WALL STREET INVESTMENT GROUP, LLC v. PLEVY & PLEVY REAL ESTATE HOLDINGS, LLC

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-5714-13T3

A-5967-13T30

WALL STREET INVESTMENT GROUP, LLC,

Plaintiff-Appellant/

Cross-Respondent,

v.

PLEVY & PLEVY REAL ESTATE

HOLDINGS, LLC,

Defendant/Third-Party

Plaintiff-Respondent/

Cross-Appellant,

v.

DORIS SCOTT HUGGINS,

Third-Party Defendant-

Appellant/Cross-Respondent.

_________________________________

WALL STREET INVESTMENT GROUP, LLC,

Plaintiff-Respondent,

v.

PLEVY & PLEVY REAL ESTATE

HOLDINGS, LLC,

Defendant/Third-Party

Plaintiff-Appellant,

v.

DORIS SCOTT HUGGINS,

Third-Party

Defendant-Respondent.

__________________________________

September 7, 2016

Submitted February 29, 2016 Decided

Before Judges Carroll and Sumners.

On appeal from Superior Court of New Jersey, Law Division, Mercer County, Docket No. L-1697-12.

Cho Legal Group, LLC, attorneys for appellants/cross-respondents Wall Street Investment Group and Doris Scott Huggins (Jae H. Cho, on the brief).

Joseph L. Mooney, III, P.C., attorneys for respondent/cross-appellant Plevy & Plevy (Mr. Mooney, on the brief).

PER CURIAM

This consolidated matter arises from a commercial landlord-tenant dispute. Following a bench trial, judgment was entered dismissing plaintiff Wall Street Investment Group's wrongful distraint of property complaint, and defendant/third-party plaintiff Plevy & Plevy Real Estate Holdings, LLC's counterclaim and third-party complaint for unpaid rent against Wall Street and third-party defendant Doris Scott Huggins. Wall Street and Huggins appealed, followed by Plevy & Plevy's cross-appeal.1 For the reasons that follow, we affirm.

I.

Trial was conducted over two separate days in March and May, 2014, before Judge Philip S. Carchman, with testimony from Robert Plevy, owner of Plevy & Plevy, and Huggins. We glean the following relevant facts and contentions from the trial.

Pursuant to a written lease agreement dated June 1, 2006, Plevy & Plevy rented office space in Trenton on a month-to-month basis beginning on June 1, 2006, and ending on May 31, 2007, to tenants, "Dee Huggins and Wall Street Investments Group." Huggins, a principal of Wall Street, signed the lease as tenant without indicating she was signing on behalf of Wall Street. Apparently, the lease was continued beyond its termination date although there was no written agreement extending the lease.

Sometime in the fall of 2009,2 after rent was unpaid for several months, Plevy decided to take matters into his own hands by locking Huggins out of the office. Huggins claimed that between March, and November 2009, she unsuccessfully attempted to reach Plevy to discuss the lockout by visiting his office "five times" and making fifty telephone calls, none of which were returned.

Plevy testified that Huggins abandoned the premises, and as a result, his office manager sent her an email on November 10, 2009, advising that her property had been removed from the premises in September 2009. The email stated,

[n]o rent has been paid for 2009[.] Your messages stated that you would be in to pay rent (in April, May, [and] June)[;] however[,] that never happened. So the bottom line is in September with still no rent paid[,] all you[r] contents have been boxed up and placed in storage. Your space has been considered abandoned as is our rights stated in your lease. If payment in full is made we can make arrangements to have all your belongings available to be removed from storage.

Plevy claimed that he never destroyed, sold, or discarded any of the property on the premises. He acknowledged, though, that prior to changing the locks he did not commence an eviction action through the court, as required under the lease agreement in the event of any breach of a lease provision.

It was not until March 30, 2010, many months after Plevy & Plevy claimed it took possession of the premises through self-help, that a complaint was filed to legally evict Huggins and Wall Street for nonpayment of rent. A default judgment of possession and warrant of removal was issued on April 26, 2010.

Sometime in early 2011, Huggins sent Plevy's attorney a fax demanding return of furniture and other property that was left in the office. Huggins claimed that she had not been able to occupy the premises since January 2007, as a result of injuries from a car accident and a subsequent broken hip. On April 20, 2011, the attorney responded in an email providing an inventory of the property held and offering to return it in exchange for payment of outstanding rent.

Neither Huggins nor Wall Street paid the past due rent. Instead, Wall Street filed a wrongful distraint action on January 10, 2012 in the Special Civil Part. In response, Plevy & Plevy filed a counterclaim against Wall Street and a third-party complaint against Huggins seeking payment of unpaid rent, costs and attorney fees. All claims were subsequently transferred to the Law Division.

In 2013, Plevy met with Huggins at the premises to collect her property but their testimony conflicted as to what occurred. Plevy indicated that, except for a few items, the property was returned to Huggins when she came to the premises on four separate occasions. Huggins claimed that she only met Plevy on two occasions in December 2013, and that he only returned a few items, including five to six pieces of furniture and some boxes. She testified that all of her business files were "thrown away." Moreover, she stated that Plevy told her that he had been using some of her furniture, and that she observed her furniture in other people's offices as well as in Plevy's office.

However, Huggins stated on cross-examination that she went to the premises to retrieve her property on July 19. This was confirmed in emails by Huggins's counsel reflecting that, Huggins had "picked up some of her files" on July 19, and she agreed to come back to the premises in August to retrieve the rest of her property. Explaining that it was a matter of "semantics," Huggins claimed that she had picked up boxes with "sales literature" and not any files.

On June 30, 2014, the court placed its oral decision on the record. Based upon his assessment of the parties' testimony and applicable law, Judge Carchman found no cause for action as to either Wall Street's complaint, or Plevy & Plevy's counterclaim and third-party complaint, dismissing all claims with prejudice. The judge ruled

I find that [Plevy & Plevy] did violate the terms of the lease and unlawfully entered the premises prior to exercising [its] right of eviction, t[ook] possession of and store[d] [Wall Street's] property.

I further conclude that [Wall Street] breached the terms of this lease agreement and failed to pay rent as required by its terms.

. . . .

I further conclude that [Plevy & Plevy's] breach of its own lease agreement precludes any entitlement to collect past-due rent. Accordingly[,] I find no cause for action as to either the complaint or in the counterclaim and dismiss all of the complaints, the counterclaim, and the third party complaint with prejudice.

Judge Carchman found Huggins's testimony to be generally incredulous. For example, contrary to Huggins's assertion that her payment in March of 2009 brought the rent payments current to that date, the judge found

[T]he payment made in March of 2009[,] only brought the payments current to December 31[], 2008, and there were still arrears that were due.

There is no credible evidence submitted other than [Huggins's] word that she paid the rent through December that the rent was paid past December 31[], 2008. And in fact in a subsequent writing she acknowledged that fact.

No further payments were made after the March 9[], 2009 payment though promises of further payments were made by [Huggins] in April, May, and June of 2009.

Moreover, Judge Carchman did not believe Huggins's testimony that she called Plevy, "[fifty] times," to determine what caused the lockout. The judge stated that "[Huggins] had not paid her rent and whether [Plevy & Plevy] had a right to change the locks or not[,]" he was "satisfied that [Huggins] understood that she was behind in her rent payments." Thus, as of August 31, 2009, the "rent arrears had accumulated to $9,400[,] representing eleven months of rent and late charges."

Additionally, the judge found that "the locks were not in fact changed in April 2009[,] and despite [Plevy & Plevy's] argument that they were changed in April of 2010[,]" he was "satisfied that they were in fact changed some time in the fall of 2009." The judge further noted, "[c]ertainly[,] the email by [Plevy & Plevy's counsel] would support the proposition that as of November 2009[,] [Plevy & Plevy were] taking possession of the premises."3 The judge found further support from the fact that Plevy & Plevy rented the premises to a new tenant that same month.

Judge Carchman also was skeptical of Huggins's testimony indicating that she had used the premises as a business office after April 2009. He determined that the photographic evidence submitted by [Wall Street] of the premises "demonstrate[d] that the rooms were not in use as an office or conference room but they were being utilized for storage." Furthermore, he gave importance to a fax submitted by Huggins to Plevy's counsel in early 2011 to refute her testimony, reasoning

And I find that this communication in 2011 is contrary to [Huggins's] assertion that she was operating the business from the premises and that she had meaningful records, documents, and business necessities located on the premises.

It's inconsistent, such testimony rather, is inconsistent with the timing here. If someone were operating, and this was a financial services business, an investment counseling business, if someone were operating a business as described by [Huggins], to wait for that period of time before making contact with [Plevy] to secure a return of property is inconsistent with an operating business.

Although the court found Plevy & Plevy violated the distraint statute, N.J.S.A. 2A:33-17, by keeping, and even using, Wall Street's property, relief was denied to Wall Street because there was no proof of loss and the parties were ordered to make arrangements for the property's return. Judge Carchman stated

[W]hile there are various listings of property which [Wall Street] claims w[ere] retained by [Plevy & Plevy] and while [Plevy & Plevy] admits that [it] utilized certain of those property, there are serious flaws in [Wall Street's] case which in essence [caused Wall Street's] failure to recover[].

. . . .

But more important there is not one scintilla of evidence as to the value of any items allegedly retained by [Plevy & Plevy]. Mere listings do not indicate value and they are of limited value to the [c]ourt in assessing a potential claim for damages.

. . . .

In addition[,] [Wall Street] claims that records were lost, however[,] there is a dispute, a substantial dispute, as to whether [Wall Street] ever sought to recover all [its] records which again [Plevy & Plevy] assert[] are available to [Wall Street].

. . . .

Not only is the[re] absence of proof as to damages . . . . [Plevy & Plevy] has indicated that the property remains on the premises and is available to [Wall Street].

I give no weight to [Wall Street's] claim that certain items are missing. [Plevy & Plevy] has admitted use of the property but by order here [Wall Street] will be made whole by return of the property.

I conclude while there has been a violation of the distraint statute the absence of damage (indiscernible) there is any recovery for violation of the statute. Moreover[,] no recovery under N.J.S.A. 2A:33-17 is available as the property was not sold nor is recovery available because no value was established.

[(Emphasis added).]

The court rejected Plevy & Plevy's claim that Wall Street and Huggins abandoned the premises allowing Plevy & Plevy to take possession of property left on the premises pursuant to the Abandoned Tenant Property Act, N.J.S.A. 2A:18-72 to -84. The judge was not persuaded that Plevy & Plevy "met its burden to establish that the property was in fact abandoned."

In addition, Judge Carchman decided

I am of the view that the lease agreement provides for the remedy of the eviction and as such precludes [Plevy & Plevy] from the self-help provision of the distraint act.

Although not set forth as the exclusive remedy available to [Plevy & Plevy], I interpret the lease as reflecting an intent to utilize the eviction remedy as the appropriate remedy to take possession of [Wall Street's] property.

[Plevy & Plevy] has in fact waived [its] rights of the distraint section. By taking possession of property prior to the April 10, 2010 order of eviction and causing a lockout in November of 2009[,] [Plevy & Plevy] has violated the lease agreement and again under the unique facts presented here the statute as well.

. . . .

Moreover[,] I find that [Plevy & Plevy] is not entitled to the rent because of [its] violation of the lease and I dismiss [its] counterclaim to the third party defendant, [Wall Street].

Following entry of an order memorializing the court's decision, Wall Street and Huggins appealed, and Plevy & Plevy cross-appealed.

II.

Our standard of review of the trial court's determinations following a non-jury trial is a limited one. Petrozzi v. City of Ocean City, 433 N.J. Super. 290, 316 (App. Div. 2013), certif. denied, 217 N.J. 623 (2014) (citing Rova Farms Resort, Inc. v. Inv'rs Ins. Co., 65 N.J. 474, 484 (1974)). Accordingly, an appellate court must "give deference to the trial court that heard the witnesses, sifted the competing evidence, and made reasoned conclusions." Griepenburg v. Twp. of Ocean, 220 N.J. 239, 254 (2015) (citing Rova Farms Resort, Inc., supra, 65 N.J. at 483-84 (1974)). Reviewing courts "should 'not disturb the factual findings and legal conclusions of the trial judge' unless convinced that those findings and conclusions were 'so manifestly unsupported by or inconsistent with the competent, relevant and reasonably credible evidence as to offend the interests of justice.'" Ibid. (quoting Rova Farms Resort, Inc., supra, 65 N.J. at 484). Review on appeal "does not consist of weighing evidence anew and making independent factual findings; rather, our function is to determine whether there is adequate evidence to support the judgment rendered at trial." Cannuscio v. Claridge Hotel & Casino, 319 N.J. Super. 342, 347 (App. Div. 1999) (citing State v. Johnson, 42 N.J. 146, 161 (1964)).

However, we owe no deference to the trial court's "interpretation of the law and the legal consequences that flow from established facts." Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995) (citations omitted). We review such decisions de novo. 30 River Court E. Urban Renewal Co. v. Capograsso, 383 N.J. Super. 470, 476 (App. Div. 2006) (citing Rova Farms, supra, 65 N.J. at 483-84; Manalapan Realty, supra, 140 N.J. at 378).

Applying these principles, we conclude there is no reason to disturb the trial court's judgment. We therefore affirm substantially for the reasons expressed by Judge Carchman in his well-reasoned oral decision. We add the following comments.

Initially, we address the contentions by Wall Street and Huggins. They argue that the court erred in finding that Huggins executed the lease in her individual capacity, not on behalf of Wall Street.

There is no evidence in the record to support Huggins's contention. The main objective of interpreting a contract is "to ascertain the intention of the parties as revealed by the language used, the situation of the parties, the attendant circumstances, and the objects the parties were striving to attain." Celanese Ltd. v. Essex Cty. Imp. Auth., 404 N.J. Super. 514, 528 (App. Div. 2009) (citations omitted). The clear language of the lease reflects Huggins and Wall Street as tenants and only Huggins's signature as tenant. This is supported by Plevy's testimony that it was his intention that Huggins sign the lease individually, so if Wall Street failed, Huggins would be personally responsible for paying rent. There is no indication that Huggins signed the lease for Wall Street. In presenting herself as a highly educated investment advisor and having associations with Fortune 500 companies, Huggins would know the distinction between signing for the company or as an individual. Thus, Judge Carchman's determination is consistent with the record, and we see no reason to disagree with his finding.

Wall Street maintains that it is entitled to damages for the wrongful distraint of property. However, there is no proof to substantiate the monetary value of the property. Moreover, the judge found that Plevy & Plevy had possession of the property that Huggins did not remove despite given the opportunity to do so. Thus, the judge ordered that the remaining property be returned. We see no cause to disturb this credibility determination, and logical remedy.

Wall Street's contention that the trial court erred in finding that it was liable for any damage to the premises as a result of a phone installation has no merit as Plevy & Plevy acknowledges that the claim was abandoned at trial, and was not considered by the court.

Lastly, Wall Street's argument that this court shall exercise original jurisdiction to reconsider Plevy & Plevy's liability for distraint and Huggins's personal liability as signatory on the lease is without sufficient merit to warrant discussion. R. 2:11-3(e)(1)(E).

Turning to Plevy & Plevy, it contends that the court incorrectly held that it violated the distraint statute, N.J.S.A. 2A:33-1 to -23. It argues that its actions towards Wall Street and Huggins were reasonable given that: they abandoned the premises; owed $9400 in back rent; and there was no proof of the value of the property allegedly distrained. We are not persuaded.

In accordance with N.J.S.A. 2A:33-1,

Distraints may be taken when authorized by law; but no unreasonable, excessive or wrongful distraint shall be taken, and for any such taking, the distraining party shall be liable in damages to the party aggrieved.

No distraint shall be permitted for money owed on a lease or other agreement for the occupation of any real property used solely as a residence of the tenant.

[(Emphasis added).]

Here, Plevy & Plevy's self-help measures in locking out Wall Street and Huggins and withholding their property because of outstanding rent was not authorized by law. Plevy & Plevy failed to exercise the legal remedy set forth in the lease agreement to evict its tenants for non-payment of rent. Section 22 of the lease titled, "Violation, Eviction, Re-entry and Damages," states

The landlord reserves a right of re-entry which allows the Landlord to end this Lease and re-enter the Rental Space if the Tenant violates any agreement in this Lease. This is done by eviction. Eviction is a court procedure to remove a tenant. . . . After obtaining a judgment for possession and compliance with the warrant of removal, the Landlord may re-enter and take back possession of the Rental Space. If the cause for eviction is nonpayment of rent, notice does not have to be given to the Tenant before the Landlord files a complaint.

There was also no proof that Wall Street and Huggins abandoned their property. More importantly, Plevy & Plevy did not provide written notice as required by N.J.S.A. 2A:18-72 based upon its reasonable belief that the tenants "left the property upon the premises with no intention of asserting any further claim to the premises or the property and" a warrant for removal was executed and Plevy & Plevy regained legal possession of the premises. The first time Wall Street and Huggins were informed that their property had been removed from the premises was in November 2009, two months after Plevy & Plevy had removed the property, and four months before a lawful eviction proceeding was commenced. Thus, Judge Carchman properly determined that Plevy should return the property in its possession.

Plevy & Plevy contends that the trial court erred in finding that Plevy & Plevy's unlawful eviction precluded it from recovering unpaid rent accrued prior to the unlawful eviction. However, Plevy & Plevy benefitted from improperly evicting Wall Street and Huggins and renting the property to a new tenant in the fall of 2009 before commencing lawful eviction proceedings in March 2010. Effectively, the rent collected from this new tenant mitigated the amount of rent owed by Wall Street and Huggins. Thus, we defer to the trial court's determinations as they are supported by credible evidence in the record.

Affirmed.

1 Subsequent to filing the notice of appeal on behalf of Wall Street, counsel submitted correspondence confirming that he was also representing Huggins.

2 The date of the lockout was disputed at trial; Huggins maintained that she was locked out in April 2009, and Plevy testified that the lockout occurred in April 2010. Additionally, in November 2009, Plevy and Plevy s counsel indicated in an email to Huggins that as of September 2009, "with still no rent paid all you[r] contents have been boxed up and placed in storage." The court recognized the inconsistencies and was "satisfied that the locks were in fact changed some time in the fall of 2009."

3 The email states that "in September with still no rent paid all you[r] contents have been boxed up and placed in storage."