Azalea Garden Bd. & Care, Inc. v. Vanhoy

2009 NCBC 8
North Carolina Business Court·Decided March 17, 2009·No. 06-CVS-0948·Published·Cited by 1 cases

Opinion

Azalea Garden Bd. & Care, Inc. v. Vanhoy, 2009 NCBC 8.

NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE SUPERIOR COURT DIVISION DAVIDSON COUNTY 06 CVS 0948

AZALEA GARDEN BOARD & CARE, INC., Plaintiff,

v.

MEREDITH DODSON VANHOY, ORDER & OPINION Personal Representative of the Estate of Ricky C. Dodson, Deceased; LARRY S. GIBSON, NINA G. GIBSON, DANIEL W. TUTTLE; TIMOTHY D. SMITH; and HARVEY ALLEN, JR.,

Defendants.

{1} This matter is before the Court on Defendant Daniel W. Tuttle’s (“Tuttle”) Motion for Summary Judgment and Memorandum of Law in Support of Daniel W. Tuttle’s Motion for Summary Judgment, dated March 31, 2008. For the reasons set forth below, the Court hereby GRANTS partial summary judgment.

Biesecker, Tripp, Sink & Fitts by Joe E. Biesecker and Christopher A. Raines for Plaintiff Azalea Garden Board & Care, Inc.

Sharpless & Stavola, P.A. by Frederick K. Sharpless for Defendant Meredith Dodson Vanhoy.

Randolph M. James, P.C. by Randolph M. James for Defendant Timothy D. Smith.

Spilman Thomas & Battle, PLLC by Jeffrey D. Patton and Nathan B. Atkinson for Defendant Daniel W. Tuttle.

Brooks Pierce McLendon Humphrey & Leonard, LLP by Benjamin R. Norman and James C. Adams, II for Defendant Harvey Allen.

Tennille, Judge.

I.

FACTS {2} This is a suit for damages for the alleged failure of Defendants to fulfill a contract (the “Contract”) to purchase Azalea Gardens Board & Care’s (“Plaintiff”) Brookside of Winston-Salem Rest Home (“Brookside”). Brookside is a nursing care facility located in Winston-Salem, North Carolina. The Contract was signed on May 6, 1999, on behalf of Plaintiff as seller by David H. Wagner (“Wagner”), 1 owner and President of Plaintiff. (Def.’s Br. Supp. Mot. Summ. J. 2; Pl.’s Br. Opp’n Mot. Summ. J. 2.) Defendant Nina Gibson (“N. Gibson”) and Defendant Timothy Smith (“Smith”) signed individually as purchasers. 2 (Def.’s Br. Supp. Mot. Summ. J. 2; Pl.’s Br. Opp’n Mot. Summ. J. 2.) On July 20, 1999, N. Gibson and Smith executed a modification of the Contract (the “Modification”). (Def.’s Br. Supp. Mot. Summ. J. 2; Pl.’s Br. Opp’n Mot. Summ. J. 2.) Ultimately, the transaction fell through, and the closing of the Brookside purchase never occurred. (Compl. ¶ 14; Def.’s Br. Supp. Mot. Summ. J. 2; Pl.’s Br. Opp’n Mot. Summ. J. 4.) As a result of the failed closing, Plaintiff has filed suit alleging breach of contract and seeking monetary damages. (Compl. ¶¶ 16−18.)

{3} It is alleged that Tuttle was a member of a joint venture with N. Gibson and Smith, among others, to purchase Brookside pursuant to the Contract. (Compl. ¶ 8.) Tuttle, however, was not listed on and did not sign the Contract or the Modification. (Def.’s Br. Supp. Mot. Summ. J. 2, 4; Pl.’s Br. Opp’n Mot. Summ. J. 2.) Plaintiff’s claim against Tuttle is based exclusively on the allegation that Tuttle was a member of a joint venture formed to purchase Brookside. (Compl. ¶ 8.) Tuttle asserts that there are no issues of material fact and he is entitled to a judgment as a matter of law because (1) Plaintiff’s claim is barred by the Statute of Frauds since there is no evidence of the alleged joint venture, (2) Plaintiff breached the Contract,

1 Mr. Wagner has a law degree but is not engaged in the private practice of law.

2 Defendant Smith has settled the claims against him. The Court previously granted summary judgment in favor of Meredith Dodson Vanhoy, Personal Representative of the Estate of Ricky Dodson, deceased. That ruling is on appeal. Defendant Allen’s Motion for Summary Judgment is treated separately.

and (3) the liquidated damages provision limits Plaintiff’s alleged damages as a matter of law. (Def.’s Br. Supp. Mot. Summ. J. 1.)

{4} A first action was filed against Defendants in Davidson County in 2002 shortly before expiration of the three (3) year statute of limitation for breach of contract. At trial, during Plaintiff’s evidence, Plaintiff took a voluntary dismissal without prejudice as to all claims. One (1) day before the one (1)-year period to refile expired, Plaintiff filed this new suit. 3 {5} The Court holds that there are genuine issues of material fact to be determined on the question of Tuttle’s participation in a joint venture and the breach of contract claim. Furthermore, the Court holds that the liquidated damages provision limits Plaintiff’s recovery as a matter of law.

II.

LEGAL STANDARD {6} Summary judgment is proper “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that any party is entitled to judgment as a matter of law.” N.C.R. Civ. P. 56(c). “It is not the purpose of the rule to resolve disputed material issues of fact but rather to determine if such issues exist.” Id. at 56 cmt. The burden of showing a lack of triable issues of fact falls upon the moving party. See, e.g., Pembee Mfg. Corp. v. Cape Fear Constr. Co., 313 N.C. 488, 491, 329 S.E.2d 350, 353 (1985). Once this burden has been met, the nonmoving party must “produce a forecast of evidence demonstrating that [it] will be able to make out at least a prima facie case at trial.” Collingwood v. Gen. Elec. Real Estate Equities, Inc., 324 N.C. 63, 66, 376 S.E.2d 425, 427 (1989). The Court must exercise caution in granting a motion for summary judgment. N.C. Nat’l Bank v. Gillespie, 291 N.C. 303, 310, 230 S.E.2d 375, 379 (1976).

3 This being a new lawsuit, the Court is not bound by decisions in the previous case.

III.

ANALYSIS A.

THE ALLEGED JOINT VENTURE {7} Plaintiff has produced evidence that makes the following facts true or in dispute with respect to Tuttle’s participation in a joint venture to purchase Brookside: Tuttle had an ongoing business relationship with Ricky Dodson 4 (“Dodson”) and Smith. Dodson approached Tuttle and Smith with a proposal to purchase Brookside. Tuttle took an active role in meetings and discussions regarding the purchase of Brookside. Prior to the signing of the Contract, Tuttle toured Brookside and brought in persons to inspect Brookside’s physical condition and air conditioning system. Furthermore, Tuttle brought in persons to estimate the cost of upgrades to the facility.

{8} On May 6, 1999, N. Gibson and Smith signed the Contract in Wagner’s office. Tuttle was in Wagner’s office at the time the Contract was signed. The Modification was executed on July 20, 1999. Prior to the signing of the Modification, Tuttle spoke with Dodson, N. Gibson, and Smith about the terms of the Modification. Ultimately, Tuttle agreed to the terms of the Modification. Moreover, on at least two (2) separate occasions, Tuttle met with N. Gibson to discuss her managing the Brookside facility.

{9} The parties required financing to purchase Brookside. James Keen (“Keen”) of Branch Banking & Trust (“BB&T”) was the banker in charge of originating the loan. Tuttle is linked to the bank documents originated for the purchase of Brookside. As a result of this financial information, Tuttle was listed as a co-maker or guarantor of the loan. Keen testified at his deposition, however, that he understood the buyers would acquire Brookside through an entity called Trillium

4 Ricky Dodson was a broker with The Interstate Companies of America, Inc. He was retained as Plaintiff’s agent for the sale of the Brookside property. Plaintiff alleged that Mr. Dodson subsequently withdrew from his broker status and became a partner in a joint venture to buy Brookside pursuant to the Contract. (Compl. ¶ 10.) Mr. Dodson passed away in October of 2000. The Personal Representative of Mr. Dodson’s estate moved for summary judgment on the basis that Plaintiff failed to file a timely claim within the claim notice period. This Court, by Order dated February 28, 2008, granted summary judgment as to Mr. Dodson’s estate.

Residential Systems, LLC (“Trillium”), which would have included Tuttle as a member.

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Azalea Garden Bd. & Care, Inc. v. Vanhoy, 2009 NCBC 8 (N.C. Super. Ct. 2009).

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