North Carolina Lawyers Weekly
In its decision reversing the imposition of a penalty for respondent’s large (64 percent) understatement of her income, the Office of Administrative Hearings drew a distinction between improper deductions and deductions that were insufficiently documented. However, G.S. § 105-236(a)(5)(b) says ...
Read More »Taxation — Large Individual Income Tax Deficiency – ‘By Any Means’ – Insufficient Documentation of Deductions
Insurance — Commercial – Civil Practice – Discovery – Reserve Information – Relevance 
The defendant-insureds suffered an equipment breakdown and related losses, and their insurers seek a declaratory judgment as to coverage. Since this case does not involve fraud, the insurers’ reserves are not relevant and therefore are not discoverable. The court denies ...
Read More »Civil Practice — Late-Served Summons – Corporate – Derivative Action
The only service the defendant-limited liability company has received came in the form of an expired summons, meaning the action was discontinued as to the LLC. However, the LLC is a necessary party in this derivative action. To avoid more ...
Read More »Corporate — LLC – Litigation Expenses – Prior to Suit – Non-Lawyer Contractor – Voluntarily Dismissed Claims
Defendant Burnette seeks indemnification from the defendant-limited liability company for the expenses he incurred in successfully defending a lawsuit brought by plaintiff, a co-member of the LLC. Both the Limited Liability Company Act (LLC Act) and the Business Corporation Act ...
Read More »Tort/Negligence — Negligent Misrepresentation – Accounting – Corporate – Justifiable Reliance
Plaintiff, now a former shareholder of the defendant-corporation, complained often about the defendant-accountants’ failure to include certain “commissions receivables” when they calculated the corporation’s share price; nevertheless, due to his desperate financial situation, plaintiff accepted the proffered stock redemption price ...
Read More »Contract — LLC Operating Agreement – Amendment – Signature Pages Only
Even if plaintiff was given only the signature page of a 2010 amendment to the family limited liability company’s operating agreement, plaintiff agreed that he signed it because he considered the LLC to be his father’s to do with as ...
Read More »Civil Practice — Voluntary Dismissal & Refiling – Statutes of Limitation – Corporate – Tort/Negligence
Where plaintiff’s refiled 2021 complaint alleges facts in support of the breach of fiduciary duty claim that were not included in its 2015 voluntarily dismissed complaint, the expanded allegations are not subject to the savings provision of N.C. R. Civ. ...
Read More »Corporate — Stock Agreement – Breach of Contract – Constructive Fraud – Accounting Practices
Plaintiff, who was in poor health and dire financial straits, signed a stock redemption agreement (Redemption Agreement) even though he disagreed with the agreement’s valuation of the defendant-corporation’s stock. However, nothing in the Redemption Agreement or in plaintiff’s complaint indicates ...
Read More »Civil Practice — Mislabeled Claim – Motion to Dismiss – ‘Course of Dealing’ – Implied-in-Fact Contract
The parties agree that the complaint’s “course of dealing” claim was actually a mislabeled claim for breach of an implied-in-fact contract. The fact that a plaintiff might have mislabeled his claim is of no significance in ruling on a motion ...
Read More »Tort/Negligence — Breach of Fiduciary Duty – LLC – Majority Member – Business Judgment Rule
Where (1) defendant Hornwood, Inc. (defendant) is the majority member of the nominal defendant limited liability company (LLC); (2) defendant owned all of the manufacturing facilities at which the LLC’s products were manufactured; (3) plaintiff was not capable of manufacturing ...
Read More »
