# Bb&t Boli Plan Tr. v. Mass. Mut. Life Ins. Co.

> North Carolina Business Court · April 29, 2016 · 2016 NCBC 34

URL: https://www.frixlaw.com/law-library/cases/11057982

## Case

- **Court:** North Carolina Business Court
- **Decided:** April 29, 2016
- **Citations:** 2016 NCBC 34
- **Precedential status:** Published
- **Opinion:** Opinion by Louis A. Bledsoe, III
- **Cited by:** 1 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/11057982

## How later opinions describe it (automated extraction)

- noting that “same claim” as used in Rule 41(a) “does not include independent causes of action with unique elements”

## Opinion text

BB&T BOLI Plan Tr. v. Mass. Mut. Life Ins. Co., 2016 NCBC 34.

STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
FORSYTH COUNTY 09 CVS 4007

BB&T BOLI PLAN TRUST,

Plaintiff,

v.
ORDER AND OPINION ON
MASSACHUSETTS MUTUAL LIFE DEFENDANT’S MOTION FOR
INSURANCE COMPANY, DETERMINATION OF EFFECT OF
VOLUNTARY DISMISSAL AND
Defendant. DEFENDANT’S MOTION TO DISMISS

BB&T BOLI PLAN TRUST, by and through 15 CVS 2638
its Trustee,

Plaintiff,

v.

MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY,

Defendant.

{1} THIS MATTER is before the Court upon Defendant Massachusetts Mutual
Life Insurance Company’s (“Defendant” or “MassMutual”) Motion for Determination
of Effect of Voluntary Dismissal and For Attorneys’ Fees (“Motion to Set Aside
Dismissal”) in BB&T BOLI Plan Trust v. Massachusetts Mutual Life Insurance
Company, No. 09 CVS 4007 (Forsyth County) (“BB&T I”) and Defendant’s Motion to
Dismiss the Complaint (“Motion to Dismiss”) (collectively, the “Motions”) in BB&T
BOLI Plan Trust v. Massachusetts Mutual Life Insurance Company, 15 CVS 2638
(Forsyth County) (“BB&T II”).
{2} After considering the parties’ briefs in support of and in opposition to the
Motions, the appropriate evidence of record, and arguments of counsel at the
hearing held on the Motions, the Court hereby DENIES the Motion to Set Aside
Voluntary Dismissal and DENIES the Motion to Dismiss.
Alston & Bird LLP, by Frank A. Hirsch Jr., Matthew P. McGuire,
Heather Adams, and Ryan P. Ethridge, for Plaintiff BB&T BOLI Plan
Trust.

Skadden, Arps, Slate, Meagher & Flom LLP, by James R. Carroll,
Christopher Lisy, and David S. Clancy, and Stevens & Lee, P.C., by E.
Thomas Henefer and Julie E. Ravis, and Ellis & Winters LLP, by
Matthew W. Sawchak and Jonathan A. Berkelhammer, for Defendant
Massachusetts Mutual Life Insurance Company.
Bledsoe, Judge.
I.
PROCEDURAL AND FACTUAL BACKGROUND
{3} This matter arises out of protracted litigation between Plaintiff BB&T
BOLI Plan Trust (“Plaintiff” or “BB&T Trust”) and Defendant MassMutual over
Defendant’s sale and management of a bank-owned life insurance policy (“BOLI
Policy”), which Plaintiff purchased to insure the lives of key employees of BB&T
Corporation (“BB&T”), the Plaintiff’s grantor.
A. The BOLI Policy
{4} BB&T Trust purchased the BOLI Policy from MassMutual in August 2006
for over $112 million.1 (BB&T II Compl. ¶ 2.) BOLI policies are regulated by
federal tax laws, and while a policy owner may select the accounts into which the
premiums are allocated, the policy owner cannot actively manage those assets once
allocated. (BB&T II Compl. ¶ 21.) Rather, the insurer of a BOLI policy is the legal
owner of the assets and manages the assets for the benefit of the BOLI purchaser.
(BB&T II Compl. ¶ 22.)
{5} Shortly after purchasing the BOLI Policy, BB&T Trust allocated the
premiums almost equally between two funds: a BlackRock-managed fund and a
Citigroup-managed fund called Falcon (the “Falcon Fund”). (BB&T II Compl. ¶ 3.)
The Falcon Fund was a non-traditional hedge fund that offered a potentially higher
yield with correspondingly higher risk. (BB&T II Compl. ¶ 4.)

1 For the purposes of laying out the factual background, the Court cites the allegations in the BB&T
II Complaint. Because the differences in the factual allegations are relevant to the Motion to
Dismiss, the Court will specifically note when it relies on a fact in BB&T II that was not alleged or in
the record in BB&T I.
{6} Prior to BB&T Trust’s purchase of the BOLI Policy, MassMutual provided
BB&T Trust with a Private Placement Memorandum (“PPM”) that set out the terms
of the BOLI Policy. (BB&T II Compl. ¶ 38.) The PPM also included a “stable value
option,” a policy feature by which BB&T Trust could elect to pay additional fees to
MassMutual in exchange for increased protection of its premiums. (BB&T II
Compl. ¶¶ 42–43.)
{7} A stable value agreement is an agreement between the policy insurer and
a third-party stable value provider, usually a major financial services institution.
(BB&T II Compl. ¶ 28.) The stable value provider essentially agrees to protect the
value of the assets from decreases in market value up to a certain amount, allowing
the policy owner to carry the cash value of the BOLI account on its books at par
without adjusting for decreases in the market value of the assets, so long as the
spread between par value and market value does not exceed the limit set forth in
the stable value agreement. (BB&T II Compl. ¶ 29.) BB&T Trust elected to
purchase the stable value option, with Bank of America serving as the stable value
provider. (BB&T II Compl. ¶¶ 42–43.)
{8} BB&T Trust alleges that the full terms of its agreement with MassMutual,
particularly regarding the terms of the stable value agreement (“Stable Value
Agreement”), were set forth in a number of documents. The differences in these
documents across BB&T I and BB&T II is a point of contention in the Motion to
Dismiss.
{9} In BB&T I, BB&T Trust specifically alleged that the parties’ contract
consisted of: (i) the PPM, which included a summary of the stable value agreement
between MassMutual and Bank of America (“SVA Summary”), (BB&T I Am. Compl.
¶¶ 38, 123); (ii) the BOLI Policy, including the Stable Value Endorsement (“SVA
Endorsement”) attached as an addendum thereto (BB&T I Am. Compl. ¶¶ 41, 44,
123); (iii) an August 16, 2006 letter agreement (“Letter Agreement”) by which
MassMutual acknowledged the issuance of the BOLI Policy with the Stable Value
Agreement (BB&T I Am. Compl. ¶¶ 45, 123); and (iv) “certain other
representations, understandings and agreements between the parties,” (BB&T I
Am. Compl. ¶ 123.)2
{10} In BB&T II,3 BB&T Trust additionally alleged that the parties’ contract
included a Negotiated SVA Term Sheet, dated August 11, 2006, by which
MassMutual and BB&T Trust allegedly negotiated the substantive terms of the
Stable Value Agreement that would apply to the BOLI Policy. (BB&T II Compl. ¶¶
48, 138.) BB&T Trust also alleged for the first time that MassMutual and Bank of
America revised the SVA Summary on September 8, 2006, after the purchase of the
BOLI Policy.4 (BB&T II Compl. ¶ 147.)
{11} BB&T Trust alleges that under the terms of the parties’ contract, including
the Stable Value Agreement, certain downward changes in the value of the Falcon
Fund investment would qualify as “Reallocation Events” under which MassMutual
was required to notify BB&T Trust and transfer the premiums out of the Falcon
Fund into more stable assets. In BB&T I, BB&T Trust alleged that the SVA
Summary defined the Reallocation Events. (BB&T I Am. Compl. ¶¶ 47–48.) In
BB&T II, BB&T Trust alleges that the Negotiated SVA Term Sheet defined further
Reallocation Events. (BB&T II Compl. ¶¶ 58, 61–63.) BB&T Trust alleges that
certain Reallocation Events occurred in the fall of 2007, during which time

2 In BB&T I, BB&T Trust alleged claims against MassMutual for alleged breach of fiduciary duty,
aiding and abetting breach of fiduciary duty, negligence, negligent misrepresentation, breach of
contract, fraud, and unfair and deceptive trade practices under N.C. Gen. Stat. § 75-1.1. (BB&T I
First Am. Compl. ¶¶ 94–142). On January 26, 2010, this Court (Diaz, J.) granted MassMutual’s
Motion to Dismiss and dismissed BB&T Trust’s claims for breach of fiduciary duty, aiding and
abetting breach of fiduciary duty, negligence, and unfair and deceptive trade practices, and allowed
BB&T Trust’s claims for breach of contract, fraud, and negligent misrepresentation to proceed.
Order, BB&T I (N.C. Super. Ct. Jan. 26, 2010). On December 4, 2014, BB&T Trust dismissed its
fraud claim without prejudice. At the time of BB&T Trust’s Voluntary Dismissal in May 2015, the
only claims remaining for trial were breach of contract and negligent misrepresentation.

3 In BB&T II, BB&T Trust alleges claims for negligent misrepresentation, breach of contract, and
fraud.

4 In theBB&T II Complaint, BB&T Trust abandons the “SVA Summary” name and instead refers to
that document as the SVA Term Sheet or the Post-Closing Term Sheet. All of those terms refer to
the same document, which was attached as Appendix B to the PPM. (BB&T I Am. Compl. ¶ 38;
BB&T II Compl. ¶ 147.)
MassMutual failed to act to protect the Falcon Fund premiums as agreed, resulting
in significant losses to BB&T Trust.
B. The Litigation
{12} BB&T Trust voluntarily dismissed its claims in BB&T I under N.C. R. Civ.
P. 41(a)(1) on May 1, 2015 (the “Voluntary Dismissal”), twenty-five days before a
scheduled jury trial in the matter was to begin. It filed the BB&T II complaint the
same day. BB&T Trust apparently refiled its case in order to plead theories of
liability that it was barred from presenting in BB&T I.
{13} On April 15, 2011, BB&T Trust moved for leave to file a second amended
complaint. The Court (Murphy, J.) denied BB&T Trust’s motion on the grounds of
undue delay and undue prejudice, because some of the proposed theories of liability
were not explored in the discovery period, which had already closed. Order on
Motion to Amend at ¶¶ 12–13, BB&T I (N.C. Super. Ct. Jan. 27, 2012). The Court
also stated that some of the proposed allegations “smell[ed] of futility and bad faith”
for being inconsistent with deposition testimony of Plaintiff’s designated
representative. Id.
{14} The Court later denied MassMutual’s summary judgment motion, Order
on Motion for Summary Judgment, BB&T I (N.C. Super. Ct. Aug. 15, 2013)
(Murphy, J.), and the parties began to prepare for trial. In response to concerns
raised in pretrial discussions with BB&T Trust, MassMutual moved the Court in
limine for an order precluding BB&T Trust from presenting evidence, argument,
and testimony relating to the theories of liability that it unsuccessfully sought to
plead in its proposed second amended complaint. The Court granted MassMutual’s
motion in limine, affirming Judge Murphy’s Order on the Motion to Amend and
barring BB&T Trust from presenting evidence that supported those rejected
theories. Order on Defendants’ Motion in Limine No. 1 ¶ 20, BB&T I (N.C. Super.
Ct. Apr. 14, 2015).
{15} Two weeks after the Court’s ruling on Defendants’ Motion in Limine No. 1,
BB&T Trust voluntarily dismissed its claims in BB&T I and filed a complaint in
BB&T II. Shortly thereafter, MassMutual filed the Motion to Set Aside Dismissal
in BB&T I and then the Motion to Dismiss in BB&T II. The Motions have been
fully briefed and argued. At the Court’s invitation, counsel submitted
supplementary briefs, which the Court has considered. The Motions are now ripe
for resolution.
II.
ANALYSIS
A. MassMutual’s Motion to Set Aside Dismissal in BB&T I
{16} Defendant’s Motion to Set Aside Dismissal requests that the Court deem
ineffective and set aside the Voluntary Dismissal. MassMutual argues, and BB&T
Trust disputes, that a trial court retains jurisdiction to set aside a Rule 41(a)(1)
voluntary dismissal in the limited circumstance where a plaintiff takes a dismissal
in bad faith. Brisson v. Santoriello, 351 N.C. 589, 597, 528 S.E.2d 569, 573 (2000).
Separate from that argument, MassMutual seeks its attorney’s fees related to the
Motion to Set Aside Dismissal, because a voluntary dismissal under Rule 41 “does
not deprive the court of jurisdiction to consider collateral issues such as sanctions
that require consideration after the action has been terminated.” Bryson v.
Sullivan, 330 N.C. 644, 653, 412 S.E.2d 327, 331 (1992).
{17} N.C. R. Civ. P. 41(a)(1) governs the voluntary dismissal of claims:
Subject to the provisions of Rule 23(c) and of any statute of this State,
an action or claim therein may be dismissed by the plaintiff without
order of court (i) by filing a notice of dismissal at any time before the
plaintiff rests his case, or; (ii) by filing a stipulation of dismissal signed
by all parties who have appeared in the action. . . . If an action
commenced within the time prescribed therefor, or any claim therein,
is dismissed without prejudice under this subsection, a new action
based on the same claim may be commenced within one year after such
dismissal . . . .
This final sentence is known as Rule 41(a)’s “savings provision,” because it allows a
plaintiff to refile an action within one year of a voluntary dismissal, even though
the underlying limitations period may have expired in the interim. See Ga.-Pac.
Corp. v. Bondurant, 81 N.C. App. 362, 365, 344 S.E.2d 302, 304 (1986). The savings
provision is a distinct feature of North Carolina’s Rule 41, which is not present in
its federal counterpart. Compare N.C. R. Civ. P. 41(a)(1) with Fed. R. Civ. P.
41(a)(1).
{18} In general, Rule 41(a) gives a plaintiff broad power over its case.
The Rule 41(a) voluntary dismissal “has salvaged more lawsuits than
any other procedural device, giving the plaintiff a second chance to
present a viable case at trial.” 2 G. Gray Wilson, North Carolina Civil
Procedure § 41-1, at 32 (2d ed. 1995). Many plaintiffs have used “this
rule to cure an unforeseen defect in a claim that did not become
apparent until trial . . . . The rule also offers a safety net to plaintiff or
his counsel who are either unprepared or unwilling to proceed with
trial the first time the case is called.” 2 G. Gray Wilson, North
Carolina Civil Procedure § 41-1, at 33. The purpose of our long-
standing rule allowing a plaintiff to take a voluntary dismissal and
refile the claim within one year even though the statue of limitations
has run subsequent to a plaintiff’s filing of the original complaint is to
provide a one-time opportunity where the plaintiff, for whatever
reason, does not want to continue the suit. The range of reasons
clearly includes those circumstances in which the plaintiff fears
dismissal of the case for rule violations, shortcomings in the pleadings,
evidentiary failures, or any other of the myriad reasons for which the
cause of action might fail. The only limitations are that the dismissal
not be done in bad faith and that it be done prior to a trial court’s
ruling dismissing plaintiff’s claim or otherwise ruling against plaintiff
at any time prior to plaintiff resting his or her case at trial.
Brisson, 351 N.C. at 597, 528 S.E.2d at 572–73. MassMutual argues that the two
exceptions identified in Brisson—that voluntary dismissals cannot be taken in bad
faith and cannot be taken to avoid a court ruling—affect BB&T Trust’s right to
voluntarily dismiss its claims in BB&T I. (Def.’s Mem. Supp. Mot. Determination of
Effect of Vol. Dismiss. 7.) BB&T Trust, on the other hand, argues that the proper
place to challenge the Voluntary Dismissal is in BB&T II. In other words, BB&T
Trust argues that the Brisson exceptions, if present, would bar the application of
the savings provision, but would not authorize the Court to set aside the Voluntary
Dismissal in BB&T I.
{19} The general rule is that once a plaintiff takes a Rule 41(a)(1) dismissal,
“there is nothing the defendant can do to fan the ashes of that action into life[,] and
the court has no role to play.” Brisson, 351 N.C. at 593, 528 S.E.2d at 570. The
plain language of Rule 41(a)(1) supports a plaintiff’s broad authority to unilaterally
dismiss its claims. Roberts v. Young, 120 N.C. App. 720, 726, 464 S.E.2d 78, 83
(1995). Our appellate case law upholds this interpretation. Generally, “no order or
other approval of the court is necessary” to effect a voluntary dismissal once a
plaintiff gives notice under Rule 41(a)(1). Lowe v. Bryant, 55 N.C. App. 608, 610,
286 S.E.2d 652, 653 (1982). See also In re Foreclosure by Rogers Townsend &
Thomas, PC, 773 S.E.2d 101, 103 (N.C. Ct. App. June 2, 2015) (stating that the trial
court’s orders entered after voluntary dismissal were “without legal effect”); Carter
v. Clowers, 102 N.C. App. 247, 250–51, 401 S.E.2d 662, 664 (1991) (“[A] Rule
41(a)(1) notice of dismissal is an action taken by the plaintiff ending the suit, and no
action of the court is necessary to give the notice its full effect.”); Ward v. Taylor, 68
N.C. App. 74, 78, 314 S.E.2d 814, 819 (1984) (Rule 41(a)(1) “does not require court
action, other than ministerial record-keeping functions, to effect a dismissal”).
{20} Nevertheless, there are some well-established exceptions to the general
rule, and these exceptions limit a plaintiff’s ability to terminate an initial action
through a Rule 41(a)(1) voluntary dismissal. The rule itself subjects a plaintiff’s
ability to take a voluntary dismissal to Rule 23(c), which addresses the dismissal of
class actions, and any other statutory exception.5 N.C. R. Civ. P. 41(a)(1).
Furthermore, once a defendant asserts a claim for affirmative relief arising out of
the same transactions alleged by the plaintiff, the plaintiff cannot take a voluntary
dismissal without the defendant’s consent. McCarley v. McCarley, 289 N.C. 109,
111–12, 221 S.E.2d 490, 492 (1976). Even in instances where a plaintiff does
voluntarily dismiss its claims, the trial court retains jurisdiction to consider
collateral issues, including requests for attorney’s fees under N.C. R. Civ. P. 11 and
N.C. Gen. Stat. § 6-21.5. Bryson, 330 N.C. at 653, 412 S.E.2d at 331. All of these

5 Following the spirit of Rule 23(c), the Court of Appeals has likewise held that a plaintiff must
obtain court approval before taking a voluntary dismissal of a pre-certification class action
complaint. See generally Bennett v. Commer. Coll. of Asheboro, Inc., 2016 NCBC LEXIS 24 (N.C.
Super. Ct. Mar. 22, 2016).
scenarios impact a plaintiff’s right to take a voluntary dismissal of its initial action,
but no court has clearly stated whether the Brisson exceptions operate similarly.
{21} The Court concludes that the first Brisson exception does not limit BB&T
Trust’s statutory right to take a voluntary dismissal. If that exception is met, it
would operate to render the Voluntary Dismissal a dismissal with (rather than
without) prejudice. This conclusion is consistent with the general rule that a
voluntary dismissal is effective upon filing, and it acknowledges the realities of the
procedural posture following a voluntary dismissal. In Troy v. Tucker, the plaintiff
took a voluntary dismissal, and the defendant subsequently filed a Rule 60(b)
motion seeking relief from the voluntary dismissal, which the trial court denied.
126 N.C. App. 213, 484 S.E.2d 98 (1997). The Court of Appeals concluded that the
appeal of the Rule 60(b) denial was interlocutory because the voluntary dismissal
“resulted in there being no action pending.” Troy, 126 N.C. App. at 215, 484 S.E.2d
at 99. The Court of Appeals concluded that the defendants were not aggrieved at
the trial court level and would only be aggrieved “when the plaintiff files a new
action.” Id. at 215–16, 484 S.E.2d at 99. MassMutual, likewise, is only aggrieved
by the filing of BB&T II. The Court suspects that had BB&T Trust not refiled their
case, MassMutual would not be seeking to set aside the Voluntary Dismissal and
proceed to a costly and lengthy trial. Furthermore, allowing Brisson’s bad faith
exception to subject all voluntary dismissals to judicial scrutiny would undermine
the intent of Rule 41(a) by creating unnecessary barriers for plaintiffs who wish to
abandon their claims.
{22} The Court concludes that the second Brisson exception, on the other hand,
may limit a plaintiff’s ability to take a voluntary dismissal in the initial action. As
discussed below, the second Brisson exception is essentially a restatement of Rule
41(a)(1) itself, which does not allow a plaintiff to take a voluntary dismissal after
resting his case. See Roberts, 120 N.C. App. at 726, 464 S.E.2d at 83. This
temporal restriction “limit[s] the time within which a plaintiff has the absolute
right to dismiss his action . . . .” Whitehurst v. Va. Dare Transp. Co., 19 N.C. App.
352, 355, 198 S.E.2d 741, 743 (1973). When a plaintiff attempts to take a voluntary
dismissal after resting its case, the trial court may appropriately set aside the
voluntary dismissal and deem it a nullity. See, e.g., Troy, 126 N.C. App. at 216–17,
484 S.E.2d at 100 (noting that trial court could have stricken a voluntary dismissal
and proceeded to rule on the pending summary judgment motion where plaintiff
attempted to take a dismissal after resting his case); Maurice v. Hatterasman Motel
Corp., 38 N.C. App. 588, 591–92, 248 S.E.2d 430, 432–33 (1978) (voiding and
vacating a voluntary dismissal taken after the plaintiff rested his case). Therefore,
if the Court concludes that the second Brisson exception is met, the Court may
grant the requested relief and set aside the Voluntary Dismissal in BB&T I.
{23} Because MassMutual seeks dismissal in both BB&T I and BB&T II, the
Court will consider the merits of MassMutual’s arguments as to each of the Brisson
exceptions. Consistent with the discussion above, the Court considers the first
exception as if raised in BB&T II, and the second exception as it was actually raised
in BB&T I.
{24} The bad faith exception to Rule 41(a)(1) is a narrow one; Brisson itself
states that a Rule 41(a) dismissal may be taken for a myriad of reasons, even, for
instance, that the plaintiff or his counsel is “unwilling” to proceed with trial.
Brisson, 351 N.C. at 597, 528 S.E.2d at 572–73. Our courts have consistently
applied the bad faith exception to Rule 41(a) in only one scenario, where the initial
complaint fails to conform with the rules of pleading and merely seeks to take
advantage of the savings provision. In laying out the bad-faith exception, the
Brisson court primarily relied on Estrada v. Burnham, in which the North Carolina
Supreme Court held that a plaintiff had not filed its pleadings in good faith where
she filed a bare-bones complaint and took a voluntary dismissal just two minutes
later for the admitted purpose of obtaining the one-year extension of the savings
provision. 316 N.C 318, 319, 341 S.E.2d 538, 539–40 (1986). After the plaintiff
refiled the action, the trial court granted a motion to dismiss the refiled complaint
as time barred, and the Supreme Court affirmed, holding that the initial complaint
violated the good-faith filing requirement of N.C. R. Civ. P. 11(a) because the
plaintiff had no intent to prosecute the litigation. Id. at 323, 341 S.E.2d at 542. The
Court concluded, reading the Rules of Civil Procedure as a whole, that “in order for
a timely filed complaint to toll the statute of limitations and provide the basis for a
one-year ‘extension’ by way of a Rule 41(a)(1) voluntary dismissal without prejudice,
the complaint must conform in all respects to the rules of pleading, including Rule
11(a).” Id.
{25} Relying on Estrada, the Court of Appeals has also applied the bad faith
exception to Rule 41(a) where the plaintiff willfully and intentionally violated Rule
11(a) and Rule 4 in litigating its initial complaint. Stocum v. Oakley, 185 N.C. App.
56, 65, 648 S.E.2d 227, 235 (2007) (holding that the plaintiff could not take
advantage of the savings provision following a voluntary dismissal where plaintiff
did not attempt service of the initial complaint for two years and represented to the
court that discovery was ongoing). Most recently, our Court of Appeals has clarified
that Estrada and those cases following it require an initial complaint to “conform in
all respects to the rules of pleading contained in Rules 8, 9, 10, and 11 of the North
Carolina Rules of Civil Procedure,” which govern the form and content of pleadings,
in order to benefit from the one year savings provision of Rule 41(a). Murphy v.
Hinton, 773 S.E.2d 355, 359 (N.C. Ct. App. July 7, 2015) (holding that a plaintiff
was not entitled to the savings provision’s one year extension where the initial
complaint lacked any allegations of negligence and therefore failed to satisfy Rule
8(a)(1)).
{26} The rationale behind this bad faith exception is that where an initial
complaint does not conform with the rules of pleading, a plaintiff should not be
entitled to the “safety net” of Rule 41(a)’s savings provision after dismissal. See
Estrada, 316 N.C at 323, 341 S.E.2d at 542. Here, MassMutual does not allege that
the complaint in BB&T I did not conform to the rules of pleading. Acknowledging
that the present situation is not factually identical to precedent, MassMutual
argues that whether a voluntary dismissal is taken in bad faith “must be
determined on an individualized basis.” Eubank v. Van-Riel, No. COA11-1088,
2012 N.C. App. LEXIS 727, at *32 n.3 (June 19, 2012) (unpublished). MassMutual
argues that BB&T Trust took the Voluntary Dismissal in bad faith by waiting three
years after the Court’s order denying its motion to amend. (Def.’s Mem. Supp. Mot.
Determination of Effect of Vol. Dismiss. 10.) The Court declines, however, to extend
the bad faith exception so far beyond precedent. Unlike the parties in Estrada,
Stocum, and Murphy, BB&T Trust has complied with the general rules of pleading
and actively pursued its claims. The Court therefore concludes that BB&T Trust
did not take the Voluntary Dismissal in bad faith; to hold otherwise would defeat
Rule 41(a)’s broad function as a “safety net.”
{27} As for the second exception identified in Brisson, that a voluntary
dismissal cannot be used to avoid a court’s adverse ruling, that exception has only
been applied in cases where the plaintiff sought to avoid a pending dispositive
ruling. For instance, the Court of Appeals has held that a plaintiff was not entitled
to take a voluntary dismissal after the trial court had already signed an order
granting summary judgment for the defendant but not yet filed the order with the
clerk. Maurice, 38 N.C. App. at 591–92, 248 S.E.2d at 432–33 (1978). This
exception is, in essence, an extension of Rule 41(a)(1) itself:
Where a party appears at a summary judgment hearing and produces
evidence or is given an opportunity to produce evidence and fails to do
so, and the question is submitted to the court for decision, he has
“rested his case” within the meaning of Rule 41(a)(1)(i) of the North
Carolina Rules of Civil Procedure. He cannot thereafter take a
voluntary dismissal under Rule 41(a)(1)(i). To rule otherwise would
make a mockery of summary judgment proceedings.
Id. See also Troy, 126 N.C. App. at 216, 484 S.E.2d at 99 (holding that plaintiff had
rested her case after a summary judgment hearing and therefore could not take a
voluntary dismissal under Rule 41(a)(1)(i)). The same principle applies to other
pending dispositive orders where the plaintiff has in effect “rested his case.” See
Eubank, 2012 N.C. App. LEXIS 727, at *32 (affirming that voluntary dismissal was
ineffective, and thereby leaving in place trial court’s 12(b)(6) dismissal with
prejudice on the merits, where plaintiff took a voluntary dismissal after the trial
court announced its 12(b)(6) ruling but before it entered the formal dismissal order).
{28} Even so, a plaintiff is still entitled to take a voluntary dismissal to avoid a
pending unfavorable ruling where the plaintiff has not “rested his case” as
contemplated by Rule 41(a)(1). Wesley v. Bland, 92 N.C. App. 513, 515, 374 S.E.2d
475, 476–77 (1988) (holding that plaintiff timely took a voluntary dismissal in the
middle of a summary judgment hearing, after the court heard defense counsel’s
arguments but before plaintiff spoke). More specifically, our case law suggests that
so long as the plaintiff has not advanced its arguments about the merits of its
claims, the plaintiff has not rested his case and may use Rule 41(a)(1) to avoid a
pending dispositive ruling. See, e.g., Cassidy v. Cheek, 308 N.C. 670, 674, 303
S.E.2d 792, 795 (1983) (holding that plaintiff was permitted to voluntarily dismiss
his claims while defendant’s motion to dismiss for failure to comply with a court
order was pending); Schnitzlein v. Hardee’s Food Sys., Inc., 134 N.C. App. 153, 158,
516 S.E.2d 891, 893 (1999) (holding that plaintiff had not rested his case after the
trial court’s ruling on a 12(b)(6) motion where the motion only raised questions of
federal preemption); Lowe, 55 N.C. App. at 610–11, 286 S.E.2d at 653 (holding that
where a fully argued motion to dismiss dealt with plaintiff’s failure to comply with a
court order rather than the allegations of the complaint, plaintiffs had not “rested
their case” under Rule 41(a)(1)).
{29} Moreover, taking a voluntary dismissal after receiving an unfavorable
ruling on a non-dispositive motion is not prohibited by the second exception. In
Alston v. Duke Univ., the Court of Appeals held that the plaintiff was entitled to
take a voluntary dismissal after the trial court denied plaintiff’s motion to amend
the discovery scheduling order. 133 N.C. App. 57, 62, 514 S.E.2d 298, 301 (1999).
In fact, the plaintiff took the voluntary dismissal in the middle of a hearing on
multiple motions, including defendant’s summary judgment motion. Id. In
upholding the validity of the voluntary dismissal, the Court of Appeals considered
as significant that the plaintiff’s attorney “made it clear” that he did not wish to
argue against summary judgment prior to the trial court’s ruling on its discovery
motion and gave notice of the voluntary dismissal immediately after the trial court
announced its denial of plaintiff’s motion. Id. (“Plaintiff is not deemed to have
rested her case at that point, and was free to take a voluntary dismissal of the
action. Following Plaintiff’s voluntary dismissal, this action was not pending before
the trial court.”)
{30} In sum, the second exception identified in Brisson applies to a narrow fact
pattern, where a plaintiff who has rested its case on the merits seeks to take a
voluntary dismissal to avoid a pending ruling. Taking MassMutual’s allegations as
true, BB&T Trust took the Voluntary Dismissal to avoid the consequences of the
Court’s Order on Motion in Limine No. 1 (as it affirmed the Court’s Order on the
Motion to Amend). Those orders were final, interlocutory orders at the time BB&T
Trust dismissed its claims, and BB&T Trust could not be deemed to have “rested its
case” prior to taking the Voluntary Dismissal. Therefore, MassMutual’s argument
that BB&T Trust’s dismissal violates the second exception in Brisson is without
merit.
{31} The Court therefore concludes that BB&T Trust was within its rights in
taking the Voluntary Dismissal, and MassMutual is not entitled to relief in either
BB&T I or BB&T II based on the Motion to Set Aside Dismissal. Therefore, BB&T I
is ended, and the Court may hereafter only consider collateral issues in that action
such as costs and attorney’s fees. Bryson, 330 N.C. at 653, 412 S.E.2d at 331.
1. Attorney’s Fees
{32} MassMutual’s Motion to Set Aside Dismissal asks that the Court award it
attorney’s fees pursuant to (i) N.C. Gen. Stat. § 6-21.5, (ii) the Court’s inherent
authority to sanction litigants for vexatious litigation, and (iii) N.C. R. Civ. P. 11(a).
MassMutual seeks attorney’s fees dating back to 2012, arguing that BB&T Trust
should have taken its voluntary dismissal at that time when Judge Murphy denied
its motion to amend. For the following reasons, the Court denies MassMutual’s
request for attorney’s fees.
{33} N.C. Gen. Stat. § 6-21.5 gives the Court discretion to award attorney’s fees
“to the prevailing party if the court finds that there was a complete absence of a
justiciable issue of either law or fact raised by the losing party in any pleading.”
Although BB&T Trust voluntarily dismissed its claims without prejudice,
MassMutual may still be considered the “prevailing party” for purposes of section 6-
21.5. Bryson, 330 N.C. at 664, 412 S.E.2d at 338. MassMutual argues that an
award of fees is justified under this statute when a “losing party persisted in
litigating the case after a point where he should reasonably have become aware that
the pleading he filed no longer contained a justiciable issue.” Sunamerica Fin.
Corp. v. Bonham, 328 N.C. 254, 258, 400 S.E.2d 435, 458 (1991).
{34} A court is required to award attorney’s fees under N.C. R. Civ. P. 11(a) if a
party’s action was not “well-grounded in fact, was not legally sufficient, and was
interposed for an improper purpose.” VSD Communs. v. Lone Wolf Publ. Group,
124 N.C. App. 642, 646, 478 S.E.2d 214, 217 (1996).6 Similarly, once a “case has
become meritless, failure to dismiss or further prosecution of the action may result
in sanctions” pursuant to the Court’s inherent power. Bryson, 330 N.C. at 658, 412
S.E.2d at 334; see also Ashton v. City of Concord, No. COA02-1257, 2003 N.C. App.
LEXIS 1693, at *11 (Aug. 19, 2003) (unpublished) (affirming exercise of inherent
authority to order attorney’s fees for “vexatious conduct”).
{35} Attorney’s fees are not warranted on any of those bases here, however,
because BB&T Trust’s case never became meritless and never lacked a justiciable
issue. After Judge Murphy ruled on the motion to amend, BB&T Trust pursued
three existing claims through dispositive motions and then took a voluntary
dismissal to overcome evidentiary failures and shortcomings in the pleadings, which
are reasons recognized as legitimate under Rule 41(a)(1). Indeed, the record does
not demonstrate that BB&T Trust was vexatiously prosecuting the rejected theories
for the three years between the Order on the Motion to Amend and the filing of
MassMutual’s Motion in Limine No. 1. Rather, the issue appears to have arisen
only after the parties’ counsel began pretrial discussions and BB&T Trust indicated

6 Rule 11 sanctions and awards of attorney’s fees are generally awarded on the basis of an offending

“pleading, motion, [or] other paper of a party.” N.C. R. Civ. P. 11(a); Bryson, 330 N.C. at 655, 412
S.E.2d at 332. See, e.g., Williams v. Hinton, 127 N.C. App. 421, 424, 490 S.E.2d 239, 241 (1997)
(“Rule 11 applies only to signed pleadings, motions, or other papers. . . . This Court has pointed out
that Rule 11 is not a panacea intended to remedy all manner of attorney misconduct.”) (internal
quotations omitted). Although MassMutual does not clearly identify a specific offending paper in its
Motion, the Court will assume without deciding that MassMutual’s identification in the context of
this case is sufficient for purposes of determining whether the Court should award attorney’s fees
under Rule 11.
its intent to introduce evidence in support of the theories Judge Murphy had
rejected in the Order on the Motion to Amend. At root, MassMutual’s primary
complaint is that BB&T Trust delayed in taking a voluntary dismissal, and the
Court, in the exercise of its discretion, declines to award attorney’s fees on that
ground in these circumstances.
B. MassMutual’s Motion to Dismiss in BB&T II
{36} MassMutual moves the Court to dismiss the Complaint in BB&T II on two
grounds. First, MassMutual alleges that BB&T Trust has failed to plead a legally
cognizable injury. Second, MassMutual alleges that BB&T Trust’s claims are
barred by the applicable statute of limitations.
{37} A Rule 12(b)(6) motion to dismiss tests the legal sufficiency of the
complaint. Stanback v. Stanback, 297 N.C. 181, 185, 254 S.E.2d 611, 615 (1979).
“The motion does not present the merits, but only whether the merits may be
reached.” Concrete Serv. Corp. v. Investors Grp., Inc., 79 N.C. App. 678, 681, 340
S.E.2d 755, 758 (1986). The question on a Rule 12(b)(6) motion is whether, as a
matter of law, the allegations of the complaint, treated as true, state a claim upon
which relief can be granted. Wood v. Guilford Cty., 355 N.C. 161, 166, 558 S.E.2d
490, 494 (2002) (citation omitted). While the Court does not make findings of fact
on a motion to dismiss, the Court may consider, in addition to the complaint,
documents to which the complaint specifically refers even though presented by the
defendant. Oberlin Capital, L.P. v. Slavin, 147 N.C. App. 52, 60, 554 S.E.2d 840,
847 (2001). The Court may also consider records of which it has taken judicial
notice. Wood v. J.P. Stevens & Co., 297 N.C. 636, 641, 256 S.E.2d 692, 696 (1979)
(“[I]t is clear that judicial notice can be used in rulings on . . . motions to dismiss for
failure to state a claim . . . .”).
{38} MassMutual has asked the Court to take judicial notice of certain
documents from BB&T I. (Def.’s Mem. Supp. Mot. Dismiss 6 n.3.) A “[t]rial court[]
may properly take judicial notice of ‘its own records in any prior or contemporary
case when the matter noticed has relevance.’” Stocum, 185 N.C. App. at 61, 648
S.E.2d at 232 (quoting Kenneth S. Broun, Brandeis and Broun on North Carolina
Evidence § 26 (5th ed. 1998)); see N.C. R. Evid. 201(f) (“Judicial notice may be taken
at any stage of the proceeding.”). The Court’s prior records are relevant here
because the applicability of the Rule 41 savings provision, which is at issue in the
Motion to Dismiss, necessarily requires consideration of the claims in BB&T I. See
id. (holding that the trial court correctly took judicial notice of earlier proceedings in
a case raising Rule 41 issues). The Court therefore takes judicial notice of those
documents in BB&T I pursuant to MassMutual’s request.
1. Damages
{39} MassMutual argues that BB&T Trust has failed to allege any legally
cognizable injury in BB&T II.7 Under the terms of the BOLI Policy, MassMutual
owns the assets in the accounts holding BB&T Trust’s invested premiums. (Def.’s
Mot. Dismiss Ex. 3, hereinafter “BOLI Policy”, 10.) Relying on the complaint’s
allegation that BB&T Trust suffered damages “representing the difference in its
premium belatedly transferred into the BlackRock fund following the Falcon Fund’s
liquidation, compared to the principal that would be in the BlackRock Fund had
MassMutual reallocated pursuant to the parties’ agreement,” (BB&T II Compl. ¶
115), MassMutual therefore argues that BB&T Trust has only alleged diminution in
the value of assets that it does not own. (Def.’s Mem. Supp. Mot. Dismiss 12.)
{40} The BOLI Policy entitles BB&T Trust to receive the payment of death
benefits under the policy, (BOLI Policy 23,) or to surrender the policy for its then-
cash value, (BOLI Policy 16). MassMutual contends that BB&T Trust cannot
allege or prove damages because MassMutual has thus far paid all owed death
benefits, and BB&T Trust has not exercised and may never exercise its surrender
rights. (Def.’s Supplemental Mem. Supp. Mot. Dismiss 4.)

7 MassMutual raised this argument in BB&T I at the summary judgment stage, and the Court
(Murphy, J.) denied MassMutual’s motion. MassMutual sought to raise this argument again in
BB&T I by moving in limine to exclude BB&T Trust’s expert witness on the grounds that there were
no legally cognizable damages about which he could testify. The Court refused to consider the
argument because MassMutual’s requested relief would have required overruling Judge Murphy’s
summary judgment order. Order on Defendant’s Motion in Limine No. 2 at ¶ 7, BB&T I (N.C. Super.
Ct. Apr. 14, 2015.) The Court noted that MassMutual would have the opportunity to make the same
argument at the directed verdict stage, at which point the Court would be able to consider it on the
merits. Id.
{41} In advancing this argument, MassMutual relies on factually similar cases
from other jurisdictions. In Wilmington Trust Co. v. Metro. Life Ins. Co., the
plaintiff purchased a corporate life insurance policy from the defendant and sued
the defendant-insurer alleging that the defendant breached its contract by failing to
reallocate premiums. No. 600242/08, 2008 N.Y. Misc. LEXIS 10085, at *12–13 (N.Y.
Sup. Ct. Aug. 11, 2008). Concluding that the plaintiff only owned the “right to be
paid the benefits promised under the contracts,” which defendant had thus far
honored, and that plaintiff only alleged losses related to the decreased value of the
account, the court held that the plaintiff had failed to allege any damage other than
“unrealized losses to [defendant’s] property.” Id. at *14.
{42} In a similar case from Delaware, a plaintiff who owned a corporate life
insurance policy sought a declaratory judgment and brought several other claims
alleging that the insurer’s changes to the contract’s surrender provisions gave the
insurer improper discretion over whether and when to pay in the event of
surrender. Aviva Life & Annuity Co. v. Am. Gen. Life Ins. Co., No. 8414-VCG, 2014
Del. Ch. LEXIS 60 (Del. Ch. Apr. 29, 2014.) The Court held that the plaintiff’s
claim was not ripe for adjudication because any damages suffered to the surrender
value of the account were purely speculative until the plaintiff actually exercised its
surrender rights. Id. at *46–47.
{43} Relying on this line of cases, MassMutual also alleges that Delaware
substantive law governs Plaintiff’s claims. BB&T Trust agrees that, under the
principle of lex loci delecti, its claims for fraud and negligent misrepresentation are
governed by the laws of Delaware, where the injuries occurred. As for the breach of
contract claim, MassMutual contends that Delaware law governs because two of the
four documents relied on as part of the contract—the BOLI Policy and the Letter
Agreement—contain Delaware choice of law provisions, while the other two
documents are silent on that issue. (Def.’s Mem. Supp. Mot. Dismiss 9.) BB&T
Trust, however, believes that North Carolina substantive law must govern the
contract claim. This question is relevant to the question of damages because, under
Aviva Life, MassMutual believes that Delaware law requires a conclusion that
BB&T Trust has not suffered damages, whereas BB&T Trust argues that under
North Carolina law it would be entitled to at least nominal damages in the event of
a breach. (Def.’s Mem. Opp. Mot. Dismiss 13.)
{44} North Carolina recognizes the general principle that the law of the place
where a contract is made typically governs the contract. Fortune Ins. Co. v. Owens,
351 N.C. 424, 428, 526 S.E.2d 463, 466 (2000). Furthermore, our legislature has by
statute pronounced that “[a]ll contracts of insurance on property, lives, or interests
in this State shall be deemed to be made therein . . . .” N.C. Gen. Stat. § 58-3-1.
Construing this statute with the general principle, North Carolina law will apply
when a “close connection exists between this State and the interests insured by an
insurance policy,” although the mere presence of the insured interests at the time of
an accident is not a sufficient connection to warrant application of North Carolina
law. Fortune Ins., 351 N.C. at 428, 526 S.E.2d at 466. Here, BB&T Trust has
alleged that the BOLI Policy insures a substantial number of individuals who live
and work in North Carolina, more so than in any other state. (BB&T II Compl. ¶
41.) Viewing BB&T Trust’s allegations in the light most favorable to Plaintiff, the
Court concludes that North Carolina law may apply to the contract, although the
issue cannot be conclusively decided without factual development. See Martin v.
Cont’l Ins. Co., 123 N.C. App. 650, 656, 474 S.E.2d 146, 149 (1996) (eschewing strict
formulas for determining a sufficient “close connection”). The Court therefore views
Aviva Life as persuasive authority for purposes of this Motion under Rule 12(b)(6)
and reserves judgment concerning the applicable law for BB&T Trust’s contract
claim.
{45} Regardless of which state’s law ultimately applies to the contract, however,
the Court concludes that BB&T Trust has sufficiently alleged legally cognizable
damages to survive a Rule 12(b)(6) motion. Contrary to MassMutual’s contentions,
BB&T Trust’s allegations are not limited to the diminution in value that allegedly
occurred as a result of MassMutual’s alleged acts; the complaint specifically alleges
that BB&T was required to publicly report $17 million in losses directly related to
MassMutual’s failure to timely reallocate BB&T Trust’s premiums, (BB&T II
Compl. ¶¶ 116, 114), and BB&T Trust contends that it has suffered an actual loss
through the impairment of BB&T’s accounting and death benefits under the BOLI
Policy. (Pl.’s Resp. Br. Opp. Mot. Dismiss 14–15). In particular, BB&T Trust
alleges that it specifically paid a higher fee for the Stable Value Agreement to
protect against these types of accounting losses, which BB&T Trust argues it would
not have suffered but for MassMutual’s alleged breach of the parties’ agreement.
(BB&T II Compl. ¶¶ 116–17.) Moreover, BB&T Trust contends that the BOLI
Policy and the PPM set forth the formula by which MassMutual is required to pay
death benefits to BB&T Trust, and that certain aspects of this formula are tied to
investment performance, (BOLI Policy 23-24; PPM 11), entitling BB&T Trust to
show purported damages in the form of impaired death benefits currently payable.
(Pl.’s Resp. Br. Opp. Mot. Dismiss 14–15).
{46} Liberally construing the allegations of the Complaint in BB&T Trust’s
favor and giving BB&T Trust the benefit of all permissible inferences not
inconsistent with facts alleged, the Court cannot conclude that BB&T Trust has
failed to allege legally cognizable damages as a matter of law, particularly in light of
our Supreme Court’s instruction that “Rules 8(a) and 54(c), when read together,
reject any strict rule that a certain measure of damages must be specifically sought
in the prayer for relief.” Holloway v. Wachovia Bank & Trust Co., N.A., 339 N.C.
338, 345–46, 452 S.E. 2d 233, 237 (1994); see also, e.g., N.C. State Ports Auth. v.
Lloyd A. Fry Roofing Co., 32 N.C. App. 400, 408, 232 S.E.2d 846, 851 (1977) (“[I]t is
not crucial error to demand the wrong relief” in the complaint.).
{47} Indeed, BB&T Trust has alleged at least some actual loss, unlike the
plaintiff in Aviva Life who sought a declaratory ruling that changes in policy terms
impaired its ability to obtain the policy’s surrender value in the event of a
surrender. Aviva Life, 2014 Del. Ch. LEXIS 60, at *9. Viewing BB&T Trust’s
allegations in the light most favorable to Plaintiff, the Court concludes that BB&T
Trust has sufficiently alleged that it suffered legally cognizable damages to survive
the Motion to Dismiss and that further examination of the sufficiency of Plaintiff’s
damages claim must await a later stage of this litigation.8
2. Statute of Limitations
{48} MassMutual alternatively argues that all of BB&T Trust’s claims are time-
barred by the statute of limitations. A statute of limitations can be the basis for
dismissal on a Rule 12(b)(6) motion if the face of the complaint discloses that the
plaintiff’s claims are so barred. Reunion Land Co. v. Vill. Of Marvin, 129. N.C. App.
249, 250, 497 S.E.2d 446, 447 (1998) (citing Long v. Fink, 80 N.C. App. 482, 484,
342 S.E.2d 557, 559 (1986)).
{49} BB&T Trust’s claims for negligent misrepresentation, fraud, and breach of
contract each have a three-year statute of limitations. N.C. Gen. Stat. §§ 1-52(1),
(5), and (9). As alleged, these claims accrued more than three years ago, (Def.’s
Mem. Supp. Mot. Dismiss 15–18), and would be time-barred if they were brought for
the first time in the BB&T II complaint. However, BB&T Trust argues that the
savings provision of Rule 41(a)(1) has tolled the statute of limitations for the claims
pleaded in BB&T II.
{50} As stated above, the savings provision provides that “[i]f an action
commenced within the time prescribed therefor, or any claim therein, is dismissed
without prejudice under this subsection, a new action based on the same claim may

8 MassMutual has also raised the issue of BB&T Trust’s standing and requests the opportunity to
submit supplemental briefing on whether BB&T Trust has alleged an “injury in fact” should the
Court determine that North Carolina law applies to Plaintiff’s contract claim. ((Def.’s Reply Mem.
Supp. Mot. Dismiss 5 n.1.) Under North Carolina law, “an injury in fact” is required to establish
standing, Coker v. DaimlerChrysler Corp., 172 N.C. App. 386, 391, 617 S.E.2d 306, 310 (2005), and
“[s]tanding is a necessary prerequisite to a court's proper exercise of subject matter jurisdiction.”
Street v. Smart Corp., 157 N.C. App. 303, 305, 578 S.E.2d 695, 698 (2003) (internal quotation
omitted). Based on the Court’s conclusion that BB&T Trust has alleged in BB&T II that it suffered
an actual loss as a result of MassMutual’s alleged conduct, the Court is satisfied that, if the Court
were to apply North Carolina law to BB&T Trust’s contract claim, Plaintiff has satisfactorily pleaded
standing for purposes of Rule 12(b)(6). See, e.g., Bruggeman v. Meditrust Co., L.L.C., 165 N.C. App.
790, 795, 600 S.E.2d 507, 511 (2004) (standing requires “that the plaintiff have been injured or
threatened by injury or have a statutory right to institute an action”) (quotations and citations
omitted); In re Ezzell, 113 N.C. App. 388, 392, 438 S.E.2d 482, 484 (1994) (“[I]njury in fact” must be
“distinct and palpable—and conversely that it not be abstract or conjectural or hypothetical.”)
(internal citations and quotations omitted). Thus, the Court denies MassMutual’s request for
supplemental briefing on standing in connection with this Motion.
be commenced within one year after such dismissal . . . .” N.C. R. Civ. P. 41(a)(1).
This “long-standing rule allow[s] a plaintiff to take a voluntary dismissal and refile
the claim within one year even though the statute of limitations has run subsequent
to a plaintiff’s filing of the original complaint.” Brisson, 351 N.C. at 597, 528 S.E.2d
at 572. The extension to the statute of limitations is notably limited to refiled
actions “based on the same claim.”
{51} MassMutual argues that “same claim” requires not only that the causes of
action be the same but also that the underlying factual contentions be the same for
Rule 41(a)(1)’s savings provision to apply. BB&T Trust argues that the savings
provision has tolled the statute of limitations in this case because “[w]here, as here,
both actions involve the same parties and the same causes of action arising from the
same operative facts, the actions are ‘based on the same claims.’” (Pl.’s Resp. Br.
Opp. Mot. Dismiss 17.) Relying on our Supreme Court’s holding that a voluntary
dismissal may be used to “cure an unforeseen defect in a claim” or address
“shortcomings in the pleadings [and] evidentiary failures,” Brisson, 351 N.C. at 597,
528 S.E.2d at 573, BB&T Trust contends that a new action is “based on the same
claims” where it involves the same parties, the same right, and the same causes of
action. (Pl.’s Resp. Br. Opp. Mot. Dismiss 18.) Here, BB&T Trust has alleged
against MassMutual the same three causes of action that it dismissed in BB&T I;
the complaint in BB&T II adds factual allegations and expands the universe of
documents on which its claims rest. Therefore, the question before the Court is
whether the “same claim” requirement of Rule 41(a)(1) requires strict factual
identity between the dismissed and the refiled claims.
{52} It is clear at least that “same claim” does not include independent causes of
action with unique elements. Staley v. Lingerfelt, 134 N.C. App. 294, 299, 517
S.E.2d 392, 396 (1999). See also Losing v. Food Lion, LLC, 185 N.C. App. 278, 284,
648 S.E.2d 261, 265 (2007) (“This Court has long held that the Rule 41(a) tolling of
the applicable statute of limitations only applies to the claims in the original
complaint, and not to other causes of action that may arise out of the same set of
operative facts.”). In Staley, the Court held that claims asserted for the first time in
the refiled complaint did not get the benefit of the savings provision because,
although they arose from the same events as those alleged in the initial complaint,
“the defendants were not placed on notice that they would be asked to defend these
claims within the time required by the statute of limitations.” Staley, 134 N.C. App.
at 299, 517 S.E.2d at 396.
{53} Within this outer bound, however, a plaintiff has some room to revise its
factual allegations. For instance, a plaintiff may typically seek new types of
damages in the refiled action so long as they arise from the same causes of action
asserted in the first action. See, e.g., Holley v. Hercules, Inc., 86 N.C. App. 624,
628, 359 S.E.2d 47, 50 (1987) (holding that plaintiff’s claim for punitive damages
could be made for the first time during the one-year savings period because it was
merely derivative of the negligence claim pleaded in the first action); Royster v.
McNamara, 218 N.C. App. 520, 532–33, 723 S.E.2d 122, 131 (2012) (holding that
plaintiff’s newly-asserted claim for emotional damages was not barred by the
statute of limitations because it was simply a description of the damage that he
claimed to have suffered in the first action).
{54} Certain derivative claims may also receive the benefit of the savings
provision when pleaded for the first time in the refiled action. In Sloan v. Miller
Bldg. Corp., the Court of Appeals held that the plaintiff’s voluntary dismissal had
the effect of extending the time within which his spouse could bring her derivative
loss of consortium claim, even though she had not pleaded it in the original action.
128 N.C. App. 37, 40–41, 493 S.E.2d 460, 462–63 (1997). See also Strawbridge v.
Sugar Mt. Resort, Inc., 243 F. Supp. 2d 472, 479 (W.D.N.C. 2003) (applying North
Carolina law to determine that the savings provision protects a newly-raised plea to
pierce the corporate veil because it is a method of imposing liability and derivative
of the underlying negligence claim). Thus, strict factual identity between the
original and the refiled action is not always necessary to toll the statute of
limitations under Rule 41(a). Under Staley, the issue appears to be one of notice;
extending Rule 41 tolling to new types of damages and derivative claims does not
prejudice a defendant where the original action placed him on notice of the claims
against which he would have to defend.
{55} Nevertheless, MassMutual argues that the factual allegations underlying
the causes of action must be the same between the original and the refiled action in
light of Stutts v. Duke Power Co., 47 N.C. App. 76, 26 S.E.2d 861 (1980). In Stutts,
the Court of Appeals upheld the dismissal of the plaintiff’s refiled claim for libel and
slander as time-barred, because the second complaint was not “based on the same
claim” as the original action, which also asserted causes of action for slander and
libel. Id. at 76, 266 S.E.2d at 864. MassMutual argues that Stutts stands for the
proposition that identity of cause of action is not enough to invoke Rule 41(a)(1)
tolling, and that the factual allegations must also be identical. The first action in
Stutts alleged that Duke Power libelously reported that plaintiff was discharged for
a “dishonest act” and then “reasserted the false and libelous allegations against the
[p]laintiff” at a hearing requested by plaintiff with the North Carolina Employment
Security Commission. Id. at 79–80, 266 S.E.2d at 864 (“The first action, then, was
based upon proceedings before the Employment Security Commission . . .”) In the
refiled action, the plaintiff instead alleged that Duke Power’s agents and employees
libelously reported his termination for a “dishonest act” and then made slanderous
statements to the same effect to the plaintiff’s coworkers and prospective employers.
Id.
{56} The Court of Appeals concluded that while the defamation claims in both
suits stemmed from Duke Power’s discharge of plaintiff, “there the similarity ends.”
Id. While the causes of action were the same in both cases, the defamatory
statements were allegedly made to different audiences, at different times, by
different individuals, and in different words. The Stutts court did not announce a
standard by which a court could measure whether a refiled action is “based on the
same claim.” The Court, however, considers the heightened pleading requirements
for defamation relevant in interpreting Stutts. See id. at 84, 266 S.E.2d at 866
(requiring claims for defamation to allege the defamatory words with sufficient
particularity to enable the court to determine whether the statement was
defamatory); see also Stanford v. Owens, 76 N.C. App. 284, 289, 332 S.E.2d 730, 733
(1985) (holding that a refiled action asserting a claim for fraud was not “based on
the same claim” as an initial action alleging negligent misrepresentation, because
fraud is unique and must be pleaded with particularity). The slander claim in the
first action was essentially factually independent from the slander claim in the
second action, and the two claims could not be considered the same, despite being
titled as the same legal claim for relief.
{57} MassMutual also relies on Williams v. Lynch to argue that the Court
should scrutinize the factual allegations underlying the claims in refiled actions.
225 N.C. App. 522, 528, 741 S.E.2d 373, 377 (2013). In Williams, the Court of
Appeals held that a claim for professional malpractice in the refiled action related
back under Rule 41(a) to the plaintiff’s claims for negligence in the voluntarily
dismissed action. Id. In reaching that conclusion, the court concluded that the two
types of claims were synonymous, the plaintiff had essentially relabeled the claim,
and the claims asserted identical facts. Id. That case does not mandate, however,
as MassMutual urges, that a refiled action must contain identical factual
allegations as the initial action. Williams, by holding that Losing and Staley are
controlling, affirmed that the Rule 41(a) savings provision only applies to “those
claims in the second complaint that were included in the voluntarily-dismissed first
complaint,” id. at 526, 741 S.E.2d at 376, and those cases, as discussed above, apply
Rule 41(a) to causes of action asserted in the original complaint that give notice to
the defendant.
{58} MassMutual argues that by inserting new factual allegations and new
documents into the body of documents alleged to be the “contract,” BB&T Trust has
not asserted the “same claims” in BB&T II as it did in BB&T I. In particular, while
both complaints identify the BOLI Policy with the Stable Value Endorsement as a
“valid and binding contract” between the parties, (see BB&T I Am. Compl. ¶ 123;
BB&T II Compl. ¶ 138), MassMutual contends that the specific contractual source
of the alleged reallocation event obligations at the core of this case is the Negotiated
SVA Term Sheet in BB&T II and a document BB&T Trust acknowledges is
“materially different,” the SVA Summary, in BB&T I. (Def.’s Supplemental Mem.
Supp. Mot. Dismiss 2.) MassMutual further contends that BB&T Trust makes
certain claims in BB&T II that were “not pled at all in BB&T I.”9 (Def.’s
Supplemental Mem. Supp. Mot. Dismiss 2.)
{59} BB&T Trust responds that its Amended Complaint in BB&T I avers that
the terms of the parties’ agreement that is the subject of BB&T Trust’s claims “were
set out in the PPM, the BOLI Policy, the August 16, 2006 Letter Agreement, and
certain other representations, understandings and agreements between the
Parties.” (BB&T I Am. Compl.¶ 123). BB&T Trust contends that this latter
language—“certain other representations, understandings and agreements between
the Parties”—put MassMutual on notice that the terms of various unidentified
documents, including both the post-closing SVA Summary emphasized in BB&T I
and the pre-closing Negotiated SVA Term Sheet that is the focus of BB&T II, were
alleged to evidence the parties’ agreement. In further support, BB&T Trust alleges
that the PPM included the SVA Summary as an appendix and, because the SVA
Summary had not been prepared as of the closing, included the Negotiated SVA
Term Sheet at that time, (BB&T II Compl. ¶¶ 52, 147), providing further evidence
that the agreement alleged in BB&T I and II was the same.
{60} Although the Court is sympathetic to MassMutual’s position, particularly
in light of the passage of time since BB&T I was filed, the Court concludes that Rule
41(a)’s tolling provision extends to BB&T Trust’s claims in BB&T II. While adding
additional factual detail in BB&T II not found in BB&T I, BB&T Trust alleges the

9 In particular, MassMutual contends that BB&T Trust’s new claims include allegations that (i)
MassMutual misrepresented to BB&T Trust that the terms of the SVA would be consistent with
those of the Negotiated Term Sheet, (BB&T II Compl. ¶¶ 97–100), (ii) the 7% NAV Trigger in the
Negotiated SVA Term Sheet was hit in August 2007 without required reallocation, (Compl. ¶¶ 58,
65), (iii) the Standard Deviation Trigger was hit in August 2007 through December 31, 2007 without
required allocation, (BB&T II Compl. ¶ 65), (iv) MassMutual failed to communicate an
“Immunization Period” in the Negotiated Term Sheet in November 2007, (BB&T II Compl. ¶¶ 36,
61–63, 105, 110), and (v) MassMutual failed to disclose certain changes to Falcon Fund’s guidelines
in 2006, 2007 and 2008 (BB&T II Compl. ¶¶ 58, 69–73, 84–85, 103). BB&T Trust acknowledges that
it is asserting claims in BB&T II based on (i), (ii), and (iii) but asserts that (iv) and (v) constitute
supporting evidence and are not separate claims for relief. (Pl.’s Reply to Def.’s Resp. to Pl.’s Post-
Hearing Br. 3.)
same conduct in support of its causes of action in both operative complaints,
including the same alleged statements in August 2006 and September 2007 in
support of its fraud and negligent misrepresentation claims and the same alleged
actions constituting the alleged breach of the parties’ agreement—in particular,
MassMutual’s alleged failure to monitor BB&T Trust’s investment and to use
reasonable efforts to cause the reallocation and preservation of the investment
following the occurrence of alleged reallocation events. The terms of the parties’
agreement are alleged to exist in the same specific documents and in “certain other
representations, understandings and agreements between the Parties” in both
cases. Each operative complaint requires the factfinder to determine the terms of
the parties’ agreement based on the various documents alleged to embody those
terms.
{61} BB&T Trust has asserted the same causes of action against the same
defendant, and added factual allegations for the purpose of curing defects,
addressing shortcomings in the pleadings, and remedying evidentiary failures.
While BB&T Trust has changed its emphasis as to the specific contract document
most at issue in the two operative complaints, the Court is satisfied that the claims
asserted in BB&T I and II “arise out of the same set of operative facts,” Losing, 185
N.C. App. at 284, 648 S.E.2d at 256, the allegations in BB&T I were sufficiently
specific to place MassMutual on notice that it would have to defend these claims
within the time required by the statute of limitations, Staley, 134 N.C. App. at 299,
517 S.E.2d at 396, and the claims in the two operative complaints are “substantially
the same, involving the same cause[s] of action and the same right[s].” Cherokee
Ins. Co. v. R/I, Inc., 97 N.C. App. 295, 297, 388 S.E.2d 239, 240 (1990). The Court
thus concludes that the allegations in BB&T II are “based on the same claims” as
BB&T I for purposes of Rule 41(a) and are therefore not barred by the applicable
statute of limitations.
III.
CONCLUSION
{62} WHEREFORE, for the foregoing reasons, the Court hereby DENIES the
Motion to Set Aside Dismissal in BB&T I and DENIES the Motion to Dismiss in
BB&T II.
SO ORDERED, this the 29th day of April, 2016.

/s/ Louis A. Bledsoe, III
Louis A. Bledsoe, III
Special Superior Court Judge
for Complex Business Cases

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/11057982. Public record. Not legal advice.