Marciano Blimpie Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-6228-07T1

R.A.M. HOLDING CORP., Plaintiff-Appellant, v. HOBOKEN NO. 1 BLIMPIE, INC., Defendant-Respondent. _______________________________ Submitted June 30, 2009 - Decided July 24, 2009 Before Judges Skillman and Wefing. On appeal from Superior Court of New Jersey, Law Division, Hudson County, No. L-1267-08. Robert S. Feder, attorney for appellant. Frank P. Marciano, attorney for respondent. PER CURIAM Plaintiff R.A.M. Holding Corp. ("RAM") appeals from a trial court order granting summary judgment to defendant Hoboken No. 1 Blimpie, Inc. ("Blimpie") and finding that Blimpie had validly exercised its option to renew its lease. record

in

light

of

the

contentions

After reviewing the

advanced

on

appeal,

we

affirm, although for reasons other than those stated by the trial court. RAM owns a building located at 110 Washington Street in Hoboken, and in 1997 it leased the building to Blimpie for a period

of

ten

years,

commencing

September

1,

1997,

August 31, 2007, for a monthly rent of $4,000. reluctant

to

pay

rent

as

of

September

1,

1997,

through

Defendant was because

the

building required substantial renovations before defendant could open as a Blimpie's restaurant.

The parties executed a rider

to the lease under which defendant's obligation to pay rent did not commence until December 1, 1997, and defendant agreed that the monthly rent would increase annually in accordance with the cost of living computation included in the rider.

Paragraph 48

of the rider granted Blimpie an option to renew the lease for two successive five-year periods.

The rider defined the option

in the following manner. Tenant is herein granted an option to renew this lease for an additional five (5) year term (hereinafter the "First Renewal Period") for a monthly rental of the monthly base rent of equal to the monthly rent due for the 120th month plus the COLA annual increase as described in Paragraph 36 above. Upon the expiration of the First Renewal Period and the five (5) year term, Tenant is herein granted an option to renew this Lease for an additional five (5) year term (hereinafter the "Second Renewal Period") for a monthly rent equal to the 150th month

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A-6228-07T1

of this Lease plus the COLA annual increase as described in Paragraph 36 above. Tenant shall furnish the Landlord within 60 days of the termination of this Lease written notification of its intent to exercise its option to renew. The rider also stated that it was "intended to supplement, and be a part of, the Lease Agreement between the parties.

To

the extent that any of the terms of this Rider conflict with the terms as contained within the printed Lease Agreement, the terms of this Rider shall be controlling." In early to mid-September 2007, the principals of RAM and Blimpie held discussions about a new lease, but an agreement was not finalized.

There is no indication in the record that these

discussions had broken off; rather, they had not been completed. On

September

26,

1997,

RAM's

attorney

wrote

to

Blimpie,

informing it that the lease had terminated on August 31, 2007. Blimpie responded by letter dated October 2, 2007, that it was exercising its option to renew the lease for an additional five years. new When

RAM responded in turn that it was willing to negotiate a

lease,

but

Blimpie

at

a

would

substantially not

agree,

increased RAM

monthly

commenced

rental.

dispossess

proceedings which were eventually removed to the Law Division. The

matter

was

presented

motions for summary judgment.

to

the

trial

court

on

cross-

RAM argued that Blimpie did not

exercise its option within the sixty-day period before the lease

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expired on August 31, 2007, and that its written notification of October 2, 2007, was of no effect. arguments

in

support

of

its

Blimpie put forth several

position

that

exercised its option to renew this lease.

it

had

validly

It first responded

that the language of the rider was ambiguous, specifically, that the phrase "within sixty days of the termination of this Lease" did not necessarily require such notification in the sixty days preceding the termination of the Lease.

It contended that it

could

the

as

easily

be

read

to

mean

that

option

could

be

exercised within the sixty days succeeding the termination of the lease.

It pointed to other portions of the lease in which

the phrase "within" clearly referred to a period after a defined event. The trial court agreed with Blimpie that the phrase was ambiguous and, citing the principle that ambiguities in a lease are generally construed in a tenant's favor, Carteret Props. v. Variety

Donuts,

Inc.,

49

summary judgment to Blimpie.

N.J.

116,

127

(1967),

it

granted

This appeal followed.

RAM argues that the construction put forth by Blimpie and adopted by the trial court is unreasonable.

In our judgment,

RAM's position is correct. A tenant is generally required to give ample notice of the exercise of an option to renew a lease so that the landlord is not forced to wait until the last day of the lease term

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before he is informed whether the tenant wishes to remain on the premises. This requirement substantially reduces the risk that the premises will remain unoccupied for an indefinite period of time in the event that the renewal option is not exercised. [Goodyear Tire & Rubber Co. v. Kin Props., Inc., 276 N.J. Super. 96, 102 (App. Div.), certif. denied, 139 N.J. 290 (1994).] RAM stresses, and we agree, that construing the rider so as to permit the option period to run past the expiration date of the lease

would

only

increase

a

landlord's

risk.

In

addition,

adopting such a construction would lead to the anomalous result of

conferring

rights

upon

Blimpie

after

its

leasehold

had

expired. Because

the

trial

court

agreed

with

Blimpie's

first

argument, it had no occasion to consider its other contentions in support of its position.

Blimpie also pointed to the terms

of the Rider, under which its obligation to pay rent did not commence until December 1, 1997, and extended through November 30, 2007.

The rider specifically provides, as we set forth

earlier, that to the extent any of its terms conflict with the terms of the printed lease, the rider would prevail. We agree with Blimpie that the most reasonable construction of this provision is to extend the termination of the lease to November 30, 2007.

Blimpie, having exercised its option to

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renew its lease within sixty days of November 30, 2007, was entitled to summary judgment. The order under review is affirmed.

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