Court Opinion

ID: 4201311
Source: CourtListenerOpinion
Date Created: 2017-09-06 13:10:57.533708+00
Date Added: 2024-06-11T14:14:07.677289
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NOT FOR PUBLICATION WITHOUT THE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-2506-15T2

CENTURY 21-MAIN STREET
REALTY, INC., a New Jersey
Corporation,

        Plaintiff-Appellant,

v.

ST. CECELIA'S CHURCH, ISELIN,
NEW JERSEY a/k/a ST. CECELIA'S
CATHOLIC CHURCH OF ISELIN a/k/a
ST. CECELIA'S R.C. CHURCH a/k/a
ST. CECELIA'S ROMAN CATHOLIC
CHURCH OF ISELIN, NEW JERSEY
a/k/a R.C. DIOCESE OF METUCHEN,

     Defendants-Respondents.
___________________________________

              Argued February 14, 2017 – Decided September 6, 2017

              Before Judges Ostrer, Leone and Vernoia.

              On appeal from the Superior Court of New
              Jersey, Law Division, Middlesex County, Docket
              No. L-4635-15.

              David M. Hutt argued the cause for appellant
              (Hutt & Shimanowitz, PC, attorneys; Mr. Hutt
              and Bryan D. Plocker, of counsel and on the
              briefs).

              Nicholas J. Dimakos argued the cause for
              respondents (Norris McLaughlin & Marcus, PA,
              attorneys; David C. Roberts, of counsel and
            on the brief;   Bradford     W.   Muller,   on   the
            brief).

PER CURIAM

     Plaintiff, Century 21-Main Street Realty, appeals from the

trial court's order dismissing its complaint with prejudice for

failure to state a claim upon which relief can be granted.                  R.

4:6-2(e).    Century and defendant St. Cecelia's Church entered into

a listing agreement for Century to assist in the sale, lease or

rental of a school building in the Iselin section of Woodbridge

Township.    The Church ultimately entered into a no-rent lease with

the Edison Board of Education.         The lease obliged the Board to

bear the cost of any improvements it deemed necessary.             The costs

turned out to be substantial.    After the Church refused Century's

demand for a commission based on the Board's expenditures, Century

asserted claims of breach of contract and unjust enrichment.

     The Church persuaded the trial court that the agreement's

plain terms did not entitle Century to a commission on a rent-free

lease.   Based on the allegations of the complaint, we agree.            But,

we modify the dismissal order to provide that it is without

prejudice to Century filing an amended complaint.

                                  I.

     We discern the following facts from the allegations in the

complaint and the terms of the documents that the complaint

                                  2                                  A-2506-15T2
referenced, extending all favorable inferences to Century.             See

Tisby v. Camden Cty. Corr. Facility, 448 N.J. Super. 241, 247-48

(App. Div.), certif. denied, ___ N.J. ___ (2017).

     The May 21, 2012 exclusive listing agreement pertained to the

Church's property at 1300 Oak Tree Road, Iselin, New Jersey, which

the parties agree contained an inactive school building.               The

parties extended the agreement's one-year term to June 30, 2014,

without otherwise modifying it.    The agreement granted Century the

exclusive right, on the Church's behalf, to sell the property,1 or

"to lease or rent the property at a monthly rate of $25 sq. ft.

. . . ."   (Emphasis added on the handwritten provisions).             The

agreement acknowledged the terms of Century's commission was a

product of their agreement, and not any governmental authority or

listing service:

           3. COMMISSION   ON   SALE,   LEASE   OR   RENT,   OR
           EXCHANGE:

           AS SELLERS OR LANDLORDS, YOU HAVE THE RIGHT
           TO INDIVIDUALLY REACH AN AGREEMENT ON ANY FEE,
           COMMISSION OR OTHER VALUABLE CONSIDERATION
           WITH ANY BROKER. NO FEE, COMMISSION OR OTHER
           CONSIDERATION   HAS   BEEN    FIXED   BY   ANY
           GOVERNMENTAL AUTHORITY OR BY ANY TRADE
           ASSOCIATION OR MULTIPLE LISTING SERVICE.
           Nothing herein is intended to prohibit an
           individual broker from establishing a policy
           regarding the amount of fee, commission, or

1
  The agreement left the sale price blank, but stated the terms,
in a handwritten insert, as "cash." A second word following "cash"
is indecipherable.

                                  3                               A-2506-15T2
          other valuable consideration to be charged in
          transactions by the BROKER.

     The agreement then set the commission as follows:

          SELLERS agree to pay BROKER a Sale Commission
          of 6%: a Lease or Rental Commission of 1 Month
          and a Lease Renewal Commission of 1 Month on
          each one-year renewal of the lease if, the
          sale or exchange, or lease of this property
          or any part of it, is made by BROKER,
          cooperating agent, SELLERS, or any person
          during the term of this listing agreement.
          This commission shall be payable on closing
          of title or signing of lease.

          [(Emphasis added on handwritten provisions).]

     In April 2014, shortly before the extended agreement expired,

the Church entered into a twenty-six-month lease with the Board,

which intended to use the property for an elementary school.    The

parties agree the Board needed a temporary location for the pupils

and staff of the James Monroe Elementary School that was severely

damaged in a fire the previous month.

     The Board was entitled to use the school "rent free" for the

initial twenty-six months, but was required to pay the Church

$900,000 for each of two six-month "hold over terms" if the Board

continued to occupy the school after the initial term:

               2.01 Rent.   Tenant shall enjoy the use
          and occupancy of the Premises subject to the
          terms of this Lease rent free for the Term.
          If Tenant should occupy the Premises beyond
          the Term (the "Holdover Term") Tenant shall
          be bound to pay Landlord the sum of $900,000
          (the "Holdover Rent") for each additional six

                                4                          A-2506-15T2
           months of holdover by Tenant payable monthly
           for six months, regardless of whether Tenant
           actually occupies the Premises for the entire
           six month Holdover Term.     Tenant shall be
           entitled to no more than two Holdover Terms.

The Board was also obliged to pay any real or personal property

taxes — the Church paid none — and any land-use-related fines.

     The Church leased the school "as-is, where-is, with all

faults."   In its sole discretion, the Board could cancel the lease

by October 1, 2014. The lease also authorized the Board to conduct

various inspections.   The lease was subject to approval of local

zoning and State education officials.2

     The Board was required, at its sole cost and expense, to

repave the parking lot.   It was also permitted — not compelled —

to make any other improvements to the school it deemed necessary

or desirable, including, specifically, replacing or repairing the

roof, and replacing the boiler.       The Board was also responsible

for all utilities, building and landscape maintenance, and snow

removal and for obeying governing laws.     The parties warranted to

each other that they had not dealt with a broker in connection

with the lease, and would indemnify the other for any broker's

claims.

2
  The lease included a provision of questionable enforceability,
which generally obliged the Board not to disclose to the Church,
or anyone else, the results of its environmental investigation.

                                  5                          A-2506-15T2
       On June 18, 2014, Century sought payment of a commission

based on the asserted cost of the Board's repairs. The bill sought

$115,384.62,    stating   "$1,500,000        repairs     for   rental    of   St.

Cecelia's School, based on a 26 month lease, 2 months commission

due.      Two   (2)   month's   rent       due   based   on    rental,    repair

evaluation."3    The Church refused to pay, and Century's complaint

followed in August 2015. Century alleged, "Pursuant to the Listing

Agreement, [the Church] agreed to pay [Century] a commission in

the event of any sale or sale of the Subject Property," and it was

entitled to a commission based on theories of breach of contract

and unjust enrichment.      The Church answered that the agreement

spoke for itself and Century was not entitled to damages under

either theory.

       In its motion to dismiss for failure to state a claim, the

Church provided the court with the referenced documents.4                At oral

3
  We assume Century took 1/26th of the $1,500,000 to calculate an
alleged "monthly rent" of $57,692.31, then multiplied that by two,
which equals $115,384.62.
4
 In opposition, Century expanded the record beyond the complaint,
by providing what counsel claimed, in a certification, was the
Board's response to an Open Public Records Act request for
documentation of "the Board's expenditures in connection with the
repairs and/or renovations of the St. Cecelia's School."       The
document includes multiple categories of expenses under various
numbered accounts without explicit reference to St. Cecelia's
School, except for one account described as "Building Improvements
- St. Cecelia's", which included payments of $943,417 for the

                                       6                                 A-2506-15T2
argument, the Church contended: the plain terms of the agreement

— which authorized a commission of one month's rent on leases at

$25 a square foot — did not entitle Century to a commission under

the Board's rent-free lease; Century sought to "expand the meaning

of commission and rent to something that the contract . . . doesn't

contemplate"; and the unjust enrichment claim was barred since the

parties contractually agreed to the terms of a commission.

     Century argued that instead of the Board paying rent on a per

square footage basis, the parties to the lease agreed, based on

the condition of the building, that the Board would pay for capital

improvements   in    lieu     of   rent.        Regardless     of   the   form    of

consideration,      Century    argued,     it    should   be    entitled     to    a

commission based on the consideration the Board paid for the right

to utilize the property.

     In an oral decision, the trial court held that the commission

was based on rent — "something that you pay once a month."                       The

court acknowledged that if the Board held over and incurred the

$900,000 rent for one or both of the six-month periods, then

period April 2014 through December 2014, including roof and boiler-
related expenditures.     The total of all expenditures on the
document exceeded $3.2 million. Although the document may have
qualified as a business record, or public record, it was not self-
authenticating, nor was a proper foundation laid. See R. 1:6-6.
Nonetheless, the court noted, as we do, that only roughly $900,000
of expenditures were clearly attributed to the school.

                                       7                                   A-2506-15T2
Century would be entitled to a commission based on that rent.

However, Century was not entitled to a commission based on the

value of capital improvements the Board made.             The parties to the

agreement    could   have   based   a       commission   on   other   forms    of

consideration, but did not.         In support of its conclusion that

capital improvements should not be deemed a form of rent, the

court observed that the lease addressed rent separately from the

provisions on capital improvements, and nothing in the lease

characterized the improvements as payments in lieu of rent.               Also,

the court resolved any ambiguity in the agreement against Century,

as the drafter.

                                    II.

                                     A.

     We begin by reviewing governing principles of law.               We review

de novo an order dismissing a complaint under Rule 4:6-2(e).                  See

Stop & Shop Supermarket Co. v. Cty. of Bergen, 450 N.J. Super.
286, 289-90 (App. Div. 2017).       "In reviewing a complaint dismissed

under Rule 4:6-2(e) our inquiry is limited to examining the legal

sufficiency of the facts alleged on the face of the complaint."

Printing Mart-Morristown v. Sharp Elecs. Corp., 116 N.J. 739, 746

(1989).     "The essential test is simply whether a cause of action

is suggested by the facts, and plaintiffs are entitled to every

reasonable inference of fact."          Green v.    Morgan Props., 215 N.J.
8                               A-2506-15T2
431,    451-52   (2013)   (internal       quotation   marks   and   citation

omitted).    "A motion to dismiss a complaint for failure to state

a claim 'may not be denied based on the possibility that discovery

may establish the requisite claim; rather, the legal requisites

for plaintiffs' claim must be apparent from the complaint itself.'"

Teamsters Local 97 v. State, 434 N.J. Super. 393, 413 (App. Div.

2014) (quoting Edwards v. Prudential Prop. & Cas. Co., 357 N.J.

Super. 196, 202 (App. Div.), certif. denied, 176 N.J. 278 (2003));

see Printing Mart-Morristown, supra, 116 N.J. at 768.

       We review de novo a trial court's contract interpretation,

as it presents a legal issue.         See Kieffer v. Best Buy, 205 N.J.
213, 222 (2011).     We seek to ascertain "the reasonably certain

meaning of the language used, taken as an entirety, considering

the situation of the parties, the attendant circumstances, the

operative usages and practices, and the objects the parties were

striving to achieve."     George M. Brewster & Son, Inc. v. Catalytic

Constr. Co., 17 N.J. 20, 32 (1954); see also Pacifico v. Pacifico,

190 N.J. 258, 267 (2007) (stating that a court examines contract

terms "in light of the common usage and custom").               We enforce

contracts as written, and decline to make a better contract than

the parties made for themselves.          Kampf v. Franklin Life Ins. Co.,

33 N.J. 36, 43 (1960); see also Kieffer, supra, 205 N.J. at 223

("The judicial task is simply interpretive; it is not to rewrite

                                      9                              A-2506-15T2
a contract for the parties better than or different from the ones

they wrote themselves.").

     Moreover, we construe any ambiguity against the drafter,

because we presume it protected its own interests, and "chose the

words that may be susceptible to different meanings . . . ."

Kieffer, supra, 205 N.J. at 224.           Where an ambiguity exists,

meaning the contract is susceptible to two reasonable alternative

interpretations, M.J. Paquet, Inc. v. N.J. Dep't of Transp., 171
N.J. 378, 396 (2002), its resolution is a fact question.       Michaels

v. Brookchester, Inc., 26 N.J. 379, 388 (1958).        But, a jury need

not resolve an ambiguous term's meaning if, after considering all

competent relevant materials, a genuine issue of material fact

does not remain.    In re Teamsters Indus. Emps. Welfare Fund, 989
F.2d 132, 137 (3d Cir. 1993).

                                    B.

     The parties acknowledge that the agreement entitled Century

to a commission equal to one month's rent, although the listing

agreement does not actually use the word "rent" in defining the

amount of a commission for a lease.        The agreement simply states

"1 month" as the amount of commission.

     The parties dispute whether the Board's lease with the Church

obliged the Board to pay rent for the initial twenty-six month

term.   Century    asserts   that   the   Board's   "renovations    [were]

                                    10                             A-2506-15T2
consideration   paid   in    lieu    of   rent[,]"   which   triggered    an

obligation to pay a commission.            The Church argues that the

spending was not rent, and that it provided the building rent-free

for the initial term.

     "Ordinarily when a lease is made we find an agreement by the

owner-lessor to turn over specifically-described premises to the

exclusive possession of the lessee for a definite period of time

and for a consideration commonly called rent."               Thiokol Chem.

Corp. v. Morris Cty. Bd. of Taxation, 41 N.J. 405, 416 (1964).

"Rent is a fixed sum, or property amounting to a fixed sum, to be

paid at stated times for the use of property . . . ."          M. E. Blatt

Co. v. United States, 305 U.S. 267, 277, 59 S. Ct. 186, 189, 83
L. Ed. 167, 170 (1938) (internal quotation marks and citations

omitted).   However, "rent is not essential to a lease; for, from

favor, or valuable consideration, the tenant may have a lease

without any render."       Thiokol Chem. Corp., supra, 41 N.J. at 418

(internal quotation marks and citation omitted); see also Powell

on   Real   Property   §    16A.01   (2017)   ("Since   a    landlord    may

gratuitously create a lease, however, not every tenant is liable

for its [rent] payment.").

     Rent may be payable "in kind," such as in the form of crops

raised from the leased land.          See, e.g., Reeves v. Hannan, 65
N.J.L. 249, 251 (E. & A. 1900); Van Dyke v. Anderson, 83 N.J. Eq.
11                            A-2506-15T2
568, 570 (Ch. 1914).           However, improvements are generally not

rent.    "Even when required, improvements by lessee will not be

deemed   rent    unless     intention    that   they    shall       be   is    plainly

disclosed.      Rent . . . does not include payments, uncertain both

as to amount and time, made for the cost of improvements . . . ."

M.E. Blatt & Co., supra, 305 U.S. at 277, 59 S. Ct. at 189, 83

L.Ed.    at   170.    In     determining     the   nature      of    the      parties'

relationship, the court considers "the intention of the parties

as   revealed    by   the    language    employed      in    establishing        their

relationship,     and,      where   doubt    exists,    by    the    circumstances

surrounding its making as well as by their course of operation

under it."      Thiokol Chem. Corp., supra, 41 N.J. at 417.

      We need not firmly plant our flag on one side or the other

of the legal question whether "rent" is wholly a product of the

expressed intent of the parties to a lease.                 Cf. Shum v. Gaudreau,

562 A.2d 707, 713 (Md. 1989) (in a case involving landlord's

summary remedies for nonpayment of rent, the court declined to

follow authorities that "indicate that rent may be defined to be

whatever the parties intend").          The issue here is what the parties

to the agreement intended "rent" to mean, since that definition

would then apply to the lease between the Church and Board, in

order to calculate the commission owed, if any.                          Inasmuch as

Century and the Church did not adopt any special definition of

                                        12                                     A-2506-15T2
rent in its agreement, we adhere to commonly understood notions

of rent.      As discussed above, we are left to conclude that

improvements are generally not rent, and rent does not include

payments that are uncertain as to amount and time, and are entirely

discretionary.

     Applying    these   principles,   Century's   asserted    claim   for

commissions must fail.     The Board's lease with the Church did not

provide for the payment of cash rent during the initial twenty-

six-month term, nor did it require payment of rent in-kind.5

Rather, according to its terms, it left it to the Board, in the

exercise of its discretion, to decide whether to make improvements

or repairs.      The lease did not specify the extent of those

improvements, their cost, or when they had to be finished.

     We acknowledge one exception.       The lease required the Board

to pave the parking lot "[p]rior to the expiration of the Term"

and at the Board's "sole cost and expense . . . ."            The parties

left the work's "reasonable specifications," and its timing, to

the parties' later agreement.    Yet, even this mandated improvement

5
  Had the agreement pertained to the sale or lease of farmland,
and the landowner entered into a lease with a tenant farmer that
provided for payment not in cash, but in the form of half the
yield of the land, that landowner would, we presume, be liable to
the broker for one month's in-kind payment (although we need not
address whether the broker would be payable in-kind, or whether
the broker would be entitled to cash equivalent).

                                  13                              A-2506-15T2
— of uncertain scope — does not constitute "rent" as commonly used

and understood, and upon which Century predicated its commission.

     It is of no moment whether or not the Board enhanced the

value of the building by the end of the lease.        Any enhancement

is not a basis for calculating Century's commission.       Thus, there

is no need for discovery to determine the improvements' precise

cost and value.

     We also reject Century's contention that, since the parties

present differing interpretations of the agreement, discovery is

needed to ascertain its meaning. Having applied the common meaning

and usage of rent, we discern no ambiguity that would create a

fact issue warranting discovery.      Also, any remaining ambiguity

must be resolved against Century, which drafted the agreement.

See Kieffer, supra, 205 N.J. at 224.

     Century's alternative claim for unjust enrichment was also

properly dismissed.    If a contract exists between the parties,

unjust enrichment is generally inapplicable.       Shalita v. Twp. of

Washington,   270   N.J.   Super.    84,   90-91   (App.   Div.     1994)

("[G]enerally, the parties are bound by their agreement, and there

is no ground for imposing an additional obligation where there is

a valid unrescinded contract that governs their rights."); see

also Caputo v. Nice-Pak Prods., Inc., 300 N.J. Super. 498, 507

(App. Div.) (stating "unjust enrichment is an equitable remedy

                                14                                A-2506-15T2
resorted to only when there was no express contract providing for

remuneration"), certif. denied, 151 N.J. 463 (1997).                      Instead,

Century is confined to its contractual remedies.                      Cf. Nat'l

Amusements, Inc. v. N.J. Tpk. Auth., 261 N.J. Super. 468, 478 (Law

Div. 1992), aff'd, 275 N.J. Super. 134 (App. Div.), certif. denied,

138 N.J. 269 (1994).        Weichert Co. Realtors v. Ryan, 128 N.J. 427

(1992), upon which Century relies, does not compel a different

result because those parties did not execute a binding written

agreement.    Id. at 441.

      We also decline to reach Century's contention, raised for the

first time in its reply brief, that the Church breached the

covenant of good faith and fair dealing.                "We do not ordinarily

consider an argument that is raised for the first time in a reply

brief."   Quigley v. Esquire Deposition Servs., 409 N.J. Super. 69,

74   (App.   Div.    2009),   certif.        denied,   201 N.J. 154   (2010).

Furthermore, we "will decline to consider questions not properly

presented to the trial court when an opportunity for such a

presentation is available."         Nieder v. Royal Indem. Ins. Co., 62
N.J. 229, 234 (1973).

                                        C.

      Although      we   affirm   the   trial    court's     dismissal     of   the

complaint, we modify that aspect of the order that did so with

prejudice.    Generally, "[i]f a complaint must be dismissed after

                                        15                                 A-2506-15T2
it   has     been   accorded   the      kind   of    meticulous     and    indulgent

examination [required] . . . then, barring any other impediment

such as a statute of limitations, the dismissal should be without

prejudice     to    a   plaintiff's     filing      of   an   amended   complaint."

Printing Mart, supra, 116 N.J. at 772.               However, it is appropriate

to dismiss a complaint with prejudice where the "plaintiff conceded

that he had no further facts to plead" and instead "hope[d] that

he   could    use    the   tools   of   discovery        to   uncover   evidence     of

wrongdoing."        Nostrame v. Santiago, 213 N.J. 109, 128 (2013).                The

court should state its reasons if it departs from the general rule

that a plaintiff should have an opportunity to amend.                     See Hoffman

v. Hampshire Labs, Inc., 405 N.J. Super. 105, 112, 116 (App. Div.

2009).

      Here, we lack a basis for concluding that Century has no

further facts to plead, nor can we exclude the possibility that

it may have a well-founded basis for alleging a breach of the

covenant of good faith and fair dealing, or refining and bolstering

the claims we find have fallen short.                    Furthermore, the Church

conceded that Century was entitled to a commission if the Board

availed itself of one or both "holdover" periods.

      Affirmed as modified.

                                         16                                   A-2506-15T2