Moore v. Brooks

Moore v. Brooks, 2026 NCBC 52.

STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
DURHAM COUNTY 25CV001214-310

KELLY F. MOORE, individually and
as Executor of the ESTATE OF
DRUE A. MOORE; MILES MOORE,
individually and on behalf of his
minor brother, COLE MOORE; KMC
MOORE LLC, as Trustee of the
REDWOOD TRUST, u/a/d April 10,
2017; and RICK GRAVES, as Trustee
of the REDWOOD LIFE
INSURANCE TRUST u/a/d
November 15, 2018,
ORDER AND OPINION ON
Plaintiffs, DEFENDANT WINTHROP
INTELLIGENCE LLC’S MOTION TO
v. COMPEL ARBITRATION OF
COUNTERCLAIMS AND
ROBERT SCOTT BROOKS and CROSSCLAIMS
WINTHROP INTELLIGENCE, LLC,

Defendants.
___________________________________

ROBERT SCOTT BROOKS and
WINTHROP INTELLIGENCE, LLC

Crossclaim
Plaintiffs,

v.

REDWOOD WI HOLDINGS, LLC

Crossclaim
Defendant.

1. This matter is before the Court on defendant Winthrop Intelligence,

LLC’s motion to compel arbitration of certain of its counterclaims and

crossclaims. (ECF No. 97).
2. The motion has been fully briefed, and the Court held a hearing at

which the parties were represented by their counsel of record. (ECF No. 155).

3. For the reasons set forth below, the Court GRANTS in part and

DENIES in part Winthrop’s motion.

Ward and Smith, P.A., by E. Bradley Evans, Gavin B. Parsons, and Jordan
Spanner, for Plaintiffs Kelly F. Moore, individually and as Executor of the
Estate of Drue A. Moore; Miles Moore, individually and on behalf of his
minor brother, Cole Moore; KMC Moore LLC, as trustee of the Redwood
Trust, u/a/d April 10, 2017; Rick Graves, as trustee of the Redwood Life
Insurance Trust u/a/d November 15, 2018; and Crossclaim Defendant
Redwood WI Holdings, LLC.

Everett Gaskins Hancock Tuttle Hash LLP, by E.D. Gaskins and James M.
Hash, for Defendants Robert Scott Brooks and Winthrop Intelligence, LLC.

Houston, Judge.

I. BACKGROUND

4. The Court does not recite here every fact in the record. Rather, the

Court makes only those findings of fact reasonably necessary to reach its

determination in this matter. Nonetheless, and regardless of whether it is

specifically recited in this Order, the Court has considered all competent

evidence of record in resolving the motion and has excluded any matters not

properly introduced or otherwise not properly before the Court. Where the

Court makes a finding of fact from conflicting evidence, the Court’s findings of

fact reflect the Court’s determination (in its discretion as the fact finder) of the

evidence it finds most credible or convincing.

5. Defendant Winthrop Intelligence, LLC was originally formed prior to

2017 as a Delaware limited liability company with its original members,
cousins Drue and Ben Moore, each holding a fifty percent interest. (ECF No.

97.1, ¶ 3).

6. In 2017, Drue and Ben made several changes surrounding Winthrop,

including (i) naming D. Scott Robinson (an attorney) the manager of Winthrop,

(ii) converting Winthrop to a Wyoming LLC; (iii) creating two Wyoming trusts

to hold their respective membership interests in Winthrop (the Redwood Trust

for Drue’s interest and the Cushman Trust for Ben’s interest); and (iv) adopting

Winthrop’s Amended and Restated Operating Agreement, effective 1 August

2017 (“2017 Operating Agreement”). (ECF No. 97.1, ¶¶ 2, 4–6; ECF No.

41.3).

7. Robinson’s company, Opes Directed Fiduciary Services, LLC (“Opes”)

served as trustee of the Redwood Trust and the Cushman Trust. (ECF No. 97.1,

¶ 5).

8. In 2020, Drue and Ben sought to transfer their indirect interests in

Winthrop (via the Redwood Trust and the Cushman Trust, respectively) to new

Wyoming limited liability companies, Redwood WI Holdings, LLC (for Drue)

and Cushman WI Holdings, LLC (for Ben). (ECF No. 97.1, ¶ 7).

9. Accordingly, Robinson—as president of Opes (the trustee of the

Redwood Trust and the Cushman Trust)—effectuated the transaction,

transferring those interests in Winthrop (i) from the Redwood Trust to

Redwood WI Holdings (ECF No. 97.1, ¶¶ 8–9; see also ECF No. 60.1), and (ii)

from the Cushman Trust to Cushman WI Holdings, (ECF No. 97.1, ¶ 7).
10. Several weeks after the transfers, in March 2020, Winthrop’s then-

new members—Redwood WI Holdings and Cushman WI Holdings—approved

an “Amended and Restated Operating Agreement of Winthrop Intelligence,

LLC” (the “2020 Operating Agreement”). (ECF No. 97.1, ¶ 10; ECF No. 41.4).

Robinson signed that document three times: once as manager for Winthrop and

once each as manager of Redwood WI Holdings and manager of Cushman WI

Holdings. (ECF No. 97.1, ¶ 10; ECF No. 41.4 at 18).

11. The 2020 Operating Agreement contains an arbitration provision,

providing in relevant part as follows:

It is the desire of the Members that any dispute between
any Member and the Company or another Member
concerning the Company or this Agreement be settled in a
reasonable, fair, and timely manner without outside
intervention if possible, and if not, by arbitration.
....
The arbitration of any dispute is to be handled by a single
arbitrator, using the rules of commercial arbitration of the
American Arbitration Association. Arbitration will occur in
the state in which the Company’s principal office is located.
The parties will be entitled to conduct discovery in
accordance with the Federal Rules of Civil Procedure,
subject to limitation by the arbitrator in order to secure
just and efficient resolution of the dispute. If the amount in
controversy exceeds $10,000, the arbitrator’s decision must
include a statement specifying in reasonable detail the
basis for and computation of the amount of the award, if
any. A party substantially prevailing in the arbitration will
also be entitled to recover such amount for its costs and
attorneys’ fees in connection with the arbitration as may be
determined by the arbitrator. Judgment on the arbitration
award may be entered in any court having jurisdiction.

(ECF No. 41.4, §§ 20.1, 20.3).

12. Cushman WI Holdings’s interest in Winthrop was subsequently
assigned to a different entity, Sine Nominee LLC, for which Robinson also

served as manager. (ECF No. 97.1, ¶ 11).

13. In August 2024, Robinson executed a new operating agreement (the

“2024 Operating Agreement,” and, with the 2020 Operating Agreement, the

“Operating Agreements”). (ECF No. 97.1, ¶ 13; ECF No. 41.6). That

document identifies Redwood WI Holdings and Sine Nominee as the members

of Winthrop. (ECF No. 41.6; ECF No. 97.1, ¶ 13). Unlike with the 2020

Operating Agreement, Robinson affixed his own name to the 2024 Operating

Agreement only twice—once as manager of Winthrop and once as manager of

Sine Nominee. (ECF No. 41.6 at 18).

14. Drue Moore’s signature is also affixed to the 2024 Operating

Agreement as manager of Redwood WI Holdings. 1 Robinson affixed that

signature on Drue’s behalf with Drue’s knowledge and consent. (ECF No. 41.6

at 18; ECF No. 97.1, ¶ 13).

15. The 2024 Operating Agreement contains an arbitration provision

that is, in all material respects, the same as the provision in the 2020

Operating Agreement. (Compare ECF No. 41.4, §§ 20.1, 20.3, with ECF No.

41.6, §§ 20.1, 20.3).

1 In his affidavit, (ECF No. 97.1), Robinson indicates that he affixed Drue’s signature

to the 2024 Operating Agreement on behalf of “Winthrop WI Holdings LLC.” (ECF No.
97.1, ¶ 13 (emphasis added)). The reference to “Winthrop WI Holdings LLC” is an
apparent scrivener’s error, as the document itself reflects that Drue signed as
“Manager” of Redwood WI Holdings, LLC, (ECF No. 41.6 at 18).
16. Drue Moore died in January 2025, and his widow, Kelly F. Moore,

serves as executor of his estate (the “Estate”).

17. Neither the Estate nor the Redwood Trust is listed on the face of

either of the Operating Agreements as a party to those agreements, nor is there

any indication in the documents that either the Estate or the Redwood Trust

intended to be bound by the Operating Agreements.

18. By 2024, the various personal relationships surrounding Winthrop

and its members and managers had soured, and Robinson and attorney Robert

Scott Brooks (Chief Investment and Financial Officer of Winthrop) accused

Drue of embezzling millions of dollars from Winthrop. (ECF No. 85.4, ¶ 5; see

generally ECF Nos. 3, 116.1 and 137). By that time, Drue served as the

manager of Redwood WI Holdings, a position he assumed from Robinson on

1 January 2021. (ECF No. 85.3, ¶ 5; ECF No. 97.1, ¶ 8).

19. Winthrop previously moved to compel arbitration of Plaintiffs’

affirmative claims against it, primarily based on the 2024 Operating

Agreement. (ECF No. 40). Winthrop failed to provide any evidence in support

of the motion, so the Court denied it. (See generally ECF No. 78).

20. Winthrop filed its original answer, counterclaims, and crossclaims on

2 September 2025. (ECF No. 85). Thereafter, Winthrop moved to compel

arbitration of its causes of action against the Estate, the Redwood Trust, and

Redwood WI Holdings. (ECF No. 97).
21. On 22 October 2025, Winthrop amended its counterclaims and

crossclaims. In doing so, Winthrop retained two of the causes of action asserted

in its original counterclaims and crossclaims against the Estate, the Redwood

Trust, and Redwood WI Holdings: (i) breach of operating agreement and (ii)

expulsion of Redwood WI Holdings under the Operating Agreements.

(Compare ECF No. 85, Counterclaims and Crossclaims, ¶¶ 41–55, with ECF

No. 116, ¶¶ 116–132). However, Winthrop also added numerous new putative

causes of action for embezzlement, breach of fiduciary duty, conversion, money

owed, unjust enrichment, accounting, equitable lien, voidable conveyances,

statutory wrongful distribution, and piercing the corporate veil, and omitted

Winthrop’s prior cause of action for breach of the Operating Agreements for

refusal to arbitrate. (See ECF No. 116).

22. Following several extensions, the motion was fully briefed, and the

Court held a hearing on the motion, with counsel for all parties present. (See

ECF No. 155).

23. Winthrop has not filed a renewed motion to compel arbitration in

light of its amended filing, but counsel for the parties stipulated in open court

that the motion would be treated as timely filed and as if it were filed with

respect to, and applicable to, the amended counterclaims and crossclaims

encompassed within the motion (i.e., the amended counterclaims and
crossclaims for breach of contract and expulsion under the Operating

Agreements, which were asserted in the original pleading). 2

24. The Operating Agreements are in writing and contain the arbitration

provisions noted above.

25. On their face, the Operating Agreements are agreements to arbitrate.

26. Winthrop and Redwood WI Holdings are identified as parties on the

face of the Operating Agreements. However, neither the Estate nor the

Redwood Trust is listed on the face of either Operating Agreement as a party.

27. Since before the 2017 Operating Agreement, Drue (and by extension,

the Estate) has not been a party to any Winthrop operating agreement. (See

generally ECF Nos. 41.3, 41.4, and 41.6; see also ECF No. 97.1, ¶¶ 6, 12–13

(authenticating ECF Nos. 41.3, 41.4, and 41.6)). Likewise, since before the

2020 Operating Agreement, the Redwood Trust has not been a member of

Winthrop. (ECF Nos. 41.4, and 41.6). Thus, neither was a member when the

Operating Agreements were signed. (ECF No. 41.4 at 1; ECF No. 41.6 at 1).

28. While Winthrop has introduced evidence that Drue made financial

transfers from Winthrop’s accounts to other accounts and that certain financial

transactions were self-interested, (see generally ECF No. 116.1), for purposes

2 Ordinarily, as the Estate, the Redwood Trust, and Redwood WI Holdings correctly

argued initially, Winthrop’s motion to compel arbitration of the original causes of
action would have been mooted by the filing of the amended counterclaims and
crossclaims. (ECF No. 137 at 2, 14 (quoting Woody v. Vickrey, 276 N.C. App. 427, 440
(2021))). Based on the stipulation and agreement of the parties and in its discretion,
however, the Court will consider the motion on the merits as if timely filed with
respect to the first and second amended, but reasserted, causes of action.
of evaluating the present motion to compel arbitration only, the Court finds

that the evidence does not rise to the level of demonstrating that Drue

ultimately dominated and controlled the Redwood Trust or Redwood WI

Holdings or that those entities were effectively indistinguishable from Drue

such that they were his alter egos. Even if it did, however, the record does not

indicate that Drue’s conduct was unjust, unfair, or inequitable with respect to

the Operating Agreements forming the basis of the motion.

29. Winthrop seeks to compel arbitration of its amended counterclaims

and crossclaims for breach of contract and expulsion of Redwood WI Holdings

under the Operating Agreements.

30. The Estate, the Redwood Trust, and Redwood WI Holdings have

refused to arbitrate the dispute with Winthrop, despite Winthrop’s demand to

arbitrate, and have submitted briefing and evidence in opposition to the motion

to compel arbitration.

II. ANALYSIS

a. Standards to Compel Arbitration

31. Under applicable law, “[a] presumption in favor of arbitration exists,”

and “[a]ny doubts regarding the scope of arbitrable issues should be resolved in

favor of arbitration.” Hobbs Staffing Servs. v. Lumbermens Mut. Cas. Co., 168

N.C. App. 223, 225 (2005) (citations omitted).

32. “The Federal Arbitration Act (FAA) mandates the enforcement of

arbitration agreements and is enforceable in both state and federal
courts.” Park v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 159 N.C. App. 120,

122 (2003) (citing Perry v. Thomas, 482 U.S. 483 (1987)); Charles Schwab &

Co. v. Marilley, 2024 NCBC LEXIS 27, *9 (N.C. Super. Ct. Feb. 20, 2024)

(“Section 2 of the FAA provides: ‘[a] written provision in . . . a contract

evidencing a transaction involving commerce to settle by arbitration

a controversy thereafter arising out of such contract . . . or the refusal to

perform the whole or any part thereof . . . shall be valid, irrevocable, and

enforceable, save upon such grounds as exist at law or in equity for the

revocation of any contract[.]’” (quoting 9 U.S.C. § 2)).

33. Similarly, the North Carolina Revised Uniform Arbitration Act, N.C.

Gen. Stat. § 1-569.1 et seq. (“NCRUAA”), provides that “[a]n agreement

contained in a record to submit to arbitration any existing or subsequent

controversy arising between the parties to the agreement is valid, enforceable,

and irrevocable except upon a ground that exists at law or in equity for

revoking a contract.” N.C. Gen. Stat. § 1-569.6(a).

34. Under the FAA, an allegation that an agreement involves interstate

commerce creates a rebuttable presumption of such commerce, with the burden

shifting to the opposing party to rebut the presumption. Earnhardt Plumbing,

LLC v. Thomas Builders, Inc., – N.C. App. –, 924 S.E.2d 844, 849 (2025).

35. Here, Winthrop contends, and no one disputes, that the arbitration

provisions at issue are “part of a written agreement involving commerce[.]”

(ECF No. 98 at 13). “The agreements at issue concern the ownership and
management of a [company] doing business in multiple states. Thus, the

agreements involve interstate commerce and are governed by the FAA”

pursuant to the Operating Agreements. Local Soc., Inc. v. Stallings, 2017

NCBC LEXIS 94, at *9–10 (N.C. Super. Ct. Oct. 9, 2017) (internal citations

omitted).

36. The FAA governs the substance of this dispute, while the NCRUAA

governs procedure before the Court, as Winthrop recognizes in moving to

compel arbitration pursuant to N.C. Gen. Stat. § 1-569.7. Carter v. TD

Ameritrade Holding Corp., 218 N.C. App. 222, 226 (2012) (explaining that state

law controls procedural considerations in motions to compel arbitration since

§ 3 and § 4 of the FAA, which govern procedural matters, do not apply in state

court (citing Blow v. Shaughnessy, 68 N.C. App. 1, 17 (1984), and Southland

Corp. v. Keating, 465 U.S. 1, 16 n.10 (1984))).

37. Under the NCRUAA, “[o]n motion of a person showing an agreement

to arbitrate and alleging another person’s refusal to arbitrate pursuant to the

agreement,” a court is required to “proceed summarily to decide the issue and

order the parties to arbitrate unless it finds that there is no enforceable

agreement to arbitrate.” N.C. Gen. Stat. § 1-569.7; see Charles Schwab, 2024

NCBC LEXIS 27, at *10 (holding that state and federal law both require “the

existence of a valid agreement to arbitrate before compelling the arbitration of

any dispute” (citations omitted)).
38. As a threshold inquiry, when considering a motion to compel

arbitration, “[f]irst, courts determine who decides whether a particular dispute

is arbitrable: the arbitrator or the court. Second, if the court concludes that the

court is the proper forum in which to adjudicate arbitrability, the court then

decides whether the dispute is, in fact, arbitrable.” Howell v. Heafner, 2020

NCBC LEXIS 105, at *16–17 (N.C. Super. Ct. Sept. 11, 2020) (quoting

Rickenbaugh v. Power Home Solar, LLC, 2019 NCBC LEXIS 109, at *10 (N.C.

Super. Ct. Dec. 20, 2019) (internal marks and quotations omitted)).

39. If the parties delegated to an arbitrator the authority to decide

whether a dispute is arbitrable, the court then defers further determinations

on the merits of the action. Howell, 2020 NCBC LEXIS 105, at *17–18; Hall v.

Dancy, 2018 NCBC LEXIS 63, at *7–8 (N.C. Super. Ct. July 27, 2018).

40. In contrast, if the court should determine arbitrability, there is “a

two-step analysis . . . to ascertain both (1) whether the parties had a valid

agreement to arbitrate, and also (2) whether the specific dispute falls within

the substantive scope of that agreement.” Terrell v. Kernersville Chrysler

Dodge, LLC, 252 N.C. App. 414, 418–19 (2017) (quoting Slaughter v.

Swicegood, 162 N.C. App. 457, 461 (2004)).

41. As a general rule, “courts presume that the parties intend courts, not

arbitrators, to decide what . . . have [been] called disputes about ‘arbitrability.’”

BG Grp. PLC v. Republic of Arg., 572 U.S. 25, 34 (2014) (quoting Howsam v.

Dean Witter Reynolds, Inc., 537 U.S. 79, 84 (2002)). However, “parties can, and
often do, delegate arbitrability to the arbitrator.” Howell, 2020 NCBC LEXIS

105, at *17 (citation omitted).

42. Substantive arbitrability, including questions such as whether “a

valid agreement to arbitrate exists between the parties and that the specific

dispute falls within the substantive scope of that agreement” can be delegated

to the arbitrator under the FAA by showing “that the parties ‘clearly and

unmistakably’ intended for an arbitrator, instead of a court, to decide issues

of substantive arbitrability.” Bailey v. Ford Motor Co., 244 N.C. App. 346, 352–

53 (2015) (citation omitted); AT&T Techs., Inc. v. Commc’ns Workers of Am.,

475 U.S. 643, 649 (1986) (“Unless the parties clearly and unmistakably provide

otherwise, the question of whether the parties agreed to arbitrate is to be

decided by the court, not the arbitrator.” (citations omitted)).

43. The American Arbitration Association (“AAA”) Commercial Rules

specifically provide that “[t]he arbitrator shall have the power to rule on his or

her own jurisdiction, including any objections with respect to the existence,

scope, or validity of the arbitration agreement or to the arbitrability of any

claim or counterclaim, without any need to refer such matters first to a court.”

Rule 7(a), Jurisdiction, AAA Commercial Arbitration Rules & Mediation

Procedures (emphasis added).

44. Where the parties expressly incorporate the AAA Commercial Rules,

or a similar set of arbitration rules that provide for the arbitrator’s resolution

of substantive arbitrability issues, this constitutes a “clear[] and
unmistakabl[e]” sign that the parties intended to delegate substantive

arbitrability to the arbitrator. Howell, 2020 NCBC LEXIS 105, at *17–18

(“Because Rule 7(a) of the AAA Commercial Rules provides that ‘[t]he

arbitrator shall have the power to rule on his or her own jurisdiction, including

any objections with respect to the existence, scope, or validity of the arbitration

agreement or to the arbitrability of any claim or counterclaim[,]’ . . . the Court

concludes that the IMA Plaintiffs and the Corporate Defendants clearly and

unmistakably delegated issues of arbitrability to the arbitrator.” (citations

omitted)); AP Atl., Inc. v. Crescent Univ. City Venture, LLC, 2016 NCBC LEXIS

60, at *16 (N.C. Super. Ct. July 28, 2016) (“[B]y incorporating the [AAA]

Employment Rules, ‘the parties agreed the arbitrator should decide issues

of substantive arbitrability.’” (quoting Epic Games, Inc. v. Murphy-Johnson,

247 N.C. App. 54, 63–64 (2016))).

b. Arbitration Agreement Between Winthrop and Redwood
WI Holdings

45. With their plain language, the Operating Agreements between

Winthrop and Redwood WI Holdings contain arbitration provisions

incorporating the AAA Commercial Rules and those Rules’ provisions

providing for the arbitrator’s determination of substantive issues. (ECF No.

41.4, §§ 20.1, 20.3; ECF No. 41.6, §§ 20.1, 20.3); see also Rule 7(a), Jurisdiction,

AAA Commercial Arbitration Rules & Mediation Procedures.

46. While the Estate, the Redwood Trust, and Redwood WI Holdings

raise various arguments about the overall validity of the Operating
Agreements, including the validity of signatures on the documents, they do not

dispute the existence of the arbitration agreements and concede that the

Operating Agreements with arbitration provisions were signed on behalf of

Redwood WI Holdings, Winthrop, and Sine Nominee. (See, e.g., ECF No. 137

at 4–5 (acknowledging that the 2020 Operating Agreement “is signed by

Robinson as manager of each Winthrop, Redwood WI Holdings, and Cushman

WI Holdings” and that the 2024 Operating Agreement “is signed by Robinson

as manager of each Winthrop and Sine Nominee LLC, and by Drue—not

Robinson—as manager of Redwood WI Holdings”)). And the record confirms as

much: the Operating Agreements constitute agreements to arbitrate. 3

47. While a party may dispute the enforceability of an otherwise “clear

and unmistakable delegation” by challenging the specific delegation provision,

such as incorporation of AAA rules, wholesale challenges to the validity of the

entire contract generally are not a basis on which to invalidate the parties’

delegation of determinations of substantive arbitrability. See, e.g., Rent-A-

Center, W., Inc. v. Jackson, 561 U.S. 63, 70–71 (2010); Howell, 2020 NCBC

LEXIS 105, at *20–23 (suggesting that a party must make a distinct challenge

to the provision’s delegation clause to avoid its effect).

3 To be clear, as set forth below, the Court makes no determination as to whether the

Operating Agreements are binding or valid. Rather, the Court determines simply that
there is facially an “agreement to arbitrate” as between Winthrop and Redwood WI
Holdings. N.C. Gen. Stat. § 1-569.7. The validity of that agreement is appropriately
referred to the arbitrator as an issue of substantive arbitrability. See Buckeye Check
Cashing, Inc. v. Cardegna, 546 U.S. 440, 444 n.1 (2006) (“The issue of the contract’s
validity is different from the issue whether any agreement between the alleged obligor
and obligee was ever concluded.”).
48. In this case, the Estate, the Redwood Trust, and Redwood WI

Holdings do not specifically challenge delegation of substantive arbitrability or

the validity of the potential delegation in general. (See generally ECF No. 137).

Instead, they broadly challenge the validity of the entirety of the Operating

Agreements. (See generally ECF No. 137).

49. The Operating Agreements facially identify Winthrop and Redwood

WI Holdings as parties; contain a mandatory arbitration provision requiring

the parties to arbitrate under AAA rules; and therefore delegate

determinations of substantive arbitrability to the arbitrator.

50. This determination, plus Redwood WI Holdings’ undisputed refusal

to arbitrate, is sufficient to satisfy the Court’s determination requirements

under N.C. Gen. Stat. § 1-569.7.

51. Considering all appropriate matters of record, the Court determines

that there has been a “clear and unmistakable” delegation of substantive

arbitrability to the arbitrator. See Howell, 2020 NCBC LEXIS 105, at *17–18;

Hall, 2018 NCBC LEXIS 63, at *6–7.

52. To the extent the Estate, the Redwood Trust, and Redwood WI

Holdings dispute the ultimate validity of the Operating Agreements, they are

not without options. Whether the Operating Agreements are ultimately valid

and binding is a substantive issue to be resolved by the arbitrator. AP Atl.,

2016 NCBC LEXIS 60, at *16; see Hall, 2018 NCBC LEXIS 63, at *6–7 (“Under

either the FAA or the North Carolina Act, when the parties’ arbitration
agreement specifically incorporates the American Arbitration Association

(‘AAA’) rules, such incorporation demonstrates that the parties clearly and

unmistakably intended for the arbitrator to resolve disputes regarding

arbitrability.” (citations omitted)); see also Buckeye Check Cashing, 546 U.S. at

444 n.1; Bicycle Transit Auth., Inc. v. Bell, 314 N.C. 219, 228 (1985)

(“Generally, parties are free to contract to anything as long as it is not illegal,

unconscionable, or against the public interest.” (citation omitted)). Thus, the

parties retain the opportunity to present those arguments to the arbitrator and

to contest confirmation of a potential arbitration award if applicable.

53. Accordingly, the Court GRANTS Winthrop’s motion to compel

arbitration to the extent the motion pertains to its crossclaims against

Redwood WI Holdings for breach of operating agreement and expulsion

pursuant to operating agreement. (ECF No. 116 at 23–26).

c. Proceedings as to Non-Signatories of the Operating
Agreements

54. In addition to its crossclaims against Redwood WI Holdings,

Winthrop also seeks to compel arbitration of its causes of action against the

Redwood Trust and the Estate, requesting that the Court either (i) defer to the

arbitrator as to whether those parties are bound by the Operating Agreements

arbitration provisions or (ii) alternatively, affirmatively determine that they

are so bound.

55. While the validity of an arbitration agreement is a question of

substantive arbitrability that may be delegated to an arbitrator, “a court, not
an arbitrator . . . must initially decide whether a nonparty” is bound by or has

recourse under a putative arbitration agreement, regardless of any delegation

provision therein. Rogers v. Tug Hill Operating, LLC, 76 F.4th 279, 286 (4th

Cir. 2023) (citing Arthur Andersen LLP v. Carlisle, 556 U.S. 624, 630–32

(2009)). 4

56. Generally, a non-party is not bound by a contract to which it is not a

party. Barrow v. Murphrey, 95 N.C. App. 738, 741 (1989) (quoting Insurance

Co. v. Chantos, 293 N.C. 431, 438 (1977)); Richardson Assocs. v. Lincoln-

Devore, 806 P.2d 790, 806–07 (Wyo. 1991) (citation omitted) (“It is elemental

that . . . no one but the parties to the contract can be bound by it or obtain

rights under it.”).

57. Here, unlike with Winthrop’s causes of action against Redwood WI

Holdings, where both parties are identified on the face of the Operating

Agreements, neither the Redwood Trust nor the Estate is identified on the face

of the Operating Agreements, nor is there otherwise any basis upon which the

Court might reasonably conclude that it is appropriate to compel arbitration

4 At the federal level, there is a circuit split as to this issue. Compare Apollo Computer,

Inc. v. Berg, 886 F.2d 469, 473 (1st Cir. 1989); Contec Corp. v. Remote Sol. Co., 398
F.3d 205, 211 (2d Cir. 2005); Zirpoli v. Midland Funding, LLC, 48 F.4th 136, 144 (3rd
Cir. 2022); and Casa Arena Blanca LLC v. Rainwater ex rel. Est. of Green, 2022 U.S.
App. LEXIS 7473, 2022 WL 839800, at *4 (10th Cir. Mar. 22, 2022) (unpublished),
with Rogers, 76 F.4th at 283; Eckert/Wordell Architects, Inc. v. FJM Props. of
Willmar, LLC, 756 F.3d 1098, 1100 (8th Cir. 2014); and Kramer v. Toyota Motor Corp.,
705 F.3d 1122 (9th Cir. 2013). Like North Carolina’s appellate courts in similar
circumstances, this Court determines that it is appropriate to follow the approach
adopted by the Fourth Circuit Court of Appeals. E.g., Snipes v. Titlemax of Va., 285
N.C. App. 176, 186–87 (2022) (following the Fourth Circuit’s approach to the FAA).
as to those parties under the circumstances.

58. Thus, absent an applicable exception to general contract and

arbitration law, there is no evidence of an “agreement to arbitrate” as between

Winthrop and either the Estate or the Redwood Trust. See N.C. Gen. Stat. § 1-

569.7.

59. As arbitration agreements are creations of contract law, “traditional

principles of state law allow [an arbitration agreement] to be enforced by or

against nonparties to the contract through” various state contract law

doctrines. Arthur Andersen, 556 U.S. at 631 (citation and internal punctuation

omitted). The laws of North Carolina and Wyoming, for example, contemplate

certain exceptions allowing non-parties to be bound to arbitration provisions.

See, e.g., Pennaco Energy, Inc. v. KD Co., 363 P.3d 18, 23 (Wyo. 2015)

(delegation); In re Southeastern Eye Ctr., 2019 NCBC LEXIS 29, at *124 (N.C.

Super. Ct. May 7, 2019) (same).

60. Winthrop contends that the Court should conclude that the Redwood

Trust and the Estate are bound by the Operating Agreements under state law

doctrines of (i) delegation, (ii) piercing the veil/alter ego, or (iii) ratification

through acceptance of benefits/estoppel. (ECF No. 98 at 18–19; ECF No. 153 at

11–14).

61. Quite simply, however, these doctrines do not bind the Estate or the

Redwood Trust to Operating Agreements to which they were not parties.
62. As they correctly point out, the Estate and the Redwood Trust cannot

delegate or assign duties under contracts to which they were not parties (i.e.,

the Operating Agreements at issue) and otherwise have no assignment or

delegation rights. (ECF No. 137 at 26–27); Pennaco Energy, 363 P.3d at 23

(addressing the doctrine of delegation in Wyoming); Southeastern Eye Ctr.,

2019 NCBC LEXIS 29, at *124 (addressing the doctrine of delegation in North

Carolina).

63. Similarly, under both North Carolina law and Wyoming law,

Winthrop has failed to show that the Estate, the Redwood Trust, and Redwood

WI Holdings are alter egos of each other or Drue Moore such that Winthrop is

entitled to the remedy of piercing the veil for purposes of enforcing the

arbitration provisions against non-parties to the Operating Agreements.

GreenHunter Energy, Inc. v. W. Ecosystem Tech., Inc., 337 P.3d 454, 462 (Wyo.

2014) (addressing veil piercing under Wyoming law); Estate of Rivas v. Fred

Smith Constr., Inc., 258 N.C. App. 13, 15–16 (2018) (same under North

Carolina law).

64. While Winthrop makes sweeping assertions that “Drue Moore used

the Redwood Trust and its subsidiary, Redwood WI Holdings, as mere

instrumentalities to misappropriate funds from Winthrop and shield himself

from liability” and that “Drue commingled assets, abused corporate forms, and

exercised dominion and control over the Trust and its entities for his personal
benefit,” (ECF No. 153 at 13), those assertions are not supported by adequate

evidence that is convincing to the Court.

65. Indeed, Winthrop itself notes that “the facts supporting an alter ego

theory will be further developed as this matter progresses,” implicitly

conceding that it lacks such evidence now. (ECF No. 98 at 20). Given that

Winthrop bears the burden of demonstrating an arbitration agreement to

which the parties are bound, it may not rely on conclusory assertions and

minimal evidence of asset commingling. See N.C. Gen. Stat. § 1-569.7

(directing courts to compel arbitration “[o]n motion of a person showing an

agreement to arbitrate” where the moving party has satisfied its burden of

showing an agreement to arbitrate); see GreenHunter Energy, 337 P.3d at 462–

64; Rivas, 258 N.C. App. at 16–17 (“Plaintiffs’ evidence was insufficient to

create a genuine issue of material fact regarding the alleged alter ego

relationship.”).

66. Finally, Winthrop argues that the Estate and Redwood Trust should

be bound to the Operating Agreements’ arbitration provisions under the

doctrine of estoppel through acceptance of benefits because they accepted the

“benefits” of membership in Winthrop. (ECF No. 153 at 12); see Carolina

Medicorp v. Bd. of Trs. of the Tchrs.’ & State Emps.’ Comprehensive Major Med.

Plan, 118 N.C. App. 485, 492–93 (1995) (citations omitted); see also Brooks v.

Hackney, 329 N.C. 166, 173 (1991); Black v. De Black, 1 P.3d 1244, 1250 (Wyo.

2000) (addressing the doctrine in the limited context of divorce decrees under
Wyoming law). Once again, however, the doctrine is inapplicable under the

facts of this case. As articulated in the opposition briefing, the record does not

support that the Redwood Trust or the Estate (through Drue) accepted benefits

arising under or pursuant to the Operating Agreements as opposed to allegedly

misappropriating funds outside the scope of the Operating Agreements. (ECF

No. 137 at 28).

67. Ultimately, considering applicable law and all appropriate matters of

record, the Court concludes that Winthrop has failed to show “an agreement to

arbitrate” as between Winthrop and the Estate or the Redwood Trust and that

Winthrop has otherwise failed to demonstrate that the claims at issue are

arbitrable as against those parties. See N.C. Gen. Stat. § 1-569.7.

68. The Court therefore DENIES Winthrop’s motion to compel

arbitration of its causes of action against the Estate and the Redwood Trust.

III. CONCLUSIONS

69. Therefore, having considered the motion, the competent evidence of

record, the arguments of counsel, and all other appropriate matters of record,

the Court GRANTS in part and DENIES in part Winthrop’s motion as

follows:

a. Winthrop’s motion to compel arbitration of its causes of

action against Redwood WI Holdings, LLC for (i) breach of operating

agreement and (ii) expulsion of Redwood WI Holdings under the Operating

Agreements is GRANTED, and those causes of action, (ECF No. 116 at 23–
26), are REFERRED to arbitration. The parties are DIRECTED to take all

efforts necessary to commence arbitration of those causes of action within

thirty (30) days of entry of this Order and are DIRECTED to cooperate in good

faith in doing so;

b. All proceedings in this action with respect to Winthrop’s

causes of action against Redwood WI Holdings that have been referred to

arbitration are STAYED until ordered otherwise by the Court; and

c. Except as granted above, Winthrop’s motion is DENIED.

SO ORDERED, this 9th day of June 2026.

/s/ Matthew T. Houston
Matthew T. Houston
Special Superior Court Judge
for Complex Business Cases