Rite Aid of Ohio, Inc. v. Marc's Variety Store, Inc.

638 N.E.2d 1056, 93 Ohio App. 3d 407, 1994 Ohio App. LEXIS 700
CourtOhio Court of Appeals
DecidedMarch 7, 1994
DocketNo. 64771.
StatusPublished
Cited by21 cases

This text of 638 N.E.2d 1056 (Rite Aid of Ohio, Inc. v. Marc's Variety Store, Inc.) is published on Counsel Stack Legal Research, covering Ohio Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rite Aid of Ohio, Inc. v. Marc's Variety Store, Inc., 638 N.E.2d 1056, 93 Ohio App. 3d 407, 1994 Ohio App. LEXIS 700 (Ohio Ct. App. 1994).

Opinion

Porter, Judge.

Plaintiff-appellant, Rite Aid of Ohio, Inc. (“Rite Aid”), appeals from the trial court’s denial of injunctive relief which would have prohibited defendant-appellee, Marc’s Variety Store, Inc. (“Marc’s”) from operating a Marc’s store in the Brookgate Shopping Center in Brook Park, Ohio. Rite Aid claims that the trial *410 court erred in not enjoining Marc’s operation by giving effect to a prior lease restriction which provided that lessee Rite Aid would have “the exclusive privilege for the operation of a Drug Store in the Shopping Center.” Marc’s carries health and beauty aids similar to those of Rite Aid but does not have a pharmacy for dispensing prescription drugs. The case therefore turns on whether or not Marc’s operates a “Drug Store” in violation of Rite Aid’s exclusive-use provision, although Marc’s does not offer prescription drugs. We find the trial court correctly denied the injunctive relief and properly granted defendants-appellees declaratory judgment for the reasons set forth below.

Rite Aid, as lessee, operates a 9,600 square foot store with a pharmacy at the Brookgate Shopping Center under a 1981 lease with defendant RMS Investment Corp. (“RMS”). The lease gave Marshall Drug, Rite Aid’s predecessor, the right to operate a “retail drug and variety store” on the premises. Paragraph 8(a) of the lease, known as the “use clause,” listed items that Rite Aid could sell:

“[Proprietary and ethical drugs, health and beauty aids, sundries, tobacco products and smoking supplies, liquor, beer and wine, * * * school supplies, housewares, small electrical appliances, toys, recreation equipment, cameras, photographic supplies and film processing, food for off-premise and on-premises consumption, books, newspapers, and magazines, and items kindred to the foregoing.”

Paragraph 8(g) of the lease (the “exclusive-use clause”) granted Rite Aid “the exclusive privilege for the operation of a Drug Store in the Shopping Center.” At the time Rite Aid’s predecessor entered into the Lease, the anchor tenant at Brookgate was Zayre’s, a general merchandise store selling every item listed in Paragraph 8(a) of the Lease, except prescription drugs. Another tenant was the Bi-Rite grocery store (now Food Center), which also sold items listed in Paragraph 8(a) of the Lease, but not prescription drugs, right up to the present. By 1988, Zayre’s had been replaced by Ames, another general merchandise store, which sold the same items as does Rite Aid, except prescription drugs.

Rite Aid has never claimed that Zayre’s, Ames and Bi-Rite were drug stores or violated its exclusive use privilege within the meaning of Paragraph 8(g) of the lease, even though they offered the same items as Rite Aid, except for prescription drugs.

In November 1990, the Ames store went out of business. The 45,000 square feet of anchor space remained unoccupied until October 1992, when Marc’s opened. Accordingly, Brookgate Shopping Center was without an anchor tenant for nearly two years, from November 1990 until October, 1992, which had a deleterious effect on the general success of the shopping center and the business tenants.

*411 Marc’s entered into a lease with RMS on July 30,1992, to open a 45,000 square foot store in the anchor space and began to build out its new space immediately thereafter. Starting in early August 1992, Marc’s hung a banner in the window announcing its opening and that it was accepting applications for employment. RMS expended funds for repairs and improvements to the premises as well. Marc’s hired one hundred twenty-five employees to staff the new store. Marc’s opened its doors to the public on October 1, 1992.

Total sales at Rite Aid’s Brookgate drug store consisted of ninety percent pharmacy and health and beauty aid items and ten percent food and general merchandise items (housewares, paper products, greeting cards, household chemicals, batteries, etc.), liquor and cigarettes.

The Marc’s store does not have a pharmacy or a pharmacist. Accordingly, Marc’s does not call its store a “drug store,” does not advertise itself as a “drug store,” and does not sell prescription drugs at the store. Marc’s principal product category break-down chain-wide, by purchases, is food (forty-one percent), general merchandise, including tobacco (thirty-five percent), and health and beauty aids (twenty-three percent). The allocation of store space within Marc’s Brookgate store is forty-five percent devoted to general merchandise, twenty-seven percent to food, and fourteen and one-half percent to health and beauty aids.

On September 30, 1992, the day before the grand opening of Marc’s, Rite Aid filed a complaint against the defendants, seeking preliminary and permanent injunctive relief which would prohibit Marc’s from operating a drug store at Brookgate. Rite Aid’s motion for a temporary restraining order was denied, but expedited discovery was allowed. By agreement of the parties, the hearing on the preliminary injunction was consolidated with the hearing on the merits and set for October 15, 1992.

After a four-day evidentiary hearing from October 15 to October 19, 1992, the trial court took the matter under advisement and the parties submitted findings of fact and conclusions of law. On November 6, 1992, the court found for defendants-appellees and filed findings of fact and conclusions of law (cited herein as “Opinion”). A timely notice of appeal was filed.

We will address Rite Aid’s three assignments of error together taking up the issues in the order asserted:

“I. The trial court committed reversible error by failing to give effect to the parties’ intent and the obvious purpose of the Rite Aid lease which is to prohibit competition by a direct competitor in the drugstore industry. (Findings of Fact and Conclusions of Law, at 6-9; plaintiffs Exhibit 2, at 6.)
*412 “II. The trial court committed reversible error by ruling that under Ohio law a ‘drug store’ always contains a pharmacy. (Findings of Fact and Conclusions of Law, at 8.)
“HI. The trial court’s findings and conclusions regarding the other factors necessary to obtain injunctive relief were against the manifest weight of the evidence. (Findings of Fact and Conclusions of Law, at 10-11; tr. 222-23, 224, 94; plaintiffs Exhibit 4, at 10.)”

Rite Aid argues that the trial court improperly denied its request for injunctive relief.

It is well established that “[t]he right to an injunction must be clear and the proof thereof clear and convincing * * White v. Long (1967), 12 Ohio App.2d 136, 140, 41 O.O.2d 200, 202, 231 N.E.2d 337, 340; S. Ohio Bank v. S. Ohio Savings Assn. (1976), 51 Ohio App.2d 67, 69, 5 O.O.3d 183, 184, 366 N.E.2d 296, 298. The parties have agreed in their briefs and stipulated at the hearing below that, to obtain the relief it seeks, Rite Aid must establish each of the following elements:

a. Defendants committed a wrongful act;

b. Plaintiff has no adequate remedy at law;

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Bluebook (online)
638 N.E.2d 1056, 93 Ohio App. 3d 407, 1994 Ohio App. LEXIS 700, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rite-aid-of-ohio-inc-v-marcs-variety-store-inc-ohioctapp-1994.