## Facts

- A shopping-center owner/manager leased a 5,400-square-foot space in Hilltop Plaza (Bowie, Maryland) to a video-rental and consumer-electronics retailer under a fixed-rent lease.
- The lease term began October 1, 1984, ran five years, and was renewed for an additional five years through September 30, 1994.
- The lease included a continuous-operation clause requiring the tenant to operate the store diligently to generate gross sales.
- By 1990, the store began operating at a loss and projected continued losses; the tenant decided to close the store despite the continuous-operation clause.
- The landlord alleged the closure would reduce customer traffic, harm tenant mix, and injure the shopping center, and sought to compel continued operation.

## Issues

1. Whether the trial court applied an improper preliminary-injunction standard by treating the availability of damages as defeating injunctive relief.
2. Whether the trial court erred in finding the balance of hardships favored the tenant because reopening and operating would impose greater injury than denial would impose on the landlord.
3. Whether the landlord showed a likelihood of irreparable harm absent an injunction compelling operation.
4. Whether the public-interest factor supported a mandatory injunction requiring continued operation.

## Decision

- The Court of Special Appeals of Maryland affirmed the circuit court’s denial of interlocutory injunctive relief.
- The appellate court concluded the trial court applied the proper four-factor preliminary-injunction analysis and did not abuse its discretion.
- The court held the landlord failed to demonstrate irreparable harm because the asserted injuries were primarily economic and compensable by money damages, particularly given the fixed-rent structure.
- The court upheld the finding that compelling the tenant to operate a money-losing, labor- and inventory-intensive business would impose greater hardship than the landlord would suffer from closure.
- The court found no public-interest basis to justify mandatory injunctive relief in a private commercial lease dispute.

## Legal Principles

- A preliminary injunction requires consideration of (1) likelihood of success on the merits, (2) irreparable harm absent relief, (3) balance of hardships, and (4) public interest.
- Harm is not “irreparable” when it is chiefly economic and can be remedied by damages; difficulty in measuring damages alone does not establish irreparability.
- A continuous-operation covenant does not automatically entitle a landlord to a mandatory injunction; courts may deny specific performance where damages are adequate and mandatory relief would impose disproportionate hardship or require ongoing supervision.
- In weighing equities, courts may decline to compel continued operation of a business shown to be operating at a loss, especially when the plaintiff has legal remedies and mitigation options.

## Conclusion

The court affirmed denial of a preliminary injunction compelling a tenant to keep a store open under a continuous-operation clause because the landlord did not show irreparable harm, the equities favored the tenant facing ongoing losses, and the dispute did not implicate a sufficient public interest to warrant mandatory injunctive relief.


M. Leo Storch Ltd. P'ship v. Erol's, Inc., 95 Md. App. 253, 620 A.2d 408 (Ct. Spec. App. 1993)