7 MILE ADVISORS, LLC v. ZAELAB, LLC, 2023 NCBC 75

STATE OF NORTH CAROLINA
MECKLENBURG COUNTY
IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
23 CVS 8248
7 MILE ADVISORS, LLC and 7M
SECURITIES, LLC,
Plaintiffs,
v.
ZAELAB, LLC,
Defendant.
ORDER AND OPINION ON
DEFENDANT’S RULE 56(f) MOTION
TO DENY OR CONTINUE
PLAINTIFFS’ MOTION FOR
SUMMARY JUDGMENT
1. 	THIS MATTER is before the Court on Defendant Zaelab, LLC’s Rule 56(f)
Motion 	to 	Deny 	or 	Continue 	Plaintiffs’ 	Motion 	for 	Summary 	Judgment 	(the
“Motion”).1 	After considering the Motion, the parties’ briefs in support of and in
opposition to the Motion, the arguments of counsel at the hearing on the Motion, and
other appropriate matters of record, the Court hereby memorializes its oral ruling at
the hearing on the Motion and DENIES the Motion as moot as set forth below.
Womble Bond Dickinson (US), LLP, by Mark Henriques and Patrick
Grayson Spaugh, for Plaintiffs 7 Mile Advisors, LLC and 7M Securities,
LLC.
Robinson, Bradshaw & Hinson, P.A., by Andrew W.J. Tarr and Emily J.
Schultz, and Faegre Drinker Biddle & Reath, LLP, by Frank F. Velocci,
for Defendant Zaelab, LLC.
Bledsoe, Chief Judge.
1 (Zaelab’s Rule 56(f) Mot. Deny or Continue Pls.’ Mot. Summ. J. 2 [hereinafter “Rule 56(f)
Mot.”], ECF No. 27.)
7 Mile Advisors, LLC v. Zaelab, LLC, 2023 NCBC 75.

I.
FACTUAL AND PROCEDURAL BACKGROUND
2. 	Plaintiffs 	7 	Mile 	Advisors, 	LLC 	(“Advisors”) 	and 	7M 	Securities, 	LLC
(together, “Plaintiffs”) are North Carolina limited liability companies that provide
financial advisory services for mergers and acquisitions.2
3. 	On 14 September 2021, Defendant Zaelab, LLC (“Defendant” or “Zaelab”)
entered into a signed letter agreement with Plaintiffs (the “Agreement”) wherein
Plaintiffs agreed to act as Defendant’s exclusive financial advisor in connection with
a sale or transfer of Zaelab’s equity or assets in exchange for certain non-refundable
retainer fees as well as for certain transaction-based additional compensation (a
“Transaction Fee” or a “Fee”) described in Section 3 of the Agreement. 	Under the
Agreement, a Transaction Fee was payable upon the consummation of a qualifying
transaction described in Section 1 (a “Transaction”).3
4. 	The Transaction Fee provision in Section 3 provides as follows:
In further consideration for [Plaintiffs’] services hereunder, if, during
the period that [Plaintiffs are] retained by [Defendant] or during the 18-
month period thereafter (“Tail Period”), [Defendant] consummates a
Transaction or enters into an agreement regarding a Transaction (which
is subsequently consummated) with an Acquiror/Investor that was
introduced to [Defendant] during the term of this engagement, then
[Plaintiffs] shall be paid . . . a Transaction Fee[.]
5. 	Plaintiffs contend in this lawsuit that they are entitled to a Transaction Fee
because Zaelab entered into a Transaction during the Tail Period with Superstep
2 (Compl. ¶¶ 4–5, ECF No. 3.)
3 (Compl. ¶¶ 10–11; Compl. Ex. 1, §§ 1, 3 [hereinafter “Agreement”], ECF No. 3.)

Capital (“Superstep”), an investor Plaintiffs allege was “introduced to Zaelab during
the term of the Agreement.”4 When Defendant refused to pay Plaintiffs a Transaction
Fee after consummation of the Superstep transaction, Plaintiffs filed this action to
recover the Fee, asserting claims against Defendant for breach of contract and, in the
alternative, for unjust enrichment.5 Defendant denies all liability and, among other
defenses, contends that the parties’ agreement to “pause” the Agreement in February
2022 because of the Russo-Ukrainian War effected a termination of the Agreement
long before Superstep was introduced to Defendant.6
6. 	The Court entered a Case Management Order in the above-captioned case
on 16 August 2023, setting a fact discovery deadline of 19 January 20247 and
providing that “[u]nless the parties otherwise agree, no depositions may be taken by
either side prior to 30 October 2023.”8 The parties have initiated written discovery,
with Defendant producing documents to Plaintiffs on 3 August 2023 and Plaintiffs
producing documents to Defendant on 22 September 2023.9
4 (Compl. ¶¶ 33, 41.)
5 (Compl. ¶¶ 39–47.)
6 (Zaelab’s Reply Further Supp. Rule 56(f) Mot. 7 [hereinafter “Reply Br.”], ECF No. 32; Aff.
Ilia Ulianchuk Supp. Pl. 7 Mile Advisors, LLC’s Mot. Summ. J., dated Sept. 13, 2023, at ¶ 12
[hereinafter “Ulianchuk Aff.”], ECF No. 23.)
7 (Case Management Order ¶ 11, ECF No. 18.)
8 (Case Management Order ¶ 12.)
9 (Zaelab’s Br. Supp. Rule 56(f) Mot. 2–3 [hereinafter “Br. Supp.”], ECF No. 28; Br. Supp. Ex.
A, Aff. Frank Velocci Supp. Zaelab’s Rule 56(f) Mot., dated Sept. 25, 2023, at ¶¶ 6, 9
[hereinafter “Velocci Aff.”], ECF No. 28.1.)

7. 	On 13 September 2023, Advisors filed its Motion for Summary Judgment10
(the “SJ Motion”) and supported that motion with an affidavit from Ilia Ulianchuk,
Advisors’ Vice President (the “Ulianchuk Affidavit”).11
8. 	Shortly thereafter, on 25 September 2023, Defendant filed the current
Motion, seeking the denial or continuance of the SJ Motion until discovery has been
completed.12
9. 	The Court convened a hearing on the Motion on 18 October 2023 (the
“Hearing”), at which all parties were represented by counsel. 	At the Hearing, the
Court indicated that it intended to grant the Motion. Thereafter, on 25 October 2023,
Advisors withdrew its SJ Motion.13 	The Court issues this Order and Opinion to
memorialize its oral ruling at the Hearing granting the Motion and to deny the
Motion as moot in light of the subsequent withdrawal of the SJ Motion.
II.
LEGAL STANDARD
10. 	“[M]otions for summary judgment generally should not be decided until all
parties are prepared to present their contentions on all issues raised.” 	Ussery v.
Taylor, 156 N.C. App. 684, 686 (2003). Rule 56(f) of the North Carolina Rules of Civil
Procedure (“Rule”) accordingly provides that:
10 (Pl. 7 Mile Advisors, LLC’s Mot. Summ. J., ECF No. 21.)
11 (Ulianchuk Aff.)
12 (Rule 56(f) Mot.) The Court notes that Defendant’s Motion mistakenly represents that both
Plaintiffs, rather than just Advisors, brought the SJ Motion.
13 (Pl. 7 Mile Advisors, LLC’s Notice Withdrawal Mot. Summ. J., ECF No. 34.)

[s]hould it appear from the affidavits of a party opposing the motion that
he cannot for reasons stated present by affidavit facts essential to justify
his opposition, the court may refuse the application for judgment or may
order a continuance to permit affidavits to be obtained or depositions to
be taken or discovery to be had or may make such other order as is just.
11. 	“To prevail on a Rule 56(f) motion, the moving party has the burden of
showing why additional discovery is necessary and how that discovery will create a
genuine issue of material fact.” Ripellino v. N.C. Sch. Bds. Ass’n, 158 N.C. App. 423,
426 (2003). “Sufficient time for the completion of discovery is one major goal of Rule
56(f),” and the Rule should be applied liberally, especially if the party opposing
summary judgment has been diligent and acted in good faith. 	Ipock v. Gilmore, 73
N.C. App. 182, 190 (1985). 	“[T]he decision to grant or deny a continuance is solely
within the discretion of the trial judge and will be reversed only when there is a
manifest abuse of discretion.” 	N.C. Council of Churches v. State, 120 N.C. App. 84,
92 (1995).
III.
ANALYSIS
12. 	In accordance with Rule 56(f), Defendant submitted the affidavit of Frank
Velocci, one of Defendant’s attorneys, to support the Motion.14 Velocci averred in the
affidavit 	that 	Defendant 	had 	not 	been 	afforded 	sufficient 	discovery 	to 	oppose
Advisors’ SJ Motion, asserting that Zaelab had not yet been able to “(1) assess
Plaintiffs’ [discovery] productions to determine whether they thoroughly respond to
Zaelab’s requests; (2) analyze the contents of Plaintiff[s’] productions to determine
14 (Velocci Aff.)

whether 	they 	evidence 	various 	defenses 	raised 	by 	Zaelab; 	and/or 	(3) 	depose
Plaintiff[s’] 	key 	witnesses, 	including 	Ilia 	Ulianchuk, 	whose 	affidavit 	supports
[Advisors’] Motion for Summary Judgment.”15 Despite these limitations, Defendant
offered several fact-based defenses at the Hearing, discussed below, based on
discovery conducted up to that point in the litigation. Defendant also argued that the
terms “introduced” and “during the term of this engagement” in the Agreement were
ambiguous and must be interpreted in light of extrinsic evidence that Defendant
contended it should be permitted to develop in discovery.16
13. 	In response, Advisors asserted that additional discovery was unnecessary
because the Agreement is an unambiguous, integrated agreement requiring payment
of a Transaction Fee after an “introduc[tion]” of an Acquiror/Investor to Defendant
during the term of the Agreement, regardless of whether or not Plaintiffs were the
source of the introduction to Defendant. 	As a result, Advisors argued that parol
evidence was inadmissible to interpret the Agreement’s terms, and, further, that
because the undisputed facts established that Superstep was introduced to Defendant
during the term of the Agreement, Advisors was entitled to summary judgment on its
breach of contract claim as a matter of law at this stage of the litigation.17
14. 	After careful review, the Court concluded at the Hearing that Defendant’s
Motion should be granted. 	First, Defendant argued that the Superstep opportunity
15 (Velocci Aff. ¶ 11.)
16 (Br. Supp. 6; Agreement § 3.)
17 (Pl. 7 Mile Advisors, LLC’s Opp’n Def.’s Rule 56(f) Mot. 2–3, ECF No. 31.)

was 	developed 	within 	Defendant’s 	board 	of 	directors 	and 	thus 	that 	no 	party
“introduced” Superstep to Defendant at all.18 	Defendant also offered evidence that
the parties did not handle the Superstep opportunity consistent with the parties’
established course of dealing for potential transactions they agreed could result in a
Transaction Fee to Plaintiffs if consummated.19 Further, Defendant offered evidence
that the Superstep opportunity was introduced to Defendant when the Agreement
was either paused or terminated and, thus, no enforceable right to a Transaction Fee
had ever accrued.20 Finally, Defendant noted that the Ulianchuk Affidavit contained
substantive allegations that bore on Plaintiffs’ claims, including factual averments
concerning the introduction of Superstep to Defendant and the parties’ course of
dealing under the Agreement, that Defendant argued it should have an opportunity
to explore in discovery.21
15. 	The Court agreed at the Hearing that Defendant should be permitted to
explore more completely all of these fact-based defenses to Plaintiffs’ claims through
discovery before Defendant should be required to respond to, and the Court render
its decision on, Advisors’ SJ Motion because such discovery may reveal facts that are
essential to justify Defendant’s opposition to the SJ Motion. 	Accordingly, the Court
ruled, in the exercise of its discretion, that it intended to enter a written order
18 (Reply Br. 4)
19 (Reply Br. 5–6; Reply Br. Ex. A, ECF No. 32.2.)
20 (Reply Br. 6–8.)
21 (Ulianchuk Aff. ¶¶ 9–10.)

granting Defendant’s Motion and staying the period within which Defendant must
respond to Advisors’ SJ Motion. Prior to the entry of this written Order and Opinion,
however, Advisors, in reliance on the Court’s oral ruling, withdrew its SJ Motion,
thereby rendering Defendant’s Motion moot. 	See, e.g., Roberts v. Madison Cnty.
Realtors Ass’n, 344 N.C. 394, 398–99 (1996) (“A case is ‘moot’ when a determination
is sought on a matter which, when rendered, cannot have any practical effect on the
existing controversy.”).
IV.
CONCLUSION
16. 	WHEREFORE, 	based 	on 	the 	foregoing, 	the 	Court 	hereby 	DENIES
Defendant’s Motion as moot.
SO ORDERED, this the 8th day of November, 2023.
/s/ Louis A. Bledsoe, III
Louis A. Bledsoe, III
Chief Business Court Judge