The North Carolina Business Court issued a significant ruling in the case of Multifamily Select, Inc. v. Williams, docket number 25-CVS-2370, favoring Multifamily Select, Inc. (MSI). The court granted MSI's motion for summary judgment against former executives and a competing firm, resulting in a total loss of $542,000 for MSI due to the actions of the defendants. This ruling highlights the responsibilities of corporate officers and directors in maintaining fiduciary duties and the consequences of breaching those duties.

The court's decision affects MSI, a North Carolina corporation that manages and consults for FHA-insured multifamily property owners, and its former employees, including Lucinda Williams, who passed away in 2025, and Tannja Johnson. The ruling underscores the importance of ethical conduct in corporate governance and the legal ramifications of breaching fiduciary duties.

Background

The parties involved in this case include Multifamily Select, Inc., the plaintiff, and several defendants: Calvin Small, the executor of Lucinda Williams's estate, Tannja Johnson, and Presken Management, LLC. The dispute arose after Williams and Johnson, both former MSI executives, allegedly conspired to divert MSI's clients to their new company, Presken, while still employed by MSI.

Williams had worked for MSI since 2013 as Senior Vice President of Affordable Housing, while Johnson joined MSI in the same year and was promoted to Regional Vice President in 2021. The conflict escalated when Williams informed MSI's management that she intended to retire, but later approached Johnson about leaving MSI to become the President of Presken. Unbeknownst to MSI, both women began soliciting MSI's clients to switch their management contracts to Presken.

The Ruling

The court ruled in favor of MSI, granting summary judgment on multiple claims, including breach of fiduciary duty, tortious interference with contract, constructive fraud, civil conspiracy, and unfair or deceptive trade practices against Williams and Johnson. Judge A. Graham Shirley noted, "Corporate officers and directors are not permitted to use their position of trust and confidence to further their private interests," emphasizing the legal obligations that executives have to their companies.

In his opinion, Judge Shirley stated that both Williams and Johnson had breached their fiduciary duties by soliciting MSI's clients while still employed by the company. The court found that their actions resulted in MSI losing substantial profits, totaling $542,000, due to the termination of contracts with six multifamily properties.

Impact

This ruling serves as a reminder of the legal responsibilities that corporate officers and directors hold regarding their fiduciary duties. The court's decision reinforces the principle that executives must act in the best interests of their companies and avoid conflicts of interest. The case sets a precedent for how courts may handle similar disputes involving fiduciary duties and corporate governance in the future.

The outcome of this case could have broader implications for the business community, particularly for companies in the property management sector. It highlights the potential legal consequences of unethical behavior and the importance of maintaining transparency and integrity in corporate practices.

What's Next

While the court has granted summary judgment in favor of MSI, the defendants may still have the option to appeal the ruling. Details regarding any potential appeals or related cases were not available in the court filing.