Van Ness Industries, Inc. v. Claremont Painting & Decorating Co.
Van Ness Industries, Inc. v. Claremont Painting & Decorating Co.
Opinion of the Court
In this action plaintiff challenges the validity of chapter 33 of Title 2A of the Revised Statutes authorizing nonjudicial distraints for rent, thus raising serious questions of procedural due process of law. See Sniadach v. Family Finance Corp., 395 U. S. 337, 89 S. Ct. 1820, 23 L. Ed. 2d 349 (1969); D. H. Overmyer Co. v. Frick Co., 405 U. S. 174, 92 S. Ct. 775, 31 L. Ed. 2d 124 (1972); Fuentes v. Shevin, 407 U. S. 67, 92 S. Ct. 1983, 32 L. Ed. 2d 556, reh. den. 409 U. S. 902, 93 S. Ct. 177, 34 L. Ed. 2d 165 (1972).
Plaintiff has brought this case against its landlord alleging water damage to its personal property situate in an office premises in Madison Township rented to plaintiff by defendant’s predecessor in title. Plaintiff claims that defendant failed on demand either to correct the condition or compensate plaintiff for its loss. As a result of defendant’s failure
Defendant has filed a general denial of all allegations of the complaint, admitting only that plaintiff was in fact a tenant in the Madison Township premises and that it now owns them. Defendant also alleges as a separate defense that it “acted with legal justification and probable cause based upon the then existing circumstances.”
Plaintiff now moves for partial summary judgment, “asking for a declaration that the distraint procedures as authorized by statute or by common law are unconstitutional.” This application is supported as to the facts.by an affidavit of Allen Hinkes, plaintiff's president, submitted with a prior application for a temporary restraining order. The affidavit sets forth that a distraint was in fact taken at the old location and that defendant threatens a seizure of the items at the new location. There being no contrary affidavits submitted, these allegations are taken as true for purposes of this motion. R. 4:46-2; R. 4:46-5. It should also be noted that while this court has restrained defendant from talcing possession of the property “pending the final hearing in this cause or until the further order of this court,” the constitutional argument is not moot since the restraint does not free plaintiff of disposing of the propert3r without concern of liability in damages. N. J. SW. A. 2A:33-21; N. J. S. A. 2A:33-16.
Distress is a common law right of the landlord, now regulated by statute, N. J. S. A. 2A:33-1 et seq., to seize a
Prior to the enactment of chapter 228 of the Laws of 1971, amending N. J. S. A. 2A:33-1, goods and chattels on any premises (subject, perhaps, to exceptions not relevant to this opinion, such as goods and chattels on a premises occupied by entities exempt from levy) were subject to distraint. By that section distraints were forbidden for money owed on a lease or other agreements for the occupation of real property used solely as a residence of the tenant. See Zankman v. Tireno Towers, 121 N. J. Super. 346 (Cty. D. Ct. 1972).
In Sniadach v. Family Finance Corp., supra, the Supreme Court of the United States invalidated a Wisconsin statute
It is apparent that a landlord distraining in New Jersey is constitutionally prima facie in a less favorable position than the creditors whose ex parte seizure rights were abro
As a result of the recognition of procedural due process in the repossession and distraint fields, courts have invalidated state statutes in these areas in the following cases: Gross v. Fox, 349 F. Supp. 1164 (E. D. Pa. 1972); MacQueen v. Lambert, 348 F. Supp. 1334 (M. D. Fla. 1972); Holt v. Brown, 336 F. Supp. 2 (W. D. Ky 1971); Klim v. Jones, 315 F. Supp. 109 (N. D. Cal. 1970); Collins v. Viceroy Hotel Corp., 338 F. Supp. 390 (N. D. Ill. 1972); Gibbs v. Titelman, 369 F. Supp. 38 (E. D. Pa. 1973). See also, Fuentes v. Shevin, supra, 407 U. S. at 72, 92 S. Ct. at 1990, 32 L. Ed. 2d n. 5 at 565, collecting cases.
It thus follows that this court must grant plaintiff’s motion because the statute is facially unconstitutional, unless a valid distinction may be drawn between residential and commercial property or unless a distraint is deemed not to involve “state action.”
The Supreme Court of New Jersey has recognized the distinction between residential and commercial properties in landlord-tenant relationships. Thus, the covenant of habitability is implied in residential but not business leases. Marini v. Ireland, 56 N. J. 130 (1970); Berzito v. Gambino, 63 N. J. 460 (1973). Similarly, the court in Ellsworth Dobbs, Inc. v. Johnson, 50 N. J. 528 (1967), while generally invalidating brokerage agreements obligating the seller for a commission regardless of the fault of a nonsettling buyer, permitted such agreements upon a showing of equality of bargaining position. Presumably such a situation would more likely arise in the commercial than the residential field. Id. at 555-556. Thus, it might be argued that a knowledgeable tenant in his lease could eliminate his landlord’s distress rights and therefore the court should infer in the absence of such a stipulation that distress is merely a portion of the
A second possible distinction toward upholding the distress statute ‘has its genesis in the concept that procedural due process of law governs public not private action. In Messenger v. Sandy Motors, Inc., 121 N. J. Super. 1 (Ch. Div. 1972), the court sustained N. J. S. A. 12A:9-503 providing for self-help repossession of secured collateral. But Messenger is distinguishable in that the right to repossession arose pursuant to the agreement between the parties and thus was a creature more of contract than law. The right of distraint inheres in the landlord-tenant relationship and may be characterized s being imposed by the State both as to substantive right and procedure. Consequently, the process of distraint is hardly voluntary private conduct beyond the 14th Amendment. Although under the statute the initial action, the distraint itself, may be taken privately, if the tenant fails to proceed to seek to dissolve the distraint within ten days, the goods and chattels are inventoried and appraised with the assistance of public officers. N. J. S. A. 2A:33-9. See also, N. J. S. A. 2A:33-13. In the event of a surplus upon sale of the articles the proceeds are deposited with the sheriff or constable
It is true that Sniadach v. Family Finance Corp., supra; D. H. Overmyer Co. v. Frick Co., supra, and Fuentes v. Shevin, supra, all involved more direct state action since they dealt with judicial proceedings within the state court system. Nevertheless, the matter is one of degree and the state involvement in imposing as a matter of law the right of distraint and in involving its officers in the procedure is not permissible.
It consequently follows that insofar as chapter 33 of Title 2A authorizes distress for rents by landlords, the chapter is unconstitutional, and since the common law substantive right of distraint is governed by invalid procedural methods it may not be exercised in New Jersey. However, the procedure under N. J. S. A. 2A-.33-5 is not deemed affected by this ruling. Further, this court expresses no opinion as to the validity of prior distraints since intervening vested rights may be involved. See Oxford Consumer Discount Co. v. Stefanelli, 104 N. J. Super. 512 (App. Div. 1969), aff’d 55 N. J. 489 (1970).
For the foregoing reasons the motion for partial summary judgment is granted.
The appointment of constables is provided for. by N. J. S. A. 40A :9-120 through 127. See also In re Burroughs, 125 N. J. Super.
Reference
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- VAN NESS INDUSTRIES, INC. v. CLAREMONT PAINTING & DECORATING CO.
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