Bprep 530 Duncan, LLC v. Standard Logistics, LLC ( 2024 )

NOT FOR PUBLICATION WITHOUT THE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-2067-23
BPREP 530 DUNCAN, LLC,
Plaintiff-Appellant,
v.
STANDARD LOGISTICS, LLC,
Defendant-Respondent.
______________________________
Argued October 22, 2024 – Decided November 27, 2024
Before Judges Gilson and Augostini.
On appeal from the Superior Court of New Jersey, Law
Division, Hudson County, Docket No. L-0483-23.
Jaimee Katz Sussner argued the cause for appellant
(Sills Cummis & Gross, PC, attorneys; Jaimee Katz
Sussner and Michael P. Crowley, of counsel and on the
briefs).
Daniel R. Guadalupe argued the cause for defendant
(Pashman Stein Walder Hayden, PC, attorneys; Daniel
R. Guadalupe and Doris Cheung, on the brief).
PER CURIAM
This appeal involves a dispute arising out of a commercial lease between
plaintiff-landlord BPREP 530 Duncan LLC and defendant-tenant Standard
Logistics LLC. Plaintiff appeals from a February 2, 20241 order denying its
motion to enforce a June 30, 2023 settlement agreement with defendant.
Defendant defaulted on lease payments and litigation ensued. The parties
entered a settlement agreement resolving the matter. The settlement agreement
permitted defendant to remain at premises until October 31, 2023, and set forth
defendant's obligations until the lease terminated. The parties agreed that in the
event of default on any of the terms of the agreement, plaintiff was authorized
to present a consent judgment for all monies due and owing.
In September 2023, plaintiff alleged defendant breached the settlement
agreement. Defendant disputed plaintiff's allegations and asserted plaintiff had
wrongfully resorted to self-help by locking defendant out of the premises.
The court denied enforcing the settlement agreement, without a hearing,
because it concluded that plaintiff breached the agreement by prematurely taking
over the property, and because there was no evidence of unauthorized dumping
1
The typed date included in the body of the order of January 2, 2024 is an error.
The order was stamped "[p]repared and filed by the court [on] February 2,
2024." We are treating the February 2, 2024 order as a final order. However,
the record is unclear as to what, if any, issues remain unresolved.
A-2067-23
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by defendant. Because the court denied enforcement of the agreement as a
matter of law, and without a hearing to resolve the factual issues in dispute, we
reverse, vacate the order and remand for a plenary hearing.
I.
We summarize the relevant facts from the motion record. In 2015,
defendant entered a ten-year lease of a commercial warehouse located at 530
Duncan Avenue, Jersey City, New Jersey. In approximately March 2020, the
original landlord, Grenwolde Investment Corp., sold the property to plaintiff.
After the purchase, defendant executed an addendum to the lease recognizing
plaintiff as its new landlord.
In March 2022, plaintiff asserted that defendant defaulted under the lease
when it failed to pay all rent due and owing and made late rental payments on
more than two occasions. As a result, plaintiff filed a complaint for monetary
damages (the monetary action) and a complaint for possession (the possession
action) on February 7, 2023.
Plaintiff filed for summary judgment in the monetary action in April 2023.
Before the motion was heard, the parties reached a settlement agreement. The
agreement allowed defendant to remain on the premises until October 31, 2023.
The agreement required defendant, in relevant part, to:
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(1) remove all personal property and debris
from the interior and exterior of the leased
premises such that it is broom clean as
required by paragraph 31 of the lease on or
before October 31, 2023;
(2) beginning July 5, 2023, make full and
timely monthly payments of $46,058.39 on
or before August 1, September 1, and
October 1, 2023 through the date of
defendant's vacation concluding on
October 31, 2023;
(3) execute the consent judgment for
possession in the Tenancy Action, annexed
to the settlement agreement as Exhibit A;
and
(4) execute the consent money judgment
in the Law Division Action, annexed to the
settlement agreement as exhibit B.
The agreement set forth the events that would constitute a default under
the settlement agreement if defendant:
(1) fails to make any rental payment when due;
(2) files a bankruptcy petition;
(3) fails to timely vacate; or
(4) breaches any other settlement term.
Upon an event of default, the agreement authorized plaintiff to submit the
consent judgments for possession or monetary damages in the stipulated amount
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of $796,484.39, not including attorneys' fees and costs. Plaintiff asserted that
the settlement agreement did not relieve defendant of the remaining obligations
under the lease.
On September 19, 2023, a neighboring property owner advised plaintiff
that defendant had been bringing truckloads of unknown material onto the
property in unmarked trucks and dumping and spreading the material on the
premises. Over the next two days, plaintiff's representatives went to the
premises and observed unauthorized conduct and unknown material on the
premises. Plaintiff hired twenty-four-hour security to prevent further
unauthorized dumping.
On September 20, 2023, a cease-and-desist demand was served upon
defendant. Shortly thereafter, plaintiff requested relevant documents and
information regarding the material brought onto the leased premises by
defendant. Defendant's counsel agreed to provide the requested documents by
September 28, 2023. However, when the information was not provided, in a
letter dated September 29, 2023, plaintiff notified the court of defendant's breach
of the settlement agreement and submitted the consent judgments, which had
been attached to the agreement, for execution.
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Defendant objected to the execution of the consent judgment for monetary
damages and asserted that plaintiff wrongfully resorted to self-help by posting
a twenty-four-hour security guard on the premises and locking defendant out of
the property. Although defendant acknowledged not making the final rental
payment on October 1, 2023, it claimed it did so because of plaintiff's use of
self-help. Defendant also asserted that plaintiff had gained possession of the
property before October 1, 2023 and thereby breached the settlement agreement.
On January 3, 2024, plaintiff filed a motion to enforce the settlement
agreement as it pertained to the monetary damages. By that time, defendant had
vacated the premises; therefore, defendant did not object to the entry of the
consent judgment for possession, which was executed and entered on January 4,
2024.
Plaintiff contended that defendant breached the settlement agreement in
four ways: (1) by failing to vacate the premises by October 31, 2023; (2) by
failing to make the rental payment due by October 1, 2023; (3) by failing to
leave the premises in "broom clean" condition; and (4) by the unauthorized
dumping of unknown material on the premises. Defendant denied breaching the
agreement and argued that plaintiff wrongfully locked defendant out of the
premises and prevented it from entering the property. Furthermore, defendant
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contended it was repaving the driveway consistent with its responsibility under
the lease to maintain the premises and leave it in good condition upon
termination of the lease.
The parties disputed whether defendant was prevented from entering the
property. At the hearing on February 2, 2024, the court pointed out the
conflicting factual assertions regarding whether a lock out had occurred and
recognized the need for a hearing to resolve that fact. However, in denying
plaintiff's request to enforce the settlement agreement, the court did not order a
plenary hearing to resolve these genuine issues and determine whether the
settlement agreement should or should not be enforced. Instead, it reasoned that,
[t]here are several compelling circumstances present in
this matter to not enforce the settlement agreement.
First, [p]laintiff jumped the gun and took over the
property. In addition, there is no proven and contingent
"dumping" claim addressed by the current lawsuit or
addressed by the Settlement Agreement. Giving
[p]laintiff approximately $800,000 as part of a consent
judgment for [p]laintiff's allegations of contaminated
debris being dumped onto the property by [d]efendant
would deprive [d]efendant of discovery, defenses,
expert opinions, and ability to sue any responsible
parties. This alleged "property damage claim" is better
suited in a separate action.
In rendering its decision denying enforcement of the agreement, the court
appears to have conflated the breach of settlement claims with the new claim of
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unauthorized dumping. While the court seemed to conclude that the dumping
claim should be addressed in a separate action, it denied, as a matter of
undisputed facts, the breach of settlement claims without resolving the genuine
issues of material fact related to the enforcement application. This appeal
followed.
II.
Our jurisprudence in New Jersey values settlement agreements as an
appropriate way to resolve disputes. Gere v. Louis, 209 N.J. 486, 500 (2012).
Settlement agreements are to be encouraged and enforced. Ibid. "This policy
rests on the recognition that 'parties to a dispute are in the best position to
determine how to resolve a contested matter in a way which is least
disadvantageous to everyone.'" Ibid. (quoting Impink ex rel. Baldi v. Reynes,
396 N.J. Super. 553, 563 (App. Div. 2007)). Moreover, a settlement "spares the
parties the risk of an adverse outcome and the time and expense — both
monetary and emotional — of protracted litigation." Kernahan v. Home
Warranty Adm'r of Fla., Inc., 236 N.J. 301, 323 (2019) (quoting Willingboro
Mall, Ltd. v. 240/242 Franklin Ave., L.L.C., 215 N.J. 242, 253-54 (2013)).
Therefore, settlement agreements, like contracts freely and voluntarily entered,
"should [be] honor[ed] and enforce[d] as [are] other contracts." Pascarella v.
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Bruck, 190 N.J. Super. 118, 124-125 (App. Div. 1983) (citing Honeywell v.
Bubb, 130 N.J. Super. 130, 136 (App. Div. 1974)).
"In furtherance of this policy, our courts 'strain to give effect to the terms
of a settlement wherever possible.'" Brundage v. Est. of Carambio, 195 N.J.
575, 601 (2008) (quoting Dep't of Pub. Advoc. v. N.J. Bd. of Pub. Utils., 206
N.J. Super. 523, 528 (App. Div. 1985)). Therefore, settlement agreements will
be honored "absent a demonstration of 'fraud or other compelling
circumstances.'" Nolan v. Lee Ho, 120 N.J. 465, 472 (1990) (quoting Pascarella,
190 N.J. Super. at 125).
Under certain circumstances, a plenary hearing is necessary to resolve
material factual disputes. The New Jersey Supreme Court has noted that
"appellate courts will not disturb the decision to deny a plenary hearing unless
there is a 'clear abuse of discretion.'" Furst v. Einstein Moomjy, Inc., 182 N.J.
1, 25 (2004) (quoting Rendine v. Pantzer, 141 N.J. 292, 317 (1995)). Further,
the Court has emphasized that "a plenary hearing should be conducted only when
the certifications of counsel raise material factual disputes that can be resolved
solely by the taking of testimony." Id. at 24.
Here, the court recognized that genuine factual disputes existed as to
whether plaintiff locked defendant out of the premises, thereby wrongfully
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resorting to self-help, and whether defendant's conduct in paving the lot was
consistent with the lease and settlement agreement requirements. However,
while the court correctly noted that testimony was needed to resolve these
material disagreements, it erred in not conducting a hearing to resolve them.
Rather, the court denied the relief sought, with finality, and directed the parties
to address the unlawful dumping claims in a separate action. While we agree
that the court correctly denied enforcement of the settlement agreement at the
motion, it should have done so without prejudice and scheduled a plenary
hearing to resolve the material issues in dispute. As a result, the court abused
its decision in denying enforcement of the settlement agreement without a
plenary hearing to determine whether the settlement agreement should or should
not be enforced.
Even though plaintiff asserted that any alleged dumping violated the
original lease agreement which prohibited the "transport" or "disposal" of waste
and required defendant to comply with all environmental laws, the court noted,
this claim may be "better suited in a separate action." However, the court seems
to have based its decision not to enforce the settlement agreement, in part, on
the lack of evidence of the dumping allegations without considering the other
claims of a breach. Thus, at the hearing on remand, the parties should consider
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whether these claims should be joined to the present action under the entire
controversy doctrine. We express no opinion on the merits of that issue but do
direct that it be expressly addressed at the proceedings on remand.
In sum, we reverse and vacate the order denying enforcement of the
settlement agree without a plenary hearing and remand the matter for a fact-
finding hearing on plaintiff's motion to enforce the settlement agreement. In
addition, the court and parties should consider whether to join the new claims
of unauthorized dumping with the enforcement action.
Reversed, vacated, and remanded for further proceedings consistent with
this opinion. We do not retain jurisdiction.
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