N.C. Business Court Opinions, November 19, 2025 – December 2, 2025

By: Lauren Schantz

Estevez v. C&S Com., LLC, 2025 NCBC 73 (N.C. Super. Ct. Nov. 25, 2025) (Houston, J.)

Key Terms: Rule 12(b)(6); breach of fiduciary duty; piercing the corporate veil; limited liability company; majority member; remedy; N.C.G.S. 57D-3-30; mere instrumentality; alter ego; domination; conclusory allegations; operating agreement; waiver; good faith and fair dealing; unconscionability; public policy; freedom of contract

Plaintiffs are two minority members and employees of Defendant C&S Commerce, LLC. Defendant Cameron Clay is the majority member and sole manager of the company. Plaintiffs alleged that after they rejected Clay’s multiple attempts to purchase their membership interests, Clay fired them, refused their request to inspect the company’s books and records, and deemed their membership interests forfeited. Plaintiffs sued C&S and Clay, both individually and in his capacity as manager of C&S. Defendants moved to dismiss Plaintiffs’ remedy of piercing the corporate veil and their claim for breach of fiduciary duty.

Piercing the Corporate Veil. The Court determined that Defendants’ alleged breach of C&S’s operating agreement, standing alone, was insufficient to invoke this remedy. The Court further concluded that Clay’s majority ownership interest did not necessarily rise to the level of domination needed to support a veil-piercing theory. Because the remainder of Plaintiffs’ complaint merely recited the factors North Carolina courts consider when deciding whether to pierce the corporate veil without alleging any specific facts, the Court granted Defendants’ motion and dismissed Plaintiff’s request to pierce the corporate veil.

Breach of Fiduciary Duty. Clay argued that he did not owe Plaintiffs a fiduciary duty or, if he did, any such fiduciary duties were waived pursuant to the operating agreement. The Court agreed, concluding that C&S’s operating agreement contained an express waiver of any fiduciary duties owed by Clay, either as a manager or a majority member, to Plaintiffs. The Court noted that an alleged breach of the duty of good faith and fair dealing sounds in contract, not tort, and cannot serve as the basis for a breach of fiduciary duty claim. The Court determined that Plaintiffs’ argument that such a waiver was unconscionable and unenforceable was without merit given North Carolina’s freedom of contract principles. Thus, the Court dismissed Plaintiffs’ claim for breach of fiduciary duty with prejudice.

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Fulbright v. Asheville Arras Residences, LLC, 2025 NCBC Order 90 (N.C. Super. Ct. Nov. 19, 2025) (Davis, J.)

Key Terms: consent motion; settlement; derivative claims; dismissal; nonprofit corporation; condominium owners association; N.C.G.S. § 55A-7-40(d); adequate notice; best interests

Plaintiffs, owners of residential condominiums, sued several defendants over operational and safety concerns related to elevators in their buildings. Two Plaintiffs asserted a derivative claim on behalf of two condominium owners associations. The parties reached a settlement and moved the Court to approve dismissal of the derivative claim. The Court denied the motion without prejudice, noting that the motion omitted key details regarding the adequacy of the notice of the proposed settlement given to interested persons, whether the associations received any responses to the notice, and why the settlement was in the best interests of the associations.

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Water.io Ltd v. Sealed Air Corp., 2025 NCBC Order 91 (N.C. Super. Ct. Nov. 24, 2025) (Conrad, J.)

Key Terms: motion to amend; breach of contract; case management order; deadline to amend pleadings; Rule 15(a); unreasonable delay; nature of the case; raise the stakes; undue prejudice

Plaintiff initiated suit in July 2024, alleging that Defendant breached a contract for the development and sale of sensors. The case management order set a January 2025 deadline to amend the pleadings and a June 2025 deadline for the close of fact discovery. The Court subsequently granted numerous extensions of case management deadlines, though not the deadline to amend the pleadings, and, as summarized here, granted Defendant’s partial summary judgment motion filed prior to the close of discovery. Weeks before the fact discovery deadline, Plaintiff moved for leave to amend its complaint, adding a new defendant, six new claims for relief, and pages of new factual allegations. The Court denied the motion based on Plaintiff’s unreasonable delay in asserting the new allegations and because the amendments would change the nature of the case and raise the stakes of the lawsuit, thereby unduly prejudicing Defendant.

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Water.io Ltd v. Sealed Air Corp., 2025 NCBC Order 92 (N.C. Super. Ct. Nov. 24, 2025) (Conrad, J.)

Key Terms: discovery dispute; inadvertent production; attorney-client privilege; work-product immunity; claw-back; BCR 10.9; Rule 26(b)(3); waiver; undue hardship; substantial equivalent; timely; subject matter waiver

Plaintiff moved the Court to determine whether two documents inadvertently produced by Defendant in discovery may be clawed back on the basis of attorney-client privilege and/or work-product immunity. The Court concluded that the first document was protected by work-product immunity because Defendant’s in-house counsel requested that the document be created in anticipation of litigation with Plaintiff. The Court disagreed with Plaintiff that Defendant had waived its right to claw back the first document, determining that Defendant’s initial review for privilege was reasonable and its request was timely. The Court further determined that Plaintiff did not face undue hardship in obtaining the substantial equivalent of the first document through other discovery. Although the Court determined that Defendant waived its claw-back rights to the second document based on Defendant’s six-week delay in asserting the attorney-client privilege, the Court concluded that the imposition of a subject matter waiver was improper. The Court denied Plaintiff’s motion as to the first document and granted Plaintiff’s motion as to the second document.

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Dover Sub 1 LLC v. Hawks Note Purchase, LLC, 2025 NCBC Order 93 (N.C. Super. Ct. Nov. 25, 2025) (Robinson, C.J.)

Key Terms: opposition to designation; intervenor; N.C.G.S. § 7A-45.4(b)(2); limited liability company; N.C.G.S. § 7A-45.4(d)(2); timely; pleading; N.C.G.S. § 7A-45.4(a)(1); managerial authority; N.C.G.S. § 57D-3-20; N.C.G.S. § 7A-243; declaratory judgment; value of rights; N.C.G.S. § 7A-45.4(g)

This matter arises from a dispute among several interrelated limited liability companies that were parties to a real estate investment transaction. MaxMez NC, LLC filed a motion to intervene, a proposed intervenor complaint, and, a day later, a notice of designation. Plaintiffs opposed designation, arguing that the notice of designation was untimely, the matter did not involve a dispute involving the law governing limited liability companies, and MaxMez was using the designation process to delay trial.

The Court agreed that the notice of designation was untimely because MaxMez did not file it contemporaneously with its motion to intervene and intervenor complaint. However, the Court nevertheless concluded that the matter must be designated as a mandatory complex business case pursuant to N.C.G.S. § 7A-45.4(b)(2) because (1) the matter involved questions of managerial authority within a complex corporate structure such that the case was properly designated under section 7A-45.4(a)(1); and (2) it included a declaratory judgment claim where the rights at stake were valued at more than $5 million. The Court noted that a pleading need not expressly cite a provision of the North Carolina Limited Liability Company Act to qualify for designation under section 7A-45.4(a)(1), and the Court further determined that MaxMez had not unreasonably delayed in seeking to intervene. The opposition was overruled and the matter remained 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 12/02/25