FERNANDO ESCOBAR v. MARKO MILETIC

NOT FOR PUBLICATION WITHOUT THE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-2299-18T3

FERNANDO ESCOBAR,

          Plaintiff-Respondent,

v.

MARKO MILETIC,

     Defendant-Appellant.
________________________

                   Submitted December 2, 2019 – Decided March 5, 2020

                   Before Judges Ostrer and Vernoia.

                   On appeal from the Superior Court of New Jersey, Law
                   Division, Hudson County, Docket No. SC-001607-18.

                   Jure Miletic, attorney for appellant.

                   Ingrid Echeverria, LLC, attorneys for respondent
                   (Ingrid E. Echeverria, of counsel and on the brief; Rita
                   G. Pincaro, on the brief).

PER CURIAM

          Defendant landlord Marko Miletic appeals from the trial court's judgment

awarding his former tenant, plaintiff Fernando Escobar, the statutory penalty of
twice the security deposit the court found he wrongfully withheld. Miletic

claimed he was entitled to withhold unpaid rent from the security deposit

because Escobar failed to give proper notice that he was terminating his tenancy.

Having reviewed Miletic's arguments in light of the record and applicable

principles of law, we reverse.

      The facts are undisputed. On April 30, 2016, the parties entered into a

two-year residential lease starting on June 1. As the lease provided, Escobar

proffered a $2325 security deposit, equal to one-and-a-half months' rent. The

lease required Escobar to give Miletic one month's written notice before

vacating the premises. When the lease expired, Escobar remained as a month-

to-month tenant. On August 3, 2018, Escobar notified Miletic orally that he

would vacate on September 1, 2018, and he later did so.

      Miletic claimed that Escobar did not give him the required thirty days'

written notice and despite his diligent efforts, he could not relet the premises

until October. Miletic sent Escobar a check for $786.06 dated September 12,

2018, explaining in a letter that the check covered the security deposit plus

accrued interest, minus $1550 for September's rent. Escobar then sued, seeking,

pursuant to  N.J.S.A. 46:8-21.1, double the amount he alleged Miletic withheld

wrongfully.


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      The trial court concluded that Miletic was not entitled to deduct unpaid

rent from the security deposit, notwithstanding that Escobar failed to provide

proper notice. The court doubled $1550, per  N.J.S.A. 46:8-21.1, and entered

judgment for $3100 in Escobar's favor. The trial judge also held that Miletic

wrongfully deducted rent from the security deposit because Escobar remained

in possession of the premises.

      Although the trial court's fact-findings after a bench trial deserve our

respect, see Seidman v. Clifton Sav. Bank, S.L.A.,  205 N.J. 150, 169 (2011), the

principal issue on appeal is a legal one, which we review de novo, Manalapan

Realty, L.P. v. Twp. Comm. of Manalapan,  140 N.J. 366, 378 (1995).

      Escobar was a periodic month-to-month tenant.          "A month-to-month

tenancy is a continuing relationship that remains unabated at its original terms

until terminated by one of the parties." Harry's Village, Inc. v. Egg Harbor Twp.,

 89 N.J. 576, 583 (1982). The party seeking to terminate such a tenancy must

serve "upon the other a month's notice to quit." Ibid. Here, Escobar gave oral

notice on August 3, 2018 and vacated on September 1, 2018. As he did not give

thirty days' notice, he was responsible for September's rent. See id. at 585-86

(stating that a notice to quit a month-to-month tenancy not given a full month

before the anniversary date is effective "on the next ensuing anniversary date");


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S.D.G. v. Inventory Control Co.,  178 N.J. Super. 411, 414 (App. Div. 1981)

(holding, in case of commercial month-to-month tenancy, that tenant who gave

notice on November 16 that he would vacate on November 30 was responsible

for December rent).

      The trial court erred in holding that Miletic could not deduct that unpaid

rent.  N.J.S.A. 46:8-21.1 requires the landlord to return the tenant's security

deposit "[w]ithin 30 days after the termination of the . . . lease . . . less any

charges expended in accordance with the terms of [the] . . . lease."  N.J.S.A.

46:8-21.1. If the landlord violates this section, the tenant may bring suit and

"the court upon finding for the tenant . . . shall award recovery of double the

amount of said moneys." Ibid. However, we have interpreted  N.J.S.A. 46:8-

21.1 to allow the landlord to deduct from the security deposit any unpaid rent.

See Penbara v. Straczynski,  347 N.J. Super. 155, 161 (App. Div. 2002). By

deducting $1550 of unpaid rent from Escobar's security deposit, Miletic did not

wrongfully withhold the security deposit. It follows that Miletic is not liable for

double damages.

      The trial court also erred in holding that Miletic wrongfully deducted from

the security deposit because Escobar was still in possession of the premises. See

 N.J.S.A. 46:8-21.1 (stating "no deduction shall be made from a security deposit


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of a tenant who remains in possession of the rental premises"). The record does

not support the court's finding. Miletic returned Escobar's security deposit,

minus the deduction for unpaid rent, eleven days after Escobar moved out and

returned his keys. At that point, Escobar was no longer "in possession." See

Lorril Co. v. La Corte,  352 N.J. Super. 433, 438-39 (App. Div. 2002) (stating

that tenants who vacated an apartment in the middle of a month were no longer

"in possession" under the holdover statute, although they were "technically

entitled to occupancy for the entire month" because they were charged for the

whole month).

      We need not address Miletic's remaining arguments.         See R. 2:11-

3(e)(1)(E).

      Reversed.




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