By: Lauren Schantz
Implus Footcare, LLC v. Vore, 2025 NCBC 55 (N.C. Super. Ct. Sept. 11, 2025) (Davis, J.)
Key Terms: BCR 7.4; motion to amend; Rule 15; undue delay; unfair prejudice and bad faith; legal futility; judicial economy; moot; motion to dismiss; Rule 12(b)(6); breach of contract; novation; plain wording; non-solicitation; confidentiality; blue pencil; failure to brief arguments; unfair and deceptive trade practices; N.C.G.S. § 75-1.1; substantial aggravating circumstances; implied covenant of good faith and fair dealing; ambiguous; misappropriation of trade secrets; security measures; tortious interference with contract; legitimate business competition; specific knowledge; actual harm; civil conspiracy; statute of frauds; affirmative defense; tortious interference with economic advantage; abuse of process
This suit arose from a dispute between two competitors within the footcare accessories and shoe care industry. Plaintiff IM Group Holdings Corporation is the parent company of Plaintiff Implus Footcare, LLC, which designs and distributes footwear accessories and shoe care products. Implus employed Defendant Todd Vore as its president and Defendants H.B. Shoes Co. and The Mike Hale Company (“MHC”) as independent contractor sales representatives. Implus terminated its sales representative agreements (“SRAs”) with H.B. and MHC after Vore left Implus in 2020.
Implus alleged that Vore, H.B., and MHC continued to receive confidential financial information about Implus after their departures and used it to compete with Implus through Vore’s new company, Defendant Blue San, LLC. Implus alleged that at the time it entered into new SRAs with H.B. and MHC in 2024, they had already entered into similar agreements with Blue San and, at Vore’s urging, H.B. and MHC repudiated the 2024 SRAs with Implus.
Vore alleged that Blue San expanded into the footwear accessories and shoe care industry when Implus began experiencing market and financial distress. H.B. and MHC joined Blue San as sales representatives pursuant to oral agreements. Blue San alleged that Implus tried to hinder Blue San’s entry into the market by luring away H.B. and MHC and initiating this lawsuit.
Defendants moved to dismiss the Second Amended Complaint, Implus moved to dismiss Blue San’s counterclaims, and, before the Court decided the motions to dismiss, Plaintiffs moved to file a Third Amended Complaint that added additional claims and defendants.
Motion to Amend. Vore and Blue San argued that the Court should deny Plaintiffs’ motion to amend based on undue delay, unfair prejudice and bad faith, and legal futility. The Court disagreed, concluding that (1) there was no undue delay due to the unique procedural posture of the case and because the request was based on recently acquired discovery; (2) the amendments were not made in bad faith and would not result in unfair prejudice; (3) the legal sufficiency of the new claims was better suited to later motions practice; and (4) the addition of the new claims to the current lawsuit would promote judicial economy. The Court granted the motion. Although the filing of an amended complaint usually moots a prior complaint, the Court concluded that, in the interest of judicial economy, it could still decide defendants’ pending motions to dismiss because the amended complaint did not assert new material allegations related to the claims at issue in the motions.
Defendants H.B. and MHC’s Motion to Dismiss
Breach of Contract–Prior SRAs. Implus argued that H.B. and MHC violated the confidentiality provisions of their prior SRAs by sharing misdirected reports from former customers with Vore and Blue San after their termination. H.B. and MHC argued that the 2024 SRAs novated the prior SRAs—including the confidentiality provisions. The Court could not conclude from the plain wording of the 2024 SRAs that the parties intended a novation of the prior SRAs and denied the motion as to this claim.
Breach of Contract–2024 SRAs. Implus alleged that H.B. and MHC breached the non-solicitation and confidentiality provisions of the 2024 SRAs. Because counsel for Implus conceded that the non-solicitation provisions were overbroad and Implus failed to raise the blue pencil doctrine in its briefs, the Court dismissed this portion of the claim with prejudice. The Court concluded that the confidentiality provision was not overly broad or unenforceable and denied the motion as to this portion of the claim.
Unfair and Deceptive Trade Practices. The Court concluded that Implus sufficiently alleged substantial aggravating circumstances accompanying a breach of contract and denied the motion as to this claim.
Defendants’ Vore and Blue San’s Motion to Dismiss
Breach of Contract–Implied Covenant of Good Faith and Fair Dealing. IMGH alleged that Vore breached the implied covenant of good faith and fair dealing in his stockholders agreement by failing to inform Implus of his association with Blue San. The Court disagreed, determining that this was an obligation the parties could have (and did not) include in the agreement. The Court dismissed the claim with prejudice.
Breach of Contract–Confidentiality. Implus alleged that Vore breached the confidentiality provision of the stockholders agreement by sharing Plaintiffs’ confidential information with Defendants. The Court denied the motion as to this claim, because either the allegations in the complaint were sufficient or the language in the agreement was ambiguous.
Misappropriation of Trade Secrets. The Court agreed with Vore and Blue San that Implus failed to plead that adequate measures were taken to safeguard the secrecy of the alleged trade secret information and granted the motion, dismissing this claim with prejudice.
Tortious Interference with Contract. Implus alleged that Vore and Blue San interfered with (1) the confidentiality provisions of the prior and 2024 SRAs by asking H.B. and MHC to forward customer reports containing Implus’s confidential information to them, and (2) the term and service provisions of the 2024 SRAs by inducing H.B. and MHC to repudiate the 2024 SRAs. Vore and Blue San contended that (1) they were engaging in legitimate business competition; (2) Implus failed to allege they had specific knowledge of the provisions; and (3) Implus suffered no actual harm. The Court disagreed with Vore and Blue San and denied their motion to dismiss these claims.
Unfair and Deceptive Trade Practices. Because Implus sufficiently pleaded claims for tortious interference with contract, Implus also sufficiently pleaded its UDTP claim. The Court denied the motion to dismiss this claim.
Civil Conspiracy. Implus alleged that Blue San engaged in a conspiracy with H.B. and MHC to breach the SRAs. The Court disagreed, determining that (1) the basis of the underlying torts cannot also serve as the basis of a conspiracy to commit those torts; (2) complying with a request does not demonstrate a common scheme or objective; and (3) North Carolina does not recognize a claim for conspiracy based on a breach of contract claim. The Court dismissed the claim with prejudice.
Implus’s Motion to Dismiss
Tortious Interference with Contract. Blue San alleged that Implus induced H.B. and MHC to breach their contracts with Blue San. Implus argued that these contracts were invalid under the statute of frauds, but the Court determined that, as an affirmative defense, the statute of frauds is not properly considered at the Rule 12(b)(6) stage. Implus also contended that it was engaged in legitimate business competition by hiring H.B. and MHC, but the Court concluded that Blue San sufficiently alleged that Implus’s interference with H.B. and MHC’s oral employment agreements did not reflect legitimate competition. The Court denied the motion as to this claim.
Tortious Interference with Prospective Economic Advantage–H.B. and MHC. Should Blue San’s oral agreements with H.B. and MHC be unenforceable, Blue San argued that it would have entered into contracts with them but for Implus’s interference. Implus moved to dismiss on the same grounds as those argued regarding the tortious interference with contract claim and the Court denied Implus’s motion for the same reasons.
Tortious Interference with Prospective Economic Advantage–Prospective Customers. In response to allegations that that Implus interfered with contracts with Blue San’s potential customers, Implus argued that it was engaged in legitimate business competition and that the allegations failed to allege that the customers would have entered into contracts with Blue San “but for” Implus’s conduct. The Court concluded that Blue San adequately pleaded that Implus’s actions were anti-competitive rather than legitimate business tactics. The Court further concluded that Blue San adequately alleged that Implus’s conduct interfered with Blue San’s ability to contract with one of the alleged prospective customers but not the other. The Court denied Implus’s motion with respect to the first prospective customer, but granted it as to the second prospective customer and dismissed that portion of the claim with prejudice.
Abuse of Process. Blue San argued that after initiating this action, Implus improperly sent document preservation letters to Blue San’s principals to intimidate them. However, since Blue San conceded at the hearing that the letters were routine, the Court rejected this basis for an abuse of process counterclaim. Blue San argued that Implus improperly sought assurances from B.H. and MHC related to the 2024 SRAs in an email to their attorney, but the Court determined both that the email was sent prior to the issuance of process and the demands themselves did not support an abuse of process counterclaim. Blue San argued that Implus used the complaint to make demands of Vore for relief in addition to those sought in the complaint. The Court rejected this argument, noting a lack of persuasive legal authority and that the demands were made through counsel. The Court dismissed the counterclaim with prejudice.
Unfair and Deceptive Trade Practices. Because Blue San sufficiently pleaded claims for tortious interference with contract and economic advantage, Blue San also sufficiently pleaded its UDTP claim. The Court denied the motion as to this counterclaim.
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BioSkryb Genomics, Inc. v. AClarity Genomics, Inc., 2025 NCBC 56 (N.C. Super. Ct. Sept. 18, 2025) (Conrad, J.)
Key Terms: genomics; motion to strike; BCR 7.4; answer and counterclaim; frivolous; malicious; bad faith; Rule 12(f); irrelevant; Rule 8(a)(1); short and plain statement; prejudice
Plaintiff BioSkryb Genomics, Inc. sued its former officer and director, Defendant Jason West, for using its trade secrets to compete with BioSkryb in West’s newly formed company, Defendant AClarity Genomics, Inc. BioSkryb moved to strike over 60 paragraphs of Defendants’ answer and counterclaim, contending that the information contained in these paragraphs was irrelevant to Defendants’ counterclaim and served only to harass and embarrass BioSkryb. The Court denied the motion. The challenged allegations provided the background and related history of the dispute (from West’s perspective) and posed no real prejudice to BioSkyrb. Further, the Court could not say that they had no possible bearing on the litigation.
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Law Off. of Ashley-Nicole Russell, P.A. v. McLawhorn Legal Servs., PLLC, 2025 NCBC Order 66 (N.C. Super. Ct. Sept. 10, 2025) (Robinson, C.J.)
Key Terms: order on designation; N.C.G.S. § 7A-45.4(a)(5); intellectual property; computer trespass
Plaintiffs initiated this action on 14 August 2025, asserting various claims arising from a soured business relationship between the owners of a family law practice in Raleigh. Defendants timely filed a notice of designation, seeking designation pursuant to N.C.G.S. § 7A-45.4(a)(5). The Court agreed with Defendants that designation pursuant to this section was proper because Plaintiffs’ claims, particularly their computer trespass claim, were predicated on Defendants’ alleged improper use of Plaintiffs’ intellectual property and unauthorized access of Plaintiffs’ computer networks. The Court designated the case as a mandatory complex business case.
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Mayes v. Nat’l Collegiate Athletics Ass’n, 2025 NCBC Order 67 (N.C. Super. Ct. Sept. 11, 2025) (Houston, J.)
Key Terms: college football; NCAA; temporary restraining order; irreparable harm; undue delay; likelihood of success on the merits
Plaintiff Mitchell Mayes sought a temporary restraining order enjoining the NCAA from enforcing a provision of the NCAA Bylaws that limits student-athletes to participating in no more than four seasons of college athletics over a five-year period. Mayes acknowledged that he had participated in four competitive seasons but argued his participation in the 2021–2022 season was in error and that he was entitled to a waiver under the NCAA Bylaws. Mayes contended that he would be irreparably harmed if he was not permitted to continue playing college football. The NCAA argued that Mayes unduly delayed in seeking injunctive relief, could not establish irreparable harm, and failed to show a likelihood of success on the merits. The Court agreed with the NCAA and denied the motion.
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Holly Springs Chamber of Commerce, Inc. v. Holly Springs Half Marathon, 2025 NCBC Order 68 (N.C. Super. Ct. Sept. 19, 2025) (Robinson, C.J.)
Key Terms: order on designation; transfer District Court to Superior Court; N.C.G.S. § 7A-45.4(d)(1); untimely
Plaintiff Holly Springs Chamber of Commerce, Inc. initiated this action in Wake County District Court on 10 March 2025. Defendant Holly Springs Half Marathon filed a Motion to Transfer to Superior Court Division on 26 March 2025, followed by an answer and counterclaim on 10 April 2025. The Wake County Superior Court granted Defendant’s motion to transfer on 2 September 2025, and Plaintiff filed a notice of designation ten days later. The Court determined that the notice of designation was untimely because it was not filed contemporaneously with the Complaint as required by N.C.G.S. § 7A-45.4(d)(1). Accordingly, the action was not properly designated as a mandatory complex business case.
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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 09/23/25
By: Ashley Oldfield
Shively v. ACI Learning Holdings, LLC, 2025 NCBC 51 (N.C. Super. Ct. Aug. 27, 2025) (Robinson, C.J.)
Key Terms: Rule 12(b)(6); motion to dismiss; Rule 12(b)(2); personal jurisdiction; due process; specific jurisdiction; minimum contacts
This suit arose out of the termination of Plaintiff Shively’s employment with Defendant ACI Learning Holdings and Shively’s execution of and attempt to enforce the provisions of a severance agreement (“SAR”). Shively alleges that the ACI Defendants and the Boathouse Defendants (related entities) failed to purchase his equity interests in ACI pursuant to the SAR. The ACI Defendants moved to dismiss under Rule 12(b)(2), and the Boathouse Defendants moved to dismiss under Rules 12(b)(2) and 12(b)(6).
Personal Jurisdiction. The Boathouse Defendants contended that North Carolina’s long-arm statute did not subject them to jurisdiction in this action because they were not parties to the SAR. The Court disagreed, concluding that although the Boathouse Defendants had not signed the SAR, based upon the evidence before the Court, they had assented to it because one of their managing members had negotiated the SAR with Shively and the SAR included a provision that the “Company and/or Boathouse” agreed to buy Shively’s equity interests. Subsequent correspondence between the parties also showed that Boathouse understood itself to be a party to the SAR. Accordingly, the long-arm statute applied to the Boathouse Defendants. All Defendants contended that they lacked minimum contacts with North Carolina such that the Court’s exercise of personal jurisdiction would offend due process. Although some factors weighed against the exercise of personal jurisdiction, the Court ultimately concluded that Defendants had sufficient minimum contacts with North Carolina because the SAR had a substantial connection to North Carolina in that Defendants offered the SAR to Shively, who they knew to be a North Carolina resident, and Shively performed his obligations under the SAR while in North Carolina. Thus, the Court denied the motions to dismiss under Rule 12(b)(2).
Failure to State a Claim. The Boathouse Defendants argued that the complaint should be dismissed as to them because they were not parties to the SAR and could not be held liable for the breach thereof. The Court disagreed and denied the motion, concluding that the complaint sufficiently alleged facts supporting the conclusion that the Boathouse Defendants were parties to the SAR.
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Carolina Med. Partners, PLLC v. Shah, 2025 NCBC 52 (N.C. Super. Ct. Aug. 28, 2025) (Conrad, J.)
Key Terms: Rule 12(b)(6); motion to dismiss; statute of limitations; breach of fiduciary duty; constructive fraud; breach of contract; fraudulent inducement; breach of settlement agreement; wrongful interference with prospective contract; unjust enrichment; intentional infliction of emotional distress
The Patels and Shah are all physicians who used to practice together at Palmetto Medical Group and who shared interests in several other medical businesses. After their relationship deteriorated in 2021, they mediated their disputes and executed a Practice Separation Agreement which resolved some disputes and created a special litigation committee to investigate potential derivative claims that each side wished to bring. Shortly after, the Patels sued Shah and Palmetto Medical Group for breaching the Practice Separation Agreement, which lead to another partial settlement. The special litigation committee then finished its work and concluded that derivative claims were not in Palmetto Medical Group’s best interests. Two additional lawsuits followed and the three actions were consolidated. Shah and Palmetto Medical Group moved to dismiss all eleven claims asserted by the Patels.
Statute of Limitations. The Court concluded that Defendants’ argument that many of the claims were time-barred was premature because discovery was necessary to determine whether the statute of limitations was tolled due to the parties’ agreement that the claims would not be asserted while they engaged in mediation.
Breach of Fiduciary Duty and Constructive Fraud. The Court rejected Shah’s argument that these claims should be dismissed because the special litigation committee rejected them—the special litigation committee dealt with potential derivative claims, not direct claims, and, in any event, the committee’s report was outside the pleadings. The Court also was not persuaded that the Patels lacked standing since Shah did not dispute that he owed a fiduciary duty to the Patels and the complaint alleged that Shah had taken actions to benefit himself at the Patels’ expense. Lastly, the complaint’s allegations that Shah had unfairly rigged the distributions were sufficient to show bad faith and resulting harm. Accordingly, the Court declined to dismiss these claims.
Breach of Shareholder Agreement. The complaint alleged two claims for breach of the Palmetto Medical Group’s shareholder agreement: 1) that Shah manipulated the bonus formula to reduce the Patels’ bonuses; and 2) that the Patels were not reimbursed for professional expenses and not compensated for locum work and director-related services. The Court found both claims adequately pleaded and denied dismissal of both.
Fraudulent Inducement. The Court dismissed this claim because 1) it was not pleaded with adequate specificity under Rule 9(b); 2) the alleged misrepresentations were based on Shah’s opinions and the complaint did not allege that Shah did not honestly hold those opinions; and 3) the complaint did not allege in a nonconclusory way that the Patels were denied the opportunity to investigate or could not have learned the truth through reasonable diligence.
Breach of Settlement Agreement. The Court dismissed this claim, which was based on Shah’s alleged failure to make best efforts to convince a lender to release the Patels from certain personal guaranties. Although the complaint alleged that Shah did not make his best efforts, it did not allege that the lender would have released the guaranties even if Shah had done so.
Wrongful Interference with Prospective Contract. The Court declined to dismiss this claim, finding that the Patels had adequately alleged that Shah had interfered with the Patels’ relationships with patients by rerouting patients’ phone calls to make appointments with the Patels to Shah’s own answering service.
Unjust Enrichment. The Court dismissed this claim because the Patels did not allege that they had conferred a benefit on Shah.
Breach of Partnership Agreement. The Court declined to dismiss this claim because the complaint adequately alleged that Shah had made distributions in violation of the agreement and that the Patels were harmed by being deprived of their right to vote on distributions.
Breach of Operating Agreement. The Court dismissed this claim because the agreement at issue did not impose any obligations on Shah personally and therefore the Patels couldn’t maintain a claim against him for breaching the agreement.
Intentional Infliction of Emotional Distress. The Court dismissed this claim because the complaint’s allegations that Shah had berated Shephali Patel about her fitness as a wife, mother, doctor, and business owner did not satisfy the “extreme and outrageous conduct” element of the claim.
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Castillo v. RRD Fin., LLC, 2025 NCBC 53 (N.C. Super. Ct. Sept. 3, 2025) (Houston, J.)
Key Terms: judgment on the pleadings; partnership; joint venture; UDTPA; in or affecting commerce; internal conduct; negligent misrepresentation; BCR 7.2; BCR 7.5; BCR 7.8; incorporated briefing
Defendant RRD operates a network of used car dealerships. Defendants Eskandari and Algood are members and managers of RRD. Plaintiffs were previously employed as general managers of RRD dealerships; however, in December 2022 the parties negotiated and executed an operating agreement to document their partnership (or joint venture). During negotiations, certain representations were made to Plaintiffs regarding their compensation and Defendants’ provision of working capital and other assistance. Disputes eventually arose between the parties and Plaintiffs filed suit asserting that Plaintiffs had been wrongfully cast out of the partnership and deprived of information and profits. Defendants moved for judgment on the pleadings on the claims for violation of the UDTPA and negligent misrepresentation.
Pursuant to BCR 7.2, 7.5, and 7.8, the Court summarily denied Defendant Algood’s motion because he failed to submit substantive briefing in support of the motion, instead relying on the briefing submitted by the other Defendants.
As to the other Defendants, the Court granted judgment on the pleadings in their favor on the UDTPA claim because, as pleaded, the dispute was internal to a single business enterprise and therefore was not in or affecting commerce.
The Court also granted judgment on the pleadings on the negligent misrepresentation claim because Plaintiffs failed to plead the claim with the requisite particularity. There were no individualized, direct allegations of misrepresentation by Defendant Eskandari. As to Defendant RRD, the allegations did not specify the substance of the misrepresentation, who misrepresented it, or when or where it was misrepresented. Further, the purported intentional misrepresentations regarding compensation and financial support were promises or statements of intent, which could not form the basis of a negligent misrepresentation claim.
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Water.io Ltd v. Sealed Air Corp., 2025 NCBC 54 (N.C. Super. Ct. Sept. 5, 2025) (Conrad, J.)
Key Terms: breach of contract; sale of goods; UCC; consequential damages; N.C.G.S. § 25-1-305; common law; limitation of liability; waiver; estoppel
In this action, Plaintiff (the seller) alleged that Defendant (the buyer) wrongfully terminated a contract for the sale of goods, which delayed Plaintiff’s planned IPO and decimated its valuation. Defendant moved for partial summary judgment, arguing that Plaintiff could not recover the decline in valuation as damages for breach of contract because such damages are consequential damages (which Plaintiff conceded) and 1) the UCC bars sellers from recovering consequential damages for breach of contract; and 2) the parties’ contract contained a limitation-of-liability clause precluding liability for consequential damages.
The Court agreed with both points and granted summary judgment in Defendant’s favor that Plaintiff could not recover consequential damages from the alleged breach of contract. The plain terms of the UCC disallowed consequential damages as a remedy for sellers and the common law could not “add back” what the UCC’s drafters chose to leave out. The parties’ contract also precluded the recovery of consequential damages. That Defendant had made its own demand for damages in the pleadings (which it denied were consequential in nature) did not waive Defendant’s right to enforce the limitation-of-liability clause against Plaintiff.
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Piedmont NC LLC v. Walker & Assocs., Inc., 2025 NCBC Order 62 (N.C. Super. Ct. Sept. 3, 2025) (Robinson, C.J.)
Key Terms: order on designation; conditional designation; supplement; extension of time; clerk of court; N.C.G.S. § 7A-45.4(a)(9)
Plaintiffs initiated this action on 24 June 2025 asserting, inter alia, a claim for breach of contract, and contemporaneously filed a notice of designation, conditionally seeking designation pursuant to N.C.G.S. § 7A-45.4(a)(9), which permits designation in certain actions if all parties consent. Where a party files a conditional NOD, the party has thirty days after service to file a supplement to the conditional NOD that reflects the required consent. On 26 August 2025, Plaintiffs filed a motion with the clerk of court to extend the time to file the supplement, which was granted by the clerk and purported to extend Plaintiffs’ time to file the supplement to 29 August 2025. Plaintiffs filed the supplement on 29 August 2025.
The Court deemed the supplement untimely and therefore found that designation was improper. Plaintiffs filed the supplement after more than thirty days had passed from the filing of the conditional NOD. Further, while the Court may extend the time to file a supplement, Plaintiffs’ motion to extend was ineffective because it was untimely filed and sought an extension from the clerk of court, rather than the Court.
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Moore v. Brooks, 2025 NCBC Order 63 (N.C. Super. Ct. Sept. 4, 2025) (Houston, J.)
Key Terms: BCR 4; amendment to BCRs; stipulation of extension of time to file brief
Citing BCR Rule 4(e), the parties filed a stipulation purporting to extend a defendant’s deadline to file a reply brief in support of his pending motion to dismiss. BCR 4.1(e) previously provided that parties could enter into binding stipulations as permitted by Rule 6(b) of the Rules of Civil Procedure. However, BCR 4.1 and 4.2 have been recently amended to provide that parties may not act unilaterally to extend deadlines which have been set or modified by an order of the Court, but that parties may stipulate to extend a deadline to respond to a pleading. The Court determined that under either version of BCR 4, parties do not have the ability to extend briefing deadlines without a Court order. In its discretion, though, the Court construed the stipulation as a motion for extension of time and granted the requested extension.
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Tax Mgmt. Assocs., Inc. v. Bourgeault, 2025 NCBC Order 64 (N.C. Super. Ct. Sept. 4, 2025) (Conrad, J.)
Key Terms: preliminary injunction; trade secret; likelihood of success on the merits; allegations made upon information and belief; irreparable harm
Plaintiff initiated this action alleging that Defendant Bourgeault, a former employee, had taken its confidential information and trade secrets and was using them to compete against it. Plaintiff also moved for a preliminary injunction barring Defendants from interfering with its clients and using its trade secrets.
The Court denied the motion, concluding that Plaintiff had not shown a likelihood of success on the merits or irreparable harm. Many of Plaintiff’s key allegations were made upon information and belief, which are insufficient to warrant a preliminary injunction. Further, Bourgeault’s sworn declaration rebutted these allegations. In addition, Plaintiff’s delay in seeking injunctive relief weighed against a finding of irreparable harm.
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WP Church, LLC v. Whalen, 2025 NCBC Order 65 (N.C. Super. Ct. Sept. 5, 2025) (Davis, J.)
Key Terms: preliminary injunction; breach of operating agreement; competition; likelihood of success on the merits; speculation; irreparable harm; restaurant
The parties in this action are all entities or individuals connected to 5Church, a South Carolina LLC formed to operate a restaurant in Charleston. 5Church’s operating agreement purports to limit the ability of any “holder” to invest in, own, or control another person operating a restaurant within 25 miles of a restaurant operated by 5Church. Beginning in 2019, affiliates of one of 5Church’s members began purchasing and developing property for mixed-use developments. Plaintiff initiated this action and sought a preliminary injunction, asserting, inter alia, that certain defendants’ involvement with the mixed-use developments was in violation of the operating agreement because of the likelihood that they would lease space to a restaurant.
The Court denied the motion for a preliminary injunction, concluding that Plaintiff had not shown a likelihood of success on the merits or irreparable harm. As no restaurants currently operated at either development, Plaintiff’s claim was based on mere speculation. Moreover, the mere lease of space to a restaurant was not necessarily a breach of the operating agreement.
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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 09/09/25
