Castillo v. RRD Fin., LLC, 2025 NCBC 53.
STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE SUPERIOR COURT DIVISION MECKLENBURG COUNTY 25CV007822-590
JOSE A. MARRUFO CASTILLO and JORGE ABRAHAM ALVAREZ MARRUFO,
Plaintiffs, ORDER AND OPINION ON MOTIONS v. FOR JUDGMENT ON THE PLEADINGS RRD FINANCIAL, LLC; DAVID ALGOOD; and RYAN ESKANDARI,
Defendants.
1. This matter is before the Court on Defendants’ partial motions for judgment
on the pleadings, both of which seek judgment on the pleadings as to Plaintiffs’
Fourth Claim for Relief for purported violations of Chapter 75 of the North Carolina
General Statutes and Seventh Claim for Relief for negligent misrepresentation.
2. Defendants have filed answers to Plaintiffs’ complaint, (ECF Nos. 11, 12),
and the pleadings are therefore closed.
3. Defendants RRD Financial, LLC and Ryan Eskandari filed their motion for
judgment on the pleadings on 2 June 2025, (ECF No. 15), and defendant David Algood
filed his motion four days later, (ECF No. 23).
4. Having reviewed and considered the motions, the briefs, and the applicable
pleadings, the Court determines that the motion filed by defendants RRD and
Eskandari should be GRANTED and the motion filed by defendant Algood should be
DENIED at this time.
Fox Rothschild LLP, by Kip D. Nelson and Camryn Rohr, for Plaintiffs Jose A. Marrufo Castillo and Jorge Abraham Alvarez Marrufo. Lord & Lindley, PLLC, by Harrison A. Lord and Trey Lindley, for Defendants RRD Financial, LLC and Ryan Eskandari.
Knox, Brotherton, Knox & Godfrey, by Allen C. Brotherton and J. Gray Brotherton, for Defendant David Algood.
Houston, Judge.
I. BACKGROUND
5. The Court does not make findings of fact on motions for judgment on the
pleadings. The Court does, however, summarize and recite certain of the relevant,
well-pleaded allegations of the complaint, which are taken as true for purposes of the
motions.
6. RRD operates and finances a network of used car dealerships around the
United States. Between 2019 and 2022, it employed plaintiff Jose A. Marrufo Castillo
as the general manager of two of its dealerships, having first hired him to work as a
sales associate in 2018. Satisfied with Marrufo Castillo’s performance, RRD also
hired his cousin, plaintiff Jorge Abraham Alvarez Marrufo. (Compl. ¶¶ 9, 12, 15–18,
ECF No. 3).
7. In September 2022, after certain management disagreements, Marrufo
Castillo resigned from his position as general manager, and Alvarez Marrufo
conveyed his intent to do the same. (Compl. ¶ 21). 8. After Defendants 1 asked both men to reconsider, Marrufo Castillo agreed to
remain with RRD but only if he became a “partner” in the company—a condition to
which he and Defendants agreed. (Compl. ¶¶ 23–24).
9. In December 2022, the parties ultimately negotiated and executed an
“operating agreement” to document their purported partnership or, alternatively,
joint venture. In the course of negotiating that agreement, Mohammed Reza
Eskandari (defendant Ryan Eskandari’s brother) and defendant David Algood, a
member and manager of RRD, told Plaintiffs that Plaintiffs’ compensation structure
would consist of a base salary and other compensation, including the profits of any
dealerships Plaintiffs operated. Algood also represented that Defendants would assist
Plaintiffs in opening and operating dealerships in Columbia, South Carolina “and
elsewhere” by providing “working capital and other assistance.” Despite these
representations, Plaintiffs conclusorily assert that Defendants never intended to
provide the working capital and other assistance as promised. (Compl. ¶¶ 22–25, 82–
85).
10. After the agreement was reached, new issues soon arose. For example,
according to Plaintiffs, Defendants limited Plaintiffs’ access to corporate records and
“impeded Plaintiffs’ ability to open new facilities pursuant to the” agreement between
the parties. Nonetheless, Plaintiffs insist that they continued to perform under the
operating agreement, opening one dealership in Greer, South Carolina in early 2023
and another in Columbia, South Carolina about a year later—on both occasions with
1 Plaintiffs largely fail to distinguish between the individual defendants and the entity defendant in their complaint. funding from RRD. The two locations generated a substantial sales portfolio of
approximately $14 million under Plaintiffs’ management. (Compl. ¶¶ 26–29).
11. Around June 2024, defendant Eskandari and his brother Mohammed
requested that Plaintiffs review the financial records of RRD’s dealership in Houston,
Texas for signs of mismanagement by Algood. Plaintiffs agreed to do so and
ultimately concluded that Algood had, in fact, mismanaged the dealership, bringing
to RRD’s attention a number of alleged “abnormalities” in the location’s financial
records. (Compl. ¶¶ 30–32).
12. According to Plaintiffs, at Algood’s behest, RRD then promptly terminated
Plaintiffs’ access to RRD’s corporate records, stopped “providing support to Plaintiffs’
operation of the Columbia location,” and began withholding payments owed to
Plaintiffs. Algood also accused Plaintiffs of misappropriating funds from RRD. To
further exclude Plaintiffs from the business and its operations, Defendants seized a
computer containing Plaintiffs’ only copy of the parties’ “operating agreement.”
(Compl. ¶¶ 33–36, 95).
13. Plaintiffs also assert that Algood “wielded the threat of a lawsuit to demand”
that Alvarez Marrufo sign a release of Plaintiffs’ rights to the Greer Auto Finance
Center, though Plaintiffs do not detail the threatened basis (or lack of basis) for the
lawsuit or plead facts indicating that the threat was wrongful or baseless. (Compl.
¶¶ 34, 36).
14. On 13 February 2025, Plaintiffs brought suit against Defendants, suing for
breach of the operating agreement, breach of fiduciary duty, accounting, unfair or deceptive trade practices under N.C. Gen. Stat. § 75-1.1, unjust enrichment,
fraudulent misrepresentation, negligent misrepresentation, and defamation. RRD
and Eskandari, jointly represented by counsel, filed their answer in April 2025, (ECF
No. 12), as did Algood, who is separately represented, (ECF No. 11).
15. In early June 2025, RRD, Eskandari, and Algood moved for judgment on the
pleadings as to Plaintiffs’ Fourth Claim for Relief for purported violations of Chapter
75 of the North Carolina General Statutes and Seventh Claim for Relief for negligent
misrepresentation.
16. While RRD and Eskandari submitted substantive briefing in support of
their motion with both an opening brief and a reply brief in support, (ECF Nos. 16,
29), Algood failed to do so, instead submitting an opening “brief” that reads, in its
entirety other than the caption, signature block, and certificate of service, as follows:
DEFENDANT DAVID ALGOOD, by and through undersigned counsel and in support of his Motion for Judgment on the Pleadings, states as follows:
Defendant Algood hereby incorporates by reference all factual recitations, standards of review, and substantive arguments set forth in the Brief in Support of Motion for Judgment on the Pleadings of Defendants RRD Financial, LLC and Ryan Eskandari (“RRD Brief”), filed in this matter on June 2, 2025. (ECF No. 16). Said incorporations apply equally to Defendant Algood, and, for the same reasons cited therein, Defendant Algood is entitled to judgment on the pleadings as to Plaintiffs’ Fourth and Seventh Claims for Relief. Id.
Further, dismissal for failure to state a claim upon which relief can be granted is proper where either “the complaint on its face reveals the absence of facts sufficient to make a good claim, or the complaint discloses some fact that necessarily defeats the plaintiff’s claim.” Bissette v. Harrod, 226 N.C. App. 1, 7, 738 S.E.2d 792, 797 (2013). As detailed in the RRD Brief, Plaintiffs’ Fourth Claim for Relief is based on breaches of a partnership agreement, the existence of which precludes a finding that the intra-business activities were in and affecting commerce. (ECF No. 16 at pp. 3-6). Plaintiffs’ Fourth Claim for Relief for unfair and deceptive business practices is thus “necessarily defeat[ed].” Bissette, 226 N.C. App. at 7. Finally, the Plaintiffs’ failure to satisfy Rule 9(b)’s heightened pleading standard for their negligent misrepresentation claim constitutes “the absence of facts sufficient to make a good claim”, and this claim is likewise subject to dismissal. Id.
Therefore, and in reliance on the incorporated RRD Brief, Defendant Algood is entitled to judgment on the pleadings as to Plaintiff’s Fourth and Seventh Claims for Relief, including without limitation for failure to state a claim for which relief can be granted.
(ECF No. 24 (emphasis added)). Algood did not file and serve a reply in support of his
motion.
17. The motions are now ripe for decision, and, pursuant to Rule 7.4 of the
Business Court Rules, the Court elects in its discretion to resolve the motions without
a hearing.
II. ALGOOD’S MOTION
18. The Court first addresses Algood’s motion and his failure to comply with the
Business Court Rules.
19. Under the version of Rule 7.2 of the Business Court Rules in effect at the
time the briefs on this motion were filed, 2 “[a]ll motions must be accompanied by a
brief (except for those motions listed in BCR 7.10),” and “[a] motion unaccompanied
2 The Business Court Rules were subsequently amended effective 2 September 2025 to streamline the text of the Rules, but the substance of the Rules (and the Court’s determination) is the same with respect to the matters at issue. Indeed, amended BCR 7.1(c) expressly notes that “[t]he Court has discretion to disregard or strike a filing that does not comply with these rules.” BCR 7.1(c). by a required brief may, in the discretion of the Court, be summarily denied.” BCR
7.2 (“The function of all briefs required or permitted by this rule is to define clearly
the issues presented to the Court and to present the arguments and authorities upon
which the parties rely in support of their respective positions. A party should
therefore brief each issue and argument that the party desires the Court to rule upon
and that the party intends to raise at a hearing.”).
20. The parties are expected to clearly cite in their briefs to the materials
supporting their argument (including affidavits, cases, and other such support for the
argument) where possible. BCR 7.5.
21. Similarly, Rule 7.8 of the Business Court Rules expressly provides that “[a]
party may not incorporate by reference arguments made in another brief or file
multiple motions to circumvent [word] limits.” BCR 7.8.
22. Across the spectrum, this Court has repeatedly made clear that the Business
Court Rules preclude a party from adopting or incorporating by reference the party’s
earlier-filed briefing or briefing by another party without the Court’s leave. This is
not limited to situations of word-count gamesmanship and applies to any situation in
which a brief is required. See, e.g., Howard v. IOMAXIS, LLC, 2023 NCBC LEXIS
159, at *16 n.5 (N.C. Super. Ct. Nov. 29, 2023) (“The IOMAXIS Defendants seek to
incorporate their earlier Rule 12(c) motion and brief. Such a practice is contrary to
BCR 7.8.”); Anderson v. Beresni, 2022 NCBC LEXIS 125, at *1 (N.C. Super. Ct. Oct.
25, 2022) (striking brief where defendants “attempt[ed] to incorporate by reference
arguments previously made by them in their brief in opposition to” a preliminary injunction motion); Wright v. LoRusso, 2023 NCBC LEXIS 66, at *3 (N.C. Super. Ct.
May 4, 2023) (striking summary judgment motions and related briefing, exhibits, and
other filings).
23. Here, Algood’s briefing does not comply with the Business Court Rules.
24. First, in violation of Business Court Rule 7.8, Algood purports to incorporate
by reference “all factual recitations, standards of review, and substantive arguments”
in RRD and Eskandari’s brief and then acknowledges that the substance of Algood’s
argument is made “in reliance on the incorporated RRD Brief.” (ECF No. 24 at 1–2).
25. Second, in violation of then-applicable Business Court Rules 7.2 and 7.5, the
“brief” fails to clearly identify the issues or to present the arguments and authorities
upon which Algood relies and fails to substantively brief each issue and argument
that Algood apparently would have the Court consider. In short, while Algood’s filing
is captioned as a “brief,” it lacks any of the substance expected and required in a brief,
citing only a single case setting forth the standard for the Court’s consideration of a
motion for judgment on the pleadings. (ECF No. 24 at 2 (quoting Bissette v. Harrod,
226 N.C. App. 1, 7, 738 S.E.2d 792, 797 (2013))).
26. Thus, Algood’s filing violates the Business Court Rules, and, in its
discretion, the Court determines that it is appropriate for the Court to STRIKE the
purported brief, (ECF No. 24), and DENY Algood’s motion for judgment on the
pleadings, (ECF No. 23). 3
3 The Court endeavors to ensure efficiency for the parties and the Court in each case. While
the Court could, in its discretion, permit re-briefing of the motion, see, e.g., Anderson, 2022 NCBC LEXIS 125, at *1, the Court declines to do so, as it would be neither efficient nor III. RRD AND ESKANDARI’S MOTION
27. The Court next addresses the motion for judgment on the pleadings filed by
RRD and Eskandari.
28. “The purpose of . . . Rule 12(c) is to dispose of baseless claims or defenses
when the formal pleadings reveal their lack of merit,” and it “is appropriately
employed where all the material allegations of fact are admitted in the pleadings and
only questions of law remain.” DiCesare v. Charlotte-Mecklenburg Hosp. Auth., 376
N.C. 63, 70 (2020) (citation and internal quotation marks omitted). As with a motion
to dismiss for failure to state a claim upon which relief can be granted, a trial court
should grant a motion for judgment on the pleadings “when a complaint fails to allege
facts sufficient to state a cause of action or pleads facts which deny the right to any
relief.” Robertson v. Boyd, 88 N.C. App. 437, 440 (1988); see also DiCesare, 376 N.C.
at 70 (noting that judgment on the pleadings is appropriate when the movant
“show[s] that ‘the complaint . . . fails to allege facts sufficient to state a cause of action
or admits facts which constitute a complete legal bar thereto’” (citation omitted)).
29. “The trial court is required to view the facts and permissible inferences in
the light most favorable to the nonmoving party. All well pleaded factual allegations
in the nonmoving party’s pleadings are taken as true and all contravening assertions
in the movant’s pleadings are taken as false.” Ragsdale v. Kennedy, 286 N.C. 130, 137
economical, particularly where Algood seeks only partial judgment on the pleadings. Algood may, if appropriate, renew any applicable arguments at summary judgment if the claims are not sooner dismissed by Plaintiffs. (1974). “Judgment on the pleadings is a summary procedure and the judgment is
final.” Id. (citation omitted).
30. The Court addresses each of Plaintiffs’ claims at issue in turn.
31. Plaintiffs’ Fourth Claim for Relief—Purported Chapter 75
Violations. Section 75-1.1 of the North Carolina General Statutes prohibits “unfair
or deceptive acts or practices in or affecting commerce.” N.C. Gen. Stat. § 75-1.1. The
statute broadly defines “commerce” to include “all business activities, however
denominated,” id. § 75-1.1(b), 4 but the term “business activities” reaches only “a
business’s regular interactions with other market participants,” White v. Thompson,
364 N.C. 47, 51 (2010); see also HAJMM Co. v. House of Raeford Farms, Inc., 328 N.C.
578, 594 (1991) (“‘Business activities’ is a term which connotes the manner in which
businesses conduct their regular, day-to-day activities, or affairs, such as the
purchase and sale of goods, or whatever other activities the business regularly
engages in and for which it is organized.”).
32. Thus, the phrase “business activities” does not include acts that relate solely
to the “internal operations of a single business.” White, 364 N.C. at 52. Accordingly,
North Carolina courts have determined that otherwise unfair or deceptive conduct
generally does not fall within the scope of section 75-1.1 if it occurs solely within a
single partnership, joint venture, or other business enterprise. See, e.g., id. at 53–54;
Morris Int’l, Inc. v. Packer, 2021 NCBC LEXIS 99, at *30–31 (N.C. Super. Ct. Nov. 2,
2021); see also Jones v. Shoji, 336 N.C. 581, 585 (1994) (“A joint venture is in the
4 The statute excepts from this definition “professional services rendered by a member of a
learned profession.” N.C. Gen. Stat. § 75-1.1(b). nature of a kind of partnership, and although a partnership and a joint venture are
distinct relationships, they are governed by substantially the same rules.” (citation
and internal punctuation omitted)). This is true even when the market participant
consists of multiple business entities; “[t]he ‘fact that separate entities comprise [a]
single market participant does not’ make external what is otherwise internal to the
business.” LLG-NRMH, LLC v. N. Riverfront Marina & Hotel, LLLP, 2018 NCBC
LEXIS 105, at *12 (N.C. Super. Ct. Oct. 9, 2018) (second alteration in original)
(quoting Polyquest, Inc. v. Vestar Corp, LLC, 2014 U.S. Dist. LEXIS 14905, at *35
(E.D.N.C. Feb. 6, 2014)).
33. In determining whether such an internal dispute is before the Court, the
relevant inquiry is whether the alleged unfair or deceptive conduct “inheres in the
relationship between” plaintiff and defendant as partners, co-owners, managers, or
employees of a single business enterprise or otherwise as actors internal to the
business enterprise. McFee v. Presley, 2022 NCBC LEXIS 74, at *17 (N.C. Super. Ct.
July 11, 2022) (citation omitted) (collecting cases); see also Potts v. KEL, LLC, 2018
NCBC LEXIS 24, at *15 (N.C. Super. Ct. Mar. 27, 2018); Poluka v. Willette, 2021
NCBC LEXIS 105, at *16–17 (N.C. Super. Ct. Dec. 2, 2021).
34. If so, the conduct at issue is not in or affecting commerce and thus not within
the scope of section 75-1.1. See White, 364 N.C. at 54 (determining that section 75-1.1
did not encompass the defendant’s conduct even though that conduct “reduc[ed]
competition and potentially affect[ed] prices”); see also McFee, 2022 NCBC LEXIS 74, at *17; Potts, 2018 NCBC LEXIS 24, at *15; Poluka, 2021 NCBC LEXIS 105, at *16–
17.
35. Here, accepting Plaintiffs’ factual, non-conclusory allegations as true, the
pleadings establish that Plaintiffs and the individual Defendants were members of a
single business enterprise—the entity Defendant—and that the dispute at issue is
ultimately a dispute internal to that singular business enterprise and the formation
of that enterprise.
36. Plaintiffs expressly allege that they engaged in a joint business enterprise
with Defendants either as partners or, alternatively, as participants in a joint venture
and that the purpose of the enterprise was to open and operate used car dealerships
for profit. (Compl. ¶¶ 25, 63, 70). The Greer dealership operated as “Auto Finance
Center,” the same name under which RRD operated dealerships around the country,
and was under Plaintiffs’ management pursuant to the parties’ purported
partnership agreement. (Compl. ¶¶ 10, 28–29). Further, Plaintiffs assert that RRD
financed the opening of the Columbia dealership and continued funding it for a time
after it opened. (Compl. ¶¶ 28, 33).
37. According to Plaintiffs, RRD had sole “control of the corporate documents
necessary to open new dealerships and operate existing dealerships” (i.e., the very
dealerships around which this dispute centers in large part) and “the sole power to
ensure accuracy in the accounting statements of the various dealerships,” including
the Greer and Columbia dealerships that Plaintiffs were operating. (Compl. ¶ 64). 38. Defendants also were allegedly entitled to a share of the profits from the
dealerships that Plaintiffs managed, (Compl. ¶ 75), and Plaintiffs assert that their
business activities inured to Defendants’ benefit, (Compl. ¶ 77).
39. As alleged in the complaint, RRD’s and Eskandari’s purported unfair or
deceptive conduct occurred between the parties solely with respect to their
involvement in the automobile-focused partnership or joint venture. The section 75-
1.1 claim arises in significant part from Defendants’ control over “corporate
documents.” For example, Defendants allegedly restricted Plaintiffs’ access to
documents and “conceal[ed] information regarding financial status and management
of the other RRD dealerships.” (Compl. ¶ 66). In other words, Plaintiffs complain of
Defendants’ failure to grant them access to records to which Plaintiffs, as members
of the same enterprise, contend they were entitled.
40. Plaintiffs’ other allegations also concern conduct arising from the shared
enterprise. After Plaintiffs reported that Algood had mismanaged the Houston
dealership, Defendants allegedly “seiz[ed] Plaintiffs’ work computer” and froze
“Plaintiffs out of the joint venture.” (Compl. ¶ 67). Algood also allegedly told
“employees of Auto Finance Center and of RRD” that Plaintiffs had “embezzled funds
from RRD.” (See Compl. ¶¶ 95, 98). Plaintiffs complain of no conduct involving
interactions between separate businesses or between businesses and consumers, see
White, 364 N.C. at 52–53 (noting that the purpose of section 75-1.1 is to regulate
“unfair and deceptive conduct in interactions between market participants, both businesses and consumers”). 5 Even to the extent Plaintiffs allege that they were
misled into the parties’ arrangement, the factual allegations simply do not rise to the
level necessary to show conduct in or affecting commerce or otherwise subject to
Chapter 75 regulation.
41. Further, though Plaintiffs assert a defamation claim against Algood and a
valid claim for defamation can support a claim for unfair or deceptive trade practices,
see, e.g., Boyce & Isley, PLLC v. Cooper, 153 N.C. App. 25, 35–36 (2002), Plaintiffs
plead no facts and make no argument suggesting that the alleged defamation would
constitute unfair or deceptive practices or acts under the circumstances of this case,
nor do Plaintiffs otherwise make any attempt to link the defamation and Chapter 75
claims. (See Compl. ¶¶ 62–73, 94–100). Moreover, the alleged defamatory statement
by Algood was purportedly made in the context of a discussion regarding internal
documents and financial “abnormalities” and in the presence of employees of the
company—not customers or other third parties who might otherwise be engaged in
commerce. (Compl. ¶¶ 95, 98).
42. Accordingly, Defendants’ alleged conduct falls outside the scope of section
75-1.1, and the Court will grant the motion for judgment on the pleadings as to
Plaintiffs’ claim for purported violations of Chapter 75 against Defendants.
5 In their brief opposing RRD and Eskandari’s motion, Plaintiffs contend that “[i]f each car
dealership is a distinct joint venture, then this dispute by definition cannot involve a single entity.” (ECF No. 27 at 6–7). The complaint, however, alleges that the parties created a single partnership or joint venture. (See, e.g., Compl. ¶¶ 25, 63). Further, if each dealership were a distinct venture, the unfair or deceptive nature of Defendants’ conduct would still be internal (to each joint venture or enterprise) rather than arising from any interaction between the dealerships and others as market participants. 43. Plaintiffs’ Seventh Claim for Relief—Purported Negligent
Misrepresentation. To state a claim for negligent misrepresentation, a plaintiff
must allege that he “justifiably relie[d] to his detriment on information prepared
without reasonable care by one who owed the relying party a duty of care.” Raritan
River Steel Co. v. Cherry, Bekaert & Holland, 322 N.C. 200, 206 (1988); Sullivan v.
Mebane Packaging Grp., Inc., 158 N.C. App. 19, 33 (2003). The complaint must allege
negligent misrepresentation with particularity by setting forth the “time, place,
speaker, [and] specific contents of the alleged misrepresentation.” Value Health Sols.,
Inc. v. Pharm. Rsch. Assocs., Inc., 385 N.C. 250, 265–66 (2023).
44. Defendants argue that Plaintiffs have failed to plead their claim for
negligent misrepresentation with the requisite particularity. The Court agrees.
45. First, there are no individualized, direct allegations of misrepresentation as
to Eskandari in any capacity. Without facts suggesting that Eskandari (rather than
his brother Mohammed) made false statements to Plaintiff, the claim necessarily fails
as to Eskandari. See Ragsdale, 286 N.C. at 138 (noting that the first element of a
fraud claim is a “[f]alse representation or concealment of a material fact”); Sullivan,
158 N.C. App. at 33 (noting that negligent misrepresentation requires a showing that
the claimant relied “on information prepared without reasonable care”); (see generally
Compl.).
46. Second, as to the allegations actually asserted, Plaintiffs allege that
“Defendants had a duty to exercise reasonable care in preparing the financial
information regarding their business activities” but “did not exercise reasonable care in preparing the financial information communicated to Plaintiffs in the course of
negotiating the Partnership Agreement.” (Compl. ¶¶ 90–91). That is all—Plaintiffs
do not specify the purported “financial information” at issue, who misrepresented it,
or when or where it was misrepresented. In fact, no other part of the complaint alleges
that Defendants misrepresented “financial information” concerning their business
activities while the parties were negotiating their agreement. (See generally Compl.).
47. In their briefing, Plaintiffs attempt to supplement their claim by arguing
that Plaintiffs were “presented with false statements regarding profits, accounts in
the portfolio, and insurance payments” at unspecified times. (ECF No. 27 at 12–13).
In making this argument, however, Plaintiffs cite to paragraphs 83 and 84 of their
complaint, which allege that, in December 2022, Algood and non-party Mohammed
Eskandari affirmatively misrepresented the amounts of Plaintiffs’ future
compensation under the purported partnership agreement and that “[t]hese
representations were false when made, and Defendants had no intention to pay
Plaintiffs what they were promised.” (Compl. ¶¶ 82–83).
48. Defendants further allege that “Algood represented to Plaintiffs that
Defendants would provide working capital and other assistance to Plaintiffs for the
opening and operation of car dealerships in Columbia, South Carolina and elsewhere,
for shared profit” and that, as above, Defendants did not intend to fulfill that promise.
(Compl. ¶¶ 84–85).
49. These purportedly intentional misrepresentations regarding compensation
and financial support, however, are promises or statements of intent and cannot form the basis of a negligent misrepresentation claim. See Trana Discovery, Inc. v. S. Rsch.
Inst., 915 F.3d 249, 254 (4th Cir. 2019) (“A promise is a statement of intention, not
fact, meaning it is false only if the promisor never honestly intended to carry it out.
It can be intentionally false, but not negligently so.” (citations omitted)); Hills Mach.
Co. v. Pea Creek Mine, LLC, 265 N.C. App. 408, 420 (2019) (“The general rule is that
an unfulfilled promise cannot be the basis for an action for fraud unless the promise
is made with no intention to carry it out.” (quoting Nw. Bank v. Rash, 74 N.C. App.
101, 105 (1985))).
50. Further, consistent with the lack of pleading detail throughout the
complaint, Plaintiffs also assert that Defendants had the “opportunity to make
representations regarding” certain matters to Plaintiff, though there are no non-
conclusory, factual allegations that Defendants took advantage of this alleged
“opportunity.” (Compl. ¶ 65 (emphasis added)). Without factual allegations
demonstrating that Plaintiffs “justifiably relie[d] to [their] detriment on information
prepared without reasonable care by [RRD and Eskandari]” and that RRD and
Eskandari owed a duty of care not to make such statements, this claim fails as to
RRD and Eskandari. See Raritan, 322 N.C. at 206.
51. Accordingly, the Court will grant RRD and Eskandari’s motion for judgment
on the pleadings as to Plaintiffs’ claim for negligent misrepresentation.
IV. CONCLUSION
52. Therefore, the Court GRANTS the partial motion for judgment on the
pleadings filed by defendants RRD and Eskandari and enters judgment on the pleadings in favor of RRD and Eskandari with respect to Plaintiffs’ Fourth Claim for
Relief for purported violations of Chapter 75 of the North Carolina General Statutes
and Seventh Claim for Relief for purported negligent misrepresentation.
53. The Court STRIKES the purported “brief” filed by defendant Algood in
support of his partial motion for judgment on the pleadings, (ECF No. 24).
54. The Court DENIES the partial motion for judgment on the pleadings filed
by defendant Algood, without prejudice to Algood’s ability to renew his arguments at
a later stage of the case.
SO ORDERED, this 3rd day of September 2025.
/s/ Matthew T. Houston Matthew T. Houston Special Superior Court Judge for Complex Business Cases