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

Kroger Company (Kroger), a grocery store, leased a commercial space in the Sagamore shopping center, which was owned by SES Development Company (SES). Kroger’s lease included a restrictive covenant prohibiting SES from leasing space within the Sagamore shopping center to another grocery store. Eventually, Kroger subleased its space in the Sagamore shopping center to Pay Less Super Markets, Inc. (Pay Less). Pay Less subleased the space to an appliance dealer, so the space was no longer used as a grocery store. Tippecanoe Associates II, LLC (Tippecanoe) (defendant), which was owned by the owners of Pay Less, later became the holder of the lease interest that was originally held by Kroger and transferred to Pay Less. Kimco Lafayette 671, Inc. (Kimco) later became the owner of the Sagamore shopping center. At some point, Kimco sought to lease a different vacant commercial space within the Sagamore shopping center to a grocery store. Tippecanoe sought to enforce the restrictive covenant in the lease. Consequently, Kimco filed suit against Tippecanoe, requesting a declaration that the restrictive covenant was unenforceable. The trial court found that the restrictive covenant was unenforceable because the circumstances in and around the Sagamore shopping center had changed so much that the original purpose of the covenant could not be effected. The appellate court reversed the trial court’s decision. Kimco appealed.