Opinion
DOCKET NO. A-6162-09T4
12-01-2011
VILLAGE SUPER MARKET, INC., Plaintiff-Appellant, v. ESTATE OF SAUL CANTOR and JACOB1 ENTERPRISES, INC., Defendants-Respondents.
Lawrence S. Berger argued the cause for appellant (Berger & Bornstein, P.A., attorneys; Mr. Berger, of counsel and on the brief; Robert A. Bornstein, on the brief). Edward David argued the cause for respondents (Edward David & Associates, L.L.C., attorneys; Mr. David, of counsel and on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Payne, Simonelli and Hayden.
On appeal from Superior Court of New Jersey, Chancery Division, Union County, Docket No. C-50-08.
Lawrence S. Berger argued the cause for appellant (Berger & Bornstein, P.A., attorneys; Mr. Berger, of counsel and on the brief; Robert A. Bornstein, on the brief).
Edward David argued the cause for respondents (Edward David & Associates, L.L.C., attorneys; Mr. David, of counsel and on the brief). PER CURIAM
In this commercial tenancy dispute, plaintiff, Village Super Market, Inc., appeals from an order of summary judgment entered against it, terminating its lease with defendant, the Estate of Cantor, and awarding counsel fees and costs to that defendant.
I.
The facts of the matter are relatively straightforward. In 1991, plaintiff, the owner and operator of ShopRite Supermarkets, leased commercial property in Bernardsville from Saul Cantor, now deceased, for supermarket use. The property was leased "as is," and the obligation to repair was placed on plaintiff by paragraph 7 of the lease, which stated in relevant part:
The Tenant has examined the demised premises, including roof, and agrees to accept same "as is" upon the commencement of this lease term (except as otherwise expressly provided herein) and without any representations on the part of the Landlord or its agents as to the present or future condition of the said premises with respect to habitability. The Tenant at its sole cost and expense shall keep the demised premises, exterior and interior, structural and non-structural, in good condition, and shall paint and renovate and repair and maintain the said premises as may be necessary, in Landlord's opinion, reasonably exercised, to keep them and all items furnished by Landlord and Tenant in good repair and condition, including and not limited to heating and cooling facilities installed in the premises . . . .The lease, with extensions, would not expire until February 28, 2022. The leased premises was managed by defendant Jacobs Enterprises, Inc.
At some time after the lease was commenced, plaintiff allowed the property to "go dark," shifting its operations to a new store next door. Thereafter, the vacant premises was used primarily for storage and for overflow parking. Nonetheless, rent payments remained current.
At some point in 2006, Peter Jacobsen, Vice-President of JK Management, L.L.C. and Vice-President of Acquisitions and Leasing at Jacobs Enterprises, Inc., received a report by Paul Beck Associates, P.A., of its inspection of the leased premises, conducted in connection with a potential sublease of the property to The Thirsty Turtle. The Beck report, which was dated February 6, 2006, detailed the findings of an inspection of the vacant site made on January 31, 2006. It disclosed substantial damage to the premises, requiring repair, including the installation of new floor joists and wood flooring, repair of the basement block wall in areas showing extensive water damage, modification of drainage, restoration of original framing or the addition of new supports, repair of cracked and water damaged joists, repair of failures in the basement walls with steel and concrete fill in order to withstand soil pressure, correction of deflection in a metal deck closing off abandoned concrete stairs, replacement and sealing of the roofing surface, and other matters.
Thereafter, Jacobsen and George Jacobs, the President of JK Management and Jacobs Enterprises, determined to commission their own inspections. In May 2007, they commissioned architect John Buchholz and his firm, The Buchholz Architectural Group, P.C., to identify and retain structural engineering experts to inspect the property and render reports on its condition. Buchholz retained CEC Group, L.L.C., which issued a letter report, dated May 18, 2007, limited to its "visual observation of the exposed structural components of the foundation walls and the floor and roof construction only." The report separately described the results of CEC's inspection of the roof trusses and of areas designated as Area A through Area I, the locations of which were set forth in an accompanying plan. Additionally, photographs of the various conditions mentioned in the report were provided.
The report indicated that seven of the eight visible roof trusses had been inspected. All showed signs of un-engineered repairs, some causing a reversal of forces from tension to compression and the reverse. The report stated that "[f]urther analysis of the trusses is definitely required. Currently, we estimate about fifty members of the trusses will need reinforcement or repair." In addition, the report noted, in Areas A through I, extensive water damage, failures of framing, joists and flooring, and a wall crack requiring repointing and wall reinforcement. The report concluded with the following statement:
All physical condition visual observation surveys consist of a walk through visual observation tour of the building's readily accessible areas to note the general condition of major structural components and systems. Accessible areas were observed. Stored materials, suspended ceilings and other items which obstruct the view of the observer will not be moved. Observation of structural items is of a visual nature only. The structural adequacy of visible members and connections cannot be verified by visual observation alone. The determination or verification of member capacity is beyond the scope of this report.
Additionally, Buchholz retained Dajon Associates to prepare an inspection report on the building's roof trusses, which was completed on May 10, 2007. The report indicated that all trusses had been extensively repaired, including the installation of a post-tension cable system, reinforcement with additional lumber and installation of columns extending from the finished floor to the bottom chords. The report also noted fractures and splits in the trusses, as well as water damage. Numerous photographs of the condition of the trusses were provided.
On July 27, 2007, Jacobsen wrote to William Sumas of Village Super Market, enclosing the CEC Group and Dajon Associates reports, noting that they "indicate[d] the need for extensive structural work to the ground floor supports and to the roof truss system in the Shoprite Annex building[.]" The letter continued:
Pursuant to paragraph 7 of your lease (paragraph enclosed), you are responsible to maintain the building and its structures in good condition. Please make the necessary repairs as soon as possible. Please inform us within the next 30 days as to your intended schedule. Also please provide us with a set of plans and an indication of how you intend to protect the other tenants in the building. As these repairs are structural in nature, the Landlord has the right to approve the activity. Once we receive and are satisfied with all of these arrangements and materials, we will give you permission to proceed; you are not authorized to proceed until that moment. All legal requirements will also, obviously, be required to be met prior to construction commencement.Sumas did not respond, but in a subsequent conversation, claimed not to have received the reports. As a result, the structural engineers' reports were forwarded by fax again on December 28, 2007.
In a further communication from Jacobs to Sumas dated February 1, 2008, Jacobs stated:
We have spoken a number of times about the building condition. When I saw and spoke to you about 6 weeks ago, you told me to send the engineering material to you, which was done. There was still no response. We have an obligation to the Cantors and our tenant is not meeting its obligations.
Paragraph 3 of the lease declared that "Each of the following shall be deemed a default by the Tenant and breach of this lease[.]" Paragraph 3(a)(1) declared as a default failure to pay rent. Additionally, Paragraph 3(a)(2) declared as a default
(2) Failure to perform any other covenant or condition or term of this lease on the part of the Tenant to be performed for a period of twenty (20) days after service of notice by the Landlord on the Tenant, and regardless of its materiality . . . except that if performance after notice shall reasonably require more than twenty (20) days, Tenant shall not be in default so long as it shall commence performance of the covenant within ten (10) days after the notice and proceed diligently thereafter with full manpower and material to completion of performance in not more than sixty (60) days after the notice.
On March 6, 2008, defendant served plaintiff with a twenty-day notice pursuant to Paragraph 3 of the lease demanding cure of the conditions noted in the structural reports of the CEC Group and Dajon Associates. No repairs were commenced. Instead, in May 2008, plaintiff filed a verified complaint against defendants alleging that upon learning that plaintiff had identified a potential sublessor for the property at a substantially higher rent than was being charged by the landlord and learning that plaintiff was intending to request the landlord's consent to sublease, the landlord sought to prematurely terminate the lease in order to regain the property and enjoy the full amount of the higher rental. In the complaint, plaintiff denied ever receiving the inspection reports sent by defendants in July and December 2007, but alleged that, "notwithstanding these deficiencies," defendants demanded a cure of the conditions set forth in the reports by March 28, 2008 or the commencement of repairs by March 15, 2008 and completion of them within sixty days. Plaintiff asserted causes of action for breach of contract, breach of the implied covenant of good faith and fair dealing, tortious interference with prospective economic advantage, and declaratory judgment. Additionally, plaintiff sought judgment enjoining defendants from declaring the lease in default, from terminating the lease, and from any other conduct as the court deemed to be equitable and just.
Counsel for plaintiff stated at oral argument on cross-motions for summary judgment that the premises were being leased at a cost that was "very much below market rent," and that its proposed subtenant, Staples, "would like to take the space at more than double the rent that the present tenants are paying."
On July 21, 2008 the court signed a consent order for preliminary injunctive relief enjoining defendants from reentering the premises, reletting the premises, or commencing any proceedings, taking any other action to evict or otherwise remove plaintiff from the premises, exercising rights or remedies granted to defendants in the event of a default, advertising the premises for rent, interfering with plaintiff's efforts to sublease the premises, and engaging in any conduct that interfered with plaintiff's quiet use and enjoyment of the premises. However, the order permitted defendants to send a notice of termination of lease, while conditioning actual termination upon entry of a court order permitting that relief. As of August 7, 2008, repairs had not been commenced. Accordingly, defendants served plaintiff with a notice of termination of lease in accordance with Paragraph 3(c) of that lease.
On August 21, 2008, defendants sent plaintiff a second twenty-day notice of default. The certification of William Sumas, dated November 13, 2008, described that notice as identifying the following "structural and non-structural maintenance and repair conditions in and about the Premises" that would constitute a default under the lease if not repaired by plaintiff on or before September 15, 2008:
The notice does not appear in the record.
1. water damage to soffit;
2. water damage to downspouts in the receiving area (lack of storm drainage off building façade);
3. inadequate landscaping maintenance;
4. spalling and water damage to chimneys and exterior brick;
5. interior leaks evidenced by exterior water damage;
6. foliage growing out of building areas and gutters on roof, all needing to be removed and repairs to damaged building areas completed;
7. line striping needed to be restored in parking lot;
8. curb area needs to be restored where parking lot meets the street;
9. pothole repairs needed in parking lot;
10. pylon sign frame needs to be stripped and re-painted; and
11. chewing gum needs to be steam-removed from sidewalk in front of stores.
As of November 2008, plaintiff had not made any structural repairs to the property. An inspection on March 9, 2010 disclosed that plaintiff had recently effected a few of the repairs referenced in the CEC report, but none of the repairs referenced in the Dajon report.
On January 8, 2010, the court entered a consent order granting plaintiff permission to file an amendment to its verified complaint to add claims for specific performance, rent abatement and rent set-off. A further extension of discovery was denied on March 3, 2010, and trial was set for June 7, 2010.
On March 30, 2010, defendants moved for summary judgment or, in the alternative, for an order barring testimony from plaintiff's expert at trial and compelling the depositions of two of plaintiff's officers. In connection with this motion, defendants served the April 9, 2010 certification of Rajnikant Doshi, a principal of CEC Group, that was denominated "Final Report of CEC Group, Inc." In that report, Doshi opined that,
to a reasonable degree of engineering certainty . . . each of the Areas (A-I) on the Initial Report depict areas of structural damage to the Property necessitating repairs and/or maintenance.Plaintiff countered on April 12, 2010 by serving the report of its expert Todd R. Heacock, a structural engineer employed by the firm of Paulus, Sokolowski & Sartor, L.L.C. That report focused solely on the roof trusses, which Heacock found did not require any structural repair "at the time of the Dajon and CEC Reports" to make them stable. Heacock did not opine as to the trusses' present condition.
On April 19, 2010, plaintiff filed a cross-motion for partial summary judgment, arguing that the notices issued by defendants with respect to the alleged breaches by plaintiff were defective and inadequate, in that they did not sufficiently identify "structural" conditions in need of repair. In support of its motion, plaintiff relied on Heacock's analysis of the roof trusses and also on a certification of Kevin C. Sommons, a professional engineer, who opined that the need for repair of the roof trusses could not be determined by visual inspection alone.
The motions were heard by the court on April 30, 2010. At that time, defendants focused on the first twenty-day notice, as to which the notice of termination pertained. They conceded that issues of fact existed regarding the condition of the roof. With respect to the remainder, defendants also conceded that, "in the last couple of months," plaintiff had repaired "a few" of the conditions identified in the CEC report, but had done so only after two years' inactivity, and had not made all of the necessary repairs. Plaintiff argued that the reports furnished by defendants were inadequate because, admittedly, there was no engineering verification that the identified conditions were structural in nature.
Following argument, the court rendered an oral opinion granting summary judgment to defendants. In doing so, it framed the issue as being "whether . . . the defendant has complied with the terms of the lease by issuing a notice to the plaintiff of a failure to comply with a specific term[,] namely Article 7 . . . , to repair structural and non-structural defects in the property." It acknowledged plaintiff's position that the first twenty-day notice was inadequate, but held:
I think any fair reading of the notice with the attached reports and photographs clearly and obviously puts the plaintiff on notice that there are defects that are in need of repair. That while there may be some open question as it relates to the roof, there [is] more than enough information given to the plaintiff to advise the plaintiff that there is, there are things to be done.
The court additionally found that the plaintiff was a "sophisticated tenant" that had an opportunity to inspect the property before taking possession of it, and because of the length of its tenancy, it could not be deemed "a stranger to the property." Notice number one, the court held, was "more than adequate to put the plaintiff on notice that there were defects and those defects needed to be repaired. They simply were not repaired and the defendant appropriately under the terms of the lease then issued a notice of termination." Thus, the court found, summary judgment in defendants' favor was warranted. After determining that defendants had no responsibility under the terms of the lease to repair defects in the premises, and that plaintiff had offered no facts to support the claims set forth in its complaint, the court denied plaintiff's cross-motion for partial summary judgment.
Defendants were directed to file a motion for attorney's fees, and they did so, obtaining an award of $113,556.27 in fees together with costs to be taxed.
Plaintiff has appealed the entry of summary judgment in defendant's favor, the denial of its motion for partial summary judgment and the fee award.
II.
On appeal, plaintiff argues, as it did on summary judgment, that the first default notice was inadequate in that it indicated a need for "extensive structural work in and about the Premises," but failed to advise what specific "structural" defects in the property were the focus of the notice. Thus, the court erred in finding that the notice provided was "more than adequate." Plaintiff contends that because the CEC and Dajon reports were limited to "visual observation of exposed elements of the Leased Premises only," neither report stated that the conditions observed constituted structural defects that required repair, and the CEC report specifically advised that "the structural adequacy of visible members and connections cannot be verified by visual observation alone," the reports did not provide the necessary support for the notice. In plaintiff's view, all the first notice of default did was to advise plaintiff of "defects in general," and without greater specificity, supported by engineering analysis demonstrating that a particular defect was "structural," no duty to repair arose.
We do not accept plaintiff's position, but instead agree with defendants that the clear language of Paragraph 3(c) of the lease required a written notice of default, not an expert report, and that if any doubt existed as to the repairs required after review of the CEC report and accompanying photographs, plaintiff could have made inquiry of defendants, instead of doing nothing for a period of two years. In the circumstances presented, we find Brill's standard for summary judgment to have been met. See Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995); Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.) (applying Brill standard on appeal), certif. denied, 154 N.J. 608 (1998)).
Resolution of defendants' summary judgment motion depended on the court's interpretation of the language of the lease agreement -- usually a matter of law, suitable for decision on a motion for summary judgment. Spring Creek Holding Co., Inc. v. Shinnihon U.S.A. Co., Ltd., 399 N.J. Super. 158, 190 (App. Div.), certif. denied, 196 N.J. 85 (2008); Driscoll Constr. Co., Inc. v. State, Dep't of Transp., 371 N.J. Super. 304, 313 (App. Div. 2004). Only "where there is uncertainty, ambiguity or the need for parol evidence in aid of interpretation, [should] the doubtful provision . . . be left to the jury." Great Atl. & Pac. Tea Co., Inc. v. Checchio, 335 N.J. Super. 495, 502 (App. Div. 2000).
"An ambiguity in a contract exists if the terms of the contract are susceptible to at least two reasonable alternative interpretations[.] To determine the meaning of the terms of an agreement by the objective manifestations of the parties' intent, the terms of the contract must be given their 'plain and ordinary meaning.'"Whether an ambiguity exists is a matter of law to be decided by the trial court. Celanese v. Essex Cnty. Improvement Auth., 404 N.J. Super. 514, 528 (App. Div. 2009). Moreover, it is fundamental that if the terms of a contract are clear and unambiguous, the court must enforce those terms as written. Kampf v. Franklin Life Ins. Co., 33 N.J. 36, 43 (1960).
[Schor v. FMS Fin. Corp., 357 N.J. Super. 185, 191 (App. Div. 2002) (quoting Kaufman v. Provident Life & Cas. Ins. Co., 828 F. Supp. 275, 282 (D.N.J. 1992), aff'd, 993 F.2d 877 (3d Cir. 1993)).]
Paragraph 7 of the lease required plaintiff to maintain "structural and non-structural" elements of the premises in "good condition" and to "repair and maintain the said premises as may be necessary, in Landlord's opinion, reasonably exercised[.]" In the present case, defendants had ample reason as the result of the reports of two structural engineering companies, Beck and CEC, to believe that extensive water infiltration and other conditions existed in the basement area that had caused the deterioration and fracturing of wood joists and flooring; that framing was improperly supported; and that cracks in the foundation undermining wall stability existed as the result of improper drainage.
We note that the Dajon report was limited to roof conditions, as to which issues of fact exist. We, therefore, like the trial court, do not consider it or the roof portions of the CEC report when considering defendants' support for summary judgment.
We acknowledge that the first notice of default utilized the phrase "extensive structural work" and that the CEC report that was furnished to plaintiff contained no detailed engineering analysis, but merely the conclusions of trained engineers. Nonetheless, we are satisfied that the observations made by CEC's structural engineer of damage to structural elements of the demised premises, as documented in photographs, were sufficient to support defendants' reasonable belief that structural repairs were needed.
The purpose of a default notice is to inform the tenant of the alleged breach and provide the tenant with an opportunity to cure. Cf. RWB Newton Assocs. v. Gunn, 224 N.J. Super. 704, 709-10 (App. Div. 1988) (evaluating sufficiency of the notice under the Anti-Eviction Act, N.J.S.A. 2A:18-61.1 to -61.59). To do so, the notice must be sufficiently explicit in specifying the particular cause of the default. Cf. Carteret Props. v. Variety Donuts, Inc., 49 N.J. 116, 124 (1967) (evaluating sufficiency of notice under tenant removal statutes, N.J.S.A. 2A:18-53 to -57). We find the first default notice to have had the required degree of specificity as to the asserted breach and to have described the defective building conditions with sufficient particularity to permit them to be located, evaluated and remediated by plaintiff in this case.
Further, even if we were to find the notice to be vague, which we do not, the record reflects that the parties communicated extensively in the period between July 2007 when the CEC and Dajon reports were first furnished to plaintiff and March 2008 when the first notice of default was served. During that time, plaintiff never sought clarification as to what needed to be done -- and indeed, it eventually performed some of the repairs mandated by the CEC report, albeit long after notice of termination had been sent. If clarification were required, plaintiff's responsibility to obtain it would clearly fall within the implied covenant of good faith and fair dealing inherent in the lease agreement. See Palisades Props., Inc. v. Brunetti, 44 N.J. 117, 130 (1965) (holding that where fairness and justice require, courts may impose such a constructive condition in order to properly effectuate the purpose of the contractual relationship).
We are thus satisfied that the trial court was correct in concluding that the first notice properly triggered plaintiff's obligations under Paragraphs 3 and 7 of the lease.
III.
Plaintiff next argues that the trial court erred in granting summary judgment because defendants failed to establish the absence of a genuine factual dispute as to the existence of any structural defect that plaintiff failed to correct. In this argument, like the prior one, plaintiff seeks to require scientific proof by defendants that the defects observed by CEC were, in fact, structural in nature. Plaintiff claims that: "While the trial court might be able to look at the pictures in the CEC and Dajon Reports and find as a matter of undisputed fact that defects are depicted and exist at the property, the trial [court] could not read those reports and find as a matter of undisputed fact that the defects depicted are structural defects." Plaintiff points to the Heacock report regarding the structural integrity of the roof trusses as raising a factual issue in that regard. Further, plaintiff argues that the lack of engineering analysis in the initial CEC report precludes a conclusion that the other defects at issue were structural, and that its supplemental report, despite its conclusion that the defects were in fact structural, suffers from the same flaw.
Plaintiff also relies on the certification of Kevin C. Sommons as creating an issue of fact. However, that report, completed on plaintiff's behalf, refers to the roof only.
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While plaintiff may have created an issue of fact regarding defects in the roof by its late submission of Heacock's certification and report, plaintiff has offered no evidence whatsoever with respect to the basement and ground floor of the building. Thus, the claims of structural defects in those areas, as attested to by CEC's Doshi, are unrebutted. The trial court found those defects, when not timely repaired, to be sufficient to provide grounds for a declaration of default by defendant in connection with a material provision of the lease. We agree.
As stated in the certification of architect Buchholz in support of defendant's motion for summary judgment:
3. I initially was requested to inspect the property located at Route 202, 107 Morristown Road, Bernardsville, New Jersey 07924 (hereinafter the "Leased Premises"), in or about May 2007 for the purposes of determining whether or not there were structural problems or issues of repair.No issue of fact had been raised with respect to the conclusions of Buchholz and other experts as they related to Areas A through I. Thus, the court was correct that the matter was appropriate for summary judgment.
4. I inspected the Leased Premises at or around that time and visually observed several areas of concern from a structural standpoint. Both the basement and roof
attic areas were involved. At that point, I told Peter Jacobsen that we needed structural experts onsite to evaluate my observations. I was then authorized to, and subsequently did, commission two inspections — one by CEC Group and one by Dajon Associates. I received both reports . . . and reviewed them. Based upon the CEC Report, it was clear that the basement of the Leased Premises was in need of structural repairs. Each of the areas depicted in the CEC Report (referred to as Areas A-I in the CEC Report) were instances of structural defects in the basement area. By way of example, Area D had floor joists that were so deteriorated that they needed shoring and replacement. Area G showed a 5' long and 3" wide crack in the foundation, which if not repaired, could lead to the crumbling and ultimate deterioration of that portion of the building foundation. Areas A and E showed similar floor joist defects which were causing the floor above to sag and placed areas of the first floor in danger of potential collapse.
5. Based on my many years as a licensed architect, I can say to the best of my professional ability, that each of the defects noted in Areas A-I inclusive were structural in nature, and required remediation.
IV.
Plaintiff next argues that even if the court were correct in concluding that the undisputed facts established that the conditions identified in the first default notice constituted structural defects, those defects were latent, preexisted the signing of the lease, and were known by defendants who did not disclose them to plaintiff. Thus, defendants could not hold plaintiff responsible for their repair or declare plaintiff in default for not making the repairs.
We find this argument to lack sufficient merit to warrant extensive discussion in a written opinion. R. 2:11-3(e)(1)(A) and (E). We fail to see how defects that were visually observed by defendants' structural engineers could be deemed "latent." See Reste Realty Corp. v. Cooper, 53 N.J. 444, 454 (1969) (defining such defects as "those the existence and significance of which are not reasonably apparent to the ordinary prospective tenant"). Moreover, we note that plaintiff is incontestably a sophisticated business tenant that leased the property "as is." All the defects enumerated in the CEC report were in plain view and would have been observable at the time of plaintiff's initial inspection if they then existed. Yet plaintiff agreed to accept the premises as it was.
Further, we decline to accept plaintiff's argument that defendant somehow failed to disclose structural defects known to it, and thus the rule of caveat emptor should not apply. See id. at 453-54 (holding that it would be inequitable to apply caveat emptor if a latent defect were not disclosed to a prospective tenant). First of all, there is no evidence that the defects at issue were latent, and second, there is no evidence that the structural defects determined to exist in the basement and first floor of the leased premises existed in 1991 when the lease was signed. All evidence in this case suggests that the defects first came to defendants' attention upon receipt of the Berg report.
V.
In this case, Paragraph 4 of the lease provides:
In the event of termination as in Paragraph 3 above, and whether or not the premises be relet, the Landlord shall be entitled to recover from the Tenant, and the Tenant shall pay to the Landlord immediately and ipso facto, in addition to any damages becoming due under Paragraph 5 and elsewhere in this Paragraph 4, the following:
(1) An amount equal to all expenses, if any, including reasonable counsel fees incurred by the Landlord in recovering possession of the demised premises, and all reasonable costs and charges, for the care of said premises while vacant, which damages shall be due and payable by the Tenant to the Landlord at such time or times as such expenses are incurred by the Landlord. . . .
In addition, Paragraph 29 states that "[e]ach party agrees to pay all attorneys' fees and other expenses incurred by the other in the successful enforcement of any of the agreements, covenants, terms, conditions and obligations under this lease."
Because we have found defendant Estate of Cantor to be the prevailing party in this matter, in accordance with the terms of the lease, it was entitled to counsel fees and costs. Packard-Bamberger & Co., Inc. v. Collier, 167 N.J. 427, 440 (2001) (citations omitted) (permitting recovery of fees if provided for by statute, court rule or contract). By order dated August 9, 2010, an award of $113,556.27 in fees, together with costs to be taxed, was made.
Plaintiff argues that the court abused its discretion in calculating the fee award, that the court failed to analyze whether the time spent on the case was necessary or reasonable, that it improperly awarded fees for legal work unconnected with the case, and that it mistakenly accepted the hourly rates charged by defendants' New York counsel as representing the rates customarily charged in the locality for similar services.
We reject plaintiff's first two contentions, determining that the court meticulously examined defense counsels' submissions in light of the factors set forth in PRC 1.5(a). Further, we find that the judge properly eliminated unrelated, duplicative, and overlapping charges. We thus find no abuse of discretion in these respects. Id. at 444.
However, we find that the court did not address the reasonableness of the hourly rates charged by the prevailing attorneys, and we remand to permit that issue to be considered. Walter v. Giuffre, 415 N.J. Super. 597, 607-08 (App. Div. 2010), certif. granted in part, 205 N.J. 98 (2011) (limiting grant of certification to the issue of the enhancement of the attorney fee award, a matter that is not at issue here), cross-petition for certif. denied, 205 N.J. 98 (2011); Rendine v. Pantzer, 141 N.J. 292, 337 (1995).
We further require clarification as to whether defendants' amended petition requesting fees associated with plaintiff's successful motion to amend the April 30, 2010 judgment was granted, finding that it is doubtful that it should have been. We are also uncertain whether the twenty percent deduction for duplicated telephone conferences was applied to both the defendants' New Jersey and New York counsel or to New York counsel alone. In this regard, the $80,421.72 awarded to New Jersey counsel is less than the $95,011.50 originally requested by more than twenty percent, but there is no explanation for the reduction. There is a similar inconsistency in the amount awarded to New York counsel.
Plaintiff has requested a plenary hearing on remand to address issues surrounding the counsel fee award. However, the Supreme Court has discouraged the use of such a procedure, determining that its use invites the parties "to become mired in a second round of litigation." Furst v. Einstein Moomjy, Inc., 182 N.J. 1, 24 (2004). Such hearings should occur only "when the certifications of counsel raise material factual disputes that can be resolved solely by the taking of testimony." Ibid.
In the present matter, the certifications and billing records submitted to the trial court are detailed and complete. The primary issue that remains involves the reasonableness of counsels' billing rates. No testimony with respect to these matters is required.
Summary judgment in defendants' favor is granted; the matter is remanded for further consideration of the award of attorney's fees. Jurisdiction is not retained.
I hereby certify that the foregoing
is a true copy of the original on
file in my office.
CLERK OF THE APPELLATE DIVISION