Jury renders split decision in lawsuit over sinkhole near Piedmont Park

Following a seven-day trial and a full day of deliberations Wednesday, the jury found that both sides broke the lease in the aftermath of the sinkhole’s emergence in July 2018. The controversy pitted in court a respected Midtown restaurant group against and the powerful Piedmont Park Conservancy that for years were allies.

Katherine Drolett and her business partner, David Duley, who own The Nook on Piedmont Park and the Be Our Guest restaurant group, planned to open two new restaurants at 1071 Piedmont Ave. NE before a large void emerged below the building. The 10-foot-by-6-foot hole scuttled their plans, prompting the legal battle with the conservancy.

Credit: HYOSUB SHIN / AJC

Credit: HYOSUB SHIN / AJC

The restaurateurs said the ordeal was a cover-up by the conservancy to preserve the value of its building at the cost of public safety, contesting the sinkhole’s cause was never properly identified and fixed. The conservancy said the incident amounted to a tenant dispute in which Be Our Guest sought a payday out of a failed business venture.

Drolett and Duley were making preparations for a planned sandwich and salad shop called Soulshine when the sinkhole emerged. The hole halted work on that eatery alongside a sit-down restaurant and bar the partners also planned in the same building called Walker’s 1834.

The incident was labeled a “life safety emergency” when discovered, including by Mark Banta, who was the conservancy’s CEO at the time. The assumption by everyone involved was that Atlanta’s century-old sewers were to blame. But that proved difficult to determine.

Eventually, grout was pumped into the hole, which satisfied the conservancy that the issue was resolved. But that repair did not satisfy the restaurant group or their construction contractors and bankers. Be Our Guest’s bank said it would not provide additional funds for construction until a detailed soil analysis was completed and the void’s cause was found and corrected.

The conservancy ultimately terminated Be Our Guest’s lease. A Shake Shack and Willy’s Mexicana Grill & Howlin’ Willy’s now occupy those two restaurant spaces alongside the Piedmont Park Community Center.

“The community center remains structurally sound and safe for use,” Jason McLarry, the conservancy’s attorney, said during closing arguments. “It is in use every day. Willy’s has operated throughout this with no concern.”

Credit: Jason Getz / Jason.Getz@ajc.com

Credit: Jason Getz / Jason.Getz@ajc.com

In his closing arguments, Gary Scott Hulsey, the attorney representing Be Our Guest, maintained that the conservancy prioritized profit over ensuring the building was safe.

“This is our client insisting on safety and following the advice of her team. She couldn’t even get her loan to be advanced for Be Our Guest to move forward,” he said. “In light of this, what was she supposed to do? How could she move forward?”

Credit: Jason Getz / Jason.Getz@ajc.com

Credit: Jason Getz / Jason.Getz@ajc.com

The jury Wednesday awarded monetary damages to both sides, which balance out to the restaurateurs being owed a little more than $300,000. The jury also found neither side acted in bad faith.

But the largest sum at stake — attorney’s fees that eclipse $1.3 million on both sides — is likely to be contested.

Fulton County Superior Court Judge Scott McAfee, who oversaw the trial, indicated the restaurant group will be on the hook for the conservancy’s legal fees due to the language in their lease because the jury found the lease was broken. Hulsey told the judge they will “reserve our rights” on that point, likely setting up an appeal. Hulsey declined to comment to The Atlanta Journal-Constitution, awaiting the final judgment to be posted.

Doug Widener, the conservancy’s current CEO, said, “The jury has spoken, and we thank them for their service.”