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Deco Davis, Inc. v. Global International Trading Co.

June 4, 2007


On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. ESX-L-8130-02.

Per curiam.


Argued May 9, 2007

Before Judges Parker, C.S. Fisher and Yannotti.

In this appeal, we consider whether the trial judge mistakenly granted summary judgment dismissing plaintiff's complaint for damages against its former landlord. The landlord had terminated the lease by declaring its intention to demolish the two buildings that contained the leased premises, yet evidence indicated that one building was never demolished but was instead leased to another party, and the other building was not demolished as represented but later destroyed by fire. Because, among other things, the trial judge mistakenly held that the former tenant was required to prove the landlord's fraudulent intent in terminating the lease, we reverse the entry of summary judgment in favor of the landlord.

Beginning in 1986, plaintiff Deco Davis, Inc. occupied, as a commercial tenant, 30,000 square feet of 408 Freylinghuysen Avenue and 20,000 square feet of 410 Freylinghuysen Avenue in Newark. Upon its original entry into the premises, Deco Davis and the property's then owner agreed to a ten-year lease. In 1996, they agreed to another ten-year lease, which included a provision that gave the landlord the right to cancel the lease upon its "elect[ion] to demolish the building of which the demised premises form a part."

Deco Davis received a letter dated March 16, 2000 advising that the owner had elected to terminate the tenancy as of June 20, 2000 because it had decided to demolish 408 to 440 Freylinghuysen Avenue. On April 14, 2000, defendant Global International Trading Co. purchased the property from the prior owner.

On July 24, 2000, Global commenced a summary dispossess action against Deco Davis in the Special Civil Part. The parties eventually entered into a stipulation of settlement, which contained Deco Davis's agreement to vacate the premises by November 30, 2000, upon the understanding that Global "is demolishing the demised premise[s]."

Deco Davis did not vacate as agreed, and, as a result, was locked out by Global. On January 24, 2001, at the request of Deco Davis, the Special Civil Part judge ordered Global to show cause why Deco Davis should not be allowed to enter the premises to remove equipment and other property. The judge granted access, but ordered Deco Davis to completely remove itself from the premises by February 21, 2001.*fn1 Global's attorney forwarded by telecopier on February 14, 2001 what he referred to as an "Important Reminder," advising Deco Davis that "you must be out of building as per your agreement made in court by the end of 2/21/01 -- Demolition starts 2/22/01."

Demolition did not commence on February 22, 2001. And, although Global contends that part of 410 Freylinghuysen Avenue was demolished at some later point, Deco Davis provided a certification and photographs in opposition to summary judgment demonstrating that the building remained standing at the time the motion for summary judgment was heard in the Fall of 2005. In fact, there is no dispute that some part of that building was leased to Verizon prior to February 2001. In addition, Deco Davis's opposition to summary judgment suggested that 408 Freylinghuysen was never demolished despite the urgency in Global's February 2001 representations that demolition was imminent. Instead, 408 Freylinghuysen burned down on June 20, 2001 -- four months after Global had advised Deco Davis that demolition was to begin.

As a result, Deco Davis commenced this action in the Law Division on August 21, 2002, seeking compensatory and punitive damages, and other relief, based upon its claims that (1) Global had conducted unlawful eviction proceedings; (2) Global interfered with its prospective business advantages; (3) Global breached the covenant of quiet enjoyment contained in the 1996 lease; (4) Global had wrongfully locked Deco Davis out of the premises in November 2000; and (5) Global's representations and conduct in seeking Deco Davis's removal from the premises were fraudulent. Following a period of discovery, the parties cross-moved for summary judgment.

In granting summary judgment in favor of Global, the trial judge did not separately examine the various causes of actions asserted by Deco Davis in its complaint, but instead held that the facts were undisputed, or at least "overwhelming," regarding Global's intention to demolish the buildings in question, which the judge found sufficient regardless of what later occurred with these buildings:

While . . . the exact positions of the [b]uildings, 408, [410] that were actually burned or demolished [are unclear], . . . this [c]court does not believe this is a relevant issue in light of the overwhelming evidence submitted by [Global] based on the evidence cited. It is clear that Global intended to demolish the buildings in question from . . . the time [it] acquired the premise[s] to at least March of 2001 when they received all the demolition permits. Based on this overwhelming evidence, correspondence, and actions taken by [Global] it seems clear that demolition was always in mind in this particular case. The fact that the premises burned to the ground is irrelevant. It's just an unforeseen circumstance that may have changed their plans.

The lease provides that landlord/tenant acknowledge and agree that the landlord had the right at any time after July 1, '97 to cancel the lease on giving ninety days notice. The lease does not address the situation and that landlord honestly intends to demolish the building, gives notice to tenant, tenant vacates, for some reason the building is not demolished. The language in the lease does not address [when] the building must, in fact, be demolished. It only states the landlord has the right to evict. If he elects to demolish[,] the lease is silent as to either landlord or tenant[']s responsibility. If tenant vacates due to Paragraph 64 and the landlord later changes [its] mind, there's no doubt that if Global acted in bad ...

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