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Reste Realty Corp. v. Cooper

Decided: March 17, 1969.


For reversal -- Chief Justice Weintraub and Justices Jacobs, Francis, Proctor, Hall, Schettino and Haneman. For affirmance -- None. The opinion of the court was delivered by Francis, J.


[53 NJ Page 447] Plaintiff-lessor sued defendant-lessee to recover rent allegedly due under a written lease. The suit was based upon a charge that defendant had unlawfully abandoned

the premises two and a quarter years before the termination date of the lease. The trial court, sitting without a jury, sustained tenant's defense of constructive eviction and entered judgment for defendant. The Appellate Division reversed, holding (1) the proof did not support a finding of any wrongful act or omission on the part of the lessor sufficient to constitute a constructive eviction, and (2) if such act or omission could be found, defendant waived it by failing to remove from the premises within a reasonable time thereafter. We granted defendant's petition for certification. 51 N.J. 574 (1968).

On May 13, 1958 defendant Joy M. Cooper, leased from plaintiff's predecessor in title a portion of the ground or basement floor of a commercial (office) building at 207 Union Street, Hackensack, N.J. The term was five years, but after about a year of occupancy the parties made a new five-year lease dated April 1959 covering the entire floor except the furnace room. The leased premises were to be used as "commercial offices" and "not for any other purpose without the prior written consent of the Landlord." More particularly, the lessee utilized the offices for meetings and training of sales personnel in connection with the business of a jewelry firm of which Mrs. Cooper was branch manager at the time. No merchandise was sold there.

A driveway ran along the north side of the building from front to rear. Its inside edge was at the exterior foundation wall of the ground floor. The driveway was not part of Mrs. Cooper's leasehold. Apparently it was provided for use of all tenants. Whenever it rained during the first year of defendant's occupancy, water ran off the driveway and into the offices and meeting rooms either through or under the exterior or foundation wall. At this time Arthur A. Donigian, a member of the bar of this State, had his office in the building. In addition, he was an officer and resident manager of the then corporate-owner. Whenever water came into the leased floor, defendant would notify him and he would take steps immediately to remove it. Obviously Donigian

was fully aware of the recurrent flooding. He had some personal files in the furnace room which he undertook to protect by putting them on 2 X 4's in order to raise them above the floor surface. When negotiating with defendant for the substitute five-year lease for the larger space, Donigian promised to remedy the water problem by resurfacing the driveway. (It is important to note here that Donigian told Walter T. Wittman, an attorney, who had offices in the building and who later became executor of Donigian's estate, that the driveway needed "regrading and some kind of sealing of the area between the driveway which lay to the north of the premises and the wall." He also told Wittman that the grading was improper and was "letting the water into the basement rather than away from it.") The work was done as promised and although the record is not entirely clear, apparently the seepage was somewhat improved for a time. Subsequently it worsened, but Donigian responded immediately to each complaint and removed the water from the floor.

Donigian died on March 30, 1961, approximately two years after commencement of the second lease. Whenever it rained thereafter and water flooded into the leased floor, no one paid any attention to defendant's complaints, so she and her employees did their best to remove it. During this time sales personnel and trainees came to defendant's premises at frequent intervals for meetings and classes. Sometimes as many as 50 persons were in attendance in the morning and an equal number in the afternoon. The flooding greatly inconvenienced the conduct of these meetings. At times after heavy rainstorms there was as much as two inches of water in various places and "every cabinet, desk and chair had to be raised above the floor." On one occasion jewelry kits that had been sitting on the floor, as well as the contents of file cabinets, became "soaked." Mrs. Cooper testified that once when she was conducting a sales training class and it began to rain, water came into the room making it necessary to move all the chairs and "gear" into another

room on the south side of the building. On some occasions the meetings had to be taken to other quarters for which rent had to be paid; on others the meetings were adjourned to a later date. Complaints to the lessor were ignored. What was described as the "crowning blow" occurred on December 20, 1961. A meeting of sales representatives from four states had been arranged. A rainstorm intervened and the resulting flooding placed five inches of water in the rooms. According to Mrs. Cooper it was impossible to hold the meeting in any place on the ground floor; they took it to a nearby inn. That evening she saw an attorney who advised her to send a notice of vacation. On December 21 she asked that the place be cleaned up. This was not done, and after notifying the lessor of her intention she left the premises on December 30, 1961.

Plaintiff acquired the building and an assignment of defendant's lease January 19, 1962. On November 9, 1964 it instituted this action to recover rent for the unexpired term of defendant's lease, i.e., until March 31, 1964.

At trial of the case defendant's proofs showed the facts outlined above. Plaintiff offered very little in the way of contradiction. It seemed to acknowledge that a water problem existed but as defense counsel told the court in his opening statement, he was "prepared to show that the water receded any number of times, and therefore the damage, if it was caused by an act that can be traced to the landlord, [the condition] was not a permanent interference" with the use and enjoyment of the premises. Plaintiff contended further that the water condition would not justify defendant's abandonment of the premises because in the lease she had stipulated that prior to execution thereof she had "examined the demised premises, and accept[ed] them in their [then] condition * * *, and without any representations on the part of the landlord or its agents as to the present or future condition of the said premises"; moreover she had agreed "to keep the demised premises in good condition" and to "redecorate, paint and renovate the said premises as

may be necessary to keep them in good repair and good appearance."

The trial judge found that the "testimony is just undisputed and overwhelming that after every rainstorm water flowed into the leased premises of the defendant" and nothing was done to remedy the condition despite repeated complaints to the lessor. He declared also that the condition was intolerable and so substantially deprived the lessee of the use of the premises as to constitute a constructive eviction and therefore legal justification for vacating them.

On this appeal the plaintiff-landlord claims that under the long-settled law, delivery of the leased premises to defendant-tenant was not accompanied by any implied warranty or covenant of fitness for use for commercial offices or for any other purpose. He asserts also that by express provision of both the first and second leases (which are identical printed forms, except that the second instrument covers the additional portion of basement floor), the tenant acknowledged having examined the "demised premises," having agreed to accept them in their "present condition," and ...

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