Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Nehme v. Khoury

United States District Court, E.D. North Carolina, Western Division

September 26, 2019

INSAF NEHME, Plaintiff,



         This matter is before the court on defendants’ motion (DE 266) to withdraw reference to the bankruptcy court of adversary proceeding captioned Walid El Khoury, Edward El Khoury, and Hope Comercio E. Industria Limitada v. Insaf George Nehme, No. 5:19-AP-00033-SWH (Bankr. E.D. N.C. ) (the “adversary proceeding”). Upon defendants’ request, the motion, originally filed in the bankruptcy court, was transmitted to this court and filed in the instant related matter, which presently is stayed pending Chapter 7 bankruptcy proceedings in the case In re: Insaf George Nehme, No. 18-05725-5-SWH (Bankr. E.D. N.C. ) (“the Chapter 7 case”). Plaintiff responded in opposition to the motion. In this posture, the issues raised are ripe for ruling. For the following reasons, the motion is denied.


         This case arises out of an intra-family dispute over the management of a joint venture, defendant Hope Comercio E Industria Limitada (“Hope Comercio”). Plaintiff, Insaf Nehme (“Nehme”) and former plaintiff NOA, LLC (“NOA”), a North Carolina limited liability company of which plaintiff Nehme is the sole member, initiated this case by complaint filed February 28, 2014. Plaintiffs sued defendants Walid El Khoury (“Walid”), who is plaintiff Nehme’s cousin and a resident of Angola and Lebanon; Edward El Khoury (“Edward”), who is plaintiff Nehme’s nephew, defendant Walid’s son, and a resident of both Angola and Lebanon; and Hope Comercio, a limited liability company organized and existing under the laws of Angola, asserting various tort and breach of contract claims. In particular, plaintiffs asserted claims for breach of partnership agreement, breach of fiduciary duty, conversion, and unjust enrichment against defendant Walid. Plaintiffs asserted a conversion claim against defendant Edward. Finally, plaintiffs asserted a breach of contract claim against defendant Hope Comercio, in addition to an action for an accounting of defendant Hope Comercio’s assets.

         The court dismissed all of plaintiff’s claims for failure to prosecute on August 15, 2018, due to plaintiff’s failure to file notice of self-representation and other delays including failure by plaintiff’s counsel to file timely notice of appearance. Claims by and against former plaintiff NOA were voluntarily dismissed November 7, 2017.[1] This left counterclaims remaining asserted by defendants against plaintiff, adjudication of which is detailed below.

         Defendants Walid and Hope Comercio filed counterclaims on June 29, 2015, wherein they asserted four causes of action: breach of partnership agreement; constructive fraud; unfair and deceptive trade practices; and unjust enrichment. This court previously summarized the alleged facts underlying the counterclaims as follows:

[P]laintiff and defendant Walid agreed in spring 2008 to form a partnership to sell used clothing in Angola though Hope Comercio. (DE 94 at 13 ¶ 15). Defendant Walid agreed to invest $500, 000 immediately upon formation of the partnership, and plaintiff agreed to invest a similar amount in the future. (Id. at 14 ¶ 16). Plaintiff agreed to work with suppliers in the United States to obtain merchandise, and Walid agreed to operate the retail store in Angola. (Id.). Both parties agreed to reinvest the profits earned by the partnership, and if their intended agreement was fulfilled, they would share profits. (Id.).
After the partnership began operations in October 2008, Walid transferred to plaintiff $400, 000 to purchase three vehicles and to ship several used clothing containers to Hope Comercio. (Id. ¶ 17). At some point, plaintiff contributed less than $150, 000 worth of used clothing to the partnership, by shipping to Angola four containers of items he could not sell at his Liberian store, River Way Stores. Plaintiff never invested the remaining amount. (Id. ¶ 18).
In approximately August 2009, the partnership needed additional funding due to a new policy in Angola that made it necessary to clear numerous containers of clothing from the port in Luanda immediately. (Id. at 15 ¶ 19). At that time, Walid asked plaintiff to provide his investment in the partnership, but plaintiff refused, and Walid ultimately borrowed $200, 000 from a friend to rescue Hope Comercio and the partnership. (Id. at ¶¶ 20–21).
During the following years, the business carried on as Walid and Hope Comercio sent money to plaintiff and NOA to use the money to purchase used clothing. (Id. ¶ 22). Eventually, a dispute arose between the parties involving a company that plaintiff and NOA used to source clothing called Carolina International Trading ("CIT"), based in South Carolina. Specifically, plaintiff pai[d] CIT in advance for clothing where his practice with other suppliers was to pay on delivery. (Id. ¶ 23). By October 2011, plaintiff had caused Hope Comercio to advance more than $340, 000 to CIT, even as Hope Comercio's suppliers in Texas were complaining that plaintiff failed to pay them. (Id. ¶ 24). In or around October 2011, Walid accompanied plaintiff to visit CIT and, at that time, discovered that CIT's inventory was worth less than $50, 000. (Id. at 16 ¶ 25).
Several weeks later, plaintiff informed Walid that "we started the process to take [CIT's owner] to court." (Id. ¶ 26). On or around February 29, 2012, plaintiff informed Walid that CIT had filed bankruptcy, and that this would result in a loss to Home Comercio of roughly $330, 000. (Id.). Nonetheless, plaintiff continued to do business with CIT and never filed a lawsuit against CIT. (Id. ¶ 27).
Defendants allege, on information and belief, that plaintiff used Hope Comercio's prepayment to fund CIT's shipment of several containers of used clothing to Liberia, for sale in plaintiff's separate River Way Stores venture. (Id. ¶ 28). During 2012, plaintiff began operating a used clothing supply and sorting company under the name Sanford Rag Company ("SRC") and began supplying Hope Comercio with used clothing from SRC, as well as from the previously existing suppliers. (Id. ¶¶ 29–30). In 2013, plaintiff began using Hope Comercio's money to prepay SRC for its used clothing while failing to pay Hope Comercio's other suppliers. (Id. at 16–17 ¶ 31). Defendants allege, on information and belief, that plaintiff used payments from Hope Comercio to purchase used clothing for River Way Stores. (Id. at 17 ¶ 31).
In or around November 2013, six containers arrived to the port in Angola without documentation. (Id. ¶ 34). Defendant Walid learned that the suppliers withdrew documentation because plaintiff failed to pay them. (Id.). Over the course of 2013, up to and including June 29, 2015, plaintiff held between $148, 000 and $600, 000 of Hope Comercio's money, which does not include amounts plaintiff used to fund his separate business interests. (Id. ¶¶ 32, 35).

(Order (DE 244) 11-13).

         On August 15, 2018, the court granted defendants’ motion for entry of default as to the counterclaims, leaving open for final resolution defendants’ motion for default judgment. (DE 223). The court determined that a hearing for determination of default judgment was necessary on several issues:

1) “[A] damages hearing is necessary where the court may enter judgment only to the extent defendants carry their burden to prove damages by a preponderance of the ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.