J. Weingarten, Inc. v. Northgate Mall, Inc.

Decision Date08 September 1981
Docket NumberNo. 80-C-2991,80-C-2991
Citation404 So.2d 896
PartiesJ. WEINGARTEN, INC. v. NORTHGATE MALL, INC. and Pickens Bond Construction Company.
CourtLouisiana Supreme Court

Randall C. Songy and John G. Torian, III, of Onebane, Donohoe, Bernard, Torian, Diaz, McNamara & Abell, Lafayette, for defendant-applicant.

L. Lane Roy and M. Candice Hattan, Lafayette, for plaintiff-respondent.

DENNIS, Justice.

We are called upon to decide whether, under the circumstances of this case, a court should specifically enforce a lease by ordering the destruction of the major part of a $4 million building which a shopping center developer erected in an area reserved to its tenant for customer parking. The trial court refused to order the building razed, but the court of appeal reversed, requiring that approximately 60% of the building be torn down and removed within six months of the effective date of its judgment. We reserve the judgment of the court of appeal. Although specific performance is the preferred remedy for breach of a contract it may be withheld by the court when specific relief is impossible, when the inconvenience or cost of performing is greatly disproportionate to the damages caused, when the obligee has no real interest in receiving performance, or when the latter would have a substantial negative effect on the interests of third parties. In view of the great disparity between the cost of specific relief and the damages caused by the contractual breach, the magnitude of the economic and energy waste that would result from the building's destruction, the substantial hardship which would be imposed on individuals who are not parties to the contract or to this litigation, and the potential negative effect upon the community, the circumstances and nature of this case do not permit specific performance. Accordingly, the case will be remanded to the trial court for proceedings necessary to the assessment and award of any damages to which the plaintiff may be entitled.

The defendant, Northgate Mall, Inc., in 1967 and subsequently, developed an enclosed shopping mall on approximately 35 acres of land in Lafayette, Louisiana. In 1968, the defendant subleased space in the mall to the plaintiff, J. Weingarten, Inc., for the operation of a grocery store.

In early 1978, the defendant began planning to renovate and expand the mall to counter expected competition from a new mall to be built in Lafayette. The plaintiff, upon learning of the expansion plans, informed the defendant that it wished to remodel or enlarge its own store in conjunction with the defendant's activities. Later the plaintiff sent rough plans of its enlargement to the defendant for approval. The plans would have allowed the plaintiff to extend its store front fifty feet into the parking lot adding roughly 7400 additional square feet of building area. Under the lease, the plaintiff had no contractual right to expand. The defendant's right to expand was limited to roughly 40,000 square feet, but it proposed to add slightly over 100,000 square feet. Therefore, consent of both parties was necessary under the lease to permit either party's proposed expansion. However, no written modification ever resulted from their preliminary negotiations.

In February, 1979, the defendant erected a construction fence and began moving construction equipment and material onto the job site. The plaintiff alerted the defendant that it considered the defendant's activities a breach of contract and that injunctive relief would be sought if such activities did not cease. Last minute negotiations between the parties were unsuccessful, and the plaintiff filed suit on March 1, 1979 seeking preliminary and permanent injunctive relief.

Pursuant to plaintiff's petition, the trial court issued a temporary restraining order prohibiting further construction activities and continued the order until March 19, 1979 when a hearing was held on plaintiff's motion to dissolve the restraining order. The trial court denied the preliminary injunction and dissolved the temporary restraining order based on its finding that Weingarten failed to show that it would sustain irreparable damage without injunctive relief. Realizing the great costs attendant to the delay of a multi-million dollar construction project, the trial court pledged itself to speedy action in the case and encouraged the plaintiff to appeal the correctness of its ruling. The plaintiff did not take an appeal as a matter of right, see La. C.C.P. art. 3612, or apply for supervisory writs. See La. C.C.P. art. 2201. The trial on the merits of the petition for a permanent injunction was not held until October 25 and 26, 1979. By this time the $4 million expansion project was virtually complete and the new stores therein were open for business.

After the trial on the permanent injunction, the trial court reaffirmed its earlier finding that the plaintiff had not demonstrated that it would be irreparably harmed and could be adequately compensated monetarily. The court refused to enforce specifically a provision in the lease stipulating that an injunction to enforce Weingarten's rights to egress and passage over the parking area occupied by the new building could be obtained without the necessity of showing irreparable harm or the inadequacy of damages. The trial court concluded the agreed remedy provision was against public policy relying on Termplan Arabi, Inc. v. Carollo, 299 So.2d 831 (La.App. 4th Cir.), writ denied 302 So.2d 29 (La. 1974).

The court of appeal reversed the trial court, holding that the plaintiff was entitled to permanent injunctive relief because the agreed remedy provision was valid and because the plaintiff was irreparably harmed. J. Weingarten, Inc. v. Northgate Mall, Inc., 390 So.2d 527 (La.App.3d Cir. 1980). We granted defendant's application to consider the appropriateness of specific performance in this case. 396 So.2d 1326 (La. 1981).

Northgate agreed not to erect any additional buildings in the parking area of the shopping center except within the space shown on a plat attached to the lease designated as sites for future department store and a proposed theater. The defendant also promised to maintain a ratio of six car parking spaces for each 1,000 feet of floor space in the shopping center. It further agreed that its tenant, Weingarten, would have the right to an "irrevocable non-exclusive easement" over all parking areas shown on the plat attached to the lease. In connection with the "easement," the lease provided that Weingarten "shall have the right to obtain an injunction specifically enforcing such rights and interests without the necessity of proving inadequacy of legal remedies or irreparable harm."

We concur in the court of appeal's findings that Northgate breached each of the contractual provisions. Whereas the lease reserved a 39,375 square foot area for future expansion, Northgate's new building consumed over 100,000 square feet, covering part of the area reserved for customer parking and reducing the parking ratio from 5.7 spaces per 1000 square feet, in which Weingarten had acquiesced, to 5.0 spaces per 1000 square feet. However, we disagree with the court of appeal finding that the plaintiff had shown that it would be irreparably injured by the breaches of contract. The evidence fully supports the trial judge's determination that plaintiff failed to demonstrate that its injury would be irreparable or insusceptible to adequate compensation.

The decisive issue presented by the breaches of contract is whether Weingarten is entitled to the substantive right of specific performance under the circumstances of this case. Specific performance may be enforced by the extraordinary remedy of injunction, among other procedural methods. 1 It is self-evident, however, that unless Weingarten has a substantive right to specifically enforce the obligation, neither an injunction nor any other procedural remedy may be used. 2

Plaintiff Weingarten has asked specific performance of defendant Northgate's obligation not to do something namely, not to infringe on plaintiff's contractual rights over areas reserved for parking by the lease. 3 Civil Code articles 1926 through 1929 govern the enforcement of obligations to do, or not to do.

Articles 1926 and 1929 provide:

Art. 1926. On the breach of any obligation to do, or not to do, the obligee is entitled either to damages, or, in cases which permit it, to a specific performance of the contract, at his option, or he may require the dissolution of the contract, and in all these cases damages may be given where they have accrued, according to the rules established in the following section.

Art. 1927. In ordinary cases, the breach of such a contract entitles the party aggrieved only to damages, but where this would be an inadequate compensation, and the party has the power of performing the contract, he may be constrained to a specific performance by means prescribed in the laws which regulate the practice of the courts.

Art. 1928. The obligee may require that any thing which has been done in violation of a contract, may be undone, if the nature of the cause will permit, and that things be restored to the situation in which they were before the act complained of was done, and the court may order this to be effected by its officers, or authorize the injured party to do it himself at the expense of the other, and may also add damages, if the justice of the case require it.

Art. 1929. If the obligation be not to do, the obligee may also demand that the obligor be restrained from doing any thing in contravention of it, in cases where he proves an attempt to do the act covenanted against.

Since they are not models of clarity, the articles are susceptible to more than one reasonable interpretation.

A literal reading of the codal language may lead one to conclude that the general rule, i.e., the one to be...

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