Morgan v. Turn-Pro Maintenance Services, LLC
| Decision Date | 15 January 2020 |
| Docket Number | 18 CVS 1905 |
| Citation | 2020 NCBC 5 |
| Parties | JOSHUA MORGAN, both Individually and Derivatively on Behalf of ALPINE WASTE SOLUTIONS, LLC, Plaintiff, v. TURN-PRO MAINTENANCE SERVICES, LLC; ROBERT SINGLETARY; and ALPINE WASTE SOLUTIONS, LLC, Defendants. |
| Court | Superior Court of North Carolina |
Alexander Ricks, PLLC, by Alice C. Richey, for Plaintiff Joshua Morgan, both individually and derivatively, on behalf of Alpine Waste Solutions, LLC.
Robert M. Singletary, pro se.
1. THIS MATTER is before the Court upon (i) Defendant Robert Singletary's ("Singletary") Motion for Summary Judgment (the "Singletary Motion"), (ECF No. 49) and (ii) Plaintiff Joshua Morgan's ("Morgan") Motion for Summary Judgment (the "Morgan Motion") (ECF No. 41), both individually and derivatively on behalf of Alpine Waste Solutions, LLC ("Alpine" or the "Company"), in the above-captioned case (collectively, the "Motions").
2. Having considered the Motions, the related briefing, and the arguments of counsel at the hearing on the Motions, the Court (i) DENIES the Singletary Motion; and (ii) GRANTS in part and DENIES in part the Morgan Motion.
3. The Court does not make findings of fact when ruling on a motion for summary judgment, but "it is helpful to the parties and the courts for the trial judge to articulate a summary of the material facts which he considers are not at issue[.]" Hyde Ins. Agency, Inc. v. Dixie Leasing Corp., 26 N.C.App. 138, 142, 215 S.E.2d 162, 165 (1975).
4. Morgan and Singletary formed Alpine in 2014 to provide trash collection and general maintenance services for property management companies and apartment complexes.
5. Morgan and Singletary are the only two members of Alpine, and each holds a 50% ownership interest in the Company. Alpine does not have a written operating agreement, , and is no longer in business, (Morgan Aff. ¶ 47, Ex. S; see also Singletary 2nd Aff. ¶ 30).
6. Singletary served as Alpine's member-manager and handled the Company's day-to-day operations while it conducted business. (V. Compl. ¶ 10; Morgan Aff. ¶ 10; Singletary 2nd Aff. ¶ 15; Singletary Dep. 13:11-13, 14:20-15:6.) Morgan provided Alpine's initial funding and had a more passive role in the Company's operations. (Morgan Aff. ¶ 7; Singletary 2nd Aff. ¶ 12.)
7. Alpine enjoyed some early success. In late 2015, the Company obtained service contracts with three properties managed by Ardmore Residential, Inc. ("Ardmore"): (1) King's Grant Apartments, LLC, dated October 7, 2015; (2) The Retreat at the Park, LLC, dated October 12, 2015; and (3) Howell Road, LLC, dated October 2, 2015 (collectively, the "Ardmore Contracts"). (Morgan Aff. ¶¶ 15-17, Exs. B-D; Singletary 2nd Aff. ¶ 17.) Building on that success, a few months later, Alpine entered into a service contract dated March 7, 2016 with Grubb Properties, Inc. ("Grubb Properties") to provide services at Grubb Properties' LangTree Lake Norman Apartments property (the "Grubb Contract").
8. Beginning in 2016, the relationship between Morgan and Singletary deteriorated, with each suspecting the other of misusing Alpine's assets. According to Morgan, beginning in April 2016, Singletary caused Alpine to pay for Singletary's personal expenses, including groceries, meals, rent, and a personal loan to Singletary's brother, in the total amount of $4, 987.29. (Morgan Aff. ¶¶ 28-29; see also Morgan Aff. Exs. G (Alpine bank statements) and H (Alpine operating account transaction list).) Morgan also claims that Singletary made false statements to Alpine's customers to excuse Alpine's poor performance, including a statement that Singletary's "business partner" was to blame for Alpine's failures and that "a business partner was being removed from Alpine." (V. Compl. ¶¶ 18-20; Morgan Aff. ¶ 30, Ex. I.) For his part, Singletary alleges that Morgan made an unauthorized withdrawal of $1, 000 from Alpine's operating account on April 25, 2016, (Singletary 2nd Aff. ¶ 23), and failed to pay Alpine approximately $2, 500 Singletary contends Morgan owed the Company, (Singletary 2nd Aff. ¶ 24).
9. Apparently in response to this deteriorating relationship, Singletary, while still the member-manager of Alpine, created Turn-Pro Management Services, LLC ("Turn-Pro") on May 13, 2016 to provide the same services as Alpine. Singletary was and remains Turn-Pro's sole member and manager. (V. Compl. ¶ 23; Morgan Aff. ¶ 31, Ex. J.)
10. Singletary candidly acknowledges that while acting as Alpine's member-manager, he transferred funds, contracts, and assets of Alpine to Turn-Pro without Morgan's knowledge or consent. (Singletary Dep. 54:3-25, 74:12-75:18, 77:20-23, 86:16-24, 105:9-106:2, 216:8-217:25.) For example, Singletary transferred funds from Alpine's operating account to Turn-Pro on May 19, 2016 and again on May 25, 2016 in the amounts of $1, 200.00 and $1, 750.00, respectively. That same month, Singletary transferred Alpine's "insurance polic[ies]" to Turn-Pro. Most significantly, Singletary assigned Alpine's Ardmore and Grubb Contracts to Turn-Pro-executing assignment documents on behalf of both Alpine and Turn-Pro-all without Morgan's knowledge or consent. As a result of Singletary's actions, Alpine had no assets by June 2016. (Morgan Aff. ¶ 35.)
11. After the assignment of the Grubb Contract, Turn-Pro began providing services for Grubb Properties in May and June 2016 for which Turn-Pro received payment. Turn-Pro did not remit any of these sums to Alpine. (Morgan Aff. ¶¶ 40- 41; Singletary Dep. 105:9-106:2.) Alpine also received funds from Ardmore under the Ardmore Contracts during this time. Although Ardmore's payments under these contracts were paid to Alpine, Singletary transferred the paid funds from Alpine to Turn-Pro without consideration to Alpine. (Morgan Aff. ¶¶ 33, 41, Ex. O; Singletary Dep. 105:9-106:2.)
12. At some point in June 2016, Morgan became aware of Singletary's conduct, and, on June 15, 2016, e-mailed Ardmore and Grubb Properties to advise that Singletary's transfers of the Ardmore and Grubb Contracts to Turn-Pro were unauthorized and invalid.
13. Ardmore and Grubb Properties soon expressed confusion and frustration over whether Alpine or Turn-Pro was to service their contracts and to which entity they were to send their communications, complaints, and payments. (Singletary 2nd Aff. ¶ 44; Index Singletary 2nd Aff. Ex. D, at 18, Ex. J, at 37.) Shortly thereafter, Grubb Properties cancelled the Grubb Contract by "back-dat[ing]" a letter cancelling the contract on May 1, 2016 as to be effective June 1, 2016, (Singletary 2nd Aff. ¶ 44; Index Singletary 2nd Aff. Ex. F), and, on July 11, 2016, Ardmore cancelled the Ardmore Contracts, (Morgan Aff. ¶ 40, Ex. R; Singletary 2nd Aff. ¶ 43; Index Singletary 2nd Aff. Ex. D, at 21). Ardmore also ceased consideration of a fourth contract with Alpine-to provide services for Ardmore's Cates Creek apartment complex-around this same time. (Morgan Aff. ¶¶ 22, 40, Ex. R; Singletary 2nd Aff. ¶ 43; Singletary Dep. 105:1-106:13; Index Singletary 2nd Aff. Ex. D, at 21.)
14. The cancellation of the Ardmore and Grubb Contracts eliminated Alpine's and Turn-Pro's primary sources of revenue, quickly leading to the deterioration of both businesses. Morgan and Singletary thereafter exchanged demands and counter-demands, as discussed below. Their inability to resolve their dispute ultimately led Morgan to commence this litigation in January 2018. Shortly thereafter, on February 28, 2018, Alpine was administratively dissolved for failure to file an annual report. (Morgan Aff. ¶ 47, Ex. S.)
15. Prior to the commencement of this litigation, Morgan's counsel sent a Chapter 57D records and information demand (the "Records Demand") on June 8, 2016 addressed to Singletary at 4404 Firwood Lane, Charlotte, N.C. 28209 ("Charlotte Address"), asking Singletary, as Alpine's managing member, to permit inspection of certain of Alpine's records and information no later than June 22, 2016. ( Singletary confirmed that Alpine received the Records Demand, (Singletary 2nd Aff. ¶ 33), and it is undisputed that Singletary did not respond or provide the requested documents or information, (Morgan Aff. ¶ 32).
16. On August 10, 2017, Morgan's counsel mailed a letter (the "Demand Letter") by first class mail, addressed to Alpine, in care of Singletary as Alpine's managing member, at the Charlotte Address, ,...
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