Vanguard Pai Lung, LLC v. Moody
15A24
N.C.Mar 21, 2025Background
- Vanguard Pai Lung, LLC, manufacturer of knitting machines, initiated a lawsuit against William Moody and associated Nova entities for fraud and related business torts, after suspecting Moody of embezzlement and mismanagement.
- Pai Lung Machinery, a Taiwanese company, owns two-thirds of Vanguard Pai Lung; Moody, via corporate entities, controls the other third.
- Plaintiffs’ claims included fraud, conversion, embezzlement, unfair and deceptive trade practices, and unjust enrichment; defendants counterclaimed alleging contractual breaches.
- At trial, a jury found Moody and the Nova companies liable on several claims. Following judgment, Moody and the Nova entities sought judgment notwithstanding the verdict (JNOV) and other post-trial remedies, raising arguments not all preserved at trial.
- The Business Court ruled most of defendants’ JNOV arguments were waived for lack of preservation, adopted existing Court of Appeals precedent, and denied other post-trial relief on the merits. Defendants appealed to the North Carolina Supreme Court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Preservation of JNOV issues | Arguments not raised for directed verdict are waived | JNOV grounds can be broader than those in directed verdict | Only issues specifically raised in directed verdict are preserved for JNOV; defense waived. |
| Sufficiency (Fraud, Conversion, Embezzlement) | Sufficient evidence supported verdicts on claims | Insufficient evidence as to key elements of certain claims | Claims were either waived (not preserved) or, if considered, properly denied on merits. |
| Business Dissolution post-verdict | No sufficient facts for dissolution or evidence of deadlock | Company cannot function post-verdict due to conflict | Denied: no deadlock and dissolution would frustrate verdict. |
| New trial / Amended judgment | Judgment solid, no legal error or prejudicial conduct present | Sought new trial based on purported errors | Denied: Business Court ruling affirmed on all post-trial motions. |
Key Cases Cited
- Scarborough v. Dillard’s, Inc., 363 N.C. 715 (motion for JNOV is to be cautiously granted and standard applies)
- Morris v. Scenera Research, LLC, 368 N.C. 857 (articulates the sufficiency-of-evidence standard for JNOV)
- Bryant v. Nationwide Mut. Fire Ins. Co., 313 N.C. 362 (explains demanding legal standard for JNOV)
- Ragsdale v. Kennedy, 286 N.C. 130 (reiterates elements of fraud in North Carolina)
- Feibus & Co. (N.C.) v. Godley Constr. Co., 301 N.C. 294 (motion for directed verdict should state specific grounds)
- Anderson v. Butler, 284 N.C. 723 (exception for preservation in single-claim, evident cases, now limited)