Today in Torres v. The Steel Network, Inc., 2009 NCBC 19 (N.C. Super. Ct. July 27, 2009), the Business Court dismissed a tortious interference claim against Bank of America, ruling that the Bank couldn’t be sued under that theory for exercising its rights under its loan documents.
Plaintiff, a shareholder in the Defendant The
An appellate decision has to be really, really wrong before the same Court will decide that it shouldn’t be treated as the "law of the case." In fact, the wrongness has to be as overpowering as a very old and very dead fish, per the Fourth Circuit’s opinion today in TFWS, Inc. v. Franchot.
North Carolina’s Chief Justice Sarah Parker has suspended the rotation of Superior Court Judges, effective beginning July 20, 2009 and continuing through August 28, 2009, due to the State’s budget crisis. There’s an Amended Master Calendar Of Superior Courts available which shows where Judges will be holding court during the suspension period.
Rotation of
The Business Court’s decision yesterday in Leiber v. Arboretum Joint Venture, LLC, 2009 NCBC 16 (N.C. Super. Ct. July 8, 2009) involved the law of agency: whether a German Count named Spreti had been acting as Plaintiff’s agent when the Defendant LLCs and partnerships sent Plaintiff’s share of distributions to Spreti. A large chunk of the money was then stolen by Spreti.
Plaintiff Leiber, a German citizen, had put money at the urging of Spreti in a number of United States investments (the "AAC entities"). The AAC entities were operated by two other Germans, Count and Countess Arco. Over a fifteen year period, the AAC entities sent hundreds of thousands of dollars of Leiber’s distributions and tax refunds to Spreti.
Spreti paid some of the money he received to Leiber, but kept hundreds of thousands of dollars of Leiber’s money for himself. Leiber knew that his payments were sent to Spreti, but he never objected to this practice and apparently wasn’t very attentive to his investment. Leiber began to suspect Spreti’s misconduct, but Spreti committed suicide the night before the two were to meet to discuss matters.
The specific distributions at issue in the case were payments to Leiber for redemption of his interests in two of the AAC entities. Spreti received both of these payments. One was a Wachovia Bank check for $151,274 and the other a Bank of America check for $254,858. Spreti forged Leiber’s indorsement on the checks, cashed them, and kept the money.
After Spreti’s suicide, Leiber sued the AAC entities, alleging that they had improperly sent the checks to Spreti. He also sued Wachovia and Bank of America, alleging that they had improperly paid the checks over Spreti’s forged indorsement.
Agency Issues
The defense of the AAC entities was that Spreti had been acting as Leiber’s agent, and they therefore had acted appropriately in sending Leiber’s distributions to Spreti. The opinion contains a thorough discussion of the law of agency, including actual authority, apparent authority, apparent agency, agency by estoppel, and ratification.
Judge Tennille determined that although Leiber had not expressly authorized Spreti to act as his agent, there were a number of legal theories on which Spreti would be deemed to be Leiber’s agent:
The Court further determined that even if there were no agency relationship, Leiber’s fifteen year silence regarding the checks was a ratification of Spreti’s unauthorized acts. The Court granted summary judgment on all of Leiber’s claims against the AAC entities, as they all depended on the argument that Spreti had not been authorized to receive checks on Leiber’s behalf.Continue Reading You Can Count On This Case For A Good Discussion Of The Law Of Agency
There weren’t any earthshaking decisions yesterday from the North Carolina Court of Appeals, but there are a couple of cases worth a quick mention, one on arbitration and one on discoverability in a medical malpractice case of a letter to a "medical review committee." There was also a copyright case yesterday from the Fourth Circuit
It’s hard to get an injunction enforcing a covenant not to compete that has a nationwide territory, but the Plaintiff was successful at that in the Middle District’s decision last week in Philips Electronics North America Corp. v. Hope. The injunction was also based on the North Carolina Trade Secrets Protection Act.
This was a thorough 44 page opinion addressing a number of non-compete and trade secrets issues, so this is a long post. You’ll have to read to near the end to see why the post gets a picture of, of all things, a sausage?
Background
Hope was the Executive Vice President of Sales for DLO, responsible for the company’s sales of iPod accessories throughout the United States and Canada. Hope had substantial interaction in that position with a $75 million customer, Best Buy, and other major DLO customers.
In December 2006, Hope signed a Letter Agreement containing a broad covenant not to compete. It prevented him from working in the same or similar position for a DLO competitor anywhere that DLO conducted business, potentially throughout the entire world, for a two year period.
The stock of DLO was purchased by Phillips Electronics six months later. Phillips operated DLO as a separate entity until January 2009, when DLO was merged into Phillips. (This created an interesting standing issue regarding the right of a corporate acquirer to enforce a non-compete, discussed below under the heading "Standing").
In 2008, while still employed by DLO, Hope began planning to compete with the company. He contacted others at DLO about the possibility; began discussions with a manufacturer about making competing products; and used confidential DLO materials in his efforts, including DLO’s business plan and internal financial information.
Hope resigned from DLO months later, the day after his new company obtained financing. He misled his old employer about his intentions, saying he was going to work with his father. The new company immediately began selling to some of DLO’s customers, including Best Buy. Several months later, DLO discovered Hope’s involvement with the new competitor.Continue Reading Nationwide Covenant Not To Compete Enforced By North Carolina Federal Court
The North Carolina Supreme Court adopted yesterday a comprehensive overhaul of the North Carolina Rules of Civil Procedure. The new Rules will apply to cases appealed on or after October 1, 2009. This post has a quick summary of the major changes.
Assignments of Error Are Abolished
Far and away the most significant change is
There were ten new cases designated to the North Carolina Business Court during June 2009, down from eighteen in May and fourteen in April. The June cases are as follows:
Anderson & Associates of Virginia, Inc. v. Tuscany Development Co. (Guilford)(Tennille): whether an individual can be personally liable for the obligations of an LLC
The North Carolina courts are taking some serious strides towards the implementation of electronic filing in Superior Court. The State has gone live with pilot e-filing programs in Chowan and Davidson Counties. Wake County will be added shortly as a third pilot county. The goal is full and mandatory implementation throughout the State within two
The Fourth Circuit today affirmed the dismissal of a personal injury action based on a forum selection provision requiring that any claims would be resolved in the courts of Amsterdam. The case is Baker v. Adidas America, Inc.
Plaintiff, who had sued in federal court in North Carolina, argued that she was a college student