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VOL. 128 | NO. 167 | Tuesday, August 27, 2013

Nineteenth Century Club Hearing Moves Into Second Day

By Bill Dries

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The Chancery Court hearing that will likely determine whether the Nineteenth Century Club building in Midtown Memphis stands or falls moves into Tuesday, Aug. 27, after a Monday in court of testimony from the plaintiffs trying to stop the transfer of ownership of the mansion and the building’s demolition.

The plaintiffs, represented by Shelby County Commissioner Steve Mulroy and fellow attorney Webb Brewer, are contesting the sale to Union Group LLC earlier this year by the leadership of the nonprofit charitable group. They claim the leadership did not specifically take a vote of the club’s membership on the sale itself.

Attorneys for the club claim the club voted on listing the property for sale and that the club’s leadership, at that point, moved ahead with the details.

That was the argument in play as Teresa Hurst, a lifetime member of the Nineteenth Century Club and a former president of the organization, testified Monday in the non-jury trial.

“I saw that lifetime membership as a property interest,” testified Hurst, who is also an attorney. “I believe the assets of the old entity were transferred into the new entity.”

That dealt with the changing bylaws since Hurst’s tenure as president of the organization in the 1990s. Hurst had not been active in the club recently including the time during which club leaders explored options for the property which came with an estimate of $1.5 million to repair the mansion.

“How can you possibly make a decision on what’s in the best interest of the club?” asked attorney Art Quinn, representing the Nineteenth Century Club.

“I think it’s more than finances,” Hurst answered.

“You wouldn’t have been able to make an informed decision,” Craddock said during his cross examination of Hurst.

“I think there are so many other factors that would have been involved,” she replied.

Also part of the lawsuit is the Children’s Museum of Memphis. The club donated most of the $500,000 it got for the property from Union Group LLC to the museum. Use of that money has been frozen at least until Evans rules in the case.

When the hearing resumes Tuesday morning, museum director Dick Hackett is expected to testify about the impact undoing the sale would have on the museum if it had to return the $435,000 it got specifically for a new exhibit. Hackett will likely testify in open court about the general plans for the funding, according to museum attorney Bob Craddock. But Craddock will seek to close the hearing to the public as Hackett describes the specific actions the museum would have to take if it has to give the money back.

Craddock said that in general it would have “devastating effect.”

He also moved at the end of the plaintiff’s case for a directed verdict dropping the museum from the case, arguing the plaintiffs presented “absolutely no proof at all that would sustain reaching a judgment against the children’s museum or tying up assets of the children’s museum.

“This is an irrevocable act. The children’s museum has an unequivocal right to the money,” Craddock added. “There’s absolutely nothing in this record … impairing the children’s museum’s right to this money.”

“How would the Union Group get its money back?” Evans replied, in the event he rules the sale is nullified.

Craddock said he didn’t know but termed the museum an “innocent bystander.”

“There’s no allegation they’ve done anything wrong,” he said. “”There’s a lot of inconvenience in the law and in life.”

Attorney John Phillips representing the Union Group agreed.

“We gave them cash,” he said, referring to the Nineteenth Century Club. “They gave us the property. … We didn’t do anything wrong.”

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RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 72 368 16,413
MORTGAGES 66 422 21,432
FORECLOSURE NOTICES 15 76 4,266
BUILDING PERMITS 176 877 39,378
BANKRUPTCIES 60 294 15,542
BUSINESS LICENSES 20 98 5,491
UTILITY CONNECTIONS 69 423 23,573
MARRIAGE LICENSES 17 95 5,035

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