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Han Yang Plaza, LLC v. Optical Center

A-2326-04T1 (N.J. Super. App. Div. 2006) (Unpublished)

LEASES; INTERPRETATION—If the intention of the parties is clear from the language of the lease itself, the plain terms of the lease will be enforced.

An optician was a tenant under a shopping center lease which limited use of the leased premises as being for “opticians.” The owner was an optometrist. She characterized her business as “a[n] eyecare and skin care business,” and [s]he differentiated the work of an optometrist and that of an optician explaining: a doctor of optometry performs routine eye exams, diagnoses cataracts and glaucoma, treats eye diseases, sells glasses, contact lenses and hearing aides and makes referrals for Lasik surgery; an optician is only permitted to sell glasses.” She stated that her lease used the word “OPTICIAN” as a “loose reference to the services provided by her business because in Korean, a language both she and [the landlord] spoke, the word covered services of either opticians or optometrists.”

In March of 2001, the doctor began selling a particular brand of cosmetics from her store. She asserted that the landlord knew of the sales because his wife was one of her customers, but he took no action to stop the sales. In late 2001, the shopping center’s property manager stated that another tenant’s lease authorized the sale of that particular brand of cosmetics. Thus, according to the property manager, the doctor’s “utilization of her location as something other than the lease’s permitted use violate[d] the terms of the lease and adversely impact[ed] the other tenant’s exclusive authorized use.” The landlord called the tenant and sent a written notice to cease in early 2002. The tenant acknowledged receiving the notice but maintained that her landlord “made no further issue of the sale of cosmetics until its attorney sent her correspondence in June 2004.”

In the law suit that followed, the tenant’s “primary contention [was that] the use and occupancy clause of the lease [was] ambiguous, and should be construed broadly to permit a wide range of eye care services including cosmetic sales. She assert[ed] the lease term ‘optician’ was not meant to be limiting, because the parties found no word in the Korean language to describe the work she perform[ed]. Additionally, [she asserted that the landlord’s] past inaction despite his knowledge, act[ed] as an oral modification of the lease terms, permitting the use.” The lower court following “well-settled rules governing the construction of lease agreements,” entered an order requiring the tenant to “completely cease and desist from selling cosmetics” by a given date. The Appellate Division felt bound to affirm a lower court’s findings if the lower court’s findings were “supported by sufficient credible evidence in the record.” It saw its function as enforcing the lease as written. “The parties’ intention, as disclosed by the language used in the document, taken in its entirety, controls the meaning of their contract. ... If that intention is clear from the contract itself, [a court] may not alter the terms, or write a different or better contract for the parties.” Here, the Court held that the “plain terms of this lease agreement support[ed] [the lower court’s] construction of the document.” It found no ambiguity that would permit the sale of cosmetics. It also refused to conclude that the landlord had acquiesced to the tenant’s sale of cosmetics or “waive the right to prospectively enforce the lease by accepting rent.” In reaching its conclusion, it looked to a provision of the lease that “provided that the waiver of a violation shall not be construed as a waiver of a subsequent violation.”

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