On appeal from Superior Court of New Jersey, Law Division, Monmouth County, Docket Number L-5966-99.
Before Judges Havey, A.A. Rodríguez and Wells.
The opinion of the court was delivered by: Havey, P.J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
This is a contract dispute relating to the sale of a plenary retail consumption liquor license by plaintiff, The Bar on the Pier, Inc., to defendants (collectively referred to as David Bassinder or Bassinder). Bassinder agreed to purchase the license for $242,500, payable $17,500 upon execution of the agreement, $17,500 180 days thereafter, and the balance of $207,500 upon "occurrence" of one of six enumerated events described in paragraph 2d of the agreement. One such "occurrence" is Bassinder's "sale" of premises he leased on the Long Branch Pier from Ric-Cic Co. Plaintiff appeals from a judgment of dismissal entered at the close of plaintiff's case. R. 4:37-2(b).
The central issue on appeal is whether the condemnation of the subject property by the City of Long Branch constituted a "sale" of the premises by Bassinder. If so, the "sale" triggered Bassinder's obligation to pay the balance due under paragraph 2d. We conclude that the condemnation did not constitute a "sale" of the premises by Bassinder as that term was contemplated by the parties. We therefore affirm.
The salient facts are undisputed. Prior to 1987, plaintiff operated a nightclub on the Long Branch Pier. A 1987 fire on the pier totally destroyed plaintiff's business. During the same time Bassinder's was operating Scotty's Long Branch Arcade, an amusement facility also situate on the pier. Bassinder's arcade occupied its premises pursuant to two ninety-nine year leases with Ric-Cic Co. *fn1 His arcade was also totally destroyed by the fire. See Ric-Cic Co. v. Bassinder, 252 N.J. Super. 334, 336-37 (App. Div. 1991).
Because plaintiff's nightclub was destroyed, it was desirous of selling its liquor license. By written agreement dated October 30, 1987, prepared by plaintiff's attorney, it agreed to sell the license to Bassinder *fn2 for $242,000, payable by two $17,500 payments, and, pursuant to paragraph 2d of the agreement, the balance of the $207,500 as follows: upon the occurrence of the earlier of the following: i. The Liquor License or any other liquor license is actively used on the Premises; or ii. The Liquor License is transferred by the [Purchaser] in a place to place transfer, to any other property that is located within three hundred (300) feet of the Premises; or iii. The Premises is sold by the Purchaser to a third party; or iv. The Purchaser assigns, to a thirty party, the Leases, or v. The Purchaser voluntarily terminates one or both of the Leases; or vi. The Liquor License is sold to a third party in a person to person transfer . . . . Paragraph 9 of the agreement, entitled "Reversion of Seller," provides that the liquor license reverts to plaintiff: upon the occurrence of any one of the following: (a) One or both of [Bassinder's] Leases are invalidated or voided by the order of a court of competent jurisdiction; or (b) One or both of the Leases are terminated by the landlord; or (c) One or both of the Leases are foreclosed in a mortgage foreclosure action or in any other action brought by a secured creditor; or (d) The Purchaser for any reason whatsoever [loses] the interest bestowed upon it by one or both of the Leases; or (e) Premises, because of restrictions in one or both of the Leases or because of governmental regulation, cannot be used as Premises that are licensed for the retail sale of alcoholic beverages.
Paragraph 9 also provides: "However, in lieu of the rights bestowed upon it by this paragraph 9 [plaintiff] may waive this right of reversion in favor of the rights bestowed upon it by subparagraph 2.d." The agreement does not have a time limit for the triggering of any of the events set forth in either paragraphs 2d or 9.
Bassinder also executed a non-interest-bearing promissory note in favor of plaintiff for the amount of $207,500, due and payable upon the occurrence of the earlier of the six events listed in paragraph 2d of the parties' agreement. The note was personally guaranteed by Bassinder.
On May 10, 1988, the City of Long Branch adopted a resolution approving the transfer of the liquor license from plaintiff to Bassinder. On June 24, 1997, the City filed a declaration of taking which rendered the City owner of the premises leased by Bassinder from Ric-Ric Co. The City subsequently instituted a condemnation action against Ric-Cic in which all the tenants on the pier, including Bassinder, were named as defendants. In the condemnation action, the court determined that, by virtue of the "eminent domain clause" in Bassinder's leases with Ric-Cic Co., the condemnation action by the City terminated his leasehold interest in the premises, and therefore he had no standing to share in any of the condemnation proceeds.
This ruling notwithstanding, plaintiff filed an action against Bassinder seeking a declaration that he was required to pay plaintiff the balance of the $207,500 due under the agreement and accompanying promissory note. During the non-jury trial, Francis Marincola, plaintiff's principal, advanced the proposition that under paragraph 9, plaintiff had the right to demand payment "in lieu of" a reversion of the license to it. On this point, Marincola recognized that paragraph 9 did not explicitly give plaintiff that right. He claimed, however, that the "in lieu of" clause was intended to read "in favor of [plaintiff] getting paid the monies," instead of "in favor of the rights bestowed . . . by paragraph 2.d." He admitted that he should have drafted the agreement to be "very clear with that . . . . That is probably why we are here.". Alternatively, Marincola claimed that the City's condemnation of the subject property constituted a "sale" under paragraph 2d, thereby triggering Bassinder's obligation to pay the balance due under the agreement.
According to Marincola, prior to the parties' agreement plaintiff had a "monopoly" because no other licensed premises could be operated on the pier. However, since the agreement, the City has passed an ordinance permitting beachfront property owners to hold liquor licenses. It was Marincola's view that the new ordinance had the effect of devaluing plaintiff's license.
The trial court granted Bassinder's motion for judgment at the close of plaintiff's evidence. It ruled that condemnation of the subject property had triggered paragraph 9 of the parties' agreement, because, by court order, Bassinder's rights under his leases had been terminated. However, the court determined that paragraph 9 entitled plaintiff only to a reversion of the license, and not the payment of the balance due under the agreement. The court reasoned that any other interpretation would be plainly contrary to the plain language of the provision. The court further found that none of the conditions in paragraph 2d had occurred so as to trigger the obligation of Bassinder to pay the balance of the purchase price. In an earlier ruling the court had determined that condemnation of the property did ...