Patrick O’Leary Retracts Museum Bid: Legal Issues Persist.

By: Grace Smith – Wise News Network

CHERRYVILLE, NC (WNN) – It has been nearly a year since the proposed sale of the Cherryville Historical Museum sparked debate. The City returns to square one after voting to release the buyer from their contract.

During the City Council meeting on November 13, 2023, a motion emerged to terminate the bid contract for the museum building. Patrick O’Leary, founder of Cherryville Mainstreet, LLC, entered into the contract with the city when he submitted a $400,000 bid for the property.

The Cherryville Historical Association, the current tenants of the building, filed a lawsuit against the City and the Cherryville Rotary Club, claiming adverse possession of the property. Each member of the City Council and the City Manager were also individually named.

After continuations, the case went to court on Monday, November 6, 2023. The Association voluntarily dismissed the case without prejudice before either side had the opportunity to argue their case.

A dismissal without prejudice implies that the plaintiffs can correct any errors in the case and refile the lawsuit. Consequently, lis pendens remain on the property. A lis pendens is a notice that a property is involved in a lawsuit.

“The lawsuit has been dismissed at this time, but it was dismissed without prejudice, so, at this time, Mr. O’Leary and Cherryville Mainstreet, LLC, [are] having a difficult time getting title insurance.” said Brian Dalton, the city manager.

When a property is under lis pendens, the title becomes clouded. Typically, buyers must wait for lis pendens to be cleared before a purchase can go through.

O’Leary and Cherryville Mainstreet, LLC, requested that the contract be terminated and that the $20,000 retainer for his bid be returned. The City Council unanimously approved the release of the contract. 

Yansea Taylor, Cherryville’s recently appointed city attorney, provided legal insight regarding the City’s obligations to the contract. She said that the City is not required to agree to the contract being voided.  

“As the sellers, we could clear the title issue to make the buyer whole with some more time.” said Taylor.

To clear the title, the outcome of the lawsuit would have to be changed, making it dismissed with prejudice. Patrick Flanagan, the attorney who represented the City in the lawsuit, is currently negotiating with the attorneys of the Historical Association regarding the dismissal action.

City Manager Dalton recommended that the City release the buyers from their contract because of the contentious situation between the Association and the City Council. The two entities’ relationship has strained since the City put the building up for sale.

“I recommended this because the buyer was unable to get title insurance.” City Manager Dalton said in a written statement, “The reason for his inability to get title insurance was because of the frivolous lawsuit.  The right thing to do was release him from this contract.”

The Association can refile the lawsuit and correct any errors if they see fit.

“Lis pendens is good for six months. So, if the lawsuit is not filed and perfected within 6 months from the lis pendens, then the lis pendens is canceled as a matter of statute.” said Taylor.

If the lawsuit is not corrected and filed, the lis pendens will expire six months from its initial filing. However, the Association can always request another lis pendens as there is no timeframe to do so.

It remains unclear if the Association is going to correct and refile the lawsuit; however, the lis pendens affects more than the sale of the museum building. Since individuals had been specifically named in the suit, they are under lis pendens as well.

The members of the City government addressed in the lawsuit have concerns about how the lis pendens could affect their personal lives.

“We were also listed in that judgment as individuals,” Mayor H.L. Beam said. “What if I decided to sell my house tomorrow? Is there going to be a lien on my house?”

Taylor addressed the question, stating that Flanagan should negotiate with the Association’s attorney to drop the individuals’ names from the suit.

“You all are not subject to personal liability in your role in this capacity.” said Taylor.

Despite the clouded title, the City issued a notice of non-renewal to the Historical Association for their lease in August. The notice states that the tenants must vacate the property when their lease is up on December 31, 2023.

“The goal at this point would be to leave the museum in this building and the City Council now appoint a completely new board. The City welcomes all artifacts to remain in the building should a new board be appointed to manage the museum.” said City Manager Dalton.

Before the buyer backed out, Mike “Boozie” Dellinger, the vice president of the Cherryville New Years Shooters organization, acted as a mediator between the Association and the City. 

The negotiations involved the resignation of the existing Historical Association board members and dropping the lawsuit. In return, Cherryville Main Street, LLC, would draft a 10 year lease for the museum to remain in the building.

The negotiations also included the City of Cherryville not charging for utilities and paying a portion of the rent if required by Cherryville Main Street, LLC. However, Cherryville Mainstreet, LLC, did not go through with the negotiation.

“Al was ready to totally drop it. They would not pull the trigger.” said Dellinger in a written statement. 

Al Putnam is the president of the Historical Association. He did not respond to immediate attempts of contact. According to City Manager Dalton, the negotiation could not be completed due to the clouded title. 

“There were talks to try and work out an agreement, but with the buyer being unable to get title insurance this was not possible. The discussion was between the City and Mr. Dellinger.” said City Manager Dalton.

Mr. Dellinger also stated, “You don’t need title insurance if you are paying cash. I hope this man won’t have to get a mortgage seeing how he is a billionaire.”

According to the NC Department of Insurance, liens and clouded titles can potentially affect a buyer’s ability to obtain a title policy. However, it also states: “You are not required to buy an owner’s policy.”

Vickie Spurling, the realtor for Cherryville Mainstreet, LLC, did not respond to immediate attempts of contact regarding this matter.

As the fate of the museum building lingers in limbo, Cherryville citizens continue to seek answers and a conclusion to this tumultuous saga. Nearly a year later, the City finds itself in the same position, with no bids on the property and no further progress in the sale.

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