TRUDI LUCA v. AUDREY MCLEOD

NOT FOR PUBLICATION WITHOUT THE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-04374-14T1

TRUDI LUCA and

MICHAEL LUCA,

Plaintiffs-Appellants,

v.

AUDREY MCLEOD,

Defendant-Respondent.

_________________________________

December 12, 2016

Argued May 25, 2016 Decided

Before Judges Fuentes, Koblitz and Gilson.

On appeal from Superior Court of New Jersey, Law Division, Special Civil Part, Warren County, Docket No. LT-279-15.

Trudi Luca and Michael Luca, appellants, argued the cause pro se.

Angela Arabia-Meyer argued the cause for respondent (Legal Services of Northwest Jersey, Inc., attorneys; Ms. Arabia-Meyer, on the brief).

The opinion of the court was delivered by

FUENTES, P.J.A.D.

In this landlord/tenant action, plaintiffs Trudi and Michael Luca appeal from the decision of the Law Division, Special Civil Part dismissing their summary dispossess complaint for nonpayment of rent against defendant Audrey McLeod. Plaintiffs argue the trial judge committed reversible error when he denied their motion to amend the complaint to include rent that was not due and owing at the time the complaint was filed. Plaintiffs also challenge the judge's decision to award counsel fees to defendant's attorney, who is employed by Legal Services of Northwest Jersey, Inc., a non-profit corporation.

After reviewing the record developed before the trial court and mindful of prevailing legal standards, we affirm the court's decision to dismiss the nonpayment of rent complaint, but reverse and vacate the award of counsel fees. Due to the paucity of facts in the proceeding before the trial court, we derive the following facts from the factual statements in the parties' brief; these statements are supported by citations to the documents included in their respective appendixes. See R. 2:6-2(a)(4).

I

On February 27, 2015, plaintiffs filed a pro se verified complaint in the Warren County Law Division, Special Civil Part for non-payment of rent against defendant using the model pleading reflected in Appendix XI-X and approved by the Supreme Court, effective September 1, 2009.1 See R. 6:3-4(c). As the Court recently explained, this form-pleading "includes a combination of boxes to check and lines to fill in. By using the form, the landlord is able to identify the existence and relevant terms of a lease agreement, including the monthly rental amount, the last month for which rent was paid, and the total amount of rent due." Green v. Morgan Props., 215 N.J. 431, 448-49 (2013).

Following the format of the complaint, plaintiffs averred that defendant has been in possession of the premises at issue under a written lease since March 1, 2014. Under paragraph 9A of the complaint, plaintiffs stated there was rent "due, unpaid[,] and owing" from defendant in the amount of $850 for the month of February 2015. Plaintiffs also sought $60 in "court cost[s]," for a total of $910. Under paragraph 9B, plaintiffs further averred: "The date that the next rent is due is 3/1/15. . . . If this case is scheduled for trial on or after that date, the total amount you must pay to have this complaint dismissed is $1760."

The matter came for trial on March 26, 2015. Plaintiffs appeared pro se. Defendant was represented by an attorney from Legal Services of Northwest Jersey, Inc. The following constitutes a complete, verbatim account of what transpired before the trial court.

THE COURT: Good morning, everybody.

UNIDENTIFIED SPEAKER: Good morning.

THE COURT: Everybody, except those involved in this case, please be seated. This is the matter of TRUDI, MICHAEL . . . VS. AUDREY MCLEOD. Appearance of counsel, please.

[DEFENSE COUNSEL]: . . . Legal Services of Northwest Jersey, on behalf of the tenant.

THE COURT: Counsel, good morning.

[DEFENSE COUNSEL]: Good morning, Judge.

THE COURT: And appearance for the plaintiff, please.

MS. LUCA: Trudi Luca, Plaintiff.

THE COURT: Good morning.

MR. LUCA: Michael Luca.

THE COURT: Please swear in the landlord and her witness, or his witness.

. . . .

[The Court Clerk swears in plaintiffs.]

THE COURT: Mr. and Mrs. Luca, please have a seat. Tell me who is suing whom and for what.

MS. LUCA: Michael and I are suing the defendant[.]

THE COURT: For what?

MS. LUCA: -- Audrey -- for fail -- based on the fact that -- for failure to pay March's rent.

THE COURT: But you claim --

MS. LUCA: And I wanted --

THE COURT: -- you claim payment for February's rent.

MS. LUCA: Right. I wanted to ask the [c]ourt if we could move to amend the complaint for March.

THE COURT: No. I'm going to dismiss this complaint. If, in fact, the rent was paid in February, you've abused the [c]ourt process by bringing this claim.

MS. LUCA: Well, we received a letter from Housing on February 17th, saying that they weren't going to pay for March. So directly thereafter we --

THE COURT: Well, you come back in March --

MS. LUCA: What was that?

THE COURT: -- or I'm going to assess attorney's fees against you. You can't file a claim for rent that's not due. You can't do that. That's an abuse of process.

MS. LUCA: Want the letter? Do you want to show him the letter?

THE COURT: The complaint is dismissed.

[DEFENSE COUNSEL]: Thank you, Judge.

THE COURT: You may file an application for counsel fees.

[DEFENSE COUNSEL]: Thank you, Judge.

THE COURT: Thank you. You can't do it. The rent is paid.

MS. LUCA: Thank you, Judge.

In a certification, dated March 31, 2015, defendant's attorney submitted an application to the court for an award of counsel fees in the amount of $1160, representing 5.8 billable hours at $200 per hour. Defense counsel averred, for example, that she spent .3 hours (or eighteen minutes) reviewing the standard nonpayment of rent complaint reflected in Appendix XI-X, .5 hours "research[ing] statutes and case law regarding premature filing[,]" one hour answering and executing calls and emails from and to social service agencies "to gather evidence[,]" and 1.2 hours "call[ing] and fax[ing] to and from client regarding adjournment request" in case defendant lost the pre-trial motion. Finally, defense counsel billed one hour for her "court appearance."

In an order dated April 7, 2015, the trial judge awarded defense counsel the $1160 requested without modification. The court further ordered: "In the event said payment is not made with 30 days, counsel may submit a certification of default for entry of judgment in the amount of the unpaid attorney fees." The judge attached to the order the following statement of reasons

Landlords are expected to be truthful in the allegations of nonpayment of rent. The [c]ourt is satisfied that the Plaintiff, Landlord filed a complaint for nonpayment of rent in the month of February, 2015, when in fact the rent was paid and the Landlord knew it. This is an abusive process [sic] which cannot be excused and that abuse required the appearance of Legal Services of Northwest Jersey. The fees requested are reasonable and are therefore awarded.

The attorney from Legal Services of Northwest Jersey, Inc. filed a Certification of Default with the Warren County Law Division, Special Civil on May 12, 2015, requesting "in accordance with Paragraph 2" of the trial court's order, dated April 7, 2015, that a judgment be entered in favor of Legal Services of Northwest Jersey, Inc., and against plaintiffs in the amount of $1160.

II

In the statement of facts contained in plaintiffs' appellate brief, plaintiffs state that they received correspondence from the Division of Human Services informing them that defendant "would not receive further rental assistance as of March 1, 2015." In the statement of facts contained in respondent's brief, defendant, who continues to be represented by Legal Services of Northwest Jersey, Inc., states that she "receives Emergency Assistance in the form of rental assistance payments made to the landlord by the Warren County Department of Human Services." Although the parties agree on this point, they view the legal significance of this fact differently.

Plaintiffs argue the trial judge erred in denying their motion to amend the complaint to include the rent for March 2015, because, at the time of trial, defendant had not paid the rent due and owing for March 2015. Plaintiffs emphasize that the letter dated February 17, 2015, makes clear

[Defendant] is no longer eligible for Emergency Assistance as of 2/28/15. This means that this agency will no longer be able to pay the client's rent unless the case is reopened. Audrey is aware of this action.

. . . .

You may wish to contact the tenant to discuss her ability to pay rent next month. Please note, if you receive a rent check[,] without notification from this office that the case has been reopened[,] it is due to error. If this happens, please return the check to the address above. If the [check] was sent in error and is cashed[,] you will need to send a check for the amount received made out to Warrant County Department of Human Services/TASS.

The verbatim record of what occurred before the trial court shows plaintiff Trudi Luca informed the trial judge of the existence of this letter and asked the judge if he wanted to see it. The trial judge did not acknowledge plaintiffs' proffer. Plaintiffs argue the trial judge should have considered both the contents of the letter and defendant's failure to pay the March 2015 rent as valid grounds for granting their motion to amend the complaint to include March's rent. Finally, plaintiffs claim it was "a typographical error" when they handwrote "Feb[.] 2015" in the space provided in paragraph 9A of the form verified complaint to indicate the rent that is due and owing.

Citing this court's holding in Chau v. Cardillo, 250 N.J. Super. 378, 384 (App. Div. 1990) (citing Hous. Auth. of Passaic v. Torres, 143 N.J. Super. 231, 236 (App. Div. 1976)), defendant argues the trial judge correctly dismissed the complaint because "the amount claimed to be due must also be 'legally owing' at the time the complaint was filed." Defendant also notes that under N.J.S.A. 2A:18-55, if a defendant pays rent that is due and owing any time before the trial ends, the court is legally required to dismiss the complaint.

We agree with defendant's legal position in this respect. Plaintiff filed their verified complaint on February 27, 2015, seeking judgment of possession of the premises based on the representation that defendant had failed to pay the rent due and owing for the month of February 2015. When the case came for trial on March 26, 2015, the court was legally obligated to dismiss the complaint because the rent for February had been paid. As our Supreme Court explained in Green

Because the Anti-Eviction Act only permits eviction for the specified statutory reasons, landlords seeking to evict for nonpayment of rent, see N.J.S.A. 2A:18-61.1(a), technically, can only look to the amount of rent that is due and owing, and it is that calculation that is used to fix the obligations of the parties as to possession.

[Green, supra, 215 N.J. at 450.]

Plaintiffs also argue that the trial judge erred when he awarded counsel fees to defendant. Plaintiffs characterize the judge's decision in this respect "as a form of punishment" that was apparently intended to deter them from seeking relief from the court. Defendant does not dispute that "New Jersey courts historically follow the 'American Rule,' which provides that litigants must bear the cost of their own attorneys' fees." Innes v. Marzano-Lesnevich, 224 N.J. 584, 592 (2015) (citing Litton Indus., Inc. v. IMO Indus., Inc., 200 N.J. 372, 404 (2009)). Our Supreme Court has identified three main policy considerations for endorsing the American Rule

(1) unrestricted access to the courts for all persons;

(2) ensuring equity by not penalizing persons for exercising their right to litigate a dispute, even if they should lose; and

(3) administrative convenience.

[Ibid. (quoting In re Niles Trust, 176 N.J. 282, 294 (2003)).]

New Jersey's unwavering commitment to the public policy considerations underpinning the American Rule is reflected in the rules that our Supreme Court adopted to govern our State's courts. Id. at 592-93 (quoting In re Niles Trust, supra, 176 N.J. at 293). The rules only permit courts to award attorney's fees in the following situations

(1) In a family action . . .[;]

(2) Out of a fund in court . . .[;]

(3) In a probate action . . .[;]

(4) In an action for the foreclosure of a mortgage . . .[;]

(5) In an action to foreclose a tax certificate . . .[;]

(6) In an action upon a liability or indemnity policy of insurance, in favor of a successful claimant[;]

(7) As expressly provided by these rules with respect to any action, whether or not there is a fund in court[;] [and]

(8) In all cases where attorney's fees are permitted by statute.

[R. 4:42-9(a).]

Here, the trial judge decided sua sponte to award counsel fees to defendant as a sanction against plaintiffs for "abuse of process." In doing so, the judge necessarily invoked the common law tort of malicious use of process, the civil analogue to malicious prosecution. However, malicious use of process, as defined by the Supreme Court in LoBiondo v. Schwartz, 199 N.J. 62, 72 (2009), is not cognizable in a landlord/tenant summary dispossess action brought in the Special Civil Part. R. 6:3-4. The judge's reliance on this common law tort to award counsel fees to defendant sua sponte thus lacked any legal foundation.

Although not cited by the judge in support of his ruling, defendant nevertheless relies on Atkinson v. Pittsgrove Twp., 193 N.J. Super. 23, 32 (Ch. Div. 1983), for the proposition that a court "has the inherent power to protect itself and litigants against harassment and vexatious litigation and an abuse of process." In Atkinson, the trial judge began the opinion by noting the particular vexatious nature of the plaintiff

This is the fourth lawsuit brought by Atkinson against the Township of Pittsgrove on exactly the same facts, alleging the same cause of action and demanding essentially the same relief. It is clearly frivolous. Since it is the court's policy to give pro se litigants their full say in open court, the court permitted Atkinson to speak at length on his own behalf on the return day of defendant's motion for summary judgment. He did so in detail and while doing so convinced the court of his bad faith in bringing the suit.

[Id. at 25-26.]

This court has also emphasized that Atkinson's core holding is tethered to a legal environment that predated the adoption of Rule 1:4-8. See Triffin v. Automatic Data Processing, Inc., 394 N.J. Super. 237, 252 (App. Div. 2007) (citing Berthelsen v. Hall, 194 N.J. Super. 22 (App. Div. 1984)). However, the Supreme Court has made clear that the "inherent power" to impose sanctions must be used as "a means to enforce our ordinary rules of practice and discovery." Brundage v. Estate of Carambio, 195 N.J. 575, 610 (2008). Unless expressly supported by Rule 4:42-9(a), a court has no authority to award counsel fees to a prevailing party in a landlord/tenant action. We thus expressly reject any argument that views Atkinson as holding otherwise.

Here, the verbatim account of what transpired before the trial judge reveals that plaintiff Trudi Luca attempted to present to the judge a letter she had received from the Warren County Department of Human Services, which informed her that defendant would no longer receive rental assistance. The record also shows the judge refused to even consider Lucas's proffer. Although the contents of the letter would not have cured the legal insufficiency of plaintiffs' summary dispossess action, we are satisfied they would have explained to the judge why plaintiffs sought legal relief at that time. Simply stated, under these circumstances, the record does not support the trial court's award of counsel fees because it is not supported by any of the provisions in Rule 4:42-9.

III

We affirm the trial court's decision to deny plaintiffs' motion to amend the nonpayment of rent complaint because defendant paid the rent identified in the complaint "as due and owing" at the time plaintiffs filed the complaint. We reverse and vacate the trial court's sua sponte award of counsel fees to Legal Services of Northwest Jersey, Inc.

Affirmed in part and reversed in part.

1 The Court revised the verified complaint in Appendix XI-X, effective September 1, 2016. See N.J. Judiciary, Appendix XI-X Verified Complaint Nonpayment of Rent (Sept. 01, 2016), http://www.judiciary.state.nj.us/civil/forms/11252_verified_complaint.pdf. These revisions are not germane to the issues raised in this appeal.