Lunsford v. Jbl Communications, LLC

2020 NCBC 68
CourtNorth Carolina Business Court
DecidedSeptember 28, 2020
Docket19-CVS-3973
StatusPublished

This text of 2020 NCBC 68 (Lunsford v. Jbl Communications, LLC) 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
Lunsford v. Jbl Communications, LLC, 2020 NCBC 68 (N.C. Super. Ct. 2020).

Opinion

Lunsford v. JBL Communications, LLC, 2020 NCBC 68.

STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE SUPERIOR COURT DIVISION BUNCOMBE COUNTY 19 CVS 3973

J. BROOK LUNSFORD and LUNSFORD GROUP, INC. f/k/a JBL COMMUNICATIONS, INC.,

Plaintiffs and Counterclaim Defendants,

v.

VIAONE SERVICES, LLC and DAVID DORWART,

Defendants,

and ORDER AND OPINION ON OSPREY JBL COMMUNICATIONS, LLC, COMMUNICATIONS, LLC’S MOTION TO DISMISS COUNTERCLAIMS

Defendant and Counterclaim Plaintiff,

CAMERON GUNTER; CLIFFORD CHURCHILL; FIBER OPTIC SOLUTIONS LLC; PIMLICO, INC; OSPREY COMMUNICATIONS, LLC; CVO ENTERPRISES INC; and RUSSELL BROWN,

Counterclaim Defendants.

1. This action arises from the sale of a telecommunications construction

company. The sellers are Lunsford Group, Inc. (which the parties call “Old JBL”) and

its only shareholder, J. Brook Lunsford. The buyer is JBL Communications, LLC

(which the parties call “New JBL”). Each side accuses the other of foul play. Lunsford

and Old JBL came to court first, claiming fraud and breach of contract. New JBL

reciprocated by alleging, among other things, that Lunsford and Old JBL breached restrictive covenants in the asset purchase agreement and related contracts. New

JBL has asserted counterclaims against Lunsford and Old JBL as well as seven other

individuals and entities who supposedly conspired with them.

2. One of the alleged conspirators, Osprey Communications, LLC (“Osprey”),

now moves to dismiss all counterclaims against it under Rule 12(b)(6) of the North

Carolina Rules of Civil Procedure. (ECF No. 75.) For the following reasons, the Court

DENIES the motion.

Pearce Law PLLC, by Bradley E. Pearce, for Plaintiffs/Counterclaim Defendants J. Brook Lunsford and Lunsford Group, Inc.

Parker Poe Adams & Bernstein LLP, by Michael G. Adams, Jami J. Farris, and Morgan H. Rogers, for Defendants ViaOne Services, LLC and David Dorwart, and for Defendant/Counterclaim Plaintiff JBL Communications, LLC.

Law Offices of Jamie A. Stokes, PLLC, by Jamie A. Stokes, for Counterclaim Defendants Cameron Gunter, Clifford Churchill, Fiber Optic Solutions LLC, Pimlico, Inc., CVO Enterprises Inc., and Russell Brown.

O’Hagan Meyer, PLLC, by Wood W. Lay and Aretina K. Samuel- Priestley, for Counterclaim Defendant Osprey Communications, LLC.

Conrad, Judge.

I. BACKGROUND

3. The Court does not make findings of fact on a motion to dismiss. The

following background assumes that the allegations of the counterclaims are true.

4. For over twenty years, Old JBL provided engineering, design, construction,

and maintenance services for fiber-optic telecommunications systems and networks. (See Countercl. ¶¶ 14, 18, ECF No. 44.) Lunsford was the sole shareholder. (See

Countercl. ¶ 15.)

5. In July 2018, Old JBL sold its assets to New JBL for nearly $7 million (plus

or minus a few adjustments not relevant here). (See Countercl. ¶¶ 15, 16.) New JBL

aimed to carry on the business and arranged to keep Lunsford, with his deep

experience, involved after the sale. Lunsford became a minority member of New JBL,

(see Countercl. ¶ 20), and he also entered into a consulting agreement. For a monthly

fee, he agreed to manage customer relationships, help with company strategy, and

use his industry relationships to make introductions to New JBL’s management

team. (See Countercl. ¶¶ 21, 23, 24.)

6. At the same time, New JBL sought assurances that Lunsford would not

begin competing against it. The asset purchase agreement and the consulting

agreement contain essentially identical covenants not to compete. They provide that,

for a specified time and in a defined territory, Old JBL and Lunsford may not “directly

or indirectly . . . engage, invest in, own, manage, operate, control or participate in the

ownership, management, development, operation or control of, any business, trade or

occupation which engages in the Business or any activities directly competitive with

the Business.” (Asset Purchase Agrmt. [“APA”] § 12.3(a), (a)(i), ECF No. 76.1;

Consulting Agrmt. § 8(a), (a)(i), ECF No. 76.2.) The “Business” means “providing

aerial and underground engineering, design, construction and maintenance services

for telecommunications systems and networks”—in other words, the kind of work

that Old JBL had done and New JBL intended to do. (APA Recital A; Consulting Agrmt. § 8(b); see also Countercl. ¶ 14.) There are also related covenants that prohibit

solicitation of New JBL’s customers and employees and interference with its customer

relationships. (See APA § 12.3(a)(ii)–(iii); Consulting Agrmt. § 8(a)(ii)–(iii).)

7. According to New JBL, these were empty promises. Lunsford and his

affiliates have allegedly conspired to steal confidential documents, poach New JBL’s

employees, and interfere with its customer relationships. (See, e.g., Countercl. ¶¶ 30,

33, 34, 47, 50, 82–84, 129.) One alleged conspirator and competitor is Osprey. (See

Countercl. ¶ 31.) Osprey’s president is Lunsford, and it shares office space with Old

JBL and at least three related entities in a building owned by Lunsford. (See

Countercl. ¶¶ 39, 40, 60.) Although formed in 2018, Osprey advertises its “many

decades of fiber optic construction and management experience,” passing off Old

JBL’s and New JBL’s projects as its own. (Countercl. ¶¶ 60, 61, 78.) Its current

project is a fiber-optic network running from northern Virginia to Tennessee.

(Countercl. ¶ 77.)

8. New JBL also alleges that its qualifier, Clifford Churchill, left to join

Lunsford and Osprey. To be licensed as a general contractor, an entity must have a

qualifier who is a licensed general contractor. (See Countercl. ¶ 67.) Churchill had

been Old JBL’s qualifier and agreed to stay on as New JBL’s qualifier through

November 2019. (See Countercl. ¶¶ 68, 70.) At Lunsford’s request, Churchill

withdrew his qualifier status early, leaving New JBL without one. (See Countercl.

¶¶ 71, 72.) Churchill now works for Osprey while also serving as qualifier for Fiber Optic Solutions LLC, another counterclaim defendant and alleged conspirator. (See

Countercl. ¶¶ 60, 73, 74.)

9. This case began in late 2019. Lunsford and Old JBL have asserted claims

against New JBL and others for fraud and breach of contract. In response, New JBL

asserted counterclaims against nine parties, including Lunsford, Old JBL, Osprey,

and Churchill. New JBL claims not only breach of the restrictive covenants but also

breach of Churchill’s qualifier agreement, tortious interference with contract,

intentional interference with prospective economic advantage, civil conspiracy, and

unfair or deceptive trade practices.

10. Osprey has moved to dismiss all claims asserted against it. The motion to

dismiss has been fully briefed, and the Court held a hearing on August 17, 2020, at

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

II. LEGAL STANDARD

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

[counterclaim] complaint.” Isenhour v. Hutto, 350 N.C. 601, 604, 517 S.E.2d 121, 124

(1999) (citation and quotation marks omitted). The motion should be granted only

when “(1) the complaint on its face reveals that no law supports the . . . claim; (2) the

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Jewel Box Stores Corporation v. Morrow
158 S.E.2d 840 (Supreme Court of North Carolina, 1968)
Peoples Security Life Insurance v. Hooks
367 S.E.2d 647 (Supreme Court of North Carolina, 1988)
Burgess v. Busby
544 S.E.2d 4 (Court of Appeals of North Carolina, 2001)
Pinewood Homes, Inc. v. Harris
646 S.E.2d 826 (Court of Appeals of North Carolina, 2007)
United Laboratories, Inc. v. Kuykendall
370 S.E.2d 375 (Supreme Court of North Carolina, 1988)
Evans v. Star GMC Sales and Service, Inc.
151 S.E.2d 69 (Supreme Court of North Carolina, 1966)
Childress v. Abeles
84 S.E.2d 176 (Supreme Court of North Carolina, 1954)
Bicycle Transit Authority, Inc. v. Bell
333 S.E.2d 299 (Supreme Court of North Carolina, 1985)
Dalton v. Camp
548 S.E.2d 704 (Supreme Court of North Carolina, 2001)
Harris v. Matthews
643 S.E.2d 566 (Supreme Court of North Carolina, 2007)
Burton v. Dixon
131 S.E.2d 27 (Supreme Court of North Carolina, 1963)
Visionair, Inc. v. James & Colossus Inc.
606 S.E.2d 359 (Court of Appeals of North Carolina, 2004)
Spartan Equipment Co. v. Air Placement Equipment Co.
140 S.E.2d 3 (Supreme Court of North Carolina, 1965)
Isenhour v. Hutto
517 S.E.2d 121 (Supreme Court of North Carolina, 1999)
Horner International Co. v. McKoy
754 S.E.2d 852 (Court of Appeals of North Carolina, 2014)
Beverage Systems of the Carolinas, LLC v. Associated Beverage Repair, LLC
784 S.E.2d 457 (Supreme Court of North Carolina, 2016)
Moskin Bros. Inc. v. Swartzberg
155 S.E. 154 (Supreme Court of North Carolina, 1930)
RLM Communications, Inc. v. Amy Tuschen
831 F.3d 190 (Fourth Circuit, 2016)
Krawiec v. Manly
811 S.E.2d 542 (Supreme Court of North Carolina, 2018)

Cite This Page — Counsel Stack

Bluebook (online)
2020 NCBC 68, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lunsford-v-jbl-communications-llc-ncbizct-2020.