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Balogh v. Telesnick

A-1057-02T5 (N.J. Super. App. Div. 2004) (Unpublished)

LEASES; ATTORNEYS FEES—Where a lease only provides for attorneys fees incident to eviction of a tenant, the landlord is not entitled to be reimbursed for those fees in connection with a suit for money damages.

A one-year lease gave the tenant a renewal option if, during the option year, he paid the real estate taxes in addition to his rent. Before the option was exercised, the lease was renegotiated so that the tenant’s monthly payments during the second year included “anything [he] owed every month,” including the taxes. After the second year of the lease ended, the tenant remained on a month-to-month basis. The landlord then requested that the tenant pay for the taxes. The tenant refused and the landlord sued for those taxes, for additional sewer charges, for insurance costs, and for attorneys’ fees.

The lower court held the tenant responsible for the taxes, but not for the sewer charges because even though the lease repeatedly referred to “utilities including water,” and the tenant’s obligation to pay “charges for water and other utilities used by the tenant,” it made no reference to sewer charges. Sewer charges are not reasonably understood to be similar to “water and other utilities.” The lower court also held that the tenant was responsible to reimburse the landlord for insurance costs, even though, as required by the lease, the tenant bought liability insurance as required by the lease. The lease required that the tenant name its landlord as an “additional insured,” but the tenant failed to do so. Therefore, the landlord bought its own insurance, the cost for which the lower court held the tenant responsible. It also awarded counsel fees and costs to the landlord, as permitted by the lease.

The Appellate Division affirmed all of the lower court’s holdings except for the award of counsel fees. Although counsel fees can be awarded when a contract or lease stipulates, the lease in this case referred only to the landlord’s ability to collect “reasonable attorney’s fees and costs” incident to the landlords re-entry and re-possession of the premises following the tenant’s breach. Since that did not occur, the Court held that counsel fees should not have been awarded.

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