Civil suit filed in The Balcony auction dispute

  • Posted: Wednesday, February 9, 2011 12:01 a.m.
    UPDATED: Wednesday, February 9, 2011 8:10 a.m.

Controversy surrounding allegations of wrongdoing in connection with the February 2010 auction of a $2.5 million Winter Colony estate has led to a civil lawsuit filed against the auction company and the home's sellers.In February 2010, James Oremus and Melissa Lackey-Oremus of Aiken County said they were the highest bidders at an auction of the 11,600-square-foot home on about six acres of land on Whiskey Road, but were forced to sign away their offer so another bidder, who had been barred from the auction because of paperwork issues, could enter the bidding.The Oremuses are suing for damages related to fraud, civil conspiracy, negligence, recklessness and breach of contract, among others, according to the lawsuit."Plaintiffs, having submitted the highest bid at auction, have unjustly lost the opportunity and right to own this unique property known as The Balcony and to realize an expected return on their investment, and they are entitled to recover actual damages in such amount as they shall prove at trial," according to court documents.The auction company, Grand Estates Auction Co. of Charlotte, N.C., acted as the auction's agents for Karl and Erin Hirschhorn, the previous owners and residents of The Balcony, located at 836 Whiskey Road.The Hirschhorns were named in the suit, as was Grand Estates Auction Co., Grand Estates Advertising LLC and agents Stacy Kirk and Valeria Devine, as well as broker Scott Kirk.The Oremuses allege that, after the auctioneer hammered down their bid, the Hirschhorns, Grand Estates and the three shareholders of Grand Estates agreed that the amount of their bid was "unacceptably low to the Hirschhorns, as Trustees, and provided inadequate sales commissions for Grand Estates," according to the documents.The Oremuses allege that all defendants were negligent and reckless by failing to disclose to the plaintiffs the issues possibly affectingthe auction in advance, in advertising the auction as an absolute auction rather than a reserve auction, and in failing to facilitate a closing for the plaintiffs who submitted the highest bid.The plaintiffs, who said they were unfamiliar with the auction process and relied on what they allege were false representations made by the auction company, were asked to sign paperwork retracting what would have been the winning bid.In the weeks following the auction, the Oremuses said that they believed those involved in the auction process contacted certain individuals to elicit sealed bids for The Balcony, and the Oremuses were not asked to participate, according to previously published reports in the Aiken Standard.The specific charges in the lawsuit are civil conspiracy, fraud, breach of contract, breach of contract accompanied by a fraudulent act, intentional interference with contract, promissory estoppel, unfair trade practice and negligence, recklessness and willfulness.James Hornor Davis IV and Frederica M. Davis of Charleston, W.Va., purchased The Balcony on March 2010 for $2.5 million.The Balcony estate includes the house with five bedrooms, eight full bathrooms, two half-baths and a guest house with three bedrooms and two bathrooms. Also included is six acres of grounds with a pool, tennis courts, paddocks, a 20-stall barn and horse riding area.The property was valued at $3.5 million by the Aiken Tax Assessor's office in 2007, and $2.77 million more recently.Messages left at Grand Estates Auction Co. offices in Charlotte on Tuesday seeking comment were not returned.A phone number for the Hirschhorns, who court documents say have moved out of state, could not be found.A civil lawsuit represents only one side of the parties' dispute.Contact Anna Dolianitis at adolianitis@aikenstandard.com.

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