Updated, Jan. 8, 2010: Even though a state appeals court ruled in their favor, the owners of the College Street restaurant Bespoke are packing up and leaving the Elm City, The New Haven Register reported.

The restaurant’s owners, Arturo Camacho and Suzette Franco-Camacho, were locked in a years-long battle with the University over a sliver of land behind the restaurant. An appellate court ruled against Yale on Monday, but the pair have sold both the building and the restaurant, the Register reported, and are planning to open two new restaurants in Branford.

“What saddens me most is that it should have been easily resolved,” Suzette Franco-Camacho said in an interview Wednesday.

Yale purchased the lot in 1999, but the Bespoke owners tried to establish permanent free-access rights to the walkway that leads out the back door of the 266 College Street building, as well as a shed physically attached to the building. Originally, since Yale had not done anything with the property for years, the Bespoke owners asserted “squatter’s rights” to the walkway and the shed, Arturo Camacho told the News in September of last year.

But in 2005, Yale installed a metal gate along what the University considered its property border. The gate could only be unlocked from Yale’s side, and was placed so close to the back door that it could only be opened one foot.

Later, in August 2006, former Director of University Properties David Newton and third-party lawyer Tom Sansone signed an agreement with the restaurateurs that would give them access to the lot for at least two years. Upon learning of the agreement, Bruce Alexander ’65, Vice President for New Haven and State Affairs and Campus Development, rejected it, arguing that Newton and Sansone lacked the authority to negotiate the deal on Yale’s behalf.

But Yale’s suit to throw out the agreement has so far proved unsuccessful. Two out of the three judges on the appellate panel agreed with a 2008 trial court ruling that Newton and Sansone had the “apparent authority” to represent Yale in the agreement, making it legally binding. Yale plans to appeal the ruling to the Connecticut Supreme Court.

But meanwhile, the couple — whose celebrated contributions to the New Haven culinary scene included Roomba, another restaurant whose lease was terminated by Yale in 2007 as part of the ongoing legal conflict — has said its farewell to the city.

Arturo Camacho and Suzette Franco-Camacho said a combination of the loss of Roomba, the expensive structural adjustments they made to accommodate the loss of their back door and the heavy emotional toll of years of litigation led them to seek a new beginning in Branford, where they said the climate would be friendlier.

Suzette Franco-Camacho said while she has great respect for the University and credits its contribution to New Haven’s downtown development, she has heard many fellow business owners complain of feeling bullied by University Properties.

“The excitement and energy I felt coming to New Haven in 1999 is missing now, and I think that has a lot to do with how [University Properties] treats tenants,” she said. “We’re sad because it should have been a great relationship.”

The director of University Properties, Abigail Rider, declined to comment.

While there are no immediate plans for the vacant lot, Yale spokesman Tom Conroy told the News in September of last year that the University is simply trying to avoid “a position in which its legal choices on how to use the property are diminished or blocked.”

Bespoke will continue to run under the ownership of Lauren Kendzierski and chef Yosef Ghailini, the Register reported.