Definition of 'smoothie' figures in Lorain County court case appeal

What is a "smoothie"? That question was partially at the center of a Lorain County court case and appeal that was upheld by the 9th District Court of Appeals in Akron on Monday. Judges found in favor of a Pulp Juice and Smoothie Bar franchise that argued in court its lease had been violated when the landlord tried to bring in a Rita's Italian Ice franchise in the same retail strip. According to court records, franchisee Mr. Pulpstone entered into a lease with The Shops on 58 at 5301 N. Leavitt Road, north of Cooper Foster Park Road in Lorain, for one of four units in a retail development. The lease gave Mr. Pulpstone "the exclusive right in the shopping center to engage as a specialty juice, smoothie, wrap and frozen yogurt shop," according to court records. The lease further stated that as long as Mr. Pulpstone did not default on its lease, The Shops on 58 "shall not permit or allow any other tenant in the shopping center of which the premises is a part to engage in the selling of specialty juices, smoothies, wraps or frozen yogurt products as their primary business." Later, Mr. Pulpstone learned that a Rita's Italian Ice franchise was negotiating with The Shops on 58 to lease space in the same shopping center. Mr. Pulpstone objected to the plan and sought a temporary restraining order against The Shops on 58 in Lorain County Common Pleas Court, arguing that Rita's was "a competitor under the terms of the lease," and that The Shops on 58 had broken the lease. Judge John Miraldi ruled against Mr. Pulpstone in December 2020, and an appeal was filed in January this year. According to the appeals court, Miraldi "determined that the word 'smoothie,' as used in the relevant paragraph of the lease, was unambiguous; that Rita's does not offer products for sale that fell within the definition of 'smoothie;' and, therefore, that the lease permitted The Shops on 58 to lease a portion of the shopping center to Rita's." However, attorneys for Mr. Pulpstone argued that Miraldi "failed to apply the principles of contract law to the evidence," and 9th District judges Lynne Callahan, Jenifer Hensal and Thomas Teodosio agreed. An attorney for Mr. Pulpstone argued that Miraldi was wrong when he declared the term "smoothie" was "unambiguous." The lease itself did not define "smoothies," but Callahan wrote that the absence of a definition did not necessarily make the meaning of "smoothies" ambiguous. The Shops on 58 depended on a dictionary definition of "smoothie" as "a creamy beverage made of fruit blended with juice, milk or yogurt." The lease did not define the terms "juice" or "yogurt," and The Shops on 58 included definitions of those from both a dictionary and from the FDA. "Notably, The Shops on 58 did not argue that the contract terms were unambiguous — rather, The Shops on 58 argued, as it has in this appeal, that the terms were ambiguous," Callahan wrote. Miraldi "erred by resolving competing definitions of the term 'smoothie' without considering the parties' intentions, as reflected in the context of the agreement itself," Callahan wrote. "The trial court's resulting conclusion that the term is unambiguous is error for this reason." Appeals court judges did not decide whether, in context, "smoothie" is an ambiguous term, Callahan added in a footnote to the decision.