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Mo-Pe Management v. Nardiello

A-6986-97T2 (N.J. Super. App. Div. 1999) (Unpublished)

LANDLORD-TENANT; SETTLEMENTS—Where a landlord and its tenant settle a rent collection suit and the tenant fails to honor the settlement, the tenant can not raise its initial claims and defenses in the action brought to enforce the settlement.

A commercial tenant was unable to pay its rent and vacated its premises approximately 16 months before the termination date of the lease. The landlord filed a collection suit. The tenant asserted that the landlord’s conduct entitled it to terminate the lease and that the landlord had not taken reasonable steps to rent the premises after they had been vacated. With the prodding of the trial court, the parties agreed to settle. The settlement was for $2,000 to be paid in monthly installments of $100. The settlement agreement also provided that upon default in the payment of two installments, the tenant would be liable for $9,000 less any credits for payments made. The agreement was breached and the landlord moved for an entry of judgment for $8,600 pursuant to the stipulation. The motion was granted and the tenant appealed. On appeal, the tenant asserted that it was entitled to terminate the lease due to poor ventilation and lack of air conditioning and on several other grounds. The Appellate Division pointed out that the tenant failed to understand that the judgment was based on the stipulation of settlement and that the stipulation constituted a new agreement that abolished any defenses the tenant may have had under its lease or by reason of the landlord’s behavior during the term of the lease. In the settlement agreement, the landlord gave up its claim for $9,000 and the tenant gave up any claim that it was entitled to terminate the lease. Further, any contention by the tenant that the $9,000 rent calculation was in error was also lost because that a claim also was deemed to have been abandoned as part of the settlement.


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