Salem Pointe Capital, LLC v. BEP Rarity Bay, LLC (PLR2)

CourtDistrict Court, E.D. Tennessee
DecidedAugust 11, 2020
Docket3:18-cv-00443
StatusUnknown

This text of Salem Pointe Capital, LLC v. BEP Rarity Bay, LLC (PLR2) (Salem Pointe Capital, LLC v. BEP Rarity Bay, LLC (PLR2)) is published on Counsel Stack Legal Research, covering District Court, E.D. Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Salem Pointe Capital, LLC v. BEP Rarity Bay, LLC (PLR2), (E.D. Tenn. 2020).

Opinion

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF TENNESSEE KNOXVILLE DIVISION

SALEM POINTE CAPITAL, LLC, ) ) Plaintiff, ) ) v. ) ) Nos. 3:18-cv-443, 3:18-cv-444 BEP RARITY BAY, LLC and BALD ) REEVES/POPLIN EAGLE VENTURES, LLC, ) ) Defendants. ) ) ) RARITY BAY PARTNERS, ) ) Movant/Intervenor Applicant. )

MEMORANDUM OPINION AND ORDER “It's déjà vu all over again.”1 YOGI BERRA, THE YOGI BOOK: “I DIDN’T REALLY SAY EVERYTHING I SAID” 30 (Workman Publishing 1998). As follows, the Court concludes that the latest stipulation of dismissal is valid. Because the stipulation of dismissal is valid, the Court no longer has jurisdiction over the matter, and RBP’s motion to intervene must be denied as moot. I. Background The Court has reviewed the background of this case at great length, [D. 50], but will briefly do so again. The Rarity Bay Community (“Rarity Bay”) is a much-litigated 960-acre luxury planned unit residential community in Tennessee that encompasses property in both Loudon

1 Once more, Salem Pointe Capital Partners has moved to intervene in the case [D. 63], the original parties in the case have filed a joint stipulation of dismissal [D. 67], and Salem Pointe Capital Partners has moved to set aside that stipulation of dismissal [D. 68]. However, this time around, Salem Pointe Capital Partners has a new nom de guerre— Rarity Bay Partners (“RBP”)—and an ongoing case against Salem Pointe Capital, LLC (“SPC”) in Tennessee state court. Moreover, the latest joint stipulation of dismissal filed by SPC, along with BEP Rarity Bay, LLC (“BEP”) and Bald Eagle Ventures, LLC (“BEV”) (collectively, “Defendants”), has been signed and filed by counsel of record. County and Monroe County. This lawsuit involves a claim by SPC against Defendants for unpaid club membership fees in conjunction with sixty-five lots in Rarity Bay. However, SPC was not alone in its prosecution of the case; though SPC is the only plaintiff, SPC and RBP apparently entered into an “Agreement and Assignment of BEP Rarity Bay, LLC

Collection Rights” (“Collection Agreement”). In the Collection Agreement, SPC and RBP agreed to equally bear the costs of collection, equally share the proceeds of resolution, and jointly prepare any final settlement. Further, RBP would advance all litigation costs and external counsel would be retained for the collection efforts. Nevertheless, RBP never joined as a party to the litigation as a co-plaintiff. This litigious marriage was torn asunder,2 however, when settlement negotiations started to break down. When RBP walked away from settlement negotiations, SPC and Defendants continued to negotiate. SPC and Defendants reached a settlement, memorialized as the “Confidential Settlement Agreement and Mutual Release.” See [D. 67].3 On October 2, 2019, SPC, through counsel not of record, filed a stipulation of dismissal with prejudice. On October 3,

2019, RBP stepped out of the shadows, filing motions to intervene and set aside the stipulation of dismissal. [D. 42, 45]. The Court denied RBP’s motion to intervene but set aside the stipulation of dismissal under Rules 60(b)(4) and (6) of the Federal Rules of Civil Procedure. [D. 50]. The Court further stayed the case and ordered the parties to mediation. Further still, the Court ordered that the parties appear through different counsel for any further litigation unless counsel were appearing “for the purposes of filing a valid stipulation of dismissal.” [D. 50, p. 14].

2 The Court notes that it was not a happy marriage even prior to this case; the record shows that SPC and RBP have a history of disagreement that predates the filing of this suit. 3 Though this document purports to include a copy of the Confidential Settlement Agreement and Mutual Release as an exhibit, no copy was attached to the filing. The case went dormant, so the Court ordered the parties to file a status report. [D. 52]. In that status report filed by counsel for RBP, the Court learned that RBP had filed a suit against SPC in state court for breaching the Collection Agreement through its settlement agreement with Defendants in this case. [D. 54]. The Court ordered that the stay be extended, that new counsel

appear on behalf of the parties, and that further status reports should be filed on May 20, 2020 and every 21 days thereafter. [D. 58]. New counsel appeared for SPC and Defendants, who filed a joint status report that excluded counsel for RBP. [D. 61]. RBP, through counsel, filed a dueling status report, contending that new counsel of record for SPC, Thomas Hale, was not selected as external counsel for the suit in accordance with the Collection Agreement. [D. 62]. RBP moved again to intervene in the case a few days later. [D. 63]. In RBP’s motion to intervene, RBP indicated that it had selected external counsel, Wynne Caffey-Knight, to represent SPC in the collection effort, and was awaiting SPC’s approval. [D. 63, p. 5]. SPC and Defendants jointly responded in opposition, arguing that circumstances have not changed sufficiently since RBP’s prior intervention motion to warrant

intervention, RBP’s presence in the case would destroy complete diversity, and permitting intervention would prejudice the parties already before the Court. [D. 66]. RBP replied, contending that circumstances, particularly the state court action, now warrant intervention, that the Court’s diversity jurisdiction would not be destroyed by its intervention, and that the interests of justice require that RBP be permitted to intervene. [D. 71] On June 5, 2020, counsel of record for SPC filed a “Joint Stipulation and Request for Issuance of Final Order of Dismissal with Prejudice” on behalf of SPC and Defendants. [D. 67]. Arguing that the previous Confidential Settlement Agreement and Mutual Release formed a valid settlement contract that the parties have reaffirmed since the appearance of new counsel, the parties asserted that the latest stipulation of dismissal was valid under Rule 41(a)(1)(ii) and should remain undisturbed by the Court. On June 8, 2020, RBP moved to set aside the stipulation of dismissal under Rule 60(b)(3), (4), and (6). [D. 68]. Arguing that the settlement and resultant stipulation of dismissal are invalid

under to the Collection Agreement and that the stipulation of dismissal is a product of fraud and misconduct, RBP vigorously urged the Court to set it aside. SPC and Defendants jointly responded in opposition, solely arguing that RBP lacked standing to bring the motion under Rule 60(b). RBP replied, asserting that it does have standing to bring a Rule 60(b) motion as it is in privity with SPC, its interests are directly or strongly affected by any judgment in this case, and it has alleged fraud on the Court. [D. 74]. All pending motions are ripe for adjudication. II. Analysis Though RBP’s motion to intervene was filed first in sequence, prior to the stipulation of dismissal and RBP’s subsequent motion to set aside that dismissal, the validity of the stipulation

of dismissal has jurisdictional implications. Consequently, the Court will first address the stipulation of dismissal and motion to set aside that dismissal, then turn to RBP’s motion to intervene. A. Motion to Set Aside the Stipulation of Dismissal At the outset, the Court notes, unlike before, the stipulation of dismissal was filed by the attorney of record for SPC. Likewise, the parties in the case, through new counsel, have re- affirmed the settlement upon which the stipulation of dismissal is premised. The Court will first address its jurisdiction in the present matters, then turn to RBP’s standing to set aside the dismissal, and lastly address the merits of RBP’s motion. 1.

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Bluebook (online)
Salem Pointe Capital, LLC v. BEP Rarity Bay, LLC (PLR2), Counsel Stack Legal Research, https://law.counselstack.com/opinion/salem-pointe-capital-llc-v-bep-rarity-bay-llc-plr2-tned-2020.