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Business Court Pockets its Whistle on Claims that Hoops Commentator Billy Packer’s Company Unfairly Changed Roster for Mountain Development

Longtime college basketball commentator Billy Packer is credited with one of the better Yogi Berra-isms in NCAA hoops lore: “This is going to be a long three minutes here.” And that’s about how long it took for litigation against Packer and some related defendants to resolve after the North Carolina Business Court granted summary judgment for them on key claims arising from a dispute over development of a luxury RV park near the Olde Beau golf resort in Alleghany County.

In Morris Int’l v. Packer, 2021 NCBC 66A, the Court did some post-game film study on a disputed lineup change that left the plaintiff marketing company fuming about being benched when a once-stalled real estate project restarted without it.  The parties had taken initial steps to develop an RV park at Olde Beau, which is co-owned by Packer’s investment company. But after a frosty reception from Olde Beau members at a planning board hearing, the project cooled in August 2016. When plaintiff discovered it had revived in 2017 without its participation, the dispute was on. Id. ¶¶ 9-15.

The resulting litigation featured allegations common to joint ventures gone bad, including contract and fiduciary duty breaches, unfair trade practices, and tortious interference with contract. In an early 2021 ruling by Judge McGuire, the Court dismissed much of the case in a ruling that centered upon the conclusion that the joint venture had dissolved in fall 2016 after the parties assessed community opposition to the project. Id. ¶ 29.

In a thorough summary judgment ruling, Judge Davis left the plaintiff with little more than a fiduciary duty claim arising from an alleged failure to provide full information about the joint venture’s assets. That, and remaining counterclaims, resolved by voluntary dismissal a month after the Court’s ruling. While the dispositive motion ruling extended much of the logic of Judge McGuire’s earlier order, it offered a few additional insights on how the Business Court thinks about disputes in these settings.

Reconsideration: The case was reassigned to Judge Davis after he assumed the “Raleigh seat” previously occupied by Judge McGuire. In his order, Judge Davis held that the “well-established rule that one Superior Court judge is not permitted to overrule another” applies with equal force to personnel changes on the Business Court bench. Id. ¶¶ 43-44. The Court held that the limited exceptions to that rule had not been met, and suggested plaintiff could have sought reconsideration “closer in time to the Court’s [earlier] Order while Judge McGuire was still the Superior Court judge assigned to the case.” Id. ¶ 46.

Plaintiff argued an overhead shot of the park as built showed its reliance on the joint venture’s original design, left.

Lay testimony: Plaintiff contended plans and assets of the initial joint venture had been used to fuel the follow-on project from which it was allegedly excluded. It offered “visual comparisons” of concept designs from the joint venture with the second project’s marketing documents and actual build. Moreover, plaintiff’s president and COO offered affidavits that contended joint venture assets were used in the second project, including lot designs and locations. Id. ¶¶ 57-58. The affidavit of plaintiff’s president contended the materials showed the follow-on project “is remarkably consistent with the plans developed by” the joint venture. The Court rejected the contention that this evidence was sufficient to make out a factual dispute that plans from the joint venture were used to advance the second project, noting that asked too much of lay testimony:

“Our appellate courts have made clear that lay testimony is generally insufficient to create a factual dispute in matters that are outside the scope of a layperson’s customary intelligence and experience.”

Plaintiff contended the similarity of the original design, top, to marketing material for the park was suggestive that the original joint venture designs were used.

Id. ¶ 61 (quoting Davis v. City of Mebane, 132 N.C. App. 500, 504 (1999)). The Court held that the visual “compare documents” fell short where not accompanied by “testimony from a witness possessing demonstrated specialized knowledge on this technical subject.” Id. ¶ 62.

“In or affecting commerce”:  The Court has had several recent occasions to consider the types of “internal conduct of a partnership” that are insufficient to meet the “commerce” prong of an unfair and deceptive trade practices act claim. We discussed some of them here, noting their relevance in defending Chapter 75 claims. The Morris case seems to be a particularly clear use of the principle. While the court affirmed that “[a]n act giving rise to a breach of fiduciary duty is generally sufficient to constitute an unfair and deceptive trade practice,” that did not salvage plaintiff’s Chapter 75 claim where its only remaining ground for the fiduciary breach was the “internal” conduct by Packer in not providing requested information to plaintiff about the joint venture. Id. ¶¶ 83-86.

Takeaways

  • If your Packer family interests run more toward basketball than real estate development, Billy’s son Mark co-hosts a daily morning show on the ACC Network with Wes Durham, son of beloved UNC voice, Woody.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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