The Business Court handed down 11 opinions in July 2026. I wrote about six of them in the last Newsletter. This edition contains four of the remaining five. The fifth (covering Judge Davis’ monstrously long Opinion in Highlights Healthcare, LLC v. Abell, 2026 NCBC 67 (Davis, J.) (95 pages long! and 303 paragraphs) will be delivered separately later this week). Before you click on a heading below, please remember that you will not be able to view much of the content without becoming a paid subscriber. My upcoming treatment of the numerous citeworthy points in Judge Davis’ Opinion in Highlights Healthcare worth twice that alone! Don't miss it, and save yourself the hours that you would otherwise spend reading it on your own!

The case of Gaston Cap., LLC v. Kellar, 2026 NCBC 71 (Davis, J.) looks like it should be a simple collection action, but it is a whole lot more complicated than that.

The facts are simple: the Plaintiffs, a number of private equity funds and some individuals, loaned more than $10 million to companies operated by Defendant Kellar. The loans were memorialized by Promissory Notes. They reached their maturity dates in October 2022. Plaintiffs filed their lawsuit after the three-year statute of limitations set out in G. S. §1-52 had passed.

That should have resulted in Judge Davis granting the Defendants’ Motion to Dismiss based on the expiration of the statute of limitations, right? Well, there is much more to this case than a simple collection action.

Waiving the Statute of Limitations Defense

The first issue that Judge Davis confronted was whether the Defendants had waived the right to raise the statute of limitations as a defense. It’s possible to do that. “A party may either by agreement or conduct estop himself from pleading the statute of limitations as a defense to an obligation.” Op. ¶43 (quoting Franklin v. Franks, 205 N.C. 96, 97–98 (1933)).

There were 16 Promissory Notes. Two of them contained the following language: “[t]he right to plead any and all statutes of limitations as a defense to any demands hereunder is hereby waived to the fullest extent permitted by law.” Op. ¶42.

Two other Notes contained this language: “[u]pon default the holder of this Note may employ an attorney to enforce the holder’s rights and remedies[.] . . . The failure to exercise any such right or remedy shall not be a waiver or release of such rights or remedies to exercise any of them another time.” Op. ¶45.

Judge Davis ruled that the first clause was an explicit waiver of the statue of limitations and was effective to bar Defendants’ Motion to Dismiss.  The second clause, however, was insufficient. He relied on a Utah appellate court decision which held that:

Fraudulent Concealment Claim Survived

Ten of the Promissory Notes did not contain any language deemed sufficient to waive the statute of limitations defense. Judge Davis granted the Motion to Dismiss on the breach of contract claim as to those ten Notes. My rough calculation of the total amount lent on those time-barred notes (based on my review of the Amended Complaint) was $4,741,234.71. So did Plaintiffs’ claim for that nearly $5 million lent (actually much more with interest) vanish into the ether due to their inattention to the three-year statute of limitations and the grant of the Motion to Dismiss?

Luckily not for the Plaintiffs because Judge Davis let stand Plaintiff’s claim for fraudulent concealment. This claim alleges that the Defendants had concealed their intention to assign the ownership of the inventions to another entity controlled by Defendant Kellar and thus depriving the Plaintiffs of their anticipated repayment source.

[If you want a little more detail on facts surrounding that claim: Defendant Kellar was an experienced developer of devices for ligament repair procedures. Plaintiffs had lent him and his companies millions of dollars with the understanding that they would be repaid through future capitalization of the devices suggesting that the entities to which they were lending would own the intellectual rights to the devices.  In contradiction of that understanding, Defendant Kellar transferred or assigned the intellectual property rights in the devices to a company which was not liable on the Notes. Op. ¶10-12.] without revealing this to the Plaintiffs.

Judge Davis held that the plaintiffs had adequately pleaded their claim for fraudulent concealment, although he expressed his usual skepticism about whether the Plaintiffs would be able to offer more specificity for this claim when summary judgment time came around. Op. ¶64.

No Fiduciary Duty Claim

One other argument raised by the Plaintiffs deserves a mention. They had argued that the Defendants had owed them a fiduciary duty. Judge Davis shot that claim down pretty quickly, observing that “North Carolina courts have long held that no fiduciary relationship exists when the parties are in a debtor-creditor relationship.” Op. ¶68