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Reed v. Big Water Resort, LLC

United States District Court, D. South Carolina, Charleston Division

February 10, 2015

WILLIAM REED, DONNA REED, and BONNIE YOUMANS, JANE YATES, PHILLIP CAULDER, all individually and for the benefit and on behalf of all others similarly situated, Plaintiffs,
v.
BIG WATER RESORT, LLC; TLC HOLDINGS, LLC; RICHARD CLARK; JAMES THIGPEN; JIMMY " STEVE" LOVELL; and OCOEE, LLC, Defendants; BIG WATER RESORT, LLC; TLC HOLDINGS, LLC; RICHARD CLARK; JAMES THIGPEN; JIMMY " STEVE" LOVELL; OCOEE, LLC, Third-Party, Plaintiffs,
v.
M.B. HUTSON, a/k/a M.B. HUDSON, Third-Party, Defendant

For William Reed, individually and for the benefit and on behalf of all others similarly situated, Donna Reed, individually and for the benefit and on behalf of all others similarly situated, Bonnie Youmans, individually and for the benefit and on behalf of all others similarly situated, Jane Yates, individually and for the benefit and on behalf of all others similarly situated, Phillip Caulder, individually and for the benefit and on behalf of all others similarly situated, Plaintiffs: Brady Ryan Thomas, Christopher James Moore, Terry Edward Richardson, Jr, LEAD ATTORNEYS, Richardson Patrick Westbrook and Brickman, Barnwell, SC; Carl David Hiller, Harry L Goldberg, William R Padget, LEAD ATTORNEYS, Finkel Law Firm, Columbia, SC.

For Big Water Resort LLC, TLC Holdings LLC, Richard Clark, James Thigpen, Jimmy Lovell, also known as " Steve", Ocoee LLC, Defendants: Carlyle Richardson Cromer, LEAD ATTORNEY, Turner Padget Graham and Laney, Myrtle Beach, SC; John Smith Wilkerson, III, LEAD ATTORNEY, Turner Padget Graham and Laney, Charleston, SC; Jon Rene Josey, LEAD ATTORNEY, Turner Padget Graham and Laney, Florence, SC; R Wayne Byrd, Turner Padget Graham and Laney, Florence, SC.

For Jimmy Lovell, TLC Holdings LLC, Richard Clark, James Thigpen, Ocoee LLC, ThirdParty, Plaintiffs: Carlyle Richardson Cromer, LEAD ATTORNEY, Turner Padget Graham and Laney, Myrtle Beach, SC; John Smith Wilkerson III, LEAD ATTORNEY, Turner Padget Graham and Laney, Charleston, SC; Jon Rene Josey, LEAD ATTORNEY, Turner Padget Graham and Laney, Florence, SC; R Wayne Byrd, Turner Padget Graham and Laney, Florence, SC.

For M. B. Hutson a/k/a M.B. Hudson, ThirdParty Defendant, Counter Claimant: Matthew D Hamrick, LEAD ATTORNEY, Matthew D Hamrick Law Office, Mt Pleasant, SC.

For Richard Clark, Jimmy Lovell, Ocoee LLC, TLC Holdings LLC, James Thigpen, Counter Defendants: Carlyle Richardson Cromer, LEAD ATTORNEY, Turner Padget Graham and Laney, Myrtle Beach, SC; John Smith Wilkerson, III, LEAD ATTORNEY, Turner Padget Graham and Laney, Charleston, SC; Jon Rene Josey, LEAD ATTORNEY, Turner Padget Graham and Laney, Florence, SC; R Wayne Byrd, Turner Padget Graham and Laney, Florence, SC.

For Jimmy Lovell, TLC Holdings LLC, Richard Clark, Ocoee LLC, James Thigpen, Big Water Resort LLC, ThirdParty Plaintiffs: Carlyle Richardson Cromer, LEAD ATTORNEY, Turner Padget Graham and Laney, Myrtle Beach, SC; John Smith Wilkerson, III, LEAD ATTORNEY, Turner Padget Graham and Laney, Charleston, SC; Jon Rene Josey, LEAD ATTORNEY, Turner Padget Graham and Laney, Florence, SC; R Wayne Byrd, Turner Padget Graham and Laney, Florence, SC.

For M. B. Hutson a/k/a M.B. Hudson, ThirdParty Defendant, Counter Claimant: Matthew D Hamrick, LEAD ATTORNEY, Matthew D Hamrick Law Office, Mt Pleasant, SC.

For Big Water Resort LLC, Richard Clark, Jimmy Lovell, Ocoee LLC, TLC Holdings LLC, James Thigpen, Counter Defendants: Carlyle Richardson Cromer, LEAD ATTORNEY, Turner Padget Graham and Laney, Myrtle Beach, SC; John Smith Wilkerson, III, LEAD ATTORNEY, Turner Padget Graham and Laney, Charleston, SC; Jon Rene Josey, LEAD ATTORNEY, Turner Padget Graham and Laney, Florence, SC; R Wayne Byrd, Turner Padget Graham and Laney, Florence, SC.

ORDER

DAVID C. NORTON, UNITED STATES DISTRICT JUDGE.

This matter is before the court on a motion for partial summary judgment brought by defendants Big Water Resort, LLC; Richard Clark; James Thigpen; and Jimmy " Steve" Lovell (" defendants" ),

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and a motion to certify two questions to the South Carolina Supreme Court brought by plaintiffs William Reed, Donna Reed, Bonnie Youmans, Jane Yates, and Phillip Caulder (" plaintiffs" ).[1] For the reasons that follow, the court grants defendants' motion and denies plaintiffs' motion.

I. BACKGROUND

The plaintiffs are members of a putative class of over 1,000 individuals who purchased memberships in defendant Big Water Resort, LLC (" BWR" ). Am. Compl. ¶ ¶ 40, 41. The BWR membership agreements grant plaintiffs " a right to use all . . . campground facilities and services" at the Big Water Resort, a recreational campground and an accommodation located in Clarendon County, South Carolina. Pls.' Mot. Ex.1 at 1; Am. Compl. ¶ ¶ 14, 79. Plaintiffs allege that the BWR membership agreements also grant them access to " an exclusive members-only club" located at Big Water Resort. Am. Compl. ¶ ¶ 52, 54.

The BWR membership agreements date fro March 14, 2004, to June 23, 2007. Defs.' Resp., Ex. 1 at 3, 11. They include a " duration of membership" clause that provides:

The membership shall extend for the duration of the life of the purchaser, or if purchased jointly by husband and wife, for the duration of the life of the survivor of them (" Surviving Purchaser" ). In addition, the membership shall survive for the life of one transferee who is the natural or adopted child of the Purchaser (or one of the purchasers, if joint).

Pls.' Mot. Ex. 1 at 1. In addition, the BWR membership agreements state that members can sell their memberships and access the club at Big Water Resort " on a first come first served basis among all [m]embers." Id.

Defendants Richard Clark (" Clark" ), James Thigpen (" Thigpen" ), Jimmy " Steve" Lovell (" Lovell" ) allegedly had an interest in BWR and provided funding for its membership operation. Am. Compl. ¶ ¶ 17, 19. BWR sold memberships from Big Water Resort's opening in 2003 until BWR was transferred to third-party, defendant M.B. Hutson (" Hutson" ) in December 2010 through an option/purchase agreement. Defs.' Resp. 2; Am. Compl. ¶ ¶ 70-72; Hutson Answer and Countercl. ¶ 5.

Plaintiffs make various allegations regarding this transfer. They allege that: (1) BWR was insolvent at the time of the transfer; (2) Hutson did not have the financial ability to continue its operations; and (3) there was no long term contract between defendant TLC Holdings, LLC, the owner of the property on which Big Water Resort is located, and BWR to ensure that members would have continued access to Big Water Resort. Am. Compl. ¶ ¶ 36, 38, 82. Following this transaction, Big Water Resort became a public facility and BWR ceased operations. Id. ¶ ¶ 28, 82. This, in effect, rendered plaintiffs' memberships " nearly valueless." Id. ¶ 30.

In his pleadings, Hutson, a third party defendant in this case, explains how Big Water Resort came to be open to the public. He alleges that in early 2011, he contacted Clark " asking permission to convert the beautiful recreational building, known as the Clubhouse, into a public restaurant." Hutson Answer ¶ 8. As a result of this conversion, members " would no longer have open, free access to that former

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recreational building as presented in their membership agreement. The restaurant was to be open to the public and all incoming business was ...


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