NRJ REALTY, INC. VS. JOELLE KORSAK (LT-3914-16, MIDDLESEX COUNTY AND STATEWIDE) ( 2018 )

NOT FOR PUBLICATION WITHOUT THE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-2695-16T4
NRJ REALTY, INC. and
NORMAN JEMAL,
Plaintiffs-Appellants,
v.
JOELLE KORSAK, CRYSTAL ASH,
MONICA KOVBASYUK, SAMANTHA
DILL and HANNAH COLLIER,
Defendants-Respondents.
___________________________________
Submitted May 2, 2018 – Decided August 14, 2018
Before Judges Koblitz and Suter.
On appeal from Superior Court of New Jersey,
Law Division, Special Civil Part, Middlesex
County, Docket No. LT-3914-16.
Paul J. Sica, attorney for appellants.
Respondents have not filed a brief.
PER CURIAM
Plaintiffs NRJ Realty, Inc. (NRJ) and Norman Jemal appeal two
orders entered in a landlord tenant case. The January 20, 2017
order vacated a Consent To Enter Judgment (Tenant Required To
Vacate) (consent order) that included a judgment of possession.
The November 18, 2016 order required plaintiffs to refund to
defendants Joelle Korsak, Crysyal Ash, Monica Kovbasyuk, Samantha
Dill, and Hannah Collier "Paypal fees" that plaintiff deducted
from funds they owed defendants under the consent order. We affirm
the orders.
Plaintiffs are the landlords of a property in New Brunswick.1
In June 2015, the plaintiffs and defendants signed a one-year
lease effective on July 1, 2015. The lease required defendants
to pay rent of $3500 per month and a $5250 security deposit.
Defendants were responsible to pay for all utilities. Rent could
be mailed to NRJ or "paid by credit card via Paypal" on a website
that was specified. "A fee of no less than 5.3 percent will be
charged on all payments made through the website."
In February 2016, defendants stopped paying rent, claiming
there were habitability issues with the apartment. On May 3,
2016, plaintiffs filed an eviction complaint for nonpayment of
rent, that alleged defendants owed $9636.20 for past due rent,
1
Plaintiffs' brief states that Jemal is the property owner and
NRJ is the duly authorized agent of the property. The complaint
filed in the Special Civil Part identified NRJ as the owner and
Jemal as the agent. The lease lists NRJ without designating it
as the landlord, but appears to have been signed by Jemal as
landlord.
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late fees, water and sewer charges, code violations and municipal
court fees.
On June 1, 2016, the parties entered into the consent order,
where defendants agreed to "the immediate entry of a judgment for
possession." The consent order stated that defendants already had
vacated the premises and "waive[d] and release[d] any claims that
have been brought or could be brought arising out of the tenancy
with the landlord." Defendants agreed to pay $7452 by June 6,
2016 and plaintiffs waived any future claims for "rent, municipal
ordinance violations, late fees and attorney fees." Plaintiffs
agreed to return defendants' security deposit, less $1222 for
water and sewer charges that "remain[ed] due and owing" and $1100
"as damages" for terminating the lease early. The parties agreed
that the "balance of the security deposit shall be returned" in
thirty days "provided physical damages to not exceed $1500." If
they did, tenants would be responsible for the amount over $1500.
On June 29, 2016, Jemal sent each defendant a letter including
a "[s]ecurity deposit breakdown" for his/her share of the security
deposit. In addition to the $220 per person deduction for early
termination and the $224.40 per person charge for water and sewer,
plaintiffs deducted Paypal charges, which were calculated using
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"a simple percentage of whatever amount was paid via Paypal."2
Defendants objected to plaintiffs' deduction of Paypal charges
because it was not part of the agreement.
In August 2016, defendants filed tenant complaints with the
New Brunswick Office of Rent Control, complaining about the
condition of plaintiffs' rental property and seeking a monetary
credit from plaintiffs for rent they had paid. Following a
hearing, the Rent Control Board approved a resolution on November
30, 2016 that credited defendants with $9815.20 for their loss of
use of the shower, quiet enjoyment and clothing, the leaking roof
and reimbursement for medical co-pays. Plaintiffs were to pay
defendants part of that amount in thirty days and the balance
thirty days thereafter. Plaintiffs were prohibited from
increasing rent for this unit for two years.
While that matter was pending, on September 12, 2016,
defendants filed a motion in the landlord tenant case to vacate
the June 1, 2016 consent order. Defendants' supporting
certification alleged that plaintiffs "breeched [sic] the
agreement when [they] returned a portion of the security deposit
and withheld Paypal fees," even though plaintiffs had agreed to
waive future claims for rent. Defendants complained that they
2
For defendant Monica Kovbasyuk this totaled $168.59.
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were "manipulated into entering the . . . agreement under extreme
duress and where [sic] held in the [c]ourthouse for [seven]
hour[s]." They stated their settlement was not presented to the
judge for approval. Plaintiffs filed a cross-motion in opposition,
to enforce the settlement, and for attorney's fees. Plaintiffs'
counsel sent a letter to defendants warning them to withdraw their
motion or face frivolous litigation sanctions.
On November 18, 2016, the trial court denied defendants'
motion, finding "as a matter of law there was no duress" to set
aside the consent order. However, the order provided that "all
Paypal fees deducted by the [p]laintiff from [d]efendants'
security deposit shall be refunded to Defendants within [thirty]
days of the date of this order thereafter this case shall be marked
settled and dismissed and any [j]udgment for [p]ossession entered
against the [d]efendants shall be vacated." The court told
plaintiffs' attorney that if plaintiffs did not comply, he would
vacate the settlement.
Plaintiffs did not refund the Paypal fees within thirty days
as ordered. On December 20, 2016, defendants filed a motion for
entry of a default judgment where they requested to vacate the
consent order and for the return of all the monies they paid
plaintiffs under it, plus attorney's fees, and a return of their
security deposit. Plaintiffs opposed the motion. They asserted
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that defendants never provided them with the specific amount of
the Paypal fees that were deducted or to whom it was owed. They
complained that defendants never made payment arrangements as they
had promised. Plaintiffs represented that "Paypal" fees are being
held in escrow in [their] attorney trust account," and that they
were "ready, willing and able" to pay.
The trial court entered an order vacating the parties'
settlement agreement on January 20, 2017, after finding plaintiffs
did not comply with the November 18, 2016 order. The court noted
that the Paypal deduction was made "in disregard of the consent
order." The court dismissed the complaint as "moot" because
defendants had already surrendered the premises voluntarily. The
order provided that the parties were "free to pursue their remedies
in other venues."
On appeal, plaintiffs argue that the court erred by modifying
the settlement agreement between the parties when it required
plaintiffs to refund the Paypal costs. They argue that because
they "substantially complied" with the consent order, that the
court erred by vacating it.
We afford a deferential standard of review to the factual
findings of the trial court. Rova Farms Resort, Inc. v. Inv'rs
Ins. Co., 65 N.J. 474, 483-84 (1974). These findings will not be
disturbed unless they are "so manifestly unsupported by or
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inconsistent with the competent, relevant and reasonably credible
evidence as to offend the interests of justice." Id. at 484
(quoting Fagliarone v. Twp. of N. Bergen, 78 N.J. Super. 154, 155
(App. Div. 1963)). However, our review of a trial court's legal
determinations is plenary. D'Agostino v. Maldonado, 216 N.J. 168,
182 (2013) (citing Manalapan Realty, L.P. v. Twp. Comm. of
Manalapan, 140 N.J. 366, 378 (1995)).
We discern no error by the court in vacating the consent
order. Consent judgments resolving litigation are "not strictly
a judicial decree, but rather in the nature of a contract entered
into with the solemn sanction of the court." Cmty. Realty Mgmt.
v. Harris, 155 N.J. 212, 226 (1998) (quoting Stonehurst at Freehold
v. Twp. Comm. of Freehold, 139 N.J. Super. 311, 313 (Law Div.
1976)). A consent judgment is "an agreement of the parties under
the sanction of the court as to what the decision shall be." Fid.
Union Trust Co. v. Union Cemetery Ass'n, 136 N.J. Eq. 15, 25 (Ch.
1944) (internal citations omitted), aff'd, 137 N.J. Eq. 456 (E &
A 1946).
"[A] consent judgment may only be vacated in accordance with
R[ule] 4:50-1." Harris, 155 N.J. at 226 (quoting Stonehurst at
Freehold, 139 N.J. Super at 313). "Rule 4:50-1 is not an
opportunity for parties to a consent judgment to change their
minds; nor is it a pathway to reopen litigation because a party
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either views his settlement as less advantageous than it had
previously appeared, or rethinks the effectiveness of his original
legal strategy." DEG, LLC v. Twp. of Fairfield, 198 N.J. 242, 261
(2009).
Under Rule 4:50-1, the trial court may relieve a party from
an order or judgment for the following reasons:
(a) mistake, inadvertence, surprise, or
excusable neglect; (b) newly discovered
evidence which would probably alter the
judgment or order and which by due diligence
could not have been discovered in time to move
for a new trial under R. 4:49; (c) fraud
(whether heretofore denominated intrinsic or
extrinsic), misrepresentation, or other
misconduct of an adverse party; (d) the
judgment or order is void; (e) the judgment
or order has been satisfied, released or
discharged, or a prior judgment or order upon
which it is based has been reversed or
otherwise vacated, or it is no longer
equitable that the judgment or order should
have prospective application; or (f) any other
reason justifying relief from the operation
of the judgment or order.
A motion for relief under Rule 4:50-1 should be granted
sparingly and is addressed to the sound discretion of the trial
court, whose determination will not be disturbed absent a clear
abuse of discretion. U.S. Bank Nat'l Ass'n v. Guillaume, 209 N.J.
449, 467 (2012). "[A]buse of discretion only arises on
demonstration of 'manifest error or injustice[,]'" Hisenaj v.
Kuehner, 194 N.J. 6, 20 (2008) (quoting State v. Torres, 183 N.J.
8 A-2695-16T4
554, 572 (2005)), and occurs when the trial court's decision is
"made without a rational explanation, inexplicably departed from
established policies, or rested on an impermissible basis."
Guillaume, 209 N.J. at 467.
Here, we find no abuse of discretion by the trial court. The
consent order required plaintiffs to return the balance of
defendants' security deposit, less certain enumerated deductions
that did not include Paypal fees. Although it provided for an
additional deduction for damages exceeding $1500, this was for
"physical" damages and not for additional fees or costs to the
landlord. Therefore, the deduction for Paypal fees was not a
deduction that plaintiffs had preserved under the consent order,
and instead had obligated themselves to return the balance of the
security deposit. The court's November 18 order attempted to
enforce the consent order, requiring defendants to refund the
Paypal fees within thirty days; it did not add a new term as
plaintiffs allege. Because plaintiffs breached the consent order
by not paying the security deposit as agreed, the trial court was
within his discretion to vacate the judgment under Rule 4:50-1(f)
justifying relief from the operation of the consent order. There
no longer was the need for a judgment of possession because
defendants had moved out of the apartment. A monetary judgment
could not be ordered here. See R. 6:3-4. Having not complied,
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the court could vacate the order that had entered the judgment of
possession. It correctly noted any other remedies had to be
pursued in other venues.
Plaintiffs argue that they deposited money with their
attorney until defendants confirmed who utilized Paypal and the
amounts due. They contend they substantially complied with the
court's order to refund the Paypal fees and that the settlement
agreement should not have been vacated. However, the record
supports that plaintiffs had information about what Paypal fees
were paid. They knew what to deposit with their attorney. They
could have deposited the money into court. As such, plaintiffs
fail to assert "a reasonable explanation why there was not a strict
compliance with the directive." Galik v. Clara Maass Med. Ctr.,
167 N.J. 341, 353 (2001) (setting forth five elements necessary
to invoke the doctrine of substantial compliance).
Affirmed.
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