McClure v. Ghost Town in the Sky, LLC

2022 NCBC 78

• Court: North Carolina Business Court
• Decided: December 5, 2022
• Docket: 22-CVS-752
• Status: Published

Opinion

McClure v. Ghost Town in the Sky, LLC, 2022 NCBC 78.

STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE SUPERIOR COURT DIVISION HAYWOOD COUNTY 22 CVS 752

JILL MCCLURE,

Plaintiff,

v. ORDER AND OPINION GHOST TOWN IN THE SKY, LLC ON MOTION TO DISMISS and MAGGIE VALLEY RV PARK, LLC,

Defendants.

McGuire Wood & Bissette, P.A., by Mary E. Euler, for Plaintiff Jill McClure.

McLean Law Firm, P.A., by Russell Lyway McLean, for Defendants Ghost Town in the Sky, LLC and Maggie Valley RV Park, LLC.

Conrad, Judge.

1. Plaintiff Jill McClure claims to be a member of Defendants Ghost Town in

the Sky, LLC and Maggie Valley RV Park, LLC. She has brought this action with

one goal: to dissolve both companies. Ghost Town in the Sky and Maggie Valley RV

Park contend that McClure is an economic interest holder, not a member, and

therefore lacks standing to seek their dissolution. They have moved to dismiss the

complaint on that basis. (ECF No. 4.)

2. Formed in June 2020, Ghost Town in the Sky owns about 250 acres in the

North Carolina mountains that were once home to a western-themed amusement

park. Its original members were Alaska Presley and Coastal Development, LLC.

Presley, who hoped to redevelop the property as a Christian theme park, partnered with Coastal Development to obtain financing for that purpose or, if unsuccessful, to

sell the property. (See Compl. ¶¶ 25, 29–31, ECF No. 3.)

3. Maggie Valley RV Park owns a handful of acres not far from the defunct

amusement park. It was also formed by Presley and Coastal Development, just a few

months after Ghost Town in the Sky. The company’s purpose is right there in its

name: to develop a recreational vehicle park. (See Compl. ¶¶ 59, 60.)

4. The two LLCs have very similar operating agreements with nearly identical

provisions on transfers of interests and admission of new members. A couple of

provisions specifically deal with the death or incapacity of Presley, who was well into

her nineties when she formed Ghost Town in the Sky and Maggie Valley RV Park.

(See Compl. ¶ 6.) In a nutshell, Presley designated McClure, her niece, as her

successor. If Presley were to become incapacitated, McClure would “act in the place

and stead of Alaska Presley in exercising Alaska Presley’s rights, duties and

obligations under” the operating agreements. (Op. Agrmt. § 12.3. *) If Presley were

to die, McClure would “succeed to all of Alaska Presley’s Membership interest . . .

with all the interests, rights and duties previously held by the decedent.” (Op. Agrmt.

§ 12.4.)

5. Other provisions deal with transfers more generally. Members may, for

example, transfer their interests to spouses, children, and certain other related

parties. (See Op. Agrmt. § 10.2.) But the recipient is not automatically admitted to

membership. To become a member, the recipient must satisfy various conditions,

* Both operating agreements are attached to the complaint, located at ECF No. 3. Because they are identical in all relevant respects, the Court cites them as a single document. including obtaining the consent of the other members. Failure to do so means that

he or she “shall have no right to share in any management decisions, no voting rights,

no right to examine Company books and records, and no other rights of any kind

whatsoever” other than “the right to receive the share of income, losses and

distributions” possessed by the divesting member. (Op. Agrmt. § 10.5.) Transfers to

unrelated parties, though not relevant here, are subject to greater restrictions. (See,

e.g., Op. Agrmt. § 10.3.)

6. Presley died in April 2022. It didn’t take long for McClure and Coastal

Development to fall out. Claiming to be a member of Ghost Town in the Sky and

Maggie Valley RV Park, McClure began asking for books and records, an accounting

and other financial information, and access to each company’s real property. Coastal

Development denied every request. (See Compl. ¶¶ 5, 6, 15, 46–48, 75, 76.)

7. So McClure filed this action. She alleges that Ghost Town in the Sky and

Maggie Valley RV Park are insolvent, have no income, and cannot pay their taxes,

insurance, and other essential costs. She also alleges that Coastal Development has

no plans to redevelop and reopen Ghost Town in the Sky’s park grounds and that it

intends to develop Maggie Valley RV Park’s property for permanent residential

structures rather than recreational vehicles. It is necessary, she claims, to dissolve

both LLCs and wind up their affairs. (See Compl. ¶¶ 87–91, 93–97.)

8. Ghost Town in the Sky and Maggie Valley RV Park have moved to dismiss

the complaint under Rules 12(b)(1) and 12(b)(6) of the North Carolina Rules of Civil Procedure. Their motion is fully briefed, and the Court elects to decide it without a

hearing. See BCR 7.4.

9. The only question at issue is whether McClure became a member of the

LLCs when she succeeded to Presley’s interests. Ghost Town in the Sky and Maggie

Valley RV Park contend that the operating agreements gave McClure an economic

interest but not membership rights. If so, then she lacks standing because a

nonmember may not bring an action to dissolve an LLC. See N.C.G.S. § 57D-6-02;

see also, e.g., Azure Dolphin, LLC v. Barton, 2017 NCBC LEXIS 90, at *18 (N.C.

Super. Ct. Oct. 2, 2017).

10. This is a question of contract interpretation. “An operating agreement is a

contract,” and all the ordinary canons of construction apply. N.C. State Bar v.

Merrell, 243 N.C. App. 356, 370 (2015). The words chosen by the parties “are to be

given their meaning in ordinary speech, unless the context clearly indicates another

meaning was intended.” Singleton v. Haywood Elec. Membership Corp., 357 N.C. 623,

629 (2003) (citation and quotation marks omitted). “A contract that is plain and

unambiguous on its face will be interpreted by the court as a matter of law.” Schenkel

& Shultz, Inc. v. Hermon F. Fox & Assocs., P.C, 362 N.C. 269, 273 (2008).

11. The place to begin is section 12.4. That section—which is the same in each

operating agreement—unambiguously states that McClure “shall succeed to all of

Alaska Presley’s Membership interest” and receive “all the interests, rights and

duties previously held by” Presley. (Op. Agrmt. § 12.4 (emphases added).) This is not

a partial grant of economic rights. It is a comprehensive grant of all membership rights held by Presley. All means all—not some or part. Thus, when Presley died,

McClure received her membership in the LLCs and all the interests, rights, and

duties that go with membership. Construing section 12.4 to grant anything less

would be unreasonable and inconsistent with its plain language.

12. To support their contrary interpretation, Ghost Town in the Sky and Maggie

Valley RV Park point to sections 10.2 and 10.5. But those sections are irrelevant.

The operating agreements’ general rules for transfers of membership interests are

expressly “subject to” the specific terms in section 12.4 for “the transfer of the

Membership interest of Alaska Presley upon her death.” (Op. Agrmt. § 10.2.) That

is consistent with the traditional canon that “general terms should give way to the

specifics” in a contract. Wood-Hopkins Contracting Co. v. N.C. State Ports Authority,

284 N.C. 732, 738 (1974).

13. This does not mean that sections 10.2 and 10.5 are superfluous, as the LLCs

contend. Rather, those sections would naturally apply to a variety of transfers. They

are not devoid of meaning simply because the original members carved out the

transfer from Presley to McClure that is governed by section 12.4. The Court’s

interpretation gives effect to “every word and every provision”—both the general rule

and the specific exception. WakeMed v. Surgical Care Affiliates, LLC, 243 N.C. App.

820, 824 (2015) (citation and quotation marks omitted).

14. Accordingly, the Court concludes that the plain language of the operating

agreements grants to McClure the membership interests and associated rights held

by Presley. McClure is therefore a member of Ghost Town in the Sky and Maggie Valley RV Park. See N.C.G.S. § 57D-1-03(21) (defining member to include “[a] person

who has been admitted as a member of the LLC as provided in the operating

agreement”). And she has standing to bring an action for their judicial dissolution.

15. For all these reasons, the Court DENIES the motion to dismiss.

SO ORDERED, this the 5th day of December, 2022.

/s/ Adam M. Conrad Adam M. Conrad Special Superior Court Judge for Complex Business Cases