On March 25, 2013, the Superior Court of New Jersey, Appellate Division, issued a decision in the respondent/defendant’s favor in the matter Liberty House Nursing Home of Jersey City, Inc., d/b/a Liberty House Nursing Home v. GRE Jersey City, Inc., Docket No. A-0206-11T1. GluckWalrath served as attorneys for the respondent/defendant, represented by Andrew Bayer, with William C. Katz on the brief. The decision shall serve as precedent in determining ownership of a Nursing Home’s Certificates of Need when operator leases are terminated.
After winning a favorable ruling at the trial court (Chancery Division, Hudson County, Docket No. C-53-10), the appellant filed this appeal. At trial, the court concluded that the respondent validly terminated the appellant’s tenancy, the 2005 “Memorandum of Lease” executed in 2005 did not create an enforceable agreement or provide for an option to renew. It also determined that the respondent, the Nursing Home owner, was the sole owner of the right to apply for a license to operate the nursing home with Certificates of Need for one hundred and eighty beds, and that the appellant had only been operating the leased property.
On appeal, the Appellate Division found that the party’s intentions to not be bound by the 2005 Memorandum of Lease was supported by credible evidence, binding them to the lower court’s decision. The Appellate Division also found that the record fully supports the lower court’s determination that the respondent was “merely leasing its right to apply for an operator’s license at the subject property to Liberty House during the term of the lease[,]” the opportunity to apply for the license “would revert back to [the respondent] as owner of the facility that was built solely as a nursing home pursuant to the custom in the industry[,]” and reasoned that respondents opportunity to seek this license, with its attendant bed rights, reverted to respondent.
Andrew Bayer believes this decision will serve to guide future legal issues between Nursing Homes and third-parties in the future. “The decision rendered today will bring clarity to this particular area of contract formation between operators and owners. Bed rights have become somewhat of a confusing concept because of the limited number of licenses available in New Jersey and the [Appellate Division’s] ruling provides more context defining that term.”
For additional details on the March 25, 2013 ruling, read the decision online.