RALPH VANCE VS. DIVERSIFIED INVESTMENTS, ETC. (DC-000793-20, CAPE MAY COUNTY AND STATEWIDE) ( 2021 )

NOT FOR PUBLICATION WITHOUT THE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-1210-20
RALPH VANCE and
MARGARET VANCE,
Plaintiffs-Respondents,
v.
DIVERSIFIED INVESTMENTS,
d/b/a PINE HAVEN CAMPING
RESORT,
Defendant-Appellant.
Submitted September 28, 2021 – Decided October 19, 2021
Before Judges Currier and Smith.
On appeal from the Superior Court of New Jersey, Law
Division, Cape May County, Docket No.
DC-000793-20.
Lori C. Greenberg & Associates, attorneys for appellant
(Lori C. Greenberg and Mary T. Madden, on the brief).
Respondents have not filed briefs.
PER CURIAM
Defendant operates a campground in Cape May County. Plaintiffs signed
a rental contract for the October 1, 2019 to September 30, 2020 season. Full
payment was due on May 31, 2020. However, in March 2020, the campground
was closed pursuant to the Governor's COVID-19 Executive Order. Plaintiffs
had paid a sizeable portion of the contract price, but they had not yet paid the
full amount due. The campground remained closed until May 6, 2020.
Prior to the campground's re-opening, plaintiffs requested a refund of their
monies, citing: (1) the campground's closure under the Executive Order; (2) the
ongoing danger due to the COVID-19 pandemic; and (3) Ralph Vance's health
issues, including his medical conditions of diabetes and congestive heart
failure.1 Defendant denied the request in June 2020 and demanded the remaining
monies owed under the contract.
After a bench trial, the trial judge found the campground was temporarily
closed under an Executive Order, not because of an act of nature. Therefore,
plaintiffs were entitled to a return of the monies covering the period of March
30 to May 5, 2020. The judge also found defendant failed to mitigate its
damages after learning plaintiffs did not intend to use the campsite at all.
1
Plaintiffs included a note from Ralph's physician informing that Ralph was at
a high risk of contracting COVID-19 and should quarantine at home.
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Therefore, plaintiffs were entitled to an additional refund of monies for several
months. The court dismissed defendant's counterclaim that sought the balance
due on the contract as well as legal fees and costs.
In a December 22, 2020 order, the court entered judgment for plaintiffs
for $3903.54. For the reasons stated below, we affirm the entry of judgment for
plaintiffs but remand for the court's consideration of defendant's counterclaim
regarding counsel fees and costs.
In reviewing a determination based on evidence and testimony presented
at a bench trial, "we do not disturb the factual findings and legal conclusions of
the trial judge unless we are convinced that they are so manifestly unsupported
by or inconsistent with the competent, relevant and reasonably credible evidence
as to offend the interests of justice." Rova Farms Resort, Inc. v. Invs. Ins. Co.
of Am., 65 N.J. 474, 484 (1974) (internal citations omitted).
An interpretation of a contract is reviewed de novo. Kieffer v. Best Buy,
205 N.J. 213, 222 (2011). Therefore, "[a] trial court's interpretation of the law
and the legal consequences that flow from established facts are not entitled to
any special deference." Manalapan Realty, L.P. v. Twp. Comm. of Twp. of
Manalapan, 140 N.J. 366, 378 (1995). We "look at the contract with fresh eyes."
Kieffer, 205 N.J. at 223.
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On appeal, defendant disputes the court's determination that plaintiffs
were entitled to a refund for the monies paid for the time the campground was
closed under the Executive Order. It also challenges the court's finding that
plaintiffs were entitled to a partial refund of the monies paid toward the
remaining summer months because of Ralph's health problems after the
campground reopened.
Pertinent to this appeal, the parties' contract stated, "There will be no
refunds on rent for voluntary departure, acts of nature or removal by eviction."
It also provided that "[t]here will be no refunds for early departure whether
voluntary or involuntary." The contract required the camper "to pay and
discharge all reasonable costs, attorney's fees, collection fees and expenses that
shall be incurred by Pine Haven, LLC in enforcing the terms of this Agreement."
Defendant states that the contract's language prohibits any refunds for a
camper's nonuse of its property due to an act of nature or for any early departure.
Specifically, defendant contends its property was closed due to an act of nature
between March and May 2020 and under the force majeure clause in the
contract, plaintiffs were not entitled to a refund during that period of time. We
disagree.
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We construe a force majeure clause narrowly. Hess Corp. v. ENI
Petroleum US, LLC, 435 N.J. Super. 39, 47 (App. Div. 2014). A party's
performance is only excused if the force majeure clause "specifically includes
the event that actually prevents a party's performance." Ibid. (quoting Kel Kim
Corp. v. Cent. Mkts., Inc., 519 N.E.2d 295, 296 (N.Y. 1987)). The campground
was closed pursuant to an Executive Order. Therefore, under its contract,
defendant could only avoid responsibility for a refund if an "act of nature"
included executive orders. We see no support for such an interpretation.
Because the force majeure clause in the contract here does not include
"government acts or directives," we are satisfied the trial court correctly
refunded plaintiffs their monies paid for the weeks the campground was closed.
Defendant relies on the same contractual language in asserting the trial
court erred in awarding plaintiffs a partial refund due to Ralph's health even
after the campground reopened. In considering this argument, the trial court
found that, although defendant was informed by plaintiffs that they could not
use the campsite for the remainder of the contract term, defendant did not take
any steps to mitigate its damages. Specifically, the trial court found defendant
could have re-rented the site to another patron but it made no attempts to do so.
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Because the court found it might have taken defendant several months to
find a substitute renter, it did not award a refund to plaintiffs for the months of
May through July. However, the court did grant a refund for August through
October 2020, resulting from its determination that defendant could have re-
rented the site for those months.
Under common law, injured parties have a duty to "take reasonable steps
to mitigate their damages." State v. Ernst & Young, L.L.P., 386 N.J. Super. 600,
617 (App. Div. 2006) (citing McDonald v. Mianecki, 79 N.J. 275, 299 (1979);
White v. Twp. of N. Bergen, 77 N.J. 538, 546 (1978)). We have stated that,
although an injured party has not breached the contract, it cannot recover
damages "to the extent that the injured party could have avoided his losses
through reasonable efforts 'without undue risk, burden or humiliation.'" Id. at
618 (quoting Ingraham v. Trowbridge Builders, 297 N.J. Super. 72, 82-83 (App.
Div. 1997)).
Defendant had a duty to mitigate damages when it became aware that
plaintiffs were not coming to the campground after it reopened in May. On April
30, 2020, plaintiffs sent an email to defendant requesting a refund of the
$5445.80 that had been paid to date, and stating they were quarantining in
Pennsylvania due to Ralph's health conditions and the ongoing stay-at-home
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order. At that point, defendant should have taken reasonable actions to mitigate
its damages by renting plaintiffs' camping site to someone else.
Although defendant argues that plaintiffs had the duty to mitigate their
damages, there is no similar duty imposed under contract law. Only the party
claiming damages for a breach of contract has a duty to mitigate its damages.
Sommer v. Kridel, 74 N.J. 446, 454 n. 3 (1977). Moreover, the contract
prohibited the "[s]ubleasing of [plaintiffs'] [s]ite or camping unit." The trial
court did not err in finding defendant had a duty to mitigate its damages. We
discern no error in the entry of judgment for plaintiff.
We turn, then, to the dismissal of defendant's counterclaim. Although we
agree defendant was not entitled to the remaining balance owed on the contract,
it may be entitled to attorney's fees and costs. Under the contract, the "[s]easonal
[c]amper agree[d] to pay and discharge all reasonable costs, attorneys' fees,
collection fees and expenses that shall be incurred by Pine Haven, LLC in
enforcing the terms of this Agreement." The judge did not address that provision
in his decision.
Defendant did incur fees and costs in undertaking this lawsuit. It is well-
settled in New Jersey that a court must enforce, as written, contract terms that
are clear and unambiguous. Cnty. of Morris v. Fauver, 153 N.J. 80, 103 (1998).
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The contract language states defendant is entitled to the fees and costs incurred
in prosecuting the litigation. Defendant's counsel presented a certification to the
trial judge advising her legal fees were $1610. We therefore remand to the trial
judge solely for a determination of the reasonableness of defendant's fees and
costs incurred in the trial court. Thereafter, the court shall execute an Order of
Judgment comprising the amount due to plaintiffs, offset by defendant's counsel
fees and costs.
Affirmed in part, vacated in part and remanded for the consideration of
defendant's attorney's fees and costs in accordance with this opinion. We do not
retain jurisdiction.
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