This is the last Orders of Significance Newsletter you will be able to read unless you become a paid subscriber to my Newsletter.  I really like writing about the Business Court’s Orders of Significance.  They are shorter than the Court’s Opinions, usually make only one or two significant points that I find interesting enough to write about, and are more easily digested by me.

The Business Court handed down 11 orders of Significance in April 2026. This Newsletter covers four of them (and one from May, in order to double up on decisions in Mr. Marilley’s case). The remaining seven from April? I wrote about one of them last month (Anderson v. Triad Radiology Assocs., PLLC, 2026 NCBC Order 34 (Houston, J.), Three of them are Orders on Designation (which I do not write about) and three didn't make my cut for this edition (State of N.C. v. MV Realty PBC, LLC, 2026 NCBC Order 41 (Davis, J.)(entering a Consent Judgment for $1 million+ in favor of the NC Attorney General for “consumer restitution” after he obtained partial summary judgment against the “entity Defendants” in 2026 NCBC 2 (Davis, J.); Lexington Ins. Co. v. State of N.C., 2026 NCBC Order 36 (Houston, J.)(denying motion to stay case in favor of parallel federal action); and Gray Constr., Inc. v. Future Meat Techs., Inc., 2026 NCBC Order 43 (Davis, J.)(the Court allows an extension of the automatic stay allowed under NC’s receivership law [similar to the automatic stay permitted under 11 U.S.C. §362 of the federal Bankruptcy Code]).

There is no Rule of Civil Procedure that is to be more liberally construed than Rule 15, which provides that “leave to amend [a pleading] shall be freely given when justice so requires.” Vaughan v. Mashburn, 371 N.C. 428, 434 (2018)

But there are limits to that liberality, as pointed out by Judge Houston in Estevez v. C&S Com., LLC, 2026 NCBC Order 39 (Houston, J.) A Motion to Amend can be denied for” undue delay, bad faith, dilatory motive, repeated failure to cure deficiencies, undue prejudice and futility of the amendment.” Op. ¶13.

The Motion to Amend brought by the plaintiff in this case was to add three entirely new defendants to the action and six new claims for relief was brought nearly a year after the filing of the original Complaint.

Judge Houston denied the motion to amend based on the “undue delay” that he perceived. The Court had entered a Case Management order in August 2025, but the Plaintiff did not begin any discovery efforts until November 2025. He said that “This delay in commencing discovery . . .  is largely unexplained and is inconsistent with general principles governing efficient and diligent litigation. Op. ¶8.

He also trotted out a provision from the North Carolina General Rules of Practice which I had not heard of before. Rule 8 of those Rules provides that ““Counsel are required to begin promptly such discovery proceedings as should be utilized in each case and are authorized to begin even before the pleadings are completed.” That same principle is bolstered by BCR 10.4(a), which says that “These rules do not discourage the parties from beginning discovery before entry of the Case Management Order, but the presumptive discovery period, including both fact and expert discovery, is seven months from the date of the Case Management Order.”)

He denied the motion to amend, stating that “Plaintiffs unduly delayed and were dilatory in their failure to promptly commence discovery after the filing of the case and after entry of the Case Management Order, delaying service of discovery requests for months in each instance. Op. ¶18.

The lack of diligence displayed by plaintiffs in pursuing discovery may have been enough, standing alone, for Judge Houston to deny the Motion to Amend, but he also stated that the proposed amendment “would dramatically alter the scope of this litigation, more than doubling the number of parties, adding at least six new causes of action, and expanding an existing cause of action for unjust enrichment.”  Op. ¶22.  This, in turn, would require the reopening of discovery and delayed filing of dispositive motions and delay the impending trial or any other disposition of the case.”

Moral of this story?  Start discovery upon the filing of your complaint or at least shortly thereafter.  Certainly so if you have your case in front of Judge Houston.

If you are an anxious, worry prone lawyer practicing in the area of state law of receiverships, you’ll probably be interested in Allianz PCREL US Debt S.A. v. BLV Ascend LLC, 2026 NCBC Order 35 (Robinson, J.).

The Plaintiff there had filed a complaint for the appointment of a receiver, along with a second claim for relief for monetary recovery against the guarantors of the principal Plaintiff’s obligations. Tens of millions of dollars were involved.

In his July 1, 2025 Order appointing the receiver, Judge Robinson stayed the action brought by the plaintiff against the guarantors (the “Guarantor claim”) for a period of 60 days. That sixty-day stay is permitted by G.S. §1-507.42.

When the sixty-day stay period ended, Judge Robinson entered a Case Management Order for a deadline for discovery to be conducted between Plaintiff and the Defendant guarantors. The Plaintiffs, apparently not wanting to conduct any discovery on their Guarantor claim, moved to dismiss it, but seemed to feel that the consent of the court was necessary pursuant to rule 41(a)(2) of the North Carolina Rules of Civil Procedure (stating that no “action or any claim therein shall . . . be dismissed at the plaintiff’s instance save upon order of the judge and upon such terms and conditions as justice requires.”).

Plaintiff was concerned that if it dismissed its guarantor claim, that the risk would be presented of the Defendants or the Court seeking termination of the receivership in the absence of the claim for monetary relief. Op. ¶10. Judge Robinson said he found “no basis for such concern.” Id.

Judge Robinson also observed that the consent of the Court was not necessary for the dismissal. He said that “[w]hile courts may play a productive part in the resolution of legal disputes, it is clearly unnecessary for a court to intervene to do something that a party may accomplish for itself.” Order ¶8. Rule 41(a)(1) says that a party may dismiss any action or claim therein “without order of court (i) by filing a notice of dismissal at any time before the plaintiff rests his case.”

Any concern by the plaintiff that it might lose its receivership due to his dismissal of the guarantor claim should have been allayed by G.S. §1-507.37(a) which provides that “a receivership does not terminate until the court enters an order discharging the receiver and terminating receivership upon a finding that” the circumstances no longer warranted continuation of the receivership. Op. ¶13.

If this unusual situation keeps you awake at night, you can rest easy.  Or you could just take a Xanax.

Congratulations! You’ve been awarded the prestigious honor of being named a North Carolina Super Lawyer or a member of the North Carolina Legal Elite in your area of practice.  That entitles you to buy a bunch of bric-a-brac from the awarding entity with your name on it.

But are those honors really worth anything? Well, Judge Earp made specific reference to them in deciding on a petition for attorneys’ fees in Charles Schwab & Co. v. Marilley, 2026 NCBC Order 49 (Earp, J.).

In assessing the reasonableness of the hourly rate of Attorney ES, she stated in her Order that he ”has been named to North Carolina Super Lawyers—Rising Stars (2018–25) and Business North Carolina’s “Legal Elite”—Litigation/Young Guns (2017–25).”

I have never been named a “rising star” or a “young gun,” but those categories were created long after I was way too old for them. I have some honors that I am very proud of, but I would never have used those as justification to any Court for the fees that I had charged.

Attorney ES’ approved hourly rate was the predicate for an award of $90,497 in attorneys’ fees to be paid by Defendant Peter Marilley. Those fees were awarded based on Judge Earp’s previous ruling in the case awarding Defendant Peter Marilley’s daughter (his co-Defendant, Elizabeth), attorney’s fees pursuant to rule 11 of the North Carolina Rules of Civil Procedure and NC Gen. Stat §6 – 21.5.  I wrote about that Opinion, Charles Schwab & Co. v. Marilley, 2026 NCBC 7, back in February.

Mr. Marilley has a deadline of June 30 to pay the $90,000 in fees awarded.

I ended my post about the decision of Judge Earp awarding Elizabeth Marilley sole control of the brokerage account set up for her by her grandfather with Charles Schwab & Co., and directing Schwab to immediately disburse those funds to Ms. Marilley with these words: “[h]aving read in detail about Father Marilley’s litigation persistence, I doubt that this Opinion will lay this controversy fully to rest.”

I was right about that. After Mr. Marilley’s Notice of Appeal was filed, Schwab moved to stay the disbursement of those funds. Mr. Marilley filed his own Motion for similar relief about a week later. Judge Earp dealt with those Motions in Charles Schwab & Co. v. Marilley, 2026 NCBC Order 42.

Wait a minute! Does Judge Earp still have jurisdiction over this already appealed case to grant that type of relief? Section 1 – 294 of the General Statutes provides that when an appeal is perfected “it stays all further proceedings in the court below upon the judgment appealed from.”

Judge Earp accepted the arguments of Schwab and Mr. Marilley that the portion of her Opinion ordering that the restrained assets be released immediately to Ms. Marilley was essentially a mandatory injunction.

She found that she had the discretionary power pursuant to Rule 62(c)to grant an injunction pending appeal. That rule says that:

N.C. R. Civ. P. 62(c).

Although Judge Earp concluded that she had the power to grant the relief requested by Schwab and Mr. Marilley, they both failed to prove to her that they would suffer prejudice or irreparable harm if a stay was not issued.  She refused to provide a stay.

I don't think that I have ever seen a case where the parties’ efforts to keep certain documents under seal have been as annoying as those in the Davis v. HCA Healthcare case.

The documents in question? I wrote about the parties’ efforts to keep documents that they said contained "competitive health care information" under seal in February, in the order in Davis v. HCA Healthcare, Inc., 2026 NCBC Order 24 (Davis, J.).

To repeat myself from that past writing:

The documents in question are for the most part the “managed care contracts” between the Defendants and commercial health insurance providers (like Aetna, Blue Cross, and Cigna). If you are unaware of what a managed care contract is, one healthcare provider defines it as “an agreement between a medical facility and an insurance company to provide patient care while the latter covers the cost of these services.” (from peregrinehealth.com). If you are ever told that a doctor who you want to see is not in your “network,” your insurance is subject to a managed care contract. The managed care contract defines the rates, terms, and conditions under which providers deliver services to patients.

I assume that these clients have persuaded their counsel that allowing the opposing party to obtain access to these documents will be tantamount to a release of the nuclear codes. Without being dismissive of their position, I am sure that these parties have some legitimate concerns about their "competitive health care information” being made visible to their competitors.

That has led these parties to filing what Judge Davis called "an unusually large number of motions in [the] case” requesting that the Court maintain certain documents under seal either in whole or in part. Order ¶3.

In his last Order on the subject, in April 2026, Davis v. HCA Healthcare, 2026 NCBC Order 44 (Davis, J.), Judge Davis made the following statements indicating his displeasure with the Motions to Seal:

Through the present Motions, the Court faces an extraordinary request—that the Court seal specific portions of literally hundreds of documents that have been filed in this case. Order ¶1.

Given the extreme demand on the Court’s resources that would be required for the Court to adequately consider such sealing-related arguments and to make appropriate findings as to the wealth of documents at issue, the Court finds that the appointment of a referee regarding all presently existing and future sealing issues in this case would promote the efficient administration of justice and comport with notions of judicial economy. Order ¶36.

[T]he resolution of the present Motions to Seal will require the consideration of highly fact-specific arguments to an extremely large number of documents and will require the expenditure of significant time. Such an undertaking would not only be incredibly burdensome for the Court to undertake on its own but would also cause significant delay in the Court’s ability to resolve the complex and important substantive issues raised in this putative class action. Order ¶41.

Judge Davis stated his intent to appoint a Referee to resolve all the Motions to Seal in the case and indicated that he might appoint a Referee to resolve all the issues relating to the proposed sealing.

I'm getting ahead of myself, but in May 2026, Judge Davis did what he telegraphed. He appointed Attorney Lauren Schantz of Rayburn Cooper & Durham, P. A. to undertake the unpleasant task of evaluating the sealability of these documents as Referee. Davis v. HCA Healthcare, Inc, 2026 NCBC 52 (Davis, J.) From googling Ms. Schantz, I see that she has no declared expertise in the area of healthcare law, but she has the pedigree of having served as a law clerk to two of the Business Court Judges (Judges Bledsoe and Conrad). She is to be compensated at the rate of $360 per hour and was given broad authority by Judge Davis in his May Order in undertaking her task.