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Lagrew v. Hooks-SupeRx, Inc.

905 F. Supp. 401 (1995)

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Lagrew v. Hooks-SupeRx, Inc.

United States District Court for the Eastern District of Kentucky

905 F. Supp. 401 (1995)

Facts

David and Betty Lagrew (plaintiffs) were successors in interest to the Beaumont Plaza Shopping Center (the Plaza). Hooks-SupeRx, Inc. (SupeRx) (defendant) was the successor in interest to a lease in the Plaza. SupeRx operated a drugstore in the Plaza under a 30-year lease that charged a below-market base rent plus a percentage of sales exceeding $564,300 each month. The additional payments based on sales, at their peak, exceeded 150 percent of the base rent. During the second of several five-year renewal options, SupeRx’s profits declined because the Plaza’s main tenant left. SupeRx closed its store, kept paying only the base rent, and opened another successful drugstore nearby. SupeRx tried to sublet its space, but the lease was very strict about who could sublet the space and essentially reserved the space for drugstores that might compete with SupeRx. The Plaza became frustrated that SupeRx was not paying the extra sales rent each month and asked SupeRx whether it could give its space to a Rite-Aid drug store, but SupeRx declined to give up its option under the lease. The Plaza sued SupeRx, arguing that although the contract did not contain a provision requiring continuous operation, such a provision was implied in the contract.

Rule of Law

Issue

Holding and Reasoning (Wilhoit, J.)

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