N.C. Business Court Opinions, February 11, 2026 – February 24, 2026
Apex Health, Inc. v. Atrium Health, Inc., 2026 NCBC 10 (N.C. Super. Ct. Feb. 11, 2026) (Earp, J.)
Key Terms: motion to amend; Rule 15; breach of contract; unfair and deceptive trade practices; futility; undue delay; undue prejudice; fraudulent inducement; bad faith
Plaintiffs Apex Health, a provider and operator of Medicare Advantage health plans, and its affiliates filed suit against Defendant Atrium Health. In February 2021, Apex and Atrium executed an LOI to create a co-branded Medicare Advantage plan for Atrium’s patients. The parties entered into an agreement formalizing their arrangement on May 13, 2021. As efforts were underway to market the plan, Apex alleged that Atrium began to distance itself from the plan, failed to treat it as a “preferred plan” for its patients, and ultimately caused the plan to fail.
Apex filed suit on May 23, 2024, asserting a claim for breach of contract against Atrium. The parties subsequently submitted three joint motions to extend the discovery deadlines, which the Court granted. On November 6, 2025, Apex moved to amend the Complaint to add a claim for unfair and deceptive trade practices against Atrium.
The Court’s analysis included the following three considerations: (i) futility of the amendment; (ii) undue delay and undue prejudice; and (iii) bad faith. The Court concluded that the amendment was futile, as the UDTPA claim was grounded in fraudulent inducement, but the proposed amendment to the Complaint failed to meet the pleading requirements for fraud. The Court further held that amending the Complaint at this time would cause undue delay and prejudice, noting the significant amount of time that had passed since the lawsuit was filed. The Court did not find bad faith, but noted that it was Apex’s responsibility to use the discovery period efficiently and seek the Court’s intervention if Atrium presented obstacles or delays to the discovery process, which it did not. The Court denied Apex’s motion with prejudice.
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WP Church, LLC v. Whalen, 2026 NCBC 11 (N.C. Super. Ct. Feb. 11, 2026) (Davis, J.)
Key Terms: motion to dismiss; nominal defendant; Rule 12(b)(1); Rule 12(b)(6); derivative claims; pre-suit demand; demand futility; self-dealing; misappropriation; conflict of interest transaction; business judgment rule; economic loss rule
As previously summarized here and here, Plaintiff WP Church sued Defendant Whalen, the sole manager of 5Church Charleston, derivatively on behalf of 5Church based on Defendant’s alleged self-dealing and misappropriation of 5Church’s assets. Defendant filed a motion to dismiss Plaintiff’s Complaint pursuant to Rules 12(b)(1) and (6), alleging that Plaintiff failed to comply with the mandatory pre-suit demand requirements before initiating a derivative action, and that Plaintiff failed to state a valid claim for relief against Defendant because his actions were within the authority granted to him under 5Church’s operating agreement.
At the outset, the Court sua sponte raised the question of whether the Complaint was subject to dismissal on the basis that it failed to name 5Church as a nominal defendant. The Courted determined that South Carolina law applied because 5Church was a South Carolina entity and, under South Carolina law, the absence of 5Church as a nominal defendant did not deprive the Court of subject matter jurisdiction.
The Court next analyzed whether Plaintiff’s pre-suit demand was substantively defective. The Court determined that Plaintiff’s letter sufficiently set out Plaintiff’s allegations against Defendant and demanded that Defendant initiate a lawsuit on behalf of 5Church to prosecute these wrongdoings. The Court further noted that, even if the demand was found to be deficient, South Carolina law provides futility as a basis for excusing compliance with the pre-suit demand. As Defendant was the manager of the company and also the sole individual alleged to have committed these wrongful acts, the Court held that any demand would have been presumably futile. As such, the Court denied Defendant’s motion to dismiss pursuant to Rule 12(b)(1).
The Court next considered Defendant’s motion to dismiss the Complaint pursuant to Rule 12(b)(6). The Court was unpersuaded by Defendant’s argument that his actions fell within the purview of his managerial authority, noting that Defendant failed to cite any provision of the operating agreement permitting him to enter into a conflict-of-interest transaction and, if one existed, South Carolina law would not permit such a provision to be given effect. The Court also rejected Defendant’s argument that the business judgment rule applied to the situation, as Defendant stood on both sides of the transactions. Lastly, the Court rejected Defendant’s argument that the economic loss rule applied, noting that South Carolina law strictly limits the application of the rule to products liability context. As such, the Court denied Defendant’s motion to dismiss under Rule 12(b)(6).
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Weatherspoon Fam. LLC v. Hatteras Inv. Partners, L.P., 2026 NCBC 12 (N.C. Super. Ct. Feb. 11, 2026) (Houston, J.)
Key Terms: motion to dismiss; Rule 12(b)(1); derivative lawsuit; pre-suit demand; futility; breach of fiduciary duty; particularity
As previously summarized here, Plaintiff sued Defendants derivatively on behalf of Nominal Defendant Hatteras Evergreen Private Equity Fund, LLC, asserting a claim for breach of fiduciary duty based on Defendants’ decision to exchange shares in Evergreen’s investment portfolio for preferred equity shares in another company, resulting in a significant loss to Evergreen’s assets. Defendants and Evergreen moved to dismiss Plaintiff’s amended complaint pursuant to Rule 12(b)(1) on the basis that Plaintiff failed to make a pre-suit demand prior to initiating a derivative lawsuit.
The Court granted the motion without prejudice. Analyzing the demand requirements under Delaware law, which governs Evergreen, the Court held that Plaintiff failed to plead with particularity facts which would excuse Plaintiff from making a pre-suit demand. The Court determined that Plaintiff failed to adequately plead that the manager of Evergreen received a material personal benefit from the alleged misconduct that is the subject of the litigation demand. The Court further concluded that Plaintiff’s allegations failed to demonstrate a substantial likelihood of liability for breach of fiduciary duty, or that Defendants lacked independence from another person or entity receiving material benefits. As such, the Court determined that Plaintiff lacked standing to bring the derivative lawsuit, and dismissed the action without prejudice.
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Town of Carrboro v. Duke Energy Corp., 2026 NCBC 13 (N.C. Super. Ct. Feb. 12, 2026) (Davis, J.)
Key Terms: motion to dismiss; Rule 12(b)(1); Rule 12(b)(6); climate change; issue of first impression; federal preemption; nonjusticiability; political question doctrine
Plaintiff filed this lawsuit asserting claims against Defendant for public nuisance, trespass, negligence, and gross negligence. Plaintiff alleged that Defendant has known for decades about the harmful effects of fossil fuel emissions but has undertaken a series of campaigns to downplay its dangers. Plaintiff alleged that increased carbon emissions have resulted in climate change and consequently damaged Plaintiff in terms of increased municipal spending to repair roads and infrastructure. Defendant moved to dismiss pursuant to Rules 12(b)(1) and 12(b)(6).
The Court noted that “[i]t would be a vast understatement to say that this case presents an issue of first impression under North Carolina law.” Although the Court first considered whether Plaintiff’s claims were subject to federal preemption, the Court ultimately did not need to make a final determination on this issue, as the issues presented in the lawsuit were subject to the political question doctrine.
The Court considered the following three factors recently established by the Supreme Court of North Carolina to determine the nonjusticiability of an issue: whether the issue has (1) a textually demonstrable commitment of the matter to another branch; (2) a lack of judicially discoverable and manageable standards; or (3) the impossibility of deciding a case without making a policy determination of a kind clearly suited for nonjudicial discretion. Finding that all three factors mandated the invocation of the political question doctrine, the Court granted Defendant’s motion to dismiss pursuant to Rule 12(b)(1) for lack of standing and dismissed Defendant’s motion to dismiss pursuant to Rule 12(b)(6) as moot.
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Mezcalito Apex, Inc. v. Murillo, 2026 NCBC 14 (N.C. Super. Ct. Feb. 17, 2026) (Robinson, C.J.)
Key Terms: Tex-Mex; motion to dismiss; Rule 12(b)(6); breach of contract; misappropriation of trade secrets; unfair and deceptive trade practices; confidentiality agreement; injunctive relief
This case arises out of a dispute between Plaintiff, a Tex-Mex restaurant, and its former senior-level employee, Defendant Murillo. Plaintiff alleged that, after leaving his employment with Plaintiff, Defendant moved to Missouri, where he worked for another Tex-Mex restaurant and subsequently became a 25% owner in that restaurant. Plaintiff further alleged that Defendant made a series of changes to the Missouri restaurant’s menus and other elements that “copied” Plaintiff’s restaurant.
After Plaintiff filed suit against both Defendant and the Missouri restaurant, the Missouri restaurant settled with Plaintiff by terminating Defendant’s employment and reversing the changes made to their restaurant, among other terms. Defendant moved to dismiss Plaintiff’s claims for breach of Defendant’s confidentiality agreement, misappropriation of Plaintiff’s trade secrets, unfair and deceptive trade practices, and preliminary and permanent injunction pursuant to Rule 12(b)(6).
Breach of Contract. The Court denied Defendant’s motion to dismiss the breach of contract claim, finding that Plaintiff sufficiently pled the elements of a valid contract and Defendant’s breach thereof.
Misappropriation of Trade Secrets. The Court granted Defendant’s motion to dismiss Plaintiff’s misappropriation of trade secrets claim, holding that: (1) menus and the presentation of food and drinks cannot constitute trade secrets, as they are within the public view; and (2) the remaining trade secrets were not identified with sufficient particularity under the NCTSPA. The Court further determined that Plaintiff’s allegation that Defendant had used, or will inevitably use or disclose the trade secrets, was insufficient to support the claim.
Unfair and Deceptive Trade Practices. The Court likewise granted Defendant’s motion to dismiss Plaintiff’s UDTPA claim, which relied upon the trade secret claim.
Preliminary and Permanent Injunction. Noting that injunctive relief is an ancillary remedy, and not an independent cause of action, the Court granted Defendant’s motion to dismiss this claim.
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PCS Phosphate Co. v. Jacobs Eng’g Grp., Inc., 2026 NCBC 15 (N.C. Super. Ct. Feb. 19, 2026) (Houston, J.)
Key Terms: motion to transfer; Rule 12(b)(3); forum non conveniens; choice of law provision; venue provision; N.C.G.S. § 22B–2; public policy; motion to dismiss
Plaintiffs PCS Phosphate Company, Inc. and PCS Administration (USA), Inc., both Delaware corporations, maintain their principal places of business in North Carolina. Defendant Buss Chemtech AG is a Swiss company, with its principal place of business in Switzerland. In 2019, Plaintiffs and Buss entered into an agreement, whereby Buss agreed to provide engineering services, equipment, and support for Plaintiffs’ project in North Carolina. The agreement contained choice of law and venue provisions, indicating that New York law would govern any disputes and designating the Southern District of New York as the venue for any such disputes. Plaintiffs filed suit against Buss in North Carolina, asserting claims for breach of contract, breach of warranty, negligent misrepresentation, and professional negligence.
Buss moved to transfer venue to the Southern District of New York under Rule 12(b)(3) or, in the alternative, dismiss Plaintiffs’ lawsuit for forum non conveniens. Plaintiffs argued that (1) a state court action could not be “transferred” to federal court; (2) the choice of law and venue provisions were void and unenforceable under N.C.G.S. § 22B–2 because the agreement pertained to the improvement of real property situated within North Carolina; and (3) as the agreement involved improvements to real property in North Carolina, this state was the most convenient forum for the dispute.
The Court denied Buss’s motion to transfer under Rule 12(b)(3), holding that the agreement was subject to N.C.G.S. § 22B–2, rendering the choice of law and venue clauses unenforceable as a matter of public policy. The Court also denied Buss’s motion to dismiss on the basis of forum non conveniens. Buss’s argument for forum non conveniens primarily rested on two points: (1) that the Court should deny jurisdiction on the basis of the choice of law and venue clauses; and (2) that a North Carolina judgment would be unenforceable in Switzerland. The Court summarily dismissed Buss’s first argument, as the clauses were found to be unenforceable. Noting that two of the three parties to the present dispute resided in North Carolina, the dispute centered around services to be performed in North Carolina, and other factors, the Court refused to dismiss the lawsuit on the basis of forum non conveniens.
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Jones v. Bull & Bear Invs. LLC, 2026 NCBC Order 18 (N.C. Super. Ct. Feb. 13, 2026) (Robinson, C.J.)
Key Terms: order on designation; N.C.G.S. § 7A-45.4(a)(1); N.C.G.S. § 7A-45.4(a)(7); N.C.G.S. § 7A-45.4(c); timeliness; service of notice; landlord-tenant
Plaintiff Jones initiated this lawsuit on January 23, 2026 by filing a complaint against Defendant Bull & Bear Investments LLC in Guilford County Superior Court. In the complaint, Plaintiff asserted claims against Defendant for unlawful interference and coercion under the Fair Housing Act, voidable contract/duress, and unfair and deceptive trade practices. Ten days later, Plaintiff filed a Notice of Designation, seeking designation of this action as a mandatory complex business case under N.C.G.S. § 7A-45.4(a)(1) and (a)(7). Eight days after the filing of the NOD, Plaintiff emailed copies of the NOD to Business Court and Superior Court personnel, in addition to various state agencies, in an attempt to effectuate service.
The Court determined that Plaintiff’s designation was untimely. Noting that, under N.C.G.S. § 7A-45.4(d)(1), a notice of designation must be filed contemporaneously with a complaint, the Court observed that Plaintiff’s notice was not filed until ten days after the initial filing. The Court further noted that Plaintiff had failed to properly effectuate service on the Chief Justice of the Supreme Court of North Carolina and the Chief Judge of the Business Court under N.C.G.S. § 7A-45.4(c).
The Court also held that designation was not appropriate under N.C.G.S. § 7A-45.4(a)(1), as the dispute was essentially a landlord-tenant dispute which did not implicate the laws governing limited liability companies. The Court noted that designation under N.C.G.S. § 7A-45.4(a)(7) was inappropriate because that subsection has been repealed since October 2014.
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Brock v. Kyryk, 2026 NCBC Order 19 (N.C. Super. Ct. Feb. 23, 2026) (Robinson, C.J.)
Key Terms: opposition to designation; N.C.G.S. § 7A-45.4(e); derivative action; homeowners’ association; N.C.G.S. § 7A-45.4(a)(1); breach of fiduciary duty; North Carolina Planned Community Act; Chapter 55A; complexity; venue
Plaintiffs, members of a homeowners’ association, initiated a derivative lawsuit against Defendants, members of the association’s board, on 2 September 2025 (“First Action”). Defendant Taylor timely filed a notice of designation and, after the case was designated as a mandatory complex business case, Plaintiffs timely filed an opposition (“First Opposition”). Before the Court ruled on the First Opposition, Plaintiffs purported to voluntarily dismiss the First Action without prejudice on 1 December 2025. Taylor timely filed her response to the First Opposition the next day.
Plaintiffs filed another lawsuit on 11 December 2025, asserting similar claims against Defendants (“Second Action”). Taylor timely filed a notice of designation and, after the Second Action was designated to the Business Court, Plaintiffs again timely filed an opposition (“Second Opposition”). Taylor timely filed a response. The Court struck Plaintiffs’ voluntary dismissal of the First Action and stayed the Second Action.
Defendants argued that designation as a mandatory complex business case was proper under N.C.G.S. § 7A-45.4(a)(1), noting that the claim for breach of fiduciary duty asserted by Plaintiffs in both the First Action and Second Action was premised on fiduciary duties owed by nonprofit board members under Chapter 55A. The Court agreed, additionally noting that both complaints included derivative claims pursuant to N.C.G.S. § 55A-7-40.
The Court determined that none of Plaintiffs’ arguments had merit, holding that (1) case complexity has no bearing on designation; (2) the Business Court regularly hears disputes involving homeowners’ associations and their members; (3) the North Carolina Planned Community Act requires homeowners’ associations to exist as nonprofit corporations and further requires association officers and board members to exercise fiduciary duties described in Chapter 55A; (4) whether the case may be handled by a “regular” Superior Court Judge has no bearing on designation; and (5) once a case is designated to the Business Court, venue remains the county of origin and the assigned Business Court Judge is commissioned as a Superior Court Judge for that county. The Court overruled the Oppositions.
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