Court Opinion

ID: 4429566
Source: CourtListenerOpinion
Date Created: 2019-08-20 19:26:18.649876+00
Date Added: 2024-06-11T14:51:09.692988
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NOT FOR PUBLICATION WITHOUT THE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-5148-16T3

126 SOUTH STREET OWNER,
LLC,

       Plaintiff-Respondent/
       Cross-Appellant,

v.

SUZI'S SKIN AND NAIL CARE
STUDIO, INC., d/b/a SUZI'S SALON
AND SPA,

     Defendant-Appellant/
     Cross-Respondent.
________________________________

                Argued October 18, 2018 – Decided January 18, 2019

                Before Judges Simonelli and DeAlmeida.

                On appeal from Superior Court of New Jersey, Law
                Division, Morris County, Docket No. LT-000455-17.

                James T. Bryce argued the cause for appellant/cross-
                respondent (Murphy McKeon, PC, attorneys; James T.
                Bryce, on the briefs).
              Daniel L. Schmutter argued the cause for
              respondent/cross-appellant (Hartman & Winnicki, PC,
              and Law Offices of Thomas A. Buonocore, PC,
              attorneys; Daniel L. Schmutter and Rosemary G.
              Vinitsky, on the briefs).

PER CURIAM

        In this summary dispossess matter, defendant Suzi's Skin and Nail Care

Studio, Inc., d/b/a Suzi's Salon and Spa, appeals from the July 28, 2017 Law

Division order holding that defendant was not entitled to assert a Marini1

defense, ordering it to pay $63,239.98 in back rent, and awarding $39,204 to

plaintiff 126 South Street Owner, LLC for counsel fees and costs. Plaintiff

cross-appeals from that part of the order holding that N.J.S.A. 2A:18-53(c)(4)

did not apply to grant plaintiff a judgment for possession. Both parties also

challenge the amount of the counsel fee award. We affirm in part, reverse in

part, and remand for entry of a judgment for possession.

                                         I.

        Pereaux Deux, LLC (Pereaux) was the prior owner of commercial

property located at 126 South Street in Morristown.        In November 2011,

defendant began negotiating with Pereaux to lease a portion of the property.

1
    Marini v. Ireland, 56 N.J. 130 (1970).

                                                                       A-5148-16T3
                                         2
Defendant prepared a rental agreement that proposed a five-year lease with a

five-year option to renew (defendant's proposed rental agreement). Defendant's

proposed rental agreement also proposed the following rent during the initial

and renewal terms:

      Rent Breakdown: Years 1-5
           Year 1:     Months 1-4          $2,500
                       Months 5-6          $6,000
                       Months 7-12         $7,500
                             Total Year 1             $67,000
           Year 2:     Months 1-12         $8,000
                             Total Year 2             $96,000
           Year 3:     Months 1-12         $8,800
                             Total Year 3             $105,600
           Year 4:     Months 1-12         $9,700
                             Total Year 4             $116,400
           Year 5:     Months 1-12         $10,700
                             Total Year 5             $128,400
                 Total Rent for Initial 5 Yr. Term    $513,400

      Rent Breakdown: Years 6-10
           Year 6:     Months 1-12       $11,000
                             Total Year 6             $132,000
           Year 7:     Months 1-12       $11,500
                             Total Year 7             $138,000
           Year 8:     Months 1-12       $12,000
                             Total Year 8             $144,000
           Year 9:     Months 1-12       $12,500
                             Total Year 9             $150,000
           Year 10:    Months 1-12       $13,000
                             Total Year 10            $156,000
                 Total Rent for Optional 5 Yr. Term   $720,000

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                                      3
Defendant's proposed rental agreement also had an option to purchase, which

provided, in pertinent part: "Tenant will have the sole option to purchase the

entire property for the sum of $1,600,000, beginning at the signing of this

agreement, until the last day of the [second] year of the actual lease term."

      On November 12, 2011, defendant and Pereaux executed a Letter of

Understanding (LOU), agreeing to a five-year lease with a five-year option to

renew and rent as follows:

            Year 1              Months 1-4          $2,500
                                Months 5-6          $6,000
                                Months 7-12         $7,500
            Year 2              Months 1-12         $8,000
            Year 3              Months 1-12         $8,800
            Year 4              Months 1-12         $9,700
            Year 5              Months 1-12         $10,700
            Year 6              Months 1-12         $11,700
            Years 7-10 at a base of $11,700 plus the increase in
            [Consumer Price Index] for the N.Y./N.J. Area for the
            previous year or the amount of increase in the
            property's real estate taxes for the prior year, whichever
            is greater.

The LOU also contained an option to purchase, which provided, in pertinent

part: "Lessee will have the sole option to purchase the entire property for the

sum of $1,600,000, for a period beginning at the signing of the formal lease and

ending on the last day of the [second] year of the actual lease term."

                                                                          A-5148-16T3
                                        4
      Pereaux's attorney prepared the final lease, which the parties executed on

December 16, 2011.       Paragraph One of the lease provided as follows, in

pertinent part:

             Payment of Rent. The Tenant covenants and agrees to
             pay to the Landlord, as rent for and during the term
             hereof, as set forth in Schedule A which is attached
             hereto and made a part hereof.

             Rent is due on the first day of each month in advance.[2]

             [(Emphasis added).]

Schedule A, entitled "Rental Payments," provided as follows:

             Date               Annual          Monthly Base Rent
             Due

             Months 1-4                         $2,250.00
             Months 5-6                         $6,000.00
             Months 7-12                        $7,500.00
             Second Year        $96,000.00      $8,000.00
             Third Year         $105,600.00     $8,800.00
             Fourth Year        $116,400.00     $9,700.00
             Fifth Year         $128,400.00     $10,700.00

      Paragraph 43A of the lease provided as follows, in pertinent part:

                    Option to Renew. Landlord and Tenant agree
             that if the Tenant is not in default under the terms and
             conditions of this lease and Tenant is still in occupancy
             of the demised premises, Tenant shall have the right and

2
  Because the tenancy commenced in the middle of the month, Pereaux agreed
that defendant could pay rent on the fifteenth day of the month.
                                                                           A-5148-16T3
                                         5
      option to extend the term of this lease for an additional
      period of five (5) years.

            ....

             The renewal term shall be on the same terms and
      conditions applicable to the initial term hereof except
      that the basic rent payable shall be adjusted as follows:

             A. The base annual rental for the first year of the
      renewal period shall be $11,700.00. Each subsequent
      year of the renewal period shall have an annual rental
      of $11,700.00 plus $11,700.00 multiplied by the
      increase in the Consumer Price Index . . . between the
      sixtieth (60th) month of the Lease agreement and the
      date of commencement of each subsequent year of the
      renewal term. In no event shall the basic rental of each
      year of the said renewal period be less than $11,700.00
      or the prior years' rent, whichever is greater.

      [(Emphasis added).]

Paragraph 47 of the lease provided:

             Option to Purchase: Provided and subject to the
      express condition that as of the date of the exercise of
      such option the Tenant shall have fully performed and
      complied with all obligations which are imposed upon
      it under the provisions of this Lease Agreement and
      shall not be in default with respect thereto, the Tenant
      shall have the sole right and option during the first two
      years of the lease term to purchase the property for
      $1,600,000. In the event Tenant does not notify
      Landlord in writing of its intent to purchase the
      property within . . . the time provided, Tenant's option
      to purchase shall terminate. Time is of the essence.

                                                                   A-5148-16T3
                                  6
The lease granted Pereaux the right to re-enter and take possession of the

premises if defendant defaulted in the performance of any lease term or

condition.

      Defendant did not exercise its option to purchase the property. In June

2015, Pereaux notified defendant that it intended to sell the property to plaintiff.

Pereaux sent defendant a tenant estoppel certificate, which stated that defendant

had the option to renew the lease for an additional five years at rent of $11,700

per month for the first year of the renewal term. Defendant refused to execute

the document, asserting the rent amount during the renewal period was $11,700

per year, as stated in Paragraph 43A of the lease, and the premises required

repairs.

      Following negotiations, in October 2015, Pereaux sent defendant an

amended tenant estoppel certificate, which included post-closing repairs

plaintiff would make to the premises. Pereaux also sent defendant an addendum

to the lease agreement, which provided as follows, in pertinent part:

             1. [Paragraph 43A] of the Lease . . . is hereby deleted
             and replaced with the following: "A. The base annual
             rental for the first year of the renewal period shall be
             $140,400.00, payable in monthly installments of
             $11,700.00. The base annual rental shall be increased
             by [one percent] for each subsequent year of the
             renewal period."

                                                                            A-5148-16T3
                                         7
Defendant refused to execute the amended tenant estoppel certificate or the

addendum to the lease.

      Plaintiff acquired title to the property on January 29, 2016, and an

assignment of the lease. In May 2016, defendant exercised its option to renew

the lease for five years, from January 1, 2017 to December 31, 2022. In

December 2016, defendant remitted a monthly rent payment in the amount of

$975 for January 2017, the first month of the renewal term. Defendant made

this rent payment in accordance with Paragraph 43A of the lease, not because of

any defective conditions on the property or need for repairs. Plaintiff returned

the rent payment to defendant and served a notice of default and demand for full

payment of rent plus late charges. Defendant did not cure the default.

      In January 2017, defendant remitted a rent payment of $975 for February

2017. Plaintiff returned the rent payment and sent defendant a notice of default

and demand for payment. Plaintiff's attorney advised defendant that Paragraph

43A of the lease

            incorrectly provides that the base annual rental for the
            first year of the renewal period would be $11,700 when
            it was obviously intended that the monthly base rent
            would be $11,700 with an annual base rent of $140,400
            during the first renewal year. Clearly, the reference that
            the annual base rent would be $11,700 is a
            typographical error and that figure was intended to
            reference the monthly base rent amount. Under no

                                                                         A-5148-16T3
                                        8
            circumstances would a reasonable interpretation of the
            lease language indicate that the annual renewal rent
            would be less than the monthly rent paid by the Tenant
            in the preceding month during the original term of the
            lease (i.e., $11,700 total annual rent and $10,700
            monthly rent).

Defendant did not cure the default.      In February 2017, the same situation

occurred regarding the March 2017 rent payment.

      On February 15, 2017, plaintiff served a notice of termination on

defendant terminating the lease as of February 21, 2017, demanding possession

of the property, and notifying defendant the lease was terminated because

defendant "breached and violated the covenants and agreements of the Lease

Agreement by failing to pay rent when due in violation of N.J.S.A. 2A:18 -

53(c)(4)" (the NOT). Defendant did not cure the default or surrender possession

of the premises. As a result, plaintiff filed a complaint for possession in the

Special Civil Part. Plaintiff alleged breach of the lease as the cause of action

for summary dispossession and attached the NOT, which indicated plaintiff was

proceeding under N.J.S.A. 2A:18-53(c)(4). Plaintiff alleged that defendant had

not surrendered possession of the premises and held over and continued in

possession without plaintiff's consent. Plaintiff also filed a complaint in the Law

Division for unpaid rent and other relief.

                                                                           A-5148-16T3
                                        9
      Defendant filed a motion in the Special Civil Part to transfer the summary

dispossess action to the Law Division and consolidate it with the Law Division

action. Defendant argued the matter must be transferred because this was a

complex commercial tenancy that demanded discovery and required uniformity

with the Law Division action and joinder of claims.

      In a March 23, 2017 oral opinion, the trial court denied the motion. The

court first determined it had jurisdiction because the matter involved an

interpretation of the lease, and plaintiff was not seeking reformation of the lease.

The court found the issue was the rent amount and whether the parties intended

to reduce the rent by ninety-one percent. The court considered the factors

warranting transfer in Twp. of Bloomfield v. Rosanna's Figure Salon, Inc., 253

N.J. Super. 551, 563 (App. Div. 1992), and concluded the issue was not overly

complex as to require discovery and defendant's assertion of a Marini defense

did not require a transfer. The court noted that landlords frequently file separate

Law Division actions for unpaid rent simultaneously with summary dispossess

actions, and found the pending Law Division action did not require a transfer.

The court also found that the significant delay the transfer would cause "would

outweigh any prejudicial effects." The court concluded none of the factors for

                                                                            A-5148-16T3
                                        10
transfer had been met and the matter was "a simple case" that could be resolved

in the summary dispossess action.

      The court memorialized its decision in a March 23, 2017 order. Defendant

then filed an answer in the Law Division matter and a counterclaim for

declaratory judgment, damages, and other relief.

      Following trial in the summary dispossess matter, the court entered an

interim order on May 30, 2017, holding that defendant owed $63,239.98 in back

rent as of May 2017, and ordering defendant to deposit that sum into court. The

court interpreted the language in Paragraph 43A of the lease to require rent of

$10,700 per month during the renewal period, as plaintiff had claimed. The

court also ordered the parties to submit briefs addressing plaintiff's request for

counsel fees, defendant's request to assert a Marini defense, and whether

N.J.S.A. 2A:18-53(c)(4) applied to grant plaintiff a judgment for possession.

      Subsequently, in a June 29, 2017 statement of reasons, the court found,

based on the testimony of defendant's representative, Bennett Fleisher, 3 that

defendant was not entitled to assert a Marini defense because "[d]efendant

3
  Fleisher is the husband of Susan Mack, the sole shareholder of defendant and
guarantor of the lease. Fleisher was responsible for defendant's business
operations and was the primary person involved in the lease negotiations and
dealings with Pereaux and Pereaux's attorneys.
                                                                          A-5148-16T3
                                       11
unambiguously claim[ed] that $975 [was] full rent and [d]efendant ha[d] not

withheld rent on the basis of any Marini claim." The court also stated that under

Berzito v. Gambino, 63 N.J. 460, 469 (1973), defendant was not without

recourse and could recover any claimed overpayment of rent via its counterclaim

in the Law Division matter.

      The court also held that because plaintiff proceeded under a nonpayment

of rent theory, plaintiff was not entitled to a judgment for possession under

N.J.S.A. 2A:18-53(c)(4).      The court reasoned that N.J.S.A. 2A:18-53(b)

provides for a cause of action for nonpayment of rent and N.J.S.A. 2A: 18-55

permits the tenant to cure.     The court ordered the $63,239.98 defendant

deposited into court be paid to plaintiff, reserved on the counsel fee issue, and

ordered plaintiff's counsel to submit an updated affidavit of services complying

with Rule 4:42-9 and R.P.C. 1.5(a).

      The court memorialized its decision in a July 28, 2017 order and also

awarded plaintiff $39,204 for counsel fees and costs. In its statement of reasons,

the court determined the reasonableness of the rates charged and time spent by

plaintiff's counsel and omitted redundant and excessive services. This appeal

followed.

                                                                          A-5148-16T3
                                       12
                                         II.

      On appeal, defendant contends the court erred in not enforcing the clear

and unambiguous terms of Paragraph 43A, which provided that rent was $11,700

per year during the renewal period. Defendant argues the court impermissibly

found an ambiguity in Paragraph 43A and used extrinsic evidence to determine

the parties' intent in violation of the parol evidence rule. Defendant also argues

that reformation was the correct remedy and was outside the court's jurisdiction.

      We review the facts that relate to defendant's arguments.             Without

objection, Pereaux's representative, Rob Oberdick, testified on direct

examination about defendant's proposed rental agreement and the LOU, and

defendant's attorney cross-examined Oberdick on these documents. In addition

to this evidence, plaintiff's witnesses testified, without objection, that the use of

the words "annual" and "year" in Paragraph 43A of the lease were a mistake, the

parties never intended to reduce and never discussed a reduction of the rent

during the renewal period, and defendant never requested a rent reduction.

      It was not until plaintiff sought to introduce the LOU and defendant's

proposed rental agreement into evidence that defendant objected, arguing the

lease was an integrated agreement and the parol evidence rule does not permit

admission of extrinsic evidence to interpret an integrated agreement. The court

                                                                             A-5148-16T3
                                        13
overruled the objection, finding admission of the documents did not violate the

parol evidence rule because the documents were relevant and admissible to

determine the intent of the parties regarding rent during the renewal period. The

court concluded: "And . . . clearly there's inconsistent statements in Paragraph

43[A]. That’s why we're here . . . and I think it's permitted, relevant . . .

evidence, as to the parties' intent. . . ."

      The court issued an oral opinion at the conclusion of the trial on May 30,

2017. Addressing credibility, the court noted that Fleisher admitted he did not

request a rent reduction during the renewal period and there were no discussions

about a rent reduction. The court found Fleisher's testimony that he intended

the rent be $975 per month during the renewal period "extremely incredible."

The court also found that Fleisher "lacked candor and credibility," his

"testimony was contradicted by documents and did not seem reasonable and

logical[,]" his responses to certain questions were "argumentative[,]"

"incomplete[,]" and "arrogant[,]" and his testimony was "disingenuous."

      The court noted that when confronted by defendant's proposed rental

agreement, Fleisher admitted he drafted it, but had no credible response as to

how he could interpret the document to mean rent would be $975 per month

during the renewal period. The court also noted the LOU and defendant's

                                                                          A-5148-16T3
                                          14
proposed rental agreement contradicted Fleisher's testimony that the rent was

reduced because the option to purchase the property was reduced from five years

to two years, as these documents gave defendant a two-year option to purchase

and nevertheless provided for monthly rental amounts of $11,700 and $11,000,

respectively. The court emphasized that Fleisher's "testimony that the two-year

option [to purchase] was negotiated down in exchange for this incredible

[ninety-one] percent reduction of rent is, to put it kindly, disingenuous at best,

and is directly contradicted by the documents submitted into evidence."

         The court found Fleisher admitted that Paragraph 43A was very close to

the LOU as to year six, but Fleisher essentially did nothing to correct the mistake

in Paragraph 43A because it benefitted defendant. The court concluded that

"what in essence [Fleisher] said was he was aware of [the mistake in Paragraph

43A] but it was more advantageous to [defendant] so he kept his mouth . . .

shut."

         The court also found that plaintiff did not seek reformation of Paragraph

43A to provide for rent of $11,700 per month, but rather, sought an interpretation

that the rent was $10,700 in year six. We reiterate that Paragraph 43A provides:

               The base annual rental for the first year of the renewal
               period shall be $11,700.00. Each subsequent year of
               the renewal period shall have an annual rental of
               $11,700.00 plus $11,700.00 multiplied by the increase

                                                                           A-5148-16T3
                                         15
            in the Consumer Price Index . . . between the sixtieth
            (60th) month of the Lease agreement and the date of
            commencement of each subsequent year of the renewal
            term. In no event shall the basic rental of each year of
            the said renewal period be less than $11,700.00 or the
            prior years' rent, whichever is greater.

      The court found "the evidence [was] overwhelming that there was no

intent by the parties to reduce the rent whatsoever commencing in year six, and

that a fair, reasonable and sensible interpretation of Paragraph 43[A] . . . is that

the rent should be . . . $10,700 per month in year six[.]" The court determined

its decision was "consistent with the language of [the third sentence in]

Paragraph 43[A], which limits and modifies [the language in the first and second

sentences], so that the rent will not be reduced in any year of the lease and any

year of the renewal." The court explained:

            And I understand that there's conflicting language, and
            there's ambiguous language in [Paragraph 43A] and
            certain interpretations could be made, but that's based
            on the evidence . . . and based on my interpretation of
            [Paragraph 43A] and the case law cited, I think clearly
            the evidence supports an interpretation that the rent was
            not to be decreased from the previous year's rent.

                   This is, again, consistent with the parties'
            negotiation of the [lease], in [t]he [c]ourt's judgment,
            and consistent with the case law cited, and with the
            interpretation in accordance with justice and common
            sense.

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                                        16
      The interpretation of a contract is subject to our de novo review. Kieffer

v. Best Buy, 205 N.J. 213, 222 (2011). "Accordingly, we pay no special

deference to the trial court's interpretation and look at the contract with fresh

eyes." Id. at 223. Although we owe the court here no special deference, we

agree with the court's conclusions and credibility determinations.

      "Under New Jersey law a lease is like any other written contract."

Ringwood Assocs., Ltd. v. Jack's of Route 23, Inc., 153 N.J. Super. 294, 309

(Law Div. 1977), aff'd, 166 N.J. Super. 36 (App. Div. 1979). Courts should read

contracts "as a whole in a fair and common sense manner," and enforce them

"based on the intent of the parties, the express terms of the contract, surrounding

circumstances and the underlying purpose of the contract."           Manahawkin

Convalescent v. O'Neill, 217 N.J. 99, 118 (2014) (quoting Hardy ex rel. Dowdell

v. Abdul-Matin, 198 N.J. 95, 103 (2009); Caruso v. Ravenswood Developers,

Inc., 337 N.J. Super. 499, 506 (App. Div. 2001)).

      The language of the contract, by itself, must determine the agreement's

force and effect if it is plain and capable of legal construction. Ibid. (quoting

Twp. of White v. Castle Ridge Dev. Corp., 419 N.J. Super. 68, 74-75 (App. Div.

2011)). However, "[e]ven in the interpretation of an unambiguous contract, [the

court] may consider 'all of the relevant evidence that will assist in determining

                                                                           A-5148-16T3
                                       17
[its] intent and meaning.'" Ibid. (third alteration in original) (quoting Conway

v. 287 Corporate Ctr. Assocs., 187 N.J. 259, 269 (2006)); see also Driscoll

Constr. Co. v. State, Dep't of Transp., 371 N.J. Super. 304, 316 (App. Div. 2004)

(noting that even when an integrated contract is free from ambiguity, "evidence

of the situation of the parties and the surrounding circumstances and conditions

is admissible in aid of interpretation") (quoting Great Atl. & Pac. Tea Co. v.

Checchio, 335 N.J. Super. 495, 501 (App. Div. 2000)).

      The construction of a written contract is usually a legal question for the

court, suitable for disposition on summary judgment unless there is ambiguity

or the need for parol evidence to aid in interpretation. Driscoll Constr. Co., 371

N.J. Super. at 313-14. The court's goal is to ascertain the intentions of the parties

"as revealed by the language used, taken as an entirety", the relations of the

parties, "the attendant circumstances, and the objects [the parties] were thereby

striving to attain." Id. at 313 (quoting Onderdonk v. Presbyterian Homes of N.J.,

85 N.J. 171, 184 (1981)). In light of this goal our Supreme Court has adopted

an expansive view of the parol evidence rule that permits consideration of "all

of the relevant evidence that will assist in determining the intent and meaning

of the contract." Conway, 187 N.J. at 268. Thus, when the terminology used in

a contract is not free from doubt as to its meaning, a party should be given an

                                                                             A-5148-16T3
                                        18
opportunity to present evidence of extrinsic circumstances that bear on the

proper interpretation of the document's language. Schor v. FMS Fin. Corp., 357

N.J. Super. 185, 192 (App. Div. 2002).

      "In general, the parol evidence rule prohibits the introduction of evidence

that tends to alter an integrated written document." Conway, 187 N.J. at 268.

However, as we have made clear:

            the parol evidence rule applies only to prevent the
            substantive alteration of contractual terms agreed upon
            by parties and expressed in an integration of their
            bargain, by resort to other prior or contemporaneous
            agreements or understandings. But the parol evidence
            rule does not even come into play until it is first
            determined what the true agreement of the parties is ̶
            i.e., what they meant by what they wrote down. Only
            when that is determined is one in an appropriate
            position to raise the bar of the parol evidence rule to
            prevent alteration or impugnment of the agreement by
            the asserted contradictory prior or contemporaneous
            agreement.      In other words, interpretation and
            construction must necessarily precede protection
            against forbidden contradiction or modification. And in
            the process of interpretation and construction of the
            integrated agreement all relevant evidence pointing to
            meaning is admissible because experience teaches that
            language is so poor an instrument for communication
            or expression of intent that ordinarily all surrounding
            circumstances and conditions must be examined before
            there is any trustworthy assurance of derivation of
            contractual intent, even by reasonable judges of
            ordinary intelligence, from any given set of words
            which the parties have committed to paper as their
            contract. Construing a contract of debatable meaning

                                                                         A-5148-16T3
                                      19
             by resort to surrounding and antecedent circumstances
             and negotiations for light as to the meaning of the
             words used is never a violation of the parol evidence
             rule. And debatability of meaning is not always
             discernible at the first reading of a contract by a new
             mind. More often it becomes manifest upon exposure
             of the specific disputed interpretations in the light of
             the attendant circumstances.

             [Garden State Plaza Corp. v. S.S. Kresge Co., 78 N.J.
             Super. 485, 496 (App. Div. 1963).]

      Although there is no ambiguity in the first and second sentences of

Paragraph 43A, the court found an ambiguity in the last sentence, which

provides that "[i]n no event shall the basic rental of each year of the said renewal

period be less than $11,700.00 or the prior years' rent, whichever is greater." At

trial, and on appeal, the parties disagreed as to whether the term "the prior years'

rent" included year five of the original term, as alleged by plaintiff, or applies

only after the first year of the renewal period (year six) expires, as alleged by

defendant.

      If the last sentence of Paragraph 43A applies to the first year of the

renewal period, then the base rent for year six could not be less than the rent for

year five, which was set by the lease at $128,400 per year or $10,700 per month.

However, if it did not apply until the end of year six, as defendant alleges, the

base rent amounts for the initial term are irrelevant. This distinction, and the

                                                                            A-5148-16T3
                                        20
parties' disagreement as to the application of the last sentence of Paragraph 43A,

creates an ambiguity in the terms of the lease.

      To resolve this ambiguity, the court viewed the documentary evidence and

circumstances leading up to the formation of the lease, see Conway, 187 N.J. at

269, and found that Paragraph 43A and the circumstances surrounding the

negotiation of the lease, "support[] an interpretation that the rent was not to be

decreased from the previous years' rent." The court also considered the rent

obligations during the initial lease term, set forth in Schedule A:

            Months 1-4                            $2,250.00
            Months 5-6                            $6,000.00
            Months 7-12                           $7,500.00
            Second Year        $96,000.00         $8,000.00
            Third Year         $105,600.00        $8,800.00
            Fourth Year        $116,400.00        $9,700.00
            Fifth Year         $128,400.00        $10,700.00

      The language of the lease and the circumstances surrounding its execution

demonstrated the parties' intent to increase the rental amount annually.

However, rather than changing the words "annual" and "year" in Paragraph 43A

to reflect a monthly obligation, the court merely interpreted the last sentence of

Paragraph 43A and found that the parties intended to prevent the rent obligation

from being reduced "in any year of the lease and any year of the renewal."

Accordingly, the court found the base rent amount for year six could not be less

                                                                          A-5148-16T3
                                       21
than the rent for year five, which was set at $10,700 per month, or $128,400 per

year, and by failing to pay $10,700 per month, defendant defaulted on its

obligation to pay rent under the lease.

      The court's interpretation of the parties' intent in drafting the lease

adequately resolved the ambiguity contained in the last sentence of Paragraph

43A. In light of its interpretation of that language, the court determined that

Paragraph 43A set a minimum base rent of $10,700 to the renewal period. Thus,

although plaintiff may have introduced the extrinsic evidence to vary the terms

of the lease, the court did not use the evidence impermissibly. Rather, the court

interpreted the parties' intention in drafting the lease "to aid in determining the

meaning" of the last sentence of Paragraph 43A, and properly found that

defendant failed to pay rent in full. See ibid. The extrinsic evidence was not

used for the impermissible purpose of varying the terms of the lease and

therefore, its use did not lead to an unjust result. See State v. J.R., 227 N.J. 393,

417 (2017) (quoting R. 2:10-2).

      Defendant also argues the appropriate remedy would have been

reformation because the trial testimony revealed the use of the words "annual"

and "year" in Paragraph 43A constituted an error or mistake. Defendant posits

                                                                             A-5148-16T3
                                          22
that unless and until the lease is reformed, it should only pay rent as clearly

expressed in the lease, i.e., $11,700 per year.

      At the conclusion of the trial, the court found that "the dispute, in [its]

judgment, was an interpretation of a contract issue . . . rather than a reformation

of the contract." Although the court acknowledged that if plaintiff were seeking

reformation of the contract, "that would be arguably beyond the power of the

summary dispossess action," the court noted plaintiff was seeking a

determination that "the rent should be $10,700 monthly, pursuant to the

language of the lease, and does not include a decision as to whether or not there

should be a reformation of that clause to modify it to $11,700." Defendant

nevertheless argues that the proper remedy would have been reformation, which

was outside the scope of the trial court's jurisdiction in a summary dispossess

matter. We disagree.

      "[A] court hearing a summary dispossess action lacks general equitable

jurisdiction" and "[a]lthough the court may consider equitable defenses, it is

beyond the power of the court to grant permanent injunctive or other e quitable

relief to the parties." Benjoray, Inc. v. Acad. House Child Dev. Ctr., 437 N.J.

Super. 481, 488 (App. Div. 2014) (quoting WG Assocs. v. Estate of Roman, 332

N.J. Super. 555, 563 (App. Div. 2000)).

                                                                           A-5148-16T3
                                       23
      Reformation of a contract has been used as an equitable remedy where a

contract cannot be rescinded. Dugan Constr. Co. v. N.J. Tpk. Auth., 398 N.J.

Super. 229, 242 (App. Div. 2008); see also Bonnco Petrol, Inc. v. Epstein, 115

N.J. 599, 612-13 (1989). Reformation is granted to rectify "either mutual

mistake or unilateral mistake by one party and fraud or unconscionable conduct

by the other." Dugan Constr. Co., 398 N.J. Super. at 242-43 (quoting St. Pius X

House of Retreats, Salvatorian Fathers v. Diocese of Camden, 88 N.J. 571, 577

(1982)). "The problem normally arises when the agreement fails to specify

correctly the terms that the parties agreed upon[.]" Id. at 243 (quoting Edward

D. Lord, Inc. v. Mun. Util. Auth., 133 N.J. Super. 503, 507-08 (App. Div. 1975)).

"Reformation presupposes that a valid contract between the parties was created

but, for some reason, was not properly reflected in the instrument that

memorializes the agreement." Lederman v. Prudential Life Ins. Co. of Am.,

Inc., 385 N.J. Super. 324, 345 (App. Div. 2006) (quoting H. Prang Trucking Co.

v. Local Union No. 469, 613 F.2d 1235, 1239 (3d Cir. 1980)). A court will grant

reformation only if there is "'clear and convincing proof' that the contract in its

reformed, and not original, form is the one that the contracting parties

understood and meant it to be." Cent. State Bank v. Hudik-Ross Co., 164 N.J.

Super. 317, 323 (App. Div. 1978).

                                                                           A-5148-16T3
                                       24
      Here, the court did not reform the contract and, despite the extensive

testimony that the words "year" and "annual" were a mistake in the lease,

plaintiff did not seek the remedy of reformation. Instead, plaintiff relied on the

fact that "notwithstanding [the] typo . . . the rest of Paragraph 43A simply did

not permit a conclusion that year [six] rent could be any less than the prior year's

rent of $10,700 per month." Thus, although reformation would be an appropriate

remedy arising out of an error or mistake in the drafting of a contract, that

remedy was not at issue in this matter. We are satisfied the court committed no

error in using extrinsic evidence to interpret Paragraph 43A to require rent of

$10,700 per month during the renewal period.

                                        III.

      Defendant contends the court erred in denying its motion to transfer the

summary dispossess action to the Law Division and consolidate it with the Law

Division action. Defendant reiterates this was a complex commercial tenancy

that demanded discovery and required uniformity with the Law Division action

and joinder of claims.

      "The summary dispossess statute, N.J.S.A. 2A:18-51 to -61, was designed

to provide landlords with a swift and simple method of obtaining possession."

Benjoray, Inc., 437 N.J. Super at 486. Nevertheless, either party to a summary

                                                                            A-5148-16T3
                                        25
dispossession proceeding may move to have the matter transferred to the Law

Division, and the court may grant the motion if it deems the issues before it "of

sufficient importance." N.J.S.A. 2A:18-60.

      We review the trial court's ruling on a motion to transfer for abuse of

discretion. See Master Auto Parts, Inc. v. M. & M. Shoes, Inc., 105 N.J. Super.

49, 53 (App. Div. 1969). "[A]buse of discretion only arises on demonstration

of 'manifest error or injustice[,]'" Hisenaj v. Kuehner, 194 N.J. 6, 20 (2008)

(quoting State v. Torres, 183 N.J. 554, 572 (2005)), and occurs when the trial

judge's "decision is 'made without a rational explanation, inexplicably departed

from established policies, or rested on an impermissible basis.'"          Milne v.

Goldenberg, 428 N.J. Super. 184, 197 (App. Div. 2012) (quoting Flagg v. Essex

Cty. Prosecutor, 171 N.J. 561, 571 (2002)).

      In general, a motion to transfer a summary dispossess action to the Law

Division is granted when "the procedural limitations of a summary action . . .

would significantly prejudice substantial interests either of the litigants or of the

judicial system itself, and . . . those prejudicial effects would outweigh the

prejudice that would result from any delay caused by the transfer." Twp. of

Bloomfield, 253 N.J. Super. at 563. The court should consider the following

factors in deciding a motion to transfer:

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                                        26
              [(1)] The complexity of the issues presented, where
              discovery or other pretrial procedures are necessary or
              appropriate;

              [(2)] The presence of multiple actions for possession
              arising out of the same transaction or series of
              transactions, such as where the dispossesses are based
              upon a concerted action by the tenants involved;

              [(3)] The appropriateness of class relief;[4]

              [(4)] The need for uniformity of result, such as where
              separate proceedings are simultaneously pending in
              both the Superior Court and the County District Court
              arising from the same transaction or set of facts, and

              [(5)] The necessity of joining additional parties or
              claims in order to reach a final result.

              [Id. at 562-63 (quoting Morrocco v. Felton, 112 N.J.
              Super. 226, 235-36 (Law Div. 1970)).]

        We discern no abuse of discretion in the court's denial of defendant's

motion to transfer. The issues in this matter are not complex, do not require

discovery, and there are no issues of significant importance that would warrant

transfer to the Law Division. The fact that this matter involves a commercial

tenancy does not change this result, as defendant suggests. This is a simple

summary dispossess action based on the tenant's alleged breach of a lease

4
    Because this matter did not involve class relief, factor three does not apply.
                                                                            A-5148-16T3
                                         27
provision and holding over in possession following a notice to terminate the

lease.

         Further, the mere fact that a landlord seeks to recover money damages in

a Law Division action is not sufficient to warrant a transfer to the Law Division.

The tenant may assert a counterclaim against the landlord in the Law Division

action, as defendant has done here, join whatever parties it deems necessary to

adjudicate its claims, and engage in discovery. Because none of the five factors

existed here, the court properly denied defendant's motion to transfer.

                                          IV.

         Before addressing defendant's remaining arguments, we address

plaintiff's argument on cross-appeal that it was entitled to a judgment of

possession under N.J.S.A. 2A:18-53(c)(4).

         Plaintiff argued that it pleaded a cause of action for breach of the lease

under N.J.S.A. 2A:18-53(c)(4) and defendant was not permitted to cure in

accordance with N.J.S.A. 2A:18-555 by paying the rent arrears. The court

determined that N.J.S.A. 2A:18-53(c)(4) did not apply. This was error.

5
    N.J.S.A. 2A:18-55 provides as follows, in pertinent part:

               If, in actions instituted under [N.J.S.A. 2A:18-53(b)],
               the tenant or person in possession of the demised

                                                                             A-5148-16T3
                                         28
      "In construing a statute, our 'overriding goal is to determine as best we

can the intent of the Legislature, and to give effect to that intent.'" Bermudez v.

Kessler Inst. for Rehab., 439 N.J. Super. 45, 50 (App. Div. 2015) (quoting State

v. Hudson, 209 N.J. 513, 529 (2012)). "If the Legislature's intent is clear on the

face of the statute, then we must apply the law as written." In re N.J. Firemen's

Ass'n Obligation, 230 N.J. 258, 274 (2017) (quoting Murray v. Plainfield Rescue

Squad, 210 N.J. 581, 592 (2012)). Furthermore, "[a]bsent a clear indication

from the Legislature that it intended statutory language to have a special limiting

definition, we must presume that the language used carries its ordinary and well-

understood meaning." Ibid. (quoting State v. Lenihan, 219 N.J. 251, 262-63

(2014)).

      N.J.S.A. 2A:18-53(c)(4) applies to the removal of a commercial tenant:

            [w]here such person . . . shall commit any breach or
            violation of any of the covenants or agreements in the
            nature thereof contained in the lease for the premises
            where a right of re-entry is reserved in the lease for a
            violation of such covenants or agreements, and shall
            hold over and continue in possession of the demised
            premises or any part thereof. . . .

            premises shall at any time on or before entry of final
            judgment, pay to the clerk of the court the rent claimed
            to be in default, together with the accrued costs of the
            proceedings, all proceedings shall be stopped.
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                                       29
The language of the statute does not specifically limit its application to no n-

monetary breaches; rather, it provides that removal is appropriate where the

tenant commits "any breach or violation of any of the covenants or agreements

. . . where a right of re-entry is reserved in the lease for a violation of such

covenants or agreements[.]" Ibid. (emphasis added). The plain language of the

statute indicates the Legislature intended section (c) to apply broadly to the

breach of any covenant in a lease where a right of re-entry is reserved.

      The Legislature also drew a distinction between N.J.S.A. 2A:18-53(c)(4)

and N.J.S.A. 2A:18-53(b), which permits removal of a commercial tenant "after

a default in the payment of rent," by limiting the application of N.J.S.A. 2A:18-

53(c)(4) to covenants "where a right of re-entry is reserved in the lease for a

violation of such covenants or agreements." Thus, N.J.S.A. 2A:18-53(c)(4)

applies to the non-payment of rent where the lease contains a covenant to pay

rent and the landlord reserves a right of re-entry for the violation of that

covenant.

      This matter was properly brought under N.J.S.A. 2A:18-53(c)(4) because

the lease contains a covenant to pay rent, as well as a provision granting plaintiff

the right of re-entry and possession in the event of defendant's default in the

performance of any lease provision, including non-payment of rent.

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                                        30
Accordingly, the court erred in finding that N.J.S.A. 2A:18-53(c)(4) was

inapplicable to grant plaintiff a judgment for possession. Plaintiff was entitled

to possession under the statute due to defendant's failure to pay rent and

surrender possession of the property.

                                        V.

      We next address defendant's meritless argument that the court lacked

jurisdiction because plaintiff did not properly serve the NOT in accordance with

the lease notice provision.

      N.J.S.A. 2A:18-53(c)(4) provides, in pertinent part, that a commercial

tenant may be removed from the premises:

            after the landlord or his agent for that purpose has
            caused a written notice of the termination of said
            tenancy to be served upon said tenant, and a demand
            that said tenant remove from said premises within three
            days from the service of such notice. The notice shall
            specify the cause of the termination of the tenancy, and
            shall be served either personally upon the tenant or such
            person in possession by giving him a copy thereof, or
            by leaving a copy thereof at his usual place of abode
            with some member of his family above the age of
            [fourteen] years.

      The purpose in N.J.S.A. 2A:18-53(c) of providing notice to a commercial

tenant is to "permit the tenant to adequately prepare a defense, since the tenant

may contest an alleged breach of a covenant or may raise equitable defenses."

                                                                         A-5148-16T3
                                        31
Ivy Hill Park Apartments. v. GNB Parking Corp., 236 N.J. Super. 565, 570 (Law

Div. 1989), aff'd, 237 N.J. Super. 1 (App. Div. 1989). "Because an action to

evict the tenant is normally a summary proceeding devoid of discovery,

specification of the cause of termination is a means of adequately advising the

tenant of the allegations against which it must defend." Ibid. As our Supreme

Court stated when construing N.J.S.A. 2A:18-53(c):

            The notice is required to "specify the cause of the
            termination of the tenancy," and proof that such notice
            has been served is prerequisite to judgment. The cause
            of the termination is jurisdictional, and if at trial
            evidence is adduced from which a finding could
            reasonably be made that a proper notice was served and
            that the specified statutory cause existed, a judgment
            for possession is conclusive.

            [Carteret Props. v. Variety Donuts, Inc., 49 N.J. 116,
            123, (1967) (citations omitted) (quoting N.J.S.A.
            2A:18-56).]

      A lease may provide for a different manner and time-period for service

than contemplated by N.J.S.A. 2A:18-53(c). Pa. R.R. Co. v. L. Albert & Son,

Inc., 26 N.J. Super. 508, 512-13 (1953). New Jersey courts have held that a

lease termination provision that provides for notice by registered mail may be

exercised by certified mail because "the essence of the matter is whether the

notice required by the lease was received in time." 243 So. Harrison St. Corp. v.

Ogust, 113 N.J. Super. 74, 77 (Cty. Ct. 1971).         The purpose of a lease

                                                                         A-5148-16T3
                                      32
termination provision requiring service by certified or registered mail is to

ensure the defaulting party receives proper notice. See id. at 78 (holding that

the intent of the parties, evidenced by the certified and registered mail provision

of the lease, sought "to insure the delivery of the notice, and to settle any dispute

that might arise between the parties as to whether or not the notice was duly

received").

      Here, the lease granted plaintiff the right of re-entry upon defendant's

default. The termination provision provides that upon defendant's default:

              the Landlord may . . . at any time thereafter, terminate
              this lease and the terms hereof, upon giving to the
              Tenant or to any trustee, receiver, assignee or other
              person in charge of or acting as custodian of the assets
              or property of the Tenant, five (5) days notice in
              writing, of the Landlord's intention so to do. Upon the
              giving of such notice, this lease and the term hereof
              shall end on the date fixed in such notice as if the said
              date was the date originally fixed in this lease for the
              expiration hereof; and the Landlord shall have the right
              to remove all persons, goods, fixtures and chattels
              therefrom, by force or otherwise, without liability for
              damages.

Regarding notices, the lease provided as follows:

              All notices required under the terms of this lease shall
              be given and shall be complete by mailing such notices
              by certified or registered mail, return receipt requested,
              to the address of the parties as shown at the head of this
              lease or to such other address as may be designated in

                                                                             A-5148-16T3
                                         33
            writing, which notice of change of address shall be
            given in the same manner.

      Plaintiff did not serve the NOT on defendant by certified or regular mail.

Instead, on February 15, 2017, plaintiff personally served defendant with the

NOT, and defendant does not dispute it received the notice. Accordingly, we

hold that although service was not in strict compliance with the lease notice

provision, use of the alternative, and better, method of personal service

performed the same function and served the same purpose as the authorized

method of service. In accordance with N.J.S.A. 2A:18-53(c), the NOT specified

the date and cause of the termination, demanded possession, and provided

defendant an opportunity to prepare a defense. Defendant received proper notice

of the cause of the termination and had an opportunity to defend. Due process

was satisfied.

                                      VI.

      Defendant contends the court erred by not permitting it to assert a Marini

defense. We disagree.

      Marini recognizes rent abatement as an equitable defense available to a

tenant in a summary dispossess action. In Marini, the Court held as follows:

            If, therefore, a landlord fails to make the repairs and
            replacements of vital facilities necessary to maintain
            the premises in a livable condition for a period of time

                                                                        A-5148-16T3
                                      34
            adequate to accomplish such repair and replacements,
            the tenant may cause the same to be done and deduct
            the cost thereof from future rents. The tenant's recourse
            to such self-help must be preceded by timely and
            adequate notice to the landlord of the faulty condition
            in order to accord him the opportunity to make the
            necessary replacement or repair. If the tenant is unable
            to give such notice after a reasonable attempt, he may
            nonetheless proceed to repair or replace. This does not
            mean that the tenant is relieved from the payment of
            rent so long as the landlord fails to repair. The tenant
            has only the alternative remedies of making the repairs
            or removing from the premises upon such a
            constructive eviction.

            [56 N.J. at 146-47.]

      A Marini defense can only be used by a tenant "where defects have been

asserted as a defense to nonpayment of rent or as a basis for withholding of

rental payments." Szeles v. Vena, 321 N.J. Super. 601, 607 (App. Div. 1999)

(emphasis added). Where the landlord fails to make the repairs, the tenant may

declare a constructive eviction and vacate the premises, see Reste Realty Corp.

v. Cooper, 53 N.J. 444, 456-57 (1969); make the repairs and deduct the cost

from the rent, see Marini, 56 N.J. at 146; withhold rent and seek an abatement

in a non-payment dispossess action or file a separate action to recover rents

paid, see Berzito, 63 N.J. at 469-70; or seek the appointment of an

administrator to collect rents and make repairs, see Drew v. Pullen, 172 N.J.

Super. 570, 575 (App. Div. 1980).

                                                                         A-5148-16T3
                                      35
      Defendant did not assert defects in the premises as a defense to

nonpayment of rent and did not withhold rent payment on that basis.

Defendant also did not assert a Marini defense at any time seeking to either

withhold rent, assert its right to a rent abatement, or avail itself of any of the

remedies available to it. Rather, defendant maintained throughout this matter

that it had paid the rent in full in accordance with Paragraph 43A and was not

required to pay more than $975 per month. Accordingly, the court correctly

barred defendant from asserting a Marini defense.

                                      VII.

      Both plaintiff and defendant challenge the award of counsel fees.

Defendant argues the award was excessive because it was disproportional to a

summary dispossess action and plaintiff failed to establish the reasonableness

of the fees requested. Plaintiff counters that the award was not excessive, and

argues on cross-appeal that the court erred in severely reducing the amount

awarded.

      We review an award of attorneys' fees and costs under an abuse-of-

discretion standard. Packard-Bamberger & Co. v. Collier, 167 N.J. 427, 444

(2001); Rendine v. Pantzer, 141 N.J. 292, 317 (1995). "Fee determinations by

trial courts will be disturbed only on the rarest of occasions, and then only

                                                                            A-5148-16T3
                                       36
because of a clear abuse of discretion." Packard-Bamberger, 167 N.J. at 444

(quoting Rendine, 141 N.J. at 317).

      In its application for attorneys' fees, plaintiff requested $67,945.59. The

court reduced the amount to $38,904.00 plus reasonable costs of $350. In its

July 28, 2017 statement of reasons, the court noted a number of reasons for

reducing the amount sought.      The court noted that at least five attorneys

performed services at various hourly rates, and assigned a blended rate of $355

per hour. The court also noted that one of plaintiff's attorneys whose charges

were included attended every court appearance, but did not actively participate

in the matter. The court found it was unreasonable to expect reimbursement for

an attorney to sit as second chair on a landlord-tenant dispossess action.

Furthermore, the court noted that the affidavit of services contained redundant

services; the billing for the trial brief seemed excessive and redundant; and

counsel billed for excessive fees, including transcript fees, witness fees, and

excessive copying fees, as well as the fees incurred for a private investigator.

The court found that "[i]n reviewing all of the above circumstances . . . the

reasonable amount of time spent in this matter is 109.6 hours at the rate of

$355.00 per hour for a total legal fee of $38,904.00 plus reasonable costs of

$350.00."

                                                                         A-5148-16T3
                                      37
      In determining the reasonableness of an award, "the threshold issue 'is

whether the party seeking the fee prevailed in the litigation.'" Ibid. (quoting N.

Bergen Rex Transp., Inc. v. Trailer Leasing Co., 158 N.J. 561, 570 (1999)). The

court should also consider the lodestar calculation, which "is defined as the

number of hours reasonably expended by the attorney, multiplied by a

reasonable hourly rate." Id. at 445.

      In light of these considerations, we find no abuse of discretion in the

counsel fees award. The court reviewed counsel's affidavit of services and

reduced the lodestar fee based on the nature of the action, the use of multiple

attorneys, and the excessive time spent on the trial brief. The court also noted

that counsel included redundant services and excessive costs.                These

determinations were appropriate based on the principle that "no compensation

is due for nonproductive time" Rendine, 141 N.J. at 335 (quoting Copeland v.

Marshall, 641 F.2d 880, 891 (D.C. Cir. 1980)). The court considered all the

relevant factors in reducing the plaintiff's counsel fees application. It "carefully

considered the fee requested by plaintiff[], scrutinized the value of the services

. . . provided, and evaluated the disparity between the relief initially requested

by plaintiff[] and that which was ultimately awarded." Packard-Bamberger &

Co., 167 N.J. at 446-47.

                                                                            A-5148-16T3
                                        38
     Affirmed in part, reversed in part, and remanded to the trial court to enter

a judgment for possession.

                                                                         A-5148-16T3
                                     39