R&M PIZZERIA, LLC v. B. SYLVESTER, LLC

NOT FOR PUBLICATION WITHOUT THE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-0

R&M PIZZERIA, LLC,

Plaintiff-Respondent,

v.

B. SYLVESTER, LLC,

Defendant-Appellant,

and

LARRY M. ALI BLAKE, JR.,

Defendant.

________________________________

February 3, 2017

Submitted December 19, 2016 Decided

Before Judges Nugent and Currier.

On appeal from the Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-5530-13.

Michael L. Dermody, attorney for appellant (Radames Velazquez, Jr., on the brief).

Roberta L. Tarkan, attorney for respondent.

PER CURIAM

In this landlord-tenant action, defendant B. Sylvester, LLC appeals from the June 1, 2015 judgment entered against it following a bench trial.1 Defendant argues that the trial judge erred in not enforcing the plain terms of the lease, and that a correct reading of the lease would have resulted in an award of damages to defendant, not plaintiff. After a review of these arguments in light of the record and applicable legal principles, we disagree and affirm.

We derive the following facts from the testimony presented at trial. The parties entered into a lease for the rental of commercial property. Plaintiff-tenant, R&M Pizzeria LLC's, intended use of the space as a pizzeria required extensive renovations entailing plumbing, electrical, and exhaust system work. In acknowledging the desired renovations, the lease noted that "the landlord will give 2 months free rent for construction and buildout." All of the lease negotiations and subsequent security deposit and rent payments were handled by Kevin Seabrook, a real estate agent, who was defendant's authorized agent and property manager.

After taking possession of the leased space, plaintiff hired an architect and several contractors to perform the needed construction work. Blueprints were prepared and permits were obtained for the work. The general contractor met numerous times with Seabrook, who observed the work first-hand. As the pizzeria was located on the ground floor, the contractor advised Seabrook of the need to cut through the floors above the leased space to the roof to install the exhaust system. Seabrook provided the contractor with keys permitting him to access the basement and roof area.

The contractor testified that he saw Ali around the building every few days and that Ali was aware of the work that was being done. The contractor stated he showed Ali where he would be cutting into the ceiling and there were no objections. During this time period, Ali hired the contractor to do some work for him in his personal office, also located in the building.

Plaintiff's owner, Hamid Hassen, reiterated that Seabrook was aware of all the work that was being done, including the need for outside ventilation requiring the cutting through of several floors to the roof.

On September 16, 2013, Hassen came to the premises and was unable to unlock the door. He contacted Seabrook, who did not know why the keys would not work. Shortly thereafter, Ali called Hassen screaming and cursing at him and accusing Hassen of having damaged his building. Ali asked Hassen to meet with him the following day.

During that meeting, Ali told Hassen he had a "bogus lease," he had damaged the building, and he did not want him to be there anymore. Although Hassen offered to pay more rent, Ali refused the offer, advising he would accept $1500 a month, but only for one year (the lease provided for $900 a month rent for the first year and slight increases thereafter). Hassen declined.

As a result of being locked out of the leased space, Hassen presented an order to show cause and verified complaint. On October 15, 2013, the Special Civil Part judge ordered Hassen be given access to the space for one hour. Ali objected to Hassen having access to any other areas of the building and the judge concurred with Ali, stating the matter was to be transferred to the Law Division for further proceedings.2

Without access to the building, Hassen was unable to continue and finish the needed renovations to conduct his business. The premises were left unfinished in the middle of the construction project. After he removed some tools during his one hour of permitted access, Hassen never returned to the building.

At trial, Ali denied having any knowledge of the extent of the construction work that was being done. He testified he first discovered that plaintiff's contractor had cut through the floors when he opened a door in his office space and saw a ventilation system coming up through the floor. Ali stated there was no authority from him to install the system in his office upstairs.

Ali was furious with the construction work being done and instructed the locks on the pizzeria be changed. He then called Hassen and met with him. Ali stated that he was so angry with the condition of his building that several days after the meeting he contacted the city building inspector, and then he went in person to city hall. Ali stated he questioned how this work could have been done without permits, since he had never given any authorization for the work.

When the city inspector came to the premises, Ali showed him the unfinished construction work, stating that the building was unsafe. The construction official issued a "stop construction order," finding the structure unsafe due to the inadequate support of the framing members and a failure to fasten exhaust hoods and ducts to the framing members.

In November 2013, defendant served an eviction notice on plaintiff to terminate the tenancy and then a subsequent action for removal. Default judgment was entered and the tenancy was terminated. A warrant for removal was executed in March 2014.

At trial, plaintiff sought monies for the damages incurred due to the illegal lock-out and defendant's breach of the lease, including attorney's fees. Defendant sought damages on its counterclaim, contending that plaintiff breached the lease when it made changes to the rental space without defendant's consent, and that its renovations compromised the structural integrity of the building and were in violation of the city's building code.

After the three-day bench trial, Judge Patrick J. Arre issued a written decision of April 8, 2015, finding that plaintiff was performing work on the premises as "contemplated under the lease, that the lease was not breached, and that any 'damages' claimed by the landlord occurred because the tenant was denied access to complete work it had rightfully begun." The judge further concluded that defendant had not satisfied its burden on the counterclaim. Defendant was unable to prove that plaintiff breached the lease by causing any structural damage to the building. The judge stated: "The damages . . . alleged stemmed from work that plaintiff was prevented from completing due to the lockout."

Judge Arre assessed the damages at $32,699.03, comprising payments made to contractors and six months of rent. He then trebled the damages under N.J.S.A. 2A:39-8 and awarded attorney's fees. Judgment was entered for $117,672.09.

On appeal, defendant argues that although plaintiff is entitled to damages for the lockout period of September 16 to October 15, 2013,3 the judge failed to apply the applicable law as the lease did not contain a provision allowing plaintiff the right to cure any alleged damage. Defendant also asserts the judge wrongly trebled the damages.

In considering these arguments, we are mindful of our limited scope of review. "The factual findings of a trial court are reviewed with substantial deference on appeal, and are not overturned if they are supported by adequate, substantial and credible evidence." Manahawkin Convalescent v. O'Neill, 217 N.J. 99, 115 (2014) (citations omitted). Such deference is especially due when a trial judge's findings "are substantially influenced by [the judge's] opportunity to hear and see the witnesses and to have the feel of the case, which a reviewing court cannot enjoy." Zaman v. Felton, 219 N.J. 199, 216 (2014) (alteration in original) (citation omitted).

Defendant asserts that Judge Arre disregarded pertinent terms in the lease and failed to enforce its plain terms. Specifically, defendant refers to paragraph 14(i) stating that the tenant shall "[d]o nothing to destroy, deface, damage, or remove any part of the Rental Space," and 14(l) providing that the tenant shall "[d]o nothing to destroy the peace and quiet of the Landlord, other tenants, or persons in the neighborhood." Defendant contends that plaintiff's violation of these clauses entitled it to terminate the lease and assert a claim for all related damages.

In considering and rejecting that argument, Judge Arre found that plaintiff was performing the work it required to build a pizzeria the intended end use of the space. Defendant's agent/property manager was on site almost daily and it is undisputed that he was aware of all of the construction phases and that he had provided full access to all floors of the building including the basement and roof. Plaintiff did not damage the property; it was in the midst of ongoing renovations when defendant locked the tenant out and contacted the city inspector. As the judge noted, any violations found by the city were due to the unfinished work; once locked out of the premises, plaintiff was unable to continue and complete the work.

Defendant also contends that the judge erred in considering plaintiff's testimony that it was denied access to the property, and therefore, could not make repairs because there was no right for plaintiff to cure any damages under the lease. This misconstrues plaintiff's claims. Hassen and the contractor adamantly denied that they needed to make repairs to the building because they had not caused damage to it. As the judge discussed, the construction work contemplated under the lease was ongoing and plaintiff was stopped by defendant from completing the renovation. Plaintiff did not assert a right to cure; it claimed the inability to complete the project once it was denied access to the building.

Defendant concedes it unlawfully locked plaintiff out on September 16, 2013, but when the judge allowed plaintiff back into the premises in October, that was the appropriate remedy, not a trebling of damages. N.J.S.A. 2A:39-8 provides that "a plaintiff recovering judgment shall be entitled to possession of the real property and shall recover all damages proximately caused by the unlawful entry and detainer including court costs and reasonable attorney's fees. When a return to possession would be an inappropriate remedy, treble damages shall be awarded in lieu thereof." (emphasis added).

In positing this argument, defendant disregards the Special Civil Part judge's denial of access to plaintiff in any other part of the building except the leased space. Defendant urges a narrow reading of "possession" that cannot be supported with the trial judge's factual findings. Without access to the basement and floors to the roof, plaintiff could not complete the work needed for its renovations, thus effectively preventing plaintiff's use of the space. The limited possession granted by the Special Civil Part judge was not an appropriate complete remedy. Judge Arre's decision to award a trebling of the compensatory damages is supported by the credible evidence in the record.

Affirmed.

1 Defendant Larry Ali Blake, Jr. (Ali), the managing member of B. Sylvester LLC, was dismissed from the case following trial.

2 We have not been provided a transcript from the Special Civil Part proceeding and rely on the testimony of the witnesses from the trial.

3 Defendant posits these damages would only consist of attorney's fees incurred to obtain access to the premises.