Horton sues ex-partner over ouster from biz
By Jon Hawley
Friday, December 1, 2017
An Elizabeth City city councilor is suing his former business partner for ousting him from the funeral home business they once jointly operated.
Darius Horton is suing Kevin Sanderlin and his wife, Dawna, for at least $175,000 in damages and to secure a stake in what formerly was Horton-Sanderlin Funeral and Cremation Services, according to a legal complaint filed in Pasquotank Superior Court by Horton’s attorney John Trimpi.
Horton’s complaint accuses Kevin Sanderlin of committing fraud and unfair business practices.
At issue is Sanderlin’s decision to assert complete control over the former Horton-Sanderlin funeral home, now doing business as Beach Funeral and Cremations Services. The men opened the funeral home at 310 East Grice Street earlier this year, but Sanderlin forced Horton out in October, according to a letter in Horton's complaint.
Sanderlin has until Jan.15 to respond in writing to Horton's complaint. His attorney, Phillip Hornthal III, said Thursday that Sanderlin denies the allegations in Horton’s complaint and expects to be vindicated of the councilman’s charges in court.
Horton's complaint states that the councilman approached Sanderlin, a funeral home operator based in Virginia Beach, about a partnership because Horton could not finance the purchase of the East Grice Street property himself.
According to Horton, the men agreed to an equal partnership that included an equal division of expenses. The complaint claims Horton put down a $10,000 deposit on the building, helped make the monthly mortgage payment, and paid other business expenses. It also claims the property cost $315,000, and that Horton agreed to pay half the amount not covered by a $250,000 mortgage.
However, the men entered into business without any formal partnership agreement — and with only Sanderlin’s and his wife's names on the title to the property.
Despite the lack of an agreement to protect his interest in the business, Horton's complaint asserts state law shows the funeral home is clearly partnership property and that not all partners' names have to be on a property's title for there to be shared ownership.
“Defendant has wrongly dissolved the partnership to oust plaintiff and to seize control of assets and business … knowing that there is a good likelihood of success and the extraordinary value of the property compared to its cost of acquisition,” the complaint states. While the property sold for $315,000, its tax value is more than double that, according to the complaint.
The complaint also argues Sanderlin exploited Horton's trust. Noting Horton was 30 when they struck the deal, the complaint states Horton “was relatively inexperienced in business matters and had no experience structuring business relationships with others, such as in forming partnership relationships.”
As for why Sanderlin ousted Horton from the funeral business, the complaint cites an October letter. In it, Sanderlin claims the business “is not producing as expected,” and that the partners had agreed to a “90-day time frame to evaluate the future of our business affairs.”
Sanderlin also said in the letter that “any financial resolutions need to be made through an attorney or formal court of law.”
Horton rejects the claim that he agreed to revisit his partnership with Sanderlin just three months after their funeral home opened, instead claiming the partners agreed it would take years for the business to become profitable.
Horton and Sanderlin declined to comment on the specifics of Horton’s lawsuit, though Horton said he has evidence of his investments in the business. Horton also said he continues to operate Horton Funeral Home and Cremations, of Hertford. The phone number to his business has changed, he said, to 426-7378.