Value of Restrictive Covenant when Moving for Permanent Injunction

A recent case demonstrates the value of a restrictive covenant. In The Residences at the Bath Club Condominium Association, Inc. v. Bath Club Entertainment, LLC, 48 Fla.L.Weekly D221a (Fla. 3d DCA), the parties entered into a settlement agreement and a proceeding relative to the breach and enforcement of the settlement occurred.  The trial court entered an order enforcing the settlement agreement based on a specific paragraph in the agreement.  Ultimately, the facts, for purposes of this posting, are not as significant as the appellate court’s discussion in obtaining a permanent injunction when dealing with a restrictive covenant.  In particular, when dealing with a restrictive covenant, a party does NOT need to show irreparable harm to obtain a permanent injunction.  This alone establishes the value of a restrictive covenant when moving for a permanent injunction to enforce the covenant.

To obtain a permanent injunction, a petitioner must “establish a clear legal right, an inadequate remedy at law and that irreparable harm will arise absent injunctive relief.” …. Further, the trial court did not abuse its discretion by interpreting Paragraph 5 [of the settlement agreement] as containing a restrictive covenant, the violation of which satisfies the irreparable harm element.  …  Although violation of a restrictive covenant serves to fulfill the irreparable harm element of injunction….

With that in mind, injunctive relief was appropriate without proof of irreparable injury or a showing that a judgment for damages would be inadequate. “The value of a restrictive covenant . . . is often difficult to quantify and may be impossible to replace.”  Accordingly, we affirm the imposition of the injunction….

The Residences at the Bath Club Condominium Association, supra (internal citations omitted).

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