Lendingtree, LLC v. Intercontinental Capital Grp., Inc.

2017 NCBC 53
CourtNorth Carolina Business Court
DecidedJune 23, 2017
Docket16-CVS-20746
StatusPublished

This text of 2017 NCBC 53 (Lendingtree, LLC v. Intercontinental Capital Grp., Inc.) is published on Counsel Stack Legal Research, covering North Carolina Business Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lendingtree, LLC v. Intercontinental Capital Grp., Inc., 2017 NCBC 53 (N.C. Super. Ct. 2017).

Opinion

LendingTree, LLC v. Intercontinental Capital Grp., Inc., 2017 NCBC 53.

STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE SUPERIOR COURT DIVISION MECKLENBURG COUNTY 16 CVS 20746

LENDINGTREE, LLC,

Plaintiff,

v. ORDER AND OPINION ON MOTION TO DISMISS CERTAIN CLAIMS OF INTERCONTINENTAL CAPITAL THE AMENDED COMPLAINT GROUP, INC.; EQUALIFY HOLDINGS LIMITED LIABILITY COMPANY; DANIEL WILSON; and LAURA ASHLEY BROOKS,

Defendants.

1. This case concerns a contract dispute between Plaintiff LendingTree, LLC

(“LendingTree”) and Defendant Intercontinental Capital Group, Inc.

(“Intercontinental”). LendingTree contends that Intercontinental has violated a non-

solicitation provision of the contract either by directly hiring a number of

LendingTree’s employees or by indirectly hiring them through its alter ego,

Defendant eQualify Holdings Limited Liability Company (“eQualify Holdings”). In

this action, LendingTree asserts claims against Intercontinental and eQualify

Holdings, as well as two of the individuals (Daniel Wilson and Laura Ashley Brooks)

allegedly targeted and hired.

2. Defendants jointly moved to dismiss some but not all of the asserted claims

pursuant to Rule 12(b)(6) of the North Carolina Rules of Civil Procedure. Having

considered the motion, the briefs, and the arguments of counsel, the Court GRANTS

in part and DENIES in part the motion. Nexsen Pruett, PLLC, by C. Grainger Pierce, Jr. and Kathleen D.B. Burchette, for Plaintiff LendingTree, LLC.

Bradley Arant Boult Cummings LLP, by Christopher C. Lam and G. Benjamin Milam, for Defendants Intercontinental Capital Group, Inc., eQualify Holdings Limited Liability Company, Daniel Wilson, and Laura Ashley Brooks.

Conrad, Judge.

I. BACKGROUND

3. The Court does not make findings of fact on a Rule 12(b)(6) motion to

dismiss. The following factual summary is drawn from relevant allegations in the

amended complaint.

4. LendingTree, a Delaware limited liability company, is “an online loan

marketplace.” (Am. Compl. ¶¶ 1, 7.) Among other things, LendingTree provides a

“proprietary consumer-lender matching process,” which allows consumers to compare

information from prospective lenders. (Am. Compl. ¶ 7.) LendingTree maintains its

principal place of business in Mecklenburg County, North Carolina. (Am. Compl.

¶ 1.)

5. Intercontinental, a New York corporation, is one of the lenders in

LendingTree’s network. (Am. Compl. ¶¶ 2, 10.) Intercontinental does business in

approximately forty States under the trade name “eQualify” and shares “common

ownership with” eQualify Holdings. (Am. Compl. ¶¶ 2, 19, 25, 29.) LendingTree

alleges that eQualify Holdings “may be an inactive entity” and “is a close affiliate and

alter ego” of Intercontinental. (Am. Compl. ¶ 3.) 6. The relationship between LendingTree and Intercontinental is governed by

the terms of a contract entitled “CLO Services Agreement” (“Agreement”), which

became effective on January 29, 2016 and has not been terminated. (See Am. Compl.

¶ 10.) The Agreement includes a non-solicitation provision, which states as follows:

“Unless otherwise approved in writing, during the [term of the Agreement] and for

one (1) year thereafter, [Intercontinental] shall not hire any person who is or was an

employee of LendingTree during the [term of the Agreement].” (Am. Compl. ¶ 11.)

7. According to the amended complaint, Intercontinental began recruiting and

hiring LendingTree’s employees as early as 2014 and continued to do so through 2016,

after the effective date of the Agreement. (See Am. Compl. ¶¶ 17–19.)

Intercontinental’s alleged targets included both individual Defendants, Daniel

Wilson and Laura Ashley Brooks. (Am. Compl. ¶¶ 4, 5.) Wilson is LendingTree’s

former Chief Architect of Technology. (Am. Compl. ¶ 12.) He resigned in May 2014

and, at an unspecified time “[t]hereafter,” “began actively recruiting LendingTree

employees to leave LendingTree and to provide services for” Intercontinental. (Am.

Compl. ¶ 17.) Wilson allegedly induced Brooks to resign her position as

LendingTree’s Senior Director of Product Management on July 29, 2016. (See Am.

Compl. ¶¶ 13, 17–18.)

8. Roughly two months after Brooks’s departure, Anthony Robinson and Edgar

Melendez resigned their positions with LendingTree (as Senior Developer and

Developer, respectively), allegedly due to the influence of Wilson and Brooks acting

on behalf of Intercontinental. (See Am. Compl. ¶¶ 6, 14–15, 19.) LendingTree learned that Robinson and Melendez intended “to work with Defendants Wilson and Brooks

at an entity they each identified as ‘eQualify.’” (Am. Compl. ¶ 19.) Melendez further

informed LendingTree that he and the other former employees “would be helping

‘eQualify’ to build a direct-to-consumer back-end loan origination system” to compete

with LendingTree. (Am. Compl. ¶ 20.)

9. These revelations prompted LendingTree to send Intercontinental a notice,

which identified the four former employees by name and highlighted the non-

solicitation provision of the Agreement. (See Am. Compl. ¶ 23.) On October 6, 2016,

Intercontinental’s President and General Counsel, Ron Fountain, responded that

none of the individuals were employed by Intercontinental. (Am. Compl. ¶ 24.) On

October 18, 2016, Fountain informed LendingTree that all four individuals were

employed by eQualify Holdings. (Am. Compl. ¶ 25.)

10. LendingTree filed this action less than a month later on November 11, 2016.

It contends that Intercontinental breached the Agreement, either by directly hiring

Brooks, Robinson, and Melendez or by using eQualify Holdings as its alter ego to hire

these individuals “in an attempt to circumvent the prohibitions on hiring

LendingTree employees.” (Am. Compl. ¶ 35; see also Am. Compl. ¶ 22.)

Intercontinental and eQualify Holdings moved to dismiss the original complaint on

December 16, 2016, and Wilson and Brooks did so on December 28, 2016.

LendingTree filed its amended complaint as of right on March 1, 2017, and the Court

denied the Defendants’ initial motions to dismiss as moot on March 3, 2017. 11. The amended complaint asserts claims for breach of contract (against

Intercontinental and eQualify Holdings), tortious interference with contract (against

Wilson and Brooks), unfair or deceptive trade practices (against Intercontinental);

and civil conspiracy (against all Defendants). The amended complaint also includes

sections, styled as causes of action, regarding piercing the corporate veil and a request

for a preliminary injunction. (See Am. Compl. ¶¶ 28–37, 58–61.)

12. Defendants jointly filed their renewed motion to dismiss on March 31, 2017.

The motion seeks dismissal of all claims except for breach of contract and piercing

the corporate veil. LendingTree filed its response on May 3, 2017, and Defendants

filed a reply on May 16, 2017. The Court held a hearing on May 31, 2017, at which

all parties were represented by counsel. The motion to dismiss is ripe for decision.

II. ANALYSIS

13. A motion to dismiss under Rule 12(b)(6) “tests the legal sufficiency of the

complaint.” Concrete Serv. Corp. v. Investors Grp., Inc., 79 N.C. App. 678, 681, 340

S.E.2d 755, 758 (1986). “Dismissal of a complaint under Rule 12(b)(6) is proper when

one of the following three conditions is satisfied: (1) when the complaint on its face

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