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Town of Kearny v. Municipal Sanitary Landfill Authority

Decided: July 30, 1976.


Young, J.c.c., Temporarily Assigned.


[143 NJSuper Page 451] The issues submitted on motions filed by both parties for an order granting summary judgment necessitate an analysis of the elements which distinguish a lease, a license and an easement. That analysis is prefatory to a determination of whether a covenant against subletting or assignment has been breached in

the circumstances of the case. This is the most recent of a multiplicity of litigation spawned by the garbage dumping operations managed by the defendant Municipal Sanitary Landfill Authority in the Hackensack Meadowlands.

The initial pleading was filed by the plaintiff, Town of Kearny in the Hudson County District Court as a tenancy action praying for a judgment of possession of land leased to defendant Municipal Sanitary Landfill Authority, (Municipal). The action was transferred to the Superior Court, Law Division, upon motion of Municipal pursuant to the provisions of N.J.S.A. 2A:18-60. Kearny predicts its entitlement to such a judgment of possession upon an alleged breach of covenants in a lease -- covenants which proscribed assignment or subletting. The parcels of land in question have been utilized for sanitary landfill operations.

Kearny asserts that the covenant against assignment and subletting was breached when Municipal and the City of Newark entered into an agreement dated November 5, 1969, supplemented by an agreement dated December 24, 1972. The legal tenor of the agreement, whether a lease, a license or some other species of interest, frames the threshold, and indeed the controlling, legal issue.

The agreement between Municipal and Newark, dated November 5, 1969, represented the culmination by settlement of an action filed by Newark in April 1969 against the separate corporations which today comprise Municipal, namely, Delaware Sanitation Co., Peter Roselle and Sons, Inc., William A. Keegan, Inc., and Reclamation and Improvement Co. The genesis and course of that earlier litigation is not of continuing interest except for the fact that Kearny was also a party defendant therein. The resolution of that prior dispute took the form of an agreement which granted permission to Newark to deposit its refuse on the land which is the subject of the present action. Kearny now contends that the agreement constituted a subletting which violates a provision of the lease between Kearny and Municipal forbidding Municipal to sublet the demised premises or to assign

the lease without prior consent. A breach of the restraint described would entitle Kearny to invoke a re-entry clause.

Municipal points to the acceptance of rental monies by Kearny under their lease notwithstanding knowledge by all of the parties of the terms of the resolution of the earlier litigation. Kearny denies that it was privy to the terms of settlement. Municipal also argues that the same conduct on the part of Kearny would support an estoppel. Lastly, although Municipal does not mention waiver, it may be noted in passing that Kearny's conduct would also make such a defense relevant.

One final fact requires mention before the legal relationships of all parties, Kearny, Municipal and Newark, are analyzed. Kearny first notified Municipal on November 20, 1975 of a breach of the clause which prohibited subletting. The notification pointed out that the lease provided for a ten-day period within which Municipal was to cure a breach. In reply, Municipal maintains that it took effective action within the parameters of the agreement.

A determination of the issue of the legal relationship negotiated between Municipal and Newark upon which Kearny bases its claim for right of re-entry on grounds of breach of its lease with Municipal is the central issue. The focus of the inquiry is clause 16 of the Kearny-Municipal lease which reads:

16. The tenant shall not subject [sic] the demised premises nor any portion thereof, nor shall the lease be assigned by the tenant without the prior written consent of the landlord.

The provisions of such a clause encounters the disfavor of our law for restraints against assignment of leases and subletting of premises. See Corp. Bd. Union Lodge, etc. v. J.R. Evans Co. , 102 N.J.L. 435, 437 (E. & A. 1926). A review of the case law in this jurisdiction discloses that the provisions of such clauses are strictly construed and accorded a narrow interpretation. See 24 Broad St. Corp. v. Quinn , 19 N.J. Super. 21 (Ch. Div. 1952); Stark v. Nat. Research

and Design Corp. , 33 N.J. Super. 315 (App. Div. 1954); Posner v. Air Brakes and Equipment Corp. , 2 N.J. Super. 187 (Ch. Div. 1948). See also, 3 Powell, Real ...

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