Regency Commercial Associates, LLC v. Lopax, Inc.

869 N.E.2d 310, 373 Ill. App. 3d 270
CourtAppellate Court of Illinois
DecidedMay 4, 2007
Docket4-06-0332
StatusPublished
Cited by42 cases

This text of 869 N.E.2d 310 (Regency Commercial Associates, LLC v. Lopax, Inc.) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Regency Commercial Associates, LLC v. Lopax, Inc., 869 N.E.2d 310, 373 Ill. App. 3d 270 (Ill. Ct. App. 2007).

Opinions

JUSTICE KNECHT

delivered the opinion of the court:

Due to its desire to lease land to Pictor Enterprises, III, Inc. (Pic-tor), a company planning to open a Buffalo Wild Wings restaurant, plaintiff, Regency Commercial Associates (Regency), filed a complaint for declaratory judgment concerning a restrictive covenant in a land sales contract in favor of defendant, Lopax, Inc. (Lopax), on land previously sold to Lopax by Regency’s predecessor for use as a Kentucky Fried Chicken (KFC) restaurant. Pursuant to Regency’s motion for summary judgment, the trial court determined the restriction covered “fast[-]food” restaurants primarily serving chicken and also found an evidentiary hearing would be necessary to determine if Buffalo Wild Wings was a fast-food restaurant. Prior to the evidentiary hearing, Lopax filed a motion for summary judgment contending Regency entered into a lease with Pictor prior to filing its complaint for declaratory judgment and was barred from obtaining declaratory relief by the doctrine of “non[ inability for past conduct.” The court ruled Regency was not barred by the doctrine and denied Lopax’s motion for summary judgment. After an evidentiary hearing, the court found Buffalo Wild Wings was not a fast-food restaurant and, hence, was not covered by the restrictive covenant. Lopax appeals the court’s decisions (1) the restrictive covenant covered only fast-food restaurants serving primarily chicken, (2) the declaratory-judgment action was not barred by the doctrine of nonliability for past conduct, and (3) Regency need not be compelled to produce the entire lease agreement between itself and Pictor. We affirm.

I. BACKGROUND

On June 20, 2001, Lopax entered into a contract with Arbours Development Limited Partnership (Arbours) to purchase a parcel of land in Savoy in order to lease it to Bartlett Management Services, Inc., for the operation of a KFC restaurant. The contract included a restrictive covenant negotiated between the parties prohibiting Arbours from permitting certain types of competitive restaurant operations within its commercial development area. The restriction was memorialized in paragraph 4.1(h) of the contract and reads in pertinent part as follows:

“Seller will not after the date of this agreement sell, lease[,] or permit to be occupied any real estate which [s]eller owns, manages!,] or otherwise controls within one mile of the [l]and for the purpose of constructing, or having conducted thereon, any fast!-] food [(quick service restaurant)] restaurant or restaurant facility whose principal food product is chicken on the bone, boneless chicken!,] or chicken sandwiches. The prohibited businesses would include but be not limited to Boston Market, Popeye’s Chicken, Church’s Fried Chicken!,] and Pirtles Chicken. Other than the aforementioned restaurants which shall absolutely be prohibited, a restaurant shall be deemed to ‘feature boneless chicken or chicken sandwiches’ only if the primary business of such restaurant is the sale of such items. This provision shall survive the [c]losing and shall not be merged into the [d]eed. Seller may sell, lease!,] or permit the occupancy of any such real estate by (1) dinner houses or seafood restaurants, (2) Oriental, French, Mexican, Italian!,] or other ethnic restaurants, (3) any so-called ‘casual dining’ restaurant such as Chili’s or Black-Eyed Pea, or (4) any food speciality shops such as ice cream, yogurt, pizza!,] or similar single[-]item shops.”

Regency later purchased Arbours’ rights under the contract.

Sometime in February 2005, Regency’s attorney contacted Lopax’s attorney in an attempt to obtain permission to lease a portion of its restricted land for the operation of a Buffalo Wild Wings restaurant. On February 23, 2005, Lopax’s attorney sent a written objection based on the restrictions in paragraph 4.1(h) of the contract and Lopax’s position that Buffalo Wild Wings is a restaurant facility whose principal food product is chicken. On March 7, 2005 Regency’s attorney again contacted Lopax’s attorney in an effort to convince Lopax to withdraw its written objection to the leasing of the property for a Buffalo Wild Wings restaurant because it is a full service “casual dining” restaurant expressly permitted under paragraph 4.1(h) and not a fast-food restaurant. On March 8, 2005, Lopax’s attorney responded Lopax was not withdrawing its objection due to its interpretation of the restrictive covenant as generally prohibiting restaurant facilities whose primary food product is chicken and not just fast-food restaurants. On March 16, 2005, Daniel Pictor, the Buffalo Wild Wings franchisee, contacted Lopax and offered $5,000 for permission to locate in the restricted area.

On March 29, 2005, Regency filed a verified complaint for declaratory judgment asking the trial court to find (1) the restriction found in paragraph 4.1(h) prohibits fast-food restaurant operations serving primarily chicken but does not prohibit other types of restaurant operations whose primary food product is chicken and (2) Buffalo Wild Wings is not a fast-food restaurant but a full-service restaurant featuring “casual dining.”

On May 2, 2005, Lopax filed a motion to dismiss under section 2 — 619 of the Code of Civil Procedure (735 ILCS 5/2 — 619 (West 2002)) and attached exhibits in support of its contention that Buffalo Wild Wings is a restaurant whose principal food product is chicken and paragraph 4.1(h) was unambiguous in its prohibition of both (1) fast-food restaurants whose principal food product is chicken or (2) restaurant facilities whose principal food product is chicken.

On June 29, 2005, Regency filed both a response to Lopax’s motion to dismiss and a motion for summary judgment with attached exhibits in support of its contention that paragraph 4.1(h) unambiguously prohibits only restaurants and restaurant facilities that are both fast food and whose primary food product is chicken.

On July 27, 2005, the trial court heard arguments on both parties’ motions. After taking the matter under advisement, on September 7, 2005, the court determined, first, the language of paragraph 4.1(h) was ambiguous, and second, after reviewing the exhibits pertaining to correspondence between the parties during negotiations of the final contract and the circumstances under which agreement on the final terms were reached, the contract language prohibits fast-food restaurants whose principal food product is chicken and fast-food restaurant facilities whose principal food product is chicken. Further, the court determined a genuine factual dispute remained as to whether Buffalo Wild Wings fit the description of either a fast-food restaurant or fast-food restaurant facility whose principal product is chicken. Thus, the court denied Lopax’s motion to dismiss and granted part of Regency’s motion for summary judgment.

On September 29, 2005, Lopax filed a motion to reconsider, which was denied on October 27, 2005. On November 10, 2005, Daniel Pic-tor, the Buffalo Wild Wings franchisee, contacted Mike Bartlett, a minority shareholder of Lopax and manager of the KFC at issue, and offered to negotiate with Lopax to settle this dispute just to speed things up as he was confident Regency would prevail in court. However, he also stated he already signed a lease with Regency.

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Cite This Page — Counsel Stack

Bluebook (online)
869 N.E.2d 310, 373 Ill. App. 3d 270, Counsel Stack Legal Research, https://law.counselstack.com/opinion/regency-commercial-associates-llc-v-lopax-inc-illappct-2007.