On appeal from Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-7263-09.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted February 27, 2012
Before Judges Grall and Alvarez.
Plaintiffs EAM Investments, LLC, Ryan Estates, LLC and GTAG LLC t/a Suburban Square, LLC commenced this litigation to recover damages from defendants William McDonagh (McDonagh) and McDonagh Dodge, Inc. (McDonagh Dodge) for breach of a commercial lease.*fn1 They subsequently added a claim against defendant Manfried Glucksmann, who sold the leased premises to plaintiffs subject to a commercial lease then assigned to McDonagh Dodge.
The claims against Glucksmann and McDonagh were dismissed on summary judgment. Subsequently, plaintiffs obtained a judgment against McDonagh Dodge. Plaintiffs' appeal is limited to the grant of summary judgment in favor of McDonagh, which we now affirm.
As early as 1970, Glucksmann owed the premises in question and leased it to a series of entities operating car dealerships. McDonagh Dodge first occupied the premises in 2003, when it took an assignment of a lease held by Suburban Dodge, Inc. Plaintiffs' claim against McDonagh is based on their assertion that McDonagh promised to guarantee payments due in a letter agreement with Glucksmann, which expired in 2005, and, thereafter in exercising an option to renew the lease for a five-year term. The breach occurred on June 1, 2009, during the extended term.
Plaintiffs acknowledge that the validity of their claim against McDonagh depends on the documents that they allege establish his personal guarantee. The first in the series of writings is a June 12, 2003 letter agreement stating the conditions of Glucksmann's consent to the assignment of the lease held by Suburban Dodge to McDonagh Dodge. McDonagh signed that letter manifesting his consent to the conditions twice, once over a signature line provided for his signature and once over a line provided for the President of McDonagh Dodge.
The third condition states the following personal guarantee: "William McDonagh guarantees the prompt payment by McDonagh of rent and real estate taxes on the demised premises through December 31, 2005. At the end of the current lease term, Glucksmann will revisit the issue requiring the personal guarantee of William McDonagh." By its terms, this personal guarantee is for the limited period stated, and plaintiffs do not claim that the personal guarantee is restated in the lease itself.
McDonagh Dodge subsequently exercised its option to renew the lease for a five-year term beginning on January 1, 2006. In doing so, McDonagh signed for McDonagh Dodge over a line provided for his signature as President of McDonagh Dodge. That document, which was prepared by Glucksmann's attorney, states: "Tenant hereby exercises its option to renew the Lease for a further term of five (5) years commencing January 1, 2006, upon the same terms and conditions of said Lease."
In connection with the exercise of that option, a second letter memorializing additional agreements was executed on December 9, 2005. As he had done with the June 12, 2003 letter, McDonagh signed the letter agreeing to the conditions twice, once over a line for his name and once over a line for the signature of the President of McDonagh Dodge.
Plaintiffs rely on the following paragraph to establish a continuation of McDonagh's personal guarantee:
In all other respects, it is agreed that all terms and conditions set forth in the October 3, 1980 letter; the September 8, 1995 letter, the December 12, 1995 letter and the December 7, 2000 letter shall continue in force and effect and the tenancy will be subject to all terms and conditions of the primary Lease between Chrysler Realty Corp. and Manfried Glucksmann dated June 25, 1970 and an Amendment thereto dated January 12, 1976. The tenancy shall also be subject to the terms and conditions of the Sublease between Suburban Dodge, Inc. and Chrysler Realty Corp. dated June 25, 1970 and any Amendments thereto, unless any provisions thereof conflict with the Lease between Chrysler Realty Corp. and Manfried Glucksmann, in which case the primary Lease shall control. In addition, the Lease shall be subject to the Agreement between Asterio Allessandrelli, individually, and Manfried Glucksmann and the Amendment thereto dated May 17, 1973, which shall in no way be affected by the assumption of the primary Lease by McDonagh Dodge, Inc. herein.
On Glucksmann's motion for summary judgment, Judge Hyland reviewed the language of the several writings quoted above, and concluded that McDonagh gave his personal guarantee for a limited period that expired with the initial lease. He further determined that the terms of the letter exercising the option to renew and the December 9, 2005 letter agreement, read alone or together, could not reasonably be understood as an agreement to extend that personal guarantee. Reasoning that N.J.S.A. 25:1-15 requires that a promise to assume ...