Wincopia Farms, LP v. G&G, LLC (In re Wincopia Farms, LP)

Summarized by Brett Weiss , The Weiss Law Group, LLC
13 years 2 months ago

Citation:

Wincopia Farms, LP v. G&G, LLC (In re Wincopia Farms, LP), Nos. 12-1064 and 12-1080 (4th Cir. Dec. 12, 2012)

Tag(s):

Ruling:

In this unpublished per curiam opinion, the Fourth Circuit upheld the District Court's order adopting the Bankruptcy Court's recommendation that Plaintiff/Debtor's fraud complaint be dismissed. Basing its ruling on Maryland state law, it found that the plaintiff's allegations were too vague and general, and that there was no reasonable reliance upon the statements made.

Procedural context:

The appeal was a de novo review from the District Court's grant of a motion to dismiss for failure to state a claim. The opinion was per curiam and unpublished.

Facts:

The Court spends the majority of its opinion reviewing the lengthy history of the dealings between the parties. Wincopia Farms, LP ("WFLP") owned 124 acres of land (the "Farm") in Howard County, Maryland, valued at approximately $30 million. The land was leased to Wincopia Farms, Inc. ("WI"), which operated a nursery. Both WFLP and WI were owned by the same family. WI borrowed money from G&G, LLC ("G&G"), a land investment company. WFLP guaranteed payment. As security for the loan, G&G obtained an indemnity deed of trust on the Farm. WFLP filed for bankruptcy in 2007. After WI defaulted on payments, G&G sued, obtained a lift of the automatic stay, and foreclosed on the Farm, purchasing it at the auction for $12.5 million. Prior to the foreclosure, WFLP filed an adversary proceeding alleging that the G&G loan was procured by fraud, and that its lien was invalid. The Bankruptcy Court, concluding that the adversary was not a core proceeding, submitted recommendations to the District Court. The district court ruled that, to the extent WFLP sought to allege that G&G’s fraud induced WFLP to guaranty the Loans, WFLP’s allegations failed to state a claim for which relief could be granted, primarily because WFLP could not have reasonably relied on the various misrepresentations and omissions alleged. WFLP appealed.

Judge(s):

Chief Judge William B. Traxler, Jr., Judge Albert Diaz and Judge Catherine C. Eagles (United States District Judge for the Middle District of North Carolina, sitting by designation)

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