N.J. SUPERIOR COURT, APPELLATE DIVISION

ASHI-GTO Associates v. Irvington Pediatrics, P.A., etc.

LANDLORD/TENANT LAW - Attorneys' Fees

New Jersey Law Journal

ASHI-GTO Associates v. Irvington Pediatrics, P.A., etc., A-5054-08T2, A-5265-08T2; Appellate Division; opinion by Wefing, P.J.A.D.; decided and approved for publication July 15, 2010. Before Judges Wefing, Grall and LeWinn. On appeal from the Law Division, Essex County, L-3867-99. DDS No. 27-2-8624 [15 pp.]

These two appeals, consolidated for purposes of this opinion, both flow from a landlord-tenant dispute between the parties. Defendant Irvington Pediatrics, P.A., and its principal Bernier Lauredan, M.D., signed a seven-year lease in 1995 to lease first-floor office space from plaintiff ASHI-GTO Associates. Plaintiff's principal, Clifford Lisman, D.M.D., conducted a pediatric dental practice on the second floor. In 1999, Lauredan abandoned the premises and plaintiff filed suit for unpaid rent. Lauredan similarly abandoned office space in Perth Amboy that he leased from plaintiff, resulting in a suit in Middlesex County for unpaid rent. The parties agreed to binding arbitration and dismissed both matters with prejudice. Arbitration, however, did not proceed and plaintiff successfully moved to reinstate both matters.

In A-5054-08, the jury rejected the defense of constructive eviction at the Irvington property and returned a net award in plaintiff's favor for $67,645.03. Defendant appeals. In A-5265-08, plaintiff appeals from the denial of its application for counsel fees.

Held: The trial court did not err in restoring plaintiff's complaint as it was not barred by laches or estoppel and was not time-barred. The denial of plaintiff's motion for attorneys' fees is affirmed since the defense assertion of greed and bigotry at the outset of the trial did not result in increased costs for plaintiff.

The panel rejects defendant's contention that the motion judge abused his discretion in granting plaintiff's motion to restore its complaint. It says defendant could not advance the inherently contradictory positions that he did not agree to arbitrate the Essex County dispute and maintain that he detrimentally relied on the order dismissing that action in favor of arbitration.

Nor, says the panel, was there a statutory bar to restoration where plaintiff's initial complaint was filed within the limitations period. Further, defendant failed to show why it would be inequitable if the complaint were restored, an essential element to his claim of laches. Defendant's argument that plaintiff should be estopped from seeking reinstatement is similarly baseless.

The panel also rejects defendant's contention that the motion judge erred in denying its motion for reconsideration, which could not be accurately characterized as a motion for reconsideration because it did not rely on matters or controlling decisions which counsel believes the court overlooked or as to which it erred.

Defendant's argument that plaintiff's motion to reinstate its complaint was time-barred under Rule 4:50 is rejected. Contrary to defendant's argument that plaintiff sought relief under Rule 4:50-1(c), the panel says that plaintiff's motion falls under (f), which permits a party to seek relief for any reason justifying relief and must be brought only within reasonable time.

The panel next rejects defendant's argument that the trial judge erred in denying his request to instruct the jury that it could draw an adverse inference from plaintiff's failure to produce the individual who repaired the suction pump used in the dental practice. The trial court denied defendant's request on the ground that the repairman was equally available to both sides, thus making an adverse-inference charge inappropriate. However, the panel concludes that plaintiff had no reason to anticipate, until Lauredan's testimony that he vacated the premises because it was contaminated by foul leakage from Lisman's office, that the repairman's testimony would be deemed a factor. Thus, the repairman was not a witness plaintiff would have been expected to call.

The panel then addresses the denial of plaintiff's motion for attorneys' fees based on its assertion that defendant had acted in bad faith in presenting its defense at trial. Plaintiff cited to Rule 1:4-8 and N.J.S.A. 2A:15-59.1 but did not specify whether it sought sanctions against defendant's attorney under the rule or against defendant under the statute, or both. In support of its motion, plaintiff argued that it had prepared to defend a claim of constructive eviction based on inadequate heat and air conditioning but was confronted at trial with an allegation that defendant's office space had been periodically contaminated with human waste from plaintiff's dental practice and that plaintiff acted in complete disregard of the health of the patients because they came from a poor, minority population.

The panel agrees with plaintiff that while it did not give any notice to defendant that it intended to seek counsel fees until its post-trial motion, it should not be held to the procedural time frame in the court rule because of defendant's conduct. The purpose of that time frame is to give the offending party the chance to withdraw the material claimed to be frivolous. Here, there was no effective way to undo the claim of bigotry inserted into this trial at its outset.

However, the trial court's observation that the defense did not result in increased costs for plaintiff was correct. Plaintiff came to court to seek unpaid rent and to defend against a claim of constructive eviction. The assertions of contamination and greed, while inflammatory and ultimately rejected by the jury, did not cause an additional expenditure of attorney time. If they had, plaintiff may well have been entitled to relief. Also, that the defense may have attempted at trial to inflame the jury with racial and class arguments was not a basis for plaintiff to seek fees for the work performed.

— By Judith Nallin

For Irvington Pediatrics and Bernier Lauredan appellants in A-5054-08T2 and respondents in A-5265-08T2 — Dean R. Maglione. For ASHI-GTO Associates respondent in A-5054-08T2 and appellant in A-5265-08T2 — Harry Jay Levin (Levin Cyphers; Colleen Flynn Cyphers and Kelly Hamilton Uliano on the briefs).

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