Carolina Med. Partners, PLLC v. Shah, 2025 NCBC 61.
STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE SUPERIOR COURT DIVISION MECKLENBURG COUNTY MASTER FILE 22CVS013767-590
CAROLINA MEDICAL PARTNERS, PLLC; NIMISH PATEL; and SHEPHALI PATEL,
Plaintiffs, ORDER AND OPINION ON MOTION TO DISMISS COUNTERCLAIM v.
AMIT G. SHAH and PALMETTO MEDICAL GROUP, PLLC,
Defendants.
AMIT G. SHAH and PALMETTO 24CV059193-590 MEDICAL GROUP, PLLC, RELATED CASE
Plaintiffs,
v.
NIMISH PATEL and SHEPHALI PATEL,
Defendants.
NIMISH PATEL and SHEPHALI 24CV059359-590 PATEL, RELATED CASE
Plaintiffs,
v.
AMIT G. SHAH et al.
Defendants. 1. These consolidated cases arise out of disputes among three physicians who
once practiced together. There are many claims and parties. At issue here is a
counterclaim asserted by Nimish and Shephali Patel against Amit Shah in Shah v.
Patel, No. 24CV059193-590 (“Shah Action”). Shah has moved to dismiss the
counterclaim. For the following reasons, the Court DENIES his motion.
Ward and Smith, P.A., by Alexander C. Dale and Edward James Coyne, for Nimish Patel, Shephali Patel, and Carolina Medical Partners, PLLC.
K&L Gates LLP, by Daniel Drew McClurg and Marla Tun Reschly, for Palmetto Medical Group, PLLC and Amit G. Shah.
Robinson, Bradshaw & Hinson, P.A., by Stephen M. Cox, for Piedmont Research Partners, LLC.
Burris, MacMillan, Pearce & Burris, PLLC, by Hugo Pearce, III, for Carolinas Living, L.L.C. and Carolinas Senior Care, LLC.
Conrad, Judge.
I. BACKGROUND
2. This background assumes that the Patels’ allegations are true, as required
on a motion to dismiss. (See Countercl., ECF No. 113 [Lead Case No. 22CV013767-
590].)
3. Shah and the Patels are physicians who used to practice together at
Palmetto Medical Group, PLLC. No longer. Each side now accuses the other of
dishonesty, financial improprieties, and contractual infractions. Since 2021, the
myriad efforts to resolve these disputes—through litigation and alternative dispute resolution—have yielded halting progress. This consolidated action encompasses
three lawsuits involving eight parties and claims by the dozen. *
4. Relevant here is the Patels’ counterclaim in the Shah Action. The Patels
allege that Shah was Palmetto Medical Group’s controlling, majority member and,
thus, owed a fiduciary duty to them. Shah allegedly breached that duty by using
company funds to benefit himself, his wife, and other entities in which he has an
interest. A few examples will paint the picture: according to the counterclaim, Shah
directed Palmetto Medical Group to make phony loans to one of his other entities,
used the practice’s funds to pay his personal expenses, unilaterally raised his own
salary, hired his wife and gave her a salary for little or no work, and had the practice
pay two individuals for services that they or their related entities provided to Shah
personally. Based on these allegations, the Patels assert a single counterclaim for
constructive fraud. (See, e.g., Countercl. ¶¶ 24, 26, 27, 32.)
5. Shah has moved to dismiss the counterclaim under Rule 12(b)(6) of the
North Carolina Rules of Civil Procedure. The motion is fully briefed. Having
reviewed the briefs, the Court concludes that oral argument would not aid its decision
and therefore decides the motion without a hearing. See BCR 7.4.
* Earlier decisions describe these cases and their history in more detail. See, e.g., Carolina Med. Partners, PLLC v. Shah, 2025 NCBC LEXIS 113 (N.C. Super. Ct. Aug. 8, 2025); Carolina Med. Partners, PLLC v. Shah, 2024 NCBC LEXIS 86 (N.C. Super. Ct. June 27, 2024); Carolina Med. Partners, PLLC v. Shah, 2023 NCBC LEXIS 9 (N.C. Super. Ct. Jan. 24, 2023). II. ANALYSIS
6. In deciding a motion to dismiss, the Court must treat the well-pleaded
allegations as true and view the facts and permissible inferences “in the light most
favorable to” the nonmoving party. Sykes v. Health Network Sols., Inc., 372 N.C. 326,
332 (2019) (citation and quotation marks omitted). The Court need not accept as true
any “conclusions of law or unwarranted deductions of fact.” Wray v. City of
Greensboro, 370 N.C. 41, 46 (2017) (citation and quotation marks omitted).
7. Shah asserts two grounds for dismissal. First, he contends that the Patels
released their counterclaim for constructive fraud in a Practice Separation
Agreement that the parties executed in 2021. Second, he contends that the
counterclaim does not sufficiently allege an essential element of constructive fraud.
Neither contention carries the day.
8. Turning to the Practice Separation Agreement, a preliminary question is
whether the Court may consider the agreement at all. The Patels say that it is
evidence outside the pleading and, thus, off limits. In fact, the agreement is at the
heart of these consolidated actions, and the Patels were the ones who began the
litigation by asserting claims for its breach. Given the agreement’s centrality to the
parties’ disputes and its undisputed authenticity, there is no reason not to consider
it. See, e.g., Sec. Camera Warehouse, Inc. v. Bowman, 2017 NCBC LEXIS 39, at *8
(N.C. Super. Ct. May 1, 2017) (collecting cases and considering settlement agreement
in connection with motion to dismiss when authenticity not in dispute). 9. It is by no means clear, however, that the Patels released their counterclaim
for constructive fraud in the Practice Separation Agreement. Yes, the agreement
contains a release of claims. But the scope of the release is ambiguous and arguably
does not apply to this counterclaim.
10. The agreement’s text bears this out. In section 9, the parties agreed to defer
litigation of their unresolved direct and derivative claims pending completion of a
second mediation and an investigation by a special committee of “disinterested
lawyers.” (PSA § 9(b)–(d).) The special committee’s task was to produce a report
stating “whether each asserted derivative claim should or should not be pursued on
behalf of” Palmetto Medical Group. (PSA § 9(d).) Only after receiving this report
would the parties be free to begin a lawsuit “to pursue any direct claims not resolved
at the [second] mediation.” (PSA § 9(e).) If neither side filed suit within thirty days
of receiving the report, a broad release of all claims would “become effective, binding,
and fully enforceable.” (PSA § 9(f).) But if either side filed suit, the release would
not apply to any claims timely filed within the thirty-day window “or any
counterclaims asserted by any Party against whom claims are asserted.” (PSA § 9(f)
(emphasis added).)
11. As it happens, Shah and the Patels timely filed separate lawsuits asserting
certain direct claims after receiving the special committee’s report. Then, in response
to Shah’s complaint, the Patels asserted this claim for constructive fraud as a
counterclaim. Were the Patels allowed to double dip in this way? That is, does section
9 require the parties to assert all claims at one time (either affirmatively in a complaint or defensively as counterclaims), as Shah contends? Or does it exempt any
and all counterclaims from the broad language of the release, as the Patels contend?
The structure of section 9 favors Shah, but portions of the text favor the Patels. As a
result, “the effect of [the release] provisions is uncertain or capable of several
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Carolina Med. Partners, PLLC v. Shah, 2025 NCBC 61.
STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE SUPERIOR COURT DIVISION MECKLENBURG COUNTY MASTER FILE 22CVS013767-590
CAROLINA MEDICAL PARTNERS, PLLC; NIMISH PATEL; and SHEPHALI PATEL,
Plaintiffs, ORDER AND OPINION ON MOTION TO DISMISS COUNTERCLAIM v.
AMIT G. SHAH and PALMETTO MEDICAL GROUP, PLLC,
Defendants.
AMIT G. SHAH and PALMETTO 24CV059193-590 MEDICAL GROUP, PLLC, RELATED CASE
Plaintiffs,
v.
NIMISH PATEL and SHEPHALI PATEL,
Defendants.
NIMISH PATEL and SHEPHALI 24CV059359-590 PATEL, RELATED CASE
Plaintiffs,
v.
AMIT G. SHAH et al.
Defendants. 1. These consolidated cases arise out of disputes among three physicians who
once practiced together. There are many claims and parties. At issue here is a
counterclaim asserted by Nimish and Shephali Patel against Amit Shah in Shah v.
Patel, No. 24CV059193-590 (“Shah Action”). Shah has moved to dismiss the
counterclaim. For the following reasons, the Court DENIES his motion.
Ward and Smith, P.A., by Alexander C. Dale and Edward James Coyne, for Nimish Patel, Shephali Patel, and Carolina Medical Partners, PLLC.
K&L Gates LLP, by Daniel Drew McClurg and Marla Tun Reschly, for Palmetto Medical Group, PLLC and Amit G. Shah.
Robinson, Bradshaw & Hinson, P.A., by Stephen M. Cox, for Piedmont Research Partners, LLC.
Burris, MacMillan, Pearce & Burris, PLLC, by Hugo Pearce, III, for Carolinas Living, L.L.C. and Carolinas Senior Care, LLC.
Conrad, Judge.
I. BACKGROUND
2. This background assumes that the Patels’ allegations are true, as required
on a motion to dismiss. (See Countercl., ECF No. 113 [Lead Case No. 22CV013767-
590].)
3. Shah and the Patels are physicians who used to practice together at
Palmetto Medical Group, PLLC. No longer. Each side now accuses the other of
dishonesty, financial improprieties, and contractual infractions. Since 2021, the
myriad efforts to resolve these disputes—through litigation and alternative dispute resolution—have yielded halting progress. This consolidated action encompasses
three lawsuits involving eight parties and claims by the dozen. *
4. Relevant here is the Patels’ counterclaim in the Shah Action. The Patels
allege that Shah was Palmetto Medical Group’s controlling, majority member and,
thus, owed a fiduciary duty to them. Shah allegedly breached that duty by using
company funds to benefit himself, his wife, and other entities in which he has an
interest. A few examples will paint the picture: according to the counterclaim, Shah
directed Palmetto Medical Group to make phony loans to one of his other entities,
used the practice’s funds to pay his personal expenses, unilaterally raised his own
salary, hired his wife and gave her a salary for little or no work, and had the practice
pay two individuals for services that they or their related entities provided to Shah
personally. Based on these allegations, the Patels assert a single counterclaim for
constructive fraud. (See, e.g., Countercl. ¶¶ 24, 26, 27, 32.)
5. Shah has moved to dismiss the counterclaim under Rule 12(b)(6) of the
North Carolina Rules of Civil Procedure. The motion is fully briefed. Having
reviewed the briefs, the Court concludes that oral argument would not aid its decision
and therefore decides the motion without a hearing. See BCR 7.4.
* Earlier decisions describe these cases and their history in more detail. See, e.g., Carolina Med. Partners, PLLC v. Shah, 2025 NCBC LEXIS 113 (N.C. Super. Ct. Aug. 8, 2025); Carolina Med. Partners, PLLC v. Shah, 2024 NCBC LEXIS 86 (N.C. Super. Ct. June 27, 2024); Carolina Med. Partners, PLLC v. Shah, 2023 NCBC LEXIS 9 (N.C. Super. Ct. Jan. 24, 2023). II. ANALYSIS
6. In deciding a motion to dismiss, the Court must treat the well-pleaded
allegations as true and view the facts and permissible inferences “in the light most
favorable to” the nonmoving party. Sykes v. Health Network Sols., Inc., 372 N.C. 326,
332 (2019) (citation and quotation marks omitted). The Court need not accept as true
any “conclusions of law or unwarranted deductions of fact.” Wray v. City of
Greensboro, 370 N.C. 41, 46 (2017) (citation and quotation marks omitted).
7. Shah asserts two grounds for dismissal. First, he contends that the Patels
released their counterclaim for constructive fraud in a Practice Separation
Agreement that the parties executed in 2021. Second, he contends that the
counterclaim does not sufficiently allege an essential element of constructive fraud.
Neither contention carries the day.
8. Turning to the Practice Separation Agreement, a preliminary question is
whether the Court may consider the agreement at all. The Patels say that it is
evidence outside the pleading and, thus, off limits. In fact, the agreement is at the
heart of these consolidated actions, and the Patels were the ones who began the
litigation by asserting claims for its breach. Given the agreement’s centrality to the
parties’ disputes and its undisputed authenticity, there is no reason not to consider
it. See, e.g., Sec. Camera Warehouse, Inc. v. Bowman, 2017 NCBC LEXIS 39, at *8
(N.C. Super. Ct. May 1, 2017) (collecting cases and considering settlement agreement
in connection with motion to dismiss when authenticity not in dispute). 9. It is by no means clear, however, that the Patels released their counterclaim
for constructive fraud in the Practice Separation Agreement. Yes, the agreement
contains a release of claims. But the scope of the release is ambiguous and arguably
does not apply to this counterclaim.
10. The agreement’s text bears this out. In section 9, the parties agreed to defer
litigation of their unresolved direct and derivative claims pending completion of a
second mediation and an investigation by a special committee of “disinterested
lawyers.” (PSA § 9(b)–(d).) The special committee’s task was to produce a report
stating “whether each asserted derivative claim should or should not be pursued on
behalf of” Palmetto Medical Group. (PSA § 9(d).) Only after receiving this report
would the parties be free to begin a lawsuit “to pursue any direct claims not resolved
at the [second] mediation.” (PSA § 9(e).) If neither side filed suit within thirty days
of receiving the report, a broad release of all claims would “become effective, binding,
and fully enforceable.” (PSA § 9(f).) But if either side filed suit, the release would
not apply to any claims timely filed within the thirty-day window “or any
counterclaims asserted by any Party against whom claims are asserted.” (PSA § 9(f)
(emphasis added).)
11. As it happens, Shah and the Patels timely filed separate lawsuits asserting
certain direct claims after receiving the special committee’s report. Then, in response
to Shah’s complaint, the Patels asserted this claim for constructive fraud as a
counterclaim. Were the Patels allowed to double dip in this way? That is, does section
9 require the parties to assert all claims at one time (either affirmatively in a complaint or defensively as counterclaims), as Shah contends? Or does it exempt any
and all counterclaims from the broad language of the release, as the Patels contend?
The structure of section 9 favors Shah, but portions of the text favor the Patels. As a
result, “the effect of [the release] provisions is uncertain or capable of several
reasonable interpretations.” Register v. White, 358 N.C. 691, 695 (2004). Because of
the ambiguity, the release does not support dismissal at the pleading stage.
12. As a second ground for dismissal, Shah argues that the counterclaim’s
allegations of constructive fraud are deficient. To state a claim for constructive fraud,
a plaintiff must allege “(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.” Bryant v. Wake Forest Univ. Baptist Med. Ctr.,
281 N.C. App. 630, 637 (2022) (citation and quotation marks omitted). Shah takes
issue with the third element.
13. Little needs to be said about this argument. Shah concedes that the
counterclaim adequately alleges that he sought to benefit himself through certain
transactions. (See Countercl. ¶ 27(d) (salary increase), ¶ 27(e) (direct payment),
¶ 27(g) (usurpation of corporate opportunity).) The complaint plainly alleges
ill-gotten benefits related to several other transactions as well. (See Countercl.
¶ 27(a) (“distributions to Shah”), ¶ 27(j) (“improper $10,000.00 distribution”), ¶ 27(k)
(“improper transfers of monies . . . to himself”).) And there are also allegations that
Shah made payments from Palmetto Medical Group to his wife and to other entities
that he owns. (See Countercl. ¶ 27(b), (c), (h).) These are more than sufficient to state a claim. See, e.g., Wayne Constr. Managers of Goldsboro v. Amory, 2019 NCBC LEXIS
32, at *40–41 (N.C. Super. Ct. May 17, 2019) (“The Court also is not persuaded by
Amory’s argument that the element of personal benefit necessary to a claim for
constructive fraud must be alleged with particularity . . . .”); Scott v. Lackey, 2012
NCBC LEXIS 60, at *45 (N.C. Super. Ct. Dec. 3, 2012) (denying motion to dismiss
based on allegations that defendants “breached their duty to [plaintiff] to benefit their
new company . . . by providing it with start-up capital”).
14. Shah may well be right that some of the allegations that he sought to benefit
himself are less plausible than others. But “the higher federal plausibility pleading
standard differs from our State’s notice pleading standard.” Fox v. Johnson, 243 N.C.
App. 274, 286 (2015). And in any event, “a court dismisses claims, not allegations.”
JT Russell & Sons, Inc. v. Russell, 2024 NCBC LEXIS 37, at *10 (N.C. Super. Ct. Feb.
28, 2024) (citation and quotation marks omitted); see also United States ex rel. Cooley
v. ERMI, LLC, 2023 U.S. Dist. LEXIS 196605, at *9 n.3 (N.D. Ga. Nov. 2, 2023) (“If
the allegations that ERMI makes are sufficient to state a claim as a whole, the fact
that some of its allegations may not contribute to a breach of fiduciary duty does not
doom an otherwise sufficiently pled claim.” (cleaned up)).
III. CONCLUSION
15. For all these reasons, the Court DENIES the motion. SO ORDERED, this the 8th day of October, 2025.
/s/ Adam M. Conrad Adam M. Conrad Special Superior Court Judge for Complex Business Cases