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Metromedia Co. v. Hartz Mountain Associates

April 11, 1995

METROMEDIA COMPANY, A GENERAL PARTNERSHIP, PLAINTIFF-RESPONDENT,
v.
HARTZ MOUNTAIN ASSOCIATES, A NEW JERSEY GENERAL PARTNERSHIP, DEFENDANT-APPELLANT.



On certification to the Superior Court, Appellate Division.

The opinion of the Court was delivered by O'hern, J. Chief Justice Wilentz and Justices Handler, Pollock, Garibaldi, Stein, and Coleman join in this opinion.

The opinion of the court was delivered by: O'hern

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).

METROMEDIA COMPANY V. HARTZ MOUNTAIN ASSOCIATES (A-100-94)

Argued February 27, 1995 -- Decided April 11, 1995

O'HERN, J., writing for a unanimous Court.

Metromedia Company (Metromedia) is a national conglomerate with numerous business interests, including: computer software development; motion picture production and distribution; restaurant franchises; and the manufacturing of motor vehicle engines and parts. In 1978, Metromedia leased space at the Harmon Tower office complex in Secaucus, New Jersey, which is owned by Hartz Mountain Industries (Hartz), a New Jersey partnership engaged in the development of commercial real estate. Metromedia's initial rent under the lease with Hartz was $455,366.00 per year.

Metromedia was unhappy with the cleaning services provided by Hartz through the lease. Therefore, Metromedia negotiated an agreement with Hartz under which Metromedia could hire its own cleaning service that would be paid directly by Hartz upon the presentation by Metromedia of the bills for those services. Metromedia's rent was to remain the same but, in effect, Hartz would be reimbursing Metromedia for the cleaning costs. The agreement became effective on January 1, 1985.

Unfortunately, the parties failed to adequately discuss the process for issuing the monthly cleaning service payments. For six and one-half years, Metromedia paid the bills for its cleaning service but did not submit those bills to Hartz for reimbursement. In May 1991, a Metromedia employee discovered that Hartz had not reimbursed Metromedia for the cleaning services and contacted Hartz' property manager for Harmon Tower regarding payment under the cleaning-service agreement.

Initially, the manager denied the existence of an agreement. Eventually, the parties did attempt to amicably resolve the dispute but were unable to do so. As a result, Metromedia filed suit in February 1992, seeking reimbursement for cleaning service costs pursuant to the agreement. In its answer, Hartz asserted that any claim for reimbursement for cleaning services arose in 1985 and was, therefore, barred by the six-year statute of limitations. The lower courts disagreed, finding that the cause of action did not arise until Hartz refused to pay in May 1991.

The trial court did find that an agreement to reimburse for cleaning-service costs existed. The court's calculations began with January 1, 1985 and, with certain adjustments, it allowed recovery for each month thereafter, for a total due to Metromedia of $190,481.09. On appeal, the Appellate Division affirmed the decision of the trial court with a minor adjustment for a duplicate billing of $2632.

The Supreme Court granted certification.

HELD: Under the installment contract theory of accrual of a cause of action, Metromedia's claims for a monthly credit for cleaning services accrued on a monthly basis beginning on January 1, 1985; however, any recovery for cleaning services for the period from January 1, 1985 to February 1, 1986 is barred by the six-year statute of limitations.

1. There was an agreement to credit Metromedia for cleaning services and Hartz failed to reimburse Metromedia from January 1985 until May 1992. However, the Court disagrees in part with the lower courts' ...


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