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N.C. Business Court

May 23, 2018

Antitrust – Chiropractic Network – Monopsony Allegation – Market Power

Defendant Health Network Solutions, Inc., a practice association of North Carolina chiropractors, negotiates with health insurers on behalf of its members, who make up about half of North Carolina’s chiropractors. According to the non-member plaintiffs, this allows insurers to avoid paying for medically necessary care. However, plaintiffs’ allegations of output reductions among in-network chir[...]

May 9, 2018

Corporate – Shareholders’ Records Request – Judgment Creditor – Improper Use of Assets

Even though one of the plaintiff-shareholders is also a judgment creditor of the defendant-corporation, plaintiffs have stated proper purposes for their request to inspect corporate records: to determine whether “any improper transactions have occurred and to determine any possible mismanagement of [defendant Fortran Corp.] or any possible misappropriation, misapplication, or improper use of any[...]

May 9, 2018

Civil Practice – Declaratory Judgment Action – Sovereign Immunity – Tobacco Settlement – Escrow Refund

As a manufacturer of tobacco products who did not participate in the 1998 settlement with other tobacco companies, plaintiff must pay into an escrow account required by G.S. § 66-291. Plaintiff alleges that it has paid more than required into the escrow account and that it is entitled to a refund; however, § 66-291 does […]

May 7, 2018

Civil Practice – Appeals – Appellate Court Designation

Appeals from the Business Court must be taken to the N.C. Supreme Court, yet plaintiff’s notice of appeal designated the N.C. Court of Appeals rather than the Supreme Court. Even though this court’s judgment addressed significant issues that would present matters of first impression before the Supreme Court, the court concludes that it does not […]

May 1, 2018

Contract – Partnership & LLC – Breach of Fiduciary Duty – Labor & Employment – Wages – Business Opportunities

In this lawsuit arising from a failed business venture, plaintiff’s claim of breach of fiduciary duty fails because the parties’ purported partnership was subsumed into their limited liability company. The parties’ cross-motions for summary judgment are granted in part and denied in part. Fiduciary Duty While partners owe one another a fiduciary duty, members of […]

Apr 26, 2018

Tort/Negligence – Fraud – Corporate – Derivative & Individual Claims

Normally, fraud claims may not be based on promises of future intent; however, in this case, plaintiff has alleged that, when defendant Rives promised not to dispose of the nominal defendant-corporation’s assets without plaintiff’s consent, Rives had already taken steps to give himself authority to do just that. Moreover, plaintiff alleges that Rives began misappropriating […]

Apr 25, 2018

Corporate – Public vs. Private – Poison Pill – Civil Practice – Preliminary Injunction – Banks & Banking

Since a private corporation may not create a poison pill as a means of forestalling a hostile takeover, plaintiff has shown a likelihood of success on the merits of its declaratory judgment claim. The court grants plaintiff’s motion for a preliminary injunction. Defendants are prohibited from taking any action under their Shareholder Rights Plan or […]

Apr 25, 2018

Corporate – Receiver – Civil Practice –Tort/Negligence – Breach of Fiduciary Duty

Having been appointed to manage the business of defendant A Perfect Fit for You, Inc., during the pendency of this action, the Receiver has the authority to “institute suits for the recovery of any . . . property, damages, or demands existing in favor of the corporation.” Therefore, it was not unreasonable for the Receiver […]

Apr 17, 2018

Taxation – Sales & Use Tax – Gas Pump Installation – Use

Despite the exacting specifications imposed by the project owners, when the respondent-taxpayer installed fuel tanks and fueling islands, it was not selling the items it used in installing the tanks and islands; rather it was using those items. Hence, respondent was required to pay a use tax on such items. The court reverses the Office […]

Apr 17, 2018

Civil Practice – Preliminary Injunction – Contract – Former Franchisee – Unfair Competition

The parties’ franchise agreement prohibits defendant Salinas – the former franchisee – from using plaintiff’s name but not from competing with plaintiff or soliciting customers. The court grants in part and denies in part plaintiff’s motion for a preliminary injunction. After 20 years as a “Window Gang” franchisee, defendant Salinas created his own company, “Window […]

Apr 17, 2018

Contract – Material Term – Labor & Employment – Former Employees – Return of Property – Domain Name Sale

An email chain between the parties’ counsel is the basis for their dispute over whether plaintiff agreed to pay defendant Sabatino $16,000 for several internet domain names. Plaintiff’s counsel made clear in her first email that defendant Barnett-Sabatino’s return of company property was a material term of any settlement agreement, but Barnett-Sabatino never agreed to […]

Apr 11, 2018

Attorneys – Tort/Negligence – Legal Malpractice – Breach of Fiduciary Duty – In pari delicto – Aiding & Abetting – Corporate – Agency

While the plaintiff-corporation’s directors were allegedly looting the corporation (Zloop) for personal benefit, their fraud benefitted Zloop by allowing it to temporarily remain in business and to obtain franchises and lines of credit; as such, the directors’ acts are imputed to Zloop as a matter of law (pursuant to the Delaware and New York approach, […]

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