ISLET SCIS., INC. v. BRIGHTHAVEN VENTURES, LLC 2017 NCBC 5

Islet Scis., Inc. v. Brighthaven Ventures, LLC, 2017 NCBC 5.
STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
COUNTY OF WAKE 15 CVS 16388
ISLET SCIENCES, INC. )
Plaintiff, )
)
v. ) OPINION AND ORDER ON
) DEFENDANT BRIGHTHAVEN
BRIGHTHAVEN VENTURES, LLC, ) VENTURES LLC’S MOTION
JAMES GREEN, WILLIAM WILKISON, ) TO DISMISS
OFSINK LLC, and DARREN OFSINK, )
Defendants, )
)
and )
)
BRIGHTHAVEN VENTURES LLC, )
Third-Party Plaintiff, )
)
v. )
)
JOHN F. STEEL, IV, EDWARD T. )
GIBSTEIN, and COVA CAPITAL )
PARTNERS, LLC, )
Third-Party Defendants. )
THIS MATTER comes before the Court on Defendant Brighthaven Ventures,
LLC’s (“BHV”) Motion to Dismiss pursuant to Rule 12(b)(6) of the North Carolina
Rules of Civil Procedure (“Rule(s)”) (“Motion to Dismiss”).
THE COURT, having considered the Motion to Dismiss, the briefs in support
of and in opposition to the Motion to Dismiss, the oral arguments of counsel at the
hearing, and other appropriate matters of record, concludes that the Motion to
Dismiss should be GRANTED, in part, and DENIED, in part, for the reasons set forth
below.

McGuireWoods LLP by Michael F. Easley, Jr, Esq., Irving M. Brenner,
Esq., Michael L Simes, Esq., for Plaintiff Islet Sciences, Inc. and for
Third-Party Defendants John F. Steel, IV, Edward T. Gibstein and
COVA Capital Partners, LLC.
Parry Tyndall White by K. Allan Parry, Esq., for Defendants James
Green and William Wilkison.
Jerry Meek, PLLC by Gerald F. Meek, Esq. for Defendant Brighthaven
Ventures, LLC.
Young Moore and Henderson, P.A. by Walter E. Brock, Jr., Esq. for
Defendants Offsink LLC and Darren Offsink.
McGuire, Judge.
FACTUAL1 AND PROCEDURAL BACKGROUND
1. The factual and procedural background of this matter has been recited
by the Court in its Opinion and Order on Green and Wilkison’s Motions issued
contemporaneously with this Opinion and Order. Here, the Court recites only those
limited background and procedural facts necessary to the resolution of the Motion to
Dismiss.
2. Plaintiff Islet Sciences, Inc. (“Islet” or “Plaintiff”) is a public corporation
organized and existing under the laws of the State of Nevada with its headquarters
in Raleigh, North Carolina. Islet is in the business of developing and commercializing
new medicines and technologies to treat patients suffering from metabolic disease.
3. Defendant Brighthaven Ventures, LLC (“BHV”) is a privately-owned
pharmaceutical research and development company headquartered in Raleigh, North
1 The Court does not make findings of fact on motions to dismiss under Rule 12(b)(6), but only
recites those facts included in the Complaint that are relevant to the Court’s determination
of the Motion.
See, e.g.,
Concrete Serv. Corp. v. Investors Grp., Inc., 79 N.C. App. 678, 681,
340 S.E.2d 755, 758 (1986).

Carolina. BHV develops pharmaceutical products to treat obesity-related health
complications. Defendants James Green (“Green”) and William Wilkison (“Wilkison”)
own BHV.
4. On or around September 2013, Islet approached Green and Wilkison
about joining Islet’s management team. On October 25, 2013, Islet’s board appointed
Green as CEO and Wilkison as COO of Islet.
5. Green and Wilkison remained officers of Islet until they resigned their
positions on July 23, 2015. They remained directors of Islet until they were removed
on September 24, 2015.
6. On or about February 9, 2014, the parties agreed on the “key terms” of
an agreement for Islet to merge with BHV, but the agreement was subsequently
terminated in or around March 9, 2015. (Am. Compl. ¶ 27, 61
.) Green and Wilkison
remained the owners of BHV at all times relevant to the Motion to Dismiss.
7. Plaintiff alleges that during their tenures as officers and directors of
Islet, Green and Wilkison breached their respective fiduciary duties to Islet and
instead engaged in conduct that directly benefitted themselves and BHV at the
expense of Islet.
8. On December 11, 2015, Plaintiff initiated this lawsuit by filing a
Complaint.
9. On February 19, 2016, BHV filed its Answer and Counterclaims.
10. On February 19, 2016, BHV also filed a Motion to Dismiss pursuant to
Rule 12(b)(6), seeking dismissal of Plaintiff’s claims against it.

11. On April 20, 2016, the Court entered an Order granting Plaintiff leave
to file its First Amended Complaint. The First Amended Complaint made claims for
relief against BHV for: aiding and abetting Green and Wilkison’s breaches of
fiduciary duties (Second Cause of Action); unjust enrichment (Sixth Cause of Action);
and, for the imposition of a constructive trust (Seventh Cause of Action).
12. On May 20, 2016, BHV filed its Answer to the First Amended
Complaint.
13. On May 20, 2016, BHV also filed a renewed Motion to Dismiss the claims
stated against it in the First Amended Complaint. The Motion to Dismiss was fully
briefed, the Court has heard oral arguments, and it is now ripe for disposition.
DISCUSSION
14. When ruling on a Rule 12(b)(6) motion to dismiss, the Court must
determine “whether the complaint, when liberally construed, states a claim upon
which relief can be granted on any theory.”
Benton v. W. H. Weaver Constr. Co., 28
N.C. App. 91, 95, 220 S.E.2d 417, 420 (1975). Such a motion should be granted only:
“(1) when the complaint on its face reveals that no law supports plaintiff's claim; (2)
when the complaint on its face reveals the absence of fact sufficient to make a good
claim; (3) when some fact disclosed in the complaint necessarily defeats plaintiff's
claim.”
Jackson v. Bumgardner, 318 N.C. 172, 175, 347 S.E.2d 743, 745 (1986). The
Court treats the well-pleaded allegations in a complaint as true and admitted in
analyzing a Rule 12(b)(6) motion to dismiss.
Sutton v. Duke, 277 N.C. 94, 98, 176
S.E.2d 161, 163 (1970). While facts and permissible inferences set forth in the

complaint are analyzed in a light most favorable to the plaintiff, un-warranted
conclusions of law or deductions of fact will not be deemed admitted.
Sutton, 277 N.C.
at 98, 176 S.E.2d at 163;
Ford v. Peaches Entm’t Corp., 83 N.C. App. 155, 156, 349
S.E.2d 82, 83 (1986). “The general standard for civil pleadings in North Carolina is
notice pleading. Pleadings should be construed liberally and are sufficient if they give
notice of the events and transactions and allow the adverse party to understand the
nature of the claim and to prepare for trial.”
Radcliffe v. Avenel Homeowners Ass’n,
789 S.E.2d 893, 913, 2016 N.C. App. LEXIS 824, *52 (2016) (citation omitted).
A. Aiding and Abetting Breach of Fiduciary Duty.
15. Plaintiff contends that BHV, “through its principals Green and
Wilkison,” had knowledge of Green and Wilkison’s fiduciary duties to Islet and
“provided substantial assistance to [ ] Green and Wilkison in breaching those
fiduciary duties.” (Am. Compl. ¶¶ 97–100.) Plaintiff does not allege specifically how
BHV provided such assistance. In its Memorandum in Opposition to BHV’s Motion
to Dismiss, however, Plaintiff contends that “BHV . . . was the vehicle by which Green
and Wilkison accomplished their self-dealing and . . . the primary beneficiary of their
wrongful conduct. As the sole owners and officers of BHV, BHV acts and operates
through Green and Wilkison.” (Pl.’s Mem. Opp. Mot. Dismiss 19.)
16. As a preliminary matter, the parties dispute whether North Carolina or
Nevada law applies to the claim for aiding and abetting breach of fiduciary duty. The
answer to this question is critical because North Carolina has not clearly recognized
the existence of a cause of action for aiding and abetting breach of fiduciary duty,
see

e.g., Corwin v. British Am. Tobacco PLC, 2016 N.C. App. LEXIS 1320 *42–43 (Dec.
20, 2016) (citing
Bottom v. Bailey, 238 N.C. App. 202, 211-12, 767 S.E.2d 883, 889
(2014)) (“The validity of an aiding and abetting a breach of fiduciary duty claim
brought against a corporation for the actions of its directors is unsettled in North
Carolina.”);
Bell v. Kaplan, 2016 U.S. Dist. LEXIS 24408, *14–15 (W.D.N.C. Feb. 29,
2016) (“North Carolina has never recognized this cause of action.”);
Veer Right Mgmt.
Grp., Inc. v. Czarnowski Display Serv., 2015 NCBC LEXIS 13, *6–7 (N.C. Super. Ct.
2015) (“[W]hether North Carolina recognizes a claim for aiding and abetting a breach
of fiduciary duty remains an open question.”);
Laws v. Priority Tr. Servs. of N.C.,
LLC, 610 F. Supp. 2d 528, 532 (W.D.N.C. 2009) (dismissing claim for aiding and
abetting breach of fiduciary duty because “no such cause of action exists in North
Carolina”), while Nevada has recognized this claim.
See Kahn v. Dodds (
In re
AMERCO Derivative Litig.), 127 Nev. 196, 225, 252 P.3d 681, 701–02 (2011).
17. Plaintiff contends that the claim for aiding and abetting is governed by
the “internal affairs doctrine,” and because Islet is a Nevada corporation, Nevada law
applies, citing
Bluebird Corp. v. Aubin, 188 N.C. App. 671, 680, 657 S.E.2d 55, 63
(2008). (Pl.’s Mem. Opp. Mot. Dismiss 15–17.) Plaintiff argues that since its claims
for breach of fiduciary duty against Green and Wilkison are governed by Nevada law,
Nevada law must be applied because its “claim for aiding and abetting breach of
fiduciary duty is rooted in Green and Wilkison’s breaches of their fiduciary duties to
Islet. . . .” (
Id. at 16.) Plaintiff cites primarily to cases from other jurisdictions in
support of its position.

18. BHV contends that the internal affairs doctrine does not compel the
application of Nevada law, and that North Carolina law applies to the claim for aiding
and abetting. (BHV’s Reply Supp. Mot. Dismiss 2–6.) BHV argues that “aiding and
abetting breach of fiduciary duty is a separate tort which, under our state’s law, is
not automatically governed by the law of the state of incorporation. That is especially
true where, as here, the alleged aider and abetter is an outsider to Islet who is not
alleged to have breached any fiduciary duties owed to Islet.” (
Id. at 2.) BHV also cites
to
Bluebird, quoting the relevant holding from that case as follows:
The internal affairs doctrine is a conflict of laws principle
which recognizes that only one State should have the
authority to regulate a corporation's internal affairs—
matters peculiar to the relationships among or between the
corporation and its current officers, directors, and
shareholders—because otherwise a corporation could be
faced with conflicting demands.
188 N.C. App. at 680, 657 S.E.2d at 63 (quoting
Edgar v. MITE Corp. 457 U.S. 624,
645 (1982)). BHV contends that applying “the internal affairs doctrine to the alleged
tortious conduct of outsiders like BHV . . . ignores the very purpose of the doctrine.”
(BHV’s Reply Supp. Mot. Dismiss 5.)
19. BHV also relies on the recent opinion issued by the Honorable Graham
Mullen in
Bell v. Kaplan, supra, involving the same issue with which this Court is
faced—a claim of aiding and abetting breach of fiduciary duty brought by a Nevada
corporation against a third-party. In
Bell, the Court held:
Kaplan next argues that the Receiver’s claim for aiding and abetting
breach of fiduciary duty must be dismissed because North Carolina
does not recognize such a cause of action. It appears that the
Defendant is correct that North Carolina has never recognized this

cause of action. The Receiver contends, however, that Nevada law
applies to the Receiver’s claim because RVG was incorporated in
Nevada and the claim involves the “internal affairs” of RVG. “Under
North Carolina law, the substantive law of a corporation’s state of
incorporation governs suits involving ‘[the] corporation’s internal
affairs—matters peculiar to the relationships among or between the
corporation and its current officers, directors, and shareholders . . . .’”
Mr. Kaplan is neither an officer, director, nor shareholder of RVG.
Therefore, this claim does not invoke the internal affairs doctrine and
Nevada law is inapplicable. As North Carolina does not recognize this
claim, it must be dismissed.
2016 U.S. Dist. LEXIS 24408 at *14–15 (citations omitted).
20. The Court has carefully reviewed all of the authority cited by both
parties in support of their respective positions and concludes that the internal affairs
doctrine should not be applied to the aiding and abetting claim under the facts of the
present case. The doctrine’s primary purpose is to minimize the potential for
corporations to be subjected to the “conflicting” standards of different state’s laws
with regard to matters of internal corporate governance and the relationships
between and among shareholders, officers, and directors.
Bluebird, 188 N.C. App. at
680, 657 S.E.2d at 63 (“States normally look to the State of a business’ incorporation
for the law that provides the relevant corporate governance general standard of care,”
quoting Atherton v. F.D.I.C., 519 U.S. 213, 224 (1997));
see also Mancinelli v.
Momentum Research, Inc., 2012 NCBC LEXIS 30, *4–8 (N.C. Super. Ct. 2012) (“The
need for the inner workings of a corporation to be governed by a single body of laws
has been frequently emphasized by state and federal courts alike. The internal affairs
doctrine ‘serves the vital need for a single, constant and equal law to avoid the

fragmentation of continuing, interdependent internal relationships.’”) (citations
omitted).
21. The Restatement (Second) of Conflict of Laws offers the following
examples of the types of conduct encompassed by the internal affairs doctrine:
[S]teps taken in the course of the original incorporation,
the election or appointment of directors and officers, the
adoption of by-laws, the issuance of corporate shares,
preemptive rights, the holding of directors’ and
shareholders’ meetings, methods of voting including any
requirement for cumulative voting, shareholders’ rights to
examine corporate records, charter and by-law
amendments, mergers, consolidations and reorganizations
and the reclassification of shares.
Restatement (Second) of Conflict of Laws § 302 cmt. a (Am. Law. Inst. 1988).
22. While a standard of fiduciary responsibility expected of officers and
directors of a corporation generally should be the subject of uniform regulation by the
state of incorporation, the same concerns do not necessarily apply to the conduct of
third-party corporate outsiders that may lead to tort liability for aiding and abetting.
Such third-party conduct does not implicate the standard to which a director or officer
should be held; that standard is best left to determination by the state of
incorporation. As one court that considered the application of the internal affairs
doctrine to an aiding and abetting claims aptly held:
[T]here are no compelling reasons to apply the “internal
affairs” doctrine here, since the claims do not involve
“matters peculiar to the relationships among or between
the corporation and its current officers, directors, and
shareholders.” Here determination of the aiding and
abetting issues does not involve a determination as to the
nature or extent of the fiduciary duties that were owed by
the Rigases or other Adelphia management, or the extent

to which fiduciary duties were breached. There is no risk
that different courts might reach different conclusions as
to the applicable standards for appropriate officer or
director conduct, or as to claims for failure to satisfy these
standards. This case instead involves basic principles of
tort secondary liability, as established in the
current
	Restatement (which applies to many different
types of torts), and which principles are applicable to
alleged aiding and abetting of
	many types of primary
violations of duty—of which a breach by a corporate officer
or director is only one.
Adelphia Communs. Corp. v. Bank of Am., N.A. (In re Adelphia Communs. Corp.),
365 B.R. 24, 41 (Bankr. S.D.N.Y. 2007) (citations omitted).
23. The Court concludes that under the facts present in this case, there is
no compelling reason that the internal affairs doctrine must be applied to the claim
for aiding and abetting breach of fiduciary duty. Rather, North Carolina’s choice of
law principles applicable to claims affecting the substantial rights of the parties, such
as torts, should be applied to the aiding and abetting claim.
Harco Nat’l Ins. Co. v.
Grant Thornton LLP, 206 N.C. App. 687, 692, 698 S.E.2d 719, 722–723 (2010) (“Our
traditional conflict of laws rule is that matters affecting the substantial rights of the
parties are determined by lex loci, the law of the situs of the claim . . . . For actions
sounding in tort, the state where the injury occurred is considered the situs of the
claim,”
quoting Boudreau v. Baughman, 322 N.C. 331, 335, 368 S.E.2d 849, 853-54
(1988));
Camacho v. McCallum, 2016 NCBC LEXIS 81, *17 (N.C. Super. Ct. 2016)
(“The place of the injury is the state where the injury or harm was sustained or
suffered—the state where the last event necessary to make the actor liable or the last

event required to constitute the tort takes place, and the substantive law of that state
applies.”).
24. Neither party has addressed the application of North Carolina’s lex loci
principles to the facts underlying the claim for aiding and abetting. Nevertheless, the
allegations in the First Amended Complaint and Plaintiff’s arguments regarding the
nature of BHV’s assistance in the breaches of fiduciary duty point to North Carolina
as the “situs of the claim.” First, Plaintiff maintains its principal place of business in
North Carolina. (Am. Compl. ¶ 6.) Although North Carolina has not adopted a “bright
line” rule that a corporation necessarily sustains economic injury in the state in which
its principal place of business is located, the Court of Appeals has recognized that
“[t]he location of a plaintiff’s residence or place of business may be useful for
determining the place of a plaintiff’s injury in those rare cases where, even after a
rigorous analysis, the place of injury is difficult or impossible to discern.”
Harco Nat'l
Ins. Co., 206 N.C. App. at 697, 698 S.E.2d at 726.
25. BHV also has its principal place of business in North Carolina, and
Green and Wilkison are residents of North Carolina. Plaintiff contends that BHV
aided and abetted the breach of fiduciary duty by being “the vehicle by which Green
and Wilkison accomplished their self-dealing and which was the primary beneficiary
of their wrongful conduct.” (Pl.’s Mem. Opp. Mot. Dismiss 19.) Plaintiff further
contends that “[a]s sole owners and officers of BHV, BHV acts and operates through

Green and Wilkison.”2 (
Id.) Plaintiff has not alleged any actions taken by other
directors or corporate officials of BHV. These allegations would indicate that BHV’s
alleged “aiding and abetting,” apparently limited to Green and Wilkison acting on
BHV’s behalf, took place in North Carolina.
26. Absent allegations or information pointing to the applicability of the law
of another state, the Court will apply North Carolina law to the claim for aiding and
abetting.
27. As noted
supra, North Carolina’s appellate courts have not, to-date,
expressly recognized a cause of action for aiding and abetting breach of fiduciary duty,
and the existence such claim is, at best for Plaintiff, “unsettled.”
Corwin, 2016 N.C.
App. LEXIS 1320 at *42–43. Nevertheless, even if such a claim should be recognized
in North Carolina, the Court of Appeals has held that the claim requires facts
supporting an allegation of “substantial assistance by the aider and abettor in the
achievement of the primary violation.”
Bottom v. Bailey, 238 N.C. App. 202, 212, 767
S.E.2d 883, 889 (2014) (
citing Blow v. Shaughnessy, 88 N.C. App. 484, 490, 364 S.E.2d
444, 447 (1988)). Mere “conclusory allegations” that the abettor “was aware of
Bailey’s fraudulent acts and rendered substantial assistance” are not sufficient.
Id.
In this case, Plaintiff has not alleged any specific assistance, let alone substantial
assistance, provided to Green and Wilkison by BHV. In other words, Plaintiff has
failed allege sufficient facts to support the claim that BHV aided and abetted Green
2 Plaintiff has not alleged where any of the specific conduct in the Amended Complaint
occurred, except for Green and Wilkison’s meeting with Schoninger in New York in February,
2014.

and Wilkison in breaching their fiduciary duties. BHV’s motion to dismiss Plaintiff’s
claim for aiding and abetting breach fiduciary duty should be GRANTED.
a.	
Unjust Enrichment.3
28. As a Sixth Cause of Action, Plaintiff alleges that “BHV, Green, and
Wilkison unjustly enriched themselves by negotiating agreements, purportedly on
behalf of Islet, that served to benefit the Defendants’ personal pecuniary interests”
and “resulted in substantial benefits to [ ] BHV, Green, and Wilkison.” (Am. Compl.
¶¶ 120–21.) In the Amended Complaint, Plaintiff does not specifically allege the
benefits to BHV, Green, and Wilkison received except for “the continued research and
marketing of Remo.” (
Id. ¶ 121.)
29. A claim for unjust enrichment “is neither in tort nor contract but is
described as a claim in quasi contract or a contract implied in law.”
Booe v. Shadrick,
322 N.C. 567, 570, 369 S.E.2d 554, 556 (1988). “The general rule of unjust enrichment
is that where services are rendered and expenditures made by one party to or for the
benefit of another, without an express contract to pay, the law will imply a promise
to pay a fair compensation therefor.”
Atlantic C. L. R. Co. v. State Highway Comm’n,
268 N.C. 92, 95–96, 150 S.E.2d 70, 73 (1966). In North Carolina, to recover on a claim
of unjust enrichment, Plaintiff must prove: (1) that it conferred a benefit on another
party; (2) that the other party consciously accepted the benefit; and (3) that the
3 Plaintiff has cited to both North Carolina and Nevada law in support of its argument that
it has adequately pleaded a claim for unjust enrichment. (Pl.’s Mem. Opp. Mot. Dismiss 20–
21.) Nevada’s law regarding unjust enrichment appears to be essentially the same as North
Carolina’s law.
LeasePartners Corp. v. Robert L. Brooks Tr. Dated Nov. 12, 1975, 113 Nev.
747, 755, 942 P.2d 182, 187 (1997). The Court will apply North Carolina law to this claim.

benefit was not conferred gratuitously or by an interference in the affairs of the other
party.
Southeastern Shelter Corp. v. BTU, Inc., 154 N.C. App. 321, 330, 572 S.E.2d
200, 206 (2002). “The doctrine of unjust enrichment was devised by equity to exact
the return of, or payment for, benefits received under circumstances where it would
be unfair for the recipient to retain them without the contributor being repaid or
compensated.”
Collins v. Davis, 68 N.C. App. 588, 591, 315 S.E.2d 759, 761 (1984).
30. In its Memorandum, Plaintiff contends that the claim for unjust
enrichment is based on Green’s and Wilkison’s “self-dealing” in negotiating certain
agreements between Islet and BHV that unfairly benefitted BHV at the expense of
Islet, and in diverting certain benefits from Islet to BHV. (Pl.’s Mem. Opp. Mot.
Dismiss 20–21.) As best the Court can determine, Plaintiff claims the following
actions are the basis of the unjust enrichment claim:
a. Green negotiated a reduction of approximately $40 million in the
milestone payments owed by Kissei to BHV. Plaintiff alleges that the
reduction should have been for the benefit of Islet, but resulted only
in a benefit to BHV. (Am. Compl. ¶¶ 23–25.)
b. Green and Wilkison negotiated both sides of the merger termination
agreement between Islet and BHV and shifted all expenses related
to the termination to Islet, benefitting BHV. (
Id. ¶¶ 55–56.)
c. Green and Wilkison diverted to BHV “some or all” of the funds from
Schoninger that were supposed to be for Islet. (
Id. ¶¶ 33–34.)

d. Green and Wilkison committed Islet to a $200,000 loan from Chicago
Ventures but diverted the $200,000 in loan proceeds to BHV. (
Id. ¶¶
65–67.)
e. “Green and Wilkison failed to pursue valuable Islet assets in favor of
pursuing Remo for the benefit of themselves and for BHV on behalf
of Islet, that served to benefit the Defendants’ personal pecuniary
interests.” (
Id. ¶ 49.)
31. Plaintiff’s allegations underlying the unjust enrichment claim appear to
be nothing more than an attempt to repackage a number of Plaintiff’s claims against
Green and Wilkison. In fact, Plaintiff’s argument in response to Green and Wilkison’s
Motion to Dismiss makes it clear that the unjust enrichment claim is co-extensive
with its claims against Green and Wilkison for breach of fiduciary duty and
constructive fraud. (Pl.’s Mem. Opp. Green and Wilkison’s Mot. Dismiss 11–15.) To
the extent Plaintiff alleges that Green and Wilkison negotiated both sides of
agreements between Islet and BHV, or diverted funds and opportunities from Islet to
BHV, Plaintiff has made the same allegations against Green and Wilkison for breach
of fiduciary duty and self-dealing, and constructive fraud, and has remedies available
under those claims. Plaintiff has not alleged or otherwise explained how any of the
facts alleged support an allegation that Islet, as opposed to Green and Wilkison,
conferred a benefit on BHV, or how any benefits received by BHV, Green, or Wilkison
resulted from and implied contract. There are simply no grounds under the
allegations present in this action that would support a claim for unjust enrichment.

BHV’s motion to dismiss Plaintiff’s claim for unjust enrichment should be
GRANTED.
b.	
Constructive Trust.
32. As a Seventh Cause of Action, Plaintiff has requested that the Court
impose a constructive trust “with respect to any transfer of funds, assets, benefits,
corporate opportunities, or property from Plaintiff, as well as any benefits received
by Defendants in the past or on a going forward basis. . . .” (Am. Compl. ¶ 127.)
33. A constructive trust is an equitable remedy. “Courts of equity will
impose a constructive trust to prevent the unjust enrichment of the holder of the legal
title to property acquired through a breach of duty, fraud, or other circumstances
which make it inequitable for him to retain it against the claim of the beneficiary of
the constructive trust.”
Cline v. Cline, 297 N.C. 336, 343–44, 255 S.E.2d 399, 404
(1979). “[A] constructive trust ordinarily arises out of the existence of fraud, actual or
presumptive—usually involving the violation of a confidential or fiduciary relation—
in view of which equity transfers the beneficial title to some person other than the
holder of the legal title.”
Leatherman v. Leatherman, 297 N.C. 618, 621–22, 256
S.E.2d 793, 795–96 (1979),
superseded by statute on other grounds (quoting
Bowen
v. Darden, 241 N.C. 11, 13–14, 84 S.E.2d 289, 292 (1954)). A constructive trust “arises
purely by construction of equity independently of any contract or of any actual or
presumed intention of the parties to create a trust. . . .”
Teachey v. Gurley, 214 N.C.
288, 292, 199 S.E. 83, 87 (1938).

34. The Court has denied the motions to dismiss Plaintiff’s claims for breach
of fiduciary duty and constructive fraud against Green and Wilkison and the remedy
of a constructive trust remains available to Plaintiff at this stage of the action. Some
of the assets over which Plaintiff seeks a constructive trust may currently be held by
BHV. Accordingly, Defendant BHV’s Motion to Dismiss Plaintiff’s claim for
constructive trust should be DENIED.
35. THEREFORE, IT IS ORDERED that Defendant BHV’s Motion to
Dismiss is GRANTED, in part, and DENIED in part as follows:
36. Defendant’s Motion to Dismiss Plaintiff’s claim for aiding and abetting
breach of fiduciary duty (Second Cause of Action) is GRANTED.
37. Defendant’s Motion to Dismiss Plaintiff’s claim for unjust enrichment
(Sixth Cause of Action) is GRANTED.
38. Defendant’s Motion to Dismiss Plaintiff’s claim for constructive trust
(Seventh Cause of Action) is DENIED.
39. Except as expressly granted above, Defendant’s Motion to Dismiss is
DENIED.
This the 12th day of January, 2017.
/s/ Gregory P. McGuire
Gregory P. McGuire
Special Superior Court Judge
for Complex Business Cases