT Matter, before Smith was even required to file an answer in the Detainer Matter. (Id. 16:8-12; 15:16-18)

         Judge Rosa's statement that Smith was "out already" seemingly referred to the fact that the municipal officials had "red-tagged" the unit as unfit for habitation and removed her. The Judge stated that he would not let Ms. Smith reenter the apartment while it was in that condition. Counsel for Smith acknowledged that she was not immediately seeking such relief. (Detainer Tr. 14:3-7)

         Judge Rosa volunteered further that "if I were the landlord, I would be in no rush to clean that up. If [the municipal authorities have] already said we'll give you another 30 days, why in the world would you want to clean it up and then just have her try to come back in?" (Detainer Tr. 14:8-14) Counsel for Hillside stated that although the municipality could fine his client for unsanitary conditions, it was not his client's "responsibility to clean the tenant's apartment." [Id. 14:17-18, 24-25)

         Judge Rosa and counsel, all talking over each other, seemingly came to share an understanding that the Detainer Matter would stay open so that Hillside's claim for "money damages" could be adjudicated.[3] Counsel for Ms. Smith stated that the Detainer Matter should be dismissed outright. She noted, correctly, that there was currently no such claim for damages even alleged in the Detainer Complaint. (Detainer Tr. 15:23-25; see Detainer Cplt., passim.)

         Judge Rosa declined to sign Hillside's order to show cause for emergent relief in the Detainer Matter. He found no irreparable harm and stated that the issue of the tenancy could be settled in the LT Matter. (See Id. 16:15-17:5)

         B. The State LT Matter, DC-5606-15

         Hillside filed a handwritten complaint in the LT Matter the same day, July 24, 2015. (Hillside Village v. Sandra Smith, Docket no. DC-5606-15 (N.J.Super. Ct, Law Div., Special Civil Part, Bergen Co.) As statutory grounds for removal, the Complaint cited N.J. Stat. Ann. § 2A: 18-61-1(c) ("The person has willfully or by reason of gross negligence caused or allowed destruction, damage or injury to the premises."). It incorporated by reference die earlier Notice to Quit and sought a judgment of possession. (LT Cplt. ¶ 10) An eviction action, it did not seek back rent or damages. It alleged that Ms. Smith had willfully damaged the apartment and had failed to vacate it as required by the Notice to Quit.[4] Trial was scheduled for August 6, 2015.

         Hillside attaches an August 4, 2015, letter from Smith's counsel in advance of the LT trial requesting an "interactive dialogue for reasonable accommodation under the Fair Housing Amendments Act of 1988, 42 U.S.C. 3601, et seq. (hereafter: FHAA), to enable Mrs. Smith to comply with her lease, in view of her obsessive compulsive/hoarding disorder." (Cplt. Ex. F, ECF no. 5-2 at 83) The letter cited the landlord's duty under FHAA to accommodate the needs of disabled persons and make reasonable accommodations before terminating a tenancy. [Id.) Hillside's counsel emailed that he would discuss it at the courthouse, but that Smith should be prepared to try the case if an accommodation could not be reached. [Id. at 84)

         The LT Matter was tried before Judge Rosa on August 6 and 18, 2015. (ECF no. 5-2 at 20) Smith attempted to raise the FHAA, 42 U.S.C. §§ 3601-19 (at least as a defense if not as a claim), but was not permitted to do so in this summary action. [Id. at 21; see Hillside Village v. Smith, 2017 WL 412803 at *6 n.3 (Jan. 31, 2017).)[5]

         Judge Rosa announced his decision on August 28, 2015, and on September 2, 2015, entered judgment in favor of Hillside on the claim that Smith had willfully or by gross negligence damaged the apartment. (LT Judgment, as amended, ECF no. 5-2 at 97) Hillside was granted possession of the premises.

         Smith appealed to the New Jersey Superior Court, Appellate Division. (Notice of Appeal, ECF no. 5-2 at 99) To look ahead a bit, the Appellate Division ultimately reversed the LT Judgment. See Section I.D, infra.

         C. The Detainer Matter-Phase 2

         The Detainer Matter, as noted above, was left open so that Hillside could pursue its claim for damages. The record of what happened next in the Detainer Matter, at least as presented by the parties, is sparse. In particular, the papers seem to lack a copy of the judgment in the Detainer Matter-the very judgment on which Hillside relies to foreclose the current action.

         This much can be gathered. In the Detainer Matter, Hillside pursued a claim for damages based on damage to the apartment during Ms. Smith's tenancy. After a two-day trial concluding on January 6, 2016, the Hon. James X. Sattely, J.S.C., dismissed Hillside's case for failure of proof. (See Decision of Judge Sattely regarding attorneys' fees, dated Jan. 28, 2016, ECF no. 7-2 at 3)

         D. Appeal of the LT Matter

         As noted above, Ms. Smith appealed from the judgment of eviction in the LT Matter. The Appellate Division reversed Judge Rosa's judgment awarding possession to Hillside. Hillside Village v. Smith, 2017 WL 412803 (Jan. 31, 2017) (Copy of decision, ECF no. 5-2 at 61).

         The Notice to Quit, the Appellate Division held, was defective, and did not create jurisdiction in the trial court. The Notice cited hoarding and unsanitary conditions, but did not specify any damage that Smith had caused to the apartment. In particular, it did not specify the damage-structural damage, broken faucets, collapsed cabinets, and so on-to which the witnesses testified at trial.[6] Nor did the trial court make the necessary findings that the damage resulted from Ms. Smith's willful or grossly negligent conduct. 2017 WL 412803 at *6.

         The Appellate Division vacated the judgment of possession and remanded for entry of an order dismissing the LT Complaint with prejudice. The court noted that Hillside had left the apartment vacant and had not performed any repairs for more than a year. It stated that "[s]ince the judgment of possession has now been vacated, we expect that [Hillside] will promptly make the necessary repairs and restore [Smith] to possession of the apartment." 2017 WL 412803 at *6 n.7. That allegedly has not occurred, "promptly" or otherwise.

         E. The Complaint in this Federal Action

         On February 9, 2017, Ms. Smith filed the complaint in this federal action. It asserts claims under the federal Fair Housing Act ("FHA"), 42 U.S.C. § 3613(c), and the New Jersey Law Against Discrimination ("NJLAD"), N.J. Stat. Ann. §§ 10:5-4 et seq. ...

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