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WLAE, LLC v. Edwards

Court of Appeals of North Carolina

December 19, 2017

WLAE, LLC, Plaintiff,
v.
ROBERT L. EDWARDS a/k/a ROBBIE EDWARDS and WOLF ARBIN WEINHOLD, Defendants.

          Heard in the Court of Appeals 23 August 2017.

         Appeal by plaintiff from orders entered 17 June 2016 and 31 August 2016 by Judge Mark E. Powell in Henderson County No. 14 CVS 395 Superior Court.

          Craig Law Firm, PLLC, by Sam B. Craig, and James, McElroy & Diehl, P.A., by Preston O. Odom, III, for plaintiff-appellant.

          Prince, Youngblood & Massagee, PLLC, by Sharon B. Alexander, for defendant-appellee Edwards.

          F.B. Jackson and Associates Law Firm, PLLC, by Frank B. Jackson and Angela S. Beeker, for defendant-appellee Weinhold.

          ELMORE, Judge.

         Plaintiff WLAE, LLC, appeals from two dismissal orders, one each of which was entered in favor of defendants Robert L. Edwards and Wolf Arbin Weinhold, and both of which were entered pursuant to Rule 12(b)(1) of the North Carolina Rules of Civil Procedure. Because plaintiff lacked standing at the time its complaint was filed, the trial court correctly determined that it did not have subject matter jurisdiction over the proceeding. Accordingly, we affirm the dismissal orders of the trial court.

         I. Background

         The series of events culminating in this appeal were set in motion more than 20 years ago with the filing of a bankruptcy petition in the United States Bankruptcy Court for the Middle District of Florida, Tampa Division. Upon filing for Chapter 7 bankruptcy in June 1994, defendant Weinhold scheduled as an asset his 80 percent limited partnership interest in a Florida limited partnership known as Wolf's Lair, Ltd. At all relevant times, Wolf's Lair owned approximately 1, 400 acres of land in Henderson County, North Carolina (the "property").

         In June 1996, the bankruptcy trustee sold defendant Weinhold's 80 percent limited partnership interest in Wolf's Lair to Carolina Preservation Partners, Inc. (CPP), a corporation wholly owned by Mr. Douglas Smith. The bankruptcy case was then closed from June 1998 until October 2000, when creditors moved to reopen it based on a conveyance by defendant Weinhold's brother of a 20 percent general partnership interest in Wolf's Lair to defendant Weinhold shortly after the case was closed. As a result of these events, the trustee filed an adversary proceeding in November 2001 against defendant Weinhold, CPP, and Smith, in which she alleged the 20 percent general partnership interest in Wolf's Lair belonged to the bankruptcy estate and sought to rescind the sale of the 80 percent limited partnership interest to CPP.

         Nearly eleven years later, on 21 February 2012, the trustee, CPP, and Smith executed a settlement agreement within the adversary proceeding that attempted to resolve all issues regarding ownership of Wolf's Lair (the "2012 agreement"). The 2012 agreement reserved to the trustee her claim against defendant Weinhold regarding the 20 percent general partnership interest in Wolf's Lair, and it provided for the creation of WLAE, LLC, as an "acquiring entity" to be formed jointly by the trustee and Smith. The 2012 agreement provided further details as follows:

Trustee, Smith and CPP shall quitclaim to [WLAE] all of Trustee's, Smith/CPP's right, title and interest in and to the Property and Wolfs' Lair [sic], excepting and expressly reserving to Trustee, however, Trustee's claims against Weinhold as set forth in the [adversary proceeding] Complaint. [WLAE] shall be a limited liability entity established by CPP, and at the time of Trustee's and CPP/Smith's quitclaims, Trustee and CPP shall enter into a limited liability operating agreement . . . for [WLAE] which shall provide that CPP shall be an 80% managing member, and the Trustee shall be a 20% non-managing member . . . . Trustee makes no representation, warranty or covenant as to the condition of title to the Property or as to the Property's physical condition, and the quitclaim of her interest shall be "as-is, where-is." [WLAE] shall assume all responsibility for the management and control of the Property.

         Paragraph 11 of the 2012 agreement is also particularly significant and references the fact that the state of Florida administratively dissolved Wolf's Lair in 2000.

Trustee shall retain all right, title and interest in and to the claims she asserted against Weinhold in the [adversary proceeding] Complaint, including, without limitation, Trustee's rights in Weinhold's purported 20% general partnership interest in Wolfs' Lair [sic] and/or any derivative interest in the Property, including any 20% tenant in ...

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