The South Republican Leadership Conference flatly denies allegations that it skipped out on its bill after a four-day stay at the Charleston Place Hotel in January, and it appears close to ready to come out swinging in its own defense.
Charleston Attorney John Harrell, who represents the SRLC, says he's preparing to respond to a lawsuit filed by the hotel on Jan. 30, and that he expects to file within the 30-day deadline.
"What form the response might take, I just don't know yet," Harrell says. "I'm not being dodgy. I just need more time to evaluate the case."
The attorney explained that a number of actions fall under the definition of a "responsive pleading," ranging from a countersuit to a direct answer to the lawsuit that's been filed to a straightforward motion to dismiss.
"I will say this," Harrell added. "It certainly seems, from what I've been able to glean from the file so far, that the Charleston Place hotel should have looked before they leapt, because there are discrepancies that may be brought out in a counterclaim which do not serve the best interest of Charleston Place ... by a long shot."
The luxury hotel has filed a suit against the SRLC in the Charleston County Court of Common Pleas, charging that the organization abruptly cancelled a scheduled meeting to settle its bill and left without paying $227,872 for a conference the group held from Jan. 19 through 22.
According to the suit, which was filed against both the SRLC and long-time political operative Robert C. Cahaly, who signed the contract on the group's behalf, the group booked virtually the entire hotel for the duration of the event.
The terms of the contract stipulated that after an initial deposit, any outstanding fees would be calculated at the end of the conference.
The SRLC also booked two other hotels in downtown Charleston, the Wentworth Mansion and Courtyard by Marriott, neither of which has complained of lack of payment. The City Paper has left messages with both hotels but has not gotten a response from either.
"Nor has the TD Arena, where one of the conference's events was held," Harrell says.
"The only problem is with Charleston Place, and they have generated the problems," he added.
The lawsuit acknowledges that the event didn't go off exactly as planned, but it squarely places blame for that on the SRLC, stating, "The defendant corporation was grossly undercapitalized; failed to observe corporate formalities; was insolvent; and was merely used as a facade for the operations of the defendant Cahaly."
It also accuses Cahaly of using the SRLC to "hide from the normal consequences of carefree entrepreneuring by doing so through a corporate shell."
In response to these allegations, the Conference released a statement earlier this week that says, "After prepaying over $235,000 to the Charleston Place Hotel, we at SRLC 2012 had an unprofessional experience that directly and indirectly breached our contract causing great harm and distraction to our attendees, sponsors, and staff.
"The Charleston Place's attempt to mischaracterize this legitimate dispute as the SRLC's walking away from a bill is in keeping with the pattern of deception and misrepresentation that is a significant part of our ongoing disagreement," the statement continued.
Asked if he could describe the discrepancies the SRLC was referring to, Harrell declined, explaining that such a conversation would be better had after he filed his response.
"It is, after all, pending litigation," he says.
Harrell, who heads a litigation law firm, says what strikes him about the lawsuit is that only five business days had passed between the end of the conference and the filing of the lawsuit.
"Within those five days, we told them we wanted to have a meeting and that we wanted to evaluate the bill, because there were some discrepancies that we wished to address in the meeting — and we even asked them to mail us an itemized invoice," he says.
"But in lieu of all of that, and after only five business days had passed, eight days in total, they went ahead and filed a lawsuit. That was really unusual," Harrell says. "In a professional world, organizations talk about discrepancies — real or perceived — particularly when dollar amounts are so high, as they are here. It only makes sense.
He adds, "But Charleston Place wasn't interested in doing that. They are only, apparently, interested in litigating and in alleging claims and facts which they are going to have a great deal of difficulty supporting."