JOSE LUIS LLOGLLA v. DOWNING CORPORATION INC.

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

JOSE LUIS LLOGLLA,

Plaintiff-Appellant,

v.

DOWNING CORPORATION INC., t/a

BEIRA MAR OF SPAIN, BEIRA MAR

RESTAURANT, JOSE G. PACHECO,

MARIA PACHECO,

Defendants-Respondents.

_________________________________________________

June 19, 2014

Submitted February 24, 2014 Decided

Before Judges Yannotti, Ashrafi and St. John.

On appeal from Superior Court of New Jersey, Law Division, Essex County, Docket No. L-2053-08.

Clark Law Firm, PC, attorneys for appellant (Gerald H. Clark and Sarah K. Delahant, of counsel and on the briefs).

Wright & O'Donnell, P.C., attorneys for respondents Jose Pacheco and Maria Pacheco (George T. McCool, Jr., on the brief).

PER CURIAM

Plaintiff Jose Luis Lloglla appeals from two orders entered by the Law Division on July 13 and October 16, 2012, granting summary judgment in favor of defendants Jose G. Pacheco and Maria Pacheco (collectively, the Pachecos) on plaintiff's negligence and spoliation claims. After reviewing the record in light of the contentions advanced on appeal, we affirm.

I.

Plaintiff was employed as a cook at a now-defunct restaurant in Newark called Beira Mar of Spain (the Restaurant). On the evening of March 18, 2006, plaintiff was working at the Restaurant when a kitchen carpet slipped underneath him, causing him to lose his balance. As he was falling, he grasped a fryer which tipped over, spilling hot oil over his legs causing significant injuries.

Beira Mar of Spain occupied the street level and basement of a building located at 18-20 Downing Street (the Building), which was owned at the time of plaintiff's accident by the Pachecos. Sometime in 1992, Jose and Maria purchased the Building, including the Restaurant, with Joao Pacheco and his wife, Maria L. Pacheco. Joao is Jose's nephew. After the acquisition, the Restaurant business was incorporated as Downing Corporation Inc. (Downing Inc.).1

Downing Inc. occupied the Building pursuant to an undated commercial lease agreement (the Lease) entered into between Downing Inc. as tenant and an entity labeled "J&J Pacheco Ptrship" (J&J) as landlord. The Lease bears the signatures of both Jose and Joao under the landlord signature block, and "Jose Pacheco, President" and "Joao C. Pacheco, V.P." under the tenant block. The lease established a ten-year term, from May 1, 1992 and ending April 30, 2002, and set forth rental payments for the entire term.

The Lease, in pertinent part, required Downing Inc., as tenant, to "make all necessary repairs to the Rental Space2 and all equipment and fixtures in it, except structural repairs," and to "[m]aintain the Rental Space in a neat, clean, safe, and sanitary condition."

Jose and Joao managed the Restaurant's operations and, according to his deposition testimony, Jose would typically arrive first thing in the morning and stay until 11:00 p.m. In 1997, however, Jose apparently bought out Joao and Maria L.'s interests in the Building and Downing Inc. On October 30, 1997, Joao and his wife deeded their ownership interest in the Building to Jose and Maria for $350,000. The deed itself is the only document in the evidentiary record pertaining to the buyout. There is no evidence before us concerning the effect of the buyout on the ownership of the corporation or the leasehold estate between Downing Inc. and J&J.

At his deposition, Jose testified that only he and his wife owned the Building and Downing Inc. after October 1997. According to his uncontroverted testimony, the Lease continued after the term of the lease expired in April 2002.

In March 2008, plaintiff filed a complaint against defendants Downing Corporation t/a Beira Mar of Spain, Beira Mar of Spain Restaurant, Jose and Maria. Plaintiff was twice granted leave to amend his complaint, ultimately filing a two-count second amended complaint on February 28, 2012.3 In the first count, plaintiff alleged that all named defendants were negligent in their operation, maintenance and repair of the premises, thus leading to his injuries. The second count alleged that defendants had intentionally or negligently lost or destroyed evidence specifically requested by plaintiff during discovery, including photographs.

Defendants Jose and Maria moved for summary judgment on the negligence claim, asserting, as a matter of law, that they owed no duty of care to plaintiff in their capacity as owners of the Building. Following oral argument on July 13, 2012, the motion judge rendered an oral decision, which was memorialized in an order of the same date, granting the motion and dismissing the negligence claim against Jose and Maria.

The motion judge relied primarily on McBride v. Port Authority of New York & New Jersey, 295 N.J. Super. 521, 522 (App. Div. 1996), in which we held that "an employee of a commercial tenant in exclusive possession may [not] hold the tenant's landlord responsible for personal injuries suffered on the leased premises, due to a lack of proper maintenance or repair, when the lease unquestionably places responsibility for such maintenance or repair solely upon the tenant." The judge found that Jose's use of allegedly unsuitable kitchen mats in the Restaurant was undertaken as agent of the tenant corporation, and not in his capacity as landlord. Since the provisions in the Lease clearly placed the responsibility on Downing Inc. to maintain the demised premises in a safe condition, the judge concluded that landlords Jose and Maria did not owe plaintiff, an employee of the tenant Downing Inc., a duty of care.

With respect to the Pachecos' summary judgment motion on the second spoliation count, the motion judge declined to address it at the July 13 hearing on procedural grounds. Instead, a second judge thereafter heard and decided that renewed motion on October 16, 2012. In the interim, plaintiff had cross-moved to compel the deposition of Maria.

After hearing argument from the parties, the second judge granted the motion and dismissed the second count against Jose and Maria, concluding that the spoliation count was not an independent cause of action but rather an application for relief linked to the already-dismissed negligence claim. Accordingly, the second judge also denied plaintiff's cross-motion to compel discovery.4 Plaintiff timely appealed from both the July 13 and October 16 orders.

On appeal, plaintiff contends that the Law Division erred in: (l) granting summary judgment despite the existence of material fact issues concerning whether the 1992 Lease was still controlling at the time of his accident; (2) misapplying the law and extending McBride because Downing Inc. did not have exclusive possession of the premises; (3) failing to recognize that Jose's status as a landlord and tenant called for the imposition of a duty of care under the test enunciated by the Court in Hopkins v. Fox & Lazo Realtors, 132 N.J. 426, 439 (1993); and (4) denying plaintiff's cross-motion to compel the deposition of Maria.

II.

In reviewing a grant of summary judgment, we apply the same standard under Rule 4:46-2(c) that governed the motion court. See Gray v. Caldwell Wood Prods., Inc., 425 N.J. Super. 496, 499 (App. Div. 2012). Initially, we determine whether the moving party has demonstrated there were no genuine disputes as to material facts, and then we decide whether the motion judge's application of the law was correct. Atl. Mut. Ins. Co. v. Hillside Bottling Co., 387 N.J. Super. 224, 230-31 (App. Div.), certif. denied, 189 N.J. 104 (2006). This court must "consider whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party." Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). In such review, "'[a] trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference.'" Estate of Hanges v. Metro. Prop. & Cas. Ins. Co., 202 N.J. 369, 382 (2010) (quoting Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995)).

Plaintiff contends that material questions of fact exist as to whether the 1992 Lease is controlling here, first because the original term of lease expired in April 2002.5 In addition, plaintiff argues there was a material fact question about whether the Pachecos were a party to the Lease considering that (1) J&J, and not Jose and Maria individually, is the named landlord on the Lease; (2) Jose acknowledged during his deposition that he was unsure why J&J was listed as landlord; and (3) Joao and his wife transferred their ownership interests in the Building in 1997. Thus, plaintiff ascribes error to the judge's reliance, at the summary judgment stage, on the provisions of the Lease in dismissing the negligence claim when there were genuine questions about its validity and applicability.

We find these arguments unavailing. First, a lease ordinarily does not terminate merely because its term has expired. See N.J.S.A. 46:8-10 (establishing a month-to-month tenancy by operation of law upon the expiration of a lease with an original term of one month or more, absent any agreement to the contrary); see also S.D.G. v. Inventory Control Co., 178 N.J. Super. 411, 414 (App. Div. 1981). Here, plaintiff has not identified, and we fail to discern, any provision in the Lease to the contrary.

Moreover, Section 18 of the Lease expressly provides that the agreement "binds the Landlord and Tenant and all parties who lawfully succeed to their rights or take their places." Jose testified at his deposition that the Lease continued to operate after the buyout of Joao and his wife. Plaintiff presented no evidence that the Lease terminated prior to his injury, and thus we see no genuine factual dispute that the Lease provisions were controlling at the time. See U.S. Pipe & Foundry Co. v. Am. Arbitration Ass'n, 67 N.J. Super. 384, 399-400 (App. Div. 1961).

Plaintiff argues next that, even if the Lease was valid and its provisions controlling, there was a genuine issue of material fact about whether Downing Inc. was in "exclusive possession" of the demised premises. He contends that when Jose entered the Restaurant on a daily basis, he was acting as both an officer of Downing Inc. and as the landlord of the building. Accordingly, plaintiff asserts that Downing Inc. cannot be said to have had exclusive possession over the premises, and therefore the McBride holding has no bearing on this case. Instead, plaintiff maintains that the motion judge should have utilized the "modern approach" to premises liability as set forth in Hopkins, supra, 132 N.J. 426, under which Jose and Maria as landowners plainly owed him a duty of care. We disagree.

Here, viewed in the light most favorable to plaintiff, the facts entitle defendants to judgment as a matter of law. The evidence clearly establishes that plaintiff's fall was due to a condition on the kitchen floor within the exclusive possession and control of Downing Inc. The gravamen of plaintiff's argument for imposing a duty on defendants is Jose's status as both landowner of the Building and an officer of Downing Inc. This commonality of ownership between landlord and corporate tenant, standing alone, is insufficient to alter the acknowledged legal principle expressed in McBride.

The Lease governed the landlord-tenant relationship between the Pachecos and Downing Inc. and it unambiguously placed exclusive responsibility for maintaining the leased premises in a safe condition upon Downing Inc. Although Jose co-owned the building and had an ownership interest in the corporation, Downing Inc. was a separate legal entity. His frequent presence on site as an officer of Downing Inc. performing tasks related to the operation of the Restaurant did not negate the fact that the tenant-corporation physically and legally had exclusive possession and control of the demised premises in which plaintiff was injured.

We recognize that under Hopkins, supra, a defendant's duty to one injured on his or her property turns on a number of considerations, including "the relationship of the parties, the nature of the attendant risk, the opportunity and ability to exercise care, and the public interest in the proposed solution." 132 N.J. at 439. Nonetheless, we have not held that allocation of responsibility under a lease like the one at issue here could be altered by the landlord's knowledge of a condition that the landlord is not obligated to repair or correct. See McBride, supra, 295 N.J. Super. at 522; see also Geringer v. Hartz Mountain Dev. Corp., 388 N.J. Super. 392, 401 (App. Div. 2006)(applying McBride in concluding that a building owner owed no duty to maintain or repair an interior stairway because the lease unambiguously imposed exclusive responsibility for such repairs on the commercial tenant), certif. denied, 190 N.J. 254 (2007).

Finally, we conclude that the Law Division did not abuse its discretion in denying plaintiff's motion to compel the deposition of Maria. We find no merit to plaintiff's contentions. However, we note that plaintiff never requested additional time for discovery in opposition to the motions for summary judgment, R.4:24-1(c), and his motion to compel the deposition of Maria was not made returnable prior to the discovery period expiring, R.4:24-2.

Affirmed.

1 We note that the record contains no articles of incorporation or other documentation related to the formation or operation of the corporation. At his deposition, Jose explained that the Restaurant was incorporated at the urging of the bank as mortgagee and to obtain certain licenses.

2 "Rental Space" was defined in the Lease as the entire first floor and basement of the Building, including the "kitchen, dining area and bar area."

3 The initial and first-amended complaints are not contained in the record. The procedural history between the 2008 filing of the complaint in 2008 and the second amended complaint in 2012 is unclear from the record. Apparently, plaintiff delayed this action to pursue a claim for workers' compensation benefits, but it turned out that Downing Inc. did not carry such a policy. In addition, the matter was stayed for a time after Jose and Maria filed for bankruptcy protection in 2011. Their liability was discharged by the federal bankruptcy judge, but the judge permitted plaintiff to resume his action to the extent he was seeking damages from the Pachecos' insurance policy on the Building.

4 Jose and Maria appeared in this matter in their individual capacities only, and the other named defendants did defend the suit. On January 28, 2013, the Law Division entered a revised order of dismissal, dismissing the second amended complaint against the remaining defendants that did not contest the lawsuit.

5 Plaintiff also argues on appeal that Jose's conduct after execution of the Lease demonstrated an intent to abandon or modify its provisions. Plaintiff did not present this argument to the trial court, and we decline to address it. See Nieder v. Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973).