Winn-Dixie store, Inc v. Dolgencorp Inc

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Citation. 64 So. 2d 261

Brief Fact Summary.

Winn-Dixie held the exclusive right to be the only grocery store in a shopping plaza, and Dolgencorp a dollar store violated that covenant when they used more than 500 square feet of its store as a grocery.

Synopsis of Rule of Law.

In order to have a valid covenant running with the land that agreement must touch and concern the land, have intent for it to run with the land, and there must be notice of such agreement.

Facts.

Winn-Dixie is what is called an anchor tenant, the kind of company that brings business to a shopping plaza. To that end, Winn-Dixie negotiated with the landlord of the Crest Haven Shopping Plaza to be the only grocery store in the plaza. The covenant specifically stated it would run with the land and was recorded in the jurisdiction. One provision stated that stores may have groceries in its store as long as it does not dedicate more than 500 square feet to groceries. Dolgencorp, a dollar store, became a new tenant at Crest Haven Shopping Plaza. They had a grocery section that was bigger than 500 feet. Winn-Dixie asked the landlord to enforce the covenant and he refused. So Winn-Dixie brought an injunction against the shopping plaza and Dolgencorp.

Issue.

Whether a grocery’s store exclusive right to be the only grocery store in a shopping center can be covenant running with the land versus a personal contractual obligation.

Held.

Yes. Exclusive covenants do run with the land, especially when the agreement explicitly states so.  Dolgencorp argued that the agreement was a contract and that they were not liable to uphold the contract only the shopping plaza was. The court disagreed; these types of covenants have long been held to run with the land.  When a covenant touches and concerns the land, and creates higher value or makes something more beneficial for the parties then that covenant runs with the land. Here the agreement states it will run with the land and that all users of this property must follow this covenant. A personal covenant is only a promise between two parties which is not the case here. Also with notice it is proper for a covenant to be enforced against all parties. Dolgencorp knows that companies like Winn-Dixie operate under such exclusive agreements, and the agreement was on record.

Discussion.

It is proper for tenants to create agreements to grant a covenant running with the land that will be held against all other tenants.  Such agreements are not mere personal contractual obligations between landlord and tenant, but an agreement all tenants must abide by.