Levine v. McLeskey
| Decision Date | 10 March 1995 |
| Docket Number | Civ. A. No. 2:94cv512. |
| Parties | Gale M. LEVINE and Marina Shores, Ltd., Plaintiffs, v. F. Wayne McLESKEY, Jr., Defendant. |
| Court | U.S. District Court — Eastern District of Virginia |
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J. Gray Lawrence, Jr., Howell, Daugherty, Brown & Lawrence, Norfolk, VA, Wyatt B. Durrette, Jr., Durrette, Irvin, Lemons & Bradshaw, Richmond, VA, for plaintiffs.
Conrad Moss Shumadine, Walter Dekalb Kelley, Jr., Willcox & Savage, Norfolk, VA, for defendant.
Plaintiffs Gale M. Levine (Levine) and Marina Shores, Ltd. (Marina Shores or the Marina) are suing defendant F. Wayne McLeskey (McLeskey), alleging antitrust and various state law injuries in a fifteen count complaint as follows: Count I (Levine's claim under § 1 of the Sherman Antitrust Act), Count II (Marina Shores' claim under § 1 of the Sherman Antitrust Act), Count III (Marina Shores' claim under § 2 of the Sherman Antitrust Act), Count IV (Levine's claim under the Virginia antitrust laws), Count V (Marina Shores' claim under the Virginia antitrust laws), Count VI (defamation of Levine), Count VII (defamation of Marina Shores), Count VIII (slander of title of Levine's property), Count IX (malicious prosecution of Marina Shores), Count X (malicious prosecution of Levine), Count XI (intentional infliction of emotional distress on Levine), Count XII (tortious interference with Levine's contract and business expectancy), Count XIII (tortious interference with Marina Shore's contract and business expectancy), Count XIV (Levine's claim of conspiracy in violation of Va.Code § 18.2-500), and Count XV (Marina Shores' claim of conspiracy in violation of Va.Code § 18.2-500). Plaintiffs seek compensatory, treble and punitive damages totaling $224,800,000.00. McLeskey has filed four motions for summary judgement, which together seek dismissal of all counts of the complaint.
For the reasons that follow, the Court GRANTS summary judgment on all counts.1
Rule 56(c) provides that a moving party is entitled to summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). The party moving for summary judgment is initially responsible for identifying those portions of the factual record which it believes establish that there are no genuine issues of material fact. Once the moving party has made this showing, the opposing party must demonstrate, by reference to affidavits, depositions, answers to interrogatories, or admissions, that a triable issue of fact exists. See Celotex Corp. v. Catrett, 477 U.S. 317, 323-24, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986). In deciding a motion for summary judgment, the court is required to view the facts and draw reasonable inferences in a light most favorable to the nonmoving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
Furthermore, "when the moving party has carried its burden under Rule 56(c), its opponent must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986) (footnote omitted). In order for Levine and Marina Shores to survive summary judgment, they must show that McLeskey's actions proximately caused their damages, and that their claim is "at least a reasonable probability rather than merely one of several equally surmisable possibilities." Charleston Area Medical Center, Inc. v. Blue Cross & Blue Shield Mut. of Ohio, Inc., 6 F.3d 243, 247 (4th Cir.1993).
In 1978, F. Wayne McLeskey founded Lynnhaven Dry Storage Marina, Inc. ("Lynnhaven Marine"). Lynnhaven Marine is located on one of the main highways in Virginia Beach and for many years it was the principal dry storage marina in the surrounding area. In 1989, Levine and her husband, David, formed Marina Shores.2 The following year, construction of the Marina at Marina Shores began.
Marina Shores was envisioned as a complex that would include dry boat storage, wet slips, stores, and a restaurant. Levine also planned to build an apartment complex and shopping centers on land nearby after construction of the marina was complete. Problems with the restaurant and construction of the additional facilities laid the foundation for the current litigation.
While construction of the marina was underway, Levine reached an agreement with a Virginia Beach restaurateur named Norman Cohn to open and manage a restaurant at Marina Shores. Mr. Cohn subsequently formed a corporation called Cohn-Phillips, Ltd. to operate the restaurant, and named the restaurant "Hoppers II." The parties signed a fifteen-year lease on October 5, 1990. The basic terms of the lease stated that rent of at least $6,000 per month or 15% of the restaurant's gross receipts, whichever was greater, would be due on the first of every month.3 This payment would cover the preceding month's tenancy. Levine also provided Cohn-Phillips with a credit line of approximately $95,000 to cover restaurant equipment and start-up costs. The terms of this credit line required repayment of the borrowed funds within two days of notice. If the money was not repaid upon two days notice Cohn-Phillips would lose its right to operate the restaurant. According to Levine, she informed Cohn that the money was to be repaid near the end of construction.
In April of 1991, the marina was completed and began competing with Lynnhaven Marine for dry storage customers. A few weeks later, Levine demanded that Cohn repay the money extended under the line of credit. Cohn did not have the funds available and eventually sold McLeskey 50% of Cohn-Phillips, Ltd. for approximately $90,000.4 Cohn repaid Levine on May 9, 1991. Levine subsequently discovered that McLeskey was Cohn's partner. McLeskey and the Levines have had a longstanding dislike for each other that predates their current dispute.
On June 2, 1991, Levine's attorneys notified Cohn-Phillips that she was terminating the company's lease for failure to pay rent for the previous two months.5 Cohn-Phillips immediately attempted to pay the rent, but it was refused. Cohn-Phillips then refused to vacate the restaurant and a flurry of litigation between the parties ensued.
The first of these lawsuits was Marina Shores, Ltd. v. Cohn-Phillips, Ltd., Law No. CL91-1780 hereinafter the "Hoppers case", which was brought on June 7, 1991. In this case, Marina Shores filed an unlawful detainer action against Cohn-Phillips seeking to regain possession of the restaurant premises and to recover damages allegedly caused by improper management. In response, Cohn-Phillips filed three counterclaims, arguing that Marina Shores had breached the lease, tortiously interfered with Cohn-Phillips' business expectancy, and conspired to injure the restaurant's business in violation of the Virginia conspiracy laws.6 Before trial, the judge in the case granted partial summary judgment to Cohn-Phillips precluding litigation of whether Cohn-Phillips breached its lease by not making timely rent payments. The court found that since the lease had not been terminated properly under Virginia law, an action based on failure to pay rent was not maintainable. On April 1, 1992, after a lengthy trial, the jury in the Hoppers case returned a verdict in favor of Cohn-Phillips on both the claims raised by Marina Shores and the counterclaims made by Cohn-Phillips. The jury awarded Cohn-Phillips $43,000 in damages for breach of contract, $120,000 in compensatory damages and $480,000 in punitive damages for tortious interference, and $400,000 in compensatory damages for conspiracy. The conspiracy damages were then trebled pursuant to the relevant statute to $1.2 million. The trial judge entered final judgment on July 24, 1992, and, among other rulings, set aside the conspiracy verdict and reduced the punitive damages award to $350,000. Both parties appealed to the Virginia Supreme Court.
Meanwhile, on May 15, 1992, Cohn-Phillips filed the lawsuit Cohn-Phillips, Ltd. v. David I. Levine and Gale M. Levine, Law No. CL92-1338 hereinafter the "Alter Ego Litigation". In this action, Cohn-Phillips sought to pierce Marina Shores' corporate veil on the grounds that the business was undercapitalized and was merely a shell company formed in order to protect David and Gale Levine from liability. Shortly thereafter, Cohn-Phillips also filed a lis pendens on the 24-acres of unsubdivided land where the marina was located.
Later that month, Cohn-Phillips sought an injunction against Marina Shores claiming that Marina Shores continued to interfere with its operation of the restaurant. The case was styled Cohn-Phillips, Ltd. v. Marina Shores, Ltd., Chancery No. CH92-1806 hereinafter the "Conspiracy Act Litigation". Cohn-Phillips states that it filed this action in chancery court because the court considering the Hoppers case did not have power to grant equitable relief. This case is still pending.
On July 15, 1992, in Virginia Beach Circuit Court, Levine's attorney moved to have the lis pendens quashed, arguing that it prevented Marina Shores from restructuring its construction loan. Cohn-Phillips' attorney at the time was unable to attend. However, the court entered an ex parte order despite this fact, which quashed and released the trust. Levine's attorney objected to the entry of the ex parte order in writing and subsequently filed a second lis pendens, which was never served upon Levine or Marina Shores.7 Meanwhile, another judge vacated the order quashing the lis pendens and rescheduled argument on...
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