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Supermarket Successfully Litigates Against Encroachment

January 30, 2013

On January 29, 2013 a jury unanimously agreed with the operators of Philadelphia-based Holiday Supermarkets, Inc. that the landlord of the Mayfair Shopping Center violated the exclusive use provision in their lease by allowing Dollar Tree to directly compete in the same shopping center by selling grocery and food products.  

The conflict spans more than seven years, first with complaints to the landlord (Regency Realty and USRPI) then cease and desists letters to Dollar Tree. Despite acknowledging that Dollar Tree was in violation of Holiday’s lease rights, the landlord was unwilling to take legal action, forcing Holiday to commence a lawsuit in 2009. The suit was dismissed in 2010 when the judge ruled that Holiday’s lease was limited to competition from other supermarkets and Dollar Tree was not a supermarket. After that ruling White and Williams was retained as new counsel and Kim Kocher, partner in the Appellate Group, was successful in getting the decision reversed on appeal.

After a five-day trial, the jury found that the Mayfair Dollar Tree Store was a retail supermarket of some nature and that the landlord violated the exclusive use provision in Holiday’s lease by allowing Dollar Tree to sell food and grocery products in the same shopping center. While Dollar Tree argued that it was not a retail supermarket, Justin Proper, partner in the Commercial Litigation Group, effectively proved to the jury that the lease language was not intended to be limited to traditional supermarkets and that the intent was to prohibit competition from any business selling food and grocery items.

Additional coverage of the case is available here

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