Graham Calder Mullen

This case concerns a bankruptcy trustee's attempt to recover as a preferential transfer under 11 U.S.C. § 547 funds that debtor ESA transferred to obtain a letter of credit securing performance bonds from Hanover Insurance for government contracts. The Bankruptcy Court granted summary judgment to Hanover, and the District Court affirmed. The court held that the earmarking defense applied because the funds came from a specific lender (Prospect) and were designated solely for the letter of credit without diminishing the estate. It further held that Hanover established a complete new-value defense under § 547(c)(1) because it issued the bonds contemporaneously in exchange for the collateral, enabling ESA to obtain and perform revenue-generating contracts. The decision rested on undisputed facts showing the transfers occurred on the same dates as the bond issuance and contract awards.

business & regulatoryprocedure

This case involved a former employee suing his employers for wrongful termination under the FLSA and North Carolina public policy, claiming retaliation for filing prior lawsuits regarding overtime pay and outsourcing of his position. The court granted the defendants' motion for summary judgment. The core reasoning was that claims based on events before the second prior lawsuit were barred by res judicata, the non-renewal of the outsourcing contract was a legitimate business decision unrelated to protected activity, and the plaintiff failed to present admissible evidence creating a genuine dispute of material fact on causation or pretext.

labor & employmentprocedure

Cleveland Construction sued Fireman's Fund Insurance over an all-risks builder's risk policy for a county courthouse project, alleging breach of contract for unpaid claims related to damaged or stolen materials, repair work, and related costs, plus added claims for bad faith refusal to pay and unfair/deceptive trade practices after the insurer allegedly failed to investigate. The court had previously dismissed a negligence claim. On the insurer's summary judgment motion, the court granted judgment to the defendant on the bad faith claim but denied it on the breach of contract and unfair/deceptive trade practices claims. The ruling on bad faith rested on the absence of evidence showing aggravated conduct by the insurer, while the unfair practices claim survived due to a factual dispute over whether the insurer violated statutory duties by not timely investigating the claims.

business & regulatorypropertytorts & liability

This case involves claims under ERISA regarding the Bank of America cash balance pension plan (BAC Plan) and transfers of assets from the company's 401(k) plans into it. Plaintiffs challenged the plan's method for calculating lump-sum benefits upon early retirement (Count I), as well as the transfers themselves. The court granted the motion to dismiss Counts I and III but denied it as to Count IV. For the surviving claim, the court found that the complaint plausibly alleged a prohibited transaction because plan fiduciaries allowed 401(k) assets to be commingled and used to offset the bank's funding obligations, causing participants to lose separate account protections under ERISA sections 406(a)(1)(D) and 406(b).

labor & employmentbusiness & regulatory

This ERISA case involved plaintiff Lynn Vincent, who was involuntarily transferred from Lucent to IBM in 2001, received a lump-sum pension distribution, and was rehired by Lucent in 2002 but automatically enrolled in the Account Balance Plan rather than the closed Service Based Pension Program. Vincent sought injunctive relief to reenter the SBP and statutory damages for the company's alleged failure to produce certain plan documents during her administrative appeals. The court granted summary judgment to Vincent on the pension eligibility issue, ordering that she be allowed to reenter the SBP upon repaying her lump-sum distribution with interest and receive service credits from September 2001 onward, while denying her claim for statutory damages. The decision rested on the court's interpretation of the plan's reentry exceptions and the administrative record, finding Vincent eligible under the plan terms despite the administrator's contrary determination. The request for attorney fees was held in abeyance.

labor & employmentbusiness & regulatory

The case involved professional race car driver Jeremy Mayfield and his company suing NASCAR and related parties after his suspension for allegedly violating NASCAR's Substance Abuse Policy following a random drug test conducted by Aegis. Plaintiffs asserted claims including defamation, unfair and deceptive trade practices, breach of contract, negligence, and violation of the North Carolina Persons with Disabilities Protection Act, primarily alleging flaws in the testing process and improper publication of results. The court granted defendants' motion for judgment on the pleadings and dismissed all claims. It reasoned that the signed NASCAR agreements and Policy contained broad releases waiving liability for claims arising from the Policy's implementation, including negligence and publication of results, and that plaintiffs failed to allege sufficient facts to support any of their claims.

business & regulatoryproceduretorts & liability

This case concerns an insurance company's declaratory judgment action seeking a ruling that it had no duty to defend or indemnify a church, its preschool, and related defendants in a state court lawsuit alleging personal injuries to minor children from negligent supervision. The underlying suit claimed that a 4-year-old preschooler with a history of sexual acting-out was improperly enrolled and supervised, resulting in harm to other children. The court granted the insurer's motion for summary judgment and denied the defendants' cross-motions. It held that the policy's exclusion for bodily injury arising from abuse or molestation applied, based on the plain meaning of those terms encompassing the alleged acts, irrespective of the children's ages, lack of sexual motivation, or the fact that the claims were framed as negligent supervision rather than intentional conduct.

torts & liability

This case involves an application by Mullen Holland & Cooper P.A., counsel to the Chapter 7 Trustee in the bankruptcy of RFS Ecusta Inc., seeking approval of attorney fees and expenses from 2003 through 2009. The court granted the fifth interim and final fee applications after correcting a clerical error, awarding $317,049.50 in fees and $19,404.27 in expenses for the interim period, final fees of $1,312,811.99 plus expenses, and an additional contingent fee of $2,641,457.89. The decision applied the lodestar method of reasonable hours multiplied by reasonable rates, drawing on precedents such as Hensley v. Eckerhart and Johnson v. Georgia Highway Express to evaluate factors including the time expended, skill required, results obtained, and prevailing rates in the district, finding the requested compensation appropriate without further adjustment.

business & regulatoryprocedure

This case involved a dispute between property owner Gellman and insurer Cincinnati over the amount owed under a replacement cost insurance policy after a fire damaged an apartment building. Gellman argued the building was a total loss because repair costs exceeded its value and sought the full $4.5 million policy limit, while Cincinnati maintained it only needed to pay the actual repair costs of around $680,000. The court decided that Cincinnati was only obligated to pay the cost of repairs, not the full amount, as the policy unambiguously allowed the insurer to choose to pay repair costs for the partially damaged building. The core reasoning was that the policy language controlled, the loss was not total under the facts, and any excess repair costs over the building's value did not trigger full coverage.

propertybusiness & regulatory

This case involved borrowers Ronnie and Sheila Laws suing a Georgia law firm (MSP) and a North Carolina trustee company (PTS), alleging that PTS was MSP's alter ego and that the defendants improperly acted in dual roles as substitute trustee and lender's counsel during foreclosure proceedings on the Laws' property, leading to claims including breach of fiduciary duty, constructive fraud, unfair trade practices, and breach of contract. The court granted the defendants' motion to dismiss under Rule 12(b)(6). The core reasoning was that all claims rested solely on alleged violations of North Carolina State Bar ethics rules and opinions, which North Carolina law does not permit as a basis for civil liability; the complaint also failed to allege any actual damages to the plaintiffs or specific contract terms breached, and the unfair trade practices claim was barred by the professional services exception for attorneys' work.

propertyproceduretorts & liability

This case involves a challenge to the denial of Social Security Disability Insurance (DIB) and Supplemental Security Income (SSI) benefits. The plaintiff alleged disability due to left arm numbness and back pain from gunshot wounds sustained in 2003, after prior relevant work in medium and heavy jobs. The district court conducted a de novo review of the magistrate judge's memorandum and recommendation, along with the administrative record, and concluded that the ALJ's decision denying benefits was supported by law. Accordingly, the court denied the plaintiff's motion for summary judgment, granted the Commissioner's motion, and affirmed the denial of benefits.

labor & employmenthealthcare

This case involved the SEC's civil enforcement action against defendant John F. Mangan, alleging that he violated federal securities laws by directing a short sale of 25,000 shares of CompuDyne Corporation stock in an account he controlled, using nonpublic information about an upcoming PIPE offering that he learned through his employment at a broker-dealer. The short sale occurred on October 9, 2001, before the public announcement of the PIPE but after its pricing, allowing Mangan to cover the position with discounted shares and realize at least $54,000 in profits. The court granted summary judgment to Mangan and denied the SEC's cross-motion, holding that the information about the PIPE was not material as a matter of law. The core reasoning was that CompuDyne stock traded in an efficient market, the price showed no materially negative movement between the short sale and the market close on October 9, and the SEC presented no other evidence raising a genuine issue of fact on materiality; because materiality is an essential element of the claims under Section 17(a), Section 10(b), and Rule 10b-5, judgment for the defendant followed without needing to address scienter.

business & regulatory

This case involved a purported class action by vehicle purchasers against a car dealership, alleging that the dealership's mandatory inclusion of an "Etch" vehicle security product in all sales constituted the unlicensed sale of insurance, leading to miscalculations in financing disclosures and violations of federal and state laws including TILA, the Dealer Act, NCRISA, and NCUDTPA. The court granted the defendant's motion to dismiss under Rule 12(b)(6), holding that the Etch product qualified as a warranty rather than insurance under North Carolina General Statute § 58-1-15(b) because it was sold by the product provider with a guarantee against theft loss without a separate charge for the guarantee. The court further reasoned that the plaintiffs failed to allege facts showing deceptive practices or proximate causation for their unfair trade practices claim, as the sales contracts disclosed the charge and the dealership's policy was transparent.

business & regulatoryprocedure

In Moore v. Hunt, the petitioner, after pleading guilty in North Carolina state court to possession with intent to manufacture, sell, or deliver cocaine as a habitual felon and receiving a sentence of 101-131 months, sought federal habeas corpus relief under 28 U.S.C. § 2254. He alleged that police violated his Fourth Amendment rights by entering a third party's home without a warrant or probable cause to arrest him, that the resulting evidence was inadmissible as fruit of the poisonous tree, that his due process rights were infringed by the plea agreement and conviction process, and that his sentence violated Blakely v. Washington. The district court granted the state's motion for summary judgment and dismissed the petition. The court applied the deferential standard of review under § 2254, found that the claims either lacked merit under clearly established federal law, were not properly preserved, or involved non-retroactive rules such as Blakely that do not apply to convictions final before 2004, and concluded that the state proceedings did not result in a decision contrary to or involving an unreasonable application of federal law.

criminal lawprocedure

This case involves a federal habeas corpus petition under 28 U.S.C. § 2254 filed by Darrell Eugene Strickland challenging his North Carolina state conviction and death sentence for the first-degree murder of Henry Brown. The petition raised multiple constitutional claims arising from the trial, including issues with juror exposure to pretrial publicity, admission of evidence, prosecutorial arguments, and jury instructions on mitigating circumstances. The district court examined whether the claims had been exhausted in state court and were not procedurally defaulted, while reviewing the trial record detailing the shooting during a social gathering and Strickland's statements to police. The court applied standards for fair presentation of claims and assessed the state courts' handling of the underlying facts and legal issues.

criminal lawprocedure

The case concerns a bankruptcy trustee's lawsuit against the IRS seeking tax refunds for a debtor's estate, including a claim under 26 U.S.C. § 1341 for taxes paid on income later repaid pursuant to a global settlement in related litigation, as well as carryback of net operating losses from later years under I.R.C. § 172. The trustee filed amended returns and claims after the debtor's 1993 Chapter 7 filing and a 1994-approved settlement that preserved certain creditor claims while transferring assets to the estate; the IRS denied the refunds, leading to this action filed in 1997. Prior orders addressed standing, statute of limitations under §§ 6511 and 6532, and related procedural defenses, and the court now considers the parties' cross-motions for summary judgment on the remaining claims.

taxesprocedure

The case involved a North Carolina corporation's lawsuit in the Western District of North Carolina against Oracle (a California corporation) and Pomeroy for breach of contract, misrepresentation, unfair trade practices, and breach of warranty arising from the purchase and implementation of eBusiness software under a License Agreement and a related Consultant Agreement. The court denied Oracle's motion to dismiss for improper venue, finding that venue was proper under 28 U.S.C. § 1391 because a substantial part of the events occurred in North Carolina. However, the court granted the motion to sever the claims and transfer the Oracle-related portion to the Northern District of California under 28 U.S.C. § 1404(a), reasoning that the mandatory forum selection clause in the License Agreement was valid and enforceable under federal law, and that case-specific factors including convenience and the parties' contractual choice weighed in favor of transfer.

procedurebusiness & regulatory

This case concerns a dispute over the amount of benefits owed to plaintiff William Adams under an ERISA-governed supplemental executive retirement plan (SERP) maintained by ABT and later administered by Louisiana-Pacific after a corporate merger. Adams sought benefits calculated to include cash payments he received for vested stock options, but the Retirement Committee denied the claim, ruling that those payments did not qualify as "Compensation" under the plan formula. The court held that the plan's clear grant of discretionary authority to the Retirement Committee required review of the denial only for abuse of discretion rather than de novo. It noted a potential conflict of interest arising from the committee's composition of company employees and the plan's self-funded structure, and identified multiple factors to assess whether the denial was reasonable and supported by substantial evidence.

labor & employment

The case was a consolidated ERISA class action brought by current and former participants in the Duke Energy Retirement Savings Plan against the company, its directors, and plan fiduciaries. Plaintiffs alleged breaches of fiduciary duties through material misrepresentations about the company's financial results (including round-trip trades) that led participants to hold Duke stock, and through failure to treat the stock as an imprudent investment option given alleged risks. The court granted the defendants' motion to dismiss the complaint with prejudice. It reasoned that the misrepresentation claims lacked materiality because the stock's performance tracked the broader market without evidence of collapse, the prudence claims failed as the company remained financially viable with no showing that holding employer stock was unsuitable, and the remaining counts depended on the dismissed fiduciary breach allegations.

labor & employmentbusiness & regulatory

This case involved a dispute over funds from an ERISA-governed employee savings plan administered by General Motors, with Fidelity as record-keeper. After the plan participant's divorce, a QDRO awarded his ex-wife half the vested balance and included her waiver of remaining rights, but an administrative error left her as the listed beneficiary; upon his death she received the full remaining amount, which her estate sought to retain while the defendants demanded repayment due to the mistake. The court granted summary judgment to General Motors and Fidelity, authorizing recovery of the $87,351.27 plus interest, while denying the estate's cross-motion. It reasoned that ERISA sections 1132(a)(1)(B) and (a)(3) gave the defendants standing as fiduciaries to pursue equitable relief, and that federal common law unjust enrichment applied because the ex-wife had waived rights, the payment resulted from error with prompt notice, and repayment aligned with reasonable expectations and proper plan administration.

labor & employmentbusiness & regulatoryfamily law