Court Opinion

ID: 4206948
Source: CourtListenerOpinion
Date Created: 2017-09-28 13:14:58.380015+00
Date Added: 2024-06-11T12:42:38.152065
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NOT FOR PUBLICATION WITHOUT THE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-5182-15T1

RON and ESTHER KRUKOWSKI,

        Plaintiffs-Respondents,

v.

GRACE S. WONG,

     Defendant-Appellant.
_____________________________________________

              Submitted September 19, 2017 – Decided September 28, 2017

              Before Judges Yannotti and Mawla.

              On appeal from Superior Court of New Jersey,
              Law Division, Special Civil Part, Monmouth
              County, Docket No. SC-1382-16.

              Grace S. Wong, appellant pro se.

              Respondents have not filed a brief.

PER CURIAM

        Defendant Grace S. Wong appeals from a judgment entered by

the Law Division on June 16, 2016, awarding plaintiffs Ron and

Esther Krukowski $3900, plus court costs in the amount of $42. We

affirm.
     This   appeal   arises   from   the   following   facts.   Plaintiffs

entered into a lease for certain premises on Avalon Lane in

Manalapan for a term beginning on April 6, 2015, and ending on

July 5, 2015, at a monthly rent of $3900. The lease identified

Trinity Referral Company, LLC (Trinity) as the landlord and "Esther

Krukowski and family" as tenants. Among other things, the lease

stated that the tenant must pay a security deposit in the amount

of $3900.

     The lease also stated that the landlord must deposit the

security deposit in an interest-bearing or money market account

within thirty days after its receipt. The section of the lease

pertaining to the security deposit stated in pertinent part that:

                 The Landlord shall inspect the Property
            after the Tenant vacates at the end of the
            Term. Within 30 days of the termination of
            this Lease, the Landlord shall return the
            Security Deposit plus the undistributed
            interest to the Tenant, less any charges
            expended by the Landlord for damages to the
            Property   resulting   from    the   Tenant's
            occupancy. The interest and deductions shall
            be itemized in a statement by the Landlord,
            and shall be forwarded to the Tenant with the
            balance of the Security Deposit by personal
            delivery, registered or certified mail.

                 If the Landlord sells or transfers the
            Property during the Term of this Lease, the
            Landlord will transfer the Security Deposit
            plus the undistributed interest to the new
            owner. Landlord shall notify the Tenant of the
            sale and transfer, as well as the name and
            address of the new owner. The notice shall be

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              given by registered or certified mail within
              five days after conveyance of title. After
              acquisition of the Property, the new owner
              shall have all responsibility regarding the
              Security Deposit, and the Landlord shall have
              no further responsibility.

     In May 2016, plaintiffs filed a complaint against defendant

in the Small Claims Division of the Special Civil Part, seeking

damages in the amount of $4550. Plaintiffs alleged defendant had

wrongfully        withheld   their   $3900     security   deposit.   They      also

alleged that defendant had forced them to vacate the premises

before   the      end   of   the   lease   term.   They   sought   $645,     which

represented a pro-rata portion of the rent they had paid for the

month ending on October 5, 2015.

     On June 16, 2016, the judge conducted a trial in the matter,

sitting without a jury. At the trial, Ms. Krukowski testified that

a fire damaged plaintiffs' home. She said that after the fire, the

family moved to a hotel but they required temporary housing until

the home was rebuilt. Plaintiffs leased the residence on Avalon

Lane in Manalapan, at the suggestion of their insurer, State Farm,

and its agent, Churchill Corporate Services (Churchill).

     The initial lease term was for three months, from April 6,

2015, to July 5, 2015, after which plaintiffs could remain in the

house    on   a    month-to-month     basis.    Mr.   Krukowski    stated      that

plaintiffs and their children moved into the house on April 6,

                                           3                               A-5182-15T1
2015, and they later extended the term of the lease to October 5,

2015. Ms. Krukowski said plaintiffs were informed the property had

been sold and the closing would take place sometime in October

2015. She stated that defendant offered to allow plaintiffs to

remain in the house until November 5, 2015, but plaintiffs agreed

to vacate the premises by October 5, 2015.

     Mr.    Krukowski     further   testified    that   in   September   2015,

plaintiffs began to receive e-mails stating that contractors would

be coming to the house to fix certain tiles. The contractors

performed    the   work   on   September   27,   2015.   According   to    Mr.

Krukowski, on September 29, 2015, plaintiffs received a text-

message stating that they had to vacate the premises by the

following day. Mr. Krukowski said the notice was a surprise. He

further testified that on September 30, 2015, plaintiffs received

numerous text-messages informing them they had to get out of the

house as soon as possible.

     Plaintiffs vacated the premises on September 30, 2015, and

expected that their security deposit would be returned to them

within thirty days. However, plaintiffs received a letter from

defendant's    attorney,       which   stated    that    defendant   had    no

obligation to return the security deposit. He said the property

had been sold and plaintiffs should seek the monies from the new

owner.

                                       4                             A-5182-15T1
     Counsel also stated that plaintiffs were not entitled to the

return of any monies because the cost of repairing the damage

plaintiffs caused to the property exceeded the amount of the

security deposit. In his letter, defendant's attorney referenced

an "extensive number of broken tiles" in the kitchen and bathrooms,

the condition of the carpets, and the debris left behind when

plaintiffs vacated the premises. Mr. Krukowski testified that he

did not understand how his family could have damaged the tiles.

     Ms. Krukowski stated that plaintiffs were aware when they

signed the lease that the property was in foreclosure. They

understood they would have to move out at some time. She explained

that State Farm gave money for the rent to Churchill, and Churchill

tendered the rental payments to defendant.

     Ms. Krukowski acknowledged that the lease identified Trinity

as the landlord, but said all of her dealings with regard to the

property were with defendant. She said she was defendant's tenant.

Ms. Krukowski also stated that when she had the garbage disposal

fixed, she called defendant "as the owner" to ask her if she would

contribute toward the cost.

     Ms. Krukowski stated that when defendant had to show the

house to prospective buyers, defendant communicated with her by

text message. Defendant was not acting as an agent. Ms. Krukowski

also said that defendant was identified as the owner of the house

                                 5                          A-5182-15T1
on the water bill. In addition, Ms. Krukowski's research identified

defendant as the owner of 391 Franklin Turnpike.

     Ms. Krukowski further testified that she did not believe the

new owner was responsible for return of the security deposit

because plaintiffs had moved out before the closing and they did

not rent the premises from the new owner. Ms. Krukowski stated

that plaintiffs vacated the house at around 1:00 or 2:00 p.m. and

thereafter, none of their possessions remained in the house.

     Defendant's attorney then moved pursuant to Rule 4:37-2(b)

for involuntary dismissal of the complaint. Counsel asserted that

defendant was not the owner of the property and she was not the

company that leased the property to plaintiffs. Counsel stated

that defendant did not hold the security deposit and the lease

provided that upon the sale of the property, the security deposit

would be turned over to the new owner. He also stated that the

security deposit was actually Churchill's money and Churchill was

the real party in interest. The judge denied the motion.

     Defendant then testified that 391 Franklin Turnpike was the

owner of the house. Defendant and her husband are the owners of

391 Franklin Turnpike. She said that Trinity is the management

company that "handles" 391 Franklin Turnpike. Defendant stated

that she is not an owner of Trinity, and she is "the only contact

person" for 391 Franklin Turnpike.

                                6                           A-5182-15T1
     Defendant claimed that Trinity received plaintiffs' security

deposit, which was in the form of a check payable to Trinity.

Defendant stated that she did not take the money and put it in her

name. She said, it was "always Trinity." She claimed the money was

deposited for Trinity by "one of the persons who goes to the bank"

on Trinity's behalf. She admitted, however, that sometimes she is

one of the persons who handles the banking for Trinity.

     Defendant also testified that before plaintiffs moved into

the house, it "was in perfect condition," and claimed there were

no broken tiles in the home when plaintiffs moved in. She explained

that plaintiffs had agreed different selling agents could show the

house to prospective purchasers. Defendant claimed she was told

the house was a "mess."

     In addition, defendant stated that plaintiffs had damaged the

house "tremendously." She said she had an estimate that it would

cost $12,000 to repair the damaged tiles in the house. The carpet

also had been damaged "badly." Defendant told plaintiffs that

because of the damage they caused, the security deposit would not

be returned to them.

     The judge then placed his decision on the record. He found

that plaintiffs' testimony established that defendant was the

landlord because she was the person primarily responsible for the

property. The judge did not find defendant's testimony to be

                                7                           A-5182-15T1
credible. The judge also did not accept defendant's assertion that

plaintiffs were responsible for the damage to the property. The

judge found that the damage resulted from its prior use as a rental

property.

     The judge determined that defendant was the landlord of the

leased premises and she was legally responsible for return of

plaintiffs' security deposit. The judge did not double the amount

of the deposit that had been wrongfully withheld, as permitted by

N.J.S.A.    46:8-21.1,   because   the   judge   believed   defendant   had

attempted to comply with the security deposit law.

     The judge also rejected plaintiffs' claim for the return of

the rent plaintiffs paid for the period from September 30, 2015,

when they vacated the premises, to October 5, 2015, the end of the

lease term. The judge awarded plaintiffs damages of $3900 for the

return of the security deposit, and court costs of $42. Thereafter,

the judge entered a final judgment for plaintiffs in accordance

with his findings. This appeal followed.

     On appeal, defendant argues: (1) the trial court erred by

finding she is responsible for the return of the security deposit

because she is not the landlord of the property; and (2) the new

owner of the property is legally obligated to return the security

deposit to plaintiffs.

                                    8                             A-5182-15T1
     Appellate review of a final determination of a trial judge

sitting in a non-jury case is limited. Seidman v. Clifton Sav.

Bank, S.L.A., 205 N.J. 150, 169 (2011). We will not disturb the

judge's findings of fact and legal conclusions unless "they are

so manifestly unsupported by or inconsistent with the competent,

relevant   and   reasonably   credible     evidence    as   to    offend    the

interests of justice[.]" In re Trust Created by Agreement Dated

Dec. 20, 1961, ex rel. Johnson, 194 N.J. 276, 284 (2008) (quoting

Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474,

484 (1974)). Deference to the trial court's findings "is especially

appropriate when the evidence is largely testimonial and involves

questions of credibility." Cesare v. Cesare, 154 N.J. 394, 412

(1998) (citing In re Return of Weapons to J.W.D., 149 N.J. 108,

117 (1997)).

     The Security Deposit Act, N.J.S.A. 46:8-19 to -26, provides

in pertinent part that within thirty days after the termination

of a tenant's lease, the owner or lessee of the premises shall

return to the tenant the security deposit, plus any interest or

earnings   accumulated   thereon,       less   any   charges     expended    in

accordance with a contract, lease, or agreement. N.J.S.A. 46:8-

21.1.

     As noted, defendant argues that Trinity was the landlord of

the premises leased to plaintiffs. She asserts that she never

                                    9                                 A-5182-15T1
claimed to be the person who owns, or who purports to own, or

exercise control of the premises. There is, however, sufficient

credible evidence in the record to support the trial judge's

factual finding that defendant was the landlord of the property

leased to plaintiffs.

     In his decision, the judge noted that defendant had conceded

she and her husband owned the property through 391 Franklin

Turnpike. The lease identifies Trinity as the landlord. Although

defendant testified that she had nothing to do with Trinity, the

judge found defendant's testimony entirely lacking in credibility.

     The judge noted that the evidence showed that defendant

received plaintiffs' security deposit and she was the person in

charge of dealing with those monies. The monies also had been

deposited in Trinity's bank account, and defendant conceded she

is one of the persons who handles the banking for Trinity. We

conclude   that   the   record   supports   the   judge's   finding   that

defendant was legally obligated under N.J.S.A. 46:8-21.1 to return

the security deposit to plaintiffs upon the end of the tenancy.

     The record also supports the judge's finding that defendant

failed to establish any credible basis for a reduction in the

security deposit as a result of the alleged damage caused by

plaintiffs. The judge noted that when the home was sold, the home

inspection report indicated that certain repairs were required.

                                   10                             A-5182-15T1
The judge found, however, that plaintiffs had credibly testified

that they did not cause the damage that defendant attributed to

them. The judge pointed out that plaintiffs had only been in the

home for a short period of time, and before plaintiffs moved in,

the home had been rented to other persons.

     Defendant further argues that she is not legally required to

return the security deposit to plaintiffs. She argues that this

obligation falls upon the new owner of the property. N.J.S.A.

46:8-20 provides in pertinent part that an owner or lessee of

property leased who has received a security deposit from a tenant,

shall, upon conveying the property or assigning it to another in

a mortgage foreclosure action, turn over the deposit to the

grantee, assignee, or purchaser at the foreclosure sale at the

time of the delivery of the deed or assignment or within five days

thereafter.

     The statute further provides that notwithstanding any other

law to the contrary, it shall then be the "duty and obligation of

the grantee, assignee or purchaser to obtain from the grantor who

is the owner or lessee at the time of the transfer, conveyance or

purchase any and all security deposits, plus accrued interest on

the deposits, that the owner or lessee received from a tenant[.]"

Ibid. In addition, N.J.S.A. 46:8-21 provides:

                               11                          A-5182-15T1
           Any owner or lessee turning over to his or its
           grantee, assignee, or to a purchaser of the
           leased premises at a foreclosure sale the
           amount of such security deposit, plus the
           tenant's portion of the interest or earnings
           accumulated thereon, is hereby relieved of and
           from liability to the tenant or licensee for
           the repayment thereof. Whether or not the
           deposit plus accumulated interest are so
           transferred,    the   grantee,   assignee   or
           purchaser   of    the   leased   premises   is
           nevertheless responsible for . . . return of
           the security deposit, plus any accumulated
           earnings or interest thereon, to the tenant
           or licensee, in accordance with the terms of
           the contract, lease, or agreement unless he
           or it shall thereafter and before the
           expiration of the term of the tenant’s lease
           or   licensee's   agreement,   transfer   such
           security deposit to another . . . .

           [N.J.S.A. 46:8-21.]

     Here, the evidence shows that the property in question was

in foreclosure and it was sold to a third-party. As plaintiffs

explained, they had extended their lease until October 5, 2015,

but on September 29, 2015, defendant demanded that they vacate the

premises   the   following   day.        Mr.   Krukowski   testified   that

plaintiffs vacated the premises on September 30, 2015, and all of

their personal belongings were removed on that day, which was the

date of the closing.

     Defendant conceded that she did not transfer plaintiffs'

security deposit to the new owner. Rather, she claimed that the

purchasers used the security deposit in negotiations to lower the

                                    12                             A-5182-15T1
overall purchase price of the property. The judge found defendant's

testimony   to   be   entirely   lacking   in   credibility.   Moreover,

defendant provided no documentation to show that the deposit had

been transferred to the new owner by means of a reduction of the

purchase price.

     Furthermore, there is no evidence that defendant closed on

the sale of the property before plaintiffs vacated the property

on September 30, 2015. Ms. Krukowski testified that plaintiffs

vacated the property prior to the closing and transfer of title.

She also testified that plaintiffs did not have a landlord-tenant

relationship with the new owner.

     We conclude that there is sufficient credible evidence in the

record to support the judge's determination that defendant was the

party obligated by N.J.S.A. 46:8-21.1 to return the security

deposit to plaintiffs.

     Affirmed.

                                   13                            A-5182-15T1