N.C. Business Court Opinions, September 9, 2026 – September 22, 2026
Apex Elastics, LLC, v. Tucker, 2026 NCBC 76 (N.C. Super. Ct. Sept. 9, 2026) (Houston, J.)
Key Terms: limited liability company; personal protective equipment; third-party defendant; N.C.G.S. § 1-76(4); N.C.G.S. § 1-83(1); N.C.G.S. § 1-82
Plaintiff Apex Elastics, LLC, owned and operated by Thomas Lewis, is a North Carolina limited company that owns specialized knitting equipment for manufacturing personal protective equipment. Defendants Joseph Tucker and Kirk Deverick co-own Defendant The Filter Shop, LLC (“TFS”). Plaintiff, through Lewis, purportedly entered an oral joint venture with Defendants to increase “the manufacturing capacity at TFS’s facilities using Plaintiff’s equipment.” Deverick and Tucker managed Plaintiff’s daily operations from Gaston County while Lewis managed “business development, sales, and customer relationship” from Wake County. Plaintiff eventually moved some of its manufacturing equipment to TFS’s facilities in Gaston County. After, the parties’ business relationship eventually soured and came to an end, Plaintiff filed suit asserting thirteen causes of action, including ten claiming money damages and two seeking recovery of personal property. Thereafter, Tucker and TFS (“Movants”) moved to have venue transferred to Gaston County, contending that venue in Wake County was improper under N.C.G.S. § 1-76(4) and, alternatively, that transferring the action to Gaston County pursuant to N.C.G.S. § 1-83(2) would promote the ends of justice and be more convenient for witnesses.
The Court first analyzed the terms of § 1-76(4), which provides that actions generally “must be tried in the county in which the subject of the action, or some part thereof, is situated” if the action is for the “[r]ecovery of personal property when the recovery of the property itself is the sole or primary relief demanded.” The Court rejected Movants’ argument that § 1-76(4) was applicable because Plaintiff’s complaint did not seek injunctive relief or the recovery of its purported personal property as the “sole or primary” relief demanded – ten of the thirteen causes of action addressed money damages, not recovery of property. Moreover, venue was proper in Wake County, as Plaintiff is a resident of Wake County, and N.C.G.S. § 1-82 allows for venue where the plaintiff resides if no other statute is applicable. Finally, because Movants provided no affidavit, declaration, or other substantive evidence in support of their motion or their arguments and did not identify any witnesses or explain why trying the case in Wake County would “impose unnecessary burden and expense,” the Court concluded that Movants failed to meet their burden to demonstrate that, under N.C.G.S. § 1-83(2), the convenience of witnesses and the ends of justice would be promoted by a transfer. Accordingly, the Court denied the motion to transfer.
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Brown v. TM Northlake Mall, LP, 2026 NCBC 77 (N.C. Super. Ct. Sept. 10, 2026) (Conrad, C.J.)
Key Terms: summary judgment; negligence; premises liability; invitee; duty to protect; security; proximate cause
These cases arise from a shooting that took place in August 2022 on a street outside the Northlake Mall shopping center in Charlotte. The victims, Brown, Perkins, and Spencer, had dinner at a restaurant in Northlake Commons, which is adjacent to Northlake Mall. After leaving the restaurant, they drove onto Northlake Mall property and were shot at by an unidentified assailant. Spencer was killed and Brown and Perkins were severely injured. Brown, Perkins, and Spencer’s estate filed suit for negligence, alleging that the attack could have been prevented if there had been adequate security at Northlake Commons and Northlake Mall. Five of the nine defendants moved for summary judgment.
ARC, Hiffman, and S&S—Northlake Commons’s owner, manager, and security agency, respectively—argued that they were entitled to summary judgment in their favor because they had no duty to protect Brown, Perkins, and Spencer from an attack that occurred outside Northlake Commons. The Court agreed. Although other jurisdictions have held that a landowner cannot escape liability for an attack that begins on its premises but then moves outside the premises before the attack is completed, here the undisputed evidence showed that the attack began and ended outside Northlake Commons. Accordingly, the Court granted summary judgment for ARC, Hiffman, and S&S.
TM Northlake and Spinoso—Northlake Mall’s owner and manager—argued that they were entitled to summary judgment in their favor on the ground that their failure to provide adequate security was not a proximate cause of the injuries suffered by Brown, Perkins, and Spencer. The Court rejected this argument. Causation is generally a question of fact for the jury, unless reasonable minds could not differ as to the foreseeability of the injury. Here, a jury could reasonably infer that more robust security would have prevented the attack. Thus, the Court denied TM Northlake’s and Spinoso’s motions for summary judgment.
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Daedong-USA, Inc. v. KI Finance, Inc., 2026 NCBC 78 (N.C. Super. Ct. Sept. 8, 2026) (Davis, J.)
Key Terms: declaratory judgment; voidable contract; N.C.G.S. § 55-8-31(b); material financial interest; ratification; breach of fiduciary duty; business judgment rule; de facto fiduciary duty; constructive fraud; conspiracy; misappropriation of corporate funds; embezzlement; unjust enrichment; UDTP; aggravating circumstances; unpleaded damages; indemnification
Plaintiff Daedong-USA, Inc., an agricultural equipment manufacturer, brought the present action against its top-level executives (Defendants Peter, Anna, and Yung (the “C-Suite Defendants”)), alleging that they used their control and influence over the company to enter into self-dealing transactions with Defendant KI Finance, Inc. (“KIF”), specifically a Services Agreement and the DataScan Assignments, which cost the company millions of dollars. The C-Suite Defendants and KIF also asserted counterclaims. After extensive discovery, the parties filed cross motions for summary judgment.
Daedong’s Claims
Declaratory Judgment. Daedong sought a declaration that the Services Agreement and DataScan Assignments were voidable contracts based on Peter’s status as a conflicted director. The parties agreed that Peter did not have a direct interest in the disputed transactions nor an indirect interest pursuant to N.C.G.S. § 55-8-31(b)(2). However, the parties disputed whether Peter had a “material financial interest” in KIF that gave rises to an indirect interest pursuant to N.C.G.S. § 55-8-31(b)(1) based on Peter’s $200,000 payment to KIF. Defendants argued that the payment was merely a loan and thus did not give rise to a “material financial interest.” The Court determined that first, there was a dispute of material fact as to whether the payment was a loan or an equity investment, and second, even if the payment were merely a loan, there would still be a dispute of material fact as to whether it could be reasonably expected to impair Peter’s judgment and objectivity when authorizing Daedong to enter into the transactions with KIF. The Court also determined that disputes of material fact existed as to whether the transactions were ratified by a majority of disinterested directors and whether the transactions were fair. Accordingly, the Court denied summary judgment on the declaratory judgment claim.
Breach of Fiduciary Duty. Daedong asserted breach of fiduciary duty claims against each of the C-Suite Defendants, in part based on their involvement in the execution of the Services Agreement and DataScan Assignments. With respect to this portion of the claims, the Court concluded that a genuine dispute of material fact existed as to whether the C-Suite Defendants’ conduct was a breach of their fiduciary duties and whether their conduct was protected by the business judgment rule. Daedong also asserted that Peter breached his fiduciary duties by using Daedong’s funds to pay legal expenses relating to a personal business venture and that Anna breached her fiduciary duties by using Daedong’s resources to form a competing business while she still owed fiduciary duties to Daedong. The Court concluded that disputes of material fact existed as to these claims as well. Lastly, Daedong asserted a breach of fiduciary claim against Defendant Dae, asserting that although he was not a corporate officer or director, he owed de facto fiduciary duties to Daedong based on his status as the head of the company’s finance department. The Court concluded that the evidence was insufficient to establish that Dae dominated or exercised control over the entire company so as to give rise to a fiduciary duty. The Court denied summary judgment as to the C-Suite Defendants but granted summary judgment in favor of Dae.
Constructive Fraud. Daedong asserted constructive fraud claims against Peter, Yung, Anna, and Dae. At the hearing, counsel for Daedong informed the Court that Daedong was not pursuing the claim against Anna; thus, the Court granted summary judgment in her favor. The Court also granted summary judgment in favor of Dae based on its determination that Dae did not owe a fiduciary duty to Daedong. With respect to Peter and Yung, the Court determined that disputes of material fact existed as to whether they had received a personal benefit as a result of their allegedly improper actions. Thus, the Court denied summary judgment as to Peter and Yung.
Conspiracy to Commit Constructive Fraud. Since the constructive fraud claim survived in part and the evidence suggested that the individual Defendants all acted in furtherance of a common scheme, the Court denied summary judgment on this claim.
Misappropriation of Corporate Funds. Daedong’s misappropriation/embezzlement claim against the individual Defendants was based on 1) payments made to KIF pursuant to the Services Agreement; and 2) payments made for legal expenses relating to Peter’s personal business venture. The Court determined that the first basis did not fit within the enumerated elements of embezzlement under N.C.G.S. 14-90(b), because the payments were made pursuant to invoices for services KIF generated in accordance with the Services Agreement. Thus, the Court granted summary judgment in favor of the individual Defendants. With respect to the second basis, the Court concluded that the evidence was sufficient to establish the first two elements of embezzlement: that Peter acted as an agent or fiduciary for his principal and that he received money of the principal in the course of his employment and though his fiduciary relationship. However, a dispute of material fact existed as to whether Peter fraudulently misapplied or converted the money to his own use because the record was unclear as to Daedong’s policy on allowing executives to invoice the company for personal expenses. Accordingly, summary judgment was denied as to the misappropriation claim against Peter arising from the payments for personal legal expenses.
Conspiracy to Misappropriate Corporate Funds. The Court dismissed this conspiracy claim to the extent it was based on the dismissed portion of the misappropriation claim. The Court also dismissed the claim relating to the payment of Peter’s personal legal expenses as against Yung and Dae because there was no evidence that they participated in any such conspiracy. The Court denied summary judgment as to Anna and Peter though, because evidence showed that Anna was involved in processing the payment.
Unjust Enrichment. Daedong’s unjust enrichment claim was also based on 1) payments made to KIF pursuant to the Services Agreement; and 2) payments made for legal expenses relating to Peter’s personal business venture. With respect to the first, although an unjust enrichment claim cannot survive where an express contract exists, the Court had determined that a dispute of material fact existed as to whether the Services Agreement was a voidable transaction. Thus, the Court denied KIF’s motion for summary judgment on the unjust enrichment claim. With respect to the second, the Court also denied summary judgment, having already determined that a dispute of material fact existed relating to the payment of the legal expenses.
UDTP. Daedong asserted a UDTP claim against all Defendants. With respect to the individual Defendants, the Court denied summary judgment based on the surviving claims for breach of fiduciary duty, constructive fraud, and conspiracy. With respect to KIF, Daedong alleged a UDTP claim based on KIF’s refusal to return control over the DataScan portal to Daedong after the termination of the Services Agreement, which interfered with Daedong’s ability to process vendor payments. The Court concluded that this conduct reflected, at most, a breach of KIF’s obligations and that there was insufficient evidence of the substantial aggravating circumstances necessary to elevate the breach into an unfair or deceptive trade practice. Thus, the Court granted summary judgment in favor of KIF on this claim.
Unpleaded Damages. Defendants sought summary judgment as to several categories of damages identified by Daedong’s expert witness, on the grounds that they constituted “special damages” which were required to be affirmatively pleaded but were not. Specifically, Daedong’s expert identified damages arising from 1) lost profits from a canceled joint venture that Daedong had been contemplating; 2) default interest imposed by the bank under a credit agreement based on the individual Defendants’ failure to disclose the existence of the Services Agreement and the DataScan Assignments; 3) interest waivers that Daedong granted to dealers while Daedong was locked out of the DataScan portal; and 4) lost profits suffered as a result of lost business with certain dealers. The Court determined that all of these categories constituted special damages which had not been pleaded. Accordingly, the Court granted summary judgment in favor of Defendants and excluded any evidence relating to these categories of damages.
C-Suite Defendants’ Counterclaims
The C-Suite Defendants’ counterclaims requested a declaration that they were entitled to indemnification under Chapter 55 and Daedong’s bylaws. However, their right to indemnification hinged on them prevailing on all claims asserted against them by Daedong. Since the Court determined that at least some of the claims against the C-Suite Defendants still survived, the Court was unable to determine at this time whether the C-Suite Defendants were entitled to indemnification. Thus, the Court denied summary judgment on the C-Suite Defendants’ counterclaims.
KIF’s Counterclaims
Because KIF’s counterclaims depended on the validity of the Services Agreement, which the Court had already determined presented a genuine issue of material fact, the Court could not resolve KIF’s counterclaims as a matter of law and thus denied summary judgment on KIF’s counterclaims.
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Present v. State of N.C., 2026 NCBC Order 73 (N.C. Super. Ct. Sept. 8, 2026) (Davis, J.)
Key Terms: motion to transfer; N.C.G.S. § 1-267.1; constitutional challenges; N.C.G.S. § 55-7-48(1); deferred action
Plaintiff asserted both facial and as-applied constitutional challenges to N.C.G.S. § 55-7-48(1). Plaintiff then moved the Court to transfer the facial challenges to a three-judge panel, pursuant to N.C.G.S. § 1-267.1. However, if the statute being challenged is found to be constitutional as applied to the challenging party, then a facial challenge necessarily fails. Accordingly, the Court deferred ruling on the motion to transfer until it ruled on Defendants’ motion to dismiss the as-applied challenges.
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In re Asheville Eye Assocs. Data Incident Litig., 2026 NCBC Order 74 (N.C. Super. Ct. Sept. 8, 2026) (Davis, J.)
Key Terms: class action; data breach; attorneys’ fees; hacking; personally identifiable information (“PII”), personal health information (“PHI”); Rule 23; settlement administration; class action representatives; RPC 1.5; lodestar method
This case arises out of an alleged data breach that compromised the medical records of patients of an optometry practice in Western North Carolina. Each named plaintiff brought suit individually, asserting various claims on behalf of themselves and a putative class. The individual lawsuits were later consolidated. Thereafter, Plaintiffs moved for preliminary approval of class action settlement, which was granted by the Court. The Court also authorized Kroll Settlement Administration to provide written notice to the putative class. On April 20, 2026, Plaintiffs moved for final approval of the class action settlement and attorneys’ fees, expenses, and service awards.
Class Certification and Final Settlement Approval. The Court first addressed class certification under Rule 23(c) and determined that the numerosity, commonality, typicality, adequate representation, and adjudicative efficiency requirements had been met. Accordingly, the Court certified the class as “All individuals whose PII/PHI was compromised in the Data Incident,” excluding Defendant’s officers and directors, any entity in which Defendant has a controlling interest, Defendant’s affiliates and legal representatives, attorneys affiliated with Class Counsel, and anybody who decided to reject the Settlement’s terms. To approve a class action settlement, the Court must “find that there has been fair notice, an opportunity for class members to object, and that the settlement terms are fair, reasonable, and adequate.” The Court granted final approval of the Settlement Agreement because the settlement was the result of arms-length negotiations, the settlement provided various forms of relief, and the putative Class members had been provided adequate notice and none had objected. The Court dismissed the action with prejudice reserving jurisdiction over the consummation and enforcement of the Settlement Agreement.
Approval of Attorneys’ Fees, Expenses, and Service Awards. The Court then assessed the reasonableness of attorneys’ fees under Rule 1.5(a) of the Rules of Professional Conduct. First, the Court reduced Plaintiffs’ attorneys’ hourly rates, based upon the Court’s review of “the education, experience, and qualifications of each of Plaintiffs’ counsel.” The Court also reduced the requested hourly rate for non-attorney support staff because it was unreasonably high and not the rate actually charged for the work. The Court also excluded time spent in connection with the various pro hac vice motions filed and on clerical and administrative tasks, and significantly reduced fees for time entries which were vague or block billed. Although the Plaintiffs requested a 2.5 lodestar multiplier for the attorneys’ fees, the Court determined that a 1.3 multiplier was appropriate based on the other RPC 1.5 factors. Accordingly, the Court granted the motion for attorneys’ fees and expenses in part. The Court also granted plaintiffs’ motion for service awards and awarded each named Plaintiff $1,250 for their service as class representatives.
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WP Church, LLC v. Whalen, 2026 NCBC Order 75 (N.C. Super. Ct. Sept. 14, 2026) (Davis, J.)
Key Terms: misappropriation; preliminary injunction; receivership; inherent judicial authority; N.C.G.S. § 1-502(1)
Plaintiff WP Church, LLC and Defendant Patrick Whalen are members of 5Church Charleston, LLC, a South Carolina limited liability company. Plaintiff brought the present action, alleging that Defendant, the manager of 5Church, misappropriated the company’s funds for the benefit of his other restaurant ventures (“Affiliate Restaurants”). Plaintiff previously obtained a preliminary injunction to prevent such conduct. Thereafter, Plaintiff moved for appointment of a receiver based on Defendant’s alleged violations of the injunction, including exchanges of tens of thousands of dollars between 5Church and the Affiliate Restaurants that Defendant called “a series of accidental and corrective transfers”; an accelerated repayment schedule of a loan from the Whalen family; leases of luxury vehicles using 5Church’s funding; paying water bills for an Affiliate Restaurant; Affiliate Restaurants’ use of 5Church’s credit card; raised salaries for 5SG’s owners; and Defendant’s use of 5Church’s credit card for Defendant’s personal expenses.
The Court granted the motion pursuant to N.C.G.S. § 1-502(1) and its inherent equitable authority. Under N.C.G.S. § 1-502(1), a receiver may be appointed prior to final judgment when “(1) the party establishes an apparent right to property that is the subject of the action and (2) in the possession of an adverse party, and (3) the property or its rent and profits are in danger of being lost or materially injured or impaired.” The Court determined that these elements were satisfied. First, Defendant conceded that Plaintiff has an apparent right to 5Church’s assets as a member of the LLC. Second, 5Church’s funds were in the possession of an adverse party because they were controlled by Defendant, 5Church’s manager, and the allegations in the complaint made clear that Plaintiff was suing Defendant based on his actions as 5Church’s manager, regardless of whether the case caption specifically stated he was being sued as a manager. Third, 5Church’s assets were in danger of being lost or materially impaired because of the myriad withdrawals of assets from 5Church. The Court granted the Motion for Appointment of Receiver to the extent that it was “limited to financial oversight and regulation,” without removing Defendant as 5Church’s manager or limiting his authority under the 5Church Operating Agreement apart from the express terms of the order.
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Estevez v. Clay, 2026 NCBC Order 76 (N.C. Super. Ct. Sept. 21, 2026) (Conrad, C.J.)
Key Terms: order on designation; N.C.G.S. § 7A-45.4(a)(1); mootness; opposition to designation; Rule 2.1
Defendants filed a Notice of Designation, asserting that the action should be designated as a mandatory complex business case under N.C.G.S. § 7A-45.4(a)(1). The case was subsequently designated as “complex business,” per Rule 2.1 of the General Rules of Practice for the Superior and District Courts. Plaintiffs then filed an Opposition to Designation, opposing designation under section 7A-45.4. But because the case was designated under Rule 2.1, not section 7A-45.4, the Court overruled the opposition as moot.
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