De La Cruz v. Cohen (In Re Cohen)

185 B.R. 180, 1995 Bankr. LEXIS 1082, 1995 WL 468445
CourtUnited States Bankruptcy Court, D. New Jersey
DecidedJune 19, 1995
Docket08-30632
StatusPublished
Cited by14 cases

This text of 185 B.R. 180 (De La Cruz v. Cohen (In Re Cohen)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
De La Cruz v. Cohen (In Re Cohen), 185 B.R. 180, 1995 Bankr. LEXIS 1082, 1995 WL 468445 (N.J. 1995).

Opinion

OPINION

ROSEMARY GAMBARDELLA, Bankruptcy Judge.

The matter before the Court is to determine damages in the instant adversary proceeding. The following constitutes the Court’s findings of fact and conclusions of law.

Facts

On November 12, 1993, the Court conducted a trial in the matter of Hilda De La Cruz et al. v. Edward S. Cohen, Adv. No. 91-2094.

On October 24, 1994, the Court issued a written opinion, 185 B.R. 171 (the “Opinion”), 1 rendering the debt in question nondis-chargeable under § 523(a)(2)(A). As to damages, the Court noted that a hearing would be held to make the determination on the amount.

For purposes of the damages hearing, the following parts of the Opinion are pertinent:

*182 (i) None of the Plaintiffs were born in the continental United States or spoke English as their native language or graduated college, see Opinion, at pp. 173-74;
(ii) The parties agreed that the written record of the Hoboken Rent Leveling Board represents the determination that the Board made with respect to the alleged rental overcharges, see id., at p. 175;
(iii) Section 523(a)(2)(A) requires proof of actual fraud, which meant that Plaintiffs had to establish by a preponderance of the evidence that: (1) Edward S. Cohen (the “Debtor”) obtained money, property or services through a material misrepresentation; (2) the Debtor, at the time of the transaction, had knowledge of the falsity of the misrepresentation or reckless disregard or gross recklessness as to its truth; (3) the Debtor made the misrepresentation with intent to deceive; (4) the Plaintiffs reasonably relied on the representation; and (5) the Plaintiffs suffered loss, which was proximately caused by the Debtor’s conduct; see id., at p. 177.

The Court ruled the debt in question non-dischargeable under § 523(a)(2)(A) because the Court found, inter alia, that: (i) the Debtor made a misrepresentation regarding the amount of rent, see id., at p. 177; (ii) the Plaintiffs reasonably relied on the representation that the amount of rent they were asked to pay was within the bounds of the law, see id., at p. 177; and (iii) the Debtor’s reckless disregard for the truth satisfied both the knowledge and intent to deceive elements of actual fraud, see id., at pp. 178-79.

On December 9, 1994, the Plaintiffs filed a brief with respect to damages (“Plaintiffs Brief’). Firstly, the Plaintiffs note that there is a dispute as to the total amount of rent the Plaintiffs paid, and thus, the total overpayment. See Plaintiffs Brief, at 1. The Plaintiffs, however, concede that the amount should be reduced and have attached a table setting forth the reduced calculations. See id., at 1-2 and Appendix A (damages table).

The Plaintiffs argue that the principle legal issue is the applicability of the New Jersey Consumer Fraud Act (the “Act”). 2 The Act provides for imposition of treble damages for violations of the Act. The Plaintiffs contend that the Act is applicable to the instant case, and therefore, ask this Court to award them treble the amount of the overpayments.

On March 17,1995, the Debtor submitted a brief with respect to damages (“Debtor’s Damages Brief’). First, the Debtor argues that the overpayment calculation previously determined by the Hoboken Rent Leveling Board (the “Board”) was in error. Next, the Debtor asserts that the “sole legal issue” before the Court is the applicability of the Act. Id. The Debtor argues that the Act is inapplicable for the following two reasons: (1) the Act has not been applied to landlord-tenant matters where the violation involves excessive rents charged in violation of a rent control ordinance; and (2) the Plaintiffs cannot establish the elements of fraud under the Act.

On March 27,1995, a hearing was conducted on these issues. At the hearing, the parties submitted a Stipulation As To Rental Overpayments that was dated March 21, 1995. The Stipulation provided, in pertinent part, that:

... the determination of the Hoboken Rent Leveling Administrator shall be adjusted to reflect the following overpay-ments:
*183 Plaintiff Corrected Overcharge Determination
Nelfo C. Jimenez $ 5,681.50
Elvia Siguenzia $ 3,319.00
Hilda De La Cruz $ 5,048.00
Maria Morales $ 5,310.00
Hector Santiago $ 5,975.00
Santia Santos $ 728.00
Gloria Sandoval $ 5,321.00
Enilda Tirado $ -0-
Total $81,382.50

See Stipulation dated March 21, 1995, filed March 27, 1995, at ¶ 6.

Due to the Stipulation, the only remaining issue before the Court was the applicability of the Act and the Court reserved decision on the matter.

Discussion

I. The Act Can Be Applied To the Rental Of Residential Apartments

N.J.S.A. 56:8-2 reads in pertinent part:

The act, use or employment by any person of any unconscionable commercial practice, deception, fraud, false pretense, false promise, misrepresentation, or the knowing, concealment, suppression or omission of any material fact with intent that others rely upon such concealment, suppression or omission, in connection with the sale or advertisement of any merchandise or real estate, or with the subsequent performance of such person as aforesaid, whether or not any person has in fact been misled, deceived, or damaged thereby, is declared to be an unlawful practice; ...

N.J.S.A. 56:8-2. The statutory language of N.J.S.A 56:8-2 encompasses the landlord-tenant relationship. 49 Prospect St. Tenants Ass’n. v. Sheva Gardens, Inc., 227 N.J.Super. 449, 461-69, 547 A.2d 1134 (App.Div.1988); see also, 316 49 St. Assoc. Ltd., Partnership v. Galvez, 269 N.J.Super. 481, 491-92, 635 A.2d 1013 (App.Div.1994), cert. denied, 137 N.J. 164, 644 A.2d 612 (1994). 3 Specifically, the Sheva court extended the definition of “sellers” and “consumers” to include landlords and tenants when the landlord is engaged in the “sale” or commercial enterprise of rental of real estate. Id. The Sheva

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Cite This Page — Counsel Stack

Bluebook (online)
185 B.R. 180, 1995 Bankr. LEXIS 1082, 1995 WL 468445, Counsel Stack Legal Research, https://law.counselstack.com/opinion/de-la-cruz-v-cohen-in-re-cohen-njb-1995.