RALEIGH, N.C.— Shanahan Law Group, PLLC is pleased to announce that it has earned a significant legal victory for its client in a precedent setting case recently decided by the North Carolina Supreme Court. The Court unanimously ruled in favor of Thomas “Skip” Stokes, allowing him to conduct post-confirmation discovery under the Family Law Arbitration Act (FLAA).
Stokes, of Pittsboro, North Carolina, is seeking to vacate and reopen the arbitration of his divorce from Catherine Crumpton, the appellee in the Supreme Court matter. Crumpton, the founder of Drug Safety Alliance, Inc., asserted during the arbitration proceedings that she had no intention of selling her company, but within weeks of resolution of the arbitration Crumpton and DSA entered into a letter of intent to sell DSA to Irish firm UDG Healthcare plc less than two months after the arbitration concluded. The sale price—$28,000,000—was significantly more than the 3 to 5 million dollar valuation Stokes and Crumpton discussed during the arbitration.
Stokes subsequently filed a motion in Wake County District Court, arguing that the arbitration award had been proceeded by Crumpton’s fraud. As part of his motion, Stokes requested limited discovery regarding the details of the sale of Drug Safety Alliance, to determine whether negotiations took place during his arbitration with Crumpton. The trial court denied the request, determining that it did not have the authority to grant discovery because the arbitration had already concluded. Stokes appealed the matter first to the North Carolina Court of Appeals, which, by a split decision upheld the trial court’s order. Stokes then appealed to the Supreme Court of North Carolina.
In its unanimous opinion, the Supreme Court determined that not only did Stokes have the right to reasonable discovery, but the trial court also had the authority to grant it. Justice Beasley described the information sought by Stokes as “highly material” to his efforts to vacate the arbitration, and found that such information was difficult to obtain “due to the concealment and deception inherent in fraud.” The court concluded that “there is no provision of the [Family Law Arbitration Act] which prohibits post-confirmation discovery,” and that Stokes’ motion is “a pending action under which the trial court had the discretion to order discovery.”
“The Supreme Court’s decision empowers courts to ensure court proceedings and outcomes are subject to review and in favor of the potential victims of fraud on legitimate allegations of fraud,” said Kieran Shanahan, principal of Shanahan Law Group. “All we have been asking is for the opportunity to get at the truth be provided. We look forward to returning to District Court and conducting discovery.”
Shanahan Law Group is a boutique law firm in Raleigh, North Carolina that offers a full range of business and litigation services. The firm’s multi-faceted team of attorneys can design strategies for numerous practice areas, such as complex business litigation, banking and financial institutions, commercial real estate, trust and estates, and government representation. The firm has offices in downtown Raleigh and North Raleigh. For more information, visit http://www.shanahanlawgroup.com.