6404 PARK AVE., LLC v. THERESA BETANCOURT

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-1118-11T2

6404 PARK AVE., LLC,

Plaintiff-Appellant,

v.

THERESA BETANCOURT,

Defendant-Respondent.

_______________________________

Telephonically Argued November 9, 2012 - Decided December 3, 2012

Before Judges Lihotz and Ostrer.

On appeal from the Superior Court of New Jersey, Law Division, Special Civil Part, Hudson County, Docket No. LT-9507-11.

Tara P. D'Amato argued the cause for appellant (Ms. D'Amato and Jeffrey Unger, on the brief).

Mario M. Blanch argued the cause for respondent.

PER CURIAM

In this landlord-tenant action, plaintiff 6404 Park Ave., LLC, appeals from two orders dated September 22 and November 15, 2011, dismissing its complaint for possession against defendant Theresa Betancourt, based on her habitual late payment of rent. Following trial, the judge dismissed plaintiff's complaint.

We affirm.

I.

The terms of the parties' March 2, 2010 lease agreement for the rental of the premises occupied by defendant required the monthly rental to be paid by the first day of each month.1 Defendant failed to timely remit her rent for the months of February through June 2010; although each payment was made, it was not paid on the first of the month. On June 28, 2010, plaintiff sent defendant a "NOTICE TO CEASE HABITUAL LATE PAYMENT OF RENT." The notice identified the late payments and stated defendant may be evicted from her apartment if she persisted in paying rent after the first of the month. A second notice of late payment was sent on November 19, 2010, stating defendant's rent payments for July through November 2010 were remitted beyond the first of each month. A third and final notice, dated February 28, 2011, identified the rent payments for November 2010 through February 2011 were also paid late. This notice also advised "IF YOU CONTINUE TO PAY LATE YOU WILL BE ISSUED A NOTICE TO QUIT DEMANDING POSSESSION OF YOUR APARTMENT."2 Plaintiff then sent defendant a notice to quit on April 28, 2011. The notice instructed defendant's lease was terminated as of June 1, 2011.

Plaintiff initiated an action for possession under Docket No. LT-6705-11 for non-payment of rent. A trial date was set for May 17, 2011, after which plaintiff and defendant executed a consent order. Because our review requires consideration of this agreement, we present it at length. The parties agreed:

1. The Tenant shall pay to the Landlord, $937.36 thru [sic] May 2011, which the Tenant admits is now due and owing AGREES TO THE IMMEDIATE ENTRY OF A JUDGMENT FOR POSSESSION.

2. The Tenant shall pay the amount shown in paragraph 1 as follows:

a. . . . .

b. The Tenant shall pay the rest of the amount shown in paragraph 1 as follows: Tenant shall pay (1) $524.36 representing the May 2011 rent, late fees and court [costs] by no later that 4:30 pm on May 18, 2011, either in person or by dropping the money off at landlord's attorney . . . and (2) $413 no later than 30-days from the date hereof (replacing money order #14149575769 dated 9/15/2010 representing the Sep. 2010 rent. The previously served Notice to Quit for habitual late payment of rent, which set forth a June 1[], 2011 effective date for Tenant to vacate the apartment, is in no way impaired as a result of this [a]greement, nor will the acceptance of rent owed pursuant to this agreement be deemed a waiver of Landlord's right to pursue an eviction action for habitual late payment of rent should Tenant holdover past the June 1[], 2011 deadline outlined in [the] Notice to Quit.

3. The Tenant also agrees to pay $412.04 each month as required by the rental agreement, in addition to the payment required . . . until this settlement agreement is over.

4. All payments made during the term of this agreement shall be applied first to the rents that become due after today, and then they shall be applied to pay the balance of the arrears stated in paragraph 1. If the Tenant makes all payments required in paragraph 2b of this agreement, the Landlord agrees not to request a warrant of removal. If the Tenant does not make all payments required in paragraph 2b of this agreement, the Tenant agrees that the Landlord, with notice to the tenant, may file a certification stating when and what the breach was and that a warrant of removal may then be issued by the clerk.

THIS MEANS THAT IF THE TENANT FAILS TO MAKE ANY PAYMENT THAT IS REQUIRED IN PARAGRAPH 2b OF THIS AGREEMENT, THE TENANT MAY BE EVICTED AS PERMITTED BY LAW AFTER THE SERVICE OF THE WARRANT OF REMOVAL.

5. This agreement shall end when the Tenant has paid the full amount of rent stated in paragraph 1 and then the judgment shall be vacated and the complaint shall be dismissed.

The agreement was executed by the parties and their counsel.

Defendant delivered the first two money orders totaling $524.36 on May 17. Ten days later, she paid $412.04, stating on that money order that the payment was for rent due June 1, 2011. On June 17, defendant remitted a payment of $413.

Plaintiff applied payments received in satisfaction of the obligations in paragraph 2b of the agreement, with the final payment of $413 deemed June's rental payment, which was provided after the first day of the month, and therefore, deemed paid late. Accordingly, plaintiff filed a dispossess action alleging habitual late payment of rent, under Docket No. LT-9507-11. Trial was held on July 18, 2011.

Esther Kaplan testified on behalf of plaintiff. She identified the prior notices sent June 28, November 19, 2010 and February 28, 2011; the April 28, 2011 Notice to Quit; the May 17, 2011 agreement; and the two payments made in May following entry of the agreement. Kaplan testified no rent payments were accepted "for application to June . . . 2011[.]" However, Kaplan identified two money orders that were received, but not negotiated: one on June 17 for $413, stating it replaced the September 2010 money order; and the second for $412.04 marked rent for July 2011. Plaintiff's counsel acknowledged these payments were received but not cashed.

Defendant identified the payments made following the May 17, 2011 agreement. She asserted she paid the rent for May 2011 using two money orders, which she delivered to Kaplan that day. She later sent her June rent check on May 27; replaced the unnegotiated money order from September 2010, with her June 17 payment of $413 and submitted rent due for July 2011 in June.

The trial judge dismissed plaintiff's complaint, concluding the parties' May 17, 2011 agreement had granted plaintiff a judgment of possession. She also found defendant complied with paragraph 2b of the May 17 agreement by applying the three money orders remitted in May 2011. She permitted plaintiff to request a warrant of removal. An order dated September 22, 2011, memorialized the dismissal of plaintiff's complaint.

Defendant filed an order to show cause to stay the eviction and a notice of appeal. On August 18, 2011, the trial judge advised she intended to clarify her opinion; defendant withdrew her appeal awaiting the judge's opinion. In an oral opinion rendered on September 22, 2011, the judge advised she sua sponte reconsidered her determination. The judge concluded plaintiff's complaint was properly dismissed; however, the determination permitting a warrant for removal to be filed was "erroneous." The judge found defendant's payment of $412.04 made May 27, 2011, represented the rent due as of June 1, 2011, and was inappropriately applied by plaintiff to satisfy the replacement of the September 2010 money order, which was expressly permitted to be paid by June 16, 2011, under paragraph 2b of the parties' agreement. On November 15, 2011, the trial judge filed a thirteen-page written opinion. She found plaintiff's interpretation of the parties' agreement applying defendant's May 27, 2011 payment to satisfy the September 2010 rent was misplaced and found defendant's payments under the agreement were timely made. Further, the judge noted upon satisfaction of the agreement's terms, the "agreement shall end, . . . the judgment shall be vacated and the complaint shall be dismissed." Further, defendant timely remitted her rent payments for June and July 2011, defeating plaintiff's assertion of habitually late payments. A final order dismissing plaintiff's complaint was filed on November 15, 2011, from which plaintiff also appeals.

II.

In our review of the trial court's conclusions in a non-jury trial, we determine whether the judge's findings are so wholly unsupportable as to result in a denial of justice. Rova Farms Resort, Inc. v. Investors Ins. Co., 65 N.J. 474, 483-84 (1974). Generally, we defer to a trial court's factual findings relying on the trial judge's opportunity to make first-hand credibility judgments about the witnesses who appear on the stand, allowing the judge to develop "a 'feel' for the case that the reviewing court cannot enjoy" from its review of the cold record. Twp. of W. Windsor v. Nierenberg, 150 N.J. 111, 132 (1997). The decision of a trial court should not be disturbed unless the reviewing court determines the trial court s findings could not reasonably have been reached on sufficient credible evidence found in the record. Id. at 133.

A landlord seeking to evict a tenant must satisfy one of the requirements defined in New Jersey's Anti-Eviction Act, N.J.S.A. 2A:18-61.1 to -61.12 (the Act). "In promulgating the Act, the Legislature noted that its purpose was to limit evictions to situations in which a landlord had reasonable grounds and provided suitable notice[.]" A.P. Dev. Corp. v. Band, 113 N.J.485, 492 (1988). As remedial legislation, the terms of the Act are strictly enforced. Id. at 499.

The Act mandates a tenant may not be removed from premises leased for residential purposes unless "good cause" is established under one of the seventeen subsections of N.J.S.A. 2A:18-61.1. Plaintiff relies on N.J.S.A. 2A:18-61.1j, which allows removal when "[t]he [tenant], after written notice to cease, has habitually and without legal justification failed to pay rent which is due and owing." "This section has been interpreted to encompass habitual late payments of rent, even though it refers to 'failure to pay,' rather than late payment." Band, supra, 113 N.J.at 493-94 (quoting 534 Hawthorne Ave. Corp. v. Barnes, 204 N.J. Super. 144, 148 (App. Div. 1985)).

Under this provision, a landlord must prove it has issued written notice instructing the tenant to cease the late payment of rent, which persists for more than one month thereafter, and must issue written notice for delivery of possession of the premises one month prior to instituting legal action for possession. Id. at 495 (citing 534 Hawthorne Ave., supra, 204 N.J. Super. at 147). The "landlord is obliged to accept a series of late payments in order to establish that the lateness is habitual." Id. at 498 (citing 534 Hawthorne Ave., supra, 204 N.J. Super. at 148).

Plaintiff seeks to rely on proof of defendant's late rental payments made prior to the execution of the May 17, 2011 agreement. Further, it maintains paragraph 2b of the agreement clearly supports this position in providing:

The previously served Notice to Quit for habitual late payment of rent, which set forth a June 1[], 2011 effective date for Tenant to vacate the apartment, is in no way impaired as a result of this [a]greement, nor will the acceptance of rent owed pursuant to this agreement be deemed a waiver of Landlord's right to pursue an eviction action for habitual late payment of rent should Tenant holdover past the June 1[], 2011 deadline outlined in [the] Notice to Quit.

Plaintiff argues there was no intention to allow defendant to continue her tenancy after June 1, 2011. Also, plaintiff maintains the lease agreement entitled it to apply rent received to satisfy any amounts overdue. Therefore, the late June 2011 rent triggered its ability to obtain possession.

This crabbed interpretation of the agreement ignores its additional provisions. First, the agreement specified that the payment for the replaced September 2010 money order could be remitted by June 16, 2011. Second, paragraph 3 contemplated rental payments would be made after the sums due in paragraph 2b brought the lease payments current as of May 2011. Third, paragraph 5 provides for the dismissal of the complaint once all payments were satisfied.

Plaintiff's argument that the lease terms may trump those of the agreement lacks merit. Certainly the agreement was designed to address defendant's default under her lease. Under the agreement, plaintiff contracted to accept the two past due payments by certain dates, which defendant met. Plaintiff's attempt to modify those terms was properly rejected by the trial judge.

Another important distinction disregarded by plaintiff, but recognized by the trial judge, is plaintiff's first complaint for possession was grounded on defendant's alleged non-payment of rent, pursuant to N.J.S.A. 2A:18-61.1a, not for habitual nonpayment of rent.3 Plaintiff had served the requisite notices for pursuing an action based on defendant's habitual late payment, but instead chose to simply show defendant owed rent for two months. Likely, because defendant had proof she sent payment September 2010, although plaintiff had not cashed the money order, the parties agreed to allow defendant to pay May's rent by the following day and replace the September 2010 payment. The agreement's terms permit the deficiency to be cured and, upon doing so, provides defendant's tenancy would resume uninterrupted.

Finally, plaintiff suggests the trial judge erred as a matter of law because her determination inferred plaintiff was not permitted to simultaneously pursue eviction based on N.J.S.A. 2A:18-61.1a and subsection j. Although the agreement attempts to preserve the Notice to Quit and lease termination date of June 1, 2011, defendant paid all rent due, under the agreement to resolve the eviction action premised on non-payment, and received no further notices to cease or quit prior to the filing of the second complaint. Defendant justifiably believed her compliance with the agreement averted dispossession. Plaintiff's preservation of rights was directed to the acceptance of defendant's payments outlined in paragraph 2b. Therefore, if defendant partially complied, plaintiff would continue to pursue a warrant of removal. Once all payments were made, the judgment of possession and complaint for eviction were nullities.

Thereafter, rental payments for June and July were received by plaintiff and not returned; nevertheless, plaintiff filed a second eviction complaint, without notice that it considered defendant remained in breach of her lease. Plaintiff suggests its claim for possession based on habitual late payment had not accrued, yet the proofs offered were for late payments accepted prior to the May 17, 2011 agreement. Defendant, having timely satisfied all payments under the agreement and thereafter timely remitted rent for the two ensuing months had no idea plaintiff believed her tenancy was in jeopardy. Recognizing "the role of equitable considerations in dispossess cases[,]" 279 4th Ave. Mgmt., LLC v. Mollett, 386 N.J. Super. 31, 39 (App. Div.), certif. denied, 188 N.J. 354 (2006), we conclude plaintiff's attempt to obtain possession based on its acceptance of late payments occurring prior to execution of a settlement agreement, which permitted the tenancy to continue, without demonstrating defendant made subsequent late payments of rent is not sustainable. Further, plaintiff's failure to return the June and July rent payments is wholly inconsistent with an intention to seek surrender of possession of the premises. Moreover, plaintiff could not demonstrate defendant "habitually" paid her rent in an untimely fashion following satisfaction of the terms of the settlement agreement.

Any remaining arguments presented by plaintiff which have not otherwise been specifically addressed are deemed to lack sufficient merit to warrant discussion in our opinion. R. 2:11-3(e)(1)(E).

A

1 Plaintiff acquired the property in February 2010. Defendant, who had been a tenant in the building under plaintiff's predecessor, believed her rent was not late if paid by the third Wednesday of every month.

2 The record also includes correspondence from plaintiff dated January 6, February 28, and March 30, 2011, notifying defendant of her outstanding rental balance. The letters included a statement that plaintiff s "acceptance of your late rent payments is not a waiver of your landlord's right to pursue an action for habitual late payment of rent[.]"

3 N.J.S.A. 2A:18-61.1a provides as a ground for removal when a tenant:

fails to pay rent due and owing under the lease whether the same be oral or written; provided that, for the purposes of this section, any portion of rent unpaid by a tenant to a landlord but utilized by the tenant to continue utility service to the rental premises after receiving notice . . . such service was in danger of discontinuance based on nonpayment by the landlord, shall not be deemed to be unpaid rent.