Jeffrey Weston Shields (2948) James D. Gardner (8798) Brock N.

V/orthen (127 2l)

SNELL & WILMER L.L.P.

15 V/est South Temple, Suite 1200 Salt Lake City, UT 84101 Telephone: (801) 257-1900 Facsimile: (801) 257-1800 Email: j shields@swlaw.com jgardner@swlaw.com bworthen@swlaw.com Attorneys

for P laint iff B iaggi's

Ris t or ante

ltal i ano, LLC

IN THE THIRD JUDICIAL DISTRICT COURT IN AND FOR SALT LAKE COUNTY, STATE OF'UTAH BIAGGI'S RISTORANTE ITALIANO, LLC, an Illinois limited liability company,
Plaintiff,
VS.

COMPLAINT
(Tier 3)

INLAND SOUTH\ilEST MANAGEMENT LLC, a limited liability company; and INLAND \ilESTERN SALT LAKE CITY GATEWAY, L.L.C., a Delaware limited liability company,
Defendants.

Case No.

Honorable

Plaintiff, Biaggi's Ristorante Italiano, LLC ("Biaggi's" or "Plaintiff'), through counsel,

complains of Defendants Inland Southwest Management LLC ("ISM") and Inland Western Salt Lake City Gateway, L.L.C. ("I\rySLC," and together with ISM, "Defendants") and seeks relief
as follows:

l090023.4

PARTIES. JURISDI

ON AND VENUE

1. 2.
of Utah.

Biaggi's is an Illinois limited liability company, duly authorizedto conduct

business in the State of Utah.

ISM is a limited liabitity company conducting business in Salt Lake County, State

3. 4. 5. 6.

I$/SLC is a Delaware limited liability company that conducts business and owns

property in Salt Lake County, State of Utah. This Court has jurisdiction over the subject matter of this case pursuant to Utah

Code Ann. $ 784-5-102.

Venue is proper in this judicial district under Utah Code Ann. $$ 788-3-301 and

304 and pursuant to the terms of the contracts at issue. The relief sought in this Complaint qualifies as Tier 3 standard discovery pursuant

to Utah R. Civ. P.26(c) because Plaintiff seeks damages exceeding $300,000.00, in addition to injunctive relief.

GENERAL ALLEGATIONS

7. 8.

Biaggi's owns an award-winning chain of Italian restaurants, operating twenty-

four Italian restaurants in twelve different states.

On or about November 17,2003, Biaggi's and Gateway Associates, Ltd.

("Gateway"), a Utah limited liability partnership entered into that certain Lease (the "Lease"),
whereby Biaggi's agreed to lease certain commercial property located in the shopping center

commonly known as "the Gateway," located in Salt Lake City, Utah (the "Shopping Center").

A copy of the Lease is attached hereto as Exhibit A.

g.

On May 4,2004, Biaggi's and Gateway entered into that certain First Amendment

to Lease Agreement (the "X'irst Amendment").

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10. 1.
1

Defendants are Gateway's successors-in-interest under the Lease. On June 18, 2010, Biaggi's and Defendants entered into that certain Second

Amendment to Lease Agreement (the "second Amendment"). A copy of the Second Amendment is attached hereto as Exhibit B (the Lease, as that term is used hereafter, includes

modifications to the Lease contained in the First Amendment and the Second Amendment).

12. 13. 14. 15. 16.

Center.
17

The Second Amendment, among other things, establishes that IWSLC is the

owner of the Shopping Center and Gateway's successor-in-interest of the Lease.

The Second Amendment also establishes that ISM is IWSLC's agent and the

"Landlord" of the Shopping Center.

Pursuant to the terms of the Lease, Biaggi's operates a full service restaurant

featuring Italian cuisine ("Italian restaurant") in the Shopping Center. Pursuant to the terms of the Lease, Biaggi's pays Defendants a minimum annual

rent of no less than $241,668.00.

Biaggi's sales, revenues, and profits, among other things, are dependent on the

traffic flow at the Shopping Center and on its being the sole Italian restaurant at the Shopping

In order to ensure that Biaggi's was and remained the only operator of an Italian

restaurant in the Shopping Center, Biaggi's successfully negotiated with Defendants'

predecessor-in-interest that Biaggi's would be the only ltalian restaurant in the Shopping Center.

18.

Specifically, $ 9.9 of the Lease provides:

Exclusivity. Landlord will not lease, convey or grant its consent for the operation of any portion of the Project (other than the Premises and other than with respect
to restaurant uses under 3,000 square feed) or any land owned by Landlord or an affiliate adjacent to the Project, for use by any tenant, other than [Biaggi's]' for the operation of a full-service restaurant featuring Italian cuisine. Additionally, Landlord shall not lease, sell or permit the operation of any of the following

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restaurants: Maggiano's, Brio Tuscan Grille, Bravo Italian Kitchen, Carrabba's, Romano's Macaroni Grille, Il Foranaio, Olive Garden, Buca, Bertucci's, or Johnny Carino's or any restaurant using the wOrd "trattoria," "ristorante," "cuccina," or "Italinano" in its name, or other restaurants which are similar in cuisines or presentation.

19.

Notwithstanding the unambiguous language of the Lease, Biaggi's has recently

learned that Defendants have entered into an agreement which

will allow La Jolla

Groves

("LJG") to open in the Shopping

Center.

20. 2I.

LJG is a full-service restaurant featuring Italian cuisine and an Italian theme. According to the LJG website, the restaurant's owners were inspired to create

LJG restaurant concept while dining in Capri, Italy. LJG's owners have patterned their

restaurant-both in design and cuisine-on their Italian dining experience. The LJG website
describes the owners' inspiration as follows:

Our first inspiration for La Jolla Groves came to us, late one evening, while visiting the Isle of Capri. We found ourselves dining under the canopy of a lemon grove, drinking garden-fresh lemonade made from the very trees we sat under.
Upon returning home, we longed to again visit that magical place, enjoying the vibrant tastes and alluring atmosphere of Capri. It was then that we determined to create such a place of our own. We partnered with a world-class chef and started on the adventure of building La Jolla Groves. We worked tirelessly to achieve insanely good food using healthier ingredients, all at an affordable price. With our garden-fresh, wholesome food, kind staff & charming atmosphere among a grove of lemon trees, we've created a dining experience that transplants you to a starry night-out on the Isle of Capri.
See excerpt taken

from www.lajollagroves.com, a copy of which is attached as Exhibit C.

22.

LJG's menu makes it clear that LJG is an Italian restaurant-featuring traditional

Italian cuisine such as tomato and fresh mozzarellacaprese, grilled summer tomato bruschetta,
chicken marsala, herb polenta, fusilli, ravioli, tortellini, and ltalian sodas, among others.

6090023.4

23.

The Shopping Center directory located on the Shopping Center's website lists the

LJG restaurant as "coming soon." A copy of the Shopping Center directory, available at ht://www.shopthegateway.com/images/stories/pdfs/directory.pdf, is attached hereto as Exhibit D.

24. 25. 26.

and profits.

LJG's website also declares: "We are excited to announce that La Jolla Groves is

expanding! Location No. 2 is coming to the Gateway in Salt Lake City in Summer of 2012."
By permitting LJG to open in the Shopping Center, Defendants have breached its

obligations under the Lease. Permitting LJG to open its full-service Italian restaurant in the Shopping Center
and significantly interfere with Biaggi's sales, revenues

will irreparably harm Biaggi's goodwill

27.

Pursuant to Section 17.5 of the Lease, Biaggi's has given Defendants notice of

this breach, but Defendants have refused to comply with their obligation to prohibit any other tenant from operating a full-service restaurant featuring Italian cuisine.

28. 29.

Defendants failed to respond to Biaggi's notice or to correct their breach of the

Lease. Thus, Defendants are now in default under the Lease.

Pursuant to the terms of the Lease, Biaggi's is entitled to damages and all

attorneys' fees and costs incurred in enforcing its rights under the Lease. F'IRST CAUSE OF ACTION (Breach of Contract)

30. 31.

Biaggi's incorporates by this reference the allegations contained in the above

paragraphs of this Complaint.

The Lease, as amended, is a valid and binding contract.

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32. 33. 34. 35.

damages.

Defendants are Gateway's successor-in-interest under the terms of the Lease, as

amended, and are bound to comply with all obligations as "Landlord" under the Lease.

Biaggi's has performed all of its obligations under the Lease.

Defendants have materially breached the Lease by, among other things, violating

Biaggi's right to be the exclusive restaurant featuring Italian cuisine in the Shopping Center.
As a result of Defendants' conduct, Biaggi's has been and will continue to suffer

36. 37.

Accordingly, Biaggi's is entitled to an award of damages in an amount to be

proven at trial, but in no event less than $300,000'00.

Additionally, Biaggi's is entitled to an award of attorneys' fees and costs for all

expenses incurred to enforce its rights under the Lease.

OF'ACTION SECOND (Declaratory Judgment-Rights Under the Lease)

38. 39. 40.

breach

Biaggi's incorporates by this reference the allegations contained in the above

paragraphs of this Complaint.

An actual controversy has arisen and now exists between Biaggi's and Defendants

concerning Biaggi's rights under the Lease.

Biaggi's has the right to terminate the Lease based on Defendants' material

ofthe Lease.

41. 42.

Because Defendants' have breached the Lease, Biaggi's is not liable to

Defendants for any alleged damages from the termination of the Lease. pursuant to Utah Code Ann. $$ 7SB-6-401 and 404 and Utah R. Civ. P. 57,

Biaggi's is entitled to an order declaring: (1) Defendants are in breach of the Lease; (2) Biaggi's

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can properly terminate the Lease; and (3) Defendants are not entitled to any damages from

Biaggi's termination of the Lease.

THIRD CAUSE OF ACTION (Breach of Covenant of Good Faith and Fair Dealing)

43. 44. 45.

Biaggi's incorporates by this reference the allegations contained in the above

paragraphs of this Complaint.

The Lease contained an implied covenant of good faith and fair dealing. The covenant of good faith and fair dealing requires that Defendants refrain from

arbitrary or uffeasonable conduct that has the effect of preventing Biaggi's from receiving the benefit of what it bargained for in the Lease.

46.
Center.
47

The intention of Biaggi's and Defendants and their predecessor-in-interest was

that Biaggi's would be the only full-service restaurant featuring Italian cuisine in the Shopping

As set forth herein, Defendants breached their duty of good faith and fair dealing

by permitting LJG to operate a full-service restaurant featuring Italian cuisine in the Shopping
Center.

48.

As a result of Defendants' breaches of the covenant of good faith and fair

dealing, Biaggi's has been damaged in an amount to be proven at trial, but in an amount no less than $300,000.00, plus pre- and post-judgment interest.

FOURTH CAUSE OF ACTION (Preliminary and Permanent Injunction)

49.

Biaggi's incorporates by this reference the allegations contained in the above

paragraphs of this Complaint.

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50. 51.

By virtue of their conduct as alleged herein, Defendants are in violation of their

obligations under the Lease. Defendants' violations and actions have and will cause irreparable harm to

Biaggi's and infringe upon valuable rights of Biaggi's by, among other things, damaging Biaggi's goodwill and relationships with its customers and potential customers.

52. 53. 54. 55.

The nature of the injury that Biaggi's has sustained, and

will continue to sustain,

is impossible to quantify and not remediable by money damages.

Defendants, by being enjoined from the aforementioned violation, will be in the

same position as

if they

had not breached the Lease and

will not suffer any compensable loss.

The requested injunction is not adverse to the public interest. Rather, the public

interest is served by enforcing the terms of the applicable contracts.

As alleged herein, there is a substantial likelihood that Biaggi's will prevail on the

merits of its claims or, at the very least, its claims present serious issues on the merits that should
be the subject of further litigation.

56.

Accordingly, Biaggi's is entitled to temporary, preliminary and permanent

injunctive relief restraining Defendants for the duration of the Lease from leasingarry portion of
the Shopping Center to any person or entity to operate a full-service restaurant featuring Italian cuisine, including but not limited LJG.

PRAYER

R RELIEF'

WHEREFORE, Biaggi's demands judgment as follows:

1.

For damages for breach of contract in an amount to be proven at trial, but in an

amount no less than $300,000.00, plus pre- and post-judgment interest;

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2.

For a declaration and order of the Court declaring: (1) Defendants are in breach of

the Lease; (2)Biaggi's can properly terminate the Lease; and (3) Defendants are not entitled to any damages from Biaggi's termination of the Lease;

3.

For damages for breach of the covenant of good faith and fair dealing in an

amount to be proven at trial, but in an amount no less than $300,000.00, plus pre- and post-

judgment interest;

4.

For temporary, preliminary, and permanent injunctive relief restraining

Defendants for the duration of the Lease from leasing any portion of the Shopping Center to any
person or entity to operate a full-service restaurant featuring Italian cuisine, including but not

limited LJG;

5.
and

For attorneys' fees, costs, and interest as allowed by law and applicable contracts;

6.

For any other relief the Court deems just and equitable under the circumstances.
12, 2012.

DATED: November

SNELL & WILMER L.L.P.

/s/ Brock ^ Worthen Jeffrey Weston Shields James D. Gardner Brock N. Worthen
Attorneys

r Plaintiff

Plaintiffls Address: Biaggi's Ristorante Italiano, LLC 1705 Clearwater Avenue

Bloomington,IL 61704

16090023.4