Benjoray, Inc. v. Academy House Child Development Center, 437 N.J. Super. 481 (App. Div. 2014). In general, landlord-tenant cases are intended to proceed in the Special Civil Part. The presumption is that such cases are suitable for disposition without the full panoply of discovery and other procedures that the Law or Chancery Divisions afford. The goal of the summary dispossess statute, N.J.S.A. 2A:18-51 to -61 is, as Judge O’Connor stated in this opinion, “to provide landlords with a swift and simple method of obtaining possession.” N.J.S.A. 2A:18-60, however, allows transfer to the Law Division of a landlord-tenant case that is of “sufficient importance.” Defendant, a child development center, sought to transfer this commercial tenancy matter to the Law Division. That application was denied in the Special Civil Part. On appeal, the Appellate Division reversed and ordered transfer.
About thirteen months after entering into this lease, defendant came across plans that showed that the leased space, represented to be 11,200 square feet, was in fact only 9,633 square feet, a 15% difference. An attempt to address this with the landlord went unanswered. Accordingly, defendant began to withhold part of the rent, depositing that portion into court. Plaintiff then produced an analysis from its own architect that concluded that defendant actually had use of more square footage than the lease provided.
Plaintiff sued for possession on the ground of non-payment. Defendant responded with a motion to transfer to the Law Division. That motion attached a verified Answer and Counterclaim that alleged fraud in the inducement of the lease and demanded rescission of the lease, an equitable remedy. The Special Civil Part found no “sufficient importance” or difficulty in the case and denied transfer. Applying the abuse of discretion standard, the Appellate Division reversed.
“The claims of negligent misrepresentation and breach of contract alleged here are too complicated to be disposed of in a summary dispossess hearing, not to mention that, given the allegations, the parties should be given the opportunity to conduct discovery.” Judge O’Connor also rejected the landlord’s argument that the tenant had inspected the premises and accepted them “as is,” with an “approximate” square footage. The alleged 15% difference in square footage did not fall within the range of an “approximation.” Moreover, a non-expert tenant who eyeballs a space of 9-12,000 square feet could not be expected to determine the approximate square footage. “The parties have retained expert architects and even they hold significantly different views of how many square feet are within the leasehold.”
Finally, Judge O’Connor observed that “a court hearing a summary dispossess action lacks general equitable jurisdiction.” That court lacked power to grant equitable relief. The tenant, however, had sought equitable relief in the form of rescission. As a result, transfer should have been granted “because otherwise substantial interests of the tenant, none of which is outweighed by prejudice to the landlord, are jeopardized.”
Roughly every 20-25 years or so, the Appellate Division publishes an opinion on this subject, since everyone seems to need a refresher about this issue periodically. See Bloomfield Tp. v. Rosanna’s Figure Salon, Inc., 253 N.J. Super. 551 (App. Div. 1992); Master Auto Parts, Inc. v. M. & M. Shoes, Inc., 105 N.J. Super. 49 (App. Div. 1969); see also Morrocco v. Felton, 112 N.J. Super. 296 (Law Div. 1970), all cited by Judge O’Connor. This case is the latest reminder that this exception to the summary procedures of the Special Civil Part is available in cases of sufficient complexity or importance.