Forest Ridge Townhomes Corporation of Greensboro v. Heag Pain Management Center, P.A.
North Carolina Court of Appeals · N.C. Ct. App. · North Carolina bar guidance
Verified April 26, 2026
- Citation
- Forest Ridge Townhomes Corp. of Greensboro v. Heag Pain Mgmt. Ctr., P.A., No. COA 25-600, 2026 WL 762385 (N.C. Ct. App. Mar. 18, 2026) (unpublished) (Murry, J.)
- Decided
- March 18, 2026
Summary
Respondents' counsel Harry G. Gordon of Gordon Law Offices, representing Greensboro Realty & Investments, LLC and K&S Resources, LLC, supplemented his appellate research with Perplexity.AI Professional and attached a "Perplexity.AI Answers" exhibit to a post-judgment motion in a Guilford County surplus-funds dispute. On appeal, Judge Murry (joined by Judges Griffin and Freeman) found that respondents' brief relied on irrelevant authority, including RM Contrs., LLC v. Wiggins (a mechanics'-lien case bearing no relation to the HOA surplus-funds proceeding under N.C.G.S. section 45-21.32) and a miscited Porter v. Bank, with the panel concluding "some of which appears to be AI-generated work product that they failed to adequately examine." Petitioner moved for Rule 34 sanctions for harassment and gross noncompliance with appellate rules.
- AI tool:
- Perplexity.AI (Professional Version)
What sanction did the court impose?
Trial court order disbursing $26,911.38 in surplus funds AFFIRMED. The Court of Appeals declined to impose Rule 34 sanctions, finding the noncompliance did not rise to "gross" under Dogwood, but chastised respondents' counsel on the record for failing to review AI-generated work product, citing N.C. State Bar Formal Op. 1 (2024) and Benjamin v. Costco Wholesale Corp. No monetary sanction, suspension, or bar referral imposed.
Why does Forest Ridge Townhomes Corporation of Greensboro v. Heag Pain Management Center, P.A. matter for law firms using AI?
Forest Ridge is the rare AI-citation case where the court declined to impose monetary sanctions yet still memorialized a public chastisement of counsel by name in a written opinion, expressly invoking the State Bar’s 2024 formal opinion on attorney responsibility for AI work product. For a managing partner, the lesson is that the reputational cost of an AI-hallucination admonition now lands even where the procedural threshold for Rule 34 sanctions is not met. The opinion also confirms that vendor-marketed “Professional” tiers of consumer AI tools, here Perplexity.AI Professional, do not insulate counsel from the Rule 3.3 candor and N.C. State Bar Formal Op. 1 (2024) review obligations.
Sources
Further reading
Source PDF is a Westlaw printout mirrored from the Damien Charlotin hallucination database. We are working to add the underlying court docket (PACER, CourtListener, or court website) as a second source.
- Direct CourtListener or N.C. Court of Appeals primary-source URL not located during verification; opinion is unpublished slip copy (2026 WL 762385) and the Charlotin-hosted PDF of the verbatim opinion is the only primary-equivalent source confirmed.