Where the limited partners’ summary judgment motion sought declaratory relief that was more expansive than the relief requested in the complaint itself, the Court would on consider the relief sought in the complaint. Woodcock v. Cumberland County Hospital System, 2022 NCBC 2 (J. Davis). As a result, the Court would disregard any request for declaratory relief than was greater than the declarations sought in the original claim.
Plaintiffs are all limited partners of a limited partnership (“FASC”), which owns an ambulatory surgery center in Fayetteville, North Carolina. The general partner (“CFVASC”) purported to sell its entire interest to another defendant (“CCHS”). Plaintiffs filed an eleven-claim complaint which included, inter alia, a claim for declaratory relief. At the commencement of discovery, Plaintiffs immediately filed a motion for summary judgment related to their DJ claim, seeking numerous declarations which the Court recognized went well-beyond the declarations Plaintiffs sought in their actual complaint. Defendants objected, contending the motion was premature because discovery had only just commenced.
The Business Court agreed. Recognizing that summary judgment can be an appropriate procedure in a declaratory judgment claim, the Business Court nonetheless held that such motions are inappropriate if ongoing discovery could produce evidence relevant to the motion. (Opinion, ¶ 24). In denying Plaintiffs’ motion without prejudice, the Business Court further noted that the declaratory relief Plaintiffs sought in their motion was “significantly broader than” the claim within the complaint itself. (Id., ¶30). Because a declaratory judgment is an “independent claim, and may not be commenced by a motion in the cause,” (Id., ¶31), the Business Court noted it would be “improper” to grant any declaration contained in the motion which had not been requested in the claim itself. (Id., ¶34).
Based upon this decision, a business should remember that any motion seeking a declaration from the Court about its rights or obligations related to business contracts or anything else can be no broader than the declarations identified in its lawsuit.