Lisa Van Horn v. Harmony Sand & Gravel, Inc.
122 A.3d 1021
N.J. Super. Ct. App. Div.2015Background
- Lisa Van Horn inherited a 45-acre parcel previously subject to a 1990 "Lease Agreement" (First Agreement) permitting Harmony Sand & Gravel to remove soil and aggregates; First Agreement was witnessed/notarized and exclusive.
- A March 2, 2000 Second Agreement replaced the First Agreement: it used the word "indeterminate," allowed Harmony to extract materials until it determined extraction was no longer commercially reasonable, increased certain obligations, and was not witnessed, notarized, or recorded.
- Smith (the original lessor) died in 2002; Van Horn later sent notices terminating the agreement (2008 and 2012) and filed suit in 2012 seeking declaratory relief and possession of the property and improvements.
- The parties conceded no material facts were disputed and submitted the question of the Second Agreement's legal character to the court on summary judgment.
- The Law Division held the Second Agreement was a lease complying with the statute of frauds; the Appellate Division affirmed but on different grounds, concluding the Second Agreement created a profit a prendre (a profit), not a lease or license.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the Second Agreement a revocable license? | Van Horn: It is a license revocable at will and thus terminable. | Harmony: Even if a license, it is irrevocable or alternatively it is a lease. | No — not a license; terms show an alienable, inheritable extraction right inconsistent with a revocable personal license. |
| Is the Second Agreement a lease violating the statute of frauds? | Van Horn: If a lease, it lacks a definite term ("indeterminate") and thus fails N.J.S.A. 25:1-12, making it year-to-year terminable on notice. | Harmony: It is a lease that terminates on objective events (depletion/commercial unreasonableness) and complies with statute of frauds. | Court: It is not a lease; exclusive possession was not granted and owner retained rights inconsistent with a lease. |
| Alternatively, does the Second Agreement create a profit a prendre (or easement in gross)? | Van Horn: Lacked deed formalities (witnessing/recording) and thus cannot convey a real property interest. | Harmony: Agreement is analogous to recognized profits; parties intended an extraction interest that survives heirs. | Held: The agreement created a profit a prendre — an assignable, inheritable right to extract materials — valid despite informalities. |
| Can Van Horn unilaterally terminate the extraction right after inheriting the land? | Van Horn: Yes, as owner she can revoke if agreement is merely a license or invalid. | Harmony: No; the profit survives and cannot be unilaterally renounced by the servient owner. | Held: Van Horn cannot unilaterally revoke; the profit remains in force. |
Key Cases Cited
- Thiokol Chem. Corp. v. Morris Cnty. Bd. of Taxation, 41 N.J. 405 (distinguishes lease by exclusive possession from lesser interests)
- Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520 (summary judgment standard on genuine issues of material fact)
- Moore v. Schultz, 22 N.J. Super. 24 (profit a prendre may exist where quarrying rights granted; license may become irrevocable when substantial expenditures or rights conveyed)
- Township of Sandyston v. Angerman, 134 N.J. Super. 448 (licenses do not protect licensee against owner interference; labels do not control substance)
- Sachau v. Sachau, 206 N.J. 1 (contract interpretation focuses on parties' intent)