The Court held that plaintiff, an insurance agent who had given up two profitable territories based upon the representations of defendants that he would be given two new territories, stated a claim for fraud. The Court noted that allegations based upon information and belief do not satisfy Rule 9(b), but said there were sufficient facts pled without that qualification for plaintiff to survive the motion.

The Court was clearly troubled, however, by the quality of the facts specified in the complaint to support the allegation that the defendants never intended to fulfill their promise. It stated that "Plaintiffs’ skeletal factual predicate as to the Defendants’ fraudulent intent treads dangerously close to the outer limit of legal sufficiency." It held, however, the Rule 9(b) allows such an allegation "to be averred generally."

The allegations were also sufficient for plaintiff to state a claim against another defendant based on allegations of conspiracy.

Plaintiff also made a claim of unjust enrichment, since he had lost the valuable sales organization he had given up when he surrendered his existing territories. Defendants argued that there had not been a direct transfer of benefits to them, but the Court held that it was sufficient that the defendants had gotten some benefit from the transfer.

Full Opinion

The Court granted Plaintiff’s Motion for Summary Judgment, ruling that the defendants had participated in a conspiracy in restraint of trade with regard to public contracts for the remediation of underground storage tanks. The Court found that the defendants had engaged in an orchestrated effort to submit artificially high bids in response to a solicitation for bids from a state agency. The defendants had done this by submitting an inaccurate survey to the state agency as to what a reasonable rate for their services would be, and by encouraging the members of their organization to quote that rate to the agency, even though they knew that it was inflated.

The Court held that the term "restraint of trade" is broad, and includes the collusive provision of false market data that will be used to set prices. The Court held that as a result, the bidding process for the state contract was not competitive, and that a number of firms would have submitted lower bids but for the conspiracy.

On the point of damages, the Court awarded 10% of the face amount of the contracts awarded, as provided for by N.C.G.S. §133-28(a), which it then trebled, pursuant to N.C.G.S. §75-16. The Court gave defendants a credit against the judgment for payments made by settling defendants.

Full Opinion

The Court denied a motion for preliminary injunction on two covenants not to compete.  It found that one covenant was overly broad, since it had no geographic scope whatsoever.  Another covenant was also overly broad, as it restrained the defendant from working for a competitor in any capacity at all, including as a security guard or a custodian.  The defendant had been plaintiff’s Director of Software Engineering. The Court refused to blue-pencil the covenant. 

The covenant was also invalid becasue it unreasonably prevented the defendant from having an interest in a mutual fund which held shares in a publicly traded competitor, and because it attempted to prevent contact with future customers.  The Court found that a restriction on future customers did not protect any legitimate interest of any employer. 

At the conclusion of its opinion, the Court rejected plaintiff’s argument that the Court was making a decision that was "bad for business," and therefore inconsistent with its mandate.  The Court held that "the North Carolina Business Court was created to provide judicial specialization in complex business litigation. This Court’s judges do not, however, decide cases based on the prevailing economic winds, nor do we consider how best to promote a litigant’s business interests. Our oath is the same as that of any judge of this state—to apply the law and decide cases without regard to the parties who are before us."

Full Opinion

Plaintiff, who was pro se, moved for Rule 11 sanctions based on defendant’s Rule 68 Offer of Judgment of a single dollar. After noting that the purpose of Rule 68 is to "encourage settlements and avoid protracted litigation," the Court found that the $1.00 offer provided little chance of seriously opening negotiations or settling a case. It found, instead, that the minimal offer "was not intended to promote a settlement but instead it was a tactical maneuver intended to trigger the cost-shifting mandate of Rule 68 in the event of a defense verdict."

The Court held, however, that this tactic did not warrant sanctions. The offer satisfied the literal requirement of Rule 68, and a defendant is not required to offer a substantial sum to obtain the benefit of the statute if it is convinced that the case lacks merit. The Court denied the motion for sanctions, although it expressed doubt as to whether the $1.00 offer would entitle the defendant to recover its costs if it was successful.

The plaintiff had also moved for sanctions against the defendant for removing the case to the Business Court. The defendant cross-moved for sanctions, and the Court granted this motion. It held that even though the plaintiff was pro se, he could have readily determined from the Court’s own information that the removal was proper. It found that the purpose of the motion was to harass the defendant, to unnecessarily delay the proceedings, and to needlessly increase the cost of litigation. Plaintiff, as a pro se litigant, was not exempt from the operation of Rule 11.

Full Opinion

This was the second effort of this plaintiff to secure class certification of a claim under the Federal Telephone Consumer Protection Act. The Court discussed the requirements for class certification, and found that certification should be denied. The individualized inquiries that would be necessary to determine whether the faxed advertisements at issue were unsolicited, and whether there was an "established business relationship" between the sender and the recipients predominated over the common issues. The lack of any evidence of consent, or of an established relationship, was not preclusive because the Court found that it would still be required to undertake this inquiry. Plaintiff could not avoid this inquiry through the manner in which it chose to define the class. Nor was the class action device the superior means of resolving controversies of this type. The members of the class were free to go to small claims court if they desired.

Full Opinion

The Court held that plaintiffs had failed to plead fraud with particularity, and dismissed their fraud claim pursuant to Rule 9(b) of the North Carolina Rules of Civil Procedure. Plaintiffs had attempted to plead both affirmative misrepresentations and fraud by concealment. With regard to the first, the Court held that the Complaint contained no specific allegations about the identity of the speaker, or the time or place when, or where, the supposedly fraudulent statements were made.

On the claim of fraud by concealment, the Court adopted the mutli-factor test adopted by the Court in Breeden v. Richmond Community College, 171 F.R.D. 189, 195 (M.D.N.C. 1997). It held that plaintiffs had presented no facts demonstrating what defendant would have gained by its alleged failure to disclose. Nor had plaintiff presented any facts showing why their reliance was reasonable and detrimental. Finally, plaintiffs’ claim of damages was questionable.

The Court also dismissed plaintiffs’ unfair and deceptive practices claims, on a variety of grounds. Plaintiffs were out of state residents, suing for an injury that had occurred in Texas. Their injury therefore did not arise from competition between the parties or from the consumption of goods or servies in North Carolina, and there was no substantial effect on North Carolina trade or commerce.

Full Opinion

This case involved a trustee caught between the income beneficiary and the remainder beneficiaries of a trust. The beneficiaries disputed whether proceeds of the sale of property were income, to be distributed to the income beneficiary, or principal, to be held in trust for the remainder beneficiaries. The trustee elected to put the money in a money market account while the beneficiaries attempted to solve the dispute. The Court engaged in a thorough discussion of the fiduciary duties of a trustee, and found that the trustee had acted reasonably and in good faith.

Full Opinion

The defendant, the trustee of a trust, hired lawyers to represent it with regard to a dispute between the income beneficiaries and the remaindermen of the trust. In the course of that dispute, the income beneficiary also sued the trustee for maladministration. The issue was the trust’s right to reimbursement for the fees incurred.

The Court found the trust’s retention of counsel to be a prudent action. The Court held that the trustee was entitled to recover the fees it had paid, because its actions fell within the category of "trust administration" and trustees are "entitled to be reimbursed out of the trust property for expenses properly incurred in the administration of the trust." The trustee’s role in the litigation was not passive, as it had a duty to protect the interests of all of the parties. The Court awarded the trustee fees out of the trust property.

The Court also ruled that the trustee was entitled to recover its fees for the maladminstration claims against it, because those claims came about as a direct result of the dispute between the beneficiaries. Furthermore, the trustee had been successful on its defense of those claims.

Full Opinion

The only issue before the Court in this case was whether it should dismiss plaintiff’s unfair and deceptive practices claim. Plaintiffs had sought to raise money to recapitalize their business. Defendants had promised to provide the necessary capital, but then reneged on their commitment. Plaintifs suffered a loss as a result, and sued on a variety of theories, including unfair and deceptive practices.

The Court held, reluctantly, that the only relevant question was "whether the transactions at issue involved securities or other financial instruments involved in raising capital." The Court held that they did. Therefore, the transaction was not one "in or affecting commerce" under the statute.

Full Opinion

Defendant sought a "prosecution bond," pursuant to N.C.G.S. §1-109, against the allegations made by plaintiff, a pro se litigant. The Court held that it was required to consider "(1) the relative merits of the case; (2) whether the costs in the case will be substantial; (3) the evidence, if any, of the plaintiff’s inability to satisfy a judgment for costs; and (4) whether the plaintiff has a history of filing frivolous lawsuits."

The Court found there was no evidence to support the imposition of a prosecution bond, and denied the motion. On the last factor, the Court found that the plaintiff’s history of being a prolific pro se litigant was insufficent to require the imposition of a bond.

The Court also held that plaintiff’s pro se status would not excuse him from compliance with the rules of the Court.

Full Opinion