Rohrig Invs., LP v. Knuckle P'ship, LLLP (In re Rohrig Invs., LP)

• Decision Date: 30 March 2018
• Docket Number: CASE NO. 13–53483–BEM
• Citation: 584 B.R. 382
• Parties: IN RE: ROHRIG INVESTMENTS, LP, Debtor. Rohrig Investments, LP, Plaintiff, v. Knuckle Partnership, LLLP, 3110 Roswell Road, LLC, 3116–3136 Roswell Road LLC, and Robert C. Loudermilk, Jr., Defendants.
• Court: U.S. Bankruptcy Court — Northern District of Georgia

584 B.R. 382

IN RE: ROHRIG INVESTMENTS, LP, Debtor.Rohrig Investments, LP, Plaintiff,

v.Knuckle Partnership, LLLP, 3110 Roswell Road, LLC, 3116–3136 Roswell Road LLC, and Robert C. Loudermilk, Jr., Defendants.

CASE NO. 13–53483–BEM

United States Bankruptcy Court, N.D. Georgia, Atlanta Division.

Signed March 30, 2018

David L. Bury, Jr., Thomas T. McClendon, Ward Stone, Jr., Stone & Baxter, LLP, Macon, GA, for Plaintiff.

Sean A. Gordon, Michael J. King, Greenberg Traurig, LLP, George M. Geeslin, Atlanta, GA, for Defendants.

ORDER ON (1) PLAINTIFF'S MOTION FOR RECONSIDERATION OF ORDER GRANTING MOTION TO DISMISS AND TIME TO AMEND COMPLAINT; AND (2) DEFENDANTS' MOTIONS TO DISMISS AMENDED COMPLAINT

Barbara Ellis–Monro, U.S. Bankruptcy Court Judge

I. Background

Plaintiff filed this adversary proceeding on July 6, 2016 seeking specific performance or, alternatively, damages for breach of contract. [Doc. 1 (the "Original Complaint") ]. Defendants filed motions to dismiss the Original Complaint. [Docs. 11, 12]. The Court granted the motions to dismiss with leave for Plaintiff to make limited amendments to the Complaint (the "Dismissal Order"). [Doc. 21]. Plaintiff filed a motion to reconsider the order granting the motions to dismiss (the "Motion to Reconsider") [Doc. 23] and filed an amended complaint (the "Amended Complaint"). [Doc. 30]. Defendants filed motions to dismiss the Amended Complaint (the "Second Motions to Dismiss") [Docs. 40, 41]. The Court herein considers Plaintiff's Motion to Reconsider and Defendants' Second Motions to Dismiss.

The parties and other relevant persons in this proceeding are as follows:

• Rohrig Investments, LP ("Plaintiff"): the Debtor–Plaintiff in this proceeding;

• Knuckle Partnership, LLLP ("Knuckle"), 3116–3136 Roswell Road, LLC ("3116"), and Robert C. Loudermilk, Jr. ("Robin" or "Robin Loudermilk" and with Knuckle and 3116, the "Loudermilk Parties"): Defendants in this proceeding;

• 3110 Roswell Road, LLC ("3110" and with the Loudermilk Parties, the "Defendants"): a Defendant in this proceeding;

• George W. Rohrig, Jr. ("George" or "George Rohrig" and with Plaintiff, the "Rohrig Parties"): a principal of Plaintiff;

• R. Charles Loudermilk, Sr. ("Charlie" or "Charlie Loudermilk"): a principal of 3110.

Plaintiff's Original Complaint contained two counts—one for specific performance and one for breach of contract. In summary, the Original Complaint alleged as follows: 3116 owns real property in the Buckhead District of Atlanta, which it agreed to sell for more than $10 million. The deal was temporarily halted when Plaintiff filed in the county real property records a document asserting an interest in parking rights in the property. Thereafter, 3116 filed an adversary proceeding against Plaintiff and George Rohrig to remove the affidavit from the public record (the "Parking Rights Dispute" or the "Parking Rights AP"). The parties settled the matter, along with other disputes, under terms set forth in a settlement agreement. [Doc. 30–1, Ex. 6, hereinafter the "Agreement" or the "Settlement Agreement"]. The Settlement Agreement required the Loudermilk Parties to obtain from 3110 and convey to Plaintiff a deed to the 8 at 8 office building (the "8 at 8 Property"), an extension of the property lines for the 8 at 8 Property (the "Disputed Property"), and an easement for a pedestrian walkway (the "Breezeway," and with the 8 at 8 Property and the Disputed Property, the "8 at 8 Properties"). Plaintiff complied with all its obligations under the Settlement Agreement, but Defendants failed to convey the entirety of the 8 at 8 Properties. The dispute primarily centers on the language "to the extent it is legally possible, the Loudermilk Parties will obtain ... and convey ... an extension of the property lines for the 8 at 8 Property westward to Early Street ...." [Settlement Agreement § 3.0].

The Court granted Defendants' motions to dismiss the Original Complaint in their entirely because the Court found that: (1) it was not legally possible for the Loudermilk Parties to convey all of the Disputed Property when the property owner refused to agree to the transfer, (2) the description of a portion of the property to be conveyed was not adequately described, and (3) Plaintiffs failed to allege sufficient facts to state a claim against 3110 based on an agency relationship between the Loudermilk Parties and 3110. [Doc. 21]. The Dismissal Order further granted Plaintiff limited leave to amend the complaint. In the Amended Complaint, Plaintiff has supplemented its allegations to address the agency question, the sufficiency of the description, generally provide greater detail, and has added equitable claims against Defendants. The Amended Complaint includes the following documents attached as exhibits:

(1) 2006 Consolidation Map; (2) 2007 Boundary Survey; (3) Limited Warranty Deed to 3110 Roswell Road, LLC; (4) Limited Warranty Deed to Rohrig Investments, LP; (5) 2007 Valentino Survey; (6) Settlement Order and Settlement Agreement; (7) 2014 Rohrig Survey (with Valentino email exchange); (8) email exchange from Mr. Teague to Mr. Howard to Mr. Frasier; (9) Valentino email to Rohrig Investments with Replat Survey; (10) email from Mr. Howard to Mr. Frasier by way of Valentino; (11) Section 3.0 Letter from Mike King; and (12) Proposed Deed for Specific Performance. In addition, the Amended Complaint contains lengthy quotations from the transcript of a hearing held in this Court on October 28, 2014. A copy of the transcript is filed in the main bankruptcy case. [Case No. 13–53483, Doc. 1121, hereinafter "Hearing Tr."].

The Amended Complaint includes counts for specific performance against all Defendants; breach of contract against all Defendants; breach of contract against the Loudermilk Parties; quantum meriut and unjust enrichment against 3110; and reformation of the Settlement Agreement.

II. Procedural Issues

As a preliminary matter, Defendants contend the Motion to Reconsider is moot because the Amended Complaint supersedes the original complaint. [Doc. 52 at 2, 53]. Defendants are correct in stating the general rule. Pintando v. Miami–Dade Housing Agency , 501 F.3d 1241, 1243 (11th Cir. 2007). However, the general rule does not address the effect of an amended complaint on a pending motion to reconsider dismissal. "A rule that a party waives all objections to the court's dismissal if the party elects to amend is too mechanical ....Without more, the action of the amending party should not result in completely denying the right to appeal the court's ruling." 6 Fed. Prac. & Proc. Civ. § 1476 (3d ed.) ; see also Varnes v. Local 91, Glass Bottle Blowers Ass'n of U.S and Canada , 674 F.2d 1365, 1370 (11th Cir. 1982) (a plaintiff is "not barred, by consenting to the dismissal [of his complaint for failure to state a claim] and filing the amended complaint, from raising on appeal the correctness of the dismissal order ...."); Wilson v. First Houston Inv. Corp ., 566 F.2d 1235, 1238 (5th Cir. 1978)¹ , vacated on other grounds , 444 U.S. 959, 100 S.Ct. 442, 62 L.Ed.2d 371 (1979), ("plaintiff, by filing an amended complaint after a dismissal with leave to amend, was not barred from raising on appeal the correctness of the dismissal order."). Usually this issue arises when the plaintiff opts not to reassert a dismissed claim in the amended complaint. Here, all of Plaintiff's claims from the Original Complaint are subsumed in the Amended Complaint. Nevertheless, in an abundance of caution and to preserve any appeal rights held by Plaintiff, the Court will consider the Motion to Reconsider in conjunction with the Second Motions to Dismiss as all the issues raised in the Motion to Reconsider are relevant to determination of the Second Motions to Dismiss.

III. Legal Standards

A. Standard for Reconsideration

Plaintiff's Motion to Reconsider seeks to alter or amend the order granting the motions to dismiss pursuant to Fed. R. Civ. P. 59(e), made applicable in adversary proceedings by Fed. R. Bankr. P. 9023. The Motion was filed within 14 days after entry of the Dismissal Order and is therefore timely. Fed. R. Bankr. P. 9023. The relief sought by Plaintiff is rare and granted only upon a showing of "newly-discovered evidence or manifest errors of law or fact." Kellogg v. Schreiber (In re Kellogg) , 197 F.3d 1116, 1119 (11th Cir.1999) ; Hearn v. Intern'l Business Machines , 588 Fed.Appx. 954, 958 (11th Cir. 2014). Such motions cannot be used to relitigate issues already decided, to pad the record for an appeal, to substitute for an appeal, or to raise arguments which were or could have been raised before judgment was issued. Kellogg , 197 F.3d at 1120 ; In re McDaniel , 217 B.R. 348, 350–51 (Bankr. N.D. Ga. 1998) (Drake, J.); In re Oak Brook Apartments of Henrico Cnty., Ltd. , 126 B.R. 535, 536 (Bankr. S.D. Ohio 1991) ; O'Neal v. Kennamer , 958 F.2d 1044, 1047 (11th Cir. 1992). Nor should such motions be used "to test whether the Court will change its mind." Brogdon v. National Healthcare Corp. , 103 F.Supp.2d 1322, 1338 (N.D. Ga. 2000) (citing McCoy v. Macon Water Auth. , 966 F.Supp. 1209, 1223 (M.D. Ga. 1997) ; Paper Recycling, Inc. v. Amoco Oil Co. , 856 F.Supp. 671, 678 (N.D. Ga. 1993) ).

B. Standard for Dismissal

Defendants seek dismissal of the Amended Complaint under Fed. R. Civ. P. 12(b)(6) and Fed. R. Bankr. P. 7012(b) for failure to state a claim upon which relief can be granted. Pursuant to Fed. R. Civ. P. 8(a), made applicable in adversary proceedings by Fed. R. Bankr. P. 7008, "A pleading that states a claim for relief must contain: ... (2) a short and plain statement of the claim showing that the pleader is entitled to relief[.]" To survive a motion to dismiss for failure to state a claim, the complaint "must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ... A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw...