North Carolina Lawyers Weekly
Attorney Richard Wiggins from McCoy, Wiggins, Cleveland & O’Connor in Fayetteville.
A Cumberland County woman received an award of nearly $826,000 after she purchased a hotel she later learned would be landlocked by a state Department of Transportation road project.
Brenda Lee Joseph, a state contractor, won a real estate fraud lawsuit in May against a married couple, Subodh and Sangeeta Thakur, after it was determined she purchased a motel that would not have access to a public road and needed to be condemned. Actual damages to Joseph were determined to be $275,319.52. She was entitled to treble damages of $825,958.56, and opted for that in lieu of punitive damages.
Attorney Daniel Higgins from McCoy, Wiggins, Cleveland & O’Connor in Fayetteville.
Joseph was represented by Richard Wiggins and Daniel Harrison of McCoy, Wiggins, Cleveland & O’Connor in Fayetteville. Harrison said Joseph has yet to collect any damages and has filed a lawsuit under the Fraudulent Transfers Act. Harrison said the lawsuit alleges the Thakurs have transferred the rights to the motel to avoid making a payment. The Thakurs were represented by Fayetteville attorney Coy Brewer. Brewer did not return messages requesting comment.
In the fall of 2011, Brenda Lee Joseph, who provided counseling and social work services to people who are homeless or addicted to drugs or alcohol, agreed to rent rooms for her clients at the Regency Inn from Subodh and Sangeeta Thakur for $18,000, with the understanding the rooms would be remodeled in two weeks. After those two weeks, the remodeling was not completed and Subodh Thakur told Joseph that if she instead purchased the Shangri La Motel, the $18,000 would be credited to the purchase price. About the same time, the North Carolina Department of Transportation was holding town hall meetings to discuss how a highway connector project would affect owners of nearby property. Court documents say Subodh Thakur attended one meeting and also conducted a meeting with N.C. DOT officials in December 2011 about the road project, named U-444.
In that December meeting, N.C. DOT District Construction Engineer Tracy Pittman told Subodh Thakur that the property would have access to Main Street if Thakur would raise the property eight to ten feet to accommodate a new ramp and roundabout on Main Street, according to the judgment. But raising the land would require the destruction of the motel.
A month after the Thakur’s meeting with N.C. DOT, he met with Joseph to discuss the property transaction. Joseph noticed a map on the wall depicting proposed highway construction in front of the property, but Thakur said it would not affect access to the motel. Joseph’s operations manager, Kevin DeLoach, testified that Thakur said the motel would have an entrance to a public road and signed a memorandum of understanding to that effect.
The two parties closed on the sale eight days later, which was before N.C. DOT had filed a condemnation action or a “taking” map, so the condemnation did not appear in a title search. At the sale closure, Joseph provided a down payment of $150,000 in cash and secured a promissory note for another $700,000. Joseph paid all the closing costs, an additional $5,406.80.
Joseph then spent $50,000 to improve the property along with making eight payments, which totaled $51,912.72, in accordance to the promissory note. After discovering during a title search that Joseph was now the owner, the DOT in April 2012 informed her that the property would be landlocked. She continued to make payments on the promissory note until the DOT evicted her in October 2012 to start the highway project. Once Joseph stopped making payments, the Thakurs foreclosed on the motel and, as its owner, collected all of the $482,825 in proceeds from the DOT’s condemnation action.
The court ruled that the “oral and written representations of fact made by Subodh to Joseph regarding whether the U-444 project would affect the Property were material and were false,” leading to the treble damages award. The judge found the Thakurs actions in violation of the state’s Unfair and Deceptive Trade Practices Act.
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VERDICT REPORT – REAL ESTATE FRAUD
Amount: $825,958.56 with interest
Case name: Brenda Lee Joseph v. Subodh K. Thakur and Sangeeta Thakur
Court: Cumberland County Superior Court
Case number: 13-cvs-6105
Judge: Winston C. Gilchrist
Date of verdict: May 18, 2015
Attorney(s) for plaintiff: Richard M. Wiggins and Daniel S. Harrison of Fayetteville
Attorney(s) for defendant: Coy Brewer of Fayetteville
Was the plaintiff successful in actually collecting the judgement? No. Collection is ongoing. Plaintiff has filed a lawsuit in Cumberland County Superior Court under the Fraudulent Transfers Act.
