Justia North Carolina Supreme Court Opinion SummariesArticles Posted in Business Law
Button v. Level Four Orthotics & Prosthetics, Inc.
The Supreme Court affirmed the judgment of the trial court in this complex business dispute, holding that neither party successfully demonstrated a substantial right that had been affected or that an error likely occurred at the trial court.Plaintiff brought this complaint seeking a declaratory judgment setting forth his rights under an Employment Agreement and Level Four Holdings Agreements. Plaintiff also alleged claims for tortious interference with a contract against Penta Mezzanine SIBC Fund I, L.P. (Penta Fund), Seth Ellis, and Level Four SBIC Holdings. The trial court (1) determined it did not have subject matter jurisdiction over Plaintiff's declaratory judgment claim; (2) dismissed the tortious interference with contract claim against all defendants; and (3) denied motions to dismiss for lack of personal jurisdiction by Level Four Holdings and Ellis. The Supreme Court affirmed, holding that there was no error in the proceedings below. View "Button v. Level Four Orthotics & Prosthetics, Inc." on Justia Law
Reynolds Am. Inc. v. Third Motion Equities Master Fund Ltd.
The Supreme Court affirmed the judgment of the business court determining the fair value of shares held by shareholders in Reynolds American Inc. (RAI), holding that the dissenters' challenges to the business court's judgment were without merit.RAI sought judicial appraisal after it was acquired by British American Tobacco. The business court determined that the $59.64 per share plus interest RAI paid the dissenters after they notified RAI of their intent to seek judicial appraisal equaled or exceeded the fair value of RAI shares as of the date of the merger and that no further payments to the dissenters was required. The Supreme Court affirmed, holding that the business court correctly concluded that the dissenters were paid fair value for their shares. View "Reynolds Am. Inc. v. Third Motion Equities Master Fund Ltd." on Justia Law
Bandy v. A Perfect Fit For You, Inc.
The Supreme Court reversed the order of the business court refusing to authorize the court-appointed receiver for the company A Perfect Fit For You, Inc. to pay fees to the law firm Womble Bond Dickinson (US), LLP for services rendered by Philip Mohr, one of the firm's attorneys, holding that the business court erred.The business court refused authorization solely on the basis of its conclusion that Mohr and the receiver had flagrantly disregarded requirements imposed by a previous court order establishing the process Womble and the receiver were required to follow when requesting authorization for fee payments. The Supreme Court reversed, holding that the business court (1) abused its discretion in denying authorization for the receiver to pay Womble fees incurred for Mohr's work; (2) erred in imposing monetary sanctions on Womble; and (3) erred in denying the receiver's request for permission to pay Womble's fee-litigation fees without making the necessary findings regarding the value to the receivership of the work that generated those fees. View "Bandy v. A Perfect Fit For You, Inc." on Justia Law
Chisum v. Campagna
In this appeal arising from a dispute concerning the parties' respective membership interests in three related LLCs the Supreme Court affirmed in part and reversed in part the judgment of the trial court, holding that none of Defendants' challenges to the trial court's judgment and related orders had merit and that, with one exception, the same was true of Plaintiff's challenges to the judgment and orders.Plaintiff filed a complaint alleging claims for conversion, unfair and deceptive trade practices, unjust enrichment, a declaration that he continued to own interests in each of the LLCs and a claim seeking judicial dissolution of the LLCs. The trial court entered judgment in favor of Plaintiff as to certain claims and in favor of Defendants as to other claims. The parties cross-appealed. The Supreme Court affirmed, holding (1) the trial court erred in deciding to direct a verdict in favor of Defendants with respect to Plaintiff's claims related to Carolina Coast Holdings, LLC; and (2) the remaining claims on appeal were without merit. View "Chisum v. Campagna" on Justia Law
Orlando Residence, Ltd. v. Alliance Hospitality Management, LLC
The Supreme Court modified and affirmed the decision of the Business Court dismissing Defendant's crossclaims against a co-defendant, holding that the Business Court correctly dismissed the crossclaims.This appeal arose from litigation between Kenneth Nelson, Alliance Hospitality Management, LLC, and Orlando Residence, Ltd. Orlando filed this lawsuit against Alliance and Nelson seeking recovery of funds that Alliance allegedly wrongfully transferred. Nelson, appearing pro se, filed a document in which he asserted eighteen crossclaims against Alliance seeking damages and various forms of equitable relief. The Business Court dismissed the claims asserted by Orlando and all of Nelson's crossclaims. Nelson appealed, arguing that the Business Court incorrectly ruled that a crossclaim asserted by one defendant against a co-defendant automatically ceases to be viable once the plaintiff's original claims against the defendants are dismissed. The Supreme Court agreed, holding (1) with the exception of certain crossclaims, the dismissal of the original action does not, by itself, mandate the dismissal of a crossclaim so long as the crossclaim meets the Rule 13(g) prerequisites for bringing such a claim; and (2) because res judicata barred Nelson's "qualifying claims," the dismissal of Nelson's remaining fifteen crossclaims was proper. View "Orlando Residence, Ltd. v. Alliance Hospitality Management, LLC" on Justia Law
Global Textile Alliance, Inc. v. TDI Worldwide, LLC
The Supreme Court affirmed the decision of the Business Court in this action brought by Global Textile Alliance, Inc. (GTA) alleging that Defendants engaged in several improper acts during the formation and operation of Dolven Enterprises, Inc., holding that the Business Court did not abuse its discretion either by ordering production of the relevant communications or by conducting a limited review of those communications.When it was discovered that GTA had withheld confidential correspondence between GTA and its outside counsel and Haspeslagh conveying legal advice regarding the matters giving rise to the instant litigation Defendant filed a motion to compel GTA to produce the communications. Defendant argued that GTA waived the attorney-client privilege by including Stefaan Haspeslagh on communications with GTA's counsel. The Business Court granted the motion to compel. The Supreme Court affirmed, holding that the Business Court (1) did not abuse its discretion by determining that communications involving Haspeslagh were not privileged under the attorney-client privilege; (2) did not err in determining that communications involving Haspeslagh were not protected under the work-product doctrine; and (3) did not err by not conducting an exhaustive in camera review of all communications involving Haspeslagh. View "Global Textile Alliance, Inc. v. TDI Worldwide, LLC" on Justia Law
Beem USA Limited-Liability Limited Partnership v. Grax Consulting LLC
In this business case, the Supreme Court reversed the orders of the business court denying Plaintiffs' motion for default judgment based on its finding that Plaintiffs had failed to satisfy their burden of proving that the court possessed personal jurisdiction over Defendant, a nonresident company, holding that Defendant's contacts with North Carolina were sufficient to permit the exercise of personal jurisdiction over it in North Carolina state courts.In the complaint, Plaintiffs sought an injunction, in part, directing Defendant to turn over certain documents and information necessary for Plaintiffs to wind up the affairs of a limited-liability limited partnership. A default was entered against Defendant, but the business court denied Plaintiffs' motion for default judgment. The Supreme Court reversed, holding that Defendant had sufficient minimum contacts with this state such that a North Carolina court could constitutionally exercise personal jurisdiction over it. View "Beem USA Limited-Liability Limited Partnership v. Grax Consulting LLC" on Justia Law
Vizant Techs., LLC v. YRC Worldwide, Inc
In this action arising out of an alleged breach of a professional services agreement (PSA) between Vizant Technologies, LLC and YRC Worldwide Inc. the Supreme Court concluded that YRC's motion for summary judgment should be granted in part and denied in part, holding that partial summary judgment should be granted in YRC's favor on the issue of certain damages involving automated clearing house (ACH) batch payments.Vizant sought declaratory and injunctive relief against YRC as well as damages for breach of the PSA, claiming that it was owed outstanding fees for savings that YRC allegedly realized through successful efforts to pay using ACH rather than credit cards. Vizant argued that the PSA required YRC to pay a fee to Vizant because YRC realized savings as a result of the strategies identified by Vizant. YRC, however, argued that it did not owe Vizant a fee because Vizant's suggestions did not actually cause YRC to change business practices and realize savings. The Supreme Court granted in part and denied in part YRC's motion for summary judgment, holding (1) Vizant failed to produce evidence to support its claimed ACH damages; and (2) YRC's summary judgment motion is denied with regard to Vizant's breach of contract claim. View "Vizant Techs., LLC v. YRC Worldwide, Inc" on Justia Law
Azure Dolphin, LLC v. Barton
The Supreme Court affirmed the orders of the trial court dismissing the claims that Plaintiffs asserted their first amended complaint and denying Plaintiffs’ second motion to amend their complaint, holding that the trial court did not err by dismissing Plaintiffs’ amended complaint and denying Plaintiffs’ second amendment motion.Plaintiffs commenced this action by filing a complaint asserting fifteen claims. Plaintiffs subsequently amended their complaint and then filed a motion for leave to file a second amended complaint. The trial court denied the second amendment motion because it involved undue delay and suggested the existence of a dilatory motive. After Plaintiffs voluntarily dismissed some of their claims, the trial court granted Defendants’ dismissal motion. The Supreme Court affirmed, holding that the orders of the district court were not an abuse of its discretion. View "Azure Dolphin, LLC v. Barton" on Justia Law
Corwin v. British American Tobacco PLC
The Supreme Court reversed the decision of the Court of Appeals reversing the conclusion of the Business Court that British American Tobacco PLC (BAT) did not owe fiduciary duties to other Reynolds American, Inc. shareholders in the context of Reynolds’ acquisition of Lorillard, Inc. and granting BAT’s motion to dismiss, holding that the Business Court properly dismissed Plaintiff’s breach-of-fiduciary claim against BAT.BAT owned forty-two percent of the stock in Reynolds and agreed to fund a portion of the Lorillard transaction by purchasing enough of the newly acquired shares to maintain its forty-two percent ownership interest. This agreement diluted the voting power of Reynolds’ other minority shareholders, including Plaintiff. Plaintiff filed a putative class action suit on behalf of similarly situated stockholders. The Business Court granted BAT’s motion to dismiss. The Court of Appeals reversed, concluding that Plaintiff’s allegations, if true, would satisfy the actual control test as elucidated in Delaware caselaw. The Supreme Court reversed, holding that because BAT was not a majority or controlling stockholder, it did not owe fiduciary duties to the other Reynolds stockholders. View "Corwin v. British American Tobacco PLC" on Justia Law