Judge cans beer sales at Clark’s Market in Aspen
Aspen Wine & Spirits awarded $25k in damages, but bigger impact is grocer not allowed to sell full-strength beer
Aspen Wine & Spirits claimed victory in a court trial Thursday after a judge ordered that its neighbor Clark’s Market isn’t allowed to sell full-strength beer because of anti-competitive agreements.
PItkin County District Judge Chris Seldin also ruled that Clark’s Market ran afoul of its lease restrictions on beer sales and awarded Aspen Wine & Spirits $25,404.19 in damages.
The monetary award to Aspen Wine & Spirits, however, was a footnote to the bigger issue at hand, Seldin said.
“The court’s expectation is that that’s not really driving this case, and in this case the damages are a bit of a side show,” he said. “The parties really care about whether Clark’s is going to be able to sell full-strength beer or not.
“According to the court’s ruling, the answer is not.”
Seldin delivered his oral ruling with parties tuned in virtually. It came after a single-day bench trial Wednesday where plaintiff Aspen Wine & Spirits sought a court order finding the supermarket had violated terms of its lease by selling full-strength beer, among other claims.
Aspen Wine & Spirits and Clark’s Market are located across the hallway from each other in the Puppy Smith Building, which is owned by Puppy Smith LLC, which is controlled by Aspen landlords Tony Mazza and Frank Woods.
Aspen Wine & Sprits attorney Rick Neiley argued by selling full-strength beer, Clark’s Market breached the terms of its lease agreement, which restricted the store to selling the weaker 3.2% beer unless it became unavailable.
He also argued that Aspen Wine & Spirits, through its corporate identity Mountain Laurel, was a third-party to the lease Clark’s Market had with Puppy Smith LLC.
Seldin agreed on both fronts, noting the anti-competitive provision on beer sales made it evident Mountain Laurel was a third-party beneficiary to the lease between Clark’s and Puppy Smith. As such, that meant it could also attempt enforce the lease terms, chiefly the January 2020 addendum to the supermarket’s lease that expressly limited the sale of 3.2 beer at Clark’s.
As well, Mountain Laurel’s own lease stated the liquor store would “have the exclusive right to sell vinous and spirituous liquors in sealed containers within the confines of the Puppy Smith Shopping Center. Provided, however, Clark’s Market shall be permitted to sell 3.2 beer.”
“It’s undisputed that Clark’s was selling full-strength beer,” Seldin said. “The court does find that it violated the terms of the contractual documents unless the court finds that 3.2 beer is no longer brewed and available for Clark’s to purchase and carry in the state of Colorado.”
Both Tom Clark, the founder of the Colorado grocery company, and his son David Clark, who runs the Aspen store, testified during trial Wednesday that because 3.2 beer is so scarce, they don’t bother to buy it because it’s not what the majority of their customers want. They said beers like Coors no longer come in the 3.2 version after Colorado law took effect Jan. 1, 2019, allowing supermarkets and convenience stores to sell full-strength beer.
Yet Seldin was unpersuaded, noting the lease said nothing about the level of scarcity of 3.2 beer in production.
“Moreover, the testimony from Tom Clark was that his customers want the marquee brands of beer,” the judge said. “They want Coors. They want MGD — Miller Genuine Draft. They want well-known brands, and those brands are no longer available in 3.2 beer. I didn’t hear any testimony to the contrary, but that is what the contract talks about.”
Seldin said the lease’s language was fairly clear.
“The contract doesn’t say ’in the event 3.2 beer is no longer brewed and available for tenant to purchase from major brewers or from nationally recognized brands.’ That’s not what the language says,” the judge said. “The language just says ’in the event 3.2 beer is no longer brewed and available to carry and purchase’ in this state. And the testimony from both parties was that you can get it; it’s not a big category any more. It’s a small category. There’s not large producers making these products, but you can still get it. And that’s the end of the analysis based on this plain language.”
Seldin also said he was not convinced by the defense’s argument that full-strength beer was the natural progression from 3.2 beer after state laws changed to eliminate 3.2 beer from the statutory vernacular. Clark’s Market attorneys and the two Clarks said that’s how they understood the lease’s language and justified the sale of 3.2 beer at the Aspen store.
The judge based the monetary damages on Clark’s beer sales in 2019, subtracting 25% to arrive at the total.
Clark’s Market will have 49 days from within the time Seldin enters a written order to start the appeal process. Karoline Henning and Andrew Teske of the Grand Junction law firm Hoskin Farina & Kampf represented Clark’s Market in the trial.
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