A years-long legal battle between the University and the owners of local restaurant Bespoke progressed further this month, and could potentially force the owners to sell their restaurant.

The conflict dates back to 2002, when both Yale and Bespoke claimed ownership over a sliver of land behind the restaurant. When a settlement signed by both parties fell through — because Yale questioned the authority of those who signed the settlement on its behalf — University administrators filed a lawsuit. But the settlement was upheld in trial court last year.

So Yale lawyers appealed the decision, and earlier this month, engaged in oral arguments with Bespoke’s lawyers before an appellate court. They now await the court’s decision.

The current case revolves around the legal concept of “apparent authority”: whether Bespoke’s owners were meant to believe that the Yale affiliates who brokered the initial settlement — former Associate Vice President and University Properties Director David Newton and third-party lawyer Tom Sansone — actually had the authority to make decisions on behalf of the University.

Yale purchased the back lot of the restaurant in 1999, but the Bespoke owners — Suzette Franco-Camacho and her husband, Arturo — have since tried to establish permanent rights to the walkway. In 2005, the University placed a metal gate in front of Bespoke’s back door along what the University said is its property border. The gate could only unlock from Yale’s side and was placed so close to Bespoke’s back door that it could only open partially.

In the beginning, the Bespoke owners had tried to assert their ownership of the back passage through “squatter’s rights,” Arturo Franco-Camacho said in 2008. Because University Properties had not done anything with the land for so long, he explained at the time, they felt it was theirs. Later, in August 2006, the owners worked with Newton and Sansone to put themselves into an official agreement with Yale.

But upon hearing about the agreement, Vice President for New Haven and State Affairs and Campus Development Bruce Alexander ’65 rejected it outright, and the courts must now determine whether Newton or Sansone had the “apparent authority” to negotiate such a deal.

Yale spokesman Tom Conroy said the settlement has “clouded” Yale’s property rights to the land, adding that University officials want to ensure that they can never be “in a position where [their] legal choices on how to use the property are diminished or blocked.”

Conroy also said the University had offered the Franco-Camachos a license agreement that would have ensured Yale had all possible property rights. But the Bespoke owners refused to sign it because, as they argued in the briefs, they would lose their ability to defend themselves against any University decision that could harm the restaurant.

The lawsuit has taken a toll on the owners: They are considering leaving New Haven — and their restaurant, Bespoke. (University Properties evicted their old restaurant, Roomba, in 2007.) Because of lawsuit expenses and the current economic climate, the owners said they are in a rut from which they will never recover. They said they have already started to pursue buyers for Bespoke’s building, which they currently own.

Suzette Franco-Camacho said the bickering between Yale and Bespoke has since become a stalemate, adding that the appellate court’s decision is unlikely to change anything. Regardless of which party the judges’ ruling favors, it is likely the other will appeal to the state Supreme Court. Yale officials said they want to keep all of their property rights; Bespoke officials said they deserve access for their customers.

The Franco-Camachos said they plan on pursuing the lawsuit until the end: “It’s our intention to see it completely through,” Suzette Franco-Camacho said.

And she expects Yale to follow suit, she said. The University started the lawsuit, so its officials will likely continue the arguments up to the stateSupreme Court, she said.

Conroy declined to speculate on what the University would do. “The strong hope is to be successful in the appeal,” he said last week. “But let’s wait for that decision before disseminating any next steps.”

Although the appellate judges are not tied to a specific deadline, Bespoke owner Suzette Franco-Camacho said she expects them to rule on the case within the next two to four months.