Civil Practice – Long-Arm Statute – Severance Agreement

Defendants are subject to personal jurisdiction in North Carolina, and Plaintiff has sufficiently alleged that the Boathouse Defendants are parties to the Severance Agreement and Release (SAR).

The Court denied the motions.

An action arose out of the termination of Plaintiff’s employment with Defendant ACI Learning Holdings, LLC and Plaintiff’s execution of and attempt to enforce the provisions of a corresponding severance agreement. Plaintiff alleged the “ACI Defendants” and the “Boathouse Defendants” failed to purchase his equity interests in ACI pursuant to the severance agreement.

The Boathouse Defendants contended North Carolina’s long-arm statute does not subject them to jurisdiction in this action because they are not parties to the SAR. They argued that the Chair of ACI’s Board of Directors and the Managing Partner of the Boathouse Defendants only negotiated the SAR on ACI’s behalf, and neither Boathouse nor an authorized representative of Boathouse signed it. The Boathouse Defendants, therefore, contended they have not promised to deliver payment for Plaintiff’s equity interests to North Carolina, precluding the application of North Carolina’s long-arm statute to them.

The Court applied North Carolina law to determine whether the Boathouse Defendants are parties to the SAR and determined that the Boathouse Defendants assented to the SAR. One of the managing members of the Boathouse Defendants exclusively negotiated the SAR with Plaintiff. He initially proposed that the Boathouse Defendants purchase Plaintiff’s equity interests. A corresponding term appears in the executed SAR, albeit modified to include the “Company”: “As a material term of this Agreement . . . Company and/or Boathouse . . . agrees to buy all of Executive’s equity interests[.]” Provided that the Boathouse Defendants did not contest his authority to enter agreements on their behalf, it follows that the Boathouse Defendants inserted this term into the SAR and, therefore, agreed to assume obligations under the SAR. Because the Boathouse Defendants assented to the SAR, they promised to deliver to Plaintiff payment for his equity interests. Accordingly, the Court determined that the Boathouse Defendants are parties to the SAR and North Carolina’s long-arm statute applies to them.

The ACI Defendants conceded they are parties to the SAR and that North Carolina’s long-arm statute applies to them. Accordingly, the Court concluded that Defendants are subject to the long-arm statute. The focus of the Court’s inquiry was whether the SAR has a substantial connection with North Carolina. Defendants offered the SAR to Plaintiff, who they knew to be a North Carolina resident, and Plaintiff performed his obligations under the SAR while in North Carolina. The first of these factors is “critical” in determining whether the SAR has a substantial connection with North Carolina. Thus, while it is a close case, the Court found that, on balance, Defendants have sufficient minimum contacts with North Carolina to require them to defend this action here consistent with the requirements of due process. Defendants’ contacts with North Carolina are sufficient to support a finding of personal jurisdiction.

Denied.

Shively v. ACI Learning Holdings LLC (Lawyers’ Weekly No. 020-051-25, 26 pp.) (Michael L. Robinson, J.) 2025 NCBC 51. Parker Poe Adams & Bernstein LLP by Nicholas H. Lee, and Vedder Price P.C. by Jason B. Sobelman and Chad A. Schiefelbein, for Plaintiff. Rayburn Cooper & Durham, P.A. by Ross R. Fulton and Lauren J. Schantz, and Ice Miller LLP by Aaron A. Nichols, for Defendants Boathouse Capital Continuation Fund, LP, Boathouse Capital LP, and Boathouse Capital III LP. Gordon Rees Scully Mansukhani, LLP by Kendra Stark, Benjamin Williams, and Robert W.F. Beckmann, for Defendants ACI Learning Holdings, LLC and MIS Training Institute Holdings, Inc. North Carolina Business Court