N.C. Business Court Opinions, April 9, 2025 – April 22, 2025
Atkore Int’l, Inc. v. Dinkheller, 2025 NCBC 20 (N.C. Super. Ct. April 10, 2025) (Robinson, C.J.)
Key Terms: motion to dismiss; non-compete agreement; misappropriation of trade secrets; NCUDTPA; tortious interference
Plaintiff filed suit against a former employee, Keith Dinkheller, and his new employer, National Pipe & Plastics, Inc., alleging various claims relating to Dinkheller’s alleged breaches of his confidentiality and noncompetition agreement with Plaintiff. Defendants moved to dismiss all claims pursuant to Rule 12(b)(6).
Breach of Contract – Dinkheller. The Court dismissed Plaintiff’s claim for breach of the noncompetition provision, finding that the provision was overly broad and unenforceable as a matter of law. The noncompetition provision’s time restriction (including a two-year look back period) paired with the broad definition of the “Company” (encompassing many entities beyond Plaintiff) and the far-reaching geographic restriction (which essentially covered the entire country), when considered as a whole, were not reasonably limited to protect Plaintiff’s legitimate business interests.
Tortious Interference with Contract – National Pipe. Plaintiff asserted that National Pipe intentionally induced Dinkheller to breach his restrictive covenants with Plaintiff. The Court dismissed the claim to the extent it related to the noncompetition agreement, having found that the noncompetition agreement was unenforceable as a matter of law. However, the Court denied Defendants’ motion to dismiss as to the nondisclosure provision, finding that the pleadings sufficiently alleged the requisite elements for the claim.
Breach of Fiduciary Duty and Constructive Fraud – Dinkheller. The Court granted Defendants’ motion to dismiss these claims because the complaint failed to allege that Dinkheller possessed the type of domination or control over Plaintiff required to warrant the imputation of fiduciary duties where Dinkheller was not an officer or director of Plaintiff.
UDTPA – All Defendants. The Court granted Defendants’ motion to dismiss Plaintiff’s UDTPA claim because Plaintiff did not raise any opposition to the motion in its brief, and as such, the motion was deemed unopposed.
Misappropriation of Trade Secrets – All Defendants. Plaintiff alleged that Dinkheller misappropriated its trade secrets, not only by disclosing them to his new employer, but also by disclosing them in an affidavit filed in this case. The Court found that Plaintiff had adequately identified its trade secrets and that the complained of conduct satisfied the misappropriation requirement. The Court also found the allegations that National Pipe had interfered with Dinkheller’s restrictive covenants by placing him in a position where he has disclosed and is using Plaintiff’s trade secrets was sufficient to allege the claim against National Pipe. Accordingly, the Court denied the motion to dismiss this claim.
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Jackson v. MH Master Holdings, LLLP, 2025 NCBC 21 (N.C. Super. Ct. April 16, 2025) (Earp, J.)
Key Terms: summary judgment; contract interpretation; ambiguity
As summarized here, this action was brought by the Attorney General on behalf of and in the name of Dogwood Health Trust, a nonprofit corporation, relating to an asset purchase agreement memorializing Defendant’s acquisition of Mission Health, a hospital system serving western North Carolina. Pursuant to the APA, the Attorney General was granted contractual enforcement rights under certain circumstances and filed this action alleging that Defendant violated the APA by failing to provide the requisite level of emergency and trauma care and oncology services.
Defendant moved for partial summary judgment, asking the Court to determine that the phrase “shall not discontinue the provision of [certain] services” in the APA was unambiguous and to interpret the language as a matter of law. The parties argued conflicting interpretations of the phrase based on dictionary definitions and other provisions in the APA. The Court denied Defendant’s motion, finding that not only was the phrase “shall not discontinue” ambiguous, but also that the word “services” lacked clarity. A more developed factual record was necessary to determine the parties’ true intent. As Defendant failed to establish that no genuine issues of material fact existed surrounding the interpretation of the APA’s language, the Court denied the motion.
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Jackson v. MH Master Holdings, LLLP, 2025 NCBC Order 22 (N.C. Super. Ct. April 10, 2025) (Earp, J.)
Key Terms: motion to compel; privilege; Public Records Act; N.C. Gen. Stat. § 132-1; in camera review; discovery
As summarized here, Defendant previously moved to compel Plaintiff to produce documents which were allegedly improperly withheld or redacted in response to a Rule 34 document request. Plaintiff (the Attorney General) asserted that the documents were properly withheld because they were attorney-client privileged or attorney work product. On February 28, 2025, the Court entered an order concluding that the documents were subject to the Public Records Act and that an in camera review was necessary to determine if they were protected under the Act. Having conducted the in camera review, the Court entered a second order on the motion to compel.
The Court first concluded that the statutory protection set forth in N.C.G.S. § 132-1.1(a), rather than the common law attorney-client privilege, governed the dispute. Prior to 2023, N.C.G.S. § 132-1.1(a) provided that attorney-client communications were excepted from the definition of “public records” for a period of three years from receipt of the communication and thus not subject to disclosure under the Act. In 2023, the statute was amended to eliminate the three-year limitation. Here, the document request was made after the 2023 amendment but sought documents that pre-existed the amendment. The Court concluded that the date of the records request governed and therefore, if the documents at issue otherwise qualified under the Act, they were not public records and therefore protected.
Defendant argued that many of the documents withheld by Plaintiff did not satisfy the requirements of Section 132-1.1(a), because they were documents created by or within the Attorney General’s Office, rather than communications made to the Attorney General’s Office. The Court rejected this argument, concluding that, just as communications from in-house counsel to their clients are protected by the attorney-client privilege, communications to the Attorney General from his staff attorneys are protected if the communications otherwise qualify under the Act.
Lastly, Defendant argued that the communications were not protected because they were made in the ordinary course of the Attorney General’s business and not for litigation purposes. Having conducted an in camera review of the documents, the Court largely agreed, concluding that most of the communications were not protected by the Act’s protections for attorney-client communications or attorney work product. The Court included an attachment to the order delineating which communications were protected and which were not.
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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.