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Staples, The Office Superstore East, Inc. v. Hunterdon Shopping Center Partners

A-721-03T5 (N.J. Super. App. Div. 2004) (Unpublished)

LEASES; INTERPRETATION—The term “initial signs” in a lease means the “first” or “original,” and not “temporary signs.”

A commercial tenant entered into a lease agreement with a shopping center after the local planning board approved a variance and site plan waiver application jointly submitted by both parties. The tenant proposed to construct a twenty-seven foot pylon that would hold a dual-faced illuminated sign containing its store name. The board approved the application even though the sign did not conform to the municipality’s requirements. Its approval was granted because the sign was to replace an existing, non-conforming, triangular-based sign that was 33 feet higher. The board considered this to be a significant improvement, even though the new sign was still non-conforming. The lease provided that the tenant had the right to install and maintain the “initial signs,” including the pylon sign at its own cost. The tenant then had the right to change such initial signs as long as they were in the same location and were of no greater size.

Approximately six years after the new sign was installed, the landlord entered into a lease agreement with a different tenant. The lease provided that the landlord would tear down the existing pylon sign and replace it with a new sign that added the name of the new tenant. The landlord and new tenant submitted a joint application to the planning board. The old tenant was not notified of the application. The board approved the application but included, as a condition of its approval, that no sign would be placed at the main entrance to the shopping center. When the old tenant learned of this, it immediately protested, contending that the landlord had no right to remove the existing pylon sign. It argued that any attempt to do so would be a breach of its rights under its lease. When negotiations failed, the old tenant sued. The landlord argued that there was a genuine issue of material fact, specifically about the meaning of the phrase “initial signs” within the lease. The landlord claimed that “initial” meant “temporary” while the tenant argued that “initial” meant “the first” or “original.”

The lower court granted the tenant’s motion for summary judgment. The court referred to various dictionaries to support its conclusion that the ordinary meaning of the term “initial” is first or primary, without any connotation of “temporary.” On appeal, the Appellate Division, considering the lease as a whole, determined that the lease vested exclusive control of the pylon sign in the tenant and conferred no right upon the landlord to remove or modify it. In its view, the two parties used the term “temporary” when discussing other signs at the shopping center, such as those announcing the upcoming opening of the tenant’s store. The lease used the term “initial” when discussing the pylon sign. Furthermore, when the second tenant inquired about the possibility of erecting a pylon sign, the landlord referred it to the original tenant, suggesting that the two might be able to share the sign. This suggestion was inconsistent with the notion that the pylon sign was only temporary. Therefore, the Appellate Division agreed the lower court that there was no genuine issue of material fact regarding the meaning of “initial,” and that the landlord had no right to remove the tenant’s sign.

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