Synovus Bank v. Parks
| Decision Date | 30 July 2013 |
| Docket Number | 10 CVS 5819 |
| Citation | 2013 NCBC 40 |
| Court | Superior Court of North Carolina |
| Parties | SYNOVUS BANK, Plaintiff, v. TERRY R. PARKS and HELAINE V. PARKS, Defendants, Counterclaimants and Third-Party Plaintiffs, v. SYNOVUS FINANCIAL CORP. d/b/a NATIONAL BANK OF SOUTH CAROLINA, KEITH VINSON, individually, KEITH VINSON d/b/a SEVEN FALLS, LLC et al., Third-Party Defendants and Counterclaim Defendants. |
Van Winkle, Buck, Wall, Starnes, and Davis, P.A. by W. Carleton Metcalf and Melissa L. English for Plaintiff and Third-Party Defendant Synovus Financial Corp. d/b/a National Bank of South Carolina.
The Ward Law Firm, P.A. by John E. Rogers, II for Defendants, Counterclaimants, and Third-Party Plaintiffs.
James, McElroy and Diehl, P.A. by Richard B. Fennell for non-bank Third-Party Defendants Keith Vinson, Seven Falls, LLC, et al.
{1} THIS MATTER is before the Court on Plaintiff's Motion to Dismiss Amended Counterclaims ("Motion I") and Third-Party Defendant Synovus Financial Corp. d/b/a National Bank of South Carolina's ("Third-Party Defendant") Motion to Dismiss Amended Third-Party Claims ("Motion II") (collectively the "Motions"). After considering the Motions, the briefs in support and opposition, and the arguments made by counsel at the Court's May 4, 2012, hearing on the Motions, the Court GRANTS in part, and DENIES in part, Plaintiff and Third-Party Defendant's Motions.
{2} Plaintiff filed its Complaint on November 8, 2010, in Buncombe County, North Carolina. (Compl. 3.) On April 12, 2011, Defendants filed their Answer, Counterclaims, and Third-Party Complaint. (Defs.' Answer 32.)
{3} Because Defendants were also members of a class action in Georgia involving the same Plaintiff and claims herein, Defendants moved to dismiss this action, or in the alternative, have this action stayed pending resolution of the Georgia case. In response, Plaintiff moved for an anti-suit injunction to bar Defendants from litigating its claims against Plaintiff in this action in any other jurisdiction within or without North Carolina. On June 19, 2011, the Honorable Mark E. Powell denied Defendants' Motion to Dismiss, and granted Plaintiff's Motion for Anti-Suit Injunction.
{4} Plaintiff moved for this case to be designated as a complex business case pursuant to Rule 2.1 of the General Rules of Practice and Procedure for the Superior and District Courts on August 4, 2011. Synovus Bank v. Parks, 10 CVS 5819 (N.C. Super. Ct. Aug. 4, 2011) (). The case was subsequently designated as an exceptional case by the Chief Justice of the North Carolina Supreme Court and assigned to the undersigned for adjudication of all matters. Synovus Bank v. Parks, 10 CVS 5819 (N.C. Super. Ct. Sept. 7, 2011) ().
{5} On November 1, 2011, Defendants renewed their motion for leave to file an amended Answer and Counterclaims that was originally filed on August 9, 2011. Plaintiff consented to the August 9 Motion to Amend. The Motions presently before the Court were filed on January 26, 2012. (Pl.'s Mot. Dismiss 1; Third-Party Def.'s Mot. Dismiss 2.) The Court heard oral arguments on the Motions on May 4, 2012, and the Motions are ripe for adjudication.
{6} The Court does not make findings of fact in connection with motions to dismiss pursuant to Rule 12(b)(6), as such motions "do[] not present the merits, but only whether the merits may be reached." Concrete Serv. Corp. v. Investors Group, Inc., 79 N.C.App. 678, 681, 340 S.E.2d 755, 758 (1986). Accordingly, for the purposes of analyzing Plaintiff and Third-Party Defendant's motions to dismiss pursuant to Rule 12(b)(6), the Court recites only those facts included in the pleadings that are relevant to the Court's legal determinations.
{7} Seven Falls Golf and River Club ("Seven Falls") was planned to be a 1, 600 acre private golf community in Hendersonville, North Carolina. However, the community was never completed. (Am. Countercls. 7.) On April 22, 2008, Defendants entered into a Purchase and Sale Agreement (the "Agreement") with Seven Falls, LLC (the "Developer") to purchase lot 50 in Seven Falls. Per the terms of the Agreement, the Developer was "obligated to complete the following: (a) paved roads . . .; and (b) installation of utility services to the Property . . . ." (Pl.'s Br. Supp. Mot. Dismiss Ex. A ¶ 13.) In addition, the Developer was also obligated to complete: the eighteen-hole golf course, golf house, golf-practice facility, and other non-golf sport facilities including tennis courts, fitness center, and swim club. (Pl.'s Br. Supp. Mot. Dismiss Ex. A ¶ 13.)
{8} Defendants acknowledged as part of the Agreement that the Developer "shall be the sole party responsible for the performance of the [Developer's] obligations under th[e] Agreement and acknowledges that no other person, firm, or entity, including, without limitation, any entity affiliated with [Developer], shall have any obligation or liability under th[e] Agreement." (Pl.'s Br. Supp. Mot. Dismiss Ex. A ¶ 17.) Defendants also agreed to "waive[] all claims against all companies and persons affiliated with [Developer] for any loss, cost or damages arising out of [Developer's] performance or non-performance of its obligations to [Defendants] in connection with this Agreement or any other instrument relating to Seven Falls." (Pl.'s Br. Supp. Mot. Dismiss Ex. A ¶ 17.)
{9} As was the case with many real estate developments marketed at the height of the real estate boom, the global financial crisis of 2008 negatively impacted Plaintiff's ability to complete the Seven Falls project, and investors who thought they were buying into a luxury residential community were left holding worthless property while owing significant financial obligations on their purchases. Defendants' claims against Plaintiff and Third-Party Defendant stem from a theory that Plaintiff, Third-Party Defendant, and the Developer fraudulently induced the purchase of lots at Seven Falls through the use of an aggressive marketing scheme. Defendants further argue that the relationship between Plaintiff, Third-Party Defendant, and the Developer constituted a joint venture or partnership, and thus, any liability attributable to one of the parties should be imposed on all of the parties. Specifically, Defendants allege claims for: violations of the Interstate Land Sales Full Disclosure Act ("ILSA"); breach of fiduciary duty/constructive fraud; violations of the South Carolina Unfair and Deceptive Trade Practices Act ("UDTPA"); negligence/gross negligence; breach of contract; tortious interference with contract; and violations of North Carolina's Anti-Deficiency Statute ("Deficiency Statute"). In addition, Defendants invoke the doctrines of equitable estoppel; apparent agency; agency by estoppel; and estoppel to deny joint venture.
{10} On a motion to dismiss pursuant to Rule 12(b)(6) of the North Carolina Rules of Civil Procedure, the question before the court is "'whether, as a matter of law, the allegations of the complaint, treated as true, are sufficient to state a claim upon which relief may be granted under some legal theory.'" Block v. County of Person, 141 N.C.App. 273, 277, 540 S.E.2d 415, 419 (2000) (quoting Harris v. NCNB Nat'l Bank, 85 N.C.App. 669, 670, 355 S.E.2d 838, 840 (1987)).
{11} "The complaint must be liberally construed, and the court should not dismiss the complaint unless it appears beyond a doubt that the plaintiff could not prove any set of facts to support his claim which would entitle him to relief." Id. at 277–78, 540 S.E.2d at 419.
{12} In considering a motion to dismiss for failure to state a claim upon which relief can be granted, "the well-pleaded material allegations of the complaint are taken as admitted; but conclusions of law or unwarranted deductions of fact are not admitted." Pinewood Homes, Inc. v. Harris, 184 N.C.App. 597, 613, 646 S.E.2d 826, 837 (2007) (quoting Sutton v. Duke, 277 N.C. 94, 98, 176 S.E.2d 161, 163 (1970)).
{13} Defendants argue that the Plaintiff, Third-Party Defendant, and Developer's conduct in the sale of lots at Seven Falls constituted a joint venture, and accordingly, that Plaintiff and Third-Party Defendant are both liable for certain claims based on the Developer's conduct.
{14} "A joint venture exists when there is: '(1) an agreement, express or implied, to carry out a single business venture with joint sharing of profits, and (2) an equal right of control of the means employed to carry out the venture.'" Rifenburg Constr., Inc. v. Brier Creek Assocs., L.P., 160 N.C.App. 626, 632, 586 S.E.2d 812, 817 (2003) (quoting Rhoney v. Fele, 134 N.C.App. 614, 620, 518 S.E.2d 536, 541 (1999)), aff'd, 358 N.C. 218, 593 S.E.2d 585 (2004). Therefore, Defendants must allege sufficient facts for the Court to infer that the essential elements of joint venture exist.
{15} In support the sharing of profits element, Defendants allege: (1) that Plaintiff and Developer "jointly marketed and orchestrated approximately Fifty Million Dollars . . . in residential lot sales . . ." (Am. Countercls. ¶ 8); and (2) that upon information and belief, Plaintiff and the Developer shared profits on numerous transactions related to the sale of lots at Seven Falls (Am. Countercls. ¶ 8.)[1] Taking Defendants' allegations at true, the Court concludes that Defendants have adequately alleged that Plaintiff, Third-Party Defendant, and the Developer shared profits.
{16} As for allegations related to Plaintiff and Third-Party Defendant's alleged right of control over the...
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...agree that the law of the state where the claimant sustained its injuries governs tort claims. See Synovus Bank v. Parks , 2013 NCBC 40, *24, 2013 WL 3965424 (N.C. Sup. Ct. July 30, 2013) ("the suffering of damages ... [is] the last event necessary to make [another] party liable" in tort). ......