Wegman’s Ducks Landlord’s Attorneys’ Fee Claim Following Successful Tax Appeal

Wegmans Food Markets Inc. is no longer on the hook for nearly $58,000 in attorneys’ fees related to a tax appeal after a two-judge panel from the New Jersey Appellate Division agreed that the owner of shopping center could not collect the fees as additional rent.  Another tenant in the shopping center, Lowes Home Center, Inc., filed appeals for the 2007 and 2008 tax years which led to substantial reductions in the yearly tax bills, and reduced the pro rata share due from each of the shopping center’s tenants.  The owner, Crosspointe Developers, L.L.C, credited Wegmans with its pro rata share of the property tax reduction, but charged Wegmans with a pro rata share of both Crosspointe’s and Lowe’s attorneys’ fees for obtaining the reduction.

Wegmans argued that it had no obligation to pay the attorney fees, and deducted the fee amount from its rent under a “self help” provision in its lease.  Crosspointe filed a complaint to evict Wegmans from the shopping center for failing to pay rent, which a trial court dismissed after reviewing the lease between two “sophisticated corporations”.  The Appellate Division agreed that the clear terms of the lease did not permit Crosspointe to collect the fees as additional rent, and affirmed the trial court’s decision.

New Jersey law permits a tenant, residential or commercial, to file a tax appeal on property occupied by the tenant.  Whenever a conflict arises because the tenant and the landlord, and sometimes even another tenant, file tax appeals for the same year, the courts will often look to the lease terms to determine which party has the superior right to pursue the tax appeal.  (See blog posts below for more details).

A copy of the Appellate Division’s unpublished opinion in Crosspointe Developers, L.L.C. v. Wegmans Food Market, Inc, (November 12, 2013), can be found here.

For more on landlord-tenant issues in tax appeal cases, please see the following blog posts:

Court Confirms Tenant’s Right To Control Tax Appeal and to Refund

Retail Landlord Prevails on Right to Control Tax Appeal

Tenant Entitled to Tax Refund, But No More

No Landlord-Tenant Relationship Means No Dismissal Under Chapter 91