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Tippecanoe Associates II, LLC v. Kimco Lafayette 671, Inc.

Indiana Court of Appeals
811 N.E.2d 438 (2004)


Facts

SES Development Company (SES) owned the Sagamore Shopping Center in Indiana. Beginning April 27, 1973, SES leased one of its stores to Kroger Company (Kroger), a grocery store operator, for twenty years. The lease contained a covenant restricting SES from renting space in the shopping center or within a two-mile radius to any other grocery store operators. On January 15, 1997, SES sold the shopping center to Kimco Lafayette 671, Inc. (Kimco) (plaintiff). At the time, Target occupied almost half the space at the shopping center. But in April 2000, Target moved out of the shopping center. Despite various attempts, the only new tenant Kimco was able to attract was Schnucks, a grocery store operator. On December 6, 2001, Kimco filed suit requesting the trial court to declare the restrictive covenant in the SES-Kroger lease to be unenforceable. By that point, the lease had undergone various assignments until Tippecanoe Associates II, LLC (Tippecanoe) (defendant) had the rights to the lease and the property was subleased to H.H. Gregg Appliances, Inc. The trial court declared the restrictive covenant unenforceable.

Rule of Law

Issue

Holding and Reasoning (Hastings, C.J.)

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