Chisum v. Campagna, 16 CVS 2419

• Decision Date: 25 April 2019
• Docket Number: 16 CVS 2419
• Citation: 2019 NCBC 27
• Court: Superior Court of North Carolina
• Parties: DENNIS D. CHISUM, individually and derivatively on behalf of JUDGES ROAD INDUSTRIAL PARK, LLC; CAROLINA COAST HOLDINGS, LLC; and PARKWAY BUSINESS PARK, LLC, Plaintiff, v. ROCCO J. CAMPAGNA; RICHARD J. CAMPAGNA; JUDGES ROAD INDUSTRIAL PARK, LLC; CAROLINA COAST HOLDINGS, LLC; and PARKWAY BUSINESS PARK, LLC, Defendants.

2019 NCBC 27

DENNIS D. CHISUM, individually and derivatively on behalf of JUDGES ROAD INDUSTRIAL PARK, LLC; CAROLINA COAST HOLDINGS, LLC; and PARKWAY BUSINESS PARK, LLC, Plaintiff,
v.
ROCCO J. CAMPAGNA; RICHARD J. CAMPAGNA; JUDGES ROAD INDUSTRIAL PARK, LLC; CAROLINA COAST HOLDINGS, LLC; and PARKWAY BUSINESS PARK, LLC, Defendants.

No. 16 CVS 2419

Superior Court of North Carolina, New Hanover

April 25, 2019

ORDER AND OPINION ON POST-TRIAL MOTIONS

GREGORY P. MCGUIRE SPECIAL SUPERIOR COURT JUDGE

THIS MATTER comes before the Court on the following motions filed by Plaintiff and Defendants following trial in this case:

• Defendants' Motion for Judgment Notwithstanding the Verdict ("Defendants' JNOV Motion", ECF No 268)

• Defendants' Alternative Motion for New Trial ("Defendants' New Trial Motion", ECF No. 270)

• Plaintiff's Post-Trial Motion ("Plaintiff's Motion", ECF No. 277);

• Plaintiff's Motion to Bar Campagnas from Sharing in Punitive Damage Award ("Plaintiff's Motion to Bar Punitives", ECF No. 261);

• Defendants' Alternative Motion to Alter or Amend the Judgment ("Defendants' Motion to Amend", ECF No. 272); and

• Defendants' Motion for Relief from Orders Appointing Receiver ("Defendants' Motion for Relief", ECF No. 274).

(Collectively the Defendants' JNOV Motion, Defendants' New Trial Motion, Plaintiff's Motion, Plaintiff's Motion to Bar Punitives, Defendants' Motion for Relief, and Defendants' Motion to Amend are "the Post-Trial Motions".)

THE COURT, having considered the Motions, the briefs filed by the parties in support of and opposition to the Post-Trial Motions, the exhibits filed with certain of the Motions, and other appropriate matters of record, CONCLUDES that Defendants' JNOV Motion, Defendants' New Trial Motion, Plaintiff's Motion to Bar Punitives, and Defendants' Motion for Relief should be DENIED, and that Defendants' Motion to Amend should be GRANTED, in part, and DENIED, in part, in the manner and for the reasons set forth below.

I. INTRODUCTION

1. The procedural history of this long and arduous case is set out in the many orders issued by the Court in this matter, including the orders on dispositive motions, and will not be repeated here.

2. The trial of this case took place from August 6, 2018 through August 15, 2018 in the Superior Court of New Hanover County. Plaintiff Dennis D. Chisum's ("Plaintiff") derivative claims for breach of fiduciary duty and constructive fraud on behalf of Judges Road Industrial Park, LLC ("Judges Road") and Parkway Business Park, LLC ("Parkway"), Plaintiff's theory of civil conspiracy, and his individual claim for failure to pay distributions, were submitted to the jury. Certain issues of fact underlying Plaintiff's claims for declaratory judgment were also submitted to the jury, but the Court decided the legal issues underlying those claims. The Court also decided Plaintiff's claim for judicial dissolution.

3. At trial, the Court directed verdicts for the Defendants on Plaintiff's claims relating to Carolina Coast Holdings, LLC ("CCH") on the grounds that the evidence at trial established as a matter of law that Plaintiff's claim for declaratory judgment regarding CCH was filed after the applicable statute of limitations expired. The Court also directed a verdict against Plaintiff on the issue of whether non-parties James A. MacDonald ("MacDonald") and Milton R. Hardison ("Hardison") were participants in an alleged conspiracy with Defendants Rocco J. Campagna ("Rocco") and Richard J. Campagna ("Richard") (collectively, Rocco and Richard are "the Campagnas"). Finally, the Court dismissed Defendants' equitable defense of laches as a sanction imposed against Defendants based on evidence uncovered during trial of discovery abuses, pursuant to Rule 26 of the North Carolina Rules of Civil Procedure (hereinafter "Rule(s)"). N.C. Gen. Stat. § 1A-1, Rule 26.

4. On August 15, 2018, the jury returned its verdict on the issues of liability and damages submitted as follows:

1. Did Dennis Chisum file this lawsuit within three years of the date that he knew, or reasonably should have known, that the Campagnas no longer considered Dennis Chisum to be a member of Parkway and were excluding him from his membership rights in Parkway?

Yes.

2. Was Parkway damaged by a failure of Richard Campagna to discharge his fiduciary duties as manager of the company?

Yes.

3. Did Richard Campagna take advantage of a position of trust and confidence to bring about the transfer of money and real property from Parkway to himself or his other companies, including the Camp Group, LLC?

Yes.

4. What amount, if any, is Parkway entitled to recover from Richard Campagna as damages?

$128, 757.00

5. Was Parkway damaged by a failure of Rocco Campagna to discharge his fiduciary duties as manager of the company?

No.

6. Did Rocco Campagna take advantage of a position of trust and confidence to bring about the transfer of money and real property from Parkway to himself or his other companies, including the Camp Group, LLC?

Yes.

7. What amount, if any, is Parkway entitled to recover from Rocco Campagna as damages?

$128, 757.00

8. Did Dennis Chisum file this lawsuit within three years of the date that he knew, or reasonably should have known, that the Campagnas no longer considered Dennis Chisum to be a member of Judges Road and were excluding him from his membership rights in Judges Road?

Yes.

9. Was Judges Road damaged by a failure of Richard Campagna to discharge his fiduciary duties as manager of the company?

Yes.

10. Did Richard Campagna take advantage of a position of trust and confidence to bring about the transfer of money from Judges Road to himself or his other companies, including the Camp Group, LLC?

Yes.

11.What amount, if any, is Judges Road entitled to recover from Richard Campagna as damages?

$1.00

12.Was Judges Road damaged by a failure of Rocco Campagna to discharge his fiduciary duties as manager of the company?

No.

13. Did Rocco Campagna take advantage of a position of trust and confidence to bring about the transfer of money from Judges Road to himself or his other companies, including the Camp Group, LLC?

Yes.

14.What amount, if any, is Judges Road entitled to recover from Rocco Campagna as damages?

$1.00

15.Did Richard Campagna and Rocco Campagna conspire to divert money and property from Parkway to the Camp Group, LLC?

No.

16. Did Richard Campagna and Rocco Campagna conspire to divert money and property from Judges Road to the Camp Group, LLC?

Yes.

17. What amount of unpaid distributions is Dennis Chisum entitled to receive from Parkway?

$10, 695.00

18.What amount of unpaid distributions is Dennis Chisum entitled to receive from Judges Road?

$3, 927.00

5. On August 16, 2018, the jury returned its verdict on the issues of punitive damages submitted as follows:

19.Is Richard Campagna liable to Parkway for punitive damages?

Yes.

20.What amount of punitive damages, if any, does the jury in its discretion award against Richard Campagna to Parkway?

$150, 000.00

21.Is Richard Campagna liable to Judges Road for punitive damages?

Yes.

22.What amount of punitive damages, if any, does the jury in its discretion award against Richard Campagna to Judges Road?

$350, 000.00

23.Is Rocco Campagna liable to Parkway for punitive damages?

No.

24.What amount of punitive damages, if any, does the jury in its discretion award against Rocco Campagna to Parkway?

N/A

25.Is Rocco Campagna liable to Judges Road for punitive damages?

Yes.

26.What amount of punitive damages, if any, does the jury in its discretion award against Rocco Campagna to Judges Road?

$250, 000.00

6. On October 4, 2018, prior to entry of the final judgment, Plaintiff filed the Motion to Bar Punitives, and an accompanying brief in support. (Pl. Br. Supp. Mot. Bar Pun., ECF No. 262.) On November 13, 2018, Defendants filed a response in opposition to Plaintiff's Motion to Bar Punitives, (Def. Br. Opp. Pl. Mot. Bar Pun., ECF No. 285), and Plaintiff subsequently filed a reply brief. (Pl. Reply Supp. Post-Trial Mots., ECF No. 297.)

7. On October 11, 2018, the Court entered a Final Judgment on the jury's verdicts and on Plaintiff's claim for declaratory judgment declaring that Plaintiff remains a member of Parkway with a current percentage of ownership in the company of 8.34%, and that Plaintiff remains a member of Judges Road with a current percentage of ownership in the company of 18.884%. The Court also granted Plaintiff's request for judicial dissolution of Parkway and Judges Road pursuant to N.C. Gen. Stat. (hereinafter "G.S.") § 57D-6-02(2)(i). (Final Judgment, ECF No. 264.)

8. Simultaneously with the Final Judgment, and in order to facilitate execution of the judgment, the Court issued an Order Appointing Receiver for Parkway (Parkway Recv'r Order, ECF No. 265), and an Order Appointing Receiver for Judges Road (Judges Road Recv'r Order, ECF No. 266) (collectively, "the Receiver Orders"). The Receiver Orders directed the Receiver to: apply to the Secretary of State of North Carolina for reinstatement of Parkway as an active LLC; collect the judgments on behalf of Judges Road and Parkway; marshal the assets of the two companies and pay creditors; and wind up and distribute any remaining assets to the members. The Receiver Orders further directed that Richard and Rocco would be jointly and severally liable for paying the fees and costs of the receiver.

9. On October 22, 2018, Defendants filed a Motion to Stay Proceedings to Enforce Judgment, ("Motion to Stay", ECF No. 276), and on November 13, 2018, Plaintiff filed a Memorandum in Opposition to the...