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Business Litigation Archives

Homeowner's Insurance and Natural Disasters

H.P Lovecraft once wrote that "the oldest and strongest kind of fear is fear of the unknown." For all the spooks and scares facing homeowners this October, the worst may be not knowing how to deal with the damage caused by Hurricane Matthew. Trees have been uprooted. Winds have torn siding from your walls. Your roof is in tatters. Flood waters have destroyed your furniture. Your carpet will require, at the very least, an extensive cleaning if not total replacement. Your drywall will need replaced. The insulation behind the walls needs to go. And to make matters worse, there is the ever present lurking horrors of mold growth spawned by stagnant flood water, asbestos in houses built before 1978, and lead paint revealed by storm damage. It's enough to make one's skin crawl. But you don't need to go it alone, follow this advice and you may avoid a costly and painful experience as you recover from Hurricane Matthew.

Zoning Ordinances and Burdens of Proof

What happens when you would like to use your property for a use isn't permitted under your current zoning restrictions? A recent case from the North Carolina Court of Appeals walks through the process, and clarifies the duties of zoning commissions and the burdens of proof for people that applying for conditional use permits. In Dellinger v. Lincoln County,1 the Dellingers owned a 54 acre tract of land in Lincoln County on part of which Strata Solar, LLC wanted to operate a solar power facility. However, the land was zoned as residential-single family use. In order to get permission for the solar facility, the Dellingers and Strata Solar applied for a conditional use permit with the Lincoln County Planning Board. The planning board then sent the application to the Lincoln County Board of Commissioners, who held a series of quasi-judicial proceedings. After a series of denials and appeals, the Board denied the conditional use permit because one Commissioner found that Strata Solar did not prove its case beyond a doubt, and because the Commissioners found that [a]lthough [Strata Solar] did meet its burden of production and provided evidence as to this element, we found the evidence unpersuasive.

What Does 'Wind Up' Mean for a Partnership?

Partnerships are a longstanding method by which people come together to create a business in which all of the partners are owners of the business. In North Carolina, partnership is defined under the Uniform Partnership Act (UPA) as "an association of two or more persons to carry on as co-owners a business for profit."1 Partners are co-owners to the extent that they share in the liabilities and profits of the partnership, but they often have an equal share in the voting and management of the partnership business. So, what happens when a partnership goes awry, and one or more partners decide they would like to leave the partnership?

Contract and Debt Assignment

A recent case from the North Carolina Court of Appeals demonstrates the importance of being mindful of what you sign. In Caron Associates v. Southside Manufacturing Corp., a buyer had an agreement with a cabinet maker for the creation and delivery of cabinets for a school. The buyer, Caron,  was to install the cabinets at Bertie County High School, and contracted with Southside Manufacturing for the cabinets to be delivered in November 2013. Caron was to pay Southside 30 days after the cabinets were delivered. There was a delay, and Caron agreed to accept delivery of the cabinets in December 2013. However, before the cabinets were delivered, Southside sent an invoice to Caron for $45,000 for the work that was in progress. Caron rejected the invoice, noting that their contract stated that they were only responsible for payment after the completed cabinets were delivered. On the same day, December 9, 2013, Southside sold their accounts receivable, i.e. their right to receive payment from Caron, to Crown Financial, LLC.

The White House on Non-Compete Prevalence and Enforceability

Non-compete agreements are often used by businesses to ensure that they can share trade secrets with their workers without fear of those workers being able to leave and distribute such information to their market competitors. If a business were to lose all of its valuable trade secrets (i.e., secrets about the way they conduct business or create products, as well as guarded confidential information like certain types of customer lists and customer information), it would lose its competitive edge in the marketplace. Non-competes have also been traditionally used so that businesses feel comfortable investing in the training and development of its employees, not fearing that they will invest only to have employees leave for another job without seeing a return on that investment.

Surface Water: What Are Your Rights and Responsibilities

A common problem encountered by homeowners and owners of commercial properties alike is the runoff and drainage from surface waters. As a property owner in North Carolina, you are allowed a decent amount of leeway in how you would like to use your property, provided that it is unencumbered by easements, licenses, or other usage or zoning restrictions. However, you do have certain obligations to your neighbors, including obligations regarding the drainage of surface waters.

Lien Protections for Contractors

What happens when you aren't paid for work you've already performed? If you're a contractor, subcontractor, or supplier to a building project, you have several options open to you. The main tool used by builders, suppliers, and designers is the lien on real property or lien on funds. A lien on real property is essentially a claim made by someone who has made improvements on property that they have not been paid, and therefore they have a right to a portion of the value of the property that is equal to the work that they put in to improve the property. For instance, if contractor has supplied materials and installed them on a building project, and their material and labor expenditures were $20,000, and they were unpaid for the work that they performed, they could file a lien on that property entitling them to $20,000 worth of value in that property. If subcontractors are not paid by the General Contractor, the process is similar but a lien is filed on the funds that the General Contractor receives for the work of the subcontractor.

Problems with Contractors for Home Repairs or Renovations?

Have you encountered a problem with your contractor based on the quality of their workmanship or their breach of your agreement? When homeowners feel out of their depth, many times they hire the help of a contractor to perform renovation or repair work on their homes. However, what happens when something goes wrong? If a dispute arises between you and your contractor, it usually arises out of several common reasons: lack of quality workmanship, delays, results that are not in accordance with agreed upon plans, defective installations, or disagreements over the terms of the contract.

UDTPA and Substantial Aggravating Circumstances - Broadnax v. Associated Cab

North Carolina's Unfair and Deceptive Trade Practices Act (UDTPA) has long been a source of consternation for lawyers looking to seek extra damages for business conduct that falls outside the realm of normal breaches of contract. North Carolina's UDTPA attracts plaintiffs because of the possibility of treble damages, which allows for three times actual, compensatory damages for conduct that is found to violate the law. However, as can be seen in a recent decision by the North Carolina Business Court, finding conduct that meets this standard is a high bar that requires pleading of undefined "substantial aggravating circumstances."

Clarification for Covenants not to Compete: Beverage Systems of the Carolinas, LLC v. Associated Beverage Repair, LLC

In a recent North Carolina Supreme Court case, Beverage Systems of the Carolinas, LLC v. Associated Beverage Repair, LLC, the Court upheld a trial court's decision not to enforce a covenant not to compete that was entered in to after the sale of a North Carolina Business.

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