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Zaklama v. Ziegler

A-1253-07T1 (N.J. Super. App. Div. 2009) (Unpublished)

LANDLORD-TENANT; EVICTIONS — Where a tenant challenges a landlord’s claim that it intends to personally occupy the tenant’s apartment, the landlord has the burden of proving that it intends to do so because tenants do not ordinarily have ready access to the information necessary to disprove a landlord’s claim.

A woman lived in an apartment on the third floor of a rent-controlled building. Her landlord instituted an eviction proceeding. In his “Notice Terminating Lease” the landlord based the eviction on him being a new owner, intending to personally occupy the apartment with his wife. The woman responded by claiming that the landlord’s predecessor in title, the landlord’s father, had unsuccessfully attempted to evict her from the premises several times on the same statutory grounds. Each of the previous actions was either withdrawn or dismissed for failure to prosecute. She also claimed that the action was frivolous in that the landlord did not actually intend to personally occupy the apartment.

The lower court held that the landlord failed to sustain his burden of proving that he was going to personally occupy the unit as was required by statute. It noted that the owner’s father testified that when he instituted an eviction action against the woman, he listed the property for sale, contradicting his claim that he intended to live in the apartment. Another tenant at the property testified that the owner and the owner’s father asked him to sign a false certification. Another woman testified that the owner’s father told her that he was trying to get rid of the tenant because she was paying a very low rent. Further, another woman testified that the owner told her that he also wanted the tenant to leave the apartment so he could raise the rent. Based on this testimony, the Court ruled the testimony of the owner and his father were not credible. It believed that the owner’s intention to occupy the apartment was a pretext to evict the tenant and raise the rent.

As a result, the Court agreed with the tenant that she was entitled to reasonable counsel fees because the lawsuit was frivolous. It held that it was required by the Frivolous Litigation Statute to make such a finding given the fact that it found that the complaint was not filed in good faith and was made solely for the purpose of harassing the tenant and causing her to be unlawfully displaced from her apartment. It also awarded the tenant court costs in defending the action. The landlord appealed both the denial of his summary dispossession action and the lower court’s award of counsel fees and costs. The tenant appealed the lower court’s determination as to counsel fees, deeming them to be insufficient.

The Appellate Division affirmed the lower court’s determination that the landlord did not prove that he intended to move into the apartment. The Court held that the landlord had the burden of proving that it intended to personally occupy the residence because tenants do not ordinarily have ready access to the information necessary to disprove a landlord’s claim. It also believed that the anti-eviction statute is intended to protect tenants against pretextual evictions. It deferred to the lower court as to the credibility of the witnesses. It also rejected the landlord’s contention that the lower court should have applied the remedies of another statutory provision which would have required the tenant to move out, wait six months, and then bring an action if the landlord’s intent was insincere. It noted that by the time the six-month period would have passed, the wrongfully dispossessed tenant might lack the resources or motivation to sue her former landlord, despite the prospect of recovering treble damages and counsel fees under the other statutory provision. As to the lower court’s awarding of counsel fees under the Frivolous Litigation Statute, the Court noted that the statute provided a limited exception to the “American Rule” for civil justice, whereby litigants are expected to bear their own counsel fees. The Court was persuaded that the landlord’s legal arguments concerning the construction of the eviction statute were sufficiently colorable to make it inappropriate to subject him here to fee-shifting sanctions. It also noted that a previous case, which the lower court described as instructive on the issue of pretext and a landlord’s intent to occupy a leased apartment, was decided by the Appellate Division after the landlord served its tenant with the Notice of Termination and that it would be unfair to penalize him for not being sufficiently prescient to anticipate the clarification of the statutory scheme.

Another earlier case, decided before the landlord instituted his action, did instruct landlords that they were obligated to prove their bona fide intention to occupy leased premises, but it did not articulate exactly what such a “bona fide” showing would entail, or whether it would be measured by an objective or subjective standard. Thus, the Court held that even if there was bad faith in the landlord’s actions, fee-shifting was inappropriate here in light of the legally debatable issues inherent in the case. It also pointed out that, contrary to the lower court’s holding, fee-shifting under the statute is discretionary, not mandatory. It therefore found that the lower court may have mistakenly believed that it had no choice but to award fees and costs. In addition, it mentioned that the record contained no indication that the tenant had complied with the mandatory “safe-harbor” procedures under the Frivolous Litigation Statute affording the landlord a 28-day window to reconsider his complaint and withdraw it without penalty. It disagreed with the tenant that such a notice was provided to the landlord in the text of its counterclaim, and stated that, in any event, the safe-harbor procedure is more appropriately carried out in the form of a written notice to opposing counsel. It also found that the safe-harbor requirement had been “strictly construed” by the courts and that similar frivolous pleading claims have been denied when the safe harbor requirements have not been followed. Nevertheless, it affirmed the award of costs to the tenant as the prevailing party, under Rule 4:42-8, irrespective of the non-applicability of the Frivolous Litigation Statute.


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