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American Plaza, LLC v. Marbo Cross Shop, LLC

2010 WL 455349 (U.S. Dist. Ct. D. N.J. 2010) (Unpublished)

EASEMENTS — A benefitted party under an easement cannot unilaterally expand the easement to benefit another parcel.

In 1996, the owner of a shopping center, located on a “Parcel I,” signed a contract with the owner of an adjoining parcel (Parcel II). It stated, in part that: (a) Parcels I and II must be developed in accordance with municipal site plan approval; and (b) Parcel II was benefitted by certain easements burdening Parcel I. A developer contracted to purchase Parcels II and a new parcel, “Parcel III.” The developer wanted the owner of Parcel I to modify the 1996 contract to extend the easement rights to Parcel III. The owner of Parcel I expected to be compensated before it would grant its consent. Meanwhile, a prospective tenant of the developer obtained approval to revise the 1996 site plan and to redevelop Parcels II and III. The owner of parcel I did not object to this application. The developer sued the owner of Parcel I to restrain it from interfering with the redevelopment. It argued that when the municipality approved the new site plan it vitiated the prior site plan referenced in the 1996 contract and thereby altered the contract.

The United States District Court held that the 1996 contract was binding on the parties and unambiguously created easements that burdened Parcel I and benefitted Parcel II. It determined that the redevelopment proposal would impermissibly expand these easements to benefit Parcel III. In addition, it held that a benefitted party cannot unilaterally expand an easement to benefit another parcel. Therefore, it rejected the developer’s position that the new site plan approval altered the 1996 contract and expanded the easement. The Court determined that, absent renegotiation with the owner of Parcel I, and payment of some form of consideration, the proposed redevelopment would violate the express terms of the 1996 contract and the property rights the contract bestowed upon the parties. The Court also rejected the developer’s contention that the owner of Parcel I should be estopped from refusing to consent to the redevelopment because it did not object to the redevelopment application. The Court said the owner had a perfectly logical reason for not opposing the redevelopment plan as it expected to be compensated for extending the easement rights to another parcel.

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