In 2012, the former owners of the Inn on the Square sued Lander University and its foundation for what the suit says was a “breach of oral contract” to purchase the hotel.
Nearly six years later, the lawsuit still hasn’t been resolved.
Crystal Rookard, who was recently hired as general counsel at Lander, told the university’s board of trustees at a meeting in December that the suit stemmed from an assumption that Lander would buy the building while it was leasing it several years ago.
The company that owned the hotel and property until April 2012 is IOS LLC, which was registered by John Huffman. County records show the Inn on the Square was sold to Business Carolina Inc. in 2012 for $805,000.
“Once upon a time, prior to my arrival, there was someone who allegedly made a promise to purchase the Inn on the Square — that hasn’t been proven as of yet. We, of course, disagree with that allegation,” Rookard said. “You may recall at one point when you guys had a peak in enrollment and you needed housing very quickly, you leased it. And during that leasing process, there was the consideration of possibly purchasing that building, which is not a simple process under the state because you have to go through an inspection process, and the state said, ‘No, you probably shouldn’t buy this building.’ And then that’s when everything fell apart.”
Most recently, IOS filed to have Lander’s foundation dismissed from the suit.
Rookard said Lander has also made a motion for a summary judgment, which IOS responded to in opposition, but a representative with Lander said the motion is still pending.
Included in the lawsuit are emails exchanges with Huffman and representatives of Lander concerning a leasing agreement between the school and hotel in 2009 to use it as dormitories.
In 2009, the Inn on the Square was leased to Lander to use as a dormitory for 100 students after the university saw a jump in enrollment.
The lease allowed the school to have full use of the inn for 10 months, which was renewed each year up until June 2011.
The lawsuit lists six causes of action: breach of oral contract for the sale of the property, breach of contract and specific performance, promissory estoppel, negligent misrepresentation, negligence and breach of lease agreement.
Included in the suit are emails between Lander staff and Huffman about the leasing agreement and possible purchase of the inn.
The suit claims Lander was waiting on approval from the state budget and control board before purchasing the inn from IOS for $2.3 million, but that the school was committed to the purchase even if it was not approved by the office by using funds from the foundation.
Emails from Diane Newton, vice president for business and administration at Lander at the time, said the university was waiting to hear back from the state budget and control board. Attached to the suit is an email from Newton dated Sept. 2, 2009, that says the university is “actively working” on coming up with an offer amount on the property.
Emails between Tom Covar, then-director of financial services, and Lisa Catalanotto, program manager and attorney of the state budget and control board, in March 2010 said Lander’s attorney drafted a letter to notify Huffman the university would option the lease.
Catalanotto responded to Covar’s email asking if it was still Lander’s plan to purchase the inn by June 2011.
“Yes. BCB gave approval for Phase I studies (Environmental Impact, Building Assessment and Appraisal) in December. We are scheduled to receive those documents this week. Pending detrimental study data, we wish to proceed with the June 2011 purchase,” Covar said in an email attached to the lawsuit.
A letter included in the suit from Huffman’s attorney, Leonard Jordan, to Lander’s attorney, Douglas Bell, dated March 7, 2011, responded to the school’s decision to vacate the property at the end of the lease in June 2011 and said Huffman planned on going through the property to assess damage.
“Doug, I am disappointed that Lander has decided not to follow through with its announced plan to purchase the building. As you know, the lease was always considered to be a temporary arrangement to address an emergency short-fall in Lander’s student housing requirement. The plan from the start was for Lander to purchase the building; and since the parties had reached tentative agreement regarding the purchase, Lander was allowed to utilize the property in all respects as though it were the owner rather than as a tenant. Now that Lander has reneged on this agreement to purchase, it will be expected to pay for its actions in preparing to purchase the property and/or dealing with the property as an owner,” Jordan wrote.
Rookard told Lander board members mediation with the plaintiff was unsuccessful.
“It was unsuccessful because they asked for an astronomical amount of money that we just couldn’t agree to that,” Rookard said.
Contact staff writer Ariel Gilreath at 864-943-5644 or follow on Twitter @IJARIELGILREATH.
