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Law Offices of Fedderly v. Skoda

July 15, 2009

LAW OFFICES OF DONALD P. FEDDERLY, PLAINTIFF-APPELLANT,
v.
MARC M. SKODA & FRANK S. EVANS, A GENERAL PARTNERSHIP, DEFENDANT-RESPONDENT.



On appeal from Superior Court of New Jersey, Law Division, Morris County, Docket No. L-456-07.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued February 10, 2009

Before Judges Parker, Yannotti and LeWinn.

Plaintiff Law Offices of Donald P. Fedderly appeals from an order granting defendants' motion for summary judgment and denying his cross-motion for summary judgment.

This action arises out of a commercial lease agreement entered into by the parties in November 1994. Plaintiff is a lawyer who requested that the defendants-landlords advise him when additional space became available in the building. The lease agreement included a right of first refusal for such space.

Over plaintiff's twelve-year tenancy, space became available but defendants never offered plaintiff a right of first refusal, nor did plaintiff pursue defendants for additional space during the tenancy. Plaintiff exercised all of his renewal options, the last of which expired on November 30, 1999. Thereafter, the lease was changed in writing to a year-to-year lease with the "exact terms and conditions of the old lease" applicable to the one-year extensions. The final lease extension expired on November 30, 2003 and defendants advised plaintiff that they intended to lease plaintiff's space to Wachovia Insurance Agency (Wachovia). Plaintiff then agreed to a month-to-month tenancy and defendants agreed not to raise plaintiff's rent during the month-to-month tenancy.

On January 30, 2006, defendants sought to have plaintiff sign a "notice of termination/mutual release/notice to vacate" by May 1, 2006. Plaintiff declined to sign the notice. On April 10, 2006, however, plaintiff notified defendants that defendants' failure to extend the right of first refusal for available space "estopped defendants from compelling plaintiff to vacate."

On April 13, 2006, defendants sent plaintiff five invoices for additional rent due, totaling $4,020.06. These invoices were for increases in real estate taxes from 2000 to 2005. On April 20, 2006, defendants sent additional invoices totaling $6,127.56, for increases in utilities, maintenance and other building costs.

Plaintiff then filed suit in Morris County, Chancery Division, General Equity Part, seeking to enjoin the May 1 notice to vacate. On May 11, 2006, the Chancery Division denied plaintiff's request for injunctive relief and found that the right of first refusal expired when he became a month-to-month tenant. Defendants counterclaimed, seeking possession of plaintiff's leased space, enhanced rent pursuant to N.J.S.A. 2A:42-6, additional rent and counsel fees. The parties entered a consent order on June 13, 2006, whereby plaintiff agreed to vacate the space by June 30, 2006. On February 13, 2007, the matter was transferred to the Law Division and ultimately referred to arbitration on the damages claims in June 2007.

The arbitrator rejected defendants' claim for additional rent, counsel fees and costs. Defendants were awarded a total of $3,500 as double rent for the months of May and June 2006 and $700 in legal fees.

Defendants moved for trial de novo and the parties cross-moved for summary judgment. The Law Division entered the order granting defendants' motion for summary judgment on April 16, 2008, and awarded defendants $3,500 plus interest in double rent, $11,068.96 plus interest in additional rent and $32,908 in counsel fees and costs. The court appended a statement of reasons in which it stated:

The court can find no reason why Mr. Fedderly could have logically had a good faith belief that paragraph 39*fn1 of the lease entitled him to legally holdover lease assuming arguendo that the plaintiff did still have the right of first refusal, the right to expand is not equivalent to a right to holdover [sic].

The court further noted with respect to additional rent, that paragraph 30, which set forth the bases for additional rent, is not ambiguous and "the [l]andlord's failure to exercise any right under the lease is not to be deemed to be a waiver or relinquishment of any rights and that those rights are cumulative and may be exercised in full force. That the defendants did not make a claim for these additional rents until plaintiff brought suit is of no moment."

It is from that April 16, 2008 order that plaintiff appeals and argues:

POINT ONE

THE CHANCERY DIVISION ERRED IN HOLDING THAT PLAINTIFF'S RIGHT OF FIRST REFUSAL WAS EXTINGUISHED WHEN PLAINTIFF BECAME A MONTH-TO-MONTH TENANT; THE 1947 E&A CASE IS NOT GOOD LAW ACCORDING TO THE CONNECTICUT SUPREME COURT AND OTHER JURISDICTIONS, AND SHOULD BE OVERTURNED IN NEW JERSEY AND IS OTHERWISE DISTINGUISHABLE

POINT TWO

THE LAW DIVISION ERRED IN DENYING PLAINTIFF'S MOTION TO FILE AN AMENDED PLEADING (WITH AN ADDITIONAL COUNT REGARDING DEFENDANTS' VIOLATION OF THE PARTIES' CONSENT ORDER)

POINT THREE

THE TRIAL COURT MISUNDERSTOOD PLAINTIFF'S "RIGHT OF FIRST REFUSAL" CLAIM, AND IMPROPERLY PENALIZED PLAINTIFF ...


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