The dispute between Olympus Hills Shopping Center and Smith's Food King is likely to go to trial, thanks to a judge's decision earlier this week to deny two motions.
One of the motions, filed by the center, would have barred Smith's from leasing its space in the center to a warehouse discount store.The other, filed by Smith's, would have allowed the store to cease operations at the site for approximately 60 days.
The trial will determine whether Smith's breached its duty of good faith and fair dealing when it moved from the center to a nearby shopping center and decided to lease its space at the Olympus Hills to a discount store.
Third District Judge Michael R. Murphy said one issue to be resolved is whether Smith's current 30-year lease with the center restricts the grocery store's operations.
"Olympus Hills will ask for an expedited trial on this matter. There are conflicting facts. We contend one thing and they contend another . . .," said Olympus Hills Attorney Robert S. Campbell Jr.
Campbell said he was pleased with the denial of Smith's motion to close its operation for 60 days because its March 1985 lease agreement has a "continuous use clause," which binds it to keep the premises operative.
Smith's Attorney James S. Jardine said Olympus Hills' motion sought to prevent the supermarket from opening its discount store but was unsuccessful.
"We can go ahead and open the buy-and-save store as we have announced at the end of June," Jardine said. The store will sell convenience items, non-perishable goods and items by the case to the public.
Earlier this year, Smith's opened a food-and-drug center at the site of a former Skaggs Alpha Beta store, 3171 E. 3300 South.
"We were pleased by the ruling. We are going to go ahead and open the store the way we planned to," Jardine said. "Smith's has invested a substantial amount of money and expects this to be a successful store that will serve a very broad segment of the Salt Lake market. We believe there's an interest in this market."
The ruling followed a suit filed by the shopping center against the supermarket chain in March. The suit accused Smith's of breaching its lease agreement and devising a deceitful plan to relocate two miles from the center.
The suit says that Smith's departure from the shopping center, 3981 S. Wasatch Blvd., would cause severe financial harm to the center's operations through the loss of rent, property value and development and improvement costs.
The center has asked the court to terminate the supermarket chain's lease since another regional supermarket has expressed an interest in leasing the space. But since Smith's has relocated less than two miles away, Olympus Hills attorneys contend that Smith's doesn't want to give up the premises because Olympus Hills would present considerable competition to Smith's new site.