County of Jackson Vestlyn BMP, LLC v. Balsam Mountain Group, LLC, 062216 NCSUP, 15 CVS 386

Docket Nº:15 CVS 386
Opinion Judge:GREGORY P. MCGUIRE SPECIAL SUPERIOR COURT JUDGE.
Party Name:COUNTY OF JACKSON VESTLYN BMP, LLC, Plaintiff, v. BALSAM MOUNTAIN GROUP, LLC, Defendant.
Attorney:Adams Hendon Carson Crow & Saenger, P.A.., by Matthew S. Roberson, Esq., and Golenbock, Eiseman, Assor, Bell & Peskoe, LLP by Michael M. Munoz, Esq. for Plaintiff. Daniels Law Firm, P.C., by Walter E. Daniels, III, Esq. and Mainsail Lawyers by J. Kellam Warren, Esq. and Adam Fisher, Esq. for Defe...
Case Date:June 22, 2016
Court:Superior Courts of Law and Equity of North Carolina
 
FREE EXCERPT

2016 NCBC 46

COUNTY OF JACKSON VESTLYN BMP, LLC, Plaintiff,

v.

BALSAM MOUNTAIN GROUP, LLC, Defendant.

No. 15 CVS 386

Superior Court of North Carolina

June 22, 2016

THIS CAUSE, designated a mandatory complex business case by Order of the Chief Justice of the North Carolina Supreme Court, pursuant to N.C. Gen. Stat. § 7A-45.4(b) (hereinafter, references to the North Carolina General Statutes will be to "G.S."), and assigned to the undersigned Special Superior Court Judge for Complex Business Cases, comes before the Court upon Plaintiff's Motion to Dismiss pursuant to Rule 12(b)(6) of the North Carolina Rules of Civil Procedure ("Rule(s)") ("Motion to Dismiss"). On April 14, 2016, the Court held a hearing on the Motion to Dismiss.

THE COURT, after considering the Motion to Dismiss, the briefs in support of and opposition to the Motion to Dismiss, and other appropriate matters of record, concludes that the Motion to Dismiss should be GRANTED, in part, and DENIED, in part, for the reasons below.

Adams Hendon Carson Crow & Saenger, P.A.., by Matthew S. Roberson, Esq., and Golenbock, Eiseman, Assor, Bell & Peskoe, LLP by Michael M. Munoz, Esq. for Plaintiff.

Daniels Law Firm, P.C., by Walter E. Daniels, III, Esq. and Mainsail Lawyers by J. Kellam Warren, Esq. and Adam Fisher, Esq. for Defendant.

OPINION AND ORDER

GREGORY P. MCGUIRE SPECIAL SUPERIOR COURT JUDGE.

PROCEDURAL HISTORY

1. On June 23, 2015, Plaintiff Vestlyn BMP, LLC ("Plaintiff") filed a complaint against Defendant Balsam Mountain Group, LLC ("Defendant"). On July 7, 2015, Plaintiff filed an Amended Complaint. The Amended Complaint alleges two claims for breach of contract and related claims for attorneys' fees and costs.

2. On September 4, 2015, Defendant filed its Answer, Defenses, and Counterclaims. On December 2, 2015, Defendant filed its Amended Counterclaims, in which it asserted the following claims against Plaintiff arising out of same transactions underlying the Amended Complaint: breach of contract (Counterclaim One); mutual mistake, or, in the alternative, unilateral mistake accompanied by misrepresentation, deceitful action or misleading silence (Counterclaim Two); fraud/fraudulent inducement/misrepresentation (Counterclaim Three); negligent misrepresentation (Counterclaim Four); securities fraud (Counterclaim Five); and unfair and deceptive trade practices (Counterclaim Six).[1]

3. On January 18, 2016, Plaintiff filed the Motion to Dismiss, seeking dismissal of all of Defendant's counterclaims pursuant to Rule 12(b)(6).

4. The Motion to Dismiss has been fully briefed and argued, and is ripe for determination.

FACTUAL BACKGROUND

5. This Motion to Dismiss involves claims arising from two separate agreements entered between Plaintiff and Defendant:2 a Sales-Purchase Agreement executed on September 9, 2011 (the "SPA"), and an Agreement executed in 2013 (the "2013 Agreement").3The Court will summarize the facts surrounding the two agreements in turn.

The Sales-Purchase Agreement (SPA).

6. On September 9, 2011, Defendant and Plaintiff entered into the SPA for the sale of real property and other assets that Plaintiff owned within Jackson County, North Carolina.4

7. Among the assets Plaintiff agreed to sell to Defendant were: (a) Plaintiff's "right, title, and interest in and to certain land located in Jackson County, North Carolina and more particularly described in" an exhibit to the SPA; (b) Plaintiff's "right, title and interest in and to any other land located in Jackson County, North Carolina determined prior to closing to be owned by Plaintiff;" (c) Plaintiff's right, title and interest in and to any and all buildings and other improvements, if any, built on or attached to the foregoing land, subject to certain exceptions; (d) certain fixtures related to the foregoing property; (e) certain personal property related to BMP; (f) certain leases and other agreements related to BMP; and (g) certain contract rights of Vestlyn related to BMP.5

8. The SPA provided Defendant with a "Due Diligence Period" of 44 days to "inspect and review all matters relating to the Property, " and provided Defendant with the right to terminate the SPA during that diligence period.6 Defendant also "warrant[ed] and agree[d]" that it "ha[d] examined and understands the operation and/or condition of the Property" it was purchasing, and that it "ha[d] made such examination of the operation, income and expenses of the Property, as well as other matters and documents affecting or relating to this transaction" as it "deemed necessary."7

9. The SPA contained a disclaimer of representations that provided as follows: [E]xcept for and solely to the extent of the express representations and warranties of Seller set forth in this Agreement, neither Seller nor any affiliates thereof, or any employees, agents, attorneys, partners, members, officers, directors, advisors or property manager of Seller or its affiliates or any broker have made any verbal or written representations, warranties or statements of any nature or kind whatsoever to Purchaser, whether expressed or implied, and, in particular, that no representations or warranties have been made with respect to (a) the physical condition or operation of the Property . . . or (e) any other matter or thing affecting or related to the Property or the transactions contemplated hereby, except as and solely to the extent expressly set forth in this Agreement. Purchaser agrees that Seller shall not be bound in any manner whatsoever by any guarantees, promises, projections, or other information pertaining to the Property made, furnished or claimed to have been made or furnished by Seller or any affiliates, employees, agents, attorneys, partners, members, officers, directors, advisors or property manager of Seller or any broker, whether verbally or in writing, except as expressly set forth in this Agreement.[8]

10. Finally, the SPA states that Plaintiff would provide a Deed at closing, and that Defendant's "acceptance of the Deed at Closing shall constitute conclusive proof that [Plaintiff] has performed all of its obligations under this Agreement to be performed at or prior to Closing."9 The sale of the property and assets closed in November 2011.10

11. Defendants allege that "prior to closing" the parties determined that Plaintiff held a lien on one of the lots within the conveyed property (the "Lot 192 Lien"), and the Lot 192 Lien "was among 'Plaintiff's right, title, and interest in and to any other land located in Jackson County, North Carolina" to be conveyed to [Defendant].' "[11] Plaintiff made "written and oral representations . . . that the Lot 192 Lien would be handled and transferred at closing."12 Defendants allege that, despite these representations, Plaintiff had no intention of transferring the Lot 192 Lien.13 After the closing, Plaintiff claimed that the Lot 192 Lien was not among the assets Plaintiff conveyed to Defendant by the SPA.14

12. Defendant also represented to Plaintiff that 75 lots that were within a conservation easement being transferred as part of sale could be "replatted elsewhere in the development."15 In late 2014, Defendant learned that the 75 lots could not be replatted.16Defendant alleges that it "did not discover, and reasonably should not have discovered, the false and misleading representations by [Plaintiff]" before late 2014.17

The 2013 Agreement.

13. In 2012, Plaintiff began pressuring Defendant purchase the Lot 192 Lien.18Defendant alleges that, despite its belief that it had purchased the Lot 192 Lien already as part of the SPA, it decided to negotiate the purchase of the Lot 192 Lien.19 The parties subsequently entered into the 2013 Agreement for the sale of the Lot 192 Lien and related assets to Defendant.20 The 2013 Purchase Agreement states that Vestlyn "agrees to transfer and assign to [Defendant] on July 1, 2015 . . . all of [Plaintiff]'s right, title and interest in and to the Nature Center Loan Documents." The Nature Center Documents included promissory notes, deeds of trust, and "certain other loan and security documents" relating to Lot 192 ("Lot 192 Interest").21 In exchange for the Lot 192 Interests, Defendants agreed to make two payments of $450, 000 to Plaintiff on August 31, 2014 and on July 1, 2015.22

14. Defendants allege that during negotiation of the 2013 Agreement, Plaintiff represented to Defendant that the Nature Center located on Lot 192 could be redeveloped for single or multi-family use.23 Notwithstanding these representations, after the closing of the 2013 Agreement, Defendant learned that Lot 192 was and is restricted from being redeveloped for single or multi-family use.24

15. Defendant alleges that Plaintiff's...

To continue reading

FREE SIGN UP