N.C. Business Court Opinions, August 27, 2025 – September 9, 2025
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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