Rimm, J.t.c. (temporarily assigned).
This matter involves the right of a voluntary fire company to conduct a business on municipal property leased to it. There are no reported cases in New Jersey dealing with the extent to which this can be done.
Plaintiffs allege that they operated a recording studio on the boardwalk in Wildwood in the spring and summer of 1986. They further allege that the City of Wildwood, by an ordinance enacted on or about August 15, 1984, leased to the Wildwood Volunteer Fire Company No. 1 an 18-feet by 24-feet area adjoining the boardwalk at Oak Avenue. According to plaintiffs, the fire company "assigned and subleased [its] right, title and interest over" the property to defendants, James Peterson and Judith Peterson, who then operated a recording studio at the property. Plaintiffs finally allege that the operation of the recording studio by defendants, Peterson, caused plaintiffs to be unable to operate their business profitably. They claim damages, a declaration that the ordinance is void, and relief under 42 U.S.C.A. §§ 1983, 1985 (1976).
On May 14, 1986, plaintiffs, as tenants, entered into a lease for the "Southwesterly corner of 3410 Boardwalk, Wildwood, New Jersey, known and identified as 3410 Boardwalk, Unit D, as shown on Exhibit A attached" to the lease. Exhibit A is a diagram showing the block known as 3410 Boardwalk. Unit D is an area approximately 20 feet by 16 feet located at the rear of the property approximately 150 feet from the boardwalk. The lease commenced on May 9, 1986 and terminated on September 9, 1986 and had a two-year renewal option. Plaintiffs also entered into a license agreement on May 7, 1986 with Recording Studios of America, Inc., by which plaintiffs were granted, for a five-year term, the exclusive "right, license and privilege to rerecord at least one hundred forty (140) musical compositions with studio 'singalong' vocals." Additional recordings were also to be provided to plaintiffs under the license agreement. After entering into the lease and the license agreement, plaintiffs constructed a recording studio in Unit D and installed equipment in the studio in accordance with their license agreement.
Plaintiffs opened their studio to the public after the Memorial Day weekend using the trade-name Starfinders Recording Studio and continued its operation until the second week of July 1986. The studio was closed from June 24, 1986 to June 30, 1986 because of water damage.
The business operated by plaintiffs involved recording songs customers sang to the accompaniment of music which plaintiffs had a right to rerecord in accordance with their license agreement. The recordings were made on cassettes. Plaintiffs promoted their business by distributing "flyers" listing the songs available as background music in their recording studio and by "barking." This consisted of one plaintiff standing at their landlord's property's entrance on the boardwalk and talking to people in an effort to get them off the boardwalk and into plaintiffs' studio. Plaintiffs were not permitted to leave the property when they were "barking."
On or about July 3, 1986, the fire company opened a recording studio, similar to plaintiffs', at Oak Avenue and the boardwalk. The studio, located in a trailer, fronted directly on the boardwalk. The location was between plaintiffs' location and the busier, or more traveled, portion of the Wildwood boardwalk, to the north of Oak Avenue. The trailer was marked "Superstar Recording Studio" and had the fire company's logo on it.
Plaintiffs claim that the competition of the recording studio operated at Oak Avenue and the boardwalk, particularly given its location between plaintiffs' location and the busier portion of the boardwalk, effectively shut down their business.
Ordinance 54-84, with final passage on August 15, 1984, authorized the City of Wildwood to lease to the fire company certain premises 18 feet by 24 feet on the westerly side of the boardwalk at the intersection of Oak Avenue and the boardwalk. Among other things, the ordinance provided for a nominal consideration and stated that a public purpose is served by the fire company's aid and assistance to the residents, citizens and taxpayers of Wildwood by the fire protection service offered without charge. The ordinance also provided that the lease shall not be assignable by the fire company, although the ordinance apparently contemplated that others might assist the fire company in activities on the demised premises. Section 10 of the ordinance provides that the lease shall be voidable at the option of Wildwood, if among other things, "any person, persons or corporation engaging in the conduct of an amusement game on the Leasehold premises," emphasis supplied, violated certain statutory provisions or certain rules and regulations of agencies of the State of New Jersey.
In accordance with the ordinance, the fire company went on the premises in the summer of 1985 and engaged in various activities. In the summer of 1986 it conducted the recording studio which is the subject of this litigation. In conducting the studio, ...