The New Jersey Appellate Division recently issued an unpublished decision that shows that good leases and procedures can help landlords prevent problems as well as make and save money. Rondell L. Thurman, Et Al vs. Lindenwold Center LLC., A-5364-12T4 (App. Div., March 9, 2015). The trial court dismissed claims of tenants because they were litigated in a prior action in which the landlord sought to collect past-due rents from the tenants.
The case was affirmed on appeal. The case is important for landlords to ensure successful collection and protection against defaulting tenants, especially ones that try to file claims against landlords.
This case involved a breach of a shopping center lease by tenants that failed to pay rent. The landlord filed a summary dispossess action seeking a judgment for possession against tenants due to their failure to pay rent. The landlord then obtained a consent judgment pursuant to which tenants agreed to the entry of a judgment of possession, to vacate the premises, to make a payment, and to surrender their security deposit. The tenants then vacated but failed to pay and the landlord filed a complaint in the Law Division.
The tenants filed an answer alleging that an eminent domain action caused the nullification of the lease and also asserted a counterclaim seeking the return of their security deposit and monetary claims. The landlord moved for summary judgment. The trial court granted the landlord’s motion and entered a judgment against the tenants.
The tenants then filed an action against the landlord seeking damages in the Law Division. The allegations of the tenants included claims that the landlord breached the lease and committed fraud by failing to inform the tenants of a taking or condemnation. The landlord moved to dismiss the complaint arguing that it was barred by res judicata, collateral estoppel, and the entire controversy doctrine. The trial court agreed with the landlord and dismissed the complaint. The trial court found that all of the allegations of the current action were conclusively determined in favor of the landlord in the prior action.
The Appellate Division also agreed with the landlord and affirmed the trial court. The Appellate Division added that “the entire controversy doctrine embodies the principle that the adjudication of a legal controversy should occur in one litigation in only one court”…and the entire controversy doctrine also “serves the purpose of providing finality and repose; prevention of needless litigation; avoidance of duplication; reduction of unnecessary burdens of time and expenses; elimination of conflicts, confusion and uncertainty; and basic fairness.” The Appellate Division then found that because the tenants had litigated the eminent domain issue, they were precluded from doing so again.
For landlords, this decision illustrates that the entire controversy doctrine is a powerful tool in New Jersey and also shows the importance and value of preparing good leases and following proper procedures, both before and during litigation. Although the decision does not reveal the lease or the consent judgment that were signed by the tenants, it is likely that both documents were properly prepared in order to persuade the court to grant the landlord summary judgment. And by quickly obtaining summary judgment, the landlord was able to make and save money.
Do you have the lease and procedures you need to win a lease dispute? Further, should your lease and procedures be improved and updated to maximize your opportunities for recovery for a breach and minimize your risks of loss if you breach? Evaluating your legal issues and addressing them correctly, requires careful review on an individual basis. It is also vital to have counsel familiar with these issues for your commercial, retail, industrial and/or residential property needs.