Three Rivers Landing of Gulfport, LP et al v. Three Rivers Landing, LLC et al

Filing 31

MEMORANDUM OPINION. Signed by Judge James C. Turk on 5/4/12. (med)

CLERK' OFFI U. DI .
S
CE S. ST COURT
A- ROANOKE,
r
VA
FIED
L

I TH E UN I
N
TED STA TES DI
STR I T C O UR T
C
FO R TH E W ESTERN DI
STR I O F V I I I
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RG N A
R O AN O K E DI ISIO N
V

MAY 2i 2 1
22
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TH R EE R W ER S LA ND I G O F
N
G U LFPO RT ,LP,
Case N o.7:
11-cv00025
and

A PO LLO TA X CR EDIT FUN D X 3 LI I
M TED PA RTN ER SH I
P
Pl ntif
ai f s,

M EM OM NDUM OPI ON
NI

V.

TH REE R W ER S LA ND I ,LLC,
NG
H G DEV ELO PER ,I C .
N ,
U NLIM ITED C O N STRU C TIO N ,IN C.
,
M A RK D.K IN SER ,
and
H O RIZO N M AN A G EM EN T IN C.
,

By: H on.Jam es C .Turk
Se or U nie St e Di t i tJudge
ni
t d at s s r c

Defendant
s.

Thi matri pr e l befr t Co ton t Dee ns M oton t Dimis ( .
s te s esnty oe he ur he fnda t' i o s s. Dkt
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6)
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t ad a r ume t n he
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i
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r i s he eq s e n de e e ng he as o di ton,
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he ri
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i 7, 2 t t onf r nc he ri
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endant M oton t D i m i i D ENIED .
s'
i o s ss s

Background

Thi c s a i e ou oft cons r to ofa 1 uni l -nc e a r m e c pl x i
s a e r s s t he
t uc i n
70- t ow i om pa t nt om e n

Gulpo t M i ss i a t al ge mius ofa o ma ey $2 milon by De e ntThr e
f r, s isppi nd he le d s e ppr xi t l
li
f nda
e

Ri r La ng, (sheFor rGe r Pa t r).Twoc r cs t Pa t rhi
ves ndi LLC l
t
me neal rne'
onta t,he rnes p
Agr me andt De l e Ag e me ,c ai pr vi i r r ng t pa e oft $2
ee nt
he veopm nt r e nt ont n o sons ega di he ym nt he
m ilon a i s he e The Def nda si t s c s a e Thr Ri r La ng,
li t s ue r .
e nt n hi a e r
ee ve s ndi LLC;H G

De eo e, n .Ch De lp r'; l tdCo sr ci n lc (teMa g r'; rz n
v lp r I c (l e veo e' Uni e n tu to ,n .ûh na e' Ho io
t
l mi
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l
Ma a e n ,nc (t M a a e n Co n ' ; n M akD. ns r(Kis r'.Kis r
n g me t l .ûhe n g me t mpa y' a d r Ki e t n e' n e
t
l
t
)
o ne t Fonne G e r lPa t , hi h he c r l d t ough t M a
w d he
r ne a rner w c
ontole hr
he nage . K i e a s
r ns r l o
owne t De l r a t M a ge e tCom pa The Pl ntf sa e Thr Ri r Land ng
d he ve ope nd he na m n
ny.
ai i f r
ee ve s
i

ofGulpor,LP (thePa t rhi 'a ApoloTa Crdi Fund- Li t Pa t rhi (she
f t C
t rnes p' nd
)
l x et
x3 mied rnes p l
t
Li tdPa t r'.RBC Thr Ri r,LLC i t Cur n Ge rlPa t roft Pa t rhi a
mie rne '
l
ee ve s
s he re t nea rne he rne s p nd
ha br
s oughtt i t nts to be l oft Pa t s p.
he ns a ui n ha f he rner hi
The pur e oft a t e c pl x w a t pr d l -nc e hous ng a ass h i
pos
he parm nt om e
s o ovi e ow i om
i nd
uc t

qualfedf a a r oftxce t,c le Low l o Ho i Ta Cr t ($ HTCs'.The
ii or n wad a rdis ald
nc me usng x edis tLI
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)
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lulto
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s e n he alulton f he t i bl i. e . C. d)1.
e
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r plca e tt
o I ll w . l ;IR. N o i 88- 1 1 8- C. 449.
r oca a d. . S. tce 1 6, 98 2 B.

l t sc et t alde opme f ewa $3, 621e r d a oft dat t a rme
n hi as he ot vel nt e s 789, a ne s he e he pa t nt
c
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e
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Pl i i f ale t tt For erGe r lPa t rpa d t e tr de l pm e f e t t
a ntf s l ge ha he m
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Pa t s p $16713 19. ThePa t r hi as lc d t f t pa of t c t c i
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rne s p lo a ke he unds o y f he onsnzton
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Ag e me .SeeVa.
r e nt
CodeAnn.j50- 1 B) Thepr sntc ei ditng s efom
73.02( .
ee as s si uihabl r
A uc t M ut . l A ugus a M ut t de e ntf ie t obt i a ur t i o m a i n
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ual n
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r a di t co to oft hom ebeng i ur d t rby e e sy vi ai t c r c
eg r ng he ndii n he
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be w ee t pa test tds ii a l r quie ç d lge i obt ni ac ur t i or a i n
t n he r i ha ûpec f c ly e r d due ii nce n ai ng c a e nf m to
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nd
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. ! , 65 .
ai if urhe l e ha he mied rne eled n he e
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rnerhi ha s
ontmpltd
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es nt as s s i uiha e t a t r
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t a t ubm ted ym
eq t onnst co a ne a s o n s a e e c r iyi t
hat nt i d w r t t m nt e tf ng he
consr c i ha bee c pl t d i a c da wih t a i a e co r ct 5 S. 2d a 3
t u ton d n om e e n c or nce t he pplc bl nt a . 07 E. t 45.
Subs que ty, tw a di c r t tt c r c orha notc ple w ih t c r t
e n l i s s ove ed ha he ont a t
d
om i d t he ontac
s c fc tons l On t e f c s t Vi gi a Supr m e Cour r e t tt tt c us ofac i
pe i i a i . d.
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e
t ul d ha ha he a e
ton
s
ounde onl i co r c a noti t t a e t dute br c d e sed s e y i t c r c
d y n nt a t nd
n or bec us he i s ea he xi t ol l n he ont a t

a nota c
nd
t ommonlw.J. a 347.l t pr e ca e ho vert For rGenea Pa t r
a - t
I
L
n he esnt s , we ,he me
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w a a fduc a y t t Parne s p. Th t du i be w e n t Fo m e G e a Pa t a t
s i i r o he t r hi
us he tes t e he r r ner l rner nd he
Pa t r hi do notars s el f om t c t a t a t y di i t c e oft co r c ori
rne s p
i e ol y r he on r c , s he d n he as
he nt a t n
M c e t . The For e Ge r lPa t rbr a hed hi co m on 1 w dute t t Pa t r hi w he
D vit
m r ne a r ne e c
s m
a
i s o he rne s p
n
he m ade m i r pr e a i i t Gene a Pa t r hi Ce tfca e. Thust ac i f f a a
s e es nt tons n he
r l rne s p r ii t
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neglgentm i r
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3A lhough t Vigi a Supr m e Cour hasbe c ef t ts e r a i tt r ng eve y br a ofco r ti o
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7

C . Count1 Br h ofC o r t
I: eac
nt ac

The Def nda s M otont Dimiss ciia l diputst Pli if dn
e nt ' i o s s pe fc ly s e he antfs mage

c lulto a dtep o e meh dt c lult t ea pia l da g s ( tNo. 7 a 9 .To
ac ai n n h r p r t o o ac ae h p lc be ma e .Dk . 1 , t )
saeacli f bra ofc rc,Pl ntfsmus aser ( )al lye or a eoblg tonofa
tt am or e ch onta t ai if
t s t 1 egal nf ce bl iai

d fn a tt apanif ( )ted fn a tsvolto o t t bi ai n a d ()ij r o d ma e
ee d n o litf; 2 h ee d n ' i ai n f ha o lg to ; n 3 nu y r a g
t t pl i i fc us d by t br ac oft toblga i Fia v.Geor ,594 S. 2d 61 61
o he a ntf a e
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E.
0, 4

( 2004) Pli if ha pr pel pl t e se eoft Pa t s p Ag e me a t
Va.
. antfs ve o ry ed he xitnc he rnerhi r e nt nd he
D e l m e A gr em e ,t tt De e nt vi a ed t ag ee e by pa ng ou t
ve op nt e nt ha he f nda s ol t he r m nt
yi
t he

de l
veopme f ebef ei waso d, nd t tt Pl i if we edn a d i t f r oft l n
nt e
or t
we a ha he antfs r m ge n he o m
he oa
t ywe e c
he r ompeledt m a t t Pa t r hi Pli if as e t
l o ke o he rne s p. antfs s r damag i t a
es n he mountof

$2, 111 Ast Pl i if c r c l no e am oto t dim isi nott pr rve c et
452, . he antfs ore ty t ,
in o s s s
he ope hil o
di put Pl i if 'alege dn a s.Att m oton t di m i s s a ,t Pl i if a e onl
s e a ntf s l d m ge
he
i o s s t ge he a ntf s r
y
r quied t s a e a pl i e ba i f rr i ,a t rt Cour a c pt t Pl i if 'a l ga i nsas
e r o tt
aus bl s s o elef fe he
t c e s he a ntf s le to
t u l ,1 S.Ct a 1
r e, qbal 29
. t 949- , hi t Pl i if ha don
51 w ch he a ntf s ve e.

D. Count11 Unj tEnrc
1 : us
ihment

Tosaeacam f ru j s e c me tt ePlitfsmus alg ( )t th yc n erda
tt li o nu t mi h n ,h an if t le e 1 ha te o fre
be i ont Def nt;( t Dee nt kne oft be ia s dra ona yha
nett he enda s 2) he fnda s w he neft nd houl e s bl ve
e tdt r yt Pli if;a ( )t Dee nsa c ptdorrti dt be ttwiho
xpece o epa he antfs nd 3 he fnda t c e e eane he nei t ut
pa ngf isval Sc dtv.Hous hol Fi Cor .I,661S. 2d834,8 ( .2008 .
yi or t ue. hmi
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)
He e t Pl i t fs by alegi t For e G e r lPa t rpa d t de l e f e r y, he
r , he a n if
l ng he m r ne a rne i he ve opm nt ee a l t
e se ofc r tt r st tgove ned t tm i oft pa entoft de opm e f e a
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nt e , nd

ove u i co m on l pr ce ntt tapa t ri a fduc a y r ltons p m us nota ta ns t i e e t ofhi
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s
prncpl,e n i t r ltons p i f r e by c r t
i i e ve f he eai hi s o m d
ontac.

8

t tt De ope ke ,a i f c ta f re t d veopme f et a he Ki e c r ld
ha he vel r pt nd n a t r ns e r d he e l
nt e o not r ns r ontole

e tt h v s fiin l p e u j t mi h n a an t h De eo e .
n i a e u fce ty ld nus e c me t g is t e v lp r
y,
The Cour fndst D e enda s a gum e t t c r r unc nci a t m oton t
ti
he f
nt r
nt o he ont a y onvi ng t he
i o

d s s sa e TheDee d n sa sr ta n cam fru j te c me t isb c u eu j s
imis tg .
fn a t se th t o li o nus mi h n le e a s nu t
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ontac t e he ri . n as
r n xpr s on r c xi t , he e s
dom y

aco rc a al qua um mei rc r Se Ne ihv. one ,429S. 2d201 207(
nta t nd low nt
rt e ovey. e drc J s
E.
, Va.

1 .l t pr e ca e, ve ,heei noe es c ta t lpr vii bewe t
993) n he esnt s howe r t r s xpr s onrcua o son t en he
pa te t tc
ri s ha over t alege wr ngf c
s he l d o ul onduc . The De ope i notpa t t t Pa t s p
t
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ry o he rner hi

Ag ee nta t De l e Agr e e , t e t Fo rGe r lPa t a t
r me nd he veopm nt e m nt bewe n he nne ne a rner nd he
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c
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t aitfs a e ci or mj t mi nt y ol d.
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De e
f ndan a guest tt Pli tfsha f ie t sa eac am f a ountngbec us
tr
ha he a n if ve a ld o t t l i or cc i
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t Com pl i doe nota l ge t Fo m e G e r lPa t r f l t ke p pr rbooks a
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en de nd

r us ( . 1 a 11 1 .Howe r t pla acam f a ountngt Pli if nee
ef ed. DktNo. 7, t - 2)
ve, o e d li or cc i he antfs d
no pl a a r us de a f r co ds A cl i f ac ountng i ( f m ofe t bl r le
t e d ef ed m nd or e r .
a m or c i s ; or
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quia e e i f
w hi h i a ia e upon or rofa c t n e t ç ovi ng f a a c
c s va l bl
de
our i quiy pr di or n c ountng off
i
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m
t e w ih a parners p or ot f duci y r aton i erse.' M ccl v.Sm ih,870 F.Supp.
hos t
t hi
her i ar el i nt
''
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t

1 4,1 ( D. 1 4)( tngLei B.Midldich, r a Ke Si li,Vizi aCi l
38 400 E. Va. 99 quoi
gh
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P o e u e j34 1 ( n e 1 9 :.Th rf r, yalgn teDe e d n s wh so di a
r c d r, .4) 2 d d. 9 2
eeo e b le ig h fn a t, o to n
fduc a y r l t o hi t t Pa t r hi wr f ly c nve t d pa t r hi f ,t Pl i if
i i r e a i ns p o he r ne s p, ong u l o re r ne s p unds he a ntf s

ha pld s fc e tf t t wihsa t De e nt 'moton t dim is
ve e ufi i n acs o t t nd he f nda s
i o s s.
F. CountI : Breach ofAf ii e G uarant
X
f lat
y

ThePli if aleget Fonue Ge r lPa t rbr ac d t Afiit Gua a y whe he
a ntfs l he
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r nt
n
f ie t pay t Exce sD e l e tCos s The De enda t a gue how e ,t tt Pl n if
a ld o
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s ve opm n
t.
f
ns r ,
ver ha he ai tf s
cam o s a e a c a m f rbr a h be a e t t r soft A fii t Gua a y r uie a w rte
l t t t l i o e c c us he e m
he fla e
r nt eq r
it n

de ndfrpay ntt twa notma i t sc e.( . 1 a 1 .ThePli if r pond
ma o me ha s
de n hi as DktNo. 7, t 4)
antfs es
t tunde Secin 8()oft Afiit Guaa y,heGuaa or -her t Dee nt ha
r to e he flae rnt t
rnt s
e he fnda s
e e sywai da rghtt a sr l kofde nda adee e.( . 18,a 22) Tosae
xprs l ve ny i o se tac
ma s fns DktNo. t . tt
ac am f rbr c oft Afii t Gua a y r quiest s me eeme sasar r quie t sa e
l i o ea h he tlae
r nt e r he a
l nt
e e r d o tt
a br a h ofc ta tc am .Thus b al ngt e se eoft Afii t Guar nt t
ny e c
on r c l i
, y legi he xit nc
he flae
a y, he
Def nda s f iur t pay t de a pr vi i n oft A f ii t Guar nt a t m one ar dam a s
e nt a l e o
m r o so
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s t ne a a r ul,i t f m oft l tExc s De opm e Cos st tw e e pa bl by t
usai d s es t n he or
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For e Ge r lPa t r t Pl i if ha s fc e ty pl d a c ai f br c oft A fi i t
m r ne a rne , he a ntf s ve uf i i n l e
l m or ea h he tla e
Gua an y. The f tt tt pa tesdi put w he he a wrte de a i r r d asa
r t
ac ha he r i s e
t r
it n m nd s equie
pr ondii f pay e unde t Afi i t Gua a y i no c r lng he e be a e a t
ec ton or m nt
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r c us t he
m o i t di m i sphas t Cour m us a c ptt Pl n if 'wel- e a l to ast u a
ton o s s
e he
t t c e he ai t f s
lpl d lega i ns r e nd
t Pl i tf s ha alege t tl k ofde a asa def ns w asw a ved.
he a n if ve l d ha ac
m nd
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G . C ountX : Indem niy
t

The Pl ntf shave br
ai i f
oughtan i m niy c a m a i tt For e Ge r lPa t runde
nde t l i ga ns he m r ne a r ne
r

Se ton8. oft Pa t rhi Agre t TheCompli sae t tûgl ars toft a t
ci 09 he rnes p e men .
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s i n, lea a e
nf s nc
he m r ne a rne , he m t
r ne s

10

i red a wilc i t i urmoni ,ncl ng bu notlmie t t pa m e o cossa
ncu r nd l ontnue o nc
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t
i t d o he y nt f t nd

at ne 'f e ,i de i wih c am sa s re by Be r n and o he sofnotls t n $354, '
tor ys e s n alng t l i s e td
a de
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. . e nt r s hathi ount nno ur ve ton o s s c us he
da a s a e t s ul tve. How e r aspr vi usy not a t m oton t di m i s s a e t
m ge r oo pec a i
ve ,
e o l
ed, t he
i o s s t g he

Cour a c pt t Pli tfs a l a i a tuea t t m o i t dimissa i nott
t c e s he a n if ' leg tons s r nd hus he ton o s s t ge s
he
a o i t pha e ofltga i t c le Pl i tf s d m a c l ul ton.
ppr pr a e s
ii ton o ha l nge a n if ' a ges a c a i

Furhe mor t Pl ntfsi mniycl m i,i e s nc apa tcul i dbr a h of
t r e, he ai if nde t ai s n s e e, ri arze e c
conr c cli a t ust elmen sar t s m east e f ra br ac ofc r c ca m.
ta t a m nd h he e t e he a
hos o ny e h onta t li
Agan, de al d a
i as t ie bove,t Pl ntfsha pld t e se eofa va i e or a ec r t a
he ai if ve e he xit nc
ld, nf ce bl ontac,
s cii br ac oft tc r c ,i t f r off iur t i mniyt De e nt unde t
pe tc e h ha onta t n he o m
al e o nde f he f nda s
r he
i m niy pr s onsoft Pa t r hi A gr e e , nd t da ag r s tng f o t tbr a h.
nde t ovi i
he rne s p
e m nt a he m es e uli r m ha e c

Thus t Pl ntfsha s fc e l pl d t i mniycli
, he ai if ve ufii nty e he nde t a m.
I . Conc us on
V
l i
I i cl art tt Pl i if ha s fci nty pl t i c a m s ag ns t D e e nt t
t s e ha he a ntf s ve uf i e l ed he r l i
ai t he f nda s o
be a l w e t pr e
lo d o oc ed. A c di y,t De enda t ' M o i t D i m i s i D ENI . An
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