Opinion
DOCKET NO. A-0988-14T2
06-29-2016
OCEANFRONT INVESTMENTS, LLC, Plaintiff-Respondent, v. PHILOMENAS, LLC and THOMAS M. ZUCCHETTI, Defendants-Appellants.
James P. Manahan argued the cause for appellants (Bernstein & Manahan, LLC, attorneys; Mr. Manahan, of counsel and on the briefs). Robert A. Morley argued the cause for respondent.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Leone and Whipple. On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-158-14. James P. Manahan argued the cause for appellants (Bernstein & Manahan, LLC, attorneys; Mr. Manahan, of counsel and on the briefs). Robert A. Morley argued the cause for respondent. PER CURIAM
Defendants Philomenas, LLC and its principal Thomas M. Zucchetti appeal September 19, 2014 orders, denying their motion to file a pleading, declaring their lease interests terminated, and granting judgment in favor of plaintiff Oceanfront Investments, LLC. We affirm.
I.
The following facts are drawn largely from plaintiff's statement of undisputed facts. In 2011, Philomenas entered into a lease agreement with Fair Banks Resort and Marina, Inc. for a commercial property located in Sea Bright. The property consisted of a motel, restaurant, and bar. The lease agreement provided that defendants would pay annual rent of $40,000, due in $10,000 installments in June, July, August, and September. Pursuant to an August 2011 order involving Fairbanks and the bank holding its mortgage, a rent receiver was appointed to receive all rents paid on the property.
This corporation was also referred to as "Fairbanks," and we will refer to it as Fairbanks.
In July 2012, Fairbanks filed a verified complaint, alleging that defendants owed a total of $49,322 in past due base rent, late charges, fees, and costs. On August 24, 2012, Fairbanks, Philomenas and Zucchetti entered into a "Consent To Enter Judgment for Possession (Tenant Remains)" (the settlement agreement). In the settlement agreement, defendants agreed to the immediate entry of a judgment of possession, and to pay $30,700, which they admitted was then past due. In paragraph 2b of the consent agreement, the parties agreed to the following installment plan: (1) defendants would pay the first $15,000 no later than August 28, 2012; (2) defendants would pay arrears payments of $1570 per month, commencing October 1, 2012, and continuing until the balance was paid. In addition, defendants agreed to pay the installments of $10,000 required by the lease agreement. Finally, the settlement agreement provided: "IF THE TENANT FAILS TO MAKE ANY PAYMENT THAT IS REQUIRED IN PARAGRAPH 2b OF THIS AGREEMENT, THE TENANT MAY BE EVICTED AS PERMITTED BY LAW AFTER THE SERVICE OF THE WARRANT OF REMOVAL," which could be issued by the clerk.
Foreclosure proceedings were brought on the mortgage. On September 12, 2012, plaintiff purchased the property at a sheriff's sale.
On September 5, 2012, defendants paid the $15,000 a week late. On September 11, 2012, defendants were presented with a bill totaling $23,785.81. That amount included the $1570 arrears payment, utilities, and a demand to replenish the security deposit of $10,000 because the original security deposit had been used to pay the past due June 1, 2012 rent. Defendants paid $13,785.81, but refused to pay the $10,000. On October 23, 2012, a request to the clerk was filed in Fairbanks' name seeking a warrant of removal, alleging defendants had breached the settlement agreement. A warrant of removal was issued on or around November 16, 2012.
The lease agreement provides: "If the Landlord uses the Security or any part of it during the Term, the Tenant shall on demand pay the Landlord for the amount used."
Meanwhile, on or about October 29, 2012, Superstorm Sandy caused substantial damage to the property. Around this time, Zucchetti removed furniture and equipment from the property. Plaintiff alleges that defendants abandoned the property, but defendants contend that they removed the business fixtures, furnishings, and equipment to prevent further damage from the effects of Superstorm Sandy.
Defendants failed to pay the $1570 monthly arrears payments from November 2012 through June 2013, leaving a balance due of $12,260. It is undisputed that plaintiff neither heard from nor received any payments from defendants from October 2012 until July 2, 2013, when defendants moved to vacate the warrant of removal. In July 2013, the Special Civil Part's landlord-tenant court vacated the warrant of removal for procedural deficiencies.
The parties dispute whether service of the warrant of removal was proper, but defendants concede that issue was mooted when the warrant of removal was vacated.
Plaintiff moved for reconsideration, arguing that plaintiff was the true party in interest and had not been served with defendants' motion. Defendants responded that the warrant of removal was defective because Fairbanks' application for the warrant did not reflect that plaintiff was the property owner. At defendants' request, a Law Division judge transferred the matter from the Special Civil Part to the Law Division on January 8, 2014.
On April 14, 2014, another Law Division judge (the motion judge) entered a consent order dismissing Fairbanks and substituting plaintiff as the true party in interest. On June 12, 2014, defendants filed a motion for leave to file pleadings, seeking to include a counterclaim against plaintiff and a third-party complaint against the property manager.
On June 30, 2014, plaintiff moved for a declaration of rights and an order to enforce the terms of the settlement agreement. In support of its motion, plaintiff filed a statement of material facts, under Rule 4:46-2(a). Defendants opposed the motion, but did not respond to plaintiff's statement of material facts, as required by Rule 4:46-2(b).
On September 19, 2014, the motion judge issued an order declaring that all lease interests between plaintiff, or Fairbanks, and defendants had been duly and legally terminated, and that defendants retained no right to possession of the property. The judge also imposed a judgment for $12,260 against defendants. The judge issued a second order denying defendants' motion seeking leave to file pleadings.
Defendants appealed. We entered a consent order for limited remand so the motion judge could make findings of fact and conclusions of law, as required under Rule 1:7-4(a).
On March 13, 2015, the motion judge issued an oral opinion. The judge found it was undisputed that the parties had freely entered into the settlement agreement, which resulted in a consent to enter judgment for possession allowing eviction in the event of noncompliance. The judge also found it was undisputed that defendants had failed to comply with that agreement. Therefore, the motion judge found plaintiff was entitled to possession, and granted the declaration of rights. The court added that it had denied defendants' motion for leave to file pleadings because granting leave would effectively result in "giving the defendants a second bite of the apple." "To do so would be inconsistent with the [settlement] agreement, would be unfair, unreasonable and inconsistent with the agreement the parties both had previously made in good faith."
II.
Summary judgment must be granted if the court determines "that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law." R. 4:46-2(c). The court must "consider 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." Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). As "appellate courts 'employ the same standard that governs the trial court,'" we review these determinations de novo, and the "trial court rulings 'are not entitled to any special deference.'" Henry v. N.J. Dept. of Human Servs., 204 N.J. 320, 330 (2010) (citations omitted). We must hew to that standard of review.
Defendants argue that the trial court erred in granting summary judgment under Rule 4:46-2, because plaintiff was really seeking dismissal on the pleadings under Rule 4:6-2, and because neither form of relief would have been appropriate.
However, defendants concede that plaintiff's motion, "although not described as a motion for summary judgment, in effect was a motion for summary judgment." Plaintiff's motion asked for judgment, not dismissal. The motion expressly contained a "Statement of Material Facts" pursuant to "R. 4:46-1 et seq." See R. 4:46-2(a). Moreover, the motion attached several certifications and exhibits. If "matters outside the pleading are presented to and not excluded by the court," a motion under Rule 4:6-2(e) "shall be treated as one for summary judgment and disposed of as provided by R. 4:46." R. 4:6-2. Further, the brief accompanying plaintiff's motion stated the motion was filed "under R. 4:46-2." Thus, plaintiff's motion was properly viewed as a motion for summary judgment.
Despite plaintiff's submission of a statement of material facts pursuant to Rule 4:46-2(a), defendants did not "file a responding statement either admitting or disputing each of the facts in the movant's statement" as required under Rule 4:46-2(b). "The consequence of defendants' failure to dispute any of the assertions in plaintiff['s] statement of material facts is clearly prescribed by the rule. They 'will be deemed admitted.'" Housel for Housel v. Theodoridis, 314 N.J. Super. 597, 602 (App. Div. 1998) (quoting R. 4:46-2(b)). Thus, we consider the material facts in plaintiff's statement to be admitted. Moreover, defendants' certifications do not deny that defendants have made no payments under the settlement agreement since September 2012.
Zucchetti's certification claimed that he did not replenish the $10,000 security deposit because the lease agreement stated that the "[o]riginal security payment may be used for June 2012 lease payment." However, defendant failed to raise any such claim in a response to the statement of material facts. In any event, defendants do not dispute that they failed to make any of the $1570 monthly arrears payments required by the settlement agreement, or that the settlement agreement expressly provides that failure to make any of those payments is sufficient to terminate defendants' right of possession. --------
Defendants argue that summary judgment should not have been granted as their discovery requests had not been answered. "Although discovery frequently should be completed before the court entertains summary judgment, that general practice need not be observed in cases where it is readily apparent that continued discovery would not produce any additional facts necessary to a proper disposition of the motion." DepoLink Court Reporting & Litig. Support Servs. v. Rochman, 430 N.J. Super. 325, 341 (App. Div. 2013) (citation omitted). "[D]iscovery need not be undertaken or completed if it will patently not change the outcome." Minoia v. Kushner, 365 N.J. Super. 304, 307 (App. Div.), certif. denied, 180 N.J. 354 (2004).
Here, all claims which arose prior to the settlement agreement were barred by that agreement. Defendants' subsequent claims could not succeed under the facts that were effectively admitted through defendants' failure to respond to plaintiff's statement of material facts. Thus, we hold that discovery regarding those claims was unnecessary because it would not change the outcome of the case. Ibid.
Defendants also complain that summary judgment was improper because plaintiff did not file new pleadings after the transfer of the matter from the Special Civil Part to the Law Division. Defendants cite no basis for such a requirement. Thus, "'we will not consider' defendant's entirely unsupported and 'conclusionary statement.'" United States Bank Nat'l Ass'n v. Curcio, 444 N.J. Super. 94, 114 (App. Div. 2016) (citation omitted).
Accordingly, we affirm the motion judge's September 19, 2014 order declaring that defendants' leasehold interests were terminated and that they had no right to possession, and entering judgment against them for $12,260.
III.
Defendants argue that, even after our remand, the motion judge's March 13, 2015 oral opinion failed to make findings of fact and conclusions of law which satisfy Rule 1:7-4(a). First, with regard to the granting of plaintiff's motion for summary judgment, we disagree. The judge's oral decision satisfied the requirements of Rule 1:7-4(a), as the court properly "f[ound] the facts and state[d] its conclusions of law thereon."
Second, we address the motion judge's denial of defendants' motion seeking leave to file a pleading containing a counterclaim against plaintiff and a third-party complaint against the property manager. We read the judge's oral opinion as denying the motion because defendants' proposed pleading raised claims which could not succeed, given defendants' failure to respond to the statement of material facts, and the judge's resulting finding that defendants had no valid leasehold interests and no right of possession.
Generally, motions for leave to file amended or supplemental pleadings should "be liberally granted and without consideration of the ultimate merits of the amendment." Interchange State Bank v. Rinaldi, 303 N.J. Super. 239, 256 (App. Div. 1997) (citing R. 4:9-1); see R. 4:9-4. Nonetheless, such motions "'are best left to the sound discretion of the trial court in light of the factual situation existing at the time each motion is made.'" Interchange State Bank, supra, 303 N.J. Super. at 256 (citation omitted). "Significantly, 'courts are free to refuse leave to amend when the newly asserted claim is not sustainable as a matter of law,'" because "'there is no point to permitting the filing of an amended pleading when a subsequent motion to dismiss must be granted.'" Id. at 256-57 (citation omitted).
Defendants' proposed counterclaims and third-party complaint were premised on their assertions that they had performed all obligations to plaintiff under the lease agreement, that Superstorm Sandy had rendered the property unusable, and that plaintiff had failed to restore the property and permit defendants to "re-occupy the property, all in accordance with the aforesaid Lease." Zucchetti certified that he had a valid lease and "[w]hat I simply and only seek is enforcement of my rights to be restored to the property as a commercial tenant."
However, in granting summary judgment, the motion judge properly found that, both before and after Superstorm Sandy's landfall, defendants had failed to make a payment required under the settlement agreement. That justified the termination of their lease interests and their right to possession.
Plaintiff argues that the termination of defendants' right of possession rendered their claims moot. Defendants' reply brief simply argues that all required payments were made. However, we have affirmed the motion judge's ruling to the contrary. Thus, defendants have failed to show why their proposed counterclaims and third-party complaint are not moot.
Accordingly, we cannot say that the motion judge abused "the court's sound discretion" in denying defendants' motion for leave to file pleadings. See Kernan v. One Wash. Park Urban Renewal Assocs., 154 N.J. 437, 457 (1998).
Affirmed.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION