North Carolina Lawyers Weekly
Our Supreme Court has held that “[s]ince proceedings for declaratory relief have much in common with equitable proceedings, the equitable doctrine of laches has been applied in such proceedings.” Taylor v. Raleigh, 290 N.C. 608, 227 S.E.2d 576 (1976), and the Supreme Court has applied statutes of limitations to declaratory judgment actions. Penley v. Penley, 314 N.C. 1, 332 S.E.2d 51 (1985). Accordingly, the court reconsiders its previous ruling that North Carolina legal precedent is not clear as to whether a claim for declaratory judgment is subject to statutes of limitations or only to an equitable defense of laches.
The court vacates its prior order on plaintiff’s second motion for partial summary judgment. The court also vacates its prior order on cross-motions for summary judgment. Plaintiff’s motion is denied.
Plaintiff’s claim for declaratory judgment is subject to a statute of limitations defense and potentially to a laches defense.
The declarations plaintiff seeks involve his status and rights as a member of the defendant LLCs. Those rights are created by and arise out of the LLCs’ operating agreements, which are contracts. Accordingly, the three-year statute of limitations for breach of contract actions provided in G.S. § 1-52(1) applies.
Since plaintiff was owed no fiduciary duty and has no individual claim for constructive fraud, the substantive rights he is pursuing do not arise from breach of any fiduciary duty owed to him. Consequently, the statute of limitations for constructive fraud is inapplicable to his declaratory judgment claims.
Factual issues remain as to when plaintiff’s declaratory judgment claims accrued, and they must be decided by a jury.
Orders withdrawn. Motion denied.
Chisum v. Campagna (Lawyers Weekly No. 020-054-18, 14 pp.) (Gregory McGuire, J.) 2018 NCBC 76
