State Ex Rel. Jackson v. Mv Realty Pbc, LLC

2026 NCBC 2

• Court: North Carolina Business Court
• Decided: January 16, 2026
• Docket: 23-CVS-6408
• Status: Published
• Author: Mark A. Davis

Opinion

State ex rel. Jackson v. MV Realty PBC, LLC, 2026 NCBC 2.

STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE SUPERIOR COURT DIVISION WAKE COUNTY 23CV006408-910 STATE OF NORTH CAROLINA, ex rel. JEFF JACKSON, Attorney General,

Plaintiff, ORDER AND OPINION ON v. PLAINTIFF’S PARTIAL MOTION FOR SUMMARY JUDGMENT AND MV REALTY PBC, LLC; MV REALTY OF NORTH CAROLINA, PLAINTIFF’S MOTION TO STRIKE LLC; MV BROKERAGE OF NORTH CAROLINA, LLC; AMANDA ZACHMAN; ANTONY MITCHELL; DAVID MANCHESTER; and DARRYL COOK,

Defendants.

THIS MATTER is before the Court on Plaintiff State of North Carolina, ex rel.

Jeff Jackson, Attorney General’s Motion for Partial Summary Judgment (ECF No.

165) and Motion to Strike Averments in Declaration of David Manchester (“Motion to

Strike,” ECF No. 174).

THE COURT, having considered the Motion for Partial Summary Judgment,

the Motion to Strike, the parties’ briefs and exhibits, the arguments of counsel, and

all other appropriate matters of record, CONCLUDES that Plaintiff’s Motion for

Partial Summary Judgment should be GRANTED, and Plaintiff’s Motion to Strike

should be GRANTED in part and DENIED in part. The Court DEFERS ruling on

Plaintiff’s request for an award of restitution and civil penalties until a later date.

Attorney General Jeff Jackson, by Director of Major Litigation, Consumer Protection Division Brian D. Rabinovitz, Special Deputy Attorney General Keith T. Clayton, and Special Deputy Attorney General Asa C. Edwards, IV for Plaintiff. Saul Ewing Arnstein & Lehr, LLP, by John C. Gekas, Nathan S. Henderson, Angela C. de Cespedes, Jillian C. Postal, Samuel Bordoni- Cowley, Steven Reingold, and Megan Warshawsky; and Young Moore and Henderson, P.A., by Walter E. Brock, Jr., and David W. Earley, for Defendants.

Davis, Judge.

INTRODUCTION

1. Beginning in 2020, the defendants in this case began operating an

enterprise in North Carolina in which they persuaded homeowners to sign contracts

obligating them to use defendants’ agents as their exclusive real estate brokers if they

sold their homes within the ensuing forty-year period. The terms of these contracts

purported to allow the defendants to recover monetary penalties against a

homeowner who breached the contract by using a different broker. Defendants also

engaged in a pattern and practice of acts designed to create a cloud on the title of

participating homeowners in their respective properties. The State of North

Carolina, through its Attorney General, has filed the present action asserting that by

operating this enterprise the defendants have engaged in unfair or deceptive trade

practices as well as committing other violations of North Carolina law—including

violations of existing legal restrictions on telephonic solicitations.

FACTUAL AND PROCEDURAL BACKGROUND

2. “The Court does not make findings of fact on motions for summary

judgment; rather, the Court summarizes material facts it considers to be

uncontested.” McGuire v. LORD Corp., 2021 NCBC LEXIS 4, at **1–2 (N.C. Super.

Ct. Jan. 19, 2021) (cleaned up). 3. The Plaintiff in this action is the State of North Carolina, ex rel. Jeff

Jackson, Attorney General (the “State”), acting pursuant to N.C.G.S. §§ 75-14 and

75-105(a). (Compl. ¶ 1, ECF No. 2.)

4. Defendant MV Realty PBC, LLC is a Florida limited liability company

and the sole corporate member of Defendant MV Realty of North Carolina, LLC.

(2022 Florida Limited Liability Company Annual Report, ECF No. 32.21; MV Realty

Operating Agreement, at 13, ECF No. 167.36.)

5. Defendant MV Realty of North Carolina, LLC is a North Carolina

limited liability company that held a North Carolina real estate broker’s license until

2023. (Compl. ¶ 3; Answer ¶ 3, ECF No. 100; North Carolina Real Estate Commission

Order dated 13 March 2024, at 13, ECF No. 167.2.)

6. Defendant MV Brokerage of North Carolina, LLC is a North Carolina

limited liability company. (Compl. ¶ 5; Answer ¶ 5.)1

7. The individual Defendants are current and former owners, officers, and

employees of the various MV Realty entities.

8. Defendant Amanda Zachman founded MV Realty PBC, LLC in 2014 and

serves as its managing director and officer. (Compl. ¶ 8; Answer ¶ 8; 2022 Florida

Limited Liability Company Annual Report.) Zachman also serves as an officer of MV

Realty of North Carolina, LLC. (MV Realty Operating Agreement, at 4.)

1 Throughout this Opinion, the Court often refers to these entities collectively as “MV Realty.”

At other times, the Court refers to these entities (along with the four individually named defendants) simply as “Defendants.” 9. Defendant Antony Mitchell is the Chief Executive Officer of MV Realty

PBC, LLC and an officer of MV Realty of North Carolina, LLC. (Mitchell Decl. ¶ 1,

ECF No. 38.2; MV Realty Operating Agreement, at 4.)

10. Defendant David Manchester is the Chief Operating Officer of MV

Realty PBC, LLC. (Manchester Decl. ¶ 2, ECF No. 170.1). Zachman, Mitchell, and

Manchester are also members of MV Realty of North Carolina, LLC. (North Carolina

Limited Liability Company Annual Report, Ex. 11, ECF No. 32.11; MV Realty

Operating Agreement, at 4.)

11. Defendant Darryl Cook is a former licensed real estate broker and

former employee of MV Realty of North Carolina, LLC, who served as both its Broker-

in-Charge and Broker-of-Record. (Real Estate Commission Order ¶ 5.) 2

12. Defendants began marketing a Homeowner Benefit Agreement (“HBA”)

program to North Carolina homeowners in August 2020. (Mitchell Decl. ¶¶ 3–6, 9.)

13. Through the HBA program, MV Realty represented to North Carolina

homeowners that it was “offer[ing] a homeowner an immediate cash payment

between $300 to $5,000, depending on the value of the homeowners’ property. In

exchange, homeowners agree that, if they choose to sell their home during the

duration of the program, they will (1) enter into a separate listing agreement; and (2)

allow MV [Realty] to be their listing agent.” (Mitchell Decl. ¶ 6.)

2 On 13 March 2024, the North Carolina Real Estate Commission entered Findings of Fact,

Conclusions of Law, and an Order (the “Real Estate Commission Order” ECF No. 167.2) in which it determined that Darryl Cook and MV Realty of North Carolina LLC had violated N.C.G.S §§ 93-6(a)(1), (a)(2), (a)(3), (a)(8), (a)(10), and (a)(15). The Real Estate Commission Order revoked Darryl Cook’s real estate broker license and permanently revoked the real estate broker license of MV Realty of North Carolina, LLC. 14. MV Realty operated websites where it advertised the HBA program to

homeowners and requested that homeowners provide their contact information and

consent to be contacted by an MV Realty agent about the program. (Mitchell Decl. ¶

30.) 3 MV Realty also contracted with online lead generators to direct homeowners to

its website, thereby maximizing the number of homeowners who would sign up for

the program. (Mitchell Decl. ¶ 31.)

15. An agent of MV Realty would thereafter contact homeowners and offer

an incentive payment to the homeowner if they enrolled in the program. (Mitchell

Decl. ¶¶ 6, 30–32, 35–36.) If a homeowner responded that they would accept the

payment, MV Realty sent a notary to their home along with a copy of an HBA, which

consisted of a written contract between the homeowner and MV Realty. (Compl. ¶ 40;

Mitchell Decl. ¶ 37.) Absent a specific request from the homeowner, the first time a

homeowner was afforded the opportunity to review the terms of the HBA was the day

the notary arrived at their home to have them sign it. (Mitchell Decl. ¶ 38.)

16. The HBA granted MV Realty an exclusive right to serve as the

homeowner’s listing agent in the event the homeowner decided to sell their home or

if title to the home was otherwise transferred. (Sample HBA at 1–2, ECF No. 38.3.)

The duration of each HBA was forty years. (Sample HBA at 2.) If a participating

homeowner decided to sell their home during the HBA’s term, the commission due to

MV Realty upon sale would be the greater of 6% of the sale price or the estimated fair

3 As discussed in much more detail later in this Opinion, the State vigorously contends that Defendants have failed to put forth evidence that lawful consent was actually given by the homeowners MV Realty contacted. market value of the home at the time the HBA was entered into if there was no other

cooperating broker. (Sample HBA at 2.) If another broker participated in the sale,

the commission due to MV Realty was the greater of 3% of the sale price or 3% of the

home’s estimated value at the time the HBA was executed. (Sample HBA at 2.) The

HBA’s terms provided that the agreement would remain binding on the homeowner’s

heirs upon the homeowner’s death during the forty-year term. (See Sample HBA at

2.)

17. If a participating homeowner breached the HBA by, for example, using

a different listing agent to sell their home, the HBA provided that MV Realty was

entitled to receive an Early Termination Fee (“ETF”) in the amount of 3% of the fair

market value of the home either at the time the HBA was executed or at the time the

HBA was breached—whichever was greater. (Sample HBA at 2.) The HBA further

stated that the obligations of program participants “constitute covenants running

with the land and . . . shall bind future successors in interest to title to the Property”

and that, in the event the HBA was breached, “any amounts owed . . . to [MV Realty]

. . . shall be secured by a security interest and lien in and against the Property as

security for the amounts owed” under the agreement. (Sample HBA at 3.)

18. MV Realty provided public notice of a homeowner’s participation in the

HBA program by recording a document designated as a Memorandum of MVR

Homeowner Benefit Agreement (“Memorandum” or “Memoranda”) with the Register

of Deeds office in the county where the home was located. (Mitchell Decl. ¶ 27.) The

Memorandum consisted of one page (plus signature pages for the homeowner and an MV Realty representative) and did not recite the terms of the HBA or attach the HBA

as an exhibit. (Mem. HBA at 11–12, ECF No. 38.3.) Instead, the Memorandum

simply contained a brief description of the homeowner’s participation in the program

and stated that the obligations of the homeowner were “covenants running with the

land and bind future successors-in-interest to title to the Property.” (Mem. HBA at

11.)

19. The HBA included three exhibits: (1) a “Working with Real Estate

Agent”’ brochure, (2) a “Payment Authorization Agreement” form, and (3) the above-

mentioned Memorandum. (Revis Aff. ¶ 4, ECF No. 39.1.) Although the HBA

referenced a sample listing agreement, no such listing agreement was actually

attached to the HBA. Instead, the HBA provided a link to a website where MV

Realty’s standard listing agreement could be downloaded. (Sample HBA at 1.)

20. Approximately 2,100 North Carolina homeowners have participated in

the HBA program through the present date. (Compl. ¶4; Answer ¶ 4.)

21. MV Realty’s general practice when it suspected an HBA program

participant may have breached the HBA was to send the homeowner a letter

“remind[ing] the homeowner of their obligations under the HBA and the payments

they may be liable for in the event of breach.” (Mitchell Decl. ¶ 53.) MV Realty sent

at least 67 such letters to homeowners in North Carolina. (Mitchell Decl. ¶ 54.)

22. MV Realty has sought to enforce HBAs by filing a number of lawsuits

for breach of contract against North Carolina homeowners who were alleged to have

breached their respective HBAs. (Compl., Ex. 19; Compl., Ex. 20; Pls.’ Reply Br. Supp. Mot. Prelim. Inj., Ex. 9, ECF No. 39.9; Pls.’ Reply Br. Supp. Mot. Prelim. Inj.,

Ex. 10, ECF No. 39.10.)

23. When MV Realty filed such lawsuits, it also filed a notice of lis pendens

against the homeowner’s property with the Register of Deeds in the applicable

county. (Compl. Ex. 21; Compl. Ex. 22.) In those lawsuits, MV Realty typically

requested that the lis pendens remain pending throughout the duration of the

lawsuit. (Pl.’s. Reply Br. Supp. Mot. Prelim. Inj., Ex. 9; Pl.’s Reply Br. Supp. Mot.

Prelim. Inj., Ex. 10.)

24. On several occasions when MV Realty believed a homeowner had

breached an HBA, MV Realty sent letters “to the buyer[s] of the properties

threatening to file suit against the buyer[s] to foreclose its ‘lien’.” (Compl., Ex. 23.)

25. On 30 March 2023, the State initiated the present action by filing a

Complaint in Wake County Superior Court asserting the following claims for relief

against Defendants: (1) unfair or deceptive trade practices (“UDTP”) pursuant to

N.C.G.S. § 75-1.1, et seq.; (2) unlawful telephone solicitation practices under N.C.G.S.

§ 75-100, et seq.; (3) unfair debt collection practices pursuant to N.C.G.S. § 75-50, et

seq.; and (4) usurious lending practices under N.C.G.S. § 24-1, et seq. (Compl. ¶¶

173–99.)

26. This case was designated as a complex business case and assigned to the

undersigned on 19 April 2023. (ECF No. 7.)

27. On 18 September 2023, the Court entered a Preliminary Injunction

Order (the “PI Order,” ECF No. 72) that directed MV Realty to: (1) record terminations of all Memoranda it had filed regarding the properties of North Carolina

homeowners associated with an HBA; (2) file cancellations of all lis pendens that it

had previously filed on the properties of North Carolina homeowners; and (3) remove

any reference to a lis pendens from any future legal pleadings associated with an

alleged breach of an HBA against a North Carolina homeowner.

28. The PI Order also enjoined MV Realty from:

a. Recording a Memorandum of Homeowner Benefit Agreement (“Memorandum” or, in the plural form, “Memoranda”) on the property of any North Carolina homeowner who entered into a Homeowner Benefit Agreement (“HBA”) with MV Realty prior to 24 August 2023.

b. Asserting or representing to any North Carolina homeowner, title agent, real estate agent, closing attorney, lender, prospective purchaser, or in any legal action involving a North Carolina homeowner who has signed an HBA, that MV Realty holds any valid lien, security interest, real covenant, or any other encumbrance or cloud on title on the home of any North Carolina homeowner or that MV Realty may recover an Early Termination Fee or liquidated damages from a North Carolina homeowner in connection with an HBA.

c. Recovering or attempting to recover any Early Termination Fee or penalty relating to an HBA signed by a North Carolina homeowner, provided that MV Realty may collect (a) a commission provided for in the applicable HBA in cases in which MV Realty performed its services as a listing agent or cooperating broker as set out in the HBA or the listing agreement; and (b) an administrative fee associated with the performance of the services referenced in subpart (a), but only to the extent that said administrative fee was clearly identified in a listing agreement that was either attached to the HBA signed by the North Carolina homeowner or accessible via a URL link contained in the HBA signed by the North Carolina homeowner. d. Filing or causing to be indexed a lis pendens on a property that is the subject of an existing HBA signed by a North Carolina homeowner.

e. Commencing or continuing to prosecute or maintain any legal action or arbitration proceeding to enforce an Early Termination Fee, lien, security interest, or other encumbrance allegedly arising from an HBA signed by a North Carolina homeowner, except that MV Realty shall be permitted to file a legal action or arbitration proceeding (consistent with the terms of the applicable HBA signed by the North Carolina homeowner) to recover damages for breach of the HBA (or to negotiate a settlement of its claim).

(PI Order, at 2–4.) 4

29. On 21 and 22 September 2023, Defendants MV Realty of North

Carolina, LLC and MV Realty PBC, LLC filed petitions for relief under Chapter 11 of

the United States Bankruptcy Code in the United States Bankruptcy Court for the

Southern District of Florida, Case Nos. 23-17595-EPK and 23-17596-EPK,

respectively (the “Bankruptcy Cases”).

30. In conjunction with the Bankruptcy Cases, the Debtor-Defendants

initiated an adversary proceeding (the “Adversary Proceeding,” AP No. 23-01211-

EPK) against the State and other states’ attorneys general on 25 October 2023 that

addressed issues similar to the claims existing in the present litigation.

31. On 7 February 2024, the bankruptcy court entered an Order Abstaining

From and Dismissing Adversary Proceeding. (See ECF No. 104.) On 24 May 2024,

4 On 29 September 2023, the Defendants filed a Notice of Appeal as to the PI Order.(ECF No. 80.) On 21 August 2024, the North Carolina Supreme Court entered an Order dismissing the appeal and remanding this case to this Court. (ECF No. 125.) the bankruptcy court entered an Order Dismissing Cases. (Case No. 23-17590-EPK,

(Bankr. S.D.Fla. May 24, 2024, Doc. 1523).)

32. In the present Motions, the State seeks partial summary judgment on

its UDTP claims and full summary judgment on its Telephone Solicitation Act

claims. 5

33. A hearing was held via Webex on 29 July 2025 at which all parties were

represented by counsel. Following the hearing, the parties submitted supplemental

briefs at the direction of the Court.

34. The Motions are now ripe for resolution.

LEGAL STANDARD

35. It is well established that “[s]ummary judgment is proper ‘if the

pleadings, depositions, answers to interrogatories, and admissions on file, together

with the affidavits, if any, show that there is no genuine issue as to any material fact

and that any party is entitled to a judgment as a matter of law.’ ” Morrell v. Hardin

Creek, Inc., 371 N.C. 672, 680 (2018) (quoting N.C. R. Civ. P. 56(c)). “[A] genuine

issue is one which can be maintained by substantial evidence.” Kessing v. Nat’l

Mortg. Corp., 278 N.C. 523, 534 (1971). “Substantial evidence is such relevant

evidence as a reasonable mind might accept as adequate to support a conclusion and

means more than a scintilla or a permissible inference.” Daughtridge v. Tanager

Land, LLC, 373 N.C. 182, 187 (2019) (cleaned up).

5 Because the State is not seeking summary judgment as to its claims for unfair debt collection practices or usurious lending practices, this Opinion does not address those claims. 36. On a motion for summary judgment, “[t]he evidence must be considered

‘in a light most favorable to the non-moving party.’ ” McCutchen v. McCutchen, 360

N.C. 280, 286 (2006) (quoting Howerton v. Arai Helmet, Ltd., 358 N.C. 440, 470

(2004)). “[T]he party moving for summary judgment ultimately has the burden of

establishing the lack of any triable issue of fact.” Pembee Mfg. Corp. v. Cape Fear

Constr. Co., 313 N.C. 488, 491 (1985).

37. The party moving for summary judgment may satisfy its burden by

proving that “an essential element of the opposing party’s claim does not exist, cannot

be proven at trial, or would be barred by an affirmative defense . . . or by showing

through discovery that the opposing party cannot produce evidence to support an

essential element of [the] claim[.]” Dobson v. Harris, 352 N.C. 77, 83 (2000). “If the

moving party satisfies its burden of proof, then the burden shifts to the non-moving

party to ‘set forth specific facts showing that there is a genuine issue for trial.’ ” Lowe

v. Bradford, 305 N.C. 366, 369–70 (1982) (quoting N.C. R. Civ. P. 56(e)). If the

nonmoving party does not satisfy its burden, then “summary judgment, if

appropriate, shall be entered against [the nonmovant].” United Cmty. Bank (Ga.) v.

Wolfe, 369 N.C. 555, 558 (2017) (quoting N.C. R. Civ. P. 56(e)).

38. When a party requests offensive summary judgment on its own claims

for relief, “a greater burden must be met.” Brooks v. Mt. Airy Rainbow Farms Ctr.,

Inc., 48 N.C. App. 726, 728 (1980). The moving party “must show that there are no

genuine issues of fact, that there are no gaps in his proof, that no inferences

inconsistent with his recovery arise from the evidence, and that there is no standard that must be applied to the facts by the jury.” Parks Chevrolet, Inc. v. Watkins, 74

N.C. App. 719, 721 (1985). For that reason, it is “rarely . . . proper to enter summary

judgment in favor of the party having the burden of proof.” Blackwell v. Massey, 69

N.C. App. 240, 243 (1984).

ANALYSIS

39. The State seeks summary judgment on the following portions of its

UDTP claims as alleged in the Complaint:

a. Defendants committed an unfair or deceptive trade practice by recording encumbrances on the residences of North Carolina homeowners that falsely claimed to be covenants that run with the land;

b. Defendants committed an unfair or deceptive trade practice by filing lis pendens against the properties of homeowners that it believed had breached their HBAs; and

c. Defendants committed an unfair or deceptive trade practice by collecting [ETFs] from North Carolina homeowners under the HBAs despite the fact that such fees constituted unenforceable penalties under North Carolina law.

(Pl.’s Br. Supp. Mot. Summ. J. at 15–31, ECF No. 166.) 6

40. In addition, the State seeks summary judgment on its Telephone

Solicitation Act claims in their entirety based on the following alleged acts by

Defendants:

a. Making of unlawful calls to persons on North Carolina’s Do Not Call Registry; and

6 For clarity, the State contends in this lawsuit that Defendants are also liable for UDTP on

several other grounds as well but are only seeking summary judgment on the three UDTP theories set out above. Therefore, this Opinion does not address those other grounds for UDTP liability. b. Engaging in automatic dialing and recorded message player violations.

(Pl.’s Br. Supp. Mot. Summ. J. at 31–38.)

41. The Court will address each of these issues in turn.

I. UDTP Claims

42. N.C.G.S. § 75-14 states as follows:

If it shall become necessary to do so, the Attorney General may prosecute civil actions in the name of the State on the relation of the Attorney General to obtain a mandatory order, including (but not limited to) permanent or temporary injunctions and temporary restraining orders, to carry out the provisions of [North Carolina’s Unfair and Deceptive Trade Practices Act], and the venue shall be in any county as selected by the Attorney General.

N.C.G.S. § 75-14.

43. In addition, N.C.G.S. § 75-105(a) provides, in pertinent part, that

[t]he Attorney General may investigate any complaints received alleging violation of this Article. If the Attorney General finds that there has been a violation of this Article, the Attorney General may bring an action to impose civil penalties and seek any other appropriate relief pursuant to this Chapter, including equitable relief to restrain the violation.

N.C.G.S. § 75-105(a).

44. The nature of UDTP claims has been summarized by this Court as

follows:

North Carolina law created a private right of action under Chapter 75 as part of its effort to protect consumers from unfair or deceptive trade practices. See N.C.G.S. § 5-1.1 (outlawing unfair or deceptive practices in trade); N.C.G.S. § 75-16 (creating a private right of action and authorizing treble damages); see also Hardy v. Toler, 24 N.C. App. 625, 630–31, 211 S.E.2d 809, 813 (1975). The protections of N.C.G.S. § 75- 1.1 extend, in certain circumstances, to businesses as well. Dalton v. Camp, 353 N.C. 647, 656, 548 S.E.2d 704, 710 (2001) (citing United Labs., 322 N.C. at 665, 370 S.E.2d at 389).

“[T]o establish a prima facie claim for unfair trade practices, a plaintiff must show: (1) defendant committed an unfair or deceptive act or practice, (2) the action in question was in or affecting commerce, and (3) the act proximately caused injury to the plaintiff.” Dalton, 353 N.C. at 656, 548 S.E.2d at 711 (citing Spartan Leasing, Inc. v. Pollard, 101 N.C. App. 450, 460–61, 400 S.E.2d 476, 482 (1991)). “The Act does not . . . define an unfair or deceptive act, ‘nor is any precise definition of the term possible.’ ” Bernard v. Cent. Carolina Truck Sales, Inc., 68 N.C. App. 228, 229–30, 314 S.E.2d 582, 584 (1984) (quoting Wachovia Bank & Trust Co. v. Smith, 44 N.C. App. 685, 690, 262 S.E.2d 646, 649 (1980)). A trade practice “is unfair if it is unethical or unscrupulous, and it is deceptive if it has a tendency to deceive.” Sunbelt Rentals, Inc. v. Head & Engquist Equip., L.L.C., 174 N.C. App. 49, 59, 620 S.E.2d 222, 230 (2005) (citing Polo Fashions, Inc. v. Craftex, Inc., 816 F.2d 145, 148 (4th Cir. 1987)).

Charah, LLC v. Sequoia Servs., LLC, 2020 NCBC LEXIS 52, at *18 (N.C. Super. Ct.

Apr. 17, 2020). 7 Our Supreme Court has reiterated that “a practice is deceptive if it

has the capacity . . . to deceive.” Walker v. Fleetwood Homes of N.C., Inc., 362 N.C.

63, 72 (2007).

45. It is well established that “[w]hether the alleged conduct constitutes an

unfair or deceptive act is a question of law for the court.” Campbell Sales Grp., Inc.

v. Niroflex by Jiufeng Furniture, LLC, 2022 NCBC LEXIS 148, at *33 (N.C. Super.

Ct. Dec. 5, 2022) (cleaned up). “The question of ‘[w]hether a particular act is unfair

or deceptive, depends on the facts surrounding the transaction and the impact on the

7 At the 29 July hearing, counsel for Defendants stipulated that the acts at issue were in or

affecting commerce. (29 July Hr’g Tr. at 79, line 13.) marketplace’.” Id. (quoting Dealers Supply Co., 348 F. Supp. 2d at 577, 591 (M.D.N.C.

2004)). 8

A. Recording of Memoranda Falsely Claiming to Contain Covenants That Run with the Land

46. The State contends that Defendants committed an unfair or deceptive

trade practice each time they filed a Memorandum with a Register of Deeds office

containing the false representation that the HBA referenced in the Memoranda

encompassed covenants running with the land, thereby creating a cloud on the

homeowners’ title.

47. As noted above, each Memorandum consisted of a one-page document

that MV Realty recorded with the Register of Deeds after a homeowner executed an

HBA. (See, e.g., Compl., Exs. 1, 13, 19, 20.) It referred to a “certain MVR Homeowner

Benefit Agreement,” included a legal description of the homeowner’s property, and

stated that the HBA term began as of an “Effective Date” (which was not actually

listed in the Memorandum), and “expires on the earlier of: (i) the date the Property

8 On 24 August 2023, Governor Roy Cooper signed into law House Bill 422, “An Act to Prohibit

Unfair Real Estate Service Agreements for Residential Real Estate.” N.C.G.S. § 93A-88.1, et seq. The stated legislative purpose of this law was “to prohibit the use of real estate service agreements that are unfair to an owner of residential real estate or to other persons who may become owners of that real estate in the future” and “prohibits the recording of such residential real estate service agreements so that the public records will not be clouded by them and provides remedies for owners who are inconvenienced or damaged by the recording of such agreements.” N.C.G.S. § 93A-88.1. The statute prospectively makes the types of HBAs offered by MV Realty illegal. The statute specifically defines as unfair and void those real estate service agreements that purport to run with the land, create a lien or encumbrance, and have a stated duration of longer than one year. Moreover, violations of the statute are deemed violations of the UDTPA under N.C.G.S. § 75-1.1. (N.C.G.S. § 93A- 88.4.) Although House Bill 422 prohibited MV Realty from entering into new HBAs with North Carolina homeowners after its effective date, the new law did not apply retroactively to HBAs previously entered into between MV Realty and North Carolina homeowners. is sold in accordance with the Agreement, and (ii) the date that is forty (40) years

after the Commencement Date (the “Term”), unless otherwise terminated in

accordance with its terms.” (Compl. Ex. 1.) The Memorandum also stated—in bold,

underlined text—that “the obligations of Property Owner under the [HBA]

constitute covenants running with the land and shall bind future

successors-in-interest to title to the Property.” (Compl. Ex. 1 (emphasis in

original).)

48. MV Realty argues that the recordation of the Memorandum with the

local Register of Deeds was permissible pursuant to the broad language of N.C.G.S.

§ 161-14, which sets out the duties of a Register of Deeds in North Carolina regarding

the registration of instruments. N.C.G.S. § 161-14(a) provides that “[a]fter the

register of deeds has determined that all statutory and locally adopted prerequisites

for recording have been met, the register of deeds shall immediately register all

written instruments presented to him for registration.” N.C.G.S. § 161-14(a).

49. In Fleming v. Mann, 23 N.C. App. 418 (1974), our Court of Appeals

stated that “it is not the function of the Register of Deeds to inquire into the substance

or the legal efficacy of the documents presented to him for recording. If they are

properly acknowledged and probated and if the appropriate fee is tendered, it is his

duty promptly to record and index them.” Id. at 422. The Court of Appeals further

held that “any instruments pertaining to real property are included among the

documents allowed by law to be registered.” Id. at 421 (cleaned up). 50. Nevertheless, there are limits to what may properly be recorded under

N.C.G.S. § 161-14(a). Most notably, N.C.G.S. § 14-118.6 makes it unlawful for

any person to present for filing or recording in a public record or a private record generally available to the public a false lien or encumbrance against the real or personal property of an owner or beneficial interest holder, knowing or having reason to know that the lien or encumbrance is false or contains a materially false, fictitious, or fraudulent statement or representation.

N.C.G.S. § 14-118.6(a).

51. Moreover, subpart (d) of the statute states that “the presentation of an

instrument for recording or filing with a register of deeds or clerk of superior court

that purports to be a lien or encumbrance that is determined to be materially false,

fictitious, or fraudulent shall constitute a violation of G.S. 75-1.1.” N.C.G.S. § 14-

118.6(d).

52. The State contends that MV Realty’s characterization of the HBA as

creating a covenant running with the land that binds successors-in-interest to the

property is false. This is so, the State argues, because the HBA is a contract for

personal services that does not meet the legal requirements applicable to covenants

that run with the land.

53. Our Court of Appeals has stated the following:

Covenants that run with the land are real as distinguished from personal covenants that do not run with the land. Three essential requirements must concur to create a real covenant: (1) the intent of the parties as can be determined from the instruments of record; (2) the covenant must be so closely connected with the real property that it touches and concerns the land; and (3) there must be privity of estate between the parties to the covenant.

Cunningham v. City of Greensboro, 212 N.C. App. 86, 97 (2011) (cleaned up). 54. Although the State contends that none of these three prongs are

satisfied, the Court need only address the second prong.

55. Our Supreme Court has held that “[w]here the burdens and benefits

created by the covenant are of such a nature that they may exist independently from

the parties’ ownership interests in land, the covenant does not touch and concern the

land and will not run with the land.” Runyon v. Paley, 331 N.C. 293, 300 (1992)

(cleaned up). “To touch and concern the land, the object of the covenant must be

annexed to, inherent in, or connected with, land or other real property, or related to

the land granted or demised.” Raintree Corp. v. Rowe, 38 N.C. App. 664, 670 (1978)

(cleaned up); see also id. at 669 (“The provision that the covenant is to run with the

land is not binding unless the covenants possess the characteristics of a real

covenant.”).

56. Although the “touch and concern” element does not require “that the

covenant have a physical effect on the land[,]” it does require that the restriction

“affect the legal rights of the covenanting parties as landowners.” Runyon, 331 N.C.

at 300. As a general proposition, a covenant “to pay money [does] not touch and

concern the land.” Raintree, 38 N.C. App. at 670.

57. Well over a century ago, our Supreme Court held that a real estate

listing agreement is a contract for personal services. See Abbot v. Hunt, 129 N.C. 403,

404 (1901) (“But we cannot agree that the statute of frauds applies. This is not an

action for specific performance, but on a contract for personal services, or for damages

on breach of such contract for the value of the services.”). 58. The Court concludes that for purposes of this issue the HBA is akin to a

listing agreement and therefore is properly deemed to be a contract for personal

services as opposed to an obligation that touches and concerns the land.

59. Furthermore, the Court notes that at the 29 July hearing, Defendants’

attorney conceded that its recording of the Memorandum did, in fact, constitute a

cloud on the title of a homeowner’s property.

The Court: Well, do you acknowledge that the recording of the memorandum constituted a cloud, or at least potentially constituted a cloud on their ownership title?

Mr. Henderson: Your Honor, I would say that it certainly – when you say potentially, undoubtedly, yes, it evokes those concepts.

(29 July Hr’g Tr. at 84, lines 15–20.)

60. For these reasons, the Court concludes that no genuine issue of material

fact exists as to whether Defendants committed an unfair or deceptive trade practice

each time it filed a Memorandum that falsely claimed to contain covenants that ran

with the land. Therefore, summary judgment is GRANTED in favor of the State on

this issue.

B. Filing of Lis Pendens

61. As noted above, each time MV Realty sued a homeowner for breach of

the HBA and sought to recover the ETF, it filed a notice of lis pendens with the clerk

of court in the county where the home was located. (Compl., Ex. 21.) This notice

stated that it was being filed in connection with a lawsuit for breach of contract and

that the homeowner’s obligation to use MV Realty as their exclusive listing agent as described in the HBA was an “obligation [that] runs with the Property[.]” (Compl.

Ex. 21.)

62. N.C.G.S. § 1-116(a) governs the filing of a lis pendens in North Carolina

and sets out the exclusive list of circumstances in which a lis pendens is proper.

(a) Any person desiring the benefit of constructive notice of pending litigation must file a separate, independent notice thereof, which notice shall be cross-indexed in accordance with G.S. 1-117, in all of the following cases:

(1) Actions affecting title to real property.

(2) Actions to foreclose any mortgage or deed of trust or to enforce any lien on real property.

(3) Actions in which any order of attachment is issued and real property is attached.

(4) Actions seeking injunctive relief under G.S. 113A-64.1 or G.S. 113A-65 regarding sedimentation and erosion control for any land-disturbing activity that is subject to the requirements of Article 4 of Chapter 113A of the General Statutes.

(5) Actions for asset freezing or seizure under G.S. 14-112.3.

N.C.G.S. § 1-116(a).

63. Earlier in this litigation, Defendants took the position that the filing of

a lis pendens was authorized under N.C.G.S. § 1-116(a)(1) on the theory that the HBA

affected title to real property. However, this contention is meritless given that the

limited nature of the contractual arrangement created by the HBA cannot reasonably

be said to affect title to the property. Such a conclusion is consistent with applicable

case law from North Carolina’s appellate courts. See, e.g., Parker v. White, 235 N.C.

680, 688 (1952) (“[I]t is clear from a reading of the complaint, and the amendments thereto, that this is an action to recover monetary damages. . . . Hence, the action is

not one affecting the title to real property within the purview of G.S. § 1-116.”);

Horney v. Price, 189 N.C. 820, 825 (1925) (“The rule of lis pendens . . . does not apply

to an action merely seeking to recover a money judgment, nor to any other action

which does not directly affect property.”); Doby v. Lowder, 72 N.C. App. 22, 29 (1984)

(“The nature of plaintiffs’ action . . . must be determined by reference to the facts

alleged in the body of the complaint. This is an action for a money judgment. It does

not seek to set aside a transfer of realty. In such a case, the filing of a notice of lis

pendens is not authorized.” (cleaned up)).

64. In any event, Defendants appear to have abandoned this argument. In

their response brief to the present Motion for Summary Judgment, the only argument

they make is that the State failed to place in the summary judgment record each of

the actual lis pendens that were filed against the properties of North Carolina

homeowners (or the complaints that were filed in the individual breach of contract

lawsuits that gave rise to each lis pendens). As a result, they contend, the Court is

unable to rule on the validity or invalidity of each lis pendens when viewed in light of

the specific circumstances of each lawsuit.

65. The Court rejects this argument. In the present case, the State does not

seek to litigate the issue of whether each affected homeowner actually breached the

HBA that they had previously signed. Rather, the State is contending that

Defendants’ pattern and practice of filing a notice of lis pendens based solely on a

homeowner’s alleged breach of a contract for personal services constituted an unfair or deceptive act. As a result, it was not necessary for the State to submit copies of

each lis pendens or of the accompanying complaints in the breach of contract lawsuits.

66. As conceded by Defendants’ counsel at the 29 July hearing, documents

produced by Defendants during discovery (and submitted to the Court by the State)

show that at least twenty-four notices of lis pendens were filed against North Carolina

homeowners by Defendants. (See Ex. 13, ECF No. 167.13; 29 July Hr’g Tr. at 89, line

13.)

67. Accordingly, the Court concludes that no genuine issue of material fact

exists as to whether Defendants committed an unfair or deceptive trade practice each

time they filed a notice of lis pendens on the property of a North Carolina homeowner

based on an alleged violation of an HBA, and summary judgment is GRANTED for

the State on this issue.

C. Early Termination Fees as Unenforceable Penalties

68. Finally, the State contends that MV Realty’s pattern and practice of

collecting an ETF from homeowners alleged to have breached their HBA constituted

an unfair or deceptive trade practice. In making this argument, the State contends

that the ETF amounted to an unlawful penalty. MV Realty, conversely, contends

that the ETF served as a valid form of liquidated damages.

69. As discussed above, subject only to minimal exceptions, the HBA

entitled MV Realty to recover from the homeowner an ETF upon any “sale or other

transfer [of the home] that does not result in [ ] [MV Realty] being paid [a]

[c]ommission[,]”—that is, any sale of the home by anyone other than an MV Realty listing agent. (Sample HBA at 2.) The amount of the ETF is calculated based upon

the greater of the value of the home at the time the HBA is signed or its value at the

time the HBA is breached. (Sample HBA at 2.)

70. “It is well established that a sum specified in [a] contract as the measure

of recovery in the event of a breach will be enforced if the court determines it to be a

provision for liquidated damages but not enforced if it is determined to be a penalty.”

KNC Techs., LLC v. Tutton, 2021 NCBC LEXIS 38, at *42 (N.C. Super. Ct. Apr. 8,

2021) (cleaned up).

71. Our Supreme Court has explained as follows how this distinction should

be applied:

A stipulated sum is for liquidated damages only (1) where the damages which the parties reasonably anticipate are difficult to ascertain because of their indefiniteness or uncertainty and (2) where the amount stipulated is either a reasonable estimate of the damages which would probably be caused by a breach or is reasonably proportionate to the damages which have actually been caused by the breach.

Knutton v. Cofield, 273 N.C. 355, 361 (1968) (cleaned up).

72. “Whether the liquidated amount is a reasonable prior estimate of

damages is determined by the status of the parties at the time of [the] making [of]

the contract.” E. Carolina Internal Med., P.A. v. Faidas, 149 N.C. App. 940, 946, aff’d

per curiam, 356 N.C. 607 (2002). Our Court of Appeals has held that “[i]n

determining whether a fixed sum, described by the contract as a measure of recovery

in the event of breach, is a liquidated damage or perhaps an unenforceable penalty,

this Court will consider the nature of the contract, the intention of the parties, and

the sophistication of the parties.” Majestic Cinema Holdings, LLC v. High Point Cinema, 191 N.C. App. 163, 167 (cleaned up), disc. rev. denied, 362 N.C. 509 (2008).

“The party seeking to invalidate a liquidated damages clause bears the burden of

proving the provision is invalid.” WFC Lynnwood I LLC v. Lee of Raleigh, Inc., 259

N.C. App. 925, 929 (2018).

73. Defendants argue that the first prong of this test is satisfied because the

amount of the ETF is tied to the fair market value of the property at the time the

breach of the HBA occurs, which amount could not be reasonably ascertained at the

time the HBA is originally entered.

74. This argument lacks merit. As noted above, in order for a stipulated

damages amount to be deemed a valid liquidated damages provision, the damages

reasonably anticipated by the parties must be “difficult to ascertain because of their

indefiniteness or uncertainty.” Knutton, 273 N.C. at 361; see also Ledbetter Bros. Inc.

v. N.C. Dep’t of Transp., 68 N.C. App. 97, 106 (1984). Here, conversely, the calculation

of the damages recoverable by MV Realty in the case of a homeowner’s breach of an

HBA would be simple to calculate—a proposition that MV Realty has failed to

persuasively counter. 9 See Knutton, 273 N.C. at 361 (in determining whether a

stipulated sum is a valid liquidated damages provision or an unlawful penalty, “the

courts have been greatly influenced by the fact that in almost all [ ] cases [ ] damages

are uncertain and very difficult to estimate”).

9 Although the HBA contains language reciting that the parties agree that the damages from

a breach would be difficult to ascertain because of indefiniteness or uncertainty, the Court is not bound by the parties’ characterization of the payment in determining the enforceability of the provision. See, e.g., United Ord. of Am. Bricklayers & Stone Masons Union v. Thorleif Larsen & Son, Inc., 519 F.2d 331, 333 (7th Cir. 1975) (“[U]se of the term ‘liquidated damages’ . . . is not conclusive[.]” (citations omitted)). 75. Indeed, in Knutton, the Supreme Court expressly observed that the

ability to measure damages by reference to market value causes the damages amount

for a breach to be ascertainable.

Where the damages resulting from a breach of contract cannot be measured by any definite pecuniary standard, as by market value or the like, but are wholly uncertain, the law favors a liquidation of the damages by the parties themselves; and where they stipulate for a reasonable amount, the agreement will be enforced.

Id. at 362 (emphasis added); see also Starling v. Sproles, 69 N.C. App. 598, 602 (1984)

(holding that “[t]he measure of damages for breach of contract to convey land is the

difference between the contract price and the market value of the land” (cleaned up)).

76. Several courts in other jurisdictions have rejected Defendants’ logic on

this issue. 10 See, e.g., Kellam v. Hampton, 58 Tex. Civ. App. 484, 487 (1910) (“where

the loss or injury may be easily determined by proof of market values the sum will be

regarded as a penalty and not as liquidated damages.”); see also Pac. Dock &

Terminal v. L.A. Dock & Terminal Co., 50 F.2d 557, 566 (9th Cir. 1941) (holding that

“the market value of real estate is practically always capable of exact

ascertainment”).

77. Furthermore, as noted above, the relative sophistication of the parties

is a factor to be considered by a court in determining whether such a contractual

provision is valid. Here, this factor also weighs against the enforceability of the ETF

provision. The homeowners who participated in the HBA program were consumers

10 It is well settled that North Carolina courts may consider case law from other jurisdictions as persuasive authority. See, e.g., Sykes v. Health Network Sols., Inc., 2018 NCBC LEXIS 29, at *8 (N.C. Super. Ct. Apr. 5, 2018). who were being asked to sign a pre-printed form that was drafted by MV Realty (a

sophisticated commercial enterprise) under “take it or leave it” circumstances.

78. Finally, although not dispositive on this issue, the Court notes that in

earlier versions of the HBA, the ETF was expressly referred to as a “penalty” by MV

Realty itself. (See, e.g., Compl., Exs. 1, 13, 19, 20.) A prior version of the HBA stated

in large, capitalized boldface print, as follows: “THIS AGREEMENT PROVIDES

FOR A PENALTY FOR EARLY TERMINATION AS SET FORTH IN THIS

SECTION 3.” (Compl., Ex. 1 (emphasis in original).) Although MV Realty

subsequently removed this language from its standard HBA, the substantive terms

that MV Realty itself had previously described as a “penalty” did not change in the

new version of the HBA. (Sample HBA at 2.)

79. A Georgia court recently reached a similar conclusion as to the punitive

nature of the ETFs.

MV Realty’s ETF was intended to penalize consumers, as demonstrated by MV Realty’s characterization of the HBAs to investors and how it went about enforcing its HBAs, i.e. by filing foreclosure actions and lis pendens against Georgia consumers.

State ex rel. Carr v. MV Realty PBC, LLC, Case No. 24CV001338, ¶ 49 (Fulton Cnty.

Super. Ct. Aug. 28, 2025).

80. For these reasons, the Court concludes that no genuine issue of material

fact exists as to whether Defendants committed an unfair or deceptive trade practice

each time it collected an ETF from a North Carolina homeowner, and summary

judgment is GRANTED in favor of the State on this issue.

II. Telephone Solicitation Act 81. The State advances two theories in support of its contention that

Defendants violated North Carolina’s Telephone Solicitation Act (“TSA”). First, the

State contends that Defendants improperly called homeowners whose phone

numbers were listed on the “Do Not Call” Registry without first obtaining proper

consent to do so. Second, the State asserts that Defendants violated statutory

restrictions regarding calls involving the use of automatic dialing and recorded

message players. 11

82. The Court will first address Defendants’ contention that any calls made

by MV Realty to homeowners on the “Do Not Call Registry” did not violate North

Carolina’s TSA because MV Realty does not meet the statutory definition of a

“telephone solicitor.” Next, the Court will consider Defendants’ argument that the

prerecorded calls it made to homeowners were not robocalls as defined under the TSA.

Finally, the Court will evaluate Defendants’ contention that the homeowners at issue

consented to receiving the challenged calls.

A. Calls to Homeowners on the Do Not Call Registry

83. The Telemarketing Sales Rule (“TSR”), 16 C.F.R. Part 310, was

promulgated by the Federal Trade Commission pursuant to a directive of Congress

to enact regulations designed to prohibit abusive and deceptive telemarketing

practices. See 15 U.S.C. §§ 6101–6108.

11 For ease of reference, the Court will refer to the latter category of calls by the colloquial term “robocalls.” 84. The “Do Not Call” Registry is a national registry created and maintained

by the Federal Trade Commission pursuant to the Telemarketing Sales Rule.

N.C.G.S. § 75-101(3).

85. N.C.G.S. § 75-102 provides in pertinent part as follows:

Except as provided in G.S. 75-103, no telephone solicitor shall make a telephone solicitation to a telephone subscriber’s telephone number if the telephone subscriber’s telephone number appears in the latest edition of the “Do Not Call” Registry.

N.C.G.S. § 75-102(a).

86. A “telephone solicitation” in North Carolina is defined as

[a] voice or text communication whether prerecorded, live, or a facsimile, over a telephone line or wireless telephone network. . . that is made by a telephone solicitor to a telephone subscriber for the purpose of soliciting or encouraging the purchase. . . of. . .services. . . . “Telephone solicitation” also includes those transactions that are defined as “telemarketing” under the Telemarketing Sales Rule.

N.C.G.S. § 75-101(9).

87. A “telephone solicitor” is, in turn, defined as

[a]ny individual, business establishment, business, or other legal entity doing business in this State that, directly or through salespersons or agents, makes or attempts to make telephone solicitations or causes telephone solicitations to be made. “Telephone solicitor” also includes any party defined as a “telemarketer” under the Telemarketing Sales Rule.

N.C.G.S. § 75-101(10).

88. Pursuant to N.C.G.S. § 75-103(e), a telephone solicitor has the burden

of proving that a telephone subscriber on the “Do Not Call” Registry has provided an

“express invitation or permission” by producing the original document, facsimile document, or an electronic form evidencing the telephone subscriber’s consent. N.C.

G.S. § 75-103(e).

89. The State alleges that MV Realty—operating as a “telephone solicitor”—

violated the TSA by making thousands of unlawful calls (telephone solicitations) to

homeowners who were listed on the “Do Not Call” Registry and who did not give prior

consent to receive such calls.

90. Specifically, the State argues that the undisputed evidence in this case

shows that MV Realty initiated 149,983 calls to North Carolina phone numbers on

the “Do Not Call” Registry. (Pl.’s SJ Mot., Ex. 16, 25.)

91. In response, Defendants contend that MV Realty does not qualify as a

“telephone solicitor” because, as noted above, N.C.G.S. § 75-101(9) defines telephone

solicitations as those communications that are made “for the purpose of soliciting or

encouraging the purchase. . . of services.”

92. In support of this argument, Defendants take the position that MV

Realty was not selling a service or a product through the HBA program and was

instead providing monetary payments to the homeowner (rather than vice-versa) in

consideration for MV Realty’s right to serve as the homeowner’s broker in connection

with a future sale of the home over the next forty years.

93. The Court is unable to agree with this argument. Under the HBA, the

homeowner entered into a contract for the contingent provision of future real estate

listing services. In so doing, each homeowner provided consideration to MV Realty

by entering into a forty-year contract that resulted in a cloud on the title to their properties and subjected them to being forced to pay an ETF if they were to breach

the HBA.

94. The entire purpose of the HBA was not the payment of the upfront

money to the homeowner but rather to lock the homeowner into a contractual

relationship with MV Realty that would last four decades based on terms that violate

North Carolina law. The HBA contemplated that services would be “purchased” by

the homeowner and provided by MV Realty at some point during those forty years.

95. A federal court in North Carolina recently rejected an analogous

argument by a defendant, stating the following:

In evaluating whether or not a call is a “solicitation,” the Court examines the content and context of the message while using “a measure of common sense.” The content of the message offers RFC’s financial services as a means to save consumers money. Defendant claims that plaintiff’s complaint was conclusory. However, from the context, it is clear that the message was meant to elicit a business transaction between the recipient and RFC. Therefore, plaintiff’s allegations are sufficient to show solicitation.

Davis v. Reliance First Cap., LLC, 2023 U.S. Dist. LEXIS 24055, at *9–10 (E.D.N.C.

Feb. 13, 2023) (cleaned up).

96. Utilization of such a commonsense approach here results in a similar

conclusion. 12 As a result, the Court finds that MV Realty meets the statutory

definition of a “telephone solicitor.”

12 Although not dispositive on this issue, the Court notes that contained in the record (Pl.’s

Reply Br. Supp. P.I., Ex. 8, ECF No. 39.8) is a document from MV Realty’s internal training materials titled “DO NOT CALL POLICY” that states “[a] telephone solicitation call’ means any call that is made for the purpose of encouraging the purchase of products and services from MV Realty.” 97. As a result, no genuine issue of material fact exists as to whether

Defendants made calls to North Carolina homeowners who were on the “Do Not Call”

Registry as a “telephone solicitor” for purposes of N.C.G.S. § 75-102.

B. Robocalls

98. North Carolina law generally prohibits the use of “an automatic dialing

and recorded message player to make an unsolicited telephone call.” N.C.G.S. § 75-

104(a).

99. By statute, the term “automatic dialing and recorded message player” is

defined as

[a]ny automatic equipment that incorporates a storage capability of telephone numbers to be called or a random or sequential number generator capable of producing numbers to be called that, working alone or in conjunction with other equipment, disseminates a prerecorded message to the telephone number called.

N.C.G.S. § 75-101(2).

100. The State has offered evidence that MV Realty made 344,009 robocalls

to North Carolina homeowners as part of the marketing scheme for its HBA program.

(Pl.’s Br. Supp. Mot. Summ. J., Ex. 16, 25.)

101. Defendants, conversely, argue that the calls they made were materially

different from those defined in N.C.G.S. § 75-101(2) based on MV Realty’s utilization

of third-party vendors and the existence of human interaction for those calls. They

contend that these features of their calls render them materially distinguishable from

the types of calls identified in § 75-101(2). 102. It is undisputed that in connection with these calls, MV Realty used the

PhoneBurner platform, a cloud-based service that allowed MV Realty to import and

store lead contact information. In addition to storing lead contact information,

PhoneBurner also dialed stored phone numbers for leads. (Manchester Decl. ¶¶ 16–

17, 19.)

103. Defendant David Manchester, the Chief Operating Officer of MV Realty

PBC, LLC, testified that PhoneBurner only dials a lead when it is prompted to do so

by an MV Realty employee or agent (either a “transfer specialist” or a real estate

agent) and that those persons actually initiated the calls to leads within the

PhoneBurner platform. He also testified that once a phone call is complete, the

system prompts the agent to dial the following number in the lead queue.

Manchester further testified that PhoneBurner’s voicemail feature did not function

as an automated call; instead, he stated, an MV Realty agent needed to initiate a

voicemail drop. (Manchester Decl. ¶¶ 2, 19–22.)

104. The State argues in response that this aspect of Manchester’s testimony

proves that Defendants’ use of the PhoneBurner platform places these calls squarely

within the statutory framework of N.C.G.S. §§ 75-101(2) and 75-104. Specifically, the

State notes that the storage prong of the statutory definition is satisfied because—as

Manchester testified—PhoneBurner allows its users to import and store phone

numbers to be called. (Manchester Decl. ¶ 17.) Furthermore, Manchester testified

that MV Realty used PhoneBurner to leave voicemail messages when a lead did not

answer a call and that once a voicemail message was left, PhoneBurner prompted the Defendants’ agent to move to the next lead to be contacted. (Manchester Decl. ¶¶ 20–

22.)

105. The Court finds the State’s arguments on this issue to be persuasive.

106. Defendants also contend that the PhoneBurner platform’s functionality

requires a human agent’s action and judgment (namely, the action of an agent in

initiating a phone call and leaving a voicemail message for non-responsive contacts)

and that this human participation in the process takes these calls outside the scope

of N.C.G.S. §§ 75-101(2) and 75-104.

107. However, the definition of “automatic dialing and recorded message

player” set out in N.C.G.S § 75-101(2) does not identify the absence of human

participation as a necessary factor in order for the definition to be met.

108. The Court also finds the United States Supreme Court’s decision in

Facebook, Inc. v. Duguid, 592 U.S. 395 (2021), to be instructive on this general issue.

Duguid contends that ordinary cell phones are not autodialers under his interpretation because they cannot dial phone numbers automatically and instead rely on human intervention. But all devices require some human intervention, whether it takes the form of programming a cell phone to respond automatically to texts received while in “do not disturb” mode or commanding a computer program to produce and dial phone numbers at random. We decline to interpret the TCPA as requiring such a difficult line-drawing exercise around how much automatic is too much.

Id., 592 U.S. at 408 n.6.

109. Thus, the Court concludes that no genuine issue of material fact exists

on the question of whether MV Realty made calls encompassed by N.C.G.S. §§ 75-

101(2) and 75-104. C. Consent Issue

110. The Court has now determined that the evidence of record establishes

as a matter of law that Defendants did, in fact, make both (1) calls to homeowners

whose phone numbers were listed on the “Do Not Call” Registry; and (2) robocalls as

defined under the applicable North Carolina statutes.

111. Therefore, the entry of summary judgment in favor of the State would

be appropriate on both theories underlying its TSA claims unless Defendants can

show that a genuine issue of material fact exists as to their defense that all such calls

were made only to persons who had previously given consent to receive them.

112. Although consent would, in fact, be a valid defense to both of the State’s

theories of recovery under the TSA, North Carolina law provides that a telephone

solicitor bears the burden to demonstrate that consent existed at the time the phone

calls at issue were made, see N.C.G.S. § 75-103(e), and the Court finds that

Defendants have failed to meet this burden.

113. Defendants argue that they have sufficiently demonstrated that consent

was given for the phone calls at issue. Defendants maintain that the lead generator

vendors from whom MV Realty purchased the names and contact information for

homeowners likely to be interested in the HBA program obtained the required

consents on MV Realty’s behalf. (Manchester Decl. ¶¶ 4–10.)

114. Manchester testified that the lead generators provided MV Realty with

“the customer’s time-stamped contact information as well as the unique IP address

from which the consumer gave consent for MV Realty to communicate with them, which included consent to be contacted through automated means if MV Realty chose

to do so.” (Manchester Decl. ¶ 11.)

115. MV Realty also asserts that it contracted with a company called

Journaya, a third-party data storage provider, to maintain these records of consent

obtained by the lead generators. (Manchester Decl. ¶ 12.)

116. Defendants contend that Journaya’s practice was to digitally store these

records (detailing each customer call) with data fields including the date each

homeowner was contacted, other call details, and a record of the consumer’s consent

to be contacted. According to Defendants, Journaya then reduced this data into

discrete digital records that they refer to as “tokens.”

117. However, there is a disconnect between the arguments advanced by

Defendants on this issue and the evidence that they have produced in opposing the

State’s summary judgment motion. In fact, the only Journaya-related evidence in the

record relates to merely two homeowners.

118. At the 29 July hearing, in response to repeated questioning from the

Court as to why there were not significantly more Journaya documents in the record

to support Defendants’ consent argument, counsel for MV Realty failed to provide a

satisfactory response—merely hinting that it would have been cost-prohibitive for

MV Realty to obtain such additional documentation. (29 July Hr’g Tr. at 121, lines

1–7.) Obviously, however, the Court cannot rely on evidence that is not actually in

the record based simply upon counsel’s representation that it exists. 119. Moreover, the State has offered detailed testimony from its expert

witness, Jasper Van Beusekom, as to the deficiencies with Defendants’ contentions

regarding the consent issue. Defendants have not designated an expert witness of

their own and instead seek to rely on the Declaration of Manchester on this subject.

(Manchester Decl.) The State, in turn, has filed a motion to strike certain portions of

Manchester’s Declaration on the grounds that they are inadmissible in that they

contain information outside of his own personal knowledge, merely state legal

conclusions, and at times contradict his prior testimony in this case.

120. Rule 56(e) of the North Carolina Rules of Civil Procedure provides that

affidavits filed in support of or in opposition to a motion for summary judgment

shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein.

N.C.G.S. § 1A-1, N.C.R. Civ. P. 56(e).

121. This Court has noted that

[a]n affidavit must be based on personal knowledge, and its allegations should be of the pertinent facts and circumstances, rather than conclusions. A witness may not testify to a matter unless evidence is introduced sufficient to support a finding that he has personal knowledge of the matter. Thus, statements in affidavits as to opinion, belief, or conclusions of law are of no effect.

W&W Partners, Inc. v. Ferell Land Co., LLC, 2019 NCBC LEXIS 104, at *4 (N.C.

Super. Ct. Dec. 6, 2019) (cleaned up); see also rFactr, Inc. v. McDowell, 2023 NCBC

LEXIS 18, at *22 (N.C. Super. Ct. Jan. 27, 2023) (“It is axiomatic that evidence

contained in affidavits or declarations that would be inadmissible at trial must be stricken and cannot be considered by the Court in rendering summary judgment.”

(cleaned up)).

122. Moreover, it is well established that a “party opposing a motion for

summary judgment cannot create a genuine issue of material fact by filing an

affidavit contradicting his prior sworn testimony.” Pinczkowski v. Norfolk S. Ry. Co.,

153 N.C. App. 435, 440 (2002).

123. In support of its Motion to Strike, the State argues that Manchester

inappropriately testified that North Carolina homeowners gave express consent to

receiving contact from MV Realty and that he reached this conclusion based on his

“personal knowledge” of Defendants’ business operations and how they used lead

generators. (Manchester Decl. ¶¶ 1, 4–8.) The State contends that the evidence of

record in this case rejects the proposition that Manchester has personal knowledge of

which North Carolina homeowners may have actually consented to receive calls from

MV Realty. Indeed, Michael Bolek, a Senior Manager with MV Realty, testified that

MV Realty was simply “operating under the expectation that consent was being

collected” by the third-party lead generators. (Bolek Dep., at 65, ECF No. 177.1.)

124. Additionally, although Manchester testified that a spreadsheet provided

to the State by MV Realty with 260,0000 columns of data “constituted evidence of

consent[,]” (Manchester Decl. ¶¶ 14–15), Defendants’ own corporate representative,

Antony Mitchell, testified in his Rule 30(b)(6) deposition that the data fields in the

spreadsheet “are meaningless pieces of code” (Mitchell Rule 30(b)(6) Dep. at 209,

ECF No. 167.19.). 125. The State further takes issue with Manchester’s testimony regarding

various aspects of PhoneBurner's operations, including his statement that after

reviewing PhoneBurner’s website, he concluded that “PhoneBurner is not a

robocalling technology or a predictive dialer.” (Manchester Decl. ¶¶ 17, 20.) This

assertion, the State argues, is merely a legal conclusion. In addition, the State cites

Manchester’s prior deposition testimony that he had never actually used the

PhoneBurner platform. (Manchester Dep. at 66, ECF No. 167.15.)

126. Based on the Court’s careful review of the record and consideration of

the arguments of counsel, the following italicized statements from his Declaration are

hereby stricken:

4. During the course of its business, MV Realty contacted individuals through phone calls, whose phone numbers and contact information it obtained from various third-party lead generators after those individuals explicitly consented to MV Realty contacting them.

5. To facilitate this, MV Realty used reputable lead providers, like the Wisdom Company, Powers Company, Lead Lead, PX, the Leads Warehouse, and Landfall (collectively, “Lead Generators”), [sic] connected MV Realty with individuals who explicitly consented to receiving communications from MV Realty.

...

9. Obtaining consent from individuals before selling leads, especially when it comes to personal information like phone numbers, is not just ethical but also legally mandated for the Lead Generators MV Realty bought leads from.

10. The consent obtained by the Lead Generators and included in the records provided to Plaintiff, evidence the consumer’s interactions on the website where they submitted their contact information and consented to MV Realty contacting them. 11. When Lead Generators provided MV Realty with the contact information for any particular lead, the Lead Generator provided MV Realty with the customer’s time stamped contact information as well as the unique IP address from which the consumer gave consent for MV Realty to communicate with them, which included consent to be contacted through automated means if MV Realty chosen [sic] to do so.

14. Specifically, MV Realty produced a large volume of information comprised of more than 260,000 columns of information relating to phone numbers with North Carolina area codes which were called by MV Realty, the majority of which were obtained from Lead Generators and some of which were obtained as a result of direct outreach to MV Realty by prospective customers who also gave direct conset [sic] to MV Realty via its own website.

15. Each time-stamped IP address associated with any particular individual on the above referenced spreadsheet, is a unique numerical identifier that represents a device or network on the internet particular to the individual North Carolina resident which together with the consumer’s phone number evidences consent. It is like a digital address for an individual’s device from which consent was provided, be it a computer or mobile device—all of which have a unique IP address to be recognized and communicate [sic].

20. Once a call finishes, the system prompts the individual making the call can [sic] to dial the next number on the list, thus minimizing downtime that occurs with traditional individual digit input dialing methods. PhoneBurner is not a robocalling technology or predictive dialer.

23. “Automated calls” refer to situations where a system automatically dials numbers and delivers messages or information without direct human intervention (i.e. robocalls). In contrast, PhoneBurner initiates and terminates all calls only with human interaction.

24. Even if a potential HBA customer had already opted-in or consented to receiving communications from MV Realty, when a call recipient requested not to be contacted again, the agent or transfer specialist would comply and place them on MV Realty’s internal do-not contact list.

(Manchester Decl. ¶¶ 4-5, 9–11, 14–15, 20, 23–24) (emphasis added).) 127. It is clear from the record that Manchester lacks personal knowledge of

consent actually being obtained from homeowners by MV Realty’s third-party

vendors, and as a result, the statements contained in paragraphs 4–5, 10, 11, 14, and

15 representing that such consent was actually obtained is inadmissible. In addition,

paragraphs 9, 20, and 23 contain legal conclusions that likewise fail to meet

admissibility requirements under Rule 56(e). Finally, there is no indication

Manchester possesses personal knowledge of the actions of the third-party vendors

set out in paragraph 24.

128. Therefore, the State’s Motion to Strike is GRANTED as to these

portions of Manchester’s declarations, and its Motion to Strike is otherwise DENIED.

The Court further concludes that Defendants have failed to show the existence of a

genuine issue of material fact as to whether consent was obtained by MV Realty (or

its agents) from the North Carolina homeowners who received calls despite having

placed their phone numbers on the “Do Not Call” Registry or who received robocalls.

129. For all of the reasons set forth above, the Court concludes that no

genuine issue of material fact exists on the issue of whether Defendants violated the

TSA both by unlawfully making calls to homeowners whose phone numbers were

listed on the “Do Not Call” Registry and by making robocalls. Accordingly, the State’s

Motion for Summary Judgment is GRANTED as to its claims under the TSA. III. Liability of Named Defendants

130. As noted above, the State has brought this action against seven

Defendants. Three of the Defendants are entities, and four of them are natural

persons.

A. Entity Defendants

131. The following entities are Defendants in this action: MV Realty PBC,

LLC; MV Realty of North Carolina, LLC; and MV Brokerage of North Carolina, LLC.

132. In their response brief, Defendants have not made specific arguments

as to why any of these three entities should not be held liable in the event the Court

determines that the State has shown as a matter of law that the operation of the HBA

program against North Carolina homeowners resulted in unfair or deceptive trade

practices or violations of the TSA. Therefore, the Court need not address the specific

roles each of these entities played in the operation of the HBA program in North

Carolina.

133. Instead, Defendants contend that the State has failed to show any actual

injury that was suffered as a result of Defendants’ conduct. This argument is

meritless.

134. The record is clear that numerous North Carolina homeowners were

forced to pay ETFs for alleged breaches of the HBA, that at least twenty-four

homeowners had notices of lis pendens unlawfully placed on their homes, and that

the filing of the Memoranda created a cloud on the titles of multiple homeowners’ properties. Moreover, the State has shown that thousands of North Carolina

residents received unlawful phone calls or robocalls in violation of the TSA.

135. The Court concludes that these facts are easily sufficient to show actual

injury stemming from the acts of Defendants discussed throughout this Opinion.

B. Individual Liability

136. The individual Defendants named in the State’s Complaint are Antony

Mitchell, David Manchester, Amanda Zachman, and Darryl Cook.

137. Defendants broadly assert that individual liability cannot exist under

North Carolina law for the State’s claims in this action (even if liability exists as to

the entity Defendants). However, this argument is not legally supportable.

138. Our Court of Appeals has held that

[j]oint and several liability is allowed when (1) defendants have acted in concert to commit a wrong that caused an injury; or (2) defendants, even without acting in concert, have committed separate wrongs that still produced an indivisible injury. Concerted action is when “two or more persons unite or intentionally act in concert in committing a wrongful act, or participate therein with common intent.” Garrett v. Garrett, 228 N.C. 530, 531 (1948).

GE Betz Inc., v. Conrad, 231 N.C. App. 214, 235 (2013) (cleaned up).

139. In Rich Food Servs., Inc., 139 N.C. App. 691 (2000), our Court of Appeals

expressly held that the Attorney General can seek the imposition of both criminal

and civil liability under Chapter 75 of the North Carolina General Statutes against

not only corporations but also against their agents, officers, and employees.

N.C. Gen. Stat. § 75-9, which sets out the broad authority of the Attorney General to investigate possible violations of Chapter 75, provides in part that it is the duty of the Attorney General to “investigate . . . the affairs of all corporations or persons doing business in this State . . . in violation of law . . . .” Id. The purpose of such investigation is to “acquire such information as may be necessary to enable him to prosecute any such corporation, its agents, officers and employees for crime, or prosecute civil actions against them if he discovers they are liable and should be prosecuted.” Id. (emphasis added).

The plain language of the statute allows the Attorney General to prosecute “agents, officers and employees” of corporations in either criminal or civil actions. Further, it is unlikely that the Legislature would have authorized the Attorney General to investigate “persons,” without intending that such “persons” might be held to answer for their violations of Chapter 75.

Rich Food Servs., Inc., 139 N.C. App. at 705; see also Baker v. Rushing, 104 N.C. App.

240, 247 (1991) (“[A] person is personally liable for all torts committed by him,

notwithstanding that he may have acted as an agent for another or as an officer for

a corporation.”).

140. Furthermore, the Court finds that the TSA likewise contemplates

individual liability. For example, N.C.G.S. § 75-104 applies to “persons” who use

automatic dialing and recorded message players, and N.C.G.S. § 75-101(7) defines

the term “person” as “any individual, business establishment, business, or other legal

entity.” (emphasis added)

141. Defendants have failed to make any specific arguments in their response

brief suggesting that the State failed to meet its burden under Rule 56 of establishing

that the named individual Defendants were sufficiently involved in the HBA program

so as to warrant the imposition of individual liability against them.

142. The Court is satisfied that the evidence of record supports the State’s

arguments regarding the individual liability of these Defendants. 143. The HBA program was primarily designed by Mitchell, the Chief

Executive Officer of MV Realty PBC, LLC, and an officer of MV Realty of North

Carolina, LLC. (Mitchell Dep. at 21–23, 49–53; Mitchell Adv. Pro. Dep. at 35–38;

Mitchell Adv. Pro. Dep. II at 208–10, ECF No. 167.38.) Mitchell also developed

specific features of the HBA program, including the promotion fee, the forty-year

term, the filing of the Memoranda, and the commission structure. (Mitchell Adv. Pro.

Dep. II at 208; Mitchell Dep. at 59–60; Mitchell Rule 30(b)(6) Dep. at 23, 180.)

Mitchell was personally involved with the use of the Memoranda, and his signature

appears on documents filed in various North Carolina Register of Deeds offices.

(Mitchell Rule 30(b)(6) Dep. at 202–04; Ex. 39, ECF No. 167.39.) In addition, as an

MV Realty executive, Mitchell had control over the Defendants’ telemarketing

campaigns and legal compliance. (Mitchell Dep. at 125–38; Mitchell Rule 30(b)(6)

Dep. at 9, 208–13; Zachman Dep. at 29, 90, ECF No. 167.20.)

144. Manchester is the Chief Operating Officer of MV Realty PBC, LLC. In

that role, he helped create and implement the HBA program and the attendant

business strategy. (Manchester Dep. at 32–34, 36–38; Mitchell Adv. Pro. at 51–57,

ECF No. 167.40.) He was also heavily involved with the company’s marketing efforts.

(Manchester Dep. at 41–44, 57–58, 68, 144; Manchester Adv. Pro. Dep. at 40, 52.) In

addition, Manchester was personally involved in the company’s North Carolina

operations, handling customer matters that required management intervention.

(Manchester Dep. at 106–12; ECF No. 167.42.) Manchester also took the lead in

human resources duties for MV Realty. He hired “transfer specialists” and had primary responsibility for agent training and the development of training materials.

(Manchester Dep. at 41–44, 57–58, 94–95; Zachman Dep. at 28–30, 40.)

145. Zachman founded MV Realty PBC, LLC in 2014 and serves as its

managing director and as a corporate officer. (Zachman Dep. at 15–18.) She is the

corporate secretary of MV Realty of North Carolina, LLC. (MV Realty Operating

Agreement, at 5.) Zachman supervised MV Realty of North Carolina, LLC’s legal

department and managed the company’s listing operations. (Zachman Dep. at 17,

32.) She was significantly involved with individual North Carolina homeowners, as

she sent breach notices and approved the filing of lis pendens. (Zachman Dep. at 107,

109, 117–18; ECF No. 167.43.) She also executed—as an agent for MV Realty of

North Carolina, LLC—thousands of HBAs and recorded Memoranda in North

Carolina. (Zachman Dep. at 100–07; ECF No. 32.13.)

146. Cook was the Broker in Charge for MV Realty of North Carolina, LLC,

until 2023. (Real Estate Commission Order ¶ 5.) In this role, he used his personal

residence as the corporate address for the Defendant entities. (Cook Dep. at 45–47,

ECF No. 167.45.) He supervised the North Carolina agents for MV Realty and acted

as an agent himself. (Cook Dep. at 36, 174–75.)

147. Thus, each of the individual Defendants played a substantial part in the

operations of MV Realty that form the basis for the State’s summary judgment

motion.

148. The Court notes that a Florida trial court recently addressed similar

claims asserted by that state’s attorney general against Mitchell, Manchester, and Zachman regarding MV Realty’s HBA program. In Office of Atty Gen., Dep’t of Legal

Affs. v. MV Realty, PBC, LLC, No. 22-CA-9958 (13th Cir. Sept. 24, 2024), the court

entered an order granting partial summary judgment in favor of the attorney general,

finding, inter alia, that MV Realty had violated Florida’s Deceptive and Unfair Trade

Practices Act and entering summary judgment in favor of the attorney general on his

claims against Zachman, Mitchell, and Manchester individually. Id. at 10–11.

149. In rejecting the individual defendants’ argument that they could not be

held liable under Florida law because they lacked the requisite “involvement,

responsibility, or knowledge,” id. at 8, the court stated the following:

Each of the named Individual Defendants directly participated in the wrongful acts or practices and each is liable under FDUTPA. Each was directly involved in the planning, engineering, implementation, execution and other key aspects of the Homeowner Benefit Program, HBA, and Memoranda which the court separately found violative of FDUTPA as a matter of law. Further, all three Individual Defendants had the ability to control the respective conduct and practices that violate the Act within their spheres of responsibility.

Id.

150. The same is true here. Accordingly, this Court’s determination that the

State is entitled to partial summary judgment as to its UDTP claims and full

summary judgment as to its TSA claims applies equally to both the entity Defendants

and to Mitchell, Manchester, Zachman, and Cook. IV. Permanent Injunctive Relief

151. For the reasons set out above, the Court concludes that the collection of

ETFs pursuant to the HBA program against North Carolina homeowners is not

permitted under North Carolina law. Likewise, the filing of the Memoranda as to

North Carolina homeowners who participated in the HBA program and the filing of

notices of lis pendens on the properties of such homeowners also violates North

Carolina law.

152. Accordingly, Defendants are hereby permanently enjoined from (1)

taking any action to collect any ETFs against North Carolina homeowners pursuant

to the HBA program; (2) filing any Memoranda executed by North Carolina

homeowners in connection with the HBA program; and (3) filing any notices of lis

pendens affecting the properties of any North Carolina homeowners stemming from

the HBA program. 13

V. Remedies

153. Finally, the State also seeks various forms of monetary relief against

Defendants, including an award of restitution and civil penalties. However, the Court

concludes that further proceedings are necessary in connection with those issues.

154. Therefore, the Court DEFERS ruling on the State’s request for any

monetary award against Defendants.

13 The Court need not decide at the present time whether any remaining terms of the HBAs are legally enforceable. CONCLUSION

THEREFORE, IT IS ORDERED as follows:

1. Plaintiff’s Motion for Partial Summary Judgment on its claims for

UDTP is GRANTED.

2. Plaintiff’s Motion for Summary Judgment on its claims under the TSA

is GRANTED.

3. Plaintiff’s Motion to Strike the Declaration of David Manchester is

GRANTED in part and DENIED in part.

4. Defendants are hereby PERMANENTLY ENJOINED from (1) taking

any action to collect any ETFs against North Carolina homeowners

pursuant to the HBA program; (2) filing any Memoranda executed by

North Carolina homeowners in connection with the HBA program; and

(3) filing any notices of lis pendens affecting the properties of any North

Carolina homeowners stemming from the HBA program.

5. The Court DEFERS ruling on the State’s request for monetary relief,

including restitution and civil penalties.

SO ORDERED, this the 16th day of January, 2026.

/s/ Mark A. Davis Mark A. Davis Special Superior Court Judge for Complex Business Cases