- Associated Press - Friday, May 10, 2019

RALEIGH, N.C. (AP) - The North Carolina Supreme Court upheld on Friday a civil judgment against a former Republican U.S. Senate and House candidate in which jurors decided he made false and misleading statements while urging two people to invest in a now-closed technology company.

A majority of the justices hearing the case rejected arguments from attorneys for Greg Brannon, a favorite of tea party Republicans who finished second in the 2014 and 2016 Senate primaries. His 2016 House bid also fell short.

During a 2014 trial completed just before his primary loss to Thom Tillis, the Cary OB-GYN was ordered to pay $250,000 to the investors in Neogence Enterprises, of which he was a board member, along with another $132,000 in attorney fees and court costs.

Sam Lampuri and Larry Piazza had sued Brannon, Neogence ex-CEO Robert Rice and a company founder who was dismissed earlier from the case. While a Wake County jury found Brannon liable, it absolved Rice of wrongdoing.

The lawsuit alleged the plaintiffs had been given misleading information in 2010 that Verizon was interested in preinstalling its application on company smartphones, when in fact Verizon never said that. The Verizon deal was actually a potential deal with an advertising firm that never occurred, according to court documents. Piazza invested $150,000 and Lampuri $100,000. The company failed to get the software functioning quickly and closed.



Wake Superior Court Judge Bryan Collins refused to grant a new trial. Brannon’s lawyers told appeals judges the Brannon and Rice verdicts were inconsistent and impermissible, and that the jurors should have been told about a state law allowing company directors to avoid liability if they rely on the information of a company employee.

In April 2016, shortly after losing to U.S. Sen. Richard Burr in a primary, a divided 2-1 panel of the state Court of Appeals disagreed with Brannon and upheld the judgment.

On Friday, Associate Justice Sam Ervin IV confirmed the crux of that decision, writing on behalf of four justices that based on the trial record Collins didn’t abuse his discretion. Ervin pointed out specific information Brannon had provided separately to Piazza and Lampuri compared to what Rice offered.

For example, Brannon “told Mr. Lampuri that Neogence had the opportunity to be preloaded onto Verizon’s phones while Mr. Rice never made any such statement,” Ervin wrote, adding the “record discloses ample justification for a jury decision to treat defendant and Mr. Rice differently.” Other legal challenges weren’t properly laid out on appeal, Ervin wrote.

In a dissenting opinion, Associate Justice Paul Newby wrote the competing trial court verdicts represent a “miscarriage of justice” and warned the majority’s holding “could expose to liability anyone who discusses a potential investment opportunity with a friend.”

The trial evidence clearly shows the plaintiffs didn’t invest until after multiple conversations with Rice and other company officers, Newby added.

Brannon attorney Matthew Leerberg expressed disappointment with the ruling, writing in an email that his client “fought hard for the rights of volunteer directors serving on the corporate boards of startup companies and other business and nonprofit organizations.” Brannon has been hosting a weekly conservative radio show.

The two investors didn’t respond Friday to a phone message seeking comment through their attorney.

Two of seven justices who recently joined the court didn’t participate because oral arguments were heard 14 months ago. Ervin is a registered Democrat. Newby is now the sole Republican on the court.

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