CARMEL REALTY, INC. v. FAIRVIEW BERGEN ASSOCIATES, LLC (C-000173-19, BERGEN COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE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-0893-20
CARMEL REALTY, INC.,
Plaintiff-Respondent/
Cross-Appellant,
v.
FAIRVIEW BERGEN
ASSOCIATES, LLC, and
JP MANAGEMENT, LLC,
Defendants-Appellants/
Cross-Respondents.
___________________________
Submitted February 17, 2022 – Decided February 28, 2022
Before Judges Haas and Mitterhoff.
On appeal from the Superior Court of New Jersey,
Chancery Division, Bergen County, Docket No.
C-000173-19.
Brach Eichler, LLC, attorneys for appellants/cross-
respondents (Bob Kasolas, of counsel and on the
briefs).
Barto & Barto, LLC, attorneys for respondent/cross-
appellant (Raymond Barto, on the briefs).
PER CURIAM
In this dispute over a lease involving twenty-eight parking spaces in an
apartment complex garage, defendants Fairview Bergen Associates, LLC (FBA)
and J.P. Management, LLC appeal from the Chancery Division's (1) April 17,
2020 order granting plaintiff Carmel Realty, Inc.'s cross-motion for partial
summary judgment and dismissing defendants' affirmative defenses; (2) June 9,
2020 order denying defendants' motion for reconsideration; and (3) Oct ober 22,
2020 final judgment in favor of plaintiff following a bench trial. Plaintiff cross -
appeals from the portion of the October 22, 2020 judgment that denied its
request for access to the parking spaces through all three doors of the garage.
After reviewing the record in light of the contentions the parties raise on appeal,
we affirm the three orders substantially for the reasons set forth in Judge James
J. DeLuca's comprehensive written decisions supporting each of his rulings.
The judge extensively detailed the underlying procedural history and facts
of this case in his three opinions. Therefore, we need only briefly summarize
this material here.
Joseph Berardo and Oded Aboodi were equal partners in two companies,
Crystal Lake, Inc. and Aras Properties, Inc. (Aras). Crystal Lake owned
commercial real property at 371 Bergen Boulevard in Fairview (the 371
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Property). Aras owned the property next door at 361 Bergen Boulevard (361
Property). Aras had retail space on the first floor of its building and three
residential apartments on the second floor.
On April 1, 1994, Crystal Lake agreed to lease Aras twenty-eight parking
spaces in a garage it was constructing, along with an apartment building, at the
371 Property. Aboodi signed the written lease as the president of both
companies. The lease term was ninety-nine years, and the annual rent was $1
per year. Aras also agreed to secure insurance for the parking spaces. The
companies filed a Memorandum of Lease documenting this arrangement with
the county clerk's office.
On July 21, 1994, Crystal Lake sold the 371 Property to a third party,
Fairview Associates 94 LP (Fairview 94). That company completed
construction of the apartment building and garage. At the beginning of the lease
term, Aras paid Fairview 94 the annual rent each year, but later simply paid the
rest of the rent for the lease term in a lump sum. Aras also obtained the required
insurance coverage each year.
Plaintiff asserted Aras used the parking spaces after Fairview 94 finished
the garage. Aras' employees parked in the garage and the company also stored
equipment and other materials in the leased area.
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The parking garage had three entrance doors. The lease did not designate
which entrance Aras was to use to access its spaces. The garage's main point of
ingress was through the "northern entrance." There was also a "southern
entrance," which was primarily used to admit vendors, and a side-street access
door known as the "Morningside Avenue entrance." Plaintiff claimed Aras had
a key permitting it to use the southern entrance, which was nearer to its
designated parking spaces than the northern entrance.
On May 31, 2001, Aboodi executed an "Assignment & Assumption
Agreement" on behalf of Aras that assigned the parking lease to plaintiff, a real
estate property company. Berardo was plaintiff’s president. On August 11,
2004, Aras conveyed the 361 Property to plaintiff.
After plaintiff obtained title to the 361 Property, it stored construction
materials and other items on the first floor and rented the three second-floor
apartments. Plaintiff continued to use some of the twenty-eight parking spaces
in the parking garage on the 371 Property and maintained the required insurance.
On November 1, 2018, Fairview 94 sold the 371 Property to defendant
FBA. According to FBA's managing member, John Pjeternikaj, defendants were
aware there was a lease in effect for the twenty-eight parking spaces when FBA
purchased the 371 Property. The Agreement of Sale had a copy of the April 1,
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1994 lease attached to it as an exhibit, and Fairview 94 "represent[ed] that the
Crystal/Aras Lease is currently in full force and effect, and there have been no
defaults by the Landlord under the Crystal/Aras Lease."
On behalf of plaintiff, Berardo also provided defendants and Fairview 94
with a Tenant Estoppel Certificate attesting that the lease was "in full force and
effect"; did not expire until March 31, 2093; and that the rent had already been
paid through that date. In addition, FBA stated it was "satisfied with the Parking
Lease Estoppel and layout of parking spaces subject thereto" in the First
Amendment to Agreement of Sale relating to its purchase.
After FBA became the landlord under the parking lease, plaintiff noticed
that unauthorized vehicles were parking in its spaces. It notified Pjeternikaj of
the problem, and FBA took immediate steps to correct it. Thereafter, plaintiff
asserted it continued to use the parking spaces and to enter the garage through
the southern entrance.
In March 2019, however, plaintiff claimed defendants changed the lock
on the southern entrance and its key no longer worked. Defendants denied
changing the lock but denied plaintiff's request to permit it to enter the garage
through the southern entrance. Plaintiff also discovered that defendants had
fenced off two of its parking spots and were using the spaces for storage.
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On July 3, 2019, plaintiff filed a complaint and order to show cause
against defendants seeking an order permitting it access to the garage and its
parking spaces through the southern entrance. Defendants responded by filing
a counterclaim for a declaratory judgment that the lease was void and
unenforceable and that plaintiff had surrendered or abandoned its rights under
it.1
Both parties subsequently filed motions for summary judgment. In his
April 17, 2020 decision, Judge DeLuca denied defendants' motion in its entirety
and plaintiff's motion to the extent it sought a final judgment against defendants
because a trial was needed to resolve the factual disputes raised by the parties.
However, the judge considered the merits of defendants' counterclaims and
affirmative defenses because these issues involved questions of law.
Defendants asserted the lease was not valid because it was not "the result
of arm's length transactions between Aras and Crystal Lake" and was not
"entered into for legal consideration." Defendants also argued the terms of the
lease were unconscionable and violated the statute of frauds and best evidence
rule. Judge DeLuca rejected each of these contentions.
1
Judge DeLuca ordered defendants to permit plaintiff to access the garage
through the northern entrance during the pendency of the trial court litigation.
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Addressing the propriety of the April 1, 1994 lease agreement between
Crystal Lake and Aras, the judge found that although the partners in each were
the same, the companies were separate legal entities. The judge stated:
The fact that such entities may have been owned . . . by
the same individuals does not make the Parking Lease
any more or less enforceable than if it had been entered
into by entities controlled by different members or
shareholders. Thus, this court rejects [d]efendants'
argument that this was anything other than an arm's
length transaction between two separate entities.
Defendants provide no evidence, and only speculation,
as to the bona fides of these entities.
Judge DeLuca also found the lease was supported by adequate
consideration. "Consideration is the price bargained for and paid for a promise."
Friedman v. Tappan Dev. Corp., 22 N.J. 523, 535 (1956). "Consideration may
take many forms and may be based upon either 'a detriment incurred by the
promisee or a benefit received by the promisor.'" Seaview Orthopaedics ex rel.
Fleming v. Nat'l Healthcare Res., Inc., 366 N.J. Super. 501, 508 (App. Div.
2004) (quoting Cont'l Bank of Pa. v. Barclay Riding Acad., Inc., 93 N.J. 153,
170 (1983)). In determining whether a contract should be enforced, the court
is not responsible for questioning the "adequacy of consideration" because
consideration is not dependent "upon the comparative value of the 'things'
exchanged." Id. at 508-09 (internal quotations omitted). Consideration "must
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merely be valuable in the sense that it is something that is bargained for in fact."
Id. at 509 (quoting Borbely v. Nationwide Mut. Ins. Co., 547 F. Supp. 959, 980
(D.N.J. 1981)).
Consistent with these principles, Judge DeLuca determined that Aras, and
later plaintiff, paid the required rent and provided the necessary insurance under
the lease. In return, Fairview 94 and defendants, as that company's successor,
provided the twenty-eight parking spaces to plaintiff.
While the annual rental fee was nominal, Judge DeLuca found the contract
was not unconscionable. The judge noted that defendants were fully aware of
the existence of the lease when FBA purchased the 371 Property from Fairview
94. The lease was a matter of public record because it was filed with the county
clerk. In addition, plaintiff provided defendants with a Tenant Estoppel
Certificate attesting to the fact that the agreement was in full force and effect.
FBA and Fairview 94 even attached the lease to their contract of sale, and FBA
stated in the first amendment to the contract that it was satisfied with the
estoppel document and the layout of the parking spaces. Based upon these
undisputed facts, the judge found no basis for defendants' claim that the terms
of the lease were unconscionable.
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Judge DeLuca also rejected defendants' argument that the lease should be
declared void under the statute of frauds and barred from evidence by the best
evidence rule because plaintiff could only produce a copy of it rather than the
original. The judge found the terms of the lease were well known to the parties
and had been in effect since 1994. As noted above, the lease was recorded with
the county clerk and Pjeternikaj admitted he was aware of the lease at the time
FBA bought the 371 Property. There was therefore no genuine question raised
as to the authenticity of the lease agreement that would require it to be voided
or barred from evidence.
Defendants thereafter filed a motion for reconsideration, raising the exact
same arguments Judge DeLuca addressed in his April 17, 2020 decision. The
judge denied this motion because defendants did not show the prior rulings were
palpably incorrect or that the court failed to consider or appreciate the
significance of defendants' arguments or the evidence they presented in the prior
proceeding.
Judge DeLuca then conducted a trial on the remaining issues in dispute
and heard testimony from six witnesses, including Berardo and Pjeternikaj.
Based upon his review of that testimony and the documentary evidence, the
judge found no evidence that plaintiff ever intended to abandon or surrender its
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right to the twenty-eight parking spaces under the lease. Plaintiff paid the rent
due on the lease in full and maintained the required insurance. It prepared a
Tenant Estoppel Certificate, provided defendants with a list of the cars
authorized to park in the spaces, objected when defendants permitted other
individuals to use the spaces, and filed a lawsuit to enforce the terms of the lease
when the dispute could not be resolved.
Finally, Judge DeLuca rejected plaintiff's claim that it was entitled to
access the garage through the southern entrance. The judge found the lease
agreement was silent on the question of the appropriate way to enter the garage.
The judge determined the northern entrance was the main means of ingress for
the garage and served as a security checkpoint. On the other hand, the southern
entrance was at the end of a one-lane alley and could only accommodate one car
at a time. Defendants used the Morningside Avenue entrance almost exclusively
to move trash containers to the street for collection. Under these circumstances,
the judge concluded plaintiff could continue to enter the garage only through the
northern entrance.
On appeal, defendants raise the same contentions Judge DeLuca
painstakingly considered and resolved in his lengthy written decisions.
Defendants again assert "the parking lease is invalid and unenforceable" and that
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plaintiff's claim to the parking spaces "is barred by the statute of frauds [and
the] best evidence rule." Defendants also argue plaintiff "abandoned and
surrendered the parking spaces" and that the judge did not consider all of the
evidence it presented on these issues. In its cross-appeal, plaintiff repeats its
contention that its access to the garage should not be limited to the northern
entrance. We discern no basis for disturbing Judge DeLuca's rejection of these
claims.
With regard to Judge DeLuca's April 17, 2020 order, our review of a ruling
on summary judgment is de novo, applying the same legal standard as the trial
court, namely, the standard set forth in Rule 4:46-2(c). Conley v. Guerrero, 228
N.J. 339, 346 (2017). Thus, we consider, as Judge DeLuca did, whether "the
competent evidential materials presented, when viewed in the light most
favorable to the non-moving party, are sufficient to permit a rational factfinder
to resolve the alleged disputed issue in favor of the non-moving party." Town
of Kearny v. Brandt, 214 N.J. 76, 91 (2013) (quoting Brill v. Guardian Life Ins.
Co. of Am., 142 N.J. 520, 540 (1995)).
If, as here, there is no genuine issue of material fact, we must then "decide
whether the trial court correctly interpreted the law." Dickson v. Cmty. Bus
Lines, 458 N.J. Super. 522, 530 (App. Div. 2019) (citing Prudential Prop. & Cas.
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Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div. 1998)). We accord no
deference to the trial judge's conclusions of law and review these issues de novo.
Nicholas v. Mynster, 213 N.J. 463, 478 (2013). However, this court should
affirm the judgment if it concludes that the trial court's conclusions of law were
correct. Henry v. N.J. Dept. of Human Servs., 204 N.J. 320, 330 (2010).
We review Judge DeLuca's June 9, 2020 order denying defendants' motion
for reconsideration to determine whether the judge abused his discretionary
authority. Cummings v. Bahr, 295 N.J. Super. 374, 389 (App. Div. 1996).
Reconsideration should only be used "for those cases which fall into that narrow
corridor in which either 1) the [c]ourt has expressed its decision based upon a
palpably incorrect or irrational basis, or 2) it is obvious that the [c]ourt either
did not consider, or failed to appreciate the significance of probative, competent
evidence . . . .” Id. at 384 (quoting D’Atria v. D’Atria, 242 N.J. Super. 392, 401
(Ch. Div. 1990)).
Finally, our review of Judge DeLuca's fact-finding following the bench
trial on the issues of whether plaintiff abandoned or surrendered its right to the
parking spaces and whether plaintiff could access the garage through the
southern or Morningside Avenue entrances is limited. Seidman v. Clifton Sav.
Bank, S.L.A., 205 N.J. 150, 169 (2011). "The general rule is that findings by
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the trial court are binding on appeal when supported by adequate, substantial,
credible evidence." Ibid. (quoting Cesare v. Cesare, 154 N.J. 394, 411-12
(1998)). However, we owe no deference to a trial court's interpretation of the
law, and review issues of law de novo. Mountain Hill, L.L.C. v. Twp. Comm.
of Middletown, 403 N.J. Super. 146, 193 (App. Div. 2008).
Applying these standards, we conclude that Judge DeLuca's factual
findings are fully supported by the record and, in light of those findings, his
legal conclusions are unassailable. We therefore affirm substantially for the
reasons that the judge expressed in his well-reasoned opinions.
Affirmed.
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