The Leasing Hotline

Restrictive Covenants

A court may not award a judgment on the pleadings for a restrictive covenant where the definitions as contained in the original declaration were not clear. Dillon Real Estate Co., Inc. v. American National Insurance Co., No. CV-08-01508-PHX-FJM, United States District Court for the District of Arizona, Dec. 11, 2008.

Two property owners owned adjoining pieces of land upon which one shopping center was built. The owners signed a declaration with restrictive covenants, including an exclusive use provision, and easements that run with the land. One of the property owners leased space to a company called SFDC (d/b/a Fry's Food & Drug Store). Thereafter, one property owner sold the property and the successor-in-interest leased space to a Dollar Tree store. The other property owner commenced an action, holding that the Dollar Tree was selling grocery items in violation of the exclusive use provision, and sought compensatory damages and injunctive relief. It then moved for a judgment on the pleadings. The court denied the motion, holding that a judgment on the pleadings is only appropriate where the moving party has established that no material issues of fact exist. The court held that because the issue of “grocery items” was not defined in the original declaration, it remained in dispute whether Dollar Tree actually sold “grocery items.” Furthermore, the declaration was unclear whether it applied to the successor-in-interest.

Discovery

A party's failure to respond to requests for admission during discovery may result in those admissions being admitted at trial and used against that party during the trial. Deming IX, LLC. v. Millonzi International Products Group, Inc., et al, Case No. 2008-L-090, Court of Appeals of Ohio, Eleventh Appellate District, Lake County, Dec. 31, 2008.

The landlord commenced an action against the tenant, alleging that the tenant had breached the lease by vacating the subject premises and had failed to make the annual rent payment that was due March 1, 2007. The tenant's answer admitted to vacating the leased premises but argued they did so in accordance with the lease. During the discovery phase, the landlord served discovery upon the tenant, seeking requests for admission. The tenant never replied to those discovery requests. During the trial, at issue was whether the landlord's requests for admission should be deemed admitted because the tenant never responded to the requests for admission. The trial court deemed the requests for admission admitted and after a trial, held the tenant to be in default of its obligations under the lease. The tenant appealed, and the appellate court affirmed. The appellate court noted that the requests for admission were not made a part of the record, and, therefore, could only conclude that the trial court made no error. However, the court further noted that the lease between the parties was clear and unambiguous: The tenant was responsible for the unpaid rent, regardless of whether the admissions were deemed admitted or not.

Restrictive Covenants

A court may not award a judgment on the pleadings for a restrictive covenant where the definitions as contained in the original declaration were not clear. Dillon Real Estate Co., Inc. v. American National Insurance Co., No. CV-08-01508-PHX-FJM, United States District Court for the District of Arizona, Dec. 11, 2008.

Two property owners owned adjoining pieces of land upon which one shopping center was built. The owners signed a declaration with restrictive covenants, including an exclusive use provision, and easements that run with the land. One of the property owners leased space to a company called SFDC (d/b/a Fry's Food & Drug Store). Thereafter, one property owner sold the property and the successor-in-interest leased space to a Dollar Tree store. The other property owner commenced an action, holding that the Dollar Tree was selling grocery items in violation of the exclusive use provision, and sought compensatory damages and injunctive relief. It then moved for a judgment on the pleadings. The court denied the motion, holding that a judgment on the pleadings is only appropriate where the moving party has established that no material issues of fact exist. The court held that because the issue of “grocery items” was not defined in the original declaration, it remained in dispute whether Dollar Tree actually sold “grocery items.” Furthermore, the declaration was unclear whether it applied to the successor-in-interest.

Discovery

A party's failure to respond to requests for admission during discovery may result in those admissions being admitted at trial and used against that party during the trial. Deming IX, LLC. v. Millonzi International Products Group, Inc., et al, Case No. 2008-L-090, Court of Appeals of Ohio, Eleventh Appellate District, Lake County, Dec. 31, 2008.

The landlord commenced an action against the tenant, alleging that the tenant had breached the lease by vacating the subject premises and had failed to make the annual rent payment that was due March 1, 2007. The tenant's answer admitted to vacating the leased premises but argued they did so in accordance with the lease. During the discovery phase, the landlord served discovery upon the tenant, seeking requests for admission. The tenant never replied to those discovery requests. During the trial, at issue was whether the landlord's requests for admission should be deemed admitted because the tenant never responded to the requests for admission. The trial court deemed the requests for admission admitted and after a trial, held the tenant to be in default of its obligations under the lease. The tenant appealed, and the appellate court affirmed. The appellate court noted that the requests for admission were not made a part of the record, and, therefore, could only conclude that the trial court made no error. However, the court further noted that the lease between the parties was clear and unambiguous: The tenant was responsible for the unpaid rent, regardless of whether the admissions were deemed admitted or not.