A New Jersey appellate court has vacated a judgment against a landlord in a landlord-tenant dispute, sending the case back for further proceedings. The ruling affects both the landlord, Emad Ghaly, and the tenants, Franklin Castanos and Solange Plasencia, who had sought damages related to their rental agreement.

The case, Franklin Castanos v. Emad Ghaly, was heard by the New Jersey Superior Court Appellate Division under docket number A-4035-24. The court's decision on October 20, 2026, comes after a series of legal actions stemming from the tenants' claims that the rental property was uninhabitable.

Background

The dispute began when Castanos and Plasencia entered into a lease for a single-family home in Bayonne, New Jersey, owned by EIG Real Estate Management, LLC, in which Ghaly is a member. The tenants paid their first month's rent and a security deposit but later vacated the property due to alleged issues with its condition.

After vacating, the tenants filed a lawsuit in the Law Division of Hudson County. Ghaly did not appear for a scheduled trial in October 2023, leading the court to enter a default judgment against him. Ghaly later attempted to vacate the default, arguing that he had a scheduling conflict, but the court denied his motions. The case remained in limbo until the tenants moved to reinstate their complaint, which the court granted in October 2024.

The Ruling

During a proof hearing held in January 2025, the court allowed the tenants to present their claims for damages. The tenants' attorney argued that Ghaly was liable for various financial losses due to the uninhabitable conditions of the property. The attorney sought a total judgment of $61,361.04, which included damages for the security deposit, first month's rent, attorney's fees, and additional costs incurred by the tenants.

However, the court found that the tenants did not provide sufficient evidence to support their claims. The court noted that the attorney acknowledged that the damages were not clearly tabulated and that some receipts were missing. As a result, the court expressed difficulty in determining the basis for the final judgment amount.

The court ruled, "we cannot fairly discern what evidence the court relied upon to determine the final judgment amount because no factual findings were made."

Ultimately, the appellate court decided to vacate the final judgment against Ghaly, stating that the trial court failed to provide adequate factual findings and legal conclusions regarding the damages awarded to the tenants. The appellate court emphasized the need for the trial court to articulate its reasons clearly and correlate them with the relevant legal conclusions.

Impact

This ruling has significant implications for both parties involved. For Ghaly, it means that the judgment against him has been vacated, allowing him another chance to contest the claims made by the tenants. For Castanos and Plasencia, the court's decision means they will have to present their case again, providing the necessary evidence to support their claims for damages.

The appellate court's ruling also highlights the importance of clear documentation and evidence in legal proceedings. It underscores the necessity for trial courts to provide comprehensive findings when entering judgments, particularly in cases involving default judgments where one party may not have had the opportunity to present their side of the case.

What's Next

The case has been remanded to the trial court for further proceedings, where the court will need to address Ghaly's liability and the amount of damages to be awarded to the tenants. Ghaly may have the opportunity to present his defense with the assistance of legal counsel, as he was self-represented during the initial hearings. The court's decision to vacate the judgment allows for a more thorough examination of the evidence and claims made by both parties.