N.C. Business Court Opinions, August 12, 2026 – August 25, 2026
By: Rachel Brinson
Davis v. McHatton, 2026 NCBC 72 (N.C. Super. Ct. Aug. 12, 2026) (Conrad, C.J.)
Key Terms: motion to dismiss; limited liability company; corporate control; judicial dissolution; receiver; N.C.G.S. § 57D-6-02; N.C.G.S. § 57D-6-03(d)
Plaintiff, an equal member and manager in two limited liability companies, sued his co-member/manager alleging that the Defendant took unilateral control of the companies to the exclusion of Plaintiff and was using such companies improperly for his own personal benefit. Defendant moved to dismiss Plaintiff’s claims for judicial dissolution and appointment of a receiver. The Court found that Plaintiff’s allegations that Defendant had unilaterally excluded Plaintiff from management, diverted company assets, and increased his own compensation were sufficient to support a claim for judicial dissolution based on the inability to conduct the LLCs’ business in conformance with the operating agreement and governing statutes. The Court also found Defendant’s argument that the Court lacked subject matter jurisdiction over the dissolution claim because Defendant was willing to purchase Plaintiff’s membership interests pursuant to N.C.G.S. § 57D-6-03(d) incompatible with the statute which requires the Court to determine any procedures for such a buyout in lieu of dissolution. The Court further determined that Plaintiff sufficiently stated a claim for a receivership and that Defendant’s contrary arguments were premature at this stage. The Court denied the Defendant’s motion to dismiss.
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Leris v. De Leon, 2026 NCBC 73 (N.C. Super. Ct. Aug. 19, 2026) (Conrad, C.J.)
Key Terms: motion to dismiss; Rule 12(b)(6); breach of contract; breach of implied covenant of good faith and fair dealing; unjust enrichment; breach of fiduciary duty; conversion; negligence; fraud, punitive damages; civil conspiracy
Plaintiffs filed suit against Defendants, a member/former employee and her husband, alleging various claims relating to their alleged theft of company funds. Defendants moved to dismiss all claims pursuant to Rule 12(b)(6).
Contract Claims. The Court dismissed Plaintiffs’ claims for breach of contract and breach of the implied covenant of good faith and fair dealing because Plaintiffs’ complaint failed to sufficiently allege the existence of a valid contract between the parties.
Unjust Enrichment. The Court dismissed Plaintiffs’ unjust enrichment claim because it was based on the alleged taking of property by Defendants without Plaintiffs’ permission rather than the willing transfer of a measurable benefit from Plaintiffs to Defendants. Such a taking cannot support an unjust enrichment claim.
Breach of Fiduciary Duty. The Court found that Plaintiffs failed to allege the existence of a fiduciary relationship between Defendant Sara and the Company because generally neither members of an LLC nor employees of a company owe fiduciary duties to other members or the company/employer. The Court dismissed this claim.
Negligence and Gross Negligence. The Court dismissed the negligence claims because Plaintiff failed to allege that Defendant Sara owed a duty of care to Plaintiffs and because the claims were based on Sara’s alleged intentional conduct which cannot support negligence claims.
Fraud. The Court dismissed the Plaintiffs’ fraud claim for failure to comply with the specific pleading requirements of Rule 9(b), including by failing to allege the time and place of the alleged misrepresentations.
Conversion. The Court dismissed the conversion claim because Plaintiffs failed to specifically identify the origin and amount of the payments allegedly diverted. Plaintiffs further failed to allege that Sara either unlawfully obtained the money or that after lawfully obtaining it, she refused a demand by Plaintiffs to return it.
Punitive Damages and Civil Conspiracy. Having dismissed all of Plaintiffs’ other claims, the Court also dismissed Plaintiffs’ claims for punitive damages and civil conspiracy, neither of which can survive without an underlying claim for relief.
In granting Defendants’ motion, the Court noted Plaintiffs’ failure to cite to specific allegations in their complaint to support their arguments in their brief as required by BCR 7.5.
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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.