Rowe v. Great Atlantic & Pacific Tea Co., Inc.
Court of Appeals of New York
385 N.E.2d 566 (1978)
Robert Rowe (plaintiff) leased property to Great Atlantic & Pacific Tea Co. (A & P) (defendant), to use for a new location of its supermarket chain. The lease did not restrict any assignment. Years later, Rowe and A & P negotiated a new lease, which contained a percentage rental clause in addition to a base rental clause. The new lease also did not restrict A & P’s ability to assign the lease. After disappointing profits, A & P decided to close the store, and over Rowe’s objection, A & P assigned the lease to Southland Corp., another supermarket-chain operator. Rowe sued A & P for possession and damages, claiming that A & P breached an implied covenant against assignment of the lease without Rowe’s consent. A trial court dismissed the case, ruling that A & P had the right to assign the lease absent an express provision to the contrary. The court also found there was no implied covenant against assignment, because no reasonable landlord would have signed the lease without believing that A & P had the right to assign the lease. An appeals court reversed the trial court, ruling that the existence of a percentage rental clause indicated Rowe’s reliance upon characteristics specific to A & P, and thus the lease contained an implied covenant against assignment. A & P appealed.
Rule of Law
Holding and Reasoning (Gabrielli, J.)
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