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Whalen v. Celani

A-1979-96T2 (N.J. Super. App. Div. 1997) (Unpublished)

LEASES; EVICTION—Compliance with a consent order regarding the payment of rent by a tenant involved in an eviction proceeding can be a prerequisite to allowing tenant to pursue its claims.

In September 1995, a contract was entered into for the purchase of a single-family home. The next day, a sister of the purchaser rented the house, intending to live there until closing of the sale to her brother. One month later, the purchaser informed the seller that he was unable to obtain a sufficient mortgage. Shortly thereafter, letters from the sister complained of various defects and deficiencies in the house. The owner instituted summary eviction proceedings for non-payment of rent against the sister, and two months later brought a separate action against the purchaser for breach of the contract of sale. The cases were consolidated, but until the case could be heard, the judge entered a consent order requiring part of all future payments of rent to go directly to the landlord, and the other part to be deposited with the clerk of the Superior Court pending the outcome of the consolidated cases. The tenant failed to make any of these required rent payments and neither defendant filed an answer or entered an appearance in the consolidated case. The owner moved for default judgments to be entered against the defendants, who filed a motion requesting a hearing on all issues. The Law Division entered default judgments against the tenant and the purchaser, concluding that compliance with the consent order was a prerequisite to raising defenses to the claims in the consolidated case.

The Appellate Division agreed with the Law Division’s opinion that compliance with the consent order was necessary before hearing any claims of the tenant. At the very least, she had an obligation to remit that portion of the rent required to be held by the Superior Court clerk before raising any habitability defenses. The Court also found that the Law Division did not abuse its discretion in refusing to vacate the default judgments. Even assuming the failure to file answers was excusable, the Court held that the tenant failed to present a meritorious defense against the owner’s claim for rent due and possession of the premises. As against the purchaser, the Court held that he demonstrated neither excusable neglect nor a meritorious defense to excuse his failure to file an answer. However, even though he was going to purchase the house subject to his sister’s tenancy, he was not liable for any part of her rent obligations since he was never on the lease and was not a guarantor.


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