IN RE: CUSTODIAL ACCOUNT OF JOHN ROBERT OLDS CUST FOR DAVIS AUSTIN OLDS UGAUTMA; DAVIS AUSTIN OLDS v. JOHN ROBERT OLDS II, individuаlly, and as Custodian of the JOHN ROBERT OLDS CUST FOR DAVIS AUSTIN OLDS UGAUTMA UNTIL AGE 21, and as Managing Member of Cressbrook Investments LLC; and CRESSBROOK INVESTMENTS LLC
25CV000166-740
STATE OF NORTH CAROLINA, POLK COUNTY, IN THE GENERAL COURT OF JUSTICE, SUPERIOR COURT DIVISION
2026
2026 NCBC 58
Shirley, Judge
1. THIS MATTER is before the Court upon Defendants’ Partial Motion to Dismiss and Plaintiff‘s Motion to Dismiss Defendant Olds’ Counterclaim (collectively, the “Motions“). Defendants’ Partial Motion to Dismiss (Defendants’ Motion) was filed pursuant to
2. Having considered the Motions, the parties’ briefs in support of and in opposition to the Motions, the Complaint (“Complaint“)3, and other appropriate matters of record, the Court hereby GRANTS in part and DENIES in part Defendants’ Motion and GRANTS in part and DENIES in part Plaintiff‘s Motion.
Shumaker, Loop, & Kendrick, LLP, by Lucas D. Garber, Clifton Andrew Dandison, and Lynn F. Chandler, for Defendants John Olds and Cressbrook Investments, LLC.
John Stephens Law, by John M. Stephens, for Plaintiff Olds.
Shirley, Judge.
I. FACTUAL AND PROCEDURAL BACKGROUND
3. The Court does not make findings of fact when ruling on motions to dismiss under
4. Plaintiff Davis Olds (“Plaintiff“) is an adult resident of Spartanburg County, South Carolina, and attained 21 years of age on 8 February 2025.5
6. Defendant Cressbrook Investments LLC (“Cressbrook“) is a North Carolina Limited Liability Company with its principal office in Polk County, North Carolina (Cressbrook and Defendant Olds are collectively “Defendants“).7
7. Defendant Olds purports to be the Managing Member of Cressbrook Investments LLC.8
8. Plaintiff was the beneficiary of the JOHN ROBERT OLDS CUST FOR DAVIS AUSTIN OLDS UGAUTMA UNTIL AGE 21 account (the “UTMA Account“).9
9. Defendant Olds is Plaintiff‘s father and was the custodian of the UTMA account.10
10. Plaintiff alleges that “[p]ursuant to
11. Plaintiff attained 21 years of age on 8 February 2025.11
13. On or about 16 January 2025, Defendant Olds transferred $15,400 from the UTMA account.13 After that transfer, less than $100.00 remained in the UTMA account (the $1,072,400.00 transferred from the UTMA Account on 3 October 2024 and 16 January 2025 are hereinafter referred to as the “Funds“).14
14. On or about 3 December 2024, Defendant Olds told Plaintiff that Defendant Olds had “made a change to the structure of [his] educational funds by moving most of that money [from the UTMA account] into a trust-like mechanism.”15
15. Defendant Olds further told Plaintiff that he had transferred the money from the UTMA account in order to keep the Funds beyond Plaintiff‘s control because he believed Plaintiff was “not yet mature enough, experienced enough, or responsible enough to handle” the Funds.16
17. Defendant Olds claims to have “invested” the Funds in Cressbrook. Defendant Olds is the managing member of Cressbrook and claims to be an owner of a 51% interest in the company.19 Defendant Olds further claims that Plaintiff is the owner of a 49% interest in the company; such ownership interest having been acquired pursuant to the transfer of the Funds from the UTMA account.20 The value of the Funds from the UTMA account that went towards such purported acquisition remains unknown.21
18. On 25 March 2025, Plaintiff, through counsel, requested that Defendant Olds produce the company‘s operating agreement and financial records.22
19. Defendant Olds replied to the request, through counsel, that he would not produce the operating agreement or financial records unless Plaintiff signed a “confidentiality agreement,” which agreement sought to prohibit Plaintiff from using
20. On 20 May 2025, Plaintiff again, now through counsel, demanded Defendant Olds transfer all Funds to Plaintiff due to him from the UTMA account. Defendant Olds, through counsel, responded to such demand that he would not “allow [Plaintiff] to withdraw from” Cressbrook.24
21. Defendant Olds alleges that Plaintiff made several written and oral statements regarding Defendant Olds that are false and that, if true, would lead him to be condemned by reasonable members of the general community and injure his professional reputation as a defense contractor holding a security clearance.25
22. Specifically, on 2 March 2025, Plaintiff sent an email to Defendant Olds’ in-laws, which contains falsities and false implications.26 The email states, in pertinent part:
I was punished by Mom and Dad through horrible words, violence, and intimidation. They were very unlike themselves. Dad even told me that he thinks the Bible is “full of contradictions” and made fun of me and my girlfriend for saying it is the perfect Word of God. Mom defended Dad denying the Bible. I know they have spread lies through the family and that breaks my heart. They have often encouraged me to lie to you in the past . . . . As you all know, Dad created an LLC with money that he
fraudulently withdrew from my Schwab account to punish me. He also sold my car without telling me and refused to help me purchase a replacement. He will not provide for my books, food, insurance, phone, or anything else. He has put me in a position where I have no choice but to take legal action. I am also in talks with the police as they are concerned that Dad committed fraud and he could face prison time for the abuse he has perpetrated against me. I don‘t want this to happen, but he has made things so difficult that I have no choice.27
23. Additionally, on 3 March 2025, Defendant Olds alleges that Plaintiff sent an email to Defendant Olds’ parents, which contains falsities and false implications.28 The email states, in pertinent part:
. . . I was punished by Mom and Dad through horrible words, violence, and intimidation. They were both unstable, threatening to steal my money . . . . As you all know, Dad created an LLC with money that he fraudulently withdrew from my Schwab account to punish me. He also sold my car without telling me and refused to help me purchase a replacement. He will not provide for my books, food, insurance, phone, or anything else. I am also in talks with the police as they are concerned that Dad committed fraud and he could face prison time for the abuse he has perpetrated against me.29
24. Plaintiff reported to the financial aid office at Wofford College that Defendant Olds had run out of money and taken money from Plaintiff to apply to Defendant Olds’ own financial needs, leaving Plaintiff with no way to pay for college.30
26. Plaintiff continues to publish false and disparaging statements regarding Defendant Olds.32
27. On 16 June 2025, Plaintiff filed a Complaint, asserting claims against Defendant Olds for breach of fiduciary duty, conversion, fraud, constructive fraud, common law fraud, fraudulent misrepresentation, fraud in the inducement, fraudulent conveyance, unfair and deceptive trade practices, piercing the corporate veil, special/punitive damages, and a statement of sum certain.33 On 18 August 2025, Defendants filed an Answer, Affirmative Defenses, and Counterclaim in which Defendant Olds asserted a counterclaim for defamation against Plaintiff.34
28. Defendants filed a Partial Motion to Dismiss on 18 August 2025 and Plaintiff filed a Motion to Dismiss Defendant Olds’ Counterclaim on 17 September 2025.35 Through Defendants’ Motion, Defendants seek dismissal with prejudice of
II. LEGAL STANDARD
29. A motion to dismiss under
30. In deciding a
III. ANALYSIS
31. The Court will take up each claim in turn with respect to the Motions.
Defendants’ Motion to Dismiss
A. Conversion
32. The elements of a conversion claim include “(1) the unauthorized assumption and exercise of the right of ownership; (2) over the goods or personal property; (3) of another; (4) to the exclusion of the rights of the true owner.” RoundPoint Mortg. Co. v. Florez, 2016 NCBC LEXIS 18, at *127 (N.C. Super. Ct. Feb. 18, 2016). Conversion does not exist until some act is dоne which denies or violates Plaintiff‘s dominion over his rights to his property. See Wake Cnty. v. Hotels.com, L.P., 235 N.C. App. 633, 652, 762 S.E.2d 477, 489 (2014).
33. Defendants argue that Plaintiff fails to state a claim for conversion. However, the Court disagrees. Specifically, Defendants contend that the Complaint fails to allege “Dr. Olds has assumed ownership over or exercised rights with respect to Plaintiff‘s membership interest in Cressbrook” or “facts that Dr. Olds has prevented Plaintiff from exercising his rights as a member in Cressbrook under the North Carolina Limited Liability Act...”39 Defendant Olds asserts that he transferred the funds to Defendant Cressbrook in which he owns a majority interest and is the managing member.40 Plaintiff alleges Defendant Olds assumed control over funds belonging to Plaintiff without Plaintiff‘s knowledge or consent and while deceiving Plaintiff as to the status of such funds.41 Plaintiff also highlights the fact that he has alleged that Defendant Olds did so with the “express purрoses of securing his full control over the funds and denying Plaintiff access to them and has, thus far, achieved these goals.”42 Plaintiff further alleges that Defendant Olds refused his demands for
B. Fraud, Common Law Fraud, Fraudulent Representation, and Fraud in the Inducement
34. Plaintiff alleges Defendant Olds made fraudulent misrepresentations of material facts and concealed material facts as to Defendant Olds’ management and disposition of the custodial property.45
35. The essential elements of fraudulent misrepresentation are well estаblished: (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.” Lamm v. Till, 2015 N.C. App. LEXIS 250, * 13 (unpublished) (citing, Forbis v. Neal, 361 N.C. 519, 526-27 (2007) quoting Ragsdale v. Kennedy, 286 N.C. 130, 138 (1974)). Claims for common law fraud, fraudulent representation, and fraudulent inducement require a showing of the same elements. To sufficiently plead fraud consistent with the heightened standards of
36. “Because ‘silence is fraudulent only when there is a duty to speak,’ a claim based on ‘concеalment or nondisclosure’ requires the plaintiff to allege that the defendant ‘had a duty to disclose material information.’ Lawrence v. UMLIC-Five Corp., 2007 NCBC LEXIS 20, at *8 (N.C. Super. Ct. June 18, 2007) (citing Griffin v. Wheeler-Leonard & Co., 290 N.C. 185, 198 (1976)). A duty to disclose arises when the parties are in a fiduciary relationship . . . .” Maxwell Foods v. Smithfield Foods, 2023 NCBC LEXIS 20 at *5 (N.C. Super. Ct. Feb. 3, 2023).
37. Unlike fraud based upon fraudulent misrepresentation:
“[f]raudulent concealment or fraud by omission is, by its very nature, difficult to plead with particularity.” McKee v. James, 2013 NCBC LEXIS 33, at *22 (N.C. Super. Ct. July 24, 2013) (quoting Lawrence v. UMLIC-Five Corp., 2007 NCBC LEXIS 20, at *9 (N.C. Super. Ct. June 18, 2007)). Fraud claims based on omission require a plaintiff to allege:
(1) the relationship [between plaintiff and defendant] giving rise to the duty to speak; (2) the event or events triggering the duty to speak and/or the general time period over which the relationship arose and the fraudulent conduct occurred; (3) the general content of the information that was withheld and the reason for its materiality; (4) the identity of those under a duty who failed to make such
disclosures; (5) what [the defendant] gained by withholding information; (6) why plaintiff‘s reliance on the omission was both reasonable and detrimental; and (7) the damages proximately flowing from such reliance. Lawrence, 2007 NCBC LEXIS 20, at *9 (quoting Breeden v. Richmond Cmty. Coll., 171 F.R.D. 189, 195-96 (M.D.N.C. 1997)).
Vitaform, Inc. v. Aeroflow, Inc. 2020 NCBC LEXIS 132, at *46 (N.C. Super. Ct. Nov. 4, 2020).
38. Plaintiff alleges that “Defendant [Olds] owed a fiduciary duty to Plaintiff as custodian of the UTMA account.”46 There is a disagreement between the parties as to whether the custodial account is governed by the North Carolina Uniform Transfer to Minors Act (
39. Pursuant to
40. While Plaintiff alleges a number of statements made by Defendant Olds in the factual assertions section of the Complaint,47 he fails to identify which statements or assertions are false. Instead, Count 3 of his Complaint merely states that “Defendant Olds made false representations and concealed material facts as to his management of and disposition of custodial property from the UTMA account.”48 This leaves the Court to speculate as to which of the alleged statements were false. Plaintiff‘s failure to specifically identify which statements are false makes his claims based upon fraud ripe for dismissal.
41. Plaintiff now argues Defendant Olds concealed material facts from him as a basis to support his fraud сlaim.49 Plaintiff first claims that Defendant Olds concealed the fact that he had removed over $1,000,000.00 from the UTMA account and, then two months later after taking the money, told Plaintiff he had “made a change to the structure of your educational funds by moving most of that money . . . into a trust-like mechanism” only later to claim, instead, that he ‘invested’ the funds in an LLC he owns and controls.50 This argument undermines itself in that while arguing the transfers were concealed, he admits they were disclosed. This alone
42. In addition, even if the transfer of Funds was concealed from Plaintiff he has not identified any duty Defendant Olds owed to him which required Defendant Olds to disclose the transfer of Funds prior to their transfer. Any duty Defendant Olds owed to Plaintiff flows from his position as the custodiаn of the Funds. Pursuant to the duties imposed under the UTMA, Defendant Olds had a duty to (a) “keep records of all transactions with respect to custodial property . . . and shall make them available for inspection at reasonable intervals . . . by the [Plaintiff],”51 Defendant Olds was also required to provide an accounting when required by the court52; Plaintiff has failed to cite and the Court has been unable to find any requirement in
43. Plaintiff also argues that Defendant Olds’ refusal to allow him unconditional access tо the operating agreement and financial records of Defendant Cressbrook constitutes a concealment of material facts regarding the management and
44. Accordingly, and for all of the reasons discussed herein, the Court GRANTS Defendants’ Motion with respect to the fraud, common law fraud, fraudulent representation, and fraud in the inducement claims whether based on misreprеsentation or concealment of facts.
C. Constructive Fraud
45. A constructive fraud claim requires a plaintiff to allege and show (1) that the defendant “owes the plaintiff a fiduciary duty;” (2) that the defendant “breached” that duty; and, (3) that the defendant “sought to benefit himself in the transaction.” Ironman Med. Props., LLC v. Chodri, 268 N.C. App. 502, 513 (2019) quoting Crumley & Assocs., P.C. v. Charles Peed & Assocs., P.A., 219 N.C. App. 615, 620 (2012) (internal citations omitted). The primary difference between pleading a claim for constructive fraud and one for breach of fiduciary duty is intent and a showing that defendant benefitted from his breach of duty. White v. Consol. Planning, Inc., 166 N.C. App. 283, 294 (2004). This element requires a plaintiff to allege and prove that the defendant took “advantage of his position of trust to the hurt of plaintiff” and
46. Defendants contend that Plaintiff‘s constructive fraud claim fails for failure to allege facts evidencing the intent to benefit from the transaction and to harm Plaintiff. The Court does not find this argument persuasive. Plaintiff‘s claim for constructive fraud is solely based upon Defendant Olds’ handling and transfer of the Funds and statements made with respect to the same. First, Plaintiff alleges that he has been denied access to and dominion over the custodial property upon his attainment of 21 years of age.54 Second, Plaintiff alleges that Defendant Olds sought to benefit himself by ensuring unilateral control over the Funds and denying Plaintiff access to and dominion over the Funds.55 Third, Plaintiff alleges Defendant Olds has retained the Funds and claims to have used them for his own benefit by investing them in Cressbrook.56 Lastly, Plaintiff alleges that Defendant Olds sought successfully to benefit himself by maintaining and escalating his control over the life and choices of his adult son.57 The Court disagrees with Defendants that Plaintiff has failed to state a claim for constructive fraud. Accordingly, the Court DENIES Defendants’ Motion in respect to the constructive fraud claim as it relates to the
D. Fraudulent Conveyance
47. Plaintiff alleges Defendant Olds made transfers of custodial property by removing the Funds from the UTMA account to a company controlled by Defendant Olds shortly before the Plaintiff turned 21 at which time Plaintiff would have been entitled to receive such Funds.58
48. Causes of action for fraudulent conveyance in North Carolina are governed by the Uniform Voidable Transactions Act (“UVTA“) and are available exclusively in the context of debtor-creditor relationships. See BIOMILQ, Inc. v. Guiliano, 2024 NCBC LEXIS 58, at *142 (N.C. Super. Ct. Apr. 19, 2024);
49. The UVTA defines “creditor” in substantially the same manner as the United States Bankruptcy Code (“Bankruptcy Code“) as any person who has a “right
50. For the purposes of the Court‘s analysis, the Court assumes, as alleged by Plaintiff, but without deciding the issue, that a creditor-debtor relationship existed between the Plaintiff and Defendant Olds within the meaning and intent of the UVTA. The Court must therefore determine whether Defendant Olds’ transfer of custodial funds governed by the UTMA to an LLC in order to keep the funds beyond Plaintiff‘s control could constitute a voidable transfer within the meaning of UVTA.
51. Historically, “generally, any conveyance or transfer of a debtor that lessens the fund from which his creditors can expect to be repaid may have a tendency to hinder or delay them and is subject to being treated as fraudulent.”59 This concept
52. Plaintiff is correct that “[a] transfer made by a debtor is voidable as to a creditor . . . if the debtor made the transfer . . . [w]ith intent to hinder, delay, or defraud any creditor of the debtor.”62
53. A transfer under the UVTA is defined as [e]very mode, direct or indirect, absolute or conditional, voluntary or involuntary, or disposing of or parting with an asset or an interest in an asset . . . .”63 An asset is “[p]roperty of a debtor, but the term does not include . . . property to the extent it is generally exempt under non-bankruptcy law.”64
55. When the Funds were transferred to the UTMA account for the benefit of Plaintiff, they became custodial property subject to the provisions of the UTMA.65 The transfer of the Funds by Defendant Olds pursuant to the UTMA was irrevocable, and the Funds were indefeasibly vested in the Plaintiff subject to Defendant Olds’ “rights, powers, duties, and authority” as the custodian of the Funds.66 Defendant Olds’ rights and duties included the duty to “take control of the [Funds]” as well as to “collect, hold, manage, invest, and reinvest the [Funds].”67 Any income or proceeds from the Funds became custodial property as well.68 Any property оbtained through investment of the income or proceeds of the Funds became custodial property and was indefeasibly vested in Plaintiff, not Defendant Olds, who only had the rights and duties with respect to the Funds that were set forth in the UTMA.
56. Upon transfer of the Funds to Cressbrook for a 49% ownership interest, that 49% ownership interest was indefeasibly vested in Plaintiff and held in the custody of Plaintiff as it became custodial property.
58. Upon Plaintiff turning 21, Defendant Olds, as custodian, was required to transfer full control of the 49% interest in Cressbrook to Plaintiff.70 Plaintiff does not complain that a 49% interest in Cressbrook was not delivered to him but rathеr that the Funds that were used to obtain that interest were not returned to him. What Plaintiff complains about is the investment vehicle in which the Funds were deposited and his inability to access those funds now.
59. Under the UTMA Defendant Olds had the duty and right to invest the Funds, and a disagreement over the wisdom of the investment does not give rise to a claim under the UVTA.
60. The funds were never the property of Defendant Olds and therefore could not be considered an asset under the UVTA. This analysis conforms with the plain wording of the UVTA and is consistent with the law of fraudulent conveyances that has endured for centuries in North Carolina. Accordingly, the Court GRANTS Defendants’ Motion with respect to the fraudulent conveyance claim.
E. Unfair and Deceptive Trade Practices
61. To support a claim of unfair and deceptive trade practices a plaintiff must show (1) an unfair or deceptive act оr practice, or an unfair method of competition,
62. Plaintiff alleges at paragraph 54 of the Complaint that “Defendant Olds’ knowingly and intentionally deceived Plaintiff including as to the disposition of the custodial property, and as to Defendant Olds’ management thereof, and as Plaintiffs rights thereto.” These are the same claims the Court found deficient in paragraphs 40 and 43 supra, and they are likewise insufficient to support a violation of Chapter 75 of the North Carolina General Statutes.
63. In paragraph 55 of his Complaint Plaintiff alleges
Defendant Olds created Cressbrook Investments LLC and transferred custodial property from the UTMA account to “invest” in the company knowing and with the intention of using the same as a vehicle by which to deny Plaintiff control over thе custodial property beyond Plaintiff‘s attainment of 21 years of age/or with the intention of profiting from the use of such custodial property by Cressbrook Investments LLC, of which Defendant Olds is the majority owner.
64. However,
65. By contrast, when fiduciary misconduct occurs within the context of buyer/seller or broader market transactions, North Carolina courts have recognized that the conduct may fall within the scope of the UDTPA. See Sara Lee Corp. v. Carter, 351 N.C. 27 (1999) (holding that the defendant-employee “clearly engaged in buyer-seller relations in a business setting” by selling computer parts and services to his employer through entities he controlled); see also Compton v. Kirby, 157 N.C. App. 1 (2003) (holding that breach of fiduciary duty was sufficient to support a UDTPA claim where thе defendant-partner sold the partnership to a third-party without disclosing his fellow partners’ interests and without their consent).
66. Here, Plaintiff has not sufficiently alleged facts that demonstrate interactions with other market participants or alleged unfair or deceptive conduct of Defendant Olds in his capacity as a member of Cressbrook. The alleged failure of Defendants to provide Plaintiff a lump sum cash payment from Cressbrook does not
F. Piercing the Corporate Veil
67. Disregarding the corporate entity is not a theory of liability, but rather a means of imposing liability. See Krawiec v. Manly, 370 N.C. 602, 611 (2018) (quoting Green v. Freeman, 367 N.C. 136, 146 (2013)). Evidence typically supporting piercing the corporate veil includes inadequate capitalization, noncompliance with corporate formalities, lack of a separate corporate identity, excessive fragmentation, siphoning of funds by the dominant shareholder, nonfunctioning officers and directors, and absence of corporate records. See Glenn v. Wagner, 313 N.C. 450, 455-58 (1985) (citations omitted).
68. Here, Plaintiff contends that he did not plead piercing the corporate veil as an independent cause of action. However, the Complaint suggests otherwise.71 Accordingly, the Court GRANTS Defendants’ Motion in respect to the piercing the corporate veil claim without prejudice and permits Plaintiff to pursue veil piercing as a remedial theory if supported by the remaining claims and the evidence.
69. “[P]unitive damages are a remedy rather than a standalone cause of action.” Halikierra Cmty. Servs. LLC v. N.C. HHS, 2021 NCBC LEXIS 27, at *25 (N.C. Super. Ct. Mar. 25, 2021); see also Collier v. Bryant, 216 N.C. App. 419, 434 (2011) (“Punitive damages are available, not as an individual cause of action, but as incidental damages to a cause of action.“).
70. Because Plaintiff purports to assert a claim for relief out of what is merely a remedy72, the Court GRANTS Defendants’ Motion with respect to the punitive damages claim and this claim is hereby DISMISSED without prejudice. Because the award of punitive damages is a valid remedy against a litigant under appropriate circumstances, the dismissal of this claim is without prejudice, and does not prevent the Court from awarding, or Plaintiff from seeking, this same remedy later on in this litigation upon a showing of factual and legal entitlement.
H. Statement of Sum Certain
71. Plaintiff‘s Complaint includes a “Statement of Sum Certain” section where Plaintiff states that, for purposes of potential default, he sеeks a sum certain or a sum capable of being made certain by computation.73 Plaintiff identifies that amount as the value of the UTMA account on the date Plaintiff attained 21 years of age, plus
72. The Court does not construe this section as an independent cause of action. Rather, it is a statement of the damages Plaintiff seeks to recover. See
Plaintiff‘s Motion to Dismiss Defendant Olds’ Counterclaim
Defamation
73. Plaintiff asserts that Defendant Olds fails to state a counterclaim for defamation on several grounds, including (1) the counterclaim on its face shows the statements are subject to a qualified privilege, (2) with respect to statements allegedly made to “financial institutions,” Wofford College, “government agencies [including] the Polk County Sheriff,” and other unidentified third parties, Defendant Olds failed to plead the content of the statements, the identity of the persons to whom the alleged statements were published, the time the statements were made, malice and special damages, (3) Defendant Olds fails to identify which of the alleged statements in the 2 March 2025 and 3 March 2025 emails is untrue, how the alleged statements harmed him, and which of the alleged statements caused such harm, and (4) the statements are non-actionable opinion.
74. Qualified privilege arises where “(1) a communication is made in good faith, (2) the subject and scope of the communication is one in which the party uttering it has a valid interest to uphold, оr in reference to which he has a legal right or duty, and (3) the communication is made to a person or persons having a corresponding interest, right, or duty.” Presnell v. Pell, 298 N.C. 715, 720 (1979) (original citation and internal quotation marks omitted). The duty need not be legal, and it is sufficient if it is a moral or a social duty. Stewart v. Nation-Wide Check Corp., 279 N.C. 278, 286 (1971).
75. “Where qualified privilege exists, plaintiff cannot recover absent actual malice” and “[t]he burden of proving actual malice rests on plaintiff.” Stewart, 279 N.C. at 283. A false and unprivileged charge of the crime of embezzlement is actionable per se. Id. at 284. However, even when there is an inference of malice created by libel per se, a finding of qualified privilege rebuts the inference of malice and makes it necessary for the plaintiff to prove actual malice before he can recover. You v. Roe, 97 N.C. App. 1, 12 (1990).
76. While qualified privilege most often does not operate in the context of motion to dismiss for failure to state a claim, where a claimant establishes the existence of the privilege in their pleading they must plead malice to survive such a motion. See, e.g., Presnell, 298 N.C. at 720; Andrews v. Elliot, 109 N.C. App. 271, 275 (1993).
78. The Court will assume that qualified privilege applies to Plaintiff‘s statements, but Defendant Olds’ Counterclaim does allege actual malice. Defendant Olds asserts that “Plaintiff knew that the statements about Dr. Olds were false or made the statements with reckless disregard to their falsity.”75 Per the criteria for proving actual malice in You, Defendant Olds alleged actual mаlice in his counterclaim because he alleged that Plaintiff knew that the statements about Defendant Olds were false.76 At the 12(b)(6) motion to dismiss stage, the Court concludes that Defendant Olds has sufficiently pleaded actual malice. Accordingly, Plaintiff‘s Motion is denied on this ground.
Second Ground
79. Plaintiff argues that Defendant Olds’ allegations regarding statements allegedly made to “financial institutions,” Wofford College, “Government Agencies [Including] the Polk County Sheriff“, and other unidentified third parties fail to state a claim for defamation because Defendant Olds fails to sufficiently plead: the content of the statements, the identity of the persons to whom the alleged statements were
80. Defendant Olds alleges Plaintiff has made “numerous statements” to “third parties in person, to financial institutions, to government agencies, including, without limitation, the Polk County Sheriff, and to Wofford College.”78 Defendant Olds also alleges that “Plaintiff reported to the financial aid office at Wofford College that Dr. Olds had run out of money and taken money from Plaintiff to apply to Dr. Olds‘s own financial needs, leaving Plaintiff with no way to pay for college.”79
81. Defamatory remarks needn‘t be stated verbatim but must “be alleged substantially in haec verba, or with sufficient particularity to enable the court to determine whether the statement was defamatory.” Stutts v. Duke Power Co., 47 N.C. App. 76, 84 (1980).
82. Rule 8(a)(1) requires a “short and plain statement of the claim sufficiently particular to give the court and the parties notice of the transactions, occurrences, or series of transactions or occurrences, intended to be proved showing that thе pleader is entitled to relief[.]”
83. Rule 9(f) requires allegations of the time and place the alleged defamatory statements were published.
85. In contrast, libel per se and slander per se presume malice and damages by proof of publication, with no further evidence required as to any resulting injury. Stewart v. Nation-Wide Check Corp., 279 N.C. 278, 284 (1971).
86. Defendant Olds’ allegations concerning statements to unidentified “financial institutions“, “government agencies“, and other unidentified third parties are insufficiently pleaded per the standard articulated in Stutts. Defendant Olds’ general allegation that Plaintiff made “numerous statеments” to broad categories of recipients concerning “fraud allegedly committed by Dr. Olds by theft of money from Plaintiff”80 fails to identify dates of publication, specific words used, particular recipients, or the circumstances in which the statements were made. The Court cannot determine whether those alleged statements are defamatory or whether they are actionable per se. Insofar as these statements are only actionable per quod, Defendant Olds’ bald allegation of injury to his professional and personal reputation is insufficient to plead special damages. Accordingly, the allegations are too vague to state a defamation claim.
Third Ground
88. Plaintiff also argues that Defendant Olds’ allegations regarding the emails of 2 March 2025 and 3 March 2025 fail to state a claim because Defendant Olds has not identified which of the alleged statements are untrue, how the alleged statements harmed him, and which of the alleged statements caused such harm.82 The Court disagrees with Plaintiff on this ground.
89. Unlike the allegаtions concerning the unidentified third parties, the counterclaim identifies the dates of the emails, the excerpts Defendant Olds argues are defamatory, and the recipients of the emails.83 Specifically, these excerpts include
Fourth Ground
90. Plaintiff‘s fourth ground for dismissing Defendant Olds’ counterclaim is that Defendant Olds fails to state a claim because the alleged statements are non-actionable opinion.85 The Court disagrees with Plaintiff on this ground.
91. Opinions are those statements that cannot be proven true or false. See Skinner v. Reynolds, 237 N.C. App. 150, 155 (2014) ( “[N]either plaintiff‘s inner motivation for his accusations, nor the hypothеtical reaction of a future client or judge is a fact that can be proven“); Daniels v. Metro Magazine Holding Co., L.L.C., 179 N.C. App. 533, 542 (2006) (expressions of pure opinion are not capable of being proven or disproven).
92. While some of the alleged statements may reflect Plaintiff‘s opinions or characterizations, the counterclaim does also allege statements that are able to be proven true or false per Skinner and Daniels. In particular, Defendant Olds alleges that Plaintiff stated Defendant Olds took Plaintiff‘s funds for Defendant Olds’ own financial needs, withdrew money from Plaintiff‘s Schwab account, and engaged in
93. At the motion to dismiss stage, the Court need not determine whether each alleged statement is ultimately actionable. The Court finds it sufficient that Defendant Olds has alleged at least some statements that are not protected as non-actionable opinion and are capable of defamatory meaning. Accordingly, Plaintiff‘s Motion is denied on this ground.
94. On the basis of the first, second, third, and fourth grounds, the Court GRANTS Plaintiff‘s Motion to the extent it is based on alleged statements to unidentified financial institutions, government agencies, and other unidentified third parties. Plaintiff‘s Motion is otherwise DENIED.
IV.
CONCLUSION
WHEREFORE, for the reasons set forth above, the Court hereby GRANTS in part and DENIES in part the Motions as follows:
- Defendants’ Motion is GRANTED with prejudice with respect to Plaintiff‘s claims for Fraud, Common Law Fraud, Fraudulent Representation, Fraud in the Inducement, Fraudulent Conveyance, and Unfair and Deceptive Trade Practices.
Defendants’ Motion is GRANTED without prejudice with respect to Plaintiff‘s claims for Piercing the Corporate Veil and Punitive Damages. - Defendants’ Motion is DENIED with respeсt to Plaintiff‘s claims for Conversion, and Statement of Sum Certain.
- Defendants’ Motion is GRANTED in part and DENIES in part with respect to Plaintiff‘s claims for Constructive Fraud.
- Plaintiff‘s Motion is GRANTED in part to the extent that it is based on alleged statements to unidentified financial institutions, government agencies, and other unidentified third parties and is otherwise DENIED.
SO ORDERED, this the 25th day of June 2026.
/s/ A. Graham Shirley
A. Graham Shirley
Special Superior Court Judge
for Complex Business Cases