Great Isle Development Group V. Orange Post Assoc., LLC (Conn. Sup. Ct. Feb. 2023)
CLAIMS: A commercial shopping center owner sues an adjacent shopping center owner for violation of restrictive covenants as to the issue of whether an Amazon distribution center complies with the restrictive covenants that require retail and prohibit industrial.
EVIDENCE: The properties were encumbered with a restrictive covenant filed of record that included the following: “Every parcel shall be used only for financial institutions, service shops, offices and retail stores selling retail merchandise normally carried in other shopping centers and restaurants with over fifty (50) percent of gross revenues from food sales.” The Defendant’s property had been occupied by a Lowes Home Improvement store until it closed and Defendant bought it and then proceeded to lease it to Amazon for a distribution center. The Plaintiff property was being used as a retail center for uses such as fitness center, guitar sales, and other retail occupants. Plaintiff argued that an Amazon distribution center did not comply with the covenants and was detrimental to the retail shopping center harmony.
COURT RULING: The Court went through a lengthy analysis to determine the “intent” of the covenants at the time of their recordation in 1997; and also the actions of the parties in how they handled the covenant. The Court considered that in 1997 Amazon did not exist and the concept of selling retail out of a distribution warehouse did not exist. Therefore the Court found that the covenants did not intend for a warehouse retail distribution concept to be allowed. As to the actions of the parties, the evidence showed that the Defendant had acted extensively to seek a zoning change because the Amazon distribution center did not comply with the retail zoning, and further evidence showed that the Defendant had sought out a covenant amendment to address the issue. Consequently, the Court ruled for the Plaintiff and ordered the Amazon operations to cease and desist and further ordered that all exterior renovations made to the building for the Amazon warehouse/distribution center be removed because they destroyed the visually harmonious retail appearance of the shopping center. Neighboring shopping center owner wins.
Kaplan v. Menlo Realty Income Prop. 28, LLC, (NY Sup. Ct., July 2023)
CLAIMS: Worker brought negligence action against former property owner, who owned property at time building was constructed, former property manager, architectural firm, general contractor, and current building owner, seeking damages for injuries allegedly sustained when, after obtaining supplies from second-floor storage area of drugstore where he worked as a pharmacist, he fell down the interior stairway leading to that storage area. The worker alleged that his fall was caused by absence of non-slip or abrasive treads and nosings on stairway.
EVIDENCE: The stairway was a smooth coat finish with nothing on it to prevent slipping, such as abrasive treads. However, the stairway design did comply with all state and local regulations and the provisions of the building code in effect at the time of the design and construction, which did not require treads or nosings to be slip-resistant. OSHA standards were separate from building code requirements and were not referenced or included as part of the architectural drawings.
COURT RULING: The court reasoned that a couple of the defendants did not have any duty to third parties, as the defendants were only tied to the property through prior contractual situations and had not risen to the level of any duty to third party beneficiaries, such as when the contracting party, in failing to exercise reasonable care in the performance of his duties, creates a force or instrument of harm. As to the general issue of the stair treads, the Court reminded that “in the absence of evidence of a negligent application of floor wax or polish, or other substance, the mere fact that a smooth floor (including stairs) may be slippery does not support a cause of action to recover damages for negligence” because “merely withholding a benefit (such as beneficial non-slip treads) does not amount to creating an instrument of harm” and therefore does not amount to negligence liability. Defendants win.
1524 Hamlin Highway, LLC v. Black, (PA. Super. Ct. Sept. 2023)
CLAIMS: Buyer sues a Seller for specific performance to enforce the sale of a commercial property after Seller refuses to close and alleges contract breach by Buyer.
EVIDENCE: On Nov. 4, 2021, the parties entered into a commercial real estate sale agreement, which required the Buyer to provide an initial deposit of $50,000 within five days of the execution date. An additional $50,000 was to be paid within 60 days of the execution date. The agreement also specified, “Deposits, regardless of the form of payment and the person designated as payee, will be paid in U.S. Dollars to Broker for Seller.” The Seller made the required deposits into an account held by Penn Jersey Abstracts, Inc., the title company. It was undisputed that the title company was not the “Broker” for Seller and nothing reflected that the parties designated the title company as an escrow agent for the transaction. Additionally, the first deposit may have been made later than five days after the Contract date. The Seller had not objected to the timing or the payment to title company.
COURT RULING: The Court took a hardline approach and ruled on the contract language exactly as it required. Looking deeper the Court noted that the contract allowed for a blank space where the parties could designate for the deposit payments to someone other than the Seller’s Broker, but had left it blank. Also, the Court noted that the payment may have been made late, after the five days, and thus out of time. Therefore, with proof that the Buyer had not strictly fulfilled the terms of the Contract, by not paying the deposits to Seller’s Broker instead of the title company, the Court ruled that Buyer could not benefit from any counter-proof of breach of contract by the Seller and thus could not enforce specific performance on the sale. Seller wins.
