NC Business Court dismisses owners' challenge to a Helene repair assessment
NC Business Court dismisses owners' challenge to a Helene repair assessment
2026-09-12 · North Carolina · Courts
Owners who challenged a $3,970-per-lot special assessment for Hurricane Helene repairs had their complaint dismissed in full — but the dismissal was without prejudice, and they never filed a response to the motion. The North Carolina Business Court decided Brock v. Kyryk on July 8, 2026.1
Both qualifications matter, and both are missing from most accounts of the case. This is a decision about how an owner must plead a challenge to an assessment, decided on an unopposed motion, and it forecloses very little on the merits.
The facts
In late September 2024, Hurricane Helene caused “substantial damage to the common areas” of The Settings of Black Mountain in Buncombe County, “including to roads and common area infrastructure.”
At a March 1, 2025 meeting the board addressed repair costs estimated at $2.7 million, to be funded from a combination of FEMA grants and a special assessment then estimated at $1.45 million. In July 2025 the association, through its management company, notified members that the final special assessment would be $3,970.00 per lot — a figure that factored in increased FEMA grant amounts.
The declaration lets the board levy special assessments to cover unbudgeted expenses, with any such assessment becoming effective unless disapproved at a meeting by members holding a majority of the total votes. Owners petitioned for a special meeting; it was held August 10, 2025; the disapproval vote did not succeed, and the assessment proceeded.
Three plaintiffs sued the six directors and the association for breach of fiduciary duty, negligent misrepresentation and injunctive relief.
What the court held
On derivative standing. The plaintiffs framed the action as derivative under G.S. 55A-7-40 but pleaded only harm to themselves. The court held a suit does not become derivative merely because the complaint cites the derivative statute — it must allege injury to the association and seek recovery for it. The complaint “fails to identify any putative harm to the Association, as opposed to Plaintiffs.”
On fiduciary duty. Under G.S. 55A-8-30, “the North Carolina Nonprofit Corporation Act requires a director to act in the best interests of the nonprofit corporation, not its members.” As to the association itself, the court held the relationship between an association and its members is “generally contractual, rather than fiduciary” absent facts showing a de facto fiduciary relationship. The business judgment rule was noted as a further hurdle.
On negligent misrepresentation. The claim failed for want of actual and reasonable reliance and causation. An inaccurate statement in a meeting notice is not, without more, a tort.
On injunctive relief. It is a remedy, not an independent cause of action.
The two qualifications that change how this reads
First, the plaintiffs did not respond. They missed the deadline to oppose the motion to dismiss, then attempted to voluntarily dismiss the action; the court struck that as improper for a putative derivative action and reopened the case. The court decided the motion on the briefing of one side only, and said so — it noted it did “not have the potential benefit of briefing from Plaintiffs,” that the defendants' own briefing was “of little assistance,” and, remarkably, that “it appears that Plaintiffs do not themselves know or understand the relief they seek.”
Second, every dismissal was without prejudice. The court observed that this outcome — dismissal without prejudice — “is the relief originally sought by Plaintiffs for all causes of action in the case.”
So this is not a ruling that a Helene special assessment survives challenge. It is a ruling that this complaint, unopposed, did not state a claim. An owner elsewhere in western North Carolina facing a storm assessment should read it as a pleading guide, not as a verdict on the merits.
What it does establish, and it is real
Notwithstanding the procedural posture, the legal propositions are consistent with a developing Business Court line and are worth taking seriously.
The court applied Port Trinitie Homeowners Ass'n v. Port Trinitie Ass'n, 2025 NCBC 43 (August 7, 2025), and the same reasoning was applied again six weeks after Brock in Spencer Creek, L.L.C. v. Linville Ridge Property Owners' Ass'n, 2026 NCBC 74 (August 28, 2026), which dismissed a breach of fiduciary duty claim with prejudice following both. Three Business Court opinions in thirteen months now say the same thing.
For a North Carolina owner, the practical consequences:
- Breach of fiduciary duty against directors is the wrong claim for an assessment grievance, and it is the claim owners reach for first. Directors' duties run to the corporation.
- A derivative action requires association injury and association recovery. An assessment that every owner must pay is, almost by definition, a harm to owners rather than to the association — which makes the derivative route a poor fit for exactly this grievance.
- The viable theory is contractual. If the relationship is contractual, the question is whether the board followed the declaration and bylaws — notice, meeting, vote thresholds, the scope of the special-assessment power. Spencer Creek is precisely such a challenge, alleging a repair assessment levied without following bylaw procedure, and it survived to a joinder fight rather than being dismissed outright.
What it means for a board levying a storm assessment
The defensive lesson is narrower than “boards win.” What protected this board was that it followed the declaration's mechanism: it noticed the assessment, it honoured the owners' petition for a special meeting, it permitted proxy voting, and the disapproval vote failed. The process is what made the challenge a pleading problem rather than a merits problem.
The disapproval structure in this declaration — the assessment takes effect unless a majority of total votes disapproves — is common and is heavily weighted toward the board. Owners organising against an assessment under such a clause need an affirmative majority of all votes, not merely of those voting, which is a far higher bar than most assume until they attempt it.
The wider western North Carolina picture
This is the first substantial North Carolina decision arising from Helene repair assessments, and it will not be the last. Private roads and private stormwater infrastructure are the two largest uninsured cost centres for mountain associations, and they are precisely what the storm destroyed.
Associations in that position should be aware of the state Private Road and Bridge Program, which provides a 50% cost share for HOA-owned private roads and bridges under the Disaster Recovery Act of 2025 — and whose partial-reimbursement application deadline has already passed.
What to watch next
Whether the Brock plaintiffs refile. The dismissal was without prejudice, the defects identified were pleading defects, and a properly framed contractual claim was never adjudicated.
More broadly, Spencer Creek is the case to follow. It raises the claim Brock did not — that a repair assessment was levied without following the bylaws — and the court has ordered joinder of all current members and all prior members against whom the assessment was levied before the declaratory claim proceeds. That is where the merits question about storm assessments will actually get answered.
Related North Carolina HOA Topics
Stay on top of North Carolina HOA law
Every week: new North Carolina legislation, court rulings, and regulatory developments affecting condos, planned communities, and property managers. Free.
No spam. Unsubscribe anytime.