When a Court enters sanctions against a party, it is usually the result of the opposing party filing a Motion for Sanctions or the Court becoming so outraged at one party’s conduct that it delivers a punishment. But in Davis v. Davis Funeral Service, Inc., 2024 NCBC 20, Judge Conrad sanctioned both the Plaintiff and the Defendants sua sponte. What led to this Order by the Business Court? Well, it was a repeated disregard by both sides for deadlines established by the Court. First, the parties did not submit their proposed pretrial order on time. Then, when the Court ordered them to cure their ..read more

Can you file a Motion for Summary Judgment too soon? The Plaintiffs in Wright v. LoRusso, 2023 NCBC 34 did exactly that, and were called out by Business Court Judge Conrad for violating Business Court Rules. The Plaintiffs, members of an LLC called Cinch.Skirt, alleged that Defendant LoRusso, the majority member of the LLC, had improperly distributed cash from the LLC to herself. This alleged misconduct formed the basis for a dozen direct and derivative claims against LoRusso. Plaintiffs filed a motion for partial summary judgment as to one of the twelve claims. This claim was for a declarato ..read more

There are two words that have been in virtually every covenant not to compete that I have looked at. They are “directly or indirectly.” Banish those words from your covenant drafting! The covenant not to compete considered by the NC Business Court in Prometheus Group Enterprises, LLC v. Gibson, 2023 NCBC 23, and found unenforceable contained the following language: I will not directly or indirectly engage in (whether as an employee, consultant, proprietor, partner, director or otherwise), or have any ownership interest in, or participate in the financing, operation, management or control of ..read more

The errata sheet. You’ve probably never given it a second thought. It is baked into the Rule of Civil Procedure governing the taking of depositions. NCRCP 30(e) gives the deponent the right to review her deposition and to make “changes in form or substance” by completing an errata sheet and stating the reason for the changes. But are there limits on a deponent’s right to revise her testimony? Surely, having testified that the “traffic light was green,” the witness can’t backtrack and revise her testimony about the light color to red. Can she? Well, yes, she can. Judge Davis of the NC Business ..read more

I couldn’t pass on writing about a Business Court Order that the Court itself described as “Sua Sponte Order on Abusive Language.”  This is In re SE Eye Ctr, 2023 NCBC Order 15. Abusive language?  That might be too complimentary a description of the stream of vitriol let loose by Mark McDaniel, a “contingent debtor” of Southeastern Eye Center, in his court filings.  McDaniel, not a physician (nor a lawyer), is the former Executive Director of the Center. He is proceeding pro se. Judge Bledsoe laid out a long list of abusive statements by McDaniel in his order. Most of the abuse ..read more

Plaintiffs asked for an award of attorneys’ fees in Vanguard Pai Lung, LLC v. Moody, 2022 NCBC 48.  They had been awarded $3 million in compensatory and punitive and thjeir lawyers sought $2.5 million in fees.  The motion for fees was not successful, for a number of reasons, but what sticks out in Judge Conrad’s opinion is his assessment that the fees applied for were excessive. How much were Plaintiffs asking per hour? More than $700 per hour, with two of the lawyers billing more than $1,000 per hour.  (Note that these lawyers weren’t from around here, they were from California ..read more

The parties in Leonard v. Ast, 2022 NCBC 35, decided by the NC Business Court last week, were collaborators in a business venture they named Barks and Recreation.  Barks was a dog training business which the Defendants felt would funnel business to their already existing dog grooming business, “Just Dog People.” As anyone interested in the NC Business Court can already guess, there was a falling out among the parties.  It happened less than a year after Barks began operations with $100,000 invested by the Plaintiff from her retirement account.  (The Defendants contributed no cas ..read more

This is Part 2 of an examination of the 100+ “Orders of Significance” dropped by the NC Business Court late last year.  Part 1 of this series (on designating cases to the Court) is here.  If you haven’t heard anything about the Orders of Significance, look here. There are a couple of Orders of Significance dealing with attorney-client privilege that are significant enough to be written about on this blog.  The first is Judge Conrad’s Order on a Motion to Compel in Kelley v. Charlotte Radiology, P.A. 2019 NCBC Order 13. Waiver By Disclosure To A Non-Client The “general rule” is that the attorne ..read more

This is the first of several intended posts on the so far unexamined “Orders of Significance” handed down by the NC Business Court.  This one focuses on several Orders from Chief Judge Bledsoe on whether a case was properly designated to the Court.  It is embarrassingly long, sorry. Intellectual Property Cases A handful of these Orders involved a designation per G.S. § 7A-45.4(a)(5), which gives the Court jurisdiction over cases which relate to  a “dispute involving the ownership, use, licensing, lease, installation, or performance of intellectual property. . . . ” You would think that a Compl ..read more

If you ever look at the Business Court’s website, you’ve noticed that the Court added late last year a new category of rulings, which it has dubbed “Orders of Significance.”  There are 118 of these Orders, stretching back ten years, to 2010. The Court is statutorily mandated to publicly post a number of its rulings, per N.C.G.S. § 7A-45.3, which obligates the Court to issue a written Opinion on rulings rendered per NCRCP 12, 56, 59, and 60, but these Orders of Significance don’t fall into those categories. I asked Chief Judge Bledsoe (via email) what had prompted the posting of these Orders ..read more