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410 Commerce, L.L.C. v. Geologlistics Americas, Inc.

2006 WL 337082 (N.J. Super. Ch. Div. 2006) (Unpublished)

SUBLEASES—A sublease ends when the overlease is terminated even though the sublandlord may have voluntarily agreed to the termination, but the subtenant may still have a damages claim against its sublandlord for doing so.

A tenant’s right to sublet its premises was subject to the landlord’s prior written consent. Here, the landlord consented to a sublease provided that the sublease did not interfere with the landlord’s rights under the lease. The sublease provided that it would terminate at the same time the lease was terminated “for any reason whatsoever.” The sublease also provided that the tenant/sub-landlord would not do anything that would terminate the lease so as to shorten the term of the sublease. Nonetheless, the landlord and tenant entered into a lease amendment terminating the lease, and therefore the sublease. The lease amendment provided that the lease was terminable by the landlord upon ninety (90) days’ notice to the tenant if the landlord found a new tenant. When the landlord found a new tenant, it sent notice to the tenant, who in, turn notified the subtenant that its sublease was being terminated and that it would be required to vacate on or before the lease was terminated. The subtenant asserted that the tenant/sub-landlord breached the sublease because it failed to advise the subtenant of any facts or circumstances of which it was aware that could result in the early termination of the sublease. The landlord sought an injunction removing the subtenant from the premises. The Court noted that, in order to grant injunctive relief: (a) the landlord needed to show irreparable harm if the injunction was not granted; (b) the underlying law must be well settled; (c) there could be no material facts in dispute and the landlord needed to demonstrate a reasonable likelihood of winning the case; and (d) after balancing the relative hardships, the landlord must be burdened more than the subtenant.

The Court agreed that the landlord demonstrated irreparable harm because its reputation and integrity in the industry would be damaged if it could not deliver possession to the new tenant on time. It also held that the subtenant’s claim that the tenant, its sub-landlord, breached the terms of the sublease by agreeing to terminate the lease early was irrelevant. The primary lease and consent to sublease stated that the landlord’s rights were unaffected by the sublease. The sublease stated that the sublease would be terminated if the primary lease was terminated for any reason whatsoever. The Court noted that the subtenant might have had a claim against the tenant, its sub-landlord, because the tenant agreed to terminate the lease early, but it still had to vacate the premises once the lease was terminated. After balancing the equities, the Court rejected the subtenant’s claim of undue hardship if it was forced to move during its busiest season, noting that the subtenant received sixty days’ notice of its requirement to vacate, and that any hardship was caused by the subtenant who failed to vacate timely.

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