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Carousel Snack Bars of Minnesota Inc. v. Crown Construction Co.

decided: March 9, 1971.

CAROUSEL SNACK BARS OF MINNESOTA, INC., APPELLANT,
v.
CROWN CONSTRUCTION COMPANY AND PURPLE COW OF SCRANTON, INC.



Biggs, Van Dusen and Rosenn, Circuit Judges.

Author: Van Dusen

Opinion OF THE COURT

VAN DUSEN, Circuit Judge.

This is an appeal from a judgment of the United States District Court for the Middle District of Pennsylvania determining that the contemplated use of the premises at Viewmont Mall Shopping Center by defendant Purple Cow of Scranton, Inc. (Purple Cow) did not violate the lease agreement between plaintiff, Carousel Snack Bars of Minnesota (Carousel), and defendant Crown Construction Company (Crown), and that plaintiff Carousel was not entitled to injunctive relief.*fn1

Plaintiff Carousel entered into a lease agreement with Crown on August 30, 1967, concerning a portion of the covered mall known as the Viewmont Mall Shopping Center, which is located partly in Dickson City and partly in Scranton, Pennsylvania. Article XXXII of the lease provided that:

Article XXXII -- Notwithstanding any other terms or conditions on this Lease, the parties hereto agree as follows: * * *

2. Article IX, "Use of Premises," Section 1, is modified to the extent of the addition of the following provision:

It is agreed that the tenant shall be sole operator in the center of a kiosk, a standup-type snack bar, restaurant or food store that has as its principal business the sale of such items as popcorn, caramel corn, candy floss, soft drinks, soft ice cream, coffee, hot chocolate, milk, snow cones, hot dogs, and pastries; other tenants in other types of stores may sell certain of such items but not as their principal business. It is understood, however, that the foregoing restrictions shall not prevent any candy store from handling candy as its principal item, or any bakery from handling pastries as its principal item, nor the operation of a delicatessen so long as it does not sell hot dogs ready-to-eat, as its principal or major item. It is further understood that the foregoing restriction does not apply to Sears, Roebuck Company, J. C. Penney Company, Thrift Drug Company, W. T. Grant and Giant Markets, or other department stores, junior department stores, drug stores, variety stores and supermarkets whose leases permit the handling of all types of merchandise without limitation, provided any competing operation by said businesses would be conducted within their leased premises. * * *

On March 17, 1969, defendant Crown entered into a written lease agreement with Purple Cow, leasing to that company a portion of the Mall. Article IX of this lease provided that:

1. The demised premises shall be occupied and used solely for the purpose of operating a conventional type of restaurant and a combination cafeteria with counter and table facilities.

Carousel had notified Crown by letter dated March 11, 1969, that it considered the proposed Purple Cow establishment to be in violation of the exclusive use rights afforded it under Section 2 of Article XXXII of its lease. Plaintiff failed to dissuade Crown and Purple Cow from their plans and subsequently instituted this action for injunctive relief.

Plaintiff claims that Article XXXII of the lease was violated by the agreement between defendants because the contemplated Purple Cow establishment is a "stand-up type" restaurant and because the principal business of Purple Cow will be the sale of products covered by Section XXXII.

The defendants' contract is in violation of the agreement between plaintiff and Crown if Purple Cow is both (a) "* * * a kiosk, stand-up type snack bar, restaurant or food store," and (b) an establishment that has "as its principal business the sale of such items as popcorn, caramel corn, candy floss, soft drinks, soft ice cream, coffee, hot chocolate, milk, snow cones, hot dogs, and pastries. * * *" If Purple Cow falls within the description of neither phrase (a) nor phrase (b) above, or if it can be described by only one of the two phrases, then its operation does not violate Article XXXII of Carousel's lease.*fn2 Only if Purple Cow is an operation that can be described by both phrases "(a)" and "(b)" is Article XXXII violated. However, we have concluded that the Purple Cow operation is covered neither by phrase (a) nor phrase (b) and that, as a consequence, the district court judgment must be affirmed since Carousel is not entitled to injunctive relief.

The record supports the conclusion that Purple Cow is not "* * * a kiosk, stand-up type snack bar, restaurant or food store" ...


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