A North Carolina court has ruled in favor of Multifamily Select Inc. (MSI) in a significant business dispute involving former executives and a competing management company. The North Carolina Business Court granted summary judgment to MSI against Calvin Small, executor of the estate of Lucinda Williams, Tannja Johnson, and Presken Management, LLC. This ruling addresses serious allegations of breach of fiduciary duty, tortious interference, and unfair trade practices, among others.

The case, Multifamily Select Inc. v. Williams, was filed under docket number 25-CVS-2370 and highlights the legal complexities surrounding corporate governance and competition. The court's decision is crucial as it underscores the responsibilities of corporate officers and directors to act in the best interests of their companies.

Background

Multifamily Select Inc. is a North Carolina corporation based in Winston-Salem that manages and consults for FHA-insured multifamily property owners. Lucinda Williams, who passed away in 2025, was a significant figure in MSI, serving as the Senior Vice President of Affordable Housing and holding directorial positions since her hiring in 2013. Tannja Johnson, who also worked at MSI, was promoted to Regional Vice President in 2021.

The dispute arose when Williams and Johnson allegedly conspired to divert MSI's clients to Presken Management, a company founded by Williams. The court documents reveal that Williams informed Johnson of her plans to retire from MSI but instead sought to take clients away from MSI to Presken. This led to the termination of contracts with several properties managed by MSI, resulting in significant financial losses.

The Ruling

The court, presided over by Judge A. Graham Shirley, ruled in favor of MSI, granting summary judgment on several claims against Williams and Johnson. The court found that both defendants breached their fiduciary duties by soliciting MSI's clients while still employed by the company. The ruling stated, "Corporate officers and directors are not permitted to use their position of trust and confidence to further their private interests."

Judge Shirley's opinion detailed how Williams and Johnson's actions led to MSI losing management contracts worth $542,000 in profits. The court also noted that the defendants did not contest the facts presented by MSI, which contributed to the ruling in favor of the plaintiff.

Impact

This ruling has significant implications for corporate governance in North Carolina. It reinforces the legal obligations of corporate officers and directors to prioritize their company's interests over personal gain. The court's decision may serve as a precedent for similar cases involving fiduciary duties and competitive practices in the business sector.

Moreover, the ruling highlights the potential consequences of breaching fiduciary duties, including financial liability for lost profits. Companies may need to reevaluate their internal policies and training regarding the responsibilities of their executives to prevent similar disputes in the future.

What's Next

While the court's ruling is final regarding the claims against Williams and Johnson, the case may still have implications for Presken Management, LLC. The defendants have the option to appeal the decision. The outcome of this case could influence future legal interpretations of fiduciary duties and competitive practices within corporate law.