Unfair & Deceptive Practices

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The managing member and president of an LLC could not be liable for tortious interference with contract for firing the Plaintff. "A party to a contract, including the party’s managing agent, cannot be liable for wrongful interference of the contract." The defendant was not an outsider to the contract, and therefore could not be liable for wrongful interference for firing the Plaintiff

The Court dismissed Plaintiff’s unfair and deceptive practices claim, ruling that it was outside the scope of the statute because it involved securities claims and employer-employee relations.

Full…

Continue Reading Palles v. Hatteras Investment Partners LLC, July 27, 2009 (Tennille)(unpublished)

The Business Court, relying on the Court of Appeals decision in White v. Thompson, dismissed an unfair and deceptive practices claim brought by an LLC member who claimed that another member and manager had usurped Company opportunities and converted Company assets.  It held that there was no assertion that the defendant’s "actions had any impact in the broader marketplace" and that dismissal was therefore appropriate.

Full OpinionContinue Reading J Freeman Floor Company, LLC v. Freeman, March 14, 2009 (Diaz)(unpublished)

A parent corporation can, under certain circumstances, be liable for the actions of its subsidiary under a conspiracy theory, notwithstanding the doctrine of intracorporate immunity.

This opinion summarizes prior law in North Carolina — consisting of six cases — addressing the doctrine of intracorporate immunity in the context of a claim for civil conspiracy under North Carolina law. 

The Court nevertheless dismissed the claim in this case, stating that 

"if plaintiffs were allowed to sue parent entities whenever the decision to cause a subsidiary to act in a certain manner

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Continue Reading BHB Enterprises, Inc. v. Waste Management of Carolinas, Inc., March 25, 2009 (Diaz)(unpublished)

The Court dismissed unfair and deceptive trade practice claims in a dispute among doctors based on the "learned profession" exemption and because the dispute was not "in commerce." 

Plaintiff alleged that her partners had forced her out of their medical practice.  Judge Tennille (in a very short order), held that "North Carolina Appellate Courts have historically broadly interpreted the learned profession exemptions to the North Carolina Unfair and Deceptive Trade Practice Act, and the courts have also narrowly defined the definition of commerce for internal disputes between professionals."

Full Opinion…

Continue Reading Faruque v. Bishopric, November 18, 2008 (Tennille)(unpublished)

Defendants’ contention was that they were entitled to reformation of a contract because a page was inadvertently left out of the asset purchase agreement.  The missing page detailed long term liabilities which Defendants claimed the Plaintiff was obligated to pay.  Defendants argued that the failure to pay constituted a violation of the accompanying Promissory Note and Security Agreement, and relieved them from their obligations under their non-compete agreements.

The Motion for Judgment on the Pleadings filed by the Plaintiff asserted that even if reformation was allowed, the only remedy for Defendants…

Continue Reading A-1 Pavement Marking, LLC v. APMI Corp., 2008 NCBC 13 (N.C. Super. Ct. August 4, 2008)(Diaz)

The Business Court dismissed on a Motion for Judgment on the Pleadings an unfair and deceptive practices claim stemming from a dispute between members of a limited liability company.

CDC, a minority member of the LLCs, argued that the member owning a 70% interest, Grimmer, had removed CDC as a manager and had made unnecessary capital calls in order to force CDC out of the LLC.  CDC also alleged that it had been defamed by Grimmer, that Grimmer had taken steps to cause banks to freeze the accounts of the…

Continue Reading Reid Pointe, LLC v. Stevens, 2008 NCBC 15 (N.C. Super. Ct. August 18, 2008)

This was a dispute between insurance agents and an insurer for which they had sold policies.

Plaintiff asserted that the Court had personal jurisdiction over a parent company with an indirect subsidiary in North Carolina based on the alter ego doctrine.  The Court held that "if [the parent] has dominated and controlled. . . a second tier subsidiary doing business in North Carolina, to the extent that the corporate veil may be pierced, such action would justify assertion of jurisdiction over the parent."  Although the Court found the allegations of dominance…

Continue Reading Hinson v. Trigon Healthcare, Inc., August 23, 2001 (Tennille)(unpublished)

The Court dismissed the derivative claim of a minority shareholder who alleged that the majority shareholders of the corporation had breached their fiduciary duty to the minority shareholders by failing to make distributions, failing to investigate allegations on that subject, and terminating the minority shareholder’s employment. 

The Court held that this was not a proper derivative claim, because the shareholder had not alleged a cause of action belonging to the corporation or a remedy to which the corporation would be entitled.

The Court further found that even if the claim was…

Continue Reading Western Piedmont Anesthesia, P.A. v. Barnette, November 20, 2007 (Tennille)(unpublished)

A minority member (Kaplan) of a limited liability company, who was the LLC’s only source of funds and who controlled the LLC’s checkbook, did not have fiduciary duties to the LLC and its other members.

Judge Tennille held:

Being an investor in a company does not create a fiduciary relationship. . . . Kaplan, as a minority shareholder, had no fiduciary duty to the other shareholders even though he was the sole financial contributor to O.K.  Like an investor in a corporation, Kaplan’s position as the holder of the purse strings did not create

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Continue Reading Kaplan v. O.K. Technologies, June 27, 2008 (Tennille)(unpublished)