N.C. Business Court Opinions, June 3, 2026 – June 16, 2026
By: Amanda Reader, Romney Harris, and Ashley Oldfield
BioSkryb Genomics, Inc. v. AClarity Genomics Inc., 2026 NCBC 51 (N.C. Super. Ct. June 8, 2026) (Conrad, J.)
Key Terms: summary judgment; California choice-of-law clause; nonsolicitation covenant; restrictive covenant; public policy exception; extraterritorial effect; attorney’s fees
Plaintiff, a Delaware company headquartered in North Carolina, initiated this action, alleging, inter alia, that after Defendant left his role at Plaintiff, he had breached the nonsolicitation provisions of his employment agreements, both of which contained a California choice of law provision. Defendant denied wrongdoing and asserted a counterclaim under California law, which prohibits contracts in restraint of trade and provides for a private right of action against an employer who attempts to enforce such a contract. After discovery closed, Plaintiff voluntarily dismissed its claims without prejudice, leaving Defendant’s counterclaim as the only remaining claim. Defendant then moved for summary judgment on Plaintiff’s liability for that counterclaim.
Because the parties agreed that the nonsolicitation provisions would be void under California law, the motion turned on whether California law applied. Plaintiff argued that the choice of law provisions should be disregarded because the agreements had no meaningful connection to California and applying California law would violate North Carolina public policy. The Court rejected Plaintiff’s arguments and enforced the choice-of-law provisions. The Court concluded that the parties had a reasonable basis for selecting California law because although Plaintiff was headquartered in North Carolina, it had substantial California ties and Defendant had traveled there approximately twenty-five times for Plaintiff’s business. The Court also concluded that applying California law would not violate a fundamental policy of North Carolina, since North Carolina generally disfavors restrictive covenants. The Court also rejected Plaintiff’s argument that California law should not apply extraterritorially because Defendant worked in North Carolina. Although legislation is generally presumed to operate territorially, the Court concluded that the California statute’s language overcame that presumption because it explicitly stated that it applied regardless of where the employment took place. Accordingly, the Court granted summary judgment in Defendant’s favor on liability for his counterclaim.
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Moore v. Brooks, 2026 NCBC 52 (N.C. Super. Ct. June 9, 2026) (Houston, J.)
Key Terms: motion to compel arbitration; arbitration agreement; American Arbitration Association Commercial Rules; substantive arbitrability; alter ego; veil piercing; non-signatory; estoppel; delegation
Plaintiff Drue Moore’s estate, the Redwood Trust, and Redwood Holdings were involved in a dispute with Defendant Winthrop Intelligence, a Wyoming LLC, concerning Winthrop’s operating agreements and related claims arising from alleged misconduct by Drue Moore. Winthrop moved to compel arbitration of certain counterclaims and crossclaims based on arbitration provisions in Winthrop’s 2020 and 2024 operating agreements.
Arbitration as to Redwood Holdings. The Court first addressed whether the Court or an arbitrator should decide arbitrability. The operating agreements were written agreements containing arbitration provisions, and the parties did not dispute that Winthrop and Redwood Holdings were parties to those agreements. The arbitration provisions incorporated the American Arbitration Association Commercial Rules, which give the arbitrator authority to decide issues of arbitrability. The Court concluded that this incorporation clearly and unmistakably delegated questions of substantive arbitrability to the arbitrator.
The Court rejected Redwood Holdings’ broad challenge to the enforceability of the operating agreements as a basis to avoid delegation, explaining that wholesale challenges to the validity of the contract generally do not defeat a clear delegation provision. Because the operating agreements identified Winthrop and Redwood Holdings as parties, contained mandatory arbitration provisions incorporating the AAA rules, and Redwood Holdings refused to arbitrate, the Court granted Winthrop’s motion to compel arbitration as to its claims against Redwood Holdings for breach of the operating agreement and expulsion under the operating agreement.
Arbitration as to Non-Signatories. Winthrop also sought to compel arbitration against the Estate and the Redwood Trust, neither of which appeared on the face of the operating agreements. The Court noted that, while questions about the validity of an arbitration agreement may be delegated to an arbitrator, a court must first determine whether a nonparty is bound by or may enforce the agreement.
Winthrop argued that the Estate and Redwood Trust were bound by the arbitration provisions based on delegation, veil piercing or alter ego principles, and ratification or estoppel through acceptance of supposed benefits. The Court rejected each theory. Because the Estate and Redwood Trust were not parties to the operating agreements, they could not have delegated arbitrability to an arbitrator. The Court also concluded that Winthrop had not shown that Redwood Holdings, the Estate, the Redwood Trust, or Drue Moore were alter egos of one another sufficient to pierce the veil under North Carolina or Wyoming law. Finally, the Court found Winthrop’s estoppel theory unsupported by the record and declined to bind the Estate or Redwood Trust based on alleged acceptance of membership benefits.
Accordingly, the Court concluded that Winthrop failed to show an agreement to arbitrate between Winthrop and either the Estate or the Redwood Trust and denied the motion to compel arbitration as to those parties.
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Moore v. Brooks, 2026 NCBC 53 (N.C. Super. Ct. June 9, 2026) (Houston, J.)
Key Terms: Rule 60; void judgment; personal jurisdiction; Rule 12(b)(2); Business Court Rules; electronic filing; notice; order of inclination; motion to set aside; appeal
Plaintiffs moved under Rule 60(b)(4) to set aside the Business Court’s prior order dismissing certain Defendants for lack of personal jurisdiction. Plaintiffs had already appealed the dismissal order to the North Carolina Supreme Court but asked the Court for an order of inclination on how it would likely resolve the Rule 60 motion if the appeal were not otherwise pending.
Plaintiffs argued that the dismissal order was void because Defendants’ motion to dismiss had been filed and served through the Business Court’s e-filing system, but was not timely filed with the Durham County Clerk of Superior Court as required. The Court determined that this technical defect did not leave the Court without jurisdiction to rule on the motion to dismiss and did not render the resulting order void. The Rules contemplate various situations in which a court may rule on a motion before it is filed (including motions for a TRO and oral motions). Further, Plaintiffs had actual notice of the motion, fully briefed the personal-jurisdiction issue, participated in the hearing, and did not object to the defect until after the Court ruled and therefore were not prejudiced by the defect. In contrast, Defendants would be materially affected if the dismissal order was set aside because they would then be subject to the Court’s jurisdiction for the duration of the case. Accordingly, the Court indicated that if the matter were not otherwise the subject of a perfected appeal, it would deny the Rule 60 motion.
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Matt Logan, Inc. v. Abitz, 2026 NCBC 54 (N.C. Super. Ct. June 9, 2026) (Robinson, C.J.)
Key Terms: Rule 12(b)(6); restrictive covenants; non-compete; non-solicitation; overbroad; breach of employment agreement; trade secrets; misappropriation of trade secrets; UDPTA; unfair competition; injunctive relief
Plaintiff, which provides financial and brokerage advice to clients, sued its former employee after he resigned shortly before Plaintiff transitioned to a new financial advisory firm and allegedly solicited Plaintiff’s clients for his newly formed LLC. Defendant moved under Rule 12(b)(6) to dismiss several claims.
Breach of Employment Agreement. Defendant sought dismissal of Plaintiff’s breach of contract claim only to the extent it related to the agreement’s non-solicitation and non-competition provisions, not the nondisclosure provision.
As to the non-solicitation provision, which prohibited Defendant from inducing or attempting to induce, directly or indirectly, any person to discontinue doing business with Plaintiff, the Court rejected Plaintiff’s attempt to characterize the restriction as a narrower “non-interference” provision, and held it unenforceable because it broadly prohibited solicitation of anyone doing business with Plaintiff without limiting the restriction to customers with whom Defendant had contact or influence.
As to the non-competition provision, which prohibited Defendant from performing any services in competition with Plaintiff, the Court concluded that it was unenforceable because it barred Defendant from working in any capacity for any competitor and was not limited to work similar to his prior role and therefore failed to protect a legitimate business interest. The Court declined to narrow the provision based on Plaintiff’s contention that the provision only restricted Defendant from taking an identical position.
Misappropriation of Trade Secrets. Plaintiff alleged that Defendant misappropriated trade secrets by using confidential client information and information about Plaintiff’s planned advisor transition. Defendant argued that Plaintiff failed to identify any trade secret with sufficient particularity. The Court dismissed the claim. Although confidential client and business information may qualify as trade secrets, Plaintiff’s generalized allegations did not give Defendant notice of the specific information allegedly misappropriated. Defendant’s knowledge developed during employment also could not itself support a trade secrets claim. The Court further held that Plaintiff failed to plead misappropriation of advisor-transition information because Defendant allegedly learned that information in meetings he attended with Plaintiff’s consent, and Plaintiff did not allege later unauthorized access to the information.
Unfair Competition and Unfair and Deceptive Trade Practices. The Court denied dismissal of the claim. Although the trade secrets claim failed, computer trespass may support a claim, and Defendant did not challenge Plaintiff’s computer trespass claim. Accepting the allegations as true, the Court could not conclude that Plaintiff was entitled to no relief.
Injunctive Relief. Plaintiff also asserted a separate claim for injunctive relief based on Defendant’s alleged solicitation of clients and use of confidential information. The Court dismissed the claim because injunctive relief is a remedy, not an independent cause of action.
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Belmont Korners, LLC v. Lynk Invs., LLC, 2026 NCBC 55 (N.C. Super. Ct. June 16, 2026) (Shirley, J.)
Key Terms: Rule 12(b)(6); declaratory judgment; LLC operating agreement; fiduciary duty; fraud; fraudulent inducement; reasonable reliance; constructive fraud; civil conspiracy; intracorporate immunity doctrine; N.C.G.S. § 75-1.1; unfair or deceptive trade practices; unjust enrichment; constructive trust; punitive damages; accounting
This matter arises from a failed Charlotte real estate development project. Plaintiffs Belmont Korners, LLC and related entities alleged that developer Defendant Staley, lender Defendant Lynk Investments, LLC, and individuals associated with Lynk wrongfully obtained control over the project property. Plaintiffs asserted declaratory judgment and other claims. The Lynk Defendants moved to dismiss under Rule 12(b)(6). The Court granted the motion, leaving only Plaintiffs’ declaratory judgment claim to proceed.
Claims Asserted Collectively by Multiple Plaintiffs. As an initial matter, the Court addressed the Complaint’s frequent references to “Plaintiffs” collectively. The Court explained that collective pleading is not necessarily fatal, but where multiple plaintiffs and defendants are involved, the pleading must allege facts showing that the plaintiff asserting the claim has standing and that the defendant against whom relief is sought engaged in conduct sufficient to support liability.
Fiduciary Duty and Constructive Fraud. Plaintiffs alleged that Lynk owed fiduciary duties based on the parties’ lender-borrower relationship and because Lynk’s alleged representative signed Belmont Development’s operating agreement as manager. The Court rejected both theories. A lender-borrower relationship does not create fiduciary duties, and Plaintiffs did not plead facts showing that Lynk became an LLC member or manager or undertook another person’s fiduciary duties. Because constructive fraud also required a fiduciary relationship, the Court dismissed both claims against Lynk with prejudice.
Fraud and Fraudulent Inducement. Plaintiffs alleged that Lynk misrepresented that the 2024 restructuring would not affect Plaintiffs’ ownership rights and misrepresented the ownership structure, including RATB’s existence. The Court held that Plaintiffs failed to plead fraud with particularity because they did not identify specific statements, when they were made, why reliance was reasonable, or what Lynk obtained from the alleged misrepresentations. The fraud-based claims were dismissed with prejudice.
Civil Conspiracy. Plaintiffs alleged that Lynk and others conspired to seize control of the property and deprive Plaintiffs of ownership benefits. The Court dismissed the claim because Plaintiffs pleaded only conclusory allegations and the intracorporate immunity doctrine applied.
Unfair or Deceptive Trade Practices and Unjust Enrichment. Plaintiffs alleged unfair or deceptive trade practices under N.C.G.S. § 75-1.1 and unjust enrichment based on Defendants’ alleged control over the property. The Court dismissed the UDTPA claim because the alleged misconduct concerned the restructuring, membership, management, and control of a single real estate venture, not marketplace conduct between separate market participants. The unjust enrichment claim also failed because Plaintiffs did not plead that the Lynk Defendants received title to the property or personally received a measurable benefit from Plaintiffs.
Constructive Trust, Punitive Damages, and Accounting/Referee. The Court also dismissed Plaintiffs’ requests for constructive trust, punitive damages, accounting, and appointment of a referee because they were remedies rather than standalone claims. Further, punitive damages were not recoverable for Plaintiffs’ only remaining claim (for declaratory judgment) and the other requested remedies were not asserted against the Lynk Defendants.
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Higher Tech Realty NC, LLC v. Navigate Realty, LLC, 2026 NCBC Order 53 (N.C. Super Ct. June 2, 2026) (Davis, J.)
Key Terms: temporary restraining order; confidentiality agreement; non-compete; non-solicitation; likelihood of success on the merits; valuable consideration; blue-penciling; tortious interference with contract; irreparable harm; balancing of equities; breach of contract; notice of restrictive covenants
This action involves a dispute between plaintiff Mark Spain Real Estate and its former employees Byerly, Connor, and Johnson, and their new employer, Navigate Realty regarding the former employees’ alleged violations of the restrictive covenants in their employment agreements with Mark Spain and Navigate’s alleged scheme to misappropriate Mark Spain’s information and poach its employees. Plaintiff sought a temporary restraining order (1) enjoining the former employees from working in their current roles and from soliciting current Mark Spain employees; and (2) enjoining Navigate from tortiously interfering with Mark Spain’s contracts with its employees.
To grant a TRO, the plaintiff must demonstrate a (1) likelihood of success on the merits and (2) likelihood of irreparable harm/loss if the TRO is not granted.
Breach of Contract. With respect to Plaintiff’s claim against Johnson for breach of the contract, the Court found that Plaintiff had not shown a likelihood of success on the merits because Plaintiff had not shown that the agreement was supported by valuable consideration. The agreement was signed after Johnson was already employed and there was no evidence that new consideration was paid. With respect to the breach of contract claims against the other two former employees, the Court found that Plaintiff had not shown a likelihood of success on the merits regarding the non-compete because it appeared overbroad and unenforceable. The non-compete prohibited future participation in “services,” the definition of which was broad and ambiguous. Further, the territorial limitation included states in which the former employees had not worked. However, with respect to the non-solicitation agreement, the Court found that Plaintiff had shown a legitimate business interest in protecting itself against solicitation of its employees by former employees and had presented evidence that the former employees had breached the non-solicitation agreements.
Tortious Interference with Contract. The Court found that Plaintiff had shown a likelihood of success on its tortious interference with contract claim due to (1) Navigate knowing that its employees were bound by restrictive covenants with Mark Spain, and (2) allegations that Navigate had engaged in a coordinated raiding scheme to poach employees and harm Mark Spain.
Irreparable Harm and Balancing of the Equities. Because Plaintiff moved quickly in seeking injunctive relief and had shown that it would likely continue to lose employees, the Court found that Plaintiff had adequately shown the potential for irreparable harm. Further, the balance of equities weighed in favor of injunctive relief because an injunction against further solicitation of employees would not cause any significant harm to defendants.
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Brooks v. Piedmont Hardware Lumber Co., Inc., 2026 NCBC Order 54 (N.C. Super Ct. June 4, 2026) (Robinson, C.J.)
Key Terms: N.C.G.S. § 7A-45.4(a); order on designation; N.C.G.S. § 7A-45.4(d)(1); contemporaneous filing; Rule 5(b)
Plaintiffs filed suit seeking judicial dissolution of the defendant company and alleging breach of fiduciary duties by the individual defendant. They filed their verified complaint at 4:51 P.M. on May 26, 2026. At 5:30 P.M., they filed a notice of designation and shortly after, served the NOD on the Chief Justice and the Business Court.
N.C.G.S. § 7A-45.4(d)(1) requires parties to file the NOD and the complaint contemporaneously. The Court ruled, consistent with Rule 5(b) and BCR 3.6, that any filing submitted past 5:00 P.M. is deemed to have been sent on the next business day. Accordingly, because Plaintiffs filed the complaint and the NOD on different filing dates, the filings were not contemporaneous and designation to the Business Court was improper. The Court noted that this type of filing error can be avoided by e-filing both documents in the same “envelope.”
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Indep. Infrastructure Co. v. View Cap. Mgmt., LLC, 2026 NCBC Order 55 (N.C. Super Ct. June 10, 2026) (Robinson, C.J.)
Key Terms: N.C.G.S. § 7A-45.4(a)(9); conditional notice of designation; amount in controversy; supplement to the conditional notice of designation
Shortly after defendants filed their answer and counterclaims, plaintiffs filed a conditional notice of designation pursuant to N.C.G.S. § 7A-45.4(a)(9), and subsequently filed a supplement notifying the court that all parties consented to designation. However, to satisfy the requirements of subsection (a)(9), the pleading on which the designation is based must provide a path whereby the Court can clearly determine that the amount in controversy requirement of $1,000,000 is met. Here, though, plaintiffs attempted to rely on the complaint to satisfy the amount in controversy, rather than the counterclaims upon which they based designation. As such, designation to the Business Court was improper.
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McCarron v. Howell, 2026 NCBC Order 56 (N.C. Super Ct. June 11, 2026) (Davis, J.)
Key Terms: preliminary injunction; appointment of receiver; Uniform Voidable Transactions Act; likelihood of success; balancing of equities, Rule 65; irreparable harm; N.C.G.S. § 39-23.4(b)(6)
In a previous lawsuit, a final judgment was entered against the corporate defendant in excess of $300,000. Thereafter, plaintiff filed the present action alleging that defendant had engaged in a series of fraudulent transactions to prevent plaintiff from collecting on the judgment. Plaintiff then moved for a preliminary injunction to enjoin further asset transfers and for the appointment of a receiver to manage the defendant corporations.
Preliminary Injunction: Plaintiff had shown a likelihood of success on the merits of its claim for fraudulent transfer under the Uniform Voidable Transactions Act because there was evidence of several of the badges of fraud in N.C.G.S. § 39-23.4(b), including that the assets were transferred to insiders, that the assets and the transfers were concealed from plaintiff, that defendant had absconded by allowing itself to be administratively dissolved, and that the transfers were made after debtor had been sued and/or while it was insolvent. The Court also found that there was a likelihood of irreparable harm because plaintiff would not be capable of being remedied solely by an award of money damages if defendant’s assets continued to be depleted through further transfers and there was evidence in the record that defendants intended to continue making the transfers. The Court also found that the balance of equities weighed in favor of an injunction due to the amount and frequency of the asset transfers, and the false representations made concerning those transfers.
The Court deemed a $100,000 bond necessary to protect the Defendants’ interests.
Appointment of Receiver: Lastly, based on the evidence of record, the Court appointed a receiver to take control of the assets of the corporate defendants to prevent further asset transfers during the pendency of the litigation.
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Watts Guerra LLC v. Series 1 of Oxford Ins. Co. NC LLC, 2026 NCBC Order 57 (N.C. Super Ct. June 13, 2026) (Earp, J.)
Key Terms: motion to compel; fee agreement; relevance; privilege; Rule 26; murvin test; subject matter waiver
Plaintiff initiated this lawsuit against its insurer, alleging, inter alia, that Defendant had engaged in a deliberate scheme to delay any claim by Plaintiff on the insurance policies. During discovery and following completion of the BCR 10.9 process, Defendant moved to compel Plaintiff to produce the following documents: (1) emails discussing the terms of an engagement agreement with drafts of the agreement attached; (2) emails between Plaintiff, its counsel, and third parties, and (3) emails between Plaintiff and its counsel regarding litigation strategy. Plaintiff objected on relevance and attorney-client privilege grounds.
Fee Agreement. Consistent with persuasive federal authority, the Court determined that Plaintiff’s engagement agreement with counsel and related communications were not privileged except with respect to a single sentence outlining the substantive work to be performed. Although Plaintiff disclosed some of the information in the engagement agreement to Defendant during negotiations, this did not constitute a waiver of privilege for the entire agreement because the disclosures were made during negotiations for a business solution and were not made to obtain a litigation advantage.
Emails with Third Parties. These emails were not privileged because they were not made in confidence and included multiple third parties. Further, they were relevant because they related to the parties’ competing explanations for the delays in the claim filing process.
Emails Regarding Litigation Strategy. These emails were protected by the attorney-client privilege because they contained advice of counsel and pertained to litigation strategy.
Because Plaintiff’s opposition to producing the majority of the documents was not substantially justified, the Court ordered Plaintiff to pay Defendant’s reasonable expenses in obtaining the order.
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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.