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Beatley v. Ayers

United States District Court, E.D. Virginia, Richmond Division

June 26, 2018

J. IRVIN BEATLEY, Plaintiff,
v.
CHARLES E. AYERS, JR., et al, Defendants.

          MEMORANDUM OPINION

          M. Hannah Lauck, United States District Judge.

         This matter comes before the Court on Defendants Charles E. Ayers, Jr., Ralph L. Costen, Jr., and Jesse L. Barber's (collectively, the "Defendants") Motion to Dismiss Count Two of Plaintiff J. Irvin Beatley's Complaint (the "Motion to Dismiss"). (ECF No. 6.) Beatley responded and the Defendants replied. (ECF Nos. 10, 11.) Accordingly, the matter is ripe for disposition. The Court dispenses with oral argument because the materials before it adequately present the facts and legal contentions, and argument would not aid the decisional process. The Court exercises jurisdiction pursuant to 28 U.S.C. § 1332.[1] For the reasons that follow, the Court will deny the Motion to Dismiss. (ECF No. 6.)

         I. Factual and Procedural Background

         A. Procedural History

         These allegations arise from a June 16, 2017 Settlement Agreement (the "Agreement") between Beatley and the Defendants. Beatley alleges that the Defendants failed to comply with the Agreement, which required the Defendants to "pay Beatley $134, 000 on or before July 17, 2017," and "assume a loan from Fulton Bank to Beatley in the amount of approximately $157, 000." (Compl. 5, ECF No. 1.)

         Beatley filed his four-count Complaint with this Court on January 16, 2018, alleging breach of contract, conspiracy to breach contract, fraudulent inducement, and conspiracy to commit fraud. On February 12, 2018, the Defendants jointly filed both an answer and the Motion to Dismiss. On February 23, 2018, Beatley filed a Motion for Partial Judgment on Count One of the Complaint, the breach of contract claim (the "Motion for Partial Judgment"). (ECF No. 8.) On April 20, 2018, the Defendants moved to amend their response to Beatley's Motion for Partial Judgment, seeking to integrate information about money they paid to Beatley on April 12, 2018, and April 20, 2018, totaling $139, 949.60. These payments satisfied the portion of the Agreement that Beatley's Motion for Partial Summary Judgment concerned. All parties agreed that these payments rendered Beatley's Motion for Partial Judgment on Count One moot. Accordingly, on May 1, 2018, this Court denied Beatley's Motion for Partial Judgment as moot.

         B. Factual Allegations in the Complaint[2]

         These allegations in the Complaint arise from the Defendants' alleged failure to comply with the Agreement, which was the outcome of a separate lawsuit Beatley filed against the Defendants in Circuit Court for the City of Richmond (the "Richmond City Lawsuit").

         Beatley and the Defendants are members of Anchor Point Ventures, LLC ("APV") and MPD Ventures, LLC ("MPD"). APV owned property in Hopewell, Virginia, that MPD sought to develop into a residential community called Anchor Point. During the course of Anchor Point's development, Beatley personally contributed "large sums of money" to the Anchor Point project "in the form of cash contributions, loans, and loan payments." (Compl. 3.) Beatley made these contributions in reliance on the Defendants' promises to personally reimburse Beatley "if he was not reimbursed by APV." (Id. at 4.)

         When the Defendants failed to repay Beatley, he filed the Richmond City Lawsuit. With trial scheduled for June 26-27, 2017, retired Judge Michael Allen conducted mediation on June 16, 2017, between Beatley, the Defendants, and Kevin Walsh, a representative of John Woodfin, Jr., whose late father was a member of APV and MPD. Through mediation, the group reached a settlement. The Defendants promised to: (1) pay Beatley $134, 000 on or before July 17, 2017; and, (2) assume a loan that Beatley had from Fulton Bank for $157, 000. Pursuant to the Agreement, on June 21, 2017, the Circuit Court for the City of Richmond ordered the case continued.

         On August 30, 2017, the Richmond City Circuit Court held a status conference. At that time, the Defendants had yet to fulfill their obligations under the Agreement. They had not paid Beatley $134, 000, nor had they fully assumed the loan from Fulton Bank, though the Defendants had made two of the loan's monthly payments. At the status conference, the Defendants' counsel explained that his clients fully intended to fulfill the terms of the Agreement but were hindered by delayed paperwork from Fulton Bank and notice of two of Beatley's uncollected debts which caused confusion about who the Defendants should pay.

         One of these debts is a lien on Beatley for attorney's fees he owes to the law firm Setliff & Holland. The Defendants learned of this lien through a letter dated August 15, 2017, nearly a month after the Agreement's obligations were due. Defendants also pointed to a debt owned by Grove & Libbie Service Co., LLC ("GL") as an explanation for their failure to fulfill the Agreement. Beatley and the Defendants had a joint loan from Fulton Bank, of which they each personally guaranteed a portion. Beatley personally guaranteed $100, 000 of the loan. GL, a company in which John Woodfin Jr.'s late father was a principal, purchased this debt from Fulton Bank in July 2014. In his Complaint, Beatley alleges that the Defendants conspired to threaten him with collection of this GL-owned debt as a way to discourage him from enforcing the Agreement.

         Beatley alleges that as of January 16, 2018, when he filed the Complaint in this Court, the Defendants had not fulfilled the terms of the Agreement. Beatley further contends that the Defendants never intended to fulfill the terms of the Agreement, even at the time it was signed. Beatley argues that the Defendants conspired with each other, Kevin Walsh, and John Woodfin Jr., to "induce Beatley into agreeing to a settlement with which defendants had no intention of complying," and to "make demands upon Beatley [prior to July 17, 2017]... for payment... to GL for all or a portion of any amount he was to receive pursuant to the Agreement." (Id. at 6.) Beatley asserts that the Defendants and John Woodfin, Jr., discussed this plan during "weekly Monday meetings," and crafted this plan to avoid trial and a potentially adverse verdict in the Richmond City Lawsuit, as well as to discourage Beatley from demanding the Defendants fulfill the terms of the Agreement. (Id.)

         Beatley recounts a series of communications between the parties as evidence of this conspiracy. On July 13, 2017, days before the Defendants' July 17, 2017 deadline to pay Beatley $134, 000, Kevin Walsh called Beatley on behalf of John Woodfin, Jr. During the call, Walsh "wanted to know how much of the settlement proceeds Beatley was going to pay to GL in order to satisfy" his debt to the company, a concern that Walsh had not raised during mediation four weeks earlier. (Id.) Beatley alleges that Ayers, Costen, and the Defendants' counsel knew about this call before it happened. After July 17, 2017, the Defendants' counsel failed to return multiple emails from Beatley's counsel requesting an explanation for the Defendants' failure to timely pay $134, 000. On August 4, 2017, John Woodfin, Jr., sent Beatley a letter on behalf of GL demanding "that Beatley pay GL $100, 000." (Compl. Ex. H, ECF No. 1-9.) On August 17, 2017, John Woodfin, Jr., sent Beatley and the Defendants another letter on behalf of GL stating that any money the parties receive through the settlement should be "remitted immediately and directly to [GL]" in order to satisfy their personal guarantees. (Compl. 8.) Beatley alleges that both the August 4 and August 17 letters were written "with the knowledge and agreement of defendants and their counsel" and were "in furtherance of the plan to defraud Beatley and to breach the Agreement." (Id.)

         II. Analysis; ...


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