State ex rel. Brown v. Palzes, Inc.

317 N.E.2d 262, 39 Ohio Misc. 155, 68 Ohio Op. 2d 386, 1973 Ohio Misc. LEXIS 175
CourtCuyahoga County Common Pleas Court
DecidedNovember 2, 1973
DocketNo. 920799
StatusPublished
Cited by3 cases

This text of 317 N.E.2d 262 (State ex rel. Brown v. Palzes, Inc.) is published on Counsel Stack Legal Research, covering Cuyahoga County Common Pleas Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State ex rel. Brown v. Palzes, Inc., 317 N.E.2d 262, 39 Ohio Misc. 155, 68 Ohio Op. 2d 386, 1973 Ohio Misc. LEXIS 175 (Ohio Super. Ct. 1973).

Opinion

FINAL JUDGMENT

GoemaN, J.

This matter comes before this court on the complaint filed on September 4, 1973 by the Attorney General of the state of Ohio and on his motion for preliminary injunction against the defendants’ continued violation of the antitrust laws of the state of Ohio, Chapter 1331 of the Ohio Eevised Code (commonly known as the Valentine Act). This final judgment has been agreed upon among all the parties, after conferences, and has been adopted by the court.

[156]*156 FINDINGS OF FACT

The defendants Andrew Palzes, Inc. (hereinafter “Palzes”) and Bambi Fashion Shop, Inc., doing business as Germaine Fashion Shop (hereinafter “Bambi”), are Ohio corporations engagd in the business of selling women’s clothing and teen-age women’s clothing, respectively, at the retail level to the general public in the Brecksville Shopping Center, Brecksville, Ohio. Defendant Brecksville Shopping Center, Inc. (hereinafter “Brecksville”), also an Ohio corporation, owns the commercial area known as the Brecksville Shopping Center, located at 7680 Chippewa Road, and leases space in the center to approximately twenty retail merchandisers of various goods and services.

During May, 1962, Palzes as lessee and Brecksville as lessor entered into a 15-year lease for a storeroom in the center which Palzes was to use for the retail sale of women’s apparel and related accessories. (Section 6(a), Brecks-ville-Palzes lease dated May 15, 1962.) The Brecksville-Palzes lease contained a provision, Section 4, giving the lessee, Palzes, “the right and option to renew this lease for two (2) successive terms of five (5) years each at the same rent basis and upon the same terms and conditions” as were provided for the last year of the original fifteen (15) year term. Section 42 of the lease states :

“Lessor agrees, except for Department stores and except for Variety Stores (such as S. S. Kresge, F. W. Woolworths, etc.) Lessee shall be the only women’s wear store in Lessor’s Shopping Center engaged in the sale of so-called ‘High Priced Quality’ Women’s Wear. The exclusive right granted in this Section shall not, however, prohibit or prevent Lessor from leasing space to Tenants engaged in the sale of low priced women’s wear similar to the operations of stores such as Red Robin, Wilbur Rogers, Darling Stores, Inc., so long as said Tenants shall covenant not to sell ‘High Priced Quality’ Women’s Wear.”

The grant of this right is referred to generally in the shopping center industry as an “exclusive.” The exclusive found in Section 42 of the Brecksville-Palzes lease conferred upon Palzes in practical effect the right to compel Brecksville, within the limitations of the exclusive, not to [157]*157lease space in the shopping center to anyone who would compete in the same business as Palzes.

Sometime prior to September 8,1962, Brecksville, after seeking and receiving advice and agreement from Palzes as to what specific sizes and prices should define what a teen-age women’s store could sell, agreed to lease a storeroom in the shopping center to Bambi and allow it to transact business there as Germaine Fashion Shop, so long as clothing sold was restricted to teen-age, petite and junior miss sizes and so long as such clothing was sold at a price of less than twenty-five dollars ($25.00) per individual garment except for suits and coats which could be sold for less than forty dollars ($40.00). Bambi agreed to and accepted these conditions and on September 8,1962, Brecks-ville and Bambi executed the lease for a period of ten (10) years, Bambi having “the right and option to renew this lease for one successive term of five years at the same rent basis and upon the same terms and conditions” as were provided for the last year of the original ten year term. (Sections 3 and 4, Brecksville-Bambi lease dated September 8, 1962.) In addition to the price and product restrictions, Section 6(a) of this latter lease states that “Lessor agrees that Lessor will not rent any other storeroom in Lessor’s shopping center to any other tenant who shall be engaged primarily in the sale of teen-age clothing within the price range herein stipulated.”

In 1967, Palzes caused Brecksville to bring an action to enjoin Bambi from selling apparel competing with Palzes at sizes and prices other than those allowed in the Bambi lease. Brecksville sought to enforce the agreement, and a permanent injunction was entered in that case (Brecksville Shopping Center v. Bambi Fashion Shop, No. 848436 (C. P. Cuyahoga County, Dec. 15, 1967), after Brecksville submitted to the court pleadings, testimony in open court and certain supporting papers including an affidavit of Brecks-ville’s counsel which stated:

“* * * that the defendant [Bambi] entered into a lease with plaintiff and agreed to the restrictions therein imposed on it after first negotiating with another tenant [Palzes] selling women’s wear in plaintiff’s Shopping Center; that [158]*158prior to entering into the lease agreement with defendant, plaintiff required it to have the approval of said other tenant; that defendant was aware of, and entered into negotiation for, said approval, and agreed to the lease restrictions as set forth in the Petition in order to obtain the approval of the other tenant and thereby obtain the lease from plaintiff, said lease being specifically dependent upon the approval of the other tenant; that said procedure is necessary to the proper operation of the Shopping Center in order that competition between tenants may be reduced to the minimum. * # *” (Emphasis added.)

Palzes has since urged Brecksville to enforce the injunction against Bambi by means of contempt proceedings in this court. Bambi continues in the status as tenant on a month-to-month basis under all the terms and conditions of the original lease. Both of the leases in issue contain provisions in numbered Section 40 which provide for separability of clauses, sentences, paragraphs or parts of the lease without the result of invalidating the remainder of the lease.

The court finds that the restrictive agreement which was incorporated into the Breeksville-Bambi lease was so included because of Bambi’s representation and agreement that it would not be a competitor of Palzes and because of Section 42 of the Brecksville-Palzes lease which gave Palzes the right to compel Brecksville within the limitation of the exclusive, not to lease space to competing businesses, as discussed above; that the agreement fixed the prices above which Bambi could not sell; that the agreement was intended to limit and eliminate competition between Bambi and Palzes; and that the agreement did, in effect, so limit competition between the two defendant retail women’s stores. The court also finds that the agreement among defendants limiting competition between Bambi and Palzes will continue unless enjoined.

CONCLUSIONS OF LAW

The court has jurisdiction over the parties and the subject matter of this action and the complaint states a cause of action. The Attorney G-eneral of the state of Ohio has standing to seek an injunction against these defendants’ [159]*159acts under the antitrust laws of this state, including Chapter 1331 of the Ohio Revised Code. E. C. 1331.11.

E. C. 1331.01(B) prohibits:

“* * * a combination of capital, skill, or acts by two or more persons for any of the following purposes:

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Cite This Page — Counsel Stack

Bluebook (online)
317 N.E.2d 262, 39 Ohio Misc. 155, 68 Ohio Op. 2d 386, 1973 Ohio Misc. LEXIS 175, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-brown-v-palzes-inc-ohctcomplcuyaho-1973.