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Triestman v. Soranno,

A-5128-05T2 (N.J. Super. App. Div. 2006) (Unpublished)

LANDLORD-TENANT; SECURITY DEPOSITS; ATTORNEYS FEES—Attorney’s fees awarded by a court in connection with a tenant’s failure to appear at trial do not constitute a fee awarded under the lease; therefore, such attorney’s fees are to be deducted after doubling any unremitted security deposit, not before such doubling takes place.

A landlord entered into a residential lease. When its tenant failed to pay the rent or change the utility accounts into his own name as required by the lease, the landlord sued for eviction. Prior to trial, the tenant paid the past due rent and corrected the utility accounts and the case was dismissed. Later, the tenant vacated the property. The landlord then completed a series of repairs, and sent the tenant a certified letter to the tenant’s old address with a partial refund of the security deposit and explanation of the charges deducted. The tenant never received the letter and when it was returned to the landlord, she redeposited the check into one of her bank accounts (but not the account upon which the check was drawn).

The tenant sued the landlord for violating N.J.S.A. 46:8-21.1 by failing to return the security deposit within thirty days. The tenant failed to appear at the trial, mistakenly believing that the case was adjourned. The case was dismissed without prejudice and the landlord moved for attorneys’ fees incurred in appearing at the trial. The tenant then filed a second suit seeking recovery of the security deposit, but instead of seeking statutory doubling of the security deposit, the tenant asked for treble damages in addition to the return of the security deposit. The lower court determined the amount of security deposit held by the landlord. It then deducted the landlord’s attorney’s fees incurred in the eviction trial as well as the landlord’s attorney’s fees in appearing at the tenant’s first trial for the return of the security deposit. The lower court then rejected some of the landlord’s claimed expenses, but gave the landlord a credit based on the equity of the circumstances, after having determined that the matter belonged in the Small Claims Division, not the Special Civil Part, and that the landlord incurred additional legal expenses based on the tenant’s erroneous request for treble damages. The lower court then ruled that the landlord’s credits offset any damages awardable to the tenant.

In the appeal that followed, the Appellate Division affirmed in part and reversed in part. It agreed that the landlord failed to comply with the statutory requirement to return the tenant’s security deposit within thirty days. It noted that the landlord had the tenant’s cell phone number and could have contacted the tenant to verify his address to properly return the deposit, but failed to do so because she was annoyed with the tenant. The Court also found that the landlord failed to show that she complied with the statute when the check was returned to her. She should have redeposited it in the same account as the one in which it had originally been held. The Court, having found that the landlord violated the statute, then determined if any credits to the landlord were to be deducted before or after statutory doubling of the security deposit. It found that the landlord’s attorney’s fees under the original eviction action were properly deducted prior to any statutory doubling. The statute requires doubling of any portion of the security deposit that should have been returned to the tenant under the lease. Since the tenant’s lease required the tenant to pay the landlord’s collection costs, that fee should have been deducted prior to doubling. On the other hand, the Court held that the lower court’s award of attorneys’ fees in connection with the tenant’s failure to appear at the first trial was not a fee awarded under the lease, but rather was a punishment to the tenant under the Rules of Court. Therefore, the Court held that those attorneys’ fees should have been deducted after the doubling of the security deposit. With respect to the lower court’s equitable deduction, the Appellate Division found that it amounted to an additional, inappropriate award of attorneys’ fees to the landlord. However, the Court found that the lower court did not adequately address the legitimacy of the landlord’s repairs. Thus, it remanded the case to the lower court to revisit the issue of proper repair deductions.

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