2013 U.S. Dist. LEXIS 10102
D. Md.2013Background
- Redner’s Markets, Inc. and Joppatowne G.P. Limited Partnership are parties to a 20-year lease for ~54,000 sq ft of shopping-center space in Joppatowne, Maryland; a gas-station addition was approved in 2006.”
- Redner’s alleges Joppatowne breached Article XIII (Restrictive Covenants) by permitting an Amish Farmer’s Market that competes with Redner’s.
- JTF, a Maryland LLC created by Brian Miller, leases ~108,000 sq ft in the same center to host the Amish Farmer’s Market and a flea market; Joppatowne indemnified JTF for enforcing the covenant.
- Redner’s sought to enforce the covenant against stalls inside the Amish Market enclosure, including seven Amish stalls and two outside “Vendor Stalls,” while All Fresh Seafood & Produce operated outside the enclosure.
- Joppatowne contends the Amish Market stalls are not covered by the restrictive covenant and that Redner’s is in default for not paying percentage rent on gasoline sales; the case proceeded to a bench trial.
- Court held that Joppatowne breached the Restrictive Covenant, but several aspects require further fact-finding via magistrate; numerous issues remained unresolved at the time of the order.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether non-parties under Rule 19 must be joined | Rule 19 requires joining JTF and stall owners if necessary | Joining non-parties would destroy complete diversity | Not necessary or indispensable parties; case may proceed |
| Whether notice of default under the Lease was proper | Redner’s gave written notice under Section 20.05 | Notice defects dismissed; no default | Notice proper; no event of default by Landlord established |
| Whether Redner’s owes percentage rent on gas sales | Gas-station expansion increased rent; no default | Gas operations not subject to percentage rent | Redner’s not in default on gas- station rent; covenant not breached |
| Interpretation of Section 13.01 (Use Covenant) and its subsections | Amish Market stalls violate four prohibited uses | Safe harbors (b)(ii) apply; many stalls permitted | Section 13.01(a)(ii) governs; several stalls violate covenant; others saved by safe harbors; pending magistrate determination on some stalls |
| Definition of terms Gross Floor Area and in-store sales areas under subsection 13.01(a)(ii)(2) | Broader counting includes more space | Count limited to display areas; record insufficient | Record insufficient; magistrate to determine applicability to three stalls |
Key Cases Cited
- Dickson v. Morrison, 187 F.3d 629 (4th Cir. 1999) (Rule 19 joinder analysis; diversity concerns)
- Shelton v. Exxon Corp., 843 F.2d 212 (5th Cir. 1988) (Rule 19, nonjoinder not automatic; interests insufficient)
- Heist v. Eastern Sav. Bank, FSB, 884 A.2d 1224 (Md. Ct. Spec. App. 2005) (contract interpretation precedence of specific terms)
- Helzberg’s Diamond Shops, Inc. v. Valley West Des Moines Shopping Ctr., Inc., 564 F.2d 816 (8th Cir. 1977) (use of specific terms over general terms; implied contract ambiguity)
- Washington Nat. Ins. Co. v. Philadelphia Auth. for Indus. Dev., 1992 WL 33934 (E.D. Pa. 1992) (noncovering of parties; district court discretion on joinder)