Court Opinion

ID: 4508385
Source: CourtListenerOpinion
Date Created: 2020-02-19 15:06:43.216221+00
Date Added: 2024-06-11T09:37:41.975061
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NOT FOR PUBLICATION WITHOUT THE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-0953-18T3

COMMERCE LIMITED
PARTNERSHIP #9326,

          Plaintiff-Appellant,

v.

EDISON FURNITURE, LLC,
d/b/a ALL BRANDS FURNITURE
CLOSEOUTS, LLC,

     Defendant-Respondent.
_____________________________

                    Argued January 29, 2020 – Decided February 19, 2020

                    Before Judges Mayer and Enright.

                    On appeal from the Superior Court of New Jersey, Law
                    Division, Middlesex County, Docket No. L-4047-17.

                    Jonathan R. O'Boyle argued the cause for appellant.

                    Carlos Aaron Ortiz argued the cause for respondent.

PER CURIAM
       Plaintiff Commerce Limited Partnership #9326 appeals from a July 23,

2018 no cause finding after a bench trial in favor of defendant Edison Furniture,

LLC d/b/a All Brands Furniture Closeouts, LLC and an October 18, 2018 order

denying its motion for a new trial. In addition, plaintiff appeals from various

pre-trial orders related to discovery and denial of summary judgment. We affirm

all orders on appeal.

       Plaintiff owns property with a stand-alone commercial building that it

leased to defendant on March 3, 2010.1 In accordance with the lease, defendant

is obligated to pay monthly rent, as well as late fees, taxes, and insurance. If

defendant breached the lease terms, defendant was accorded an opportunity to

cure. If defendant failed to cure its breach under the lease, plaintiff could

exercise its "rights and remedies . . . provided for by law or equity or elsewhere

in this [l]ease."   In such event, plaintiff could seek reimbursement from

defendant for "reasonable sums paid or costs incurred by [it] in curing such

default." The lease also required defendant to indemnify plaintiff for liabilities

arising out of defendant's use of the property.

1
    Lease amendments were signed on March 18, 2010 and October 2, 2014.
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      On July 5, 2017, plaintiff filed a complaint alleging defendant breached

the lease by failing to pay late charges and rent for 2015 and 2016. Plaintiff also

claimed defendant failed to carry adequate insurance in accordance with the

lease. Plaintiff demanded all outstanding amounts due under the lease, plus

reasonable attorney's fees and costs. Plaintiff also sought to evict defendant.

      After filing its complaint, plaintiff received municipal summonses for

failure to maintain the property.       Plaintiff retained a law firm, incurring

$8179.50 in legal fees, to defend cited ordinance violations. Plaintiff also spent

$1765 to remedy the cited conditions at the property and sought repayment of

these expenses pursuant to the lease.

      Defendant filed an answer and affirmative defenses. Defendant asserted

waiver, estoppel, and other defenses.        Thereafter, the parties exchanged

discovery. Defendant provided signed answers to interrogatories on March 5,

2018, and defendant's representative was deposed on March 12, 2018.

      In February 2018, plaintiff filed a motion for summary judgment based on

defendant's breaches of the lease.       The judge denied the motion because

discovery was ongoing and there were genuine disputed issues of material fact

regarding the amount defendant owed.

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      During discovery, plaintiff sent a March 20, 2018 letter, entitled "Estoppel

Letter," to defendant and asked defendant to execute and return the document.

The letter instructed defendant to "make . . . corrections in ink and initial same"

if any of the statements were incorrect. Although the parties were engaged in

contentious litigation related to defendant's breaches under the lease, the letter

requested defendant certify as true the following statements:

                   1.    The Lease is unmodified and in full force
                         and effect.

                   2.    [Defendant] . . . paid all Rent due through
                         the period of March 31, 2018.

                   3.    [Defendant] is not in default in the
                         performance of any covenant, agreement or
                         condition contained in the Lease.

                   4.    [Plaintiff] is not in default in the
                         performance of any covenant, agreement or
                         condition contained in the Lease.

                   5.    The Commencement of the Term was
                         March 15, 2010.

                   6.    The statements made herein may also be
                         relied upon by [plaintiff], any prospective
                         purchaser of the Demised Premises or any
                         mortgagee thereof or any assignee of
                         [plaintiff]'s interest in the Lease.

      Defendant, fearing the letter was a "trick," declined to sign the document.

Instead, defendant forwarded the letter to its attorney.

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      Plaintiff also filed motions asserting defendant failed to provide fully

responsive discovery.     Because the trial was set to begin shortly after the

motions were to be heard, the pre-trial judge determined any discovery

violations would be "better addressed at trial."

      The matter was tried before a judge without a jury on May 23, June 11,

and June 12, 2018. Immediately prior to trial, plaintiff filed in limine motions

regarding admission of evidence. The judge reserved on the motions, explaining

she would address potentially inadmissible evidence during the trial.

      During opening argument, defense counsel argued plaintiff's Estoppel

Letter waived any breaches of the lease prior to March 20, 2018. Plaintiff's

counsel objected to remarks related to the Estoppel Letter, claiming he only

received the letter the day before trial.

      Each party presented a single trial witness. After defendant presented its

case, plaintiff sought to present rebuttal evidence to refute defendant's claim it

paid monthly rent in full and on time. Because the judge admitted in evidence

the lease, defendant's checks, and plaintiff's check log, she stated she would

review the documents and the testimony to determine whether defendant owed

rent, and denied plaintiff's proffered rebuttal testimony.

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      On June 12, 2018, counsel gave closing arguments. In a July 23, 2018

written decision, the judge determined defendant owed $21,109.92 to plaintiff.

However, the judge found the Estoppel Letter constituted a "waiver of any rights

available to [plaintiff] in this suit," and plaintiff was precluded from enforcing

the lease based on defaults arising prior to the date of the Estoppel Letter. The

judge denied plaintiff's claims in their entirety, and dismissed the complaint with

prejudice.

      Plaintiff moved for a new trial. The judge heard argument on the new trial

motion and denied it in an October 18, 2018 order and written decision.

      On appeal, plaintiff raises several challenges. Plaintiff claims the judge

erred in denying its motion for summary judgment. Plaintiff also argues the

judge erred in admitting the March 20, 2018 Estoppel Letter, and finding the

document constituted a waiver of its claims that defendant breached the lease.

Further, plaintiff contends the judge erred in denying plaintiff's request to

present rebuttal testimony. In addition, plaintiff asserts the judge erred in

excluding evidence of a monetary fine and legal bills incurred as a result of

defendant's violation of municipal ordinances. Plaintiff also claims the judge

erred in denying its motion for a new trial.

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      Our scope of review after a bench trial is limited. Final determinations of

a trial court "premised on the testimony of witnesses and written evidence at a

bench trial" are deferentially reviewed. D'Agostino v. Maldonado, 216 N.J. 168,

182 (2013). "Findings by the trial judge are considered binding on appeal when

supported by adequate, substantial and credible evidence." Rova Farms Resort,

Inc. v. Inv'rs Ins. Co. of Am., 65 N.J. 474, 484 (1974).

      "[W]e do not disturb the factual findings and legal conclusions of the trial

judge unless we are convinced that they are so manifestly unsupported by or

inconsistent with the competent, relevant and reasonably credible evidence as to

offend the interests of justice[.]" Seidman v. Clifton Sav. Bank, S.L.A., 205
N.J. 150, 169 (2011) (second alteration in original) (quoting In re Tr. Created

By Agreement Dated Dec. 20, 1961, 194 N.J. 276, 284 (2008)). We will "not

weigh the evidence, assess the credibility of witnesses, or make conclusions

about the evidence." Mountain Hill, L.L.C. v. Twp. of Middletown, 399 N.J.

Super. 486, 498 (App. Div. 2008).

      We first address plaintiff's argument that the judge erred in denying its

motion for summary judgment. Summary judgment decisions are reviewed de

novo, applying the same standard as the trial court. Townsend v. Pierre, 221
N.J. 36, 59 (2015).     A court should deny summary judgment when "the

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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). When discovery is

incomplete, summary judgment should ordinarily be denied. Crippen v. Cent.

Jersey Concrete Pipe Co., 176 N.J. 397, 409-10 (2003) (citing Laidlow v.

Hariton Mach. Co., 170 N.J. 602, 619 (2002)).

      Applying this standard, the judge properly denied summary judgment

because discovery was incomplete. Given the significant factual disputes and

ongoing discovery when plaintiff filed for summary judgment, we discern no

basis to reverse the judge's denial of the motion.

      We next consider whether the judge erred in admitting the Estoppel Letter

and finding the document constituted a waiver of plaintiff's right to declare

defendant in default of the lease. Plaintiff argued the judge's admission of the

Estoppel Letter was prejudicial because the document was provided the day

before trial. It also contended the judge failed to formally admit the Estoppel

Letter in evidence.

      In a bench trial, the court's role as evidentiary gatekeeper is merged with

the fact-finding function normally reserved for a jury. State v. Hannah, 448 N.J.

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                                        8
Super. 78, 89-90 (App. Div. 2016) (citing State v. Tormasi, 443 N.J. Super. 146,

156-57 (App. Div. 2015)).      The judge in a bench trial is presumed to be

cognizant of the appropriate weight of evidence that potentially runs afoul of the

rules of evidence. N.J. Div. of Child Prot. & Permanency v. J.D., 447 N.J.

Super. 337, 349 (App. Div. 2016). Based on this standard, the need for formal

admission or exclusion of evidence is unnecessary. It is presumed in the context

of a bench trial "that the fact-finder appreciates the potential weakness of . . .

proofs, and takes that into account in weighing the evidence." Ibid.

      Here, the judge explained she would "take the appropriate notice" of the

documents marked during the trial. All marked documents were offered to the

judge for her consideration with counsels' caveat that she accord appropriate

weight to the evidence based on the objections asserted during the trial.

      The judge found plaintiff's principal authored the Estoppel Letter and sent

it to defendant while the litigation was pending. Plaintiff's counsel received a

copy of the Estoppel Letter prior to trial. Based on defense counsel's opening

argument, plaintiff's counsel knew defendant intended to rely on the Estoppel

Letter as part of its defense. Therefore, the judge did not find any "prejudicial

impact" associated with the Estoppel Letter.

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      Based on this record, we disagree plaintiff was unfairly surprised or

unduly prejudiced by the admission of the Estoppel Letter. In a contested

litigation, as here, it is axiomatic that parties will offer evidence to advance their

cause to the disadvantage of the adverse party. See Stigliano v. Connaught

Labs., Inc., 140 N.J. 305, 317 (1995) ("We would ill-serve the cause of truth and

justice if we were to exclude relevant and credible evidence only because it

might help one side and adversely affect the other.").

      We also reject plaintiff's contention that defendant hid its intent to rely on

the Estoppel Letter as a defense until the day before trial. Defendant's certified

discovery responses and the deposition of defendant's representative pre-dated

the Estoppel Letter. Defendant's waiver argument could not have been formed

until after receipt of plaintiff's Estoppel Letter.

      Because we are satisfied the judge's admission of the Estoppel Letter was

proper, we consider whether the judge erred in finding the Estoppel Letter

constituted a waiver of plaintiff's claims for breach of the lease.

      "Waiver is the voluntary and intentional relinquishment of a known right."

Knorr v. Smeal, 178 N.J. 169, 177 (2003). While the party waiving a right must

do so "clearly, unequivocally, and decisively," it need not expressly state its

intent to waive, "provided the circumstances clearly show that the party knew

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of the right and then abandoned it, either by design or indifference." Ibid. An

analysis of whether a party waived a right is fact-sensitive. Cole v. Jersey City

Med. Ctr., 215 N.J. 265, 277 (2013) (citing Knorr, 178 N.J. at 177).

         Here, plaintiff's Estoppel Letter was highly probative of plaintiff's waiver

of its right to enforce the lease against defendant. The letter was sent by

plaintiff's principal during the pendency of plaintiff's litigation for breach of the

lease.     Despite the pending legal action, the Estoppel Letter clearly and

unambiguously stated neither plaintiff nor defendant were in breach of the lease

as of March 20, 2018.

         We next consider plaintiff's claim that the judge erred because she did not

address its claim that defendant failed to carry proper insurance.           Having

reviewed the record, the judge's decision on the failure to maintain insurance

was not an abuse of discretion. The judge declined to address the lack of

adequate insurance because the issue was subsumed in her decision that the

Estoppel Letter constituted a waiver of plaintiff's claims against defendant

through March 20, 2018.           Plaintiff alleged defendant failed to maintain

insurance prior to the date of the Estoppel Letter. Therefore, it was one of the

claims waived, not requiring its own explanation.

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      We need not consider plaintiff's argument that the judge erred in failing

to address defendant's obligations to pay the municipal fine or plaintiff's legal

fees in defending the municipal summons because the issues were not raised in

plaintiff's complaint. Nor did plaintiff amend the complaint to include these

allegations.   See Fair Share Hous. Ctr., Inc. v. N.J. State League of

Municipalities, 413 N.J. Super. 423, 433-34 (App. Div. 2010), rev'd on other

grounds, 207 N.J. 489 (2011). Plaintiff's claim for expenses arising after the

filing of its complaint required amendment of its pleading.2

      Attorney's fees can be awarded as a "traditional element of damage[s]"

where they represent "the reasonable counsel fee incurred . . . in defending" an

action. Gerhardt v. Cont'l Ins. Cos., 48 N.J. 291, 300 (1966). In addition, where

there is an indemnification provision allowing recovery of legal fees, a common-

law indemnitee "may recoup from the indemnitor the reasonable costs of its

2
  Defendant objected to evidence of the municipal fine and legal bills and never
consented to the trial court's adjudication of whether it was responsible for
payment of these items. Therefore, Rule 4:9-2, allowing the amendment of a
pleading during trial to conform to the evidence, was inapplicable. See R.
Wilson Plumbing & Heating, Inc. v. Wademan, 246 N.J. Super. 615, 618-19
(App. Div. 1991). See also Skripek v. Bergamo, 200 N.J. Super. 620, 629 (App.
Div. 1985) (holding where a party declines an opportunity to amend the
pleadings to conform to the evidence, the subject of the declined amendment is
a precluded issue on appeal).

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defense." Cent. Motor Parts Corp. v. E.I. duPont deNemours & Co., 251 N.J.

Super. 5, 10 (App. Div. 1991) (citing Westfield v. Mayo, 122 Mass. 100 (1897));

see also Vergopia v. Shaker, 383 N.J. Super. 256 (App. Div. 2006) (reversing

and remanding to determine whether legal expenses incurred by indemnitee

were reasonable).

       Plaintiff never asserted a claim for indemnification of its reasonable

attorney's fees in the complaint and failed to amend the complaint to include this

claim. Even if indemnification for reasonable legal fees was properly before the

trial court, we discern no abuse of discretion in the judge's rejection of the claim

because plaintiff failed to prove the reasonableness of the fees incurred. The

judge was not required to "accept passively" plaintiff's claimed expenses in

defending the municipal ordinance violations. See Walker v. Giuffre, 209 N.J.
124, 131 (2012) (citing Rendine v. Pantzer, 141 N.J. 292, 335 (1995)).

      We next address plaintiff's claim that the judge erred in denying its motion

for a new trial. Specifically, plaintiff contends the judge abused her discretion

in declining rebuttal testimony to counter defendant's use of the Estoppel Letter ,

warranting a new trial.

      A trial court's denial of a motion for new trial will not be reversed unless

"it clearly and convincingly appears that there was a miscarriage of justice under

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the law." R. 4:49-1(a). Whether there was a miscarriage of justice is determined

by the sufficiency of credible evidence presented at trial.         Fanarjian v.

Moskowitz, 237 N.J. Super. 395, 406 (App. Div. 1989) (citing Rova Farms

Resort, Inc., 65 N.J. at 484). If the trial judge "went so wide of the mark that a

mistake must have been made," given the judge's "clearly mistaken" conclusions

of fact and law, reversal is warranted. Pioneer Nat'l Title Ins. Co. v. Lucas, 155
N.J. Super. 332, 338 (App. Div. 1978).

      "[T]he question of what is proper rebuttal evidence, and whether it should

be admitted, lies within the trial court's discretion, and the exercise of that

discretion will not be disturbed in the absence of gross abuse." State v. Balles,

47 N.J. 331, 343 (1966) (quoting State v. DeRocco, 53 N.J. Super. 316, 323

(App. Div. 1959)). Rebuttal evidence that is not repetitive or cumulative of

evidence already presented by the party seeking rebuttal is proper, and exclusion

thereof is an abuse of discretion.    See Casino Reinvestment Dev. Auth. v.

Lustgarten, 332 N.J. Super. 472, 497 (App. Div. 2000).

      Plaintiff claims rebuttal testimony was necessary to address defendant's

arguments related to the Estoppel Letter. However, plaintiff's proffered reason

for rebuttal testimony during trial related solely to defendant's payment history.

Counsel never told the judge that rebuttal testimony was required to address

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plaintiff's intent in sending the Estoppel Letter. Only after its claims were

dismissed did plaintiff raise a new theory in support of the need for rebuttal

testimony. Plaintiff cannot belatedly argue the judge abused her discretion when

the argument was never made to the judge in the first place.

      In support of its new trial motion, plaintiff submitted a certification from

its testifying trial witness, who purported to know why the Estoppel Letter was

sent to defendant. According to the certification, the Estoppel Letter was "an

attempt to lock in a sworn statement before trial," "an Extra[-]Judicial attempt

at [d]iscovery by [plaintiff] who believed that [defendant was] not complying

with . . . [d]iscovery obligations," "not meant to trick or deceive [defendant] or

any potential buyer," and "not intended to be a waiver" of plaintiff's claims.

      In denying plaintiff's motion for a new trial, the judge concluded,

"[Plaintiff] offered to recall only [its trial witness], whose testimony would have

been limited to hearsay and would not have been admissible." Because the

rebuttal witness did not author the Estoppel Letter, his testimony would not have

been based on personal knowledge, contrary to N.J.R.E. 602. Plaintiff had the

opportunity to develop information regarding the Estoppel Letter during direct

examination of its trial witness and cross-examination of the defense witness.

See N.J. Div. of Child Prot. & Permanency v. T.D., 454 N.J. Super. 353, 385

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(App. Div. 2018) (finding the judge's denial of a request for rebuttal testimony

proper where the issue was "not an unexpected issue").

      After reviewing the record, we are satisfied the judge did not abuse her

discretion in denying plaintiff's request to present rebuttal. Therefore, denial of

plaintiff's motion for a new trial based on the exclusion of improper rebuttal

testimony was not erroneous.

      In accordance with our deferential standard of review of a judge's decision

in a bench trial, we discern no legal or factual basis to disturb the judge's

findings.   The judge's findings are supported by adequate, substantial, and

credible evidence.

      Affirmed.

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