NORTH CAROLINA EX REL. STEIN v. MV REALTY PBC, LLC, 2023 NCBC 59

STATE OF NORTH CAROLINA
WAKE COUNTY
IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
23 CVS 6408
STATE OF NORTH CAROLINA, ex
rel. JOSHUA H. STEIN, Attorney
General,
Plaintiff,
v.
MV REALTY PBC, LLC; MV
REALTY OF NORTH CAROLINA,
LLC; MV BROKERAGE OF NORTH
CAROLINA, LLC; AMANDA
ZACHMAN; ANTONY MITCHELL;
DAVID MANCHESTER; and
DARRYL COOK,
Defendants.
ORDER AND OPINION ON
PLAINTIFF’S AMENDED MOTION
FOR PRELIMINARY INJUNCTION
THIS 	MATTER 	is before the Court on Plaintiff’s Amended Motion for
Preliminary Injunction (“PI Motion,” ECF No. 31).
THE 	COURT, 	having 	considered 	the 	PI 	Motion, 	the 	briefs, 	affidavits,
declarations, exhibits, arguments of counsel, and all other appropriate matters of
record, CONCLUDES, in its discretion, that the PI Motion should be GRANTED for
the reasons set forth below.
Attorney General Joshua H. Stein, by Special Deputy Attorney General and
Policy Litigation Counsel Brian D. Rabinovitz and Special Deputy Attorney
General Keith T. Clayton, for Plaintiff.
Holland & Knight, LLP, by Thomas R. Woodrow, Dalton B. Miller, and James
C. King and Young Moore and Henderson, P.A., by Walter E. Brock, Jr., and
David Duke, for Defendants.
North Carolina ex rel. Stein v. MV Realty PBC, LLC, 2023 NCBC 59.

FINDINGS OF FACT
1. 	The Court makes the following findings of fact, which are made solely
for the purpose of resolving the present PI Motion and are not binding in any
subsequent proceedings in this action. 	See Lohrmann v. Iredell Mem’l Hosp., Inc.,
174 N.C. App. 63, 75 (2005) (“It is well settled that findings of fact made during a
preliminary injunction proceeding are not binding upon a court at trial on the
merits.”); disc. rev. denied, 360 N.C. 364 (2006).
2. 	The Plaintiff in this action is the State of North Carolina, ex rel. Joshua
H. Stein, Attorney General (the “State”), pursuant to N.C.G.S. §§ 75-14 and 75-105(a).
(Compl. ¶ 1, ECF No. 2.)
3. 	The various MV Realty entities who are named as Defendants in this
case hold themselves out as a real estate brokerage firm and have marketed a
Homeowner Benefit Agreement (“HBA”) program to North Carolina homeowners
since August 2020. (Mitchell Decl. ¶¶ 3–6, 9, ECF No. 38.2.)
4. 	Defendant MV Realty PBC, LLC is a Florida limited liability company
and sole corporate member of Defendant MV Realty of North Carolina, LLC, a
licensed North Carolina real estate brokerage firm that is organized as a limited
liability company. (Pl’s. Br. Supp. Mot. Prelim. Inj., Ex. 21, ECF No. 32.21; MV Realty
Operating Agreement, at 13, ECF No. 32.33; Compl. ¶¶ 2–3.)
5. 	The individual Defendants are current and former owners, officers, and
employees of the various MV Realty entities. Defendant Amanda Zachman founded
MV Realty PBC in 2014 and serves as its managing director and officer. (Compl. ¶ 8;

Pl’s. Am. Br. Supp. Mot. Prelim. Inj., Ex. 21, ECF No. 32.31.) 	Zachman also serves
as an officer of MV Realty of North Carolina. (MV Realty Operating Agreement, at 4.)
Defendant Antony Mitchell is the Chief Executive Officer of MV Realty PBC and an
officer of MV Realty of North Carolina. 	(Mitchell Decl. ¶ 1; MV Realty Operating
Agreement, at 4.) Defendant David Manchester is the Chief Operating Officer of MV
Realty PBC. 	(Pl’s. Am. Br. Supp. Mot. Prelim. Inj., Ex. 17, at 3, 5, 7–8, ECF No.
32.17.) Zachman, Mitchell, and Manchester are also members of MV Realty of North
Carolina. 	(Pl’s. Br. Supp. Mot. Prelim. Inj., Ex. 11, ECF No. 32.11; MV Realty
Operating Agreement, at 4.) Defendant Darryl Cook is a licensed real estate broker
and former employee of MV Realty of North Carolina, who—until March 2023—
served as both its Broker-in-Charge and Broker-of-Record. (Compl. ¶ 16; MV Realty
Operating Agreement, at 4.)1
6. 	Although certain aspects of MV Realty’s program have been modified
during the time period in which it has been doing business in North Carolina, the
core terms have remained unchanged. MV Realty represents to homeowners that it
is “offer[ing] a homeowner an immediate cash payment between $300 to $5,000,
depending on the value of the homeowners’ property. In exchange, homeowners agree
that, if they choose to sell their home during the duration of the program, they will
(1) enter into a separate listing agreement; and (2) allow MV [Realty] to be their
listing agent.” (Mitchell Decl. ¶ 6.)
1 Throughout this opinion, the Defendants are referred to collectively as “MV Realty.”

7. 	MV 	Realty operates 	websites 	and social media accounts 	where 	it
advertises the HBA program to homeowners and requests that homeowners provide
their contact information and consent to be contacted by an MV Realty agent about
the program. (Compl. ¶¶ 56, 62; Michell Decl. ¶ 30.) MV Realty also contracts with
online lead generators to direct homeowners to its website in order to maximize the
number of homeowners who sign up for the program. 	(Compl. ¶ 92; Mitchell Decl.
¶ 31; Pl’s. Reply Br. Supp. Mot. Prelim. Inj., Ex. 7, ECF No. 39.7.)
8. 	After a homeowner provides consent and contact information on the
website, an agent of MV Realty contacts the homeowner and offers an incentive
payment to the homeowner if they sign up for the program. (Mitchell Decl. ¶¶ 6, 30–
32, 35–36.) If a homeowner responds that they will accept the payment, MV Realty
sends a notary to their home shortly afterwards along with a copy of the HBA, which
is the written contract between the homeowner and MV Realty. 	(Compl. ¶ 40;
Mitchell Decl. ¶ 37.) Absent a specific request from the homeowner, the first time a
homeowner is afforded the opportunity to review the terms of the HBA is the day the
notary arrives at their home for them to sign it. 	(Mitchell Decl. ¶ 38.) 	MV Realty
agents are not present at the time the HBA is signed by a participating homeowner.
(Mitchell Decl. ¶ 41.)
9. 	By virtue of the HBA, MV Realty is granted an exclusive right to serve
as the homeowner’s listing agent in the event the homeowner decides to sell their
home or if title to the home is otherwise transferred. 	(Sample HBA, at 1–2, ECF
No. 38.3.) 	The duration of each HBA is forty years. 	(Sample HBA, at 2.) 	If a

participating homeowner decides to sell their home during the HBA’s term, the
commission due to MV Realty upon sale is the greater of 6% of the sale price or the
estimated fair market value of the home at the time the HBA is entered into if there
is no other cooperating broker. 	(Sample HBA, at 2.) 	If another broker participates
in the sale, the commission due to MV Realty is the greater of 3% of the sale price or
3% of the home’s estimated value at the time the HBA was executed. (Sample HBA,
at 	2.) 	The 	HBA’s 	terms 	provide 	that 	the 	agreement 	remains 	binding 	on 	a
homeowner’s heirs upon the homeowner’s death during the forty-year term. 	(See
Sample HBA, at 2.)
10. 	If a participating homeowner breaches the HBA by, for example, using
a different listing agent to sell their home, the HBA provides that MV Realty is
entitled to receive an Early Termination Fee (“ETF”) in the amount of 3% of the fair
market value of the home either at the time the HBA was executed or at the time the
HBA is breached—whichever is greater. (Sample HBA, at 2.) The HBA further states
that the obligations of program participants “constitute covenants running with the
land and . . . shall bind future successors in interest to title to the Property” and that,
in the event the HBA is breached, “any amounts owed . . . to [MV Realty] . . . shall be
secured by a security interest and lien in and against the Property as security for the
amounts owed” under the agreement. (Sample HBA, at 3.)
11. 	MV Realty provides public notice of a homeowner’s participation in the
HBA program by recording a document designated as a Memorandum of MVR
Homeowner Benefit Agreement (“Memorandum”) with the Register of Deeds in the

county where the home is located. (Mitchell Decl. ¶ 27.) The Memorandum consists
of only one page (plus signature pages for the homeowner and an MV Realty
representative) and does not recite the terms of the HBA or attach the HBA as an
exhibit. 	(Mem. HBA, at 11–13, ECF No. 38.3.) 	Instead, the Memorandum simply
contains a brief description of the homeowner’s participation in the program and
states that the obligations of the homeowner are “covenants running with the land
and bind future successors-in-interest to title to the Property.” 	(Mem. HBA, at 11,
ECF No. 38.3.)
12. 	The HBA includes three exhibits: a “ ‘Working with Real Estate Agents’
brochure, a ‘Payment Authorization Agreement’ form,” and the above-mentioned
Memorandum. (Revis Aff. ¶ 4, ECF No. 39.1.) Although the HBA references a sample
listing agreement, no such listing agreement is actually attached to the HBA.
Instead, the HBA provides a link to a website where MV Realty’s standard listing
agreement can be downloaded. (Sample HBA, at 1; Revis Aff. ¶ 4.)
13. 	Since MV Realty began operating in North Carolina, approximately
2,100 North Carolina homeowners have participated in the program. 	(Compl. ¶ 4;
Pls.’ Br. Supp. Mot. Prelim. Inj., at 4, ECF No. 33.)
14. 	MV 	Realty’s 	general 	practice 	when 	it 	suspects 	an 	HBA 	program
participant may be in breach of an HBA is to send the homeowner a letter
“remind[ing] the homeowner of their obligations under the HBA and the payments
they may be liable for in the event of breach.” (Mitchell Decl. ¶ 53.) MV Realty has
sent 67 such letters to homeowners in North Carolina. (Mitchell Decl. ¶ 54.)

15. 	On a number of occasions, MV Realty has sought to enforce HBAs by
filing lawsuits for breach of contract against North Carolina homeowners who were
alleged to have breached their respective HBAs. (Compl., Ex. 19; Compl., Ex. 20; Pls.’
Reply Br. Supp. Mot. Prelim. Inj., Ex. 9, ECF No. 39.9; Pls.’ Reply Br. Supp. Mot.
Prelim. Inj., Ex. 10, ECF No. 39.10.)
16. 	When MV Realty brings such lawsuits, it files a notice of lis pendens
against the homeowner’s property. 	(Compl., Ex. 21; Compl. Ex. 22; Pls.’ Reply Br.
Supp. Mot. Prelim. Inj., Ex. 9; Pls.’ Reply Br. Supp. Mot. Prelim. Inj., Ex. 10.) 	In
those lawsuits, MV Realty typically requests that the lis pendens remain pending
throughout the duration of the lawsuit. (Compl., Ex. 19; Compl., Ex. 20; Pls.’ Reply
Br. Supp. Mot. Prelim. Inj., Ex. 9; Pls.’ Reply Br. Supp. Mot. Prelim. Inj., Ex.10.)
17. 	On several occasions when MV Realty believed a homeowner had
breached 	an 	HBA, 	MV 	Realty 	sent 	letters 	“to 	the 	buyer[s] 	of 	the 	properties
threatening to file suit against the buyer[s] to foreclose its ‘lien.’ ” 	(Compl. ¶ 162;
Compl., Ex. 23.) 	“These threatened legal actions against subsequent purchasers of
real property assert that the [HBA] creates an obligation to pay MV Realty’s [ETF]
that is . . . binding on successors in interest to title to the property.” (Compl. ¶ 162;
Compl., Ex. 23.)
18. 	On 30 March 2023, the State initiated the present action, asserting the
following claims for relief against MV Realty: (1) unfair or deceptive trade practices
(“UDTP”) pursuant to N.C.G.S. § 75-1.1, et seq.; (2) unlawful telephone solicitation
practices under N.C.G.S. § 75-100, et seq.; (3) unfair debt collection practices pursuant

to N.C.G.S. § 75-50, et seq.; and (4) usurious lending practices under N.C.G.S. § 24-1,
et seq. (Compl. ¶¶ 173–199.)
19. 	The parties have represented to the Court that since November of 2022,
MV Realty has not entered into any new HBAs in North Carolina. After the present
lawsuit was filed, MV Realty agreed that it would not execute any new HBAs until
the Court ruled on the State’s request for immediate injunctive relief.
20. 	This case was designated as a complex business case and assigned to the
undersigned on 18 April 2023. (ECF No. 7.)
21. 	On 5 May 2023, the State filed the present PI Motion. (ECF No. 31.)
22. 	Both in its Complaint and in support of its PI Motion, the State contends
that many of the North Carolina homeowners who entered into HBAs were misled by
MV Realty representatives about key aspects of the program and that material terms
of the program were not properly disclosed to them. 	The State further asserts that
numerous homeowners were not given adequate time to read the HBA before signing
and, after execution of the document, were not given a signed copy of the HBA in a
timely fashion. 	Finally, the State argues that key terms contained in the HBA are
unlawful in North Carolina.
23. 	As attachments to its Complaint, the State submitted various exhibits,
including the following: (1) three examples of HBAs utilized by MV Realty in North
Carolina and a “Termination of an HBA”2 filed with a North Carolina Register of
2 The “Termination of an HBA” is a document recorded with the Register of Deeds that
provides notice of a release of MV Realty’s interest in a home, stating that a Memorandum
has been “terminated and [is] of no further force or effect and the property described therein

Deeds; (2) various internal MV Realty correspondence discussing the HBA program;
(3) email and text message communications between MV Realty agents and HBA
program participants; (4) nine consumer affidavits by homeowners who claim they
were misled about material terms of the program or were not afforded an advance
opportunity to learn the terms of the program before their execution of an HBA; (5)
promotional documentation for prospective HBA program participants; (6) a listing
agreement with a homeowner; (7) a checklist containing instructions by MV Realty
for notaries who notarize signings of HBAs in North Carolina; (8) demand letters from
MV Realty to program participants suspected of being in breach of an HBA (including
attached 	draft 	complaints, 	recorded 	Memoranda, 	and 	executed 	payment
authorization forms as exhibits); (9) two notices of lis pendens recorded on the
property of allegedly breaching HBA program participants; and (10) a demand letter
to 	a 	purchaser 	of 	a 	program 	participant’s 	home 	attaching 	a 	draft 	complaint
purporting to seek recovery of the associated ETF along with attorneys’ fees, interest,
and costs. (Compl., Exs. 1–23, ECF No. 2.)
24. 	The State submitted additional evidence in connection with the PI
Motion, which included the following: (1) five additional affidavits from HBA program
participants who claim to have been misled about material terms of the program or
allegedly were not afforded an opportunity to learn the terms of the program before
the day they signed an HBA; (2) internal MV Realty email correspondence along with
correspondence between MV Realty and third-party lenders containing references to
is released from the effect, restriction and encumbrance” of the relevant HBA. 	(Compl.,
Ex. 2.)

the creation of a “lien” or “cloud” on a program participant’s title resulting from the
HBA; (3) two title insurance policies reflecting the fact that the Memorandum signed
by program participants served as an encumbrance upon their homes; (4) email
correspondence regarding refinancing requests by homeowners in which the request
resulted in the homeowner being required to pay an ETF; (5) four demand letters
from MV Realty asserting that MV Realty was entitled to attorneys’ fees and costs
upon a participant’s alleged breach of an HBA (despite the fact that recovery of
attorneys’ fees and costs are not expressly authorized under the HBAs); (6) bank
records regarding MV Realty receipts in North Carolina; (7) two affidavits by Mitchell
(the CEO of MV Realty PBC and President of MV Realty of North Carolina) that were
filed in defense of a consumer protection action brought by the Massachusetts
Attorney General; (8) an affidavit by the Guilford County Register of Deeds, in which
he 	stated 	that 	he 	has 	instructed 	his 	staff 	to 	refuse 	to 	record 	MV 	Realty’s
Memorandum based on his concern that it qualifies as a false lien; and (9) a demand
letter from MV Realty to a participating homeowner that was sent after the State
filed suit against MV Realty and while the PI Motion remained pending. (Br. Supp.
Mot. Prelim. Inj., Exs. 1–32, ECF Nos. 32.1–32.32.)
25. 	The State also submitted additional evidence in connection with its
filing of a reply brief in support of its PI Motion, which included (1) the affidavit of a
North Carolina Department of Justice investigator (attaching exhibits received by
the State pursuant to a Civil Investigative Demand served upon MV Realty); (2) a
“pitch deck” to potential investors in MV Realty describing the HBA program; (3) two

title insurance company bulletins discussing the effects of the HBA program; (4) two
additional consumer affidavits from homeowners expressing their dissatisfaction
with MV Realty’s program; and (5) three Better Business Bureau complaints made
by HBA program participants in North Carolina. (Pls.’ Reply Br. Supp. Mot. Prelim.
Inj., Exs. 1–10, ECF Nos. 38.2–38.12.)
26. 	As noted above, the State has submitted a total of sixteen affidavits from
homeowners expressing their dissatisfaction with the program based on, among other
things, misrepresentations allegedly made to them by MV Realty agents. Pertinent
allegations contained in those affidavits are summarized below:
a. 	Vernice Smith was told by an MV Realty agent that the program
mandated that she agree to use MV Realty as her realtor when she
decided to sell her home or else pay a fee of 1.5% of the sale price. She
was also led to believe that the duration of the contract was only thirty
years. (Smith Aff. ¶¶ 6–7, Compl., Ex. 12.) Ms. Smith was not given the
opportunity to review the terms of the HBA until a notary brought it to
her home for her to sign it. (Smith Aff. ¶¶ 9, 12.) An MV Realty agent
was not present for the signing. Although there was an agent available
on the phone during the signing, the agent did not provide any details
about the HBA or answer any questions about it. (Smith Aff. ¶ 9.) After
Ms. Smith signed the contract, she was not provided with a copy. (Smith
Aff. ¶ 12.) 	The entire process took ten to fifteen minutes. 	(Smith Aff.
¶ 11.) 	The notary then paid Ms. Smith by a check from MV Realty.
(Smith Aff. ¶¶ 13–14.) 	Ms. Smith was not informed that MV Realty
could file a lien on her home after she signed the contract; had she been
informed of the possibility of such a lien she would not have signed it.
(Smith Aff. ¶ 15.) 	Ms. Smith later learned that the contract term was
actually forty years, but she was never informed that the contract would
be binding on her heirs if she died before the forty-year term had
expired. (Smith Aff. ¶¶ 7, 16.) Ms. Smith was not correctly informed of
the actual amount of the ETF and was instead told that the ETF would
equal 1.5% of the sale price of her home. (Smith Aff. ¶ 17.)
b. 	Bennie Davis was offered $1,144 by an MV Realty agent via text
message if he agreed to use MV Realty as a listing agent if he ever
decided to sell his home. After he responded, a notary came to his home

the very same day. (Davis Aff. ¶ 5, 8, Compl., Ex. 9.) Mr. Davis was told
the term of the agreement was six months. (Davis Aff. ¶ 13.) While Mr.
Davis was emailed an electronic copy of the HBA shortly before the
notary arrived, the listing agreement referenced by the HBA was not
included. (Davis Aff. ¶ 8.) Just before the notary arrived, Mr. Davis was
informed that the amount he would receive for signing the HBA had
been reduced, but not by how much. (Davis Aff. ¶ 11.) After the notary
arrived, Mr. Davis learned that he would only receive $936 for entering
into the HBA. 	(Davis Aff. ¶ 11.) 	Mr. Davis asked the notary several
questions about the program but the notary informed Mr. Davis she
could not answer his questions as she was not an agent of MV Realty.
(Davis Aff. ¶ 10.) 	The signing process took approximately thirty
minutes. (Davis Aff. ¶ 9.) Mr. Davis was not informed the contract term
was forty years; he would not have entered into the HBA if he had been
given this information. (Davis Aff. ¶ 13.) 	Before Mr. Davis signed the
agreement, he was informed that there was an ETF of $1,800 if he
cancelled the agreement. Mr. Davis was not informed that the ETF was,
in actuality, the greater of 3% of the value of the home at the time the
HBA was entered into or the value at the time of breach. 	(Davis Aff.
¶ 14.)
c. 	Cynthia Jones received an email from MV Realty about the availability
of grant money of up to $360. (Jones Aff. ¶ 3, Compl., Ex. 10.) Ms. Jones
called MV Realty to discuss the grant money and was told she would
receive it if she agreed to use MV Realty as a listing agent in the event
she decided to sell her home. 	(Jones Aff. ¶ 6.) 	A notary came to Ms.
Jones’ home, where she signed the HBA. (Jones Aff. ¶¶ 8, 10–12.) The
signing process took approximately twenty minutes. 	(Jones Aff. ¶ 11.)
Ms. Jones was provided with some papers by the notary after signing
the contract but not a copy of the contract itself. (Jones Aff. ¶ 10.) She
was paid approximately $320 after she signed the HBA. 	(Jones Aff.
¶ 12.) Ms. Jones was not informed that the term of the agreement was
forty years, that the contract would be binding on her heirs if she died
before the forty-year term expired, or that that there was an ETF of 3%.
(Jones Aff. ¶¶ 14–16.) 	After she entered into the HBA, Ms. Jones
received a letter from the Guilford County Register of Deeds notifying
her that there was a lien on her home. (Jones Aff. ¶ 18.)
d. 	Barry Hinton was told by an MV Realty agent that he qualified for a
payment of about $600 in exchange for agreeing to use MV Realty as his
real estate agent if he ever decided to sell his home. 	(Hinton Aff. ¶ 4,
Compl., Ex. 6.) Mr. Hinton was not given an opportunity to review the
HBA contract until a notary brought it to his home for him to sign.
(Hinton Aff. ¶¶ 6–7.) 	No MV Realty agent was present at the signing,

which took approximately fifteen minutes. 	(Hinton Aff. ¶¶ 6, 8.) 	Mr.
Hinton did not receive a copy of the HBA contract after he signed it, but
a copy was sent to him later. (Hinton Aff. ¶¶ 7, 10.) Mr. Hinton was not
informed that MV Realty would file a lien on his home if he signed the
HBA, that the term of the HBA was forty years, or that there was an
ETF of 3%. He would not have entered into the HBA if he had been so
informed. (Hinton Aff. ¶¶ 11–14.) Mr. Hinton decided to sell his home
in 2022 and contacted MV Realty to request brokerage services but
despite repeated attempts to contact MV Realty by phone and email, MV
Realty did not respond. (Hinton Aff. ¶¶ 16–17.) After at least a month
of unsuccessfully trying to contact MV Realty, Mr. Hinton listed his
home with a different realty company, whereupon he received a notice
from MV Realty that he had breached the HBA and had to pay an ETF
of 3%. 	(Hinton Aff. ¶ 18.) When he sold his home in 2022, Mr. Hinton
was forced to pay an ETF of between $4,000 and $6,000. (Hinton Aff. ¶
19.)
e. 	Kara Bessinger was informed by email that she qualified for a payment
of $530 in exchange for agreeing to use MV Realty if she chose to sell
her home. (Bessinger Aff. ¶¶ 4–5, Compl., Ex. 5.) Ms. Bessinger did not
receive a copy of the HBA before she met with a notary in the parking
lot of a CVS pharmacy to sign it. 	(Bessinger Aff. ¶¶ 9–10.) 	Ms.
Bessinger signed the HBA inside her car while parked outside the CVS
pharmacy. (Bessinger Aff. ¶ 9.) The process took approximately fifteen
minutes. During that time, Ms. Bessinger had only four or five minutes
to review the HBA. 	Because it was raining heavily, the notary got in
Ms. Bessinger’s backseat for the signing process. (Bessinger Aff. ¶ 12.)
After Ms. Bessinger signed the contract, she was paid $530. (Bessinger
Aff. ¶ 13.) 	Ms. Bessinger was not provided with a copy of the contract
after signing it; instead, a copy was sent to her about two weeks later
upon her request. 	(Bessinger Aff. ¶¶ 14–15.) 	Ms. Bessigner was not
informed that MV Realty would file a lien on her home after she signed
the HBA, that the term of the HBA was forty years, or that the contract
would be binding on her heirs if she died before the forty-year term
concluded. 	She would not have entered into the HBA if she had been
given this information. 	(Bessinger Aff. ¶¶ 16–18.) 	Ms. Bessinger
decided to sell her home in late 2022, so she attempted to contact MV
Realty to request brokerage services. 	(Bessinger Aff. ¶ 20.) 	After
several attempts, Ms. Bessinger eventually reached an MV Realty
agent, 	but 	the 	agents 	Ms. 	Bessinger 	spoke 	with 	were 	unhelpful.
(Bessinger Aff. ¶¶ 21–22.) Ms. Bessinger had been contacted by several
potential buyers before reaching out to MV Realty, and she presented a
buyer’s proposed offer to an MV Realty agent. The agent contacted the
prospective buyer and told the buyer that MV Realty had a contract to

sell the home for forty years and had a lien on the property. (Bessinger
Aff. ¶ 23.) Ms. Bessinger ultimately paid an ETF of $5,887.20 to sell the
home to the buyer without the assistance of a real estate broker.
(Bessinger Aff. ¶ 24.)
f. 	Patricia Bandy was told by an MV Realty agent that she qualified for a
payment of $890 in exchange for agreeing to use MV Realty as a broker
if she decided to sell her home. 	(Bandy Aff. ¶ 4, Compl., Ex. 4.) 	Ms.
Bandy was not given the opportunity to review the HBA contract until
a notary brought it to her home two to three days later. 	(Bandy Aff.
¶¶ 6–8.) 	No MV Realty agent was present at the signing. 	(Bandy Aff.
¶ 7.) 	The signing process took approximately 20 minutes, and after it
concluded, Ms. Bandy was paid $890. (Bandy Aff. ¶¶ 9–10.) Ms. Bandy
was not provided with a copy of the HBA after she signed it, so she made
copies using her personal copier before the notary left her home. (Bandy
Aff. ¶¶ 8, 11.) Ms. Bandy was not informed that MV Realty would file a
lien on her home or that the contract would be binding on her heirs if
she died before the expiration of the forty-year term. She would not have
signed the HBA if she had been given this information. 	(Bandy Aff.
¶¶ 12–13.) 	Ms. Bandy decided to sell her home in July 2022 and
attempted to contact MV Realty by phone at least three times to request
services, but MV Realty did not respond. 	(Bandy Aff. ¶¶ 15–16.)
Eventually, Ms. Bandy was successful in getting in touch with an MV
Realty agent, but the agent was unhelpful. 	Ms. Bandy told the agent
she would use a different realty company instead. 	(Bandy Aff. ¶¶ 17–
19.) 	MV Realty then listed the property for sale without Ms. Bandy’s
knowledge. 	(Bandy Aff. ¶¶ 17–19.) 	When Ms. Bandy learned of the
listing, she engaged counsel, who instructed MV Realty to remove the
listing and that Ms. Bandy was terminating her relationship with MV
Realty. (Bandy Aff. ¶ 20.) MV Realty responded by serving Ms. Bandy
with a notice of lis pendens. (Bandy Aff. ¶ 21.) By then, the home was
under contract, and Ms. Bandy was forced to pay an ETF of $11,714.40
to close the sale. (Bandy Aff. ¶ 23.)
g. 	Syidah Mateen was told by an MV Realty agent that she qualified for a
payment of approximately $795 if she agreed to use MV Realty in the
event that she decided to sell her home. 	(Mateen Aff. ¶ 4, Compl.,
Ex. 11.) 	Ms. Mateen did not have an opportunity to review the HBA
until a notary brought it to her home several days later. 	(Mateen Aff.
¶¶ 7–8.) 	The signing process took place on the street in front of Ms.
Mateen’s home and took approximately five minutes. 	Ms. Mateen
signed the HBA on the tailgate of the notary’s car. 	Ms. Mateen felt
rushed by the notary to complete the signing and did not have time to
read the HBA before she signed it. (Mateen Aff. ¶ 9.) Ms. Mateen asked

the notary questions about the HBA program, but the notary told her
she could not answer Ms. Mateen’s questions. 	The notary did not
suggest that Ms. Mateen contact MV Realty to get answers to her
questions. 	(Mateen Aff. ¶ 10.) 	After she signed the HBA, Ms. Mateen
was paid approximately $795. (Mateen Aff. ¶ 11.) Ms. Mateen was not
informed that MV Realty would file a lien on her home, that the term of
the HBA was forty years, that the contract would be binding on her heirs
if she died before the forty-year term concluded, or that there was an
ETF in the amount of 3%. 	She would not have signed the HBA if she
had been given this information. (Mateen Aff. ¶¶ 12–15.)
h. Rodney Benifield specifically asked an MV Realty agent if MV Realty
would put a lien on his home before he signed an HBA in late 2021, and
the agent said no. 	(Benifield Aff. ¶¶ 3, ECF No. 39.4.) 	Mr. Benifield
would not have entered into the HBA had he known that a lien could be
placed on his home. (Benifield Aff. ¶ 3.) Mr. Benifield was not informed
that the term of the HBA was 40 years or that the contract would be
binding on his heirs if he died before the forty-year term concluded. Nor
was he informed that he would owe an ETF in the amount of 3% if he
breached the terms of the HBA. 	He would not have entered into the
HBA if he had been told these facts. 	(Benifield Aff. ¶¶ 5–7.) 	In late
2022, Mr. Benifield unsuccessfully attempted on several occasions to
reach MV Realty in order to cancel his HBA. 	(Benifield Aff. ¶ 9.) 	Mr.
Benifield 	eventually 	got 	in 	touch 	with 	an 	MV 	Realty 	agent 	and
requested brokerage services but was dissatisfied with the services he
received. (Benifield Aff. ¶¶ 10–11.) After unsuccessfully attempting to
sell his home using MV Realty for over six months, Mr. Benifield was
told he had sixty days to sell his home or else he would owe a 3% ETF.
Mr. Benifield had been told before signing the HBA that if MV Realty
was not successful in selling his home within six months, he would be
free to use a different realty company. 	(Benifield Aff. ¶ 14.) 	Although
Mr. Benifield has been contacted by an interested buyer, he has not
accepted the buyer’s offer because he does not want to pay MV Realty
the ETF. (Benifield Aff. ¶ 15.)
i. 	Yolonda Frasier was offered $1,000 by an MV Realty agent in exchange
for agreeing to use MV Realty if she decided to sell her home. (Frasier
Aff. ¶ 4, ECF No. 39.5.) 	Ms. Frasier was told MV Realty “would give
public records a notice to not forget about the HBA[.]” (Frasier Aff. ¶ 14.)
Ms. Frasier was also informed by the MV Realty agent that the contract
term was ten years and that all she would have to do if she wanted to
cancel the HBA was to give back the $1,000. 	(Frasier Aff. ¶¶ 15–16.)
Ms. Frasier did not have the opportunity to review the terms of the HBA
until a notary brought the contract to her home several days later.

(Frasier Aff. ¶¶ 6–8.) The notary instructed her where to sign the HBA.
No MV Realty agent was present or available by telephone to answer
questions during the signing. 	(Frasier Aff. ¶ 9.) 	The signing process
took approximately fifteen minutes. (Frasier Aff. ¶ 7.) After signing the
HBA, Ms. Frasier was paid $1,000. (Frasier Aff. ¶ 11.) Ms. Frasier was
not provided with a copy of the HBA until approximately two to three
months later, when she received an unsigned version. 	(Frasier Aff.
¶ 12.) 	Ms. Frasier has attempted to contact MV Realty by phone and
email numerous times to cancel the HBA but has never received a
response. (Frasier Aff. ¶ 13.) Ms. Frasier would not have entered into
the HBA if she had been informed MV Realty would place a lien on her
home. (Frasier Aff. ¶ 14.) Ms. Frasier was not informed that the term
of the HBA was forty years or that the contract would be binding on her
heirs if she died before the forty-year term concluded. 	Nor was she
informed that she could be forced to pay an ETF in the amount of 3%.
She would not have entered into the HBA if she had been given this
information. (Frasier Aff. ¶¶ 15–16.)
j. 	Roshawn Walker spoke with an MV Realty agent who offered her $1,200
in exchange for agreeing to use MV Realty if she decided to sell her
home. (Walker Aff. ¶ 6, ECF No. 32.5.) The next day, a notary came to
Ms. Walker’s home with an HBA for her to sign. (Walker Aff. ¶ 8.) The
signing took place on Ms. Walker’s front porch. 	The process took
approximately twenty minutes. 	(Walker Aff. ¶ 9.) 	No agent of MV
Realty was either present or made available by phone to answer
questions during the signing. (Walker Aff. ¶¶ 10–11.) Ms. Walker was
not afforded an opportunity to review the terms of the contract prior to
the signing, nor was she provided with a copy of the HBA until five
months later. (Walker Aff. ¶¶ 12–13.) Ms. Walker was paid $1,200 after
she signed the contract. 	(Walker Aff. ¶ 14.) 	Ms. Walker was never
informed MV Realty would put a lien on her home, that the HBA would
be binding on her heirs if she died before the forty-year term concluded,
or that there was a 3% ETF. She would not have entered into the HBA
if she had known of these terms. 	(Walker Aff. ¶¶ 15–17.) 	Ms. Walker
attempted to sell her home using MV Realty not long after signing the
HBA. (Walker Aff. ¶ 19.) She was dissatisfied with MV Realty’s services
and attempted to engage another broker. (Walker Aff. ¶¶ 19–25.) That
broker told her he could not represent her because of the HBA. (Walker
Aff. ¶ 25.) Ms. Walker contacted an MV Realty agent and informed the
agent that she was unaware of the forty-year term, the impact of the
HBA on her heirs, and the lien on her property, but the agent told her
that there was nothing the agent could do. (Walker Aff. ¶ 27.) The agent
told Ms. Walker that she could use another broker, but she would have
to pay an ETF if she did so. (Walker Aff. ¶ 28.)

k. Donna Turner was offered $325 by an MV Realty agent in exchange for
agreeing to use MV Realty as a broker if she decided to sell her home
within the next three years. (Turner Aff. ¶ 5, ECF No. 32.4.) A notary
arrived at Ms. Turner’s home with an HBA a few days later. 	(Turner
Aff. ¶¶ 6–7.) The notary advised Ms. Turner to direct any questions to
MV Realty. (Turner Aff. ¶ 8.) Ms. Turner did not have an opportunity
to review the terms of the contract before the day of the signing. (Turner
Aff. ¶ 9.) The signing process took ten to fifteen minutes. (Turner Aff.
¶ 8.) Ms. Turner was never informed that MV Realty could have a lien
placed on her home, that the HBA would be binding on her heirs if she
died before the forty-year term concluded, or that there was an ETF of
3% associated with the HBA. 	If she had been given this information,
she would not have executed the HBA. 	(Turner Aff. ¶¶ 11–13.) 	After
Ms. Turner signed the HBA, she was paid $325 by check. 	(Turner Aff.
¶ 15.) 	Ms. Turner unsuccessfully attempted to cash the check at
Walmart because she did not have a bank account but was told that she
could not do so because the check appeared to be fraudulent. 	(Turner
Aff. ¶ 15.) Ms. Turner contacted MV Realty and was told to tear up the
check and that the check would be reissued. (Turner Aff. ¶¶ 16–17.) Ms.
Turner received a second check that, once again, she was unable to cash
at Walmart because she was told that “the numbers at the bottom of the
check were not matching up.” 	(Turner Aff. ¶ 17.) 	For this reason, Ms.
Turner has received no money in exchange for executing the HBA.
(Turner Aff. ¶ 18.)
l. 	Teresa McCalop was offered between $800 and $900 by an MV Realty
agent in exchange for agreeing to use MV Realty if she decided to sell
her home. 	(McCalop Aff. ¶ 9, ECF No. 32.3.) 	Approximately five days
later, a notary came to her home with the HBA for her to sign. (McCalop
Aff. ¶ 10.) Ms. McCalop was not afforded an opportunity to review the
contract prior to the day of the signing, nor was she provided with a copy
of it after she signed it. 	(McCalop Aff. ¶¶ 15–16.) 	The notary flipped
from one page of the HBA to another and showed Ms. McCalop where to
sign. (McCalop Aff. ¶ 15.) The signing process took approximately five
to ten minutes. 	(McCalop Aff. ¶ 13). 	Ms. McCalop was paid $800 or
$900 after she signed the contract; she was unable to recall the exact
amount. (McCalop Aff. ¶ 17.) Ms. McCalop attempted to sell her home
using MV Realty about one year later. MV Realty referred Ms. McCalop
to 	Sade 	Washington, 	a 	real 	estate 	agent, 	but 	Ms. 	McCalop 	was
dissatisfied with the services she received. 	(McCalop Aff. ¶¶ 18–22.)
Ultimately, Ms. McCalop decided to sell her home directly to a buyer for
cash. 	(McCalop Aff. ¶ 22.) 	MV Realty sent a settlement statement to
Ms. McCalop two days before the closing, which reflected a “commission

payment” to MV Realty of $12,003 and an “administrative fee” of $500.
The statement also reflected a separate additional payment of $12,003
to Hometown Realty, Ms. Washington’s real estate agency. 	(McCalop
Aff. ¶ 24.) 	Ms. McCalop believed that the HBA required MV Realty to
serve as her listing agent if she decided to sell her home and not merely
to refer her to a separate realty company. 	She was dismayed to learn
that Sade Washington and her realty company, Hometown Realty,
claimed to be entitled to a separate commission in addition to the
commission MV Realty stated it was owed. 	(McCalop Aff. ¶¶ 25–26.)
Ms. McCalop was not informed MV Realty could put a lien on her home,
that the HBA would be binding on her heirs if she died before the forty-
year term concluded, or that there was an ETF of 3% if she breached the
HBA. She would not have entered into the HBA if she had been provided
with these facts. (McCalop Aff. ¶¶ 27–29.)
m. Sheila Ingram spoke to an MV Realty agent who offered her money in
exchange for agreeing to use MV Realty if she decided to sell her home.
(Ingram Aff. ¶ 6, ECF No. 32.2.) Ms. Ingram was told she could cancel
the HBA at any time. (Ingram Aff. ¶ 7.) Ms. Ingram was not afforded
an opportunity to review the terms of the HBA until a notary brought
the contract to her friend’s home for her to sign it. 	(Ingram Aff. ¶¶ 8–
10.) 	Ms. Ingram did not receive a copy of the contract until two weeks
after she signed it. 	(Ingram Aff. ¶ 13.) 	The signing process took
approximately five to ten minutes. (Ingram Aff. ¶ 11.) After she signed
the contract, Ms. Ingram was paid $1,200. 	(Ingram Aff. ¶ 12.) 	Ms.
Ingram was not informed that MV Realty could have a lien placed on
her home, that the HBA would be binding on her heirs if she died before
the forty-year term ended, or that she would have to pay an ETF
consisting of 3% of the sale price of her home if she used a different
listing agent. Had she been given this information, she would not have
entered into the HBA. (Ingram Aff. ¶¶ 14–16.) Ms. Ingram decided to
sell her home after signing the HBA but was not satisfied with MV
Realty’s services, and her home is not currently listed for sale. (Ingram
Aff. ¶¶ 18–21.) 	Ms. Ingram has attempted to refinance her mortgage
but her prospective lender could not move forward with her refinancing
because MV Realty has not provided the lender with the necessary
information. (Ingram Aff. ¶ 22.)
n. Gary Devone was offered an incentive payment by MV Realty in
exchange for agreeing to use MV Realty if he decided to sell his home.
(Devone Aff. ¶ 6, ECF No. 32.1.) 	Mr. Devone was not afforded an
opportunity to review the HBA prior to a notary bringing it to his home
for him to sign it approximately a week after his conversation with the
MV Realty agent. 	(Devone Aff. ¶¶ 7–8, 11.) 	The signing process took

approximately ten to fifteen minutes. 	(Devone Aff. ¶ 9.) 	Mr. Devone
was paid $500 after he signed the contract. 	(Devone Aff. ¶ 12.) 	Mr.
Devone was never told that a lien would exist on his home, that the HBA
would be binding on his heirs if he died before the forty-year term
concluded, or that he could be liable for an ETF consisting of 3% of the
sale price of the home. 	He would not have signed the HBA if he had
received that information. (Devone Aff. ¶¶ 13–14.)
o. 	Sabrina Abney was offered $455 by an MV Realty agent in exchange for
agreeing to use MV Realty if she decided to sell her home. (Abney Aff.
¶ 5, Compl., Ex. 7.) Although Ms. Abney was provided with an advance
copy of the HBA before she signed it, she was not given a copy of the
listing agreement referenced in the HBA. 	(Abney Aff. ¶ 7.) 	A notary
brought the HBA to Ms. Abney’s place of employment for her to sign
several days later. No MV Realty agent was present during the signing.
The process took about ten minutes. 	(Abney Aff. ¶ 9.) 	Ms. Abney was
paid $455 after she signed the HBA. 	(Abney Aff. ¶ 11.) 	Although she
did not realize it at the time of signing, there were differences between
the version of the contract she was sent in advance and the version of
the contract that she actually signed. (Abney Aff. ¶ 10.) Ms. Abney was
not told that MV Realty would put a lien on her home, that the term of
the HBA was forty years, that the contract would be binding on her heirs
if she died before the forty-year term ended, or that there was an ETF
of 3% as a part of the HBA. 	She would not have entered into the HBA
if she had known of these terms. (Abney Aff. ¶¶ 12–15.)
p. 	Anthony Bradley was offered $400 by an MV Realty agent in exchange
for agreeing to use MV Realty if he decided to sell his home. (Bradley
Aff. ¶ 5, Compl., Ex. 8.) Mr. Bradley was not afforded an opportunity to
review the terms of the HBA until a notary brought it to his home for
him to sign a week or two after his initial conversation with the MV
Realty agent. 	(Bradley Aff. ¶¶ 8–10.) 	Mr. Bradley felt rushed and
pressured 	during 	the 	signing 	process, 	which 	lasted 	approximately
twenty minutes. (Bradley Aff. ¶ 11.) Mr. Bradley was given a check for
$400 after signing the HBA. (Bradley Aff. ¶ 12.) Mr. Bradley’s bank did
not honor this check, and Mr. Bradley was forced to contact MV Realty
to request a second check. 	(Bradley Aff. ¶ 13.) 	The notary did not
provide Mr. Bradley with a copy of the contract after he signed it.
(Bradley Aff. ¶ 14.) Mr. Bradley was not told that MV Realty would put
a lien on his home, that the HBA term was for forty years, that the
contract would be binding on his heirs if he died before the forty-year
term concluded, or that he would have to pay a 3% ETF if he sold the
home with the assistance of a separate listing agent. He would not have
signed the HBA if he had been given this information. 	(Bradley Aff.

¶¶ 15, 17–19.) 	Mr. Bradley has been informed by the Guilford County
Register of Deeds that there is a lien on his property. (Bradley Aff. ¶ 16.)
27. 	In response to the PI Motion, MV Realty submitted (1) declarations by
an officer of MV Realty and one of its attorneys explaining how the HBA program
operates; (2) a sample HBA; (3) declarations from a number of HBA program
participants in North Carolina stating that they fully understood the MV Realty
program and their satisfaction with MV Realty’s services; and (4) five recordings of
automated telephone calls from MV Realty to new North Carolina participants in the
program, confirming that the homeowner (after signing an HBA) understood and
agreed to the HBA’s terms. 	(Resp. Opp’n Mot. Prelim. Inj., Exs. A–F, G1–G5, ECF
Nos. 38.1–38.12.)
28. 	The Motion originally came on for hearing on 14 June 2023. On 15 June
2023, the Court ordered supplemental briefing on several issues. (ECF No. 47.) On
26 July 2023, the Court heard additional arguments at a hearing via Webex on the
issues addressed in the supplemental briefing. On 31 July 2023, at the request of MV
Realty, the Court permitted the parties to submit final supplemental briefs by 21
August 2023. 	(ECF No. 56.) 	The Court conducted a Webex hearing on 25 August
2023 with regard to the issues addressed in the parties’ final supplemental briefs.
29. 	The PI Motion is now ripe for decision.
CONCLUSIONS OF LAW
30. 	A preliminary injunction “is an extraordinary measure taken by a court
to preserve the status quo of the parties during litigation.” Ridge Cmty. Invs., Inc. v.
Berry, 293 N.C. 688, 701 (1977).

31. 	N.C.G.S. § 75-14 states as follows:
If it shall become necessary to do so, the Attorney General may
prosecute civil actions in the name of the State on relation of the
Attorney General to obtain a mandatory order, including (but not
limited 	to) 	permanent 	or 	temporary 	injunctions 	and 	temporary
restraining orders, to carry out the provisions of [North Carolina’s
Unfair and Deceptive Trade Practices Act], and the venue shall be in
any county as selected by the Attorney General.
N.C.G.S. § 75-14. In addition, N.C.G.S. § 75-105(a) provides, in pertinent part, that
“[t]he Attorney General may investigate any complaints received alleging violation of
this Article. 	If the Attorney General finds that there has been a violation of this
Article, the Attorney General may bring an action to impose civil penalties and to
seek any other appropriate relief pursuant to this Chapter, including equitable relief
to restrain the violation.” Id. § 75-105(a).
32. 	This Court has previously stated the applicable standard for evaluating
motions brought by the Attorney General seeking a preliminary injunction.
A preliminary injunction is an extraordinary measure that “will not be
lightly granted.” Travenol Labs., Inc. v. Turner, 30 N.C. App. 686, 692,
228 S.E.2d 478 (1976) (citation omitted). To obtain such relief, a plaintiff
must generally show “a likelihood of success on the merits of his case
and . . . [that] plaintiff is likely to sustain irreparable loss unless the
injunction is issued, or if, in the opinion of the Court, issuance is
necessary for the protection of his rights during the course of litigation.”
Analog Devices, Inc. v. Michalski, 157 N.C. App. 462, 466, 579 S.E.2d
449 (2003) (citations omitted). 	When the Attorney General brings an
enforcement action “to vindicate public interest rather than to redress
individual grievances,” however, a more lenient standard may apply to
the requirement of irreparable loss or harm, and the State need not
show “actual injury” to obtain an injunction; rather, the State-movant
must show that the “act or practice complained of adversely affects the
public interest.” State ex rel. Edmisten v. Challenge, Inc., 54 N.C. App.
513, 521–22, 284 S.E.2d 333 (1981). 	In Challenge, Inc., the court
explicitly took note of the fact that G.S. § 75-14 provides the Attorney
General with the authority to obtain mandatory orders to enforce the

North Carolina Unfair and Deceptive Trade Practices Act. Id.; see also
State ex rel. Ross v. Overcash, 2008 N.C. App. LEXIS 1669 (Sept. 16,
2008) (affirming an injunction issued in an enforcement action that
required the defendant to close a mining operation pending compliance
with statutory law, even in the absence of actual or apparent injury).
State ex rel. Cooper v. W. Sky Fin., LLC, 2015 NCBC LEXIS 87, at *44–45 (N.C. Super.
Ct. Aug. 27, 2015).
33. 	The issuance of a preliminary injunction is a decision committed to a
trial court’s discretion. 	State ex rel. Edmisten v. Fayetteville St. Christian Sch., 299
N.C. 351, 357 (1980).
34. 	As noted above, the State’s complaint states four substantive causes of
action: (1) a UDTP claim; (2) an unlawful telephone solicitation practices claim; (3) a
claim for unfair debt collection practices; and (4) a usurious lending practices claim.
(Compl. ¶¶ 173–199.)
35. 	In support of its PI Motion, however, the State focuses primarily on its
UDTP claim.
36. 	The nature of UDTP claims has been summarized by this Court as
follows:
North Carolina law created a private right of action under Chapter 75
as part of its effort to protect consumers from unfair or deceptive trade
practices. See N.C.G.S. § 5-1.1 (outlawing unfair or deceptive practices
in trade); N.G.G.S. § 75-16 (creating a private right of action and
authorizing treble damages); see also Hardy v. Toler, 24 N.C. App. 625,
630–31, 211 S.E.2d 809, 813 (1975). 	The protections of N.C.G.S. § 75-
1.1 extend, in certain circumstances, to businesses as well. 	Dalton v.
Camp, 353 N.C. 647, 656, 548 S.E.2d 704, 710 (2001) (citing United
Labs., 322 N.C. at 665, 370 S.E.2d at 389.
“[T]o establish a prima facie claim for unfair trade practices, a plaintiff
must show: (1) defendant committed an unfair or deceptive act or

practice, (2) the action in question was in or affecting commerce, and (3)
the act proximately caused injury to the plaintiff.” Dalton, 353 N.C. at
656, 548 S.E.2d at 711 (citing Spartan Leasing, Inc. v. Pollard, 101 N.C.
App. 450, 460–61, 400 S.E.2d 476, 482 (1991)). 	“The Act does not . . .
define an unfair or deceptive act, ‘nor is any precise definition of the
term possible.’ ” 	Bernard v. Cent. Carolina Truck Sales, Inc., 68 N.C.
App. 228, 229–30, 314 S.E.2d 582, 584 (1984) (quoting Wachovia Bank
& Trust Co. v. Smith, 44 N.C. App. 685, 690, 262 S.E.2d 646, 649 (1980)).
A trade practice “is unfair if it is unethical or unscrupulous, and it is
deceptive if it has a tendency to deceive.” Sunbelt Rentals, Inc. v. Head
& Engquist Equip., L.L.C., 174 N.C. App. 49, 59, 620 S.E.2d 222, 230
(2005) (citing Polo Fashions, Inc. v. Craftex, Inc., 816 F.2d 145, 148 (4th
Cir. 1987)).
Charah, LLC v. Sequoia Servs., LLC, 2020 NCBC LEXIS 52, at *18 (N.C. Super. Ct.
Apr. 17, 2020). 	Our Supreme Court has reiterated that “a practice is deceptive if it
has the capacity . . . to deceive.” 	Walker v. Fleetwood Homes of N.C., Inc., 362 N.C.
63, 72 (2007).
37. 	“Whether the alleged conduct constitutes an unfair or deceptive act is ‘a
question of law for the court.’ ” Campbell Sales Grp., Inc. v. Niroflex by Jiufeng
Furniture, LLC, 2022 NCBC LEXIS 148, at **33 (N.C. Super. Ct. Dec. 5, 2022)
(quoting Dealers Supply Co. v. Cheil Indus., 348 F. Supp. 2d 579, 592 (M.D.N.C.
2004)). “The question of ‘[w]hether a particular act is unfair or deceptive, depends on
the facts surrounding the transaction and the impact on the marketplace.’ ” 	Id.
(quoting Dealers Supply Co., 348 F. Supp. 2d at 591).
38. 	The parties differ greatly in their respective characterizations of the
HBA program. 	The State portrays the program as a predatory scheme targeting
financially vulnerable homeowners who are misled about key aspects of the program,
while MV Realty, conversely, contends that the program not only provides valuable

real estate brokerage services but also provides homeowners with an upfront
payment that is never required to be refunded. (See, e.g., Mitchell Aff. ¶ 5, ECF No.
32.27.)
39. 	The Court has thoroughly reviewed all of the materials submitted by the
parties and carefully considered the legal arguments of counsel.
40. 	As 	described 	above, 	the 	record 	contains 	sixteen 	affidavits 	by
homeowners who testified that they were either misled about material terms of the
HBA program or that important aspects of the program were not disclosed to them.
These affidavits also demonstrate that participating homeowners were not regularly
afforded an opportunity to review the HBA before it was brought to them by a notary
and that signed copies of the HBA were not routinely given to the homeowners
afterward. The Court finds the testimony contained in those affidavits to be credible
and probative on the issues raised by the present Motion.
41. 	On 17 August 2023—near the end of the parties’ briefing in connection
with the present PI Motion—the North Carolina General Assembly passed House Bill
422, 	entitled 	“An 	Act 	to 	Prohibit 	Unfair 	Real 	Estate 	Service 	Agreements 	for
Residential Real Estate,” which materially affects MV Realty’s ability to lawfully
operate in North Carolina going forward. See 2023 H.B. 422 § 3.
42. 	House Bill 422 states that it is “intended to prohibit the use of real estate
service agreements that are unfair to an owner of residential real estate or to other
persons who may become owners of that real estate in the future” and “prohibits the
recording of such residential real estate service agreements so that the public records

will not be clouded by them and provides remedies for owners who are inconvenienced
or damaged by the recording of such agreements.” Id. § 1.
43. 	House Bill 422 contains the following Definitions section:
For the purposes of this Article, the following definitions apply:
(1) 	Person. – A person as defined by G.S. 105-228.90(b)(23).
(2) 	Real 	estate 	service 	agreement. 	– 	A 	written 	contract
between a service provider and the owner or potential buyer of
residential real estate to provide services, current or future, in
connection with the maintenance, purchase, or sale of residential
real estate.
(3) 	Residential real estate. – Real property located in this
State which is used primarily for personal, family, or household
purposes.
(4) 	Service provider. – A person who provides a service related
to residential real estate, including a real estate broker.
(5) 	Unfair real estate service agreement. – A real estate
service agreement that violates G.S. 93A-85.2.
Id.
44. 	House Bill 422 creates a new statute—N.C.G.S. § 93A-85.2—providing
that real estate service agreements are “unfair, void, and in violation of this Article
if the agreement is to be in effect for more than one year and either expressly or
implicitly aims to . . . [r]un with the land or bind future owners of residential real
estate . . . [or] [c]reate a lien, encumbrance, or other real property security interest.”
Id. The new law further states that service providers are not entitled to a refund for
any “consideration paid to the owner . . . in connection with an unfair real estate
services agreement.” Id.

45. 	House Bill 422 goes on to provide that “[r]ecording an unfair real estate
service 	agreement 	is 	prohibited” 	and 	that 	“[i]f 	an 	unfair 	real 	estate 	service
agreement, or notice or memorandum thereof, has been recorded, it is void.” 	Id.
Pursuant to House Bill 422, all of the following provisions apply to any such recording
that becomes void:
(1) 	The recording shall not operate as a lien, encumbrance, or
security interest.
(2) 	No owner or buyer shall be required to record any document
voiding the recording.
(3) 	The recording shall not provide actual or constructive notice to
any person interested in the residential real estate that is identified in
the unfair real estate service agreement.
(4) 	The recording violates G.S. 14-118.6(a).
Id.
46. 	House Bill 422 authorizes a private right of action for violations by
providers of such services, including the right to recover damages, costs, and
attorneys’ fees. Id.
47. 	House Bill 422 also makes any such violations “an unfair or deceptive
trade practice under G.S. 75-1.1” and states that an aggrieved party may seek all of
the types of relief available under Chapter 75. 	Id. 	House Bill 422 provides that
“recoveries available under Chapter 75 of the General Statues . . . will not be offset
by the consideration paid by the service provider to the owner or buyer in connection
with [an] unfair services agreement.” 	Id. 	House Bill 422 expressly authorizes the

North 	Carolina 	Attorney 	General 	to 	bring 	enforcement 	actions 	for 	any 	such
violations. Id.
48. 	House Bill 422 was signed by Governor Roy Cooper on 24 August 2023.
2023 S.L. 117 § 3. 	Pursuant to its terms, the effective date of House Bill 422 is the
date on which it became law, and it “applies to unfair real estate service agreements
that are executed, modified, extended, or amended on or after that date.” Id. § 3.
49. 	It is clear that House Bill 422 applies to MV Realty’s HBA program and
prohibits MV Realty from entering into new HBAs (in their current form) with North
Carolina homeowners going forward. However, MV Realty argues, and the State does
not appear to seriously dispute, that House Bill 422 does not control the resolution of
certain aspects of the State’s PI Motion—namely, the issue of whether, and to what
extent, the State is entitled to have the Court preliminarily enjoin MV Realty’s
continued enforcement of its existing HBAs with North Carolina homeowners.
Accordingly, the Court must address those issues, and the remainder of this Opinion
analyzes the State’s right to preliminary injunctive relief under North Carolina law
as it existed prior to the General Assembly’s enactment of House Bill 422.
50. 	For the reasons set out in detail below, the Court concludes that even
under North Carolina law predating the enactment of House Bill 422, the State has
demonstrated an entitlement to preliminary injunctive relief.
51. 	As an initial matter, the State has not pointed the Court to any legal
authority in this State making it unlawful for an entity to purchase an option to serve
as a homeowner’s exclusive listing agent for a future sale of their home. 	Moreover,

the State does not challenge the reasonableness of the amount of the commission set
out in the HBA to be paid by the homeowner in circumstances where MV Realty fully
performs its duties as a listing agent in connection with selling that homeowner’s
residence.
52. 	Nevertheless, as discussed below, the Court concludes that the State has
shown a likelihood of success as to the merits of its UDTP claim in that certain aspects
of the HBA program are either deceptive, possess the capacity to deceive a reasonable
homeowner, or are otherwise unenforceable under North Carolina law.
53. 	The question of whether the ETF is legally enforceable is a key issue in
this case as the answer materially affects other aspects of MV Realty’s program. MV
Realty contends that the ETF is a valid liquidated damages provision, whereas the
State claims that it amounts to an unlawful penalty.
54. 	As discussed above, subject only to highly limited exceptions, MV Realty
is entitled to recover from the homeowner the ETF upon any “sale or other transfer
[of the home] that does not result in [ ] [MV Realty] being paid [a] [c]omission[,]”—
that is, any sale of the home by anyone other than an MV Realty listing agent.
(Sample HBA, at 2.) The amount of the ETF is calculated based upon the greater of
the value of the home at the time the HBA is signed or its value at the time the HBA
is breached.
55. 	“It is well established that a sum specified in [a] contract as the measure
of recovery in the event of a breach will be enforced if the court determines it to be a
provision for liquidated damages, but not enforced if it is determined to be a penalty.”

KNC Techs., LLC v. Tutton, 2021 NCBC LEXIS 38, at *42 (N.C. Super. Ct. Apr. 8,
2021) (cleaned up).
A stipulated sum is for liquidated damages only (1) where the damages
which the parties reasonably anticipate are difficult to ascertain because
of 	their 	indefiniteness 	or 	uncertainty 	and 	(2) 	where 	the 	amount
stipulated is either a reasonable estimate of the damages which would
probably be caused by a breach or is reasonably proportionate to the
damages which have actually been caused by the breach.
Knutton v. Cofield, 273 N.C. 355, 361 (1968) (cleaned up).
56. 	“Whether the liquidated amount is a reasonable prior estimate of
damages is determined by the status of the parties at the time of [the] making [of]
the contract.” E. Carolina Internal Med., P.A. v. Faidas, 149 N.C. App. 940, 946, aff’d
per curiam, 356 N.C. 607 (2002). “In determining whether a fixed sum, described by
the contract as a measure of recovery in the event of breach, is a liquidated damage
or perhaps an unenforceable penalty, this Court will consider the nature of the
contract, the intention of the parties, and the sophistication of the parties.” Majestic
Cinema Holdings, LLC v. High Point Cinema, 191 N.C. App. 163, 167, disc. rev.
denied, 362 N.C. 509 (2008) (cleaned up). A court will also look to the language used
by the parties to the contract to ascertain their intent. 	Knutton, 273 N.C. at 361.
“Whether a liquidated damages amount is a reasonable estimate of the damages that
would likely result from a default is a question of fact.” Green Park Inn, Inc. v. Moore,
149 N.C. App. 531, 540 (2002). “The party seeking to invalidate a liquidated damages
clause bears the burden of proving the provision is invalid.” WFC Lynnwood I LLC
v. Lee of Raleigh, Inc., 259 N.C. App. 925, 929 (2018).

57. 	Although the parties have spent significant time debating the second
prong of the above-referenced test, the Court need not resolve that dispute because
the Court finds that the State has shown a likelihood of success on the merits of its
argument that the ETF fails to satisfy the first prong. As noted above, in order for a
stipulated damages amount to be deemed a valid liquidated damages provision, the
damages reasonably anticipated by the parties must be “difficult to ascertain because
of their indefiniteness or uncertainty.” 	Knutton, 273 N.C. at 361; see also Ledbetter
Bros. Inc. v. N.C. Dep’t of Transp., 68 N.C. App. 97, 106 (1984). Here, conversely, the
calculation of the damages recoverable by MV Realty in the case of a homeowner’s
breach of an HBA would be simple to calculate—a proposition that MV Realty has
failed to persuasively counter.3 See Knutton, 273 N.C. at 361 (in determining whether
a stipulated sum is a valid liquidated damages provision or an unlawful penalty, “the
courts have been greatly influenced by the fact that in almost all [ ] cases [ ] damages
are uncertain and very difficult to estimate.”).
58. 	Furthermore, as noted above, the relative sophistication of the parties
is a factor to be considered by a court in determining whether such a contractual
provision is valid. Here, this factor also weighs against the enforceability of the ETF
provision. The homeowners who participate in the HBA program are consumers who
3 Although the HBA contains language reciting that the parties agree that the damages from
a breach would be difficult to ascertain because of indefiniteness or uncertainty, the Court is
not bound by the parties’ characterization of the payment in determining the enforceability
of the provision. 	See, e.g., United Ord. of American Bricklayers & Stone Masons Union v.
Thorleif Larsen & Son, Inc., 519 F.2d 331, 333 (7th Cir. 1975) (“[U]se of the term ‘liquidated
damages’ . . . is not conclusive[.]”) (citations omitted).

are being asked to sign a preprinted form that was drafted by MV Realty, a
sophisticated commercial enterprise, under “take it or leave it” circumstances.
59. 	Finally, although not dispositive on this issue, the Court notes that in
earlier versions of the HBA, the ETF was expressly referred to as a “penalty” by MV
Realty itself. (See e.g., Compl., Exs. 1, 13, 19, 20.) A prior version of the HBA stated
in large, capitalized boldface print, as follows: “THIS AGREEMENT PROVIDES
FOR A PENALTY FOR EARLY TERMINATION AS SET FORTH IN THIS
SECTION 3.” 	(Compl., 	Ex. 1 	(emphasis 	in 	original).) 	Although 	MV 	Realty
subsequently removed this language from its standard HBA, the substantive terms
that MV Realty itself had previously described as a “penalty” did not change in the
new version of the HBA. (Sample HBA, at 2.)
60. 	Thus, the Court concludes that the State has shown a likelihood of
success on the merits regarding its argument that the ETF is unenforceable under
North Carolina law.
61. 	The Court finds that the State has also met its burden of showing a
likelihood of success on its UDTP claim as to those aspects of the HBA program that
create 	a 	cloud on 	the 	title 	of 	participating 	homeowners 	with 	regard to 	their
residences—namely, the recordation of the Memorandum and the filing of a notice of
lis pendens.
62. 	In 	essence, 	MV 	Realty 	is 	asserting 	the 	following 	interrelated
propositions, 	which 	are 	admittedly 	somewhat 	circular: 	(1) 	the 	Memorandum
“pertains to real property” (and thus is properly subject to recordation by the Register

of Deeds) because the HBA (which is referenced in the Memorandum) contains a
covenant that “runs with the land”; (2) the HBA is able to be properly characterized
as containing a covenant that “runs with the land” largely because of the inclusion of
the ETF provision therein, which gives rise to a security interest in favor of MV
Realty; (3) this security interest operates as a lien on the home in the event of a
homeowner’s breach of the HBA; and (4) because of the existence of this lien, the filing
of a notice of lis pendens in the event of a breach of the HBA is legally permissible.
For the reasons set out below, however, the Court finds that the house of cards upon
which MV’s arguments rest collapses under scrutiny.
63. 	The Court will first address the parties’ arguments concerning MV
Realty’s 	ability 	to 	file 	a 	notice 	of 	lis 	pendens 	upon 	its 	determination 	that 	a
participating homeowner has breached the HBA.
64. 	As noted above, when MV Realty sues a homeowner for breach of the
HBA and seeks to recover the ETF, it files a notice of lis pendens with the Clerk of
Superior Court in the county where the home is located. (Compl., Ex. 21; Compl., Ex.
22; Pls.’ Reply Br. Supp. Mot. Prelim. Inj., Ex. 9; Pls.’ Reply Br. Supp. Mot. Prelim.
Inj., Ex. 10.) This notice states that it is being filed in connection with a lawsuit for
“breach of contract” and that the homeowner’s obligation to use MV Realty as their
exclusive listing agent “as described in the [HBA]” is an “obligation [that] runs with
the Property[.]” (Compl. Ex. 21.)

65. 	N.C.G.S. § 1-116 governs the filing of a lis pendens in North Carolina
and sets out an exclusive list of circumstances in which a lis pendens is proper.
Defendants rely on subparts (a)(1) and (2) of the statute, which read as follows:
(a) Any person desiring the benefit of constructive notice of pending
litigation must file a separate, independent notice thereof, which
notice shall be cross-indexed in accordance with G.S. 1-117, in all of
the following cases:
(1) Actions affecting title to real property.
(2) Actions to foreclose any mortgage or deed of trust or to enforce
any lien on real property.
N.C.G.S. § 1-116(a)(1)–(2).
66. 	With regard to subpart (a)(1), this provision is clearly inapplicable given
that the limited nature of the contractual arrangement created by the HBA cannot
reasonably be said to affect title to the property. Such a conclusion is consistent with
applicable case law from North Carolina’s appellate courts. See, e.g., Parker v. White,
235 N.C. 680, 688 (1952) (“[I]t is clear from a reading of the complaint, and the
amendments thereto, that this is an action to recover monetary damages. . . . Hence,
the action is not one affecting the title to real property within the purview of G.S. § 1-
116.”); Horney v. Price, 189 N.C. 820, 825 (1925) (“The rule of lis pendens . . . does not
apply to an action merely seeking to recover a money judgment, nor to any other
action which does not directly affect property.”); Doby v. Lowder, 72 N.C. App. 22, 29
(1984) (“The nature of plaintiffs’ action . . . must be determined by reference to the
facts alleged in the body of the complaint. This is an action for a money judgment. It
does not seek to set aside a transfer of realty. In such a case the filing of a notice of

lis pendens is not authorized.”) (cleaned up); Lord v. Jeffreys, 22 N.C. App. 13, 14
(1974) (“This complaint asks for commissions for the sale and purchase of [ ]
properties . . . and for damages for breach of contract. . . . 	[T]he language of the
statute is too clear to permit any construction other than that for plaintiff to have the
right to file a notice of lis pendens in this action, it must be an action affecting the
title to land.”).
67. 	MV Realty’s reliance on subpart (a)(2) of N.C.G.S. § 1-116 hinges on the
validity of its argument that the HBA does, in fact, create a legally enforceable lien
on the home.
68. 	MV Realty contends that the HBA contains a contingent (or “springing”)
lien that comes into existence upon the breach of an HBA by a participating
homeowner.4
69. 	Such a security interest is created, MV Realty asserts, based on Section
5(a) of the HBA, which states as follows:
Property 	Owner’s 	obligations 	hereunder shall 	constitute 	covenants
running with the land and, until this Agreement is terminated pursuant
to Section 5(c), shall bind future successors in interest to title to the
Property. 	Should Property Owner default under this Agreement, any
amounts owed by Property Owner to Company as a result of such default
shall be secured by a security interest and lien in and against the
Property as security for the amounts owed by Property Owner to
Company.
4 Notably, this contention is at odds with the State’s evidence suggesting that MV Realty’s
agents have on a number of occasions assured homeowners that the program will not result
in a lien being placed on their home. (See, e.g., Benifield Aff. ¶ 3, ECF No. 39.4 (“I specifically
asked the MV Realty agent with whom I was speaking whether MV Realty would be placing
a lien on my home. The MV Realty agent told me that MV Realty would not be filing a lien
on my home.”).)

(Sample HBA, at 3 (emphasis added).)
70. 	MV Realty concedes that the existence of such a security interest is
premised upon the enforceability of the ETF.5 However, for the reasons stated above,
the Court has ruled that the ETF is likely an unenforceable penalty rather than an
enforceable liquidated damages provision.
71. 	Accordingly, the Court concludes that the State has shown a likelihood
of success as to its argument that the HBA creates no valid security interest in the
property sufficient to trigger subpart (a)(2) of N.C.G.S. § 1-116.6 See, e.g., Cutter v.
Cutter Realty Co., 265 N.C. 664, 668 (1965) (“The lis pendens statute does not apply,
for example, to an action the purpose of which is to secure a personal judgment for
the payment of money even though such a judgment, if obtained and properly
docketed, is a lien upon land of the defendant described in the complaint.”); Zinn v.
Walker, 87 N.C. App. 325, 337 (1987), disc. rev. denied, 321 N.C. 747 (1988) (holding
5 At the 26 July 2023 supplemental hearing on the PI Motion, the following colloquy occurred
between the Court and counsel for MV Realty:
THE COURT: Is the lien tied to the existence of the ETF?
[DEFENDANTS’ COUNSEL]: Yes, because the lien – I think it has to be, Your
Honor, because the lien only arises upon default. There are a number of events
of default, and those include retaining another broker to list the property.
That’s a breach of the agreement. That’s a default. And so in that instance,
now the owner becomes liable – unless it changes its mind, which would be
great – but the owner becomes liable for the liquidated damages because it’s in
clear default of the contract.
(26 July 2023 Tr., at pp. 64–65) (emphasis added).
6 In its second supplemental brief, MV Realty suggests—for the first time—that the HBA
may create an equitable lien. However, under North Carolina law equitable liens exist only
“where there are factors invoking equity[.]” Falcone v. Juda, 71 N.C. App. 790, 793 (1984)
(cleaned up). No such equitable factors favoring MV Realty exist in the present case.

that “if neither a foreclosure nor attachment order are involved, a lis pendens may be
filed only where a legitimate interest in real property may lie”); Pegram v. Tomrich
Corp., 4 N.C. App. 413, 415 (1969) (“An action to secure a personal judgment for
payment of money is not an action ‘affecting title to real property’ within the meaning
of G.S. § 1-116(a)(1), even though such a judgment, if obtained and properly docketed,
is a lien upon land of the defendant.”).
72. 	Furthermore, even assuming arguendo that a lien does, in fact, come
into existence upon a homeowner’s breach of the HBA, the Court believes that the
State has shown a likelihood of success on its claim that MV Realty’s program
possesses a capacity to deceive in that the HBA does not sufficiently put a reasonable
homeowner on notice as to the specific nature of such a lien.
73. 	As noted above, Section 5(a) of the HBA states as follows:
Property 	Owner’s 	obligations 	hereunder shall 	constitute 	covenants
running with the land and, until this Agreement is terminated pursuant
to Section 5(c), shall bind future successors in interest to title to the
Property. 	Should Property Owner default under this Agreement, any
amounts owed by Property Owner to Company as a result of such default
shall be secured by a security interest and lien in and against the
Property as security for the amounts owed by Property Owner to
Company.
(Sample HBA, at 3 (emphasis added).)
74. 	However, Section 5(c) contains the following language:
In the event Property Owner wishes to refinance an existing mortgage
on the Property or grant a new mortgage on the Property, Company will
consider in good faith any request from Property Owner to facilitate
such refinancing or new mortgage by subordinating the lien of this
Agreement to the refinanced or new mortgage. 	In the event that
Property Owner sells the Property in compliance with this Agreement
(whether through the efforts of Company or pursuant to Section 4), or in

the event Property Owner ceases to own the Property due to foreclosure,
condemnation or arms-length deed in lieu of foreclosure to an unrelated
third party, Company will, upon written request, deliver to the closing
agent for the sale of the Property or the purchaser of the Property a
Notice of Termination of the Memorandum, in recordable form.
(Sample HBA, at 3 (emphasis added).)
75. 	As the State notes, these two sections of the HBA are not consistent.
Section 5(a) implies that a lien does not come into existence unless and until the
homeowner breaches the HBA. 	Conversely, Section 5(c) suggests that a lien exists
from the inception of the signed HBA and does not contain any language indicating
that this subpart is applicable only in case of a breach by the homeowner. 	It is not
clear to the Court how a reasonable homeowner would be able to comprehend the
interplay between these two provisions.
76. 	The lack of clarity with regard to the scope and effect of the alleged lien
was further demonstrated at the hearings on the PI Motion in which counsel for MV
Realty was unable to provide a definitive answer to the Court’s repeated questioning
as to whether such a lien could ever confer upon MV Realty the right to foreclose on
the homeowner’s property in the event of a breach. 	Assuming a right of foreclosure
is contemplated by the lien allegedly created by the HBA, such a possibility is
nowhere communicated to the homeowner. 	Moreover, it need hardly be said that if
MV Realty’s own attorneys are unable to determine whether such a right of
foreclosure exists, no reasonable homeowner can be deemed to be on notice of this
possibility at the time they sign the HBA.

77. 	The Court likewise has serious concerns about MV Realty’s ability to
lawfully record the Memorandum with the Register of Deeds following a homeowner’s
execution of the HBA.
78. 	As noted above, the Memorandum is a one-page document that MV
Realty records with the Register of Deeds after a homeowner executes an HBA. (See,
e.g., Compl., Exs. 1, 13, 19, 20.) 	It refers to a “certain MVR Homeowner Benefit
Agreement,” includes a legal description of the homeowner’s property, and states that
the HBA term begins as of an “Effective Date” (which is not actually listed in the
Memorandum), and “expires on the earlier of: (i) the date the Property is sold in
accordance with the Agreement, and (ii) the date that is forty (40) years after the
Commencement Date (the ‘Term’), unless otherwise terminated in accordance with
its terms.” (Compl. Ex. 1.) 	The Memorandum also states—in bold, underlined text—
that 	“the 	obligations 	of 	Property 	Owner 	under 	the 	[HBA] 	constitute
covenants 	running 	with 	the 	land 	and 	shall 	bind 	future 	successors-in-
interest to title to the Property.” (Compl. Ex. 1 (emphasis in original).)
79. 	MV Realty argues that the recordation of the Memorandum with the
local Register of Deeds is permissible pursuant to the broad language of N.C.G.S.
§ 161-14, which sets out the duties of a Register of Deeds in North Carolina regarding
the registration of instruments. 	N.C.G.S. § 161-14(a) provides that “[a]fter the
register of deeds has determined that all statutory and locally adopted prerequisites
for recording have been met, the register of deeds shall immediately register all
written instruments presented to him for registration.” N.C.G.S. § 161-14(a).

80. 	In Fleming v. Mann, 23 N.C. App. 418 (1974), our Court of Appeals
stated that “it is not the function of the Register of Deeds to inquire into the substance
or the legal efficacy of the documents presented to him for recording. 	If they are
properly acknowledged and probated and if the appropriate fee is tendered, it is his
duty promptly to record and index them.” Id. at 422. The Court of Appeals further
held that “any instruments pertaining to real property are included among the
documents allowed by law to be registered.” Id. at 421 (cleaned up).
81. 	Nevertheless, there are limits to what may properly be recorded under
N.C.G.S. § 161-14(a). For example, N.C.G.S. § 14-118.6 makes it unlawful
for any person to present for filing or recording in a public record or a
private 	record 	generally 	available 	to 	the 	public 	a 	false 	lien 	or
encumbrance against the real or personal property of an owner or
beneficial interest holder, knowing or having reason to know that the
lien or encumbrance is false or contains a materially false, fictitious, or
fraudulent statement or representation.
N.C.G.S. § 14-118.6(a).
82. 	Moreover, subpart (d) of the statute states that “the presentation of an
instrument for recording or filing with a register of deeds or clerk of superior court
that purports to be a lien or encumbrance that is determined to be materially false,
fictitious, or fraudulent shall constitute a violation of G.S. 75-1.1.” Id. § 14-118.6(d).
83. 	Although MV Realty disputes the applicability of N.C.G.S. § 14-118.6 to
its recordation of the Memorandum, it does not go so far as to argue that a document
purporting to reference a covenant running with the land can lawfully be recorded if
the reference to such a covenant is clearly false.

84. 	The State challenges the validity of the statement in both the HBA and
the Memorandum that the obligation of a participating homeowner to use MV Realty
as their listing agent creates a covenant “running with the land” that binds
successors-in-interest. This statement is false, the State argues, because the HBA is,
in actuality, a contract for personal services that does not meet the legal requirements
applicable to covenants that run with the land. As such, the State contends that the
HBA is merely a personal covenant rather than a real covenant.
85. 	Our Court of Appeals has stated the following:
Covenants that run with the land are real as distinguished from
personal covenants that do not run with the land. 	Three essential
requirements must concur to create a real covenant: (1) the intent of the
parties as can be determined from the instruments of record; (2) the
covenant must be so closely connected with the real property that it
touches and concerns the land; and, (3) there must be privity of estate
between the parties to the covenant.
Cunningham v. City of Greensboro, 212 N.C. App. 86, 97 (2011) (cleaned up).
86. 	Our Supreme Court has held that “[w]here the burdens and benefits
created by the covenant are of such a nature that they may exist independently from
the parties’ ownership interests in land, the covenant does not touch and concern the
land and will not run with the land.” 	Runyon v. Paley, 331 N.C. 293, 300 (1992)
(cleaned up). 	“To touch and concern the land, the object of the covenant must be
annexed to, inherent in, or connected with, land or other real property, or related to
the land granted or demised.” Raintree Corp. v. Rowe, 38 N.C. App. 664, 670 (1978)
(cleaned up); see also id. at 669 (“The provision that the covenant is to run with the

land is not binding unless the covenants possess the characteristics of a real
covenant.”).
87. 	Although the “touch and concern” element does not require “that the
covenant have a physical effect on the land[,]” it does require that the restriction
“affect the legal rights of the covenanting parties as landowners.” Runyon, 331 N.C.
at 300.
88. 	As a general proposition, a covenant “to pay money [does] not touch and
concern the land.” Raintree, 38 N.C. App. at 670.
89. 	The Court observes that our General Assembly has stated that “[t]he
public 	policy 	of 	this 	State 	favors 	the 	marketability 	of 	real 	property 	and 	the
transferability of interests in real property free from . . . unreasonable restraints on
alienation[ ] and covenants . . . that do not touch and concern the property.” N.C.G.S.
§ 39A-1(a).
90. 	MV Realty appears to be contending that the “touch and concern”
element is satisfied here based on its accompanying argument that the HBA creates
a security interest (or lien) on the homeowner’s property. 	Indeed, as the following
statement from MV Realty’s briefing on this Motion makes clear, the existence of a
valid lien pursuant to the HBA serves as a key basis for MV Realty’s contention that
the HBA contains covenants that run with the land:
“To touch and concern the land[,] the object of the covenant must be
annexed to, inherent in, or connected with, the land.” . . . In Section 5,
the homeowner grants a lien over (and interest in) the property in the
event of a breach. 	That lien right is clearly connected with the land—
and indeed enforceable against a subsequent purchaser who had notice

(including constructive notice as a matter of law) of the agreement and
lien. Accordingly, the statement in the Memorandum is not false.
Defs.’ Final Suppl. Br., at 6, ECF No. 57. See also Defs.’ Suppl. Br., at 6, ECF No. 51
(“The 	conveyance 	of 	a 	contingent 	lien 	and 	security 	interest 	in 	real 	property
undoubtedly ‘concerns’ or ‘has to do with’ real property, especially upon the vesting
of such lien rights and security interest.”).
91. 	However, in this Opinion, the Court has explained why the State has
demonstrated a likelihood of success on its argument that no legally enforceable lien
is created by the HBA. Thus, based on the present record, the Court is unpersuaded
that the HBA contains covenants that “touch and concern” the land. 	Instead, it
appears more likely that the HBA—when properly construed—merely authorizes a
breach of contract suit for damages.
92. 	Therefore, 	because 	MV 	Realty’s 	asserted 	basis 	for 	filing 	the
Memorandum appears to be legally invalid, the State has shown a likelihood of
success on its argument that the filing of the Memorandum is likewise unlawful.
93. 	The Court is also concerned that the HBA does not fully explain to the
homeowner the ramifications of the recordation of the Memorandum—that is, the fact
that the recorded Memorandum serves as a cloud on the homeowner’s title in the eyes
of lenders. 	This concern was in no way alleviated by the response of MV Realty’s
counsel to the Court’s questions on this issue at the 26 July hearing. 	During a
colloquy with MV Realty’s attorney, the Court asked counsel to identify the specific
facts that the recording of the Memoranda was intended to give notice of to third
parties. MV Realty’s counsel replied: “[w]hat we’re notifying the world of is the HBA;

that it exists, and that there is a need to understand whether the owner has complied
with the requirements of it.” (26 July 2023 Tr., at p. 37.) 	When questioned further
about whether a reasonable homeowner could actually be expected to understand the
ramifications of entering into an HBA or of breaching it, counsel’s response was as
follows:
I expect the homeowner to be responsible to understand it. Whether the
homeowner can on his or her own would completely depend on that
homeowner’s experience, what industry he or she works in. You know,
we’d have to figure out – if there’s such a thing as an average homeowner,
I don’t know that they would necessarily understand. But they know to
ask. They know who they can ask.
(26 July 2023 Tr., at p. 66 (emphasis added).)
94. 	All of the concerns 	expressed above suffice to show a reasonable
likelihood of success on the merits of the State’s UDTP claim. In addition, the Court
believes that certain other aspects of MV Realty’s HBA program (or the way in which
the program is actually carried out) potentially give rise to UDTP liability as well.
For example, the most current version of the HBA appears to provide a three-day
right of rescission to homeowners following their execution of the HBA. However, the
State has offered evidence that, at least in some instances, participating homeowners
were not given a signed copy of the agreement post-execution, which would obviously
undercut the effectiveness of a cancellation period.
95. 	In addition, as mentioned previously, the HBA does not contain as an
attachment a copy of the listing agreement to be executed by the homeowner upon
their decision to sell their home—instead simply citing to a URL link that apparently
contains this information online. The State has also offered evidence that the listing

agreement used by MV Realty provides for a $500 administrative fee to be paid by
the homeowner to MV Realty upon a completed sale (in addition to the payment of
the commission), and the existence of the $500 fee is nowhere mentioned in the HBA.
96. 	In sum, the State has shown a likelihood of success on its claim that—
through its operation of the HBA program—MV Realty has engaged in a pattern of
acts that both have the capacity to deceive, and actually have deceived, homeowners
in North Carolina.
97. 	The Court has also carefully considered the State’s arguments regarding
its entitlement to a preliminary injunction based on its claims alleging unlawful
telephone solicitation practices, unfair debt collection practice, and usurious lending
practices. 	The Court concludes that based on the record that presently exists, the
State has failed to show a likelihood of success on the merits as to these claims.
98. 	As noted above, in suits by the Attorney General brought under N.C.G.S.
§ 75-14 	seeking 	a 	preliminary 	injunction, 	the 	State 	is 	not 	required 	to 	show
irreparable harm but rather simply that the defendant’s conduct adversely affects
the public interest. That standard is easily met here. Defendants have entered into
contracts with approximately 2,100 homeowners across North Carolina, and each of
those contracts contain all, or virtually all, of the same terms that the Court has
discussed herein in connection with the Court’s determination that the State has
shown a likelihood of success on the merits on its UDTP claim.
99. 	As noted earlier in this Opinion, the enactment of House Bill 422
precludes MV Realty – going forward – from entering into new contracts with North

Carolina homeowners containing the same terms set out in its existing HBAs. With
regard to the status of those existing HBAs, the Court is not unmindful of the effects
that 	a 	preliminary 	injunction 	in 	favor 	of 	the 	State 	will 	potentially 	have 	on
Defendants’ ability to enforce certain provisions of those contracts during the
pendency of this lawsuit.
100. 	The Court finds, however, that any harm suffered by MV Realty from a
preliminary injunction is outweighed by the likelihood of continued harm to North
Carolina homeowners absent the entry of a preliminary injunction.
101. 	Therefore, in its discretion, the Court concludes that, on balance, the
equities clearly favor issuance of a preliminary injunction in favor of the State.
102. 	For the reasons set out above, the Court, in the exercise of its discretion,
GRANTS the State’s PI Motion.
103. 	However, before actually issuing an order setting out the specific terms
of the injunctive relief to which the State is entitled, the Court deems it appropriate
to allow the parties an opportunity to each submit (1) a proposed preliminary
injunction order that takes into account both the Court’s rulings contained herein as
well as the provisions of House Bill 422; and (2) a concise brief explaining the
rationale underlying the inclusion of the terms contained in its proposed order. Each
party shall file its proposed preliminary injunction order and accompanying brief on
or before 8 September 2023. 	The parties’ briefs shall be no more than 2,000
words and shall comply in all respects with the North Carolina Business Court

Rules.7 The Court will determine at that time whether a hearing is necessary with
regard to the parties’ submissions.
CONCLUSION
104. 	For 	the 	reasons 	set 	out 	above, 	the 	Court 	CONCLUDES, 	in 	its
discretion, that the Motion for Preliminary Injunction is GRANTED.
SO ORDERED, this the 30th day of August, 2023.
/s/ Mark A. Davis
Mark A. Davis
Special Superior Court Judge
for Complex Business Cases
7 The briefs shall not be accompanied by any additional affidavits, declarations, or other
exhibits.