# FILED June 6, 1997 Cecil Crowson, Jr. App ellate C ou rt Clerk I N TH E C O U R T O FA PPEA LSO FTEN N ESSEE EA STER N SEC TI O N

KEI TH HAR

DW AR E, I NC. , ) C / A N O . 03A 01- 9610- C

H

- 00339 ) Pl a i ntif f

- A

pp e lla nt , ) W ASHI NGTON C

HANC ER Y ) v. ) HON. LEW I SW . M AY, ) C HANC ELLOR DOUGLASL. W

HI TEa n dwi f e , ) C AR OLYN L. W

HI TE, ) ) D e f e n d a nt s - A

pp e l l ees . ) R

EM ANDED

M . STANLEY GI VENS , ANDER S ON, FUGATE, GI VENS , COUNTS& BELI SLE, J ohns on C

i t y, f or Pl a i nt i f f

- A ppe l l a nt . J OHN S . TAYLOR

, M c KI NNON, FOW

LER , FOX &

TAYLOR

, J o hn s o nC

i t y , f or D e f e nda nt s - A

ppe l l e e s .

O

PI N I O N

Fr a nks . J . The i s s ue on t hi s i nt e r l oc ut or y a ppe a l gr a nt e d p ur s u a nt toT. R. A . P . R u l e 9 , is w

h e t he r the le a s e b e t w e e nthe pa r t i e s i s t oo br oa d t o be e nf or c e a bl e , a s w a s he l d by t he Tr i a l C

o ur t . Si nc e 1994, a ppe l l a nt ha s be e n a t e na nt i n a ppe l l e e s ’ s hoppi ng c e nt e r , a nd t he l e a s e c ont a i ns t he f ol l ow i ng c l a us e : D ur i ng t he t e r m

of t hi s Le a s e , t he Te na nt s ha l l ha ve t he e xc l us i ve a nd s ol e r i ght t o ope r a t e a r e t a i l s t or e i n t he s hoppi ng c e nt e r , t he pr i nc i pa l bus i ne s s of w hi c h i s t he s e l l i ng of a ny one of t he f ol l ow i ng2 c l a s s e s o f m

e r c h a n di s e , t ow

i t : h a r dw

a r e , h o u s e w a r e s , aut o m

ob i l e s upp l i e s , el ect r i cal pl um bi ng, t oys , hom

e f ur ni s hi ngs , s por t i ng goods , a ppl i a nc e s a nd pa i nt s . N o ot he r r e t a i l s t or e i n t he s hoppi ng c e nt e r s ha l l de vot e m or e t ha n t w

e nt y- f i ve pe r c e nt ( 25%

) of i t s s a l e s t o t he a ggr e ga t e of t he f or e goi ng c l a s s e s of m e r c ha ndi s e . I n 1996, a ppe l l a nt w a s m a de a w a r e t ha t a ppe l l e e s ha d r e nt e d s pa c e i n t he s hoppi ng c e nt e r t o a D ol l a r G e ne r a l St or e a nd A ut o Zone . A

ppe l l a nt f i l e d s ui t t o pr e ve nt w ha t w a s s e e n a s a vi ol a t i on of i t s l e a s e by t he l a ndl or d. O n t he he a r i ng f or a n i nj unc t i on, a ppe l l a nt ’ s ow ne r t e s tif i e dth a t the pr o du c t s s o l da t D o lla r G

e n e r a l St or e ove r l a ppe d w

i t h 68%

of t he m

e r c ha ndi s e s ol d a t hi s s t or e , s uc h a s e l e c t r i c a l e qui pm e nt , l a w

n a nd ga r de n f ur ni t ur e , a ppl i a nc e s , pa i nt , s por t i ng goods , a nd t oys . H e a l s o t e s tif i e dth a t 7 . 9 % o f a pp e lla nt ’ s s a l e s c a m e f r o m a ut o m o tiv e pr oduc t s , w

hi c h he be l i e ve d w oul d be ne ga t i ve l y a f f e c t e d by t h e c o m

p e titiono f A

ut oZo n e . A

pp e lle e s ’ w

itne s s e s te s tif i e d t ha t t he r e s t r i c t i ve c ove na nt w a s br oa de r t ha n t ha t i n a t yp i c a l c o m

m e r c i a l le a s e a n dth a t, inthe i r op i ni o n , th e a ddi t i ona l bus i ne s s e s w oul d br i ng e xt r a t r a f f i c t o a ppe l l a nt a nd i m pr ove i t s bus i ne s s . The Tr i a l C

our t de ni e d a ppe l l a nt ’ s a ppl i c a t i on f or a n i nj unc t i on, f i ndi ng t ha t t he c l a us e i n t he l e a s e w a s t oo br oa d t o be e nf or c e a bl e a nd t ha t t he r e ha d be e n ? no de m ons t r a t i on t ha t t he Pl a i nt i f f w oul d s uf f e r i r r e pa r a bl e ha r m f r o m thi s tim

e u ntil w

e tr ythi s la w

s u it. ? R e s t r i c t i v e co v e n a nt s ar e f r e qu e nt l yi n s e r t e di nt o s hoppi ng c e nt e r l e a s e s , f or t he pur pos e of pr ot e c t i ng t he t e na nt a ga i ns t c om pe t i t i on w

i t hi n t he c e nt e r . 49 A m . J ur 2d La ndl or d a nd Te na nt § 70 ( 1995) . W e ha ve be e n r e f e r r e d t o no3

Te nn e s s ee w

hi c hh a s addr e s s e dt h e i r enf or ceab i l i t y . H o w e v e r , m a ny ot he r s t a t e s ha ve c ons i de r e d s uc h c l a us e s a nd f ound t he m e nf or c e a bl e s o l ong a s t he y a r e r e a s ona bl e i n s c ope . C . K . & J . K . , I nc . v . F

ai r v i e w

Shoppi ng C

e nt e r C

orp. , 407 N

. E. 2d 507 ( O hi o 1980) ; Al e x ande r ’ s D ep’ t St or e s v . Ar nol d C ons t abl e C orp. , 250 A

. 2d 792 ( N

. J . Supe r . C

t . C h. D i v. 1969) ; N at i onal Supe r M

ar k e t s , I nc . v . M agna Tr us t C

o ., 5 7 0N

. E. 2 d 1191 ( I l l . A

pp. C t . 1991) ; M

e nde l l v . G

ol de n- F

ar l e y of H op k i ns v i l l e , I n c . , 573 S . W . 2d 346 ( K

y. C t . A pp. 1978) . The r a t i ona l e be hi nd t he s e de c i s i ons i s t he r e c ogni t i on t ha t r a t he r t ha n r e s t r i c t i ng c om pe t i t i on, s uc h c ove na nt s s e r ve t o f aci l i t a t e t r a de andi n du ce t e n a nt s t or e nt i na p a r t i c u l a r s hoppi ng c e nt e r .

Th e r eas o n a b l e n e s s o f a r e s t r i c t i v e co v e n a nt i s e x a m i n e di nt e r m

s o f i t s s c op e andef f ect . C . K . & J . K ., I n c . The r e s t r i c t i on i n t hi s c a s e i s not unr e a s ona bl y br oa d by t h e s e cr i t e r i a . I nt e r m s o f ef f ect , t h e r e s t r i c t i o naf f ect s onl y a s i ngl e s hoppi ng c e nt e r . I t i s r e a s ona bl e f or t he p l a i nt i f f tow

a nt t oa v o i dc o m

p e t i t i o nw

i t hi nthi s c e nt e r . Th e p ub l i c ’ s i nt e r e s t i s n o t adv e r s e l yaf f ect e d , as t h e m a r ke t a s a w h o l e i s u n a f f ect e dw h e r e t h e r e ar e s e v e r a l s h opp i n g c e nt e r s a va i l a bl e i n a c om m uni t y. I n t e r m

s of s c ope , de f e nda nt s ’ e xpe r t opi ne d t ha t t hi s c l a us e w a s m uc h br oa de r t ha n t hos e he ha d de a l t w i t h i n hi s e xpe r i e nc e . I t i s t r ue t ha t t he c l a us e doe s c ont a i n a r a t he r l e ngt hy l i s t of i t e m s w hi c h ot he r s t or e s w i t hi n t he c e nt e r m a y not c a r r y i n s i gni f i c a nt a m

ount s . H

ow e ve r , c our t s ha ve e xpe r i e nc e d di f f i c ul t y i nt e r pr e t i ng c l a us e s w hi c h de s c r i be d c om pe t i t or s w i t hle s s s p e c i f i c i t y . Se e e . g ., Ri t e Ai do f O h i o, I n c . ,1 M r . K e i t h t e s t i f i e d t h a t har d wa r e s a l e s pr ovi d e onl y 20% of hi s s t o r e ’ s r e v e nue . O t h e r ar e a s of s i gni f i c a n t r e v e nue w e r e l a w n / f a r m / g a r d e n at 2 2 . 4 %, au t o m o t i v e p r o d u c t s at 7 . 9 %, el ect r i cal at 7 . 9 %, pl u m

b i ng at 13. 8 %, pai n t and s undr i e s at 12. 7 %, and s por t i ng goods a t 7%. 4 M ar c ’ s V

ar i e t y St or e , I nc . , 638 N . E. 2d 1056 ( O

hi o C t . A pp. 1994) ; Sny de r ’ s D r ug St or e s , I nc . , v . She e hy Pr ope r t i e s , I n c . , 266 N

. W . 2d 882 ( M

i nn. 1978) . I f t h e cl a u s e m

e r e l yb a r r e ds i m

i l a r ? ha r dw a r e ? st or e s or na m e d s pe c i f i c c om

pe t i t or s , i t w

oul d be i gnor i ng t he f a c t t ha t a ppe l l a nt ’ s bus i ne s s de pe nds on m or e t ha n s i m

pl y t he s a l e of ha r dw

a r e 1

. The l i s t of goods , a l t hough r a t he r num e r ous , s e r ve s t o c l a r i f y a ny a m bi gui t y t ha t m

i ght ot he r w

i s e e xi s t i n t h e c l a u s e . It is lim ite dtoite m

s w hi c hpr o v i de s i g ni f i c a nt por t i ons of pl a i nt i f f ’ s s a l e s a nd i s not s o ove r l y br oa d i n s c ope a s t o r e nde r i t une nf or c e a bl e .

I f t h e l a n g u a g e o f a co nt r act i s cl ear an d una m bi guous , i t m

us t be c ons t r ue d a s w r i t t e n. C

um m i ngs v . V aughn , 911 S . W

. 2d 739, 742 ( Te nn. A pp. 1995) . Thi s l e a s e r e qu i r e s t h a t s t or e s w hi c hl eas e i nt h e cent e r m a yn o t h a v e one of t he na m

e d i t e m

s a s t he i r pr i nc i pa l bus i ne s s . N or m a y a pp e l l ees l eas e t oa s t or e w hi c hcar r i e s s e v e r a l o f t h e n a m e d c a t e gor i e s , i f t he s um of t hos e pr oduc t s a m ount s t o m

or e t ha n 25% of i t s ove r a l l bus i ne s s .

W e co n c l u de t h e l eas e i s enf or ceab l e ag a i n s t a pp e l l ees an dt h e cau s e i s r e m a n de dt ot h e Tr i a l C o ur t t o pr oc e e d i n t hi s c a us e c ons i s t e nt w i t h t hi s opi ni on. Th e co s t o f t h e app eal i s as s e s s e dt oapp e l l ees .5 ________________________ H e r s c he l P. Fr a nk s , J . CONC UR:

___________________________ H ous t on M

. G odda r d, P. J .

___________________________ D on T. M

c M ur r a y, J .

# FILED June 6, 1997 Cecil Crowson, Jr. App ellate C ou rt Clerk I N TH E C O U R T O FA PPEA LSO FTEN N ESSEE EA STER N SEC TI O N

KEI TH HAR

DW AR E, I NC. , ) C / A N O . 03A 01- 9610- C

H

- 00339 ) Pl a i ntif f

- A

pp e lla nt , ) W ASHI NGTON C

HANC ER Y ) v. ) ) DOUGLASL. W

HI TEa n dwi f e , ) C AR OLYN L. W

HI TE, ) ) D e f e n d a nt s - A

pp e l l ees . )

O R D ER

Thi s c a us e w

a s r e gul a r l y he a r d a nd c ons i de r e d by t he c our t . I TI SN

O W O R D ER ED t ha t t he j udgm

e nt of t he Tr i a l C our t i s r e v e r s e d , an dt h e cau s e r e m a n de d . Th e co s t s o f app eal ar e a dj udge d t o a ppe l l e e s , f or w hi c h e xe c ut i on m

a y i s s ue i f n ecess a r y . PER CU RI U M