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ICSC Legal Database - CasesMonday, February 22, 1999 05:01 PM

Case Index:
00108

Citation:
754 Fifth Avenue Assocs. v. Neiman-Marcus Group, Inc., 646 N.Y.S.2d 990 (N.Y. App. Div. 1996); Appeal

dismissed, 654 N.Y.S. 2d 718 (1997).

Issue:
Whether a provision in a lease that prohibits the tenant from opening other branches within a certain proximity to

 the leased premises and in a latter amendment prohibits the Tenant from relocating at all should be interpreted,

 as a matter of law, to apply only to relocations within the same territorial boundary?

Facts:
Plaintiff-Landlord owned the New York City building in which Defendant-Tenant operated a Bergdorf Goodman

department store with a mail-order division in the same building. The original lease, as well as subsequent

amendments, prohibited Tenant from establishing similar operations within one hundred miles of the premises.

One amendment also prohibited Tenant from relocating the mail order business from the premises. Tenant

relocated the mail order business to Texas. Tenant contended that the amendment only banned relocations in

New York. Tenant sought a declaration that it did not have to pay Landlord any percentage of the gross sales

from the Texas operation. Both parties filed motions for summary judgment. The trial court found for Tenant.

Holding:
Judgment reversed. There is too much ambiguity in the lease to justify a summary judgment. The trial court's

decision that interpreting the amendment to prohibit the relocation would render the other provisions (that had

territorial limitations) meaningless is not supported by the evidence. The lease sought to answer various

contingencies and has insufficient clarity to justify a summary judgment. The dissent argued that the

amendments display two clear provisions. First, that Tenant may not relocate the mail-order business anywhere

 within 100 miles of the premises. Second, that Tenant would not otherwise divert the mail-order business from

the premises. If the second provision interpreted to ban the relocation, then the first provision would be rendered

meaningless. As the

parties were all well-represented, the dissent argued that the amendments only addressed issues concerning

the 100-mile-radius of the original location.

Publication:
Legal Update

Date:
Winter 1997

Classification 1:
Landlord and Tenant

Classification 2:

Classification 3:

00108 - Legal Update - Winter 1997