In re Webb Mtn, LLC
| Decision Date | 11 February 2009 |
| Docket Number | Bankruptcy No. 07-32016.,Adversary No. 08-3070. |
| Citation | 414 B.R. 308 |
| Court | U.S. Bankruptcy Court — Eastern District of Tennessee |
| Parties | In re WEBB MTN, LLC, Debtor. Webb Mtn, LLC, Plaintiff, v. Executive Realty Partnership, L.P., Gerald Franklin, Trustee, Greenbrier Developers, LLC, M & A Enterprises, Inc., Kenneth Whaley, Defendants. |
Gentry, Tipton & McLemore, P.C., Maurice K. Guinn, W. Morris Kizer, Knoxville, TN, for Plaintiff.
Hodges, Doughty & Carson, Thomas H. Dickenson, Oliver D. Adams, Knoxville, TN, for Defendants.
MEMORANDUM ON MOTION TO DISMISS ADVERSARY PROCEEDING, MOTION OF WEBB MTN, LLC FOR SUMMARY JUDGMENT, DEFENDANTS' CROSS MOTION FOR SUMMARY JUDGMENT, AND MOTION TO STRIKE PORTIONS OF AFFIDAVIT OF KENNETH WHALEY
This adversary proceeding was commenced on May 27, 2008, by the Complaint filed by the Plaintiff seeking to nullify and/or set aside four quit claim deeds executed by the Plaintiff in favor of the Defendants. The Defendants filed a Motion to Dismiss Webb Mtn, LLC's Adversary Proceeding For Failure to State a Claim Upon Which Relief Can Be Granted and Failure to Plead Fraud With Particularity on July 8, 2008, after which the Plaintiff, on July 31, 2008, filed an Amended Complaint adding eight additional counts. On August 1, 2008, the Plaintiff filed the Plaintiff's Response to Defendants' Motion to Dismiss Webb Mtn, LLC's Adversary Proceeding.
On August 11, 2008, the Defendants filed (1) an Amended Motion to Dismiss Webb Mtn, LLC's Adversary Proceeding for Failure to State a Claim Upon Which Relief Can be Granted and Failure to Plead Fraud With Particularity (Amended Motion to Dismiss Adversary Proceeding); and (2) a Reply to Webb Mtn, LLC's Response to Defendants' Motion to Dismiss Adversary Proceeding. On August 25, 2008, the Plaintiff, pursuant to E.D. Tenn. LBR 7007-1(a), filed its Response of Webb Mtn, LLC to the Defendants' Amended Motion to Dismiss (Response to Amended Motion to Dismiss Adversary Proceeding).
Thereafter, on September 2, 2008, the Plaintiff filed the Motion of Webb Mtn, LLC for Summary Judgment (Motion for Summary Judgment), asking the court to grant it a summary judgment with respect to Counts VII, VIII, and X of the Amended Complaint. As required by E.D. Tenn. LBR 7056-1, the Motion for Summary Judgment is accompanied by the Memorandum in Support of Webb Mtn, LLC's Motion for Summary Judgment and is supported by the Statement by Webb Mtn, LLC of Undisputed Material Facts (Plaintiff's Statement of Undisputed Facts) and the Affidavit of Jack Collier (Collier Affidavit). Incorporated into and made a part of the Collier Affidavit as Collective Exhibit A are the following: (1) a Deed of Trust dated March 24, 2006, between the Plaintiff as Grantor and R. Patrick Harrell, Trustee, by which the Plaintiff secured a $10,465,000.00 Promissory Note to the Defendant, Greenbrier Developers, LLC, with a 195.89 acre tract in Sevier County, Tennessee; (2) a Deed of Trust dated March 24, 2006, between the Plaintiff, as Grantor, and R. Patrick Harrell, Trustee, by which the Plaintiff secured a $4,790,000.00 Promissory Note to the Defendants, Kenneth Whaley, Greenbrier Developers, LLC, M & A Enterprises, Inc., and Gerald Franklin, Trustee, with a 71.21 acre tract in Sevier County, Tennessee; (3) a Deed of Trust dated March 24, 2006, between the Plaintiff, as Grantor, and R. Patrick Harrell, Trustee, by which the Plaintiff secured a $990,000.00 Promissory Note to the Defendant, Executive Realty Partnership, L.P., with a 21.0 acre tract in Sevier County, Tennessee; and (4) a Deed of Trust dated March 24, 2006, between the Plaintiff, as Grantor, and R. Patrick Harrell, Trustee, by which the Plaintiff secured a $8,980,000.00 Promissory Note to the Defendant, Gerald Franklin, Trustee, with tracts encompassing 1,440 acres in Sevier County, Tennessee. All four Deeds of Trust were recorded in the Office of the Register of Deeds for Sevier County, Tennessee, on March 28, 2006.
The Collier Affidavit also incorporates as Collective Exhibit B the following: (1) a Quit Claim Deed dated March 27, 2007, by which the Plaintiff conveyed and quit claimed to the Defendant, Greenbrier Developers, LLC, its interest in the 195.89 acre tract in Sevier County, Tennessee, securing the $10,465,000.00 Promissory Note; (2) a Quit Claim Deed dated March 27, 2007, by which the Plaintiff conveyed and quit claimed to the Defendant, Executive Realty Partnership, L.P., its interest in the 21 acre tract in Sevier County, Tennessee, securing the $990,000.00 Promissory Note; (3) a Quit Claim Deed dated March 27, 2007, by which the Plaintiff conveyed and quit claimed to the Defendant, Gerald Franklin, Trustee, its interest in the 1,440 acres securing the $8,980,000.00 Promissory Note to Gerald Franklin, Trustee; and (4) a Quit Claim Deed dated March 27, 2007, by which the Plaintiff conveyed and quit claimed to the Defendants, Kenneth Whaley, Greenbrier Developers, LLC, and Gerald Franklin, Trustee, its interest in the 71.21 acre tract securing the $4,790,000.00 Promissory Note to Kenneth Whaley, Trustee, Greenbrier Developers, M & A Enterprises, Inc., and Gerald Franklin, Trustee.1
The Defendants filed their Response to Webb Mtn, LLC's Motion for Summary Judgment and Defendants' Cross Motion for Summary Judgment (Cross Motion for Summary Judgment) on September 22, 2008, asking the court to grant them a summary judgment and dismiss Counts VII, VIII, and X of the Amended Complaint. The Cross Motion for Summary Judgment is accompanied by the Defendants' Memorandum of Law in Opposition to Webb Mtn, LLC's Motion for Summary Judgment and in Support of Defendants' Motion for Summary Judgment, and the Response to Webb Mtn, LLC's Statement of Undisputed Material Facts and Defendants' Statement of Undisputed Material Facts (Defendants' Statement of Undisputed Facts).
The Cross Motion for Summary Judgment is also supported by the Affidavit of Kenneth Whaley in Opposition to Motion of Plaintiff, Webb Mtn, LLC For Summary Judgment and In Support of Judgment in Favor of Defendants (Whaley Affidavit). Incorporated into and made a part of the Whaley Affidavit as Collective Exhibit A are the following: (1) the $990,000.00 Promissory Note executed by the Plaintiff in favor of the Defendant, Executive Realty Partnership, L.P., on March 24, 2006, and Deed of Trust of the same date securing that indebtedness with the 21.0 acre tract in Sevier County, Tennessee; (2) the $8,980,000.00 Promissory Note executed by the Plaintiff in favor of the Defendant, Gerald Franklin, Trustee, on March 24, 2006, and Deed of Trust of the same date securing that indebtedness with the 1,440 acres in Sevier County, Tennessee; (3) the $10,465,000.00 Promissory Note executed by the Plaintiff in favor of the Defendant, Greenbrier Developers, LLC, on March 24, 2006, and Deed of Trust of the same date securing that indebtedness with the 195.89 acre tract in Sevier County, Tennessee; and (4) the $4,790,000.00 Promissory Note executed by the Plaintiff in favor of the Defendants, Kenneth Whaley, Greenbrier Developers, LLC, M & A Enterprises, Inc., and Gerald Franklin, Trustee, on March 24, 2006, and Deed of Trust of the same date securing that indebtedness with the 71.21 acres in Sevier County, Tennessee.
Also incorporated into the Whaley Affidavit as Collective Exhibit B are Year 2007 Property Tax Statements for the real property that is the subject of the aforementioned Deeds of Trusts and Quit Claim Deeds and a check dated February 29, 2008, payable to Jettie Clabo-Sevier County Trustee, evidencing payment of these property taxes by Kenneth Whaley in the amount of $15,678.00.2 Finally, the Defendants rely upon excerpts of testimony of Jack Collier, in his capacity as representative of the Plaintiff: (1) from the Plaintiff's meeting of creditors held on August 1, 2007; (2) from his deposition taken September 4, 2007; and (3) from the trial in the Plaintiff's case held on September 11, 2007, in connection with the Motion to Dismiss Chapter 11 Case (Motion to Dismiss Bankruptcy Case) filed by the Defendants on August 10, 2007.
On October 13, 2008, the Plaintiff, in accordance with E.D. Tenn. LBR 7007-1(a) and 7056-1(b), filed a Response of Webb Mtn, LLC to Defendants' Cross Motion For Summary Judgment, the Memorandum of Webb Mtn, LLC in Opposition to Defendants' Cross Motion For Summary Judgment, and Response by Webb Mtn, LLC to Defendants' Statement of Undisputed Material Facts. The Plaintiff additionally filed the Motion of Webb Mtn, LLC to Strike Portions of Affidavit of Kenneth Whaley (Motion to Strike) on October 13, 2008, to which the Defendants filed a Response and Objection of Defendants to Motion of Webb Mtn, LLC to Strike Portions of Affidavit of Kenneth Whaley on October 21, 2008.
Presently before the court are the Amended Motion to Dismiss Adversary Proceeding, the Motion for Summary Judgment, the Cross Motion for Summary Judgment, and the Motion to Strike. In addition to the record provided by the parties, the court, in its resolution of the present motions and pursuant to Rule 201 of the Federal Rules of Evidence, takes judicial notice of material undisputed facts of record in the Plaintiff's bankruptcy case file, including the Memorandum on Motion to Determine That Debtor is Subject to the "Single Asset Real Estate" Provisions of 11 U.S.C. § 362(d)(3), filed on March 6, 2008, and affirmed by the United States District Court on August 26, 2008 (hereinafter cited to as Mar. 6, 2008 Mem. Op.). See Baccala Realty, Inc. v. Fink (In re Fink), 351 B.R. 511, 517, n. 1 (Bankr. N.D.Ill.2006) ().
This is a core proceeding. 28 U.S.C. § 157(b)(2)(A), (H),...
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