RON AND ESTHER KRUKOWSKI VS. GRACE S. WONG(SC-1382-16, MONMOUTH COUNTY AND STATEWIDE) ( 2017 )

NOT FOR PUBLICATION WITHOUT THE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-5182-15T1
RON and ESTHER KRUKOWSKI,
Plaintiffs-Respondents,
v.
GRACE S. WONG,
Defendant-Appellant.
_____________________________________________
Submitted September 19, 2017 – Decided September 28, 2017
Before Judges Yannotti and Mawla.
On appeal from Superior Court of New Jersey,
Law Division, Special Civil Part, Monmouth
County, Docket No. SC-1382-16.
Grace S. Wong, appellant pro se.
Respondents have not filed a brief.
PER CURIAM
Defendant Grace S. Wong appeals from a judgment entered by
the Law Division on June 16, 2016, awarding plaintiffs Ron and
Esther Krukowski $3900, plus court costs in the amount of $42. We
affirm.
This appeal arises from the following facts. Plaintiffs
entered into a lease for certain premises on Avalon Lane in
Manalapan for a term beginning on April 6, 2015, and ending on
July 5, 2015, at a monthly rent of $3900. The lease identified
Trinity Referral Company, LLC (Trinity) as the landlord and "Esther
Krukowski and family" as tenants. Among other things, the lease
stated that the tenant must pay a security deposit in the amount
of $3900.
The lease also stated that the landlord must deposit the
security deposit in an interest-bearing or money market account
within thirty days after its receipt. The section of the lease
pertaining to the security deposit stated in pertinent part that:
The Landlord shall inspect the Property
after the Tenant vacates at the end of the
Term. Within 30 days of the termination of
this Lease, the Landlord shall return the
Security Deposit plus the undistributed
interest to the Tenant, less any charges
expended by the Landlord for damages to the
Property resulting from the Tenant's
occupancy. The interest and deductions shall
be itemized in a statement by the Landlord,
and shall be forwarded to the Tenant with the
balance of the Security Deposit by personal
delivery, registered or certified mail.
If the Landlord sells or transfers the
Property during the Term of this Lease, the
Landlord will transfer the Security Deposit
plus the undistributed interest to the new
owner. Landlord shall notify the Tenant of the
sale and transfer, as well as the name and
address of the new owner. The notice shall be
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given by registered or certified mail within
five days after conveyance of title. After
acquisition of the Property, the new owner
shall have all responsibility regarding the
Security Deposit, and the Landlord shall have
no further responsibility.
In May 2016, plaintiffs filed a complaint against defendant
in the Small Claims Division of the Special Civil Part, seeking
damages in the amount of $4550. Plaintiffs alleged defendant had
wrongfully withheld their $3900 security deposit. They also
alleged that defendant had forced them to vacate the premises
before the end of the lease term. They sought $645, which
represented a pro-rata portion of the rent they had paid for the
month ending on October 5, 2015.
On June 16, 2016, the judge conducted a trial in the matter,
sitting without a jury. At the trial, Ms. Krukowski testified that
a fire damaged plaintiffs' home. She said that after the fire, the
family moved to a hotel but they required temporary housing until
the home was rebuilt. Plaintiffs leased the residence on Avalon
Lane in Manalapan, at the suggestion of their insurer, State Farm,
and its agent, Churchill Corporate Services (Churchill).
The initial lease term was for three months, from April 6,
2015, to July 5, 2015, after which plaintiffs could remain in the
house on a month-to-month basis. Mr. Krukowski stated that
plaintiffs and their children moved into the house on April 6,
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2015, and they later extended the term of the lease to October 5,
2015. Ms. Krukowski said plaintiffs were informed the property had
been sold and the closing would take place sometime in October
2015. She stated that defendant offered to allow plaintiffs to
remain in the house until November 5, 2015, but plaintiffs agreed
to vacate the premises by October 5, 2015.
Mr. Krukowski further testified that in September 2015,
plaintiffs began to receive e-mails stating that contractors would
be coming to the house to fix certain tiles. The contractors
performed the work on September 27, 2015. According to Mr.
Krukowski, on September 29, 2015, plaintiffs received a text-
message stating that they had to vacate the premises by the
following day. Mr. Krukowski said the notice was a surprise. He
further testified that on September 30, 2015, plaintiffs received
numerous text-messages informing them they had to get out of the
house as soon as possible.
Plaintiffs vacated the premises on September 30, 2015, and
expected that their security deposit would be returned to them
within thirty days. However, plaintiffs received a letter from
defendant's attorney, which stated that defendant had no
obligation to return the security deposit. He said the property
had been sold and plaintiffs should seek the monies from the new
owner.
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Counsel also stated that plaintiffs were not entitled to the
return of any monies because the cost of repairing the damage
plaintiffs caused to the property exceeded the amount of the
security deposit. In his letter, defendant's attorney referenced
an "extensive number of broken tiles" in the kitchen and bathrooms,
the condition of the carpets, and the debris left behind when
plaintiffs vacated the premises. Mr. Krukowski testified that he
did not understand how his family could have damaged the tiles.
Ms. Krukowski stated that plaintiffs were aware when they
signed the lease that the property was in foreclosure. They
understood they would have to move out at some time. She explained
that State Farm gave money for the rent to Churchill, and Churchill
tendered the rental payments to defendant.
Ms. Krukowski acknowledged that the lease identified Trinity
as the landlord, but said all of her dealings with regard to the
property were with defendant. She said she was defendant's tenant.
Ms. Krukowski also stated that when she had the garbage disposal
fixed, she called defendant "as the owner" to ask her if she would
contribute toward the cost.
Ms. Krukowski stated that when defendant had to show the
house to prospective buyers, defendant communicated with her by
text message. Defendant was not acting as an agent. Ms. Krukowski
also said that defendant was identified as the owner of the house
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on the water bill. In addition, Ms. Krukowski's research identified
defendant as the owner of 391 Franklin Turnpike.
Ms. Krukowski further testified that she did not believe the
new owner was responsible for return of the security deposit
because plaintiffs had moved out before the closing and they did
not rent the premises from the new owner. Ms. Krukowski stated
that plaintiffs vacated the house at around 1:00 or 2:00 p.m. and
thereafter, none of their possessions remained in the house.
Defendant's attorney then moved pursuant to Rule 4:37-2(b)
for involuntary dismissal of the complaint. Counsel asserted that
defendant was not the owner of the property and she was not the
company that leased the property to plaintiffs. Counsel stated
that defendant did not hold the security deposit and the lease
provided that upon the sale of the property, the security deposit
would be turned over to the new owner. He also stated that the
security deposit was actually Churchill's money and Churchill was
the real party in interest. The judge denied the motion.
Defendant then testified that 391 Franklin Turnpike was the
owner of the house. Defendant and her husband are the owners of
391 Franklin Turnpike. She said that Trinity is the management
company that "handles" 391 Franklin Turnpike. Defendant stated
that she is not an owner of Trinity, and she is "the only contact
person" for 391 Franklin Turnpike.
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Defendant claimed that Trinity received plaintiffs' security
deposit, which was in the form of a check payable to Trinity.
Defendant stated that she did not take the money and put it in her
name. She said, it was "always Trinity." She claimed the money was
deposited for Trinity by "one of the persons who goes to the bank"
on Trinity's behalf. She admitted, however, that sometimes she is
one of the persons who handles the banking for Trinity.
Defendant also testified that before plaintiffs moved into
the house, it "was in perfect condition," and claimed there were
no broken tiles in the home when plaintiffs moved in. She explained
that plaintiffs had agreed different selling agents could show the
house to prospective purchasers. Defendant claimed she was told
the house was a "mess."
In addition, defendant stated that plaintiffs had damaged the
house "tremendously." She said she had an estimate that it would
cost $12,000 to repair the damaged tiles in the house. The carpet
also had been damaged "badly." Defendant told plaintiffs that
because of the damage they caused, the security deposit would not
be returned to them.
The judge then placed his decision on the record. He found
that plaintiffs' testimony established that defendant was the
landlord because she was the person primarily responsible for the
property. The judge did not find defendant's testimony to be
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credible. The judge also did not accept defendant's assertion that
plaintiffs were responsible for the damage to the property. The
judge found that the damage resulted from its prior use as a rental
property.
The judge determined that defendant was the landlord of the
leased premises and she was legally responsible for return of
plaintiffs' security deposit. The judge did not double the amount
of the deposit that had been wrongfully withheld, as permitted by
N.J.S.A. 46:8-21.1, because the judge believed defendant had
attempted to comply with the security deposit law.
The judge also rejected plaintiffs' claim for the return of
the rent plaintiffs paid for the period from September 30, 2015,
when they vacated the premises, to October 5, 2015, the end of the
lease term. The judge awarded plaintiffs damages of $3900 for the
return of the security deposit, and court costs of $42. Thereafter,
the judge entered a final judgment for plaintiffs in accordance
with his findings. This appeal followed.
On appeal, defendant argues: (1) the trial court erred by
finding she is responsible for the return of the security deposit
because she is not the landlord of the property; and (2) the new
owner of the property is legally obligated to return the security
deposit to plaintiffs.
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Appellate review of a final determination of a trial judge
sitting in a non-jury case is limited. Seidman v. Clifton Sav.
Bank, S.L.A., 205 N.J. 150, 169 (2011). We will not disturb the
judge's findings of fact and legal conclusions unless "they are
so manifestly unsupported by or inconsistent with the competent,
relevant and reasonably credible evidence as to offend the
interests of justice[.]" In re Trust Created by Agreement Dated
Dec. 20, 1961, ex rel. Johnson, 194 N.J. 276, 284 (2008) (quoting
Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474,
484 (1974)). Deference to the trial court's findings "is especially
appropriate when the evidence is largely testimonial and involves
questions of credibility." Cesare v. Cesare, 154 N.J. 394, 412
(1998) (citing In re Return of Weapons to J.W.D., 149 N.J. 108,
117 (1997)).
The Security Deposit Act, N.J.S.A. 46:8-19 to -26, provides
in pertinent part that within thirty days after the termination
of a tenant's lease, the owner or lessee of the premises shall
return to the tenant the security deposit, plus any interest or
earnings accumulated thereon, less any charges expended in
accordance with a contract, lease, or agreement. N.J.S.A. 46:8-
21.1.
As noted, defendant argues that Trinity was the landlord of
the premises leased to plaintiffs. She asserts that she never
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claimed to be the person who owns, or who purports to own, or
exercise control of the premises. There is, however, sufficient
credible evidence in the record to support the trial judge's
factual finding that defendant was the landlord of the property
leased to plaintiffs.
In his decision, the judge noted that defendant had conceded
she and her husband owned the property through 391 Franklin
Turnpike. The lease identifies Trinity as the landlord. Although
defendant testified that she had nothing to do with Trinity, the
judge found defendant's testimony entirely lacking in credibility.
The judge noted that the evidence showed that defendant
received plaintiffs' security deposit and she was the person in
charge of dealing with those monies. The monies also had been
deposited in Trinity's bank account, and defendant conceded she
is one of the persons who handles the banking for Trinity. We
conclude that the record supports the judge's finding that
defendant was legally obligated under N.J.S.A. 46:8-21.1 to return
the security deposit to plaintiffs upon the end of the tenancy.
The record also supports the judge's finding that defendant
failed to establish any credible basis for a reduction in the
security deposit as a result of the alleged damage caused by
plaintiffs. The judge noted that when the home was sold, the home
inspection report indicated that certain repairs were required.
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The judge found, however, that plaintiffs had credibly testified
that they did not cause the damage that defendant attributed to
them. The judge pointed out that plaintiffs had only been in the
home for a short period of time, and before plaintiffs moved in,
the home had been rented to other persons.
Defendant further argues that she is not legally required to
return the security deposit to plaintiffs. She argues that this
obligation falls upon the new owner of the property. N.J.S.A.
46:8-20 provides in pertinent part that an owner or lessee of
property leased who has received a security deposit from a tenant,
shall, upon conveying the property or assigning it to another in
a mortgage foreclosure action, turn over the deposit to the
grantee, assignee, or purchaser at the foreclosure sale at the
time of the delivery of the deed or assignment or within five days
thereafter.
The statute further provides that notwithstanding any other
law to the contrary, it shall then be the "duty and obligation of
the grantee, assignee or purchaser to obtain from the grantor who
is the owner or lessee at the time of the transfer, conveyance or
purchase any and all security deposits, plus accrued interest on
the deposits, that the owner or lessee received from a tenant[.]"
Ibid. In addition, N.J.S.A. 46:8-21 provides:
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Any owner or lessee turning over to his or its
grantee, assignee, or to a purchaser of the
leased premises at a foreclosure sale the
amount of such security deposit, plus the
tenant's portion of the interest or earnings
accumulated thereon, is hereby relieved of and
from liability to the tenant or licensee for
the repayment thereof. Whether or not the
deposit plus accumulated interest are so
transferred, the grantee, assignee or
purchaser of the leased premises is
nevertheless responsible for . . . return of
the security deposit, plus any accumulated
earnings or interest thereon, to the tenant
or licensee, in accordance with the terms of
the contract, lease, or agreement unless he
or it shall thereafter and before the
expiration of the term of the tenant’s lease
or licensee's agreement, transfer such
security deposit to another . . . .
[N.J.S.A. 46:8-21.]
Here, the evidence shows that the property in question was
in foreclosure and it was sold to a third-party. As plaintiffs
explained, they had extended their lease until October 5, 2015,
but on September 29, 2015, defendant demanded that they vacate the
premises the following day. Mr. Krukowski testified that
plaintiffs vacated the premises on September 30, 2015, and all of
their personal belongings were removed on that day, which was the
date of the closing.
Defendant conceded that she did not transfer plaintiffs'
security deposit to the new owner. Rather, she claimed that the
purchasers used the security deposit in negotiations to lower the
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overall purchase price of the property. The judge found defendant's
testimony to be entirely lacking in credibility. Moreover,
defendant provided no documentation to show that the deposit had
been transferred to the new owner by means of a reduction of the
purchase price.
Furthermore, there is no evidence that defendant closed on
the sale of the property before plaintiffs vacated the property
on September 30, 2015. Ms. Krukowski testified that plaintiffs
vacated the property prior to the closing and transfer of title.
She also testified that plaintiffs did not have a landlord-tenant
relationship with the new owner.
We conclude that there is sufficient credible evidence in the
record to support the judge's determination that defendant was the
party obligated by N.J.S.A. 46:8-21.1 to return the security
deposit to plaintiffs.
Affirmed.
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