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Pathmark Stores, Inc. v. Bernard Oster

July 29, 2009


On appeal from the Superior Court of New Jersey, Chancery Division, Bergen County, Docket No. C-232-07.

Per curiam.


Argued February 9, 2009

Before Judges R. B. Coleman and Simonelli.

Defendant Landlord Bernard Oster, Inc., a New Jersey corporation, appeals from an April 9, 2008 order of the Chancery Division that granted summary judgment in favor of its tenant, plaintiff Pathmark Stores, Inc. The order permanently enjoined defendant from proceeding with its construction plans. After careful review of the record and the arguments of the parties, we affirm.

The following is a summary of the facts of the record. Plaintiff, a Delaware corporation, owns and operates Pathmark, a supermarket, in the Maple Avenue Shopping Center (the Shopping Center). The Shopping Center is owned by defendant and located in Fair Lawn, New Jersey. On July 3, 1974, before construction of the Shopping Center began, plaintiff and defendant's predecessor in title entered into a Lease pertaining to the anchor store at the Shopping Center (the Lease). The term of the Lease was for an initial twenty-five years, with five successive options to extend the term: the first for a ten-year period, and the subsequent four for five-year periods. With all options exercised, the Lease would expire in 2030.

Article 2 of the Lease granted plaintiff "an easement to use, in common with other tenants . . ., the portions of the Shopping Center intended to be for common use, including but not limited to parking areas . . . ." The Lease provided that the construction of the anchor store and remainder improvements, including satellite stores, was to be completed according to an attached plan, referred to in the record as the 1973 site plan.

Article 9(B)(1), entitled "Remainder of the Improvements," provides that the "Landlord shall not at any time during the term of this Lease construct or permit to be constructed any buildings or improvements on the Land which do not conform thereto." That Article provided that "[t]he aggregate gross floor area of buildings constructed on the Land, exclusive of the Tenant's Building, shall not at any time during the term of this Lease exceed 30,500 square feet." Pursuant to Paragraph C of Article 9, the Common Area is required to be "sufficient for the parking of not less than 8.3 automobiles for each 1,000 square feet of gross floor area of buildings in the Shopping Center," with stalls being of a specific size. According to plaintiff, the 1973 site plan depicted 447 spaces for customer parking. Under the Lease, employees are not allowed to park in customer-parking areas.

A separate provision, Article 11, entitled "Common Area," recites the Landlord's agreement that parking shall be available during all times Pathmark is open for business and that "[t]he layout of, and striping in, the Common Area, as indicated in [the 1973 site plan] shall not be changed without Tenant's consent." Article 12 provided that the landlord shall make roof repairs to tenant's building and "shall keep and maintain the Roadway Easement in good condition and repair, including but not limited to repairing and replacing paving; keeping the same properly drained . . . and suitably lighted."

In addition, Article 44 provides that "Landlord shall promptly forward to Tenant any notice or other communication received by Landlord from . . . any municipal or governmental authority in connection with any hearing or other administrative procedure relating to the use of the Land or any adjoining or adjacent property."

According to defendant, it had been unable to retain and attract tenants in the 10,000 square foot satellite store space, due to the antiquated design of the Shopping Center and the lack of visibility of the storefronts. Defendant claims that the vacant store space became an "eye-sore to the community and a detriment to the remaining Maple Avenue Shopping Center tenants and to [defendant]." Thus, without prior discussion with plaintiff, defendant met with the Fair Lawn Mayor and the River Road Improvement Corporation and explored its plan to modify the Shopping Center so as to keep up with current shopping center designs, which were more efficient and aesthetically pleasing.

In or about February 2006, defendant applied for approval of the Fair Lawn Planning Board to modify the Shopping Center. The proposed site plan included the "elimination of four satellite stores attached to the Pathmark premises, comprising approximately 10,000 square feet, and the construction of a single story, 19,665 square foot retail building near a wooded area . . . and a single story, 3,600 square foot branch bank building with a drive-thru facility on the eastern side." The proposed site plan provided for 482 parking spaces, which exceeded the number of spaces mandated by Fair Lawn by fourteen spaces.

On August 14, 2006, the Fair Lawn Planning Board approved defendant's site plan. Still, defendant did not provide plaintiff with a copy of its plans. According to plaintiff, defendant informed it of possible renovations but indicated that no final decision had been made.

In November 2006, defendant commenced construction at the Shopping Center. In January or February 2007, it demolished 10,000 square feet of store space adjoining Pathmark and created approximately 12,000 square feet of parking spaces in that area. Between November and July 2007, defendant constructed a demising wall, installed storm drainage at one corner of the Pathmark building, installed an underground conduit for accent lighting, removed four concrete islands and associated ...

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