Krg New Hill Place, LLC v. Springs Investors, LLC

KRG New Hill Place, LLC v. Springs Investors, LLC, 2015 NCBC 69.

STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE

SUPERIOR COURT DIVISION

COUNTY OF WAKE 13 CVS 14770

KRG NEW HILL PLACE, LLC and KITE )

REALTY NEW HILL PLACE, LLC, )

Plaintiffs )

)

v. ) OPINION AND ORDER

)

SPRINGS INVESTORS, LLC; B. KYLE )

WARD; MICHAEL L. HUNTER and )

STEPHEN C. WARD, )

Defendants )

THIS CAUSE, designated a mandatory complex business case by Order of the Chief

Justice of the North Carolina Supreme Court, pursuant to N.C. Gen. Stat. § 7A-45.4(b)

(hereinafter, references to the North Carolina General Statutes will be to “G.S.”), and

assigned to the undersigned Special Superior Court Judge for Complex Business Cases,

comes before the Court upon Plaintiffs’ Motion for Partial Summary Judgment (“Plaintiffs’

Motion”) and Defendants’ Motion for Partial Summary Judgment (“Defendants’ Motion”)

(collectively, “Motions”). On May 28, 2015, the Court held a hearing on the Motions.

THE COURT, after reviewing the Motions, briefs in support of and in opposition to

the Motions, the record evidence filed by the parties, the arguments of counsel, and other

appropriate matters of record, FINDS and CONCLUDES as stated herein.

Smith Moore Leatherwood LLP by Bradley M. Risinger, Esq. and Barnes & Thornburg

LLP by Robert D. MacGill, Esq., Karoline E. Jackson, Esq., and Alexander P.

Orlowski, Esq. for Plaintiffs.

Shanahan Law Group, PLLC by Kiernan J. Shanahan, Esq., John E. Branch III, Esq.,

Brandon S. Neuman, Esq., Christopher Battles, Esq., and Jeffrey M. Kelly, Esq. for

Defendants.

McGuire, Judge.

PROCEDURAL HISTORY1

1. On November 5, 2013, Plaintiffs initiated this case by filing their Complaint.

On March 6, 2015, Plaintiffs filed their Amended Complaint with leave of Court.

2. The Amended Complaint states claims for breach of contract, breach of implied

covenant of good faith and fair dealing, declaratory judgment, fraudulent transfer, unfair and

deceptive trade practices, and liability of the individual Defendants under G.S. §§ 57C-3-30

and 57C-3-32.

3. On April 30, 2015, Defendants filed their Answer to Amended Complaint and

Counterclaims. Defendants allege counterclaims for breach of contract, breach of the

covenant of good faith and fair dealing, and declaratory judgment.

4. On February 20, 2015, Defendants filed their Motion for Partial Summary

Judgment. Defendants’ Motion seeks summary judgment in their favor as to: (1) Defendants’

counterclaim for breach of contract; (2) Plaintiffs’ request for specific performance on their

claim for breach of contract; and (3) Plaintiffs’ claims for fraudulent transfer and unfair and

deceptive trade practices.

5. On February 20, 2015, Plaintiffs filed their Motion for Partial Summary

Judgment. Plaintiffs’ Motion seeks summary judgment in their favor as to: (1) Defendants’

counterclaim for tortious interference with prospective economic advantage;2 and (2)

Defendants’ counterclaims for breach of contract, breach of good faith, and declaratory

judgment stemming from (a) Defendants’ allegations that Plaintiffs were obligated to

1 The full procedural history of this matter has been included in prior orders of this Court, and for

brevity will not be restated here.

2 In their amended counterclaims, Defendants also re-alleged a claim for tortious interference with

prospective economic advantage that the Court had already dismissed with prejudice in its February

27, 2015 Opinion and Order. Defendants’ counsel conceded at the May 28, 2015 hearing that they

have no viable claim for tortious interference, and the Court will not address that claim again in this

Order.

complete construction under the contract by December 31, 2010, and (b) Defendants’

allegation that Springs Investors, LLC is entitled to credits against any amounts it may owe

for “Confirmed Cost Savings.”

6. On May 28, 2015, the Court held a hearing on the Motions. The Motions have

been fully briefed and argued and are ripe for determination.

FACTUAL BACKGROUND

7. On July 15, 2008, Plaintiffs KRG New Hill Place, LLC and Kite Realty New

Hill Place, LLC (Plaintiffs are hereinafter referred to in the singular as “KRG”) and

Defendant Springs Investors, LLC (“Springs”),3 entered into a written Post-Closing

Development Agreement to coordinate the development of their adjacent properties located

in Holly Springs, North Carolina. In the Development Agreement, KRG and Springs agreed

to share the cost of making certain improvements to existing roadways and the construction

of an internal thoroughfare to enable the public to access both properties (“Infrastructure

Work”).4 The parties intended to develop a shopping center and residential apartments on

the properties.

8. Section 2 of the Development Agreement provided as follows:

KRG shall cause the Infrastructure Work to be constructed and installed in

accordance with the Approved Plans by a general contractor selected in

accordance with Section 2. Following approval of the Approved Plans, KRG

shall bid each of the major trades involved in the Infrastructure Work to not

less than three qualified contractors. KRG and Springs Investors shall jointly

review all such bids and KRG shall promptly notify Springs Investors of KRG’s

decision to award contracts to the respective bidders. KRG shall endeavor to

cause each contract entered into for the performance of the Infrastructure

Work to require substantial completion of the work thereunder to be completed

such that the entire Infrastructure Work shall be completed by December 31,

2010. All construction performed by or on behalf of any party under this

Agreement shall be performed in accordance with all applicable laws,

3 Defendants B. Kyle Ward, Michael L. Hunter, and Stephen C. Ward are the principals in Springs

Investors, LLC, and are collectively referred to in this Opinion and Order as the “Individual

Defendants.”

4 Am. Compl. Ex. 1 (“Development Agreement”).

ordinances, and regulations of the Town or other applicable governmental

entity, and shall be performed in as expeditious manner as reasonably

possible.5

9. Shortly after the Development Agreement was executed, KRG put the

Infrastructure Work on hold due to the downturn in the economy. The Infrastructure Work

has never been completed. Nevertheless, the parties continued to communicate with one

another and work together towards potential completion of the Infrastructure Work until

this lawsuit was filed in November 2013.

10. The parties disagree whether the Section 2 of the Development Agreement

required KRG to complete the Infrastructure Work by December 31, 2010. KRG contends

that the words “shall endeavor” in Section 2 of the Agreement meant that the December 31,

2010 date was a goal, rather than a deadline. Springs contends that the provision required

the completion of all Infrastructure Work by December 31, 2010.6 In addition, KRG contends,

and Springs disputes, that even if December 31, 2010, was the deadline for completion of the

work, Springs waived the deadline by its conduct following December 31, 2010, including

continuing to collaborate with KRG.7 Springs contends that the provision in the Development

Agreement stating that it could only be modified or amended by written agreement, and the

5Id. at § 2.

6Compare Pls.’ Mem. Supp. Mot. Summ. J. 11 (“The plain language of the Agreement states that

[KRG] had no obligation to complete the Infrastructure Work by December 31, 2010.”) with Defs.’

Mem. Supp. Mot. Summ. J. 2-3 (“The parties, at the time they executed the [Development

Agreement], intended December 31, 2010 to serve as a deadline for the completion of the

Infrastructure Work . . . .”; “There is no material dispute of fact that [KRG] failed to complete the

Infrastructure Work by December 31, 2010, which constitutes a material breach” of the Development

Agreement.); Am. Compl. Ex. 3 at 2 (March 11, 2013 letter from KRG to Springs regarding the

December 31, 2010 date, stating that “[w]hile that time frame may have been contemplated by both

parties in July of 2008 when the Agreement was executed, the parties did not and could not have

foreseen the devastating economic downturn that befell the U.S. shortly after the Agreement was

executed”).

7 See, e.g., Pls.’ Mem. Supp. Mot. Summ. J. Ex. 28 (notes from Jan. 4, 2011 meeting).

fact no such written amendment ever occurred, means that the purported deadline was never

changed.8

11. The Development Agreement required KRG to “prepare and submit to

[Springs] a set of plans and specifications for the Infrastructure Work.”9 Springs had ten

business days after receipt of the plans in which to notify KRG of any problems with the

plans. A dispute of fact exists as to whether KRG complied with this requirement and

provided project plans to Springs.10

12. The Development Agreement also provided that the cost of the Infrastructure

Work would be shared between KRG and Springs. KRG was to contribute a fixed sum of

$6,156,394.00 to the Infrastructure Work (the “Contribution Amount”). The parties dispute

whether KRG has expended the Contribution Amount towards work properly attributed the

Infrastructure Work. Springs was to be “solely responsible for the Cost of the Infrastructure

Work in excess of the Contribution Amount,” and was required to deposit $2,915,409.00 into

an escrow account to be applied to any funds needed in excess of the Contribution Amount.11

Springs established the escrow account, but the parties dispute whether Springs is required

to contribute additional amounts to the costs of the Infrastructure Work.12

13. The Development Agreement also provides that Springs would receive credits

against any funds it was required to contribute to the Infrastructure Work for “Confirmed

8 Development Agreement at § 6.

9 Id. § 1.

10 Compare Defs.’ Mot. Summ. J. Ex. D (stating that Defendants “never received any such Plans

prior to going to Bid and, therefore, did not have an opportunity to review any of the Plans pursuant

to the Agreement”) with Am. Compl. ¶ 28 (“Pursuant to Section 1 of the Agreement, on or around

April 25, 2012, Kite provided Springs Investors with the Infrastructure Work Plans.”); Pls.’ Br. Opp.

Defs.’ Mot. Summ. J. Exs. 25-26 (emails discussing attached project plans).

11 Development Agreement at §§ 2-3.

12 Compare Defs.’ Br. Supp. Mot. Summ. J. at 10 (“There is no evidence in the record showing that

[Plaintiffs have] spent approximately $6.1 million on the Infrastructure Work called for in the

PCDA”) with Pls.’ Opp. Defs.’ Mot. Summ. J. 6 (“The latest budget projects that [Defendants] will be

responsible for over $3,000,000 in expenses above [their] escrowed amount.”).

Cost Savings” that Springs was able to achieve on the project.13 There is a dispute of fact as

to whether Springs achieved such Confirmed Costs Savings.

14. KRG contends that it has spent its full Contribution Amount of $6,156,394.00

and that the Development Agreement requires Springs to contribute additional amounts

towards the cost of the Infrastructure Work. Springs alleges that KRG “has not exceeded its

contribution amount because [KRG] continues to include costs outside the scope of the

[Development Agreement] and exclude credits to which Springs is entitled.”14 In December

2012, KRG sent Springs additional bids from contractors for completion of the Infrastructure

Work. KRG alleges that the bids would have put Springs on notice that it would need to

contribute an additional $2 million towards the Infrastructure Work.15 In February 2013,

KRG sent notice to Springs that Springs was obligated to contribute additional amounts to

escrow. In May 2013, Springs notified KRG that it would not make any further contributions

towards the cost of the Infrastructure Work. 16

15. On or around February 28, 2013, shortly after KRG sent notice to Springs that

additional escrow payments were required, Springs transferred certain real property to the

Individual Defendants for little or no consideration.17 Springs also transferred other assets

to sister entities owned by the Individual Defendants. KRG contends that these transfers

left Springs with insufficient equity to cover its existing liabilities, and were made for the

purpose of putting those assets outside the reach of KRG.18 Springs disputes this claim, and

contends that the transfers of property and assets were made for legitimate reasons

13 Development Agreement at § 3.

14 Defs.’ Reply Supp. Partial Summ. J. 2, n.3.

15 Pls.’ Opp. Defs.’ Mot. Partial Summ. J. 3.

16 Id. at 3-5.

17 Id. at 19.

18 Id. Exs. 9 & 11.

unrelated to the notice from KRG. Springs also alleges that the transfers did not leave

Springs unable to fulfill its obligations under the Development Agreement.

ANALYSIS

16. “Summary judgment is appropriate '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 any party is entitled to a judgment as a

matter of law.'” Variety Wholesalers, Inc. v. Salem Logistics Traffic Servs., LLC, 365 N.C.

520, 523 (2012) (quoting Rule 56(c)). Any inference of fact should be drawn against the

movant. Forbis v. Neal, 361 N.C. 519, 523-524 (2007) (citing Caldwell v. Deese, 288 N.C. 375,

378 (1975)). A genuine issue of material fact will require the court to preserve the issue for a

finder of fact. Bumpers v. Cmty. Bank of N. Va, 367 N.C. 81 (2013). Although the court must

view the record “in the light most favorable to the party opposing the motion,” Rule 56(e)

provides that summary judgment may not be defeated by “mere allegations or denials,” but

rather that the opposition must be supported by “specific facts showing that there is a

genuine issue for trial.” Patterson v. Reid, 10 N.C. App. 22, 28 (1970).

Breach of Contract

17. KRG and Springs each claim that the other breached the Development

Agreement. A successful claim for breach of contract shows (1) a valid contract, and (2)

breach of the terms of that contract. Poor v. Hill, 138 N.C. App. 19, 26 (2000).

The December 31, 2010 Completion Deadline

18. The primary dispute underlying the claims in this case centers on whether the

Development Agreement obligated KRG to complete the Infrastructure Work by December

31, 2010. Both parties argue that Section 2 of the Development Agreement is unambiguous

and requires judgment in their favor as matter of law. Springs alleges that KRG breached

the Development Agreement by not entering into contracts requiring “substantial

completion” of the work by December 31, 2010, and by not completing construction before

December 31, 2010. KRG argues that the language of Section 2 unambiguously provides that

KRG only had to “endeavor” to complete the Infrastructure Work by December 31, 2010, and

that it complied with this requirement by continuing the Infrastructure Work

notwithstanding Springs’ refusal to provide its share of the funds.

19. It is well-settled that “[w]here the language of a contract is plain and

unambiguous, the construction of the agreement is a matter of law; and the court . . . must

construe the contract as written, in light of the undisputed evidence as to the custom, usage,

and meaning of its terms.” Happ v. Creep Pointe Homeowner’s Assoc., 215 N.C. App. 96, 103

(2011) (alterations in original) (quoting Hodgin v. Brighton, 196 N.C. App. 126, 128-29

(2009)). Moreover:

Contracts are interpreted according to the intent of the parties. The intent of

the parties is determined by examining the plain language of the contract.

Extrinsic evidence may be consulted when the plain language of the contract

is ambiguous.

Brown v. Ginn, 181 N.C. App. 563, 567 (2007) (citations omitted). “Ambiguities in contracts

are to be resolved . . . upon consideration of ‘the expressions used, the subject matter, the end

in view, the purpose sought, and the situation of the parties at the time.’” Cleland v.

Children’s Home, Inc., 64 N.C. App. 153, 157 (1983) (quoting Silver v. Bd. of Trans., 47 N.C.

App. 261, 268 (1980)).

20. The Court concludes that the language of Section 2 of the Development

Agreement is ambiguous, and that its meaning must be determined by a jury. The terms

“shall endeavor” and “shall be completed” as used in Section 2 appear to be inconsistent with

one another, the former suggesting that the deadline is aspirational and the latter that the

deadline is a firm requirement. The language of the last sentence of Section 2 suggests that

while the parties wished to meet a December 31, 2010 deadline, the construction work under

the agreement needed only to “be performed in as expeditious a manner as reasonably

possible.” In addition, the evidence regarding the intent of parties with regard to Section 2

is disputed, with both parties presenting evidence supporting their respective

interpretations.19 See Root v. Allstate Ins. Co., 272 N.C. 580, 590 (1968) (“[I]f the writing

itself leaves it doubtful or uncertain as to what the agreement was, parol evidence is

competent . . . to show and make certain what was the real agreement between the parties;

and in such case what was meant, is for the jury, under proper instructions from the court.”).

21. The Court also concludes that issues of material fact exist regarding KRG’s

argument that Springs waived the December 31, 2010 completion deadline. Accordingly,

summary judgment on these grounds is not appropriate.

22. The Court further concludes that Springs’ Motion as to its counterclaim that

KRG breached the Development Agreement by failing to provide Springs with plans for the

Infrastructure Work must fail because the because there exist issues of material fact.20

Summary judgment is therefore DENIED as to these issues.

Springs’ Obligation to Provide Additional Funds

23. Springs also moves for summary judgment as to KRG’s first claim for breach

of contract and for an order requiring Springs’ specific performance. KRG alleges that

Springs breached the Development Agreement by failing to provide additional funds towards

19 Because the Court is unable to conclude as a matter of law that failure to complete the

Infrastructure Work by December 31, 2010 was a breach of the Development Agreement, the Court

finds that it cannot properly consider at this time Plaintiffs’ argument that Defendants’ breach of

contract claims are barred by the statute of limitations.

20 Compare Defs.’ Mot. Summ. J. Ex. D (stating that Defendants “never received any such Plans

prior to going to Bid and, therefore, did not have an opportunity to review any of the Plans pursuant

to the Agreement”) with Am. Compl. ¶ 28 (“Pursuant to Section 1 of the Agreement, on or around

April 25, 2012, Kite provided Springs Investors with the Infrastructure Work Plans.”); Pls.’ Br. Opp.

Defs.’ Mot. Summ. J. Exs. 25-26 (emails discussing attached project plans).

the Infrastructure Work. Springs argues that the evidence establishes that KRG had not

reached its contribution amount so as to trigger any further obligation for Springs to

contribute to the Infrastructure Work. Springs further argues that because KRG has

breached the Development Agreement, it cannot seek the equitable remedy of specific

performance.

24. The Court concludes that there exist disputed facts regarding Springs’

obligation to contribute additional funds towards the Infrastructure Work. Similarly, with

regard to Springs’ counterclaim that it is entitled to a credit for “Confirmed Cost Savings”

against any amounts it may owe, the parties dispute the meaning of “Confirmed Cost

Savings”21 as used in the Development Agreement, and the Court concludes that the

provision is ambiguous. Accordingly, summary judgment on this issue is also not

appropriate. Summary judgment as to the issue of Spring’s obligations to contribute

additional funds should be DENIED.

Breach of Good Faith/Declaratory Judgment

25. KRG seeks summary judgment on Defendants’ counterclaim for breach of good

faith and Defendants’ counterclaim for a declaratory judgment “stemming from [Springs’]

contention that the [Development Agreement] . . . obligated [KRG] to complete construction

of the Infrastructure Work by December 31, 2010.”22

26. As discussed above, the record evidence leaves questions of fact as to whether

KRG was bound by a December 31, 2010 deadline. Accordingly, summary judgment should

be DENIED as to these counterclaims.

21 Development Agreement at § 3.

22 Pls.’ Mot. Partial Summ. J. 1-2.

Fraudulent Transfer

27. Defendants seek summary judgment on KRG’s fourth claim alleging that

Springs fraudulently transferred real property and other assets to the Individual Defendants

and sister entities controlled by the Individual Defendants in violation of the North Carolina

Fraudulent Transfers Act, G.S. § 39-23.1 et seq. (“UFTA”). KRG alleges that Springs

transferred the property and assets for less than reasonable value and for the purpose of

making Springs insolvent at the time that Springs would have been obligated to provide

additional funds for the Infrastructure Work. KRG alleges that Springs did so with the intent

of hindering or delaying creditors such as Plaintiffs from collecting amounts due.23

28. A debtor is liable under the UFTA if, inter alia, the debtor transferred assets

with the intent to hinder, delay or defraud any creditor, or if the transfer was made without

receiving “reasonably equivalent value” and the debtor was engaged in or about to engage in

business or incur debts for which the debtor’s remaining assets would be “unreasonably

small” or otherwise insufficient. G.S. § 39-23.4(a).

29. Defendants argue that they are entitled to summary judgment on this claim

because KRG has conceded that Springs has fully satisfied all existing liabilities, and KRG

is therefore not a “creditor” of Springs within the meaning of the statute.24 KRG disputes this

argument, and contends that the facts clearly establish that it meets the definition of a

“creditor” of Springs under the UFTA.25

23 KRG also contends that Springs was dominated and controlled by the Individual Defendants and

that the Court should pierce the corporate veil to reach the transferred assets in the hands of the

Individual Defendants. Am. Compl. ¶¶ 74-79.

24 Defs.’ Mem. Supp. Mot. Partial Summ. J. 11-14.

25 Pls.’ Opp. Defs.’ Mot. Partial Summ. J. 16-21.

30. The Court concludes that significant disputes of material fact exist that

preclude summary judgment as to this claim. Accordingly, summary judgment is DENIED

as to the claim for relief under the UFTA.

Unfair and Deceptive Trade Practices

31. Finally, Defendants have moved for summary judgment on KRG’s claim for

unfair and deceptive trade practices in violation of G.S. §75-1.1 (“UDTPA”). KRG alleges that

Springs induced KRG to continue performing under the Development Agreement after

December 31, 2010 and then fraudulently transferred assets to the Individual Defendants to

avoid Springs’ financial obligations under the Agreement.26 KRG summarizes the basis for

its UDTPA claim as follows:

The Individual Defendants intentionally drained Springs’ assets, engaging in

a series of voluntary and uncompensated transactions that left the entity

insolvent. Second, the Defendants unfairly unfurled a scheme by which it

secured [KRG]’s cooperation in construction of the Infrastructure Work, took

responsibility for securing a key permit and set target dates for projection

completion in 2013, only to later refuse to pay its share of the expenses. Springs

lured [KRG’s] cooperation, gave no contemporaneous notice that it believed

Kite had breached the Agreement, and then systematically drained its assets

so that it would be unable to meet its contractual obligations to [KRG].27

32. To recover for a violation of G.S. § 75-1.1, KRG “must show: (1) defendant

committed an unfair or deceptive act or practice, (2) the action in question was in or affecting

commerce, and (3) the act proximately caused injury to the plaintiff.” Dalton v. Camp, 353

N.C. 647, 656 (2001) (citation omitted). “Whether a particular commercial act or practice

constitutes an unfair or deceptive trade practice is a question of law.” Akzo Nobel Coatings,

Inc. v. Rogers, 2011 NCBC 41 ¶ 108 (N.C. Super. Ct. Nov. 3, 2011) (citing Norman Owen

Trucking, Inc. v. Morkoski, 131 N.C. App. 168, 177 (1998)).

26 Pls.’ Opp. Defs.’ Mot. Partial Summ. J. 21-24.

27 Id. at 22.

33. Defendants argue that KRG has not presented evidence that Defendants

engaged in conduct that was unfair or deceptive or presented evidence that KRG suffered

damages other than damages arising from the alleged breach of the Development

Agreement.28 The Court already has concluded that issues of fact exist regarding, and

Defendants are not entitled to summary judgment on, KRG’s claim for fraudulent transfer.

The fraudulent transfer claim could support a claim for violation of the UDTPA. See L.J.

Best Furniture Distribs., Inc. v. Capital Delivery Serv., Inc., 111 N.C. App. 405, 410 (1993)

(finding that an issue of fact existed as to whether asset purchase for inadequate

consideration or fraudulent conveyance amounted to an unfair trade practice). In addition,

the Court concludes that there are disputed issues of material fact regarding KRG’s claim

that Springs induced KRG to continue performing under the Development Agreement. See

Gress v. Rowboat Co., Inc., 190 N.C. App. 773, 777 (2008) (finding that allegations that a

potential purchaser of businesses induced the businesses to enter into a salary and profit

sharing agreement prior to the purchase of the businesses, when the potential purchaser had

no intention of consummating its purchase of the businesses, supported a claim under G.S. §

75-1.1). Accordingly, the Court concludes there summary judgment is inappropriate on these

grounds.

34. Defendants’ argument that KRG has failed to present evidence that

Defendants’ unfair and deceptive conduct proximately caused KRG injury separate from the

injury resulting from Springs’ alleged breach of the Development Agreement presents a closer

call. KRG does not point to any specific injury or damages caused by Defendants’ unfair

conduct other than amounts owed due to Springs’ alleged breach of the Development

Agreement, namely amounts expended on Infrastructure Work by KRG above its

28 Defs.’ Mem. Supp. Mot. Partial Summ. J. 14-17.

Contribution Amount. KRG summarizes the injury caused by Defendants’ unfair conduct as

follows:

[KRG] has been injured by the Defendants’ maneuvering, which was intended

to make Springs incapable of meeting its contractual obligations. At least one

measure of that injury is the “shortfall” intentionally created by the

Defendants: the difference between the funds above [KRG’s] Contribution

Amount ultimately needed to complete the Infrastructure Work and Springs’

remaining assets.29

35. Although KRG’s alleged injury appears to be coterminous with the damages it

seeks from Springs’ under its breach of contract claim, the Court concludes that the

underlying facts regarding KRG’s Chapter 75 claim are in dispute, and the Court cannot

conclude as a matter of law that KRG has not presented facts that could support a claim for

injury based on the alleged unfair and deceptive acts. First, as noted above, North Carolina

has recognized that conduct amounting to a fraudulent transfer designed to avoid the claims

of creditors can constitute an unfair and deceptive act. Second, evidence of a breach of

contract accompanied by aggravating factors also can support a claim for violation of Chapter

75. Johnson v. Colonial Life & Accident Ins. Co., 173 N.C. App. 365, 370 (2005). In such

cases, the underlying monetary injury would be the amount recoverable for the breach of

contract. Accordingly, that KRG’s primary injury under its claim for unfair and deceptive

trade practices are the amounts allegedly owed by Springs under the Development

Agreement does not defeat KRG’s claim as a matter of law.

NOW THEREFORE, based upon the foregoing, it hereby is ORDERED that:

1. Defendants’ Motion for Partial Summary Judgment is DENIED in its entirety.

2. Plaintiffs’ Motion for Partial Summary Judgment is DENIED in its entirety.

29 Pls.’ Opp. Defs.’ Mot. Partial Summ. J. 23.

This the 8th day of July, 2015.

/s/ Gregory P. McGuire

Gregory P. McGuire

Special Superior Court Judge

for Complex Business Cases