Motion To Stay

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Wachovia Bank, N.A. v. Harbinger Capital Partners Master Fund I, Ltd., 2008 NCBC 6 (N.C. Super. Ct. March 13, 2008) (Diaz)

Wachovia was first to file its claims in North Carolina Superior Court, but the Business Court nevertheless stayed the action in favor of a later filed New York action.

The claims in both cases involved Wachovia’s arranging of $285 million in credit for Le Nature, which collapsed in a massive accounting fraud. After the fraud was revealed, the Defendants purchased some of Le Nature’s debt on the secondary market with the express intention of suing Wachovia for alleged complicity in the fraud.

Wachovia, in an effort to preempt the expected lawsuit by the Defendants in New York, filed a declaratory judgment in North Carolina and obtained an injunction prohibiting the Defendants from asserting any "personal tort claims." Wachovia asserted that Defendants had engaged in "illegal trafficking in litigation claims."

Undeterred, Defendants went ahead and filed a lawsuit against Wachovia Capital Markets in the Southern District of New York alleging a RICO violation. Defendants then moved to stay the North Carolina action pursuant to N.C.G.S. Sec. 1-75.12 in favor of their own later filed action.  The Court granted the motion after considering the ten factors enumerated in Lawyers Mut. Liab. Ins. Co. v. Nexsen Pruett Jacobs & Pollard, 435 S.E.2d 571, 573 (N.C. App. 1993).Continue Reading NY Lawsuit Trumps NC Lawsuit, Even Though NC Lawsuit Was First Filed

The Court granted a Motion to Stay in this case, ruling that the plaintiff was required to litigate its claims in New York, even though its North Carolina action had been filed before the New York action.   N.C.G.S. Sec. 1-75.12 in favor of their own later filed action.  The Court granted the Motion after considering the ten factors enumerated in Lawyers Mut. Liab. Ins. Co. v. Nexsen Pruett Jacobs & Pollard, 435 S.E.2d 571, 573 (N.C. App. 1993).

One reason the Court held that the plaintiff was not entitled to the…

Continue Reading Wachovia Bank, N.A. v. Harbinger Capital Partners Master Fund I, Ltd., 2008 NCBC 6 (N.C. Super. Ct. March 13, 2008) (Diaz)

The Court dismissed some of plaintiff’s claims because they had been the subject of a dismissal, with prejudice, in a prior action. The Court held that a dismissal with prejudice is a final judgment for purposes of res judicata. Other claims were being simultaneously litigated in another action between the parties. It was difficult to determine, because of the procedural posture of the cases, in which action the claims had been first filed. The Court had jurisdiction over both actions, and determined that it would manage them "so as to…

Continue Reading Phillips & Jordan, Inc. v. Mountaineer Land Group, LLC, 2006 WL 4537235 (December 28, 2006)(Diaz)

There were parallel actions challenging a merger, one in Delaware and one, filed first, in North Carolina. Defendant filed a motion to stay the North Carolina action. The Court identified twelve factors it would consider in such situations, including whether the issues should be settled in the corporation’s state of incorporation, the convenience of parties and witnesses, and the significance, if any, of the first to file. The Court stayed the North Carolina action pending the Delaware Court’s consideration of a proposed settlement.

Full OpinionContinue Reading Levy Investments v. James River Group, Inc., September 19, 2007 (Tennille)(unpublished)

The Court applied the literal definition of "first to file" in ruling on a Motion to Stay.  One party had e-filed in federal court several hours before the other party had hand filed a similar action in state court.  The Court held that the party which had e-filed had priority, and stayed the case before it because it was the second to be filed.  The Court rejected cases holding that cases filed on the same day should be deemed to have been filed simultaneously.

Full Opinion

Brief in Support of…

Continue Reading Signalife, Inc. v. Rubbermaid, Inc., 2008 NCBC 3 (N.C. Super. Ct. Feb. 8, 2008)(Diaz)

The Court granted the defendant’s motion to stay the action so that a related action pending in New York could proceed, pursuant to N.C.G.S. §1-75.12. The Court considered the following factors: "(1) the nature of the case, (2) the convenience of the witnesses, (3) the availability of compulsory process to produce witnesses, (4) the relative ease of access to sources of proof, (5) the applicable law, (6) the burden of litigating matters not of local concern, (7) the desirability of litigating matters of local concern in local courts, (8) convenience…

Continue Reading Wachovia Bank v. Deutsche Bank Trust Company Americas, 2006 NCBC 8 (N.C. Super. Ct. June 2, 2006)(Diaz)