M. Leo Storch Limited Partnership v. Erol's Inc.

95 Md. App. 253, 620 A.2d 408 (1993)

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M. Leo Storch Limited Partnership v. Erol’s Inc.

Maryland Court of Special Appeals
95 Md. App. 253, 620 A.2d 408 (1993)

  • Written by Tammy Boggs, JD

Facts

M. Leo Storch Limited Partnership (Storch) (plaintiff) owned a Maryland shopping center. Erol’s Inc. (defendant) leased a portion of the shopping center to operate a store that earned a certain profit. The lease contract ran from 1984 to 1994 and required a fixed monthly payment by Erol’s. The lease also contained a clause that required Erol’s to continuously operate its store during the lease term “with due diligence and efficiency so as to produce all of the gross sales” that could be diligently produced (the continuous-operation clause). Erol’s sold and rented televisions, video cameras, videotapes, movies, and accessories. The operation of Erol’s required a manager, an assistant manager, two part-time managers, and two part-time associates. Managers had to understand the financial operations of the business, and employees had to be knowledgeable about movies. In 1990, Erol’s began operating at a loss, and losses were projected to continue. Financial issues were facing other stores in the video-rental industry. Erol’s decided that it would close its store. Storch sued Erol’s to enforce the continuous-operation clause of the lease contract and sought an injunction to stop Erol’s from closing its store. The trial court denied injunctive relief based on finding an unlikelihood of success on the merits. Storch appealed.

Rule of Law

Issue

Holding and Reasoning (Bishop, J.)

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