Coffee shop gets injunction against competition
October 2, 2008 · Updated 4:52 PM
To find a cup of coffee on Snoqualmie Ridge, patrons currently have the option of visiting BiBO Coffee Co. or an espresso stand located inside the recently opened Village Foods.
Last year, commercial real estate developer Mark McDonald began talks with Starbucks about putting in a full-service coffee shop in the grocery store development of the Snoqualmie Ridge Retail Center, but outside of the actual grocery store.
Upon hearing the news, Brandon Wright and Brandon Kuvara, co-owners of the independent BiBOs, re-examined their lease and the agreement that was made with McDonald when the space was leased to them in 2002.
The point of contention that is now a legal dispute has to do with an exclusivity clause within the contract and whether McDonald, who owns retail development rights on Snoqualmie Ridge, is legally able to negotiate and/or put in another coffee shop.
The case of Northwest Coffee Partners Inc. (the Washington corporation that serves as BiBOs) as the plaintiffs versus Mark McDonald, an individual; Village Partners III Inc., a Washington corporation; and NWCC Investments, II, LLC, a Washington limited liability company as defendants, has a trial date set for May 14, 2007.
In fall 2005, BiBOs secured a preliminary injunction against the defendants, which means they cannot negotiate until the injunction is repealed. The injunction will be reviewed March 10 to see whether it will continue through the trial date.
"[My clients] saw the opportunity and they saw the potential, if they could stick it out, provided there wasn't competition because it is such a small area," said the plaintiff's attorney, former Snoqualmie Councilmember Greg Fullington, who emphasized that this is not a case about Starbucks. "We all appreciate what Mark McDonald has done. Our side of the dispute is about him living up to the agreement."
The issue is about whether the defendants may put in another full-service coffee shop near the grocery store.
Fullington says that his clients have an agreement with McDonald against that. The attorney for the defendant, Paul Brain, says that they [the plaintiffs] knew any exclusivity did not extend to the grocery store lot of land, inside or outside of the building.
The plaintiffs are suing for reformation of the contract based on misrepresentation.
In his legal papers, Brain said BiBO's was suing over fraud and said there is no basis for the legal action.
"The lease says full service is allowed for any future grocery store development," Brain said. "They knew that full -ervice coffee would be allowed in the development."
Fullington contends that BiBOs had an agreement with the defendants to be the only coffee shop on the Ridge with the exception of a coffee shop to be incorporated within the grocery store.
BiBOs signed a five-year lease with two five-year options attached, thus McDonald may have to wait for up to 12 years to put in another coffee shop if the plaintiffs win the case.
However, Brain noted that should the plaintiffs lose the court case in 2007, they could be held liable to pay back potential earnings lost to McDonald during the legal suit. The decision would be up to the presiding judge.