On appeal from Superior Court of New Jersey, Chancery Division, Bergen County, Docket No. C-278-05.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Coburn, Fuentes and Grall.
Defendants Voislav Sajnoski and Vasa Sajnoski appeal from the judgment of the Chancery Division, General Equity Part ordering specific performance of an option to purchase real estate included as part of a commercial lease agreement. The ten-year lease agreement provided plaintiff with an option to purchase the property for $225,000 within five years of the lease term, as long as he was not in default under the lease.
Two years into the lease, plaintiff notified defendant of his intent to purchase the property; defendant responded in letter form, claiming plaintiff could not exercise his option because he was in breach of the lease's insurance coverage requirements. Plaintiff sued after the parties were unable to resolve this issue.
After a bench trial, Judge Martinotti found that plaintiff had not complied with the lease's specific insurance requirements. Despite this breach, the court found that equitable principles militated in favor of plaintiff. Defendant appeals claiming the court erred in refusing to enforce the clear and unambiguous terms of the lease.
After reviewing the record before us, and in light of prevailing legal standards, we reject defendant's argument and affirm substantially for the reasons expressed by Judge Martinotti. We gather the following facts from the evidence presented at trial.
The lease agreement at issue here was a material part of the sale of a tavern business. Plaintiff acquired the tavern from defendant for $150,000.*fn1 Defendant also leased the building where the bar is located for ten years at a monthly rent of $2,500; the lease included an option to purchase the building within five years.
The option to purchase provision stated:
During the first five years of this lease, and provided that the tenant is not in default thereunder, tenant shall have the right to purchase the entire premises, with the sale price to be TWO HUNDRED TWENTY-FIVE THOUSAND DOLLARS ($225,000.00).
The lease required that plaintiff purchase and maintain:
(1) insurance coverage with a single limit amount of $1,000,000; (2) rental insurance for the primary benefit of the landlord; and (3) the insurance provider had to have an A rating by Best's Key Rating Guide. Plaintiff was obligated to present defendant with evidence of insurance coverage within twenty days of the signing of the lease; ...