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Pathmark Stores, Inc. v. Bernard Oster, Inc.

A-4385-07T3 (N.J. Super. App. Div. 2009) (Unpublished)

EASEMENTS — Where a tenant also has an easement across parts of the improved land, its landlord may not construct improvements upon the encumbered land in contradiction to the terms of the easement unless the easement holder grants its consent.

A supermarket entered into a shopping center lease. The lease gave the tenant “an easement to use, in common with other tenants …, the portions of the [shopping center] intended to be for common use, including but not limited to parking areas.” The lease also provided that the other stores and improvements were to be completed according to an attached site plan and prohibited the landlord from constructing any improvements that did not conform to the site plan. In addition, another lease clause recited the landlord’s agreement that parking would be available during all times the supermarket was open for business and that the layout of, and striping in, the common areas shown on the site plan would not be changed without the tenant’s consent. Finally, the lease required the landlord to promptly forward to the tenant all notices or communications from any governmental authority in connection with any hearing or other administrative procedure relating to the shopping center property. Twenty years later, the landlord found itself unable to retain and attract tenants in 10,000 square feet of satellite store space due to the shopping center’s antiquated design and the storefront’s lack of visibility of the storefronts. Without notifying the supermarket, it met with municipal officials to explore a plan to modify the shopping center. It then applied for planning board approval to modify the shopping center. The plan provided for the elimination of four satellite stores attached to the supermarket. The planning board approved the new site plan. The landlord never provided the supermarket with a copy of the new site plan and only told the supermarket tenant that it was considering possible renovations to the shopping center. It then commenced construction and the supermarket contacted the planning board. When it learned of the specifics of its landlord’s plans, the supermarket demanded that the landlord halt construction. It also sued for injunctive relief and claimed breach of contract, trespass, and private nuisance. The landlord responded with an allegation that the supermarket’s employees were parking in the customer parking area in violation of the lease, that it had already spent over one million dollars on the project, and that it would lose $10,000 each day the project was delayed.

The Chancery Division permanently enjoined the shopping center owner from proceeding with construction plans and the owner appealed.

The Appellate Division affirmed. In doing so, it rejected the landlord’s contention that even if the lower court were correct in determining that the supermarket’s rights had been impinged upon, the lower court should have considered the totality of the circumstances in light of the limited purpose of the easement and the landlord’s intent to improve the shopping center. The Court agreed that granting injunctive relief is a discretionary matter, and this meant it could look to see if enforcement would be inequitable under the circumstances. On the other hand, it recognized that relocation of an easement without the consent of the parties is also an extraordinary remedy and should only be granted where there is a strong showing of necessity. Here, it was not convinced that the shopping center owner was suffering such extraordinary hardship as to justify a court’s interference with the supermarket’s easement rights absent the supermarket’s consent. Further, the Court was not satisfied that the construction work that had been done prior to the filing of the suit gave the supermarket notice of the planned extensive renovation. Thus, it found no merit to the shopping center owner’s defenses of equitable doctrines of estoppel, waiver or laches. The Court also held that the shopping center owner offered no proof that the supermarket’s enforcement of its rights under the lease was being done in bad faith or that the supermarket had engaged in conduct calculated to induce the shopping center’s reliance. In comparing hardships, the Court ruled that the shopping center owner’s injures were not irreparable and could be compensated by a monetary award. It also held that the shopping center owner was not precluded from making improvements that conformed to the original site plan approved by the supermarket, nor was it prohibited from coming to an agreement on a plan acceptable to the supermarket. Finally, it held that enforcement of the lease was a competing, and more persuasive, public interest than the possible economic benefits that might be conferred upon the community if the project were allowed to proceed.


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