ARTICLES

“Payment in Full” Memo Insufficient

April 15, 2012
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The often misunderstood impact of writing “Payment in Full” on a check was before the North Carolina Court of Appeals in In the Matter of the Foreclosure of a Lien by Five Oaks Recreational Association, Inc., decided on March 6, 2012.  In this case, a member of a planned community failed to pay his assessments on time.  The association sued and moved for summary judgment in its favor.  The member argued that by writing “Payment in Full” in the memo section of a check, he had reached a settlement with the association for less than the full amount.  The Court of Appeals affirmed the entry of summary judgment by the trial court against the member, holding that there was no evidence that the amount was…

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No Merger Evidence = No Summary Judgment

April 15, 2012
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A plaintiff bank suing on a promissory note originally executed in favor of another bank must introduce evidence that it is the proper holder of the note in order to obtain summary judgment when the defendant questions the plaintiff bank’s right to sue on the note.  This was the holding in TD Bank, N.A. v. Mirabella, decided by the North Carolina Court of Appeals on March 20, 2012.   In this case, the bank claimed that it had merged with the original lender, but failed to introduce affidavits or other evidence supporting that claim prior to seeking summary judgment on the note.  The Court of Appeals reversed the trial court’s entry of summary judgment for the bank and allowed the defendant to continue contesting the suit.

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Contract Suit Claims Joint Venture and Partnership

April 15, 2012
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Related business entities must always be vigilant in maintaining legal separation between them, not only in documentation, but in the manner in which they conduct business.  In Best Cartage, Inc. v. Stonewall Packaging, LLC and Jackson Paper Mfg. Co., a North Carolina Court of Appeals case decided March 20, 2012, a trucking company sued two related businesses on a contract with one of the businesses.  The suit claimed that, although the defendants were two businesses, they should be treated as a partnership and/or joint venture.  The Court of Appeals reversed dismissal by the trial court of the claims for partnership by estoppel, joint venture and de facto partnership and allowed the case to continue with these claims intact. Among the factors relied upon by the…

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Amended Subdivision Covenants Held Valid

April 11, 2012
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In Taddei v. Vill. Creek  Prop. Owners Ass’n, Inc., COA 11-650, decided February 21, 2012, the plaintiff sought to have amended covenants enacted by the lot owners of a planned community declared invalid along with re-subdivision of lots in the community. The subdivision’s covenants were amended by a vote of a majority of lot owners at a special meeting of the association.  Plaintiff filed suit against the association and also against the association president, alleging that the president had breached a fiduciary duty to the lot owners by advocating for change in the covenants.  The Trial Court determined that the covenants were properly enacted, that the provisions changing the manner of making assessments were not reasonable and therefore were invalid, that the provisions for changes…

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Plaintiff Must Produce Medical and Financial Records in Employment Case

April 7, 2012
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In an employment dispute arising in HaywoodCounty, the Court of Appeals affirmed the order of the trial judge compelling discovery of medical records and income tax returns of the Plaintiff.  In Young v. Kimberly-Clark Corporation, COA 11-1020, decided February 21, 2012, the Court of Appeals reviewed a discovery dispute arising out of an employee suit against the employer claiming wrongful discharge, negligence and infliction of emotional distress.  Plaintiff’s damages included lost wages, employment benefits and compensation for emotional distress and/or pain and suffering. The Plaintiff refused to provide medical records and tax returns claiming that they were not reasonably related to her claims and damages.  The Court of Appeals agreed with the trial judge that the information sought was appropriate and that the Plaintiff’s claims…

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Complaints Insufficient to Create Retaliatory Dismissal

April 7, 2012
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In Pierce v. The Atlantic Group, Inc., COA 11-494, decided February 21, 2012, a fired employee filed suit claiming that he had been fired from his position as a lifting rigger supervising coordinator because of his attempts to have claimed operators and riggers certified.  The Trial Court found that the claim for retaliatory dismissal firing was properly dismissed because the employees’ actions were nothing more than complaints to his supervisors and did not constitute an “initiation of an inquiry” pursuant to NCGS § 95-241(a).  The Court of Appeals agreed and affirmed the dismissal.

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Dangerous Arbitration Agreements

February 1, 2012
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The attorneys at Cannon Law, P.C. continuously warn consumers of the dangers posed by “routine” paperwork when dealing with sophisticated corporations and other large business entities.  In Westmoreland v. Highpoint Healthcare, Inc. (COA 10-1103), decided January 17, 2012, the North Carolina Court of Appeals reaffirmed North Carolina’s reluctance to invalidate arbitration agreements.  In this case, a nursing home patient’s daughter was presented with several documents for her signature, one of which was an arbitration agreement.  The arbitration agreement provided that any claims between the patient and the nursing home would be resolved by binding arbitration and that the parties waived their right to trial before a jury or a judge.  It also provided that attorney’s fees could be assessed against the losing party. When the…

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No Good Deed Goes Unpunished

February 1, 2012
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It is usually best to seek an attorney’s advice before communicating with a creditor regarding a debt.  The case of Klingstubbins v. Reynolds, et al6 .(COA 11-549), decided January 17, 2012 by the North Carolina Court of Appeals, describes how letters from an individual regarding a debt owed by his LLC resulted in the individual becoming liable for the LLC’s debt.  In this case, an architect  sued an LLC for payment.  An individual member of the LLC wrote two letters to the architect stating his intent to pay the debt, although there was no legal obligation for him to do so.  A second letter also stated his desire to pay the bill.  When payment was not made, the architect sued both the LLC and the…

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Court of Appeals Reinstates Medical Malpractice Suit

February 1, 2012
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In Day v. Bratt, et al. (COA 09-573-2), decided January 17, 2012, the North Carolina Court of Appeals reversed a trial court’s dismissal of a medical malpractice suit.  At the trial, the Defendant doctors and hospital argued that the Plaintiff’s standard of care expert was not qualified to testify as to the applicable standard of care and that the Plaintiff’s causation expert provided insufficient evidence of causation. A key element of the trial court’s dismissal was one expert’s belief that a national standard of care existed for laparoscopic surgery.  The Court of Appeals found that although the witness believed that such a standard of care existed, he did not apply a national standard of care in reaching his conclusion that the doctors and hospital had…

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Breach of Covenant Not to Compete

December 21, 2011
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In Phelps Staffing, LLC v. Sheila Phelps, et al., decided December 20, 2011 the North Carolina Court of Appeals found that the sellers of a contract labor staffing business did not breach a non compete clause contained in the asset sale agreement.  After the business was purchased, one of the business owners opened up a competing contract staffing company and “flipped” many of the contract laborers and some of the customers who were working with the purchaser. In finding that the sellers had not breached the contract, the Court of Appeals noted that one seller held no stock or other financial stake in the competing business even though she did receive payment of some of her personal expenses from that business.  The Court also appears…

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