A 2-year-old lawsuit over a North Carolina-based retailer’s short-lived Henrico location has come to an end.
Libbie Mill-Midtown developer Gumenick Properties’ case seeking damages and fraud claims against former Southern Season CEO W. Clay Hamner and CFO Brian Fauver was dismissed in August in Richmond federal court.
The case, which was filed in June 2016, sought more than $350,000 in damages related to an agreement tied to Southern Season’s lease on its former 53,000-square-foot space in Libbie Mill.
The gourmet food store opened the location in July 2014 – its first in Virginia. It closed the store less than two years later, in April 2016, citing weak sales and too large of a space, having allegedly been late on its rent out of the gate.
Gumenick agreed to help prop up the struggling store by floating an equity investment, but on the belief that Hamner and Fauver had a letter of credit in place to cover a $500,000 security deposit for Southern Season’s 20-year lease.
Gumenick alleged the letter of credit was not in place at the time of the cash infusions, which the lawsuit contended amounted to two counts of fraud.
The developer was seeking $100,000 in damages after floating the store cash infusions of $25,000 in August 2015 and in January, February and April 2016. It also sought $350,000 in punitive damages – the maximum allowed under state law.
In a 23-page judgment, Judge Roderick C. Young stated the court was “not clearly convinced” by Gumenick’s evidence that Hamner and Fauver deliberately concealed the status of the letter of credit.
Spotts Fain attorney Edward Bagnell Jr., who with John Erbach represented Fauver and Hamner, said many of Gumenick’s claims against their client were baseless.
“It demonstrates what we believed all along, which was the allegations against Mr. Hamner and Mr. Fauver didn’t have any merit,” Bagnell said. “Anyone who knows Clay and Brian know that they are honest people.”
Ellen Thornhill, a Gumenick spokeswoman, would not comment on whether the real estate development firm would appeal the judge’s decision.
“There were many important findings that came out in the litigation that we hope will guide all of us in the future,” Thornhill said.
While Gumenick did not win the case, it since has landed a high-profile tenant to take over the former Southern Season space.
Lumber Liquidators, the publicly traded national wood flooring retailer, announced in September that it plans to move its corporate headquarters from Toano into the former Southern Season building by the fourth quarter of 2019.