| ICSC Legal Database - Cases | Monday, February 22, 1999 05:02 PM |
| Citation: |
| Columbia East Associates v. BI-LO. Inc.. 386 S.E.2d 259 (S.C. App. 1989) |
| Issue: |
| Whether commercial lease agreement between anchor store and shopping center was breached by store's |
| vacating property, and continuing to pay rent, while failing to find a substitute anchor store. |
| Facts: |
| In 1975, Defendant signed a letter of intent to lease space in Plaintiff's shopping center, as "anchor store." |
| Defendant was and still is one of the most popular supermarket chains in South Carolina. The partisz signed |
| Defendant's standard lease form, stating that the terms were "non-negotiable." Lease terms ran from the day on |
| which the supermarket opened until December 31, 1995. The lease restricted use of the premises to a |
| supermarket, gave Defendant an exclusive for this purpose and permitted assignment or sublet provided |
| Defendant remained liable. Other tenants leasing space made specific provisions relying upon Defendant's |
| occupancy of the shopping center. In 1986, Defendant gave official notice to Plaintiff of intent to close the |
| location and relocate in an adjacent shopping center approximately two hundred (200) feet away. Defendant |
| stated that a competing supermarket chain would not be an acceptable subtenant for thepremises. After |
| relocating, Defendant continued to make rental payments, but did not seek a subtenant for premises leased |
| from Plaintiff. Defendant attempted to market various of its other vacated premises in search of subtenants but |
| omitted the rental space available shopping center. Plaintiff (Shopping Center) brought an action alleging breach |
| of commercial lease agreement by Defendant. Defendant appealed the denial of its summary judgment motion |
| and the order awarding Plaintiff $400,000 in damages on a breach of contract claim. |
| Holding: |
| Affirmed. The Appellate Court found that the contract between the Plaintiff and Defendant was ambiguous as to |
| the terms of the lease. Defendant claimed that it was permitted to continue to pay rent and allow the premises |
| to remain vacant. Plaintiff asserts that Defendant had to continue operation or find a subtenant. In construing the |
| contract, the court held that Defendant was obligated to sublease if it ceased operation of the store itself, since |
| the purpose of the lease was to assure an operating anchor store for the shopping center. The Appellate court |
| held that paying rent on a vacant store was not contemplated in the drafting of the lease, but was contrary to the |
| intent of the parties. The court found that Defendant had violated an obligation of good faith by ceasing |
| operation, leaving the leased premises vacant and refusing to consider subleasing to a competing |
| Classification 1: |
| Landlord and Tenant |
| 00258 - Legal Update - Winter 1989 |
|
