O Lord Don't Buy The Nanny A Mercedes-Benz

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The Order Wednesday of last week in Patriot Performance Materials, Inc. v. Powell, 2013 NCBC 10 was appropriately timed for the day before Valentine's Day.

Powell, the Defendant, had a 50% interest in several businesses with Henderson, one of the Plaintiffs. He alleged in a third party complaint that Henderson, who shared the other 50% interest, had diverted $30,000 (and more) from their corporations.

The purpose of the $30,000? For Henderson to shower goodies on the nanny for his children. The third party complaint against the nanny said that the funds were lavished upon her to buy her a "Mercedes-Benz automobile and a high-end Mac computer." Op. 5.

Perhaps the nanny's child-care services were exceptional and warranted the computer and the Mercedes. Or perhaps the allegations of the Third Party Complaint against the nanny, which were that she was Henderson's mistress, were true.

And she wasn't the only woman who was the target of Henderson's largesse, though the $30,000 spent on her was small potatoes. The Third Party Complaint alleges that Henderson took $800,000 in company funds "to spend primarily on extravagant European and Middle Eastern vacations with both his wife . . . and his mistress." Third Party Complaint at 37.

Powell argued that the diversion of $30,000 for the Mercedes and the computer was an inappropriate use of corporate funds. He sued the nanny, Amber Clancy, for unjust enrichment.  

That didn't fly, for a couple of reasons. Unjust enrichment does not include claims for gifts, which were what Powell alleged the Mercedes and the Macintosh were. Also, Judge Gale ruled that Powell was not the proper party to bring the claim. He said that "it was the corporation, not Powell individually, who conferred a benefit . . . upon Clancy and it is the corporation that would be the proper party to bring such an action." Op. ¶10.

Our nannies always drove Porsches.