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Lt Propco, LLC v. Westland Garden State Plaza Limited Partnership and Borough of Paramus

December 28, 2010

LT PROPCO, LLC, PLAINTIFF-APPELLANT,
v.
WESTLAND GARDEN STATE PLAZA LIMITED PARTNERSHIP AND BOROUGH OF PARAMUS PLANNING BOARD, DEFENDANTS-RESPONDENTS.



On appeal from the Superior Court of New Jersey, Chancery Division, Bergen County, Docket No. C-217-09.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued: November 4, 2010 - Decided: Before Judges Cuff, Sapp-Peterson and Fasciale.

This case involves a lease dispute between plaintiff subtenant LT Propco, LLC (Propco) and a commercial landlord, defendant Westland Garden State Plaza Limited Partnership (Westland). Propco appeals from Judge Peter Doyne's January 5, 2010 order that dismissed its first amended complaint pursuant to Rule 4:6-2(e), and denied its motion to file a second amended complaint. Judge Doyne determined that Propco had no standing to sue Westland due to lack of privity. We agree and affirm.

Westland leased property in the Garden State Plaza Mall to The May Department Store Company (May Stores).*fn1 The lease term was for twenty years with an option to extend. Section 19.2 of the lease required May Stores to operate a: specialty [] retail department store . . . under the trade name of 'Lord & Taylor' or under such other name as is then being used in conjunction with a majority of the stores operating in the 'Metropolitan New York Area' . . . now operated by the division known as Lord & Taylor.

Lord & Taylor was not a freestanding company when the Lease was executed; it was a division of May Stores.

Other than Westland and May Stores, no other party is a beneficiary of the Lease. Section 41.22 of the Lease provided that:

This Lease is made for the exclusive benefit of the parties hereto and to their successors and assigns (except to the extent limited by the specific terms of this Lease), and nothing herein contained shall be deemed to confer upon any other Person than the parties hereto, and such successors and assigns, any rights or remedies by reason of this Lease.

The Lease provided that May Stores had expansion rights of up to 65,000 square feet of retail space (Section 42.2), and entitled May Stores to withhold consent to any parking plan that decreased the number of parking spots guaranteed by Westland (Section 21).

Section 26.4 of the Lease entitled May Stores to sublet the premises and stated in part that:

[t]enant shall have the right . . . to assign or sublease this lease to an entity which, in conjunction with such assignment or sublease, acquires a majority of the then existing stores in the metropolitan New York area now operated by the division known as Lord & Taylor.

On October 2, 2006, Federated (formerly May Stores) sublet the premises to Propco for a five-year term, or until October 1, 2011. In 2006, Propco acquired the Lord & Taylor division from Macy's and continued to operate the Lord & Taylor retail store. The Sublease recognized that there is no privity of contract between Westland and Propco. Paragraph seven of the Sublease stated in part that:

Subtenant [Propco] acknowledges that Sublandlord [Federated] is not obligated to provide services hereunder; however, since Prime Landlord [Westland] and Subtenant do not have privity of contract under this Sublease . . . Sublandlord shall . . . enforce . . . Sublandlord's rights to cause Landlord to provide such services, repairs or replacements as Landlord is obligated to provide under the Prime Lease.

The Sublease provided that Propco, for the payment of a separate fee and execution of additional documents, had the right to take the Lease by assignment. Paragraph ...


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