Forest Ridge Townhomes Corporation of Greensboro v. Heag Pain Management Center et al.
North Carolina Court of Appeals · Mar 18, 2026
- Jurisdiction
- federal
- Court
- North Carolina Court of Appeals
- Record ID
- forest-ridge-townhomes-corporation-of-greensboro-v-heag-pain-management-center-et-al-2026-03-18
- Observed outcome
- The court affirmed the trial court's disbursement order and declined to impose formal sanctions, but issued a formal judicial admonishment regarding the use of unverified AI-generated research.
- Known monetary consequence
- Not recorded
Why this matter warrants attention
The North Carolina Court of Appeals admonished Respondents' counsel for submitting AI-generated legal authorities that were irrelevant or hallucinated. Although the court declined to impose formal sanctions, it formally chastised counsel for failing to verify the accuracy of the 'Perplexity.AI Answers' exhibit, citing the attorney's professional duty to evaluate all work product before submission.
The court reasoned that counsel failed to meet the professional duty of candor and competence by submitting AI-generated work product without adequate review, noting that the cited authorities were irrelevant and appeared hallucinated.
This case illustrates the judicial expectation that attorneys must independently verify AI-generated research. It serves as a precedent for how appellate courts may address the submission of hallucinated authorities, even when formal sanctions are not imposed.
Failure modes and consequences
- Fake Citations
- Contract
- Trial
- None Adjudicated
- AI attribution
- Admitted
- Recorded tool
- Perplexity.AI
- Known monetary consequence
- Not recorded
- Procedural posture
- Appeal from a trial court order disbursing surplus funds from a foreclosure action.
Damien Charlotin case archive
Publisher document archive. The recorded document is hosted in the upstream publisher archive.
Open underlying sourceA recorded source link is not a substitute for checking the underlying order, filing, opinion, or disciplinary record.
What this record does—and does not—establish
Counsel admitted to using Perplexity.AI, Professional Version.
The record summarizes the outcome described in the linked public source. The recorded document is hosted in the upstream publisher archive. This page is not a substitute for the complete docket, subsequent history, or jurisdiction-specific advice.
Latest evidence review: Primary Document Verified (high confidence).
Controls suggested by the public record
- Implement mandatory verification protocols for all legal research generated by AI tools.
- Ensure all cited authorities are independently checked against primary legal databases before inclusion in court filings.
- Review internal policies regarding the use of generative AI to ensure compliance with professional duties of candor and competence.