Archive for July, 2025
By: William H. Scott and Ashley Oldfield
Dapper Dev., L.L.C. v. Cordell, 2025 NCBC 33 (N.C. Super. Ct. July 15, 2025) (Brown, J.)
Key Terms: judgment on the pleadings; Rule 12(c); breach of contract; judicial estoppel; North Carolina Wage & Hour Act; N.C.G.S. § 95-25.14(b)(4); declaratory judgment; termination of membership interest; negligent/fraudulent misrepresentation; inspection of books and records; judicial dissolution
The Individual Plaintiffs and Defendant were each 25% members of Plaintiffs Dapper Development, L.L.C. and Tantalum Holdings, LLC (the “Companies”). The Companies’ Operating Agreements provide that the Companies shall be operated by Managers with each Member serving as a Manager. Following a series of disputes, Plaintiffs began to negotiate a voluntary buyout of Defendant’s membership interest in the Companies. In June 2023, Plaintiffs voted to remove Defendant from the Companies and offered a cash payment. Defendant rejected the buyout offer, extended a counteroffer, and filed suit against Plaintiffs after the counteroffer’s rejection. During continued buyout negotiations, Defendant voluntarily dismissed the Initial Lawsuit. Plaintiffs then filed suit against Defendant in April 2024. Defendant answered and asserted numerous counterclaims. Plaintiffs moved for a judgment on the pleadings on some of their claims and on many of Defendant’s counterclaims.
Defendant’s Counterclaim for Declaratory Judgment – Employment Status. Defendant asserted that there was a controversy regarding whether he was an employee of the Companies. However, because Defendant had made repeated and unqualified factual allegations in the Initial Lawsuit that he was an employee of the Companies, the Court concluded that Defendant was judicially estopped from alleging in this action that he was not an employee of the Companies. Thus, the Court dismissed this counterclaim with prejudice.
Defendant’s Counterclaim for Negligent/Fraudulent Misrepresentation. The Court dismissed Defendant’s misrepresentation counterclaim with prejudice, concluding that Defendant failed to allege facts showing reasonable reliance on Plaintiffs’ representations about his employment status, especially considering that he had been with the Companies since their formation and had participated in drafting and updating the Companies’ operating agreements.
Defendant’s Counterclaim for Violation of North Carolina’s Wage & Hour Act. The Court dismissed Defendant’s Wage & Hour Act counterclaim with prejudice, agreeing with Plaintiffs that the bona fide executive exemption of N.C.G.S. § 95-25.14(b)(4) barred Defendant’s recovery because he was a 25% owner of the Companies who was actively engaged in their management.
Declaratory Judgment: Status as Member. The parties disputed whether Defendant had been removed as a member of the Company. The Court agreed with Plaintiffs that Defendant had been removed as a member because the Operating Agreements provided that a member was terminated upon the affirmative vote of a majority of the membership interest and such a vote had occurred.
Declaratory Judgment: Status as Manager. The parties disputed whether Defendant had been removed as a Manager of the Companies. Defendant argued that because he remains a Member, he also remains a Manager because the Operating Agreements provide that each Member is a Manager. Since the Court had already determined that Defendant was not a Member, the Court found Defendant’s argument moot and granted Plaintiffs a declaratory judgment that Defendant had ceased to be a Manager.
Defendant’s Counterclaim for Inspection of Books and Records. Because the information rights provided by N.C.G.S. § 57D-3-04 are limited to members of LLCs and Defendant did not make his demand for inspection until after his membership had terminated, the Court dismissed this counterclaim.
Defendant’s Counterclaim for Judicial Dissolution. Because the Court had determined that Defendant was no longer a member of the Companies, the Court dismissed the counterclaim as Defendant lacked standing to request judicial dissolution.
Defendant’s Counterclaim for Breach of Fiduciary Duty. Defendant alleged that Plaintiffs breached their fiduciary duties as Managers to him as a Member. Since no de jure fiduciary relationship exists between Managers and Members, the Court looked to whether Defendant had pleaded the existence of a de facto fiduciary relationship based on complete domination and control. Although Defendant alleged numerous controlling actions by Plaintiffs, he also alleged facts showing that he still “held a card or two.” Thus, the Court determined that a de facto fiduciary relationship did not exist and, therefore, dismissed the claim.
Defendant’s Counterclaims for Breach of Contract and Breach of the Implied Covenant of Good Faith and Fair Dealing: Operating Agreements. Defendant alleged that Plaintiffs had breached various provisions of the Operating Agreements. Plaintiffs sought judgment in their favor, arguing that the pleading was deficient because it did not describe the date or substance of any breach. The Court disagreed with Plaintiff and found that the breach of contract claim was adequately pleaded under the notice pleading standard. The Court also denied judgment on the ICGFFD claim for the same reasons.
Defendant’s Counterclaim for an Equitable Accounting. The Court dismissed the “claim” for an equitable accounting, but without prejudice to Defendant’s ability to seek an equitable accounting as a remedy at a later stage as permitted by law.
Defendant’s Counterclaim for Reimbursement/Contribution. Defendant sought reimbursement for payments he made to satisfy the Companies outstanding debts after he received notice of his termination. The Court was unable to conclude that Plaintiffs were entitled to judgment as a matter of law on this claim and thus denied the motion.
Declaratory Judgment: Occurrence of Triggering Event. The parties disputed whether a Triggering Event had occurred under the Operating Agreements. The Court agreed with Plaintiffs that a Triggering Event had occurred. First, under the Operating Agreements’ plain language, Plaintiffs’ June 2023 vote to terminate Defendant’s employment unambiguously constituted a Triggering Event. Second, since Defendant had taken contrary positions in the Initial Lawsuit, the Court held that the doctrine of judicial estoppel barred him from asserting in this lawsuit that a Triggering Event had not occurred.
Declaratory Judgment: Valuation Dates. The Court found that Defendant had adequately pleaded the existence of a controversy regarding the effective date for a valuation of the Companies as neither the Operating Agreements nor the Consent Order in the Initial Lawsuit clearly identified a date. Accordingly, judgment on the pleadings was denied.
Declaratory Judgment: Winston Property. The parties disputed whether any payment to Defendant in exchange for his Membership Interest was subject to setoff. The Court concluded that based on the relevant documents, Plaintiffs were entitled to a declaratory judgment that they were entitled to an offset against the purchase price of Defendant’s interest.
Plaintiffs’ Claim for Breach of Contract: Operating Agreement. Plaintiffs sought judgment on the pleadings on their claim that Defendant had breached the Operating Agreements by refusing to accept a buyout offer in June 2023. The Court denied the motion because it was unable to conclude that no material issue of fact existed and that Cordell breached the Operating Agreements by refusing to accept a buyout offer solely based on the parties’ pleadings.
Plaintiffs’ Claim for Breach of Contract: Consent Order. Since Plaintiffs did not address this claim in their brief, the Court denied Plaintiffs’ motion for judgment on the pleadings on it.
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Value Health Sols. Inc. v. Pharm Rsch. Assocs., 2025 NCBC 34 (N.C. Super. Ct. July 23, 2025) (Davis, J.)
Key Terms: Rule 12(f); motion to strike; summary judgment; statute of limitations; anticipatory repudiation; North Carolina Supreme Court
This lawsuit involves a dispute between Plaintiffs Neil Raja and Value Health Solutions Inc. (“VHS”) and Defendants Pharmaceutical Research Associates, Inc. and PRA Health Sciences, Inc. (PRA) in connection with PRA’s acquisition of VHS and its proprietary software (PSO). The Court previously entered orders dismissing certain of Plaintiffs’ claims and granting summary judgment as to Plaintiffs’ remaining claims. As summarized here, the North Carolina Supreme Court affirmed all but one of the Business Court’s rulings. The Supreme Court reversed the Court’s entry of summary judgment against Plaintiffs on the issue of PRA’s alleged breaches of Section 2.6 of the parties’ Asset Purchase Agreement and remanded for further proceedings. PRA allegedly breached Section 2.6(b)’s schedule of “Milestones” for business development; upon completing a Milestone, PRA was obligated to pay VHS set sums of money. Following supplemental discovery, Plaintiffs moved to strike Defendants’ statute of limitations affirmative defense and Defendants moved for summary judgment on three issues: 1) whether the statute of limitations barred Plaintiffs from asserting certain breaches of Section 2.6(b); 2) whether a signed agreement between PRA and third-party Takeda Pharmaceuticals constituted an External Sale under the APA; and 3) whether PRA’s internal use of PSO was an External Sale under the APA.
Motion to Strike: Defendants’ Statute of Limitations Defense. Plaintiffs argued that Defendants’ single-sentence statute of limitations affirmative defense should be stricken because it was not pleaded with the requisite specificity. The Court rejected this argument, concluding that the allegation was sufficient to put Plaintiffs on notice. Further, the Court found that Plaintiffs would not be unfairly prejudiced by allowing Defendants to pursue this defense as Plaintiffs had been on notice of it for over five years and had never previously asserted that it was insufficiently pleaded. Accordingly, the Court denied Plaintiffs’ motion to strike.
Summary Judgment: Statute of Limitations. Defendants contended that Plaintiff Raja had first learned of Defendants’ alleged breaches of contract through a conversation with PRA’s CEO in June 2015. The Court concluded that to the extent this conversation was sufficient to give rise to a claim for breach of contract at that time, the claim would be based on a theory of anticipatory repudiation. However, the evidence was clear that Plaintiffs did not treat the statements as an anticipatory repudiation at that time. Accordingly, the Court was unable to conclude as a matter of law that Plaintiffs’ claim accrued in June 2015. The Court denied Defendants’ motion for summary judgment, finding that significant questions of fact remained as to when Plaintiffs’ claim accrued.
Summary Judgment: External Sales
The Court granted Defendants’ motion for summary judgment related to External Sales. With respect to Takeda, the Court found that there was no evidence that the Takeda master service agreement was drafted to require Takeda to pay consideration to acquire and use a license of the PSO. Accordingly, the Takeda MSA was not an External Sale under the APA. With respect to PRA’s internal use of PSO to conduct research for customers, the Supreme Court had instructed that “in order for an External Sale to have occurred under the APA, a contract between PRA and its customer must have included a transfer of license for the customer to use PSO.” Since PRA had not conveyed a license to a customer, no External Sale occurred.
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Compass Tax Servs. LLC v. Karki, 2025 NCBC 35 (N.C. Super. Ct. July 23, 2025) (Robinson, C.J.)
Key Terms: counterclaim; breach of contract; material misrepresentation; fraud; breach of fiduciary duty; UDTPA; bench trial; final judgment
As summarized here, this dispute arose out of Defendant/Counterclaim Plaintiff Rabindra Karki’s sale of five Liberty Tax franchise locations to Plaintiffs/Counterclaim Defendants Compass Tax Services, LLC, Ashok Lamichhane, and Amar Shrestha pursuant to a sale Agreement. Although some payments were made under the Agreement, the full price was never paid to Karki. Karki asserted counterclaims arising from Counterclaim Defendants’ failure to pay and from Lamichhane’s conduct managing Compass Tax. The Court previously dismissed all of Plaintiffs’ claims leaving only Karki’s counterclaims for trial. Following a bench trial, the Court entered a final judgment.
Breach of Contract. The Court had previously determined that one or more of the Counterclaim Defendants failed to pay Karki under the Agreement. The only issue remaining was which of the Counterclaim Defendants were obligated to make the payments. Karki contended that Lamichhane and Shrestha were personally liable, while they contended that Compass Tax was liable. The Court concluded that Lamichhane and Shrestha were personally liable, jointly and severally, based on the evidence that they had signed the Agreement in a personal capacity and used their personal funds to make initial payments to Karki.
Fraud. The Court dismissed the fraud counterclaim with prejudice because Karki had failed to demonstrate by the greater weight of the credible evidence that Lamichhane knowingly made false promises to Karki regarding his intent to make payments pursuant to the September Agreement at the time that agreement was signed.
Breach of Fiduciary Duty. The Court dismissed Karki’s breach of fiduciary duty counterclaim against Lamichhane without prejudice. The Court first determined that, based on Lamichhane’s majority interest in Compass Tax and managerial control, Lamichhane owed a fiduciary duty to Karki–a minority member. The Court also concluded that there was ample evidence that Lamichhane had breached his fiduciary duties owed as majority and managing member. However, the evidence showed that any harm suffered as a result of Lamichhane’s actions was harm suffered by Compass Tax, not Karki. Accordingly, Karki lacked standing to bring a direct claim for breach of fiduciary duty for harm suffered by Compass Tax.
Constructive Fraud. The Court dismissed Karki’s constructive fraud counterclaim without prejudice, as the alleged harm was to Compass Tax, not to Karki.
UDTPA. The Court dismissed the UDTPA counterclaim with prejudice because the underlying tort claims had all been dismissed and, with respect to the breach of contract claim, Lamichhane’s and Shrestha’s conduct did not rise to the level of egregious or aggravating circumstances necessary to support a UDTPA claim. Further, the alleged misconduct concerned intra-corporate actions and therefore was not “in or affecting” commerce.
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Pridgen v. Carlson, 2025 NCBC 36 (N.C. Super. Ct. July 25, 2025) (Robinson, C.J.)
Key Terms: motion to dismiss; fraud; fraudulent concealment; statute of limitation; discovery rule; professional services; North Carolina Investment Advisers Act; N.C.G.S. § 78C-38(d); N.C.G.S. § 1-538.2; negligent misrepresentation
This action arises out of Plaintiff’s contention that beginning in 2007, Defendant Carlson, her investment advisor, made fraudulent statements to induce her to enter an investment advisor relationship with him and that he continued to make fraudulent statements throughout their relationship regarding his status as a registered investment advisor and the status of her investments. She further contended that the corporate Defendants—Carlson Financial and Repple—agreed to manage her investment profiles through Carlson, thereby becoming responsible for Carlson’s fraudulent acts. Plaintiff terminated her relationship with Carlson around July 2021 and filed suit on April 17, 2024. The Carlson Defendants moved to dismiss under Rules 12(b)(1) and 12(b)(6) and Repple moved to dismiss under Rule 12(b)(6).
Statute of Limitation. Defendants argued that Plaintiff’s fraud claims should be analyzed under N.C.G.S. § 1-15(c), which provides that a cause of action for malpractice arising out of professional services accrues at the time of the occurrence of the last act of defendant giving rise to the cause of action. The Court rejected this argument, concluding that investment advisors did not fall under professional services for purposes of N.C.G.S. § 1-15(c). Instead, the Court applied N.C.G.S. § 1-52(9), which provides that causes of action for fraud do not accrue until the aggrieved party’s discovery of facts constituting fraud or mistake.
Fraudulent Inducement & Common Law Fraud
The Court denied dismissal of the claims for fraudulent inducement and common law fraud, as Defendants conceded that Plaintiff alleged these claims with sufficient particularity under Rule 9(b). The Court also found that Plaintiff met the burden to demonstrate Repple’s vicarious liability for Carlson’s conduct while he was in Repple’s employ.
Fraudulent Concealment. The Court also denied dismissal of Plaintiff’s claim for fraudulent concealment. Plaintiff’s allegations that Carlson and Carlson Financial maintained total discretionary control over her investment portfolio created a fiduciary duty where Carlson had a “duty to speak” to inform Plaintiff of the true and diminishing value of her portfolio. Because Carlson sent Plaintiff monthly account statements containing false financial information through Repple, the Court determined that Plaintiff pleaded a valid claim against Repple.
Violation of the North Carolina Investment Advisers Act. The Court denied dismissal of this claim, rejecting Defendants’ five-year statute of limitations argument. Under the IAA, no person may sue more than three years after the person discovers the facts constituting the violation, but in any case no later than five years after the rendering of investment advice, except that if the violation is concealed through fraud, the suit may be commenced not later than three years after the person discovers that the act was fraudulent. Since Plaintiff had adequately alleged fraudulent conduct and there were disputed facts regarding when Plaintiff should have discovered the fraud, the Court declined to dismiss the claim at this stage.
Negligent Misrepresentation. The Court denied dismissal, noting the need for a more developed record to determine whether the applicable three-year statute of limitations barred the claim.
Civil Liability under N.C.G.S. § 1-538.2. N.C.G.S. § 1-538.2 allows private actions based on violations of criminal statutes. However, since the discovery rules does not apply to this claim, the three-year statute of limitations of N.C.G.S. § 1-52(2) barred the claim to the extent it was based on any actions that took place before 17 April 2021.
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United Therapeutics Corp. v. Liquidia Techs., Inc, 2025 NCBC 37 (N.C. Super. Ct. July 29, 2025) (Earp, J.)
Key Terms: summary judgment; trade secrets; compilation trade secret; process trade secrets; reasonable efforts to maintain secrecy; damages; UDTPA
As summarized here and here, this dispute concerns the alleged misappropriation of trade secrets by Defendant Roscigno from his former employer Plaintiff UTC to the benefit of his new employer, Defendant Liquidia. Liquidia moved for summary judgment on UTC’s misappropriation of trade secrets and UDTPA claims, arguing that the documents at issue (the “UTC Documents”) are not a protectable compilation or process trade secret and that UTC did not engage in reasonable efforts to protect its trade secrets.
Individual Trade Secret Documents. Although UTC claimed that the “totality” of the UTC Documents constituted a trade secret, it also referenced specific information within some of the documents. The Court found that a factfinder could conclude that the UTC Documents contain individual trade secrets that UTC had identified with sufficient particularity. Liquidia also argued that UTC could not recover damages for unjust enrichment for misappropriation of individual trade secrets because its expert did not apportion damages by-document. The Court, however, was unable to conclude that UTC would be incapable of presenting evidence to allow the calculation of damages with respect to at least some of the trade secrets. Additionally, if successful on liability, UTC could obtain injunctive relief, punitive damages, or attorneys’ fees. Accordingly, the Court denied summary judgment on this basis.
Compilation Trade Secrets. Liquidia argued that UTC could not support its claim for misappropriation of a compilation trade secret because it did not present evidence regarding the effort or cost expended in compiling the information and some of the information was publicly available. The Court rejected both these arguments, noting that it would be left to the jury to decide whether Roscigno compiled the documents as a “roadmap,” as UTC argues, or whether the documents “were randomly compiled in the course of doing business,” per Liquidia’s stance. Thus, the Court denied summary judgment on this basis.
Process Trade Secret. The Court found that record evidence existed to support a conclusion that the documents at issue constitute a process trade secret. Although the UTC Documents contained some information that is publicly available, other portions of the UTC Documents were not publicly available and thus the process may constitute a trade secret. Accordingly, the Court denied summary judgment on this basis.
Efforts to Maintain Secrecy. Liquidia asserted that the trade secret claim failed because, when it comes to efforts to maintain secrecy, UTC did not distinguish between its trade secrets and other confidential information. The Court disagreed, concluding that the failure to differentiate security measures was not dispositive. The evidence of UTC’s efforts to maintain the secrecy of its information was sufficient to go to the jury.
Unfair and Deceptive Trade Practices. The Court denied Defendant’s motion related to the UDTPA claim because it was based on the surviving trade secret misappropriation claim.
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Meridian Renewable Energy LLC v. Birch Creek Dev., LLC, 2025 NCBC Order 51 (N.C. Super. Ct. July 23, 2025) (Robinson, C.J.)
Key Terms: order on designation; N.C.G.S. § 7A-45-4(a)(1); N.C.G.S. § 7A-45-4(b)(2); N.C.G.S. § 7A-45.4(e); notice of designation; Chapter 59
As summarized here, the Court previously rejected Defendant Birch Creek Development, LLC’s attempt to designate this case as a complex business case based on Plaintiff Meridian Renewable Energy LLC’s second amended complaint. Thereafter, however, Birch Creek filed an answer with counterclaim and third-party complaint, asserting a claim for breach of fiduciary duty and declaratory relief against Pine Gate and other third-party defendants. Birch Creek contemporaneously filed a Notice of Designation, asserting that the case now met the criteria for a mandatory complex business case under N.C.G.S. § 7A-45.4(a)(1). Meridian timely filed an opposition to designation, contending that designation was improper.
Per N.C.G.S. § 7A-45.4(a)(1), designation as a mandatory complex business case is proper for actions involving a material issue related to “[d]isputes involving the law governing corporations . . . including disputes arising under Chapters 55, 55A, 55B, 57D, and 59 of the General Statutes.” Meridian argued that Birch Creek’s third-party complaint insufficiently referenced Chapter 59 and partnership law and that on the face of the contracts at issue, no joint venture or partnership existed. The Court disagreed, concluding that the action “involves the law governing partnerships under Chapter 59 of the General Statutes,” as Birch Creek’s new breach of fiduciary duty claim named Pine Gate as a joint venture partner and sought declaratory relief concerning the existence of a partnership. Moreover, the Court declined to make a determination on the merits at this stage as to whether a joint venture existed. Accordingly, the Court overruled Meridian’s Opposition and determined that the action was properly designated as a mandatory complex business case.
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Mohr Partners, Inc. v. Elior, Inc., 2025 NCBC Order 52 (N.C. Super. Ct. July 23, 2025) (Davis, J.)
Key Terms: summary judgment; stipulation; supplemental order
As summarized here, the Court previously issued an order and opinion which granted Plaintiff Mohr Partners, Inc’s motion for summary judgment concerning its entitlement to a commission for work on the Moosic Transition from Defendant Elior, Inc. but deferred ruling on the amount of the commission that Plaintiff was due. Thereafter, the parties stipulated that Plaintiff was due $450,000 plus pre-judgment interest and post-judgment interest.
This Order supplemented the original order by entering partial summary judgment in favor of Plaintiff on the Moosic Transaction for the parties’ stipulated amount.
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In Re Asheville Eye Assocs. Data Incident Litig., 2025 NCBC Order 53 (N.C. Super. Ct. July 24, 2025) (Davis, J.)
Key Terms: pro hac vice revocation; sua sponte judicial reconsideration; habitual practice; N.C.G.S. § 84-4.1
The Court previously entered an order granting pro hac vice admission to Raina C. Borrelli in ongoing litigation, after finding that Borrelli had satisfied the requirements of N.C.G.S. § 84-4.1, the statute governing pro hac vice admissions.
Thereafter, a supplement to the motion for Borrelli’s PHV admission was filed, which provided that Borelli had been admitted pro hac vice in North Carolina fifteen times in the last five years, rather than eight times, as was stated in the original PHV motion. The supplement stated that the failure to include the seven undisclosed cases in the original PHV motion was due to an “inadvertent error.”
N.C.G.S. § 84-4.1 forbids North Carolina courts from allowing nonresident attorneys to practice in this State’s courts habitually. The Court revoked Borrelli’s pro hac vice admission, concluding that her fifteen pro hac vice admissions within five years constituted habitual practice.
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Comic Certification Serv. LLC v. CBCS Operations, LLC, 2025 NCBC Order 54 (N.C. Super. Ct. July 28, 2025) (Davis, J.)
Key Terms: comics; default; Rule 55(a)
The Court entered default under Rule 55(a) against Defendants Eli Global, LLC and Global Growth Holdings, LLC for failing to timely file an answer or plead in response to Plaintiffs’ Amended Complaint.
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In re Matter of the 2025 Ann. S’holders’ Meeting of Charles & Colvard Ltd., 2025 NCBC Order 55 (N.C. Super. Ct. July 29, 2025) (Robinson, C.J.)
Key Terms: order on designation; application for court-order shareholder meeting; contemporaneous filing requirement
On 10 July 2025, Riverstyx initiated this action by filing an Application for Court-Ordered Shareholder Meeting pursuant to N.C.G.S. § 55-7-03. One week later, it filed a notice of designation under N.C.G.S. § 7A-45.4(a). The Chief Justice issued a determination order, directing the Court to determine whether the action was properly designated. Because the NOD was not filed contemporaneously with the filing of the Application, as required by N.C.G.S. § 7A-45.4(d)(1), the Court determined that the action was not properly designated as a mandatory complex business case.
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United Therapeutics Corp. v. Liquidia Techs., Inc., 2025 NCBC Order 56 (N.C. Super. Ct. July 29, 2025)
Key Terms: expert witness; trade secrets; value from secrecy; damages apportionment; Rule 403; Rule 702; state of mind
As summarized here and here, this dispute concerns the alleged misappropriation of trade secrets by Defendant Roscigno from his former employer Plaintiff UTC to the benefit of his new employer, Defendant Liquidia. UTC retained an expert witness to support its trade secret misappropriation claim, who opined in his report as to the value that Liquidia received from the trade secrets. Liquidia moved to exclude the expert under Rules 702 and 403 of the Rules of Evidence.
Liquidia first contended that the expert’s testimony should be excluded because it was based on his speculation about the “state of mind” of Defendants and the FDA. The Court agreed with Liquidia that to the extent the expert’s conclusions regarding the value Liquidia placed on the alleged trade secrets was not based on record evidence, it should be excluded. However, given the expert’s qualifications and experience, he could opine generally on the value this type of information would have to a competitor like Liquidia. The Court also held that the expert could testify as to what the FDA actually did and said based on the documents he reviewed and could testify as to the FDA’s general practices.
Next, Liquidia asserted that the expert’s opinions with respect to the value of the documents was inherently unreliable because his analysis lacked a specific methodology and he failed to assess the independent economic value of the trade secrets on a by-category or by-document basis. With respect to the first point, the Court determined that a specific methodology is unnecessary when the expert’s testimony is based on experience. Since the expert here had extensive relevant experience, his testimony was sufficiently reliable. As to the second point, the Court acknowledged that since the expert’s testimony did not apportion damages between specific trade secrets, Liquidia may have difficulty establishing damages at trial in the event that the jury determined that not all of the alleged trade secrets were misappropriated. However, this issue was left for trial.
Lastly, Liquidia argued that the expert’s opinions regarding the independent economic value of UTC’s alleged trade secrets were irrelevant because the expert did not address their value “derived from secrecy” since some of the information was in the public domain. The Court rejected this argument, concluding that most of the information was not publicly available and a fact-finder could conclude that UTC expended significant resources developing and including the publicly available information in its drug development efforts and that Roscigno purposefully chose those documents to include in a larger compilation which he then shared.
The Court also concluded that the probative value of the expert’s opinions outweighed the danger of misleading the jury.
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Posted 07/29/25
By: William H. Scott and Ashley Oldfield
Action Learning Assocs., LLC v. Kenan-Flagler Bus. Sch. Exec. Educ. LLC, 2025 NCBC 30 (N.C. Super. Ct. July 2, 2025) (Davis, J.)
Key Terms: motion to dismiss; breach of contract, tortious interference with contractual relations, fraud, unfair and deceptive trade practices, conversion, misappropriation of trade secrets, constructive fraud, civil conspiracy
Plaintiff Action Learning Associates, LLC and Defendant Kenan-Flagler Business School Executive Education LLC (“KFEE”) collaborated since 2013 to develop executive learning courses for clients, including ExxonMobil. The parties codified their working agreements in an Independent Contractor Scope of Work in 2013 and an updated Master Services Agreement (“MSA”) in 2019. The parties renewed the MSA annually between 2019 and 2022, and during negotiations for the 2023 renewal, Plaintiff entered a one-year contract to renew the MSA at discounted rates. In August 2023, KFEE informed Plaintiff that there would be no future renewals of the MSA. Plaintiff filed suit asserting various claims against KFEE and several of its employees (the “Individual Defendants”) arising from the failure to renew and other alleged misconduct. Defendant moved to dismiss all of Plaintiff’s claims pursuant to Rule 12(b)(6).
Breach of Contract. The Court granted the motion with respect to the Individual Defendants because they were not parties to the contracts at issue. The Court also granted the motion to the extent it was based on KFEE’s decision not to renew the MSA as there was no contractual right to renewal. The Court rejected Plaintiff’s argument in its brief that the failure to renew was a breach of the implied covenant of good faith and fair dealing since the complaint did not allege such a claim, and, in any event, such a claim would have failed along with the claim for breach of an express contract because they were based on identical facts. However, the Court denied the motion with respect to breach of the MSA’s confidentiality and non-disclosure provisions, concluding that the allegations met the minimum pleading requirements.
Tortious Interference with Contractual Relations. Plaintiffs alleged that Defendants had tortiously interfered with the contracts between the parties and with Plaintiff’s contracts with its former facilitators. The Court dismissed both. The first theory failed because one cannot legally interfere with a contract to which it is a party and there were no allegations that the Individual Defendants had taken any actions to induce any breach. The second failed because the complaint did not contain allegations of inducement regarding the facilitators.
Fraud & Fraud in the Inducement. The Court dismissed these claims because the allegations largely failed to meet the Rule 9(b) pleading standards. The only statement that met the pleading standards was not a misrepresentation of fact or promissory representation.
Conversion. Plaintiff’s conversion claim was based on materials which it had designed for its ExxonMobil programs. The Court granted the motion with respect to the Individual Defendants because there were no allegations that they had converted anything. KFEE argued that Plaintiff’s training materials were intellectual property rights which cannot be the subject of a conversion claim. However, because KFEE’s computer servers maintain some electronic documents that Plaintiff created, the Court allowed the conversion claim relating to KFEE to continue.
Unfair & Deceptive Trade Practices. The Court dismissed the UDPTA claim against the Individual Defendants because there were no remaining predicate claims against them, but denied dismissal as to KFEE based on the surviving conversion claim.
Misappropriation of Trade Secrets. The Court dismissed the claim for misappropriation of trade secrets because the complaint failed to even come close to describing the alleged trade secrets with the requisite degree of specificity.
Constructive Fraud. The Court dismissed the constructive fraud claim because Plaintiff had failed to allege the existence of a fiduciary duty. Allegations that KFEE had obtained Plaintiff’s confidential and proprietary information pursuant to the MSA and then breached its confidentiality obligations were not sufficient to demonstrate a fiduciary duty between the parties.
Civil Conspiracy. The Court dismissed the civil conspiracy claim because the underlying tort claims had been dismissed and because the complaint failed to adequately allege an agreement to commit an unlawful act or the identity of the conspirators.
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Londry v. Stream Realty Partners, L.P., 2025 NCBC 31 (N.C. Super. Ct. July 7, 2025) (Earp, J.)
Key Terms: summary judgment, breach of contract, breach of partnership agreement, N.C.G.S. § 59-704(a), fraud, economic loss rule, unfair and deceptive trade practices; tortious interference
Plaintiff Londry worked as a real estate broker for Defendant Stream Realty Partners-Charlotte, L.P. (“Stream Charlotte”). Defendant Farrar is a minority owner of Stream Charlotte. While employed by Stream Charlotte, Londry worked on a deal for the sale of seventeen parcels of land in South Carolina (the PBC Deal). Londry left Stream Realty, formed Alpha Advisors LLC as its sole member, and closed on the PBC Deal. Farrar heard of the closing and requested an escrow agreement to hold the portion of the commission that Stream Charlotte would have received if the listing agreement had been executed while Londry was employed by Stream Charlotte. Londry and Stream Charlotte both alleged that they are entitled to the commission for the closing of the PBC Deal. Londry filed a Complaint, alleging breach of contract against Stream Charlotte and Farrar, breach of partnership agreement against Farrar, breach of fiduciary duty against Farrar, fraud against Farrar, and unfair and deceptive trade practices against all Defendants. Stream Charlotte’s answered and asserted counterclaims for breach of fiduciary duty and tortious interference with prospective business relations. Defendants moved for summary judgment on all of Plaintiffs’ claims and Plaintiffs moved for affirmative summary judgment on their claim for wrongful interference.
Breach of Contract. The Court granted Defendant’s motion for summary judgment with respect to Plaintiff’s claims of divestment of partnership and for being stripped of his title as co-market leader. The Court denied summary judgment with respect to Plaintiff’s claims for payment of commissions on outstanding deals and for the related claim for breach of the covenant of good faith and fair dealing.
Breach of Partnership Agreement. The Court denied summary judgment with respect to breach of a partnership agreement. Londry asserted that he was a partner in Stream Charlotte and that Farrar had agreed to form a general partnership within the limited partnership of Stream Charlotte. Under N.C.G.S. § 59-704(a), admission to a limited partnership requires consent from all other partners. The Court found that, due to the absence in the record of Stream Charlotte’s partnership agreement and “the mix of evidence presented,” it could not conclude as a matter of law whether Londry and Farrar had reached an enforceable partnership agreement.
Breach of Fiduciary Duty. The Court denied summary on the breach of fiduciary duty claims because the Court could not determine whether a legal partnership, and therefore an accompanying fiduciary relationship, existed between Londry and Farrar.
Fraud. The Court granted summary judgment in Defendants’ favor on Londry’s fraud claim because it was based on alleged breaches of the employment agreement and was therefore barred by the economic loss rule.
Wrongful Interference with Contract. The Court granted Defendants’ motion for summary judgment for wrongful interference with the listing agreement providing for a commission on the PBC Deal, as Plaintiff had failed to establish that Defendants’ sole motivation in seeking a commission was to injure Plaintiffs. It was reasonable to expect Defendants to pursue a commission on a deal that it had pursued for more than two years.
Unfair and Deceptive Trade Practices Act. The Court granted the motion for summary judgment with respect to the UDTPA claim because the wrongful interference claim failed and Plaintiff had not produced sufficient evidence to prove that the breach of contract was accompanied by egregious or aggravating circumstances.
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Comic Book Certification Serv. LLC v. CBCS Operations, LLC, 2025 NCBC 32 (N.C. Super. Ct. July 9, 2025) (Davis, J.)
Key Terms: motion to dismiss; breach of contract; unjust enrichment; implied covenant of good faith and fair dealing; declaratory judgment; unfair and deceptive trade practices; fraud; piercing the corporate veil; alter ego/instrumentality test; comics
Plaintiff Michael Bornstein created Plaintiff Comic Book Certification Service LLC (“CBCS”) in 2014 to provide comic book grading services to comic book collectors. Pursuant to an Asset Purchase Agreement, an Equity Equivalence Agreement (“EEA”), and a Consulting Agreement, CBCS’s assets were subsequently sold to the newly-formed CBCS Operations, which the Non-CBCS Operations Defendants managed. The various agreements required CBCS Operations to pay CBCS certain sums over time. Defendants’ payments to CBCS were initially timely paid, then late-paid, and then not paid at all. Later, CBCS Operations provided Plaintiff with a Fair Market Value Statement which indicated that CBCS had a negative EBITDA, rendering Plaintiff’s equity interest in CBCS Operations worthless. Plaintiff filed suit in 2024, alleging various claims arising from the parties’ soured business relationship. Defendants moved to dismiss most of Plaintiff’s claims.
Breach of Contract/Breach of the Implied Covenant of Good Faith and Fair Dealing.
The Court dismissed Bornstein’s individual claims for breach of the EEA and the Consulting Agreement for lack of standing, as he signed both documents in his capacity as Manager of CBCS, not in his personal capacity. As for CBCS’s claims for breach of the EEA and the Consulting Agreement, the Court denied dismissal, except to the extent the claim was based on Defendants’ intentional devaluing of CBCS’s phantom equity interest, for which there was no express contractual basis. However, the Court allowed the claim for breach of the implied covenant of good faith and fair dealing to go forward based on the intentional devaluing of the phantom equity interest.
Unjust Enrichment. The unjust enrichment claim survived as an alternative to the breach of contract claim.
Breach of Fiduciary Duty and Constructive Fraud. The Court dismissed Plaintiff’s breach of fiduciary duty and constructive fraud claims because no fiduciary relationship arose from the parties’ arms-length contractual relationship.
UDTPA. The Court denied dismissal of the UDTPA claim because Plaintiffs had adequately pleaded substantial aggravating circumstances to elevate a breach of contract to an unfair or deceptive trade practice, including “an elaborate scheme designed to help CBCS Operations avoid making required payments to Plaintiffs while secretly devaluing Plaintiffs’ phantom equity interest.”
Declaratory Judgment. Plaintiffs requested three declarations from the Court. Although the first two clearly overlapped with the subject matter of Plaintiffs’ breach of contract claims, the Court declined to dismiss them at this stage. The third requested a declaration that Defendants must comply with a TRO entered in a separate pending lawsuit. The Court dismissed the claim for this declaration as it did not have the authority to issue a ruling addressing the enforceability of an order issued by another judge in another pending case.
Piercing the Corporate Veil. The Court dismissed Plaintiffs’ veil piercing claim against the Non-CBS Operations Defendants without prejudice. Plaintiffs’ pleadings did not satisfy the instrumentality test, which allows veil piercing if the corporate entity is a mere instrumentality or alter ego of another entity or individual. The Amended Complaint was unclear as to which entities controlled which other entities and how any such control specifically related back to Defendant CBCS Operations.
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Allin v. Compassion Healthcare, Inc., 2025 NCBC Order 50 (N.C. Super. Ct. July 14, 2025) (Robinson, C.J.)
Key Terms: order on designation; N.C.G.S. § 7A-45-4(a); timeliness of filing; clerk of court
Plaintiff filed suit on May 27, 2025, and served the Defendant with the complaint on June 5, 2025. Defendant timely served its Notice of Designation upon the Chief Justice and the Business Court on July 7, 2025, by email, but did not file the NOD with the Caswell County Clerk of Superior Court until July 9, 2025.
Per N.C.G.S. §§ 7A-45.4(c) and (d), parties must file NODs with the clerk of court within thirty days of service of a complaint, which here was July 7, 2025. Because the NOD was not filed with the clerk of court until July 9, 2025, it was untimely. Accordingly, the Business Court concluded that the action would not proceed as a mandatory complex business case under N.C.G.S. § 7A-45.4(a). This ruling was made without prejudice to the right of any party to seek designation as a mandatory complex business case as provided under N.C.G.S. § 7A-45.4.
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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 07/15/25
By: Natalie E. Kutcher
Fin. Carrier Servs. LLC v. Kingpin Cap. Inc., 2025 NCBC 27 (N.C. Super Ct. June 19, 2025) (Conrad, J.)
Key Terms: motion to dismiss; non-compete agreement; non-solicitation agreement; misappropriation of trade secrets; UDTPA; tortious interference; fraud, injunctive relief; confidentiality agreement
Defendant Ryan McCray was employed by Plaintiff Financial Carrier Services, LLC, a factoring and financial services company for over a decade, most recently serving as Plaintiff’s Client Services Supervisor. As a condition of his employment with Plaintiff, McCray signed an employment agreement containing broad noncompetition, nonsolicitation, and confidentiality provisions. In early 2024, McCray resigned from his position with Plaintiff, and took a similar role with Defendant Kingpin Capital, Inc. Plaintiff initiated this lawsuit against McCray and Kingpin, alleging misappropriation of trade secrets, breach of contract, tortious interference with contract, unfair and deceptive trade practices, and fraud. McCray and Kingpin moved jointly to dismiss all claims pursuant to Rule 12(b)(6).
Misappropriation of Trade Secrets. The Court granted Defendants’ motion as to Plaintiff’s misappropriation of trade secrets claim, noting the complaint failed to adequately describe the trade secrets at issue with particularity. Plaintiff’s broad descriptions of its alleged trade secrets, such as “business development strategies and goals,” “knowledge of [Plaintiff’s] operations” and “business practices and plans for future business” were held to be inadequate to put Defendants on notice of the precise information allegedly misappropriated.
Breach of Contract – Noncompetition and Nonsolicitation. The Court granted Defendants’ motion as to Plaintiff’s claims against McCray for breach of the employment agreement’s noncompetition and nonsolicitation provisions. The noncompetition provision, which barred McCray from “directly or indirectly” providing financial services to any of Plaintiff’s customers within the United States, was facially overbroad and unenforceable and not subject to blue-penciling because it was not clearly drafted to be divisible. The nonsolicitation provision was likewise facially overbroad and unenforceable because, read literally, it would bar McCray from doing any financial service business with any customer of Plaintiff’s within the United States, including those customers with which he’d had minimal or no contact.
Breach of Contract – Confidentiality. The Court denied Defendants’ motion as to Plaintiff’s claim for breach of the employment agreement’s confidentiality provision. Defendants argued the Complaint failed to adequately plead a breach. Noting that breach of contract claims are not subject to heightened pleading standards, the Court determined the claim was adequately pleaded.
Tortious Interference with Contract and Unfair and Deceptive Trade Practices. Plaintiff asserted that Defendant Kingpin had tortiously interfered with the restrictive covenants in McCray’s employment agreement and had unlawfully induced Plaintiff’s customers to terminate their contract with Plaintiff. Defendants moved to dismiss, arguing that the restrictive covenants were all unenforceable and that any interference with Plaintiff’s contracts was justified. The Court dismissed the claim to the extent it was based on the noncompetition and nonsolicitation provisions of McCray’s employment agreement, which had already been determined to be unenforceable. However, since the claim for breach of the confidentiality provision remained and such breach supplied the unlawful conduct necessary to plead a tortious interference claim, the motion was otherwise denied as to this claim. Because the UDTPA claim was premised on the tortious interference claim, it survived to the same extent as the tortious interference claim.
Fraud. Plaintiff’s fraud claim was based on Defendant’s providing a materially different version of McCray’s employment agreement which Plaintiff believed to be fake. The Court dismissed this claim, concluding that Plaintiff had not alleged that it had been deceived by, relied upon, or been damaged by the disputed document.
Injunctive Relief. Noting that injunctive relief is not an independent cause of action, the Court dismissed the standalone claim for injunctive relief without prejudice to Plaintiff’s ability to seek injunctive relief at a later time if appropriate.
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Accelerando, Inc. v. Relentless Sols., Inc., 2025 NCBC 28 (N.C. Super. Ct. June 19, 2025) (Robinson, C.J.)
Key Terms: motion to dismiss; misappropriation of trade secrets; breach of contract; tortious interference with contract; unjust enrichment, unfair and deceptive trade practices
Plaintiff Accelerando Inc. is a provider of software and services to businesses that license a point-of-sale software owned by NCR Corporation. Defendant Relentless Solutions, Inc. is also an authorized provider of software and services to NCR licensees. In 2017, Plaintiff and Relentless entered into a reseller agreement, whereby Relentless was authorized to resell certain products created by Plaintiff to use with the NCR software. In 2021, three of Plaintiff’s employees, including Defendant Robert Yoder, resigned from Plaintiff’s company and began working for Relentless. Following this, several of Plaintiff’s customers left Plaintiff and began working with Relentless. Plaintiff filed suit, asserting various claims relating to Defendants’ alleged misappropriation of trade secrets. Relentless moved to dismiss all claims asserted against it pursuant to Rule 12(b)(6).
Misappropriation of Trade Secrets. The Court denied in part and granted in part the motion to dismiss the trade secret claim. Relentless argued that the Complaint failed to include sufficient facts or evidence demonstrating that Relentless possessed and used the alleged trade secrets. The Court held that the Complaint’s allegations were “minimally sufficient” at the present stage to the extent the claim was based on Customer Service Protocols taken by Dollaeye, a former employee of Plaintiff. However, the Court ruled that Plaintiff’s allegations relating to trade secrets taken by Defendant Yoder and another employee, Muller, were insufficient to support a claim. Plaintiff conceded that the confidential information taken by Yoder did not warrant trade secret protection. Additionally, the Complaint failed to allege that any trade secrets were taken by Muller and subsequently used by Relentless. Although Relentless argued that the Complaint’s allegations amounted to misappropriation by “inevitable disclosure,” a doctrine not yet recognized in North Carolina, the Court concluded that the pleadings alleged actual, rather than inevitable, disclosure of trade secrets.
Breach of Contract. The Court denied Relentless’ motion to dismiss Plaintiff’s breach of contract claim, holding that the Complaint had met the relatively low bar to state a claim for breach of contract. Specifically, the Court pointed to allegations asserting the existence of a valid contract between Plaintiff and Relentless, and Relentless’ breach of the contract by using Plaintiff’s confidential proprietary information to compete with Plaintiff.
Wrongful Interference with Contract. The Court denied Relentless’ motion to dismiss as to wrongful interference with contract, concluding that Plaintiff had adequately pleaded the claim. Because Plaintiff had alleged that Relentless had interfered with Plaintiff’s contracts through unlawful means, the Court rejected Relentless’ argument that the interference was justified.
Unfair and Deceptive Trade Practices. Because the Court had concluded that Plaintiff’s allegations were sufficient to state claims for misappropriation and tortious interference, the Court concluded that the allegations were likewise sufficient to state a UDTPA claim as to that same conduct.
Unjust Enrichment. The Court dismissed the unjust enrichment claim because, as alleged, any benefit Relentless received resulted from Relentless’ unauthorized taking of Plaintiff’s trade secrets and confidential information, not from a voluntary conferment of benefit from one party to another, as required to state an unjust enrichment claim.
Permanent Injunction. The Court granted Relentless’ motion to dismiss Plaintiff’s claim for a permanent injunction, as injunctive relief is a remedy, not an independent cause of action. The Court dismissed this claim without prejudice to Plaintiff’s ability to seek this remedy at a later time.
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Accelerando, Inc. v. Relentless Sols., Inc. 2025 NCBC 29 (N.C. Super. Ct. June 19, 2025) (Robinson, C.J.)
Key Terms: judgment on the pleadings; breach of contract; tortious interference with contract; unjust enrichment, unfair and deceptive trade practices; restrictive covenants
As described further above, this case arises following certain individuals’ resignation from Plaintiff Accelerando Inc. and subsequent employment with Defendant Relentless Solutions, Inc. In 2009, Defendant Robert Yoder began his employment with Plaintiff. At this time, Yoder executed a subcontractor agreement with Plaintiff containing noncompetition and confidentiality provisions. Yoder served as Plaintiff’s Vice President of Platform Services until his resignation in 2021. On the day of his resignation, Yoder allegedly forwarded certain information relating to two of Plaintiff’s customers to Yoder’s personal email address. Yoder subsequently began employment with Relentless. Plaintiff filed suit against both Relentless and Yoder. Yoder moved for judgment on the pleadings on all claims asserted against him.
Breach of Restrictive Covenants. The Court granted Yoder’s motion as it related to the noncompetition provision of the agreement, on the basis that the restriction was overly broad and unenforceable as a matter of law because, among other reasons, it prohibited “indirect” competition. The Court denied Yoder’s motion as it related to the confidentiality provision, noting that the pleadings adequately alleged the requisite elements for a breach of contract action.
Wrongful Interference with Contract. The Court denied Yoder’s motion as it related to Plaintiff’s claim for wrongful interference with contract. Yoder asserted that the claim failed due to Plaintiff’s failure to allege how Yoder induced the named customers to terminate their contracts with Plaintiff, or allege malice on Yoder’s behalf. The Court disagreed, finding that the Complaint adequately pleaded the elements of the claim, including that Defendants had interfered through unlawful means.
Unfair and Deceptive Trade Practices. The Court denied Yoder’s motion as it relates to Plaintiff’s claim under the NCUDTPA, noting that the survival of the tortious interference claim asserted by Plaintiff warranted the survival of its connected NCUDTPA claim.
Unjust Enrichment. The Court granted Yoder’s motion as it related to the unjust enrichment claim. As with the analysis offered above for Defendant Relentless’ motion to dismiss, the Court found that no benefit was voluntarily conferred upon Yoder by Plaintiff.
Permanent Injunction. The Court granted Yoder’s motion to dismiss Plaintiff’s claim for a permanent injunction, as injunctive relief is a remedy, not an independent cause of action. The Court dismissed this claim without prejudice to Plaintiff’s ability to seek this remedy at a later time.
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Johnson v. Hildebrandt, 2025 NCBC Order 46 (N.C. Super. Ct. June 24, 2025) (Houston, J.)
Key Terms: voluntary dismissal; pro se; motion to reopen case; show cause hearing
Plaintiff filed a putative derivative action on behalf of nominal defendants in March 2024 alleging that Defendants Hildebrandt and Johnson had engaged in corporate mismanagement and waste. Although Plaintiff was represented by counsel, in July 2024, Plaintiff, through his son, filed a pro se notice of voluntary dismissal. Though the dismissal was notarized, Plaintiff’s son stated at hearing that the notarization had taken place without Plaintiff being present and without the notary observing Plaintiff signing the document. Plaintiff’s counsel filed to reopen the case in March 2025, contending that the dismissal was unauthorized and ineffective. Because no material actions were taken in the case prior to the dismissal and no filings were made in the case following the dismissal until the motion to reopen, the Court entered an order requiring Plaintiff to show cause why the action should not be dismissed for failure to prosecute.
Following the show cause hearing, the Court held that the voluntary dismissal should be struck because 1) Plaintiff was represented by counsel and therefore could not make pro se filings; 2) Plaintiff had not obtained leave to file the dismissal, which is required for dismissal of derivative claims; and 3) there were reasonable grounds to question the authenticity of the filing. Plaintiff orally moved for a dismissal without prejudice at the show cause hearing, indicating that a resolution outside of court was expected. Finding that the dismissal was in the best interest of all interested parties, the Court granted this dismissal without prejudice.
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Rhinehart v. Howard, 2025 NCBC Order 47 (N.C. Super. Ct. June 27, 2025) (Robinson, C.J.)
Key Terms: order on designation; N.C.G.S. § 7A-45.4; mandatory complex business case; contemporaneous filing
Plaintiff initiated this action in Cumberland County Superior Court on June 24, 2025. On June 25, 2025, Plaintiff filed a notice of designation. The Court determined that designation was improper because the NOD was not contemporaneously filed with the complaint, as required by N.C.G.S. § 7A-45.4(d)(1). This ruling was made without prejudice to the right of any party to seek designation of this action as a mandatory complex business case as provided under N.C.G.S. § 7A-45.4.
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G1.34 Holdings, LLC v. Chapman Grp. Inc. of SC., 2025 NCBC Order 48 (N.C. Super. Ct. June 27, 2025) (Robinson, C.J.)
Key Terms: order on designation; N.C.G.S. § 7A-45.4(a)(5); intellectual property; mandatory complex business case
Plaintiff filed suit alleging claims for unfair and deceptive trade practices and tortious interference. Plaintiff timely filed a notice of designation, designating the case as a mandatory complex business case under N.C.G.S. § 7A-45.4(a)(5), which provides for designation of actions involving a material issue related to disputes involving the ownership, use, licensing, lease, installation, or performance of intellectual property.
The Court held that the case was improperly designated. After a review of the record, the Court determined that the dispute arose from a financing agreement for software development costs, not the software or intellectual property itself. Designation under § 7A-45.4(a)(5) requires the dispute to be “closely tied to the underlying intellectual property aspects” of the property at issue rather than closely tied to areas such as contract, fraud, or tort. The Court also declined to recommend the case for Rule 2.1 designation. This ruling was made without prejudice to the right of any party to seek designation of this action as a mandatory complex business case as provided under N.C.G.S. § 7A-45.4.
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In re Asheville Eye Assocs. Data Incident Litig., 2025 NCBC Order 49 (N.C. Super. Ct. July 1, 2025) (Davis, J.)
Key Terms: pro hac vice; sanctions; duty of candor; barred from practicing law in North Carolina
This Order arises from the Court’s sua sponte reconsideration of its Order granting Andrew J. Shamis pro hac vice status in this matter. Shamis, an attorney with Shamis & Gentile, P.A. in Florida, was listed as additional counsel on the complaint, “pro hac vice forthcoming.” Shamis was also listed as an attorney in two other class action cases in the state. In his various pro hac vice motions for these three cases, Shamis presented conflicting information to the Court regarding the states in which he is admitted to practice, his Florida bar license number, and his history of pro hac vice admission in North Carolina.
On May 9, 2025, Shamis’ conflicting representations were noted by Chief Judge Robinson in one of the other cases, resulting in his request for pro hac vice admission to be denied in that matter. On that same day, unaware of Shamis’ misrepresentations, the Court granted Shamis’ motion for pro hac vice admission in this case. Shamis did not alert the Court of the misrepresentations contained in his motion at this time. Three weeks later, the Court independently discovered this and noticed a hearing to determine whether reconsideration of his admission was warranted.
Three days before the hearing Shamis and local counsel filed an amended motion for Shamis to appear pro hac vice and statement in support thereof. In this amended motion and statement, Shamis disclosed for the first time that he had been admitted pro hac vice in North Carolina multiple times within the last five years. Shamis and local counsel represented that they were unaware of the inaccuracies contained in the pro hac vice motion when filed.
The Court revoked Shamis’ pro hac vice admission. Noting Shamis’ “repeated violations of clear North Carolina rules and his failure to comply with his duty of candor” the Court sanctioned Shamis, prohibiting him from practicing within the state for a period of one year. The Court further admonished local counsel for failing to bring to the Court’s attention the inaccuracies contained in Shamis’ motion.
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The information in this article is not, nor is it intended to be, legal advice. You should consult an attorney for
Posted 07/01/25
