United States District Court, D. South Carolina, Florence Division
Bryan Harwell, United States District Judge.
matter is before the Court on the parties' cross motions
for summary judgment. [ECF Nos. 71 & 73]. For the reasons
stated below, the Court grants in part and denies in part
Defendants' motion for summary judgment and denies
Plaintiff's motion for summary judgment.
September 15, 2006, Plaintiff Lowes Foods, LLC
("Lowes") and Defendant Grand Dunes Development
Company, LLC ("GDDC") entered into a lease
agreement ("Lease") for property to be used as a
location for a Lowes Foods retail grocery store. [Complaint,
ECF No. 1, at ¶ 9].
alleges that Burroughs & Chapin Company, Inc.
("B&C"), who is the parent company of
Defendants GDDC and Myrtle Beach Farms Company, Inc.
("MBF"), was developing the area as the Grande
Dunes community. Id. at ¶ 11. The new Lowes
Foods grocery store was to be located at the Grande Dunes
Marketplace, 970 Cipriana Drive, Myrtle Beach, South
Carolina. Id. at ¶ 9.
negotiating the Lease, Lowes alleges that it discussed with
Defendants two critical issues regarding the Lease and the
new grocery store. First, it was important to Defendants that
the Lowes store at the Grande Dunes development be a high
quality, “four-star project” befitting an upscale
shopping center. Second, it was critical to Lowes that the
Lease contain a “radius restriction” protecting
Lowes from the development of a competing grocery store
within a two-mile radius of the Lowes store at Grande Dunes.
Id. at ¶ 12.
alleges the radius restriction was the subject of
communications between Jeffrey LeForce, Chief Commercial Real
Estate Officer for B&C, and Roger Henderson, Vice
President of Real Estate for Alex Lee, Inc., which is
Lowes's corporate parent. Id. at ¶¶
13-20. Lowes viewed the communications between LeForce and
Henderson to be a clear representation by Defendants that (1)
they knew the importance of the radius restriction to Lowes,
(2) they knew Lowes would not enter into the Lease if it
thought its sales might be diminished as a result of a
competing grocery store within the radius restriction, and
(3) they knew the radius restriction must be effective
throughout the term of the Lease. Id. at ¶ 21.
alleges that it signed the Lease on November 3, 2006, in
reliance on the representation that the radius restriction
would be effective throughout the term of the Lease.
Id. at ¶ 22.
7.4.3 of the Lease (the "radius restriction")
In addition, Landlord, any entity which controls, is
controlled by or under common control with Landlord, any
entity which acquires all or substantially all of
Landlord's assets, or Landlord's affiliates,
successors or assigns (collectively, the “Landlord
Entities”), shall not (directly or indirectly) develop
a supermarket on any property within a radius of two (2)
miles from any portion of the Demised Premises; provided,
however, at any time after the seventh (7th) anniversary of
the Commencement Date, Landlord and each of the Landlord
Entities may develop a grocery store with up to 25, 000
square feet on any property within such radius other than
property owned by Landlord or any of the Landlord Entities
that is contiguous to the Center.
[Lease, ECF No. 1-1 at 28-29].
alleges it would not have entered into the Lease without the
radius restriction and the Defendants knew the radius
restriction must remain effective throughout the term of the
Lease to adequately protect Lowes's interests.
[Complaint, ECF No. 1 at ¶ 24]. Lowes alleges that it
made a greater than normal financial investment in the Lowes
store at Grande Dunes to comply with Defendants' demand
that the Lowes store at Grande Dunes be a high-end,
"four star" store befitting an upscale shopping
center. Id. at ¶ 25.
alleges that in or about December 2013, B&C sold a
substantial amount of its property within the Grande Dunes
development to LStar Management (“LStar”).
Included in the sale was a tract of land owned by MBF,
located at the northwest corner of 82nd Avenue North and
North Kings Highway in Myrtle Beach (the "New
Development"), which was also within the two-mile radius
restriction in the Lowes Lease. MBF's sale of the
"New Development" to LStar did not include a
restriction like the one included in the Laniado
October 31, 2014, LStar, along with a company called Crosland
Southeast, issued a press release stating its intention to
develop a new commercial center at the New Development,
anchored by a grocery store of approximately 45, 000 square
feet. [Complaint, ECF No. 1 at ¶ 28; Deposition of
Steven Vining, ECF No. 95-3 at 43].
states that a 45, 000 square foot Publix grocery store at the
New Development is now open and operating less than a mile
from the Lowes store, in violation of the radius restriction.
Id. at ¶ 34; Henderson Depo. at 146.
filed this case on February 4, 2016, against Defendants
Burroughs & Chapin Company, Inc. ("B&C"),
Grande Dunes Development Company, LLC ("GDDC"), and
Myrtle Beach Farms Company, Inc. ("MBF"), asserting
four claims for relief: 1) fraud in the inducement; 2) breach
of contract; 3) breach of contract accompanied by a
fraudulent act; and 4) violation of the South Carolina Unfair
Trade Practices Act, SC Code Ann. § 39-5-140.
August 31, 2018, Defendants filed a motion for summary
judgment as to all of Lowes's claims. Lowes filed a
cross-motion for summary judgment on its breach of contract
claim. In its brief in response to Defendants' motion for
summary judgment, Lowes indicated that it is not proceeding
on its claim for fraud in the inducement. The motions have
been fully briefed and are ripe for review.
court shall grant summary judgment if the movant shows that
there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a) (2010). “A party asserting that a
fact cannot be or is genuinely disputed must support the
assertion by: (A) citing to particular parts of materials in
the record . . .; or (B) showing that the materials cited do
not establish the absence or presence of a ...