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Lincoln Highway Realty Inc. v. State

Decided: April 17, 1974.

LINCOLN HIGHWAY REALTY, INC., A NEW JERSEY CORPORATION, PLAINTIFF,
v.
STATE OF NEW JERSEY, DEFENDANT



Antell, J.s.c.

Antell

[128 NJSuper Page 37] On this motion plaintiff asks summary judgment for specific performance of an option to purchase, allegedly exercised by the defendant. Defendant responds that because the option was not exercised in the manner prescribed by statute the facts presented do not give rise to an

enforceable agreement. There is no genuine issue as to the following material facts.

In June 1967 plaintiff entered into a 25-year lease agreement with the New Jersey Commission for the Blind, a state agency. Paragraph 36 contains the following provision:

Landlord grants unto the Tenant the option to purchase the leased premises for the sum of TWO HUNDRED FIFTY THOUSAND DOLLARS ($250,000.00), such option to be exercisable only during the sixth year of the term of the Lease Agreement, and if not then exercised then this Option shall be null and void * * *.

On May 11, 1973 the Director of the Division of Purchase and Property wrote the following letter to the plaintiff:

Gentlemen:

In accordance with paragraph Thirty-six as contained in the lease agreement dated June, 1967 this letter will serve as formal notice that the State of New Jersey intends to exercise the purchase option in accordance with the said paragraph for the sum of $250,000.00.

On May 17 plaintiff acknowledged the foregoing and supplied information requested by the Director's letter. Nothing further transpired until June 27, 1973 when plaintiff inquired by letter of the Director as to the proposed schedule for the performance of their respective obligations. The Director replied on June 28, 1973:

Since May, 1973, when I wrote you concerning the above captioned premises, I have had several appraisals completed concerning the property. On the basis of these appraisals and all other pertinent facts considered, I must withdraw my original offering of $250,000.00 and resubmit a new offering of $180,000.00 for the concerned property.

Ordinarily, these circumstances would leave little doubt as to the lessor's right to relief. But this defendant is a governmental body, the powers of which are created and limited by law, and the provisions of N.J.S.A. 52:34-6 et seq. are applicable. Section 6 provides:

All purchases, contracts or agreements, the cost or contract price whereof is to be paid with or out of State funds shall, except as otherwise provided in this act, be made or awarded only after public advertisement for ...


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