Legal Question in Business Law in California

Hi,

I own a desserts cafe in a shoppng plaza in San Jose, California. We have been in business for 6 years. Our next door neighbor (a real estate office) closed down shop last year. The landlord then leased the space next door to a business that sells frozen yogurt. I did contact the landlord to express my concern that the yogurt store will hurt our business since yogurt is a type of dessert. Also, I mentioned that there was already a yogurt shop in the plaza so the new yogurt store would create un-needed competition for everyone. The yogurt store was allowed to open anyways and now we are seeing our revenue 20-25% lower. The negative effect to us is the greatest because the yogurt shop is righ next door and now patrons that come in for a dessert or drink after lunch/dinner at restaurants in the same plaza now go next door for yogut.

Now the landlord is able to collect rent for the space next door while we suffer financially as a result. I looked through the lease agreement and it specified that we were not allowed to operate as a frozen yogurt shop as long as the first yogurt shop in the plaza remained in business. I find it contradicting since they allowed a new yogurt place to open in the same plaza.

Not only have our revenue gone down, the value of the business has also decreased as a result of the landlord's action. Is there anything that we can do legally to receive compensation from the landlord?


Asked on 10/08/09, 6:06 pm

1 Answer from Attorneys
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Your possible case seems to have some merit, perhaps on the basis that you are a third party beneficary of the agreement with the original yogurt shop, an unfair competition statute, or a business tort such as interference with prospective business advantage. Some research for similar cases would be needed.

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Answered on 10/09/09, 2:55 am


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