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Pellino v. Cano

A-624-02T1 (N.J. Super. App. Div. 2003) (Unpublished)

LEASES; NOVATION—Executing a replacement lease to add more space at an increased rent does not constitute a novation of obligations under the earlier lease unless there is a clear indication that the parties intended that to be the case.

A landlord and tenant entered into a commercial lease. The lease required the landlord to maintain the sidewalks in a safe condition. The landlord failed to do so, and the tenant repaired the sidewalk. The landlord and tenant entered into a second lease that added additional space to the leased premises and increased the rental charge. When the tenant vacated the premises after the expiration of the lease, he sued the landlord for reimbursement of his expenses incurred in repairing the sidewalk. The lower court found in the tenant’s favor. On appeal, the landlord claimed that the second lease was a novation of the first lease. It agreed that since the second lease was a substitute for the first lease, the landlord’s obligation to repair the sidewalk was extinguished and the tenant could not seek reimbursements for the repair expense. The Appellate Division rejected the landlord’s claim. First, it noted that the landlord improperly presented the novation argument on appeal after failing to present it at trial. The Court then analyzed the novation argument and noted that a novation is never presumed, but must be shown to have been the clear and definite intent of the parties. The landlord never presented evidence to show that the landlord and tenant intended the second lease to be a replacement for the first. It only relied on the fact that there was a subsequent lease. The Court deemed the mere execution of a second lease to be insufficient to find a novation of the first lease. The Court also agreed that the landlord had an obligation to reimburse the tenant for the sidewalk repairs. While there was no express agreement to repair the sidewalk, the landlord was obligated to maintain it in a safe manner. When the landlord failed to do so, the tenant was permitted to do so to avoid potential injuries and damage claims and was entitled to be reimbursed.

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