BLOOMFIELD 206 CORPORATION v. CITY OF HOBOKEN

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-04781-11T3

A-6075-11T4

BLOOMFIELD 206 CORPORATION,

Plaintiff-Appellant,

v.

CITY OF HOBOKEN, CITY OF

HOBOKEN MUNICIPAL COUNCIL,

MAYOR OF THE CITY OF HOBOKEN,

CITY OF HOBOKEN, DEPARTMENT

OF HUMAN SERVICES, RENT LEVELING

BOARD, JAY RUBINSTEIN AND

GARY RUBINSTEIN,

Defendants-Respondents.

_______________________________

September 4, 2014

Before Judges Lihotz and Hoffman.

On appeal from the Superior Court of New Jersey, Law Division, Hudson County, Docket Nos. L-3112-07 and L-1023-12.

Charles X. Gormally argued the cause for appellant (Brach Eichler, LLC, attorneys; Mr. Gormally, of counsel and on the briefs; Sean A. Smith, on the briefs).

Victor A. Afanador argued the cause for respondents (Lite DePalma Greenberg, LLC, attorneys; Mr. Afanador, on the brief).

Jay Rubinstein, respondent pro se (Cathy C. Cardillo, on the brief).

Gary Rubinstein, respondent pro se (Cathy C. Cardillo, on the brief).

PER CURIAM

These matters, consolidated by our October 3, 2012 order, challenge rent calculations made by defendant, the City of Hoboken's (Hoboken) Department of Human Services Rent Leveling and Stabilization Board (the Board), for rental of an apartment subject to Hoboken's rent control ordinance (RCO). We affirm.

Plaintiff Bloomfield 206 Corporation challenges to Hoboken's calculation of rent under the RCO have been longstanding. In 2006, at the request of residential tenants, defendants Jay and Gary Rubinstein, the Rent Leveling and Stabilization Officer (Rent Regulation Officer) determined the rent charged by plaintiff should have been $286 per month rather than the $975 monthly rent set forth in the Rubinsteins' lease. On plaintiff's administrative appeal, the Board affirmed the rent regulation officer's calculation.

Plaintiff filed a complaint in lieu of prerogative writs against the Board (HUD-L-3112-07), challenging this rent calculation (2007 action). At issue was the formula used by the Board to calculate the rent, including the appropriate base year and the applicability of newly enacted provisions requiring a landlord to file annual registrations and vacancy decontrol forms,1 to seek rent increases in the event of a vacancy.

Hoboken's rent regulation officer, charged with enforcing the RCO, calculated the current rent by determining the base year then allowing approved vacancy decontrol increases, and finally applying consumer price index (CPI) increases. Therefore, the amount of current rent was dependent upon the determined base year and the permissible prior vacancy decontrol increases. Testimony from the former rent regulation officer established that although the RCO required landlords to file vacancy decontrol forms, the Board's policy over the twenty-five years preceding 2006, permitted a landlord to submit alternative evidence to establish a unit had been voluntarily vacated, in support of a vacancy decontrol rent increase. In 1988, the Board began to limit the frequency of vacancy decontrols to once every three years, regardless of the number of vacancies during that period. Then, despite the prior longstanding practice, the 2006 amendment constrained permissible proof to only the annual registration and a vacancy decontrol form; the absence of either of these documents required the rent regulation officer to ignore the vacancy and the accompanying rent increase, when calculating current allowable rent.

Here, the rent regulation officer noted the first registration statement on file for the building was dated October 13, 1981, fixing 1981 as the base year. Further, she found the prior owner filed vacancy decontrol forms in 1983 and 1984, but failed to submit annual registration forms. Applying the provisions of the 2006 ordinances, she ignored the rent increases for those years and concluded no rental increases were permitted after 1982, making the allowed monthly rent $286. This calculation was approved by the Board's decision, challenged by plaintiff, who asserted the legal rent should be $698 per month.

In a written opinion, the late Judge Shirley A. Tolentino concluded the Board acted arbitrarily and capriciously in retroactively applying the amended RCO's mandates when calculating the maximum rent for the Rubinsteins' unit. She specifically noted that prior to 1985, Hoboken had no mandatory annual registration vacancy decontrol form requirement. The 1985 ordinance made the filings mandatory and permitted residential landlords to file a one-time registration form for prior years. Judge Tolentino found the Board was arbitrary in applying the new ordinance provisions and ignoring previously valid rent increases because the prior landlord had not filed annual registrations in 1983 and 1984, before such a requirement was mandatory. This conduct made it impossible for plaintiff, who purchased the building in 1990, to produce the now necessary documentation. Judge Tolentino also rejected the Board's interpretation of court opinions addressing rent control challenges, which the Board argued required this retroactive application. She concluded the Board's application was erroneous and its administration of the RCO lacked uniformity and amounted to an unconstitutional exercise of its police powers. The Board's resolution calculating the rent plaintiff could charge for the Rubinsteins' unit was declared void as a retroactive application of the new requirements in the amended RCO and was set aside as arbitrary, capricious and unreasonable. Finally, she remanded the matter to the Board for further proceedings.

In her opinion, Judge Tolentino also denied plaintiff's request for an injunction to enjoin the Board from applying the amended RCO and dismissed its claims under "42 U.S.C.A. 1984," including a request for attorney's fees.

Delays occurred in the entry of a final order because of a pending interlocutory appeal by a third-party intervenor and Judge Tolentino's passing. The final order memorializing Judge Tolentino's determination was entered on September 9, 2010.2 Initial cross-appeals were voluntarily dismissed because the matter was deemed interlocutory. An amended order was entered on September 19, 2011.

Prior to the ordered remand hearing before the Board, Hoboken adopted Ordinance No. Z-88 (Z-88), entitled, "An Ordinance Amending Certain Provisions of Chapter 155 of the City Code, Entitled 'Rent Control.'" Z-88 amended the RCO and allowed landlords to more easily obtain decontrol and permissible rent increases based on vacancy rates. Burns v. Hoboken Rent Leveling & Stabilization Bd., 429 N.J. Super. 435, 441 (App. Div. 2013). Specifically, Z-88 modified the base year for rent calculations to 1985, when the mandatory annual landlord registration requirement was first imposed. It also provided alternative procedures to prove past years' vacancies, entitling the landlord to at most a 25% rent increase, in the absence of vacancy decontrol forms. The ordinance became effective on March 31, 2011. Ibid.

The remand hearing was held as ordered by Judge Tolentino. The Board, following Z-88, started with the 1985 base year rent of $525, and allowed vacancy decontrols requested by plaintiff for 1989 and 1992. Therefore, the calculated 2006 permissible monthly rent was $1,498.84. Thereafter, Hoboken's rent regulation officer wrote to the Board questioning the retroactive application of Z-88. The Board held a special meeting to address the issue, reversed its prior determination, and required the rent calculation be made in accordance with the law prior to Z-88's enactment. As a result, the Board directed the rent regulation officer to calculate the rent using 1981's $120 rent as the base year and allowing vacancy decontrols in 1983 and 1984. Accordingly, the permitted 2006 rent for the unit was calculated as $447 per month. The Board adopted this resolution on January 11, 2012.

Plaintiff filed an order to show cause, seeking to void the Board's new rent calculation and reinstate its prior rent calculation of $1,498.84. Plaintiff included a claim that the Board had violated 42 U.S.C.A. 1983 and New Jersey's Civil Rights Act, N.J.S.A. 10:6-1 to -2, and sought damages and attorney's fees. Plaintiff also moved to reopen and amend its original prerogative writs complaint to add these new claims.

Judge Maureen Mantineo considered the matter. She found no basis for injunctive relief noting the demands were merely monetary. Further, she noted the prior action had been finalized and dismissed. She issued an order on April 20, 2012, denying plaintiff's requests, with prejudice.

Plaintiff filed its first appeal from the order memorializing Judge Tolentino's decision entered on September 9, 2010; the amended order filed September 19, 2011; and the April 20, 2012 order denying its motion to amend the complaint and require the Board to comply with Z-88 in calculating the permitted rent (A-4781-11).

After dismissal of its order to show cause, plaintiff filed a new prerogative writs action (HUD-L-1023-12), challenging the Board's recalculation of rent without considering Z-88's ameliorative provisions (2012 action). The Rubinsteins moved to dismiss, maintaining the issue was pending on appeal. A different Law Division judge assigned to review the matter agreed and dismissed the complaint without prejudice for lack of jurisdiction. The decision was memorialized in an order dated July 17, 2012. Plaintiff also appeals from that order (A-6075-11).

We reject plaintiff's challenge to Judge Tolentino's denial of injunctive relief to enjoin the Board from future rent calculations using the amended RCO, which was ultimately memorialized in the September 9, 2010 order. We find no abuse of discretion, Horizon Health Ctr. v. Felicissimo, 135 N.J. 126, 137 (1994), in denying the relief. We affirm substantially based on Judge Tolentino's reasoned analysis that the irreparable harm element of Crowe v. De Gioia, 90 N.J.126, 132-33 (1982) was not proven. R. 2:11-3(e)(1)(A). Although plaintiff's argument on appeal advances the merits of its claim for relief, it fails to identify facts in the record, which could support a finding that, absent relief, it would suffer irreparable harm. See Del. River & Bay Auth. v. York Hunter Constr. Inc., 344 N.J. Super. 361, 364-65 (Ch. Div. 2001) (holding where monetary damages will suffice, injunctive relief is improper). Similarly, we reject the application of the doctrine of manifest injustice to grant relief and conclude the claim lacks merit. R. 2:11-3(e)(1)(E).

We also find unavailing the challenge to the denial of plaintiff's alleged civil rights action under 42 U.S.C.A. 19833 and a request for an award of attorney's fees. Plaintiff's complaint, however, asserted a claim under 28 U.S.C.A. 1984, and now for the first time on appeal, maintains the references were typographical errors, understood to reference the civil rights statute. The citation to "28 U.S.C.A. 1984" certainly is an error, as no federal statute corresponds to this citation. We note plaintiff's complaint, filed on June 15, 2007, contains the erroneous reference eight times. Certainly, plaintiff did not assert its complaint was in error before Judge Tolentino.4

We do not consider issues not previously raised before the trial court unless they address "the jurisdiction of the trial court or concern matters of great public interest." Nieder v. Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973) (citation and internal quotation marks omitted). Accordingly, we decline to consider plaintiff's claim.

For completeness, assuming the court recognized plaintiff's error and concluded no claim was shown, we determine that conclusion was proper. A municipality's error in the exercise of its police power will not support a 1983 action, which requires the municipality to act deliberately and to be the moving force behind the deprivation of civil rights. Stewart v. Moll, 717 F. Supp. 2d 454, 464 (E.D. Pa. 2010). No evidence supports such a claim; consequently no entitlement to an award of attorney's fees is presented.

The final claim raised in A-4781-11 is a challenge to Judge Mantineo's denial of plaintiff's post-remand hearing motion to amend its complaint and grant it emergent relief. The issue raised at that time was the Board's failure to follow Z-88 in calculating the rent. Plaintiff argues the order to show cause sought to enforce the terms of the Judge Bariso's September 19, 2011 remand order.

In our review, we consider "whether the trial judge pursue[d] a manifestly unjust course[,]" which requires reversal. Gillman v. Bally Mfg. Corp., 286 N.J. Super. 523, 528 (App. Div.), certif. denied, 144 N.J. 174 (1996) (citation and internal quotation marks omitted). We are not persuaded by plaintiff's arguments.

Plaintiff's 2012 order to show cause sought what amounted to the retroactive application of Z-88. Failure to apply Z-88 to the rent calculation was not a violation of Judge Bariso's final order, as the issue was never presented to Judges Tolentino or Bariso. As noted, Z-88 included new procedures to be followed when rents were calculated. Of particular note to plaintiff's position was Z-88's use of 1985 as the base year for rental calculations and its more permissive provisions to substantiate entitlement to vacancy decontrols.

When plaintiff filed the 2012 order to show cause and motion to amend its complaint, the underlying prerogative writs action had already been finalized, the matter had been remanded to the Board, the complaint was dismissed and the Law Division did not retain jurisdiction. Contrary to plaintiff's assertion that its application merely sought to enforce litigant's rights and require the Board to comply with the terms of the remand order, the request actually presented a new claim not previously adjudicated by the Law Division.

Judge Mantineo did not abuse her discretion in denying the requests for relief and requiring plaintiff to initiate a new prerogative writs action. Under the circumstances and in light of the procedural posture of the 2007 action, her instruction to file a new action was not "a manifestly unjust course." Gillman, supra, 286 N.J. Super. at 528. We conclude Judge Mantineo did not err in declining the motion to amend that complaint to add new requests for relief. The 2007 claims raised in the original complaint were subject to a plenary hearing and were adjudicated. Thus, the 2012 request to amend cannot be considered timely. SeeWm. Blanchard Co. v. Beach Concrete Co., 150 N.J. Super.277, 293-94 (App. Div.) (stating a motion to amend must be offered in a timely manner), certif. denied, 75 N.J.528 (1977); see alsoFox v. Mercedes-Benz Credit Corp., 281 N.J. Super.476, 483 (App. Div. 1995) (holding motion to amend pleadings filed late and found to lack merit must be denied).

In summary, following our review, we find Judge Tolentino did not abuse her discretion in denying plaintiff's request for injunctive relief and attorney's fees. Further, Judges Bariso and Mantineo did not err in subsequent reviews, which declined to alter Judge Tolentino's determinations and expand the issues to be addressed in the litigation.

We turn to the issue presented in A-6075-11. Plaintiff argues the dismissal of the 2012 action was error. On the Rubinsteins' motion, the court dismissed the matter without prejudice pending our review of the issues raised in A-4781-11. Judge Martha T. Royster concluded plaintiff's appeal of Judge Mantineo's order denying plaintiff's order to show cause and amendment of its complaint to challenge the Board's rent calculation without regard to Z-88, divested the Law Division of jurisdiction to consider that same issue. R. 2:9-1(a). We conclude the July 17, 2012 order properly dismissed the complaint, without prejudice, subject to reinstatement when our opinion was issued.

We are also mindful that our review is of final orders. R. 2:2-3(a)(1). A dismissal without prejudice is not a final order subject to appeal as of right. See Caggiano v. Fontoura, 354 N.J. Super. 111, 123 (App. Div. 2002) (explaining when order does not resolve all issues as to all parties it is interlocutory). See also Auster v. Kinoian, 153 N.J. Super. 52, 56 (App. Div. 1977) (noting a dismissal without prejudice generally is not a final order).

We find plaintiff's suggestion it has been deprived of the ability to challenge the Board's November 2011 and January 2012 decisions specious. As we have found no error resulted from Judge Mantineo's denial of the motion to amend the 2007 complaint to review the applicability of Z-88, plaintiff may now move before the Law Division to reinstate the 2012 action. In the interest of justice, the timeliness of plaintiff's complaint shall be considered based upon the date of its initial filing, February 24, 2012, not the date of reinstatement.

Affirmed.

1 A "vacancy decontrol" refers to the instance when an apartment is voluntarily vacated making rent temporarily "decontrolled." When this occurs, a landlord may apply a one-time 25% increase in rent when leasing to a new tenant.

2 Oral argument was held before Judge Peter Bariso, who denied various requests advanced. In remanding the matter to the Board as Judge Tolentino ordered, he stated:

In these proceedings, the Board should recalculate the legal rent for the subject unit based upon the trial testimony of the Rent Control Office's senior clerk which established that if the legal rent was calculated without retroactively applying the requirements for registration and vacancy decontrol forms prior to 1996 the legal rent for the subject unit would be $698.00 per month as of October 23, 2006. Plaintiff is entitled to receive the appropriate annual CPI increases to the rental amounts since 2006[.]

[(emphasis added)].

3 42 U.S.C.A. 1983 provides a cause of action for the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, by one acting under the color of law. 42 U.S.C.A. 1988 authorizes an award of attorney fees for any person who prevails on a 1983 action.

4 In 2012, after the Board conducted the remand hearing, plaintiff sought to amend its complaint. Among the amendments was an assertion correctly citing 42 U.S.C.A. 1983, along with a claim under New Jersey's Civil Rights Act. Prior to that, however, there was no apparent recognition that the complaint was erroneous.