NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ."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-3697-22
CHARLOTTE WALLACE AND THE CHARLOTTE HAMILTON WALLACE EDUCATION TRUST,
Plaintiffs-Respondents,
v.
MERRICK WILSON,
Defendant-Appellant. ___________________________
Submitted March 4, 2025 – Decided July 1, 2025
Before Judges Gilson and Bishop-Thompson.
On appeal from the Superior Court of New Jersey, Law Division, Mercer County, Docket No. L-0578-21.
Merrick Wilson, appellant pro se.
Respondents have not filed a brief.
PER CURIAM In this landlord-tenant dispute, defendant landlord Merrick Wilson
appeals from two May 26, 2023 Law Division orders, which granted summary
judgment to plaintiffs tenants Charlotte Wallace and the Charlotte Hamilton
Wallace Education Trust (collectively, Wallace), and denied his cross-motion to
amend his counterclaims. We affirm.
I.
We derive the following facts from evidence submitted by the parties in
support of, and in opposition to, the summary judgment motion. We view those
facts in the light most favorable to defendant, the non-moving party. Crisitello
v. St. Theresa Sch., 255 N.J. 200, 218 (2023) as revised (Aug. 14, 2023).
Wilson, who owns a home in Princeton, entered into a residential lease
agreement with plaintiffs Charlotte Wallace and seven other co-tenants. The
tenants were all college students and none of them were full-time New Jersey
residents. The tenants agreed to lease the home for $12,000 per month from
August 22, 2020, through November 21, 2020, and they paid an $18,000 security
deposit. On August 28, 2020, an additional tenant, also not a full-time New
Jersey resident, was added to the lease, and paid a security deposit of $1,300
and additional monthly rent of $900.
A-3697-22 2 Paragraph 6 of the lease stated: "Landlord shall comply with the Rent
Security Deposit Act (SDA), N.J.S.A. 46:8-19 [to -26], unless [the lease] [was]
for . . . a seasonal tenancy of not more than 125 consecutive days. Any attempt
to waive the requirements of the [SDA] is prohibited and void as a matter of
law." The lease further provided that "[t]he [s]ecurity [d]eposit may not be used
by the Tenant for the payment of rent without the written consent of the
[l]andlord."
Shortly after the onset of the COVID-19 pandemic, Governor Philip F.
Murphy issued Executive Order 128 (EO128) on April 24, 2020, permitting
residential tenants in New Jersey to apply their security deposits to pay rent.
N.J. Exec. Order. No. 128 (April 24, 2020); Exec. Order No. 128 ¶ 1, 52
N.J.R.1043(a). EO 128 provided:
Upon written request from a tenant, including electronic communication, a security deposit governed by the provisions of [the SDA] . . . shall be applied to or credited towards rent payments due or to become due from the tenant during the Public Health Emergency established in Executive Order No. 103 (2020) or up to [sixty] days after the Public Health Emergency terminates.
[Id.]
Wallace and the eight other co-tenants paid their rent in full during the
three-month lease. Wallace, pursuant to EO128, applied $1,450 of her security
A-3697-22 3 deposit to pay for her last month's rent. One other tenant paid Wilson $900 for
"an outstanding rental obligation" for October 2020; however, because Wilson
had already collected the rent, the payment constituted an overpayment. Wilson
refused to return the overpayment.
All tenants vacated the home, leaving it in broom swept condition and free
of damage beyond ordinary wear and tear. Nevertheless, Wilson refused to
return the remaining $17,850 security deposit within thirty days of the
termination of the lease. The remaining security deposit of $17,850 was based
on the original deposit of $18,000, plus the additional deposit of $1,300, less the
$1,450 applied to the last month's rent. The eight co-tenants assigned their rights
and securities, including the overpayment, to Wallace.
Thereafter, in March 2021, Wallace filed a complaint in the Law Division
seeking damages for the security deposit, the overpayment, and attorney's fees.
In April 2021, Wilson filed an answer and counterclaim alleging Wallace: (1)
caused $32,675 in "extensive" damages; (2) did not pay the October rent; (3) did
not pay the late penalty fees; (4) slandered his reputation to real estate agents
and prospective tenants, preventing futures leases or sales; and (5) could not sue
on behalf of the other tenants. Wilson also alleged that the seasonal lease was
not covered by the SDA.
A-3697-22 4 Wilson did not provide complete answers to interrogatories or produce
any documents during the discovery period. Instead, he responded: "[T]o be
provided in the future." After receiving Wallace's ten-day demand letter, Wilson
failed to cure the deficient interrogatory responses or provide the outstanding
documents. Neither party moved to extend discovery.
Following the close of discovery, Wallace moved for summary judgment.
Wallace argued the tenants paid the security deposit and monthly rents under
the Lease, and Wilson failed to return the security deposit and the overpayment.
Wallace further argued defendant was unable to establish tenants damaged the
home, given the "complete absence of documents, witnesses, or other evidence."
Accordingly, Wallace contended that under N.J.S.A. 46:8-21.1, they were
entitled to double their $17,850 security deposit, resulting in a damage claim of
$35,700.
In opposition to Wallace's motion, Wilson filed a counterstatement of
material facts, but it contained no citations to the record. He also alleged, for
the first time, that plaintiffs failed to pay a $1,350 water bill. Wilson attached
numerous exhibits in support of his claims, but none of those exhibits had been
produced in discovery. In September 2022, he also cross-moved to amend his
A-3697-22 5 counterclaim and answer, alleging common law fraud and violations of the
Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -224.
Following oral argument on May 26, 2023, the trial court granted
Wallace's motion for summary judgment. In rendering an oral decision, the
court determined there was no genuine issues of material fact regarding the
application of the SDA. The court point out that the reference in the SDA
regarding seasonal lease of less than 125 days, related to putting the security
deposit into an interest-bearing bank account. The trial court then reasoned that
the "carve out" for the placement of the security deposit in an interest-bearing
account did not relieve the landlord of the obligation to return the security
deposit within thirty days.
The court rejected Wilson's argument that EO 128 did not allow the out-
of-state tenants to apply their security deposit to pay rent. The court explained
that "there [was] nothing in any of those five operative paragraphs [of the
Executive Order] that impose any kind of means testing . . . or residency
requirements [to use the security deposit to pay the last month's rent]."
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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-3697-22
CHARLOTTE WALLACE AND THE CHARLOTTE HAMILTON WALLACE EDUCATION TRUST,
Plaintiffs-Respondents,
v.
MERRICK WILSON,
Defendant-Appellant. ___________________________
Submitted March 4, 2025 – Decided July 1, 2025
Before Judges Gilson and Bishop-Thompson.
On appeal from the Superior Court of New Jersey, Law Division, Mercer County, Docket No. L-0578-21.
Merrick Wilson, appellant pro se.
Respondents have not filed a brief.
PER CURIAM In this landlord-tenant dispute, defendant landlord Merrick Wilson
appeals from two May 26, 2023 Law Division orders, which granted summary
judgment to plaintiffs tenants Charlotte Wallace and the Charlotte Hamilton
Wallace Education Trust (collectively, Wallace), and denied his cross-motion to
amend his counterclaims. We affirm.
I.
We derive the following facts from evidence submitted by the parties in
support of, and in opposition to, the summary judgment motion. We view those
facts in the light most favorable to defendant, the non-moving party. Crisitello
v. St. Theresa Sch., 255 N.J. 200, 218 (2023) as revised (Aug. 14, 2023).
Wilson, who owns a home in Princeton, entered into a residential lease
agreement with plaintiffs Charlotte Wallace and seven other co-tenants. The
tenants were all college students and none of them were full-time New Jersey
residents. The tenants agreed to lease the home for $12,000 per month from
August 22, 2020, through November 21, 2020, and they paid an $18,000 security
deposit. On August 28, 2020, an additional tenant, also not a full-time New
Jersey resident, was added to the lease, and paid a security deposit of $1,300
and additional monthly rent of $900.
A-3697-22 2 Paragraph 6 of the lease stated: "Landlord shall comply with the Rent
Security Deposit Act (SDA), N.J.S.A. 46:8-19 [to -26], unless [the lease] [was]
for . . . a seasonal tenancy of not more than 125 consecutive days. Any attempt
to waive the requirements of the [SDA] is prohibited and void as a matter of
law." The lease further provided that "[t]he [s]ecurity [d]eposit may not be used
by the Tenant for the payment of rent without the written consent of the
[l]andlord."
Shortly after the onset of the COVID-19 pandemic, Governor Philip F.
Murphy issued Executive Order 128 (EO128) on April 24, 2020, permitting
residential tenants in New Jersey to apply their security deposits to pay rent.
N.J. Exec. Order. No. 128 (April 24, 2020); Exec. Order No. 128 ¶ 1, 52
N.J.R.1043(a). EO 128 provided:
Upon written request from a tenant, including electronic communication, a security deposit governed by the provisions of [the SDA] . . . shall be applied to or credited towards rent payments due or to become due from the tenant during the Public Health Emergency established in Executive Order No. 103 (2020) or up to [sixty] days after the Public Health Emergency terminates.
[Id.]
Wallace and the eight other co-tenants paid their rent in full during the
three-month lease. Wallace, pursuant to EO128, applied $1,450 of her security
A-3697-22 3 deposit to pay for her last month's rent. One other tenant paid Wilson $900 for
"an outstanding rental obligation" for October 2020; however, because Wilson
had already collected the rent, the payment constituted an overpayment. Wilson
refused to return the overpayment.
All tenants vacated the home, leaving it in broom swept condition and free
of damage beyond ordinary wear and tear. Nevertheless, Wilson refused to
return the remaining $17,850 security deposit within thirty days of the
termination of the lease. The remaining security deposit of $17,850 was based
on the original deposit of $18,000, plus the additional deposit of $1,300, less the
$1,450 applied to the last month's rent. The eight co-tenants assigned their rights
and securities, including the overpayment, to Wallace.
Thereafter, in March 2021, Wallace filed a complaint in the Law Division
seeking damages for the security deposit, the overpayment, and attorney's fees.
In April 2021, Wilson filed an answer and counterclaim alleging Wallace: (1)
caused $32,675 in "extensive" damages; (2) did not pay the October rent; (3) did
not pay the late penalty fees; (4) slandered his reputation to real estate agents
and prospective tenants, preventing futures leases or sales; and (5) could not sue
on behalf of the other tenants. Wilson also alleged that the seasonal lease was
not covered by the SDA.
A-3697-22 4 Wilson did not provide complete answers to interrogatories or produce
any documents during the discovery period. Instead, he responded: "[T]o be
provided in the future." After receiving Wallace's ten-day demand letter, Wilson
failed to cure the deficient interrogatory responses or provide the outstanding
documents. Neither party moved to extend discovery.
Following the close of discovery, Wallace moved for summary judgment.
Wallace argued the tenants paid the security deposit and monthly rents under
the Lease, and Wilson failed to return the security deposit and the overpayment.
Wallace further argued defendant was unable to establish tenants damaged the
home, given the "complete absence of documents, witnesses, or other evidence."
Accordingly, Wallace contended that under N.J.S.A. 46:8-21.1, they were
entitled to double their $17,850 security deposit, resulting in a damage claim of
$35,700.
In opposition to Wallace's motion, Wilson filed a counterstatement of
material facts, but it contained no citations to the record. He also alleged, for
the first time, that plaintiffs failed to pay a $1,350 water bill. Wilson attached
numerous exhibits in support of his claims, but none of those exhibits had been
produced in discovery. In September 2022, he also cross-moved to amend his
A-3697-22 5 counterclaim and answer, alleging common law fraud and violations of the
Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -224.
Following oral argument on May 26, 2023, the trial court granted
Wallace's motion for summary judgment. In rendering an oral decision, the
court determined there was no genuine issues of material fact regarding the
application of the SDA. The court point out that the reference in the SDA
regarding seasonal lease of less than 125 days, related to putting the security
deposit into an interest-bearing bank account. The trial court then reasoned that
the "carve out" for the placement of the security deposit in an interest-bearing
account did not relieve the landlord of the obligation to return the security
deposit within thirty days.
The court rejected Wilson's argument that EO 128 did not allow the out-
of-state tenants to apply their security deposit to pay rent. The court explained
that "there [was] nothing in any of those five operative paragraphs [of the
Executive Order] that impose any kind of means testing . . . or residency
requirements [to use the security deposit to pay the last month's rent]."
As to Wilson's motion to amend his counterclaim to include the fraud
claim and CFA claim, the court concluded defendant's application was "far too
late." The court explained Wilson could have sought to reopen or extend
A-3697-22 6 discovery but failed to do so. Accordingly, the court dismissed Wilson's
counterclaims and denied his motion to amend his counterclaims.
The court entered judgment in favor of Wallace and against Wilson in the
amount of $35,700, excluding the $1,450 applied toward rent pursuant to EO
128, $900 for the overpayment, and reasonable attorney's fees. The trial court
also entered a separate order denying Wilson's motion to amend his
counterclaims.
II.
Wilson raises four arguments on appeal for our consideration. He argues
the trial court erred by (1) granting summary judgment and failing to recognize
his damage claim, (2) doubling the security deposit without considering
damages to offset the security deposit, (3) failing to recognize the seasonal lease
agreement, which was not subject to the SDA, (4) allowing Wallace to use the
security deposit to pay the October 2020 rent; (5) applying EO 128 to the lease;
(6) awarding reasonable attorney's fees; and (7) denying his request to amend
his counterclaims. Wallace did not file a respondent brief on this appeal.
A. The Summary Judgment in Favor of Wallace.
We review a trial court's grant of summary judgment de novo, applying
the same standard as the trial court. Thomas Makuch, LLC v. Twp. of Jackson,
A-3697-22 7 476 N.J. Super. 169, 184 (App. Div. 2023) (citing Branch v. Cream-O-Land
Dairy, 244 N.J. 567, 582 (2021)). That standard requires us to "determine
whether 'the pleadings, depositions, answers to interrogatories and admissions
on file, together with the affidavits, if any, show that there is no genuine issue
as to any material fact challenged and that the moving party is entitled to a
judgment or order as a matter of law.'" Branch, 244 N.J. at 582 (quoting R.
4:46-2(c)).
"Summary judgment should be granted . . . 'against a party who fails to
make a showing sufficient to establish the existence of an element essential to
that party's case, and on which that party will bear the burden of proof at trial.'"
Friedman v. Martinez, 242 N.J. 449, 472 (2020) (quoting Celotex Corp. v.
Catrett, 477 U.S. 317, 322 (1986)). We do not defer to the trial court's legal
analysis or statutory interpretation. RSI Bank v. Providence Mut. Fire Ins. Co.,
234 N.J. 459, 472 (2018); Perez v. Zagami, LLC, 218 N.J. 202, 209 (2014).
Having reviewed the record and law, we hold that Wallace was entitled to
summary judgment. The SDA requires a landlord to return a security deposit
within thirty days of the end of the lease unless certain offsets apply. N.J.S.A.
46:8-19. The SDA also requires the security deposit to be held in trust for the
tenants in an interest-bearing account, unless the lease is a seasonal lease for
A-3697-22 8 less than 125 days. N.J.S.A. 46:8-19 (d). Wilson relied on the 125-day
exception, but that exception did not apply to the deposit; rather it only allows
him not to hold the deposit in an interest-bearing account. Thus, the trial court
did not fail to consider the seasonal nature of the lease. Instead, it correctly
ruled that N.J.S.A. 46:8-19 (d) did not excuse Wilson from returning the deposit,
albeit without interest.
Wallace was also entitled to double the wrongfully withheld portion of the
security deposit under N.J.S.A. 46:8-21.1. That statutory section states in
relevant part: "In an action by a tenant … for the return of moneys due under
this section, the court upon finding for the tenant … shall award recovery of
double the amount of said moneys, together with full costs of any action and, in
the court's discretion, reasonable attorney's fees." Id.
Moreover, Wilson's other defenses were not supported by competent
evidence. Indeed, he failed to cite any competent evidence in his Rule 4:46-2(b)
response to the motion for summary judgment. The record also establishes that
he failed to meet his obligation as a landlord. Reilly v. Weiss, 406 N.J. Super.
71, 80-81 (App. Div. 2009). "Any deductions the landlord makes must be
'itemized,' and notice must be forwarded to the tenant." N.J.S.A. 46:8-21.1.
Wilson ultimately failed to meet his burden to show entitlement to all or some
A-3697-22 9 of the remaining security deposit. Hale v. Farrakhan, 390 N.J. Super. 335, 341
(App. Div. 2007); Veliz v. Meehan, 258 N.J. Super. 1, 5 (App. Div. 1992).
The trial court properly ruled "there was no genuine issues of material fact
regarding the application of the SDA[,]" notwithstanding the lease duration for
less than 125 days. The court further ruled the "carve out" for the placement of
the security deposit in an interest-bearing account did not relieve the landlord of
the obligation to return the security deposit within thirty days.
We agree with the judge's interpretations. See Kieffer v. Best Buy, 205
N.J. 213, 223 (2011) ("[W]e pay no special deference to the trial court's
interpretation and look at the contract with fresh eyes."); Fastenberg v.
Prudential Ins. Co. of Am., 309 N.J. Super. 415, 420 (App. Div. 1998)
("Interpretation and construction of a contract is a matter of law for the court
subject to de novo review."). Based on our de novo review, we see no error in
the trial court's legal conclusion that the SDA applied to the lease and Wallace
was entitled to the return of the security deposit. Hale, 390 N.J. Super. at 342-
43.
Wilson also argues Wallace was not permitted to use the security deposit
to pay the October 2020 rent under the terms of the lease. That argument,
however, is not supported by the law. In Kravtiz v. Murphy, we considered the
A-3697-22 10 constitutionality of EO 128 and held that EO 128 permitted residential tenants
to use their security deposit to pay rent during the COVID-19 emergency. 468
N.J. Super. 592 (App. Div. 2021). We reasoned that it was "one of many
measures meant to aid both the landlords and tenants to financially survive the
pandemic." Ibid.
The undisputed material facts support the trial court's finding that Wilson
wrongfully withheld the $17,850 remaining security deposit. Moreover, the trial
court correctly applied the SDA in doubling that amount and allowed for an
award of attorneys' fees. See Penbara v. Straczynski, 347 N.J. Super. 155, 160-
61 (App. Div. 2022) (holding tenants are entitled to doubling and attorneys' fees
for any portion of the security deposit which has been "wrongfully withheld").
B. Wilson's Motion to Amend.
We review a trial court's decision on a motion for leave to amend a
pleading for an abuse of discretion. "'Rule 4:9-1 requires that motions for leave
to amend be granted liberally' and that 'the granting of a motion to file an
amended [counterclaim] always rests in the court's sound discretion.'" Notte v.
Merchs. Mut. Ins. Co., 185 N.J. 490, 501 (2006) (quoting Kernan v. One
Washington Park Urb. Renewal Assocs., 154 N.J. 437, 456-57 (1998)).
A-3697-22 11 "An abuse of discretion 'arises when a decision is 'made without a rational
explanation, inexplicably departed from established policies, or rested on an
impermissible basis." Pitney Bowes Bank, 440 N.J. Super. at 382 (quoting Flagg
v. Essex Cnty. Prosecutor, 171 N.J. 561, 571 (2002)). "That exercise of
discretion requires a two-step process: whether the non-moving party will be
prejudiced, and whether granting the amendment would nonetheless be futile."
Notte, 185 N.J. at 501.
Having reviewed the record, we discern no abuse of discretion in the trial
court's denial of Wilson's motion for leave to amend. Wilson filed his cross-
motion to amend sixteen months after the filing of his answer and counterclaim
and after the completion of discovery. He provided no explanation for his delay
in seeking to amend his counterclaims. Moreover, he had failed to produce any
discovery and, therefore, he had no evidence to support his proposed claims of
fraud and a violation of the CFA. To allow Wilson to assert fraud and CFA
claims would cause undue delay and significant prejudice to Wallace. Thus, we
conclude the trial court properly denied Wilson's cross-motion to amend his
counterclaim and answer.
A-3697-22 12 To the extent that we have not addressed Wilson's remaining arguments,
we conclude they lack sufficient merit to warrant discussion in a written opinion.
R. 2:11-3(e)(1)(E).
Affirmed.
A-3697-22 13