N.C. Business Court Opinions, December 17, 2025 – December 31, 2025
By: Ashley Oldfield
Kayser-Roth Corp. v. Gallotti, 2025 NCBC 76 (N.C. Super. Ct. Dec. 29, 2025) (Robinson, C.J.)
Key Terms: Rule 12(b)(6) motion to dismiss; contract interpretation; ambiguity; damages; fraud; breach of contract; Wage and Hour Act; statute of limitations
This action arose out of Defendant’s employment with, and termination from, Plaintiff. Plaintiff alleged that because it terminated Defendant for cause, it did not owe Defendant certain payments under his employment agreement. Defendant filed counterclaims for breach of contract for Plaintiff’s non-payment of severance, annual bonuses, and deferred compensation; NCWHA violations for such nonpayment; and fraud for Plaintiff’s alleged misrepresentation regarding the terms of the employment agreement which induced Defendant to sign it. Plaintiff moved to dismiss the counterclaims.
Damages. Under Defendant’s employment agreement, Defendant’s “base salary” was to be used to in calculating his bonus and severance payments. Defendant contended that “base salary” referred to his annual salary, while Plaintiff contended “base salary” referred to his monthly salary. Plaintiff argued that the claim should be dismissed or limited to the extent it sought damages beyond a calculation based on monthly salary. Due to various inconsistencies in the employment agreement, the Court determined that the term “base salary” was ambiguous and thus declined to dismiss or limit the claim.
Fraud. Defendant’s fraud claim was based on alleged misrepresentations made in 2018 regarding how his bonus and severance payments would be calculated under the employment agreement. The Court determined that Defendant’s allegations were insufficient to state a fraud claim. That Plaintiff now asserted a different interpretation of the agreement did not mean that Plaintiff’s agent had knowingly made a misrepresentation of existing fact at the time of the negotiations.
Statute of Limitations. Plaintiff asserted that Defendant’s breach of contract claim for the 2021 annual bonus and his NCWHA claim for the 2021 and 2022 annual bonuses were time-barred because they were brought outside their respective statutes of limitations. The parties disputed whether, under the employment agreement, bonuses were payable in the year in which they were earned or payable within 75 days of the close of the fiscal year. The Court concluded that under the NCWHA’s two-year statute of limitations, Defendant’s NCWHA claim for the 2021 annual bonus was barred regardless of which party’s position was correct. However, the Court determined that the employment agreement’s language regarding the payment date was ambiguous and, therefore, denied the motion as to the breach of contract claim for the 2021 bonus and the NCWHA claim for the 2022 bonus.
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Evergreen Builder Sols., LLC v. Taylor, 2025 NCBC 77 (N.C. Super. Ct. Dec. 29, 2025) (Houston, J.)
Key Terms: Rule 12(b)(6) motion to dismiss; breach of contract; non-compete agreement; non-solicit agreement; non-disclosure agreement; conversion; tortious interference with contract; legitimate business purpose; UDTPA; constructive trust; punitive damages
Plaintiff brought suit against two former employees, Taylor and Price, and their new employer (and related persons and entities, collectively the “Integrity Defendants”), asserting various claims relating to Taylor’s and Price’s alleged violations of the restrictive covenants in their employment agreements with Plaintiff. Defendants moved to dismiss most of the claims under Rule 12(b)(6).
Breach of Non-Compete and Non-Solicit Provisions. Although Plaintiff only operated in two cities in North Carolina, the non-compete and non-solicit provisions of Taylor’s and Price’s employment agreements prohibited them from competing “directly or indirectly” in any capacity with Plaintiff across at least a 150-mile radius spanning three states for at least three years. The Court found that these provisions were overbroad and unenforceable as they conceivably encompassed all services and products offered and clients serviced at any time regardless of whether Taylor and Price provided the products or services and regardless of whether Plaintiff provided the products or services while Taylor and Price were employed by Plaintiff. Thus, the breach of contract claim was dismissed to the extent based on the non-compete or non-solicit provisions.
Breach of Non-Disclosure/Confidentiality Provisions. With respect to these provisions, Taylor and Price argued that the claim should be dismissed because the information which Plaintiff alleged had been improperly disclosed was publicly available. However, even if the Court took judicial notice of the websites provided by Taylor and Price in support of this argument, the Court was unable to conclude that all of the information covered by the parties’ agreements was publicly available. As Plaintiff had minimally met the pleading requirements for this claim, the Court denied the motion to dismiss.
Conversion. Plaintiff alleged that Taylor and Price had converted its proprietary information by making copies of it while employed by Plaintiff and then using it without permission. The Court dismissed this claim because Plaintiff did not allege that it had demanded the return of the information or that it had actually been deprived of the information by Taylor’s and Price’s conduct.
Tortious Interference with Contract. Plaintiff alleged that the Integrity Defendants had tortiously interfered with Plaintiff’s agreements with Taylor and Price by inducing them to breach the agreements. The Court determined that, with respect to the non-compete and non-solicit provisions of the agreements, the claim failed because those provisions were unenforceable. With respect to the non-disclosure provisions, the claim failed as well because the complaint failed to factually allege that the Integrity Defendants acted with malice, i.e., without a legitimate business purpose. Moreover, the Court determined that the claim failed to meet the notice pleading standards and requirements because it lumped the six Integrity Defendants together and made only conclusory allegations of alter ego status. Without identifying which Defendant did what, the complaint failed to give sufficient notice of the claim.
Violation of the UDTPA. The Court dismissed the UDTPA claim against the Integrity Defendants because it was based solely on the tortious interference claim which was dismissed. However, the Court declined to dismiss the UDTPA claim against Taylor and Price based on Plaintiff’s existing claim for computer trespass, which defendants had not moved to dismiss and which may form the basis of a UDTPA claim.
Injunctive Relief, Constructive Trust, and Punitive Damages. As these are not standalone causes of action, the Court dismissed them without prejudice to Plaintiff’s ability to seek them as remedies if appropriate.
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Meridian Renewable Energy LLC v. Birch Creek Dev., LLC, 2025 NCBC Order 96 (N.C. Superior Ct. Dec. 29, 2025) (Houston, J.)
Key Terms: breach of contract; declaratory judgment; joint venture; chapter 11 bankruptcy; automatic stay; 11 U.S.C. § 362
Plaintiff Meridian Renewable Energy filed suit against Defendant Birch Creek Development asserting, inter alia, claims for breach of contract and declaratory judgment. Birch Creek responded by filing counterclaims against Meridian and third-party claims against Pine Gate Renewables for declaratory judgment and breach of fiduciary duty. A joint venture between Birch Creek and Pine Gate was also named as a third-party defendant. The dispute centered on a consulting agreement and multiple scopes of work (“SOWs”) between the parties. On November 6, 2025, Pine Gate filed chapter 11 bankruptcy in the Southern District of Texas. The parties agreed that the bankruptcy filing stayed all proceedings against Pine Gate under 11 U.S.C. § 362; Birch Creek, though, argued that the bankruptcy automatic stay should extend to all proceedings in the case, or, in the alternative, that the court should stay all proceedings in the case in its discretion.
The Court determined that the automatic stay did not prevent the ongoing litigation as between Meridian and Birch Creek on the whole. However, because both Meridian and Birch Creek sought declaratory judgments regarding the parties’ rights and interests under the consulting agreement and the SOWs, which would necessarily implicate Pine Gate, the Court determined that the declaratory judgment claims should be denied and dismissed without prejudice since the requested relief would not terminate the controversy between the parties. The remaining claims between Meridian and Birch Creek could proceed.
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Moore v. Brooks, 2025 NCBC Order 97 (N.C. Super. Ct. Dec. 31, 2025) (Houston, J.)
Key Terms: show cause; disqualification
As summarized here, the Court previously issued a show cause order to the law firm representing the Plaintiffs in this case due to their filing several motions on behalf of Defendant Redwood WI Holdings. The order directed the firm to show cause to why it should not be disqualified from representing Plaintiffs or Redwood WI Holdings or both.
After the show cause order was entered, Plaintiffs filed notices of voluntary dismissal without prejudice as to Redwood WI Holdings and several other defendants. The law firm then submitted a responsive brief asserting that Plaintiffs had intended to file suit against Redwood WI Holdings as a nominal defendant and that they did not intend to pursue causes of action against it. Because the law firm was no longer representing adverse parties, the Court in its discretion determined that the firm and its attorneys should not be disqualified as counsel.
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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.