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DeBrown v. Ballem

A-6639-96T5 (N.J. Super. App. Div. 1998) (Unpublished)

LEASES; INTERPRETATION; IN OR ABOUT—The phrase “in or about the demised premises” is ambiguous and extrinsic evidence is admissible in interpreting the intention of the parties in using that phrase.

A pedestrian fell on icy debris in a parking lot of a commercial building while on her way to a pharmacy which was a tenant in the building. The building owner contended that pursuant to its lease, the pharmacy owner was obligated to obtain insurance that would have covered the accident in the parking lot. The lease described the premises as the first floor of the building consisting of approximately 3,000 square feet. No part of the parking lot was included in the defined demised premises. Maintenance of the entire lot was the sole responsibility of the landlord. A lease amendment, however, obligated the landlord to provide twenty parking spaces, six of which were for tenant’s use. A sidewalk from the parking lot led to the back door of the building. That door lead to a common area which serviced the back entrance of the pharmacy, stairways to the building’s second floor, and to an elevator.

The critical language in the lease was that the tenant was required to carry insurance covering “claims for bodily injury, death or property damage occurring in or about the Demised Premises… .” The initial draft of that language called for coverage for claims occurring “in or about the Demised Premises including any sidewalks adjoining the Demised Premises.” That language was removed during lease negotiations. In the Court’s view, if there was to be no responsibility to obtain liability insurance for the sidewalk, there would be no responsibility as to the parking lot. At the crux of the appeal was whether or not extrinsic evidence relating to the history of the lease negotiations should be used as an aid to discern the scope of the term “in or about.” The landlord contended that the term was unambiguous and plainly encompassed the parking lot area. The interpretation of a written contract, and the determination of whether any ambiguities exist, are matters of law for a court to determine. In doing so, a court must discern the intent of the parties as shown in the language used. Consequently, once a court determines that particular contract language is ambiguous, extrinsic evidence is admissible as an aid to understand the significance of the contract language. The Court had no difficulty in deciding that the parking lot area was not “in” the demised premises. Consequently, it focused on the word “about.” After an extended review of dictionary and case law definitions of “about,” the Court determined that the definition was “six-of-one, half-a-dozen of the other.” Consequently, the term was found to be ambiguous. Then the Court followed a review of similar cases and determined that there was significant precedent for the use of extrinsic evidence in determining the intention of the parties. Finally, after reviewing the record, the Court thought it plain that the tenant negotiated and obtained a lease that was designed to reduce its responsibilities to the demised space and the immediate common areas, limited though they may be. Nothing was found to be improper about this risk allocation and, the Appellate Division agreed with the lower court that for this lease “in or about” did not extend to the parking lot.


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