Tippecanoe Associates Ii, LLC v. Kimco Lafayette

671, INC. 811 N.E.2d 438 (2004)

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Nature of the Case

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Facts

SES Development Company (SES) owned the Sagamore Shopping Center. On April 27, 1973, Kroger leased one of the stores in the shopping center for a term of twenty years, with an option to extend the lease by four successive terms of five years each. The lease contained a restrictive covenant: not to lease, rent, occupy, or suffer or permit to be occupied, any part of the Shopping Center premises or any other premises owned or controlled directly or indirectly within 2 miles of the Shopping Center premises for the purpose of conducting therein or for the use as a food store or a food department. On March 25, 1983, Kroger assigned its rights to Pay Less Super Markets, Inc., effective April 1, 1983. On June 1, 1984, Pay Less Super Markets sub-leased the space to H.H. Gregg Appliances, Inc., who remains the tenant to this day. On January 15, 1997, P purchased the shopping center. At that time, 79,020 square feet of the 183,440 square feet in the shopping center were occupied by Target. The only prospective tenant P located is Schnucks, a Missouri corporation that operates grocery stores. P filed a complaint asking the trial court to declare unenforceable the restrictive covenant in D's lease that prohibits P from renting space in the shopping center to a grocery store. The trial court ruled for P and declared the restrictive covenant unenforceable. D appealed.