North Carolina Business Court Socks Overly Persistent Plaintiff With Attorneys' Fees

North Carolina Business Court Socks Overly Persistent Plaintiff With Attorneys' Fees

Persistence can be a valuable quality, but when it leads to an unjustified refusal to give up a questionable case, the party suffering from persistency can get socked with attorneys' fees. That was the result in Judge Gale's Order on [June 12] in McKinnon v. CV Industries, Inc., No. 09 CVS 830, N.C. Super., Catawba Co. [enhanced version available to subscribers]).

McKinnon was entitled to benefits under a Severance Agreement which looked at when he had stopped competing with CV Industries after leaving his employment (yes, it's unusual for a party to say he's entitled to benefits because he was competing with his former employer but that was the situation here).

McKinnon argued throughout discovery, and into the Court of Appeals and then into a Petition for Discretionary Review with the NC Supreme Court that his employment with a company called Basofil Fibers was in competition with CV Industries. CV Industries manufactures high-end furniture and fabric through two subsidiaries. Basofil manufactures and sells fiber, but not fabric.

The Business Court's opinion by Judge Tennille on summary judgment -- and the Court of Appeals opinion -- turned on the meaning of the word "competition. McKinnon urged a very broad definition saying that Basofil "competed" with CV Industries because they both sold product to the furniture industry. Both Judge Tennille and the COA rejected that argument. The COA said that "competition":

entail[s] more than mutual existence in a common industry or marketplace; rather, it requires an endeavor among business entities to seek out similar commercial transactions with a similar clientele.

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Read this article in its entirety on North Carolina Business Litigation Report, a blog for lawyers focusing on issues of North Carolina business law and the day-to-day practice of business litigation in North Carolina courts.

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