FILED

June 6, 1997

Cecil Crowson, Jr.

Appellate Court Clerk

 I N THE COURT OF APPEALS OF TENNESSEE

EASTERN SECTI ON

KEI TH HARDWARE, I NC. , ) C/ A NO. 03A01- 9610- CH- 00339

)

Pl a i ntif f - Appe lla nt , ) WASHI NGTON CHANCERY

)

v. ) HON. LEWI S W. MAY,

) CHANCELLOR

DOUGLAS L. WHI TE a nd wi f e , )

CAROLYN L. WHI TE, )

)

De f e nda nt s - Appe l l ees . ) REMANDED

M. STANLEY GI VENS, ANDERSON, FUGATE, GI VENS, COUNTS & BELI SLE,

J ohns on Ci t y, f or Pl a i nt i f f - Appe l l a nt .

J OHN S. TAYLOR, Mc KI NNON, FOWLER, FOX & TAYLOR, J ohns on Ci t y,

f or De f e nda nt s - Appe l l e e s .

O P I 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

pur s ua nt to T. R. A. P. Rul e 9, is whe t he r the le a s e be t we e n the

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 wa s he l d by t he

Tr i a l Cour 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 owi ng c l a us e : 

Dur 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 whi c h i s t he s e l l i ng of a ny one of t he f ol l owi ng
2

c l a s s e s of me r c ha ndi s e , t o wi t : ha r dwa r e ,

hous e wa r e s , aut omobi l e s uppl i e s , el ect r i cal

pl umbi ng, t oys , home 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 . No 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 mor e t ha n t we 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 me r c ha ndi s e . 

I n 1996, a ppe l l a nt wa s ma de a wa 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 Dol l a r

Ge ne r a l St or e a nd Aut o Zone . Appe l l a nt f i l e d s ui t t o pr e ve nt

wha t wa 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. 

On t he he a r i ng f or a n i nj unc t i on, a ppe l l a nt ’ s owne r

t e s tif i e d tha t the pr oduc t s s ol d a t Dolla r Ge ne r a l St or e

ove r l a ppe d wi t h 68% of t he me 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 pme nt , l a wn 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 . He a l s o

t e s tif i e d tha t 7. 9% of a ppe lla nt ’ s s a l e s c a me f r om a ut omotive

pr oduc t s , whi c h he be l i e ve d woul d be ne ga t i ve l y a f f e c t e d by

t he c ompe tition of Aut o Zone . Appe lle e s ’ witne 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 wa s br oa de r t ha n t ha t i n a

t ypi c a l c omme r c i a l le a s e a nd tha t, in the i r opi ni on, the

a ddi t i ona l bus i ne s s e s woul 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 mpr ove i t s bus i ne s s .

The Tr i a l Cour 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 wa 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 mons t r a t i on t ha t t he Pl a i nt i f f woul d s uf f e r i r r e pa r a bl e ha r m

f r om thi s time until we tr y thi s la ws uit. ? 

Re s t r i c t i ve cove na nt s ar e f r e que nt l y i ns e r t e d i 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 ompe t i t i on wi t hi n t he c e nt e r . 49 Am. J ur 2d 

La ndl or d a nd Te na nt § 70 ( 1995) . We ha ve be e n r e f e r r e d t o no
3

Te nne s s ee whi c h ha s addr e s s e d t he i r enf or ceabi l i t y. Howe ve r ,

ma 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 . Fai r v i ew Shoppi ng Ce nt e r Cor p. , 407 N. E. 2d

507 ( Ohi o 1980) ; Al e x ande r ’ s De p’ t St or e s v . Ar nol d Cons t abl e

Cor p. , 250 A. 2d 792 ( N. J . Supe r . Ct . Ch. Di v. 1969) ; 

Nat i onal Supe r Mar k e t s , I nc . v . Magna Tr us t Co., 570 N. E. 2d

1191 ( I l l . App. Ct . 1991) ; Me nde l l v . Gol de n- Far l e y of

Hopk i ns v i l l e , I nc . , 573 S. W. 2d 346 ( Ky. Ct . App. 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 ompe 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 and i nduce t e na nt s t o r e nt i n a pa r t i c ul a r

s hoppi ng c e nt e r . 

The r eas ona bl e ne s s of a r e s t r i c t i ve cove na nt i s

e xa mi ne d i n t e r ms of i t s s c ope and ef f ect . C. K. &J . K., I nc .

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 he s e cr i t e r i a . I n t e r ms of ef f ect , t he r e s t r i c t i on af 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

pl a i nt i f f to wa nt t o a voi d c ompe t i t i on wi t hi n thi s c e nt e r . 

The publ i c ’ s i nt e r e s t i s not adve r s e l y af f ect e d, as t he ma r ke t

a s a whol e i s una f f ect e d whe r e t he r e ar e s e ve r a l s hoppi ng

c e nt e r s a va i l a bl e i n a c ommuni t y. I n t e r ms 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 wa s muc h br oa de r

t ha n t hos e he ha d de a l t wi 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 ms

whi c h ot he r s t or e s wi t hi n t he c e nt e r ma y not c a r r y i n

s i gni f i c a nt a mount s . Howe 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 whi c h de s c r i be d c ompe t i t or s

wi t h le s s s pe c i f i c i t y. Se e e . g., Ri t e Ai d of Ohi o, I nc . ,
1

 Mr . Ke 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 . Ot h e r ar e a s of s i gni f i c a n t r e v e nue we r e

l a wn / f a r m/ g a r d e n at 2 2 . 4 %, au t o mo 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 mb 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

Mar c ’ s Var i e t y St or e , I nc . , 638 N. E. 2d 1056 ( Ohi o Ct . App.

1994) ; Sny de r ’ s Dr ug St or e s , I nc . , v . She e hy Pr ope r t i e s ,

I nc . , 266 N. W. 2d 882 ( Mi nn. 1978) . 

I f t he cl a us e me r e l y ba r r e d s i mi l a r ?ha r dwa r e ? st or e s

or na me d s pe c i f i c c ompe t i t or s , i t woul 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 mor e t ha n s i mpl y t he s a l e

of ha r dwa r e

1

. The l i s t of goods , a l t hough r a t he r nume r ous ,

s e r ve s t o c l a r i f y a ny a mbi gui t y t ha t mi ght ot he r wi s e e xi s t i n

t he c l a us e . It is limite d to items whi c h pr ovi de s i gni 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 he l a ngua ge of a cont r act i s cl ear and

una mbi guous , i t mus t be c ons t r ue d a s wr i t t e n. Cummi ngs v .

Vaughn, 911 S. W. 2d 739, 742 ( Te nn. App. 1995) . Thi s l e a s e

r e qui r e s t ha t s t or e s whi c h l eas e i n t he cent e r ma y not ha ve

one of t he na me d i t e ms a s t he i r pr i nc i pa l bus i ne s s . Nor ma y

a ppe l l ees l eas e t o a s t or e whi c h car r i e s s e ve r a l of t he na me d

c a t e gor i e s , i f t he s um of t hos e pr oduc t s a mount s t o mor e t ha n

25% of i t s ove r a l l bus i ne s s . 

We conc l ude t he l eas e i s enf or ceabl e aga i ns t

a ppe l l ees and t he caus e i s r e ma nde d t o t he Tr i a l Cour t t o

pr oc e e d i n t hi s c a us e c ons i s t e nt wi t h t hi s opi ni on.

The cos t of t he appeal i s as s e s s e d t o appe l l ees .
5

________________________

He r s c he l P. Fr a nks , J .

CONCUR:

___________________________

Hous t on M. Godda r d, P. J .

___________________________

Don T. Mc Mur r a y, J .
FILED

June 6, 1997

Cecil Crowson, Jr.

Appellate Court Clerk

I N THE COURT OF APPEALS OF TENNESSEE

EASTERN SECTI ON

KEI TH HARDWARE, I NC. , ) C/ A NO. 03A01- 9610- CH- 00339

)

Pl a i ntif f - Appe lla nt , ) WASHI NGTON CHANCERY

)

v. ) 

) 

DOUGLAS L. WHI TE a nd wi f e , )

CAROLYN L. WHI TE, )

)

De f e nda nt s - Appe l l ees . ) 

O R D E R

Thi s c a us e wa 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 T I S NOW ORDERED t ha t t he j udgme nt of t he Tr i a l Cour t

i s r e ve r s e d, and t he caus e r e ma nde d. The cos t s of appeal ar e

a dj udge d t o a ppe l l e e s , f or whi c h e xe c ut i on ma y i s s ue i f

necess a r y.

PER CURI UM