Issue-Specific Directed Verdict Required to Preserve JNOV: North Carolina Supreme Court Clarifies Rule 50(b) in Multi-Claim Cases

Introduction

In Vanguard Pai Lung, LLC v. Moody, No. 15A24 (N.C. Mar. 21, 2025), the Supreme Court of North Carolina, per Justice Dietz, resolved a recurring preservation problem in complex civil litigation. The Court endorsed a line of Court of Appeals decisions and held that a party moving for judgment notwithstanding the verdict (JNOV) under Rule 50(b) must have first moved for a directed verdict under Rule 50(a) on the same, specifically articulated issue. In multi-claim or multi-theory cases, a generalized or ambiguous directed verdict motion is insufficient; the precise ground must be expressly stated, or it is waived for JNOV purposes.

The decision arises from a complex business dispute involving allegations of fraud, conversion, embezzlement, unfair and deceptive trade practices (UDTP), and unjust enrichment among corporate stakeholders in a circular knitting machine enterprise. After a jury returned a verdict largely for the plaintiffs, the defendants pursued a suite of post-trial motions. The North Carolina Business Court denied most of those motions and found several JNOV arguments unpreserved. The Supreme Court affirmed, using the case to set a clear preservation rule that will govern civil practice statewide.

Summary of the Opinion

• Holding on preservation: To preserve an issue for a Rule 50(b) JNOV motion, a party must have timely moved for a directed verdict on that same specific issue. In multi-claim, multi-theory cases, the issue is preserved only if it is expressly articulated at the directed verdict stage.
• Adoption of Court of Appeals precedent: The Court endorsed and adopted the reasoning of Plasma Centers of America, LLC v. Talecris Plasma Resources, Inc., 222 N.C. App. 83 (2012), and related cases (including Couch v. Private Diagnostic Clinic, 133 N.C. App. 93 (1999), aff’d without precedential value, 351 N.C. 92 (1999)).
• Limitation of Anderson v. Butler: The Court confined Anderson’s flexibility to simple, single-claim cases where the basis for the motion is obvious. In complex cases with multiple claims or defenses, specificity is “critical.”
• Application: Defendants’ JNOV arguments on the conversion claim (beyond laptops) and on the fraud claim (intent to deceive) were not preserved because their directed verdict motion did not specifically raise those grounds.
• Disposition: The Court affirmed the Business Court’s rulings in full, including its grant of JNOV to defendants on the UDTP claim (for lack of evidence “in or affecting commerce”) and its rejection of other post-trial relief (new trial, amended judgment, and judicial dissolution).
• Practice guidance: The Court advised that, in complex cases, counsel should file a written directed verdict motion that lists issue-specific grounds to avoid inadvertent waiver.

Case Background

Vanguard Pai Lung, LLC (VPL) manufactures and distributes high-speed circular knitting machines, both producing its own equipment and selling machines made by its affiliated Taiwanese manufacturer, Pai Lung Machinery Mill Co. Ltd. Pai Lung Machinery owns two-thirds of VPL; Nova Trading USA, Inc.—owned by William Moody—owns the remaining one-third. Moody also owns Nova Wingate Holdings, LLC and served as VPL’s CEO during much of the 2010s.

After an accountant’s 2017 review prompted concerns about losses and mismanagement, Pai Lung Machinery and VPL sued Moody, members of his family, and the Nova entities for a range of torts and equitable claims. Defendants counterclaimed primarily for contract breaches. By trial in 2022, plaintiffs pursued claims for fraud, conversion, embezzlement, constructive fraud, UDTP, and unjust enrichment. The jury found Moody and Nova Trading liable for fraud; Moody liable for conversion, embezzlement, and constructive fraud; Moody and Nova Wingate liable for UDTP; and all defendants liable for unjust enrichment. It further found Moody controlled the Nova entities when committing acts underlying the fraud, UDTP, and unjust enrichment. On conversion, the jury awarded $272,300 for monetary and property conversion (including funds, vehicles, phones, laptops, and football tickets).

The Business Court denied defendants’ motion to dissolve VPL and later denied most of their post-trial motions, but granted JNOV to defendants on the UDTP claim for lack of sufficient evidence that the offending conduct was “in or affecting commerce.”

Analysis

Precedents Cited and Their Influence

• Scarborough v. Dillard’s, Inc., 363 N.C. 715 (2009): Establishes that a JNOV is a renewal of a directed verdict motion and tests the sufficiency of the evidence supporting the verdict. The Court here reaffirms Scarborough’s framework: JNOVs are limited to grounds that could support a directed verdict.
• Morris v. Scenera Research, LLC, 368 N.C. 857 (2016): Confirms the sufficiency standard—“more than a scintilla of evidence” is enough to send an issue to the jury—and that courts view evidence in the light most favorable to the nonmovant. The Court relies on Morris to reiterate JNOV’s demanding standard.
• Bryant v. Nationwide Mutual Fire Ins. Co., 313 N.C. 362 (1985): JNOVs should be granted “cautiously and sparingly.” The Court repeats this admonition to frame the high bar for post-verdict relief.
• Rule 50 of the North Carolina Rules of Civil Procedure:
  • Rule 50(a): Directed verdict motion must “state the specific grounds therefor.”
  • Rule 50(b)(1): JNOV may be granted only “in accordance with” a directed verdict motion and “if it appears that the motion for directed verdict could properly have been granted.” The Court reads these phrases to mean JNOV is confined to issues specifically raised in the directed verdict motion.
• Feibus & Co. (N.C.) v. Godley Construction Co., 301 N.C. 294 (1980): The specificity requirement exists to give the trial court and the opposing party “adequate notice” of the arguments. The Court invokes Feibus to ground its preservation rule in notice and fairness.
• Anderson v. Butler, 284 N.C. 723 (1974), overruled on other grounds by Nelson v. Freeland, 349 N.C. 615 (1998): Permits some flexibility when the grounds for a directed verdict are obvious in a simple, single-issue case; in Anderson, a generic motion sufficed for a straightforward negligence claim. The Court limits Anderson’s reach to those rare, uncomplicated scenarios.
• Plasma Centers of America, LLC v. Talecris Plasma Resources, Inc., 222 N.C. App. 83 (2012): Holds that a JNOV movant must have made a directed verdict motion on the specific issue later asserted in JNOV. The Supreme Court expressly adopts this rule.
• Couch v. Private Diagnostic Clinic, 133 N.C. App. 93 (1999), aff’d without precedential value, 351 N.C. 92 (1999): A JNOV movant “cannot assert grounds” not raised in the directed verdict motion. The Supreme Court affirms this textual reading of Rule 50(b) and makes it binding statewide.
• Ragsdale v. Kennedy, 286 N.C. 130 (1974): Lists the elements of fraud, which matter to the preservation analysis in this case (e.g., intent to deceive).

Legal Reasoning

The Court’s reasoning is rooted in Rule 50’s text, trial-management fairness, and clarity in complex litigation:

• Textual anchor in Rule 50(b)(1): The JNOV motion must be “in accordance with” the earlier directed verdict motion and can be granted only if the directed verdict “could properly have been granted.” This confines JNOV to issues that the trial court already had a fair opportunity to consider when it could have directed a verdict.
• Specificity as notice and anti-sandbagging: Rule 50(a)’s command to state “specific grounds” ensures adequate notice to both the court and the opponent. It prevents parties from holding back particular theories during trial only to spring them after an adverse verdict.
• Complex versus simple cases: The Court preserves Anderson’s limited flexibility but restricts it to obvious, single-claim cases where the sufficiency challenge is self-evident. In complex, multi-claim settings (like Business Court cases), a generic motion fails to give the necessary notice. The Court endorses Plasma Centers’ admonition that specificity is “critical” in such cases.
• Consequences of nonspecific or ambiguous motions: Where the record shows that the movant argued narrowly or imprecisely at the directed verdict stage, those unarticulated theories are waived at both the directed verdict and JNOV stages. The Court emphasizes that courts are not obliged to infer “unasserted, but potentially viable” grounds in a complex case.
• Practice guidance: Recognizing the practical pressures at the close of evidence, the Court recommends filing a written directed verdict motion listing all issues and theories intended to be preserved for JNOV, particularly in multi-claim trials. Oral supplementation can then highlight key points without risking waiver.

Application to This Case

The Supreme Court affirmed the Business Court’s preservation rulings and its merits-based denials of defendants’ other post-trial motions. Two preservation rulings illustrate the new rule:

• Conversion:
  • JNOV argument: Insufficient evidence regarding identification of converted funds and Moody’s possession of various property (cars, phones, tickets).
  • Directed verdict content: Defendants argued only that there was insufficient evidence Moody converted laptops used by his children.
  • Result: The broader JNOV arguments were not preserved because they went “far beyond” the narrow laptops argument made at the directed verdict stage. The Business Court correctly treated the unraised issues as waived, and the Supreme Court affirmed.
• Fraud:
  • JNOV argument: Insufficient evidence of intent to deceive (the third element) concerning two fraud theories: misrepresentation of machinery value and misrepresentation of intent to obtain an appraisal.
  • Directed verdict content: Defendants’ argument read as challenging only the existence of misrepresentation (the first element), and was confusingly phrased. In other parts of their motion, defendants were element-specific about other claims, reinforcing the court’s understanding that the fraud argument targeted only the first element.
  • Result: The “intent to deceive” theory was not specifically raised at directed verdict and was therefore waived for JNOV. The Court emphasized that, in a case with “thirty-six issues” to the jury, specificity is essential.

The Supreme Court also affirmed the Business Court’s remaining rulings. These included:

• UDTP (N.C. Gen. Stat. § 75-1.1): The Business Court granted JNOV for defendants on the UDTP verdict due to insufficient proof that the conduct occurred “in or affecting commerce.” The Supreme Court affirmed for the reasons stated by the Business Court without elaborating further.
• Rule 59 new trial and amended judgment: Affirmed based on the Business Court’s analysis, with no additional statewide rule announced.
• Judicial dissolution: Defendants sought dissolution of VPL post-verdict, arguing the company could not continue given ownership and litigation posture. The Business Court denied the request (no board deadlock; no wrongful withholding of distributions; dissolution would frustrate the jury’s verdict), and the Supreme Court affirmed.

Impact and Practice Implications

Vanguard Pai Lung is a significant procedural decision for North Carolina civil litigators, especially in business and complex cases:

• Statewide binding rule on preservation for JNOV: The Court cements that a Rule 50(b) JNOV motion is limited to the same, specifically articulated grounds raised in a Rule 50(a) directed verdict motion. This is now the governing rule across trial courts.
• Higher premium on granularity: In multi-claim or multi-theory cases, counsel should enumerate, claim by claim and element by element where necessary, each insufficiency ground to preserve it. “One-size-fits-all” or ambiguous motions are risky.
• Trial strategy adjustments:
  • Prepare and file a written Rule 50(a) motion listing every theory to be preserved for JNOV and appeal.
  • Organize arguments by claim, theory, element, and party, and tie them to the evidence (or lack thereof).
  • Where multiple categories of damages or property are at issue (e.g., funds versus specific chattels), address each category explicitly.
• Reduced appellate risk: This decision should reduce disputes over what was preserved and encourage fuller, clearer trial records, at the cost of somewhat longer motions practice.
• Anderson’s narrowed domain: Counsel can no longer rely on generic directed verdict motions in complex cases. The “obviousness” exception is confined to simple, single-issue trials (e.g., a basic negligence claim without multiple theories or defenses).
• Alignment with general practice norms: Although North Carolina retains the “directed verdict”/“JNOV” terminology, the Court’s approach functionally mirrors the preservation logic seen in other jurisdictions: a JNOV is a renewal, not a vehicle for new theories.
• Substantive issues left undisturbed: By affirming the Business Court’s UDTP and dissolution rulings without additional analysis, the Court signals that the case’s lasting significance is procedural, not substantive, in those areas.

Practical Checklist: Preserving Issues for JNOV Under Rule 50

• File a written Rule 50(a) motion at the close of the opponent’s case and renew it at the close of all evidence.
• For each claim and each defendant, identify:
  • Each element allegedly lacking sufficient evidence (e.g., “intent to deceive” for fraud; “unauthorized assumption” for conversion).
  • Each distinct theory within a claim (e.g., fraud-by-valuation versus fraud-by-promise-of-appraisal).
  • Each discrete category of damages or property at issue (e.g., funds, vehicles, phones, laptops, tickets).
• Cite Rule 50(a) and specify the absence of “more than a scintilla” of evidence on identified elements.
• Do not rely on “global” or generic sufficiency objections in complex cases.
• Ensure the transcript reflects the specificity; if arguing orally, refer expressly to the written motion’s numbered grounds.
• If the court reserves ruling, ask it to note that all articulated grounds are preserved.

Complex Concepts Simplified

• Directed Verdict (Rule 50(a)): A motion made during trial asking the judge to rule that no reasonable jury could find for the opponent on certain issues because the evidence is legally insufficient. Must state specific grounds.
• JNOV—Judgment Notwithstanding the Verdict (Rule 50(b)): A post-verdict motion renewing the directed verdict arguments, asking the court to enter judgment contrary to the jury’s verdict because the evidence cannot support it as a matter of law.
• Preservation: The requirement that legal issues must be properly raised at the right time and in the right way in the trial court to be available for later review or relief. Here, preservation for JNOV requires the same, specific grounds to have been presented earlier in a directed verdict motion.
• “More than a scintilla”: A minimal sufficiency threshold; if there is more than a trivial amount of evidence supporting a claim, the case typically goes to the jury, and JNOV should be denied.
• UDTP “in or affecting commerce”: A statutory requirement under N.C. Gen. Stat. § 75-1.1 that the challenged conduct occur in or affect commerce to be actionable as an unfair or deceptive practice.
• “Overruled on other grounds”: When a case is cited as overruled on other grounds, it means a later decision rejected part of the earlier case’s reasoning or holding—but not the specific point for which it is now being cited.

Conclusion

Vanguard Pai Lung, LLC v. Moody establishes a clear, binding rule for North Carolina civil practice: a Rule 50(b) JNOV motion is confined to the exact issues specifically raised in a Rule 50(a) directed verdict motion. In complex cases, specificity is not optional; it is essential. The Supreme Court expressly adopts key Court of Appeals decisions, narrows the reach of Anderson’s flexibility, and offers practical guidance to avoid waiver—file a written, granular directed verdict motion.

On the merits, the Court affirms the Business Court’s careful handling of the parties’ post-trial motions, including its JNOV ruling on the UDTP claim and its denial of dissolution. But the lasting doctrinal significance of this opinion lies in its procedural clarity: preservation for JNOV now demands issue-by-issue articulation at the directed verdict stage. Litigators should adjust their trial practices accordingly to safeguard appellate rights and post-verdict remedies.

Note: This commentary is for informational purposes only and is not legal advice.