Clarke v. Fine Housing, Inc.
Annotate this CaseBarry Clarke brought this action for specific performance of a right of first refusal. Clarke owned a strip club at 2015 Pittsburgh Avenue in Charleston, South Carolina. Group Investment Company, Inc., whose shareholders were John Robinson and Robin Robinson, owned a strip club across the street at 2028 Pittsburgh Avenue (the Subject Property). The Subject Property included buildings, a parking lot, and other land. In 1999, Clarke and Group Investment entered into a recorded lease that allowed Clarke to use half of the parking spaces located on the Subject Property. In 2007, Group Investment conveyed the Subject Property to RRJR, LLC for the stated consideration of $5.00. John Robinson and Robin Robinson were members of RRJR. Clarke testified he "probably" knew Group Investment transferred the Subject Property to RRJR, but Clarke claimed he did not seek to exercise the Right at that time because Group Investment and RRJR were "the same people." In 2013, RRJR conveyed the Subject Property to Fine Housing for $150,000.00. Fine Housing's closing attorney did not take note of the Lease or the Right prior to the closing, but Fine Housing conceded it had record notice of both the Lease and the Right. Neither Fine Housing nor RRJR notified Clarke of the sale of the Subject Property. Clarke learned of the sale in March 2014, and in May 2015, Clarke initiated this action for specific performance against Fine Housing and RRJR. RRJR did not answer and was in default. After a bench trial, the trial court ruled the Right was enforceable as to the entire Subject Property and ordered Fine Housing to convey title to the Subject Property to Clarke upon his payment of $350,000.00. The court of appeals reversed, holding the Right was an unreasonable restraint on alienation and was therefore unenforceable. The South Carolina Supreme Court found the Right did not identify the property it encumbered, contain price provisions, or contain procedures governing the exercise of the Right. Therefore, the Court concluded the Right was an unreasonable restraint on alienation, and affirmed the court of appeals' holding that the Right was unenforceable.
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