Document dispute proves fatal for fiduciary duty, fraud claims – NC LAWYERS WEEKLY

By: Jeff Jeffrey

Typically, when someone puts information down in writing and then submits it to the government, they can be held responsible for whatever is in the document in question.

But a recent summary judgment decision by Judge Louis Bledsoe of the North Carolina Business Court shows that’s not always the case.

Bledsoe’s decision came in a lawsuit filed by a group of investors, who claimed their investment advisor engineered a scheme to transfer $188,000 they had invested to help buy a stake in a Franklin County golf course and retirement community to in order to enrich himself.

“We respectfully disagreed with that decision. But we were pleased it didn’t have an impact on our other claims,” said James White of Parry Tyndall White in Raleigh, who represented the plaintiffs in the case.

Silver lining

While Bledsoe’s summary judgment decision was undoubtedly a setback for White’s clients, he still considers the case a win.

The jury sided with White’s clients on their claims of conversion against Jacobson, and awarded $188,000 to the plaintiffs. The jury also said the stake in the golf course and retirement community purchased with Lakebound’s money should be subject to a constructive trust controlled by Lakebound.

“We are pleased that Judge Bledsoe’s decision on the breach of fiduciary duty and constructive fraud claims didn’t affect the jury’s decision on the conversion and constructive trust claims,” White said. “Had Judge Bledsoe’s decision gone the other way, we could have had the potential to recover additional damages. But we are happy with how the jury verdict came out.”

White said he has not heard from his opponents on whether they intend to appeal the jury verdict. White aid at this point, he is waiting for a judgment to be entered and for more guidance about how the constructive trust will be structured.

“If the other side appeals, we are still not sure whether we’d also appeal the ruling on the fiduciary duty and fraud claims,” White said. “We’re just waiting to see what happens next.

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Jim White
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Jim White helps people and companies facing serious financial injury by bringing and defending lawsuits and representing debtors in bankruptcy. He has successfully taken on banks, large financial institutions and other corporations in “David v. Goliath” cases. You can reach him at 919-246-4676.