SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-1840-20

APERION ENTERPRISES, INC.,

Plaintiff-Appellant,

v.

GOTHAM BEVERAGE, INC.,

GEORGE MATTHEWS,

HARAMBOS TSOTSOS,

HELEN MATTHEWS, 

JOANNE MATTHEWS and 

STEVEN MATTHEWS,

Defendants-Respondents.

___________________________

Submitted January 20, 2022 – Decided August 22, 2022

Before Judges Haas and Mitterhoff.

On appeal from the Superior Court of New Jersey, Law 

Division, Bergen County, Docket No. L-5307-19.

O'Brien Thornton LLC, attorneys for appellant (Merrill 

M. O'Brien, on the briefs).

The Levine Law Firm, LLC, attorneys for respondents 

(Kenneth T. Gallo, on the brief).

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the 

internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
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A-1840-20

PER CURIAM

In this commercial landlord-tenant dispute, plaintiff Aperion Enterprises, 

Inc. appeals a February 2, 2021 judgment of the Law Division dismissing its 

claims for underpayment of rent under a lease agreement with defendant Gotham 

Beverage, Inc. The judgment also dismissed defendant's counterclaim for 

overpayments of rent. We conclude the judge impermissibly modified the terms 

of the contract between the parties and thereby deprived plaintiff of rent to which 

it was entitled under the clear rent escalation provision in the lease. 

Accordingly, we reverse.

Aperion owns and leases the land and building located at 39-10 Broadway, 

Fair Lawn, N.J. (the property). On March 27, 1998, plaintiff entered into a 

thirty-five-year lease with non-party Quo Non Ascendet, Inc. (QNA). In 

consideration of QNA's $2,000,000 capital investment spent constructing a diner 

on the premises, plaintiff agreed to a below-market rent for the first fifteen years 

of the lease term, with a fixed monthly rent subject to a $150 per month rent 

increase each year for the first fifteen years. These terms are explicitly set forth 

in Lease Rider ONE B and are not in dispute. Lease Rider ONE C provided that 

in the fifteenth year of the lease, the parties would work to agree upon a new 

base rent, representing the fair market value, to be effective in the sixteenth year. 
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On November 13, 2007, defendant assumed the lease. During the fifteenth 

year of the lease – April 1, 2012 to March 31, 2013 – the parties could not agree, 

as provided for in the lease and rider, on which appraisers would assess fair 

market rent. The parties therefore agreed to submit the issue to binding 

arbitration through the American Arbitration Association (AAA). The sole issue 

submitted to AAA for resolution was the fair market rental value of the demised 

premises in March 2013. In a May 31, 2017 award, the arbitrator determined 

that "[t]he fair market value of the first floor of the Premises as of March 2013 

is $25.50 [per square foot] (PSF) for 5146 square feet[,]" and "[t]he fair market 

value of the basement of the Premises as of March 2013 is $9.00 PSF for 3339 

square feet." Based on the arbitrator's calculations, the March 2013 fair market 

annual rent for the property was $161,274. Defendant's pre-arbitration annual 

rent was $82,200. 

Arbitration took four years to complete. During that time, defendant 

continued to pay below-market rent over plaintiff's objection. After the 

arbitration award, plaintiff sent defendant a calculation of the underpayment, 

which he reached by applying cumulative yearly increases to the base rent 

starting in 2013. Defendant paid the requested amount with funds that cleared 

on June 23, 2017. Thereafter, defendant continued to pay, and plaintiff 
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continued to accept, rent based on the calculations used to determine 

underpayment for the years 2014-2017.

When calculating the rent increase that was scheduled to begin April 1, 

2019, plaintiff realized it had made an alleged mistake in the retroactive 

calculation of the additional rent owed for 2014-2017. On May 2, 2019, 

plaintiff's counsel sent a letter informing defendant of the mistake and seeking

an additional $41,217. Defendant disputed plaintiff's application of the rent 

escalation formula in Lease Rider ONE D, and refused to pay the additional rent.

On July 18, 2018, plaintiff filed a two-count complaint. Count one alleged 

a breach of the lease by failure to pay the full amount of rent due under its terms. 

Count two alleged that the failure to pay the rent also breached the five personal 

guarantees of the rent and that the guarantors each breached the guarantees by 

failing to provide a certification that the guaranty was unmodified and in full 

force and effect.1

1

 The trial judge did not address whether there was a breach of the personal 

guarantees. As defendants noted, however, a condition precedent for a breach 

of the guarantees was not shown, and thus the claims could not succeed as a 

matter of law. Specifically, each guarantee stated:

Guarantor agrees that it will, at any time and from time 

to time, within five (5) days following written request 

by Landlord and without charge therefor, execute, 
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On August 26, 2019, defendant and defendant-guarantors filed an answer 

and three-count counterclaim alleging breach of the lease (count one), breach of 

the lease's covenant of good faith and fair dealing (count two), and equitable 

fraud (count three). As part of its counterclaim, defendant sought return of 

$1,969.21 it claims to have overpaid in retroactive rent for 2014-2018.2 

A February 8, 2021 bench trial occurred via Zoom and consisted of the 

testimony of two witnesses. The first witness was George Konstantinitis, the 

President of Aperion, who testified for the plaintiff, and the second was George 

Matthews, the President and co-founder of Gotham, who testified for defendant.

acknowledge and deliver to Landlord a statement 

certifying that this Guaranty is unmodified and in full 

force and effect (or if there have been modifications, 

that the same is in full force and effect as modified and 

stating such modification). Guarantor agrees that such 

certificates may be relied upon by anyone holding or 

proposing to acquire any interest in the building (of 

which the demised premises is a part) from or through 

Landlord or by any mortgagee or prospective 

mortgagee of said building or any interest therein. 

Because plaintiff produced no evidence it made the required written request, we 

conclude the breach-of-guarantee claim must fail notwithstanding the trial 

court's silence on the issue. 

2 Defendant did not file a cross-appeal of the dismissal of its counterclaims and 

we deem the issues waived. 
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In his testimony, Konstantinitis explained that Lease Rider ONE D, the 

primary subject of this appeal, provides that the base rent for each year 

beginning in 2014 and concluding in 2022 would be calculated using the 

Consumer Price Index3(CPI) for New York and Northeastern New Jersey for 

"urban wage earners and clerical workers." Specifically, Lease Rider ONE D 

provides: 

D. The rent thereafter [after February 28, 2014] shall 

be computed, for years 2014 through 2022, by 

multiplying that base rent by a factor determined by 

comparing the [CPI] for New York – Northeastern New 

Jersey as published by the U.S. Department of Labor, 

Bureau of Labor Statistics (BLS) for urban wage 

earners and clerical workers, or if not available, any 

similar statistical cost of living study customarily 

utilized to determine the [CPI] shall be used, as noted 

in F. below, utilizing that index for January of the preincrease year, with January of the year of increase and 

converting that factor to a percentage, said percentage 

to be multiplied by a new base rent, and the resultant to 

be the increase for the then current year, commencing 

March 1, 2014 and, in the same manner, annually

through the [twenty-fifth] year of the term. The rent so 

computed shall not be less than the monthly rent for the 

prior year, nor more than an increase of four percent 

(4%) over the prior year's rent. 

3

 The Consumer Price Index is a measure of the average change over time in 

the prices paid by urban consumers for a market basket of consumer goods and 

services. Indexes are available for the U.S. and various geographic areas. 

Average price data for select utility, automotive fuel, and food items are also 

available. Consumer Price Index, U.S. BUREAU OF LABOR STATISTICS,

https://www.bls.gov/cpi/.
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[i.e.] If the rent for the year 2013 to 2014 is $6850, and 

the CPI for January 2012 is 156.3, and the[] CPI for 

January 2013 is 158.2, the difference of 1.9 shall be 

deemed as a percentage, and the prior year's rent ($6850 

x 12 = $82,200) shall be multiplied by 1.9% (=$1561.80 

÷ 12 = 130.15) so that the monthly rent commencing on 

March 1, 2014 will[] be $6980.15 per month, through 

February 28, 2015. 

The same computation shall be made annually, through 

the [twenty-fifth] year of the term, to arrive at a 

monthly rent. 

Simply put, the CPI for January of the pre-increase year is deducted from 

the CPI for the then current year, commencing March 1, 2014 and the resulting 

difference is deemed the percentage rent increase for that year, capped at four

percent. Although it is unclear precisely how plaintiff misapplied the formula, 

no one seriously disputes that he did not apply the plain language of the lease.4

4 Defendant's theory at trial was that the lease formula was not the "standard in 

the industry." It preferred a "sample" formula provided online by the (BLS) in 

response to a frequently asked question. Defendant's "preference," however, is 

not evidence that the method agreed to in the lease is illegal or otherwise 

prohibited, nor was any competent evidence presented that the BLS suggestion 

is, in fact, standard in rent escalation contracts. To the contrary, the posting itself 

notes it merely provides factors to consider in developing an escalation contract, 

many or most of which were considered in the subject lease. Further, the agency 

posting states it "can neither develop certain wording for contracts, nor mediate 

legal or interpretive disputes" that arise between parties to an escalation 

contract.
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At the conclusion of the bench trial, the judge delivered an oral opinion 

finding that plaintiff calculated the underpayment of the rent based initially on 

the March 2013 fair market value and then "offered" that rate to defendant, 

which was accepted. The judge reasoned that plaintiff's claim that it made a 

mistake 

is of no moment because of the fact that the landlord 

themselves knew that there was . . . a rent dispute. 

Submitted it to arbitration. And then, pursuant to that 

arbitration award, calculated what the rent should be. 

Offered that rent to the tenant. And the tenant accepted 

that . . . from the landlord as the proper formulation for 

CPI increases. 

That is the undisputed testimony. The concept 

that they could now relate back to a lease that this 

tenant had signed when there, in fact, was a new offer 

and acceptance made by the landlord which the tenant 

accepted based on a CPI formula which seems clear and 

certain, and which is, in fact, what the tenant still says 

should be the formula that is in place, is uncontradicted 

as to being what the parties had agreed to. That was the 

meeting of the minds that occurred after the Triple A 

arbitration. 

And the CPI relationship to the rent increases 

again seems to be what was offered by the landlord and 

accepted by the tenant, and is still being maintained by 

the tenant as the proper calculation. And the tenant has 

put forth D-6 which the Court finds again coincides 

with the landlord's calculation. 

Now, again, back to offer and acceptance, while 

D-6 may show a little bit less than what the landlord 
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promulgated, that is what the tenant agreed would be 

the new rent. . . . The landlord, therefore, has not 

proved that there has been a breach of the lease, and is, 

therefore, not entitled to legal fees nor any rent 

increases, other than what is promulgated under the 

appropriate CPI increase that he offered and that the 

defendant accepted. 

On February 22, 2021, the judge entered final judgment and dismissed the 

plaintiff's claims and the defendant's counterclaims in full with prejudice. The 

judge also ordered "that all past rent increases from March 1, 2014 to present 

and all future rent increases, other than base rent increases pursuant to Section 

[ONE] E of the Rider to Lease, shall be made in accordance with the standard 

CPI escalation calculation" subject to the four-percent cap provided in the lease. 

On appeal, plaintiff presents the following arguments for our 

consideration: 

POINT I 

THIS COURT SHOULD REVERSE THE COURT 

BELOW AND ENFORCE THE LEASE AS WRITTEN 

BECAUSE THE TRIAL COURT'S CONCLUSION 

THAT THE PARTIES ENTERED INTO A NEW 

AGREEMENT IS NOT SUPPORTED BY 

SUBSTANTIAL EVIDENCE. (No party raised the 

issue that they had signed or agreed to a new lease or 

lease modification. The Court below introduced it sua 

sponte . . . .). 

A. The June 1, 2017 Calculation of 

Underpayment Was Not An Offer. 
10 A-1840-20

B. There Was No Rent Dispute After Landlord 

Sent The First Mistaken Increase Calculation 

And Before Landlord Sent the Corrected 

Calculation. 

C. The Defendant's Counterclaim Disproves 

There Was a Meeting Of the Minds. 

D. There Was No Consideration To Support The 

Purported New Agreement. 

POINT II 

THIS COURT SHOULD REVERSE THE LOWER 

COURT AND ENFORCE THE LEASE AS WRITTEN 

BECAUSE THE LOWER COURT'S SUA SPONTE 

INSERTION OF AN OFFER AND ACCEPTANCE 

VIOLATED DUE PROCESS BECAUSE NO PARTY 

EVEN PLEADED OR OTHERWISE CLAIMED THE 

EXISTENCE OF A NEW AGREEMENT. (No party 

raised the issue that they had signed or agreed to a new 

lease or a lease modification. The Court below 

introduced it sua sponte . . . .). 

POINT III

THE COURT BELOW COMITTED REVERSIBLE 

ERROR BECAUSE THE STATUTE OF FRAUDS 

RENDERS UNENFORCEABLE A MOIFICATION 

OF A LEASE FOR LONGER THAN THREE YEARS 

WHERE THE MODIFICATION IS NOT IN A 

SIGNED WRITING. (No party raised the issue that 

they had signed or agreed to a lease modification. The 

Court below introduced it sua sponte . . . .). 
11 A-1840-20

POINT IV 

THE COURT BELOW COMMITTED REVERSIBLE 

ERROR BY NOT ENFORCING THE LEASE AS 

WRITTEN. (The Court below acknowledged the 

annual rent increase method which is included in the 

Lease Rider Section D, Ex. JE1, but failed to enforce it

. . . .). 

A. The Rational Meaning Of The Actual Lease 

Rider ONE D Formula Is To Determine The 

Annual Percentage Rent Increase By Subtracting 

The CPI Number Of Two Successive Januarys 

And To Attach The Percentage Sign To That 

Resulting Difference So As To Provide The 

Landlord With Above-Market Rent Increases For 

Lease Years [sixteen to thirty five]. 

B. This Court Should Reverse The Lower Court 

And Enforce The Lease As Written Because The 

Trial Court's Modification Of The Lease Does 

Not Identify Which Month's CPI Is To Determine 

Annual Increases And Because The Calculation 

Methods "Presented At Trial" Were Not 

Sufficiently Clear to Comply with the Statute of 

Frauds. 

POINT V

THE TRIAL COURT ERRED BY OMITTING A 

REQUIREMENT IN THE FINAL ORDER 

ENFORCING THE GUARANTEE WHICH 

REQUIRES THE GUARANTORS TO DELIVER A 

SIGNED REPRESENTATION THAT THE 

GUARANTEES REMAIN IN EFFECT AND 

INSTEAD SIMPLY TRUSTING DEFENDANTS TO 

PROVIDE THE LEGALLY REQUIRED 

DOCUMENT. 
12 A-1840-20

POINT VI 

THE TRIAL COURT ERRED BY DENYING AN 

AWARD OF ATTORNEY'S FEES TO APERION, 

WHICH SHOULD BE REVERSED AND THE 

MATTER REMANDED TO THE TRIAL COURT 

FOR AN AWARD OF REASONABLE ATTORNEY'S 

FEES AND COSTS TO APERION PURSUANT TO 

[RULE] 4:42-9. 

Appellate review of a judge's decision following a bench trial is limited. 

Our standard of review requires that we uphold the trial judge's factual findings, 

provided they are "supported by adequate, substantial and credible evidence."

Rova Farms Resort, Inc. v. Invs. Ins. Co. of Am., 65 N.J. 474, 484 (1974). Thus, 

"we do not disturb the factual findings and legal conclusions of the trial judge 

unless we are convinced that they are so manifestly unsupported by or 

inconsistent with the competent, relevant and reasonably credible evidence as to 

offend the interests of justice[.]" Seidman v. Clifton Sav. Bank, S.L.A., 205 

N.J. 150, 169 (2011) (alteration in original) (quoting In re Tr. Created By 

Agreement Dated Dec. 20, 1961, 194 N.J. 276, 284 (2008)). "A trial court's 

interpretation of the law and the legal consequences that flow from established 

facts are not entitled to any special deference." Manalapan Realty, L.P. v. 

Comm. of Manalapan, 140 N.J. 366, 378 (1995). When construing contract 

terms, "unless the meaning is both unclear and dependent on conflicting 
13 A-1840-20

testimony," its interpretation is a matter of law subject to de novo review. 

Celanese Ltd. v. Essex Cnty. Improvement Auth., 404 N.J. Super. 514, 528 

(App. Div. 2009) (quoting Bosshard v. Hackensack Univ. Med. Ctr., 345 N.J. 

Super. 78, 92 (App. Div. 2001)).

"The polestar of contract construction is to discover the intention of the 

parties as revealed by the language used by them." Karl's Sales & Serv., Inc. v. 

Gimbel Bros., 249 N.J. Super. 487, 492 (App. Div. 1991). Courts "should not 

torture the language of [contracts] to create ambiguity." Nester v. O'Donnell, 

301 N.J. Super. 198, 210 (App. Div. 1997) (quoting Stiefel v. Bayly, Martin & 

Fay, Inc., 242 N.J. Super. 643, 651 (App. Div. 1990)). Courts may not re-write 

a contract or grant a better deal than that for which the parties expressly 

bargained. See Solondz v. Kornmehl, 317 N.J. Super. 16, 21 (App. Div. 1998).

With these guiding principles in mind, we conclude that the judge erred 

in determining that there was a new offer and acceptance between the parties at 

the conclusion of arbitration which had the effect of altering the rent escalation 

formula.5 At the time the parties resorted to arbitration, the sole dispute was the 

fair market rental of the property in March 2013. The arbitrator was not charged 

5

 It is not clear that the issue of whether there was a new offer and acceptance 

or modification was properly before the judge. Neither party raised the issue 

directly in the pleadings or before the judge, who raised the issue sua sponte. 
14 A-1840-20

with determining the rent escalation formula, which was clearly spelled out in 

the lease. 

Once the parties completed arbitration, plaintiff sent defendant a 

calculation of the amount of rent underpaid for the period of 2014-2017 which 

defendant proceeded to pay. Against the backdrop of defendant's preexisting 

obligation to pay rent established in the lease, the parties would have had to

modify the contract at this juncture to implement a new rent escalation formula. 

"A proposed modification by one party to a contract must be accepted by the 

other to constitute mutual assent to modify" and it "must be based upon new or 

additional consideration." Cnty. of Morris v. Fauver, 153 N.J. 80, 100 (1998). 

"Such modification can be proved by an explicit agreement to modify, or, . . . 

by the actions and conduct of the parties, so long as the intention to modify is 

mutual and clear." Id. at 99. Additionally, "[u]nilateral statements or actions 

made after an agreement has been reached or added to a completed agreement 

clearly do not serve to modify the original terms of a contract, especially where 

the other party does not have knowledge of the changes, because knowledge and 

assent are essential to an effective modification." Id. at 100. We discern nothing 

in the record that suggests the parties were consciously modifying the lease in a 
15 A-1840-20

manner that made their intention to modify mutual and clear. We further

observe that there was no additional consideration to support a modification. 

Next, in the absence of a properly modified contract, the fact that plaintiff 

accepted less rent than it was entitled to under the lease is not evidence of an 

intention to modify. See id. at 101 (citing favorably the conclusion of the court 

in Walker v. Associated Dry Goods Corp., 231 Md. 168, 180 (1963), that "mere 

acceptance by [a plaintiff] for several years of payments in less amounts than 

they were entitled to under the lease does not evidence an intention on their part 

to modify the terms of the lease."). Additionally, lease paragraph twenty-two 

states: "[t]he various rights, . . . of the Landlord, expressed herein, are 

cumulative, and the failure of the Landlord to enforce strict performance by the 

Tenant of the . . . covenants of this lease, . . . shall not be construed or deemed 

to be a waiver . . . by the Landlord of any such conditions and covenants . . . ." 

As a result, by the clear terms of the parties' agreement, plaintiff is entitled to 

collect the rent plaintiff is owed, regardless of plaintiff's past performance.

Finally, because defendant owes plaintiff rent under the lease, plaintiff 

may be entitled to attorney's fees. Lease Rider Article Twelve provides that the 

costs and attorneys' fees incurred in this action will be paid by the losing party. 
16 A-1840-20

The judge short-circuited an analysis of fees by improperly concluding that there 

had not been a breach of the lease. 

To the extent we have not addressed them, any remaining contentions 

raised by the parties lack sufficient merit to warrant discussion in a written 

opinion. See R. 2:11-3(e)(2). 

Reversed and remanded for entry of judgment in plaintiff's favor in 

accordance with the terms of the lease, and for a determination of attorney's fees. 

We do not retain jurisdiction.