Archive for July, 2024

Ashley Oldfield Receives Young Lawyer of the Year Award

Associate Ashley Oldfield recently received the Young Lawyer of the Year Award from the Mecklenburg County Bar’s Young Lawyers Division (YLD). The award recognizes the outstanding impact young lawyers are making in the practice of law in Mecklenburg County.

Ashley graduated magna cum laude from Wake Forest University School of Law in 2020 and has been an active member of the YLD since joining Rayburn Cooper and Durham, P.A. that year. She served on the YLD’s Community Service Committee for the past three years and is currently serving as the Secretary/Treasurer of the YLD for 2024-2025. Ashley is also beginning a second three-year term on the Mecklenburg Bar Foundation’s Board of Directors where she has been actively involved in the Development Committee.

In addition, Ashley volunteers with the North Carolina Bar Association Young Lawyers Division, serving on its Nominating Committee for the past two years and co-chairing the McIntyre Youth Leadership Challenge since 2022. The McIntyre Youth Leadership Challenge strives to inspire middle and high school students to demonstrate good citizenship by addressing challenges in their local communities.

Ashley focuses her practice at Rayburn Cooper and Durham on business litigation and commercial bankruptcy and oversees the firm’s Business Court Blast publication. She also maintains a pro bono practice, working with Legal Aid and the Charlotte Center for Legal Advocacy on criminal expunctions and housing issues.

Posted 07/09/24

N.C. Business Court Opinions, June 19, 2024 – July 2, 2024

By: Rachel Brinson and Jack Reynolds

BCORE Timber EC Owner LP v. Qorvo US, Inc., 2024 NCBC 42 (N.C. Super. Ct. June 21, 2024) (Earp, J.)

Key Terms: summary judgment; statute of limitations; breach of lease; repudiation; sealed instruments; declaratory judgment; waste

Plaintiff BCORE leased Defendant Qorvo an industrial building in Greensboro, North Carolina for manufacturing semiconductors. After Tenant failed and refused to restore the building to its shell condition when it moved out at the end of the lease term on 30 September 2022, Landlord brought suit in June 2023 alleging claims for breach of contract, waste, and a declaratory judgment. Tenant moved for summary judgment on statute of limitations grounds.

Breach of Contract. The Court rejected Landlord’s argument that the 10-year statute of limitations for sealed instruments applied here, finding that the evidence of the corporate seal and the testimony of Landlord’s former employee stating that the Landlord intended the Lease to be afforded the additional protections of documents filed under seal was insufficient. Nevertheless, the claim survived even under the three-year statute of limitations. Although Tenant argued that the breach of contract claim accrued no later than January 2020 when it purported to repudiate the lease term at issue, the Court concluded that Tenant’s January 2020 statements did not constitute a repudiation of the entire lease but rather an expression of its interpretation of one term of the lease.

Declaratory Judgment. Since the declaratory judgment claim was most closely related to the breach of contract claim, the Court found that it was also subject to a three-year statute of limitations and survived as well.

Waste. Since a tenant does not commit waste if the property can be returned to its original position before the lease is terminated, the Court concluded that the claim for waste did not accrue until the lease ended in September 2022 and therefore the claim was filed within the three-year limitations period.

Accordingly, Tenant’s motion for summary judgment was denied.

*******

Carolina Med. Partners, PLLC v. Shah, 2024 NCBC 43 (N.C. Super. Ct. June 27, 2024) (Conrad, J.)

Key Terms: motion to dismiss; Rule 12(b)(6); breach of contract; notice pleading; fraud; punitive damages; tortious interference; unjust enrichment; civil conspiracy

As summarized here, Plaintiffs Nimish and Shephali Patel previously practiced with Defendant Shah as physicians in Palmetto Medical Group. When their professional relationship soured, the parties attempted to mediate their dispute and entered into a Practice Separation Agreement. Unfortunately, their disputes continued and culminated in this suit where both sides asserted various claims against the other. This order addresses the Patels’ 12(b)(6) motion to dismiss the counterclaims against them.

Breach of Contract Counterclaims. Arguing that the allegations of breach were too vague, the Patels moved to dismiss the breach of contract counterclaims, which were based on fourteen alleged breaches of an employment agreement and the Practice Separation Agreement. The Court largely rejected this argument, determining that the Defendants had satisfied the notice pleading standard for breach of contract claims for all but two of the alleged breaches. The Court dismissed the claim which failed to allege any breaching conduct occurring after the relevant agreement was formed, as well as another barred by a subsequent agreement containing a waiver for the breach, but otherwise denied the motion as to the breach of contract counterclaims.

Fraud Counterclaim. The Court also denied the motion to dismiss the fraud counterclaim, finding that the allegations that Defendants had relied upon specific misrepresentations made by the Patels during the mediation leading to the Practice Separation Agreement were sufficient to satisfy the Rule 9(b) pleading standard. Because the Patels’ only argument to dismiss the punitive damages demand relied on the dismissal of the fraud claim, the Court denied the motion to dismiss the punitive damages demand as well.

Tortious Interference Counterclaim. The counterclaim for tortious interference was based on allegations that the Patels contacted a client of Palmetto before their separation and induced the client to terminate its contract in violation of the notice period required, allowing the Patels to take them as a new client upon their separation from Palmetto. The Patels argued that they had become competitors of Palmetto by the time they interfered and therefore the interference was justified. The Court, however, held that the counterclaim adequately alleged that the Patels’ actions were not lawful because they involved fraudulent misrepresentations, and therefore denied the motion to dismiss the tortious interference counterclaim.

Unjust Enrichment Counterclaims. Palmetto brought two counterclaims for unjust enrichment: one for unauthorized use of a company credit card and one regarding distributions Palmetto paid to the Patels. The Court dismissed the first claim because Palmetto alleged that Patel had taken money through the unauthorized credit card charge, not that Palmetto had conferred a benefit upon him. The second claim survived dismissal because Defendants could plead unjust enrichment in the alternative to their related breach of contract claim.

Civil Conspiracy. Finally, Shah and PMG adequately pleaded the elements of civil conspiracy by naming the conspirators, the time and purpose of the conspiracy, the actions taken to carry it out, and the resulting injury. Therefore, the Court denied dismissal of the conspiracy claim.

*******

M.D. Claims Grp., LLC v. Bagley, 2024 NCBC Order 40 (N.C. Super. Ct. July 1, 2024) (Earp, J.)

Key Terms: motion for preliminary injunction; employment contract; non-disclosure agreement; breach of restrictive covenants; trade secrets; choice of law; Louisiana law

Defendant Bagley, a North Carolina resident, worked for Plaintiff MDCG, a Louisiana-based independent adjuster firm, as its claims manager and director of operations beginning in May 2021. Bagley and MDCG entered into an employment contract and a non-disclosure agreement, each of which contained certain restrictive covenants and specified that Louisiana law controls. Following Bagley resignation effective February 23, 2024, MDCG filed suit asserting, inter alia, claims arising from Bagley’s alleged breaches of restrictive covenants and misappropriation of trade secrets. In the present motion, MDCG moved for a preliminary injunction enjoining Bagley from soliciting and doing business with certain of its clients and adjusters and using its forms.

First, the Court assessed whether the law of Louisiana or North Carolina controlled MDCG’s claims. The parties agreed that North Carolina law applied to MDCG’s tort claims, and the Court agreed because the alleged injury occurred in North Carolina, where Bagley resided. Bagley, however, asserted that North Carolina law also applied to MDCG’s contract-based claims because he signed the contracts in North Carolina and this was the last act needed to effectuate the contracts. The Court disagreed, though, because the contracts explicitly stated that both parties’ signatures were required to effectuate the contracts and MDCG signed the contracts after Bagley, and did so in Louisiana. Separately, the Court determined that the choice of law provision controlled. Thus, Louisiana law applied to the contract claims.

The Court concluded that MDCG failed to establish a reasonable likelihood of success on its claims for breach of the restrictive covenants, disclosure of confidential information, or trade secret misappropriation. Accordingly, the motion for a preliminary injunction was denied. The restrictive covenants did not comply with Louisiana’s requirements that restrictive covenants contain a specific geographic limitation and be limited two years; thus, they were unenforceable under Louisiana law. Further, MDCG did not plead the existence of a trade secret or its misappropriation with the required specificity or present evidence (rather than mere speculation) that Bagley had disclosed any confidential information. Even if Bagley remembered the contact information of some clients, that information was publicly available or, if memorized by the employee, not a trade secret under North Carolina law.

 

To subscribe, email aoldfield@rcdlaw.net.

The information in this article is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation.

Posted 07/02/24