Mandia v. Applegate

In 1976, Frank Mandia and Mike Brown (plaintiffs) purchased an amusement pier and boardwalk. At that time, Applegate and Dagostino (defendants) acquired a 99-year lease for space along the boardwalk to operate a retail business. The lease provided that the tenants could not obstruct the boardwalk. The lease also provided that the landlords could end the lease if the tenants defaulted. The defendants built a building with a second-floor overhang five feet over the boardwalk. After opening a surf shop in the building, the defendants asked the plaintiffs for permission to display clothing items under the overhang. The plaintiffs agreed. Many years later, in 1994, Applegate told the plaintiffs that the defendants intended to install an awning extending eight feet over the boardwalk. The plaintiffs responded that the awning would use more of the boardwalk area than they had previously allowed and asked to be compensated for it. The parties agreed that $5,000 was fair rent for the awning’s use of the boardwalk space. However, the parties were unable to come to terms on a written agreement. The defendants installed the awning and continued displaying merchandise during the 1994–1996 seasons without paying any extra rent for the boardwalk space. The plaintiffs sued to enjoin the defendants’ use of the boardwalk space, for compensation, and for a declaration that the defendants had forfeited their lease by obstructing the boardwalk. The trial court concluded that the plaintiffs had waived their right to prevent the defendants from displaying merchandise under the overhang, but that the defendants had no right to display merchandise under the awning. The trial court also awarded the plaintiffs $5,000 for the defendants’ unauthorized use of the awning space. Finally, the court declined to find that the defendants had forfeited their lease. The plaintiffs appealed.