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Sybase, Inc. v. Verlaque

A-0300-02T3 (N.J. Super. App. Div. 2003) (Unpublished)

LANDLORD-TENANT; DISTRAINT—So long as no State action is involved, a non-residential landlord may lock-up the property of its tenant if it does so in accordance with the authorizing statute.

In a dispute about a breach of a sublease, the sublandlord locked its subtenant out of the leased space and sued the subtenant for unpaid rent and attorney’s fees. The trial judge instructed the jury that the sublandlord was entitled to distrain the subtenant’s property, even though the property’s value exceeded the amount of unpaid rent. The jury found in favor of the sublandlord, but awarded a set-off against that award for the value of the sub-tenant’s lost property. The subtenant appealed, claiming that the New Jersey Supreme Court ruled, in Callen v. Sherman’s Inc., 92 N.J. 114 (1983), that the New Jersey Distress (Distraint) Act, N.J.S.A. 2A:33-1 to -23 was unconstitutional and the sublandlord had no authority to lock up the sub-tenant’s property without notice or a hearing. The Appellate Division rejected the subtenant’s claim. It found that the Supreme Court’s decision was predicated upon State action to distrain property. In that case, a constable was called to distrain a tenant’s goods. The Supreme Court had found that the use of the constable without notice or a hearing constituted a State action that deprived that tenant of due process of law. The Appellate Division noted that, while the Supreme Court strongly urged landlords not to rely on the distinction between distraint by the landlord with or without the assistance of a constable, nonetheless the Supreme Court limited its holding on unlawful distraints to cases where a constable was involved. In this case, since the sublandlord did not utilize the services of a constable to lock up the subtenant’s property, it was not unlawful distraint. The Court also noted that, subsequent to the signing of the sublease, the New Jersey legislature amended the New Jersey Distress (Distraint) Act to confirm the right of landlords of non-residential property to use the remedy of distraint.

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