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NLH-Short Hills, Ltd., Inc. v. Trump Taj Mahal Associates

A-0909-05T3 (N.J. Super. App. Div. 2006) (Unpublished)

LEASES; INTERPRETATION—It is reasonable for a court to interpret a lease requirement that a tenant “maintain” a kiosk, in a manner consistent with another designated “kiosk,” to refer only to the maintenance of a physical unit as contrasted to use of the term “operate,” which would refer to business hours, employee dress, and similar details.

A landlord and its tenant were involved in litigation which they settled, agreeing that the tenant would install and operate five kiosks in certain locations owned by the landlord. The tenant later filed a motion claiming that the landlord had violated the agreement by prohibiting him from installing three of those kiosks. The court entered an order allowing the tenant to proceed with the installation of one of the three kiosks. The tenant installed and began operating the kiosk.

The landlord then filed a motion seeking to enforce certain terms of the settlement agreement regarding the tenant’s maintenance and operation of the kiosk. The relevant portion of the agreement stated that the tenant was to maintain and operate the kiosk in a manner consistent with the tenant’s kiosk in one of the other of the landlord’s properties. The landlord claimed that the kiosk at the other property sold only high end merchandise, whereas the kiosk in question sold merchandise that cost far less. Additionally, it asserted that the kiosk’s signage was less desirable than the signage at the other kiosk. According to the landlord, these differences violated the settlement agreement. The lower court denied the motion, finding that requiring that the level of product and signage to be the same between the two kiosks was not a reasonable interpretation of the language of the agreement requiring the same manner of maintenance and operation of the kiosks. It stated that the reasonable interpretation of “maintain” seemed to be the maintenance of a physical unit, and “operate” seemed to refer to business hours, employee dress, and similar details.

The landlord appealed, but the Appellate Division affirmed the lower court’s decision. The Court explained that a settlement agreement is a contract, and should be honored and enforced like any other contract. In interpreting a contract, a court should decipher the parties’ intentions as revealed by the contract’s language. The Court found that the lower court’s interpretation of the language of the agreement was fair and reasonable based on the record. Therefore, it affirmed the denial for the reasons expressed by the lower court.


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