Today, the Supreme Court ruled in State ex rel. Cooper v. Ridgeway Brands Mfg., LLC that a claim for piercing the corporate veil could proceed against the individual shareholders of the corporate defendant.

The opinion makes clear the standard that North Carolina applies in such cases, but more significantly resolves an question on the interplay between alter ego claims and the statute of limitations.  The holding is that the filing of a complaint against the corporation will toll the time for bringing claims against the individuals or entities which might

Continue Reading Lightning Strikes: The North Carolina Supreme Court Rules In A Piercing The Corporate Veil Case

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