RICHARD D. BENNETT, District Judge.
The Plaintiff Redner's Markets, Inc. ("Plaintiff" or "Redner's") filed this action against its landlord Joppatowne G.P. Limited Partnership ("Defendant" or "Joppatowne"), alleging violations of a restrictive use covenant in a commercial lease. Redner's initially contended that by permitting a group of ten farmer's market stalls to operate at the Joppatowne Plaza Shopping Center, Joppatowne breached a covenant not to lease to any other grocery stores within a five-mile radius of the shopping center. On January 24, 2013, Judge Legg of this Court found that two of the challenged stalls infringed the restrictive use covenant while three other stalls did not. See Jan. 24, 2013 Mem. Op. 30-35, ECF No. 133. The case was thereafter reassigned to the undersigned, who has certified familiarity with the record pursuant to Rule 63 of the Federal Rules of Civil Procedure.
This Court then scheduled a second stage of the bench trial for July 1 and 2, 2013, with the following issues remaining to be tried: (1) whether Joppatowne breached its restrictive use covenant as to the five farmer's market stalls for which Judge Legg rendered no opinion, and (2) whether Redner's is entitled to damages for lost profits caused by the infringing stalls. However, on the morning of trial on July 1, 2013, Redner's abandoned its breach of contract claim relating to four of the five remaining stalls. As to the remaining stall, specifically Beiler's Baked Goods, Redner's maintained its claim of liability, but indicated that it would pursue only injunctive relief as to that stall. Accordingly, the pending issue of lost profits damages would pertain only to the two stalls for which this Court, per its Memorandum Opinion of January 24, 2013, already found liability.
The procedural posture in this case is as follows. Jurisdiction is based on diversity of citizenship under 28 U.S.C. § 1332, as Redner's is a Pennsylvania corporation and Joppatowne is a limited partnership and citizen of Maryland. See Am. Compl. ¶¶ 1-2, ECF No. 36. In addition, the amount in controversy exceeds $75, 000. Id. Redner's originally filed this action in the United States District Court for the Eastern District of Pennsylvania on May 10, 2011. The case was transferred to this Court on July 7, 2011. On September 15, 2011, Redner's filed an Amended Complaint. See Am. Compl., ECF No. 36. The case involved issues of liability and traditional theories of damages-to wit, lost profits and lost sales.
In late 2011, a bench trial on the issues of liability and traditional damage theories commenced. The bench trial was conducted by Judge Legg over seven nonconsecutive days, from December 5, 2011 to August 14, 2012. On January 24, 2013, Judge Legg issued an opinion in which he resolved some of the issues presented at the first stage of trial and reserved some issues for report and recommendation by a United States Magistrate Judge. See Jan. 24, 2013 Mem. Op. 24-26; Order of Reference, ECF No. 135. After Joppatowne objected to Judge Legg's Order of Reference, the undersigned withdrew and vacated it. See May 16, 2013 Letter Order, ECF No. 154. Accordingly, the issues of liability and traditional damages that are identified as pending in the vacated Order of Reference remain outstanding and are decided by this Court herein.
After Judge Legg issued his Memorandum Opinion in which he found liability as to two stalls and found no liability as to three other stalls, Redner's filed a Motion for Permanent Injunction (ECF No. 141), seeking an order permanently enjoining Joppatowne from continuing to violate the restrictive use covenant. Specifically, Redner's asked that Joppatowne be required to cause the two infringing farmer's market stalls-All Fresh Quality Seafood & Produce ("All Fresh") and Lapp's Fresh Meats-to be removed from the Joppatowne Plaza Shopping Center. Applying Maryland law, this Court decided that a permanent injunction was warranted as to All Fresh and Lapp's Fresh Meats, because Joppatowne was found to have violated the restrictive use covenant and the equities favored Redner's. See June 13, 2013 Mem. Op. 10-12, ECF No. 158. Joppatowne moved to stay the enforcement of the Permanent Injunction Order, and that motion was denied. See June 20, 2013 Letter Order, ECF No. 168; see also Fourth Circuit Order, ECF No. 169 (denying Joppatowne's motion for a stay of permanent injunction pending appeal).
A two-day bench trial on the remaining issues of liability as to Beiler's Baked Goods and traditional damages as to the infringing stalls, Lapp's Fresh Meats and All Fresh Quality Seafood & Produce, commenced on July 1 and 2, 2013. Redner's called two witnesses- Gary O'Brien, Vice President of Perishable Retail Operations for Redner's, who testified regarding lost profits allegedly caused by the infringing stalls; and architectural expert Jonathan McGowan, who testified to the gross floor area and in-store sales areas of the remaining challenged stall. Joppatowne called its expert architect Shellie Curry, as well as Robert E. Fowler, Esq., Joppatowne's corporate representative. Based on the exhibits introduced into evidence, the testimony of the four witnesses, the written submissions of the parties, and the oral arguments of counsel, this Court sets forth its findings of fact and conclusions of law pursuant to Rule 52(a) of the Federal Rules of Civil Procedure.
The accompanying Order enters Judgment in favor of Defendant Joppatowne G.P. Limited Partnership and against Plaintiff Redner's Markets, Inc. as to the remaining breach of restrictive use covenant claims. In addition, this Court finds that Redner's has failed to prove lost profits with reasonable certainty as to the two infringing stalls, Lapp's Fresh Meats and All Fresh Quality Seafood & Produce, and therefore awards no monetary damages. Accordingly, the Order and Judgment shall indicate the entry of Judgment in favor of the Plaintiff Redner's Markets, Inc. for injunctive relief as to Lapp's Fresh Meats and All Fresh, with no monetary damages, and entry of Judgment in favor of the Defendant Joppatowne G.P. Limited Partnership as to all other challenged stalls.
I. THIS COURT'S PREVIOUS FINDINGS OF FACT AND CONCLUSIONS OF LAW
The findings of fact and conclusions of law found by Judge Legg in his January 24, 2013 Memorandum Opinion are summarized herein, as they continue to govern this case.
A. Previous Findings of Fact
Redner's Markets, Inc. ("Redner's" or "Plaintiff") operates a chain of grocery stores in Pennsylvania, Maryland, and Delaware. Jan. 24, 2013 Mem. Op. 1. On November 23, 2005, Redner's executed a twenty-year lease agreement ("the Redner's Lease") with Joppatowne G.P. Limited Partnership ("Joppatowne" or "Defendant"), the owner and manager of the Joppatowne Plaza Shopping Center, which is located in Joppatowne, Maryland at the intersection of Maryland Route 40 and Joppa Farm Road. Id. at 2. Article XIII of the Redner's Lease contains a restrictive use covenant, by which Joppatowne agreed not to lease any space at the Joppatowne Plaza Shopping Center or within a five mile radius thereof to be used as a food supermarket, butcher shop, seafood shop, or grocery store. See Redner's Lease § 13.01(a), Joint Trial Ex. 12.
This dispute arose when Joppatowne permitted an Amish farmer's market and other food stalls to lease space at the Joppatowne Plaza Shopping Center. Jan. 24, 2013 Mem. Op. 4. The Amish farmer's market, which opened on March 17, 2011, contains seven stalls inside an enclosure, which are loosely organized and headed by Menno Beiler ("Beiler"). Id. The seven stalls, which are separately owned and operated, are Dutch Delights; Dutch Pantry Fudge; Kreative Kitchen; Lapp's Fresh Meats; King's Cheese & Deli; Beiler's BBQ; and Beiler's Baked Goods. Id. at 5. An eighth stall, All Fresh Quality Seafood & Produce ("All Fresh"), which is not associated with the Beiler group, is located outside the enclosure. Id. There are two other food stalls (the "Vendor Stalls") located outside the enclosure, which were also challenged by Redner's. Id.
B. Previous Conclusions of Law
Judge Legg found that Joppatowne had breached the restrictive use covenant by leasing space to All Fresh and Lapp's Fresh Meats. See id. at 30-32. Under the Redner's Lease, All Fresh constituted a seafood shop and Lapp's Fresh Meats was a butcher shop. Id. However, three other stalls were found not to violate the restrictive use covenant. First, Dutch Pantry Fudge, which Judge Legg found to be divisible into three sub-stalls, did not violate the restrictive use covenant. Id. at 32-34. Likewise, Kreative Kitchen and Dutch Delights did not fall within the prohibited uses of the restrictive use covenant. Id. at 34-35.
As to five remaining stalls-Beiler's BBQ, Beiler's Baked Goods, King's Cheese & Deli, and the two Vendor Stalls-Judge Legg set forth a three-step analysis that should be applied to determine whether each stall breached the restrictive use covenant. Id. at 24. Section 13.01(a)(ii)(2) defines a retail operator, for purposes of the restrictive use covenant, as one whose "Gross Floor Area is 15, 000 square feet or less" and whose "in-store sales areas" offering specifically enumerated goods exceed twenty-five percent of the Gross Floor Area. See Redner's Lease § 13.01(a)(ii)(2). Judge Legg found that section 13.01(a)(ii)(2) applied in this case. See Jan. 24, 2013 Mem. Op. 23. To conclude whether each stall constituted an impermissible retail operator, Judge Legg explained, one would first have to determine the subject stall's "Gross Floor Area." Id. at 24. The next step would involve calculating the in-store sales areas devoted to the sale of the specifically ...