Martin Commc’ns, LLC v. Flowers, 2021 NCBC 21.
STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE SUPERIOR COURT DIVISION WAKE COUNTY 20 CVS 6137
MARTIN COMMUNICATIONS, LLC,
Plaintiff,
v. ORDER AND OPINION ON MOTION REBECCA D. FLOWERS d/b/a TO DISMISS FLOWERS PLANTATION; DFW DEVELOPMENT, INC.; and FLOWERS PLANTATION INFORMATION AND SALES, LLC,
Defendants.
1. THIS MATTER is before the Court on Defendants’ Motion to Dismiss (the
“Motion”) filed on 28 August 2020 pursuant to Rule 12(b)(6) of the North Carolina
Rules of Civil Procedure (the “Rule(s)”). (ECF No. 20.)
2. For the reasons set forth herein, the Court GRANTS in part and DENIES
in part the Motion.
Womble Bond Dickinson (US) LLP, by Charles A. Burke, for Plaintiff Martin Communications, LLC.
The Armstrong Law Firm, P.A., by L. Lamar Armstrong, Jr. and Daniel K. Keeney, for Defendants Rebecca D. Flowers d/b/a Flowers Plantation; DFW Development, Inc.; and Flowers Plantation Information and Sales, LLC.
Robinson, Judge.
I. INTRODUCTION
3. This action arises out of a dispute over software database development and
marketing services provided by Plaintiff for Defendants, the terms on which the parties agreed Plaintiff would provide such services, and the subsequent termination
of their relationship.
II. FACTUAL BACKGROUND
4. The Court does not make findings of fact on the Motion brought pursuant
to Rule 12(b)(6), but instead only recites those facts included in Plaintiff’s Amended
Complaint relevant to the Court’s determination of the Motion.
A. The Parties
5. Plaintiff Martin Communications, LLC (“Plaintiff”) is a limited liability
company organized and existing under North Carolina law with its headquarters in
Raleigh, North Carolina. (First Am. Compl. & Demand for Jury Trial ¶ 1, ECF No.
10 [“Am. Compl.”].) Plaintiff is a marketing company that specializes in a variety of
marketing, public relations, web development, and computer software application
services. (Am. Compl. ¶ 1.)
6. Defendant Rebecca D. Flowers (“R. Flowers”) is an individual who sells land
for housing developments. (Am. Compl. ¶ 2.) R. Flowers often does business under
the name “Flowers Plantation.” (Am. Compl. ¶ 2.)
7. Defendant DWF Development, Inc. (“DWF” and with R. Flowers referred to
herein as “Flowers”) is a North Carolina corporation, and R. Flowers is the registered
agent for DWF. (Am. Compl. ¶ 3.)
8. Defendant Flowers Plantation Information and Sales, LLC (“FP Sales” and
referred to herein with Flowers and Flowers Plantation, as “Defendants”) is a North Carolina limited liability company, and R. Flowers is the registered agent for FP
Sales. (Am. Compl. ¶ 4.)
B. The Computer Software Agreement
9. Plaintiff and Defendants’ contractual arrangements were initiated at
meetings on 20 February 2020 and 24 March 2020. (Am. Compl. ¶ 11.) At these
meetings, R. Flowers represented to Plaintiff that she “very badly needed to have a
new computerized software database system installed for her business that would
permit the effective management of various categories of business data.” (Am. Compl.
¶ 11.) R. Flowers also represented to Plaintiff that Flowers were (1) firmly committed
to developing such a system, (2) willing to wait the three years that it would take to
fully implement such a system, and (3) willing to spend the amounts necessary to
completely develop and implement this new system. (Am. Compl. ¶ 11.)
10. Plaintiff, Flowers Plantation, and DWF entered into a Computer Software
Agreement (the “CSA”) on 27 March 2020. (Am. Compl. ¶ 13, see also Am. Compl.
Ex. A.) Under the CSA, Plaintiff agreed to create and install a customized Customer
Relationship Management database program (“CRM”) for Flowers, to allow for the
organization and management of a wide array of data. (Am. Compl. ¶ 12.) The CSA
provides that work was estimated at 35 hours per month, billed at a rate of $150 per
hour, for a total of $5,250 per month through 30 June 2023. (Am Compl. ¶ 12; see
also Am. Compl. Ex. A ¶¶ 1–2.)
11. From 27 March 2020 to 29 April 2020, Plaintiff put a substantial amount
of work into the initial design, development, and programming of the CRM. (Am. Compl. ¶¶ 13, 17.) During this period, Plaintiff met with Flowers’ management,
disclosed operational details of the CRM, and provided Flowers with a working
prototype of the CRM, which demonstrated its features and functionality. (Am.
Compl. ¶ 13.)
12. On 21 April 2020, after receiving details regarding the CRM’s development,
Flowers wrote to Plaintiff and claimed that (1) the CSA was intended to address only
two small issues with Flowers’ existing database system, and (2) the total amount
due under the CSA was limited to $5,000 in total. (Am. Compl. ¶ 14.) The next day,
Plaintiff provided a written response to Flowers indicating that Flowers “must be
reading the wrong document[,]” because the CSA provided for services “through June
30, 2023, at a rate of $150 per hour, amounting to a monthly fee of $5,250 per month.”
(Am. Compl. ¶ 15.) Flowers responded on 24 April 2020 stating that “Flowers did not
need any computer software programming services, and that the [CSA] was being
cancelled because nothing would ever be paid to [Plaintiff] under that Agreement.”
(Am. Compl. ¶ 16.)
13. On 29 April 2020, Plaintiff expressed frustration with Flowers’ position that
they no longer needed Plaintiff’s services and indicated that Plaintiff had been
working diligently and made substantial progress on the project. (Am. Compl. ¶ 17.)
That same day, Flowers responded by again confirming that Flowers did not need
any computer software programming services under the CSA, that the contract was
cancelled, and nothing would be paid to Plaintiff under its terms. (Am. Compl. ¶ 18.) 14. Until Flowers served notices of cancellation of the CSA, Plaintiff satisfied
all of its duties under the CSA. (Am. Compl. ¶ 19.)
C. The Agency Agreement
15. At the meetings on 20 February 2020 and 24 March 2020, the parties also
discussed the possibility of entering into an agreement for Plaintiff to serve as
Defendants’ marketing agent. (Am. Compl. ¶ 22.) FP Sales and Plaintiff ultimately
signed the Agency Agreement pursuant to which Plaintiff was to render marketing
services for FP Sales, and FP Sales agreed to pay Plaintiff $10,000 per month plus an
additional amount per month for services billed by the hour. (Am. Compl. ¶¶ 22, 24;
see also Am. Compl. Ex. B.)
16. At the 24 March 2020 meeting, R. Flowers presented to Plaintiff FP Sales’s
operating budget for the 2020 calendar year, which showed FP Sales’s marketing
budget. (Am. Compl. ¶ 23.) Plaintiff was concerned that the amounts shown for
marketing expenditures in this budget did not appear to be sufficient to support the
marketing activities that Plaintiff understood that it would be engaged to provide.
(Am. Compl. ¶ 23.) R. Flowers told Plaintiff that the budget was only a draft and it
would soon be revised to show significant additional marketing expenditures during
the 2020 calendar year. (Am. Compl. ¶ 23.)
17. On 21 April 2020, less than one month after the Agency Agreement was
signed, Flowers wrote to Plaintiff and indicated that FP Sales no longer needed
Plaintiff to provide the services specified in the Agency Agreement. (Am. Compl. ¶ 25.) Notwithstanding the agreed to payment of $10,000, FP Sales also stated that
the monthly fee for the Agency Agreement could only be $3,000. (Am. Compl. ¶ 25.)
18. In response, on 22 April 2020, Plaintiff refused to acquiesce to FP Sales’s
unilateral demand that Plaintiff agree to accept $3,000 per month for its services.
(Am. Compl. ¶ 25.) Plaintiff insisted upon both parties’ complete performance of their
duties under the Agency Agreement, including FP Sales’s payment of the $10,000 fee
due for the first month of service. (Am. Compl. ¶ 25.)
19. On 24 April 2020, FP Sales again insisted that the Agency Agreement be
modified. (Am. Compl. ¶ 26.) FP Sales claimed that Plaintiff did not perform its
obligations under the Agency Agreement; however, FP Sales “may continue to honor
the remainder of this contract” but only if Plaintiff agreed that FP Sales did not have
to pay any of the $10,000 due for Plaintiff’s first month of work. (Am. Compl. ¶ 26.)
20. On 29 April 2020, Plaintiff provided to FP Sales details regarding the many
projects that Plaintiff completed in the first month under the Agency Agreement.
(Am. Compl. ¶ 27.) That same day, FP Sales informed Plaintiff, in writing, that the
Agency Agreement was being cancelled effectively immediately. (Am. Compl. ¶ 28.)
FP Sales proposed a new contract for marketing services; however, Plaintiff declined
to enter into a new contract. (Am. Compl. ¶ 28.)
21. Until Flowers served a notice of termination of the Agency Agreement on
29 April 2020, Plaintiff satisfied all of its duties pursuant to its terms. (Am. Compl.
¶ 29.) III. PROCEDURAL BACKGROUND
22. The Court sets forth here only those portions of the procedural history
relevant to its determination of the Motion.
23. Plaintiff initiated this action on 22 May 2020 with the filing of its Complaint
and Demand for Jury Trial (the “Complaint”). (ECF No. 3.) Plaintiff amended its
Complaint on 29 July 2020 with the filing of its First Amended Complaint and
Demand for Jury Trial (the “Amended Complaint”).
24. On 28 August 2020, Defendants filed the Motion and Defendants’
Memorandum of Law in Support of Defendants’ Motion to Dismiss. (Defs.’ Mem. Law
Supp. Defs.’ Mot. Dismiss, ECF No. 21 [“Defs.’ Mem. Supp.”].) On 17 September 2020,
Plaintiff filed Plaintiff’s Memorandum in Opposition to Defendants’ Motion to
Dismiss. (ECF No. 22.) Defendants did not file a reply brief as permitted by Rule 7.7
of the North Carolina Business Court Rules.
25. The Court held a hearing on the Motion on 18 November 2020. (See ECF
No. 27.) The Motion is ripe for resolution.
IV. LEGAL STANDARD
26. In ruling on a motion to dismiss pursuant to Rule 12(b)(6), the Court
reviews the allegations in the Amended Complaint in the light most favorable to
Plaintiff. See Christenbury Eye Ctr., P.A. v. Medflow, Inc., 370 N.C. 1, 5 (2017). The
Court’s inquiry is “whether, as a matter of law, the allegations of the complaint . . .
are sufficient to state a claim upon which relief may be granted under some legal
theory[.]” Harris v. NCNB Nat’l Bank, 85 N.C. App. 669, 670 (1987). The Court accepts all well-pleaded factual allegations in the relevant pleading as true. See
Krawiec v. Manly, 370 N.C. 602, 606 (2018). The Court is therefore not required “to
accept as true allegations that are merely conclusory, unwarranted deductions of fact,
or unreasonable inferences.” Good Hope Hosp., Inc. v. N.C. Dep’t of Health & Human
Servs., 174 N.C. App. 266, 274 (2005) (citation omitted).
27. Furthermore, the Court “can reject allegations that are contradicted by the
documents attached, specifically referred to, or incorporated by reference in the
complaint.” Moch v. A.M. Pappas & Assocs., LLC., 251 N.C. App. 198, 206 (2016)
(citation omitted). The Court may consider these attached or incorporated documents
without converting the Rule 12(b)(6) motion into a motion for summary judgment.
Id. (citation omitted). Moreover, the Court “may properly consider documents which
are the subject of a plaintiff’s complaint and to which the complaint specifically refers
even though they are presented by the defendant.” Oberlin Capital, L.P. v. Slavin,
147 N.C. App. 52, 60 (2001) (citation omitted).
28. Our Supreme Court has noted that “[i]t is well-established that dismissal
pursuant to Rule 12(b)(6) is proper when ‘(1) the complaint on its face reveals that no
law supports the plaintiff’s claim; (2) the complaint on its face reveals the absence of
facts sufficient to make a good claim; or (3) the complaint discloses some fact that
necessarily defeats the plaintiff’s claim.’ ” Corwin v. British Am. Tobacco PLC, 371
N.C. 605, 615 (2018) (quoting Wood v. Guilford Cty., 355 N.C. 161, 166 (2002)). This
standard of review for Rule 12(b)(6) is the standard our Supreme Court “uses routinely . . . in assessing the sufficiency of complaints in the context of complex
commercial litigation.” Id. at 615 n.7 (citations omitted).
V. ANALYSIS
29. Defendants move to dismiss five of Plaintiff’s claims including its claims
for: (1) breach of the CSA, (2) fraud, (3) negligent misrepresentation, (4) unfair and
deceptive trade practices, and (5) civil conspiracy.
A. Breach of Contract
30. The Motion requests that the Court dismiss Plaintiff’s first cause of action
for breach of the CSA. To plead a claim for breach of contract, Plaintiff must allege
the “(1) existence of a valid contract and (2) breach of the terms of that contract.” Poor
v. Hill, 138 N.C. App. 19, 26 (2000). “[S]tating a claim for breach of contract is a
relatively low bar.” Vanguard Pai Lung, LLC v. Moody, 2019 NCBC LEXIS 39, at
*11 (N.C. Super. Ct. June 19, 2019).
31. Defendants concede that “a factual dispute exists” as to whether Plaintiff
was sufficiently paid for completing work pursuant to the terms of the CSA. (Defs.’
Mem. Supp. 5.) Plaintiff completed services for Defendants between 27 March 2020
and 29 April 2020 and received no payment, despite the set rate of $150 per hour.
(Am. Compl. ¶¶ 11–16.) Plaintiff’s allegations of performance under the CSA, which
Defendants do not contend is invalid, without payment pursuant to its terms is
sufficient, for purposes of Rule 12(b)(6), to state a claim for breach of contract.
32. Therefore, the Motion, to the extent it requests that the Court dismiss
Plaintiff’s claim for breach of the CSA, is DENIED. B. Fraud and Negligent Misrepresentation 1
33. Next, the Court considers Plaintiff’s claims for fraudulent inducement and
negligent misrepresentation against Defendants. Plaintiff’s claims for fraud and
negligent misrepresentation are premised on the same representations made by
Defendants when entering into the CSA and the Agency Agreement. (Am. Compl. ¶¶
53, 59.) The Court addresses each agreement in turn.
34. To plead a claim of fraud, Plaintiff must allege “(1) a false representation
or concealment of a material fact, (2) reasonably calculated to deceive, (3) made with
intent to deceive, (4) which does in fact deceive, and which (5) results in damage to
the injured party.” Town of Belhaven v. Pantego Creek, LLC, 250 N.C. App. 459, 469
(2016) (citation omitted). “The tort of negligent misrepresentation occurs when a
party justifiably relies to his detriment on information prepared without reasonable
care by one who owed the relying party a duty of care.” Dallaire v. Bank of Am., N.A.,
367 N.C. 363, 369 (2014) (citation omitted).
35. Rule 9(b) requires that a claim for fraud be pled with particularity.
N.C.G.S. § 1A-1, Rule 9(b). “[I]n pleading actual fraud[,] the particularity
requirement is met by alleging time, place and content of the fraudulent
representation, identity of the person making the representation and what was
obtained as a result of the fraudulent acts or representations.” Terry v. Terry, 302
N.C. 77, 85 (1981). As with claims of fraud, negligent misrepresentation must also
1 The Court notes that Defendants assert multiple arguments on the deficiency of Plaintiff’s
claims for fraud and negligent misrepresentation, including that the claims are barred by the economic loss doctrine. The Court need not address each argument because the Court determines that the claims are deficient for the reasons stated herein. be pled with particularity under Rule 9(b). See Value Health Sols. Inc., v. Pharm.
Research Assocs., 2020 NCBC LEXIS 65, at *29 (N.C. Super. Ct. May 22, 2020)
(“[T]his Court and North Carolina’s federal district courts have consistently held that
plaintiffs are required to plead claims for negligent misrepresentation with
particularity required by Rule 9(b).”).
1. The CSA
36. Defendants contend Plaintiff’s claim for fraud, as it pertains to the CSA,
should be dismissed because the alleged representations are not related to any past
or existing fact but are assertions of opinion or future plans. (Defs.’ Mem. Supp. 5.)
While fraud cannot ordinarily be based on a promise of future intent, “a plaintiff may
recover for fraud where a promise of future intent is made with a present intention
not to perform.” Kornegay v. Aspen Asset Grp, LLC, 2006 NCBC LEXIS 13, at *31
(N.C. Super. Ct. Sept. 26, 2006); see also Potts v. KEL, LLC, 2018 NCBC LEXIS 24,
at *9 (N.C. Super. Ct. Mar. 27, 2018) (“Misrepresentation of the state of the promisor's
mind is itself a misrepresentation of an existing fact, subject to a claim for fraud.”).
To state a claim based on a promise of future intent, the plaintiff must allege facts
“from which a court and jury may reasonably infer that the defendant did not intend
to carry out such representations when they were made.” Potts, 2018 NCBC LEXIS
24, at *9; see also Hoyle v. Bagby, 253 N.C. 778, 781 (1961).
37. Plaintiff alleges Defendants made the following false representations
concerning the CSA: (1) Defendants were committed to developing a new software
system with Plaintiff; (2) Defendants were willing to wait the requisite three years to fully implement such a system; and (3) Defendants were willing to spend $5,250 per
month for 40 months to develop the system. (Am. Compl. ¶ 11.) Plaintiff contends
Defendants never had any intention of paying Plaintiff for a new software system and
that these representations were made to induce Plaintiff to sign the CSA. (Am.
Compl. ¶ 54.) However, Plaintiff must also allege facts from which the Court may
reasonably infer that Defendants never intended to carry out their representations
when they were made, Potts, 2018 NCBC LEXIS 24, at *9, which Plaintiff has failed
to do.
38. Plaintiff’s negligent misrepresentation claim, as it pertains to the CSA, is
based on the same promissory representations and statements of intent on which
Plaintiff bases its fraud claim, not based on any information prepared by Defendants
when entering into the CSA, and therefore Plaintiff’s claim for negligent
misrepresentation fails. See Bob Timberlake Collection, Inc. v. Edwards, 176 N.C.
App. 33, 40 (2006) (affirming the trial court’s dismissal of a negligent
misrepresentation claim where the plaintiff failed to allege that the information
provided “was prepared without reasonable care”); see also Oberlin Capital, L.P. v.
Slavin, 2000 NCBC LEXIS 8, at *25–26 (N.C. Super. Ct. Apr. 28, 2000) (declining to expand the scope of negligent misrepresentation claims beyond cases involving one
party preparing information for another).
39. Therefore, the Motion to Dismiss should be GRANTED and the fraud and
negligent misrepresentation claims should be DISMISSED without prejudice to the
extent they are based on representations made when executing the CSA. 2
2. The Agency Agreement
40. The requirement of justifiable reliance for negligent misrepresentation
claims and the requirement of reasonable reliance in fraud claims are similar.
Marcus Bros. Textiles, Inc. v. Price Waterhouse, LLP, 350 N.C. 214, 224 (1999); see
also Higgins v. Synergy Coverage Sols., LLC, 2020 NCBC LEXIS 6, at *37–38 (N.C.
Super. Ct. Jan. 15, 2020). To plead reasonable or justifiable reliance a plaintiff must
sufficiently allege that it “made a reasonable inquiry into the misrepresentation and
allege that [it] was denied the opportunity to investigate or that [it] could not have
learned the true facts by exercise of reasonable diligence.” Rountree v. Chowan Cty.,
252 N.C. App. 155, 162 (2017); see also Higgins, 2020 NCBC LEXIS 6, at *32
(requiring the same allegations for a fraud and fraudulent inducement claim).
41. Plaintiff alleges Defendants made the following fraudulent representations
which induced Plaintiff to sign the Agency Agreement: (1) that FP Sales’s budget
shown to Plaintiff was “only a draft,” and (2) that Defendants would make “significant
additional marketing expenditures” in 2020 that would be reflected in a revised
budget. (Am. Compl. ¶ 23.) Plaintiff additionally alleges that Defendants knew the
2 “The decision to dismiss an action with or without prejudice is in the discretion of the trial
court[.]” First Fed. Bank v. Aldridge, 230 N.C. App. 187, 191 (2013). budget was final, and Defendants never intended to make additional marketing
expenditures. (Am. Compl. ¶ 31.)
42. When Plaintiff reviewed the budget at the 24 March 2020 meeting, Plaintiff
was “concerned that the amounts shown for marketing expenditures in this budget
did not appear to be sufficient to support the marketing activities that [Plaintiff]
understood that it would be engaged to provide.” (Am. Compl. ¶ 23.) Three days
later, notwithstanding Plaintiff’s concern regarding FP Sales’s budget, DWF, Flowers
Plantation, and Plaintiff entered into the Agency Agreement. (See Am. Compl. Ex.
B.) In fact, the Amended Complaint tends to show that Plaintiff did not review
Defendants’ budget a second time until mid-April 2020. (Am. Compl. ¶ 34.b.)
43. Upon careful review of the Amended Complaint, the Court concludes that
there are insufficient allegations to show that Plaintiff made a reasonable inquiry
into Defendants’ representations regarding the budget and therefore fail to establish
reasonable or justifiable reliance. See Carmayer, LLC v. Koury Aviation, Inc., 2017
NCBC LEXIS 82, at *27–32 (N.C. Super. Ct. Sept. 11, 2017) (dismissing a negligent
misrepresentation claim for the plaintiff’s failure to establish that it made a
reasonable inquiry into representations in a pro forma regarding the defendant’s
profitability). While Plaintiff makes allegations that “these representations involved
information which was exclusively within the knowledge of the Defendants, and
[Plaintiff] had no way to ascertain the falsity of these representations at the time
they were made[,]” (Am. Compl. ¶¶ 56, 61), the Court concludes that these conclusory
allegations are insufficient to support Plaintiff’s claims for fraud and negligent misrepresentation as they pertain to the Agency Agreement. See Volume Servs. v.
Ovation Food Servs., L.P., 2018 NCBC LEXIS 108, at *42–43 (N.C. Super Ct. Oct. 17,
2018). The Amended Complaint is devoid of any allegations that Plaintiff even
attempted to investigate the veracity of Defendants’ statements regarding the budget
or obtain access to information held by Defendants. See Arnesen v. Rivers Edge Golf
Club & Plantation, Inc., 368 N.C. 440, 449 (2015) (“Reliance is not reasonable if a
plaintiff fails to make any independent investigation or fails to demonstrate he was
prevented from doing so.” (cleaned up)).
44. Therefore, the Motion to Dismiss should be GRANTED and the fraud and
negligent misrepresentation claims should be DISMISSED without prejudice to the
extent they are based on representations made when executing the Agency
Agreement. 3
C. Unfair and Deceptive Trade Practices
45. Plaintiff also alleges that Defendants engaged in unfair or deceptive trade
practices pursuant to N.C.G.S. § 75-1.1 (“UDTP”) by fraudulently inducing Plaintiff
to enter the CSA and the Agency Agreement. (See Am. Compl. ¶ 71.) To state a
UDTP claim, Plaintiff must allege that “(1) defendant committed an unfair and
3 Defendants contend that Plaintiff’s reliance on certain statements “is not reasonable.” (Defs.’ Mem. Supp. 9.) However, the issue of justifiable or reasonable reliance is scarcely discussed in the parties’ briefing. Notwithstanding the parties’ limited attention to this pleading requirement, the Court, in its discretion, concludes that the failure to plead facts demonstrating justifiable and reasonable reliance is an appropriate ground on which to base its dismissal of Plaintiff’s fraud and negligent misrepresentation claims. See Tuwamo v. Tuwamo, 248 N.C. App. 441, 445–46 (2016) (“Furthermore, our Supreme Court has noted that ‘[w]hen the complaint fails to state a cause of action, a defect appears upon the face of the record proper. On appeal, the Supreme Court will take notice of it and will ex mero motu dismiss the action.’ ”). deceptive act or practice, (2) the act in question was in or affecting commerce, and (3)
the act proximately caused injury to the plaintiff.” Dalton v. Camp, 353 N.C. 647,
656 (2001). “A practice is unfair if it is unethical or unscrupulous, and it is deceptive
if it has tendency to deceive.” Id.
46. Defendants contend that Plaintiff’s UDTP claim should be dismissed
because breach of contract alone, assuming dismissal of Plaintiff’s fraud claim, is an
insufficient basis for UDTP claims without “substantially aggravating
circumstances”; therefore, Plaintiff’s claim fails. (Defs.’ Mem. Supp. 12–14.) The
Court agrees.
47. It is well established that “a mere breach of contract, even if intentional, is
not sufficiently unfair or deceptive to sustain an action under N.C.G.S. § 75-1.1.”
Branch Banking & Tr. Co. v. Thompson, 107 N.C. App. 53, 62 (1992). “[A] plaintiff
must show substantial aggravating circumstances attending the breach to recover
under the [UDTP] Act[.]” Id.
48. From the Court’s careful review of the Amended Complaint, the only
conduct currently actionable based on the Court’s ruling herein is alleged breaches of
contract by Defendants, unjust enrichment, and breach of the covenant of good faith
and fair dealing. This conduct is insufficient to form the basis of Plaintiff’s UDTP
claim without allegations of an aggravating circumstance. See Branch Banking &
Tr. Co., 107 N.C. App. at 62. The only aggravating circumstance alleged by Plaintiff
is purported fraudulent conduct by Defendants. However, the Court has concluded
herein that Plaintiff has not adequately alleged this aggravating circumstance. 49. Therefore, the Court concludes that Plaintiff’s UDTP claim should be
DISMISSED without prejudice.
D. Civil Conspiracy
50. Under North Carolina law, a complaint sufficiently states a claim for civil
conspiracy when it alleges “(1) an agreement between two or more individuals, (2) to
do an unlawful act or to do a lawful act in an unlawful way, (3) resulting in injury to
plaintiff inflicted by one or more of the conspirators, and (4) pursuant to a common
scheme.” Elliot v. Elliot, 200 N.C. App. 259, 264 (2009) (cleaned up). Conspiracy
“requires an agreement between at least two persons to take an unlawful action or
take a lawful action in an unlawful manner.” Lunsford v. ViaOne Servs., LLC, 2020
NCBC LEXIS 111, at *17 (N.C. Super. Ct. Sept. 28, 2020).
51. Plaintiff alleges that “Defendants entered into an agreement among
themselves to obtain [Plaintiff’s] assistance in their business operations without
paying for that assistance.” (Am. Compl. ¶ 67.) Plaintiff also alleges that Defendants
wrongfully terminated their contracts with Plaintiff in order to obtain confidential
information to utilize in their business without compensating Plaintiff pursuant to
the terms of their contractual relationships. (Am. Compl. ¶¶ 14, 21, 31.)
52. Plaintiff still maintains claims for breach of the CSA and the Agency
Agreement, along with claims for unjust enrichment and breach of the covenant of
good faith and fair dealing, which are not subject to the Motion. Therefore, the Motion
should be DENIED to the extent it requests that that the Court dismiss Plaintiff’s
claim for civil conspiracy. VI. CONCLUSION
53. For the foregoing reasons, the Court hereby GRANTS in part and DENIES
in part the Motion as follows:
A. The Motion is DENIED to the extent it requests that the Court dismiss
Plaintiff’s claim for breach of the CSA;
B. The Motion is GRANTED to the extent it requests that the Court
dismiss Plaintiff’s fraud claim, and Plaintiff’s fraud claim is
DISMISSED without prejudice;
C. The Motion is GRANTED to the extent it requests that the Court
dismiss Plaintiff’s negligent misrepresentation claim, and Plaintiff’s
negligent misrepresentation claim is DISMISSED without prejudice;
D. The Motion is GRANTED to the extent it requests that the Court
dismiss Plaintiff’s UDTP claim, and Plaintiff’s UDTP claim is
DISMISSED without prejudice; and
E. The Motion is DENIED to the extent it requests that the Court dismiss
Plaintiff’s claim for civil conspiracy.
SO ORDERED, this the 31st day of March, 2021.
/s/ Michael L. Robinson Michael L. Robinson Special Superior Court Judge for Complex Business Cases