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Gig's Inc. v. Park

April 14, 2010


On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-750-06.

Per curiam.


Submitted March 8, 2010

Before Judges Lisa, Baxter and Alvarez.

This appeal arises from a dispute between a commercial tenant, defendants, and their landlord, plaintiff Gig's Inc.

After defendants' summary judgment motion was denied, the case went to trial. The jury awarded plaintiff $105,775 for damage to the leased premises. The judge subsequently denied defendants' motion for judgment notwithstanding the verdict (JNOV). Defendant Kyung Hee Park (Kyung) appeals, contending that the court erred in (1) denying defendants' summary judgment motion, (2) failing to instruct the jury to consider the applicable six-year limitations period when assessing damages to the building, (3) failing to instruct the jury to consider $116,000 that defendants allegedly overpaid plaintiff, and (4) failing to grant defendants' JNOV motion. We reject these arguments and affirm.


Plaintiff owns the building in Fort Lee that is the subject of this dispute. Plaintiff operated a restaurant in the building for nearly twenty-five years until 1994, when plaintiff's owner, John F. Dalesso, sold the restaurant to Kyung for $350,000. The parties then entered into a lease, which would enable Kyung to operate the restaurant business in plaintiff's building.

The November 15, 1994 lease was for a term of ten years and fifteen days, with monthly rental for the first five years of $8000, and for the last five years of $9000. Kyung signed the lease, and then assigned it to defendant KH&Y Corp., of which she was the sole shareholder, but she remained personally liable for the lease. Her husband, defendant Jimmy Park, was the "manager" of the restaurant and its chief decision-maker.

A rider to the lease gave Kyung an option to renew for an additional five years. The rider provided that if the parties could not agree upon the rental amount for the extended period, the issue would be subject to binding arbitration, in which each party would select a realtor, those two realtors would select a third realtor, and the three would make up the arbitration panel. The lease also contained a non-waiver of rights provision, under which plaintiff's failure to immediately enforce any lease provision would not be deemed a waiver of the right to seek enforcement in the future.

A lease provision obligated defendants to make repairs and maintain the premises in good condition, "and at the end or other expiration of the term hereof, [defendants] shall deliver up the rented premises in good order and condition, wear and tear from a reasonable use thereof, and damage by the elements not resulting from the neglect or fault of the Tenant, excepted." Soon after taking possession, defendants made certain repairs and alterations without plaintiff's prior approval.

Dalesso testified at trial regarding a side agreement he had with Jimmy Park from the beginning of the lease term. The lease provided that a portion of the parking area on the property was not available for use by the restaurant until after 5:00 p.m. This was because Dalesso had leased those parking spaces to another business, Kwasha Lipton, for daytime parking. Dalesso received $1500 per month from Kwasha Lipton. Dalesso said he recognized that starting up a new restaurant business is difficult, he had seen many fail, and he did not want to face the problem of obtaining another tenant if Jimmy Park's restaurant failed, nor did he want to be in a position where he would have to go in and resume operation. Therefore, in an effort to help the new venture get started, he "asked Kwasha Lipton to direct the [$1500 monthly] payment to [Jimmy Park]. So what it did, it took his rent down from 8,000 a month to 6,500 a month, to give him a break."

This arrangement continued for the first seven-and-one-half years of the lease. In apparent furtherance of the arrangement, KH&Y Corp. and Kwasha Lipton entered into a "Parking Area License Agreement" on January 5, 1995, by which Kwasha Lipton paid $1500 per month to KH&Y Corp.

On June 13, 2002, Jimmy Park signed a document given to him by Dalesso which stated that KH&Y Corp. was directing Kwasha Lipton's successor to the parking license to "direct all future payments for the 12 parking spaces to [Gig's] Inc., c/o John F. Dalesso." Therefore, beginning in July 2002, defendant stopped receiving the $1500 per month to apply toward the monthly rent due plaintiff, which had risen to $9000 per month under the lease terms. On the same date, June 13, 2002, Jimmy Park executed an "Amendment to Lease," under which the rent was increased to $10,500 per month for the remaining portion of the ten years in the original lease term. Jimmy Park signed the amendment above Kyung's typewritten name. Kyung was informed of the amendment by her husband and did not dispute its validity.

Dalesso explained in his testimony that the $1500 per month side deal he originally made with Jimmy Park regarding the parking fees was an interest-free loan. When seven-and-one-half years expired, which represented one-half of the lease plus option term, defendants' business was doing very well and defendants could now start repaying the amount of the loan. In anticipation that the five-year renewal option would be exercised, repayment at the same rate of $1500 per month for the next seven-and-one-half years would satisfy the obligation and make the parties even. According to Dalesso, this was the consideration for the ...

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