A North Carolina man was building his castle for 30 years — after a romance turned sour, he was almost forced to sell
CBS 17
For Robert Mihaly, his home really is his castle. The self-taught sculptor has been building a whimsical castle by hand on a mountaintop in North Carolina for the past three decades.
But after a whirlwind romance, he became entangled in a two-year legal feud over Castle Mont Rouge — and it hasn’t ended well for either party, local station CBS 17 reports.
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Mihaly met Julie Seel on Match.com back in 2023. They only dated a few months, but they immediately jumped into a joint business venture to turn the castle into an event venue and soon afterward moved in together, according to The News & Observer.
Mihaly alleges that Seel targeted him in a romance scam to gain control of his property. Seel, on the other hand, alleges that Mihaly targeted her for her wealth to help fund the construction of his castle.
Seel wanted a judge to impose a lien against the property to reimburse her for the money she put into the venture. If that had happened, Mihaly may have been forced to sell Castle Mont Rouge.
However, a judge was having none of it. After two days of testimony — and before reaching the jury — Durham County Superior Court Judge Josephine Kerr Davis dismissed both parties’ claims.
But after a two-year scorched-earth legal battle, Mihaly and Seel have both taken a serious financial (and perhaps reputational) hit.
A business venture turned sour
We may never know whether Mihaly was targeted in a romance scam or if Seel was targeted for her money.
But the battle over Castle Mont Rouge has some takeaways for anyone starting a joint business venture with a friend, family member or romantic partner (though it may be advisable to avoid jumping into business with someone you just met on a dating app).
According to the Observer’s reporting, the day after they first met for drinks at a pub, Mihaly took Seel to the castle. She then offered to lend him money — with a handshake and a promise of reasonable interest — to finish the decades-long project and turn it into an event venue. Soon the two moved in together.
The speed at which this progressed and the informality of their business arrangement should have been immediate flags, for both parties.
They signed what they called a “basic castle understanding” in which Mihaly would transfer the property to a jointly owned company and hold 51%. Seel lent the company $250,000, with the property serving as collateral.
Then the romance ended, and a court battle ensued.
Mihaly alleges he was the victim of a “romance scam enterprise,” in which Seel quickly forms a relationship and then persuades her target to invest in a business venture.
Importantly, court filings show that Seel has been involved in litigation seeking assets from another three men over the past five years.
Seel accused Mihaly of fraud, negligent misrepresentation and unfair and deceptive trade practices after she spent more than $233,000 on tools, materials and labor. Despite their “basic castle understanding,” Mihaly never gave her an ownership stake.
Informal arrangements for high-stakes financial investments or joint business ventures with friends, family or romantic partners can lead to issues down the road. If it involves a whirlwind romantic interest, it could leave you vulnerable to fraud or scams.
Do your homework
If you’re getting into business with someone — even someone you know and trust — you might want to vet their qualifications and credentials before pulling out your checkbook. Don’t rely on a handshake or verbal promise. If the partnership dissolves, that leaves you without much legal recourse. If you’re going into business with someone you barely know, check their history online and ask for professional references. Also check if they’ve been involved in any past lawsuits or bankruptcies.
Get everything in writing
If there’s a property transfer or LLC structure involved, don’t start work or spend any money until you have a formal, legally binding agreement in place. Hire an independent lawyer to draft and review the paperwork. You may even want your business partner to sign a non-disclosure agreement before sharing financial information or trade secrets.
Formalize the roles
This should include a partnership or shareholder agreement, which is a legally binding document that spells out each person’s roles and responsibilities, including how decisions will be made and how profits will be shared. It should also outline a process for dispute resolution and a clear exit strategy if one partner wants out.
Use secure banking
Don’t wire cash or send crypto; instead, require dual authorization on jointly owned business bank accounts. Or, for large sums of money, use a third-party escrow service — a neutral intermediary that holds funds or assets until all parties fulfill their contractual obligations.
Skipping the formal due diligence process could result in costly, time-consuming and emotionally draining court proceedings that could deplete your bank account, drive you into debt and damage your personal relationships.
In the battle over Castle Mont Rouge, it seems both parties jumped in without proper due diligence. Neither one is getting their fairytale ending.
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