Hogan v. Thayer

• Court: Court of Appeals of North Carolina
• Decided: May 6, 2026
• Docket: 25-931
• Status: Unpublished
• Author: Judge John Arrowood

Opinion

An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority. Citation is disfavored but may be permitted in accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure.

IN THE COURT OF APPEALS OF NORTH CAROLINA

No. COA25-931

Filed 6 May 2026

Wake County, No. 24CV023786-910

TYLER SCOTT HOGAN, Plaintiff,

v.

TERRANCE DOUGLAS THAYER, II, KRISTEN LEONARD THAYER, INTELLOMATE, LLC, 42 NORTH, LLC, ASAP SYSTEMS, INC., CAROLINAVEST, LLC, RUTH HOLDINGS, LLC, SUR VENTURES, LLC, T 42 SQUARED LLC, TAB RALEIGH, LLC, AMZ PROS, LLC, THAYER INVESTMENTS, INC., THAYER VENTURES, INC., TKT HOLDINGS, LLC, THE THAYER CO, LLC, and ROW 12, LLC, Defendants.

Appeal by defendants from order entered 4 June 2025 by Judge Warren

McSweeney in Wake County Superior Court. Heard in the Court of Appeals 21 April

2026.

Harris Legal, PLLC, by Zachary M. Harris, for plaintiff-appellee.

Phelps Dunbar LLP, by Sarah Covey Blount and Jonathan E. Hall, for defendants-appellants.

ARROWOOD, Judge.

Terrance Douglas Thayer, II (“Mr. Thayer”); Kristen Leonard Thayer (“Ms.

Thayer”); Intellomate, LLC; 42 North, LLC; ASAP Systems, Inc.; Carolina Vest, LLC; HOGAN V. THAYER

Opinion of the Court

Ruth Holdings, LLC; Sur Ventures, LLC; T 42 Squared, LLC; TAB Raleigh, LLC;

AMZ Pros, LLC; Thayer Investments, Inc.; Thayer Ventures, Inc.; TKT Holdings,

LLC; The Thayer Co., LLC; and Row 12, LLC (collectively the “defendants”) appeal

from an order denying their Motion to Stay Pending Arbitration. Defendants contend

there is a valid and binding agreement to arbitrate which must be enforced, and

further argue they did not waive their right to arbitration. For the following reasons,

we affirm the trial court’s order.

I. Background

On 29 July 2024, plaintiff filed his initial Complaint in this matter. Plaintiff

asserts claims of fraud, civil conspiracy, unfair and deceptive trade practices, unjust

enrichment, fraudulent transfer, negligent misrepresentation, breach of fiduciary

duty, and breach of contract, with an additional claim for veil piercing because the

corporate defendants were the Thayers’ instrumentalities.

The Complaint’s factual allegations are as follows. The course of conduct

alleged began when Mr. and Ms. Thayer formed the online commerce venture

Intellomate, which the Complaint describes as a “drop-shipping”1 company. In

March 2022, plaintiff saw a social media post by Intellomate advertising its passive

1 In this practice, Merchant A identifies a product for sale by Merchant B and advertises the product

himself at a higher price. When Customer orders the product from Merchant A, Merchant A buys the product from Merchant B but requests shipment to Customer’s address. At the time of purchase, if the sale is no longer profitable for Merchant A or the item is no longer available from Merchant B, Merchant A cancels the sale and refunds Customer. Drop-shipping merchants frequently open online vendors through Amazon, which forbids the practice and accordingly terminates such vendors.

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investment opportunity and “model of success” and subsequently paid $500.00 to

meet with Mr. Thayer. Mr. Thayer “promised they could generate incredible returns”

for him and offered a refund if he “hadn’t made his money back in 18 months[.]” Mr.

Thayer did not inform plaintiff: that the drop-shipping procedure violated Amazon

policy, that several clients’ stores had already been terminated as a result, and that

the procedure depended on the deception of both Amazon and its buyers. Mr. Thayer

routinely told investors that he developed an automated system but instead relied on

remote overseas workers.

The alleged “material misrepresentations and concealments” induced plaintiff

to pay Mr. Thayer $35,000.00 and a monthly management fee, entering an “illusory

contract” with Intellomate. Defendants also received a 35% share of any profits

investors earned on drop-shipped purchases.

On 20 May 2022, an employee of Mr. and Ms. Thayer “accidentally included all

of [their] clients” on an e-mail, which raised suspicions among its recipients. In a

subsequent Zoom meeting, these investors confronted Mr. and Ms. Thayer about

disappointing returns, and the Thayers refused to issue refunds to those who “wanted

out of the investment.” In July 2022, plaintiff requested itemized receipts to

substantiate charges to his credit card, but Mr. Thayer refused and offered to let him

out of the contract but without a refund. Plaintiff discovered that the Thayers often

refunded plaintiff’s customers even after delivery of their orders and issued them

false tracking numbers. After plaintiff demanded a meeting with Mr. Thayer, his

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access to the seller account was revoked, and on 19 August 2022, Mr. Thayer told the

investors “they were going to suspend all of their stores indefinitely” and refused to

issue refunds or otherwise honor any guarantees. This foreclosed any possibility of a

return on plaintiff’s investment.

Plaintiff says Intellomate managed 200 stores through initial investments of

“at least $35,000.00 each” over 18 months, thereby netting over $7,000,000.00.

Plaintiff alleges that Intellomate, LLC, 42 North LLC, LLC, ASAP Systems, Inc.,

Carolina Vest, LLC, The Thayer Co., LLC, Ruth Holdings, LLC, Sur Ventures, LLC,

T 42 Squared, LLC, AMZ Pros, LLC, TAB Raleigh, LLC, Thayer Investments, Inc.,

Thayer Ventures, Inc. and TKT Holdings, LLC (the “Corporate Defendants”) are

“primarily sham companies,” most of which share the same office address and phone

numbers, and for which Mr. and/or Ms. Thayer are listed as managers or corporate

representatives. Plaintiff alleges that his contract with defendants was void ab initio

because it was procured by fraud.

On 31 July 2024, all defendants received service of the above Complaint,

except Mr. and Ms. Thayer; TAB Raleigh, LLC; and AMZ Pros, LLC. Ms. Thayer was

served on 6 August 2024, and Mr. Thayer was served on 12 August 2024. Plaintiff’s

Amended Complaint added a claim for punitive damages and a new defendant, Row

12, LLC, and was served on 28 August 2024. Defendants served an Answer to the

Amended Complaint on 18 October 2024. TAB Raleigh, LLC and AMZ Pros, LLC

were served on 23 October 2024.

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On 17 March 2025, plaintiff filed a Motion for Sanctions pursuant to Rule 37

as to all defendants, and the trial court heard the Motion on 1 April 2025. The court

found that, following a previous Order allowing plaintiff’s Motion to Compel,

defendants’ production was not “full and complete” and “this failure was not

justified.” The court ordered Mr. and Ms. Thayer to provide “full and complete

responses” by 5:00 p.m. on 4 April 2025, and if they were not “full and complete” the

Amended Complaint’s allegations would be “established as admitted” and all

defendants would be “precluded from contesting them.”

Following the 1 April 2025 hearing, plaintiff’s attorney Zachary M. Harris

(“Mr. Harris”) contacted defendants’ attorney Sarah Covey Blount (“Ms. Blount”)

with an attached proposed order. By e-mail, Ms. Blount asked for a “short extension

until next week to appropriately respond before submitting this form of the Order”

because she was “forced to deal with a very serious personal matter.” Mr. Harris

waited to submit the proposed order.

However, although they were apprised of the court’s deadline, the record does

not reflect that the individual defendants complied with the Order Granting

Sanctions by making any submissions. Instead, on 4 April 2025, three days after her

e-mail response, Ms. Blount initiated commercial demand for arbitration against

plaintiff on behalf of Intellomate. On 14 April 2025, defendants filed a Motion to Stay

Pending Arbitration pursuant to N.C.G.S. § 1-569.5.

The trial court heard defendants’ Motion to Stay Pending Arbitration on

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19 May 2025. It entered its written Order denying this Motion on 5 June 2025. The

Order established the following factual findings and legal conclusions. First, it found

that the court had already denied defendants’ Motion for Reconsideration of the Order

Granting Sanctions, and that the allegations of the Amended Complaint were

therefore “judicially established” and “incorporated into this Order as findings of

fact.” Next, the court found that the parties’ contract containing an arbitration

provision was “void ab initio” because it was procured by fraud and that therefore no

arbitration agreement between the parties exists. Also, it found that defendants

“have waived any right to arbitration they may have had by their delay and by taking

actions inconsistent with an intent to arbitrate” because they made discovery filings,

filed an Answer, corresponded with plaintiff’s counsel, calendared motions, and

selected a mediator without ever “raising arbitration as an issue” and “only raised

arbitration and sought this stay after they were sanctioned.” Last, the court found

that plaintiff was prejudiced by the failure to raise arbitration earlier, due to the

significant resources expended in litigation as to the Discovery Order, Sanctions

Order, and defendants’ Motion for Reconsideration absent any pursuit of arbitration.

On 19 May 2025, defendants gave Notice of Appeal as to the Order Denying

the Motion to Stay Pending Arbitration.

II. Discussion

The order on appeal is interlocutory, as it does not dispose of the entire pending

case. See Veazey v. Durham, 231 N.C. 357, 362 (1950). Although such orders are

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generally not appealable, grounds for appellate review exist where the order “affects

a substantial right.” N.C.G.S. § 1-277(a); N.C.G.S. § 7A-27(b)(1), (3)(a). An order

denying a motion to stay pending arbitration, while interlocutory, is immediately

appealable because it affects a substantial right. Gemini Drilling & Found., LLC v.

Nat’l Fire Ins. Co., 192 N.C. App. 376, 381 (2008). Therefore, grounds exist obliging

us to review the order.

Defendants offer three contentions to support their argument that we must

reverse the trial court’s denial of their Motion to Stay Pending Arbitration and

remand to the trial court for entry of an order granting it. First, they contend that

the order should be vacated and rendered void and the allegations therein should not

be established as admitted. Second, they contend that the parties have a valid and

binding agreement to arbitrate which must be enforced under the Federal Arbitration

Act. Third, they contend that defendants never waived their right to arbitration.

A. Standard of Review

Whether a particular dispute is subject to arbitration is a question of law

asking “whether the parties had a valid agreement to arbitrate” and whether “the

specific dispute falls within the substantive scope of the agreement.” Raspet v. Buck,

147 N.C. App. 133, 136 (2001) (citation and internal quotation marks omitted). The

trial court’s factual findings are “conclusive on appeal if supported by competent

evidence, even if” contrary evidence exists; legal conclusions drawn therefrom are

reviewable de novo. Tillman v. Com. Credit Loans, Inc., 362 N.C. 93, 100–101 (2008)

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(citations and quotes omitted).

B. The Trial Court Properly Found That No Valid or Enforceable Arbitration Provision Exists

The trial court and the parties agree that the Federal Arbitration Act (“FAA”)

governs the subject matter of this dispute and that North Carolina’s Uniform

Arbitration Act applies to questions that legislation does not address. “[W]e are

bound by the decisions of the United States Supreme Court construing federal laws,

such as the FAA.” Torrence v. Nationwide Budget Fin., 232 N.C. App. 306, 321 (2014)

(citation omitted). The Supreme Court instructs that “federal policy is about treating

arbitration contracts like all others, not about fostering arbitration[,]” and “a court

may not devise novel rules to favor arbitration over litigation.” Morgan v. Sundance,

Inc., 596 U.S. 411, 418 (2022) (citation omitted).

The FAA provides for enforcement of arbitration agreements except where

superseding “grounds exist at law or in equity[.]” 9 U.S.C. § 2. “State law generally

governs issues concerning the validity, revocability, or enforcement” of arbitration

agreements, including generally applicable contract defenses such as fraud, duress,

or unconscionability without contravening the FAA. See Ragan v. Wheat First Sec.,

Inc. 138 N.C. App. 453, 546 (2000); see also Doctor’s Assocs., Inc. v. Casarotto, 517

U.S. 681, 687 (1996).

Even if a contract is valid and contains a valid arbitration clause, a party may

waive the right to invoke this agreement by taking actions inconsistent with such

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right. Herbert v. Marcaccio, 213 N.C. App. 563, 567 (2011). Whether a party has

waived a right to arbitration is a question of fact. Id. A party impliedly waives

arbitration when, by delay or conduct inconsistent with arbitration, the opposing

party is prejudiced. Id.

The record before us supports the Order’s factual finding that defendants acted

inconsistently with the intent to arbitrate. Defendants waited over six months from

the date of service and never raised arbitration before the Sanctions Order. In the

meantime, they filed an Answer and Motion to Dismiss, served discovery and

interrogatory responses so useless as to prolong litigation, and then calendared

plaintiff’s Motion to Compel. By the time defendants filed their Motion to Stay

Pending Arbitration, plaintiff was prejudiced, having pursued motions that likely

would have been unnecessary had defendants shown an intent to arbitrate at the

proper time. These findings as to prejudice and waiver are conclusive on appeal.

The court wrote that “there is no enforceable arbitration agreement between

the parties and, if there were, the Defendants have waived any right to arbitration

they might have had” and therefore denied defendants’ Motion to Stay Pending

Arbitration. Because the findings support this legal conclusion, we affirm the court’s

Order.

III. Conclusion

For the above reasons, we affirm the trial court’s order denying the Motion to

Stay Pending Arbitration.

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AFFIRMED.

Judges HAMPSON and FLOOD concur.

Report per Rule 30(e).

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