COMMERCE LIMITED PARTNERSHIP 9326 VS. EDISON FURNITURE, LLC, ETC. (LT-010328-18, MIDDLESEX COUNTY AND STATEWIDE) ( 2020 )

NOT FOR PUBLICATION WITHOUT THE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-2920-18T1
COMMERCE LIMITED
PARTNERSHIP #9326,
Plaintiff-Appellant,
v.
EDISON FURNITURE,
LLC, d/b/a ALL BRANDS
FURNITURE CLOSEOUTS,
LLC,
Defendant-Respondent.
_____________________________
Submitted January 29, 2020 – Decided February 11, 2020
Before Judges Mayer and Enright.
On appeal from the Superior Court of New Jersey, Law
Division, Middlesex County, Docket No. LT-010328-
18.
Jonathan R. O'Boyle, attorney for appellant.
Respondent has not filed a brief. 1
1
Respondent's brief was suppressed for failure to timely file a conforming brief.
PER CURIAM
Plaintiff Commerce Limited Partnership #9326 appeals from a February
25, 2019 Special Civil Part order dismissing its action to evict a commercial
tenant, defendant Edison Furniture, LLC d/b/a All Brands Furniture Closeouts,
LLC, for various violations of a written lease. The judge found defendant
breached the lease. However, instead of entering a judgment of possession, the
judge fashioned an equitable remedy, allowing defendant thirty days to cure its
breaches of the lease. According to the February 25, 2019 order, if defendant
failed to provide specific documents required under the lease within thirty days,
plaintiff could reopen the matter. Because the judge lacked the power to fashion
an equitable remedy, we reverse and remand for trial on plaintiff's complaint
based on defendant's breaches of the lease as of September 2018 to the extent
those breaches were not cured.2
The facts are straightforward. The lease required defendant to carry
$5,000,000 in personal injury insurance and $2,000,000 in property damage
insurance. The lease also mandated defendant obtain a waiver of subrogation
2
Because the order on appeal was entered prior to the expiration of the thirty-
day period, and based on the ongoing litigation between the parties related to
the lease, we are unable to determine whether defendant complied with the
February 25, 2019 order by providing the required documents within thirty days.
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on the insurance policies so plaintiff would not be held responsible for losses.
Defendant was obligated to provide "current [c]ertificates of [i]nsurance
evidencing [its] compliance" with the lease.
In addition, the lease required defendant to furnish financial statements
"for the three fiscal annual periods most recently ended prior to the date of
[plaintiff's] request" within ten days of such a request. The lease provided time
for defendant to cure defaults under the lease. If defendant failed to timely cure,
plaintiff could resort to all "rights and remedies which are provided for by law
or equity or elsewhere in this [l]ease."
On September 4, 2018, plaintiff declared defendant in default of the lease
because it failed to obtain adequate insurance. The letter also notified defendant
of its failure to provide financial statements and requested the statements within
ten days. According to plaintiff's letter, if defendant failed to cure these defaults
within the "applicable cure periods, . . . [plaintiff] intend[ed] to exercise any and
all of its remedies available to it[.]"
Defendant's attorney responded to the default letter on October 2, 2018 .
Defense counsel included an insurance certificate, providing $5,000,000 in
commercial liability umbrella coverage. However, the insurance certificate did
not waive subrogation, state the amount of damages required to trigger umbrella
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coverage, or describe the insured premises. Defense counsel also advised that
the financial statements would be forthcoming.
Ten days later, plaintiff sent defendant a notice to quit and demand for
possession of the premises, claiming defendant "failed and refused to cure [its]
default" by providing the financial statements and proof of adequate insurance.
Plaintiff terminated the lease as of October 12, 2018, and demanded defendant
vacate the premises by October 15, 2018. In the event defendant failed to vacate
the property, plaintiff intended to file a summary dispossess action.
Eventually, plaintiff received defendant's 2017 financial statement.
However, plaintiff noted defendant provided only the statement for 2017 despite
plaintiff's request for three years of financial statements. Therefore, plaintiff
claimed defendant remained in breach of the lease.
On October 18, 2018, plaintiff filed a complaint for possession of the
premises. After plaintiff filed its summary eviction action, defendant presented
a new insurance certificate. The new certificate purportedly contained a waiver
of subrogation in accordance with the lease. However, plaintiff claimed the new
insurance provided inadequate coverage for property damage and did not waive
subrogation for personal injury.
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A tenancy trial was held on January 23, 2019. Defendant did not deny it
failed to provide an insurance policy acceptable to plaintiff's insurer. Nor did
defendant deny it failed to produce financial statements for three years.
Defendant explained it was doing its best to provide the information as quickly
as possible. Defendant testified plaintiff never requested such information at
any time during the nine years preceding plaintiff's summary dispossess action.
At the conclusion of the trial, the judge rendered a decision on the record.
In his ruling, the judge found defendant "made a reasonable effort" to get the
requested financial information to plaintiff, but "tax season" precluded
defendant's ability to provide the information within the required time period.
The judge also determined that plaintiff and defendant should "together make a
reasonable effort to obtain an insurance policy which will be acceptable to
[plaintiff's] insurer." In so finding, the judge accepted as true that the insurance
policy provided by defendant did not comport with the lease requirements.
The judge entered a February 25, 2019 order for judgment dismissing
plaintiff's complaint and allowing defendant thirty days to provide certificates
of insurance in accordance with the lease and financial statements for 2016,
2017, and 2018. In the event defendant failed to provide the documents within
thirty days, the order allowed plaintiff "to reopen the matter."
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Plaintiff filed its appeal prior to the expiration of the thirty-day period in
the February 25, 2019 order. On appeal, plaintiff contends the judge exceeded
his authority by fashioning an equitable remedy and dismissing the summary
dispossess action.
By statute, review of a summary dispossess judgment is only appealable
for lack of jurisdiction. Marini v. Ireland, 56 N.J. 130, 136 (1970) (citing
N.J.S.A. 2A:18-59). Courts have expanded the scope of appellate review in
summary dispossess actions "to determine whether the trial court committed
reversible error, not solely to determine whether it exceeded its jurisdiction."
Twp. of Bloomfield v. Rosanna's Figure Salon, Inc., 253 N.J. Super. 551, 557-
58 (App. Div. 1992). The distinction between jurisdictional errors and errors
affecting the merits of the action has largely been eliminated, Hous. Auth. of
Newark v. West, 69 N.J. 293, 299-300 (1976) (discussing effect of Marini, 56
N.J. 130), and appeals may be heard as of right from final summary dispossess
judgments. Twp. of Bloomfield, 253 N.J. Super. at 558 (citing Hous. Auth. of
E. Orange v. Mishoe, 201 N.J. Super. 352, 357 (App. Div. 1985)).
Summary dispossess is a creature of statute, designed as an expeditious
alternative to an ejectment action under the common law. Hous. Auth. of
Morristown v. Little, 135 N.J. 274, 280 (1994). "The only remedy that can be
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granted in a summary[]dispossess proceeding is possession; no money damages
may be awarded." Ibid. Possession can only be granted if the landlord is entitled
to possession based on one of the enumerated statutory grounds. Id. at 281
(citing Levine v. Seidel, 128 N.J. Super. 225, 229 (App. Div. 1974)).
A trial court reviewing a summary dispossess action lacks general
equitable jurisdiction. Benjoray, Inc. v. Acad. House Child Dev. Ctr., 437 N.J.
Super. 481, 488 (App. Div. 2014) (citing WG Assocs. v. Estate of Roman, 332
N.J. Super. 555, 563 (App. Div. 2000)). While such a court "may hear equitable
defenses and entertain equitable concepts, it is beyond the power of that court
to grant . . . equitable relief . . . as may appear just and appropriate under the
circumstances presented." Carr v. Johnson, 211 N.J. Super. 341, 347 (App. Div.
1986) (quoting Morrocco v. Felton, 112 N.J. Super. 226, 230-31 (Law Div.
1970)). "The equitable jurisdiction of the Special Civil Part in a summary
dispossess action is limited to matters of defense or avoidance asserted by the
tenant." Chau v. Cardillo, 250 N.J. Super. 378, 385 (App. Div. 1990).
Here, defendant argued plaintiff waived enforcement of the lease because
plaintiff never previously requested financial statements or insurance
information. The judge rejected defendant's claim that plaintiff waived its right
to enforce the lease term and concluded defendant defaulted under the lease.
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When a trial court finds a statutory basis for eviction and compliance with
notice requirements under the summary dispossess statute, the "judgment for
possession is conclusive" if the tenant presents no countervailing defense .
Carteret Props. v. Variety Donuts, Inc., 49 N.J. 116, 123-24 (1967). The
summary dispossess statute allows for eviction when the tenant "commit[s] any
breach or violation of any of the covenants or agreements . . . contained in the
lease." N.J.S.A. 2A:18-53(c)(4).
While the judge found defendant made reasonable efforts to comply with
the lease, it is undisputed defendant did not provide the documents required
under the lease, and plaintiff "ha[d]n't waived anything." Having found no
waiver defense, the judge erred in conditioning dismissal of plaintiff's summary
dispossess action on defendant providing specific documents within thirty days.
Because the judge exceeded his authority under the summary dispossess
statute, we reverse the order on appeal and remand for a new summary
dispossess trial.
Since plaintiff filed its appeal prior to the expiration of the thirty-day time
period in the February 25, 2019 order, we take no position whether a remand
trial is moot or whether the issues giving rise to defendant's breach of the lease ,
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as asserted in the September 2018 letter, may be barred by the entire controversy
doctrine or any other affirmative defense.
Reversed and remanded. We do not retain jurisdiction.
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