2000 CLEMENTS BRIDGE, LLC,

Plaintiff-Counterclaim

Defendant,

v.

OFFICEMAX NORTH AMERICA, INC.,

DefendantCounterclaimant.

UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY

HONORABLE JOSEPH E. IRENAS

CIVIL ACTION NO. 11-57

(JEI/KMW)

OPINION 

APPEARANCES:

Patras Williams, LLC

Amy M. Williams

14 Countryside Lane, Suite #100

Ringwood, New Jersey 07456

Counsel for Plaintiff

Reilly, Janiczek & McDevitt, P.C.

Susan Valinis

2500 McClellan Blvd., Suite 240

Merchantville, New Jersey 08109

Counsel for Defendant

IRENAS, Senior District Judge:

Plaintiff 2000 Clements Bridge, LLC alleges that Defendant

OfficeMax North America, Inc. breached the terms of a lease for

commercial property. Presently before the Court are Cross Motions

for Summary Judgment. (Dkt. Nos. 52, 75)

I.

In February 2006, AIG Baker Deptford, LLC (”Former

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Landlord”) acquired ownership of Deptford Landing Shopping Center

(the “Shopping Center”). (See Williams Cert. Ex. A at 2) On

September 13, 2007, Former Landlord leased a lot to Defendant at

the Shopping Center (“Defendant’s Lease”). (See Valinis Cert. Ex.

A at 1)

Defendant’s Lease contained a restrictive covenant (the

“Prohibited Uses Provision”), inserted for the benefit of

Defendant, which ran with the land. (See Valinis Cert. Ex. A at

23) The Prohibited Uses Provision prohibited Former Landlord and

his successors from leasing a lot to a tenant in the Shopping

Center likely to be a direct competitor of Defendant.

During the initial term of this lease or during any

renewal period hereunder, and for so long as Tenant is

operating an office supply superstore from the Demised

Premises, Landlord covenants and agrees that it shall not

enter into a lease or sale of any portion of the Shopping

Center (excluding the Demised Premises) for the

following:

(a) For the purpose of, or which is permitted to

be, the sale of office, home office, school or

business products, computers and computer

products, office, home office, school or

business supplies or equipment; office

furniture; or electronics (including by way of

example those businesses operated by Office

Depot, Staples, Office Shop Warehouse, Mardel

Christian Office and Education Supply Store,

Mail Boxes etc., and Workplace); or for use as

a business support center, copy center or

“Kinko” type of operation (all of which are

hereinafter referred to as the “Prohibited

Uses”), except to the extent permitted by

subparagraph (b) immediately below . . . or

(b) For any purpose which would permit more than

(i) one thousand (1,000) square feet of space

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to be used for any Prohibited Uses . . .

(Valinis Cert. Ex. A at 23)

Defendant’s Lease also included a cotenancy provision

(“Cotenancy Provision”). If Michaels Stores, Inc., PetSmart, Inc.

or Circuit City Stores, Inc. (“Major Tenants”) ceased operations 1

at the Shopping Center (a “Cotenancy Event”) for 180 days,

Defendant’s minimum rent would abate. (See Valinis Cert. Ex. A 2

at 30) If, after eighteen months, Former Landlord had not found a

new tenant to replace the vacating Major Tenant (“Replacement

Tenant”), Defendant gained the right to terminate. (Id.) Former

Landlord could cure the Cotenancy Event within eighteen months

merely by finding a Replacement Tenant. (Id.) To cure after

eighteen months, however, Former Landlord would have to find a

Replacement Tenant and provide Defendant with notice of the cure

or Defendant’s right to terminate would not lapse. (Id.)

The parties agree that, on March 7, 2009, a Cotenancy Event

occurred when Major Tenant Circuit City ceased operations at the

Shopping Center. (See Pl.’s Facts ¶ 26) On July 29, 2009, Former 3

These Major Tenants entered leases before Defendant and 1

thus were not subject to the Prohibited Uses Provision.

 If a Cotenancy Event occurred, Defendant had to pay only 2

3% of gross sales (“Percentage Rent”) for the months that the

Cotenancy Event remained uncured. (Valinis Cert. Ex. A at 30)

 Citations to “Facts” refer to the parties’ obligation to 3

submit statements of undisputed facts with motions for summary

judgment. See L.Civ.R. 56.1(a).

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Landlord leased the lot to Replacement Tenant Gregg Appliances,

Inc. (“hhgregg Lease”), an electronics retail store similar to

Circuit City. (Id. at ¶ 27) On May 20, 2010, hhgregg opened for

business approximately fourteen months after the Cotenancy Event.

The hhgregg Lease described the proper uses for the property

(“Use Provision”):

Use. Except with respect to the Exclusive Uses and

Restrictions, which are listed in Exhibit “D” attached

hereto, and to the extent not prohibited by the Permitted

Encumbrances listed in Exhibit “F” attached hereto,

Tenant may use the Premises for any lawful retail purpose

including, but not limited to the display and retail sale

of electronics, appliances, audio and video equipment,

computers and bedding as typically sold in stores

operated by Tenant, and for the storage of merchandise or

service related purposes ancillary to the sale of its

goods.

(Valinis Cert. Ex. B at 4-5)

Attached verbatim to the hhgregg Lease as Exhibit D was the

Prohibited Uses Provision from Defendant’s Lease. (Valinis Cert.

Ex. B at Ex. D) The principal issue in this case is the

interpretation of these competing provisions: the Prohibited Uses

Provision purportedly prohibited the sale of computers and

electronics while the Use Provision expressly permitted such

retail activity.

On July 16, 2010, Plaintiff became the owner of the Shopping

Center and succeeded Former Landlord’s interests under all of the

Shopping Center leases. (See Williams Cert. Ex. A at 1) On July

27, 2010, Defendant sent notice to Plaintiff that not only did

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the Cotenancy Event remain uncured, but that the hhgregg Lease

also violated Defendant’s Prohibited Uses Provision. (See Pl.’s 4

Facts ¶ 39) 

Plaintiff disputed Defendant’s reading of the Prohibited

Uses Provision and sent Defendant notice that, under its

interpretation, hhgregg was not in violation. (See Valinis Cert.

Ex. C, Letter from Williams, Aug. 10, 2010) While still disputing

that a violation had occurred, Plaintiff sent hhgregg a notice of

default and demanded a cure. (Id.) [H]hgregg, however, did not

cure the violation and Plaintiff notified hhgregg that the

behavior had “ripened into an Event of Default.” (Valinis Cert.

Ex. C, Letter from Williams, Sept. 16, 2010) Despite the warning,

Plaintiff pursued no further rights or remedies against hhgregg.

(See Def.’s Facts ¶ 25)

Following this correspondence, Defendant continued to pay

Percentage Rent until October 7, 2010. (See Def.’s Br. 11) At

Plaintiff’s insistence, Defendant then paid full rent for the

remainder of October and November under protest. (See Pl.’s Facts

¶ 50, 52) After November, it is unclear what amount of rent, if

Ironically, OfficeMax negotiated for Circuit City to remain 4

in the Shopping Center via the Cotenancy Provision. OfficeMax

evidently found Circuit City to benefit its business. When

Landlord replaced Circuit City with hhgregg, a substantially

similar store, OfficeMax claimed a violation of the Prohibited

Uses Provision. OfficeMax’s seemingly anomalous position,

however, is not dispositive to these Motions.

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any, Defendant paid.5

On November 23, 2010, Plaintiff filed the Complaint in New

Jersey State Court. (See Pl.’s Br. 12) On December 7, 2010,

Defendant sent Plaintiff written notice that it was terminating

the lease. (See Pl.’s Facts ¶ 54) On January 6, 2011, Defendant

removed this action on the basis of diversity jurisdiction. (Dkt.

No. 1) On January 20, 2011, Defendant filed the Answer and

counterclaimed. (Dkt. No. 4) On January 22, 2011, Defendant

ceased operations. On February 28, 2011, Plaintiff retook

possession of Defendant’s property. (See Def.’s Facts ¶ 12)

II.

“[S]ummary judgment is proper ‘if the pleadings,

depositions, answers to interrogatories, and admissions on file,

together with the affidavits, if any, show that there is no

genuine issue as to any material fact and that the moving party

is entitled to a judgment as a matter of law.’” Celotex Corp. v.

Catrett, 477 U.S. 317, 322 (1986) (quoting Fed.R.Civ.P. 56(c)). 

In deciding a motion for summary judgment, the Court must

 The parties do not address post-November 2010 rent 5

payments in their Local Rule 56.1 Statements of Uncontested Facts

whatsoever. However, in the Complaint, Plaintiff alleged that

Defendant did not pay any rent following the protested payment

for November. (Compl. ¶ 80) Defendant denied this allegation and

maintained that all rent had been paid in full. (Def.’s Answer ¶

80) Neither of these facts may be considered, though, because

they were not included in the parties’ 56.1 statements.

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construe the facts and inferences in a light most favorable to

the non-moving party. Pollock v. Am. Tel. & Tel. Long Lines, 794

F.2d 860, 864 (3d Cir. 1986). 

“‘With respect to an issue on which the non-moving party

bears the burden of proof, the burden on the moving party may be

discharged by ‘showing’ – that is, pointing out to the district

court – that there is an absence of evidence to support the

nonmoving party’s case.’” Conoshenti v. Public Serv. Elec. & Gas,

364 F.3d 135, 145-46 (3d Cir. 2004) (quoting Celotex, 477 U.S. at

323). The role of the Court is not “to weigh the evidence and

determine the truth of the matter, but to determine whether there

is a genuine issue for trial.” Anderson v. Liberty Lobby, Inc.,

477 U.S. 242, 249 (1986). “Only disputes over facts that might

affect the outcome of the suit under the governing law will

properly preclude the entry of summary judgment.” Id. at 249.

III.

The claims of both Plaintiff and Defendant revolve around

the propriety of Defendant’s termination of the Lease under

either (1) the Prohibited Uses Provision or (2) the Cotenancy

Provision. Both parties move for summary judgment on all claims. 6

Plaintiff’s Complaint technically alleges four claims: (1) 6

anticipatory breach of contract; (2) unjust enrichment; (3)

breach of the covenant of good faith and fair dealing; and (4)

tortious interference with contractual relations. Plaintiff

additionally seeks a declaratory judgment finding Defendant

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A.

First, Defendant could rightfully terminate if Plaintiff

leased a portion of the Shopping Center that violated the

Prohibited Uses Provision, and such violation continued for sixty

days after Defendant gave Plaintiff written notice. (See Valinis

Cert. Ex. A at 23-25)

Normally, under New Jersey law, the construction of a

written contract is a matter of law. See Fastenberg v. Prudential

Ins. Co. of Am., 309 N.J. Super. 415, 420 (App. Div. 1998); see

also Verhagen v. Platt, 1 N.J. 85, 88 (1948) (stating that the

common intent of the parties controls). When construing a

contract “it should not be interpreted to render one of its terms

meaningless. ‘Literalism must give way to context.’” Cumberland

Cnty. Improvement Authority v. GSP Recycling Co., Inc., 358 N.J.

Super. 484, 497 (App. Div. 2003) (quoting Borough of Princeton v.

Bd. of Chosen Freeholders of Cnty. of Mercer, 333 N.J. Super.

310, 325 (App. Div. 2000), aff’d, 169 N.J. 135 (2001). “[W]here

there is uncertainty, ambiguity or the need for parol evidence to

aid in the interpretation, then the doubtful provision should be

wrongfully terminated its lease.

Defendant’s Answer technically alleges three counterclaims:

(1) breach of contract; (2) unjust enrichment; and (3) breach of

the covenant of good faith and fair dealing. Defendant also seeks

a declaratory judgment finding that Defendant properly terminated

its lease. 

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left to the jury.” Great Atl. & Pac. Tea Co. v. Checchio, 335

N.J. Super. 495, 502 (App. Div. 2000) (citing Michaels v.

Brookchester, Inc., 26 N.J. 379, 387 (1958)).

To determine whether a violation occurred, the Court must

determine what was actually prohibited. The Prohibited Uses

Provision contains two lists. One list prohibits certain

products: “office, home office, school or business products,

computers and computer products, office, home office, school or

business supplies or equipment; office furniture; or

electronics.” (Valinis Cert. Ex. A at 23) The second list

identifies examples of prohibited entities: “Office Depot,

Staples, Office Shop Warehouse, Mardel Christian Office and

Education Supply Store, Mail Boxes etc., and Workplace.” (Id.)

 The Prohibited Uses Provision, therefore, must be

interpreted to prohibit the sale of the listed products, but only

when sold through a prohibited office superstore. See Borough of

Princeton, 333 N.J. Super. at 325 (noting that a document “must

be read as a whole, without artificial emphasis on one section

with a consequent disregard for others.”). This interpretation

harmonizes both the hhgregg Lease and Defendant’s Lease. It also

comports with commonsense. 

To place undue emphasis on the list of prohibited products,

as Defendant suggests, would cause several problems. First, the

list of office superstores would be rendered meaningless. Second,

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hhgregg’s Use Provision would directly contradict Defendant’s

Prohibited Uses Provision attached as Exhibit D to the hhgregg

Lease. The Court cannot fathom that an electronics retail store

would intend to enter a contract that prohibited the sale of

electronics. Accordingly, the Court finds that the Prohibited

Uses Provision is unambiguous, parol evidence is not required,

and Plaintiff did not violate its terms. Defendant, therefore,

was not entitled to terminate the Lease under the Prohibited Uses

Provision.

B.

Second, under the Cotenancy Provision, Defendant’s only

argument is that hhgregg cannot be a Replacement Tenant because

hhgregg was violating the Prohibited Uses Provision. As noted

above, hhgregg was not violating the Prohibited Uses Provision.

Even if it were, however, nothing in the Cotenancy Provision

requires the Replacement Tenant to abide by the Prohibited Uses

Provision. The two provisions create two separate obligations

with different remedies. Defendant’s attempt to conflate the two

provisions, therefore, is without merit.

Moreover, it is undisputed that hhgregg opened for business

well within eighteen months. Although Plaintiff erroneously

conceded that the Cotenancy Event was not properly cured because

Plaintiff did not send Defendant notice of a cure (see Pl.’s Br.

at 27-28 & n.4), no reasonable interpretation of the Cotenancy

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Provision required Plaintiff to give such notice. Before the

expiration of eighteen months, a Cotenancy Event continued “until

such time as Landlord has caused the Vacant Space to be open and

operated by a single-user, retail tenant, if the Vacant Space was

previously occupied by any Major Tenant.” (Valinis Cert. Ex. A at

30) It is undisputed that hhgregg is a single-user, retail

tenant.

The Court declines to send this case to a jury based solely

on Plaintiff’s erroneous concession where no reasonable jury

could find in Defendant’s favor. Accordingly, Defendant did not

have the right to terminate under the Cotenancy Provision.

C.

For the reasons above, Defendant was not entitled to

terminate the contract under either the Prohibited Uses Provision

or the Cotenancy Provision. Accordingly, Plaintiff’s Motion will

be granted with respect to the claim for a breach of contract.

Plaintiff’s other claims, however, are without merit. 

First, unjust enrichment is an equitable doctrine. See Goady

v. Philadelphia Elec. Co., 639 F.2d 117, 122 (3d Cir. 1981)

(“[I]f an adequate remedy at law exists, equitable relief will

not be granted.”)

Second, a breach of the covenant of good faith and fair

dealing does not apply to express contract terms. See Cargill

Global Trading v. Applied Development Co., 706 F.Supp.2d 563, 580

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(D.N.J. 2010) (quoting Fields v. Thompson Printing Co., 363 F.3d

259, 271-72 (3d Cir. 2004) (“[W]here the terms of the parties’

contract are clear, the implied covenant of good faith and fair

dealing will not override the contract’s express language.”).

Third, with respect to the tortious interference claim, “an

entity cannot interfere with its own contract ...” In re Inter’l

Ben. Grp., Inc., 2007 WL 1875926, *4 (D.N.J. 2007).

Finally, a declaratory judgment is moot in light of

Plaintiff’s success on the breach of contract claim.

Defendant’s counterclaims, on the other hand, have no merit.

Because this Court finds that Defendant improperly terminated

Defendant’s Lease, Defendant’s Motion will be denied in full.

IV.

For the foregoing reasons, Plaintiff’s Motion will be denied

on the claims for unjust enrichment, breach of the covenant of

good faith and fair dealing, tortious interference, and a

declaratory judgment. In all other respects, Plaintiff’s Motion

will be granted. Defendant’s Cross Motion will be denied in full.

Dated: 8/21/12

 /s/ Joseph E. Irenas 

JOSEPH E. IRENAS, S.U.S.D.J.

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