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Neighbor’s Control Drains Away
by Ron Davis

A neighbor of a Tennessee shopping center will simply have to accept the fact that a Walgreen’s drug store will be constructed on center property.

The shopping center is Kirby Gate, in Memphis, and the neighbor had opposed construction of the drug store on grounds that he had never granted approval for such a project. And prior approval is required, he added, because he and the center’s owner had signed an agreement to that effect.

The agreement that the neighbor referred to is one that covers drainage and building placement on the shopping center property. The center’s owner wanted to continue to develop the site, but that meant he needed the cooperation of his neighbor, especially with regard to water diversion.

So prior to any further development, the two parties began negotiations and eventually reached an understanding: Before the neighbor would consent to allowing the center’s owner to divert water onto his property, he wanted certain assurances regarding the coordinated development of the properties.

To satisfy the neighbor’s concerns, the shopping center owner had his architect prepare sketches of the site. Those sketches detailed the areas of proposed development and the proposed drainage plan. Both parties then signed their names on the sketches, approving the plan and agreeing "to implement the improvements shown hereon."

When the neighbor later learned of the start of construction for a free-standing Walgreen’s drug store at the shopping center, he felt that the center’s owner had violated the agreement they had signed. The neighbor believed that the Walgreen’s store would interfere with plans for his property and that he had the right to dictate placement of the store location at the center.

The center owner pointed out, however, that the architect’s sketches that the parties agreed to are entitled "Proposed Drainage Improvements" and that there is nothing on the document binding either party to a particular location for constructing any future building.

The neighbor nevertheless sued.

A Tennessee appellate court ruled in favor of the shopping center owner, explaining, "The only improvements the parties had a meeting of minds on are drainage improvements. Thus, the only improvements binding on both parties are the drainage improvements. The agreement, then, cannot be a contract for any purpose other than drainage, as it lacks the requisite mutual assent to any other definition of the essential term ‘improvements.’" (Wills & Wills, L.P. v. Gill, 54 S.W.2d 283 [Tenn.Ct.App. 2001])

Decision: July 2001
Published: September 2001



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