Court Opinion

ID: 9949325
Source: CourtListenerOpinion
Date Created: 2024-03-11 14:07:51.312391+00
Date Added: 2024-06-11T14:25:46.338338
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NOT FOR PUBLICATION WITHOUT THE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-0921-22

905 MOUNTAIN AVENUE, LLC,

          Plaintiff-Respondent,

v.

HILLSIDE SEAFOOD HOUSE INC.,
d/b/a MARINO'S FINE FOODS,
a/k/a MARINO'S FINE FOODS,
LLC and MICHAEL MARINO,

     Defendants-Appellants.
_______________________________

                   Submitted December 19, 2023 – Decided March 11, 2024

                   Before Judges Mayer and Paganelli.

                   On appeal from the Superior Court of New Jersey, Law
                   Division, Union County, Docket No. L-0703-21.

                   Mackevich, Burke and Stanicki, attorneys                                       for
                   appellants (James E. Mackevich, on the brief).

                   Cole Schotz PC, attorneys for respondent (Lauren M.
                   Manduke, of counsel and on the brief).

PER CURIAM
      Defendants Hillside Seafood House, Inc. (Hillside), with Michael Marino,

as Hillside's guarantor, appeal from an April 22, 2022 order granting plaintiff

905 Mountain Avenue, LLC partial summary judgment and an August 16, 2022

judgment entered in plaintiff's favor. We affirm.

                                        I.

      We glean the facts and procedural history from the trial court proceedings.

Plaintiff, as landlord, and defendants, as tenants, (collectively, the parties)

executed a written commercial lease on November 10, 1995 (the Original

Lease). Under the Original Lease, in relevant part, the parties agreed to the

following: (1) a ten-year lease term; (2) if defendants remained in the premises

after the expiration of the term, plaintiff could elect to treat defendants "as one

who has not removed at the end of its [t]erm" or "construe such holding over as

a tenancy from month to month, subject to all the terms and conditions of this

Lease"; (3) defendants payment of "Additional Rent" including the real estate

taxes, insurance, and water and sewer charges; (4) plaintiff ability to impose a

late charge of eight percent on any installment of Basic Rent or Additional Rent

paid more than five days after the due date; (5) defendants maintaining the

property in "good condition and repair"; (6) plaintiff's receipt of Basic Rent or

Additional Rent did not constitute a waiver of any breach of the lease; (7) the

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Original Lease "contain[ed] the entire and only agreement between the parties

and no oral statements or representations . . . not contained in [the Lease would]

have any force or effect"; (8) "shall not be modified in any way . . . except by a

writing executed by both parties"; (9) "[n]o payment by [defendants] or receipt

by [plaintiff] of a lesser amount than the Basic Rent and Additional Rent and

additional charges . . . shall be deemed to be other than a payment on account of

the earliest . . . Basic Rent and Additional Rent . . ."; and (10) allowed plaintiff

the right to collect attorney's fees and reasonable expenses incurred for

defendants' default.

      On January 1, 2005, the parties executed a written First Amendment to the

Original Lease. The First Amendment provided: (1) the parties "desire[d] to

amend the [Original] Lease only in the respects and the conditions hereinafter

stated"; (2) extended the term of the Original Lease an additional ten years; (3)

modified the Basic Rent amount; and (4) "[e]xcept as modified by [the First

Amendment], the [Original] Lease and all covenants, agreements, terms,

provisions and conditions thereof shall remain in full force and effect and [we]re

[t]hereby ratified and affirmed."

      In March 2009, the parties executed a written Second Amendment to the

Original and First Amended Lease. The Second Amendment provided: (1) the

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parties "desire[d] to amend the [Original and First Amended] Lease only in the

respects and the conditions hereinafter stated"; (2) deferral of a portion of the

Basic Rent from April 2009 through March 31, 2010; (3) increased rent

beginning April 1, 2010 and thereafter so that plaintiff would recover the

Deferred Rent; and (4) "[e]xcept as modified by [the Second Amendment], the

[Original Lease and First Amended] Lease and all covenants, agreements, terms,

provisions and conditions thereof shall remain in full force and effect and [we]re

hereby ratified and affirmed."

      On December 15, 2015, the parties executed a written Third Amendment

to the Original and First and Second Amended Lease. The Third Amendment

provided: (1) the parties "desire[d] to amend the [Original and First and Second

Amended] Lease only in the respects and the conditions hereinafter stated"; (2)

the parties confirmed the lease term under the Original and First and Second

Amended Lease was terminating on November 30, 2015; (3) the parties

acknowledged and agreed to extend the term from December 1, 2015 through

April 30, 2016; (4) agreed, commencing May 1, 2016, the lease term shall

continue on a month-to-month basis for six months, terminating on October 31,

2016; (5) the monthly Basic Rent was to be $5,258.03; (6) defendants were in

arrears in the payment of Basic Rent and Additional Rent in excess of $130,000;

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(7) plaintiff would "release and forgive the arrearages" provided defendants

fulfilled their obligations; and (8) "[e]xcept as modified by [the Third

Amendment], the [Original; First and Second Amended] Lease and all

covenants, agreements, terms, provisions and conditions thereof shall remain in

full force and effect and are hereby ratified and affirmed."

      Plaintiff continued to invoice defendants for the Basic Rent, in the amount

of $5,258.03, and Additional Rent consistent with the parties' written

agreements. However, defendant paid lesser amounts from May 2018 through

March 2020—$4,000 a month rent, and from March 2020 through June 2021—

$2,000 a month rent.

      On January 26, 2021, plaintiff served defendants with a notice of default

and a notice to quit the premises, terminating the Lease 1 as of February 28, 2021.

Plaintiff contended defendants failed to pay accrued Basic and Additional Rent

and late fees, interest, and attorney's fees.

      On February 26, 2021, plaintiff filed a complaint against defendants

seeking damages, interest and attorney's fees and costs of suit. Defendants filed

1
 Reference to Lease includes the Original Lease and the First, Second and Third
Amendments.
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an answer and counterclaim, as relevant here, alleging oral agreement(s) reduced

the rent, which modified the Lease. Plaintiff filed an answer to the counterclaim.

      After the close of discovery, plaintiff moved for summary judgment. The

judge heard oral argument on April 18, 2022. In a written decision, the judge

concluded: (1) defendants' argument the parties orally modified the rent terms

was "belied by the terms of the Lease and misapplie[d] governing law." The

judge determined "[o]ral modifications to contracts are subject to the Statute of

Frauds [(SOF)], such as the Lease here, ha[d] to be in writing to be valid."

Moreover, "even if [d]efendants could discover conduct suggesting that the

Lease was 'modified,' without an actual written modification signed by all

parties, there c[ould] be no modification of the Lease"; (2) defendants' waiver

argument was unavailing because waiver was "directly contradictory to the

express [no waiver] provision of the Lease"; and (3) defendants' estoppel

argument failed because there was "no conduct that [gave] rise to an estoppel

claim." The judge entered an April 22, 2022 order granting plaintiff partial

summary as to liability.

      On the quantum of plaintiff's damages, the judge concluded there were

issues of material fact regarding the exact amounts of Basic Rent and Additional

Rent remaining after partial payments; and "the nature and necessity of

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                                        6
repayment for repairs that were made to the premises following defendants'

vacatur." Further, the judge denied, without prejudice, plaintiff's request for

attorney's fees for failure to comply with Rule of Professional Conduct (RPC)

1.5.

       On July 26, 2022, the judge held a plenary hearing to determine plaintiff's

damages and award of attorney's fees.           Plaintiff's bookkeeper provided

testimony regarding the parties' financial history.       The judge found her

testimony credible. The judge rejected defendants' argument "plaintiff's proofs"

were "outside the [six-year Statute of Limitations (SOL)]." The judge, relying

on the bookkeeper's testimony, found "the Lease provided that any payments

made . . . [we]re first applied to any arrears and that [p]laintiff's acceptance of

such payment d[id] not inhibit [p]laintiff's right to recover the balance" and

"[d]efendants [we]re up to date on their Basic Rent through December 13, 2017,

the [i]nsurance through June 2017, the Real Estate Taxes through May 2016,

and the repairs through February 2016."         Therefore, the judge concluded

plaintiff's February 26, 2021 complaint was filed within the SOL.

       Further, while noting defendants did not object to plaintiff's affidavit of

attorney's services, the judge conducted his own analysis of the attorney's fee

request and found the fees reasonable pursuant to RPC 1.5(a).

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      The judge entered judgment in favor of plaintiff in the amount of

$774,556.64, plus post-judgment interest accruing from the date of judgment,

and attorney's fees in the amount of $233,284.43.

                                       II.

      On appeal, defendants argue the judge erred in applying the SOF. The

defendants aver the parties "orally modified the Lease." Next, defendants argue

the judge erred in finding that the defenses of waiver and equitable estoppel

were inapplicable to them. Lastly, defendants argue plaintiff's claims were

barred by the SOL.

      We review a ruling on a motion for summary judgment de novo, applying

the same standard governing the trial court. Templo Fuente De Vida Corp. v.

Nat'l Union Fire Ins. Co., 224 N.J. 189, 199 (2016). Thus, we consider, as the

motion judge did, "whether the competent evidential materials presented, when

viewed in the light most favorable to the non-moving party, are sufficient to

permit a rational factfinder to resolve the alleged disputed issue in favor of the

non-moving party." Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540

(1995). If there is no genuine issue of material fact, we must then "decide

whether the trial court correctly interpreted the law." DepoLink Court Reporting

& Litig. Support Servs. v. Rochman, 430 N.J. Super. 325, 333 (App. Div. 2013)

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                                        8
(citation omitted). We review issues of law de novo and accord no deference to

the trial judge's legal conclusions. Nicholas v. Mynster, 213 N.J. 463, 478

(2013). "The factual findings of a trial court are reviewed with substantial

deference on appeal, and are not overturned if they are supported by 'adequate,

substantial and credible evidence.'" Manahawkin Convalescent v. O'Neill, 217

N.J. 99, 115 (2014) (quoting Pheasant Bridge Corp. v. Twp. of Warren, 169 N.J.

282, 293 (2001)).

      This standard compels the grant of summary judgment:

            if the pleadings, depositions, answers to interrogatories
            and admissions on file, together with the affidavits, if
            any, show that there is no genuine issue as to any
            material fact challenged and that the moving party is
            entitled to a judgment or order as a matter of law. An
            issue of fact is genuine only if, considering the burden
            of persuasion at trial, the evidence submitted by the
            parties on the motion, together with all legitimate
            inferences therefrom favoring the non-moving party,
            would require submission of the issue to the trier of
            fact.

            [R. 4:46-2(c).]

"Under that standard, once the moving party presents sufficient evidence in

support of the motion, the opposing party must 'demonstrate by competent

evidential material that a genuine issue of fact exists[.]'" Globe Motor Co. v.

Igdalev, 225 N.J. 469, 479-80 (2016) (quoting Robbins v. Jersey City, 23 N.J.

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                                       9
229, 241 (1957) (alteration in the original)). "[C]onclusory and self -serving

assertions by one of the parties are insufficient to overcome the motion." Puder

v. Buechel, 183 N.J. 428, 440-41 (2005) (citations omitted). More is required

than a "mere denial." Mangual v. Berezinsky, 428 N.J. Super. 299, 313 (App.

Div. 2012).

                                       III.

      Defendants argue the judge erred by "reject[ing] as a matter of law, [their]

contention that the [plaintiff] and [defendants] orally modified the lease

arrangement throughout the course of the Lease and the amendments to same."

      The judge recognized "[d]efendants argu[ment] that, although the rent

[d]efendants were paying was below the amount required under the Lease, the

parties orally modified the Lease on multiple occasions throughout the parties'

decades-long relationship."

      Defendants contend through two time periods the parties orally agreed to

modify the rent: (1) May 2018 through March 2020—$4,000 a month rent; and

(2) March 2020 through June 2021—$2,000 a month rent. These time periods

were after execution of the Third Amendment to the Lease that provided the

Basic Rent amount of $5,258.03.

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                                      10
      In rejecting defendants' argument, the judge found the SOF barred oral

modifications to the Lease and a writing was required for enforceable

modifications. We disagree with the judge on this point.

      We conclude the SOF did not apply to the Third Amendment. The SOF

only applies to "a lease of real estate for more than three years." N.J.S.A. 25:1 -

12. The Third Amendment was only for a term of five months followed by

month-to-month for the next six months. See Van Horn v. Harmony Sand &

Gravel, Inc., 442 N.J. Super. 333, 341 (App. Div. 2015) ("if a lease is intended

to last longer than three years, it is not enforceable unless it complies with the"

SOF).2 Therefore, we conclude the parties could have agreed to an enforceable

oral Third Amendment.

      However, the parties reduced the Third Amendment to a writing and, as

they did with their First and Second Amendments, provided "[e]xcept as

modified by this Amendment, the Lease and all covenants, agreements, terms,

provisions and conditions thereof shall remain in full force and effect and are

2
  Even if the SOF applied to the Third Amendment, which we conclude it does
not, defendants would not be barred from offering evidence the parties agreed
to oral modifications thereto. "The statute requires a writing . . . [or]
[a]lternatively, if there is not a writing, the . . . elements must be proved by clear
and convincing evidence." Van Horn, 442 N.J. Super. at 341 (citing N.J.S.A.
25:1-12). Therefore, even under the SOF, evidence of oral modification is
permitted.
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                                        11
hereby ratified and affirmed." Consequently, the parties' relationship remained

governed by the Original Lease as expressly modified by the Amendments.

      Therefore, defendants' argument the parties orally modified the Lease

must be considered in concert with the written Original Lease and the First,

Second and Third Amendments.         The Original Lease contained a no oral

modification provision.     Plaintiff asserts the provision is a "clear and

unequivocal prohibition" and must be enforced. Defendants cite authority in

support of their position that parties to a contract may orally modify or waive

provisions in their contract, including no oral modification provisions. We agree

with defendants, the mere presence of a no oral modification provision does not

end the inquiry. See Lewis v. Travelers Ins. Co., 51 N.J. 244, 253 (1968) ("The

parties did not thereby disable themselves from amending, supplementing or

replacing the contract [provision] by a later agreement made orally or by conduct

objectively manifesting a new understanding"); Home Owners Constr. Co. v.

Glen Rock, 34 N.J. 305, 316 (1961) ("the writing requirement may be expressly

or impliedly waived by the clear conduct or agreement of the parties . . . .").

      Waiver under New Jersey law:

            is the voluntary and intentional relinquishment of a
            known right. An effective waiver requires a party to
            have full knowledge of his [or her] legal rights and
            intent to surrender those rights. The intent to waive

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            need not be stated expressly, provided the
            circumstances clearly show that the party knew of the
            right and then abandoned it, either by design or
            indifference. The party waiving a known right must do
            so clearly, unequivocally, and decisively.

            [Knorr v. Smeal, 178 N.J. 169, 177 (2003) (internal
            citations omitted).]

Defendants' bear the burden of establishing plaintiff waived the no writing

provision by "clear and convincing evidence." Home Owners, 34 N.J. at 316-

17; see also Headley v. Cavileer, 82 N.J.L. 635, 640 (E. & A. 1912) ("waiver

will not be inferred unless the evidence is clear and convincing").

      Similarly, defendants must establish that the parties entered into a

subsequent oral agreement, notwithstanding the written Lease term regarding

the rent amount, by clear and convincing evidence. "It is established that a

subsequent verbal agreement should be proved by very clear and satisfactory

evidence." Finocchiaro v. D'Amico, 8 N.J. Super. 29, 31 (App. Div. 1950). In

D'Amico, we concluded defendant's testimony, the only evidence in the case,

"was neither clear nor convincing." Id. at 31-32.

      To establish that the parties orally waived the writing requirement and

orally agreed to a new rent amount, defendants proffer that, in April of 2018,

"[t]he parties agree[d] to a new rent of $4,000" and in March of 2020, the parties

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"agreed to a rent reduction . . . to $2,000 . . . ." Defendants also note that they

paid these amounts without objection by plaintiff.

      Plaintiff unequivocally denied any waiver or oral agreement. Plaintiff

presented evidence it continued to invoice defendants for the full amount of rent

and all prior amendments were reduced to writing.

      Even giving defendants every reasonable inference, we are satisfied

defendants' proffered evidence failed to establish that the parties clearly and

convincingly agreed to waive the writing requirement and orally agreed to a new

rent amount. "Clear and convincing evidence is evidence that produces         ...a

firm belief or conviction that the allegations sought to be proved by the evidence

are true.    It is evidence so clear, direct, weighty in terms of quality, and

convincing as to cause . . . a clear conviction of the truth of the precise facts in

issue."     Model Jury Charges (Civil) 1.19, "Burden of Proof—Clear and

Convincing" (rev. April 2011). Defendants' evidence in support of the purported

waiver and oral modification to the Lease is neither clear nor convincing.

      Because we review orders on appeal, rather than a trial judge's legal

reasons, we affirm the order granting summary judgment but for reasons other

than those expressed by the trial judge. See Isko v. Planning Bd. of Livingston,

51 N.J. 162, 175 (1968), abrogated on other grounds by Com. Realty Res. Corp.

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                                        14
v. First Atl. Props. Co., 122 N.J. 546, 565 (1991); Hayes v. Delamotte, 231 N.J.

373, 387 (2018).

      Defendants next argue the judge erred in finding the defenses of waiver

and equitable estoppel were unavailing. We disagree.

      In arguing for the application of waiver and equitable estoppel, defendants

contend there is no dispute, after execution of the Third Amendment, it paid

$5,258.03 each month. 3 Further, they contend this was the amount invoiced by

the plaintiff and accepted without comment or objection. In addition, as a

month-to-month tenant, they "could have shut [the b]usiness down" but plaintiff

"encouraged [them] to stay." Therefore, defendants argue they are "entitled to

invoke the equitable principle of estoppel and waiver in response to the

[plaintiff's] silent accrual of back charges."

      In response, plaintiff argues "[d]efendant[s] fail to address . . . the fact

that [plaintiff] continued to invoice [defendants] the entire Basic Rent due under

the Third Amendment (including Additional Rent)." In other words, there was

no "silent accrual." Moreover, plaintiff relies on the "no-waiver provision of

the Lease which explicitly provides [plaintiff] does not waive any of its rights

3
  Defendants' assertion is belied by the record as they admit paying $4,000 a
month from May 2018 through March 2020 and $2,000 a month from March
2020 through June 2021.
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or remedies with respect to collection of the full amount of Rent due under the

Lease by accepting partial payment."

      We reject defendants' waiver argument. There is no evidence plaintiff

voluntarily and intentionally relinquished their right to all the rents required

under the parties' Lease. Knorr, 178 N.J. at 177. Further, there is no clear and

convincing evidence, plaintiff waived the no waiver provision of the parties'

Lease. Home Owners, 34 N.J. at 316-17.

      "The essential elements of equitable estoppel are a knowing and

intentional misrepresentation by the party sought to be estopped under

circumstances in which the misrepresentation would probably induce reliance,

and reliance by the party seeking estoppel to his or her detriment."       In re

Johnson, 215 N.J. 366, 379 (2013) (citation omitted).

      The record is devoid of any evidence of plaintiff's "knowing and

intentional misrepresentation." Defendants merely argue plaintiff "encouraged

[them] to stay." Defendants' argument failed to establish a misrepresentation

necessary for the application of equitable estoppel.

      Lastly, defendants argue the judge erred in determining plaintiff's claims

were not barred by the SOL. Relying on the six-year SOL, N.J.S.A. 2A:14-

1.6(a), since the complaint was filed on February 26, 2021, defendants contend

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all "unpaid base rent and additional rent . . . which accrued prior to February 26,

2015, [were] barred by statute." Defendants argue the "Lease document does

not authorize [plaintiff] to pick and choose what obligations monies received

should be applied to."

      In response, plaintiff relies on the language of the Original Lease that

provides: "[n]o payment by [defendants] or receipt by [plaintiff] of a lessor

amount than the Basic Rent and Additional Rent and additional charges payable

hereunder shall be deemed to be other than a payment on account of the earliest

stipulated Monthly Basic Rent and Additional Rent . . . ."

      We agree with the motion judge and find that there is no merit to

defendants' SOL argument. The unambiguous language of the Lease provides

defendants' payments would be applied to the oldest or earliest outstanding

amounts. Therefore, despite defendants' paying more recent invoices, the Lease

provided that plaintiff would apply payment to the oldest or earliest outstanding

amounts. Moreover, the judge found "plaintiff was only seeking payment for

damages that accrued . . . well within the SOL."

      To the extent we have not addressed any of defendants' remaining

arguments, we conclude they lack sufficient merit to warrant discussion in a

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

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Affirmed.

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            18