K-Mart Corporation v. Oriental Plaza, Inc.

K-Mart Corporation (K-Mart) (plaintiff) entered as a tenant into a lease agreement (Lease) with Oriental Plaza Shopping Center, which was owned by Oriental Plaza, Inc. (OPI) (defendant). The parties agreed that OPI would build no more than 10,000 square feet of retail space in the parking area north of K-Mart’s store, and that any new construction would not deviate from an agreed site plan without K-Mart’s express written consent. OPI subsequently presented K-Mart with a site plan for the development of the rest of the shopping center, and after discussion and modification, K-Mart approved a plan. However, OPI began construction according to an earlier version of the plan rejected by K-Mart, and K-Mart did not realize the deviation for 11 weeks, at which point OPI’s construction was nearly complete. K-Mart sued in federal district court for a preliminary injunction, alleging that the development violated the Lease and harmed K-Mart by reducing its parking availability, increasing traffic congestion, obstructing the view of its store and signage, and decreasing the chance of impulse shopping. At trial, evidence showed that OPI’s construction blocked the view of K-Mart’s building from the highway, interfered with K-Mart’s “presence” as bargained for in the Lease negotiations, decreased parking availability, and interfered with vehicle maneuverability and pedestrian safety. The district court granted injunctive relief, ordering OPI to raze the southernmost structure under construction and replace the structure with no fewer than 30 parking spaces within 60 days, as well as enjoining further development in the parking area except in strict compliance with the Lease. OPI appealed, arguing that injunctive relief was inappropriate because money damages were sufficient.