The Law

Legal Expenses not Common by Ron Davis Owners of a New Jersey shopping center have failed in efforts to force a tenant to help pay legal fees incurred in a property-tax dispute. The shopping center, located in Woodbridge, is owned by Crosspointe Developers, L.L.C. Crosspointe leases space to the tenant, Wegmans Food Markets, Inc., which operates a supermarket at the center. The dispute between Crosspointe and Wegmans began after another tenant, Lowe’s Home Center, appealed the Crosspointe local tax assessment for two recent years. That appeal resulted in a big tax reduction for Lowe’s, the center—and Wegmans as well. But then Wegmans learned that Crosspointe had charged it with a prorated share of both Crosspointe’s and Lowe’s attorneys’ fees resulting from the legal action. Wegmans was therefore facing charges totaling $57,886.31. Wegmans protested, arguing that it was under no obligation to pay those attorneys’ fees. So when Wegmans consequently failed to comply with the demand for payment of those fees, the center’s owners responded with legal actions, seeking to evict Wegmans for “nonpayment of rent.” At trial, a New Jersey court heard the arguments of both landlord and tenant and noted that the lease agreement is a detailed contract between two “sophisticated corporations.” But the judge concluded that the lease actually provides that the tenant is entitled to receive attorney fees from the landlord. Therefore, he added, the lease does not provide that the landlord can charge the tenant for any attorney fees. The center’s owners appealed, arguing that the court failed to take into consideration an equitable principle. That principle, they added, is “that all those who enjoy a common benefit should be obligated to pay their fair share of the costs.” Therefore, the owners added, they are entitled to reimbursement for their successful efforts “whether or not the Wegmans’ lease specifically provides for same.” Wegmans agreed that the lease agreement does indeed provide for rent and additional rent. But, Wegmans added, that agreement does not obligate payment for the landlord’s attorneys' fees. On appeal, a New Jersey appellate court ruled in favor of the Wegmans, explaining, “It is notable that Crosspointe does not provide any precedential support for this alleged ‘principle’ or identify any specific equitable ‘principle’ or identify any specific equitable principle that necessitates eviscerating the express terms of a contract.” Concluded the court, “The circumstances here provide no basis in law or equity for disregarding the terms of the parties’ negotiated agreement. Rather, we afford them their plain meaning.” (Crosspointe Developers, L.L.C. v. Wegmans Food Markets, Inc., A.3d, 2013 WL 5975872 [N.J.Super.A.D.]) Decision: December 2013 Published: January 2014