Court Opinion

ID: 9965365
Source: CourtListenerOpinion
Date Created: 2024-05-02 14:08:59.602944+00
Date Added: 2024-06-11T08:24:55.713915
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE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-1550-22

JMC REAL ESTATE
HOLDINGS, LLC,

          Plaintiff-Respondent,

v.

ASIM HOLDINGS, LLC,
ELI GLOBAL, LLC, and
GREG E. LINDBERG,
individually,

     Defendants-Appellants.
_________________________

                   Submitted December 11, 2023 – Decided May 2, 2024

                   Before Judges Gilson and Berdote Byrne.

                   On appeal from the Superior Court of New Jersey, Law
                   Division, Somerset County, Docket No. L-0572-20.

                   Law Offices of Charles A. Gruen, and William G.
                   Whitehill (Condon Tobin Sladek Thorton Nerenberg,
                   PLLC) of the Texas bar, admitted pro hac vice,
                   attorneys for appellants (Michael Korik and William G.
                   Whitehill, on the briefs).
            DiFrancesco, Bateman, Kunzman, Davis, Lehrer &
            Flaum, PC, attorneys for respondent (Stephen Osgood
            Davis, on the brief).

PER CURIAM

      Defendants, ASiM Holdings, LLC (ASiM), Eli Global, LLC, and Greg E.

Lindberg (Lindberg), appeal from the trial court's order of October 25, 2022,

granting summary judgment to plaintiff and requiring defendants to pay unpaid

rent, taxes, utilities, and attorney's fees stemming from a five-year property

lease. Plaintiff JMC Real Estate Holdings, LLC, entered into a lease with

defendants for space in a commercial building. The lease was related to the

acquisition of the assets of a business, where defendants had entered into an

asset purchase agreement (APA), promissory note, and two guaranties with

Galen Publishing, LLC, a company related to plaintiff. We affirmed the trial

court's orders with respect to defendants' breach of the APA, promissory note,

and guaranties in a separate opinion (A-0142-22), and now affirm the trial

court's October 25, 2022 order substantially for the reasons expressed in the

well-reasoned, oral opinion of the Honorable Kevin M. Shanahan. We add the

following comments.

      Consistent with the purchase of the business assets, ASiM entered into a

lease agreement for the real estate the business occupied, to commence on March

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21, 2017, and terminate March 21, 2022. The lease contained specific annual

increases, an acceleration clause in the event of default, and a requirement that

tenant pay seventy-five percent of the increase in base property taxes and

utilities. The lease was guaranteed individually by Lindberg who also signed a

guaranty on behalf of defendant Eli Global.

      Defendants do not dispute they stopped paying rent on March 1, 2020, and

vacated the premises a year later in breach of the lease agreement. Defendants

initially defended their non-payment of rent by claiming force majeure as a

result of the COVID-19 pandemic. However, defendants abandoned their force

majeure argument prior to plaintiff's motion for summary judgment. On appeal,

defendants contend the trial court erred in (1) permitting plaintiff to introduce

evidence of its mitigation efforts; and (2) calculating defendants' portion of

responsibility for their share of municipal taxes pursuant to the lease.

      With respect to mitigation, Judge Shanahan correctly found Jack

Ciattarelli (Ciattarelli) — whom he deemed credible and who signed the lease

on behalf of plaintiff-landlord — produced evidence that showed immediately

upon defendants' breach of the lease agreement, he served them with a written

notice on April 2, 2020 explaining if they did not cure the default, plaintiff

intended to market the property for potential rent or sale. Judge Shanahan also

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                                        3
noted Ciattarelli responded to interrogatories and document demands

propounded by defendants, stating he was making efforts to mitigate damages,

and defendants made no effort to depose Ciattarelli during the discovery period

to explore those mitigation efforts. Carolyn Lang, defendants' on-site employee,

testified Ciattarelli informed her there would be people visiting to try to rent or

sell the property, and a large sign was placed on the front window before

defendants had her vacate the premises. There was testimony from a commercial

real estate agent confirming the property was listed on three different multiple

listing services, various potential buyers or renters were shown the property, but

plaintiff was unable to sell or re-lease the space during the lease period, even

after reducing the price.    Defendants presented no evidence to rebut this

testimony.

      Defendants' arguments that the trial court improperly allowed testimony

regarding mitigation are belied by this record.       Plaintiff acknowledged its

obligation to reasonable mitigation, at least from the time defendants vacated

the property in March of 2021, and presented substantial, credible evidence of

its efforts to mitigate since April 2, 2020. Defendants were not entitled to an

adjustment of the award based upon plaintiff's alleged failure to mitigate

damages.

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                                        4
      Defendants' second argument also fails. Prior to the sale of the business'

assets, defendants, as tenants, were obligated to pay seventy-five percent of the

increases in all taxes assessed on the property over the established base amount,

which was the tax amount for the 2007 tax year. That amount was $45,524.57,

as testified to by Ciattarelli and defendants' own employee Lang.         It was

corroborated by a business record from the Somerville Tax Assessor.

Defendants paid seventy-five percent over the base amount in 2017, 2018, 2019,

and 2020, including municipal taxes, consistent with the lease agreement. In

that regard, the lease stated that the seventy-five percent would apply to "real

estate taxes," including "all taxes which are imposed by any governmental

authorities and assessed against the Property." Defendants' belated claim that

municipal taxes should be excluded from the judgment because municipal taxes

are not explicitly mentioned in the lease's definition of taxes contradicts both

the terms of the lease agreement and their own course of conduct.

      Defendants' remaining arguments lack sufficient merit to warrant

discussion in a written opinion. R. 2:11-3(e)(1)(E).

      Affirmed.

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