Sunday, July 3, 2022

Developer took Wilmington man’s house in court, city and attorneys say it’s perfectly legal

The owner was shut down by Wilmington's city attorney when he tried to speak out at a public hearing and elected officials declined to help, one citing a conflict of interest. He was eventually evicted. The developer, his attorney, and the city all say everything that happened was completely legal.

The Kerr Station Lofts development in currently under construction. (Port City Daily photo / Benjamin Schachtman)
The Kerr Station Lofts development is currently under construction. (Port City Daily photo / Benjamin Schachtman)

WILMINGTON — A Wilmington man who tried to sell part of his land to a developer ended up losing the entire property, including his house, after the courts enforced a hand-written mediation agreement, gave the developer’s attorney the right to sign away his deed, and issued a rare but powerful ‘gatekeeper’ order, effectively silencing him in court before ordering his eviction.

Brian Welch claims that collaboration between a real estate agent with the Wilmington-based Maus, Warwick and Matthews firm, developer Andrew Weddle and his attorney Auley Crouch, and the courts, allowed his property to be taken in what he calls a “conspiracy” and “land fraud.” Those parties say his claims – most of which he filed in civil court – are baseless, and that the dispute was settled justly.

Welch’s house now sits in three pieces on a nearby lot while construction is underway on his former property as part of the Kerr Station Lofts mixed-use development. Welch says despite reaching out to Wilmington City Council during a rezoning meeting, as well as to local representatives Ted Davis and Deb Butler, he was unable to defend himself from losing his land.

Court transcripts from New Hanover County Superior Court show that Welch, who represented himself due to financial constraints, was not well versed in legal proceedings. He made technical mistakes in filing his appeal and apparently misunderstood the scope of what he could argue during some of the hearings.

While Welch acknowledges some of these missteps – which cost him attorney’s fees and, ultimately, his ability to further appeal – he said he still has serious questions about how his property was taken.

(Author’s note: Weddle and Crouch were both contacted for comment on this story. Amber Talton, office administrator for Crouch’s firm, replied, “Mr. Crouch relied on the legal system and our judges to resolve the dispute with Mr. Welch.” Crouch’s office also supplied copies of the five judge’s orders involved in the case, as a courtesy. 

Weddle also responded, “Mr. Crouch’s office has provided you with our position in this matter. We believe that the orders accurately relate the facts of the efforts taken to resolve the dispute.”)

The initial deal

Brian Welchs house now sits in three sections on a lot near where he used to live. (Port City Daily photo / Benjamin Schachtman)
Brian Welch’s house now sits in three sections on a lot near where he used to live. (Port City Daily photo / Benjamin Schachtman)

In late February of 2016, Wilmington-based house mover Brian Welch agreed to sell part of his property at 108 Jacksonville Street to the Sunset Medical Corporation, a South Carolina corporation acting for developer Andrew Weddle, who wanted to consolidate land next to Kerr Avenue south of Market Street for a mixed-use project, ultimately called the Kerr Station Lofts.

Welch owed money to a private lender on the land, where he stored material for his home-moving business, but he also maintained a residence on the property and wanted to keep that portion of land in his name. It’s not clear what the original offer was to Welch, but email and text records between real estate agent Stephen Hall and Welch suggest both parties agreed the house would not be part of the deal.

The deal, as the developer’s attorneys would note in court, would allow Welch to pay off his loan and profit substantially.

On March 16, Weddle signed an initial agreement; the next day Hall asked for a 90-day extension on Weddle’s behalf, saying the project needed time for rezoning. Welch agreed. Then, in June, Hall asked for two more extensions, one for 90 days and one for 60 days.

Tensions escalate

Relations between Welch and the development team became tense in June when Hall told Welch there was potential contamination on his property; Welch denied this, later providing documents from the state’s environmental agency (then DENR, Department of Environmental and Natural Resources) to refute the claims. Welch maintained at the time he would not grant any future extensions.

In mid-July, Hall’s real estate firm wrote Welch a check for $10,000 and handed it over. In court, the developer would later claim Welch unlawfully took the check, which was to be placed in escrow and not signed over to him, using “trickery and guile” — Welch countered that the check was handed over willingly, citing emails and text messages indicating it was a payment for the initial extension, as well as a signed “addendum to contract” signed by Welch and Weddle.

This dispute would eventually end up in court. A lis pendens, essentially a lien pending court action, was filed by Crouch; however, it was for Welch’s entire property – including the property where he lived in, which had been removed from earlier sale discussions. Crouch would later admit the mistake in court, saying he had corrected the paperwork. Still, Welch said he felt at the time that the developer clearly wanted his entire property.

In mid-July, Hall told Welch that environmental issues on a neighboring property — also to be part of the Kerr Station Lofts project — had set the project back six to seven months. Hall also told Welch the developer was pursuing a Brownfields agreement with the state’s environmental agency.

In August, Hall emailed to tell Welch that without a Brownfields agreement no one would buy his property. Welch balked and still did not sign additional extensions. (In December, Samuel Watson, then-project manager for DENR’s Brownfield program confirmed that no agreements had been entered into at Welch’s or the surrounding properties.)

In October, the developer decided to take legal action and filed suit on November 7, 2016, on the grounds that Welch stole $10,000 and was refusing to allow environmental testing.

The mediation session

A handwritten agreement from the mediation session. (Port City Daily photo / Benjamin Schachtman)
A handwritten agreement from the mediation session. (Port City Daily photo / Benjamin Schachtman)

Welch agreed to attend a voluntary mediation. Accompanied by his attorney, Steve Coggins, Welch met with Crouch and mediator Mark Hamlet on December 28, 2016.

During the 11-hour session at Crouch’s office, a three-page hand-written document — titled “settlement agreement terms / memorandum of understanding” — was drafted.

Welch attested in an interview — and in court — that Crouch introduced several items he did not agree to, including getting a one-year extension on his private loan for the property, something Welch said he could not compel his lender to do.

The agreement also included the parcel where his house was, though it had previously been excluded in the sale. The agreement also included a provision that Welch would not disparage the developer or any of his agents and would cooperate with the rezoning effort.

Welch said that he eventually walked out of the mediation and went to a local restaurant for a drink; Welch said Coggins convinced him to return and initial the handwritten document. Welch said he was told the document was a draft, and that all parties would have the opportunity to change what the wanted. Welch would later say in court that, exhausted and “browbeaten,” he signed, assuming he would have the chance to reject those provisions later. (When contacted for comment, Coggins said he had “very little” memory of the 11-hour mediation, which is essentially what he would eventually tell the court when he was subpoenaed to testify.)

Following the mediation, Welch told Coggins he would not agree to the terms of the voluntary mediation, citing in part the obligation to extend the loan — which Welch said was legally “impossible.” (At the time, Welch was nearing default on the loan, thus the idea of extending the note payment date seemed “absurd,” as Welch put it.)

The developer took him back to court.

Court orders agreement enforced

On February 21, 2017, Welch appeared pro se — without an attorney, as he could no longer afford Coggins — as the defendant before Superior Court Judge Thomas H. Lock.

Crouch argued that Welch was in breach of contract, based the handwritten draft mediation agreement. Crouch asked the court to enforced a typed-up version of the settlement agreement as written, also claiming that Welch had “gone on a campaign of disparaging my client, the Realtor, the project,” in part because Welch had filed a complaint against Hall with the North Carolina Real Estate Commission (later dismissed), as well as allegedly contacting his neighbors to ask about Weddle’s project.

Welch attempted to argue his case: he had been told by Coggins that the agreement was “basically a rough draft.” He also argued that his refusal to grant Weddle further extensions was because the developer had apparently done nothing to begin the rezoning process — a claim Welch supported with emails from Wilmington’s planning department. He also presented evidence to refute claims of contamination on his property.

Lock ruled in favor of Crouch, and on March 1 ordered the mediation settlement enforced.

Appeal

Welch appealed Lock’s ruling, but according to the court made several filing errors. Welch claimed in court he was following the publicly available guidelines for pro se appeal filings to the best of his ability. Welch was also ordered to appear in court to show why he should not be held in contempt of Lock’s order.

On June 8, 2017, Welch appeared before Judge W. Allen Cobb. In court, Crouch argued that his client had incurred considerable legal fees in the dispute with Welch and asked Cobb to impose those fees on Welch.

Welch again tried to argue a number of points, including that the mediation agreement was a draft. Cobb told Welch that one Superior Court judge cannot change the order of another Superior Court judge, in this case, saying that he could not change Lock’s order (a point Welch would come back to).

Cobb denied Welch’s appeal and imposed legal fees on him — but also told him that he now has a chance to appeal the decision, this time filing correctly.

Rule 70

Welch was set to appear before Judge Jay D. Hockenbury but, after a continuance by Crouch, he appeared instead on August 8, 2018, before Judge John E. Nobles to determine the extent of the attorneys’ fees that he will owe.

When the hearing opened, Crouch told the court he was filing for a Rule 70 — a court order that would allow Crouch to legally sign paperwork on Welch’s behalf, including rezoning paperwork with the City of Wilmington and the deed of sale for his property.

Welch claimed he never received proper notice for this motion (the initial notice for the Hockenbury hearing does not mention Rule 70, only “motion for contempt” and “order to show cause”).

Again the issue was whether or not Welch could obtain a one-year loan extension, which Welch had repeatedly denied ever “promising” in the past. Crouch stated that Welch “said on the night – and the day of the mediation that he would get this done.”

Welch attempted twice to object; Nobles told him to “sit.”

Crouch then asked for a Rule 70.

“It’s not a rule that we use a lot or [are] called upon to use, but it is a very powerful rule that allows a court, when you’ve got someone who is refusing to comply with a court order, in lieu of seeking – because seeking to put Mr. Welch in – having held in contempt really doesn’t advance to process to the extenet that it should be advanced, which is to say [Welch] should be required to do certain things,” Crouch said.

Nobles expressed concern that he might be in some sense changing or overruling Lock’s order — which was that Welch comply or be held in contempt. He then heard Welch’s arguments.

Welch told the court that he had filed a motion for relief, essentially arguing that Judge Lock’s order should be retroactively corrected because — as he had been arguing in the past several hearings — the mediation agreement was not in his opinion a final settlement.

Nobles allowed Welch to call Coggins to the stand.

After several attempted lines of questioning were shot down by objections from Crouch, Welch asked Coggins to read an email he had sent to Welch after the mediation. In the email, Coggins wrote that if Welch’s lender “will not agree to extend the note payment date, then that undercuts the mediation agreement. I do not think Sunset Medical or you can agree to a settlement unless the note due date is extended.”

Welch asked Coggins if he recalled a loan extension being filed on the night of mediation. Coggins said no.

Before the hearing ended, Welch revisited his arguments for relief, including what he alleged was “fraud upon the court” in the form of untrue or misleading statements made by Crouch. Nobles denied Welch’s motion.

Attorney James Oliver Carter, also representing the developer, answered that the developer had waived the requirement for the note extension. Welch would later ask why the developer was allowed to modify the settlement agreement — or why Nobles was able to essentially change Lock’s order by allowing that it be changed.

Crouch was awarded the Rule 70. Ten days later, on August 18, he signed a rezoning application on Welch’s behalf and sent it to the City of Wilmington.

Attorney Auley Crouch signed for Brian Welch as part of the rezoning application for the Kerr Station Lofts project. (Port City Daily photo / Benjamin Schachtman)
Attorney Auley Crouch signed for Brian Welch as part of the rezoning application for the Kerr Station Lofts project. (Port City Daily photo / Benjamin Schachtman)

Gatekeeper

Welch said that, as he understood it, Nobles’ order, combined with Lock’s order, effectively ended the lawsuit. Since Crouch could sign for him — as he had on the Wilmington rezoning application — he could complete any part of the mediation agreement he wanted to. Welch understood this to mean the other aspects of the agreement would also be enforced, including that the case be dismissed and that all parties be released from legal action.

Instead, on December of 2017, Welch was again ordered to appear in court.

On that day, Welch said Crouch was able to get the hearing moved in front of Nobles — who was in criminal court at the time (an unusual occurence, but one attested to by Nobles in the hearing transcript).

Crouch asked Nobles to throw out Welch’s appeals, assign $37,000 in legal fees to him, and criticized Welch for making accusations of lying, fraud — including Crouch’s initial lis pendens which was filed on more of Welch’s property than allowed — and misrepresentation, as well as making a formal complaint to the New Hanover County Sheriff’s Office.

“I normally don’t get that upset,” Crouch told Nobles. “But I can tell you that it has been a personal ad hominem attack on me.”

Welch told Nobles, as he had before, that he was in need of an attorney and apologized for any mistakes, noting his mother had just passed away.

Crouch then asked for a gatekeeper order — like Rule 70, a rarely used but powerful legal tool that effectively freezes an individual’s ability to file court motions. Also like Rule 70, gatekeeper orders require proper notice and hearings; as Crouch asked for the motion in court without prior notice, Welch later asked how this was allowed.

Welch goes before City Council

Brian Welch voiced concerns about his situation to Wilmington City Council on January 9, 2018. (Port City Daily photo / Benjamin Schachtman)
Brian Welch voiced concerns about his situation to Wilmington City Council on January 9, 2018. (Port City Daily photo / Benjamin Schachtman)

Welch attended the public hearing for the Kerr Station Lofts rezoning application on January 9, 2018 (you can watch the meeting here — Welch appears before council at roughly two hours and forty-five minutes into the meeting).

Welch addressed what he considered to be misrepresentation and bullying by the development team about contamination on his property and the fact that, for 210 days, the developer had not apparently taken any action on rezoning (the stated reason for needing an extension, according to Welch).

Welch told council that the ownership of the land was still the subject of an active lawsuit.

“I was sued because I said no to a contract,” Welch told Council.

City Attorney John Joye, who was apparently familiar with the case, then cut Welch off.

“Mr. Welch, I’m sorry to interrupt you, but as an officer of the court, I would ask you to, before you speak any further, consider the order that has been issued, before you speak further,” Joye said, apparently referring to the “no disparagement” clause of the mediation agreement.

Welch said, “I’m speaking facts, sir.”

Council voted to postpone approval but not because of Welch’s comments (Councilman Charlie Rivenbark recused himself because at the time he worked for Maus, Warwick, Matthews, and Co.). They instead felt the development was too dense and didn’t mesh appropriately with surrounding areas. Several months later, the rezoning was resubmitted and approved.

City of Wilmington spokesperson Malissa Talbert said the city had no concerns about the impact of the lawsuit on the rezoning. Talbert stated that the courts had ruled on the case, noting noted that Welch had been sanctioned in court. Joye did not directly comment.

Other elected officials decline to help

Welch said he contacted the office of State Representative Ted Davis. Welch said he met with Davis’s legislative assistant Judy Lowe who reviewed the case and said she was eager to help.

Shortly afterward, Welch said Lowe called him, apologized, and said she couldn’t help. Lowe, who has since left Davis’ office, did not respond to request for comment.

Davis himself wrote a letter to Welch, referencing “the situation with Stephen Curtis Hall of Maus Warwick Matthews and Co,” saying he could not get involved due to a conflict of interest.

“Mr. Bill Maus is married to my first cousin. In addition, the Company has been retained to assist in the sale of real property belonging to a family corporation of which I am a stockholder. Therefore, I have a conflict of interest and cannot get personally involved in this situation,” Davis wrote.

A letter from Representative Ted Davis to Brian Welch, citing a conflict of interest. (Port City Daily photo / Benjamin Schachtman)
A letter from Representative Ted Davis to Brian Welch, citing a conflict of interest. (Port City Daily photo / Benjamin Schachtman)

Asked for comment Davis initially said he wasn’t familiar with the situation, later clarifying that he did recall a conversation but that he’d recused himself for the aforementioned reasons.

Welch also said he contacted Representative Deb Butler (who is also an attorney with experience in real estate cases). According to Welch, Butler declined to get involved. Butler herself said she had no memory of speaking with Welch.

Evicted

On April 27, 2018, Crouch signed the deed to all of Welch’s property on the future Kerr Station Loft’s site; eviction paperwork was filed the same day. Less than a week later the New Hanover County Sheriff’s Office evicted Welch.

According to Welch, who had part of the incident filmed, six or seven deputies arrived and drilled out the locks on his house. Three kittens living in Welch’s house were taken to the Sheriff’s Office animal control center, Welch said.

Eviction notice for Brian Welch. (Port City Daily photo / Benjamin Schachtman)
Eviction notice for Brian Welch. (Port City Daily photo / Benjamin Schachtman)

According to Welch, he had received no prior notice and there was no eviction hearing. Although Judge Lock’s order included a 45-day window to remove his property, the eviction notice gave him just a week. He also said he did not receive additional escrow funds he alleges were due him according to the settlement. An emergency stay filed on Welch’s behalf did not halt the eviction.

In the end, the proceeds of the sale of Welch’s property went to pay the original note and the profit he originally hoped to make — around $180,000 — was eaten up by court and legal fees. At the time of sale, Welch actually ended up owing around $20,000, according to settlement paperwork submitted to the U.S. Department of Housing and Urban Development.

On June 27, 2018. Judge R. Kent Harrell signed an order formally rejecting Welch’s remaining appeals and motions for relief based on allegations of fraud upon the court. The order was served on Welch’s former residence at 108 Jacksonville Street, though he had been evicted nearly two months earlier. Apparently, the court had not yet updated his address.


Send comments and tips to Benjamin Schachtman at ben@localvoicemedia.com, @pcdben on Twitter, and (910) 538-2001

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