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Bapu Corp. v. Mody

June 26, 2007


On appeal from the Superior Court of New Jersey, Law Division, Union County, Docket Nos. LT-6894-03 and UNN-L-2394-04.

Per curiam.


Submitted June 6, 2007

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

In these back-to-back appeals, we review orders entered in the Chancery Division, Law Division, and Special Civil Part regarding the contractual relationship existing between the parties and, in particular, how that relationship was impacted by the parties' dispute about the dispensing of alcohol at the banquet facilities leased by Bapu Corp. (Bapu) to Ethnic Caterers, Inc. (Ethnic). Bapu contended that the parties' agreement permitted only Bapu to serve alcohol, that Ethnic breached this term, and that, as a result, Bapu was entitled to possession of the premises. Ethnic responded that Bapu had remained silent for a significant period of time knowing that Ethnic had served liquor at banquets, and, thus, Bapu could no longer be heard to complain.

This factual dispute spawned a good deal of litigation, which produced numerous orders and judgments, only some of which are referenced in Bapu's notices of appeal. Finding no reason to disturb the orders and judgments under review, we affirm.


On October 22, 2001, Bapu and Ethnic entered into an agreement whereby Bapu appointed Ethnic to be the exclusive caterer and food service management company for Clinton Manor, with the exception of its café, and with "the exception of distribution of alcoholic beverages on the Premises," for a five-year period effective November 1, 2001.*fn1

Under the agreement, Ethnic was required to "utilize the services of Bapu for the sale and distribution of alcoholic beverages" on the premises. In exchange for the payment of rent in the amount of $23,000 per month, subject to further revision depending upon adjustments in the property tax base, Ethnic was entitled to all the gross revenue, "excluding revenue from the sale of alcoholic beverages," from the operation. In addition, the agreement required Ethnic to obtain $6 million in liability and property insurance with Bapu named as landlord on the policy. Default would occur if any three checks were returned for insufficient funds within one year. And, the agreement stated that if it were to be found void or illegal, it would be immediately terminated without penalty to either party.

The record reveals that, on average, Ethnic catered two parties per weekend. Ethnic would provide Bapu with its liquor orders, usually on a weekly basis, and would then pick up the order at Clinton Manor's front desk. On occasion, guests were permitted to bring in their own liquor. When doing so, the customers served the liquor. Otherwise, Bapu would supply the bartender. When Bapu failed to comply, Ethnic supplied the bartender from an ABC-approved list.

In January 2003, problems arose between Ethnic and Bapu when Bapu demanded that Ethnic start charging by drink, rather than by person, and that Bapu's employees, rather than Ethnic's, serve the liquor. When Ethnic refused, Bapu stopped accepting Ethnic's liquor orders. From December 14, 2002, to November 17, 2003, Bapu did not supply liquor to Ethnic. Nonetheless, guests at the banquet hall were observed consuming alcohol during that time period.

As a result, Bapu sent a notice of termination of the leasing agreement claiming that the agreement was not enforceable. This triggered the various legal proceedings that culminated in these appeals.



The proceedings that relate to A-5724-03T5 began on August 25, 2003, when Bapu commenced an action in the Special Civil Part seeking to evict Ethnic from the premises. Bapu alleged that Ethnic breached their agreement by serving liquor at banquets, failing to collect sales tax, failing to obtain the liability and property insurance contractually required, and by violating various municipal regulations. A trial of this action was commenced on September 23, 2003 and proceeded over various other dates in October and November 2003.

On January 29, 2004, the tenancy judge issued a written decision finding that Bapu had failed to establish its right to possession under the lease. On February 2, 2004, the judge issued an addendum to his decision in which ...

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