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Domestic Violence Issues Committee Considering Revisions To GS 50B-3(b)

By Kathleen Lockwood and Melissa Averett

The Domestic Violence Issues Committee of the Family Law Section is currently considering revisions to GS 50B-3(b), inspired by a 2014 Court of Appeals decision. In Rudder v Rudder, 234 N.C. App. 173 (2014), the Court of Appeals expressed some doubt whether the time limitations of G.S. 50B-3(b) apply to ex-parte orders entered pursuant to G.S. 50B-2. In Rudder, the court granted Plaintiff an ex parte order, which was extended for over 18 months and expired without entry of a DVPO. Two days after expiration of the ex parte order, the parties appeared in court on Defendant’s motion to return firearms, at which point the court granted Plaintiff a one-year DVPO. On appeal, the Court held that “upon expiration of the ex parte order after more than a year, the trial court no longer had jurisdiction under the original complaint to enter an order further extending the DVPO.”

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NC Loan Broker Act Remains an Important Lending Statute and Litigation Tool

By Adam Altman

The North Carolina Loan Broker Act was enacted in 1979 “to protect the public from unscrupulous loan brokering practices.”  Brief of Amicus Curiae Roy Cooper, Attorney General of North Carolina at 4, Printing Services of Greensboro, Inc. v. American Capital Group, Inc. 361 N.C. 347, 643 S.E.2d 586 (2007).

The North Carolina Loan Broker Act (the “Act”), codified in Article 20 of Chapter 66 of the General Statutes, requires that loan brokers provide prospective borrowers with a disclosure statement, obtain a surety bond or establish a trust account, and file certain disclosures with the North Carolina Department of the Secretary of State.  See N.C.G.S. §§ 66-107, 66-108, 66-109.  The Act prohibits loan brokers from collecting an advance fee from prospective borrowers prior to the closing of the loan.  See N.C.G.S. § 66-108(c).  There are several categories of persons and entities that are expressly excluded from the provisions of the Act.  See N.C.G.S. § 66-106(b).  If loan brokers fail to comply with the Act, prospective borrowers may void the loan brokerage contract and sue for damages, recover attorney’s fees, and obtain treble damages.  See N.C.G.S. § 66-111.  The treble damages component is available because the violation of any provision of the Act “shall constitute an unfair trade practice under G.S. 75-1.1.”  N.C.G.S. § 66-111(d).

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Are Public Payment Bond Rights Assignable Under NC Law? Maybe.

By Jonathan Massell

Contractors, like other businesses, often find it advantageous to assign their accounts in exchange for some other form of consideration from the assignee.  What is different about a contractor’s accounts, as compared to most other businesses, is that the amounts owed might be secured by payment bonds.

It should not be disputed that a contractor can assign its accounts to a third party so long as the proper procedures are followed.  However, if the accounts relate to a project where the contractor would have a valid claim on a public payment bond, can this right be assigned along with the accounts?  Practically, the ability of a third party purchaser to make a bond claim would make the assignment of accounts more lucrative for the assignee and would provide some bargaining power for the contractor who wants to assign the accounts.  However, once the accounts are assigned and the third party assignee goes to make a claim on the bond and enforce that claim in court, will a court dismiss the action right off the bat for lack of standing of this new claimant?  In North Carolina, maybe.

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Navigating Trial Decisions Through an Appellate Framework

By Kip Nelson

Trial lawyers have a hard job, and it’s easy for appellate lawyers reviewing a cold record to find fault in the decisions made by their predecessors. As others have recognized, a symbiotic relationship can occur when a trial lawyer and an appellate lawyer work collaboratively during trial to reach the best solution for the client. A recent Court of Appeals decision, Boone Ford, Inc. v. IME Scheduler, Inc., No. COA16-750-2 (N.C. Ct. App. Nov. 6, 2018), provides two helpful reminders for appellate practitioners working at the trial level.

First, the Court of Appeals reiterated that a party cannot move for judgment notwithstanding the verdict unless the party previously moved for a directed verdict. This rule might seem counterintuitive for a party who is asserting a claim; normally one thinks of a motion for directed verdict as being brought by a defending party. Nevertheless, because the third-party plaintiff in Boone Ford had not moved for directed verdict, the court concluded that any argument regarding the third-party plaintiff’s Rule 50 JNOV motion was “not preserved for appellate review.”

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Trade Creditor Had No Right to Bring Deceptive Trade Practice Claim Against Liability Insurer of Tortfeasor/Insured

By James W. Bryan

On February 20, 2018, the North Carolina Court of Appeals upheld a ruling of the North Carolina Business Court that provides further clarification on whether a claimant with a judgment against the insured may sue the insurer for deceptive trade practices.  USA Trouser, S.A. de C.V. v. Williams, 2018 WL 943639 (N.C.App. 2018).  In this case, Navigators Insurance Co. issued a directors and officers liability insurance policy to the insured International Legwear Group, Inc. (“ILG”).  Plaintiff USA Trouser S.A. de C.V. (“USAT”), a trade creditor of the insured, sold socks on credit to the insured.  In federal court in Charlotte, USAT sued ILG and three of its directors/officers for failing to disclose ILG’s worsening financial condition while continuing to obtain products from USAT upon credit.  USAT obtained a default judgment for $2.0 mil.   USA Trouser later filed the instant action in state court against Navigators asserting claims for, among other things, bad faith claims settlement practices and unfair trade practices pursuant to N.C. Gen. Stat. § 75-1.1.  Navigators moved to dismiss.  In opposing the motion, USAT argued it became a third-party beneficiary to the insurance policy upon entry of the default judgment and obtained the right to payment on the judgment and to sue the insurer directly for its failure to pay.  Business Court Judge Gale granted the motion to dismiss and USAT appealed.

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