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Jackson v. Marshall11/7/2000
Appeal by plaintiff from judgment entered 29 December 1998 by Judge Narley L. Cashwell in Wake County Superior Court. Heard in the Court of Appeals 21 August 2000.
Plaintiff William E. Jackson (hereinafter "plaintiff") appeals from judgment entered after a bench trial, concluding that defendants had not breached any duties owed to the plaintiff.
The trial court's findings of fact tend to show the following. Plaintiff and defendant Marshall entered into several limited partnerships. Plaintiff sought defendant Marshall's investment in a limited partnership venture to acquire and re-develop the Kiddshill Plaza Shopping Center (hereinafter "KHP"). In order to obtain Marshall's investment, plaintiff offered to structure Marshall's investment so that before any partnership earnings would be distributed, Marshall's investment would be repaid with a 15% return per year (hereinafter "15% priority return"). This arrangement for repayment of defendant Marshall's investment was used in the Kiddshill Investment Limited Partnership (hereinafter "KHI") agreement as well as the KHP agreement. The agreements provided that the remaining profits would be divided 60% to defendant Marshall, 40% to plaintiff, after the payment of the 15% priority return.
The trial court found as a fact that neither plaintiff nor defendant Marshall were pleased with the format of KHP's partnership agreement. When forming KHI, defendant Marshall and plaintiff engaged a law firm, with which plaintiff had an ongoing relationship, to prepare the partnership agreement. Neither party reviewed the agreement until a few hours before they were to sign it, although both parties signed the agreement that day. Plaintiff testified that prior to signing the agreement, he read and understood the agreement. Plaintiff also testified he noticed the four month buy-sell provision in the agreement. KHI's general partner is Frederick Investment Corporation (hereinafter "FIC") whose sole shareholder and president is defendant Marshall. KHI's limited partners are defendant Marshall, plaintiff, and John Englert -- who is not a party to this litigation. After KHI was formed, plaintiff acted in conformity with the agreement, sought to benefit from the agreement's buy-sell provision, and in March of 1995, executed an amendment to the agreement, thereby ratifying the terms of the KHI agreement. Housing Inc. v. Weaver, 37 N.C. App. 284, 300, 246 S.E.2d 219, 228 (1978).
The third partnership in dispute here is the Glenmoor Limited Partnership (hereinafter "Glenmoor"). Glenmoor's managing partner is FIC, and its limited partner is KHI. At the same time the parties signed the KHI partnership agreement and purchased property for KHI, plaintiff suggested that the parties purchase the Glenmoor property. After the Glenmoor partnership was formed, plaintiff assigned his contract rights in the Glenmoor property to KHI, the limited partner. In order to finance the purchase of the Glenmoor property, Glenmoor borrowed from General Credit Limited Partnership, a partnership whose general partner is FIC and its limited partner is defendant Marshall. The trial court made the following findings of fact with regard to this loan.
38. In addition, Jackson was informed of the terms of the proposed General Credit loan in advance and was offered the opportunity to arrange more advantageous financing. Jackson objected to the loan origination fee and it was reduced from ten percent to the two percent figure Jackson agreed was reasonable. Jackson's other objection was to the length of the term of the loan, but the loan was paid off without difficulty well in advance of the maturity date and there was no actual or potential harm to the partnership
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