After more than 10 days of deliberations, a 3rd District Court jury has awarded more than $20,000 in damages to the owners of Olympus Hills Shopping Center in their legal dispute against Smith's Food & Drug Center Inc.
The verdict followed a suit filed by the shopping center against the supermarket chain in March accusing Smith's of breaching its lease agreement and devising a deceitful plan to relocate two miles from the center.The four-woman, four-man jury also found that Smith's closure of its supermarket store at 3981 S. Wasatch Blvd. in April for 63 days, to move to the site of a former Skaggs Alpha Beta store, was unreasonably long.
The jury found that Smith's breach of contract cost the center more than $23,000 because other tenants lost so much business that they couldn't make rent payments.
Olympus Hills' attorney E. Barney Gesas believes the center has suffered additional damages that could total more than $3 million.
They jury also found that Smith's breached the implied covenant of good faith and fair dealing and that Smith's intended to deprive Olympus Hills of the benefit of the bargain.
"What's more significant (is that) they found intentional breach of the implied covenant of good faith and fair dealing in a contract," Gesas said.
"The jury's findings and determinations are not only very significant to Olympus Hills, but it's a significant determination under Utah laws. (This) should clearly vindicate Olympus Hills in its litigation against Smith's to this point in time," Gesas said.
Gesas explained that even though there are further proceedings pending before 3rd District Judge Michael R. Murphy, "we'll attempt to do whatever we can to salvage the property and restore it to what it historically has always operated as."
Gesas said the judge will now decide whether to rescind or reform the original lease agreement between both parties, which is for 30 years, beginning March 1985.
"It was unfortunate the jury couldn't decide the damage aspect to the after value of Olympus Hills," Gesas said. "We will conduct further proceedings for a trial as to what damage economically Olympus Hills has suffered as a result of the shut down."
Gesas said he will ask the court to enter an order terminating the lease so that Olympus Hills can rent the premises to another supermarket.
Smith's lawyer James Jardine said, "This is not what we hoped would happen. At this stage, there are some serious legal issues that we are going to evaluate and, at least at this point, we think some very important matters that the Supreme Court of Utah will have to address."
Attorneys representing Olympus Hills said losses combined with mortgage payments had put several shops in default. The suit originally sought $3 million in damages, depreciation and loss of rent.
Jardine said the supermarket giant had fulfilled the lease agreement when it left the center by spending $100,000 in remodeling the old store and reopening a special off-price discount food and drug store called Buy-N-Save, which features case lot and non-perishable products.
Jardine said since Smith's began renting at the center more than 20 years ago, the company had paid in rent more than $4.5 million.