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Evidence Concerning Similarity of Markets Served by Two Supermarkets & Business Practices in Dispute About a Shopping Center Lease
Client: Lasky, Haas, Cohler & Munter, and Ellman, Burke & Cassidy
dashed line separator Gruen Gruen + Associates (GG+A) served as consultants and then as experts testifying on the findings of research in a matter before the Superior Court of Santa Clara County in Santa Clara County (CA) - Case No. 553461. The litigation arose over a dispute concerning a lease provision commonly called a Radius Clause. The Plaintiff, whose attorney engaged GG+A, owned a shopping center (Princeton Plaza Mall) in San Jose (CA). The Center's lease with a supermarket (Brentwood) had a Radius Clause that provided that if Brentwood opened a similar business within a two-mile radius, the gross proceeds from the other business would be added to the gross proceeds of the Brentwood Market in calculating its percentage rents.

The owners of the Brentwood Market did open a grocery store called "Pac 'n Save" about 1.3 miles from Princeton Plaza in 1982. The Brentwood owners contended that the Pac 'n Save opening did not constitute a similar business and offered to assign their lease in the Brentwood to a third party. The Plaintiff refused the assignment and Brentwood terminated their lease, leaving the store empty.

As consultants to the Plaintiff's attorneys, GG+A researched the markets that had been served between 1982 and 1984 by the 2 supermarkets. The research included field surveys and econometric analysis of available data. The findings of this research were that significant positive cross-elasticity existed in the demand for the two supermarkets - the two markets were in similar businesses. GG+A's analysis of the assignment issue in the light of standard business practices also concluded that the Plaintiff had good business reasons for not consenting to the proposed assignment.

In early 1989, Dr. Claude Gruen, who had been in charge of GG+A's research and consulting on this assignment since 1981, was disclosed as an expert witness for the Plaintiff. His deposition was taken by the Plaintiff. The trial was scheduled to begin on February 6, 1989. On February 4, 1989, a settlement was reached that was substantially in accord with the Plaintiff's position and request for damages.




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