.jpg)
It was a busy opinion day today in the North Carolina Court of Appeals: there were 44 published opinions, three of which I’m commenting about briefly below. The three involve a range of issues, including arbitrator immunity, Rule 11 sanctions, and an technical point about subpoenas in state tax refund litigation and also work product privilege.
The
A-1 Pavement Marking, LLC v. APMI Corp., 2008 NCBC 13 (N.C. Super. Ct. August 4, 2008)(Diaz)
The North Carolina Business Court on August 4th denied a Motion for Judgment on the Pleadings on a counterclaim for reformation of an asset purchase agreement. Judge Diaz, in denying the Motion, held that if the reformation were
Although this isn’t in the mainstream of the business litigation decisions that I write about on this blog, I’m writing today about a contract case that’s important to the jurisprudence of North Carolina. It’s the judicial determination made last week about the quality of Duke University football.
The case is University of Louisville v. Duke University, pending in Franklin County, Kentucky. Louisville filed its Complaint against Duke when Duke backed out of a contract to play four games against the Cardinals. Duke had lost the first game in 2002 by a score of 40-3, and decided for some reason that it didn’t want to play the remaining three games in the series, due to be played in 2007-2009.
Louisville didn’t appreciate losing a record-padding opponent of the quality of Duke. It sued, based on a provision in the Athletic Competition Agreement which called for a $150,000 payment for each game not played. Duke’s defense was a provision in the contract which stated that it had to pay only if Louisville was unable to find a replacement opponent of "similar stature" to Duke. The Agreement didn’t define the term.
Louisville, in discovery, asked Duke what NCAA football teams were of "similar stature." Duke’s response was that every single team in former Division I-A and a lot of teams in former Division I-AA were. The only teams that weren’t, to Duke, were junior varsity teams. Here is Duke’s response from Interrogatory No. 1:
Duke states that any and all college varsity teams in the Football Bowl Subdivision (formerly Division I-A) are teams of a ‘similar stature’ to Duke. . . . Additionally, Duke states that any and all college varsity football teams in the Football Championship Subdivision (formerly Division I-AA) that would be considered as good or better than Duke in football. . . are teams of a ‘similar stature’ to Duke. . . . [J]unior varsity programs of any of the aforementioned teams would not be teams of a ‘similar stature’ to Duke’s varsity college football team.
Louisville’s definition of "similar stature" was narrower, but maybe not narrow enough. It said the term should be defined as "any school that is a member of a Bowl Championship Series conference whose champion automatically qualifies for a BCS bowl game," plus Notre Dame. Louisville had been unable to find such a substitute opponent.
Duke moved for judgment on the pleadings, and won. Its argued at the hearing that the standard for "similar stature" was very low because the quality of Duke football was as low as it gets. As Judge Phillip J. Shepherd of the Franklin Circuit Court described the argument in his June 19th Opinion:
The term ‘team of similar stature’ simply means any team that competes at the same level of athletic performance as the Duke football team. At oral argument, Duke . . . persuasively asserted that this is a threshold that could not be any lower. Duke’s argument on this point cannot be reasonably disputed by Louisville. Duke won only one football game, and lost eleven, during the 2007 football season.
The Business Court today granted in part, and denied in part, a Motion to Dismiss in Gateway Management Services, Ltd. v. Advanced Lubrication Technology, Inc. Judge Tennille ruled on claims of tortious interference with prospective economic advantage, negligent misrepresentation, and misappropriation of trade secrets, among others.
Plaintiff (Gateway) alleged that the Defendant (ALT) sold it
Today, Judge Jolly ruled on a Motion to Dismiss in Essa Commercial Real Estate, Inc. v. Five Trees, LLC, in which the issues involved defenses of issue preclusion based on an Arbitration Award.
The Court determined that the Award was entitled to collateral estoppel effect — even though the Defendants had not been parties to the
Today, in Cope v. Daniel, the Business Court denied the Defendant’s request to amend its Answer to add a statute of limitations defense and a defense of ERISA preemption. Judge Tennille found that the Defendant had unduly delayed by raising the statute of limitations defense, and that the Plaintiff would be prejudiced if it were allowed. The Court denied the ERISA amendment for another reason, finding it to be futile.
The case involves a dispute between shareholders of a medical practice. Plaintiff alleged that the Defendant engaged in financial misdoings, including charging unauthorized expenses to the practice, improperly reporting to taxing authorities, paying himself unauthorized distributions of salary and bonus, and overcharging rent.
The amendment on the statute of limitations was requested fourteen months after the original Answer was filed. The Court noted that the Complaint asserted claims based on events beginning as far back as 1999, and stated "[n]o questions have been raised as to whether Defendants knew at the time the complaint was filed . . . what claims were being asserted against them and during what timeframe."
The Court denied the Motion, holding that "[a] delay of over fourteen months before filing a statutes of limitation defense is an undue delay and causes undue prejudice to Plaintiff." It also held that "[a] defense based upon statutes of limitation is, by definition, time sensitive. A delay of over fourteen months before asking for an amendment could be acceptable in certain circumstances. . . . The situation where statutes of limitations defense is raised is not one of those circumstances."
The ERISA claim came in for a different analysis.Continue Reading Motion To Amend To Add Statute Of Limitations Defense Denied Based On Undue Delay
There’s an old Jackson Browne album called "Lawyers in Love." Lately, there have been a lot of cases involving lawyers out of love, and dissolving their firms. One was decided by the Business Court on June 2nd, Walters & Zimmerman, PLLC v. Zimmerman.
Plaintiff, a lawyer in the dissolved law firm who was a
I’m glad to report that this blog was selected today as the "Blawg of the Day" by inter alia.
If you haven’t looked at inter alia, it is a great resource about legal research on the internet, as well as for its daily "Blawg of the Day." Tom Mighell, a Texas lawyer who publishes inter alia, also
The Court of Appeals affirmed yesterday a 12(b)(6) dismissal of a claim under the North Carolina Trade Secrets Protection Act, in Washburn v. Yadkin Valley Bank and Trust Co.
In Washburn, the Defendant had made a counterclaim charging that the Plaintiffs, former employees, had misappropriated its trade secrets. The trade secrets the Defendant referenced
Gateway Management Services, Inc. v. Advanced Lubrication Technology, Inc., 2008 NCBC 11 (N.C. Super. Ct. May 5, 2008)(Tennille)
When you have an additional three days to respond to a filing served by mail, and the response period ended on a weekend or holiday, do you start counting the three days on the holiday or weekend day, or do you start from the first business day after the expiration of the response period?
The North Carolina Business Court answered this counting question, and another important time calculation question, today in the Gateway Management case. (You can click on the case name at the top to see the opinion).
The issue was the timeliness of Plaintiff’s Reply to Defendant’s Counterclaim. The Plaintiff said that the right method of counting was to count first the thirty day response time allowed by Rule 12(a), and that if the thirtieth day fell on a weekend or holiday, to count the three days from the first following business day. (Note: this is exactly the right way to count under the comment to the 2005 amendments to Federal Rule of Civil Procedure 6(d), which is worded differently than the North Carolina Rule).
The Court disagreed with the Defendant on when to start counting the three days for service by mail. Here’s what it held:
"The correct formula for the computation of a time period during which a filing is required is as follows: number of days allowed under applicable statute + three days under Rule 6(e) + any weekend or holiday under Rule 6(a). The Court notes that the three days under Rule 6(e) is added to the end of the time period allowed by statute regardless of whether that time period ends on a Saturday, Sunday, or legal holiday. It is at the end of the additional three days that Rule 6(a) applies."
The Court also dealt with another time calculation issue: when to start counting the time for a response when the document to which the response is due is e-filed, but the party who has to respond has not yet registered to e-file and no Order requiring e-filing has yet been entered. Even though this might be a rare situation, there’s potential danger here, so you might want to keep reading.Continue Reading Business Court Rules On How To Count Days For Filing A Response