North Carolina Court Of Appeals: Bright Stars and Letters of Credit

The Court of Appeals on Tuesday of last week, in Speedway Motorsports Int'l Ltd. v. Bronwen Energy Trading, Ltd., [ lexis.com subscribers may access the enhanced version of this opinion ] unwound a year old decision by the Business Court . In that decision, Judge Diaz had ruled that a Defendant...

North Carolina Business Court Sifts Through Warranty Claims Based on Asset Purchase Agreement

The Business Court yesterday sifted through cross motions for summary judgment brought by the seller and buyer of a business selling "power protection devices used primarily to control power surges and to provide power filtration in high volume office equipment." The case turned on the...

A Lesson from the Business Court on Pleading Partnership Liability

The June 8th opinion from Business Court Judge Judge Gale in Best Cartage, Inc. v. Stonewall Packaging, LLC , 2011 NCBC 15, dismissed the Plaintiff's complaint, finding its allegations that an alleged partner should be liable for the partnership debts, or otherwise liable on a veil piercing ...

North Carolina Business Court Resolves Dispute Among Lawyers Over Division Of Class Action Fee Pie

Yesterday, Judge Gale entered summary judgment against a North Carolina lawyer who claimed he was entitled to a greater share of a $3 million fee award to a group of plaintiffs' counsel in a series of settled class actions. The opinion was in the case brought by the lawyer seeking an enhancement...

Another Preliminary Injunction For Breach Of Fiduciary Duty

For the second time in a space of two weeks, the North Carolina Business Court granted a motion for a preliminary injunction against an LLC member/manager as a result of breaches of fiduciary duty. The first case was GoRhinoGo, LLC v. Lewis , which I blogged about last week, and the second case,...

North Carolina Business Court Strikes "Impertinent" Reply To Counterclaim

Have you ever filed a reply to a counterclaim where your reply was 89 pages long and to which you attached more than 200 pages of exhibits? I think you probably haven't, but the Plaintiff in the Business Court case Fountain v. Fountain Powerboats, Inc . did. When the Defendant made a Motion to...

We're Gonna Zoom A Zoom A Zoom in North Carolina

You probably know that there is a fight afoot between the North Carolina State Bar and the do-it-yourself vendor of legal documents, LegalZoom. The simmering dispute has been covered in the Wall Street Journal , the ABA Journal , and the case is now in the Business Court over Legalzooom's vitriolic...

Be Careful Before Going Paperless For An In Camera Review

Judges don't like to do in camera reviews of documents. Part of the reason is the quantity of documents involved. There was an Order from Judge Tennille a couple of years ago in which the Judge chastised the parties for submitting notebooks filled with repetitive paper copies of emails which...

Five Reasons You Should Care About The Rulings From The North Carolina Business Court Even Though The NC Court Of Appeals Says You Shouldn't

The NC Court of Appeals said earlier this month in Browne v. Thompson that the decisions of the Business Court have "no precedential value." Being a big fan of the Business Court, that rankled me. And being the author of a blog which focuses on the Business Court, it caused me to question...

North Carolina Business Court Sanctions Parties for Disobeying Discovery Order

When you think of sanctions, your mind probably goes to Rule 11 of the Rules of Civil Procedure. But what about Rule 37(b)(2)? It says that: if a party . . . fails to obey an order to provide or permit discovery, . . . a judge of the court in which the action is pending may make such orders in...

Fourth Circuit on LLC Law and Fried Chicken and Waffles

The Fourth Circuit doesn't get into matters of LLC law very often, but it did last week in Painter's Mill Grille, LLC v. Brown [ an enhanced version of this opinion is available to lexis.com subscribers ]. The LLC and its members were suing their landlord for discriminating against them on...

The NC Supreme Court Speaks on Fiduciary Duty and Piercing the Corporate Veil

The best lines in Green v. Freeman , decided last week by the NC Supreme Court, are that "[t]he doctrine of piercing the corporate veil is not a theory of liability [ an enhanced version of this opinion is available to lexis.com subscribers ]. Rather, it provides an avenue to pursue legal claims...

Never Give Up? Never Surrender? Probably Bad Advice in the North Carolina Business Court

Section 6-21.5 of the North Carolina General Statutes is the closest thing the State has to " loser pays ." It allows for the award of attorneys' fees to a prevailing party "if the court finds that there was a complete absence of a justiciable issue of either law or fact raised by...

Collecting on Judgments Against a Member's LLC Interest

A lawyer has limited remedies to collect on a judgment from a defendant who is unwilling to pay. If the defendant holds stock in a corporation, you can execute on the shares, take possession of them, and sell them. N.C. Gen. Stat. §1-324.3 . But if that ownership interest is in an LLC, a "charging...

A Million Dollars in Fees for Class Counsel in Wachovia/Wells Fargo Merger Lawsuit

When I first looked at Judge Murphy's (unpublished) Order in Ehrenhaus v. Baker earlier this month awarding attorneys' fees to the class action attorneys who sued Wachovia and Wells Fargo over their merger in 2008, I was disappointed, though the judge was following a mandate from the Court of...

General Assembly May "Modernize" The NC Business Court

A bill was introduced this week in the NC General Assembly that would be entitled "An Act to Modernize the Business Court By Making Technical, Clarifying, And Administrative Changes To The Procedures For Complex Business Cases." Here's the text of the bill . This is a summary of the...

Collateral Estoppel Sinks LLC Members' Claim

It might seem uncontroversial that the members of a limited liability company cannot follow with a personal lawsuit for injuries after their LLC litigates, and loses, claims based on the same issues. But it took the Business Court a while to get to that conclusion last week, in Lancaster v. Harold...

Complying With the Rules Is Important in the North Carolina Business Court

There's an ominous sounding sentence in a Business Court decision this week: A party practicing before the North Carolina Business Court should take the deadlines imposed by its orders and the rules of practice very seriously. Estate of Capps v. Blondeau . 2014 NCBC 24 at ¶36 [ an enhanced...

An Important Tip on Appealing a Decision From the North Carolina Business Court

The North Carolina Business Court is electronic. Paper copies of documents are not filed with the Business Court. So when you e-file a Notice of Appeal, is that sufficient for purposes of Rule 3 of the NC Rules of Appellate Procedure? Let's look at the Rule first. It says that: Any party entitled...

Mark Your Calendar For October 1st For Changes to the Business Court

If you litigate cases in the NC Business Court, mark your calendar for October 1st. That's when the General Assembly's "modernization" of the Business Court is due to become effective. The bill containing these changes was signed into law by Governor McCrory last week . I wrote about...

The Motion You Probably Shouldn't Bother to Make in the Business Court (or in Any Other Court)

I think I might have made a Motion for a More Definite Statement. If I did that, I did it only once, and I can't remember the result. Asking for a more definite statement is a rarely used litigation maneuver, allowed by Rule 12(e) of the North Carolina Rules of Civil Procedure . The Defendant...

Business Court Resolves a Trio of Discovery Issues

Three interesting discovery issues were resolved last week by Judge Bledsoe's Order in Gay v. Peoples Bank . First, can you obtain in discovery in a class action the fee arrangement between the plaintiff and his lawyers? Second, can you obtain (in any kind of case) a protective order against the...

Trade Secrets Cases in the NC Business Court: You Show Me Yours Before I'll Show You Mine

There's a new roadblock for plaintiffs in the Business Court suing over trade secrets. It was imposed last week by Judge Bledsoe in DSM Dyneema, LLC v. Thagard , 2014 NCBC 50 , and it bars the plaintiff from proceeding with discovery until the trade secrets allegedly being misused by the defendant...