HILTON APARTMENTS, LLC VS. KATIE L. GOITEIN (L-1193-17, MERCER COUNTY AND STATEWIDE)

New Jersey Superior Court Appellate Division·Decided November 10, 2020·No. A-0796-18T2·Unpublished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NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ."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-0796-18T2

HILTON APARTMENTS, LLC, Plaintiff-Respondent v. KATIE L. GOITEIN, Defendant-Appellant and

KATIE L. GOITEIN, on behalf of herself and all similarly situated past and present tenants of HILTON APARTMENTS, LLC,

Third-Party Plaintiff/ Cross-Respondent

v. HILTON APARTMENTS, LLC,

Third-Party Defendant/ Cross-Appellant.

Argued October 13, 2020 – Decided November 10, 2020

Before Judges Rothstadt and Mayer.

On appeal from the Superior Court of New Jersey, Law Division, Mercer County, Docket No. L-1193-17.

Roger C. Martindell argued the cause for appellant/ cross-respondent (Roger C. Martindell, and Quainton Law, PLLC, attorneys; Roger C. Martindell and Eden P. Quainton, on the briefs).

Andrew J. Schragger argued the cause for respondent/cross-appellant.

PER CURIAM Defendant/third-party plaintiff Katie L. Goitein, on behalf of herself and all similarly situated tenants of plaintiff/third-party defendant Hilton Apartments, LLC, appeals from a September 26, 2018 order denying her motion for reconsideration of a July 24, 2018 order and her cross-motion for attorney's fees and costs. The July 24, 2018 order granted summary judgment to plaintiff in the amount of $894.69, dismissed defendant's counterclaim and third-party complaint, and denied defendant's request to compel and extend discovery. Plaintiff cross-appeals from the same September 26, 2018 order denying its motion for attorney's fees and costs. We affirm the entry of summary judgment in favor of plaintiff on the issue of liability and dismissing defendant's counterclaim and third-party complaint. However, we remand for the judge to

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enter an amended judgment as to the amount owed by defendant in accordance with this opinion.1 We reverse and remand the order denying the parties' requests for attorneys' fees and costs.

This matter arises from defendant's automatic renewal of a written lease agreement (lease) on May 1, 2016 for rental of an apartment in a complex owned by plaintiff. In accordance with the renewal, the lease term ran until April 30, 2017. However, on August 25, 2016, defendant gave written notice to plaintiff that she was terminating the lease and vacating the apartment the next day.2 Pursuant to the lease, defendant was required to provide two months' written notice to plaintiff of an intent to terminate the lease and vacate the apartment. On August 25, 2016, plaintiff sent a letter to defendant describing two options to resolve her early termination and breach of the lease. Defendant did not respond to plaintiff's letter.

In August 2016, plaintiff sought a new tenant to rent defendant's apartment. Plaintiff secured a new tenant, who entered into a written lease on

1 Defendant paid the judgment amount in full. However, her payment was "subject to and conditioned upon the outcome of the pending appeal and/or any proceeding that may take place on remand from [her] appeal." 2 According to plaintiff, defendant physically vacated the apartment on August 31, 2016.

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October 12, 2016, and took possession of defendant's former apartment on October 26, 2016.

Plaintiff then pursued damages from defendant for breach of the lease, including lost rent, 3 costs associated with re-renting the apartment, and attorney's fees and costs. Plaintiff applied defendant's security deposit , $1,605.80, to the amount it claimed due and owing as a result of defendant's early termination and breach of the lease.

In addition to lost rent, plaintiff demanded defendant pay damages associated with her breach of the lease. Plaintiff's damages included the following expenses: painting, cleaning, installing a new lockset and toilet seat; labor costs associated with the work done to the apartment after defendant vacated; and an administrative fee. Plaintiff stated these additional damages , when coupled with the lost rent, totaled $3,629.54.

When defendant failed to pay the amount demanded, plaintiff filed a lawsuit in the Special Civil Part. 4 In response, defendant filed an answer,

3 Plaintiff calculated lost rent in the amount of $2,256 ($1,128 for the months of September and October). 4 In the Special Civil Part complaint, plaintiff demanded the sum of $3,945.25, excluding attorney's fees, filing fee, and service fee.

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counterclaim, and third-party complaint. In her pleadings, defendant focused on plaintiff's enforcement of Paragraph 13 of the lease, which she claimed was an illegal liquidated damages clause. Defendant requested the matter be transferred to the Law Division because her pleadings included claims for violations of the New Jersey Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -224, the New Jersey Truth-in-Renting Act, N.J.S.A. 46:8-43 to -50, and the New Jersey Security Deposit Law, N.J.S.A. 46:8-19 to -26, and other relief. In her third-party complaint, defendant sought class certification on behalf of current and former tenants of plaintiff's apartment complex, asserting the same causes of action set forth in her counterclaim. By way of the third-party pleading, defendant sought to enjoin plaintiff and affiliated apartment complexes5 from enforcing Paragraph 13 of the lease as an improper penalty clause.

The matter was transfer to the Law Division and defendant was allowed to conduct discovery in support of class certification. After the close of discovery, plaintiff moved for summary judgment. In opposing summary

5 The affiliated apartment complexes operated under different corporate designations and were located in other municipalities.

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judgment, defendant argued Paragraph 13 was illegal and plaintiff improperly sought liquidated damages as a penalty for her early termination of the lease.

In a July 24, 2018 order, incorporating reasons placed on the record on June 22, 2018, the motion judge granted summary judgment to plaintiff and dismissed defendant's counterclaim and third-party class action complaint. The judge found plaintiff sought to recover actual damages rather than damages pursuant to Paragraph 13 of the lease.6 Regarding the third-party class action complaint, the judge held there was "no class, discovery [was] over, and bare conclusions without factual support [could not] defeat a motion for summary judgment." The judge deemed defendant's class action suit moot because in "the interest of justice and in preserving judicial resources, courts such as this one do not attempt to resolve legal issues in the abstract." Because Paragraph 13 was modified before

6 While Paragraph 13 was included in defendant's May 2016 lease renewal, plaintiff's counsel notified defense counsel that plaintiff stopped enforcing Paragraph 13 in November 2015. As of 2015, plaintiff used a new lease form that modified Paragraph 13, clarifying the rights of the tenant and the landlord in accordance with statutory law and allowing the tenant to select one of two payment options in the event of the tenant's breach of the lease agreement. Plaintiff informed the motion judge that Paragraph 13 in defendant's original lease was not the basis for its calculation of damages. Rather, plaintiff confirmed it was seeking actual damages attributable to defendant's breach of the lease.

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HILTON APARTMENTS, LLC VS. KATIE L. GOITEIN (L-1193-17, MERCER COUNTY AND STATEWIDE) (HILTON APARTMENTS, LLC VS. KATIE L. GOITEIN (L-1193-17, MERCER COUNTY AND STATEWIDE)) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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