STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION DURHAM COUNTY 25CV001214-310 KELLY F. MOORE, individually and as Executor of the ESTATE OF DRUE A. MOORE; MILES MOORE, individually and on behalf of his minor brother, COLE MOORE; KMC MOORE LLC, as Trustee of the REDWOOD TRUST, u/a/d April 10, 2017; and RICK GRAVES, as Trustee ORDER ON REDWOOD WI of the REDWOOD LIFE HOLDINGS, LLC'S MOTION TO INSURANCE TRUST u/a/d REALIGN AS PLAINTIFF AND November 15, 2018, ORDER TO SHOW CAUSE AS TO
WARD AND SMITH, P.A. AND Plaintiffs, ATTORNEYS FROM THE FIRM APPEARING IN THIS ACTION v. ROBERT SCOTT BROOKS; WINTHROP INTELLIGENCE, LLC; REDWOOD WI HOLDINGS, LLC; REDWOOD RE I, LLC; REDWOOD RE II, LLC; TETON GLOBAL VENTURES LLC; and DAC WORLDWIDE LLC,
Defendants. 1. This matter is before the Court on Redwood WI Holdings, LLC’s motion to realign as a “Nominal Plaintiff” in this action. (ECF No. 102). 2. Redwood WI Holdings’s counsel represent that they have consulted all other counsel of record for the remaining parties and that counsel for the remaining parties do not consent to the relief requested. (ECF No. 102, ¶ 10). However, the remaining parties have not filed a brief in response to the motion or otherwise responded to the motion.
3. The Court, in its discretion, may determine, “the procedural processes which will best promote the administration of justice,” and act accordingly. Simon v. Raleigh City Bd. of Ed. , 258 N.C. 381, 389 (1963) (citation omitted). The Court’s authority includes realigning the parties “[t]o simplify the pleadings and more accurately reflect the claimants’ interests” when the current alignment is “confusing and unworkable.” Mary Annette, LLC v. Crider , 2023 NCBC LEXIS 28 at *3 (N.C. Super. Ct. Feb. 23, 2023) (determining the parties’ alignment to be unworkable where “‘among the procedural oddities, the original plaintiff [wa]s purportedly asserting counterclaims against the original defendant.’” (citation and internal punctuation omitted)).
4. Here, with its motion, Redwood WI Holdings seeks to realign from a “Nominal Defendant” to a “Nominal Plaintiff” in this action. (ECF No. 102 at 3). 5. While the motion casts Redwood WI Holdings as a current nominal defendant, however, Plaintiffs filed suit against Redwood WI Holdings as a full defendant in the case. (ECF No. 3 at 24, 26, 33). Specifically, Plaintiffs assert two direct causes of action for declaratory judgment against it, seeking to have costs “taxed against Defendants” (including Redwood WI Holdings), and seeking an order “imposing a constructive trust on all assets owned, possessed, or controlled by Defendants that were wrongfully obtain ed” (including Redwood WI Holdings). (ECF No. 3 at 24, 26, 33 (listing “Redwood WI Holdings” among the defendants against which each cause of action is asserted and referring to all “Defendants” with no definition excluding Redwood WI Holdings)).
6. Plaintiffs are currently represented in this litigation by attorneys E. Bradley Evans, Gavin B. Parsons, and Jordan M. Spanner of the law firm Ward and Smith,
P.A.
7. On 2 September 2025, defendant Winthrop Intelligence, LLC asserted crossclaims against defendant Redwood WI Holdings seeking monetary damages, costs, and other relief . (ECF No. 85 at 33–46 ).
8. On 2 October 2025, those same attorneys made appearances in this action on behalf of current defendant Redwood WI Holdings — despite Plaintiffs’ outstanding declaratory judgment causes of action and requests for costs and a constructive trust against Redwood WI Holdings — and filed the instant motion to realign and a motion to dismiss defendant Winthrop Intelligence, LLC’s crossclaims against Redwood WI Holdings, along with supporting memoranda. (ECF Nos. 102 – 105).
9. With its motion, Redwood WI Holdings notes that “Plaintiffs have always claimed effective control of Redwood WI Holdings” and that Plaintiffs have now taken “actual control” over the company. (ECF No. 102, ¶ 4).
10. Accordingly, Redwood WI Holdings argues that its interests in this action are more aligned with Plaintiffs’ interests, (ECF No. 102, ¶ 5), though it “does not join Plaintiffs in any pending claims,” including Plaintiffs’ declaratory causes of action asserted against Redwood WI Holdings, and wishes to “be a nominal party only.” (ECF No. 102, ¶ 9).
11. Redwood WI Holdings does not, however, explain how it could be considered a nominal party to this action now or upon the proposed realignment when (i) Plaintiffs maintain substantive causes of action against Redwood WI Holdings for declaratory judgment, costs, and a constructive trust, and (ii) Winthrop asserts affirmative counterclaims for breach of operating agreement and expulsion against it.
12. Whether Redwood WI Holdings is listed on the caption as a plaintiff or as a defendant, it is at this time a full party to this action and not merely a nominal party, as it purports in its motion. See Party, Nominal Party, Black's Law Dictionary (12th ed. 2024) (“A party to an action who has no control over it and no financial interest in its outcome; esp., a party who has some immaterial interest in the subject matter of a lawsuit and who will not be affected by any judgment, but who is nonetheless joined in the lawsuit to avoid procedural defects.”); see also Allred v. Trexler Lumber Co. , 194 N.C. 547, 547 (1927) (noting that executrix was “ joined purely as a nominal defendant, and no separate cause of action is alleged or relief demanded as against her . ” (emphasis added)).
13. Moreover, regardless of whether the Court were to grant Redwood WI Holdings’s motion to realign, Plaintiffs would still have multiple declaratory judgment causes of action against Redwood WI Holdings, along with requests for costs, a constructive trust, and other relief that the Court might deem appropriate. Whether Redwood WI Holdings is denominated as a plaintiff or a defendant would not eliminate those adverse causes of action and, at most, might warrant recharacterizing them (e.g., as crossclaims by Plaintiffs against another plaintiff).
14. Accordingly, h aving reviewed the motion, the arguments of Redwood WI Holdings, and all appropriate matters of record, the Court determines in its discretion that there is no good cause for realigning Redwood WI Holdings as a plaintiff–– nominal or otherwise––and that that motion should be DENIED .
15. Of more concern to the Court is that the same attorneys from Ward and Smith, P.A. have now appeared in the case on behalf of Plaintiffs––on whose behalf the firm has litigated from the inception of this case––and on behalf of Redwood WI Holdings, which has been a defendant in this action since it was filed.
16. Rule 1.7 of the North Carolina Rules of Professional Conduct provides as follows: (a) Except as provided in paragraph (b), a lawyer shall not represent a client if the representation involves a concurrent conflict of interest. A concurrent conflict of interest exists if:
(1) the representation of one client will be directly adverse to another client ; or (2) the representation of one or more clients may be materially limited by the lawyer's responsibilities to another client, a former client, or a third person, or by a personal interest of the lawyer.
(b) Notwithstanding the existence of a concurrent conflict of interest under paragraph (a), a lawyer may represent a client if:
(1) the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client; (2) the representation is not prohibited by law; (3) the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal ; and (4) each affected client gives informed consent, confirmed in writing.
N.C. R. Pro. Conduct 1.7 (emphasis added). 17. Regardless of the parties’ captioned alignment in this action, Plaintiffs (and Ward and Smith, P.A. through the attorneys from the firm appearing in this action) currently assert and maintain causes of action (or “claims”) against Redwood WI Holdings in this action before the Court.
18. Under state law, this Court has inherent “authority to do all things that are reasonably necessary for the proper administration of justice.” Beard v. N.C. State Bar , 320 N.C. 126, 129 (1987); Window World of Baton Rouge v. Window World , 2022 NCBC LEXIS 58 (N.C. Super. Ct. Jun. 12, 2022), at *4; Red Valve, Inc. v. Titan Valve, Inc. , 2019 NCBC LEXIS 57, at * 39 (N.C. Super. Ct. Sept. 3, 2019).
19. This includes concurrent oversight authority of enforcement of the North Carolina Rules of Professional Conduct. See, e.g. , Couch v. Priv. Diagnostic Clinic , 146 N.C. App. 658, 665 (2001) (“h old[ing] that the trial court had authority to order [an attorney] to pay attorney’s fees for her violation of the Rules of General Practice for the Superior and District Courts and the Rules of Professional Conduct”); In re Key , 182 N.C. App. 714, 716 –18 (2007) (affirming trial court’s determination that attorneys’ con duct violated the Rules of Professional Conduct).
20. Considering the current alignment of the parties, the appearances of attorneys from Ward and Smith, P.A. on behalf of both Plaintiffs and Redwood WI Holdings in this action, and all appropriate matters of record, the Court determines in its discretion that good cause exists to require Ward and Smith, P.A. and attorneys from the firm appearing in this action to show cause as to why they should not be disqualified as counsel for either Plaintiffs or Redwood WI Holdings, or both, in this action. See Red Valve, Inc. v. Titan Valve, Inc. , 2019 NCBC LEXIS 58 at *15 (N.C. Super. Ct. Sept. 5, 2019) (“A judge’s power to admonish counsel or parties can be either sua sponte or subject to a motion from a party, such as a show cause motion.” (quoting Grubbs v. Grubbs , 252 N.C. App. 265, 2017 N.C. App. LEXIS 146, at *38 (2017))).
21. Thus, in its discretion, the Court ORDERS as follows: a. Redwood WI Holdings, LLC’s motion to realign, (ECF No. 102), is DENIED ; b. The law firm of Ward and Smith, P.A. and attorneys from the firm appearing in this action are ORDERED to show cause as to why they should not be disqualified as counsel for either Plaintiffs or Redwood WI Holdings, or both, in this action;
c. Within ten (10) days from entry of this Order, Ward and Smith, P.A. and attorneys from the firm appearing in this action are DIRECTED to file and serve a brief and any supporting evidence in response to this Order to show cause as to why they should not be disqualified as counsel for either Plaintiffs or Redwood WI Holdings, or both, in this action;
d. Any other party wishing to be heard on the Order to show cause is similarly PERMITTED , but not required, to submit a brief and any supporting evidence within ten (10) days from entry of this Order.
SO ORDERED , this 17th day of November 2025. /s/ Matthew T. Houston Matthew T. Houston Special Superior Court Judge for Complex Business Cases