New Bar Partnership v. Martin
221 N.C. App. 302
| N.C. Ct. App. | 2012Background
- New Bar filed lis pendens on 23 May 2011 concerning title to property in Raleigh.
- New Bar sued Martin, the Martin Trustee, MMP, and FMW alleging rights of first refusal and related claims.
- FMW moved to dismiss under Rule 12(b)(6) arguing invalidity under Connor Act and alternative RAP.
- Martin Defendants moved to dismiss/for judgment on the pleadings; New Bar sought a preliminary injunction.
- Trial court dismissed FMW claims (12(b)(6)); later dismissed Martin Defendants’ claims and right-of-first-refusal claims; granted summary judgment.
- Lease history shows initial 1988-1993 term with renewal options; amendments extended renewal rights to 2028; memoranda not recorded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of New Bar's right of first refusal under RAP | New Bar asserts valid preemptive right beyond contest | RAP voids long durations; Smith controls | Void under common law RAP; affirmed dismissal |
| USRAP vs common law RAP applicability | USRAP supersedes common law RAP for all transfers | USRAP excludes nondonative transfers; not applicable here | USRAP does not replace RAP for this nondonative transfer; inapplicable |
| Declaratory judgment jurisdiction | Declaratory relief sought on lease validity and rights | No real controversy; advisory opinions improper | Lack of actual controversy; dismissal upheld |
| Connor Act applicability to FMW claims | Connor Act invalidates unrecorded lease against third parties | Race to courthouse; recording controls | FMW prevailed; Connor Act does not render unrecorded lease actionable here |
Key Cases Cited
- Smith v. Mitchell, 301 N.C. 58, 269 S.E.2d 608 (N.C. 1980) (preemptive rights must not violate perpetuities; duration matters)
- Pinehurst v. Regional Inv. of Moore, Inc., 330 N.C. 725, 412 S.E.2d 645 (N.C. 1992) (confirms Smith on perpetuities for preemptive rights)
- Rich v. Carolina Constr. Corp., 355 N.C. 190, 558 S.E.2d 77 (N.C. 2002) (commercial transactions and RAP policy guidance; no blanket exceptions)
- Wendell v. Long, 107 N.C. App. 80, 418 S.E.2d 825 (N.C. App. 1992) (declaratory judgments require actual controversy; not mere threat)
- Bourne v. Lay & Co., 264 N.C. 33, 140 S.E.2d 769 (N.C. 1965) (Connor Act; registration priority; effect on third parties)