The Court of Appeals faced that rarest of truffles this week: an outcome-determinative choice of law question. The Court adhered to its traditional roots and rejected a new test fashioned by the Business Court.
At issue in Harco Nat’l Ins. Co. v. Grant Thornton, LLP was an audit of a company providing bail and immigration bonds
The North Carolina Business Court ruled today on an issue of first impression — when a North Carolina Court should apply the law of a foreign country — and concluded that it would apply North Carolina law to a forum selection clause requiring the parties to litigate their dispute in the Commercial Court of Paris
Wachovia Bank, N.A. v. Harbinger Capital Partners Master Fund I, Ltd., 2008 NCBC 6 (N.C. Super. Ct. March 13, 2008) (Diaz)
Wachovia was first to file its claims in North Carolina Superior Court, but the Business Court nevertheless stayed the action in favor of a later filed New York action.
The claims in both cases involved Wachovia’s arranging of $285 million in credit for Le Nature, which collapsed in a massive accounting fraud. After the fraud was revealed, the Defendants purchased some of Le Nature’s debt on the secondary market with the express intention of suing Wachovia for alleged complicity in the fraud.
Wachovia, in an effort to preempt the expected lawsuit by the Defendants in New York, filed a declaratory judgment in North Carolina and obtained an injunction prohibiting the Defendants from asserting any "personal tort claims." Wachovia asserted that Defendants had engaged in "illegal trafficking in litigation claims."
Undeterred, Defendants went ahead and filed a lawsuit against Wachovia Capital Markets in the Southern District of New York alleging a RICO violation. Defendants then moved to stay the North Carolina action pursuant to N.C.G.S. Sec. 1-75.12 in favor of their own later filed action. The Court granted the motion after considering the ten factors enumerated in Lawyers Mut. Liab. Ins. Co. v. Nexsen Pruett Jacobs & Pollard, 435 S.E.2d 571, 573 (N.C. App. 1993).Continue Reading NY Lawsuit Trumps NC Lawsuit, Even Though NC Lawsuit Was First Filed