WALLINGTON PLAZA, LLC v. MICHAEL TAHER

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-4122-09T1

WALLINGTON PLAZA, LLC,

Plaintiff-Appellant,

v.

MICHAEL TAHER,

Defendant-Respondent,

and

LISA TAHER,

Defendant.

______________________________

Telephonically argued February 3, 2011 Decided July 7, 2011

Before Judges Fuentes and Gilroy.

On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-9506-08.

Santo T. Alampi argued the cause for appellant (Alampi & DeMarrais, attorneys; Mr. Alampi, on the brief).

Santo J. Bonanno argued the cause for respondent.

PER CURIAM

Plaintiff Wallington Plaza, LLC, appeals from the May 4, 2010 judgment entered against defendant Michael Taher in the amount of $2,684.28, together with prejudgment interest. We affirm as modified infra, and remand for entry of a corrected order of judgment.

Plaintiff is the owner of a small commercial shopping center in Wallington that contained fourteen retail stores. On December 16, 1998, plaintiff entered into a written lease agreement with Abroad Unlimited Jewelry, Inc., as tenant, under which tenant leased a 1,400 square-foot store in the shopping center for a term of ten years, expiring March 31, 2009. Defendant Michael Taher, as owner of Abroad Unlimited, and defendant Lisa Taher, personally guaranteed the terms of the lease on behalf of tenant.1 On December 16, 2008, after tenant vacated the premises and defaulted in payment of rent, plaintiff filed a complaint against defendant seeking to collect six months' unpaid rent, including real property taxes and common area maintenance (CAM) charges under the guarantee. On May 7, 2009, defendant filed an answer and counterclaim alleging that plaintiff breached the lease by failing to maintain the shopping center.

The matter was tried to the court non-jury on April 22, 2010. At the conclusion of the trial, the court rendered an oral decision determining that plaintiff was entitled to a judgment in the amount of two months' rent, less the amount of the security deposit held by plaintiff. On May 4, 2010, the court entered an order of judgment memorializing its decision. It is from this order that plaintiff appeals.2

The only individuals who testified at trial were Arlene Faustini, plaintiff's bookkeeper; and defendant. We gather the following additional facts from the trial testimony and the exhibits introduced at trial. The lease provided that tenant would pay plaintiff a monthly base rent together with one-twelfth of tenant's pro-rata share of annual real estate taxes and CAM charges. The base rent during the tenth year was fixed at $3,501.14 per month and tenant's monthly share of the real estate taxes and CAM charges were $350 and $324 per month, respectively. On September 15, 2008, defendant sent tenant a letter advising that tenant was not going to renew the lease because defendant was moving his business to another location. Defendant requested plaintiff to "deduct the security deposit [of] $5,366.66 from the last two-month[s] of rent." In October 2008, without further notice to plaintiff, tenant vacated the premises without paying rent for the months of October, November and December 2008; and January, February and March 2009.

At trial, Faustini testified to the amount of unpaid rent claimed by plaintiff. Although the lease contained a provision requiring tenant to pay a late charge fee of 5% of any rent installment that remained unpaid beyond five days of its due date, Faustini did not testify to the amount of the late charge claimed, nor was a late charge included on plaintiff's accounts receivable ledger sheets introduced into evidence in support of the amount of rent claimed. According to Faustini, upon tenant vacating the store in October 2008, plaintiff engaged a real estate broker to re-let the premises, but was unsuccessful. However, Faustini did not testify to any specific actions the broker performed in an attempt to obtain a new lessee for the premises.

Prior to tenant executing the lease in December 1998, defendant had spoken with plaintiff's shopping center manager. Because the shopping center appeared to be "a first class place to conduct business," tenant entered into the lease for the purpose of operating a "quality jewelry" store. The term "quality jewelry" is defined in the lease as "jewelry which contains gold, silver, platinum, diamonds, and/or precious gems or minerals." Under the terms of the lease, tenant agreed to operate his business six days a week in a "first class and reputable manner," and that if it failed to open as agreed upon, it would pay plaintiff a $500 liquidated damage charge for each day the store was not open for business.

According to defendant, during the years immediately preceding tenant vacating the premises, the shopping center's parking lot fell into a state of disrepair. More importantly, many of the other stores in the shopping center closed and vacated the shopping center: a Rite-Aid Drug Store (formerly a Genovese Drug Store), a West Coast Video store, a Dollar Store, an A&P grocery store, and a Hallmark card store. As a result, defendant decided to relocate his jewelry business "because I . . . have no traffic of customer. I lost a lot of business, and I can't survive any more days in that location. I was the only one holding the flag for quite some time there, in this location." In October 2008, defendant relocated his jewelry store to an adjoining municipality, paying substantially more rent.

At the conclusion of the trial, the court determined that plaintiff breached its implied covenant to operate a "first-class" shopping center. The court concluded that while the lease obligated tenant to "only sell quality jewelry," it also imposed "a responsibility" on the landlord "to keep the premises in a reasonable condition as a tenant would expect, if he had to operate a first-class business to make respective customers welcome." The court reasoned that plaintiff had breached the implied covenant to maintain the shopping center in a good condition:

It is without question that the shopping center and the parking lot as viewed by this court [are] deplorable. The parking lot has no parking space white lines. The parking lot is uneven. There is grass growing all throughout the broken concrete of the parking lot. The store themselves have vacant signs in front of them. It is not an appealing strip mall. And certainly not one that someone would say would be a "first[-]class strip mall."

There[ are] a number of vacancy signs and [the] general condition of the mall is far below a good condition, it's a substandard condition.

It's the defendant's testimony that he could not stay in business given the condition of this mall and the amount of potential customers that would come to this mall. As a matter of fact the testimony was that when these particular pictures were taken only one car was in the parking lot and that was in the middle of the day.

Clearly there's an obligation on the part of landlord to help maintain a mall to keep customers there for [its] tenants. And I didn't see any evidence of that, [whatsoever] before this [c]ourt.

Additionally, the court found that plaintiff had failed to make a reasonable effort to mitigate its damages by attempting to re-let the premises after tenant vacated. The court concluded that plaintiff had failed to present any evidence of mitigation other than the mere conclusionary statement by Faustini "that a broker takes care of these things."

Notwithstanding the court's determination that plaintiff had breached its implied covenant to maintain the shopping center in a good condition to assist its tenants in selling their wares and goods, the court concluded that tenant had failed to provide landlord with a reasonable notice of its intent to vacate the premises. The court determined that under the facts presented tenant was required to provide at least two months' notice to vacate; and defendant's September 15, 2008 letter only provided one months' notice. Thus, the court concluded that tenant owed plaintiff rent for the months of October and November 2008, and entered judgment accordingly.

On appeal, plaintiff argues that it proved by a preponderance of the evidence that: there was a binding lease agreement; tenant breached the lease agreement by failing to pay rent; plaintiff attempted to mitigate its damages by re-letting the leasehold; and as a result of tenant's breach, plaintiff suffered damages. Plaintiff also contends that the trial court erroneously concluded that tenant was "relieved from the obligation of paying rent pursuant to the [l]ease [a]greement" because of the vacant stores in the shopping center. Defendant counters that the trial court erred in awarding plaintiff CAM charges, contending plaintiff failed to present sufficient proofs establishing the CAM charges for the calendar years 2008 and 2009, and by not awarding defendant $25,000 in damages incurred in moving expenses when he was forced to leave the leasehold because of the shopping center's condition.3

A judgment shall not be overturned except where, after a careful review of the record and weighing of the evidence, the appellate court determines that "continued viability of the judgment would constitute a manifest denial of justice." In re Adoption of a Child by P.F.R., 308 N.J. Super. 250, 255 (App. Div. 1998) (quoting Baxter v. Fairmont Food Co., 74 N.J. 588, 597-98 (1977)). We will not disturb the factual findings and legal conclusions of a trial court unless they are "so manifestly unsupported by or inconsistent with the competent, relevant and reasonably credible evidence as to offend the interests of justice." Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974) (quoting Fagliarone v. Twp. of N. Bergen, 78 N.J. Super. 154, 155 (App. Div. 1963)); see also Seidman v. Clifton Savings Bank, 205 N.J. 150, 169 (2011). Consequently, "the appellate court should exercise its original fact finding jurisdiction sparingly and in none but a clear case where there is no doubt about the matter." Rova Farms, 65 N.J. at 484. "That the case may be a close one or that the trial court decided all evidence or inference conflicts in favor of one side has no special effect." Czoch v. Freeman, 317 N.J. Super. 273, 283 (App. Div.) (quoting State v. Johnson, 42 N.J. 146, 162 (1964)), certif. denied, 161 N.J. 149 (1999).

The rationale underlying this limited scope of appellate review is that "a trial judge's findings are substantially influenced by his or her opportunity to hear and see the witnesses and to get a 'feel' for the case that the reviewing court [cannot] enjoy." Twp. of W. Windsor v. Nierenberg, 150 N.J. 111, 132 (1997) (quoting State v. Whitaker, 79 N.J. 503, 515 (1979)). For this reason, credibility determinations are entitled to particular deference because the trial judge has a superior perspective "in evaluating the veracity of witnesses." Id. at 133. However, the same level of deference is not required when we are reviewing a legal conclusion. Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995).

We have considered plaintiff's arguments in light of the record and applicable law. We are satisfied that neither of the arguments is of sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E). We affirm substantially for the reasons expressed by the trial court in its oral decision of April 22, 2010; except, however, we remand to enter a corrected order of judgment based on two months' unpaid rent at $4,175.14 per month, less the security deposit of $5,366.66 or $2,983.62, together with prejudgment interest.4

Affirmed as modified; remanded to enter a corrected order of judgment consistent with this opinion.

1 On July 2, 2009, the court dismissed the action against Lisa Taher pursuant to Rule 1:13-7(a). Because Lisa Taher is not a party to this appeal, the term "defendant" shall hereafter refer only to defendant Michael Taher.

2 The order entered judgment for two months' unpaid rent at $4,175.14 a month ($3,501.14 base rent + $324 CAM charge + $350 real estate taxes) or $8,350.28, less credit for the security deposit previously paid by tenant in the amount of $5,366.66. The order should have reflected a net judgment of $2,983.62, rather than $2,684.28.

3 Because defendant did not file a cross-appeal from the May 4, 2010 order of judgment, we do not consider the merits of defendant's arguments.

4 Plaintiff did not present sufficient evidence in support of its late charge claim as its witness did not testify to the amount of the late charge, and the late charge was not included on plaintiff's accounts receivable ledger sheets introduced in evidence in support of its rent claim.