A lawsuit filed by Stonyman Gourmet owners Alan and Susan James seeking a temporary injunction against the sale of the property where they’ve operated a cafe on Gay Street since 2008 was dismissed Monday morning (June 9) in Rappahannock County Circuit Court.
It was unclear this Wednesday whether the Jameses would pursue further legal action, or whether the owner of the property intended to hasten or negotiate their departure, though the Jameses’ attorney, Marc A. Peritz, said they are “in the process of evaluating how best to proceed.”
The Jameses were seeking a temporary injunction on the impending sale of the property they’ve leased for the last six years from Sunny View, an LLC owned by former Sunnyside Farm owner David Cole and local agent Jimmie DeBergh.
The Jameses’ suit, filed on May 20, alleges Sunny View failed to honor a 2011 oral agreement — a “right of first refusal” for Stonyman to purchase the property should it come up for sale. DeBergh said last month the property was to be sold to the Inn at Little Washington for $550,000. The Jameses also alleged DeBergh failed to honor a second oral agreement to extend their lease to April 30, 2016.
DeBergh filed a demurrer — a motion to dismiss on the grounds that regardless of whether the alleged evidence is true or not, there is still no legal basis to the lawsuit — and a plea-in-bar, which sets out special reasons for which a trial cannot go ahead.
The demurrer, filed on May 29, focuses on the lack of a written agreement, and states that the lease the Jameses entered into with DeBergh “contains all the agreements made between the parties . . . and may not be modified orally or in any manner other than by an agreement in writing.” Renewals of the lease, as well as a right of first refusal, “must be in writing and signed by the party to be charged with such agreement.”
Lastly, the defendants pointed out that the property’s lease was between Sunny View and Stonyman Gourmet Farmer LLC, while the Jameses filed the suit under their own names, meaning the proper parties are not present — and the suit can’t continue until they are.
Michael T. Brown, DeBergh’s defense counsel, disputed the idea that an oral agreement was binding, and said that “even with some gray areas in the agreement,” an oral agreement was not enforceable. Brown said a right of first refusal refers to the sale of real estate, was thereby subject to the statute of fraud and required some kind of written agreement.
He also cited 65 similar cases where a right of first refusal was disputed and found that all of them dealt with an actual, physical contract. “Otherwise people will come out of the woodwork,” Brown said, “‘Well, we talked about this.’ Well, we never reached an agreement.”
Peritz countered that none of the cases Brown cited ever said a right of first refusal had to be in writing. “[DeBergh] is required to offer the same terms as he offered to a third party . . . he is required make an offer to us,” Peritz said. Furthermore, Peritz pointed out DeBergh had admitted there was an agreement between him and the Jameses in a May 22 article in the Rappahannock News.
“With all due respect to any members of the press who might be present, [citing a newspaper article] is not just hearsay, but some of the worst kind of hearsay,” Brown countered, drawing some laughter from the audience as well as Judge Jeffrey W. Parker.
Parker ultimately agreed with Brown, and sustained the plea-in-bar on the grounds that a right of first refusal “is irrevocably connected to the sale of real estate . . . It has to be in writing,” Parker continued. “It’s just too closely connected to say it can be an oral agreement.”
Parker also sustained the demurrer, agreeing with Brown that because the suit is filed under the Jameses’ individual names (while the lease is under Stonyman LLC), the Jameses “are not a valid party. We have the Jameses, but they didn’t sign the lease . . . and somebody’s got to be the defendant.”
The Jameses, who said they were advised not to comment after the hearing, have 21 days to refile, after which Sunny View has another 21-day period to respond. DeBergh referred questions about Stonyman’s future on Gay Street to Brown, who said by phone later Monday that the next step, or any further legal or lease-related action, “is unknown until I sit down and speak with Mr. Peritz.”