Pharmacy Services v. Beverly-Hanks & Associates

• Decision Date: 22 August 2000
• Docket Number: No. 1:99CV36.,1:99CV36.
• Court: U.S. District Court — Western District of North Carolina
• Parties: Stephen D. RICE; and MMR Properties, LLC, Plaintiffs, v. VITALINK PHARMACY SERVICES, INC.; Team Care Hendersonville; and Mohr Partners, Inc., Defendants and Third Party Plaintiffs, v. Beverly-Hanks & Associates, Inc.; and Robin A. Boylan, Jr., Third-Party Defendants.

Page 343

124 F.Supp.2d 343

Stephen D. RICE; and MMR Properties, LLC, Plaintiffs, v. VITALINK PHARMACY SERVICES, INC.; Team Care Hendersonville; and Mohr Partners, Inc., Defendants and Third Party Plaintiffs, v. Beverly-Hanks & Associates, Inc.; and Robin A. Boylan, Jr., Third-Party Defendants.

No. 1:99CV36.

United States District Court, W.D. North Carolina, Asheville Division.

August 22, 2000.

George Ward Hendon, Marjorie C. Redding, Adams, Hendon, Carson, Crow, & Saenger, PA, Asheville, NC, for plaintiffs.

Craig R. Baldauf, Thomas W. Murrell, III, Smith Helms Mulliss & Moore, L.L.P, Charlotte, for Vitalink Pharmacy Services, Inc., Team Care Hendersonville, defendants.

Keith E. Coltrain, Ogletree, Deakins, Nash, Smoak and Stewart, Raleigh, NC, for Mohr Partners, Inc., third-party plaintiff.

Keith E. Coltrain, Ogletree, Deakins, Nash, Smoak and Stewart, Raleigh, NC, for Mohr Partners, Inc., defendant.

John C. Cloninger, John C. Hensley, Jr., Mary E. Euler, Cloninger, Lindsay, Hensley, Searson & Arcuri, Asheville, NC, for Beverly-Hanks & Associates, Inc., Robert A. Boylan, Jr., third-party defendants.

Thomas W. Murrell, III, Smith Helms Mulliss & Moore, L.L.P, Charlotte, for Vitalink Pharmacy Services, Inc., Team Care Hendersonville, third-party plaintiffs.

MEMORANDUM AND ORDER

THORNBURG, District Judge.

THIS MATTER is before the Court on Plaintiff's and Defendants' timely filed objections to the Memorandum and Recommendation of United States Magistrate Judge Max O. Cogburn, Jr. Pursuant to standing orders of designation and 28 U.S.C. § 636, the Defendants' motions for summary judgment were referred to the Magistrate Judge for a recommendation as to disposition. The Court notes that Defendant NeighborCare Pharmacy Services, Inc., successor in interest to Vitalink Pharmacy Services, Inc., as well as Defendant NeighborCare TCI, Inc., d/b/a NeighborCare Hendersonville, successor in interest to Team Care, Inc., d/b/a Team Care Hendersonville, have both filed Chapter 11 Bankruptcy Petitions and have cases pending in the United States Bankruptcy Court for the District of Delaware. However, because the motions and objections of both parties were filed and fully briefed prior to the bankruptcy filings, the Court will render a decision on the dispositive motions. Accordingly, the Court adopts the recommendation of the Magistrate Judge in part and will grant the Defendants' motions for summary judgment.

I. STANDARD OF REVIEW

The Court reviews de novo those portions of a Magistrate Judge's Memorandum and Recommendation to which specific objections are filed. 28 U.S.C. 636(b). "The district judge must not be a rubber stamp" and "has a duty to reject the Magistrate Judge's recommendation unless, on de novo reconsideration, he or she finds it justified." 12 Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 3070.2 (1997). Those parts of a Magistrate Judge's Memorandum and Recommendation to which no specific objections are filed are given careful review. Orpiano v. Johnson, 687 F.2d 44, 47 (4th Cir. 1982).

Summary judgment is proper when 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 summary judgment as a matter of law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

II. FACTUAL AND PROCEDURAL BACKGROUND

Between March and May 1998, discussions took place between Vitalink Pharmacy Services, Inc. ("Vitalink") and Plaintiff Stephen D. Rice, a developer of industrial real estate, regarding Vitalink's possible lease of Unit C of Plaintiff's Airport Business Center ("ABC") for a pharmacy operation. Acting on behalf of Vitalink were George Methvin, a local Vitalink manager associated with Defendant Hendersonville Team Care, and Andrew Taguwa, an agent for independent brokers Mohr Partners, Inc. ("Mohr Partners"). Third Party Defendant Robert A. Boylan, Jr., an agent for the Asheville brokerage firm, Beverly-Hanks & Associates, Inc. ("Beverly-Hanks"), acted on behalf of the Plaintiff. Exhibit D, Deposition of Robert A. Boylan, attached to Defendant Mohr Partners' Motion for Summary Judgment, filed April 17, 2000, at 14. On or about March 10, Methvin allegedly did a walkthru of the property and faxed over a proposed floor plan to Boylan. Id., at 18.

Shortly thereafter, Boylan allegedly received a proposal from Vitalink for leasing the space. Id., at 27, 35. Plaintiff alleges that during this period the parties contemplated Vitalink would begin leasing the space on May 1, 1998, and take possession on June 1, 1998. Id., at 31, 131-32, 153. On March 19, 1998, Boylan faxed Taguwa a copy of a letter drafted by Plaintiff which stated Plaintiff was preparing to perform work on the ABC Space. The fax also stated that if Boylan had any potential tenants who wanted to move in by June 1, 1998, Plaintiff needed the first month's check and a signed lease within 14 days. Id., at 38; Exhibit 6, Letter dated March 19, 1998 and attached fax transmittal sheet, attached to Defendant Mohr Partners' Motion. Plaintiff never received a signed lease or check from Vitalink. Boylan Deposition, at 40; Exhibit B, Deposition of Stephen D. Rice, attached to Defendant Mohr Partners' Motion, at 60-61. On April 3, 1998, Taguwa sent a letter which instructed Boylan that "[a]ll terms [of a lease] are subject to Board approval reflected through a signed lease document." Exhibit 53, Letter dated April 3, 1998 and attached fax transmittal sheet, attached to Defendant Mohr Partners' Motion. Plaintiff also received a copy of that letter. Rice Deposition, at 75-77. About April 21, 1998, Boylan sent leases by overnight mail to Vitalink for signing and on May 1, 1998, faxed final floor plans to Vitalink.¹ Boylan Deposition, at 83, 85; Rice Deposition, at 81-85. Vitalink did not respond to these communications. But, during this time, Plaintiff alleges that Taguwa and Methvin stated that although the legal department needed to review documentation of the agreement, "the deal is a go ..." and that the legal approval of the lease documents was merely a "rubber stamp." Boylan Deposition, at 40-42, 69, 75, 121-22, 129. Taguwa denies making this statement or anything to its effect. Exhibit E, Deposition of Andrew W. Taguwa, attached to Defendant Mohr Partners' Motion, at 73.

Based upon these alleged assurances that the deal was done, Plaintiff entered into an oral agreement with general contractor Jim Allen Construction Company ("Jim Allen") to perform upfit work to Unit C according to specifications allegedly approved by Vitalink. Rice Deposition, at 131-33. It is undisputed that Boylan never received a signed lease or requested or received a letter of intent or an indemnity agreement from Vitalink to cover the upfit work.² Boylan Deposition, at 21, 40, 42-43.

Jim Allen began upfit work on Unit C according to specifications supplied by Plaintiff on May 1, 1998. On May 26, 1999, Plaintiff wrote a letter to Boylan stating he still had not received a signed lease or a rent check which were allegedly due on May 1, 1998. Rice Deposition, at 106, 116; Exhibit 15, Letter dated May 27, 1998, attached to Defendant Mohr Partners' Motion. On May 27, Boylan wrote a letter to Vitalink's corporate counsel stating that he had just been made aware of a merger including Vitalink and that the upfit could not continue without Vitalink's immediate response.³ Boylan Deposition, at 97-99; Exhibit 16, Letter dated May 27, 1998, attached to Defendant Mohr Partners' Motion. Vitalink's response was that there was no lease agreement. Boylan Deposition, at 106. Subsequently, on June 2, 1998, Plaintiff instructed Jim Allen to find a sensible stopping point on the Unit C upfit. Jim Allen stopped work on June 12, 1998, when the upfit of Unit C was approximately 70 percent complete. Jim Allen then sought payment from Plaintiff in the amount of $50,116.40 for the work already performed.

After Plaintiff refused to make payment, Jim Allen sued him in Henderson County Superior Court for $50,116.40. Plaintiff filed an answer denying liability. Plaintiff, who admits that he has never personally made payments to Jim Allen for the upfit work performed on Unit C, is no longer the owner of the ABC space. That property was transferred to MMR Properties, LLC ("MMR"), a limited liability company of which Plaintiff is the sole shareholder. MMR made approximately $25,000 in payments to Jim Allen in 1999 and Plaintiff has not reimbursed MMR for those payments.

In this action, Plaintiff asserts causes of action for breach of contract, negligent misrepresentation, and unfair and deceptive trade practices. Plaintiff seeks to recover $50,116.40 for the cost of the upfit of Unit C and approximately $12,000 for the future removal of the structures. Treble damages are sought by Plaintiff on his claim of unfair and deceptive trade practices. Plaintiff's Complaint, at ¶ 's 35-37. Once this case was underway, Defendants brought third-party claims for indemnity and contribution against Beverly-Hanks and Boylan.⁴ The Third-Party Defendants moved for summary judgment and that motion is before this Court as well.

III. DISCUSSION

1. Motion to Amend

The Magistrate Judge recommended the Court allow Plaintiff to amend the Complaint to join MMR as an indispensable party. Defendants object and contend they would be unduly prejudiced and would require additional discovery prior to trial. However, because this order dismisses all claims against the Defendants, those concerns are moot. Therefore, in the interest of avoiding duplicative litigation in the future, the Court adopts the Magistrate Judge's recommendation and will grant the Plaintiff's request for MMR to be added as a party plaintiff to this action. Fed.R.Civ.P. 19.

2. Breach of Contract

The Plaintiff objects to the Magistrate...