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Davidson Brothers, Inc. v. D. Katz & Sons, Inc.

New Jersey Superior Court, Appellate Division
643 A.2d 642 (N.J. Super. Ct. App. Div. 1994)


Davidson Brothers (Davidson) (plaintiff) operated a supermarket on a tract of land in downtown New Brunswick (George Street) and later acquired a second supermarket about two miles away. The next year, Davidson closed the George Street location because of lost sales to Davidson’s new grocery store. Davidson sold George Street to D. Katz & Sons (Katz), subject to a covenant that prohibited anyone from using the property as a grocery store. The closing of George Street as a grocery store created significant hardships for downtown residents who did not have access to cars and could not get to the other Davidson grocery store. George Street was the only area downtown suitable for a grocery store. As a result, the New Brunswick Housing Authority (NBHA) acquired the George Street property and leased it to C-Town for one dollar a year, provided that C-Town used it as a grocery store. Davidson then brought suit against Katz, NBHA, and C-Town (defendants) to specifically enforce the covenant in the deed to Katz. The trial court awarded summary judgment to the defendants. The New Jersey Superior Court, Appellate Division affirmed. Davidson petitioned the New Jersey Supreme Court for reversal, which was granted. The case was remanded for a new trial to determine the reasonableness of the covenant. On remand, the trial court ruled in favor of the defendants, finding that the covenant was unreasonable. Davidson appealed.

Rule of Law


Holding and Reasoning (D’Annunzio, J.)

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