Ingles Markets Incorporated et al v. Maria LLC et al
Filing
80
ORDER denying 55 Motion for Summary Judgment; granting in part and denying in part 56 Motion for Summary Judgment; denying 61 Motion in Limine. Signed by Honorable Mary Geiger Lewis on 6/21/2016.(abuc)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
SPARTANBURG DIVISION
Ingles Markets, Incorporated, and Sky King, )
Inc.,
)
)
Plaintiffs,
)
)
vs.
)
)
Maria, LLC,
)
)
Defendant.
)
)
____________________________________
Civil Action No. 7:14-4828-MGL
ORDER
Plaintiffs Ingles Markets, Incorporated, and Sky King, Inc., (“Plaintiffs”), brought this civil
action for specific performance and declaratory and injunctive relief against Defendant Maria,
LLC, (“Defendant”), seeking to prevent Defendant from proceeding with construction on property
adjacent to property leased by and owned by Plaintiffs. (ECF No. 1). Defendant answered and
plead its own claim for declaratory relief, as well as counterclaims of tortious interference with
contract, unfair trade practices, and abuse of process. 1 (ECF No. 22). The matter is presently
before the Court on Plaintiffs’ Motion for Summary Judgment, (ECF No. 56), and Defendant’s
Motion for Partial Summary Judgment. (ECF No. 55). Also pending is Defendant’s Motion in
Limine to Exclude Expert Testimony. (ECF No. 61). After full briefing by the parties on these
motions, the Court held a hearing, heard argument and took all matters under advisement. (ECF
No. 75). The Court has subsequently reexamined the briefs and exhibits of the parties and
reviewed the hearing transcript, and these matters are now ripe for decision.
1
Additionally, both Plaintiffs and Defendant brought competing claims of trespass, which were subsequently
dismissed with prejudice by stipulation of the parties. (ECF No. 76).
1
FACTUAL BACKGROUND
Plaintiff Ingles is the anchor tenant of a commercial retail space, or “shopping center,”
located near the intersection of U.S. Highway 176 and Springfield Road in Spartanburg, SC.
Originally owned by developer Jaylin Spartanburg South, LLC, (“Jaylin”), the shopping center is
now owned by Plaintiff Sky King. Bill and Miriam Akkary (“the Akkarys”), who are the
controlling owners of Defendant Maria, have operated two businesses within the same shopping
center since approximately 2001, when they first entered into leases with then-owner Jaylin.
Pursuant to the terms of the lease agreement, all owners and tenants in the shopping center
are subject to certain use and development restrictions. (ECF Nos. 1-1 and 1-2). For example,
owners and tenants may not erect additional buildings in the shopping center that do not appear on
the site plan, which is attached to the amended lease agreement. (ECF No. 1-2). At least some
of these restrictions are contained in a document referred to in this litigation as the Declaration of
Reciprocal Easements or “REA,” (ECF No. 1-3), which was filed with the Spartanburg County
Register of Deeds on June 10, 2002.
On or about January 7, 2011, the Akkarys entered into a contract with Jaylin for the
purchase of a 0.91 acre outparcel, or “subject property.” On the site plan, the subject property
appears as two separately designated, adjoining outparcels. (ECF No. 1-3 at p. 3).
At the time of closing, the REA was included in the subject property’s chain of title and
imposed certain restrictions on its future development. Although there is mention in four places
in the REA of an “Exhibit E,” this exhibit was not attached to the recorded instrument. The key
provision of the REA that is at issue in this litigation, referred to as Article 5.3, directly references
the unattached Exhibit E and reads as follows:
5.3 Restrictions Relating to Development. Development and use restrictions shall limit
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the construction to be performed on Parcels 1, 2, and 3 to the construction of one building
of one story and no more than twenty-four (24) feet in height in the locations and with the
requisite parking spaces, shown on Exhibit “E” attached hereto. (ECF No. 1-3 at p. 7).
Other references to the unattached Exhibit E appear in the sections of the REA which define the
two outparcels that together comprise the subject property. These are referred to in the REA and
its attached exhibits as “Parcel 2” and “Parcel 3,” respectively. (ECF No. 1-3 at pp. 13-14).
The contract governing purchase and sale of the subject property required seller Jaylin to
provide to the Akkarys copies of the following documents pertaining to the property: existing
surveys, title insurance policies, condemnation information, environmental reports, copies of
leases and amendments, and any other information pertaining to the ownership or operation of the
property which the buyer reasonably requests. Although Jaylin produced a copy of the REA and
other plats, sketches and drawings of the subject property, Jaylin never produced an Exhibit E or
any other document setting out additional restrictions or limitations on use and development.
After owning the subject property for several years, the Akkarys, now operating through
Defendant Maria, closed on a construction loan and entered into an agreement with a company for
development of the subject property. The contemplated new construction would consist of a single
building of approximately 8,800 square feet, resting across the .91 acres purchased from Jaylin
and spanning portions of both “Parcel 2” and “Parcel 3,” as designated in the REA.
As construction was about commence, Plaintiffs filed this action, alleging that Defendant’s
proposed structure was in violation of restrictions contained in the REA, including both the
language of the above cited Article 5.3 which limits “construction to be performed on Parcels 1,
2, and 3 to the construction of one building of one story” and additional building size and
configuration limitations set out in a document which Plaintiffs proffer as the unattached, un-filed
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“Exhibit E.” (ECF No. 1-4). 2 Plaintiffs maintain that the contemplated construction will result in
irreparable harm to their property interests, primarily because the proposed building will
permanently obstruct the visibility of the Ingles store (or any future replacement tenant) from the
adjacent roadways, resulting in loss of customer goodwill and, ultimately, business revenue.
Defendant counters that its proposed construction is not in violation of any restriction contained
in the REA of which it had notice or of which it is chargeable with having notice.
SUMMARY JUDGMENT STANDARD
Pursuant to Federal Rule of Civil Procedure 56(a), a party is entitled to summary judgment
if the pleadings, responses to discovery, and the record reveal that “there is no genuine dispute as
to any material fact and the movant is entitled to judgment as a matter of law.” A genuine issue
of material fact exists "if the evidence is such that a reasonable jury could return a verdict for the
nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The party seeking
summary judgment bears the initial responsibility of informing the court of the basis for its motion.
See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). This requires the movant to identify those
portions of the "pleadings, depositions, answers to interrogatories, and admissions on file, together
with the affidavits, if any," which it believes demonstrate the absence of genuine issues of fact.
Celotex, 477 U.S. at 323; see also Anderson, 477 U.S. at 249.
Although the moving party bears this initial responsibility, the nonmoving party must then
produce specific facts showing that there is a genuine issue for trial. See Celotex, 477 U.S. at 334.
In satisfying this burden, the nonmoving party must offer more than a mere “scintilla of evidence”
that a genuine issue of material fact exists, Anderson, 477 U.S. at 252, or that there is “some
2
In an effort to establish that this document, which appears to be a “blow-up” of a relevant portion of the site plan,
is in fact the missing and agreed to (by declarant Jaylin) “Exhibit E,” Plaintiffs rely primarily upon certain
deposition testimony of Ingles attorney, Mr. Ephraim Spielman, and other correspondence issuing from his office.
See ECF No. 79 (Hearing Transcript) at p. 32.
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metaphysical doubt” as to material facts. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475
U.S. 574, 586 (1986). Rather, it must produce evidence on which a jury could reasonably find in
its favor. See Anderson, 477 U.S. at 252.
In considering the motion for summary judgment, the court must construe all facts and
reasonable inferences in the light most favorable to the nonmoving party. See Miltier v. Beorn,
896 F.2d 848 (4th Cir. 1990). Summary judgment is proper “[w]here the record taken as a whole
could not lead a rational trier of fact to find for the non-moving party, there [being] no genuine
issue for trial.” Matsushita, 475 U.S. at 587 (1986) (internal quotations omitted).
DISCUSSION
Plaintiffs’ Complaint seeks an order from this Court permanently enjoining Defendant
from constructing any building or buildings on the subject property that are in violation of the
restrictions set out in the REA, including the proffered Exhibit E. See ECF No. 1 at ¶¶ 10-18 and
30-38. 3 In order to grant a permanent injunction, the Court must find that Plaintiffs have
demonstrated success on the merits, including, specifically, that they have shown: (1) an
irreparable injury; (2) that cannot be adequately remedied by a customary legal remedy such as
money damages; (3) that the balance of hardships among the parties weighs in favor of granting
the injunction; and (4) that the public interest would not be disserved by the grant of relief. eBay,
Inc. v. MercExchange, LLC, 547 U.S. 388, 391 (2006).
However, on the record before it, the Court cannot conclude that the above standards are
satisfied as to any of Plaintiffs’ claims for equitable relief, all of which ask the Court in one form
or another to conclude that Defendant’s proposed construction is in violation of the proffered
3
This relief in sought in Plaintiffs’ Third Cause of Action. Similarly, in their First and Second Causes of Action,
Plaintiffs seek a grant of specific performance and a declaration from the Court that Defendant’s proposed
construction is in violation of both restrictions contained in the filed portions of the REA and in the proffered
Exhibit E. (ECF No. 1 at pp. 2-6).
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Exhibit E. The Court finds that a genuine issue of material fact exists as to whether this document’s
inclusion was actually agreed to by declarant Jaylin and intended to be filed along with the rest of
the REA, such that its contents may legally limit Defendant’s proposed construction, in the event
that the Court finds as a matter of law that Defendant had actual or constructive notice of its
contents. 4
The Court will, however, take the occasion of these cross motions for summary judgment
to conclude that Defendant’s counterclaims for tortious interference, unfair trade practices and
abuse of process are properly dismissed. As Plaintiffs point out, each of these claims include, as
an essential element, “improper” action or motive by the opposing party. In the case of tortious
interference, for example, the proponent of the claim must show that the opposing party
intentionally interfered with potential contractual relations “for an improper purpose or by
improper methods.” Santoro v. Schulthess, 384 S.C. 250, 262 681 S.E.2d 897 (Ct. App. 2009).
Similarly, in order to prove out a claim under the South Carolina Unfair Trade Practices Act,
(“SCUTPA”), the proponent must show evidence of “unfair or deceptive acts or practices” by the
opposing party. S.C. § 39-5-20(a). For an abuse of process claim, the proponent must show, not
only an “ulterior purpose” (i.e. a bad motive), but a willful, improper use of process. Pallares v.
Seinar, 407 S.C. 359, 370-71, 756 S.E.2d 128 (2014). Here, Defendant appears to maintain that
by pressing its claims in the instant litigation and by its earlier filing of a Lis Pendens, Plaintiffs
have acted improperly and/or with a bad motive. However, the Court finds no affirmative evidence
of improper action or motive in the record. The Court has already declined to find that the filing
of the Lis Pendis was done without right. See ECF No. 48. Moreover, the record before the Court
4
For similar reasons, the Court cannot find for Defendant on its counterclaim for declaratory relief, as the Court
cannot conclude on this record that the proffered Exhibit E is not a legally binding portion of the “Declaration”
whose contents may properly limit the subject property’s development by Defendant. See ECF No. 22 at p. 8.
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clearly indicates that, in this litigation, Plaintiffs are pressing viable legal claims with a view to
upholding legitimate property interests. Consider that quite apart from the above-addressed
controversy concerning the legal status of the proffered Exhibit E, in each of their three causes of
action for equitable relief, Plaintiffs also seek to enforce restrictions contained in the properly filed
portions of the REA, including, in particular, the language in Article 5.3, which “limit[s] the
construction to be performed on Parcels 1, 2, and 3 to the construction of one building of one
story.” (ECF No. 1-3 at p. 7). Plaintiffs maintain that Defendant’s proposed construction of one
building across portions of Parcel 2 and 3 would constitute a violation of this language, and the
Court is inclined to agree. To construct more than one building of more than one story on any of
Parcels 1, 2, and 3 would obviously violate the provision’s clear language. But so too would any
attempt to develop the parcels in any other manner than one building of one story per parcel,
including Defendant’s proposed plan to erect a building that cuts across Parcels 2 and 3, which
happen to be adjacent. Moreover, as Plaintiffs emphasize, at the time of the purchase of the subject
property, well prior to the start of any construction on the subject property, Defendant had actual
notice of the contents of all properly-filed portions of the REA, including its clear and separate
delineation of Parcels 1, 2 and 3 and the development restrictions applicable to each by the express
terms of Article 5.3.
Although the Court is not prepared, on this record, in light of the above-indicated dispute
of material fact, to undertake the full legal analysis necessary to grant or deny an award of
permanent injunctive relief, the Court cannot find and does not find that in seeking to enjoin
Defendant’s proposed development of the subject parcel Plaintiffs are operating from any motive
other than the entirely proper motivation of seeking to protect what they regard to be legitimately
obtained and enforceable property rights.
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CONCLUSION
Having carefully considered the arguments raised by counsel at the hearing, the briefs and
exhibits of the parties, and all relevant case law, and for all of the reasons set out above, the Court
hereby DENIES Defendant’s Motion for Partial Summary Judgment, (ECF No. 55), and
GRANTS IN PART AND DENIES IN PART Plaintiffs’ Motion for Summary Judgment, (ECF
No. 56), dismissing Defendant’s counterclaims for tortious interference, unfair trade practices and
abuse of process.
Finally, as to Defendant’s Motion in Limine to Exclude Expert Testimony of Richard
Alterman, (ECF No. 61), the Court DENIES that motion to the extent that the Court will consider
Alterman’s opinion, as an expert in shopping center development, but only to the extent that the
Court finds Alterman’s opinion helpful and otherwise consistent with the dictates of Federal Rule
of Evidence 702 and only on the question of what harm, if any, Plaintiffs would suffer if an
injunction is not granted and Defendant is permitted to build in a manner contrary to the restrictions
contained in the REA.
IT IS SO ORDERED.
June 21, 2016
Columbia, South Carolina
s/Mary Geiger Lewis______
United States District Judge
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