LOYD v. GRIFFIN, 2023 NCBC 26

STATE OF NORTH CAROLINA
IREDELL COUNTY
IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
20 CVS 2394
ASHTON K. LOYD,
Plaintiff,
v.
JAMES MICHAEL GRIFFIN and
GRIFFIN INSURANCE AGENCY,
INC.,
Defendants.
ORDER AND OPINION ON CROSS-
MOTIONS FOR SUMMARY
JUDGMENT
1. 	THIS MATTER is before the Court on the 6 June 2022 filing of Defendants
James Michael Griffin (“Mr. Griffin”) and Griffin Insurance Agency, Inc.’s (“GIA” and
together, “Defendants”) Motion for Summary Judgment, (ECF No. 98 [“Defs.’ Mot.”]),
and Plaintiff Ashton K. Loyd’s (“Mr. Loyd” or “Plaintiff”) Motion for Partial Summary
Judgment (together, the “Cross-Motions for Summary Judgment”), (ECF No. 100
[“Pl.’s Mot.”]). 	Pursuant to Rule 56 of the North Carolina Rules of Civil Procedure
(the “Rule(s)”), Defendants request summary judgment on all of Plaintiff’s claims and
affirmative summary judgment on three of their Counterclaims. 	(Defs.’ Mot.)
Plaintiff requests summary judgment on five of Defendants’ Counterclaims. 	(Pl.’s
Mot.)
2. 	For the reasons set forth herein, the Court GRANTS in part and DENIES
in part the Cross-Motions for Summary Judgment.
Levine Law Group, P.A. by Michael J. Levine and Cathy A. Williams,
Austin Law Firm by John S. Austin, and Mauney PLLC by Gary V.
Mauney, for Plaintiff Ashton K. Loyd.
Loyd v. Griffin, 2023 NCBC 26.

Bennett & Guthrie, PLLC by Mitchell H. Blankenship and Joshua H.
Bennett, for Defendants James Michael Griffin and Griffin Insurance
Agency, Inc.
Robinson, Judge.
I. 	INTRODUCTION
3. 	This 	matter 	arises 	out 	of 	circumstances 	related 	to 	Mr. 	Griffin 	and
Mr. Loyd’s respective insurance agencies, and the later merger of their businesses.
Throughout their business relationship, the pair and their respective insurance
agencies executed a number of agreements, and this dispute centers around the
alleged violations of several of those agreements. 	At the heart of the dispute are
events relating to those documents, and the merger of Loyd Insurance Agency, Inc.
into GIA, including: Mr. Loyd’s employment with GIA; his alleged issuance of false or
misleading certificates of insurance, and subsequent termination; Mr. Loyd’s alleged
retention of his GIA shares following that termination; and the ultimate sale of GIA,
among others.
4. 	After completing extensive discovery and briefing, the Cross-Motions for
Summary 	Judgment 	request 	dismissal 	of 	the 	twelve 	remaining 	claims 	and
counterclaims in this matter.
II. 	FACTUAL BACKGROUND
5. 	The Court does not make findings of fact when ruling on motions for
summary judgment. “[T]o provide context for its ruling, the Court may state either
those facts that it believes are not in material dispute or those facts on which a
material dispute forecloses summary adjudication.” 	Ehmann v. Medflow, Inc.,

2017 NCBC LEXIS 88, at *6 (N.C. Super. Ct. Sept. 26, 2017); see also Hyde Ins.
Agency, Inc. v. Dixie Leasing Corp., 26 N.C. App. 138, 142 (1975) (encouraging the
trial court to articulate a summary of the relevant evidence of record to provide
context for the claims and the motion(s)).
6. 	Mr. Loyd is a citizen and resident of Mooresville, Iredell County, North
Carolina. 	(Second Am. Compl. ¶ 16, ECF No. 83 [“SAC”].) 	Mr. Loyd founded Loyd
Insurance Agency, Inc. (“LIA”), a North Carolina corporation, and he later became a
minority shareholder in and vice president of GIA, (SAC ¶¶ 16, 32).1
7. 	Defendant GIA is a North Carolina corporation with its principal office
located at 135 Gasoline Alley, Mooresville, Iredell County, North Carolina. 	(SAC
¶ 18.) Mr. Griffin is a citizen and resident of Cornelius, Mecklenburg County, North
Carolina, and was the majority shareholder and president of GIA. 	(SAC ¶ 17.) Mr.
Griffin remained GIA’s president at all relevant times. (J.A. 1175.)2
A. 	The Formation of GIA
8. 	On 29 June 2001, GIA was incorporated in North Carolina. (J.A. 1486.)
1 The Second Amended Complaint was verified by Mr. Loyd on 6 June 2022, contemporaneous
with the filing of the Cross-Motions for Summary Judgment, with the verification appearing
in the Joint Appendix. (J.A. 2604–05.) A verified complaint “may be treated as an affidavit
if it (1) is made on personal knowledge, (2) sets forth such facts as would be admissible in
evidence, and (3) shows affirmatively that the affiant is competent to testify to the matters
stated therein.” Page v. Sloan, 281 N.C. 697, 705 (1972). Therefore, the Court may treat and
accept the fact-based portions of the verified Second Amended Complaint as an affidavit of
Mr. Loyd.
2 The Joint Appendix, containing the materials relevant to each side’s motion for summary
judgment, was electronically filed in ten parts but is consecutively paginated. (See ECF Nos.
118–27.) For brevity, the Court uses an abbreviated citation as follows, (J.A. [page no.], [page
no.]). 	Depositions are cited using the Joint Appendix pagination and include the ECF No.
only in the first full cite, ([Dep. name], [J.A. page:line–J.A. page:line], [ECF No.]).

9. 	The Initial Resolutions of GIA provided that Mr. Griffin would be the sole
initial shareholder of GIA, holding 1500 shares, and that he would be its president.
(J.A. 1905–06.) The Initial Resolutions also stated that the Board of Directors of GIA
elected for it to be an S Corporation. (J.A. 1908.) Mr. Griffin was also the CEO, and,
according to the GIA Bylaws, in that capacity he had “general charge of the business,
affairs, and property of the Corporation and control over its other officers, agents[,]
and employees.” (J.A. 1914.) By 2010, GIA had several separate locations, including
at least the office located at 227 West Plaza Drive, Mooresville, North Carolina (the
“West Plaza Location”). (J.A. 314.)
10. 	In 2004, Mr. Griffin hired Mr. Loyd as an associate agent for GIA to sell
Nationwide 	Mutual 	Insurance 	Company’s 	(“Nationwide”) 	insurance 	products.
(J.A. 1175; Dep. Ashton K. Loyd Oct. 15, 2021, 14:4–6, ECF No. 118 [“Loyd Dep. Oct.
2021”].) In his early years working at GIA, Mr. Loyd was an employee who received
a Form W-2 tax statement, and he did not hold shares in the corporation. (J.A. 1175–
76.) 	While Mr. Loyd began as an associate agent for GIA, Mr. Griffin believed that
Mr. Loyd was likely to be his “successor” at GIA. 	(See Loyd Dep. Oct. 2021, 23:25–
24:3; Dep. James M. Griffin 1194:2–5, ECF No. 120 [“Griffin Dep.”].)
B. 	Formation of LIA and the Revenue Stream Purchase Agreements
11. 	Mr. Loyd formed LIA in 2009 at the direction of Mr. Griffin and GIA’s
certified public accountant (“CPA”), John Potts. 	(SAC ¶ 32.) 	The Articles of
Incorporation for LIA were filed with the North Carolina Secretary of State on 31
March 2010, (SAC ¶ 32), and Mr. Loyd was at all times the sole owner and

shareholder of LIA, (Dep. Ashton K. Loyd Apr. 22, 2022, 404:13–405:4, ECF No. 118
[“Loyd Dep. Apr. 2022”]).
12. 	On 1 March 2010, Mr. Griffin, Mr. Loyd, and LIA executed a Revenue
Stream Purchase Agreement (“RSPA”) for the West Plaza Location (the “West Plaza
RSPA”). 	(J.A. 314.) 	The record demonstrates that in 2010, Nationwide’s contract
with Mr. Griffin and GIA provided that, as an exclusive agent of Nationwide, they
owned the revenue rights to the agency but not the renewal rights or the book of
business. 	(Griffin Dep. 1199:1–18.) 	Pursuant to the West Plaza RSPA, Mr. Griffin
agreed to transfer to Mr. Loyd his right to receive the revenue generated from the
sale of Nationwide insurance policies at the West Plaza Location.3 	(J.A. 314.)
Mr. Loyd purchased those rights for $1,258,276.58 plus interest to be paid over the
course of roughly 14 years, with full payment by August 2024, pursuant to the
Purchase Price Allocation schedule. (J.A. 314–15, 326–31.)
13. 	Mr. Griffin, Mr. Loyd, and LIA also executed a second RSPA for the GIA
office located at 125 East Front Street, Statesville, North Carolina (the “Statesville
Location RSPA”) on 1 March 2010. 	(J.A. 333–41.) 	This RSPA functioned the same
as the RSPA applicable to the West Plaza Location. 	Mr. Loyd agreed to pay
3 Mr. Loyd testified that the purpose of the RSPAs was to purchase the revenue streams for
the GIA locations, meaning the sale of Nationwide property and casualty insurance products,
including bonuses earned by meeting productivity requirements, such that he would
ultimately own the revenue generated at those locations. (Loyd Dep. Oct. 2021, 38:14–39:25
(comparing the RSPAs to a mortgage on a house); J.A. 314.) 	The RSPAs functioned as an
assignment from Mr. Griffin to Mr. Loyd of his right to receive the revenue at each applicable
location. (J.A. 1176.)

$219,262.00 plus interest, beginning 1 May 2012, for the rights under the second
RSPA over the course of ten years. (J.A. 333.)
14. 	On 1 July 2012, GIA, LIA, and Mr. Loyd executed three agreements, though
only GIA was a party to all three: (1) the Corporate Associate Agent Agreement;
(2) an Employment Agreement; and (3) the Agency Associate Agent/Office Staff
Agreement. 	The order in which those agreements were signed is not clear from the
evidence in the record.
15. 	The Corporate Associate Agent Agreement (the “CAA Agreement”) was
between LIA and GIA whereby LIA became an “associate agent” and “independent
contractor” of GIA. 	(J.A. 294, 301.) 	The CAA Agreement permitted LIA to sell
Nationwide insurance as an agent of GIA at its West Plaza and Statesville Locations.
(J.A. 294, 312.) 	However, LIA’s employees and independent contractors were not
employees or independent contractors of GIA.4 (J.A. 301.)
16. 	The Employment Agreement was between Mr. Loyd and GIA, naming
Mr. Loyd an “employee” of it, and providing that Mr. Loyd would hold the position of
“insurance agency [sic]” of GIA and would work primarily out of the West Plaza
Location. 	(J.A. 594.) 	It further stated that “[t]his document contains the entire
understanding and agreement between the Employer and [Employee] hereto and
supersedes all other oral and written agreements or understanding[s] between us.
4 The CAA Agreement provided that it was “not intended to, and does not, create a franchise
relationship between [the parties] and . . . the sole relationship established between them
under the terms and conditions of this Agreement is one of agency.” (J.A. 301.)

No modification or addition . . . shall be valid except in writing, signed by both the
Employer and [Employee].” (J.A. 594.)
17. 	Finally, the Agency Associate Agent/Office Staff Agreement (the “Associate
Agent Agreement”) was between Nationwide, Mr. Loyd, and GIA, naming Mr. Loyd
an Associate Agent of Nationwide, and describing his privileges and requirements as
such. (J.A. 2546–50.) The Associate Agent Agreement provided that Mr. Loyd would
“represent Nationwide exclusively in the sale and service of insurance and financial
products” and “comply with all applicable insurance laws and regulations.” 	(J.A.
2547.)
18. 	On 1 October 2017, GIA and LIA executed a third and final RSPA for the
GIA office at 7505 Hwy 73, Suite F, Denver, North Carolina (the “Denver Location”).
(J.A. 1101–04.) The Denver Location RSPA provided that LIA would pay $304,034.00
plus 	interest, 	in 	equal 	monthly 	installments 	of 	$3,225.00, 	beginning 	on
1 February 2018. (J.A. 1101–02.)
C. 	The Merger of LIA with GIA
19. 	In 2018, while Mr. Loyd was paying for his purchase of the revenue rights
to three GIA locations, Nationwide announced a plan to allow agents to purchase
their business, rendering the three RSPAs ineffective for their original purpose of
providing Mr. Loyd with the revenue rights to each location. (Griffin Dep. 1194:21–
1196:14.) Subsequently, Mr. Griffin purchased GIA’s book of business, and believed
it was best to give Mr. Loyd a “credit for the principal” paid on the GIA revenue rights
by making him a shareholder of GIA. 	(Griffin Dep. 1195:21–1196:8.) 	The parties

agree that these events sparked the merger of LIA and GIA. 	(See Loyd Dep. Apr.
2022, 482:23–484:21; Griffin Dep. 1195:8–1197:2.)
20. 	On 12 June 2018, there was a special meeting of the Board of Directors and
Shareholders of GIA where Mr. Loyd was appointed vice president and Mr. Griffin
remained president. (J.A. 965.)
21. 	On 25 June 2018, LIA and GIA executed the Agreement and Plan of Merger
Between GIA and LIA (the “Merger Agreement”). 	(J.A. 345–51.) 	The Merger
Agreement, effective on 1 July 2018, governed the merger of LIA into GIA such that
the “individual existence of [LIA] shall cease”, with the stock ownership of LIA being
converted into the stock ownership of GIA. (J.A. 345.) Upon the merger contemplated
in the agreement, the shareholders of GIA would be Mr. Griffin holding 74% of the
outstanding stock and Mr. Loyd holding 26% of the outstanding stock. 	(J.A. 346.)
Further, it provided that “[t]he Sole Shareholder of [LIA] agrees to execute the [GIA]
Shareholders’ Agreement on the Effective Date of the Merger.” (J.A. 347.)
22. 	In Section 8(g) of the Merger Agreement, LIA “represents and warrants to
[GIA]” that it “has complied with and is not in default in any material respect under
any laws, ordinances, requirements, regulations, or orders applicable to its business.”
(J.A. 349.) 	GIA warranted the same, and pursuant to Section 14 of the Merger
Agreement, 	each 	entity 	agreed 	that 	those 	warranties 	would 	survive 	beyond
1 July 2018. (J.A. 349–51.)
23. 	Mr. Loyd, and Mr. Griffin, as trustee of the J. Michael Griffin Revocable
Trust (the “Griffin Trust”), also executed the GIA Shareholders’ Agreement on

25 June 2018 (the “25 June 2018 Shareholders’ Agreement”). 	(J.A. 352.) 	The
agreement provided in relevant part:
1. Right of First Refusal. 	Any Shareholder desiring to transfer his
Shares of the Corporation . . . must give notice (the “Notice”) of his
intent to transfer in writing to the Corporation and to the remaining
Shareholders at least sixty (60) days before the date of the proposed
transfer.
* * * *
3. 	Corporate 	Purchase. 	Upon . . . (iii) the 	termination 	of 	the
Shareholder’s 	employment 	with 	the 	Corporation 	for 	any 	reason
(collectively referred to as a ‘Triggering Event’), the Shareholder or his
estate will sell, and the Corporation will purchase, at the Purchase Price
. . . all of the shares owned by the Shareholder at the time of the
Triggering Event[.]
* * * *
4. Purchase Price. 	Purchase Price [is determined by formula stated
herein, and] may be reviewed periodically by all of the Shareholders and
may be revised upon each review on the basis of the then existing
business and financial condition and prospects of the Corporation. The
good faith decision of a majority in interest of such Shareholders upon
each such review shall be conclusive; and each such decision shall be
noted in writing and endorsed by each such Shareholder.
* * * *
11. Limitations on Sale. No purchase or sale shall be effective hereunder
if any of the following occurs: . . . (c) The Shareholders have amended
this Agreement.
12. Amendment. All provisions of this Agreement shall be effective until
changed by the mutual consent of all the Shareholders, except as
otherwise provided by law.
(J.A. 352–54, 356 (emphasis added).)
24. 	Mr. Loyd described the merger of LIA into GIA as a “hostile takeover”,
stating that he “had no input” in the agreement. 	(Loyd Dep. Apr. 2022, 412:1–16.)

Mr. Loyd “certainly had objections” and raised issues with Mr. Griffin regarding the
value of the property transferred by LIA to GIA as a result of the merger and the
revenue splitting that would result from it. (Loyd Dep. Apr. 2022, 412:19–415:4.) Mr.
Loyd also stated that, “at the end of the day I still wanted to put my head down and
go to work and . . . I still thought that I saw the finish line. I still thought that I saw
that succession that had been promised to me over the years[.]” (Loyd Dep. Apr. 2022,
414:25–415:4.)
D. 	The Merger of Patton Insurance Agency, Inc. with GIA
25. 	Following the merger of LIA into GIA, GIA initiated a merger with Patton
Insurance Agency, Inc. (“Patton Insurance”), whose president was Andrew S. Patton
(“Mr. Patton”). (See Loyd Dep. Apr. 2022, 418:9–20; J.A. 571.) Prior to that merger,
Mr. Patton and Mr. Loyd spoke about Mr. Patton joining the company and whether
he would “be a good fit.” 	(Loyd Dep. Apr. 2022, 418:24–419:15.) 	Mr. Loyd testified
that he “certainly thought he would.” (Loyd Dep. Apr. 2022, 419:13–14.)
26. 	Defendants contend that on 30 November 2018, Patton Insurance and GIA
executed the Agreement and Plan of Merger Between GIA and Patton Insurance (the
“Patton Merger Agreement”).5 	(J.A. 565.) 	The Patton Merger Agreement provided
that 	“the 	sole 	shareholder 	of 	Patton 	[Insurance] 	agrees 	to 	execute 	the 	[GIA]
Shareholders’ Agreement on the Effective Date of the Merger.” 	(J.A. 567.) 	The
merger of Patton Insurance into GIA was effective 1 December 2018, with the
shareholders of GIA becoming, according to the terms of that agreement, Mr. Griffin
5 Mr. Loyd did not sign or otherwise execute the Patton Merger Agreement, and there was no
space printed on the agreement for him to sign. (J.A. 571.)

with 66%, 8% less than his ownership percentage prior to that merger, Mr. Loyd with
23%, 3% less than his prior ownership percentage, and Mr. Patton with 11% of the
outstanding shares. (J.A. 566.)
27. 	According to Mr. Loyd, “[t]here was no vote” on the merger between Patton
Insurance and GIA. 	(Loyd Dep. Apr. 2022, 478:13–479:2.) 	Mr. Griffin, however,
contends that he, Mr. Loyd, and Mr. Patton did vote on “whether or not to admit
Andrew Patton as a shareholder[.]”6 (Griffin Dep. 1211:12–20.)
28. 	An 	unsigned 	copy 	of 	the 	purported 	Shareholders’ 	Agreement 	dated
1 December 2018 (the “Unsigned December 2018 Shareholders’ Agreement”) was
included in the Joint Appendix. 	The Unsigned December 2018 Shareholders’
Agreement has spaces for Mr. Griffin, Mr. Loyd, and Mr. Patton to sign, but there is
conflicting evidence in the record regarding whether this document was ever signed
by any of them, and it is contested whether it was ever effective. (J.A. 2973–78.)
29. 	Mr. Loyd testified that “Mr. Patton became a signatory to” the GIA
Shareholders’ Agreement.7 	(See SAC ¶¶ 107, 181(d); Loyd Dep. Apr. 2022, 458:9–
6 Mr. Loyd contends that he “had no choice in the matter.” (Loyd Dep. Apr. 2022, 445:22–
446:2.) 	This is directly contradictory to Mr. Griffin’s view, as he stated that they “were in
constant contact with each other. We both knew that we were getting ready to enter into a
merger with Mr. Patton, had discussed at length and . . . ad nauseam.” 	(Griffin Dep.
1246:10–17.)
7 At Mr. Loyd’s 22 April 2022 deposition, he was questioned about the allegation in the Second
Amended Complaint of an amendment to the June 25 Shareholders’ Agreement. (See SAC
¶¶ 107, 181(d).) Specifically, he was asked:
Q: 	The 	complaint 	also 	alleges 	that 	the 	shareholder 	agreement . . . was
amended because Mr. Patton became a signatory to it. Is there any other
amendment of the agreement that you are aware of?
A: I’m not.

460:12.) 	Mr. Griffin agreed that “Mr. Patton was subsequently included as an
additional signatory to the shareholder agreement[.]”8 	(Griffin Dep. 1263:10–16.)
Notwithstanding the apparent agreement in the record that Mr. Patton was added
as a shareholder of GIA, and that he became a “signatory” to the 25 June 2018
Shareholders’ Agreement, evidenced by the Unsigned December 2018 Shareholders’
Agreement, there is no GIA shareholders’ agreement in the record before the Court
which contains Mr. Patton’s signature.
E. 	Share Ownership in GIA at Each Merger
30. 	Prior to merging LIA into GIA, Mr. Griffin held the only outstanding shares
of GIA, 1000 shares, out of the total authorized 1500 shares. 	(J.A. 1499–1500.)
Inexplicably, however, the GIA share certificates and transfer records (the “GIA
Share Records”) demonstrate that on 1 September 2013, 1500 shares, not 1000, were
transferred by Mr. Griffin to himself as trustee of the Griffin Trust.9 (J.A. 1501.) On
Q: So, then, somewhere out there, there is this same agreement with Andy
Patton’s signature on it?
Mr. Loyd did not provide a direct response to this question. 	(Loyd Dep. Apr. 2022, 458:9–
460:12.) As previously indicated, Mr. Loyd verified this pleading.
8 At Mr. Griffin’s deposition, he testified that it was his belief that on 1 December 2018, the
25 June 2018 Shareholders’ Agreement was amended to include Mr. Patton. 	(Griffin Dep.
1263:17–1264:5, 1361:25–1362:10.)
9 The certificates in the record appear to have several discrepancies. 	For example, on
certificate four of the GIA Share Records, representing the 990 shares retained by the Griffin
Trust, it lists the original certificate as number two. (J.A. 1502.) However, certificate two
represents 500 shares issued to Charles E. Moore, III and then redeemed by the corporation.
(J.A. 1500.) 	Therefore, the evidence is not conclusive as to exactly how many shares
Mr. Griffin may have held in the Griffin Trust at the time of the mergers with LIA or Patton
Insurance. The evidence is also inconclusive as to how Mr. Griffin went from owning 1000
shares in GIA to owning 1500 shares.

1 December 2018, 990 of those shares were retained in the Griffin Trust, and it was
given a new certificate to represent those shares. (J.A. 1501–02.) The same day, 345
shares were issued to Mr. Loyd and 165 shares to Mr. Patton. (J.A. 1503–04.)
31. 	The Merger Agreement provides, by its terms, that when LIA merged into
GIA, Mr. Loyd was to be issued 26% of the outstanding shares of GIA. 	(J.A. 346.)
The evidence in the record demonstrates that, at that time, 1500 shares were
outstanding and held in the Griffin Trust. 	(J.A. 346; Griffin Dep. 1237:12–24,
1239:3–10, 1244:2–3.)
32. 	There is no indication in the GIA Share Records of Mr. Loyd being issued
390 shares, or any of Mr. Griffin or Mr. Loyd’s shares being transferred to Mr. Patton
following the merger of Patton Insurance into GIA. The evidence in the record does
not disclose how Mr. Loyd’s 390 shares were reduced to 345 shares, given that the
Patton Merger Agreement states Mr. Loyd held 23% of the outstanding shares. (See
J.A. 2967.) 	Mr. Loyd testified that he did not consent to three percent of his stock
being transferred to Mr. Patton. 	(Loyd Dep. Apr. 2022, 479:22–480:2.) 	Further,
Mr. Loyd testified that there was no vote on the reduction of his stock ownership, that
he had “no say” in the redistribution of his shares, and that he was not paid for a
reduction in his ownership.10 (Loyd Dep. Apr. 2022, 480:24–481:18.)
10 Defendants contend that no separate payment to Mr. Loyd was necessary for the transfer
of 45 of his shares to Mr. Patton because Patton Insurance owned substantial assets which
became a part of GIA after the merger. (Defs.’ Br. Opp. Pl.’s Mot. 11, ECF No. 129 (citing
Loyd Dep. Apr. 2022, 420:2–22, J.A. 964).) Thus, while Mr. Loyd owned a smaller number of
shares of GIA, the value of GIA increased after the merger of Patton Insurance into GIA, and
each share was worth more after the merger. (Loyd Dep. Apr. 2022, 420:2–22, J.A. 964.)

F. 	Negotiations for the Sale of GIA and the Investigation into False
Certificates of Insurance
33. 	Around fall 2019, Mr. Griffin began preliminary discussions with various
parties that were interested in acquiring GIA. 	(Griffin Dep. 1277:1–19.) 	On
28 January 2020, Relation Insurance, Inc. (“Relation”) sent a Letter of Intent (“LOI”)
to Mr. Griffin expressing its interest in the possible acquisition of GIA. 	(J.A. 1807.)
On 4 February 2020, Leavitt Group Enterprises (“Leavitt Group”) sent a LOI to
Mr. Griffin, also expressing interest in acquiring GIA. 	(J.A. 881, 1815.) 	Both LOIs
were nonbinding expressions of interest, and did not legally require the parties
thereto to proceed with the transactions contemplated therein. 	(J.A. 1813, 1820.)
Relation mailed an additional LOI to Mr. Griffin on 12 February 2020, raising the
potential total consideration for the purchase of GIA. (J.A. 1826.)
34. 	That same month, Mr. Griffin became aware that Mr. Loyd may have
directed GIA employees to issue Certificates of Insurance (“COIs”) containing false or
inaccurate information.11 	(J.A. 1177.) 	On or about 13 February 2020, Mr. Griffin
notified Nationwide’s then-Associate Vice President of Sales for North Carolina, Doug
Penley (“Mr. Penley”), that he “had some concerns regarding potentially false and/or
inaccurate certificates of insurance generated and/or issued by individuals within
11 A COI is a form issued by an insurance agency or company evidencing the existence of an
insurance policy and providing further information about the owner of the policy, the types
of coverage, and any additional insureds under the policy. (See Dep. Brent Winans, 622:23–
623:6, ECF No. 118.) Nationwide considers a COI to be “false and/or inaccurate” if it is either:
“(1) referencing policies that did not exist; (2) misrepresenting specific coverage limits;
(3) referencing personal lines of insurance policies despite being certificates of insurance
intended for commercial lines policies; and/or (4) containing additional insureds and/or
waivers of subrogation that had not been previously approved by Nationwide[.]” (J.A. 996.)

GIA.” 	(J.A. 995.) 	Nationwide thereafter sent its investigator Clarke Dean Langfitt
(“Mr. Langfitt”) to GIA to further investigate “whether individuals at GIA had
generated certificates of insurance containing false and/or inaccurate information.”
(J.A. 995, 1177.)
35. 	On 28 February 2020, Mr. Langfitt conducted recorded phone interviews
with Mr. Loyd and GIA employees Charlotte Kincaid, Corinne Meyers, and Shana
Boehme Vielie. 	(See J.A. 685–822, 995.) 	During Mr. Langfitt’s interview with
Mr. Loyd, 	Mr. Loyd 	admitted 	to 	instructing 	GIA 	employees 	to 	create 	false 	or
misleading COIs, and to personally issuing or generating at least one false or
misleading COI. 	(J.A. 686, 995.) 	Charlotte Kincaid, Corinne Meyers, and Shana
Boehme Vielie each stated that they issued and/or generated false or misleading
COIs, and that they did so at Mr. Loyd’s request. (J.A. 995.) At the conclusion of his
investigation, Mr. Langfitt found that: (1) “Loyd admitted to directing his staff at GIA
to create false [COIs] approximately twelve (12) times starting three or four years
[prior to the interview]”; (2) “Kincaid admitted to preparing approximately fifty (50)
false [COIs] . . . at the direction of Loyd”; (3) “Meyers admitted to creating between
ten (10) and fifteen (15) false [COIs] . . . at the direction of Loyd”; and (4) “Vielie
admitted to creating one false [COI] in 2017 at the direction of Loyd.” (J.A. 996.)
36. 	On 	28 	February 	2020, 	the 	day 	after 	Mr. 	Langfitt 	conducted 	these
interviews, Relation mailed a third LOI for the acquisition of GIA. (J.A. 873.) Both
Mr. Loyd and Mr. Patton were in favor of this transaction. 	(J.A. 867.) 	The pair
approved 	of 	the 	part-equity 	option, 	and 	Mr. Loyd 	called 	it 	a 	“really 	exciting

opportunity.” 	(J.A. 867.) 	Mr. Griffin ultimately signed that Relation LOI. 	(J.A.
1836–42.)
37. 	Following Mr. Langfitt’s investigation, on 10 March 2020, Mr. Penley
emailed Mr. Griffin confirming that Mr. Loyd admitted to directing GIA staff to create
false or misleading COIs. 	(J.A. 862.) 	On 11 March 2020, Nationwide cancelled the
appointments of Mr. Loyd, Charlotte Kincaid, Corinne Meyers, and Shana Boehme
Vielie, and the four were no longer authorized to sell Nationwide insurance products.
(J.A. 996, 1107.) GIA terminated Mr. Loyd’s employment the same day.12 (J.A. 1107.)
38. 	On 12 March 2020, Mr. Griffin purportedly held a special meeting of the
directors and shareholders of GIA, and notice of the meeting to GIA shareholders was
waived by him. (J.A. 1551–52.) Pursuant to a printed agenda for the special meeting,
Item II for discussion was the dismissal of Mr. Loyd “due to actions inconsistent with
accepted insurance practices”, specifically “the issuance of numerous false [COIs].”
(J.A. 1552.) It was resolved at the meeting that the “officers and [d]irectors of [GIA]
are authorized to exercise the option in the [Shareholders’ A]greement to repurchase
the outstanding shares of stock possessed by Mr. Loyd.” (J.A. 1552.) The evidence in
the record demonstrates that Mr. Griffin was the only GIA shareholder at the
meeting, and that the only other attendee was Jacqueline Sipe, who was an officer
but not a shareholder. 	(J.A. 1552–53.) 	Mr. Loyd testified that he was not provided
12 Following an investigation by the North Carolina Department of Insurance (the “NCDOI”),
Mr. Loyd signed a Voluntary Surrender of License or Licenses (N.C.G.S. § 58-2-65), thereby
surrendering all licenses issued to him by the NCDOI, which authorized him to sell insurance
policies, for 20 years. (J.A. 382.) The form provides an acknowledgement that the voluntary
surrender is “equivalent to the taking of a regulatory action by [the ]NCDOI.” (J.A. 382.)

notice of the meeting or an opportunity to participate. (Loyd Dep. Apr. 2022, 486:9–
23.) He further denied ever signing any agreement transferring his shares of GIA to
the company and testified that he opposed the sale of his shares pursuant to the terms
of the 25 June 2018 Shareholders’ Agreement. (Loyd Dep. Apr. 2022, 487:7–16.)
39. 	While there is a GIA Severance Agreement and a Stock Redemption
Agreement in the record, neither of those documents were executed by the parties.
(J.A. 1107–16.) 	Mr. Griffin contends that Mr. Loyd’s shares in GIA were “retired”
upon the termination of his employment with GIA. 	(Griffin Dep. 1466:12–1467:11.)
Mr. Loyd did not sign any consents, agreements, or other documents, agreeing to sell
his shares in GIA back to it or otherwise “retire” his shares. 	(Loyd Dep. Apr. 2022,
487:2–16.)
40. 	On 20 May 2020, Mr. Griffin withdrew from the Relation LOI due to
“unforeseen circumstances” involving Mr. Loyd which “caused considerable stress” to
Mr. Griffin and GIA’s employees. (J.A. 1846.) Mr. Griffin “was not interested in going
forward with Relation” so he “voluntarily withdrew” from the LOI. 	(Griffin Dep.
1296:3–15, 1311:7–11.)
41. 	On 2 September 2020, counsel for Mr. Loyd at Levine Law Group, PA
received a letter regarding GIA’s intention to begin payments to Mr. Loyd pursuant
to the terms of the 25 June 2018 Shareholders’ Agreement, stating “GIA will no longer
wait for Mr. Loyd to cooperate with the signing of the Stock Redemption [documents]
because GIA must move forward as a business and plan for its future.” 	(J.A. 1030–
32, 1112–16.) The letter provided that Mr. Loyd would receive a calculated amount

for his stock that included substantial discounts based on lack of marketability and
minority interest. (J.A. 1030–32.)
G. 	Subsequent Negotiations for the Sale of GIA
42. 	Mr. Griffin began re-negotiating the sale of GIA shortly after it withdrew
from the Relation LOI. 	On 29 September 2020, Leavitt Group mailed a LOI to
Mr. Griffin and Mr. Patton for the potential purchase of GIA. (J.A. 1857.) Ultimately,
on 31 December 2020, GIA and Leavitt Group reached an agreement for the purchase
of 1155 outstanding shares of GIA. (J.A. 982.)
III. 	PROCEDURAL HISTORY
43. 	The Court sets forth herein only those portions of the procedural history
relevant to its determination of the Cross-Motions for Summary Judgment.
44. 	On 25 September 2020, Mr. Loyd initiated this action upon the filing of the
Complaint. (ECF No. 3.) The Complaint included claims for breach of fiduciary duty;
tortious 	interference 	with 	Plaintiff’s 	business; 	rescission 	of 	the 	25 	June 	2018
Shareholders’ Agreement; unjust enrichment; accounting pursuant to N.C.G.S. § 59-
52 et seq.; and punitive damages. (ECF No. 3.)
45. 	Defendants filed an answer and counterclaims on 25 November 2020. (ECF
No. 14 [“Countercls.”].) Defendants’ counterclaims included seven affirmative claims
for relief: (1) breach of fiduciary duty (“Counterclaim One”); (2) breach of contract,
breach of warranty under the Merger Agreement (“Counterclaim Two”); (3) fraud
(“Counterclaim Three”); (4) rescission of the Merger Agreement and 25 June 2018
Shareholders’ Agreement; (5) violations of the North Carolina Unfair and Deceptive

Trade Practices Act (“UDTPA”), N.C.G.S. § 75-1.1 et seq. (“Counterclaim Five”);
(6) breach of contract for the Associate Agent Agreement (“Counterclaim Six”); and
(7) breach of contract seeking specific performance of the 25 June 2018 Shareholders’
Agreement (“Counterclaim Seven”). 	(See Countercls.) 	Count Four of Defendants’
Counterclaims seeking rescission of the Merger Agreement was voluntarily dismissed
without prejudice on 19 January 2021 and was not refiled. (ECF No. 30.)
46. 	Plaintiff filed a motion to dismiss the Counterclaims on 28 January 2021,
as well as his reply to the Counterclaims. 	(ECF Nos. 32, 34.) 	The Court denied
Plaintiff’s motion to dismiss in its entirety on 1 September 2021. See Loyd v. Griffin,
2021 NCBC LEXIS 72 (N.C. Super. Ct. Sept. 1, 2021).
47. 	Following the Court’s Order on Plaintiff’s Consent Motion to Amend
Complaint, Plaintiff filed the Amended Complaint on 11 January 2021. 	(ECF
Nos. 28–29.) 	On 10 November 2021, Plaintiff filed his Motion for Leave to File a
Second Amended Complaint, which sought in part to change the claims for relief
against Defendants. (ECF No. 71.) On 25 January 2022, the Court, in its discretion,
granted the motion in part, allowing Mr. Loyd to file the Second Amended Complaint,
but disallowing a claim for declaratory judgment against Defendants. (ECF No. 82.)
In compliance with the Court’s Order, Mr. Loyd filed the Second Amended Complaint
on 1 February 2022. (See SAC.) The Second Amended Complaint, as filed, contained
claims for: breach of fiduciary duty against Mr. Griffin; constructive fraud against
Mr. Griffin; conversion against Defendants; unjust enrichment against Defendants;

constructive trust and accounting against Defendants; the alternative remedy of
rescission; and punitive damages. (SAC ¶¶ 172–223.)
48. 	Defendants 	filed 	the 	Motion 	to 	Dismiss 	Plaintiff’s 	Second 	Amended
Complaint on 3 March 2022, seeking dismissal of all seven claims for relief. 	(ECF
No. 87.) Defendants filed an answer the same day. (ECF No. 89.)
49. 	After full briefing by the parties and a hearing on the motion to dismiss,
the 	Court 	dismissed 	Mr. Loyd’s 	claims 	for 	constructive 	trust 	and 	accounting,
rescission, and punitive damages. 	Loyd v. Griffin, 2022 NCBC LEXIS 63, at **32
(N.C. Super. Ct. June 23, 2022). Four of Mr. Loyd’s claims for relief remain: (1) breach
of fiduciary duty against Mr. Griffin (“Count One”); (2) constructive fraud against
Mr. Griffin (“Count Two”); (3) conversion against Defendants (“Count Three”); and
(4) unjust enrichment against Defendants (“Count Four”).
50. 	Following the completion of discovery, the parties filed their respective
motions for summary judgment on 6 June 2022. 	Defendants request summary
judgment on Plaintiff’s four remaining claims and affirmative summary judgment on
Counterclaims One, Five, and Seven.13 	Plaintiff requests summary judgment on
Counterclaims Two, Three, Five, Six, and Seven.
51. 	After full briefing by the parties, hearings were held on the Cross-Motions
for Summary Judgment on 9 November 2022 and 30 November 2022 (the “Hearings”)
where all parties were present and represented by counsel. (See ECF Nos. 131–32.)
13 While Defendants address Plaintiff’s claims for constructive trust and accounting,
rescission, and punitive damages in their summary judgment briefing, those claims were
dismissed at the Rule 12(b)(6) stage, and therefore are not addressed herein. Plaintiff does
not dispute that these claims were dismissed and did not address them in the briefing.

52. 	Following the Hearings, Defendants filed the Motion for Further Argument
and/or Briefing which the Court, in its discretion, granted in part. (See ECF No. 136.)
Each 	side 	was 	permitted 	to 	file 	one 	brief 	on 	limited 	issues 	concerning 	the
25 June 2018 	Shareholders’ 	Agreement, 	and 	the 	Unsigned 	December 2018
Shareholders’ Agreement. 	(ECF No. 136.) 	Defendants also filed Defendants’ Brief
on Issue of Nominal/Actual Damages. (ECF No. 140.) Plaintiff followed suit by filing
Plaintiff’s Brief on the Court’s Partial Summary Judgment Damages Question. (ECF
No. 143.)
53. 	Defendants filed a separate Motion to Supplement Joint Appendix while
the supplemental briefing was ongoing. 	(ECF No. 137.) 	Following full briefing on
that 	motion, 	and 	the 	completion 	of 	supplemental 	briefing, 	the 	Court 	held 	a
subsequent hearing on 14 February 2023 where all parties participated through their
respective counsel. (See ECF No. 145.)
54. 	The Cross-Motions for Summary Judgment are ripe for resolution.
IV. 	LEGAL STANDARD
55. 	Summary judgment is appropriate “if the pleadings, depositions, answers
to interrogatories, and admissions on file, together with the affidavits, if any, show
that there is no genuine issue as to any material fact and that any party is entitled
to a judgment as a matter of law.” N.C.G.S. § 1A-1, Rule 56(c). “A ‘genuine issue’ is
one that can be maintained by substantial evidence.” Dobson v. Harris, 352 N.C. 77,
83 (2000). 	“Substantial evidence is such relevant evidence as a reasonable mind

might accept as adequate to support a conclusion and means more than a scintilla or
a permissible inference.” Head v. Gould Killian CPA Grp., P.A., 371 N.C. 2, 8 (2018).
56. 	The moving party bears the burden of showing that there is no genuine
issue of material fact, and that the movant is entitled to judgment as a matter of law.
Hensley v. Nat’l Freight Transp., Inc., 193 N.C. App. 561, 563 (2008). 	The movant
may make the required showing by proving that “an essential element of the opposing
party’s claim does not exist, cannot be proven at trial, or would be barred by an
affirmative defense, or by showing through discovery that the opposing party cannot
produce evidence to support an essential element of her claim.” Dobson, 352 N.C. at
83 (citations omitted).
57. 	“Once the party seeking summary judgment makes the required showing,
the 	burden 	shifts 	to 	the 	nonmoving 	party 	to 	produce 	a 	forecast 	of 	evidence
demonstrating specific facts, as opposed to allegations, showing that he can at least
establish a prima facie case at trial.” Gaunt v. Pittaway, 139 N.C. App. 778, 784–85
(2000).
58. 	The Court must view the evidence in the light most favorable to the
nonmovant. Dobson, 352 N.C. at 83. However, the nonmovant
may not rest upon the mere allegations or denials of their pleading, but
their response, by affidavits or as otherwise provided in this rule, must
set forth specific facts showing that there is a genuine issue for trial. If
[the 	nonmovant] 	does 	not 	so 	respond, 	summary 	judgment, 	if
appropriate, shall be entered against [the nonmovant].
N.C.G.S. § 1A-1, Rule 56(e).

59. 	“For affirmative summary judgment on a party’s own claim, the burden is
heightened.” Futures Grp. v. Brosnan, 2023 NCBC LEXIS 7, at **4 (N.C. Super. Ct.
Jan. 19, 2023). The movant “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); accord Kidd
v. Early, 289 N.C. 343, 370 (1976). 	Consequently, “rarely is it proper to enter
summary judgment in favor of the party having the burden of proof.” 	Blackwell v.
Massey, 69 N.C. App. 240, 243 (1984).
V. 	ANALYSIS
60. 	The Court first addresses Counterclaims Five and Seven, as to which both
sides request summary judgment. 	The Court then considers the remainder of
Plaintiff’s motion and concludes with the remainder of Defendants’ motion.
A. 	Counterclaim Five: Violations of the UDTPA
61. 	Both sides request summary judgment on Defendants’ Counterclaim Five
for Mr. Loyd’s alleged violations of the UDTPA for issuing false or inaccurate COIs to
GIA’s insurance clients. (Br. Supp. Defs.’ Mot. 15, ECF No. 128 [“Defs.’ Br. Supp.”];
Pl.’s Br. Supp Mot. 18, ECF No. 115 [“Pl.’s Br. Supp.”]; Countercls. ¶ 53.)
62. 	To establish a UDTPA claim, Defendants must prove “(1) an unfair or
deceptive 	act 	or 	practice 	[by 	Plaintiff], 	(2) 	in 	or 	affecting 	commerce, 	which
(3) proximately caused actual injury to the claimant.” 	Nucor Corp. v. Prudential
Equity Grp., LLC, 189 N.C. App. 731, 738 (2008) (citation omitted). Our Courts have

explained that “[t]he purpose of [the UDTPA] is to provide a civil means to maintain
ethical 	standards 	of 	dealings 	between 	persons 	engaged 	in 	business 	and 	the
consuming public within this State and applies to dealings between buyers and
sellers at all levels of commerce.” 	United Virginia Bank v. Air-Lift Assoc., 79 N.C.
App. 315, 319–20 (1986) (citing Buie v. Daniel Int’l Corp., 56 N.C. App. 445, 448
(1982)). “The determination as to whether an act is unfair or deceptive is a question
of law for the court.” Dalton v. Camp, 353 N.C. 647, 656 (2001).
63. 	This Court has held that a UDTPA claim must fail when “the alleged
conduct occurred within the scope of an employer-employee relationship[.]” Vollrath
v. Corinthian Ophthalmic, Inc., 2014 NCBC LEXIS 61, at *14–15 (N.C. Super. Ct.
Nov. 20, 2014) (citing Buie, 56 N.C. App. at 448). However,
the mere existence of an employer-employee relationship does not in and
of itself serve to exclude a party from pursuing an unfair trade or
practice 	claim. 	For 	example, 	employers 	have 	successfully 	sought
damages 	under 	the 	Act 	when 	an 	employee’s 	conduct: 	(1) involved
egregious activities outside the scope of his assigned employment duties,
and (2) otherwise qualified as unfair or deceptive practices that were in
or affecting commerce.
Dalton, 353 N.C. at 656. 	“[W]hile the statutory definition of commerce crosses
expansive parameters, it is not intended to apply to all wrongs in a business setting.”
Id. at 657.
64. 	Defendants argue that Mr. Loyd’s “practice of misrepresenting insurance
policies on forms given to customers” was misleading, and that “commerce” should be
understood broadly to include his actions because they affected GIA’s day-to-day
business. (Defs.’ Br. Supp 16–17.) Plaintiff argues that this alleged violation of the

UDTPA concerns only the internal affairs of GIA because Mr. Loyd was an employee
of GIA, and therefore the claim is barred by well-settled law. (See Pl.’s Br. Opp. Defs.’
Mot. 18, ECF No. 117 [“Br. Opp. Defs.’ Mot.”].) 	Plaintiff further contends that the
relationship between an insurance agency and its agent does not fall within the scope
of the UDTPA. (Pl.’s Br. Supp. 18–19.) The primary issue before the Court, therefore,
is whether Mr. Loyd’s relationship to GIA and Mr. Griffin is in or affecting commerce
and therefore covered by the UDTPA.
65. 	In Buie v. Daniel Int’l Corp., our Court of Appeals held that “[u]nlike buyer-
seller 	relationships, . . . employer-employee 	relationships 	do 	not 	fall 	within 	the
intended scope of [§ ]75-1.1, [and instead, e]mployment practices fall within the
purview of other statutes adopted for that express purpose.” 	Buie, 56 N.C. App. at
448. Our Supreme Court has agreed with and relied upon that holding. See Dalton,
353 N.C. at 656; Sara Lee Corp. v. Carter, 351 N.C. 27, 31, 33 (1999); Hajmm Co. v.
House of Raeford Farms, Inc., 328 N.C. 578, 593 (1991).
66. 	In Sara Lee Corp v. Carter, the relationship at issue was one of buyer-seller,
though the seller was also an employee of the buyer. 	351 N.C. at 33–34. 	There,
defendant “engaged in self-dealing business activities wherein he sold computer parts
and services to his employer from companies owned by him.” 	Id. at 32–33. 	Our
Supreme Court held that defendant’s relationship to plaintiff as an employee did not
preclude application of the UDTPA because the conduct at issue concerned their
buyer-seller transactions, which fell squarely within the UDTPA’s intended reach.
Id.

67. 	Notwithstanding that holding, which arose under unusual circumstances
not relevant to the current dispute, conduct related to disputes involving the LLC, its
officers, and an employee-minority owner, are “[i]nternal disputes . . . not in or
affecting commerce.” McFee v. Presley 2022 NCBC LEXIS 142, at **10 (N.C. Super.
Ct. Nov. 29, 2022); see also White, 364 N.C. at 48 (agreeing that regulating “purely
internal business operations” was not the General Assembly’s intent when it enacted
the UDTPA).
68. 	Regardless of Mr. Loyd’s relationship to either Defendant––be it Mr. Loyd’s
employment with GIA, or his shareholder and officer relationship with Mr. Griffin––
neither may be a basis for Defendants’ UDTPA claim. Internal business disputes are
not in or affecting commerce for purposes of the UDTPA, and neither party contends
that Mr. Loyd issued a false or inaccurate COI to GIA or Mr. Griffin such that a
potential buyer-seller relationship was created. 	Since Counterclaim Five concerns
Mr. Loyd’s conduct and its impact on GIA, rather than its impact on commerce, the
relationship alleged is not the kind our General Assembly intended to cover when
enacting the UDTPA. See White, 364 N.C. at 48.
69. 	Therefore, the Court GRANTS Plaintiff’s Motion for Partial Summary
Judgment, 	and 	Counterclaim 	Five 	is 	hereby 	DISMISSED 	with 	prejudice.
Defendants’ Motion for Summary Judgement as to Counterclaim Five is therefore
DENIED.

B. 	Counterclaim 	Seven: 	Breach 	of 	Contract 	Seeking 	Specific
Performance of the 25 June 2018 Shareholders’ Agreement
70. 	Both sides request summary judgment on Defendants’ Counterclaim Seven.
In Counterclaim Seven, Defendants allege that, if the 25 June 2018 Shareholders’
Agreement is not rescinded, it should be specifically enforced.14 	(Countercls. ¶ 74.)
Defendants allege that GIA is “entitled to specific performance and an order directing
the Plaintiff to sell his shares in GIA pursuant to the terms of the [25 June 2018]
Shareholders’ Agreement.” (Countercls. ¶ 74.)
71. 	As 	a 	preliminary 	matter, 	“[c]ourts 	may 	enter summary 	judgment 	in
contract disputes because they have the power to interpret the terms of contracts.”
McKinnon v. CV Indus., 213 N.C. App. 328, 333 (2011). “The elements of a claim for
breach of contract are (1) existence of a valid contract and (2) breach of the terms of
that contract.” Poor v. Hill, 138 N.C. App. 19, 26 (2000). “The well-settled elements
of a valid contract are offer, acceptance, consideration, and mutuality of assent to the
contract’s essential terms.” 	Se. Caissons, LLC v. Choate Constr. Co., 247 N.C.
App. 104, 110 (2016). “It is axiomatic that a valid contract between two parties can
only exist when the parties assent to the same thing in the same sense[.]” Normile v.
Miller, 313 N.C. 98, 103 (1985) (internal marks omitted).
72. 	If the terms to be interpreted “are plain and unambiguous, there is no room
for construction [and t]he contract is to be interpreted as written.” 	Jones v.
Casstevens, 222 N.C. 411, 413 (1942). Plain, unambiguous terms should therefore be
14 As stated herein, the counterclaim for rescission was voluntarily dismissed without
prejudice and not refiled. 	(ECF No. 30.) 	The Court, therefore, does not address the
allegations contained in that counterclaim.

“given their ordinary, accepted meaning unless it is apparent another meaning is
intended.” Peirson v. Am. Hardware Mut. Ins. Co., 249 N.C. 580, 583 (1959).
73. 	The primary issue at this stage concerns Defendants’ argument that the
25 June 2018 Shareholders’ Agreement is “valid and enforceable” and that the
specific terms Defendants seek to enforce “are clear and explicit.” 	(Defs.’ Br.
Supp. 20–21.) Plaintiff contends that the 25 June 2018 Shareholders’ Agreement was
amended on 1 December 2018 when Mr. Patton was added, and that because of this
amendment, the claim for specific performance––requiring Mr. Loyd to transfer his
shares in GIA upon the termination of his employment––is barred by Section 12 of
the 25 June 2018 Shareholders’ Agreement. (Br. Opp. Defs.’ Mot. 20–22.)
74. 	“Generally, a party seeking to enforce a contract has the burden of proving
the essential elements of a valid contract[.]” 	Orthodontic Ctrs. of Am., Inc. v.
Hanachi, 151 N.C. App. 133, 135 (2002) (citation omitted). Defendants seek to enforce
the 25 June 2018 Shareholders’ Agreement, and therefore have the burden of
establishing it was a valid contract following Mr. Patton becoming a shareholder in
GIA. 	However, Plaintiff contends that the 25 June 2018 Shareholders’ Agreement
was amended, and that by the terms of the agreement, the amendment bars the claim
alleged by Defendants. 	(See Br. Opp. Defs.’ Mot. 21–22.) 	“The burden of proving
modification . . . is on the party asserting it.” 	Lambe-Young v. Cook, 70 N.C. App.
588, 591 (1984) (citations omitted). 	“Further, proof of an oral agreement that
modifies a written contract should be by clear and convincing evidence.” Id. (citations
omitted).

75. 	The 25 June 2018 Shareholders’ Agreement provides that “[a]ll provisions
of this Agreement shall be effective until changed by the mutual consent of all the
Shareholders, except as otherwise provided by law.” (J.A. 356.) Notably, it does not
require a writing signed by the parties, only their mutual consent. Defendants argue
that all shareholders consented to Mr. Patton becoming a shareholder, and that this
did not amend the 25 June 2018 Shareholders’ Agreement. (Defs.’ Br. Supp. 20–21.)
Mr. Loyd asserts that he did not consent to Mr. Patton being added as a shareholder,
but 	that 	nonetheless 	there 	was 	an 	amendment 	because 	Mr. Patton 	became a
shareholder. 	(Br. Opp. Defs.’ Mot. 22.) 	Therefore, Plaintiff contends that no forced
sale of his shares may occur under the 25 June 2018 Shareholders’ Agreement
without his express consent. (Br. Opp. Defs.’ Mot. 22.)
76. 	The record is in conflict regarding this claim. 	On the one hand, the
documents of record indicate that Mr. Patton did receive shares in GIA and became
a shareholder in it. (J.A. 1504.) Further, when Patton Insurance merged into GIA,
that merger document provided that the “sole shareholder of Patton agrees to execute
the Surviving Corporation’s Shareholders’ Agreement on the Effective Date of the
Merger.” 	(J.A. 567.) 	The Unsigned December 2018 Shareholders’ Agreement looks
like the 25 June 2018 Shareholders’ Agreement on its face, and has three spaces for
Mr. Patton, Mr. Loyd, and Mr. Griffin to sign. 	(J.A. 2973–78.) 	The parties dispute
whether this document was ever executed, but the evidence suggests there was a
modification to the 25 June 2018 Shareholders’ Agreement. 	See Anthony Tile &
Marble Co. v. H.L. Coble Constr. Co., 16 N.C. App. 740, 741 (1972) (“Parties to a

contract may by mutual consent agree to change its terms and a written contract may
ordinarily be modified by a subsequent parol agreement [which] may be either
express or implied by conduct of the parties.”).
77. 	There is also evidence in the record that Mr. Loyd was aware that
Mr. Patton was becoming a shareholder, that they spoke in advance, and that
Mr. Loyd did not object. 	Further, Mr. Loyd may have known that his share
percentage would decrease upon the merger with Patton Insurance, and though there
is evidence that he did not expressly consent in writing, the evidence tends to show
that 	he 	failed 	to 	object 	in 	writing, 	or 	that 	his 	actions 	were 	consistent 	with
disagreement with Mr. Patton becoming a shareholder of GIA. 	(See Loyd Dep.
Apr. 2022, 400:16–420:8.)
78. 	Notwithstanding 	this 	evidence, 	there 	is 	also 	evidence 	of 	record 	that
Mr. Loyd objected to Mr. Patton becoming a shareholder and never executed the
Unsigned December 2018 Shareholders’ Agreement. 	(Loyd Dep. Apr. 2022, 419:5–
420:4 (stating that “Mr. Griffin had already decided this was going to happen, so I
could like it or not like it” and that he “didn’t have a choice”), 445:22–446:2 (stating
that Mr. Loyd was not alleging the Patton Insurance merger took him by surprise,
but rather that he “had no choice in the matter”), 460:5–12.) 	Further, neither side
has been able to produce a signed copy of that document.
79. 	As a result, a genuine issue of material fact remains as to whether there
was mutual consent of all parties to modify the 25 June 2018 Shareholders’
Agreement, and if so, what terms were modified. Upon the current record, whether

mutual assent to an amendment to the 25 June 2018 Shareholders’ Agreement
existed and, if so, what the modifications to that agreement were, is an issue for the
trier of fact. Creech v. Melnik, 347 N.C. 520, 527 (1998).
80. 	The Court may not properly determine by summary judgment whether
Defendants are entitled to specific performance of the 25 June 2018 Shareholders’
Agreement 	because 	reasonable 	minds 	may 	differ in 	deciding 	the 	validity and
enforceability of it.
81. 	In summary, there are a host of contested material facts making summary
disposition of this claim improper. 	Therefore, the Cross-Motions for Summary
Judgment as to Counterclaim Seven are hereby DENIED.
C. 	Counterclaim Three: Fraud
82. 	Plaintiff requests summary judgment on Defendants’ Counterclaim Three
for fraud in the Merger Agreement, contending it must be dismissed because the
representations relied upon were made by LIA, and because Defendants did not
reasonably rely on the representations in the Merger Agreement given that they had
custody and control over the COIs at issue. (Pl.’s Br. Supp. 15.)
83. 	Defendants allege that Plaintiff warranted that he and LIA “complied with
and 	is 	not 	in 	default 	in 	any 	material 	respect 	under 	any 	laws, 	ordinances,
requirements, 	regulations, 	or 	orders 	applicable 	to 	its 	business” 	and 	that 	this
provision survived the merger of LIA into GIA. 	(Countercls. ¶ 36; J.A. 349.)
Defendants allege that Mr. Loyd knew he was not in compliance with the insurance

laws applicable to the business due to his issuance of false or inaccurate COIs, and
that this was intended to deceive Defendants. (Countercls. ¶¶ 37–38.)
84. 	In 	North 	Carolina, 	the 	“essential 	elements 	of 	actual 	fraud 	are 	well
established: ‘(1) False representation or concealment of a material fact, (2) reasonably
calculated to deceive, (3) made with intent to deceive, (4) which does in fact deceive,
(5) resulting in damage to the injured party.’ ” Forbis v. Neal, 361 N.C. 519, 526–27
(2007) (quoting Ragsdale v. Kennedy, 286 N.C. 130, 138 (1974)). 	“[R]eliance on the
allegedly false representations must be reasonable.” 	Id. at 527. 	“Reliance is not
reasonable if a plaintiff fails to make any independent investigation, or fails to
demonstrate he was prevented from doing so.” 	Arnesen v. Rivers Edge Golf Club &
Plantation, Inc., 368 N.C. 440, 449 (2015) (internal marks and citations omitted).
“Whether each of the elements of actual fraud and reasonable reliance are met are
ordinarily questions for the jury ‘unless the facts are so clear that they support only
one conclusion.’ ” 	Gould Killian CPA Grp., P.A., 371 N.C.at 9 (quoting Forbis, 361
N.C. at 527).
85. 	Defendants rely on Tillery Envtl. LLC v. A&D Holdings, Inc., which the
Court finds instructive. 2018 NCBC LEXIS 13 (N.C. Super. Ct. Feb. 9, 2018). Tillery
was a case concerning agreements which facilitated a merger between two companies,
and the alleged misrepresentations and omissions concerning workplace injuries
prior to that merger. Id. at *3, *14–15. There, the Court decided, at the Rule 12(b)(6)
stage, the issue of whether “a seller could be [held individually] liable for a sold
company’s contractual representations in certain situations.” Id. at *44. Deciding an

issue of first impression, Chief Judge Bledsoe, who relied on two cases from the
Delaware Chancery Court, wrote:
[A] corporation has no mind with which to think, no will with which to
determine 	and 	no 	voice 	with 	which 	to 	speak, 	and 	this 	means 	a
corporation can only act through human agents. 	These agents . . .
cannot escape personal liability for the corporation’s fraudulent actions
when they have actively participated in the fraud. In keeping with the
holding of ABRY Partners V, L.P., the court concluded that these
principles meant the sellers could indeed be liable for fraudulent
contractual 	representations 	made 	by 	the 	Company 	because 	the
purchaser 	sufficiently 	alleged 	that 	the 	sellers 	knew 	that 	the
representations in the stock purchase agreement were false. 	The
purchaser also sufficiently alleged that the sellers actively participated
in making the false representations[.]
Id. at *45 (cleaned up) (citing ABRY Partners V, L.P. v. F&W Acquisition LLC, 891
A.2d 1032 (Del. Ch. 2006); Prairie Capital III, L.P. v. Double E Holding Corp., 132
A.3d 35 (Del. Ch. 2015)).
86. 	As the Court articulated in Tillery, an agent of the selling entity will not be
insulated 	from 	accountability 	for 	its 	false 	or 	misleading 	statements, 	if 	any.
Therefore, Mr. Loyd similarly cannot be insulated by the corporate form of LIA and
may be individually responsible for any false representations he made or any
concealment of material facts in the Merger Agreement.
87. 	However, Counterclaim Three fails on a different basis. 	The record
evidence before the Court demonstrates that LIA did not produce any false or
inaccurate COIs. 	Rather, the evidence demonstrates that all the COIs produced in
the Joint Appendix name GIA as the producer. 	(J.A. 357–80 (five COIs produced,
each listing “Griffin Insurance Agency” or “Griffin Insurance” as the producer, at the
West Plaza Location), 1733–37 (COIs issued naming GIA as the producer, each

generated throughout 2018 for the same insured), 1746–58 (COIs listing GIA’s West
Plaza Location as the producer for insureds, some issued as early as January 2017),
2188–91 (COIs listing GIA’s West Plaza Location, issued in September 2019).)
88. 	While Mr. Loyd may have directed GIA employees to issue false or
misleading COIs, and may have issued those COIs himself, there is no record
evidence that LIA was the producer of any of those policies. 	In fact, the NCDOI’s
investigation concluded that “Agent Loyd directed and advised agents at Griffin
Insurance to issue certificates and include wording on the certificates that was not
covered by the policies.” (J.A. 1007–29 (emphasis added).)
89. 	Rather, the evidence before the Court is clear that GIA was the producer of
each of the COIs included in the record, and therefore, Mr. Loyd’s representations on
behalf of LIA as to Sections 8 and 14 of the Merger Agreement were not false, nor did
they conceal any material facts related to the merger or LIA’s compliance with
applicable insurance laws and regulations.
90. 	Therefore, Plaintiff’s Motion for Partial Summary Judgment is GRANTED
and Defendants’ Counterclaim Three for fraud in the Merger Agreement is hereby
DISMISSED with prejudice.
D. 	The Breach of Contract Counterclaims
91. 	Plaintiff requests summary judgment on Defendants’ remaining breach of
contract claims, alleged in Counterclaims Two and Six.

1. 	Counterclaim Two: Breach of the Merger Agreement
92. 	Defendants allege that Mr. Loyd and LIA made various representations and
warranties in the Merger Agreement that “were false” because, at the time the parties
to the Merger Agreement entered into it, both Mr. Loyd and LIA failed to stay in
compliance with all applicable insurance laws and regulations. 	(Countercls. ¶¶ 29–
30.) 	Defendants argue that this was intentional, in bad faith, and a breach of the
material terms of the Merger Agreement. (Countercls. ¶¶ 31–32.)
93. 	The Court has determined herein that Mr. Loyd may be held individually
liable for any false representation or concealment in the Merger Agreement made in
his capacity as president of LIA, since he was serving as LIA’s agent when entering
into that agreement. 	(See supra Part V.C.) 	However, the Court need not address
whether Mr. Loyd materially breached the Merger Agreement in that capacity
because the evidence before the Court indisputably demonstrates that GIA was the
producer of each of the COIs included in the record.
94. 	Section 8(g) of the Merger Agreement provides that LIA “complied with and
is not in default in any material respect under any laws, ordinances, requirements,
regulations, or orders applicable to its business.” 	(J.A. 349 (emphasis added).)
Therefore, Mr. Loyd’s representations on behalf of LIA and its compliance with the
applicable insurance laws were not false, nor did it result in a concealment of material
facts, given that the record evidence demonstrates that LIA did not produce any false
or inaccurate COIs.

95. 	Defendants cannot establish a breach of the Merger Agreement by Mr. Loyd
because his representations therein were made on behalf of LIA and the evidence
before the Court is clear that there were no false representations or warranties, as
Defendants contend, because GIA was the producer on each false or misleading COI.
Therefore, Plaintiff’s Motion for Partial Summary Judgment is GRANTED and
Counterclaim Two is hereby DISMISSED with prejudice.
2. 	Counterclaim Six: Breach of the Associate Agent Agreement
96. 	Plaintiff contends that Counterclaim Six for breach of the Associate Agent
Agreement fails, arguing that Defendants have not offered evidence of damages
resulting from the alleged breach. (Pl.’s Br. Supp. 19–20.)
97. 	“Under North Carolina law, proof of damages is not an element of a claim
for breach of contract.” Crescent Univ. City Venture, LLC v. AP Atl., Inc., 2019 NCBC
LEXIS 46, at *127 (N.C. Super. Ct. Aug. 8, 2019) (citation omitted). Rather, “in a suit
for damages for breach of contract, proof of the breach would entitle the plaintiff to
nominal damages at least.” 	Delta Envtl. Consultants, Inc. v. Wysong & Miles Co.,
132 N.C. App. 160, 172 (1999) (citation and quotation marks omitted). 	Thus,
“judgment as a matter of law should not be entered against the claimant’s entire
cause of action on grounds that his or her evidence of damages is wanting.” Crescent
Univ. City Venture, LLC, 2019 NCBC LEXIS 46, at *127–28 (citing Bryan Builders
Supply v. Midyette, 274 N.C. 264, 271–72 (1968); Hodges v. Young, 2011 N.C. App.
LEXIS 370, at *5–6 (2011)).

98. 	Plaintiff’s sole argument in support of his motion is that Defendants have
not come forth with evidence of damages related to this counterclaim. (Pl.’s Br. Supp.
19–20; Pl.’s Reply Br. 11–12, ECF No. 116 [“Pl.’s Reply”].) 	However, even if
Defendants have failed to offer evidence of actual damages at this stage, as Plaintiff
contends, Plaintiff is not ipso facto entitled to summary judgment in his favor if the
evidence in the record tends to support the elements of that claim. 	Instead, as the
movant, it is Plaintiff’s burden of showing that no genuine issues of material fact
remain to be resolved.
99. 	Plaintiff has failed to meet his burden of showing no genuine issue of
material fact remains as to the elements of this breach of contract claim, and
therefore, Plaintiff’s Motion for Partial Summary Judgment as to Counterclaim Six
is DENIED.15
E. 	The Fiduciary Claims
100. 	Defendants request summary judgment in their favor on Counterclaim One
and Plaintiff’s Count One, each alleging claims for breach of fiduciary duties, one by
Mr. Loyd and one by Mr. Griffin, respectively. 	Defendants also request summary
judgment on Plaintiff’s Count Two, in which Plaintiff bases his constructive fraud
claim on the same fiduciary relationship alleged in Count One. Defendants contend
this claim fails because Plaintiff’s breach of fiduciary duty claim fails.
15 While not dispositive of the motion, the Court notes that Defendants have offered evidence
of actual damages, proximately resulting from Mr. Loyd’s alleged breach of the Associate
Agent Agreement.

101. 	“To establish a breach of fiduciary duty, a plaintiff must show the existence
of a fiduciary duty, a breach of that duty, and injury proximately caused by the
breach.” 	Bennett v. Bennett, 2020 NCBC LEXIS 147, at **16 (N.C. Super. Ct.
Dec. 16, 2020) (citing Green v. Freeman, 367 N.C. 136, 141 (2013)). “Claims for breach
of fiduciary duty and constructive fraud are often paired together, as they are here.”
Potts v. KEL, LLC, 2019 NCBC LEXIS 30, at *10 (N.C. Super. Ct. May 9, 2019). “The
primary difference between pleading a claim for constructive fraud and one for breach
of fiduciary duty is the constructive fraud requirement that the defendant benefit
himself.” White v. Consol. Planning, Inc., 166 N.C. App. 283, 294 (2004).
1. 	Plaintiff’s Counts One and Two
102. 	In Count One, Plaintiff alleges that Mr. Griffin, as majority shareholder of
GIA, owning as many as 1500 shares and as few as 490 shares, owed Mr. Loyd a
fiduciary duty and obligation of good faith. (SAC ¶¶ 174–75.) 	Plaintiff alleges that
Mr. Griffin “used his majority shareholder status and position of power and trust at
GIA to control and dominate the affairs of GIA, at the expense of [Mr. ]Loyd.”
(SAC ¶ 180.) 	Plaintiff specifically alleges fourteen (14) events which he contends
constituted a breach of that duty, including: failure to obey three sections of the GIA
Articles of Incorporation; failure to alert Mr. Loyd that Mr. Griffin owned only 490
shares after 1 December 2018, such that his unilateral actions were ultra vires;
failure to obey four sections of the GIA Bylaws; unilaterally taking Mr. Loyd’s shares
in GIA and selling them without his consent; and, leveraging his majority shareholder
status to coerce Mr. Loyd into executing various documents. (SAC ¶¶ 181, 183.)

103. 	In 	Count 	Two, 	Plaintiff 	alleges 	that 	Mr. Griffin 	used 	the 	fiduciary
relationship to “seize opportunities to personally benefit himself in a pecuniary
fashion, by improperly taking [P]laintiff’s GIA stock, giving it to himself and others,
and then selling [P]laintiff’s GIA stock for a tremendous and unlawful profit, all at
the expense of” Mr. Loyd. (SAC ¶ 191.) Further, Mr. Griffin’s alleged breaches were
for “his own wrongful and unfair pecuniary gain”, constituted a constructive fraud,
and proximately resulted in damages to Plaintiff. (SAC ¶¶ 192–93.)
104. 	Defendants argue that, prior to 25 June 2018, Mr. Griffin did not owe
fiduciary duties to Mr. Loyd, contending that Mr. Loyd was only an “employee of GIA”
and not a partner, because he was paid a W-2 salary, did not participate in profit
sharing, and had no say in the parties’ business dealings. (Defs.’ Br. Supp. 23 (citing
Wilder v. Hobson, 101 N.C. App. 199, 202 (1990)).) 	Even after 25 June 2018,
Defendants argue that Plaintiff cannot prove proximate causation because Mr. Loyd’s
shareholder interest was reclaimed by GIA because he violated insurance laws, not
because of any breach by Mr. Griffin. (Defs.’ Br. Supp. 24–25.)
i. 	Prior to 25 June 2018
105. 	At the Rule 12(b)(6) stage, Mr. Loyd adequately alleged that he and
Mr. Griffin 	“shared 	mutual 	fiduciary 	duties 	towards 	each 	other 	as 	partners
throughout the entirety of the relevant transactions as a matter of law.” Loyd, 2022
NCBC LEXIS 63, at **17–18. There, the allegations tended to show “that Griffin took
advantage of his position of trust as Loyd’s business partner to cause a merger
between LIA and GIA, transfer shares of GIA stock to Loyd, and then ultimately

reclaim Loyd’s stock to sell to Leavitt for a large profit to himself.” 	Id. at **18–19.
The parties dispute whether a partnership was formed, so the Court begins its
analysis there.
106. 	Plaintiff argues that a partnership was formed in 2010 and ended at the
time of the merger of LIA into GIA in 2018. 	(Br. Opp. Defs.’ Mot. 2, 6.) 	Plaintiff
contends that the RSPAs were a series of agreements between Mr. Griffin and
Mr. Loyd to work together, to share GIA’s profits, and to provide a mechanism to
transfer ownership of GIA to Mr. Loyd when Mr. Griffin retired. 	(Br. Opp. Defs.’
Mot. 6.)
107. 	“[T]he relationship of partners is fiduciary and imposes on them the
obligation of the utmost good faith in their dealings with one another in respect to
partnership affairs.” Casey v. Grantham, 239 N.C. 121, 124 (1954). A partnership is
“an association of two or more persons to carry on as co-owners a business for profit.”
Hines v. Arnold, 103 N.C. App. 31, 35 (1991). As our Supreme Court has stated, “[a]
contract, express or implied, is essential to the formation of a partnership” but a
course of dealings between the parties of (1) sufficient significance and (2) sufficient
duration may be evidence tending to establish a partnership, provided that the
parties had the necessary intent. 	Eggleston v. Eggleston, 228 N.C. 668, 674 (1948)
(citations omitted). An express agreement to form a partnership is not required, and
“a finding of its existence may be based upon a rational consideration of the acts and
declarations of the parties, warranting the inference that the parties understood that
they were partners and acted as such.” 	Id. 	Receipt of a share of the profits of a

business “is prima facie evidence that [person] is a partner in the business.” Hines,
103 N.C. App. at 36.
108. 	Other significant evidence to consider is: (1) “the filing of a partnership tax
return,” Davis v. Davis, 58 N.C. App. 25, 31, disc. rev. denied, 307 N.C. 127 (1982);
(2) an oral agreement to form a partnership; (3) statements of the parties in affidavits
and 	depositions 	concerning 	whether 	there 	was 	a 	partnership; 	and 	(4) other
documentary evidence in the record tending to indicate whether a partnership was
formed, Sturm v. Goss, 90 N.C. App. 326, 331 (1988).
109. 	The only evidence presented by Plaintiff as to whether a partnership
relationship existed are the three RSPAs. 	However, the evidence in the record
indicates that the purpose of the RSPAs was for Mr. Loyd to purchase the rights to
the revenue generated by GIA’s sale of Nationwide insurance products, not to create
a profit-sharing arrangement. 	Neither the RSPAs, nor the parties’ conduct after
executing them, indicate that the parties intended to form a partnership.
110. 	Further, the GIA Business Plan from August 2017 (the “2017 Business
Plan”) stated that Mr. Loyd was primarily responsible for the West Plaza Location,
and that “[u]nder the guidance and oversight of [Mr. ]Griffin,” Mr. Loyd was
responsible for the daily operation of that location. 	(J.A. 1685 (emphasis added).)
The record demonstrates that GIA filed a tax return as an S Corporation, and that
neither Mr. Griffin, Mr. Loyd, GIA, nor LIA ever filed a tax form for reporting
partnership income. (See J.A. 1072, 1930–73 (demonstrating that in 2017 and 2018,
Mr. Loyd did not file any forms related to a partnership).) 	Rather, the record

demonstrates that Mr. Loyd received his first Schedule K-1, a Form 1120S, from GIA
for 2018, and that the form reported shareholder income, deductions, and credits.
(J.A. 2586.) This evidence tends to indicate that Mr. Loyd and Mr. Griffin were not
partners.
111. 	Mr. Loyd testified that he personally believed that he was a partner in GIA.
(Loyd Dep. Oct. 2021, 44:12–17.) Mr. Loyd thought he was a partner in GIA because
he “had worked there for eight years,” but also stated that he did not have any
ownership interest in GIA prior to the merger of LIA into GIA. (Loyd Dep. Oct. 2021,
45:18–20, 47:24–48:19.) At his second deposition, Mr. Loyd testified that he believed
they “had a partnership from the beginning” but Mr. Loyd did not give an answer as
to whether there were any partnership documents. 	(Loyd Dep. Apr. 2022, 401:2–
402:14.)
112. 	Mr. Griffin made no statements in his deposition about Mr. Loyd being a
partner of GIA at any time prior to when Mr. Loyd became a shareholder in 2018.
(See Griffin Dep.) Rather, Mr. Griffin affirmed in his affidavit that he and Mr. Loyd
were not partners, nor was Mr. Loyd a partner with GIA, stating “Mr. Loyd did not
share in the profits or losses of GIA, nor did he have any decision-making authority
with respect to GIA’s corporate governance.” 	(J.A. 1175–76.) 	Rather, the three
RSPAs allowed Mr. Loyd to “finance the purchase of the Revenue Stream” from three
GIA locations. (J.A. 1176.) The RSPAs functioned as an assignment from Mr. Griffin
to Mr. Loyd of Mr. Griffin’s rights to receive the revenue at those locations, not as an
agreement to engage in a partnership with Mr. Loyd. (J.A. 1176.)

113. 	The Court concludes that there is insufficient evidence that Mr. Loyd and
Mr. Griffin formed a partnership to create an issue for the jury. 	There is no record
evidence of an express agreement between them, and Plaintiff has not come forward
with sufficient evidence to suggest an implied-in-fact partnership because there is no
evidence that Mr. Griffin had the necessary intent for them to carry on as co-owners.
Therefore, Mr. Griffin did not owe fiduciary duties to Mr. Loyd by virtue of a
partnership relationship.
114. 	Accordingly, Defendants’ Motion for Summary Judgment is GRANTED in
part as to the breach of fiduciary duty claim, to the extent it is based on an alleged
partnership 	between 	Mr. Loyd 	and 	Mr. Griffin 	prior 	to 	Mr. Loyd 	becoming 	a
shareholder of GIA, and to that extent, Plaintiff’s Counts One and Two are hereby
DISMISSED with prejudice.
ii. 	Following 25 June 2018
115. 	The record is clear that, following the execution of the 25 June 2018
Shareholders’ Agreement, Mr. Loyd became a minority shareholder in GIA on
1 July 2018. (See J.A. 352–56.) It is well-settled in North Carolina that “the majority
stockholder of a corporation owes fiduciary duties to the minority stockholders.”
Corwin v. British Am. Tobacco PLC, 371 N.C. 605, 616 (2018).
116. 	Between 1 July 2018, when Mr. Loyd became a shareholder of GIA, and
1 December 2018, when Mr. Patton became a shareholder of GIA, Mr. Griffin was
indisputably the majority shareholder, and Mr. Loyd a minority shareholder. 	(See
J.A. 346.)

117. 	However, a genuine issue of material fact remains as to how many shares
Mr. Griffin held in GIA after 1 December 2018, and therefore, the Court cannot
conclude that Mr. Griffin owed Mr. Loyd fiduciary duties after the addition of
Mr. Patton because the evidence is conflicting as to whether Mr. Griffin continued to
be a majority shareholder after that time.
118. 	As stated herein, the record evidence before the Court is disputed on this
issue. Mr. Griffin contends that, since the formation of GIA, he was at all times the
majority 	shareholder 	until 	GIA 	was 	sold 	on 	31 December 2020. 	(J.A. 	1175.)
Defendants argue that Mr. Griffin held 990 shares in GIA, citing to the GIA Share
Records. (Defs.’ Reply 6.) This is further evidenced by the Stock Sales Agreement for
the Leavitt Group’s purchase of GIA on 31 December 2020, which provides that
Mr. Griffin, as trustee of the Griffin Trust, had 990 shares. (J.A. 978.)
119. 	Plaintiff argues that Mr. Griffin held no more than 490 shares after
1 December 2018, also citing to the GIA Share Records. (Br. Opp. Defs.’ Mot. 24–25.)
Plaintiff alleges in the alternative, in the same verified Second Amended Complaint,
that Mr. Griffin held only 490 of GIA’s 1000 outstanding shares, Mr. Loyd held 345
shares, and Mr. Patton held 165 shares, and that Mr. Griffin therefore did not have
majority shareholder status. (SAC ¶¶ 13, 93.)
120. 	Further, Plaintiff’s expert, Gregory Thomas Reagan, calculated the number
of shares held by each individual on 1 December 2018, finding that Mr. Griffin held
490 shares, Mr. Loyd held 345 shares, and Mr. Patton held 165 shares. (J.A. 2952.)

For this opinion, Mr. Reagan cites to and relies on the same GIA Share Records that
Defendants argue show that Mr. Griffin held 990 shares. (J.A. 2201.)
121. 	These rivaling contentions are further complicated by Plaintiff’s Brief in
Opposition to Defendants’ Motion for Summary Judgment, where Plaintiff states that
“GIA was a closely held corporation, and so Griffin, the majority shareholder and sole
director, owed Mr. Loyd fiduciary duties[.]” 	(Br. Opp. Defs.’ Mot. 23 (emphasis
added).) Yet later in the same section of Plaintiff’s brief concerning Counts One and
Two, Plaintiff contends that Mr. Griffin lost that majority status at the time
Mr. Patton became a shareholder, and that Mr. Griffin’s unilateral conduct thereafter
was ultra vires.16 (Br. Opp. Defs.’ Mot. 24.)
122. 	Majority shareholders, by virtue of their majority status, may hold control
over the corporation and therefore owe a duty to protect the interests of minority
shareholders, who “can act and contract in relation to the corporate property only
through the former.” Gaines v. Long Mfg. Co., 234 N.C. 340, 344 (1951). Additionally,
in certain circumstances, a minority shareholder exercising actual control over a
corporation may owe fiduciary duties to the other shareholders. See Corwin, 371 N.C.
at 616–17. “As a necessary prerequisite for a minority stockholder to exercise actual
16 Mr. Loyd also contends that the vote taken at the 12 March 2020 special meeting of the
directors and shareholders of GIA was improper. Mr. Loyd argues that the meeting, and the
vote taken, were “bogus” because (1) all shareholders did not consent to the meeting, or to
the adoption of any resolutions taken at the meeting, and (2) the minutes of the meeting
falsely report that there was a GIA shareholder vote authorizing GIA’s repurchase of
Mr. Loyd’s shares, though there was no such vote. (Br. Opp. Defs.’ Mot. 13–14.) These acts
by Mr. Griffin, Plaintiff argues, failed to comply with GIA’s bylaws, were at odds with GIA’s
governing documents, and, therefore, were ultra vires. (Br. Opp. Defs.’ Mot. 25–27.)

control, 	then, 	the 	stockholder’s 	power 	must 	be 	so 	potent 	that 	independent
directors . . . cannot freely exercise their judgment, fearing retribution.” Id.
123. 	The 	number 	of 	shares 	Mr. Griffin 	held 	at 	the 	time 	Mr. Loyd 	was
terminated, and upon the sale of GIA to Leavitt Group, and the effect such a
determination may have on Mr. Griffin’s fiduciary duties, if any, directly to Mr. Loyd,
are disputed material facts necessary to the determination of these claims. 	Thus,
summary judgment would be improper on both Counts One and Two.
124. 	Therefore, Defendants’ Motion for Summary Judgment as to Counts One
and Two of the Second Amended Complaint is DENIED, except as stated herein at
Part V.E.1.i for the period prior to 25 June 2018.
2. 	Counterclaim One
125. 	Defendants 	contend 	that 	summary 	judgment 	is 	appropriate 	on 	their
Counterclaim One because Mr. Loyd: (1) owed GIA a fiduciary duty as its corporate
officer from 1 July 2018 through March 2020; (2) breached that duty when he directed
employees to issue false COIs; and (3) thereby caused significant damage to GIA.
(Defs.’ Br. Supp. 13–15.)
126. 	The Court first notes that, because Defendants seek “offensive summary
judgment on their own claim, they must show ‘that there are no gaps in [their] proof,
that no inferences inconsistent with [their] recovery arise from the evidence, and that
there is no standard that must be applied to the facts by the jury.’ ” Ford v. Jurgens,
2021 NCBC LEXIS 10, at **3 (N.C. Super. Ct. Feb. 2, 2021) (quoting Parks Chevrolet,
Inc., 74 N.C. App. at 721).

127. 	“A corporate officer owes a fiduciary duty to the corporation.” Meiselman v.
Meiselman, 58 N.C. App. 758, 775 (1982); Aecom Tech. Corp. v. Keating, 2012 NCBC
LEXIS 9, at **5 (N.C. Super. Ct. Feb. 6, 2012). 	An officer of a North Carolina
corporation is required to perform his duties “(1) [i]n good faith; (2) [w]ith the care an
ordinarily 	prudent 	person 	in 	a 	like 	position 	would 	exercise 	under 	similar
circumstances; and (3) [i]n a manner [they] reasonably believe[] to be in the best
interests of the corporation.” N.C.G.S. § 55-8-30(a). Importantly, “[this] standard of
conduct is subject to review under the business judgment rule.” 	State v. Custard,
2010 NCBC LEXIS 9, at *55 (N.C. Super. Ct. Mar. 19, 2010). 	The officer’s duties
“must be judged in the context in which they occur.” 	Lee v. McDowell, 2022 NCBC
LEXIS 51, at **23 (N.C. Super. Ct. May 26, 2022).
128. 	Further, “[e]vidence that a [director] was inattentive, uninformed, acted in
bad faith, or made a decision that is unreasonable may be considered in determining
that the business judgment rule does not apply to protect alleged misdeeds.” Emrich
Enters. v. Hornwood, Inc., 2022 NCBC LEXIS 19, at *45–46 (N.C. Super. Ct. Feb. 15,
2022) (applying the business judgment rule to the actions of managers). “A reviewing
court’s focus must be on the process undertaken by the [corporate fiduciary], not the
content of the decision made.” McDowell 2022 NCBC LEXIS 15, at **27–28. While
“questions of motive and a director’s state of mind may arise [during this analysis],
the existence of those issues does not automatically preclude summary judgment.
Concomitantly, there may be instances in which a director’s or officer’s motive or state
of mind is a question for the jury.” 	Custard, 2010 NCBC LEXIS 9, at **53. 	“The

Court has a significant gatekeeper role in determining which factual circumstances
warrant submission of bad faith issues to a jury.” Id. “[I]f there is any question as to
the weight of evidence summary judgment should be denied.” In re Will of Jones, 362
N.C. 569, 573 (2008) (citations omitted).
129. 	Plaintiff argues that Defendants have not shown that Mr. Loyd failed to
“act in good faith and with due regard to [GIA’s] best interests.” 	(Br. Opp. Defs.’
Mot. 15 (quoting Consol. Planning, Inc., 166 N.C. App. at 293).) 	Rather, Mr. Loyd
contends that he honestly believed his decisions were in the best interest of GIA, and
that he issued false or inaccurate COIs because it was agency policy to make
accommodations of this type to insurance clients. (Br. Opp. Defs.’ Mot. 15–16.)
130. 	Mr. Loyd became GIA’s vice president following the merger of LIA into GIA,
and the evidence indicates that he served in that capacity until his termination.
(J.A. 965–66.) Therefore, Mr. Loyd owed fiduciary duties to GIA as an officer of the
company. 	It is undisputed on this record that Mr. Loyd issued false or inaccurate
COIs and directed GIA employees to do the same. 	The primary issue, therefore, is
whether it was a breach of the fiduciary duties he owed GIA as its officer, and whether
any such breaches proximately caused the damage alleged by Defendants.
131. 	Plaintiff contends that he believed he was acting in GIA’s best interest
because he did not realize that issuing the COIs was unlawful until the NCDOI and
Nationwide investigations. 	(Br. Opp. Defs.’ Mot. 16.) 	In support of his argument,
Plaintiff cites to the Armstrong Lawn COI, (J.A. 371, 1159–63), contending that it is
an example of his acting in good faith.

132. 	Armstrong Lawn was a “one-person firm” whose lawncare client “refused
to pay unless Armstrong could produce proof of workers’ compensation coverage.”
(Br. Opp. Defs.’ Mot. 16–17.) Mr. Loyd issued Armstrong Lawn a “ghost policy,” which
is a “minimum premium proof of workers’ compensation coverage that does not
actually cover anyone.” (Br. Opp. Defs.’ Mot. 17.) While Armstrong Lawn did have a
commercial insurance policy with GIA, the company would not receive payment for
work done unless it produced a ghost policy. 	(Br. Opp. Defs.’ Mot. 17.) 	Plaintiff
contends that he has a similar explanation for every false COI he issued, and,
therefore, that he honestly believed his decisions were in the best interest of GIA.
(Br. Opp. Defs.’ Mot. 18.)
133. 	Defendants argue that issuing false or inaccurate COIs is a breach of the
standard of care for insurance agents. (Defs.’ Reply 14.) While this may be true, the
inquiry is whether it was a breach of the duties Mr. Loyd owed to GIA as its officer,
not as an insurance agent for it.
134. 	Since Defendants seek affirmative summary judgment, and they have
failed to show that there are no gaps in their proof given that there remains an issue
as to whether Mr. Loyd breached a fiduciary duty owed to GIA as its officer if his
actions were taken in good faith, and that there remains a question as to the weight
of this evidence, summary judgment would be improper. 	Accordingly, Defendants’
Motion for Summary Judgment as to Counterclaim One is DENIED.

F. 	Count Three: Conversion
135. 	Defendants request summary judgment on Plaintiff’s Count Three for
conversion, which alleges that Defendants “took, and then transferred” Mr. Loyd’s
GIA shares without authorization, and that those shares “were [his] duly owned
personal property.” (SAC ¶ 195.) Further, Mr. Loyd alleges that Defendants wrongly
exercised rights of ownership over those shares, and that those actions worked to the
exclusion of his ownership rights in them. (SAC ¶¶ 196–97.)
136. 	“The tort of conversion is well defined as ‘an unauthorized assumption and
exercise of the right of ownership over goods or personal chattels belonging to
another, to the alteration of their condition or the exclusion of an owner’s rights.’ ”
Peed v. Burleson’s Inc., 244 N.C. 437, 439 (1956) (citation omitted). 	“There are, in
effect, two essential elements of a conversion claim: ownership in the plaintiff and
wrongful possession or conversion by the defendant.” 	Variety Wholesalers, Inc. v.
Salem Logistics Traffic Servs., LLC, 365 N.C. 520, 523 (2012). 	In cases where
defendant comes into possession of plaintiff’s property lawfully, plaintiff must show
that it made a demand for the return of the property that was refused by the
defendant. Hoch v. Young, 63 N.C. App. 480, 483 (1983) (citations omitted).
137. 	Defendants’ only argument here is that the “existence and enforceability of
the [25 June 2018] Shareholders’ Agreement is fatal to Plaintiff’s claim” because it
compels him to return his GIA shares to the company. (Defs.’ Br. Supp. 26.) However,
a genuine issue of material fact remains as to whether there was mutual consent of
all parties to modify the 25 June 2018 Shareholders’ Agreement, if any such

modification created a valid and enforceable agreement, and if so, what the terms of
that modification were, including whether an enforceable agreement existed between
the parties that required Mr. Loyd to transfer his shares in GIA to the company if he
was terminated as an employee. 	Therefore, Defendants’ Motion for Summary
Judgment as to Count Three is DENIED.
G. 	Count Four: Unjust Enrichment
138. 	Defendants request summary judgment on Plaintiff’s Count Four. Plaintiff
alleges that he may recover in equity if there is no alternative remedy at law for the
injury he allegedly suffered when Defendants took and transferred his shares in GIA
without his consent. (SAC ¶¶ 200–01.)
139. 	“In North Carolina, to recover on a claim of unjust enrichment, Plaintiff
must prove: (1) that it conferred a benefit on another party; (2) that the other party
consciously 	accepted 	the 	benefit; 	and 	(3) 	that 	the 	benefit 	was 	not 	conferred
gratuitously or by an interference in the affairs of the other party.” Cty. of Wake PDF
Elec. & Supply Co., LLC v. Jacobsen, 2020 NCBC LEXIS 103, at *29 (N.C. Super. Ct.
Sept. 9, 2020) (citing Se. Shelter Corp. v. BTU, Inc., 154 N.C. App. 321, 330 (2002)).
140. 	Here, Plaintiff’s unjust enrichment claim rests on the same evidence as the
claim for conversion. Where a claim for unjust enrichment rests on the same evidence
as a claim for conversion, and that claim for conversion survives the motion for
summary judgment because an issue of material fact remains, the motion for
summary judgment with respect to the claim for unjust enrichment must also be
denied. 	See Lau v. Constable, 2019 NCBC LEXIS 71, at *32 (N.C. Super. Ct. Sept.

24, 2019) (“[B]ecause the Court has determined that there is a genuine dispute as to
the facts forming the basis for [the] claim for conversion, Plaintiffs’ motion for
summary judgment on [the] claim for unjust enrichment must also be DENIED”).
141. 	Given that the claim for conversion remains, Defendants’ Motion for
Summary Judgment as to Count Four is DENIED.
VI. 	CONCLUSION
142. 	For the foregoing reasons, the Court hereby GRANTS in part and DENIES
in part the Cross-Motions for Summary Judgment as follows:
a. 	As to Plaintiff’s Count One for breach of fiduciary duty against
Mr. Griffin, Defendants’ Motion for Summary Judgment is GRANTED in
part and that claim is DISMISSED with prejudice to the extent it is based
on a partnership relationship, and except as expressly granted herein, the
motion is otherwise DENIED;
b. 	As to Plaintiff’s Count Two for constructive fraud, Defendants’
Motion for Summary Judgment is GRANTED in part and that claim is
DISMISSED with prejudice to the extent it is based on a partnership
relationship, 	and 	except 	as 	expressly 	granted 	herein, 	the 	motion 	is
otherwise DENIED;
c. 	As to Plaintiff’s Count Three for conversion, Defendants’ Motion for
Summary Judgment is DENIED;
d. 	As to Plaintiff’s Count Four for unjust enrichment, Defendants’
Motion for Summary Judgment is DENIED;

e. 	As to Defendants’ Counterclaim One for breach of fiduciary duty,
Defendants’ Motion for Summary Judgment is DENIED;
f. 	As to Defendants’ Counterclaim Two for breach of the Merger
Agreement, 	Plaintiff’s 	Motion 	for 	Partial 	Summary 	Judgment 	is
GRANTED, and that claim is here by DISMISSED with prejudice;
g. 	As to Defendant’s Counterclaim Three for fraud in the Merger
Agreement, 	Plaintiff’s 	Motion 	for 	Partial 	Summary 	Judgment 	is
GRANTED, and that claim is hereby DISMISSED with prejudice;
h. 	As to Defendants’ Counterclaim Five for violation of the UDTPA,
Plaintiff’s Motion for Partial Summary Judgment is GRANTED, and that
claim is hereby DISMISSED with prejudice. 	Defendants’ Motion for
Summary Judgment is therefore DENIED;
i. 	As to Defendants’ Counterclaim Six for breach of the Associate Agent
Agreement, Plaintiff’s Motion for Partial Summary Judgment is DENIED;
and
j. 	As to Defendants’ Counterclaim Seven for breach of contract seeking
specific performance of the Shareholders’ Agreement, the Cross-Motions for
Summary Judgment are DENIED.
IT IS SO ORDERED, this the 27th day of March, 2023.
/s/ Michael L. Robinson
Michael L. Robinson
Special Superior Court Judge
for Complex Business Cases