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Patel v. Mathews

A-6220-06T2 (N.J. Super. App. Div. 2008) (Unpublished)

CONSUMER FRAUD; RENT CONTROL — A tenant’s right to relief under the Consumer Fraud Act is not lost by having an overcharge adjudicated before a local rent leveling board.

A tenant moved into an apartment and gave the landlord a $900 deposit. Soon after the tenant moved into the apartment, the landlord increased the rent from $600 to $680. The tenant later complained to the municipal rent leveling board. It found that the landlord illegally collected the increased rent amount and ordered that $4,240 be returned to the tenant. The tenant was authorized to make deductions from her monthly rent until the amount had been paid back or, if the relationship between the parties ended, the full amount remaining would be immediately payable. Soon after, the tenant moved out and sued its landlord for the rent overcharge plus treble damages and attorneys’ fees under consumer fraud statutes. She also sought double her unreturned security deposit. A clerk for the lower court mistakenly shortened the 150-day period for discovery by roughly one month, but neither party brought the matter to the lower court’s attentions. After the date set by the clerk had passed, the tenant moved for summary judgment and the landlord cross-moved for a correction of the discovery period and for permission to bring a counterclaim alleging that the tenant had damaged the premises and failed to pay rent for over one year. The lower court denied the landlord’s cross-motion and granted the tenant’s motion for damages of $12,720 on her consumer fraud claims but denied her motion for summary judgment on her security deposit claim. The parties agreed to dismiss the claims and counterclaims regarding the security deposit but the lower court increased the amounts due to the tenant under the consumer fraud claims to $16,939.

On appeal, the landlord argued that the consumer fraud claims were barred as a result of the rent leveling board’s decision and award. Its argument was rejected when the Appellate Division agreed with the lower court that the right to relief under consumer fraud statutes is not lost when a rent leveling board finds that a landlord has breached municipal rent control ordinances. It added that regardless of whether the board had enforcement powers over its award to the tenant, the tenant was not foreclosed from invoking consumer fraud statutes since they were enacted to provide individuals with increased legal remedies. The mistaken shortening of the discovery period was found to be harmless because the landlord never indicated what additional discovery he would have sought. The landlord’s argument that the lower court incorrectly denied him permission to file a counterclaim for damages was also rejected on the grounds that he never explained why the allegations of damage and unpaid rent were not filed in his initial answer to the tenant’s complaint or raised in the subsequent five months. The Court found such a delay to be egregious. As a result, it affirmed the lower court’s award to the tenant on her consumer fraud claims.

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