United States District Court, W.D. Arkansas, Harrison Division
MEMORANDUM OPINION AND ORDER
TIMOTHY L. BROOKS UNITED STATES DISTRIST JUDGR
before the Court are ripe cross-motions for summary judgment.
Plaintiff Hoover Brothers Farms, Inc. ("Hoover")
filed its Motion for Summary Judgment (Doc. 29), Brief in
Support (Doc. 30), and Statement of Facts (Doc. 31) on
November 15, 2017. Defendant Wal-Mart Stores, Inc.
("Walmart") filed a Response to the Motion (Doc.
35), Response to Statement of Facts (Doc. 36), and Brief in
Support (Doc. 37) on December 6, 2017. Thereafter, on
December 20, 2017, Hoover filed a Response to Defendant's
Statement of Facts (Doc. 38). About a month later, Walmart
filed a Cross-Motion for Summary Judgment (Doc. 40),
accompanied by a Statement of Facts (Doc. 41) and Brief in
Support (Doc. 42). On February 12, 2018, Hoover filed a
Response to Walmart's Statement of Facts (Doc. 45) and a
Brief in Support (Doc. 46). Then on February 20, 2018,
Walmart filed a Reply to the Response (Doc. 47).
reviewing the parties' submissions, they agree on all the
underlying facts that are material to deciding this contract
dispute, but they disagree about how the contractual
provisions at issue should be interpreted as a matter of law.
For the reasons explained below, Hoover's Motion for
Summary Judgment (Doc. 29) is GRANTED, and
Walmart's Cross-Motion for Summary Judgment (Doc. 40) is
Amended Complaint (Doc. 9) asserts a single cause of action
for declaratory judgment. Hoover asks the Court to declare
the rights of the parties with respect to an agreement (Doc.
9-1) it entered into with Walmart on June 28, 2001 (the
"Agreement"). Walmart admits that it drafted the
Agreement. See Doc. 31 at 1. It concerns certain
easements, covenants, and restrictions affecting two pieces
of real property in Mountain Home, Arkansas, described as
Tracts 1 and 2. Tract 1 is currently owned by a Walmart
affiliate and contains a Walmart store and parking lot, and
Tract 2 is adjacent to and east of Tract 1 and is currently
owned by Hoover. Tract 2 contains various buildings and a
parking lot. The 2001 Agreement envisions that Walmart's
Tract 1 and Hoover's Tract 2 will be "developed in
conjunction with each other pursuant to a general plan of
improvement to form a commercial shopping center . . .
." (Doc. 9-1, p. 2). The contract refers to Tracts 1 and
2 in combination as the "Shopping Center."
Id. A diagram is attached to the Agreement as
Exhibit A, id. at 17, and it labels Tracts 1 and 2.
3. Competing Business. Developer [Hoover] covenants
that as long as Wal-Mart or any affiliate of Wal-Mart is
either owner or lessee of Tract 1, no space in or portion of
Tract 2, and no space in or portion of any other real
property adjacent to the Shopping Center which may
subsequently be acquired by Developer, shall be leased or
occupied by or conveyed to any other party for the following
(1) A general merchandise discount store or a wholesale
membership/warehouse club; or
(2) a discount drug store selling prescription drugs required
to be dispensed by a licensed pharmacist; or
(3) a retail or discount grocery store devoted to selling
food or grocery items, specifically including, but not
limited to, the wholesale or retail sale of dairy products,
bakery goods, meat, poultry, fish, frozen goods, produce, and
shelf grocery items.
(Doc. 9-1, p. 3).
paragraph 11 of the Agreement, the parties contemplate the
future expansion of the Shopping Center, as follows:
11. Shopping Center Expansion. The parties agree
that in the event the Shopping Center is expanded by
ownership, control of the parties or agreement with a third
party, all of the provisions of this Agreement shall apply to
the expanded area and the parking to the building ratio in
the expanded area shall not be less than that provided in
Id. at 12.
parties' Agreement continued for approximately the next
15 years, seemingly without incident, until a discount
grocery store chain called Aldi Grocery Store
("Aldi") approached Hoover about acquiring a piece
of real property located south of Tract 2-which Hoover had
purchased on June 2, 2000, about a year before it entered
into the Agreement with Walmart. This so-called "South
Lot" is adjacent to Walmart's commercial Shopping
Center. It appears Hoover held off on selling or leasing the
South Lot to Aldi because Walmart expressed concern that
doing so would violate one or more of the provisions of their
Agreement, particularly the Competing Business ...