CARMEL REALTY, INC. v. FAIRVIEW BERGEN ASSOCIATES, LLC (C-000173-19, BERGEN COUNTY AND STATEWIDE)

• Court: New Jersey Superior Court Appellate Division
• Decided: February 28, 2022
• Docket: A-0893-20
• Status: Unpublished

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-0893-20

CARMEL REALTY, INC.,

Plaintiff-Respondent/ Cross-Appellant,

v.

FAIRVIEW BERGEN ASSOCIATES, LLC, and JP MANAGEMENT, LLC,

Defendants-Appellants/ Cross-Respondents. ___________________________

Submitted February 17, 2022 – Decided February 28, 2022

Before Judges Haas and Mitterhoff.

On appeal from the Superior Court of New Jersey, Chancery Division, Bergen County, Docket No. C-000173-19.

Brach Eichler, LLC, attorneys for appellants/cross- respondents (Bob Kasolas, of counsel and on the briefs).

Barto & Barto, LLC, attorneys for respondent/cross- appellant (Raymond Barto, on the briefs). PER CURIAM

In this dispute over a lease involving twenty-eight parking spaces in an

apartment complex garage, defendants Fairview Bergen Associates, LLC (FBA)

and J.P. Management, LLC appeal from the Chancery Division's (1) April 17,

2020 order granting plaintiff Carmel Realty, Inc.'s cross-motion for partial

summary judgment and dismissing defendants' affirmative defenses; (2) June 9,

2020 order denying defendants' motion for reconsideration; and (3) Oct ober 22,

2020 final judgment in favor of plaintiff following a bench trial. Plaintiff cross -

appeals from the portion of the October 22, 2020 judgment that denied its

request for access to the parking spaces through all three doors of the garage.

After reviewing the record in light of the contentions the parties raise on appeal,

we affirm the three orders substantially for the reasons set forth in Judge James

J. DeLuca's comprehensive written decisions supporting each of his rulings.

The judge extensively detailed the underlying procedural history and facts

of this case in his three opinions. Therefore, we need only briefly summarize

this material here.

Joseph Berardo and Oded Aboodi were equal partners in two companies,

Crystal Lake, Inc. and Aras Properties, Inc. (Aras). Crystal Lake owned

commercial real property at 371 Bergen Boulevard in Fairview (the 371

A-0893-20 2 Property). Aras owned the property next door at 361 Bergen Boulevard (361

Property). Aras had retail space on the first floor of its building and three

residential apartments on the second floor.

On April 1, 1994, Crystal Lake agreed to lease Aras twenty-eight parking

spaces in a garage it was constructing, along with an apartment building, at the

371 Property. Aboodi signed the written lease as the president of both

companies. The lease term was ninety-nine years, and the annual rent was $1

per year. Aras also agreed to secure insurance for the parking spaces. The

companies filed a Memorandum of Lease documenting this arrangement with

the county clerk's office.

On July 21, 1994, Crystal Lake sold the 371 Property to a third party,

Fairview Associates 94 LP (Fairview 94). That company completed

construction of the apartment building and garage. At the beginning of the lease

term, Aras paid Fairview 94 the annual rent each year, but later simply paid the

rest of the rent for the lease term in a lump sum. Aras also obtained the required

insurance coverage each year.

Plaintiff asserted Aras used the parking spaces after Fairview 94 finished

the garage. Aras' employees parked in the garage and the company also stored

equipment and other materials in the leased area.

A-0893-20 3 The parking garage had three entrance doors. The lease did not designate

which entrance Aras was to use to access its spaces. The garage's main point of

ingress was through the "northern entrance." There was also a "southern

entrance," which was primarily used to admit vendors, and a side-street access

door known as the "Morningside Avenue entrance." Plaintiff claimed Aras had

a key permitting it to use the southern entrance, which was nearer to its

designated parking spaces than the northern entrance.

On May 31, 2001, Aboodi executed an "Assignment & Assumption

Agreement" on behalf of Aras that assigned the parking lease to plaintiff, a real

estate property company. Berardo was plaintiff’s president. On August 11,

2004, Aras conveyed the 361 Property to plaintiff.

After plaintiff obtained title to the 361 Property, it stored construction

materials and other items on the first floor and rented the three second-floor

apartments. Plaintiff continued to use some of the twenty-eight parking spaces

in the parking garage on the 371 Property and maintained the required insurance.

On November 1, 2018, Fairview 94 sold the 371 Property to defendant

FBA. According to FBA's managing member, John Pjeternikaj, defendants were

aware there was a lease in effect for the twenty-eight parking spaces when FBA

purchased the 371 Property. The Agreement of Sale had a copy of the April 1,

A-0893-20 4 1994 lease attached to it as an exhibit, and Fairview 94 "represent[ed] that the

Crystal/Aras Lease is currently in full force and effect, and there have been no

defaults by the Landlord under the Crystal/Aras Lease."

On behalf of plaintiff, Berardo also provided defendants and Fairview 94

with a Tenant Estoppel Certificate attesting that the lease was "in full force and

effect"; did not expire until March 31, 2093; and that the rent had already been

paid through that date. In addition, FBA stated it was "satisfied with the Parking

Lease Estoppel and layout of parking spaces subject thereto" in the First

Amendment to Agreement of Sale relating to its purchase.

After FBA became the landlord under the parking lease, plaintiff noticed

that unauthorized vehicles were parking in its spaces. It notified Pjeternikaj of

the problem, and FBA took immediate steps to correct it. Thereafter, plaintiff

asserted it continued to use the parking spaces and to enter the garage through

the southern entrance.

In March 2019, however, plaintiff claimed defendants changed the lock

on the southern entrance and its key no longer worked. Defendants denied

changing the lock but denied plaintiff's request to permit it to enter the garage

through the southern entrance. Plaintiff also discovered that defendants had

fenced off two of its parking spots and were using the spaces for storage.

A-0893-20 5 On July 3, 2019, plaintiff filed a complaint and order to show cause

against defendants seeking an order permitting it access to the garage and its

parking spaces through the southern entrance. Defendants responded by filing

a counterclaim for a declaratory judgment that the lease was void and

unenforceable and that plaintiff had surrendered or abandoned its rights under

it.1

Both parties subsequently filed motions for summary judgment. In his

April 17, 2020 decision, Judge DeLuca denied defendants' motion in its entirety

and plaintiff's motion to the extent it sought a final judgment against defendants

because a trial was needed to resolve the factual disputes raised by the parties.

However, the judge considered the merits of defendants' counterclaims and

affirmative defenses because these issues involved questions of law.

Defendants asserted the lease was not valid because it was not "the result

of arm's length transactions between Aras and Crystal Lake" and was not

"entered into for legal consideration." Defendants also argued the terms of the

lease were unconscionable and violated the statute of frauds and best evidence

rule. Judge DeLuca rejected each of these contentions.

1 Judge DeLuca ordered defendants to permit plaintiff to access the garage through the northern entrance during the pendency of the trial court litigation. A-0893-20 6 Addressing the propriety of the April 1, 1994 lease agreement between

Crystal Lake and Aras, the judge found that although the partners in each were

the same, the companies were separate legal entities. The judge stated:

The fact that such entities may have been owned . . . by the same individuals does not make the Parking Lease any more or less enforceable than if it had been entered into by entities controlled by different members or shareholders. Thus, this court rejects [d]efendants' argument that this was anything other than an arm's length transaction between two separate entities. Defendants provide no evidence, and only speculation, as to the bona fides of these entities.

Judge DeLuca also found the lease was supported by adequate

consideration. "Consideration is the price bargained for and paid for a promise."

Friedman v. Tappan Dev. Corp., 22 N.J. 523, 535 (1956). "Consideration may

take many forms and may be based upon either 'a detriment incurred by the

promisee or a benefit received by the promisor.'" Seaview Orthopaedics ex rel.

Fleming v. Nat'l Healthcare Res., Inc., 366 N.J. Super. 501, 508 (App. Div.

2004) (quoting Cont'l Bank of Pa. v. Barclay Riding Acad., Inc., 93 N.J. 153,

170 (1983)). In determining whether a contract should be enforced, the court

is not responsible for questioning the "adequacy of consideration" because

consideration is not dependent "upon the comparative value of the 'things'

exchanged." Id. at 508-09 (internal quotations omitted). Consideration "must

A-0893-20 7 merely be valuable in the sense that it is something that is bargained for in fact."

Id. at 509 (quoting Borbely v. Nationwide Mut. Ins. Co., 547 F. Supp. 959, 980

(D.N.J. 1981)).

Consistent with these principles, Judge DeLuca determined that Aras, and

later plaintiff, paid the required rent and provided the necessary insurance under

the lease. In return, Fairview 94 and defendants, as that company's successor,

provided the twenty-eight parking spaces to plaintiff.

While the annual rental fee was nominal, Judge DeLuca found the contract

was not unconscionable. The judge noted that defendants were fully aware of

the existence of the lease when FBA purchased the 371 Property from Fairview

94. The lease was a matter of public record because it was filed with the county

clerk. In addition, plaintiff provided defendants with a Tenant Estoppel

Certificate attesting to the fact that the agreement was in full force and effect.

FBA and Fairview 94 even attached the lease to their contract of sale, and FBA

stated in the first amendment to the contract that it was satisfied with the

estoppel document and the layout of the parking spaces. Based upon these

undisputed facts, the judge found no basis for defendants' claim that the terms

of the lease were unconscionable.

A-0893-20 8 Judge DeLuca also rejected defendants' argument that the lease should be

declared void under the statute of frauds and barred from evidence by the best

evidence rule because plaintiff could only produce a copy of it rather than the

original. The judge found the terms of the lease were well known to the parties

and had been in effect since 1994. As noted above, the lease was recorded with

the county clerk and Pjeternikaj admitted he was aware of the lease at the time

FBA bought the 371 Property. There was therefore no genuine question raised

as to the authenticity of the lease agreement that would require it to be voided

or barred from evidence.

Defendants thereafter filed a motion for reconsideration, raising the exact

same arguments Judge DeLuca addressed in his April 17, 2020 decision. The

judge denied this motion because defendants did not show the prior rulings were

palpably incorrect or that the court failed to consider or appreciate the

significance of defendants' arguments or the evidence they presented in the prior

proceeding.

Judge DeLuca then conducted a trial on the remaining issues in dispute

and heard testimony from six witnesses, including Berardo and Pjeternikaj.

Based upon his review of that testimony and the documentary evidence, the

judge found no evidence that plaintiff ever intended to abandon or surrender its

A-0893-20 9 right to the twenty-eight parking spaces under the lease. Plaintiff paid the rent

due on the lease in full and maintained the required insurance. It prepared a

Tenant Estoppel Certificate, provided defendants with a list of the cars

authorized to park in the spaces, objected when defendants permitted other

individuals to use the spaces, and filed a lawsuit to enforce the terms of the lease

when the dispute could not be resolved.

Finally, Judge DeLuca rejected plaintiff's claim that it was entitled to

access the garage through the southern entrance. The judge found the lease

agreement was silent on the question of the appropriate way to enter the garage.

The judge determined the northern entrance was the main means of ingress for

the garage and served as a security checkpoint. On the other hand, the southern

entrance was at the end of a one-lane alley and could only accommodate one car

at a time. Defendants used the Morningside Avenue entrance almost exclusively

to move trash containers to the street for collection. Under these circumstances,

the judge concluded plaintiff could continue to enter the garage only through the

northern entrance.

On appeal, defendants raise the same contentions Judge DeLuca

painstakingly considered and resolved in his lengthy written decisions.

Defendants again assert "the parking lease is invalid and unenforceable" and that

A-0893-20 10 plaintiff's claim to the parking spaces "is barred by the statute of frauds [and

the] best evidence rule." Defendants also argue plaintiff "abandoned and

surrendered the parking spaces" and that the judge did not consider all of the

evidence it presented on these issues. In its cross-appeal, plaintiff repeats its

contention that its access to the garage should not be limited to the northern

entrance. We discern no basis for disturbing Judge DeLuca's rejection of these

claims.

With regard to Judge DeLuca's April 17, 2020 order, our review of a ruling

on summary judgment is de novo, applying the same legal standard as the trial

court, namely, the standard set forth in Rule 4:46-2(c). Conley v. Guerrero, 228

N.J. 339, 346 (2017). Thus, we consider, as Judge DeLuca did, whether "the

competent evidential materials presented, when viewed in the light most

favorable to the non-moving party, are sufficient to permit a rational factfinder

to resolve the alleged disputed issue in favor of the non-moving party." Town

of Kearny v. Brandt, 214 N.J. 76, 91 (2013) (quoting Brill v. Guardian Life Ins.

Co. of Am., 142 N.J. 520, 540 (1995)).

If, as here, there is no genuine issue of material fact, we must then "decide

whether the trial court correctly interpreted the law." Dickson v. Cmty. Bus

Lines, 458 N.J. Super. 522, 530 (App. Div. 2019) (citing Prudential Prop. & Cas.

A-0893-20 11 Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div. 1998)). We accord no

deference to the trial judge's conclusions of law and review these issues de novo.

Nicholas v. Mynster, 213 N.J. 463, 478 (2013). However, this court should

affirm the judgment if it concludes that the trial court's conclusions of law were

correct. Henry v. N.J. Dept. of Human Servs., 204 N.J. 320, 330 (2010).

We review Judge DeLuca's June 9, 2020 order denying defendants' motion

for reconsideration to determine whether the judge abused his discretionary

authority. Cummings v. Bahr, 295 N.J. Super. 374, 389 (App. Div. 1996).

Reconsideration should only be used "for those cases which fall into that narrow

corridor in which either 1) the [c]ourt has expressed its decision based upon a

palpably incorrect or irrational basis, or 2) it is obvious that the [c]ourt either

did not consider, or failed to appreciate the significance of probative, competent

evidence . . . .” Id. at 384 (quoting D’Atria v. D’Atria, 242 N.J. Super. 392, 401

(Ch. Div. 1990)).

Finally, our review of Judge DeLuca's fact-finding following the bench

trial on the issues of whether plaintiff abandoned or surrendered its right to the

parking spaces and whether plaintiff could access the garage through the

southern or Morningside Avenue entrances is limited. Seidman v. Clifton Sav.

Bank, S.L.A., 205 N.J. 150, 169 (2011). "The general rule is that findings by

A-0893-20 12 the trial court are binding on appeal when supported by adequate, substantial,

credible evidence." Ibid. (quoting Cesare v. Cesare, 154 N.J. 394, 411-12

(1998)). However, we owe no deference to a trial court's interpretation of the

law, and review issues of law de novo. Mountain Hill, L.L.C. v. Twp. Comm.

of Middletown, 403 N.J. Super. 146, 193 (App. Div. 2008).

Applying these standards, we conclude that Judge DeLuca's factual

findings are fully supported by the record and, in light of those findings, his

legal conclusions are unassailable. We therefore affirm substantially for the

reasons that the judge expressed in his well-reasoned opinions.

Affirmed.

A-0893-20 13