Opinion
No. 4001688
April 20, 2005
MEMORANDUM OF DECISION
This vigorously contested matter involves of a request by the plaintiff, Violynne, Inc., for a temporary and permanent injunction against the defendants prohibiting alleged activity in the condominium in violation of certain lease provisions. It was brought to this court by Verified Complaint on December 10, 2004, against Cogshall Group, LLC, hereafter "landlord" and Bogue's Alley LLC, hereafter "Bogue's." The pleadings were closed and the matter was tried to the court on a stipulation that there would be one hearing on both the temporary and permanent injunction request. All parties were well represented by counsel, presented evidence and filed briefs in support of their respective claims.
In brief, the plaintiff claims that the landlord leased premises to Bogue's in violation of a provision in its lease with the landlord that no other unit in the condominium would be rented to a tenant which would conduct the same or similar business as the plaintiff. The landlord's response is two-fold: first, the lease expired and is of no effect, and second, the Bogue's operation is not the same or similar as the plaintiffs.'
Giving consideration to the testimony of the witnesses, an evaluation of their respective credibility, the language of the leases and the conduct of the parties as reflected in the evidence, the court makes the following findings of fact.
At various times the plaintiff leased units 4 and 5 of the condominium known as The Riverwalk from landlord. Both leases provided for an expiration of the first term on July 30, 2003 unless extended by the plaintiff. The plaintiff operated the Prime Time Cafe within the premises leased, with a restaurant in unit 5 and a lounge in unit 4. Food served in the lounge came from unit 5 and drinks served in unit 5 came from unit 4. Considerable sums were expended by the plaintiff to prepare the premises for the uses intended, with $70,000 having been spent on the lounge in about October 2002. There was an arrangement with the landlord that the improvements to unit 4 would offset any rent otherwise due on that unit so that the plaintiff was not to pay rent for unit 4 until about February 2007.
The leases of both units provided a clause dealing with the extension of the term. Unit 5 was a five-year lease "with two consecutive five-year options" whereas Unit 4 entered into later was made to conform (since the premises were used together as one facility). Unit 4 was also provided with two consecutive five-year options. Both leases contained a provision dealing with "Option to Renew Lease" in addition to the general language in the paragraph dealing with the term. Article 29, among other things not here relevant, provides "The Tenant shall exercise said option to renew by notifying the Landlord in writing no later that sixty (60) days prior to the commencement of the new term. In the event Tenant exercises said option to renew, the additional term shall be subject to the same terms and conditions contained in this Lease with the basic rent payments to increase annually at 2% per year, for each year of each five year renewal."
A separate article deals with notices. Article 24 provides, in pertinent part, "Notices from the Tenant to the Landlord shall be sent by registered mail or delivered to the Landlord at the place hereinbefore designated for the payment of the rent, . . ." Article 2 provides for the rent to be delivered to "P.O. Box m451, Westerly, Rhode Island 02891 . . ."
Wendy Carr, on behalf of the plaintiff, sent a written notice of its intent to extend another five years with the March 2003 rent check to the place designated for the payment of rent. Pl's Exh. 3. The testimony of Mr. Utter that he did not receive it notwithstanding his cashing the check is not persuasive.
Therefore, it is found that the leases of units 4 and 5 were extended an additional five years. The terms of the leases make it clear that the terms and conditions are the same as the first lease and the rent goes up 2% per year. No new lease is required. The parties in the original lease leave no room for argument as to extension versus renewal. This is not a case where there is ambiguity. Whatever language they used to describe what they were doing, they provided clearly for an extension of their existing lease.
Accordingly, the plaintiff is entitled to enforce the terms of its leases with the landlord. At the time of entering into the leases Wendy Carr (owner of the plaintiff corporation's stock) negotiated with Nicolas C. Utter (manager of the landlord corporation) provisions to protect the plaintiff from competition within the condominium.
The leases provided "Exclusivity. Landlord shall not lease any other commercial unit of Riverwalk Condominiums to a person or entity engaged in a business the same as or similar to that carried on by the Tenant."
Prime Time Cafe, the business carried on by the plaintiff, protected by the exclusivity provision of the lease, consisted of a restaurant with seating for about 50 people and an adjoining lounge serviced by a full commercial kitchen in unit 5. The plaintiff serves an eclectic menu for breakfast, lunch and dinner at the Prime Time Cafe as well as selling items of food for takeout and doing catering off the premises by special arrangement.
At the time of the original lease between the plaintiff and the landlord for unit 5 Besso's Variety Store was operating in Unit 1 of the condominium. That was October 1998. Besso's primary source of income was from the sale of lottery tickets, but they also sold newspapers, magazines, candy bars, potato chips and related packaged items. Some time later after the plaintiff was operating, Besso's started serving some food items from a "deli bar" with sandwiches, soups, salads, cold grinders, egg sandwiches, coffee and sodas. As the Besso's menu expanded Wendy Carr complained to Mr. Utter about the apparent violation of the "exclusivity" clause in her lease. Mr. Utter said he would look into it. When nothing came of his looking into it, plaintiff had an attorney send a letter to landlord on October 19, 2003, demanding enforcement of the lease provision. Shortly thereafter Besso's went out of business.
On December 1, 2003, landlord entered into a lease with Bogue's. The lease contained a sentence which said: "Tenant shall not compete or interfere with the business of another tenant." Pl. Exh. 4.
In January 2004, Fred Bogue, owner of Bogue's and Wendy Carr began discussions about Bogue's intentions to use unit 1 where Besso's had previously operated. Fred Bogue was informed of the exclusivity provision protecting the plaintiff from competition within the condominium from businesses with the same or similar activities. The two met to discuss the issue, but no meeting of the minds was accomplished. After their meeting Wendy Carr on behalf of the Plaintiff, sent a letter on January 13, 2004, claiming that her lease prohibited leasing to "a business which in any way competes with my business." Pl. Exhibit 11. Bogue went ahead with his plans, installed a commercial kitchen into unit 1 and invested considerable sums to transform the former Besso's into Bogue's Alley. He did not consider his operation to be the same or similar to that of the plaintiff.
They advertised as a "well rounded market and deli." News articles about the time of their opening in the fall of 2004 indicated they were open for breakfast, lunch and dinner but noted that everything there is "to go" as there are no tables.
A review of the respective menus from both Prime Time and Bogue's indicates that the names of some food items are remarkably similar, and in some cases, the same or overlapping, especially in the breakfast and sandwich areas. While the Prime Time does some take-out business, its primary activity is in connection with its sit down restaurant. On the other hand, the primary business of Bogue's is take out. It is found nothing goes out the door except wrapped up in a "to go" container. No food is eaten inside Bogue's. There are no tables.
Neither the court nor the parties have found a case in this jurisdiction which provides guidance as to the application of the term "same or similar" to circumstances like those found here. However, there is a case from another jurisdiction which is instructive. In Snyder's Drug Stores, Inc. v. Sheehy Properties, 266 N.W.2d 882, (Minn) (1978), the plaintiff drug store/restaurant brought an action against the defendant/lessor to enjoin the construction of a proposed fast food restaurant in a shopping center where the plaintiff's facility was located. The plaintiff's lease contained a broad prohibition against other restaurants, but a subsequent rider limited the restriction by the following language: ". . . the restriction as to restaurants shall only apply to the type of restaurant operated by [Snyder's] in the demised premises." Id., 885. The court upheld the trial court which had found that the McDonald's proposed was not of the same "type" as that of the plaintiff. The court found the language ambiguous and looked to the intent of the parties, noting, among other things, that restrictive covenants must be strictly construed and must not be extended beyond the true meaning of the parties. The court said that the fact that there was some competition was not dispositive and noted the differences in the menus, food preparation and service. A trial court finding that the two were not of the same "type" was found not to be clearly erroneous.
Here we have different language to apply: "the same or similar." No one has argued that the two facilities are the same. Therefore, the court must determine if they are "similar." The intent of the parties is not apparent except to the extent that they negotiated the language used in the leases. While the plaintiff had broadened the language in her letter there was no expression by or on behalf of the landlord to provide assistance.
Black's Law Dictionary (Fourth Edition) defines similar as "Nearly corresponding; resembling in many respects; somewhat like; having a general likeness . . . Also, sometimes, exactly like; identical; exactly corresponding (at least in all essential particulars) . . ."
Merriam-Webster's Collegiate Dictionary (Tenth Ed) defines similar: "1. Having characteristics in common; strictly comparable. 2. Alike in substance or essentials . . . 3. not differing in shape but only in size or position . . ."
Applying the common meaning of the language it cannot be said that Prime Time Cafe and Bogue's are at all similar. They look different. Their primary food service is different. One caters primarily to sit down diners while the other wraps everything to go, puts it in a bag and sends it out the door. One has tables, the other no tables. One has a restaurant permit from the Town of Stonington, the other does not. While there are some items on the respective menus which resemble each other, that does not of itself make their operations "similar."
It must be noticed that the landlord and the plaintiff "negotiated" this language according to the testimony of Wendy Carr. They negotiated "similar." They did not say no other restaurant, or no other food service facilities. They didn't say no other similar menu items. They said same or similar business.
Bogue's is found by this court, under these circumstances, not to be a business the same as or similar to that carried on by Prime Time Café. Moreover, Bogue's is not competing or interfering with the business of Prime Time Cafe.
Accordingly, the plaintiff's request for injunctive relief is denied Also, since each party has to some extent prevailed in this action I find that the attorneys fees provision of Article 26 is not applicable and each party shall be responsible for their own attorneys fee. No costs are imposed in favor of any party.
Judgment may enter accordingly
Robert C. Leuba, JTR