A South Carolina appeals court ruled this week that an owner in downtown Charleston was responsible for ending a nightclub rental after a major fire in a building near City Market in 2013.
Judges in the case upheld the decision of a lower court that ordered Yaschik Development Co., the owner of the property at 213 East Bay St., to pay $ 133,333 to owners of the former Club Light, which previously rented the top floor.
The decision came almost eight years after emergency teams responded to a morning fire that broke out inside a commercial property in the heart of the peninsula’s tourist district.
Approximately 75 firefighters from various local departments battled the fire that caused flames to leap from the top of the two-story structure between S. Market and Cumberland streets.
It was not long before the fire was put out and legal disputes with displaced residents began to heat up.
The initial process on the damaged property was a complicated case involving the owner of the property, a company that was the main tenant and two other companies that subleased part of the space.
It was Yaschik’s decision to claim the property as a total loss after the fire that led to the long appeal that was decided this week.
Firefighters are battling a fire that damaged three companies at 213 East Bay St. on April 2, 2013. Archive
Lawyers for the parties involved in the case did not respond to requests for comments or refused to discuss them.
According to the case file, Yaschik informed the owners of Club Light and the other two bars that operated outside the building in 2013 – Squeeze and The Brick – that he believed the structure was “totally destroyed” by the fire.
In fact, Yaschik did not have a direct contract with Club Light, which also did business as Top of the Bay, but the owner’s decision to label the building as a loss effectively annihilated the nightclub rental.
Yaschik’s lawyers argued that it was a “reasonable business decision” and pointed out that the building was covered by a $ 1 million insurance policy, while repairs were estimated at more than $ 2 million. That was reason enough to show that the property was a loss, they said.
The problem, according to the evidence presented in court, was that Yaschik was negotiating to sell the damaged building while telling tenants that the property was a loss.
The proposed deal ended up failing, according to court records. But it presented a legal opening for Club Light and the other companies that rented the space to claim their contracts should not be canceled.
A jury apparently agreed with this logic, awarding Club Light and two other companies that operated outside the building for $ 2.4 million in damages in early 2018.
The building has been rebuilt since the fire. A local real estate agent is selling the space to potential tenants, saying it has been renovated “like a restaurant space with a bonus outdoor bar on the roof”.
This week’s decision by the SC Appeals Court involved only the portion of the Club Light jury award, which was the lowest amount.
Yaschik did not have a direct lease with Club Light, the judges agreed. But the company’s decision to claim the building as a loss directly affected the club’s ability to operate its business, they decided, and interfered with the lease.
Charleston-based Yaschik Development can still appeal the decision to the SC Supreme Court.
Queen Street paid $ 1.8 million for the 10,000-square-foot downtown building in 2003, county land records show.
Reach Andrew Brown at 843-708-1830 or follow him on Twitter @andy_ed_brown.