case no. 18-0550 - circuit court order - banbury holdings ...€¦ · the plaintiff, banbury...

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IN THE CIRCUIT COURT OF BERKELEY COUNTY, WEST VIRGINIA DIVISION II

BANBURY HOLDINGS, LLC,

Plaintiff,

v. CIVIL ACTION NO. 17-C-5 JUDGE WILKES

ROBERTW.MAY,

Defendant.

ORDER DENYING PLAINTIFF'S RENEWED MOTION FOR SUMMARY JUDGMENT AND DECLARATORY ORDER

This matter came before the Court this J/)1~ day of May 2018 upon Plaintiff's , Renewed Motion for Summary Judgment. The Plaintiff, Banbury Holdings, LLC, by counsel,

Charles F. Printz, Jr., Esq., and Defendant, Robert W. May, by counsel Alex A. Tsiatsos, Esq.,

have fully briefed the issues necessary. The Court dispenses with oral argument because the

facts and legal contentions are adequately presented in the materials before the court and

argument would not aid the decisional process. So, upon the full consideration of the issues, the

record, and the peltinent legal authorities, the Court rules as follows.

FINDINGS OF FACT

1. Plaintiffis the fee simple owner to a tract of land containing 230.58568 acres) in

Falling Waters District, Berkeley County, West Virginia (hereinafter "the subject

property") which it acquired via foreclosure sale by deed dated November 6, 2014.

Order Denying Plaintiff's Renewed Motion for Summary Judgment and Declaratory Order of 14

APP528

See PI's Mem., p. 2. Defendant is the owner of an adj acent tract of land confaining

38.41 acres. Id

2. On March 4, 2005, Mark-Banbury, LLC (hereinafter "Mark-Banbury") purchased the

subject property for purposes of development into a residential housing community

known as "The Lakes", and is a predecessor in title to Plaintiff.

3. Subsequent to its purchase, Mark-Banbury mortgaged the subject property to several

creditors, including PNC Bank (hereinafter "PNC") by instrument dated March 4,

2005, in the payment of a promissory note and demand letter of credit in: the

aggregate amount of $20,000,000.00.

4. On December 8,2010, Defendant flIed a lawsuit against Mark-Banbury, LLC, a West

Virginia limited liability company, in the Circuit Court of Berkeley County, West

Virginia, in Civil Action No. 10-C-I004 (hereinafter "lO·C-I004"). Defen9ant later

amended his Complaint in that matter to include Lawrence I. Rosenbergl as a

defendant. See PI's Mem., p. 3. This lawsuit involved causes of action related to a

storm water management system the defendants in that case had built upon Defendant

May's property.

5. By Judgment Order entered August 5,2013 (hereinafter "Judgment Order'~), the

Court in 1 O-C-l 004 awarded judgment in favor of Defendant and against Mark-

Banbury and Rosenberg, awarding damages and awarding an injunction prohibiting

Mark-Banbury and Rosenberg from future development of The Lakes until the storm

water management system was removed from Defendant's property, flooding and

damages were stopped, and further storm water management on the property was

I Lawrence L Rosenberg was Mark-Banbury's managing member.


APP529

undertaken. The Judgment Order was recorded in the appropriate books in the Office

of the County Commission (now Council) of Berkeley County.

6. The instant civil action was commenced with the filing of the Complaint on January

3,2017. The Complaint seeks declaratory judgment; specifically, Plaintiff requests

this Court to "declare that the Judgment Order is void, invalid and of no effect as to

Plaintiff Banbury Holdings, LLC and its successors in title; [and] declare that the

Judgment Order does not bind or otherwise run with the land that is the subject of this

civil action". ,See Pl's Campi., p. 8-9. The parties have agreed that there is no triable

question of fact related to this complaint for declaratory judgment, and instead have

asked, in agreement, for the Court to decide the issue based on the briefing, pleadings,

record, as well as the record in Civil Action No. 10-C-I0042.

7. On January 25,2017, Defendant flied his Answer.

8. On February 23,2017, Plaintiff filed a Motion for Summary Judgment, seeking

declaratory judgment that the Judgment Order and injunction are void, invalid, and of

no effect as to the Plaintiff and do not bind or otherwise nm with the Plainti.fr s real

property. On March 13,2017, Defendant filed his Response to Motion for Summary

Judgment. On March 17, 2017, Plaintiff filed its Rept y in Support of Motion for

Summary Judgment.

9. On May 1,2017, the Court entered its Order Denying Plaintiff's Motion for Summary

Judgment, finding genuine issues of material fact remained as to certain issues, such

"as to the members ofPlaintiffLLC's involvement in and level of knowledge of the

2 The parties agreed the CourtwouJd take judicial notice ofBerkcley County Civil Action No. 1O-C-I004. See, infra. ~ 17.

Order Denying Plaintiff's Renewed Motion for Summary Judgment and Declaratory Order oft4

APP530

issues surrounding the injunction and storm water management system", and that "the

injunction will remain in force as long as the court may feel that the protection which

it affords is necessary to complainant's rights, or until conditions demand a

modification of that protection or its entire removal". See Ord. Denying PI's Mot.

Summ.J.

10. Thereafter, on June 5,2017, in Civil Action No. 10-C-I004, Banbury Holdings filed

its Petition to Dissolve or Modify Injunction, seeking a dissolution or modification of

the injunction awarded in the Judgment Order. A hearing was held on September 7,

2017, wherein the Court took evidence and entertained oral argument. Specifically,

Banbury Holdings, LLC presented the evidence of its expert, Jason Gerhart, P,E.,

licensed engineer. However, at the hearing, the Court appointed its own expert from

an independent engineering firm. After consul~g with the parties, the Court selected

Triad Engineering, Inc. (hereinafter "Triad") as its expert, and ordered it to conduct

an appropriate investigation and file a written report on the relevant drainage and

storm water issues.

11. Meanwhile, on July 6,2017, a Status Conference was held in this civil action,

wherein Civil Action No. 1 O-C-I 004 and the Petition to Dissolve or Modify

Injunction were discussed.

12. On or about November 2:.2017, the Court, in Civil Action No. 10-C-I004, received

the report of the expert engineer regarding the drainage and storm water management

effecting Plaintiff and Defendallt's properties. The Court appointed engineer from

Triad concluded there was no area of disagreement with Plaintiff's expert, Mr.


APP 531

Gerhart, and offered the professional opinion that only certain portions of Banbury

Holdings, LLC's property drain towards Defendant May's propertyl.

13. On November 21, 2017, the Court entered an Order Granting Petition to Modify

Injunction in Civil Action No. lO-C-I004, modifying the injunction created by the

Judgment Order and allowing the development of the portion of Plaintiff's property

that does not drain onto Defendant's property. In other words, said injunction was

modified so that it applies only to those portions of Banbury Holdings, LLC's

property that drain toward Defendant May's property. See Ord. 11/21/17, p. 13.

14. On February 1, 2018, Plaintiff filed its Renewed Motion for Summary Judgment,

arguing the flIst Motion for Summary Judgment was denied because the Court

identified issues of fact to be explored through discovery, and because there is no

genuine issue of material fact as to those issues, it is now entitled to summary

judgment. See PI's Mem., p. 13.

15. On February 20, 2018, Defendant filed his Response to Renewed Motion for

Summary Judgment.

16. On March 2, 2018, Plaintiff filed its Reply in Support of Renewed Motion for

Summary Judgment.

17. On March 14, 2018, an agreed letter, to the Court, dated March 12, 2018, was filed in

the Court file. Said letter averred that the parties agreed there was "no triable

question of fact" in the case, sought the Court vacate itsjury trial date, "and that the

Court instead decide this matter based upon the record before it as developed through

1 See the Order Granting Petition to Modify Injunction, Civ. Action No. IO-C-I004. filed November 21,2017, for more detail regarding the specific drainage basins and divisions and portions of the subject property.


APP532

the parties' briefing". See Ltr., 3/14/18. By Agreed Order entered March 28, 2018,

the trial was vacated for the reasons set forth above, and it was stated that the parties

also agree that "as part of the deliberations in this case, the Court may take judicial

notice of the record in Berkeley County Civil Action No. lO-C-I004,,4. See Ord.,

3128/18.

18. The Court now finds the instant Motion is ripe for adjudication.

STANDARD OF LAW

Motions for summary judgment are governed by Rule 56, which states that "judgment

sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and

admissions on file, together with the affidavits, if any, show that there is no genuine issue as to

any material fact and that the moving party is entitled to a judgment as a matter of law." W. Va.

R Civ. P. 56(c). West Virginia courts do "not favor the use of summary judgment, especially in

complex cases, where issues involving motive and intent are present, or where factual

development is necessary to clarify application of the law." Alpine Property Owners Ass'n, Inc.

v. Mountaintop Dev. Co., 179 W.Va. 12, 17 (1987). Therefore, "[aJ motion for summary

judgment should be granted only when it is clear that there is no genuine issue of fact to be tried

and inquiry concerning the facts is not desirable to clarify the application of the law." SyL Pt 3,

Aetna Cas. and Surely Co. v. Fed Ins. Co. o/New York, 148 W.Va. 160, 171 (1963); Syl. Pt. 1,

Andrick v. Town of Buckhannon, 187 W.Va 706,421 S.E.2d 247 (1992); SyI. Pt. 1, Williams v.

Precision Coil, Inc., 194 W.Va. 52 (1995). A motion for summary judgment should be denied

"even where there is no dispute to the evidentiary facts in the case but only as to the conclusions

to be drawn therefrom." Williams v. Precision Coil, Inc., 194 W.Va. 52,59 (internal quotations

.. See supra' 6.

Ordel' Denying Plaintiffs Renewed Motion for Summary Judgment and Declaratory Order of14

APP533

and citations omitted}, However, if the moving party has properly supported their motion for

summary judgment with affJIDlative evidence that there is no genuine issue of material fact, then

"the burden of production shifts to the nonmoving party 'who must either (1) rehabilitate the

evidence attacked by the movant, (2) produce a~ditional evidence showing the existence of a

genuine issue for trial or (3) submit an affidavit explaining why further discovery is necessary as

provided in Rule 56(f)." ld. at 60.

CONCLUSIONS OF LAW

In this matter, Plaintiff, Banbury Holdings, LLC (hereinafter "Plaintiff',) argues summary

judgment is appropriate because the frrst motion for summary judgment was denied so that

Defendant could develop his case through discovery and that Defendant then failed to take

discovery within the allotted discovery period. See PI's Mem., p. 7. Further, Plaintiff argues: (1)

the fact issues identified in the Order Denying Plaintiff's Motion for Summary Judgmenf are not

"material" facts to survive summary judgment, and are void because the trustees and

beneficiaries of the deed of trust were not made parties to the civil action prior to the issuance of

the Judgment Order; and (2) the Defendant did not take additional discovery on the fact issues.

ld at 8-9. Finally, Plaintiff seeks a declaration that the Judgment Order "apply only to Mark-

Banbury, LLC and Lawrence 1. Rosenberg and are void, invalid, and of no effect as to Plaintiff

Banbury Holdings, LLC and do not bind or otherwise run with the land .. ,". Id. at 13. The issues

will be taken up in turn in the hereafter analysis.

S Specifically, these are identified as whether or not the Plaintiffhad notice of the injunction awarded in the Judgment Order, and the fact that the Judgment Order was recorde~ putting an subsequent purchasers on notice and the members ofPlaintiffLLC's involvement in and level of knowledge of the issues surrounding the injunction and storm water management system. See PI's Memo., p. 7-9.


APP534

The injunctive process is designed to deter, not to punish. Hecht Co. v. Bowles, 321 U.S.

321,64 S. Ct. 587, 88 L. Ed. 754 (1944). Rule 65 of the West Virginia Rules of Civil Procedure

governs injunctions. Rule 65(b) provides, in pertinent part:

Every order granting an iqjunction .. .is binding only upon the parties to the action, their officers, agents, servants, employees; and attorneys, and upon those persons in active concert or participation with them who receive actual notice of the order by personal service or otherwise.

W. Va. R Civ. P. 65.

Further, that which fairly puts party on inquiry is regarded as sufficient notice, if means

of knowledge are at hand; and purchaser, baving sufficient knowledge to put him on ~quiry, or

being informed of circumstances which ought to lead to such inquiry, is deemed to be

sufficiently notified to deprive him of character of innocent purchaser, where there has been

previous conveyance ofpropelty. Gullett v. Burton, 176 W. Va 447, 345 S.E.2d 323 (1986).

The West Virginia Supreme Court of Appeals has also found with regard to notice: The code

section relating to the docketing of judgment liens was enacted for the protection of purchasers

for valuable consideration without notice, and has no application to and will not serve to protect

one who accepts a deed of trust as security for 'a note when he is fully aware and has actual

notice ofasuitwhichresulted in ajudgment lien. Cooper v. Cooper, 142 W. Va. 847, 847, 98

S.E.2d 769, 769-70 (1957). The statute is designed to protect only those who have neither actual

nor constructive notice. [d. at 853, 772.

Black's Law Dictionary defines constructive notice as:

Such notice as is implied or imputed by law, usually on the basis that the information is a part of a public record or file, as in the


APP535

case of notice of documents which have "been recorded in the approptiate registry of deeds or probate. Notice with which a person is charged by reason of the notorious nature of the thing to be noticed, as contrasted with actual notice of such thing. That which the law regards as sufficient to give notice and is regarded as a substitute for actual notice.

Black's Law Dictionary (6th ed. 1990).

It is important to note that Defendant caused the Judgment Order entered August 5, 2013

to be recorded in the appropriate books in the Office of the County Commission (now Council)

of Berkeley County. Likewise, the Court notes the November 21, 2017 Order Granting Petition

to Modify Injunction, Civ. Action No. 10-C-1004,.which was appended to the August 5,2013

Judgment Order and included nunc pro tunc as part of that order in all respects, effective as of

the original date of the entry of the August 5, 2013 Judgment Order, was ordered to be recorded

in the County Clerk ~ s office. See Ord. 11121117, p. 14-15.

As the Court found in its Order Denying Plaintiff s [First] Motion for Summary

Judgment, such recordation puts subsequent successors in title on notice of said Judgment Order.

The Court considered in its Order Denying Plaintiffs Motion for Summary Judgment the

following:

According to Plaintiff, said Judgment Order brought about a default of the promissory note on the subject property held by PNC. Then, Plaintiff purchased the note from PNC. At the same time, when Mark-Banbury defaulted on the promissory note, Plaintiff initiated foreclosure proceedings. Pursuant to said foreclosure proceedings, the trustee's sale for the subject property was set for September 12, 2014, a date well after the time that the August 5,2013 Judgment Order was duly recorded.

See Ord. Denying Summ. J., 5/1117 (internal citations to the record omitted).

Order Denying Plaintiff's Renewed Motion for Summary Judgment and Declaratory Order of14

APP536

The Court also considered Judge Yoder's consideration of the injWlction in Civil Action

No. 1 O-C-l 004. Defendant filed an emergency motion in Case No. 1 O-C-l 004, seeking to

preserve the inj unction and have it declared penn anent by the Court. P1aintiff, despite not

having been formally named a party to that case, appeared to contest said motion. Plaintiff filed

a Notice of Appearance, responsive pleading, and appeared by counsel and participated in oral

argument of its position at the Court's hearing on said motion. Said hearing was held prior to

and in light of the forthcoming foreclosure sale of the subject property, on September 11, 2014.

Further, in its Order denying said motion without prejudice, the Court found that the plaintiff in

that case "may have a cause of action to enforce the injunction against any new purchaser of the

subject real estate." Also, the Court decided to "neither extend neither dissolve the injunction".

Subsequent to this hearing that Plaintiff voluntarily appeared and participated in, Plaintiff itself

purchased the subject property at the foreclosure sale.

Plaintiff argued then, and continues to assert now, that despite its knowing oftbe

Judgment Order and injunction before purchasing the property, that because other entities

comprising of the bank lien holders and their trustees allegedly not having notice of said action,

it, as a subsequent purchaser in the challi of title, should not be subject to the Judgment Order

and injunction. However, the Court found just because Defendant did not name the subject

property creditors as parties to Civil Action IO-C-I004, does not invalidate said Judgment Order.

The Court reiterates that finding now, and certainly does not agree with the Plaintiffs argument

that the recordation and any constructive notice of the recorded Judgment Order is not "material"

and thus not a genuine issue of material fact. See PI's Mem., p. 7.


APP537

Instead, the Court finds injunction awarded in the Judgment Order, as modified, does

apply to the subject property because it was duly recorded and clearly contained in the chain of

title, putting any subsequent purchaser on notice of such a Judgment.

The purchaser of land at ajudicial sale holds any title he acquires thereby in privity with

the title of the former owner. Baird-Gatzmer Corp. v. Henry Clay Coal Min. Co., 131 W. Va.

793,802,50 S.E.2d 673, 679 (1948). The Court hereby fmds Plainti.ff, as purchaser of the

subject property at the foreclosure trustee's sale, was properly in privity with the fanner owner in

the chain of title. The Court finds, upon the review of the record, this ruling dispositive, and

certainly not immaterial.

Plaintiff requested this Court to "declare that the Judgment Order is void, invalid and of

no effect as to [it] and its successors in title; [and] declare that the Judgment Order does not bind

or otherwise run with the land that is the subject of this civil action." See Compl., p. 8-9. The

Court fmds Plaintiffs notice of the recorded Judgment Order of which it voluntarily inserted

itself in the litigation of, causes it to be subject to the injunctive relief found in said Judgement

Order, and the existence PNC or other creditors in the chain of title does not affect said Judgment

Order.

Beyond that, the Court finds Plaintiff had constructive notice of the injooction. Plaintiff

LLC, like a corporation, can only act through its members. See United States v. T.l. M E.-D. C.,

Inc., 381 F. Supp. 730, 738 (W.D. Va. 1974) ("A corporation can only act through its employees,

and consequently, the acts of its employees, within the scope of their employment, constitute the

acts of the corporation"). Further, an entity knows, has notice, or receives notification of a fact


APP 538

for purposes of a particular transaction when the individual conducting the transaction for the

entity knows, has notice, or reeei ves a notification of fact, or in any event when the fact would

have been brought to the individual '8 attention had the entity exercised reasonable diligence. W.

Va. Code § 31B-l-I02(e) (West). Moreover, notice of facts to an agent is constructive notice

thereof to the principal himself, where it arises from or is at the time connected with the subject-

matter of his agency; for, upon general principles of public policy, it is presumed that the agent

has communicated such facts to the principal, and, if he, does not, still, the principal having

intrusted the agent with the particular business, the other party has the right to deem his acts and

knowledge obligatory upon the principal; otherwise the neglect of the agent might operate most

injuriously to the rights and interests of sucb party. w.F. Black & Sons v. B. Johnson & Sons, 65

w. Va. 518, 64 S.E. 626,628 (1909).

The Court found, in its Order Denying Plaintiff's Motion for Summary Judgment, that

genuine issues of material fact remained as to the members of Plaintiff LLC's involvement in

and level of knowledge of the issues surrounding the injunction and storm water management

system. Since then, the deposition testimony of Daniel Driver, corporate designee ofPlainti.ff,

taken February 14,2018, supports Plaintiff's having constructive notice of the injunction. In

addition to being the corporate designee of Plaintiff, Driver is also the chief fmancial officer of

Kinsley Properties. See Oep. Tr. 2114118, p. 5-6. He further testified that Kinsley Properties

manages Kinsley Equities, ill, LP, Plaintiff's sole member. [d. Driver also testified that Robert

A. Kinsley was the sole decision maker for all relevant Kinsley entities at aU relevant times,

including Plaintiff. [d. at 9-12. Indeed, Robert A. Kinsley trusted Larry Rosenberg to be Mark

Banbury's notice of process agent at all times relevant to civil action lO-C-I004. Rosenberg and

Order Denying Plaintifrs Renewed Motion for Summary Judgment and DeclaratOry Order of14

APP539

Mark Banbury knew about the injunction sought in 1 O-C-l 004. They were properly served and

appeared in the litigation. See Ord., 8/5113, p. 13. By virtue of their notice. Mark Banbury's

other member, Kinsley Equities III, LP, and as evidenced by Driver's testimony, Robert A.

Kinsley, are deemed to have notice under statutory LLC law. This proffered evidence supports

the fact that Plaintiff had constructive notice. Keeping in mind that the statute is designed to

protect only those who have neither actual nor constructive notice (Cooper, at 853, 772

(emphasis added»), the Couli cannot find that Plaintiff's J'equested relief be granted.

Finally, the Court notes it was proffered that the Plainti.frs sole member, Kinsley

Equities III, LP first learned of the Judgment Order from PNC. The Court notes this supports

constructive notice of PNC, whom, along with other creditors, Plaintiff argues invalidates the

Judgment Order because they were not made parties. See PI's Mem.

Accordingly, as the Court finds Plaintiff had constructive notice, and the failure to name

creditors as part of Civil Action No. lO-C-I004 did not break the chain of title when the

Judgment Order containing the inj unction was duly recorded, the Court must conclude that

Plaintiff's request for declaratory relief must be denied.

Accordingly, the Court does not declare that the Judgment Order, as modified, is void,

invalid and of no effect to Plaintiff and its SucGessors in title or declare that the Judgment Order,

as modified does not bind or otherwise run with the land. Instead, the Court FINDS and

DECLARES that the Judgment Order injunction, as modified, is valid as to Plaintiff and all

successors in title. Likewise, the Court fInds and declares that the Judgment Order injunction, as

modified, does bind and run with the land, as it was duly recorded.


APP540

Finally, unless otherwise provided by its terms, the injunction will remain in force as long

as the court may feel that the protection which it affords is necessary to complainant's rights, or

until conditions demand a modification of that protection or its entire removal. 28 Am.Jur.,

Injunctions, Section 323. (cited by Edlis, Inc. v. Miller, 132 W. Va. 147, 158,51 S.E.2d 132, 137 I

(1948)). This Cowt notes the injunction was challenged and modified so as to limit the use and

development of the smallest amoWlt of Plaintiff s land as practicable, only the areas which were

causing water to w:a1.n onto Defendant's property. See Ord. 11121/17.

CONCLUSION

Accordingly, it is hereby ADJUDGED and ORDERED that Plaintif'fs Renewed Motion

for Summary I udgment is DENIED. The Court hereby ADJUDGES, ORDERS, and

DECLARES that the Judgment Order injunction, as modified, is valid as to Plaintiffand all

successors in title. Further, the Court hereby ADJUDGES, ORDERS, and DECLARES that the

Judgment Order injunction, as modified, does bind and run with the land.

The Com notes the objections and exceptions of the parties to any adverse ruling herein.

There being nothing further to accomplish in ~s matter, the Clerk is directed to remove the

instant matter from the active docket. The Court ORDERS that this Order be recorded in the

appropriate books of the County Clerk's office. The Clerk is a directed to send a copy of this

Order to all counsel of record and to the County Clerk's office for recordation.

CHRISTOPHER C. WILKES, JUDGE TWENTY-TIITRO JUDICIAL CIRCUIT BERKELEY COUNTY, WEST VIRGINIA

Order Denying PlaintifPs Renewed Motion for Summary Judgment and Declaratory Order of14

APP541

case no. 18-0550 - circuit court order - banbury holdings ...€¦ · the plaintiff, banbury...

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