N.C. Business Court Opinions, January 14, 2026 – January 27, 2026
Lucas v. Hopper, 2026 NCBC 1 (N.C. Super. Ct. Jan. 14, 2026) (Davis, J.)
Key Terms: motion to strike affidavit; summary judgment; partnership; joint venture; principal and agent; unjust enrichment
This case involves a dispute regarding the business relationship between Andrew Lucas and Harold Hopper. Plaintiff Lucas brought suit alleging that their relationship gave rise to an implied partnership or joint venture and that he had been denied his full share of the profits. Defendant Hopper maintained that Lucas was merely an independent contractor and moved for summary judgment on all claims.
Motion to Strike. In response to Defendants’ motion for summary judgment, Plaintiffs submitted a lengthy affidavit from Lucas. Upon Defendants’ motion to strike, the Court struck the portions of Lucas’s affidavit which conflicted with his prior sworn deposition testimony.
Partnership Claims. Plaintiffs’ first six claims were premised on the theory that a partnership existed between the parties. The Court concluded that no partnership existed; therefore, it granted summary judgment in favor of Defendants on these claims and granted a declaratory judgment that no partnership existed. The Court’s conclusion was based on the following: 1) there was no business co-owned by Plaintiffs since LH Service, the only business at issue, was owned solely by Linda Hopper; 2) all projects underlying the lawsuit took place pursuant to contracts between LH Service and a third-party; 3) Lucas lacked authority to enter into contracts or sign checks with respect to these projects; 4) all of the key indicia of a partnership were absent (e.g., no capital contributions, no partnership bank account, no partnership tax returns, no partnership name, no partnership registered with the State); and 5) all payments flowing to Lucas were made through 1099s rather than K-1s. That Lucas received a portion of LH Service’s profits from the projects he worked on and that the parties sometimes referred to themselves as partners were insufficient to establish a partnership.
Joint Venture Claims. Plaintiffs’ next three claims were premised on the alternative theory that a joint venture existed between the parties. The Court rejected this theory because there was no evidence that the Plaintiffs stood in the relationship of both principal and agent to each of the other alleged co-venturers. Accordingly, the Court granted summary judgment in favor of Defendants on these claims and granted a declaratory judgment that no joint venture existed.
Unjust Enrichment. The Court denied Defendants’ motion for summary judgment on Plaintiffs’ unjust enrichment claim. The evidence in the record showed that Andrew had performed work for LH Service, that he had received some but not all of the amounts owed for this work, and that Hopper had admitted that money was owed to Lucas. The Court, however, requested additional briefing on the issue of which of the individuals/entities in the suit should be parties to the unjust enrichment claim.
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State ex rel. Jackson v. MV Realty PBC, LLC, 2026 NCBC 2 (N.C. Super. Ct. Jan. 16, 2026)
Key Terms: summary judgment; homeowner benefit agreement; UDTPA; covenant running with the land; notice of lis pendens; liquidated damages; unenforceable penalty; Telephone Solicitation Act; telephone solicitor; robocall; “Do Not Call” Registry; individual liability; permanent injunction
The NC Attorney General brought this action alleging that Defendants engaged in unfair or deceptive trade practices and other violations of North Carolina law through their enterprise in which they persuaded homeowners to sign “Homeowner Benefit Agreements” obligating them to use defendants’ agents as their exclusive real estate brokers if they sold their homes in the next forty years and authorizing monetary penalties for breach of the HBAs. The State moved for partial summary judgment on its UDTP claims and full summary judgment on its Telephone Solicitation Act claims.
UDTP Claims. The State first contended that Defendants violated the UDTPA each time they filed a memorandum with the register of deeds stating that the HBA constituted a covenant running with the land, thereby creating a cloud on the homeowners’ title. The Court agreed. The HBAs were akin to listing agreements which were contracts for personal services and therefore not covenants running with the land. Under N.C.G.S. § 14-118.6, the presentation of an instrument for recording that purports to be an encumbrance that is determined to be false constitutes a violation of the UDTPA. Accordingly, the Court granted summary judgment in the State’s favor that Defendants had committed an unfair or deceptive trade practice by filing memorandums that falsely claimed to contain covenants that ran with the land.
The State next contended that Defendants violated the UDTPA by filing a notice of lis pendens with the clerk of court each time they sued a homeowner for breach of the HBA and sought to recover an early termination fee. Defendants had previously argued that the lis pendens were proper because the HBAs affected title to real property. However, they abandoned this meritless argument at summary judgment and only argued that because the State hadn’t placed in the summary judgment record each of the actual lis pendens and related complaints, the Court could not rule on the validity of each lis pendens. The Court rejected this argument because the State’s claim was based on Defendants’ pattern and practice of filing a lis pendens based solely on a homeowner’s alleged breach of a contract for personal services, which did not require the Court to make a determination regarding whether the homeowners had actually breach the HBAs. Accordingly, the Court granted summary judgment in the State’s favor that Defendants had committed an unfair or deceptive trade practice by the filing of lis pendens.
Lastly, the State contended that Defendants’ pattern and practice of collecting an early termination fee (ETF) from homeowners alleged to have breached their HBA constituted an unfair or deceptive trade practice. Pursuant to the HBA, the amount of the ETF was calculated based upon the greater of the value of the home at the time the HBA was signed or its value at the time the HBA was breached. The Court concluded that this provision was not a liquidated damages provision but was instead an unenforceable penalty. Accordingly, the Court granted summary judgment in the State’s favor that Defendants had committed an unfair or deceptive trade practice each time an ETF was collected.
Telephone Solicitation Act Claims. The State contended that Defendants violated the TSA by 1) calling nearly 150,000 phone numbers on the “Do Not Call” Registry, and 2) making robocalls. Defendants asserted that they did not violate the TSA because 1) MV Realty did not meet the statutory definition of “telephone solicitor,” 2) their calls weren’t robocalls because the calls involved human interaction, and 3) the calls were only made to people who had consented to receive the calls. The Court concluded that 1) MV Realty was a telephone solicitor because the purpose of the calls was to solicit a business transaction between the parties, 2) the limited human participation in the calls did not take them out of the scope of a robocall; and 3) Defendants failed to produce admissible evidence sufficient to create a dispute of material fact that the homeowners had consented to the calls. Accordingly, the Court granted summary judgment in the State’s favor on its claims under the TSA.
The Court also determined that both the entity defendants and the individual defendants (who were all substantially involved in the enterprise’s operations) were liable on the UDTPA and TSA claims. The Court entered a permanent injunction enjoining Defendants from collecting ETFs or filing memoranda or notices of lis pendens in connection with the program. The Court deferred ruling on the State’s request for monetary relief.
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Bui v. Phan, 2026 NCBC 3 (N.C. Super. Ct. Jan. 21, 2026) (Conrad, J.)
Key Terms: judgment; bench trial; LLC; member expulsion; declaratory judgment; breach of operating agreement; good faith; advice of counsel
Plaintiff and Defendant each owned a 50% membership interest in Golden Rooster LLC. After their relationship deteriorated, the parties agreed that Defendant would buy out Plaintiff’s interest. Disputes arose, however, and Plaintiff eventually brought suit 1) seeking a declaratory judgment that Defendant was no longer a member of the company because she was either subject to expulsion or had involuntary withdrawn; and 2) asserting a claim for damages for Defendant’s alleged breaches of the operating agreement. Following a bench trial, the Court entered judgment in favor of Defendant and declared that Defendant remained a member of Golden Rooster.
The Court concluded that the operating agreement, read as a whole, did not allow termination of membership for acts or omissions that the member believed in good faith to be within the scope of authority conferred or implied by the operating agreement. The evidence did not support a finding that Defendant had engaged in intentional wrongdoing. Rather, the evidence showed that Defendant had acted in good faith, including, in several instances, based upon her reliance on advice of counsel.
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Law Off. of Ashley-Nicole Russell, P.A. v. McLawhorn Legal Servs. PLLC, 2026 NCBC 4 (N.C. Super. Ct. Jan. 21, 2026) (Robinson, C.J.)
Key Terms: Rule 12(b)(6); tortious interference with contract; conversion; intangible property; computer trespass; UDTPA; constructive trust; punitive damages
This case arises out of a soured business relationship between two attorneys—Plaintiff Russell and Defendant McLawhorn—who co-own a family law practice—M&R. Each attorney is also the sole owner of their respective individual practice—Plaintiff ANR Law and Defendant MLS. Plaintiffs brought suit alleging that Defendants engaged in unlawful conduct in an attempt to steal Plaintiffs’ business. Defendants moved to dismiss under Rules 12(b)(6) and 41(b). As neither party had suggested that oral argument was necessary, the Court determined the motion without a hearing.
Tortious Interference with Contract. The Court concluded that the complaint’s allegations were deficient because it was unclear which firm’s—Plaintiff ANR Law’s or non-party M&R’s—client contracts were allegedly interfered with. To the extent the claim was based on interference with M&R’s contracts, the claim failed because M&R wasn’t a party and Plaintiffs didn’t purport to bring a derivative claim on behalf of M&R. To the extent the claim was based on interference with ANR Law’s contracts, the claim failed because the allegations were vague, conclusory, and didn’t put Defendants on sufficient notice of the basis of the claim.
Conversion. To the extent the claim was based on intangible personal property, such as confidential existing clients and prospective clients, accounts, marketing strategy, processes, techniques, and services, the claim failed because a conversion claim can’t be based on intangible property. To the extent the claim was based on tangible personal property, the claim failed because Plaintiffs didn’t allege that Defendants deprived or excluded Plaintiffs of use of any such property.
Computer Trespass. This claim failed because the allegations were vague and conclusory. Further, Plaintiffs’ briefing indicated that the claim was based on Defendants’ alleged computer trespass of M&R’s computer system. Since M&R was not a party and Plaintiffs hadn’t brought a derivative claim on behalf of M&R, Plaintiffs couldn’t recover for trespass to M&R’s property.
Unfair and Deceptive Trade Practices. As Plaintiffs’ UDTPA claim was premised solely upon its other claims, which were dismissed, the UDTPA claim was dismissed as well. Because the UDTPA claim failed on other grounds, the Court didn’t reach the issue of whether the learned profession exemption applied.
Constructive Trust and Appointment of a Receiver. The Court dismissed this claim because neither a constructive trust nor the appointment of a receiver pursuant to N.C.G.S. §§ 55-14-32 and 1-502(a) are standalone claims.
Punitive Damages. The Court dismissed this claim because punitive damages is a remedy not a standalone claim.
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N.C. Dep’t of Revenue v. Asphalt Emulsion Indus., LLC, 2026 NCBC 5 (N.C. Super. Ct. Jan. 21, 2026) (Houston, J.)
Key Terms: administrative law judge; petition for judicial review; summary judgment de novo standard of review; Tax Act; N.C.G.S. § 105-164.1, et seq.; sale; consideration
The N.C. Department of Revenue appealed from the Administrative Law Judge’s Final Decision granting summary judgment in favor of Asphalt Emulsion Industries, LLC and determining that AEI’s transfers of finished emulsion product to affiliated entities (“Transfers”) were not subject to sales tax, such that AEI was not required to pay sales tax to DOR for the Transfers under N.C.G.S. § 105-164.1, et seq.
Standard of Review. In reviewing a petition for judicial review arising from a final decision granting summary judgment, the standard of review is de novo.
Summary Judgment. Under the Tax Act, a “sale” requires a “transfer for consideration.” Thus, in order for a transfer to be a sale and subject to sales tax, the transfer must be for consideration. Here, the DOR contended that the Transfers were for consideration based on 1) internal accounting entries reflecting hypothetical markups; 2) various avenues of cashflow from AEI’s parent company to AEI; and 3) the presumption that if the Transfers weren’t gifts, they must be sales. The Court rejected each of these purported bases for consideration. First, there was no evidence that the accounting entries represented reciprocal transfer obligations or that any payments were ever made or expected relating to the entries. Second, there was no evidence that the cash infusions from AEI’s parent were linked to or in exchange for the Transfers. Finally, the Court declined to adopt a presumption of consideration—just because the Transfers weren’t a gift didn’t necessarily mean that they were a sale. Accordingly, the Court affirmed the ALJ’s decision and granted summary judgment in favor of AEI on the Transfer issue.
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Moore v. Brooks, 2026 NCBC 6 (N.C. Super. Ct. Jan. 23, 2026) (Houston, J.)
Key Terms: specific personal jurisdiction; Rule 12(b)(2); Rule 12(b)(6); intentional infliction of emotional distress
As previously summarized here, the family of Drue Moore brought this suit after Moore’s death, alleging various claims arising from a dispute between Moore and a company in which he was involved, Winthrop Intelligence, LLC. In that underlying dispute, Winthrop’s CFO Scott Brooks accused Moore of misappropriating funds, demanded that Moore assign his assets to Winthrop or Brooks, and threatened criminal charges and arrest. Brooks moved to dismiss for lack of personal jurisdiction and also sought dismissal of plaintiffs’ claim for intentional infliction of emotional distress under Rule 12(b)(6).
Personal Jurisdiction. Brooks, an Arizona resident, contended that that the Court did not have personal jurisdiction over him because 1) the contacts between him and Moore were created by Moore, and 2) Brooks’ conduct was on behalf of Winthrop. Because Brooks did not introduce competent evidence contradicting any of the relevant allegations of the complaint, the Court based its ruling on the allegations of the complaint, which, under the circumstances, were assumed to be true for Rule 12(b)(2) purposes. The Court concluded that the totality of Brooks’ alleged conduct was sufficient to subject him to jurisdiction before the Court—among other conduct, and acting on behalf of both Winthrop and himself individually, Brooks oversaw Winthrop’s North Carolina business operations, attempted to effectuate the transfer of North Carolina property to himself or to Winthrop, and directed demands and threats to Moore in North Carolina (including the threat to involve North Carolina law enforcement).
Intentional Infliction of Emotional Distress. The Court found that the complaint’s allegations that Brooks had demanded that Moore transfer certain assets to which Brooks had no legal claim and threatened to have him charged and arrested if he did not do so, resulting in Moore committing suicide, were sufficient to state an IIED claim.
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Charles Schwab & Co., Inc. v. Marilley, 2026 NCBC 7 (N.C. Super. Ct. Jan. 23, 2026) (Earp, J.)
Key Terms: motion to amend; futility; timeliness; summary judgment; Uniform Transfer to Minors Act; laches; statute of limitations; interpleader
As previously summarized here, this interpleader action was brought by Charles Schwab & Co. to determine the ownership of funds it held in a brokerage account. The funds were originally gifted to Ms. Marilley by her grandfather, Dr. Marilley, through the creation of an account subject to the Uniform Transfers to Minor Act. Mr. Marilley (Ms. Marilley’s father) later became the custodian of the UTMA Account and, after Ms. Marilley turned 21, a dispute arose between her and her father regarding ownership of the funds. Ms. Marilley moved for summary judgment as to ownership, Mr. Marilley moved to amend his answer, and Schwab moved for interpleader.
Summary Judgment on Declaratory Judgment Claim. Ms. Marilley requested that the Court enter summary judgment declaring her the sole and rightful owner of the funds. Mr. Marilley argued that summary judgment should be denied because 1) the claim was time-barred under either the three-year statute of limitations for contract-based claims or the doctrine of laches; and 2) genuine issues of material fact existed. With respect to Mr. Marilley’s affirmative defenses, the Court determined that he had waived the defenses by failing to plead them in his answer to Ms. Marilley’s crossclaims. In any event, the declaratory judgment claim was quiet-title based, not contract-based, and, therefore, the three-year statute of limitations did not apply. Mr. Marilley also had not demonstrated that laches applied because he had not shown any change in the condition of the funds or the relationship of the parties or any prejudice. The Court agreed with Ms. Marilley that the undisputed facts entitled her to summary judgment. There was no dispute that Dr. Marilley had irrevocably gifted the funds to Ms. Marilley as custodial property under the UTMA. Mr. Marilley’s argument that Ms. Marilley had granted him an ownership interest in the funds by signing a form converting the UTMA Account into a joint account was without merit because she had signed the form before she turned 21. Under the applicable UTMA, she had no power to affect the ownership of custodial funds in the UTMA Account until she had turned 21.
Motion to Amend Answer. Mr. Marilley moved to amend his answer to add the affirmative defenses discussed above and a crossclaim for unjust enrichment. The Court denied the motion. The affirmative defenses were futile for the same reasons as already discussed. The unjust enrichment claim was futile because the undisputed facts showed that Dr. Marilley, not Mr. Marilley, had bestowed the funds on Ms. Marilley. Further, to the extent Ms. Marilley had promised to return excess funds, such a promise would raise contract issues and foreclose a claim for unjust enrichment. The Court also concluded that Mr. Marilley had unduly delayed in seeking to amend in that the motion to amend was not filed until the eve of the hearing on the summary judgment motion.
Interpleader. The Court determined that interpleader was appropriate, and since it had already determined that the funds belonged solely to Ms. Marilley, the Court ordered Schwab to remove the restrictions on the funds and disburse them to Ms. Marilley. The Court also discharged Schwab of liability to either Mr. Marilley or Ms. Marilley respecting ownership of the funds and dismissed Schwab from the case.
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WP Church, LLC v. Whalen, 2026 NCBC Order 4 (N.C. Super. Ct. Jan. 15, 2026) (Davis, J.)
Key Terms: preliminary injunction; stay pending appeal; N.C.G.S. § 1-294; substantial right; discretionary stay
Plaintiff WP Church and Defendant Whalen are two members of 5Church Charleston, which was formed to operate a Church and Union restaurant in Charleston. WP Church filed this suit against Whalen alleging numerous claims predicated on Whalen’s alleged self-dealing and misappropriation of 5Church’s assets. 5 Church later filed a third-party complaint and cross claims against WP Church and others based on WP Church’s alleged breaches of a non-competition provision in 5Church’s operating agreement. 5Church sought a preliminary injunction enjoining WP Church from violating the non-competition provision, which was denied. WP Church sought a preliminary injunction enjoining Whalen from making transfers of 5Church’s assets outside the ordinary course of business, which was granted. 5 Church appealed from the denial of its preliminary injunction motion and Whalen appealed from the grant of a preliminary injunction against him. 5Church and Whalen jointly filed a motion to recognize the automatic stay under N.C.G.S. § 1-294 or for a discretionary stay pending the appeals.
The Court denied the motion. No automatic stay existed under N.C.G.S. § 1-294 because the appeals were interlocutory and neither appealing party had shown that the injunction orders affected a substantial right. The Court also declined to grant a discretionary stay because neither appealing party had shown that they were likely to suffer prejudice absent a stay or that they were likely to succeed on the merits.
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Lafayette Vill. Pub, LLC v. Burnham, 2026 NCBC Order 5 (N.C. Super. Ct. Jan. 15, 2026) (Davis, J.)
Key Terms: motion for order to show cause; criminal contempt; N.C.G.S. § 5A-11(a)(3); willful conduct; administrative dissolution
This case involves a long-running dispute over the management and control over Lafayette Village Pub between its three members—Plaintiffs John Bronson and Paul Bronson and Defendant Kenneth Burnham. While the lawsuit was pending, the parties were notified that the Pub’s lease would not be renewed and that it needed to vacate the premises by the end of 2024. After Defendant informed his office administrator of this and that the Pub would no longer be in business, she—on her own initiative and without direction from or knowledge by the Defendant—filed articles of dissolution for the Pub with the N.C. Secretary of State in early May 2025. The parties learned of the administrative dissolution later that month but neither side made any effort to have the Pub’s status reinstated. On 4 December 2025, Plaintiffs filed the present motion, contending that the dissolution was unauthorized and requesting that the Court enter an order for Defendant to show cause as to why he should not be held in criminal contempt for violating N.C.G.S. § 5A-11(a)(3), which defines criminal contempt to include “willful disobedience of, resistance to, or interference with a court’s lawful process, order, directive, or instruction or its execution.”
The Court denied the motion because there was no evidence showing that the dissolution was the direct result of the willful acts of Burnham. The only admissible evidence before the Court showed that the office administrator acted without Defendant’s knowledge or permission when she had the Pub administratively dissolved.
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Kennedy v. Ringel, 2026 NCBC Order 6 (N.C. Super. Ct. Jan. 21, 2026) (Conrad, J.)
Key Terms: motion for preliminary injunction; prior restraint on speech; jurisdiction; likelihood of success on the merits; early mediation
This case arises from a dispute among the members and managers of Refuge Builders, LLC (which was not made a party to the suit). Plaintiffs alleged that Defendants usurped control of the company and made defamatory statements to clients. Plaintiffs sought a preliminary injunction to enjoin Defendants from making false statements about them to third parties and to bar Defendants from denying Plaintiffs access to Refuge Builders’ accounts and excluding them from its management.
The Court denied the motion without prejudice. First, with respect to the false statements, Plaintiffs had made no showing that would warrant the extraordinary remedy of a prior restraint on speech. Second, the Court has no authority to enter an order that would affect Refuge Builders’ management or assets because Refuge Builders was not a party to the lawsuit. Third, each of Plaintiffs’ claims had a fatal defect or lacked the evidentiary support needed to establish a likelihood of success on the merits. However, based on its discussion with counsel at the PI hearing, the Court stayed further proceedings and ordered the parties to early mediation.
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Sambria Consulting Grp., LLC v. Mayfield, 2026 NCBC Order 7 (N.C. Super. Ct. Jan. 22, 2026) (Robinson, C.J.)
Key Terms: order on designation; N.C.G.S. § 7A-45.4(a)(1); breach of contract
Plaintiff initiated this lawsuit asserting various claims arising from the alleged breach of an asset purchase agreement between the parties. Defendants timely filed a notice of designation under N.C.G.S. § 7A-45.4(a)(1), asserting that designation was proper because the suit involved an alleged breach of contract and one of the defendants is a North Carolina corporation.
The Court concluded that designation was not proper because resolution of the pleaded claims would require only a straightforward application of contract law principles and did not implicate the law governing corporations under N.C.G.S. § 7A-45.4(a)(1).
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