St. Louis Union Trust Co. v. Tipton Electric Co.

636 S.W.2d 357, 1982 Mo. App. LEXIS 2932
Missouri Court of Appeals·Decided June 8, 1982·No. No. 42869·Published·Cited by 5 cases

Opinion

SIMON, Judge.

Tipton Electric Company and Wetterau, Incorporated, appeal from the entry of a permanent injunction by the Circuit Court of St. Louis County. The trial court, after making findings of fact and conclusions of law, entered a judgment in favor of St. Louis Union Trust Company enjoining Tip-ton from operating its retail store located in the Central Park Shopping Center in Alton, Illinois. Appellants contend the trial court erred in concluding that Tipton violated restrictive covenants in its lease with St. Louis Union Trust Company’s predecessor in interest, Charles Kahn. Specifically, appellants contend the trial court erred in concluding that: (1) Tipton’s principal use of its store was as an appliance store; (2) Central had an exclusive privilege selling certain items in the Central Park Shopping Center; (3) the restrictive covenants in the leases were legal; and (4) Tipton violated the restrictive covenants. Appellants also contend the trial court erred in awarding attorney fees. We agree and accordingly, we reverse the judgment of the trial court.

The essential facts of this case are undisputed. In the late 1960’s, Central Hardware purchased eleven acres of undeveloped property along the Belt Line on the north side of Alton, Illinois. Central erected a 65,000 square foot retail store for itself. Adjacent to this building Central built a 25,000 square foot building which Central envisioned as a supermarket or drug store. The development was called the Central Park Shopping Center. The Central Hardware retail store opened in 1968 and continued to operate at the time of trial. In May of 1968 Central entered into a twenty year lease with Allied Supermarkets for the adjacent store. This lease included several restrictive covenants. Subsequently, Central sold Central Park Shopping Center to Charles Kahn and then leased back the Central Hardware store. At the same time Central assigned all of its rights under the Central-Allied lease to Kahn.

Allied’s Central Park Shopping Center supermarket venture was short-lived. In fact, between 1968 and 1978 four additional retail grocery stores, all successors under the original Central-Allied lease, occupied the store adjacent to Central in the Central Park Shopping Center. In September of 1978 the last of these, Stephenson Foods, Incorporated, assigned all its rights and interests under the Central-Allied lease to Tipton. Kahn, and after his death his successor, St. Louis Union Trust, brought this suit against Tipton alleging that Tipton was maintaining an appliance store in the Central Park Shopping Center in violation of the terms of the Central-Allied lease. In its conclusions of law, the trial court found that Tipton was violating the Central-Allied lease in two respects: first, the trial court found that Tipton was offering for sale merchandise in contravention of exclusive rights granted to Central; and second, the trial court found that the principal business of Tipton was the operation of a store offering appliances for sale, contrary to the terms of the additional rider to said lease. Based upon its findings and conclusions, the trial court entered a judgment permanently enjoining Tipton from maintaining and operating its Central Park store so long as Tipton was offering for sale refrigerators, [359] ranges, washers, dryers, televisions, freezers, air conditioners, stereos and microwave ovens. The trial court further ordered Tip-ton to remove all of these items from its store.

Since the relevant facts are undisputed in this case, our decision hinges on the interpretation of the Central-Allied lease and the Kahn-Central lease. Clause 7 of the Central-Allied lease gave Allied the right to assign the lease “for any ... lawful purpose [that] does not conflict with any exclusive privilege granted by Landlord in leases to other Tenants ... at the time of said assignment or subletting and exclusive privileges reserved by Landlord in paragraph EE of the Additional Rider attached hereto.” Paragraph DD of the additional rider provided that during the term of the lease, Tenant (Allied), “shall not use the demised premises for any of the following principal uses: a hardware store, paint store, appliance store...” Paragraph EE of the rider does not reserve any exclusive privileges as to Central. The lease does not define “principal use.”

Tipton concedes that it sells appliances such as refrigerators, ranges, washers, dryers and freezers. The evidence indicated that these so-called “white goods” accounted for roughly one-third of the value of Tipton’s inventory. The remainder of Tipton’s inventory consisted of two roughly equal categories: “brown goods,” i.e., televisions, and audio equipment. The evidence also indicated that approximately half of Tipton’s floor space was used for the sale of appliances. At trial and on appeal the parties have expended considerable effort in defining “principal use” and “appliance.” The trial court did not expressly define either term, but it concluded that, “[t]he principal business of Tipton is the operation of a store offering appliances for sale contra to the provisions of paragraph DD...” We believe this conclusion was erroneous.

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St. Louis Union Trust Co. v. Tipton Electric Co., 636 S.W.2d 357, 1982 Mo. App. LEXIS 2932 (Mo. Ct. App. 1982).

636 S.W.2d 357 (St. Louis Union Trust Co. v. Tipton Electric Co.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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