MAUCK v. CHERRY OIL CO., 2023 NCBC 62

STATE OF NORTH CAROLINA
LENOIR COUNTY
IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
21 CVS 343
ARMISTEAD B. MAUCK and
LOUISE CHERRY MAUCK,
Plaintiffs,
v.
CHERRY OIL CO., INC.; JULIUS P.
“JAY” CHERRY, JR.; and ANN B.
CHERRY,
Defendants,
AND
CHERRY OIL CO., INC. and
JULIUS P. “JAY” CHERRY, JR.,
Counterclaim-
Plaintiffs,
v.
ARMISTEAD B. MAUCK,
Counterclaim-
Defendant.
ORDER AND OPINION ON
DEFENDANTS’ MOTION FOR
SUMMARY JUDGMENT AND
MOTION IN THE CAUSE FOR COURT
SUPERVISION OF CALL OF SHARES
THIS MATTER comes before the Court on two motions: Defendants’ Motion
for 	Summary 	Judgment 	(“Motion 	for 	Summary 	Judgment,” 	ECF 	No. 	81) 	and
Defendants’ Motion in the Cause for Court Supervision of Call of Shares (“Motion for
Supervision,” ECF No. 79) (collectively, “Motions”).1
1 Since the present Motions were argued, the parties have filed two additional motions.
(Defs.’ Mot. in the Cause for Supervision of Additional Document Requests, ECF No. 103;
Pls.’ Mot. for Leave to Suppl. the Second Am. Compl., ECF No. 108.) Those new motions are
not addressed in this Opinion.
Mauck v. Cherry Oil Co., 2023 NCBC 62.

THE COURT, having considered the Motions, the briefs of the parties, the
arguments of counsel, and all applicable matters of record, CONCLUDES that, for
the 	reasons 	set 	forth 	below, 	the 	Motion 	for 	Summary 	Judgment 	should 	be
GRANTED and the Court will DEFER ruling at this time on the Motion for
Supervision.
Brooks, Pierce, McLendon, Humphrey & Leonard LLP, by Walter L.
Tippett, Jr., and Katarina K. Wong, for Plaintiffs Armistead B. Mauck
and Louise Cherry Mauck.
Womble Bond Dickinson (US) LLP, by Pressly M. Millen and Samuel B.
Hartzell, for Defendants Cherry Oil Co., Inc.; Julius P. “Jay” Cherry, Jr.;
and Ann B. Cherry.
Davis, Judge.
INTRODUCTION
1. 	As this Court has previously stated, “[t]his action, succinctly put,
concerns a dispute among family members over the management and future direction
of a family business.” Mauck v. Cherry Oil Co., 2021 NCBC LEXIS 81, at **2 (N.C.
Super. Ct. Sept. 20, 2021). The present Motions require the Court to (1) address the
scope of the fiduciary duty owed by majority shareholders to minority shareholders
in the context of a close corporation; and (2) untangle the parties’ web of contentions
and finger-pointing regarding the breakdown in the process for completing the
company’s purchase of the minority shareholders’ shares pursuant to a put/call
provision in a shareholders’ agreement.

FACTUAL AND PROCEDURAL BACKGROUND
2. 	“The Court does not make findings of fact on motions for summary
judgment; 	rather, 	the 	Court 	summarizes 	material 	facts 	it 	considers 	to 	be
uncontested.” 	McGuire v. Lord Corp., 2021 NCBC LEXIS 4, at **1–2 (N.C. Super.
Ct. Jan. 19, 2021) (cleaned up).
3. 	A complete summary of the factual and procedural background of this
case—as alleged in Plaintiffs’ Second Amended Complaint (“SAC”)2—can be found in
the Court’s Order and Opinion on Defendants’ Motion to Dismiss Second Amended
Complaint. See Mauck v. Cherry Oil Co., 2022 NCBC LEXIS 39 (N.C. Super. Ct. May
2, 2022) (“2 May Order and Opinion”).
4. 	The SAC originally contained nine causes of action, consisting of a
mixture 	of 	derivative 	and 	individual 	(or 	direct) 	claims 	asserted 	by 	Plaintiffs
Armistead B. Mauck (“Armistead”) and Louise Cherry Mauck (“Louise”)3 in their
dispute with Defendants Julius P. Cherry, Jr. (“Jay”) and Ann B. Cherry (“Ann”) over
the control of Cherry Oil Co., Inc. (“Cherry Oil”). However, as a result of the Court’s
2 May Order and Opinion, only the following two claims remain: (1) Plaintiffs’
individual claim for breach of fiduciary duty; and (2) Plaintiffs’ claim for breach of
contract (based on Defendants’ alleged breach of the above-referenced put/call
provision of Cherry Oil’s Shareholders’ Agreement). Id., at **49.
2 The SAC (ECF No. 48) is the operative pleading by Plaintiffs for purposes of the present
Motions.
3 In this Opinion, Armistead and Louise are referred to collectively as either “Plaintiffs” or
the “Maucks.”

5. 	Accordingly, the Court will summarize only those facts and procedural
developments that are most directly relevant to the remaining claims that are the
subject of the present Motion for Summary Judgment.
6. 	Defendant Cherry Oil is a business that—both directly and through its
affiliates, AJAL Investments, LLC (“AJAL”) and C-Gas, LLC (“C-Gas”)4—owns
propane and refined fuel distribution operations serving business and residential
customers, including convenience stores. 	(Jay Cherry Dep., at 63:8–12, 107:3–6,
148:20–24, ECF No. 112.1.) Cherry Oil and its affiliates—which the parties refer to
collectively as “Cherry Energy”—have been owned and managed by members of the
Cherry family since Cherry Oil was founded in 1928 by J.P. Cherry, Sr. (Mauck Aff.
I ¶ 4, ECF No. 14.)
7. 	Armistead and Louise are married and together own and control 194
(approximately 34%) of Cherry Oil’s shares.5 (Mauck Aff. I ¶¶ 2–3.)
8. 	Armistead joined Cherry Oil as an officer and director in 1995, and he
performed various functions as an employee of Cherry Oil through the end of 2021.
(Mauck Aff. I ¶ 2; J. Cherry Dep., at 32:2–22, 136:5–7.)
9. 	Prior to being terminated in 2021, Louise was employed by Cherry Oil
for approximately fifteen years and was primarily responsible for payroll and related
tasks. (Louise Mauck Dep., at 15:2–4, 17:14–17, ECF No. 112.3.) Louise also served
4 AJAL and C-Gas are not named parties to this action.
5 Armistead and Louise each individually own 97 shares of Cherry Oil. (Mauck Aff. I ¶¶ 2–
3.)

as a member and officer of Cherry Oil’s Board of Directors (the “Board”) from August
2000 until her purported removal from the Board on 16 June 2021. (J. Cherry Dep.,
at 136:5–7; Mauck Aff. I ¶¶ 2–3.)
10. 	Jay and Ann are married and together own and control 390 shares
(approximately 66%) of Cherry Oil, which constitutes a majority interest in the
company.6 (SAC Ex. D-1, ECF No 48.6.)
11. 	Jay is Louise’s brother and has worked for Cherry Oil since graduating
from college. (J. Cherry Dep., at 10:7–14.) Jay also serves both as the chairperson of
the Board and as president of Cherry Oil. (J. Cherry Dep., at 19:18–20; Mauck Aff.
III ¶ 2, ECF No. 40; Cherry Decl. ¶ 2, ECF No. 15.1.) Ann is a shareholder, director,
vice president, and assistant secretary of Cherry Oil. 	(Armistead Mauck Dep., at
87:1–2, ECF No. 112.2.)
12. 	On 	15 	October 	1998, 	the 	Maucks 	and 	Cherrys 	entered 	into 	a
shareholders’ agreement (the “Shareholders’ Agreement”) outlining their rights and
responsibilities as shareholders of Cherry Oil. (See S’holders’ Agrmt., ECF No. 15.2.)
13. 	Section 	11 	of 	the 	Shareholders’ 	Agreement 	contains 	a 	“put/call”
provision that states, in pertinent part, as follows:
Section 11: Put/Call.
. . .
Subject to the preceding provisions of this Agreement, the Corporation
shall have the right to purchase (i.e., “call”) from each Shareholder (or
his legal representative) all, but not less than all, of his Shares for the
6 Specifically, Jay owns 348 shares (59%), while Ann owns 42 shares (7%). (SAC Ex. D-1, at
1.)

price specified in Section 6 and upon the terms specified in Section 7. If
the Corporation shall elect to purchase all such Shares, the Corporation
shall provide notice to the Shareholder whose shares are called (or his
legal representative), which such notice shall fix a closing date not more
than sixty (60) days after the receipt of the same.
The Shareholder subject to a put or call shall vote, and take any other
necessary action, in accordance with the vote of the Shareholders
owning a majority of the remaining Shares.
(S’holders’ Agrmt. § 11.)
14. 	Section 6B, in turn, states the following regarding the process for
valuation of the selling shareholders’ shares:
Section 6: 	Purchase Price. 	The price of each share of capital stock
purchased pursuant to this Section shall be determined in accordance
with Subsections 6A or 6B below.7
. . .
B. Fair Market Value. 	Unless the price per share shall be determined
in accordance with the provisions of Subsection 6A above, the purchase
price for each share of stock shall be the fair market value of each such
share. The fair market value of each share of stock shall be determined
by one or more independent appraisers who shall be agreed upon in
writing by the selling Shareholder (or the personal representative of a
deceased Shareholder), and the remaining Shareholders. 	The written
decision of such appraiser or appraisers shall be binding upon all parties
as to the fair market value of such shares. If such parties cannot agree
upon such appraiser or appraisers within thirty (30) days of the date
when it becomes necessary to determine the fair market value, then,
within fifteen (15) days after the expiration of such thirty (30) day
period, the selling Shareholder (or the personal representative of a
deceased Shareholder) shall appoint an appraiser, and the remaining
Shareholders shall appoint a second appraiser, and the two so appointed
shall appoint a third appraiser. If the two so appointed fail to appoint a
third appraiser within said fifteen (15) day period, the Clerk of Superior
Court of Lenoir County shall appoint a third appraiser. 	The written
7 Subsection 6A applies in situations, unlike here, in which the company and the selling
shareholders are able to agree on the price for which the shares will be purchased.

decision of such appraisers shall be binding upon all parties as to the
fair market value of such shares.
(S’holders’ Agrmt. § 6B.)
15. 	In or around 2007, the dispute that ultimately gave rise to this lawsuit
began when Jason Cherry (“Jason”)—Jay and Ann’s son—joined Cherry Oil as an
employee. 	(J. Cherry Dep., at 56:7–8, 12–14.) 	Plaintiffs took issue with Jason’s
performance as an employee of Cherry Oil, pointing to critical reviews of Jason’s job
performance by company employees and a “family business consultant.” (SAC Ex. I,
ECF No. 48.13; see also SAC Exs. A–C, ECF Nos. 48.3–48.5.)
16. 	The Maucks’ and Cherrys’ efforts to find a path forward together ended
on 17 July 2020, when Jay sent a letter to Armistead and Louise stating as follows:
[T]he current working relationship has been strained for a while now
and is not sustainable. 	To maintain meaningful relationships and
provide for the continuity of operations, we need to develop a plan for
you to transition out of ownership of Cherry Oil, C-Gas and AJAL.
(SAC Ex. V, ECF No. 48.26.)
17. 	On 9 April 2021, Plaintiffs sent a letter (the “Derivative Demand
Letter”) to Cherry Oil demanding that the company take appropriate action with
regard to their allegations of misconduct by the Cherrys toward the company. 	(See
SAC Ex. I.)
18. 	Before receiving a response to the Derivative Demand Letter, Plaintiffs
initiated this action by filing their original Complaint in Lenoir County Superior
Court on 6 May 2021 against Defendants Cherry Oil, Jay, and Ann. 	(Compl., ECF
No. 3.) The original complaint asserted five claims for relief: (1) dissolution of Cherry
Oil pursuant to N.C.G.S. § 55-14-30; (2) removal of Jay and Ann as directors under

N.C.G.S. § 55-8-09; (3) breach of fiduciary duty and constructive fraud against Jay
and Ann; (4) breach of contract against Jay (relating to a promise allegedly made by
him to Armistead regarding a transfer of stock); and (5) a putative claim for
constructive trust against Jay and Ann.
19. 	This action was designated as a complex business case and assigned to
the Honorable Gregory P. McGuire. (Design. Ord., ECF No. 1; Assign. Ord., ECF No.
2.)
20. 	On 	16 	June 	2021, 	a 	special 	shareholders’ 	meeting 	(the 	“16 	June
Shareholders’ Meeting”) was held for the purpose of downsizing the number of
members of the company’s Board from four to three. The vote passed, and Jay, Ann,
and Armistead were elected as the members of the newly constituted Board. 	As a
result, Louise was removed as a member of the Board. (SAC Ex. N, ECF No. 48.18.)8
21. 	The Maucks attended the 16 June Shareholders’ Meeting along with
their attorney. 	At the meeting, Armistead voiced his objections to the propriety of
the notice provided to the shareholders of the meeting, which he claimed was
inconsistent with Cherry Oil’s Bylaws. (SAC Ex. N.) Specifically, Armistead objected
on the following grounds:
Article 2 Section 5 of the bylaws requires ten days’ minimum notice of a
special meeting of the shareholders, and the post office postmark on the
notice received by Louise Mauck shows June 7 for a June 16 th meeting.
The post office mark for myself is only partially legible, but it was
received a day after notice received by Louise, and to be [sic] postmarked
8 As discussed in more detail below, the validity of the actions taken at the 16 June
Shareholders’ Meeting has been vigorously disputed by the Maucks throughout this
litigation.

June 8. 	Insufficient notice to either myself or Louise would not be
sufficient for the conduct of business at this meeting.
(SAC Ex. N.)
22. 	Immediately 	after 	the 	adjournment 	of 	the 	16 	June 	Shareholders’
Meeting, a special meeting of the newly-elected Board was held (the “16 June
Directors’ Meeting”). (SAC Ex. Q, ECF No. 48.21.) At the 16 June Directors’ Meeting,
Jay stated that the matter for consideration was the call by Cherry Oil of the shares
owned by Armistead and Louise. 	(SAC Ex. Q.) 	The vote to call the Maucks’ shares
passed by a 2-1 vote with Jay and Ann voting in favor of the call vote and Armistead
voting against the call vote. 	(SAC Ex. Q.) 	Armistead stated an objection to the
validity of the notice of the 16 June Directors’ Meeting. (SAC Ex. Q.)
23. 	On 5 August 2021, the Maucks received a “Notice of Closing to Be Held
on August 13, 2021,” which provided as follows:
In accordance with the Resolution of the Special Directors’ Meeting held
on June 16, 2021, the date of closing for the sale and purchase of all of
your Shares in Cherry Oil Co., Inc. in accordance with Section 11 of the
Shareholders’ Agreement, dated October 15, 1998, will be held on
August 13, 2021 at 11:00 a.m. at the offices of Sitterson and Whitfield,
P.A., 803 Plaza Boulevard Kinston NC 28501.
The form of Share Redemption Agreement is provided with this Notice.
Please bring the original copies of your stock certificates representing
all of your shares of stock in Cherry Oil Co., Inc. to the closing.
(Mauck Aff. II Ex. A, ECF No. 25.1.) 	The attached Share Redemption Agreement
stated that the total purchase price for the Maucks’ shares would be $175,101 with
$35,020 of the total purchase price due to the Maucks at the closing on 13 August

2021. (Mauck Aff. II Ex. A, at 2.) Thereafter, the balance of the purchase price would
“be payable in ten (10) equal annual installments[.]” (Mauck Aff. II Ex. A, at 2.)
24. 	On 11 August 2021, Cherry Oil’s attorney sent the Maucks a letter
stating the following:
In light of your clients’ disagreement concerning the price representing
the valuation of Cherry Oil Co., Inc., we will postpone the Friday closing
to another date.
At this point, it is incumbent on your clients to come forward with their
own appraisal pursuant [to] the terms of the Shareholders’ Agreement.
(Mauck Aff. III Ex. 3, ECF No. 40.4.)
25. 	As discussed in detail below, over the next 16 months the parties
(through their attorneys) engaged in numerous communications on the subject of
Cherry Oil’s purchase of the Maucks’ shares. 	However, as of the present date, the
purchase has never occurred.
26. 	On 1 July 2021, this case was reassigned to the undersigned. (Reassign.
Ord., ECF No. 11.)
27. 	Plaintiffs filed a First Amended Complaint on 19 July 2021. 	(“FAC,”
ECF No. 18.) 	The FAC restated the allegations and claims from Plaintiffs’ original
Complaint 	and 	added 	new 	derivative 	claims 	against 	Jay 	and 	Ann 	for 	gross
negligence/willful misconduct, breach of fiduciary duty, constructive fraud, and a
claim seeking the removal of Jay and Ann as directors under N.C.G.S. § 55-8-09.
28. 	On 1 October 2021, Defendants’ counsel provided Plaintiffs’ counsel with
notice of a special shareholders meeting to take place on 12 October 2021 (the “12
October Shareholders’ Meeting”). (Mauck Aff. V Ex. 9, ECF No. 89.9.) By letter dated

6 October 2021, Plaintiffs’ counsel informed Defendants’ counsel that the Maucks
objected to the proposed meeting and requested that it be postponed for the following
reasons:
First, the meeting was not noticed as required by Cherry Oil’s Bylaws
and suffers the same deficiencies set forth i[n] the objections stated at
the June 16, 2021 shareholders meeting[.] . . . Second, the proposed
agenda misstates the shareholders’ rights and obligations under the
Shareholder Agreement that you previously withheld and the validity of
actions taken during an improper Board meeting on June 16, 2021.
(Mauck Aff. III Ex. 5, ECF No. 40.6.)
29. 	Despite the Maucks’ objections, the 12 October Shareholders’ Meeting
took place. (Mauck Aff. III Ex. 8, ECF No. 40.9.) At the meeting, Jay “noted that the
business to be conducted . . . was the removal of Armistead Mauck as a director of
[Cherry Oil], and the election of [Jason] as a director.” (Mauck Aff. III Ex. 8.) Upon
Jay’s motion, Armistead was removed as a director and replaced by Jason. 	(Mauck
Aff. III Ex. 8.)
30. 	Also on 12 October 2021, the Maucks were provided, through counsel,
with a “Written Consent of the Directors of Cherry Oil Co., Inc. to Action Without
Meeting” (the “12 October Written Consent”). (Mauck Aff. III Ex. 9, ECF No. 40.10.)
The 12 October Written Consent removed Armistead “from the office of Secretary-
Treasurer of the Corporation, and any and all other officer positions previously held
by him” and elected Ann as the new Secretary-Treasurer. 	(Mauck Aff. III Ex. 9.)
Moreover, the 12 October Written Consent provided that Jason had been elected as
the Vice-President of Cherry Oil. (Mauck Aff. III Ex. 9.)

31. 	On 26 October 2021, Jay, acting in his capacity as President of Cherry
Oil, terminated Louise’s employment with the company. (Mauck Aff. IV ¶ 9, ECF No.
51.)
32. 	On 6 December 2021, this Court granted Plaintiffs leave to file the SAC,
(ECF No. 46), which was filed shortly thereafter on 13 December 2021, (ECF No. 48).
33. 	The SAC added a new breach of contract claim against Defendants for
allegedly 	“fail[ing] 	to 	take 	reasonable 	and 	necessary 	steps 	[pursuant 	to 	the
Shareholders’ Agreement] to complete the call transaction while exercising dominion
and control over [Plaintiffs’] shares[.]” (SAC ¶¶ 156–64.)
34. 	On 16 December 2021, Armistead was notified by Defendants’ counsel
that his employment with Cherry Oil was being terminated effective 31 December
2021. (Mauck Aff. IV ¶ 3, ECF No. 51.)
35. 	The decision to terminate Armistead’s employment with Cherry Oil was
made by Jay, in his capacity as Cherry Oil’s president. (J. Cherry Dep., at 32:6–18.)
A termination letter sent to Armistead included the following explanation for Jay’s
decision:
Although your employment is at-will and could be terminated for any
lawful reason, the actions which inform my decision include, among
other things, bringing a lawsuit to dissolve Cherry Oil, seeking to
interfere with Cherry Oil’s relationships with its lenders and insurers,
and other generally disruptive and uncooperative behavior inconsistent
with your role as an employee of the company. At this point, I simply do
not think that you have Cherry Oil’s best interests at heart or that you
can faithfully serve as an employee of Cherry Oil at the same time you
are suing the company.
(Mauck Aff. V Ex. 1, ECF No. 89.1.)

36. 	Armistead was instructed to provide Jay with all of the corporate books
and accounting records of AJAL and C-Gas. (Mauck Aff. V ¶ 3; Mauck Aff. V Ex. 1.)
In addition, he was “directed to remove all of [his] belongings and ‘vacate the
premises’ the following day[,]” 17 December 2021. 	(Mauck Aff. V ¶ 3; Mauck Aff. V
Ex. 1.) 	Armistead ceased being an employee of Cherry Oil as of midnight on 31
December 2021. 	(J. Cherry Dep., at 32:2–5.) 	He was not offered any severance or
termination benefits. (Mauck Aff. V ¶ 3.)
37. 	On 12 January 2022, Defendants filed a Motion to Dismiss, requesting
that the Court dismiss all claims asserted by Plaintiffs in the SAC pursuant to Rules
12(b)(1) and 12(b)(6). (Mot. to Dismiss SAC, ECF No. 49.)
38. 	In its 2 May Order and Opinion, this Court dismissed all of the claims
in the SAC except for Plaintiffs’ individual claim for breach of fiduciary duty and new
claim for breach of contract (based on Defendants’ failure to follow through on the
purchase of the Maucks’ shares following the call vote). Mauck, 2022 NCBC LEXIS
39, at **49.
39. 	Defendants filed an Answer to the SAC on 23 May 2022 in which they
asserted counterclaims against Armistead for breach of fiduciary duty and duty of
loyalty and breach of the AJAL Operating Agreement, as well as a counterclaim
seeking 	a 	declaratory 	judgment 	concerning 	the 	parties’ 	rights 	under 	the
Shareholders’ Agreement. (Answer and Countercls., ECF No. 63.)9
9 These counterclaims remain pending and are not addressed in this Opinion.

40. 	On 7 April 2023, Defendants filed the present Motion for Supervision in
which they have asked the Court to supervise the process for finalizing the purchase
of Plaintiffs’ shares.
41. 	Seven days later, Defendants filed their Motion for Summary Judgment.
42. 	The Court held a hearing on the Motions on 25 July 2023, and they are
now ripe for resolution.
LEGAL STANDARD
43. 	It is well established that “[s]ummary judgment is proper ‘if 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.’ ” Morrell v. Hardin
Creek, Inc., 371 N.C. 672, 680 (2018) (quoting N.C. R. Civ. P. 56(c)). 	“[A] genuine
issue is one which can be maintained by substantial evidence.” 	Kessing v. Nat’l
Mortg. Corp., 278 N.C. 523, 534 (1971). 	“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.” 	Daughtridge v. Tanager
Land, LLC, 373 N.C. 182, 187 (2019) (citation and internal quotation marks omitted).
44. 	On a motion for summary judgment, “[t]he evidence must be considered
‘in a light most favorable to the non-moving party.’ ” McCutchen v. McCutchen, 360
N.C. 280, 286 (2006) (quoting Howerton v. Arai Helmet, Ltd., 358 N.C. 440, 470
(2004)). 	“[T]he party moving for summary judgment ultimately has the burden of

establishing the lack of any triable issue of fact.” 	Pembee Mfg. Corp. v. Cape Fear
Constr. Co., 313 N.C. 488, 491 (1985) (citation omitted).
45. 	The party moving for summary judgment may satisfy its burden by
proving that “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 by showing
through discovery that the opposing party cannot produce evidence to support an
essential element of [the] claim[.]” Dobson v. Harris, 352 N.C. 77, 83 (2000) (citations
omitted). “If the moving party satisfies its burden of proof, then the burden shifts to
the non-moving party to ‘set forth specific facts showing that there is a genuine issue
for trial.’ ” 	Lowe v. Bradford, 305 N.C. 366, 369–70 (1982) (quoting N.C. R. Civ. P.
56(e)). If the nonmoving party does not satisfy its burden, then “summary judgment,
if appropriate, shall be entered against [the nonmovant].” United Cmty. Bank (Ga.)
v. Wolfe, 369 N.C. 555, 558 (2017) (quoting N.C. R. Civ. P. 56(e)).
ANALYSIS
I. 	Motion for Summary Judgment
A. Breach of Fiduciary Duty
46. 	In their breach of fiduciary duty claim, Plaintiffs assert that Jay and
Ann—in their capacities as majority shareholders—owed a fiduciary duty to the
Maucks by virtue of their status as minority shareholders and that this duty has been
breached.
47. 	To succeed on a breach of fiduciary duty claim, “a plaintiff must show
that: (1) defendant owed 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 (2019)
(citation omitted).
48. 	Under North Carolina law, a fiduciary relationship is defined as “one in
which there has been a special confidence reposed in one who in equity and good
conscience is bound to act in good faith and with due regard to the interests of the
one reposing confidence.” 	Dalton v. Camp, 353 N.C. 647, 651 (2001) (internal
quotations omitted).
49. 	With respect to the fiduciary duty owed by majority shareholders to
minority shareholders, this Court has explained as follows:
Majority shareholders owe fiduciary duties to minority shareholders.
Gaines v. Long Mfg. Co. (Gaines II), 234 N.C. 340, 344, 67 S.E.2d 350,
353 	(1951) 	(“The 	controlling 	majority 	of 	the 	stockholders 	of 	a
corporation, while not trustees in a technical sense, have a real duty to
protect 	the 	interests 	of 	the 	minority 	in 	the 	management 	of 	the
corporation, especially where they undertake to run the corporation
without giving the minority a voice therein.”); see also Loy v. Lorm Corp.,
52 N.C. App. 428, 432, 278 S.E.2d 897, 901 (1981) (“[I]n North Carolina
majority shareholders owe a fiduciary duty and obligation of good faith
to minority shareholders as well as to the corporation.”). 	Those duties
include paying over to the minority shareholder his “just proportion of
the income and of the proceeds of the corporate property.” 	Gaines II,
234 N.C. at 344, 67 S.E.2d at 353. A fiduciary duty arises regardless of
whether the majority shareholder is an individual or an entity acting
through individuals.
Johnston v. Johnston Properties, 2018 NCBC LEXIS 119, at **28–29 (N.C. Super.
Nov. 15, 2018).
50. 	Moreover, in the context of close corporations, this Court has observed
the following:

[I]n closely-held corporations, “[t]he devolution of unlimited power
imposes on holders of the majority of the stock a correlative duty, the
duty of a fiduciary or agent, to the holders of the minority of the stock,
who can act only through them -- the duty to exercise good faith, care,
and diligence to make the property of the corporation produce the largest
possible amount, to protect the interests of the holders of the minority
of the stock, and to secure and pay over to them their just proportion of
the income and of the proceeds of the corporate property.”
Thomas v. McMahon, 2015 NCBC LEXIS 67, at **27–28 (N.C. Super. Ct. June 23,
2015) (quoting Loy, 52 N.C. App. at 432–33).
51. 	Based on these principles, the Court expressly held in its 2 May Order
and Opinion that “it is abundantly clear that under North Carolina law the Cherrys,
as 	majority 	shareholders, 	owed 	a 	fiduciary 	duty 	to 	the 	Maucks, 	as 	minority
shareholders.” 	Mauck v. Cherry Oil Co., 2022 NCBC LEXIS 39, at **34 (citing
Raymond James Capital Partners, L.P. v. Hayes, 248 N.C. App. 574, 580 (2016)). The
question currently before the Court is whether a genuine issue of material fact exists
as to whether Defendants breached that duty so as to proximately cause injury to
Plaintiffs.
52. 	Plaintiffs make a number of different arguments in an attempt to show
that Defendants have, in fact, breached the fiduciary duty owed to the Maucks.
However, for the reasons set forth below, the Court concludes that Plaintiffs have
failed to offer sufficient evidence to survive summary judgment on this claim.
53. 	First, Plaintiffs continue to assert that by taking away the Maucks’ long-
time management roles within Cherry Oil, Jay and Ann have frustrated the Maucks’
reasonable expectations that they would retain such responsibilities going forward
indefinitely. 	For example, Plaintiffs contend that Defendants’ actions included

“engag[ing] in a campaign to exclude Plaintiffs from essential management roles,
activities, communications, and decisions[.]” 	(Pls.’ Br. Opp. Mot. Summ. J., at 14.)
However, this Court has previously rejected this argument.
The SAC sets out various examples of acts committed by Jay and Ann
that Plaintiffs contend demonstrate the Cherrys’ desire to marginalize
Armistead and Louise while simultaneously increasing Jason’s role
within 	the 	company. 	Plaintiffs 	assert 	that 	the 	Cherrys’ 	conduct
constituted 	“breach[es] 	of 	Armistead 	and 	Louise’s 	reasonable
expectations regarding management of Cherry Oil.”
. . .
The SAC is replete with allegations that Jay and Ann have acted
inconsistently with Plaintiffs’ reasonable expectations regarding their
continuing status with Cherry Oil. But the Put/Call Provision in Section
11 of the Shareholders’ Agreement reflects a bargained-for agreement
between the shareholders that a shareholder’s right to receive fair
market value for his or her shares is sufficient to protect the “reasonable
expectations” of minority shareholders such as the Maucks. See Harris,
243 	N.C. 	App. 	at 	39–40, 	777 	S.E.2d 	776 	(holding 	that 	where 	a
complaining 	shareholder’s 	shares 	were 	“called” 	by 	the 	corporation
pursuant to a provision in the shareholders’ agreement, the complaining
shareholder’s “reasonable expectations” were “adequately protected” by
the buying out of his shares at the price set forth in the “call” provision).
. . .
[T]he 	Court 	agrees 	with 	Defendants 	that 	the 	Put/Call 	Provision
precludes Plaintiffs from relying on a “reasonable expectations” theory
as the basis for their individual breach of fiduciary duty claim[.]
Mauck v. Cherry Oil Co., Inc., 2022 NCBC LEXIS 39, at **8, **20, **34.
54. 	Second, Plaintiffs point to several actions taken by Defendants relating
to the Maucks’ status as employees, officers, or directors of Cherry Oil. For example,
Plaintiffs allege in the SAC that the termination of Louise’s employment and
Defendants’ ensuing false characterization of that event as a resignation constituted

a breach of fiduciary duty. (SAC ¶ 112.) Furthermore, Plaintiffs have identified the
following acts as additional examples:
Before Jay and Ann attempted to call Plaintiffs’ shares and remove
Plaintiffs as directors on 16 June 2021, they engaged in a campaign to
exclude 	Plaintiffs 	from 	essential 	management 	roles, 	activities,
communications, and decisions; make discrediting statements about
Armistead to other employees and investigated transactions involving
Armistead without any good-faith basis.
(Pls.’ Br. Opp. Mot. Summ. J., at 14.)
55. 	Plaintiffs also argue that when Jay terminated Louise’s employment, he
“promised her severance which was never provided.” (Pls.’ Br. Opp. Mot. Summ. J.,
at 7.) 	They further assert that with respect to Armistead’s termination, he “was
offered no severance or other termination benefits, and has received none.” (Pls.’ Br.
Opp. Mot. Summ. J., at 8.)
56. 	Finally, Plaintiffs attempt to rely on the fact that “Jay Cherry testified
in his deposition that since Louise and Armistead started serving on the board in the
early 2000s, there had never been any discussion about Louise and Armistead not
serving on the board prior to spring 2021” and then contend “that Jay and Ann’s
decision to exclude and remove Louise and Armistead from the Board was an
unprecedented and egregious act against Plaintiffs.” 	(Pls.’ Br. Opp. Mot. Summ. J.,
at 14–15.)
57. 	However, as discussed above, the fiduciary duty at issue in this case is
premised solely on Plaintiffs’ status as minority shareholders. 	It is axiomatic that
the existence of such a duty does not—by itself—mean that the Maucks were entitled
either to employment (or continued employment) with the company or to service as

officers or directors of the company. 	Therefore, any of Defendants’ acts relied upon
by Plaintiffs that relate to the Maucks’ capacities separate and apart from their
status as minority shareholders cannot serve as the basis for a valid breach of
fiduciary duty claim in this case.10
58. 	Third, the Maucks make a series of allegations on the subject of the call
vote, ranging from (1) Defendants’ failure to give proper notice of the 16 June
Shareholders’ Meeting and the 16 June Directors’ Meeting; to (2) Defendants’
deliberate decision not to finalize the purchase of the Maucks’ shares. However, aside
from the fact that (as discussed later in this Opinion) the record does not actually
support Plaintiffs’ assertions on these issues, they are more appropriately analyzed
under Plaintiffs’ breach of contract claim than their breach of fiduciary duty claim.
59. 	Fourth, Plaintiffs argue that Defendants breached their fiduciary duty
by 	hiding 	corporate 	records 	from 	Plaintiffs 	and 	by 	“unlawfully 	withhold[ing]
information as part of their strategy to undermine Plaintiffs.” 	(Pls.’ Br. Opp. Mot.
Summ. 	J., 	at 	1, 	13.) 	Specifically, 	Plaintiffs 	assert 	that 	Defendants 	withheld
information by “fail[ing] to provide a copy of the Shareholder Agreement when
Plaintiffs asked for the [Cherry Oil] corporate records” and that the Shareholders’
Agreement was improperly removed from Cherry Oil’s office. 	(Pls.’ Br. Opp. Mot.
Summ. J., at 14.)
10 Similarly, Plaintiffs contend that Defendants engaged in conduct such as “mak[ing]
discrediting statements about Armistead to other employees and investigat[ing] transactions
involving Armistead without any good-faith basis.” 	(Pls.’ Br. Opp. Mot. Summ. J., at 14.)
However, Plaintiffs have failed to cite to case law holding that such conduct would give rise
to a breach of the fiduciary duty owed by a majority shareholder to a minority shareholder.

60. 	However, Cherry Oil’s bylaws do not require that the Shareholders’
Agreement be maintained at Cherry Oil’s offices. 	Instead, the only document
required thereunder to be kept “at the registered or principal office of the corporation”
is “a record of shareholders showing the name and address of each shareholder and
the number of shares held by each.” (Bylaws art. V § 7, ECF No. 100.1.) Moreover,
the proper remedy for a shareholder improperly denied access to a corporate
document is a statutory claim pursuant to N.C.G.S. § 55-16-04 rather than through
a breach of fiduciary duty claim.11
61. 	Fifth, Plaintiffs assert that Cherry Oil improperly refused to issue a
dividend that would have been helpful to the Maucks in satisfying their tax liability
as set out in K-1 forms they were issued. However, there is nothing in the summary
judgment record evidencing a demand by Plaintiffs that Cherry Oil issue a dividend
to its shareholders.
62. 	Sixth, Plaintiffs assert that Defendants relied on Plaintiffs’ “outdated
personal guarantees [sic]” without Plaintiffs’ permission in obtaining loans from two
specific entities—Saratoga Rack Marketing and First Citizens Bank. (Pls.’ Br. Opp.
Mot. Summ. J., at 6.) 	However, the evidence in the record either does not support
this contention or expressly refutes its validity. 	For example, a Saratoga Rack
Marketing representative emailed Armistead to inform him that the guaranties at
issue were not considered when conducting a credit review:
11 Plaintiffs concede that at all relevant times they possessed an unexecuted copy of the
Shareholders’ Agreement and do not contend that the contents of the unexecuted copy were
in any respect substantively different from the fully executed version.

After we were originally notified of the legal situation within Cherry Oil
in 	August 	2021, 	a 	credit 	review 	was 	performed. 	The 	corporate
guarantees from both AJAL Investment, LLC and C-Gas, LLC were not
taken into consideration at that time. You can consider both guarantees
as terminated and no longer supporting the credit of Cherry Oil Co., Inc.
(Mot. Summ. J. Ex. B, ECF No. 81.2.)
63. 	Similarly, a First Citizens Bank employee confirmed via email the
following:
The bank is aware of the lawsuits and issues between the owners [of
Cherry Oil]. 	Nothing has been approved based on the statement that
appears in the financials. The bank has approved the line of credit being
fully aware of all that is happening.
(Defs.’ Not. of Filing Ex. 4, ECF No. 100.4.)
64. 	Finally, the Court has carefully reviewed all of Plaintiffs’ remaining
arguments in support of their breach of fiduciary duty claim and finds that none of
their contentions are sufficient to show a genuine issue of material fact.
65. 	Accordingly, the Court GRANTS Defendants’ Motion for Summary
Judgment with respect to Plaintiffs’ individual claim for breach of fiduciary duty.
B. Breach of Contract
66. 	The theory underlying Plaintiffs’ breach of contract claim has been
somewhat of a moving target.
67. 	As pled in the SAC, this claim was premised on the allegation that
despite voting to call Plaintiffs’ shares, Defendants have subsequently “failed and
refused to take any steps necessary to close the transaction.” (SAC ¶ 160.)
68. 	However, in opposing Defendants’ Motion for Summary Judgment as to
this claim, Plaintiffs make very different arguments—contending instead that their

breach of contract claim is actually based on the entirely separate proposition that no
valid call vote ever took place. 	This is so, Plaintiffs contend in their summary
judgment response brief, for two reasons. 	First, Plaintiffs argue that “Defendants
breached the Shareholder Agreement when they failed to provide sufficient notice
with respect to the 16 June 2021 shareholder meeting[,]” and, as a result, “[a]ny
action taken at this meeting, including the removal of Louise Mauck as a director and
the alleged call of Armistead and Louise’s shares was thus invalid.” 	(Pls.’ Br. Opp.
Mot. Summ. J., at 19.) 	Second, Plaintiffs assert that “the 16 June 2021 call was
invalid because under Section 11 [of the Shareholders’ Agreement], [Cherry Oil] has
the right to call a shareholder’s shares only after a price is specified in Section 6 and
upon the terms specified in Section 7.” (Pls.’ Br. Opp. Mot. Summ. J., at 19)
69. 	Although the SAC elsewhere contains the allegation that improper
notice was given of the two 16 June 2021 meetings, the breach of contract claim—as
noted above—is implicitly premised on the notion that the call vote was valid and
that the breaching conduct on the part of Defendants was the failure to go through
with the purchase of the Maucks’ shares. 	Thus, there is a disconnect between the
arguments contained in Plaintiffs’ summary judgment response brief regarding this
claim and the manner in which the claim was actually pled in the SAC.
70. 	This Court has explained as follows:
Our State follows traditional rules of notice pleading. 	One of the
purposes of the complaint is to frame the issues and put the opposing
party on notice of them. Thus, the complaint must give “sufficient notice
of the events or transactions which produced the claim to enable the
adverse party to understand the nature of it and the basis for it . . . .”
Sutton v. Duke, 277 N.C. 94, 104, 176 S.E.2d 161, 167 (1970). Both sides

benefit. 	For plaintiffs, the notice requirement is backed up by liberal
rules of discovery and the promise that leave to amend “shall be freely
given when justice so requires.” N.C. R. Civ. P. 15(a). For defendants,
it is an assurance of sorts that they will not be blindsided by new claims
or theories when preparing for trial.
. . .
But it is the operative complaint that must adequately notify defendants
of plaintiff’s claims. . . . Courts routinely caution that parties should
introduce new issues through the amendment process, not through
briefing, discovery responses, or expert reports.
Potts v. KEL, LLC, 2019 NCBC LEXIS 61, at *22, *24 (N.C. Super. Sep. 27, 2019)
(cleaned up and emphasis added). See also Fund 19-Miller, LLC v. Isbill, 2021 N.C.
App. LEXIS 624, at *11–12 (N.C. Ct. App. Nov. 16, 2021) (unpublished) (“Litigants
are unable to assert new theories of recovery that were not alleged in the complaint
at summary judgment because these belated changes fail to provide sufficient notice
of the events or transactions which produced the claim to enable the adverse party to
understand the nature of it and the basis for it.” (citation and quotation marks
omitted)); see also Bradshaw v. Maiden, 2020 NCBC LEXIS 106, at *19–20 (N.C.
Super. Ct. Sept. 15, 2020) (declining to consider novel theory of recovery that party
failed to plead); Wake County v. Hotels.com, L.P., 2012 NCBC LEXIS 63, at *30–33
(N.C. Super. Ct. Dec. 19, 2012) (same).
71. 	In any event, the Court concludes that Plaintiffs’ breach of contract
claim fails under any of the various theories that they have asserted.
72. 	With regard to Plaintiffs’ contention that Defendants breached the
Shareholders’ Agreement by failing to follow through with the actual purchase of the
Maucks’ shares, the record shows that Defendants repeatedly attempted to move

forward with the process but that it was Plaintiffs who were primarily responsible
for the lack of progress. 	The Court deems it helpful to set out the chronology of
relevant events regarding this issue.
73. 	Following the call vote at the 16 June Directors’ Meeting, Defendants
offered to pay the Maucks for their shares “based on the higher of the two [Cherry
Oil] valuations in the Propane Resources’ appraisal[.]”12 (Defs.’ Br. Supp. Mot. Super.
Ex. 1, ECF No. 80.2.) 	However, the Maucks rejected that offer, taking the position
that the call vote was invalid. (Defs.’ Br. Supp. Mot. Super. Ex. 1.)
74. 	On 11 August 2021, Defendants’ counsel notified Plaintiffs’ counsel in
writing 	that 	“[i]n 	light 	of 	[the 	Maucks]’ 	disagreement 	concerning 	the 	price
representing the valuation of [the company],” the closing date for the call would be
postponed. 	(SAC Ex. W, ECF No. 48.27.) 	In addition, Defendants’ counsel stated
that “[a]t this point, it is incumbent on [the Maucks] to come forward with their own
appraisal pursuant to the terms of the Shareholders’ Agreement.” (SAC Ex. W.)
75. 	For the next twelve months, the parties largely focused on conducting
discovery in this lawsuit. 	On 24 August 2022, Defendants’ counsel sent a letter to
Plaintiffs’ counsel to address the “logjam regarding the [call] process” and to ascertain
whether Plaintiffs were “interested in trying to get the Call process under the . . .
Shareholders’ Agreement unstuck.” (Defs.’ Br. Supp. Mot. Super. Ex. 1.) Specifically,
Defendants’ counsel explained Defendants’ position as follows:
12 Propane Resources is a third-party company that undertook a business valuation of Cherry
Oil and C-Gas in 2015 at the direction of Armistead and Jay. In 2020, Propane Resources
updated the 2015 valuation. (A. Mauck Dep. 55:14–56:9.)

As you will recall, our clients offered to pay your clients based on the
higher of the two [Cherry Oil] valuations in the Propane Resources’
appraisal. 	At the time, our thinking was that your clients would be
comfortable with the Propane Resources’ appraisal since the company
was chosen by your client who provided them with all of the pertinent
information and had most of the communications with the company.
Nevertheless, your clients rejected that offer and took the position that
the Call was defective and never appointed their own appraiser which
would otherwise have been the next step in the process outlined under
the Agreement.
In looking for a way forward, I have confirmed with our clients that they
would be willing to buy out your clients’ position in [Cherry Oil] on the
same terms as offered last year, i.e., using the Propane Resources’
calculation. In our view, that should be an attractive offer since it would
use 	the 	higher Propane 	Resources’ valuation and not include 	the
otherwise standard fair market value discounts for lack of control and
marketability.
If that offer is not acceptable to you, I would ask that your clients follow
the provisions of § 6 of the Shareholders’ Agreement and appoint your
own appraiser, after which our clients will appoint theirs. Just to make
things clear, in that circumstance our position will be that the [Cherry
Oil] appraisal will be done accounting for both the C-GAS-[Cherry Oil]
lease and the discounts described above.
In the event that your clients refuse to agree to the Propane Resources’
appraisal and refuse to appoint their own appraiser, we will simply,
without prejudice to our current position, restart the Call process.
(Defs.’ Br. Supp. Mot. Super. Ex. 1.)
76. 	In response, by letter dated 9 September 2022, Plaintiffs’ counsel
rejected Defendants’ offer to purchase the Maucks’ shares based on the Propane
Resources’ appraisal or otherwise restart the call process. 	(Defs.’ Br. Supp. Mot.
Super. Ex. 2, ECF 80.3.) 	Instead, Plaintiffs’ counsel informed Defendants’ counsel
that “the Maucks are more interested in pursuing a global resolution using the
mediation process[.]” (Defs.’ Br. Supp. Mot. Super. Ex. 2.)

77. 	On 6 October 2022, Cherry Oil’s Board issued a “Written Consent of the
Directors of Cherry Oil Co., Inc. to Action Without Meeting” (the “6 October Written
Consent”) confirming, and ratifying, the Board’s prior 16 June 2021 exercise of the
call option:
WHEREAS, at a special meeting of the Board of Directors (the “Board”)
of the Company held on June 16, 2021 (the “June 2021 Board Meeting”),
the Board authorized the Company to exercise its call rights under
Section 11 of the Company’s Shareholders’ Agreement, dated October
15, 1998 (the “Shareholders’ Agreement”), to purchase all of the shares
of stock in the Company held by Louise Mauck and Armistead Mauck
(such Board authorization, the “Call Rights Exercise”)
. . .
NOW, THEREFORE, BE IT:
RESOLVED, without in any way prejudicing the effectiveness of the
Call Rights Exercise at the June 2021 Board Meeting, the Board hereby
confirms and ratifies the Call Rights Exercise at the June 2021 Board
Meeting in all respects, including without limitation the validity and
effectiveness of the Board’s authorization and approval of the Call
Rights Exercise; and
FURTHER 	RESOLVED, 	without 	in 	any 	way 	prejudicing 	the
effectiveness of the Call Rights Exercise at the June 2021 Board
Meeting, the Board hereby confirms that the Company is authorized to
and has elected to exercise its call option under Section 11 of the
Shareholders’ Agreement to purchase all of the shares of stock in the
Company held by Louise Mauck and Armistead Mauck, all in accordance
with the operative terms of the Shareholders’ Agreement[.]
(Defs.’ Br. Supp. Mot. Super. Ex. 3, ECF No. 80.4.) The Board set the closing date for
the purchase of the Maucks shares as 5 December 2022. (Defs.’ Br. Supp. Mot. Super.
Ex. 7, ECF No. 80.8.)

78. 	In addition, the 6 October Written Consent required Plaintiffs to
designate their appraiser (pursuant to Section 6B of the Shareholders’ Agreement)
no later than 21 November 2022. (Defs.’ Br. Supp. Mot. Super. Ex. 7.)
79. 	Forty-six days later, Plaintiffs’ counsel sent Defendants’ counsel a letter
dated 21 November 2022 	that identified C. 	Joseph 	Ciccarello, CPA, 	MST, as
Plaintiffs’ chosen appraiser. (Defs.’ Br. Supp. Mot. Super. Ex. 4, ECF No. 80.5.) This
was the first time since the 16 June 2021 call vote that Plaintiffs’ counsel had ever
designated an appraiser.
80. 	On 30 November 2022, Defendants’ counsel sent a letter to Plaintiffs’
counsel 	identifying 	Cooper 	Wilburn 	as 	Defendants’ 	designated 	appraiser 	and
inquiring as to what information Plaintiffs’ appraiser, Ciccarello, needed to complete
his appraisal of the Maucks’ Cherry Oil shares. (Defs.’ Br. Supp. Mot. Super. Ex. 5,
ECF No. 80.6.) 	Furthermore, Defendants’ counsel noted that “[a]t this point, Mr.
Ciccarello and Mr. Wilburn will need to consult concerning the appointment of a third
appraiser in the next fifteen days (which, barring agreement, will fall to the Lenoir
County Clerk of Court to chose [sic]).” 	(Defs.’ Br. Supp. Mot. Super. Ex. 5.)
Defendants’ counsel also suggested that the 5 December 2022 closing date previously
set by the Board be pushed back to “a date to be determined after completion of the
appraisal.” 	(Defs.’ Br. Supp. Mot. Super. Ex. 5.) 	Defendants’ counsel explained his
concern that otherwise the parties would only have two weeks to complete the
appraisal process, including the appointing of a third appraiser.

81. 	On 4 December 2022, the Board executed another “Written Consent of
the Directors of Cherry Oil Co., Inc. to Action Without Meeting” (the “4 December
Written Consent”) postponing the 5 December 2022 closing date “to a date to be
established after completion of the appraisal process for the Mauck shares[.]” (Defs.’
Br. Supp. Mot. Super. Ex. 6, ECF No. 80.7.) The 4 December Written Consent stated
as follows:
WHEREAS, on October 6, 2022, the Board ratified, confirmed and re-
authorized the Company’s exercise of all of its call rights under Section
11 of the Company’s Shareholders’ Agreement, dated October 15, 1998
(the “Shareholders’ Agreement”), to purchase all of the shares of stock
in the Company (collectively, the “Mauck Shares”) held by Louise Mauck
and Armistead Mauck (collectively, the “Maucks,” and such Board
authorization, the “Call Rights Exercise”), such action having been
previously authorized by the Board at a special meeting of the Board
held on June 16, 2021; and
WHEREAS, the closing date for the Call Rights Exercise (the “Closing
Date”) was previously set by the Board for December 5, 2022 pursuant
to and in accordance with the terms of Section 11 of the Shareholders’
Agreement
. . .
NOW, THEREFORE, BE IT:
RESOLVED, the Board hereby authorizes the postponement of the
Closing Date from December 5, 2022 to a date to be established after
completion of the appraisal process for the Mauck Shares, as outlined
and in accordance with the terms of Section 6.B. of the Shareholders’
Agreement, and as soon as is reasonably practicable after the completion
of such appraisal process.
(Defs.’ Br. Supp. Mot. Super. Ex. 7.)
82. 	On the following day, Defendants’ counsel sent Plaintiffs’ counsel a
letter regarding his failure to respond to the 30 November letter and attached the 4
December Written Consent. 	(Defs.’ Br. Supp. Mot. Super. Ex. 6.) 	Additionally,

Defendants’ counsel asked Plaintiffs’ counsel for his thoughts on how the two
designated appraisers should proceed with respect to the appointment of the third
appraiser. (Defs.’ Br. Supp. Mot. Super. Ex. 6.)
83. 	By letter dated 8 December 2022, Plaintiffs’ counsel stated his belief
that the Shareholders’ Agreement required that the appraisal process take place
before a call vote can occur. 	(Defs.’ Br. Supp. Mot. Super. Ex. 8, ECF No. 80.9.)13
Plaintiffs’ counsel also reiterated the Maucks’ belief “that the meetings necessary to
call shares were not properly noticed or held, and that Defendants’ duties to the
Maucks render the call option unlawful.” (Defs.’ Br. Supp. Mot. Super. Ex. 8.)
84. 	This timeline is inconsistent with Plaintiffs’ argument that Defendants
have breached the Shareholders’ Agreement by failing to take steps to follow through
on the purchase of the Maucks’ shares. 	To be sure, there were periods during this
chronology during which neither party sought to break the logjam. 	On balance,
however, the record shows that if anyone was attempting to thwart the timely
completion of the process it was Plaintiffs rather than Defendants. 	On several
occasions, Defendants sought to move forward with the valuation process but were
repeatedly thwarted by Plaintiffs’ unwillingness to participate. 	Indeed, throughout
this time period, Plaintiffs continued to maintain that the call vote was invalid. As a
result, Plaintiffs have fallen short of successfully opposing Defendants’ Motion for
Summary Judgment on the breach of contract theory actually pled in the SAC.
13 In this 	letter, 	Plaintiffs’ counsel also requested 	certain discovery responses from
Defendants. (Defs.’ Br. Supp. Mot. Super. Ex. 8.)

85. 	Moreover, even if the Court was to consider the “new” theories of liability
asserted in Plaintiffs’ summary judgment response brief, its result would remain
unchanged.
86. 	The argument that Plaintiffs assert most vigorously is that notice of the
16 June Shareholders’ Meeting was improper because the applicable ten-day notice
period mandated by the bylaws was not given.
87. 	This contention is based on article II, section 5 of the Bylaws, which
governs shareholders’ meetings and states as follows:
Notice of Meetings: Written or printed notice stating the time and place
of the meeting shall be delivered not less than ten nor more than fifty
days before the date thereof, either personally or by mail, by or at the
direction of the President, the Secretary, or other person calling the
meeting, to each shareholder of record entitled to vote at such meeting.
. . . 	In the case of a special meeting, the notice of the meeting shall
specifically state the purpose or purposes for which the meeting is called.
(Bylaws art. II § 5.)
88. 	The notice of the 16 June Shareholders’ Meeting addressed to Plaintiffs
was mailed on 4 June 2021. (Cherry Decl. II ¶ 10, ECF No. 21.)
89. 	Because the notice was postmarked 7 June 2021, Plaintiffs contend that
it could not have been received (i.e., “delivered”) until less than ten days before the
meeting. 	The flaw with Plaintiffs’ argument, however, is that it ignores N.C.G.S. §
55-2-06(b), which provides that “[t]he bylaws of a corporation may contain any
provision for managing the business and regulating the affairs of the corporation that
is not inconsistent with law . . . ” N.C.G.S. § 55-2-06(b) (emphasis added).

90. 	Based on this statutory provision, a leading treatise has noted that “[a]ll
bylaws must be consistent with . . . all applicable state and federal laws. Any conflict
between a bylaw provision and the superior authority of . . . a statutory or
constitutional provision will necessarily be resolved in favor of the latter.” 1 Robinson
on North Carolina Corporation Law § 4.04.
91. 	The above-quoted provision in Cherry Oil’s bylaws making dispositive
the date the notice is actually delivered to the shareholder is superseded by N.C.G.S.
§ 55-1-41(c), which states in pertinent part as follows:
Written notice by a domestic or foreign corporation to its shareholder is
effective when deposited in the United States mail with postage thereon
prepaid and correctly addressed to the shareholder’s address shown in
the corporation’s current record of shareholders.
N.C.G.S. § 55-1-41(c) (emphasis added).
92. 	Therefore, pursuant to N.C.G.S. § 55-1-41(c), notice to Plaintiffs of the
16 June Shareholders’ Meeting was proper in that it was mailed twelve days before
the meeting.
93. 	Plaintiffs also argue that the 4 June 2021 notice that was mailed to
Plaintiffs of the 16 June Directors’ Meeting was invalid—albeit for a different reason.
94. 	As recited above, at the 16 June Shareholders’ Meeting, Jay and Ann
(representing a majority of the company’s shareholders) voted to dissolve the existing
Board and replace it with a new Board consisting solely of Jay, Ann, and Armistead.
The 	newly 	constituted 	Board 	conducted 	a 	meeting 	immediately 	following 	the
conclusion of the 16 June Shareholders’ Meeting in which it voted to call the Maucks’
shares.

95. 	Notice of the 16 June Directors’ Meeting was sent to Plaintiffs on 4 June
2021. 	Plaintiffs argue that this notice was invalid because it was sent prior to the
election 	of 	the 	“new” 	Board 	of 	Directors. 	Plaintiffs 	assert 	that 	because 	the
composition of the Board at the time the Board meeting took place was different than
its composition at the time notice of the meeting was given, a new notice was required
to be sent out to the members of the newly constituted Board.
96. 	Plaintiffs’ argument appears to elevate form over substance given that
the “new” Board consisted entirely of individuals who had likewise served on the “old”
Board—that is, Armistead, Jay, and Ann. Each of them received sufficient notice of
the upcoming 16 June Directors’ Meeting.
97. 	However, even assuming arguendo that Plaintiffs are correct on this
issue, any such defect was cured by the Board’s adoption of the 6 October Written
Consent, which—as 	noted above—ratified the call vote taken at the 16 June
Directors’ Meeting.
98. 	At the 25 July hearing on the present Motions, Plaintiffs’ counsel
conceded that the 6 October Written Consent would have cured any notice defects
regarding the 16 June Directors’ Meeting—assuming that the 16 June Shareholders’
Meeting was properly noticed. 	Given that the Court has now concluded that notice
of the 16 June Shareholders’ Meeting was, in fact, properly given, the Court likewise
concludes that the 6 October Written Consent rendered moot any objections to the
manner in which notice was given of the 16 June Directors’ Meeting.

99. 	Plaintiffs’ second argument in its summary judgment response brief is
unrelated to the notice issue. 	Instead, Plaintiffs contend in this second argument
that the Shareholders’ Agreement should be interpreted as requiring—as a condition
precedent to the actual call vote—a prior determination of the value of the selling
shareholders’ shares. For this reason, Plaintiffs contend, it was improper for the call
vote to have been taken at the 16 June Directors’ Meeting because there had been no
prior valuation of the Maucks’ shares in Cherry Oil.
100. 	However, the Court is unable to agree with this interpretation. 	As
Plaintiffs concede, there is no express language in the Shareholders’ Agreement
supporting the proposition that the valuation of the Maucks’ shares was a condition
precedent to the call vote. Moreover, based on its careful reading of the Shareholders’
Agreement, the Court believes the better interpretation is that the entire process is
triggered by the call vote. 	In other words, only once such a vote has occurred does
the procedure for determining the price of the selling shareholders’ shares (as set out
in Section 6) become necessary.
101. 	Therefore, the Court concludes that summary judgment should be
GRANTED in favor of Defendants on Plaintiffs’ breach of contract claim.
II. 	Motion for Supervision
102. 	In their Motion for Supervision, Defendants ask the Court “to undertake
supervision of the call of shares of [Cherry Oil] pursuant to the . . . Shareholders’
Agreement, dated October 15, 1998 . . . so that the process can finally be completed[.]”
(Mot. for Super., at 1–2.) 	Defendants seek the Court’s intervention based on their

contention that “Plaintiffs have thwarted the Call process” while simultaneously
“assert[ing] a contradictory claim against Defendants for failure to complete the Call
process.” (Defs.’ Br. Supp. Mot. Super., at 5, ECF No. 80.)
103. 	Plaintiffs do not appear to oppose Defendants’ request that the Court
take some form of supervisory role regarding this process but argue that the Court
should first rule on the substantive issues contained in the pending Motion for
Summary Judgment, including the question of whether the call vote was taken at a
properly noticed meeting. 	In this Opinion, the Court has now definitively ruled on
these issues.
104. 	Based on the briefs submitted by the parties and the arguments of
counsel at the 25 July hearing, it is clear that the parties disagree in a number of
respects on how the process set out in the Shareholders’ Agreement should proceed
going forward, particularly with regard to harmonizing the respective deadlines
contained in Sections 6B and 11.
105. 	Although it appears the Court will need to resolve the parties’ disputes
on this subject, the Court believes the parties should be given the opportunity to
submit new briefs focusing solely on this issue now that the Court has granted
summary judgment on Plaintiffs’ breach of fiduciary duty and breach of contract
claims.
106. 	Accordingly, the Court DEFERS ruling on the Motion for Supervision
at the present time. 	The parties are DIRECTED to file briefs on or before 25
September 2023 containing their respective positions on the remaining steps that

need to be taken to complete the purchase of the Maucks’ shares by Cherry Oil
pursuant to the Shareholders’ Agreement. 	Each side’s brief shall contain no more
than 5,000 words and shall comply in all respects with the provisions of the Business
Court Rules applicable to briefs.
CONCLUSION
THEREFORE, IT IS ORDERED as follows:
1. 	Defendants’ Motion for Summary Judgment is GRANTED with respect to
Plaintiffs’ claims for breach of fiduciary duty and breach of contract;
2. 	The Court DEFERS ruling on Defendants’ Motion for Supervision; and
3. 	The parties are DIRECTED to file new briefs under the terms set forth
above on or before 25 September 2023.
SO ORDERED, this the 15th day of September, 2023.
/s/ Mark A. Davis
Mark A. Davis
Special Superior Court Judge
for Complex Business Cases