Genovese Drug Stores, Inc. v. Connecticut Packing Company, Inc.

Connecticut Packing Company, Inc. (Copaco) (defendant) purchased a piece of land in Bloomfield in 1947. Copaco developed a shopping center on the property and sold part of the parcel to Bercrose Associates (Bercrose) (defendant). Bercrose was a partnership, owned by three of the four owners of Copaco. In 1971, Bercrose leased a portion of the shopping center to Genovese Drug Stores, Inc. (Genovese) (plaintiff). The lease contained a restrictive covenant that prohibited Bercrose from leasing any of its property to any retail film-development company, like Fotomat Corporation (Fotomat) (defendant). Copaco also entered into a Consent and Agreement, agreeing to apply the same restrictive covenant to land owned by Copaco. The Consent and Agreement was attached to the lease. Genovese then recorded a Memorandum of Lease in Bloomfield. The Memorandum of Lease included Bercrose as lessor and Genovese as lessee, but the recorded documents did not reference the restrictive covenant nor the Consent and Agreement. Approximately 10 years later, Copaco leased a small portion of a parking lot in the shopping center to Fotomat. Copaco’s representatives did not disclose the existence of the restrictive covenant. Fotomat then placed a kiosk on the leased space. Genovese objected and demanded Copaco remove the kiosk. Copaco did not do so, and Genovese sued Copaco, Bercrose, and Fotomat. Genovese requested a preliminary injunction barring Fotomat from operating the kiosk. The trial court determined that Fotomat had constructive knowledge of the restrictive covenant and granted the preliminary injunction. Fotomat appealed to the United States Court of Appeals for the Second Circuit.