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Moorestown Management Inc. v. Moorestown Bookshop Inc.

Decided: January 22, 1969.

MOORESTOWN MANAGEMENT, INC., SUCCESSOR TO MOORESTOWN CENTER, INC. AND MOORESTOWN MALL MERCHANTS ASSOCIATION, INC., PLAINTIFFS
v.
MOORESTOWN BOOKSHOP, INC., T/A PAPER BACK DEN, ROCCO A. DI PALMO AND WILLIAM G. THOMPSON T/A BIG TOP OF MOORESTOWN MALL, INC. AND ROCCO A. DI PALMO, ASSIGNEE, WALTER J. HAGEN T/A STAMP KORNER, CHARLES SIBBITTS T/A MARI'S JEWELERS, GINZA, INC., EDISON NEW JERSEY STORES, INC. T/A BAKER'S SHOES, ALEXANDER R. CUNNINGHAM AND PATRICIA B. CUNNINGHAM, HIS WIFE, AND MERVIN HANDLER AND FLORA HANDLER, HIS WIFE, ASSIGNEES, T/A CLASSIC ONE HOUR CLEANERS, MURRAY ROTHENBERG AND MERCEDES MARINELLI T/A MERCEDES TIES AND ZOLTAN SCHWARTZ T/A ZOLTAN TIES, ASSIGNEE, DEFENDANTS



Wick, J.s.c.

Wick

In this suit the landlord and a third-party beneficiary under various leases seek a declaratory judgment for the purpose of determining the rights and obligations of the parties who have interests under the leases. N.J.S.A. 2 A:16-50 et seq. Plaintiffs also seek specific performance of certain provisions of the leases. The operative facts are set forth below.

Plaintiff Moorestown Management, Inc. ("Moorestown") is the owner and operator of a shopping center complex commonly known as Moorestown Mall located in Moorestown, New Jersey. Moorestown is the successor in title to Moorestown Center, Inc. which contracted to lease store area in the center with the following defendants involved in this suit: a lease dated June 24, 1963 with Edison New Jersey Stores,

Inc. ("Edison") for a term of 20 years; a lease with Murray Rothenberg and Mercedes Marinelli dated October 8, 1963 for a term of ten years (as of November 29, 1965 Zoltan Schwartz ("Schwartz") assumed the obligations as assignee).

Moorestown Mall Merchants Association, Inc. (hereinafter "Association") is a nonprofit association which was incorporated under the laws of New Jersey N.J.S.A. 15:1-1 et seq. on February 17, 1964. The primary purpose of the Association is to promote the Mall by means of advertising, special events, public and community relations and other such means, It is composed of the tenants in the shopping center who elect the board of trustees and determine the policies thereof. The tenants are obligated under the terms of their leases to join the Association and pay dues thereto.

On February 17, 1964 an organizational meeting of the Association was held for the purpose of discussing and adopting a set of by-laws. Representatives of all stores, including Edison and Schwartz, attended this meeting. After discussing the proposed by-laws, the members were offered an option whether to vote on the by-laws or to have a committee review them and present them at a subsequent meeting for approval. The members voted to form a committee of ten tenants, including Edison.

The committee reviewed the by-laws and at a meeting on March 11, 1964 all the committee members except Edison voted to accept them. However, it does not appear from the evidence that these by-laws were ever voted upon or adopted by the entire membership.

On June 3, 1964 Edison notified the Association by letter that it was resigning from the Association and would not consider itself liable for dues for the reason that, contrary to the lease agreement, the by-laws interfered with the internal policies of Edison. Edison also contended that the voting arrangement in the by-laws violated the "one-man, one-vote" provision of the lease and that the by-laws were not properly adopted.

Defendant Schwartz took the position that paragraph 13(h) of the lease is unconscionable in that it attempts to bind the lessee to unspecified obligations. Both Schwartz and Edison continue to be tenants of the shopping center.

The plaintiffs instituted this suit to compel these tenants to continue their membership in the Association and to require them to pay the Association the past dues owed.

In this case the written shopping center leases are the instruments which primarily govern the rights and obligations of the parties. In light of this fact, I should point out that such leases present the court with novel legal problems which are just beginning to be dealt with in judicial and academic circles. Dover Shopping Center, Inc. v. Cushman's Sons, Inc., 63 N.J. Super. 384 (App. Div. 1960); Barr & Sons, Inc. v. Cherry Hill Center, Inc., 90 N.J. Super. 358 (App. Div. 1966); Colbourne, "A Guide to Problems in Shopping Center Leases," 29 Brooklyn L. Rev. 56 (1962); Morris, "Shopping Centers," 1955 Ill. L. Forum 681; Pollack, "Shopping Center Leases," 9 U. of Kans. L. Rev. 379 (1961); Kranzdorf, "Problems of the Developer," 1965 Ill. L. Forum 173. A shopping center such as Moorestown is more akin to a joint venture of landlord and tenants than to the traditional independent relationships between a single landlord and tenant usually created in store leases. For example, in a shopping center such devices as the percentage leases and the merchants associations make the fortunes of the landlord and tenants unalterably intertwined. Thus, the greater the extent to which the center operates as a unified ...


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