RED BANK ACQUISITION I, LLC, ETC. VS. R.B. REALTY Â ASSOCIATES, LP VS. LIZER JOZEFOVIC(C-23-12, MONMOUTH COUNTY AND STATEWIDE), A-1132-14T3

Background

R.B. Realty (landlord) owned a Red Bank nursing-home building; Chapin Hill (tenant) acquired operation via documents exchanged in 2006 (lease and an Operations Transfer Agreement (OTA)). Dispute arose over which executed lease controlled (August 21, 2006 vs. August 31, 2006) and whether bed/license rights transferred to Chapin Hill.
Trial evidence included extensive email/draft exchange, a February 23, 2006 draft signed by parties, an August 21, 2006 lease in landlord files, and an August 31, 2006 lease supplied by Chapin Hill. Handwriting experts disagreed about signatures.
Chapin Hill transferred 35 (later 50) licensed beds to a holding company in 2006–2007 without landlord consent or required notices; beds were returned to Chapin Hill in 2012 after litigation began.
Trial judge credited landlord witnesses (notably Lichtman), accepted the August 21, 2006 lease as the controlling lease, found Chapin Hill materially breached (unauthorized bed transfers and management substitution), and awarded possession to R.B. Realty.
Court held the lease reserved license/bed rights to the landlord (section 9.3) and the OTA did not override that reservation; judge denied liquidated damages but awarded possession and attorneys’ fees; appellate court affirmed liability/possession but vacated and remanded the fee award for further justification.

Issues

Issue	Chapin Hill's Argument	R.B. Realty's Argument	Held
Whether notice(s) of default complied with the lease and permitted termination	Notices failed to give curative opportunity or were procedurally deficient	Notices complied with §§19.1–19.2 and statutory requirements; tenant had cure opportunities	Court: Notices were sufficient; defaults were valid and landlord lawfully terminated and sought possession
Which lease controlled (Aug. 21, 2006 vs. Aug. 31, 2006)	Aug. 31 lease reflected the true parties’ agreement (longer term, bed-control rights to tenant)	Aug. 21 lease (matching earlier drafts) was the true, controlling lease; signatures and course of dealings support that	Court credited landlord witnesses and handwriting evidence; Aug. 21, 2006 lease controls
Whether OTA or other documents transferred bed/license rights to Chapin Hill	OTA and transaction evidence showed parties intended conveyance of licenses/bed rights to Chapin Hill	The lease expressly vested licenses/permits in landlord (§9.3); OTA excluded landlord-held licenses; no consideration/closing evidence for bed sale	Court: Bed/license rights remained with landlord; OTA did not transfer bed rights
Whether attorneys’ fees award was appropriate and properly calculated	Fee affidavit contained vague/duplicative entries and included work tied to bed-rights litigation not recoverable under lease provision	Lease §15.2 permits recovery of reasonable legal costs to obtain possession; fees awarded	Court affirmed entitlement to fees in principle but vacated the quantum and remanded for lodestar/market-rate analysis and deletion of fees tied to bed-rights claim

Key Cases Cited

Seidman v. Clifton Sav. Bank, 205 N.J. 150 (N.J. 2011) (standard and deference in appellate review of bench-trial factual findings)
Cesare v. Cesare, 154 N.J. 394 (N.J. 1998) (trial-court advantage on witness credibility; deference to factual findings)
Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474 (N.J. 1974) (test for disturbing trial-court findings: manifestly unsupported standard)
Kieffer v. Best Buy, 205 N.J. 213 (N.J. 2011) (contract and lease interpretation reviewed de novo)
Rendine v. Pantzer, 141 N.J. 292 (N.J. 1995) (lodestar / market-rate approach for attorney-fee reasonableness in contract cases)
Dunkin' Donuts of Am. v. Middletown Donut Corp., 100 N.J. 166 (N.J. 1985) (equity will not relieve forfeiture where the breaching party’s own knowing misconduct caused the forfeiture)