NRC Golf Course, LLC v. JMR Golf, LLC
| Decision Date | 21 August 2012 |
| Docket Number | No. COA11–738.,COA11–738. |
| Citation | 731 S.E.2d 474 |
| Parties | NRC GOLF COURSE, LLC, Plaintiff, v. JMR GOLF, LLC; Robert B. Hobbs, Jr., Trustee and the Bank of Currituck, Defendants. |
| Court | North Carolina Court of Appeals |
OPINION TEXT STARTS HERE
Appeal by plaintiff from orders entered 22 July 2010 and 30 September 2010 and opinion and order entered 29 December 2010 by Judge John R. Jolly, Jr., in Carteret County Superior Court. Heard in the Court of Appeals 11 January 2012.
Vandeventer Black, LLP, Kitty Hawk, by Norman W. Shearin and Wyatt M. Booth, for plaintiff-appellant.
Williams Mullen, Raleigh, by Camden R. Webb and Brian C. Vick, for defendant-appellee JMR Golf, LLC.
Where a modification to the option to purchase was not supported by adequate consideration, the revised option to purchase was unenforceable. Therefore, the trial court did not err in entering summary judgment in favor of defendants. Where plaintiff has regained possession of the golf course and the court has yet to determine the compensation to be paid to plaintiff for previously surrendering golf course operating equipment, the plaintiff's contentions regarding the trial court's entry of preliminary and mandatory injunctive relief are moot and premature, respectively, and are accordingly dismissed.
On 21 December 2009, plaintiff NRC Golf Course, LLC, (NRC) filed a complaint against JMR Golf, LLC, (JMR); Robert B. Hobbs, Jr.; and The Bank of Currituck (the Bank) seeking a declaratory judgment regarding the rights and obligations of the parties under a lease agreement between JMR and NRC which included an option to purchase the North River Golf Course (the golf course) in Carteret County.
According to the complaint, JMR purchased the golf course from Guide Group, LLC, (Guide Group) in July 2006. Upon purchase, JMR agreed to lease the golf course to NRC (a wholly owned subsidiary of Guide Group). The Triple Net Lease Agreement (the Lease Agreement) entered into by JMR and NRC, dated 17 July 2006, included an Option to Purchase whereby NRC could purchase the golf course from JMR.
The original Option to Purchase, as executed with the Lease Agreement on 17 July 2006, granted NRC the right to purchase the golf course for $2,500,000.00 at any time before the expiration of the Lease Agreement (Option A). Pursuant to the advice of Goodman & Company, the accountants for Guide Group and NRC, the price term in the original Option to Purchase was modified in order to achieve tax advantages. The revised Option to Purchase, executed on 7 March 2007 and deemed effective as of 17 July 2006, granted NRC the option to purchase the golf course at a price based on the fair market value of the property on the exercise date (Option B or revised option).
In November 2007, JMR granted the Bank a lien on the golf course to secure a loan. The lien was evidenced in the deed of trust and the deed of trust listed Robert B. Hobbs, Jr., as trustee.
Pursuant to the Lease Agreement, NRC made monthly lease payments of $16,666.00 to JMR from August 2006 until October 2009. By letter dated 28 October 2009, NRC notified JMR of its intention to exercise the Option to Purchase the golf course under the Lease Agreement. As a member of NRC's parent company—Guide Group—and pursuant to NRC's operating agreement as a wholly owned subsidiary of Guide Group, JMR demanded access to NRC's financial records. NRC rejected JMR's demand for access to its financial records.
On 21 December 2009, NRC filed its complaint. On 2 February 2010, NRC filed a Motion to Require Deposit of Funds requesting that the court order NRC's $16,666.00 monthly payments to be deposited in an interest bearing account or with the Carteret County Clerk of Superior Court.
On 11 June 2010, JMR filed with the trial court a Motion for Affirmative Emergency Injunctive Relief to Require Monthly Payments. JMR requested that the court enter an order requiring NRC to make all lease payments for the months of February, March, April, May, and June 2010 and to require NRC to make monthly lease payments in the amount of $16,666.00 during the pendency of the litigation.
On 22 July 2010, the trial court entered an Order Granting Preliminary Injunction in which it ordered NRC to pay $99,996.00 for golf course lease payments not made between February 2010 and July 2010, as well as make monthly payments in the amount of $16,666.00 beginning 1 August 2010 until the injunction was dissolved or NRC surrendered possession of the golf course to JMR.
On 28 September 2010, NRC filed a Motion for Assistance in Surrender of Golf Course, requesting a hearing as “the parties [had] been unable to agree to material terms” of NRC's surrender of the golf course. On 29 September 2010, NRC filed a motion for summary judgment.
On 30 September 2010, the trial court entered an order, the purpose of which was “only to preserve the status quo between NRC and JMR during the pendency of [the] litigation.”
[The court ordered that] [u]pon surrender of the Golf Course to JMR, NRC also immediately shall surrender to JMR possession of all Golf Course Operating Equipment.... Reasonable compensation to NRC for possession and use of the Operating Equipment by JMR will be determined by the court upon resolution of this action.
On 19 November 2010, NRC filed a new motion for summary judgment “as to a declaration of the respective rights and obligations of NRC and [JMR] under ... the Option to Purchase, to the [Lease Agreement] dated July 17, 2006 between NRC and JMR ....”.
On 29 December 2010, the trial court entered an Opinion and Order in which it concluded that the revised Option to Purchase contained in the Lease Agreement between JMR and NRC was not enforceable; that even if it had been enforceable, NRC's title would still be subordinate to the Bank's deed of trust; and NRC was not entitled to additional security with regard to operation of the golf course by JMR. The court further ordered that it would hold a later hearing to consider and/or determine the remaining issues between the parties, including the future possession and control of the golf course and the compensation, if any, due to NRC by JMR for use of the golf course operating equipment. NRC appeals.
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On appeal, NRC contends that the trial court erred in (I) denying its motion for summary judgment and granting summary judgment in favor of JMR and the Bank and (II) granting JMR preliminary and mandatory injunctive relief.
Order granting dismissal of appeal as to the Bank and Robert B. Hobbs, Jr.
We note that on 21 October 2011, subsequent to NRC filing the record on appeal and its brief with this Court, NRC and the Bank filed a Joint Rule 37(e)(2) Motion for Partial Withdrawal of Appeal requesting an order from this Court dismissing the appeal as to the Bank and the trustee under the deed of trust, Robert B. Hobbs, Jr. The motion was granted and an order was entered dismissing the Bank and Robert B. Hobbs, Jr., from this appeal on 7 November 2011. Therefore, we consider NRC's contentions on appeal only as they may apply to JMR, the sole remaining defendant in this matter.1
Appeal of orders granting injunctions and partial summary judgment
Yet, before we reach the merits of NRC's arguments, we must consider whether the orders appealed from are properly before this Court. On 13 January 2011, NRC filed with the Carteret County Clerk of Superior Court a notice of appeal from the following orders: the 22 July 2010 order granting a preliminary injunction in favor of JMR; the 30 September 2010 order granting mandatory injunctive relief in favor of JMR with respect to NRC's motion for assistance in obtaining surrender of the golf course; and the 29 December 2010 order denying NRC's motion for summary judgment, granting summary judgment in favor of JMR and the Bank, and denying NRC's motion for an order requiring additional security.
However, in the trial court's 29 December 2010 order, the trial court further ordered that:
On January 18, 2011, ... the court will hold a hearing and status conference with all parties for the purpose of considering and/or determining then-remaining issues between the parties, including but not limited to (a) future possession and control of the Golf Course and (b) present and future compensation, if any, to be paid by JMR to NRC for use of the Golf Course Operating Equipment at times material to this civil action.
In addition, the trial court stated that “[a]fter such hearing and status conference, the court anticipates entering a final disposition Order[.]”
Because the trial court order did not completely dispose of the case, its order is effectively an order of partial summary judgment and therefore interlocutory. Wood v. McDonald's Corp., 166 N.C.App. 48, 53, 603 S.E.2d 539, 543 (2004). There is generally no right to appeal from an interlocutory order, Id.; but cf. Southern Uniform Rentals v. Iowa Nat'l Mutual Ins. Co., 90 N.C.App. 738, 740, 370 S.E.2d 76, 78 (1988) (), because most interlocutory appeals tend to hinder judicial economy by causing unnecessary delay and expense, Love v. Moore, 305 N.C. 575, 580, 291 S.E.2d 141, 146 (1982). However, because the case sub judice is one of those exceptional cases where judicial economy will be served by reviewing the interlocutory order, we will treat the appeal as a petition for a writ of certiorari and consider the order on its merits. Ziglar v. Du Pont Co., 53 N.C.App. 147, 149, 280 S.E.2d 510, 512,disc. review denied,304 N.C. 393, 285 S.E.2d 838 (1981); N.C.R.App. P. 21(a)(1).
Carolina Bank v. Chatham Station, Inc., 186 N.C.App. 424, 428, 651 S.E.2d 386, 388–89 (2007).2 In the instant case, we treat the interlocutory appeal as a petition for writ of certiorari and consider the merits of the appeal.
Reaching the merits of the case, NRC contends that the trial court erred in denying its motion for summary...
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