N.C. Business Court Opinions, March 25, 2026 – April 7, 2026
Stoutt v. Perez Duran, 2026 NCBC 27 (N.C. Super. Ct. Mar. 24, 2026) (Conrad, J.)
Key Terms: LLC; motion to dismiss; fraud; Rule 9(b); standing; joint venture agreement
This case concerns a business, P & S Landacaping, LLC, and a dispute between Plaintiff, its manager, and Defendant, one of its members, regarding the handling of the LLC’s finances. Defendant moved to dismiss the claims under Rule 12(b).
Exercising its discretion to consider Defendant’s motion despite it not being filed until more than six months after Defendant filed a responsive pleading, the Court denied the motion. Regarding the fraud claim, Defendant asserted that it was not pleaded with particularity as required by Rule 9(b). However, since the Defendant failed to address this issue in his opening brief, the Court declined to consider it. Defendant also argued that the claims belonged to the LLC and therefore the Plaintiff lacked standing. The Court disagreed because Plaintiff’s claims were based on breach of the parties’ joint venture agreement and the rights at issue—which related to the proper allocation of profits and losses between the parties—were individual rights belonging to Plaintiff.
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Hart v. DWM Advisors, LLC, 2026 NCBC 28 (N.C. Super. Ct. Mar. 30, 2026) (Houston, J.)
Key Terms: default judgment; North Carolina Investment Advisers Act; constructive fraud; fraud; civil conspiracy; negligent misrepresentation; RICO Act; statute of limitations
As previously summarized here, Plaintiff initiated this suit in 2021, alleging that defendants had engaged in a multi-year scheme to exploit their positions as Plaintiff’s financial advisors and to defraud Plaintiff of his investment capital. Following a previous summary judgment order and voluntary dismissal, the only remaining defendants were Joseph P. Davis, III and DWM Advisors, LLC. Despite being properly served and making an appearance in the case (by seeking an extension of time and agreeing to be deposed), Defendants never answered the complaint. Plaintiff moved for entry of default and a default judgment.
The Court concluded that Plaintiff had adequately pleaded and otherwise met his evidentiary burden on his claims for constructive fraud, fraud, violation of the North Carolina Investment Advisers Act, and civil conspiracy and entered a default judgment against Defendants in the amount of $628,916.87 with interest from the date the action was instituted. The Court dismissed the negligent misrepresentation claim as Plaintiff would recover for Defendants’ fraudulent misrepresentations and could not recover twice for the same harm. The Court also dismissed the RICO Act claim as the conduct alleged was not the sort of activity the General Assembly intended to constitute a violation of the N.C. RICO Act. The Court noted that although Defendants may have had a statute of limitations defense to some of the claims, they failed to assert such a defense and the Court declined to do so on their behalf.
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Britcher v. Assurance Grp., LLC, 2026 NCBC 29 (N.C. Super. Ct. Mar. 31, 2026) (Davis, J.)
Key Terms: Rule 12(b)(6); Rule 13(a); compulsory counterclaim
Plaintiffs, a group of insurance agents that were former employees or independent contractors of Defendant TAG, an insurance marketing organization, brought this suit alleging, inter alia, that the restrictive covenants in their Independent Agent Agreements (IAAs) with TAG were unenforceable. TAG moved to dismiss the claims brought by Plaintiff Lorainna Passe, based on its contention that her claims are compulsory counterclaims under Rule 13(a) that must be brought in a related case before the Court in which Passe is a named defendant—the Shackelford Action.
The Court agreed and dismissed Passe’s claims without prejudice. First, the issues of fact and law are the same in the two cases because in the present action, Passe seeks a declaration that her IAA is unenforceable and in the Shackelford Action, TAG alleges that Passe breached her IAA. Second, the same evidence is involved in both cases as to Passe. Third, there is a logical relationship in the nature of both cases and the remedies sought. And finally, Passe failed to show that the adjudication of her claims requires the presence of third parties as to whom the Court in the Shackelford Action cannot acquire jurisdiction. The Court rejected Passe’s “judicial efficiency” argument because she failed to cite any authority that the application of Rule 13(a) is discretionary rather than mandatory.
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Exela Pharma Scis., LLC v. REI Automation, Inc., 2026 NCBC 30 (N.C. Super. Ct. April 2, 2026) (Conrad, J.)
Key Terms: summary judgment; fraudulent concealment; fraudulent misrepresentation; Rule 9(b); UDTPA
The parties entered into a contract under which Defendant was to design and build a robotic, aseptic IV bag filler machine. After Defendant failed to complete the contract, Plaintiff terminated the contract and brought this action, asserting, inter alia, claims for fraud and violation of the UDTPA based on allegations that Defendant’s proposal was false and fraudulent because it knew that it lacked the expertise to fabricate the machine in a timely manner and actively concealed that it had never manufactured such products before. Defendant moved for summary judgment on the fraud and UDTPA claims.
The Court first addressed the threshold question of whether summary judgment is appropriate if a complaint doesn’t state a claim for fraud with particularity. Answering this question in the affirmative, the Court then considered whether Plaintiff had adequately pleaded fraud. It did not. With respect to fraudulent concealment, Plaintiff did not allege that Defendant had a duty to speak. With respect to fraudulent misrepresentation, Plaintiff did not allege with specificity the alleged misrepresentation. Plaintiff’s attempt to reply on a different representation was unavailing as it was not alleged in the complaint. Further, the allegation that Defendant failed to fulfill its promise to finish the job “in several months” couldn’t support a fraud claim because there were no allegations that Defendant had no intention of fulfilling this promise. Accordingly, the Court granted summary judgment in Defendant’s favor on the fraud claim.
Plaintiff’s UDTPA claim was predicated entirely on its fraud and breach of contract claims. Because the fraud claim failed and Plaintiff did not otherwise allege aggravating circumstances to support a UDTPA claim based on a breach of contract, the Court granted summary judgment in Defendant’s favor on the UDTPA claim as well.
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Brady v. Cobin L. Grp., PLLC, 2026 NCBC Order 33 (N.C. Super. Ct. Mar. 30, 2026) (Davis, J.)
Key Terms: motion for preliminary injunction; irreparable harm; law firm; client files; rules of professional conduct
Following Plaintiff’s March 2025 termination from Defendant Law Firm, the Law Firm sent notification letters to Plaintiff’s current clients notifying them that Plaintiff had departed from the Law Firm and providing them with several options on how to proceed. Plaintiff then requested the contact information for all clients he had originated since 2005, claiming that State Bar 2025 FEO 1 required broader client notification. After the Law Firm denied this request, Plaintiff filed suit in August 2025 and later moved for a preliminary injunction ordering Defendants to provide him with the contact information for all current and former clients he’d had significant contact with and to notify all such clients of his departure.
The Court denied the motion, finding that Plaintiff had failed to show a likelihood of irreparable harm because 1) Plaintiff’s employment had been terminated almost a year earlier and any harm had likely already accrued; 2) Plaintiff’s evidence failed to show that his former clients had been unable to contact him; 3) Plaintiff failed to show that any disciplinary action was being considered by the State Bar; and 4) Plaintiff had delayed seeking injunctive relief.
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Anderson v. Triad Radiology Assocs., PLLC, 2026 NCBC Order 34 (N.C. Super. Ct. April 4, 2026) (Houston, J.)
Key Terms: motion to consolidate; putative class action; class counsel; pro hac vice forthcoming; BCR 7
Plaintiff filed this putative class action in February 2026 and subsequently moved to consolidate it with various related actions, for appointment of interim co-lead class counsel, and to set a “briefing schedule.”
The Court denied the motion. First, the motion failed to comply with numerous Business Court Rules: 1) the motion was actually three separate motions that should have been separately filed (BCR 7.2); 2) the motion did not reflect consultation with counsel in all of the actions sought to be consolidated (BCR 7.3); 3) no supporting brief was filed despite the motion not being fully a consent motion (BCR 7.2, 7.10); and 4) no index of exhibits was attached to the motion (BCR 7.5).
Second, the motion did not align with applicable law regarding the practice of law in North Carolina. The motion sought to have four attorneys designated as interim co-lead class counsel; however, three of the attorneys were not admitted to practice law in North Carolina and had yet to file motions for pro hac vice admission, and the fourth attorney practices with a Florida-based firm and uses a Florida address yet seeks to serve as local counsel. The Court reiterated that “pro hac vice forthcoming” status is not permitted and should not be used and denied the motion as to the unadmitted, out-of-state attorneys. The Court also denied the motion as to the fourth attorney in light of her numerous procedural and substantive failures in the proceedings to date and because she had not sufficiently shown that she was, in fact, a North Carolina resident.
Given the foregoing, the Court, in its discretion, denied without prejudice the motion to consolidate and to set a briefing schedule.
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Talley v. Earth Fare 2020, Inc., No. 174A25, 2026 N.C. LEXIS 247 (N.C. 2026) (per curiam)
Key Terms: jury trial; unjust enrichment; breach of contract; Wage and Hour Act; JNOV; dissent
As previously summarized here, after a jury awarded Plaintiff approximately $200,000 on his unjust enrichment claim, but otherwise rejected his claims for breach of contract and violation of the Wage and Hour Act, Defendants moved for JNOV on the unjust enrichment claim and Plaintiff moved for JNOV or a new trial on the breach of contract and WHA claims. The Business Court denied all motions and both sides appealed. The Supreme Court affirmed, per curiam. Justice Dietz wrote a concurring opinion, and Justice Riggs and Justice Earls dissented in part.
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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.