Joseph Martin, Jr., Delicatessen, Inc. v. Schumacher

Schumacher (defendant), a landlord, agreed to lease a retail store to Joseph Martin, Jr., Delicatessen, Inc. (Joseph) (plaintiff) for a term of five years. Under this agreement, Joseph’s rent would begin at $500 and gradually escalate to $650 after five years. The rental agreement also provided a renewal clause that permitted Joseph to renew the lease after five years by providing sufficient notice to Schumacher. The renewal clause stated that if Joseph exercised this option, the new lease would be renewed based on a rental price agreed upon by the parties in the future. Following the end of the initial five-year lease, Joseph provided sufficient notice to Schumacher of its desire to renew the lease. Schumacher stated that it would not renew the lease for less than $900 per month in rent. Joseph hired an appraiser, who stated that the fair market rental value would be $545.41. Joseph brought suit against Schumacher in New York state court seeking specific performance of the renewal clause at either a rent of $545.41 per month or a reasonable value determined by the court. At the same time, Schumacher brought an action to evict Joseph. The trial court held the renewal clause in the contract between Joseph and Schumacher to be unenforceable for indefiniteness. Joseph appealed, and the appellate court reversed. The appellate court then certified the question of whether its reversal was proper to the New York Court of Appeals.