Heyert v. Taddese, 431 N.J. Super. 388 (App. Div. 2013). [Disclosure: My firm, Lite DePalma Greenberg, LLC, represented the Hoboken Rent Leveling & Stabilization Board in this appeal and in the other appeals discussed in this post]. This has been a busy few months for the Hoboken Rent Leveling & Stabilization Board in the Appellate Division. First, there was Burns v. Hoboken Rent Leveling & Stabilization Bd., 429 N.J. Super. 435 (App. Div. 2013), discussed here. That opinion was written by Judge Lihotz. Next came Tumpson v. Farina, 431 N.J. Super. 164 (App. Div. 2013), a decision by Judge St. John, in which the Board successfully overturned an award against it under the New Jersey Civil Rights Act, N.J.S.A. 10:6-1 to -2. That opinion is discussed here. Now, earlier this week, in this remarkable 65-page opinion by Judge Parrillo, the Board won another victory.
The plaintiff tenants sued their landlords, asserting that the landlords had charged excessive rents, in violation of the New Jersey Consumer Fraud Act, N.J.S.A. 56:8-1 et seq. (“CFA”). The tenants also sought to overturn a hardship rent increase that the landlords had obtained from the Board. The landlords, in turn, sued the Board, claiming that the City’s rent control ordinance was unconstitutional and did not apply to the subject property because it was a condominium. The landlords also asserted that the Board’s application of the ordinance violated the landlords’ civil rights and constituted a regulatory taking.
The Law Division rejected the landlords’ claims against the Board in their entirety. The court also agreed with the tenants, on their motion for summary judgment, that the landords had violated the CFA and awarded attorneys’ fees to the tenants under that statute. The landlords appealed.
Judge Parrillo’s opinion affirmed the decision below in all respects. The City’s rent control ordinance was found to be constitutional, clear on its face, and applicable to condominiums. Moreover, the Board’s application of the ordinance was wholly proper and did not constitute a taking.
This was also a big win for the tenant parties. Applying the de novo standard of review applicable to summary judgment rulings, Judge Parrillo affirmed the Law Division’s vacation of the hardship rent increase, as well as the Law Division’s determination that the landlords had violated the CFA and the award of attorneys’ fees.
The facts and procedural history of this case are complicated, and the decision needs to be read in order to be fully appreciated. Not only did the opinion get the issues right, but it is an extraordinary ruling in that it addresses, in a single decision, so many legal issues. Judge Parrillo covered numerous issues under the CFA, including its scienter requirement, the three categories of CFA violations, the status of the landlords as “professional sellers” covered by the CFA, the inability to rely on an “advice of counsel” defense as to the CFA, the statute’s “ascertainable loss” requirement and the ways to measure that loss, the principle that no pre-suit demand is required in order to bring a CFA claim, the CFA’s causation requirement and the ways that it differs from reliance, which is not required under the CFA, and, of course, attorneys’ fees, which the panel reviewed under the abuse of discretion standard.
As to the issues relating to the Board, this opinion addressed the presumption of validity of municipal ordinances, the doctrine of unconstitutional vagueness, timeliness issues, the differences between void and voidable municipal actions, standing to sue (that is, whether the tenants had standing to challenge the hardship increase, which they did), mootness, “regulatory lag” and retroactivity, the Civil Rights Act, 42 U.S.C. §1983, and the statute of limitations for Civil Rights Act claims, the discovery rule and equitable tolling, allegedly unconstitutional impairments of contract in violation of the United States and New Jersey Constitutions, the effect of failure to raise an issue below, unconstitutional takings, and ripeness. In short, Judge Parrillo and the panel provided an encyclopedia that should be frequently referred to and cited by attorneys and courts.
In fact, the opinion even offered an appellate practice tip, as a final fillip. In opposing the tenants’ attorneys’ fee request, the landlords did not make an extensive case. Judge Parrillo characterized the landlords’ opposition as a “terse argument,” and quoted a prior Appellate Division case as saying that “an argument employing this economy of words and authority does little to persuade us of the righteousness of the claim.” Thus, though it’s good to be concise in appellate briefing, a too-short presentation when a more detailed analysis would be expected will not cut the mustard.