Webster v. Star Distributing Co., Inc.
| Citation | 244 S.E.2d 826,241 Ga. 270 |
| Decision Date | 04 April 1978 |
| Docket Number | No. 33210,33210 |
| Parties | , 1978-2 Trade Cases P 62,322 Garah L. WEBSTER et al. v. STAR DISTRIBUTING COMPANY, INC. |
| Court | Supreme Court of Georgia |
Floyd E. Siefferman, Jr., Floyd Siefferman & Associates, Atlanta, for appellants.
Glenville Haldi, Atlanta, for appellee.
Garah L. and Jean Webster operate a "One Hour Martinizing" laundry and dry cleaning establishment in Sage Hill Shopping Center in Atlanta, Georgia. They lease this property from Plant Improvement Co., Inc., and there is a restrictive covenant in their lease limiting the use of the premises to professional dry cleaning and commercial laundering but not coin-operated laundering.
Star Distributing Company operates "Star's Great Western Laundromat and Cleaning Center," also located in Sage Hill Shopping Center. They also lease their property from Plant Improvement Co., Inc. A restrictive covenant in Star's lease limits the use of their premises to coin-operated laundering, coin dry cleaning, and budget dry cleaning.
Star Distributing Co. assigned its lease to Richard Guerin in 1973. Approximately one year later, the Websters brought suit to enjoin Guerin from performing services prohibited by the terms of the restrictive covenant in his lease. Holding that under Rosen v. Wolff, 152 Ga. 578, 110 S.E. 877 (1922) and numerous subsequent decisions, the Websters had standing to enforce the terms of the restrictive covenant in Guerin's lease, this court in Guerin v. Webster, 233 Ga. 521, 212 S.E.2d 352 (1975) affirmed the grant of an interlocutory injunction against Guerin. The Websters were subsequently awarded a permanent injunction and damages.
Guerin then reassigned the lease to Star Distributing Co., and Star Distributing began to operate a coin-operated laundry establishment. Star began engaging in a practice known in the trade as "drop-off" laundry, i. e., the customer drops the laundry off with attendants at the coin-operated laundry, the attendants then wash the laundry in the coin-operated machines, the attendants dry and fold the washed laundry, the customer is then presented with the fluff laundry and is charged 25 cents per pound.
The Websters filed the present action for injunctive relief and damages against Star Distributing Co., arguing that this drop-off laundry practice constitutes commercial laundering and is, therefore, prohibited under the terms of Star's lease. After hearing arguments of counsel, the trial court ruled that to enforce the restrictive covenant in this manner would constitute an unreasonable and illegal restraint of trade, and thus the plaintiffs would not, as a matter of law, be entitled to relief. From the judgment for the defendant, the plaintiffs appeal. Held :
The trial court cited no authority for the proposition that enforcement of the restrictive covenant would constitute an unreasonable and illegal restraint of trade. However, for general principles used in determining whether contracts in restraint of trade are valid, see Brittain v. Reid, 220 Ga. 794, 141 S.E.2d 903 (1965); Clein v. Kapiloff, 213 Ga. 369, 98 S.E.2d 897 (1957).
In this appeal, the appellee does not cite any authority to sustain the trial court in its ruling that enforcement of the restrictive covenant would constitute an illegal restraint of trade. Rather, the appellee argues that what it is doing simply is not a violation of the restrictive covenant in its lease.
We are, therefore, presented with two questions: (a) Would enforcement of the restrictive covenant in the manner sought constitute an illegal restraint of trade? If not, (b) has the appellee violated the restrictive covenant in its lease?
( a) Rosen v. Wolff...
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