Willard v. Barger

Willard v. Barger, 2020 NCBC 72.

STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
COUNTY OF DAVIE 19 CVS 182

CHARLES WILLARD and TRACY
BARNES BLIMP WORKS, LLC,

Plaintiffs, ORDER AND OPINION ON
DEFENDANTS’ MOTION TO DISMISS
v. NOTICE OF LIS PENDENS,
PLAINTIFFS’ MOTIONS FOR
WILLIAM BARGER, individually; PARTIAL SUMMARY JUDGMENT,
WILLIAM BARGER AS EXECUTOR
OF THE ESTATE OF TRACY AND DEFENDANTS’ MOTION FOR
BARNES; and BLIMP WORKS, INC., SUMMARY JUDGMENT

Defendants.

1. The above-captioned case arises from a falling out between the co-owners

of Tracy Barnes Blimp Works, LLC (“TBBW” or the “LLC”)—Charles Willard

(“Willard”) and Tracy Barnes (“Barnes”). At issue are the actions Barnes—and after

his death, his estate’s executor, William Barger (“Barger”)—took to operate TBBW’s

business, a company owned 40% by Barnes, through Blimp Works, Inc. (“BWI”), a

North Carolina corporation owned 100% by Barnes.

2. Before the Court are four motions (collectively, the “Motions”): 1

a. Plaintiffs Willard and TBBW’s Motion for Partial Summary Judgment

as to the Counterclaims, for a Declaration that TBBW Owns the Subaru

1 The Court held a hearing on the Motions on February 20, 2020 (the “Hearing”), at which all

parties were represented by counsel, and the Motions are now ripe for resolution. The Court
also noticed for hearing and heard arguments at the Hearing concerning Plaintiffs’ Motion
to Shift Receiver Costs and for Further Sanctions (the “Cost Shifting Motion”) filed January
15, 2020. (ECF No. 106.) The Court elects to decide by separate order the Cost Shifting
Motion and other related requests for attorneys’ fees and costs contained in certain of the
other Motions.
and for Attorneys’ Fees Associated with This Motion (“Plaintiffs’ First

Summary Judgment Motion”) filed December 6, 2019, (ECF No. 73); 2

b. Defendants Barger, individually, and as executor of the Estate of Tracy

Barnes (the “Estate”), and BWI’s Motion for Summary Judgment

(“Defendants’ Summary Judgment Motion”) filed December 20, 2019,

(ECF No. 78);

c. Plaintiffs’ Motion for Partial Summary Judgment (“Plaintiffs’ Second

Summary Judgment Motion,” together with Plaintiffs’ First Summary

Judgment Motion and Defendants’ Summary Judgment Motion, the

“Cross-Motions”) filed January 3, 2020, (ECF No. 89); and

d. Defendants’ Motion to Dismiss Notice of Lis Pendens Filed by TBBW on

January 6, 2020 (“Motion to Dismiss Notice of Lis Pendens”) filed

January 9, 2020, (ECF No. 97). 3

3. Having considered the Motions, the briefs and related materials in support

of and in opposition to the Motions, the arguments of counsel at the hearing on the

2 On January 9, 2020, Defendants voluntarily dismissed with prejudice their second
counterclaim seeking recovery of Barnes’s alleged loans to TBBW (“Counterclaim 2”). (ECF
No. 96.)

3 TBBW initially filed the Notice of Lis Pendens in Iredell County on December 6, 2019, (Mot.

Dismiss Lis Pendens Ex. 1, ECF No. 85; Notice Lis Pendens, ECF No. 93), but did not file the
Notice on the North Carolina Business Court’s (“NCBC”) electronic docket at that same time.
TBBW represents that it also filed the Notice of Lis Pendens in Davie County on an
unidentified date. (Resp. Br. Defs.’ Mot. Dismiss Lis Pendens 2, ECF No. 111.) On December
31, 2019, Defendants filed a motion to dismiss the Notice of Lis Pendens. (ECF No. 85.) After
TBBW subsequently filed the Notice of Lis Pendens on the NCBC electronic docket on
January 6, 2020, (ECF No. 93), Defendants moved again to dismiss the Notice of Lis Pendens
on January 9, 2020, (ECF No. 97), effectively mooting their prior motion.
Motions, and other appropriate matters of record, the Court decides the Motions as

set forth below.

Fitzgerald Litigation, by Andrew Fitzgerald and Stuart Punger, for
Plaintiff Charles Willard.

Bennett & Guthrie, PLLC, by Jasmine Pitt, for Plaintiff Tracy Barnes
Blimp Works, LLC.

Eisele Vogel Dixon, PLLC, by Douglas G. Eisele, for Defendants William
Barger, Individually, William Barger as Executor of the Estate of Tracy
Barnes, and Blimp Works, Inc.

Bledsoe, Chief Judge.

I.

DEFENDANTS’ MOTION TO DISMISS NOTICE OF LIS PENDENS

4. The Court does not make findings of fact on motions to dismiss under Rule

12(b)(6) of the North Carolina Rules of Civil Procedure (“Rule(s)”), but instead only

recites those facts included in the Complaint relevant to the Court’s determination of

the Motion.

5. Dismissal under Rule 12(b)(6) is proper when, viewing the allegations of

the complaint in the light most favorable to the plaintiff and taking those allegations

as true, “(1) the complaint on its face reveals that no law supports the plaintiff’s claim;

(2) the complaint on its face reveals the absence of facts sufficient to make a good

claim; or (3) the complaint discloses some fact that necessarily defeats the plaintiff’s

claim.” Corwin v. British Am. Tobacco PLC, 371 N.C. 605, 615, 821 S.E.2d 729, 736–

37 (2018) (quoting Wood v. Guilford Cty., 355 N.C. 161, 166, 558 S.E.2d 490, 494

(2002)). “[T]he complaint is to be liberally construed, and the trial court should not
dismiss the complaint unless it appears beyond doubt that [the] plaintiff could prove

no set of facts in support of his claim which would entitle him to relief.” State ex rel.

Cooper v. Ridgeway Brands Mfg., LLC, 362 N.C. 431, 444, 666 S.E.2d 107, 116 (2008)

(quoting Meyer v. Walls, 347 N.C. 97, 111–12, 489 S.E.2d 880, 888 (1997)).

6. Plaintiffs filed the Complaint initiating this action on April 1, 2019,

(Compl., ECF No. 3), and TBBW filed the Notice of Lis Pendens in Iredell County on

December 6, 2019, (Mot. Dismiss Lis Pendens Ex. 1; Notice Lis Pendens). TBBW

represents that it also filed the Notice of Lis Pendens in Davie County on an

unidentified date. (Resp. Br. Defs.’ Mot. Dismiss Lis Pendens 2.) On January 6, 2020,

TBBW filed the Notice of Lis Pendens on the NCBC electronic docket, asserting that,

through this lawsuit, TBBW seeks title to and possession of land currently titled to

the Estate. (Notice Lis Pendens.)

7. Under North Carolina law, a notice of lis pendens may only be filed in

actions directly “affecting title to real property.” N.C.G.S. § 1-116(a)(1); see also

George v. Admin. Office of the Courts, 142 N.C. App. 479, 483, 542 S.E.2d 699, 702

(2001) (“Notice of lis pendens may not properly be filed except in an action, a purpose

of which is to affect directly the title to the land in question or to do one of the other

things mentioned in the statute.” (quoting Cutter v. Cutter Realty Co., 265 N.C. 664,

668, 144 S.E.2d 882, 885 (1965))); Miller & Long, Inc. v. Intracoastal Living, LLC,

NO. COA09-671, 2010 N.C. App. LEXIS 582, at *6 (N.C. Ct. App. Apr. 6, 2010) (“A lis

pendens is properly filed only where a party is asserting an interest in real property.”

(citing N.C.G.S. § 1-116(a))). “In determining whether a cause of action affects title
to real property . . . , the nature of the action must be analyzed by reference to the

facts alleged in the body of the complaint rather than by what is contained in the

prayer for relief.” George, 142 N.C. App. at 483, 542 S.E.2d at 702.

8. Defendants have moved to dismiss the Notice of Lis Pendens on the ground

that Plaintiffs have failed to allege a claim affecting title to real property. (Defs.’ Br.

Supp. Mot. Dismiss Lis Pendens ¶ 6, ECF No. 98.) Both sides focus their arguments

on Count 9 of the Complaint to support their positions. Count 9 provides, in relevant

part, that “Barnes agreed and formed a contract with Willard . . . to transfer his 40%

remaining interest in TBBW at death to Willard” and that “Barnes breached his

contract with Willard by amending his will and/or testamentary trust to instead

transfer any interest in TBBW to Barger.” (Compl. ¶¶ 86, 88.)

9. Although TBBW contends to the contrary, a review of Count 9’s language,

as well as a review of the other allegations of the Complaint, establishes that

Plaintiffs base their claims and requested relief on Barnes’s interest in TBBW. They

do not seek to transfer or otherwise directly affect the Estate’s title to any real

property through the claims asserted in the Complaint. As such, North Carolina law

requires that the Court grant Defendants’ motion and cancel the Notice of Lis

Pendens. See N.C.G.S. § 1-120 (providing for cancellation of notice of lis pendens);

Cutter, 265 N.C. at 669, 144 S.E.2d at 885 (recognizing a trial court’s jurisdiction to

cancel improperly filed notice of lis pendens before termination of the action).
II.

CROSS-MOTIONS FOR SUMMARY JUDGMENT

A. Factual and Procedural Background

10. The Court does not make findings of fact on motions for summary

judgment; rather, the Court summarizes material facts it considers to be uncontested.

See, e.g., Vizant Techs., LLC v. YRC Worldwide, Inc., 373 N.C. 549, 551, 838 S.E.2d

616, 617 (2020).

11. Barnes founded and began operating BWI in Iredell County, North

Carolina in 1985. BWI’s business involved making blimps and balloons and providing

related goods and services. (Compl. ¶ 8; Ans., Further Defenses & Countercls. ¶¶ 7–

8 [hereinafter “Ans.”], ECF No. 6.) Barnes was BWI’s sole shareholder. (Aff. Charles

Willard [hereinafter “2nd Willard Aff.”] Ex. 4 Ownership Transition Agreement 1

[hereinafter “OTA”], ECF No. 89.1.)

12. In 2012, Barnes and Willard formed TBBW as a North Carolina limited

liability company to engage in the same business as BWI. As Barnes and Willard

later agreed, “on January 1st, 2012, BWI transferred all of its operations and assets

pertaining to the design, manufacture and sale of utility and advertising blimps,

balloons and hot air balloons (the “Business”) to [TBBW], which was at that time a

wholly-owned subsidiary of BWI[.]” (2nd Willard Aff. Ex. 4 OTA 1.) Thereafter,

TBBW operated BWI’s former business from BWI’s Iredell County location, (Aff.

William Barger 1, ECF No. 102), and BWI became inactive, save for work on a single
airship project, (Aff. Charles M. Willard ¶ 3 [hereinafter “1st Willard Aff.”], ECF No.

73.2; Barger Dep. 31, ECF No. 89.2).

13. Barnes and Willard entered into agreements in 2014 regarding the

structure, management, ownership, and operation of TBBW. 4 By that time, BWI

owned 80% of TBBW and Willard owned the remaining 20%. (2nd Willard Aff. Ex. 4

OTA 1.) These 2014 agreements contemplated Barnes’s eventual departure from the

business and Willard’s resulting increased ownership. Barnes and Willard agreed to

a transition period during which BWI’s entire ownership interest in TBBW would be

transferred to Barnes and Willard would acquire an increasingly greater interest in

TBBW from Barnes 5 so that Willard would own 51% of TBBW by January 1, 2017

and 60% by January 1, 2018. (2nd Willard Aff. Ex. 3 Am. & Restated Employment

Agreement § 3(b)(i)(D).)

14. The plan proceeded as agreed, and by March 2018, TBBW was owned 60%

by Willard and 40% by Barnes. (2nd Willard Aff. Ex. 3 Amended & Restated

Employment Agreement § 3(b)(i)(E).) At that time, however, the relationship

between Barnes and Willard deteriorated, (1st Willard Aff. ¶ 15; Barger Dep. 31:22–

32:22), and Barnes told Willard he no longer wanted to work with him, (Compl. ¶ 15;

Ans. ¶ 15). Willard thereafter stopped working from TBBW’s offices. (Aff. Charles

4 These agreements included (i) an Amended and Restated Operating Agreement, (ii) an

Amended and Restated Employment Agreement, and (iii) the OTA. (See 2nd Willard Aff. Ex.
2 Am. & Restated Operating Agreement, ECF No. 89.1; 2nd Willard Aff. Ex. 3 Am. & Restated
Employment Agreement, ECF No. 89.1; 2nd Willard Aff. Ex. 4 OTA.)

5 (See 2nd Willard Aff. Ex. 4 OTA 1 (“Barnes believes it to be in his best interest and the best

interest of BWI and [TBBW] to provide a transition method whereby Willard may acquire
additional membership interest of [TBBW] over a period of time[.]”).)
Willard ¶¶ 12–15 [hereinafter “3rd Willard Aff.”], ECF No. 21.1; Barger Dep. 32:19–

22, 37:17–20.) Willard remained a TBBW employee and TBBW’s majority owner and

remains so today. (1st Willard Aff. ¶ 15; 2nd Willard Aff. ¶¶ 8–9; Barger Dep. 31:22–

32:4, 37:17–20.)

15. After operating TBBW for several months without Willard’s active

participation, Barnes called a meeting of TBBW’s employees (other than Willard) in

the summer of 2018 and announced that TBBW’s operations, including “the retail,

the blimps, [and] the web orders[,]” would no longer be conducted through TBBW (of

which Barnes owned 40%) and instead would continue through BWI (of which Barnes

owned 100%). (Barger Dep. 33:17–34:21; 44:20–45:17, 181:13–24.) There is no

evidence that Barnes notified or sought or obtained approval or consent from either

Willard or the TBBW board of directors for these actions.

16. Beginning in July 2018, BWI assumed TBBW’s business operations as its

own, including TBBW’s opportunities and resulting revenue streams, without

TBBW’s consent and without payment to TBBW. 6 (1st Willard Aff. ¶ 8; Barger Dep.

34:22–35:8, 190:10–191:12.) Not surprisingly, BWI, which had been essentially

dormant since 2012, saw its revenues dramatically increase as it began receiving the

revenues that had formerly been earned by and paid to TBBW. (Barger Dep. 44:11–

20.) At the same time, Barnes terminated TBBW’s operations, again without notice

to or the approval or consent of Willard or the TBBW board, which resulted in an

immediate and catastrophic decline in TBBW’s revenues. (Barger Dep. 44:3–10.)

6 For example, TBBW’s employees started receiving their paychecks from BWI in October

2018. (Barger Dep. 135:1–4.)
TBBW’s revenues ceased entirely after September 2018, (Barger Dep. 83:2–9), and,

in December 2018, Barnes closed TBBW’s bank account, (Barger Dep. 8:11–16).

17. In December 2018, Barnes became terminally ill, (Barger Dep. 57:6–7),

and died on January 20, 2019, (Aff. 1 [hereinafter “Barger Aff.”], ECF No. 113). After

Barnes’s death, Barger, then a TBBW employee who worked closely with Barnes

following Barnes’s falling out with Willard, became the executor of the Estate and

took over the management of BWI. (Barger Dep. 57:2–59:4, 185:23–25, Ex. 4.) BWI

ceased all operations on May 31, 2019. (Barger Dep. 18:20–19:10.) As a result,

neither TBBW nor BWI now has ongoing operations. (Report Court-Appointed

Receiver, at Items 5–6 [hereinafter “Final Report”], ECF No. 75.)

18. Plaintiffs filed this action on April 1, 2019, alleging that Barnes contracted

to leave his 40% ownership interest in TBBW to Willard upon Barnes’s death but

failed to do so and that Defendants fraudulently conveyed the assets of TBBW to BWI

before Barnes’s death without consideration to TBBW. (Compl. ¶¶ 21–22, 86.) Based

on these allegations, Plaintiffs assert claims for fraudulent conveyance, conversion,

breach of contract, breach of fiduciary duty, parol trust/tracing of assets/equitable

lien/unjust enrichment, unfair and deceptive trade practices, attorneys’ fees and

costs, and tortious interference with contract. (Compl. ¶¶ 33–98.)

19. Shortly after the action commenced, on May 23, 2019, Willard moved for

the appointment of a receiver to determine the remaining assets of TBBW and BWI.

(ECF No. 21.) The Court granted Willard’s motion by Order dated July 1, 2019 (the

“Appointment Order”) and appointed Bert Davis, Jr., CPA (“Davis” or the “Receiver”)
as receiver for TBBW and BWI (the “Companies”). (Order Pl. Willard’s Mot.

Appointment Receiver ¶ 6(a) [hereinafter “Appointment Order”], ECF No 50.)

20. In the Appointment Order, the Court directed Davis to take possession,

custody, and control of the Companies’ assets and conduct a current inventory.

(Appointment Order ¶ 6(g)(iv)–(v).) Additionally, the Court directed Davis to “provide

promptly an accounting of each Company’s business activities since January 1, 2017,

such accounting to include an investigation and determination concerning whether

assets of either Company were transferred, the identity of the recipients of any such

transfers, and whether fair value was received for any such transfers.” (Appointment

Order ¶ 6(g)(vi).) The Court also required Davis to file monthly status reports

regarding the current inventory of each Company’s assets, the accounting of each

Company’s business activities, and Davis’s best assessment of the continued viability

of each Company as a going concern. (Appointment Order ¶ 6(g)(vii).)

21. Davis accepted his appointment as Receiver on July 8, 2019, (ECF No. 54),

and thereafter submitted monthly status reports to the Court concerning his

investigation and forensic activities, (ECF Nos. 57, 60 (under seal), 63 (public), 65–

66 (public), 71 (public)), followed by a final report, (ECF No. 75). Based on the

Receiver’s initial work, later confirmed in his final report, the Receiver determined

that neither TBBW nor BWI was viable as an operating business. (Final Report, at

Item 6.)

22. The Receiver filed his final report on December 18, 2019 and was

discharged from further service. (ECF Nos. 75, 82.) Both parties attach significance
to the Receiver’s findings in his final report in advancing and defending against the

Cross-Motions.

23. For their part, Plaintiffs point to the Receiver’s conclusions that, beginning

in July 2018 and before Barnes’s death in January 2019, “revenues totaling $174,068

which had been flowing into TBBW for several years were diverted to BWI,

presumably by Mr. Barnes[,]” (Final Report, at Item 3), and that “[g]iven that Mr.

Barnes was no longer the majority owner of TBBW at the time, the legality of this

diversion is questionable[,]” (Final Report, at Item 3).

24. Defendants, in contrast, rely upon the Receiver’s acknowledgements that

he could not conclude whether various physical assets belonged to TBBW or BWI, as

the assets had been intermingled, or whether assets, other than inventory, had been

transferred from or between the Companies, (Final Report, at Item 4), due to the

broad and vague asset listing provided by the Companies’ CPA, (Final Report, at

Items 2, 4). Defendants also highlight the Receiver’s conclusions concerning sales to

a company called Arizona Balloons. While the Receiver determined that $6,400 of

the sale proceeds for “raw materials inventory” sold to Arizona Balloons was

deposited into BWI’s bank account, the Receiver also noted that “[d]ue to the nature

of the accounting records of TBBW and BWI, it is not possible to determine which

company owned the inventory.” (Final Report, at Item 5.)

B. Legal Standard

25. Under Rule 56, “summary judgment is appropriate where ‘the pleadings,

depositions, answers to interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any material fact and that

any party is entitled to a judgment as a matter of law.’ ” Cabarrus Cty. Bd. of Educ.

v. Dep’t of State Treasurer, 374 N.C. 3, 17, 839 S.E.2d 814, 823–24 (2020) (quoting

N.C. R. Civ. P. 56(c)). “An issue is ‘genuine’ if it can be proven by substantial evidence

and a fact is ‘material’ if it would constitute or irrevocably establish any material

element of a claim or a defense.” Lowe v. Bradford, 305 N.C. 366, 369, 289 S.E.2d

363, 366 (1982). “Substantial evidence is such relevant evidence as a reasonable mind

might accept as adequate to support a conclusion and means more than a scintilla or

a permissible inference[.]” DeWitt v. Eveready Battery Co., 355 N.C. 672, 681, 565

S.E.2d 140, 146 (2002) (citations and internal quotation marks omitted). The Court

must view all evidence “in a light most favorable to the nonmoving party[.]” Id. at

682, 565 S.E.2d 146 (quoting Dalton v. Camp, 353 N.C. 647, 651, 548 S.E.2d 704, 707

(2001)).

26. The moving party bears the burden of showing that there is no genuine

issue of material fact. Liberty Mut. Ins. Co. v. Pennington, 356 N.C. 571, 579, 573

S.E.2d 118, 124 (2002). The moving party may meet this burden either: “(1) ‘by

proving an essential element of the opposing party’s claim does not exist, cannot be

proven at trial, or would be barred by an affirmative defense’; or (2) ‘by showing

through discovery that the opposing party cannot produce evidence to support an

essential element of [its] claim.’ ” Strickland v. Lawrence, 176 N.C. App. 656, 661,

627 S.E.2d 301, 305 (2006) (quoting Dobson v. Harris, 352 N.C. 77, 83, 530 S.E.2d

829, 835 (2000)). If the moving party meets its burden, “the burden shifts to the
nonmoving party to produce a forecast of evidence demonstrating specific facts, as

opposed to allegations, showing that he can at least establish a prima facie case at

trial.” Gaunt v. Pittaway, 139 N.C. App. 778, 784–85, 534 S.E.2d 660, 664 (2000); see

also N.C. R. Civ. P. 56(e) (“[A]n adverse party may not rest upon the mere allegations

or denials of his pleading, but his response, by affidavits or as otherwise provided in

this rule, must set forth specific facts showing that there is a genuine issue for trial.”).

C. Cross-Motions: Counts 1–3: Fraudulent Conveyance 7

27. Both parties moved for summary judgment on Plaintiffs’ fraudulent

conveyance claims. Plaintiffs bring those claims under N.C.G.S. §§ 39-23.4(a)(2)

(transfer or obligation voidable as to present or future creditor) and 39-23.5(a)

(transfer or obligation voidable as to present creditor). 8 A necessary element of each

is that a fraudulent transfer has occurred. Plaintiffs argue that they have satisfied

this element and are entitled to judgment as a matter of law, contending that the

undisputed evidence shows that Defendants fraudulently transferred “everything

TBBW owned, such as accounts receivable, goodwill, the ongoing concern of TBBW’s

operation, tools, customer contacts, a web site, and equipment” to BWI. (Br. Supp.

Pls.’ Mot. Partial Summ. J. 7 [hereinafter “Pls.’ Br. Supp.”], ECF No. 90.) Defendants

7 Plaintiffs’ Second Summary Judgment Motion puts at issue Counts 1 (fraudulent
conveyance to defraud Willard) and 3 (declaration that conveyance was fraudulent). The
Court also addresses Count 2 (fraudulent conveyance to defraud TBBW) because Defendants
addressed all of Plaintiffs’ “fraudulent conveyances claims” in their Summary Judgment
Motion.

8 Defendants do not dispute that TBBW and Willard are creditors under these statutes, which

are each part of the Uniform Voidable Transactions Act (“UVTA”) as adopted in North
Carolina, N.C.G.S. § 39-23.1 et seq.
argue in opposition that neither Plaintiffs nor the Receiver were able to provide

evidence that any TBBW assets were fraudulently transferred, including earned

revenues that the Receiver claimed were “diverted” from TBBW to BWI, (Defs.’ Br.

Resp. Pls.’ Br. Supp. Pls.’ Mot. Partial Summ. J. 10–11, ECF No. 112; Defs.’ Br. Supp.

Mot. Summ. J. 14–15, ECF No. 79), and that the dismissal of Plaintiffs’ fraudulent

conveyance claims must necessarily follow.

28. With the exception of a single intangible asset discussed below, the Court

agrees with Defendants. Plaintiffs have not offered evidence, either through the

Receiver’s investigation or otherwise, that either establishes, or otherwise permits a

reasonable factfinder to conclude, that assets of TBBW were transferred to BWI or to

some other person or entity. Indeed, the Receiver’s investigation concluded that the

assets were so intermingled between TBBW and BWI, and the accounting records

were so vague and unclear, that it was impossible to determine whether assets ever

belonged to TBBW or BWI and thus whether any of those assets were ever transferred

from TBBW, fraudulently or otherwise. (See Final Report, at Item 2 (“independently

identifying the companies’ assets is not possible”), Item 5 (“it is not possible to

determine which company owned the inventory”).) Because Plaintiffs’ fraudulent

conveyance claims are unsupported by evidence from either the Receiver’s

investigation or some other source that permits a factfinder to conclude that

Defendants transferred TBBW’s assets, the Court concludes that Plaintiffs’

fraudulent conveyance claims must be dismissed, except to the extent provided below.
29. The single exception concerns Plaintiffs’ fraudulent conveyance claims to

the extent they are based on Barnes’s transfer of TBBW’s good will to BWI in July

2018. Good will is defined as “a property right which consists of intangibles

associated with favorable community relations and identification of the business

name[,]” and it “is an asset capable of being fraudulently conveyed[.]” Budd Tire

Corp. v. Pierce Tire Co., 90 N.C. App. 684, 688, 690, 370 S.E.2d 267, 270–71 (1988);

see also, e.g., Newark Morning Ledger Co. v. United States, 507 U.S. 546, 556 (1993)

(holding good will encompasses “the total of all the imponderable qualities that

attract customers to the business”); Stoumbos v. Kilimnik, 988 F.2d 949, 963 (9th Cir.

1993) (“Good will is an intangible element that inheres in the value of a going

business.”); L. J. Best Furniture Distribs., Inc. v. Capital Delivery Serv., Inc., 111 N.C.

App. 405, 409, 432 S.E.2d 437, 440 (1993) (finding in fraudulent transfer analysis

that a company’s good will may have been acquired where the receiving company

served “at least one, and maybe several of the same customers that [the company]

had previously serviced”).

30. The undisputed evidence here shows that Barnes announced in or about

July 2018 that TBBW’s business would from then on be conducted through BWI.

(Barger Dep. 33:17–34:21, 44:20–45:17, 181:13–24.) As Barger explained, “[i]t was a

simple matter of one company’s owner [Willard] disappeared, the company [TBBW]

ceased to exist, so the original company [BWI] continued in its place.” (Barger Dep.

136:19–22.)
31. While Plaintiffs’ evidence of transfer otherwise fails because it is

insufficient to show Plaintiffs’ ownership of the assets prior to their alleged transfer,

no such uncertainty or dispute exists concerning the ownership of TBBW’s good will

or Barnes’s transfer of that good will to BWI. Indeed, it is undisputed that Barnes

shut down the TBBW business in July 2018 and immediately and seamlessly

continued through BWI that very same business in the very same building with the

very same employees, equipment, inventory, customers, opportunities, and methods

of doing business as TBBW without Willard’s or TBBW’s approval or consent and

without compensation to TBBW of any kind. (Barger Dep. 33:17–34:21, 44:16–45:17,

181:13–24.) The undisputed evidence therefore shows as a matter of law that Barnes

transferred TBBW’s good will to BWI.

32. Having reached this conclusion, the Court next determines whether

Plaintiffs are entitled to judgment on the liability portion of their fraudulent

conveyance claims to this extent.

33. Section 39-23.4(a) concerns present and future creditors and provides:

(a) A transfer made or obligation incurred by a debtor is voidable as to a
creditor, whether the creditor’s claim arose before or after the transfer
was made or the obligation was incurred, if the debtor made the transfer
or incurred the obligation:

(1) With intent to hinder, delay, or defraud any creditor of the
debtor; or

(2) Without receiving a reasonably equivalent value in exchange
for the transfer or obligation, and the debtor:

a. Was engaged or was about to engage in a business or a
transaction for which the remaining assets of the debtor were
unreasonably small in relation to the business or transaction; or
b. Intended to incur, or believed that the debtor would incur, debts
beyond the debtor’s ability to pay as they became due.

N.C.G.S. § 39-23.4(a).

34. Section 39-23.5 concerns only present creditors and applies where the

debtor “made the transfer ‘without receiving a reasonably equivalent value in

exchange for the transfer or obligation, and the debtor was insolvent at that time or

the debtor became insolvent as a result of the transfer or obligation.’ ” Estate of Hurst

v. Jones, 230 N.C. App. 162, 169, 750 S.E.2d 14, 19 (2013) (quoting N.C.G.S. § 39-

23.5).

35. Both sections require that a “[t]ransfer” involve “[p]roperty of a debtor[.]”

See N.C.G.S. §§ 39-23.1(2), (10), (12); see also N.C.G.S. § 39-23.1 Official Comment

(defining “property” to “include[ ] both real and personal property, whether tangible

or intangible, and any interest in property, whether legal or equitable.”). The UVTA

clearly states that an “asset” is “[p]roperty of a debtor,” N.C.G.S. §§ 23.1.(2), and our

appellate courts have established that “[a]lthough it exists as an incident of other

property rights, ‘good will’ is as much an ‘asset’ as equipment, machinery, or other

tangible property[,]” Budd Tire, 90 N.C. App. at 688, 370 S.E.2d 270 (citation

omitted). Accordingly, the Court concludes that TBBW’s good will is “property of a

debtor [TBBW]” under the UVTA.

36. A “transfer” is defined very broadly under the UVTA to include “[e]very

mode, direct or indirect, absolute or conditional, voluntary or involuntary, of

disposing of or parting with an asset or an interest in an asset and includes payment

of money, release, lease, license, and creation of a lien or other encumbrance.”
N.C.G.S. § 39-23.1(12); see also, e.g., KB Aircraft Acquisition, LLC v. Berry, 249 N.C.

App. 74, 80, 790 S.E.2d 559, 564 (2016) (noting UVTA’s “all-inclusive” definition of

“[t]ransfer”); Estate of Chambers v. Vision Two Hosp. Mgmt., LLC, 2013 NCBC LEXIS

49, at *15 (N.C. Super. Ct. Nov. 21, 2013) (noting UVTA’s predecessor “UFTA’s broad

definition[ ] of . . . transfer” for “claims under UFTA sections 39-23.4(a) and 39-23.5”).

The Court concludes that Barnes’s undisputed actions in shutting down TBBW’s

business operations and continuing TBBW’s business through BWI constitute a

“transfer” of TBBW’s good will to BWI under this expansive definition.

37. The undisputed evidence also shows that TBBW did not receive reasonably

equivalent value (indeed, it received nothing) in exchange for Barnes’s transfer of

TBBW’s good will to BWI. (See Barger Dep. 34:22–35:8, 190:10–191:12); see also Gen.

Fid. Ins. Co. v. WFT, Inc., 837 S.E.2d 551, 558 (N.C. Ct. App. 2020) (finding under

section 39-23.5 that a company did not receive reasonably equivalent value when its

assets and business were transferred without payment or any consideration).

Likewise, the Receiver’s findings establish as a matter of law that Barnes’s transfer

left TBBW with assets that were unreasonably small to conduct further business, (see

Final Report, at Item 3, Ex. 2), and that TBBW became insolvent as a result of the

transfer of its good will, (see Final Report, at Item 3 (“Prior to [BWI’s continuation of

TBBW’s business], TBBW was slightly profitable on a cash flow basis.”)). And

Defendants admit that Willard’s claim for unpaid salary arose before the alleged

fraudulent transfer, making him a creditor of TBBW. (Ans. ¶ 17 (“These Defendants
do know that TBBW generated no profits in 2018 and was without income sufficient

to pay Willard’s compensation under his employment contract.”).)

38. Based on the undisputed evidence as outlined above and the legal

conclusions arising therefrom, the Court concludes that Plaintiffs’ Motion for

Summary Judgment should be granted and judgment entered against the Estate and

BWI as a matter of law as to their liability on Plaintiffs’ fraudulent transfer claims

under sections N.C.G.S. §§ 39-23.4(a)(2) and 39-23.5(a) to the extent those claims are

based on Barnes’s transfer of TBBW’s good will to BWI. 9 Except to this extent,

however, Plaintiffs’ fraudulent conveyance claims should be dismissed.

D. Defendants’ Summary Judgment Motion: Count 10: Tortious Interference
with Contract 10

39. A required element of a claim for tortious interference with contract is that

the defendant knows of the plaintiff’s contract with a third party that the plaintiff

contends the defendant has induced the third party not to perform. Beverage Sys. of

the Carolinas, LLC v. Associated Beverage Repair, LLC, 368 N.C. 693, 700, 784 S.E.2d

9 The Court enters judgment on Plaintiffs’ fraudulent conveyance claims to this extent
against the Estate and BWI because they were the beneficiaries of Barnes’s transfer of
TBBW’s good will. See N.C.G.S. § 39-23.8(b)(1)(a) (providing for judgment against “[t]he first
transferee of the asset or the person for whose benefit the transfer was made”). The Court
does not enter judgment on these claims against Barger, individually, because Barger was
neither the first transferee nor the beneficiary of the transfer. See Global Textile All., Inc. v.
TDI Worldwide, LLC, 2018 NCBC LEXIS 159, at *36 n.2 (N.C. Super. Ct. Nov. 29, 2018)
(denying relief against defendants not parties to the transaction/obligation).

10 Although Defendants indicate they seek summary judgment on “all claims,” (Defs.’ Mot.

Summ. J. 2, ECF No. 78; Defs.’ Br. Supp. Mot. Summ. J. 13), the only arguments Defendants
advanced in their brief and at the Hearing concerned Plaintiffs’ claims for fraudulent transfer
and tortious interference with contract. Nevertheless, the Court considers Defendants’
contention that all of Plaintiffs’ claims should be dismissed in considering Plaintiffs’ motions
for summary judgment. See N.C. R. Civ. P. Rule 56(c) (“[W]hen appropriate, [summary
judgment] may be rendered against the moving party.”).
457, 462 (2016) (quoting United Labs., Inc. v. Kuykendall, 322 N.C. 643, 661, 370

S.E.2d 375, 387 (1988)). TBBW alleges that Barger tortiously interfered with

Barnes’s agreement to transfer his 40% interest in TBBW to Willard at death.

(Compl. ¶¶ 94, 96.) Defendants contend that Plaintiffs have offered no evidence that

Barger knew of Willard’s contract with Barnes, requiring dismissal. (Defs.’ Br. Supp.

Mot. Summ. J. 16.) Plaintiffs conceded in their response brief “that through discovery

no strong evidence of Count 10 has emerged[,]” (Resp. Defs.’ Mot. Summ. J. 4, ECF

No. 91), and acknowledged at the Hearing that this claim should be dismissed for

failure of proof, (Feb. 20, 2020 Hearing Tr. 47:10–16, ECF No. 125). The Court agrees

and concludes that TBBW’s claim for tortious interference with contract should be

dismissed.

E. Plaintiffs’ Second Summary Judgment Motion (on Plaintiffs’ Claims)

1. Count 4: Conversion

40. Plaintiffs contend that Defendants’ transfer of assets from TBBW to BWI

constitutes conversion. (Pls.’ Br. Supp. 11.) Under North Carolina law, “only goods

and personal property are properly the subjects of a claim for conversion.” Norman

v. Nash Johnson & Sons’ Farms, Inc., 140 N.C. App. 390, 414, 537 S.E.2d 248, 264

(2000). As such, real property and intangible interests cannot properly be the subject

of a conversion claim. Id.; Window World of N. Atlanta, Inc. v. Window World, Inc.,

2018 NCBC LEXIS 111, at *8–9 (N.C. Super. Ct. Oct. 22, 2018) (“[A]n intangible

interest cannot provide the basis for a conversion claim.”). Because the Court has

previously concluded that the evidence of record shows that the only TBBW asset that
any Defendant has transferred is TBBW’s good will—an intangible asset—Plaintiffs’

conversion claim necessarily fails and must be dismissed. See Norman, 140 N.C. App.

at 414, 537 S.E.2d at 264 (recognizing that business opportunities and expectancy

interests cannot be subject to a conversion claim).

2. Count 5: Breach of Fiduciary Duty by Barnes

41. TBBW contends that Barnes breached his fiduciary duty to TBBW as a

company official by acting to further his own interests, and not TBBW’s, in

transferring TBBW’s assets to BWI. (Pls.’ Br. Supp. 12–13.)

42. “To establish a claim for breach of fiduciary duty, a plaintiff must show

that: (1) the defendant owed the plaintiff a fiduciary duty; (2) the defendant breached

that fiduciary duty; and (3) the breach of fiduciary duty was a proximate cause of

injury to the plaintiff.” Sykes v. Health Network Sols., Inc., 372 N.C. 326, 339, 828

S.E.2d 467, 475 (2019).

43. Under North Carolina’s Limited Liability Company Act (the “LLC Act”),

LLC managers and company officials owe fiduciary duties to the LLC. N.C.G.S.

§ 57D-3-21(b) (“Each manager shall discharge that person’s duties (i) in good faith,

(ii) with the care an ordinary prudent person in a like position would exercise under

similar circumstances, and (iii) subject to the operating agreement, in a manner the

manager believes to be in the best interests of the LLC.”); Kaplan v. O.K. Techs.,

L.L.C., 196 N.C. App. 469, 474, 675 S.E.2d 133, 137 (2009) (noting that managers of

an LLC owe a fiduciary duty to the LLC); Timbercreek Land & Timber Co. v. Robbins,

2017 NCBC LEXIS 64, at *12 (N.C. Super. Ct. July 28, 2017) (stating that company
officials owe the same duties as managers (citing N.C.G.S. § 57D-3-23)). Under the

LLC Act, a “[c]ompany official” is “[a]ny person exercising any management authority

over the limited liability company whether the person is a manager or referred to as

a manager, director, or officer or given any other title.” N.C.G.S. § 57D-1-03(5).

44. It is undisputed that Barnes served as a manager of TBBW until Willard

became TBBW’s majority owner, (2nd Willard Aff. Ex. 3 Am. & Restated Operating

Agreement Art. VI § 6.1(b), 20), and that Barnes served as a company official of

TBBW at all times relevant to this litigation, (see ECF No. 116); see also TBBW’s

Business Registration listing Barnes as a company official on the N.C. Secretary of

State’s website at https://www.sosnc.gov/online_services/search/Business_

Registration_Results. Barnes therefore owed a fiduciary duty to TBBW during the

period at issue in this lawsuit. See N.C.G.S. § 57D-3-23.

45. It is hard for the Court to conceive of a more egregious breach of fiduciary

duty than the undisputed evidence shows Barnes orchestrated here. As discussed at

length above, it is undisputed that Barnes ceased operating the entity in which he

was a 40% owner (TBBW) and shifted TBBW’s business operations to BWI, a

company he owned in its entirety, without Willard’s or TBBW’s approval or consent

and without compensation to TBBW. In so doing, Barnes sought to benefit himself

at the expense of TBBW and blatantly breached his fiduciary duty to TBBW. See

Meiselman v. Meiselman, 309 N.C. 279, 307, 307 S.E.2d 551, 568 (1983) (“[A]

corporate officer or director is under a fiduciary obligation not to divert corporate

business opportunity for his own personal gain.” (citation omitted)); Brite v. Penny,
157 N.C. 110, 115, 72 S.E. 964, 966 (1911) (“The law would not permit him to act in

any such double capacity to appropriate business for himself belonging legitimately

to his corporation and to reap the profits of it.”). 11 In addition, because the undisputed

evidence shows that Barnes caused TBBW to shutter its operations, Plaintiffs have

also established that Barnes’s breach of fiduciary proximately caused TBBW’s injury

as a matter of law.

46. Accordingly, the Court concludes that Plaintiffs’ motion for summary

judgment should be granted and that judgment as to liability should be entered for

TBBW and against the Estate on TBBW’s claim for breach of fiduciary duty.

3. Count 6: Parol Trust/Tracing of Assets/Equitable Lien/Unjust
Enrichment

47. Through Count 6 of their Complaint, Plaintiffs ask the Court “to establish

an attachment or legal trust on the assets fraudulently conveyed, consistent with

[N.C.]G.S. § 39-23.7(a)(2).” (Pls.’ Br. Supp. 10.) Good will, however—the only asset

the record evidence shows has been fraudulently transferred by any Defendant—“as

an asset having value, can exist only as appurtenant to or as an incident of a going

11 The Supreme Court has identified six factors a court may consider in assessing whether a

corporate opportunity has been usurped:

1) the ability, financial or otherwise, of the corporation to take advantage of
the opportunity; 2) whether the corporation engaged in prior negotiations for
the opportunity; 3) whether the corporate director or officer was made aware
of the opportunity by virtue of his or her fiduciary position; 4) whether the
existence of the opportunity was disclosed to the corporation; 5) whether the
corporation rejected the opportunity; and 6) whether the corporate facilities
were used to acquire the opportunity.

Meiselman, 309 N.C. at 310, 307 S.E.2d at 569. Consideration of each of these factors compels
the conclusion that Barnes breached his fiduciary duty by usurping TBBW’s corporate
opportunities here.
concern or operating business[.]” Mossler Acceptance Co. v. Martin, 322 F.2d 183, 185

(5th Cir. 1963), cert. denied, 376 U.S. 921 (1964); see also Dodge Bros., Inc. v. United

States, 118 F.2d 95, 100 (4th Cir. 1941) (“Good will cannot be carved out of a business

and sold independently of the going concern; for its tangibility and its value exist only

to the extent that such tangibility and such value are connected with a going

business.”).

48. Because it is undisputed that TBBW is no longer a going concern, (Final

Report, at Items 5–6), TBBW’s good will, as an asset having value, no longer exists

and cannot be transferred. As such, the equitable remedies Plaintiffs seek are

unavailable to Plaintiffs as a matter of law. See Bissette v. Harrod, 226 N.C. App. 1,

9, 738 S.E.2d 792, 799 (2013) (“[B]y definition, the creation of a trust must involve a

conveyance of property[.]” (quoting In re Estate of Washburn, 158 N.C. App. 457, 461,

581 S.E.2d 148, 151 (2003))); Tucker v. Miller, 113 N.C. App. 785, 790, 440 S.E.2d

315, 318 (1994) (“Goodwill exists as property merely as an incident to other property

rights, and is not susceptible of being owned and disposed of separately from the

property right to which it is incident.” (quoting Ice Cream Co. v. Ice Cream Co., 238

N.C. 317, 321, 77 S.E.2d 910, 914 (1953))). 12

12 The Court also notes that Plaintiffs have a full and complete remedy at law through their

claims for monetary relief, a further basis for dismissal of Plaintiffs’ request for equitable
relief in Count 6. See, e.g., Embree Constr. Grp., Inc. v. Rafcor, Inc., 330 N.C. 487, 491 (1992)
(“[E]quity will not lend its aid in any case where the party seeking it has a full and complete
remedy at law.” (quoting Jefferson Standard Life Ins. Co. v. Guilford Cty., 225 N.C. 293, 300,
34 S.E.2d 430, 434 (1945)); KNC Techs., LLC v. Tutton, 2019 NCBC LEXIS 72, at *39–40
(N.C. Super. Ct. Oct. 9, 2019) (declining to impose equitable relief where party could recover
through its breach of contract, tortious interference, and UDTPA claims).
4. Count 9: Breach of Contract

49. Plaintiffs allege through Count 9—discussed previously in connection with

Defendants’ Motion to Dismiss Notice of Lis Pendens—that the Estate breached

Barnes’s contract with Willard by failing to transfer Barnes’s remaining ownership

interest in TBBW to Willard upon Barnes’s death. (Pls.’ Br. Supp. 13–14; Compl. ¶

86 (“Barnes agreed and formed a contract with Willard . . . as part of the agreements

in 2011 and the 2014 transactions, to transfer his 40% remaining interest in TBBW

at death to Willard.”); Ans. ¶ 86 (“Defendants admit that the 2011 and 2014

transactions referred to in paragraph 86 contain the promise alleged in paragraph

86.”).) 13

50. Under North Carolina law, “[t]he elements of a claim for breach of contract

are (1) existence of a valid contract and (2) breach of the terms of that contract.” Poor

v. Hill, 138 N.C. App. 19, 26, 530 S.E.2d, 838, 843 (2000).

51. The OTA, provides, in relevant part, that: “Notwithstanding anything

herein to the contrary, Barnes shall cause his last will and testament to reflect that

upon his death, his estate shall immediately . . . (ii) transfer all of his membership

interests in [TBBW] to Willard, free and clear.” (2nd Willard Aff. Ex. 4 OTA § VI.1.)

13 Plaintiffs also contend that they are entitled to an order transferring real property to
TBBW in accordance with this same agreement. (Pls.’ Br. Supp. 13–14; see also 2nd Willard
Aff. Ex. 4 OTA § VI.1.) Plaintiffs’ contention fails, however, for the same reasons the Court
advanced in granting Defendants’ Motion to Dismiss Notice of Lis Pendens. In addition, to
the extent Plaintiffs are attempting to amend Count 9 or to assert a new claim for this relief
at summary judgment, Plaintiffs’ request is denied, in the exercise of the Court’s discretion.
See Bradshaw v. Maiden, 2020 NCBC LEXIS 106, at *19–20 (N.C. Super. Ct. Sept. 15, 2020)
(declining to allow assertion of a new claim at summary judgment when the claim was not
pleaded).
“In a contract dispute between two parties, the trial court may interpret a plain and

unambiguous contract as a matter of law if there are no genuine issues of material

fact.” Crescent Univ. City Venture, LLC v. AP Atl., Inc., 2019 NCBC LEXIS 46, at *30

(N.C. Super Ct. Aug. 8, 2019) (quoting Premier, Inc. v. Peterson, 232 N.C. App. 601,

605, 755 S.E.2d 56, 59 (2014)); see also Walton v. City of Raleigh, 342 N.C. 879, 881,

467 S.E.2d 410, 411 (1996) (“If the plain language of a contract is clear, the intention

of the parties is inferred from the words of the contract.” (citing Lane v. Scarborough,

284 N.C. 407, 410, 200 S.E.2d 622, 624–25 (1973))).

52. The language of the OTA is plain and unambiguous and requires the

Estate to transfer Barnes’s remaining ownership interest in TBBW to Willard upon

Barnes’s death. The Estate has failed to do so and has not offered evidence supporting

a defense to this claim. The Estate is therefore in breach of the OTA, and summary

judgment should be entered for Willard requiring the Estate to transfer Barnes’s

ownership interest in TBBW to Willard.

5. Count 8: Attorneys’ Fees & Costs

53. Plaintiffs seek through Count 8 of their Complaint an award of attorneys’

fees and costs under section VII.2(b) of the OTA for the Estate’s breach of contract.

(Pls.’ Br. Supp. 13–14.) That provision provides, in relevant part, as follows:

Barnes and BWI agree to indemnify and hold harmless Willard and his
successors and assigns from and against any and all liabilities, losses,
claims, costs, and damages and reasonable attorneys’ and accountants’
fees and expenses, court costs, and all other reasonable expenses
suffered or incurred by any of them in connection with or arising from:

...
(b) any breach by Barnes or BWI of any of their obligations or covenants
contained in [the OTA].

OTA § VII.2(b).

54. Because the Court has concluded that the Estate breached the OTA by

failing to transfer Barnes’s ownership interest to Willard upon Barnes’s death, the

Court further concludes that Willard is entitled to recover under section VII.2(b) the

reasonable attorneys’ fees, accountants’ fees, expenses, and court costs Willard has

incurred arising from the Estate’s breach. Accordingly, Plaintiffs’ motion shall be

granted to this extent, and the Court shall enter judgment against the Estate as to

liability on this claim. Plaintiffs’ motion is otherwise denied.

F. Plaintiffs’ First Summary Judgment Motion (on Defendants’ Counterclaim 1)

55. Plaintiffs move for summary judgment seeking dismissal of Defendants’

Counterclaim 1 and recovery of their attorneys’ fees associated with this Motion

under N.C.G.S. § 6-21.5. 14 (Pls.’ Mot. Partial Summ. J. Countercls., Decl. TBBW

Owns Subaru & Att’ys Fees Associated Mot. 1–2, ECF No. 73.)

56. BWI seeks through Counterclaim 1 the return of a 2014 Subaru titled in

BWI’s name but currently in Willard’s possession which Willard refuses to return

after BWI’s demand. Alternatively, BWI seeks payment for the Subaru’s fair market

value. (Amendment Ans. & Countercl. 1–2, Ex. 1 Certificate of Title, ECF No. 25;

Defs.’ Br. Resp. Pls.’ Br. Supp. Mot. Partial Summ. J. & Att’y Fees 7, ECF No. 76.)

14 Defendants initially asserted two counterclaims, and Plaintiffs sought dismissal of each in

their First Motion for Summary Judgment. Because Defendants subsequently filed a
voluntary dismissal of Counterclaim 2, (ECF No. 96), Plaintiffs’ motion to dismiss as to this
counterclaim is now moot.
57. Plaintiffs do not dispute that title to the Subaru is issued to BWI. Rather,

Plaintiffs contend that because TBBW paid at least 90% of the purchase price as well

as the maintenance fees, insurance, and taxes, and because the Subaru was driven

exclusively for TBBW’s business, TBBW should be declared the owner of the Subaru

and BWI’s Counterclaim 1 should be dismissed. (Br. Supp. Pls.’ Mot. Partial Summ.

J. Countercls., Decl. TBBW Owns Subaru & Att’y Fees & Costs Associated Mot. 7, 11

[hereinafter “Pls.’ Br. Supp. 1st Summ. J. Mot.”], ECF No. 74; 1st Willard Aff. ¶¶ 2,

4–7, 9.) Plaintiffs argue that the Subaru was mistakenly titled to BWI at a time when

a Chrysler PT Cruiser titled to BWI was sold to pay 10% of the Subaru purchase

price. (Pls.’ Br. Supp. 1st Summ. J. Mot. 1, 4; 1st Willard Aff. ¶¶ 4–9.) Defendants

rely entirely on the certificate of title for their claim that BWI owns the vehicle as a

matter of law. 15

58. Under North Carolina law, a titleholder “is not estopped to assert her title

to the car . . . merely because she left it in the possession of [another], unless [the

titleholder] clothed [the possessor] with some indicia of title.” Mabe v. Dillon, 46 N.C.

App. 340, 342, 264 S.E.2d 796, 797 (1980); see also Hawkins v. M. & J. Finance Corp.,

238 N.C. 174, 178, 77 S.E. 2d 669, 672 (1953) (“It is elemental that the owner of

personal property will not be estopped to assert his title by merely entrusting its

15 Although it is unclear from the briefing whether any party contends that the Uniform

Commercial Code (“UCC”) applies to Defendants’ Counterclaim 1, the Court concludes that
it does not because Defendants do not allege a sale, transaction, or transfer of goods between
TBBW and BWI. See Hensley v. Ray’s Motor Co. of Forest City, Inc., 158 N.C. App. 261, 265,
580 S.E.2d 721, 724 (2003) (noting that “[t]he scope of the UCC is limited to ‘transactions in
goods’ ” (quoting N.C.G.S. § 25-2-102)).
possession and control to another” absent “clothing [that person] with other indicia

of ownership[.]”). Examples of “indicia of title” include “the key or the certificate of

title.” Mabe, 46 N.C. App. at 342, 264 S.E.2d at 797. Both Willard and BWI offer

evidence reflecting “indicia of ownership” to support their positions and dispute that

the other owns the Subaru. Both BWI’s title certificate and Willard’s evidence are

consistent with ownership, and the Court therefore concludes that a jury must

determine who actually owns the car. Accordingly, the Court denies Plaintiffs’ motion

as to Counterclaim 1. 16

V.

CONCLUSION

59. WHEREFORE, based on the foregoing, the Court hereby ORDERS as

follows:

a. Defendants’ Motion to Dismiss Notice of Lis Pendens is

GRANTED. Accordingly, the Notice of Lis Pendens that TBBW

(i) filed in Iredell County on December 6, 2019, (ii) represents it

filed in Davie County on an unidentified date, and (iii) filed on the

Business Court’s electronic docket on January 6, 2020, (ECF No.

93), is hereby CANCELLED. The Clerks of Superior Court of

16 Plaintiffs seek attorneys’ fees under N.C.G.S. § 6-21.5, asserting that Counterclaim 1 is

frivolous since the Subaru’s title is the only evidence of BWI’s ownership and that Defendants
should have voluntarily dismissed Counterclaim 2 earlier because it was fatally deficient.
(Pls.’ Br. Supp. 1st Summ. J. Mot. 4.) The Court’s denial of Plaintiffs’ motion as to
Counterclaim 1 precludes an award of fees and costs on that claim. The Court shall resolve
Plaintiff’s request for attorneys’ fees and costs concerning Defendants’ dismissal of
Counterclaim 2 by separate order.
Davie County and Iredell County, as appropriate, shall, pursuant

to N.C.G.S. § 1-120, cancel the Notice of Lis Pendens from the

Record of Lis Pendens kept by the Office of the Clerk pursuant to

N.C.G.S. §§ 1-117 and 7A-109.

b. Plaintiffs’ First Summary Judgment Motion is DENIED as to

Counterclaim 1 (the Subaru) and DENIED as moot as to

Counterclaim 2.

c. As to the parties’ Cross-Motions concerning Plaintiffs’ Counts 1–

3 (fraudulent conveyance), Plaintiffs Second Summary Judgment

Motion and Defendants’ Motion for Summary Judgment are each

GRANTED in part and DENIED in part.

i. Plaintiffs’ Second Summary Judgment Motion is

GRANTED and Defendants’ Summary Judgment Motion

is DENIED to the extent those claims are based on

Barnes’s fraudulent transfer of TBBW’s good will to BWI,

and the Court hereby enters judgment for Plaintiffs and

against the Estate and BWI as to liability on those claims

to this extent; and

ii. Defendants’ Summary Judgment Motion is GRANTED

and Plaintiffs’ Second Summary Judgment Motion is

DENIED to the extent those claims are based on the

transfer of any tangible or intangible assets of TBBW other
than TBBW’s good will, and the Court hereby enters

judgment for Defendants dismissing those claims to this

extent with prejudice.

d. Plaintiffs’ Second Summary Judgment Motion is further

GRANTED in part and DENIED in part as follows.

i. The Motion is GRANTED as to:

1. Count 5 (fiduciary duty), and the Court hereby

enters judgment for TBBW and against the Estate

as to liability on that claim;

2. Count 8 to the extent that claim is based on Willard’s

reasonable attorneys’ fees, accountants’ fees,

expenses, and court costs arising from the Estate’s

failure to transfer Barnes’s ownership interest in

TBBW to Willard, and the Court hereby enters

judgment against the Estate as to liability on that

claim; and

3. Count 9 to the extent that claim is based on the

Estate’s failure to transfer Barnes’s ownership

interest in TBBW to Willard upon Barnes’s death,

and the Court hereby enters judgment for Plaintiffs

on that claim and orders that the Estate shall
transfer Barnes’s ownership interest in TBBW to

Willard.

ii. The Motion is DENIED as to:

1. Count 4 (conversion), and the Court hereby enters

judgment for Defendants dismissing that claim with

prejudice;

2. Count 6 (equitable relief), and the Court hereby

enters judgment for Defendants dismissing that

claim with prejudice;

3. Count 8 to the extent that claim is based on the

Estate’s failure to transfer real property to Willard,

and the Court hereby enters judgment for

Defendants dismissing that claim without prejudice;

and

4. Count 9 to the extent that claim is based on the

Estate’s failure to transfer real property to Willard,

and the Court hereby enters judgment for

Defendants dismissing that claim without prejudice.

e. Defendants’ Summary Judgment Motion is GRANTED as to

Count 10 (tortious interference with contract), and the Court

hereby dismisses that claim with prejudice.
f. As a result of the Court’s rulings, the following claims and

counterclaims shall proceed to trial:

i. Damages in connection with Plaintiffs’ Counts 1–3

(fraudulent conveyance) to the extent those claims are

based on Barnes’s fraudulent transfer of TBBW’s good will

to BWI;

ii. Damages in connection with Plaintiffs’ Count 5 (breach of

fiduciary duty);

iii. Plaintiffs’ Count 7 (unfair and deceptive trade practices);

iv. Damages in connection with Plaintiffs’ Count 8 (attorneys’

fees, accountants’ fees, expenses, and court costs) to the

extent that claim is based on the Estate’s failure to transfer

Barnes’s ownership interest in TBBW to Willard upon

Barnes’s death;

v. Damages in connection with Plaintiffs’ Count 9 (breach of

contract) to the extent that claim is based on the Estate’s

failure to transfer Barnes’s ownership interest in TBBW to

Willard upon Barnes’s death; and

vi. Defendants’ Counterclaim 1 (the Subaru).

SO ORDERED, this the 9th day of October, 2020.

/s/ Louis A. Bledsoe, III
Louis A. Bledsoe, III
Chief Business Court Judge