Cherry v. Mauck

Cherry v. Mauck, 2025 NCBC 74.

STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
LENOIR COUNTY 24CVS000635-530

JULIUS P. “JAY” CHERRY, JR. and
ANN B. CHERRY,

Plaintiffs,

v.
ORDER AND OPINION
ARMISTEAD B. MAUCK, ON MOTIONS FOR
Defendant, SUMMARY JUDGMENT

v.

AJAL INVESTMENTS, LLC and C-
GAS, LLC,

Nominal
Defendants.

1. This case arises out of a management dispute in two family businesses called

AJAL Investments, LLC and C-Gas, LLC. Julius “Jay” Cherry, Jr., and his wife, Ann,

accuse their brother-in-law, Armistead Mauck, of breaching the companies’ operating

agreements by making unauthorized cash distributions. By counterclaim and

crossclaim, Armistead seeks to dissolve the companies. Both sides have moved for

affirmative summary judgment on their own claims. For the following reasons, the

Court GRANTS in part and DENIES in part both motions.

Womble Bond Dickinson (US) LLP, by Pressly M. Millen and Samuel B.
Hartzell, for Plaintiffs Julius P. “Jay” Cherry, Jr., and Ann B. Cherry.

Williams Mullen, by Walter L. Tippett, Jr., and Lewis H. Hallowell, for
Defendant Armistead B. Mauck.

No counsel appeared for Nominal Defendants AJAL Investments, LLC
and C-Gas, LLC.
Conrad, Judge.

I.
BACKGROUND

2. The Court does not make findings of fact when deciding motions for

summary judgment. The purpose of this background is to give context for the Court’s

analysis and ruling.

3. AJAL and C-Gas are closely held, family businesses. C-Gas has just two

members: Jay and Armistead. Each holds an equal fifty-percent interest. AJAL has

four members: Ann, Jay, Armistead, and Louise (Armistead’s wife). As with C-Gas,

AJAL’s membership interest is split equally between the family’s two branches. The

Cherrys own half, and the Maucks own half. Jay and Armistead are AJAL’s and

C-Gas’s only managers. (See, e.g., A. Mauck Aff. ¶¶ 4–9, ECF No. 14.)

4. Each company has an operating agreement that details the rights and duties

of its members and managers. AJAL’s operating agreement gives the managers (Jay

and Armistead) “full and complete authority, power and discretion to manage and

control” its business. But the members retain control over major organizational

matters. Amendment of the operating agreement, for example, requires unanimous

written consent of the members, as does voluntary dissolution. In addition,

distributions are to be made “at such times and in such amounts as the Majority in

Interest of the Members determines, in its sole discretion.” (AJAL Op. Agrmt. §§ 3.1,

9.3, 11.2, 12.4, ECF No. 3.)

5. C-Gas’s operating agreement similarly gives each member-manager (again,

Jay and Armistead) the authority to make “all decisions affecting the business of the
Company” while making clear that neither may unilaterally make major structural

changes to the organization. Likewise, distributions are to be made “at such times

and in such amounts as determined by the Members.” One notable difference from

AJAL’s operating agreement is that C-Gas’s operating agreement includes a deadlock

provision. If the members cannot agree on certain matters requiring unanimous or

majority approval, “then and in that event, any Member or Members may elect(s) to

sell or purchase all other Company Interests” as a means to break the deadlock. If

neither member invokes the buyout option “within ten . . . days from the event

causing the Deadlock, the Company shall be dissolved.” (C-Gas Op. Agrmt. §§ 8.1,

9.1, 9.3, 12.1, 13.2, ECF No. 3.)

6. In addition to AJAL and C-Gas, the Cherrys and the Maucks jointly own a

third family business called Cherry Oil Company, Inc., which is in the fuel and

propane industry. All three businesses are tightly connected. AJAL’s main purpose

is to own real estate, including fifteen gas station properties, and lease that real

estate to Cherry Oil. C-Gas’s assets consist of propane-related equipment and

customer lists, which it also leases to Cherry Oil. All or nearly all of AJAL’s and

C-Gas’s revenue comes from Cherry Oil’s rent payments. (See A. Mauck Aff. ¶¶ 11–

13; J. Cherry Aff. ¶¶ 4–7, 9, ECF No. 57.)

7. It seems that the Cherrys and the Maucks ran their businesses peacefully—

and profitably—for many years. As far back as 2013, they agreed that AJAL and

C-Gas would make monthly distributions of $29,000 and $6,000 to be split equally
between the two families. This arrangement lasted more than a decade. (See A.

Mauck Aff. ¶¶ 19–21.)

8. Over time, though, the once cooperative relationship between the Cherrys

and the Maucks became contentious. Cherry Oil was the first domino to fall. In 2021,

the Maucks sued “over control, profit-sharing, and the future of” Cherry Oil. Mauck

v. Cherry Oil Co., 2025 N.C. LEXIS 861, at *2 (N.C. Oct. 17, 2025). It was to be a

lengthy, bruising lawsuit.

9. Perhaps inevitably, the quarrel involving Cherry Oil spilled over to AJAL

and C-Gas. In the Cherrys’ words, “various inter-company issues between [Cherry

Oil], AJAL, and C-Gas remained in a state of limbo” as the lawsuit dragged on. By

June 2024, the Cherrys were urging action on two of these issues: first,

reimbursement of expenses that Cherry Oil had supposedly shouldered for AJAL’s

benefit; and second, completion of maintenance and improvements that AJAL had

deferred during the litigation. The Cherrys called a special meeting of AJAL’s

members to put these matters to a vote, but the Maucks did not attend, and there

was no quorum to conduct business. (V. Am. Compl. ¶ 18, ECF No. 9; Compl. Ex. C,

ECF No. 3; A. Mauck Aff. ¶¶ 24, 25.)

10. The abortive meeting kicked off a new round of hostilities. The Cherrys sent

a pointed letter to the Maucks, stating that their absence at the meeting “call[ed] into

question the ability of AJAL to conduct its business.” In the same letter, the Cherrys

withdrew their “consent to make the continuing monthly” distributions that AJAL
had made since 2013. Armistead, as one of AJAL’s managers, made the July 2024

distribution to the members anyway. (Compl. Ex. D, ECF No. 3; A. Mauck Aff. ¶ 26.)

11. At that point, the Cherrys doubled down, giving the Maucks “specific

instructions . . . that no cash distributions from” either AJAL or C-Gas were to be

made to any member. Over the Cherrys’ objection, Armistead made monthly

distributions from both companies in August, September, and October 2024. He

explained his view that “[w]e agreed to the current monthly distributions,” “[w]e have

not agreed to stop them,” and “you do not have ‘the unilateral authority’ to do so.” In

protest, the Cherrys voided their checks and informed Armistead that Cherry Oil

would withhold “inter-company rent payments to C-Gas and AJAL in the amounts of

the wrongfully retained funds paid by Mauck to himself.” (Compl. Exs. E–G, ECF

No. 3; Aff. A. Mauck ¶¶ 35–37; Aff. A. Mauck Ex. G.)

12. The Cherrys then filed this lawsuit. They assert one claim for breach of

AJAL’s operating agreement and another for breach of C-Gas’s operating agreement.

Both claims rest on allegations that Armistead exceeded his authority when he made

distributions without the approval of a majority of the companies’ members. (See V.

Am. Compl. ¶¶ 35–37, 41–43.)

13. Soon after filing suit, the Cherrys moved for a preliminary injunction to bar

Armistead from making additional distributions. Following the hearing on this

motion but before the Court’s ruling, the Cherrys and the Maucks held member

meetings for both AJAL and C-Gas. At these meetings, they agreed that Cherry Oil

would remit overdue rent to AJAL and C-Gas, but they failed to agree on several
other issues, including whether to make distributions and whether to dissolve the

companies. (See, e.g., 2d A. Mauck Aff. ¶¶ 9–12, ECF No. 54.2.)

14. Because the parties continued to dispute Armistead’s right to make

distributions over the Cherrys’ objections, the motion for preliminary injunction

remained live. The Court went on to grant the motion, reasoning as follows:

Both [operating] agreements give the LLCs’ members the right to decide
when and whether to distribute company cash, and absent approval of
a majority of the members, the managers have no authority to make
distributions. The undisputed evidence shows that Armistead
distributed cash from both LLCs without majority approval and that he
intends to do so going forward, thus establishing a likelihood of success
on the claims for breach of the operating agreements.

Cherry v. Mauck, 2024 NCBC LEXIS 160, at *4 (N.C. Super. Ct. Dec. 18, 2024). On

that basis, the Court enjoined Armistead “from making cash distributions from AJAL

and C-Gas without the consent of a majority of the companies’ members as to the

timing and amounts of such distributions.” Id. at *7.

15. Armistead responded with a counterclaim and crossclaims. In his first

crossclaim, he seeks to dissolve AJAL under subsections (i) and (ii) of N.C.G.S.

§ 57D-6-02(2), alleging that “[i]t is not practicable to conduct AJAL business” and that

“[l]iquidation of AJAL is necessary to protect” his rights. Next, he asserts a combined

counterclaim and crossclaim for declaratory judgment, seeking a declaration that

C-Gas has been dissolved under its operating agreement’s deadlock provision. As an

alternative to the declaratory-judgment claim, he asserts a crossclaim for dissolution

of C-Gas under subsections (i) and (ii) of section 57D-6-02(2), again alleging that “[i]t

is not practicable to conduct C-Gas business” and that “[l]iquidation of C-Gas is
necessary to protect” his rights. (Def.’s Crosscl. & Countercl. ¶¶ 46–49, 59, 62, 70–

73, ECF No. 36.)

16. Discovery is now closed. Both sides have moved for partial summary

judgment. The Cherrys’ motion concerns their claims for breach of contract;

Armistead’s motion concerns his claims for judicial dissolution and declaratory

judgment. The Court held a hearing on 12 August 2025. (See ECF Nos. 41, 54.)

17. Two events of note occurred after the hearing. First, the North Carolina

Supreme Court issued a decision in the dispute over Cherry Oil that effectively

brought that litigation to an end. Among other things, the Supreme Court affirmed

the dismissal of Armistead and Louise’s claim for judicial dissolution of Cherry Oil

because they had an alternative remedy available—namely, a “contractual buyout

under [a] Shareholder Agreement.” Mauck, 2025 N.C. LEXIS 861, at *18. The buyout

provision gave the two families a way to “resolve[] an intra-shareholder dispute

through a mechanism the parties themselves created,” as opposed to the “broader and

blunter” remedy of judicial dissolution. Id.

18. Second, in the wake of the Supreme Court’s decision, the Cherrys withdrew

their opposition to the crossclaims for dissolution of AJAL and C-Gas under

subsection (ii) of section 57D-6-02(2). In doing so, the Cherrys urged the Court not to

proceed with dissolution but instead to allow them to buy the Maucks’ interests under

section 57D-6-03(d). The Court invited the parties to state their positions regarding

the effect of the Cherrys’ filing on the pending motions. Each side timely filed a
statement in mid-November 2025. (See Notice of Withdrawal, ECF No. 60 [“Cherrys’

Notice”]; Pls.’ Report, ECF No. 62; Def.’s Report, ECF No. 63.)

19. The motions are ripe.

II.
ANALYSIS

20. By rule, summary judgment is proper when the record “show[s] 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.” N.C. R. Civ. P. 56(c). The Court must view the evidence in the

light most favorable to the nonmoving party and draw all inferences in its favor. See

Vizant Techs., LLC v. YRC Worldwide, Inc., 373 N.C. 549, 556 (2020); N.C. Farm

Bureau Mut. Ins. Co. v. Sadler, 365 N.C. 178, 182 (2011).

21. When, as here, the party with the burden of proof is the one seeking

summary judgment, more is required. The moving party “must show that there are

no genuine issues of fact, that there are no gaps in his proof, that no inferences

inconsistent with his recovery arise from the evidence, and that there is no standard

that must be applied to the facts by the jury.” Parks Chevrolet, Inc. v. Watkins, 74

N.C. App. 719, 721 (1985); see also Kidd v. Early, 289 N.C. 343, 370 (1976).

22. If the circumstances warrant, the Court may enter summary judgment

“against the moving party.” N.C. R. Civ. P. 56(c). “Summary judgment in favor of

the non-movant is appropriate when the evidence presented demonstrates that no

material issues of fact are in dispute, and the non-movant is entitled to entry of

judgment as a matter of law.” A-S-P Assocs. v. Raleigh, 298 N.C. 207, 212 (1979).
A. The Cherrys’ Motion

23. The Cherrys contend that they are entitled to summary judgment on their

claims for breach of contract. The only contested issue is a narrow dispute about the

available remedies for the claimed breach.

24. Indeed, at the hearing, Armistead’s counsel conceded the issue of liability.

It is undisputed that Armistead made distributions from AJAL’s and C-Gas’s

accounts over the Cherrys’ objections. His only defense is that the Cherrys’ objections

were ineffective under the companies’ operating agreements. But the Court rejected

that argument in an earlier order and held that the operating agreements

unambiguously permitted the Cherrys to withhold their consent. See Cherry, 2024

NCBC LEXIS 160, at *5 (“Moreover, no provision in either operating agreement

requires the members to determine the amount and timing of distributions at formal

meetings or by written consent.”). Although Armistead stands by his interpretation,

he has not asked the Court to reconsider its decision and wishes only to preserve his

argument for appeal. Accordingly, there is no genuine issue of material fact, and

Armistead is liable for breach of the operating agreements as a matter of law.

25. As for remedies, Armistead’s counsel agreed that it would be appropriate to

convert the existing preliminary injunction into a permanent injunction. And he

agreed that the Cherrys are entitled to nominal damages. See Bowen v. Fidelity

Bank, 209 N.C. 140, 144 (1936) (“In a suit for damages for breach of contract, proof of

the breach would entitle the plaintiff to nominal damages at least.”).
26. The remaining issue is whether Armistead must pay back the amount of the

distributions, plus prejudgment interest, to AJAL and C-Gas. The Cherrys seek an

order requiring him to do so, which Armistead opposes.

27. In their opening brief, the Cherrys appeared to treat the repayment of

distributions as a form of compensatory damages owed to AJAL and C-Gas. Their

demand for prejudgment interest strongly suggested as much. See N.C.G.S. § 24-5

(allowing prejudgment interest for compensatory damages); see also Med. Mut. Ins.

v. Mauldin, 157 N.C. App. 136, 139 (2003) (noting that prejudgment interest is not

available for “equitable remedies which require the payment of money”). Had the

Cherrys asserted derivative claims, they might have been able to obtain a money

judgment for the companies. See Outen v. Mical, 118 N.C. App. 263, 266 (1995) (“[I]n

a derivative action, the recovery goes to the corporation.”). But the Cherrys’ claims

are direct, not derivative. And they concede that they have not personally suffered

any financial harm due to Armistead’s wrongful distributions. Thus, the Cherrys

may not recover compensatory damages on behalf of AJAL and C-Gas, and they have

not sought compensatory damages of their own.

28. In their reply brief and at the hearing, the Cherrys reframed their argument

and asserted that they were entitled to specific performance. At no point, though,

does the amended complaint plead specific performance as a claim for relief or as a

remedy in the prayer for relief. Having failed to give notice of a claim for specific

performance, the Cherrys are not entitled to that relief. See El-Hatto v. El-Hatto,

2022-NCCOA-691, at *18 (N.C. Ct. App. Oct. 18, 2022) (unpublished) (“We note
Plaintiffs’ complaint failed to plead specific performance of the Agreement,

declaratory relief, or breach of the written Agreement.”); Benjamin v. City of Durham,

2014 N.C. App. LEXIS 399, at *1 (N.C. Ct. App. Apr. 15, 2014) (unpublished)

(affirming order granting motion to dismiss when “plaintiff fail[ed] to plead each

element of a claim for specific performance”); Wijewickrama v. Christian, 2023 NCBC

LEXIS 98, at *17–18 (N.C. Super. Ct. Aug. 11, 2023) (noting that a plaintiff must

plead the existence of a contract and a request to require the opposing party to

specifically perform its terms); see also Cole v. Bonaparte’s Retreat Prop. Owners’

Ass’n, 259 N.C. App. 27, 40–41 (2018) (discussing circumstances in which it is

improper to award relief not suggested by or embraced within the pleadings).

29. Accordingly, the Court grants the Cherrys’ motion for summary judgment in

part. The Cherrys are entitled to nominal damages and a permanent injunction

barring Armistead from making additional cash distributions from AJAL’s and

C-Gas’s accounts without the consent of a majority of the companies’ members.

However, the Cherrys are not entitled to an order requiring Armistead to pay the

amount of past distributions plus prejudgment interest to AJAL and C-Gas, either as

damages or specific performance.

B. Armistead’s Motion

30. Armistead contends that he is entitled to summary judgment on his

counterclaim and crossclaims. He seeks judicial dissolution of AJAL under section

57D-6-02(2). Separately, he seeks a declaration that C-Gas is dissolved under the

deadlock provision in its operating agreement. If C-Gas’s deadlock provision does not
apply, then Armistead contends that the company should be dissolved under section

57D-6-02(2).

31. After the summary-judgment hearing, the Cherrys filed a notice

withdrawing their opposition to Armistead’s claims for judicial dissolution. In the

same notice, the Cherrys stated their intent “to elect pursuant to [section]

57D-6-03(d) to purchase [Armistead’s] ownership interests in AJAL and C-Gas at the

fair value of those interests . . . .” (Cherrys’ Notice ¶ 9.) To clarify the Cherrys’

position and the effect of their notice on the pending motions, the Court invited both

sides to state their views in supplemental filings.

32. In their supplemental filings, the parties expressed divergent views about

the effect of the Cherrys’ notice on Armistead’s crossclaims for judicial dissolution of

AJAL and C-Gas under section 57D-6-02(2). But the Cherrys made clear their

continued opposition to Armistead’s declaratory-judgment counterclaim, which is in

effect a claim for contractual dissolution of C-Gas. Because there could be no basis

for judicial dissolution of C-Gas if it has been or must be dissolved under its operating

agreement, both sides agreed that the Court must first resolve their dispute about

the declaratory-judgment claim. Hence, that is where the Court begins.

33. C-Gas. The deadlock provision in C-Gas’s operating agreement is

straightforward. If Jay and Armistead are “unable to agree to any item under Section

9.2, or any other provision . . . requiring mutual, total, or majority consent,” it is

considered “a ‘Deadlock.’ ” In that event, either may choose “to sell or purchase all

other Company Interests pursuant to Section 11.2.” But if neither Jay nor Armistead
“follow[s] the provisions of Section 11.2 within ten . . . days from the event causing

the Deadlock, the Company shall be dissolved.” Among the items listed in Section

9.2 are “[m]aking capital expenditures” and “[m]aking cash distributions.” (C-Gas

Op. Agrmt. §§ 9.2(f), 9.2(g), 9.3.)

34. Armistead points to his December 2024 member meeting with Jay. At that

meeting, the two men did not agree on proposals to reimburse Cherry Oil for certain

expenses or to make monthly cash distributions from C-Gas’s accounts. According to

Armistead, these disagreements triggered the ten-day period for either member to

buy the other’s interest. Because neither did so, Armistead contends, the operating

agreement requires C-Gas’s dissolution.

35. In response, the Cherrys argue that Armistead has manufactured a dispute

to cause C-Gas’s dissolution. To allow that, in their view, would violate section 12.1

of the agreement and the implied covenant of good faith and fair dealing. On that

basis, the Cherrys contend that no event has triggered the deadlock provision.

Assuming the deadlock provision was triggered, they contend that Armistead waived

his right to enforce it.

36. The Court agrees with Armistead. In their December 2024 meeting, Jay and

Armistead were unable to agree as to two items listed in section 9.2 of the operating

agreement: reimbursements to Cherry Oil and future cash distributions. There’s no

dispute about that. And the deadlock provision could not be clearer about what must

occur when the members cannot agree on items listed in section 9.2. Either one

member must start the process to buy out the other within ten days, or the company
shall be dissolved. The plain language of the agreement leaves no wiggle room.

Because neither member chose to buy out the other, dissolution is mandatory, and

Armistead is entitled to the declaration that he seeks. See Internet East, Inc. v. Duro

Communs., Inc., 146 N.C. App. 401, 405–06 (2001) (noting that the word “shall” is

used “to express what is mandatory” (citation and quotation marks omitted)).

37. The Cherrys’ interpretive arguments are unpersuasive. Section 12.1 merely

states that “[n]o individual Member shall have the right to cause a dissolution of the

Company.” (C-Gas Op. Agrmt. § 12.1.) By its very nature, the dissolution mandated

by the deadlock provision involves both members—first, in disputing a matter under

section 9.2 and, second, in failing to invoke the buy-out procedure within the time

allotted. Thus, section 12.1’s prohibition on unilateral dissolution is beside the point.

Likewise, the operating agreement’s implied covenant of good faith and fair dealing

cannot vary or contradict its express terms. See, e.g., Chesson v. Rives, 2016 NCBC

LEXIS 92, at *37 (N.C. Super. Ct. Nov. 30, 2016) (“Plaintiffs seek to use the implied

covenant to vary the terms of an express provision in the Partnership Agreement.

The Court rejects that effort as improper.”); Pro-Tech Energy Solutions, LLC v.

Cooper, 2015 NCBC LEXIS 76, at *21 (N.C. Super. Ct. July 30, 2015) (collecting

cases).

38. The Cherrys’ waiver argument is equally unpersuasive. A “waiver is an

intentional relinquishment or abandonment of a known right or privilege.” Mt.

Airy-Surry Cnty. Airport Auth. v. Angel, 267 N.C. App. 548, 552 (2019) (citation and

quotation marks omitted). The Cherrys contend that disputes about distributions
arose as early as July 2024 and that Armistead sat on his rights, thus waiving them.

Not so. At the outset of this lawsuit, Armistead took the position that he and Jay had

agreed to the amount and timing of distributions a decade prior, which gave him the

authority to continue making distributions. It cannot be the case that Armistead

knowingly abandoned his right to enforce the deadlock provision when he denied that

a deadlock had occurred. The situation changed when the Court preliminarily

enjoined Armistead from making additional distributions without Jay’s consent. At

that point, Armistead pursued his claim for declaratory relief. There was no waiver.

39. Moreover, Armistead does not rely only on the disagreement about

distributions. He points to a second dispute over Jay’s proposal to reimburse Cherry

Oil. It is undisputed that the proposed reimbursement requires majority approval,

that Jay and Armistead were unable to agree at the December 2024 meeting, and

that neither elected to buy out the other within ten days of that disagreement. The

Cherrys do not respond to this argument in any way, much less suggest that

Armistead knowingly waived his right to enforce the deadlock provision on this

ground.

40. Although the Cherrys complain that enforcing the deadlock provision will

produce an absurd result, they are wrong. A concern with any closely held company—

especially one with only two members—is that prolonged managerial deadlock may

stifle its operations and lead to waste, absent some way to break the tie. Here, the

members adopted an agreement that requires consensus as to capital expenditures

and distributions while also providing a fast-acting mechanism to overcome any
deadlock. Their bargain—to carry on when consensus exists; to require a buyout or

dissolution when consensus breaks down—is neither arbitrary nor absurd. And

having struck that bargain, the parties must adhere to it. See N.C.G.S.

§ 57D-10-01(c) (“It is the policy of this Chapter to give the maximum effect to the

principle of freedom of contract and the enforceability of operating agreements.”); see

also Mauck, 2025 N.C. LEXIS 861, at *18 (stressing, in the corporate context, the

value of upholding a dispute-resolution “mechanism the parties themselves created”).

41. The Court therefore grants Armistead’s motion for summary judgment as to

his declaratory-judgment claim and denies as moot his motion for summary judgment

as to his claim for judicial dissolution of C-Gas. See N.C.G.S. § 57D-6-01(1) (stating

that an LLC is dissolved upon “[a]n event causing the LLC to dissolve under the

operating agreement”).

42. AJAL. Unlike C-Gas’s operating agreement, AJAL’s has no deadlock

provision. Armistead therefore seeks only judicial dissolution of AJAL under section

57D-6-02(2).

43. A member of an LLC may seek judicial dissolution either when “it is not

practicable to conduct the LLC’s business in conformance with the operating

agreement and” governing statutes, N.C.G.S. § 57D-6-02(2)(i), or when “liquidation

of the LLC is necessary to protect the rights and interests of the member,” id.

§ 57D-6-02(2)(ii). Notably, if the trial court determines that dissolution is appropriate

under subsection (ii), “the court will not order dissolution if after the court’s decision

the LLC or one or more other members elect to purchase the ownership interest of
the complaining member at its fair value in accordance with any procedures the court

may provide.” Id. § 57D-6-03(d).

44. In his pleading, Armistead invokes both subsections, alleging not only that

“[i]t is not practicable to conduct AJAL business” but also that “[l]iquidation of AJAL

is necessary to protect” his rights. (Def’s Crosscl. & Countercl. ¶¶ 46–49.) Similarly,

in his motion, Armistead seeks summary judgment for dissolution of AJAL “under

N.C.G.S. § 57D-6-02(2),” without differentiating between the two subsections. (ECF

No. 54.) In his brief, however, Armistead directs his arguments to subsection (i),

arguing that the parties’ deadlock makes it impracticable to operate AJAL’s business.

(See generally ECF No. 55.)

45. The Cherrys initially opposed dissolution of AJAL under either subsection.

After the summary-judgment hearing, however, they withdrew their opposition to

dissolution under subsection (ii) and asserted their intent to buy Armistead’s interest

at fair value under section 57D-6-03(d).

46. A rather awkward situation now exists. Rarely does a party oppose the very

relief demanded in its pleading (and motion), but that is the case here. Armistead

has a live claim for dissolution of AJAL arising under both subsections (i) and (ii) of

section 57D-6-02(2). Although the Cherrys consent to the entry of judgment under

subsection (ii), Armistead opposes that relief and insists, instead, that judgment must

be entered under subsection (i).

47. Having carefully considered the issue, the Court concludes that judgment is

appropriate under subsection (ii), not subsection (i). Put simply, Armistead is bound
by his pleading and motion. He chose to pursue a single, unified claim for dissolution

under section 57D-6-02(2), invoking both subsections, and expressly alleged that

liquidation of AJAL is necessary to protect his rights. The claim is not contingent,

conditional, or stated in the alternative. Nor has Armistead amended, withdrawn, or

dismissed his allegations. See Rollins v. Junior Miller Roofing Co., 55 N.C. App. 158,

161–62 (1981) (“A party is bound by his pleadings and, unless withdrawn, amended,

or otherwise altered, the allegations contained in all pleadings ordinarily are

conclusive as against the pleader.” (citation and quotation marks omitted)). What’s

more, his motion requests judgment under section 57D-6-02(2), not under one

subsection or the other. And now that the Cherrys have acquiesced, there are no

issues of material fact for a jury to decide. Summary judgment is therefore

appropriate. See N.C. R. Civ. P. 56(c) (stating that “[t]he judgment sought shall be

rendered forthwith” when “there is no genuine issue as to any material fact”).

48. It appears that Armistead opposes entry of judgment on this ground because

he would rather not sell his interest to the Cherrys for fair value, as section

57D-6-03(d) allows. Pleader’s remorse is not a sound reason to set aside the claim as

alleged, and Armistead has not moved to amend either his pleading or his motion to

retract the relief requested. His pleading “specifically invokes a statutory provision

that may entail, if a member elects, a forced sale of the complaining member’s interest

at its fair value.” Troutt v. Watson, 2024 N.C. App. LEXIS 93, at *8 (N.C. Ct. App.

Feb. 6, 2024). Armistead is getting exactly what he asked for.
49. The equities also support the Court’s decision. As our Supreme Court

recently reiterated, a trial court has discretion to exercise its “equitable judgment”

not to dissolve a corporation or LLC. Mauck, 2025 N.C. LEXIS 861, at *15 (“That

discretion reflects both the gravity of the remedy and the equitable principles that

shape it.”). By all accounts, AJAL is a profitable company with substantial assets,

including real property and a long-term lease with Cherry Oil that ensures stable

cash flow well into the future. To sell these assets and wind up AJAL’s affairs would

undoubtedly be disruptive to the company’s members as well as its business partners,

such as Cherry Oil. Courts rightly hesitate to dissolve a going concern in these

circumstances. See, e.g., Levine v. Beem, 608 So.2d 373, 375 (Ala. 1992) (“The lease

and maintenance of the real property is Malaga Properties’ only objective and none

of the alleged ill will between Levine and Sinclair has prevented Malaga Properties

from accomplishing its objectives.”).

50. One other point bears noting. In their supplemental filing, the Cherrys

appear to contend that section 57D-6-03(d) gives them the right to buy Louise’s

interest as well as Armistead’s. But Armistead, not Louise, is the “complaining

member.” N.C.G.S. § 57D-6-03(d). Louise’s interest is not at issue. Moreover, she

has the same statutory right as the Cherrys to “elect to purchase the ownership

interest of” her husband for fair value. Id.

51. The Court therefore grants in part Armistead’s motion for summary

judgment. Armistead is entitled to the entry of judgment on his claim for dissolution

under section 57D-6-02(2)(ii). Because the Cherrys have stated their intent to
exercise the remedy offered by section 57D-6-03(d), the Court will not order AJAL’s

dissolution.

III.
CONCLUSION

52. For all these reasons, the Court GRANTS in part and DENIES in part the

Cherrys’ motion for summary judgment:

a. The Cherrys are entitled to judgment of liability against Armistead as

to their claims for breach of contract. They are also entitled to nominal

damages and a permanent injunction, as conceded by Armistead’s

counsel.

b. The Court DENIES the Cherrys’ request for additional monetary relief,

whether framed as compensatory damages or specific performance.

53. The Court GRANTS in part and DENIES in part Armistead’s motion for

summary judgment:

a. Armistead is entitled to a declaratory judgment that C-Gas is dissolved

under its operating agreement.

b. The Court DENIES as moot the motion as to the crossclaim for judicial

dissolution of C-Gas under section 57D-6-02(2).

c. Armistead is also entitled to judgment as to his claim for judicial

dissolution of AJAL under section 57D-6-02(2)(ii). The Court will not,

however, order AJAL’s dissolution, as permitted under section

57D-6-03(d). The Court DENIES the motion to the extent it seeks
summary judgment as to judicial dissolution of AJAL under section

57D-6-02(2)(i).

54. No claims or issues remain for trial. Within fourteen days of this order, the

parties shall confer and file (jointly, if possible) a statement reflecting their positions

on how best to bring this case to a close, including the completion of all necessary

steps under section 57D-6-03(d).

SO ORDERED, this the 8th day of December, 2025.

/s/ Adam M. Conrad
Adam M. Conrad
Special Superior Court Judge
for Complex Business Cases