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    Mark Rowley has extensive experience representing domestic and foreign real estate developers and lending institutions in a variety of real estate matters, including the acquisition and sale of real property, secured lending ...

Retail tenant still openTwo recent court decisions confirm that retail tenants cannot ignore continuous operation covenants as both ruled the retailers’ stores must remain open for business.

Starbucks Blocked from Closing Teavana Stores

In an epic battle between mega-shopping center owner Simon Property Group and seemingly ubiquitous retail tenant Starbucks, Simon has won a crucial battle. Last summer, Starbucks announced publicly that it was closing hundreds of its Teavana stores, most of which are located in shopping malls around the country. Simon, reportedly the largest shopping center operator in the United States, responded by filing suit against Starbucks in Indiana to block the closure of Teavana stores located in Simon malls. With the battle lines drawn, an Indiana judge ruled in favor of Simon and issued a preliminary injunction prohibiting Starbucks from closing 77 of its stores in Simon malls.

The Washington State Supreme Court recently held in Edmonson v. Popchoi, 172 W2nd. 272 (2011) that a grantor of a statutory warranty deed cannot summarily settle an adverse title claim but must provide a good faith defense even though there may not be a viable defense for the claim.

In 2006, Kiss sold a parcel of land to Popchoi by statutory warranty deed. By statute, the deed contained the covenant that Kiss would defend Popchoi’s title. Popchoi discovered through a survey that a fence encroached by 165 square feet into the southern part of his new property. The neighbor to the south, Edmondson, sent a letter claiming that property by adverse possession. Popchoi tendered the defense of the claim to Kiss. Kiss conditionally accepted the tender subject however to his right to settle the claim. Kiss said that it would be less expensive to pay damages to Popchoi for the breach of the title covenant than to defend the lawsuit. Kiss’ tender was rejected and Popchoi engaged his own attorney to defend the lawsuit filed by Edmonson.

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