Rudolph et al v. Beacon Independent Living, LLC et al
Filing
75
ORDER denying #63 Motion for Preliminary Injunction; denying #72 Motion for TRO. The Beacon Defendants shall comply with the Show Cause order nolater than 4/10/12. Signed by District Judge Frank D. Whitney on 4/5/12. (Pro se litigant served by US Mail.)(com)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NORTH CAROLINA
CHARLOTTE DIVISION
DOCKET NO. 3:11-cr-00617-W
MARY B. RUDOLPH, RUDOLPH-RAAD,
INC., and FAMILY FORUM, INC.,
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Plaintiffs,
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vs.
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BEACON INDEPENDENT LIVING LLC,
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FRANK MCCOLLUM, BRUCE L.
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BLEIMAN, ANTOINE LASSITER, ED
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BOWERS, in his capacity as Receiver for
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Charlottetown Manor, Inc., WIND N SEA
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HOLDINGS, LLC, and WESLEY L.
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DEATON and ROBERT BURRIS,
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Substitutes Trustees of that Deed of Trust
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executed by Rudolph-Raad, Inc., dated the
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28th day of June, 2002, and recorded July 1, )
2002, in Book 13761, Page 926 of the
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Mecklenburg County Public Registry and
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re-recorded on January 17, 2003, in Book
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14708, Page 79 of the Mecklenburg County
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Registry,
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Defendants.
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ORDER
and
ORDER TO SHOW CAUSE
THIS MATTER is before the Court upon Plaintiffs’ Second Motion for a Preliminary
Injunction (Doc. No. 63) and Plaintiffs’ Motion for a Temporary Restraining Order (Doc. No. 72).
In both motions, Plaintiffs request the Court to order Defendants Beacon Independent Living, LLC,
Bruce Bleinman, and Antoine Lassiter (collectively, “Beacon Defendants”) to cease and desist from
managing the Facility and order that the Beacon Defendants and their personnel vacate the Facility.
In addition, Plaintiffs’ Motion for a Temporary Restraining Order also requests the Court order
Defendant Beacon not distribute any funds without court approval for next fourteen days.
Defendants have not yet responded to either motion, and the time for doing so has not expired.
Nevertheless, the Court finds Plaintiffs’ pleadings sufficient to issue a ruling on both motions, and
for the reasons that follow, the Court DENIES both motions.
At the outset, the Court notes the high standard required to issue an injunction. As the
Supreme Court recently noted, “An injunction is an exercise of a court's equitable authority, to be
ordered only after taking into account all of the circumstances that bear on the need for prospective
relief. Equitable relief is not granted as a matter of course, and a court should be particularly
cautious when contemplating relief that implicates public interests.” Salazar v. Buono, __ U.S. __,
130 S.Ct. 1803, 1816 (2010) (multiple citations omitted) (emphasis added). Additionally, “In a suit
for an injunction against trespass to real property the court may determine the legal right of the
plaintiff to the possession of that property.” Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 516
(1959) (citations omitted).
The Court has already ruled on a previous motion for a preliminary injunction that Plaintiff
Rudolph-Raad, Inc., owns the property where Defendants currently operate the Facility. (Doc. No.
45, p. 2). Plaintiffs’ ownership is encumbered by two mortgages on the property. The Court further
noted two important things that bear repeating here. First, the Court acknowledged that no evidence
indicated that any licensing or regulating agency had recently found less than satisfactory conditions
at the Facility. (Doc. No. 45, p. 3). The Court also concluded, “It is not in the public interest to
disrupt the management of the Facility under these facts, particularly where occupants are veterans
and persons with disabilities.” (Doc. No. 45, p. 4). Keeping the public interest in mind, as the case
law requires, the Court declined in the earlier order to require Defendants to cease and desist
operation of the Facility. Plaintiffs now renew their request to remove Defendants from the property
and present additional evidence supporting their motion.
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The Court has reviewed the allegations in the pleadings, as well as the evidence and
affidavits submitted in support of Plaintiffs’ motions. The gravamen of Plaintiffs’ Second Motion
for a Preliminary Injunction is that the Beacon Defendants are “ill-equipped to manage the Facility”
and are “endangering the lives of the Facility’s residents.” (Doc. No. 64, p. 7). The Motion for a
Temporary Restraining Order relies on the Beacon Defendants’ conduct of allowing an insurance
policy on the property to lapse, as well as Beacon Defendants’ failure to comply with Court orders
requiring them to deposit $8,000 into an escrow account on the 25th of each month.
Although the allegations are troubling, the Court is not convinced that such accusations rise
to the level warranting injunctive relief at this point. Most problematic for Plaintiffs is the fact that
much of the allegations involve speculation and possible outcomes without concrete evidence to
support such statements. While the evidence could plausibly suggest past misconduct on part of the
Beacon Defendants, neither the depositions nor affidavits contain personal knowledge sufficient to
forecast gross misconduct by the Beacon Defendants.
As to the insurance policy issue, although it could prove detrimental for the Facility to be
uninsured, it is not within the province of this Court to instruct Defendants how to conduct their
business and where to assume (or not assume) risks. See generally Lubrizol Enterprises, Inc. v.
Richmond Metal Finshers, Inc., 756 F.2d 1043, 1047 (4th Cir. 1985) (“As generally formulated and
applied in corporate litigation the rule is that courts should defer to-should not interfere
with-decisions of corporate directors upon matters entrusted to their business judgment except upon
a finding of bad faith or gross abuse of their ‘business discretion.’”) (citations omitted). While
evidence as it unfolds in discovery may prove otherwise, Plaintiffs allegations at this stage, many
of which are speculative, do no support a finding of bad faith or gross abuse of the Beacon
Defendants’ business judgment at this stage.
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Additionally, it appears that Plaintiffs, and possibly Rudolph Wood Holding Company, have
an ownership interest in the property. Plaintiffs have not shown that they cannot procure insurance
on the property absent injunctive relief. See U.S. Fidelity & Guaranty Co. v. Reagan, 122 S.E.2d
774, 780 (N.C. 1961) (“It is a fixed rule of insurance law that an insurable interest on the part of the
person taking out the policy is essential to the validity and enforceability of the insurance contract,
whatever the subject matter of the policy, and that if no insurable interest exists, the contract is
void.”).
In denying the preliminary injunction and temporary restraining order, the Court notes that
its ruling should have no impact on Plaintiffs’ ability to report to the agencies monitoring the
Beacon Defendants and their operation of the Facility. See generally Hampton University v.
Accred. Council for Pharm. Edu, 611 F. Supp. 2d 557, 570 (ED. Va. 2009) (noting that “Courts in
many Circuits, including within the Fourth Circuit, have repeatedly emphasized in no uncertain
terms the great deference that should be afforded to accrediting organizations with respect to their
substantive standards and professional judgment.”) (citations omitted). Indeed, in the event
Plaintiffs choose to raise their concerns with the licensing or regulatory agencies, the Court wants
to make clear that by denying Plaintiffs’ motion, the Court is in not condoning the allegations of
Defendants’ conduct so as to prejudice any independent investigation by the licensing or regulatory
bodies. The Court, in its discretion, simply finds that the legal standards for a preliminary injunction
and restraining order are not satisfied here.
Finally, the Court is troubled by the fact the Beacon Defendants have failed to comply with
the Court’s order to deposit $8,000 on the 25th of each month. Although the time for responding to
Plaintiff’s motion for a temporary restraining order has not expired, counsel for Defendants Beacon
Independent Living and Bruce Bleiman emailed the Court implying that such payment had not been
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made but would be made immediately to counsel’s trust account.1 In an abundance of caution and
in light of Defendants’ acknowledgment that it had not complied with the Court’s prior order, the
Court hereby ORDERS Defendants Beacon Independent Living and Bleiman to SHOW CAUSE
as to: (1) why such payment was not timely made; and (2) why Defendants should not be held
in contempt of court for their failure to comply with the Court’s order. Such response to this
Order to Show Cause shall be filed with the Court no later than Tuesday, April 10, 2012. The
response should include documentation to establish that such payment has been made. Moreover,
Defendant Bleiman is hereby CAUTIONED that further failures to comply with the Court’s order
could result in a finding of contempt, which may include, among other things, fine and
imprisonment.
IT IS THEREFORE ORDERED that Plaintiffs’ Second Motion for a Preliminary Injunction
(Doc. No. 63) is DENIED and Plaintiffs’ Motion for a Temporary Restraining Order (Doc. No. 72)
is DENIED. The Beacon Defendants shall comply with the Show Cause order contained herein no
later than Tuesday, April 10, 2012.
IT IS SO ORDERED.
Signed: April 5, 2012
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In addition, new counsel for the Beacon Defendants shall obtain a waiver of conflict
similar (if not identical) to the one procured by former counsel for Beacon Defendants. As prior
counsel contemplated in emails to the Court and in light of the recent allegations of nonpayment, new counsel shall be required to immediately report to the Court on the 26th of
each month if the $8,000 is not timely tendered by Defendants Beacon and Bleiman. The
waiver of conflict shall be attached to the response to this Show Cause Order.
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