MED1 NC Servs., LLC v. MED1 Plus, LLC, 2021 NCBC 38.
STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE SUPERIOR COURT DIVISION ROBESON COUNTY 19 CVS 1983
MED1 NC SERVICES, LLC,
Plaintiff,
v.
MED1 PLUS, LLC; GREGORY ORDER AND OPINION ON MOTION STANTON BRYANT; FOR SUMMARY JUDGMENT COMMONCAPITAL, LLC; DANIEL MORMAN; AND MOTION TO STRIKE DONNA S. GRUENEMEIER; AND ANGELA WHITE,
Defendants.
THIS MATTER comes before the Court upon the remaining Defendants Med1
Plus, LLC (“Med1 Plus”), Gregory Stanton Bryant (“Bryant”), Donna S. Gruenemeier
(“Gruenemeier”), and Angela White’s (“White”) (collectively, “Defendants”) Motion for
Summary Judgment, (“Motion,” ECF No. 52) and Defendants’ Objection and Motion
to Strike Portions of Affidavit of Richard Hicks. (“Motion to Strike,” ECF No. 57;
collectively the Motion and the Motion to Strike are the “Motions”.)
In support of the Motion, Defendants filed evidentiary exhibits (ECF Nos.
53.1–53.14) and an Amended Memorandum in Support of Motion for Summary
Judgment (“Mem. in Support MSJ,” ECF No. 62). 1 Plaintiff filed evidentiary exhibits
in opposition to the Motion (ECF Nos. 56.1–56.24) and an Amended Memorandum in
1 Defendants also filed a “corrected” Amended Memorandum. (ECF No. 63.) It appears to the Court that the memoranda are identical, and the Court refers to ECF No. 62 as Defendants’ brief. Opposition to Defendants’ Motion for Summary Judgment (“Mem. in Opp. MSJ,” ECF
No. 61). Defendants did not file a reply.
Plaintiff also filed a Memorandum of Law in Opposition to the Motion to Strike.
(ECF No. 58.)
The Court held a hearing on the Motions at which counsel for the parties
presented argument. The Motions are now ripe for disposition.
THE COURT, having considered the Motions, the briefs filed in support of and
in opposition to the Motions, the arguments of counsel at the hearing, the applicable
law, and other appropriate matters of record, concludes that the Motion should be
GRANTED, in part, and DENIED, in part, for the reasons set forth below and the
Motion to Strike should be DENIED.
Teague Campbell Dennis & Gorham, LLP, by Matthew J. Little and Damie A. Sesay for Plaintiff Med1 NC Services, LLC.
The Charleston Group, by Jose A. Coker and Johnathan R. Charleston for Defendants Med1 Plus, LLC, Gregory Stanton Bryant, Common Capital, LLC, Daniel Morman, Donna S. Gruenemeier, and Angela White.
McGuire, Judge.
I. FACTS AND PROCEDURAL BACKGROUND
1. Many significant material facts in this case are disputed. The Court will
attempt to summarize the undisputed facts and describe the disputed ones.
A. The parties
2. Robeson County, North Carolina solicits proposals from qualified
providers for the exclusive contractual right to provide non-emergency ambulance services and non-ambulatory transportation services to residents within the county.
(Gruenemeier Dep. II, ECF No. 53.6, at pp. 41, 44.) Non-emergency ambulance
services essentially involve transporting county residents between their homes and
various medical care facilities including hospitals, nursing homes, physician’s offices,
etc. (ECF No. 53.6, at p. 35.) Residents call the service provider to schedule
appointments for transportation. (White Dep., ECF No. 53.12, at pp. 40–41 and 51.)
The Robeson County Board of Commissioners (“Board of Commissioners”) decides to
which provider the contract (the “Robeson County Contract”) will be awarded in their
sole discretion. (ECF No. 53.6, at p. 44.)
3. Med1 NC Services, L.L.C. (“Plaintiff”) is a Georgia limited liability
company with its principal place of business in Lumberton, NC. HR1 Services, Inc.,
is the sole manager/member of Plaintiff, and Richard Hicks (“Hicks”) is majority
owner and principal of HR1 Services, Inc. From July 9, 2012 to June 30, 2019,
Plaintiff was a party to the Robeson County Contract and was the exclusive provider
of non-emergency ambulance services in Robeson County.
4. From approximately 2012 to 2019, Defendant Bryant worked as a
consultant for Plaintiff. Bryant had previously owned and operated a non-emergency
ambulance services company and had worked as a consultant for another non-
emergency ambulance services company. (Bryant Dep. I, ECF No. 56.4, at pp. 9 and
15–16.) As a consultant for Plaintiff, Bryant was responsible for maintaining
relationships with Robeson County officials, hospitals, and other medical care
providers, and for investigating and resolving complaints against Plaintiff. (Hicks Dep., ECF No. 53.13, pp. 34–35; ECF No. 56.4 at p. 15.) Plaintiff did not have a
written contract with Bryant. (Id. at p. 34.)
5. Plaintiff employed White as a dispatcher from 2012 until June 24, 2019.
As dispatcher, White had access to information including health and medical
information of the Robeson County residents to whom Plaintiff provided services.
(ECF No. 56.2, at p. 40; 56.3, Skimmiehorn Dep., at pp. 30 and 32.) White also had
access to dispatch logs and utilization numbers. (Id. at 32–33.) Plaintiff contends
that this information is its confidential and proprietary information.
6. Gruenemeier owned the company that provided non-emergency
ambulance services for Robeson County from 1991 to 1998 and was Director of the
company that had the Robeson County Contract from 1998 until 2011. (ECF No. 53.6,
pp. 22–24; ECF No. 53.2, at p. 17.) Plaintiff employed Gruenemeier as its Director
for approximately six months in or around 2012. From approximately 2012 to 2019,
Gruenemeier operated a business providing consulting services to non-emergency
ambulance services. (ECF No. 53.2, at pp. 14–16.)
B. Hicks and Bryant negotiate over sale of Plaintiff to Bryant
7. Hicks claims that in late January or February 2019, he learned through
Plaintiff’s employees that Bryant planned to take over Plaintiff’s business. (ECF No.
53.13, at pp. 34–35.) Hicks contacted Bryant and contends that Bryant told Hicks
that he was going to “take [Hicks’] business.” (Id. at p. 37.) Defendants do not deny
Bryant’s statement. However, Bryant testified that on January 25, 2019 he approached Hicks and told him that “after [the Robeson County Contract] had
expired I wouldn’t be part of” Plaintiff. (Bryant Dep. II, ECF No. 53.14, at p. 12.)
8. As a result of his conversation with Bryant, Hicks decided to offer to sell
Plaintiff to Bryant, and starting in February 2019, Hicks and Bryant engaged in
negotiations over Bryant’s potential purchase of Plaintiff. (ECF No. 53.13, at pp. 38–
42; ECF No. 53.14, at pp. 24–31; Text Messages, ECF No. 56.9.) Both parties were
represented by attorneys in the negotiations. In addition, Bryant engaged
Gruenemeier to advise him during the negotiations. (ECF No. 56.4, at p. 15.)
9. Plaintiff contends that as part of the negotiations, Plaintiff and Bryant
entered into a written confidentiality agreement and Plaintiff has produced an
agreement purportedly bearing Bryant’s signature (ECF No. 53.13, at p. 39;
“Confidentiality Agreement,” ECF No. 56.6), as well as text messages between Hicks
and Bryant regarding the agreement. (Text Messages, ECF No. 56.7.) However,
while Bryant admits he received a draft of the Confidentiality Agreement, he claims
he did not sign it. (ECF No. 56.4, at pp. 28–29 and 107–08.)
10. The Confidentiality Agreement states that it is being entered to
facilitate Plaintiff in providing Bryant with “confidential, important, and/or
proprietary trade secret information concerning” Plaintiff. (ECF No. 56.6, at p. 1.)
The Confidentiality Agreement prohibited Bryant from disclosing or using the
confidential information provided by Plaintiff other than in connection with the
negotiation for the purchase of Plaintiff and expressly provided that Bryant “shall not in any way use the Confidential Information to the detriment of [Plaintiff].” (ECF
No. 56.6, at pp. 1–2.)
11. It is undisputed that during the negotiations, Hicks provided Bryant
with some information about Plaintiff’s finances and operations. Hicks claims that
the information included Plaintiff’s profit and loss (“P&L”) statements, information
about Plaintiff’s insurance policies, including Plaintiff’s cost for workers’
compensation insurance; records regarding Plaintiff’s employees including Plaintiff’s
costs associated with its employees; a list of Plaintiff’s vehicles and maintenance
records for those vehicles. (ECF No. 53.13, at pp. 39 and 42.) Bryant denies that
Hicks provided him with any information other than Plaintiff’s P&L statements.
(ECF No. 53.14, at pp. 25–26 and 39–40.) Bryant claims that Hicks never identified
any information he provided to Bryant as proprietary or confidential, and that Hicks
did not ask him to keep any information confidential. (Id.)
C. The 2019 Robeson County Contract
12. The negotiations over the sale of Plaintiff to Bryant proved unsuccessful,
and the parties were not able to reach a final agreement. As a result, Bryant decided
to form his own business to make a proposal for the Robeson County Contract. (ECF
No. 53.14, at p. 31.) In May 2019, Bryant formed Defendant Med1 Plus, LLC (“Med1
Plus”). (Id.) Bryant and former Defendant Daniel Morman (“Morman”) are each 50%
owners of Med1 Plus. (ECF No. 56.4, at pp. 9–10.)
13. In late May or June 2019, Robeson County put the Robeson County
Contract out for proposals. On June 5, 2019, Plaintiff submitted its proposal to the Board of Commissioners. (ECF No. 56.3, at pp. 17–18; “Plaintiff’s Proposal,” ECF No.
56.13.)
14. On June 5, 2019, Med1 Plus also submitted a proposal to the Board of
Commissioners. (ECF No. 56.4, at pp. 66–67; “Med1 Plus Proposal,” ECF No. 56.10.)
Gruenemeier prepared the Med1 Plus Proposal. (ECF No. 53.2, at p. 32.) It is
undisputed that Plaintiff and Med1 Plus were the only providers that submitted
proposals for the Robeson County Contract.
15. Hicks is convinced that Bryant and Gruenemeier used confidential
information Bryant obtained from Plaintiff during the negotiations over the potential
sale of Plaintiff in preparing Med1 Plus’s Proposal. (ECF No. 53.13, at pp. 67–73 and
85–86.) Hicks points to the fact that Med1 Plus’s Proposal listed several of Plaintiff’s
employees, including White, as persons who would be employed by Med1 Plus. (Id.
at p. 73.) Hicks also claims that Bryant must have used Plaintiff’s information to
obtain financing for a loan to start Med1 Plus, but admits he has no evidence to
support this claim other than his speculation. (Id. at pp. 68–70.) Hicks also implies
that Bryant must have had access to Plaintiff’s proposal because the monthly
franchise fee Med1 Plus agreed to pay to Robeson County for the rights to provide its
services was only slightly higher than the monthly fee contained in Plaintiff’s
proposal. 2 (Id. at pp. 75–77.) However, Plaintiff fails to explain how this implicates
any confidential information Plaintiff provided Bryant during the negotiations.
2 The Court understands Hicks’ implication to be that because of his close relationships with
Robeson County officials, Bryant must have been given access to Plaintiff’s proposal to unfairly assist him in obtaining the Robeson County Contract. 16. Bryant denies that Med1 Plus used any of Plaintiff’s financial
information in preparing its bid. (ECF No. 53.14, at pp. 38 and 43.) In fact, Med1
Plus’s Proposal does not contain any financial proposals or terms. (ECF No. 56.10.)
17. On June 17, 2019, the Board of Commissioners held a public meeting
during which they considered the proposals for the Robeson County Contract. For
the meeting, the Board of Commissioners were provided with a single-page summary
of the two proposals titled “Non-emergency Contract Highlights and Comparison.”
(“Comparison,” ECF No. 56.14.) The Comparison provided as follows:
CURRENT SERVICE PROVIDER MED 1 Atlanta, GA Requesting 5 Year Extension
PROS: Proposed a payment to County of $22,178.90 quarterly total $88,715.60 increase of $4,715.60 Active in the community Assisted tremendously during both hurricanes Partnership Robeson Community college Very knowledgeable staff of non-emergency transport Student scholarships annually
CONS: Headquarters Atlanta Ga 1 Client (Robeson) Has not invested any money in new ambulances over 7 Years No detail of full-time employee benefits
NEW PROVIDER PROPOSAL MED 1 PLUS Lumberton, NC Requesting 7-year contract
PROS: Local ownership/management Leadership has many years of combined experience in non- emergency transport Will employ current provider staff Will use local community college for training Will offer full-time employee benefits
CONS: New NC provider no clients currently No explanation of billing practices or pay schedule
(Id.)
18. The Board of Commissioners voted unanimously to award the Robeson
County Contract to Med1 Plus, with Med1 Plus to commence providing the non-
emergency ambulance services to Robeson County residents on July 1, 2019. (June
17, 2019 Board of Commissioner’s Minutes, ECF No. 53.11.) The minutes of June 17,
2019 meeting provide, in relevant part, as follows:
(ADM/Approval for Franchise Agreement for Non- Emergency Convalescent Transport Services/Approved) Mr. Patrick Cummings stated that we are asking for approval for our franchise agreement for Non-Emergency Convalescent Transport which expires on June 30th. Mr. Cummings stated that we sent out RFP’s and we received two proposals and one from our current provider of seven years Med 1 and we had an additional proposal from a new provider from Med 1 Plus and I have submitted the pros and cons on both providers and I am asking for your consideration on that agreement. Commissioner Oxendine made a motion, seconded by Commissioner Cummings to approve Med 1 Plus with a 1 year initial and 2 years thereafter as it is originally set up that way now. Those voting aye: 8 (Campbell, Cummings, Dial, Edge, Herndon, Oxendine, Stephens, Taylor).
19. During the Board of Commissioners’ meeting, the Commissioners
expressed a desire for Med1 Plus to offer employment to all of Plaintiff’s employees.
(ECF No. 53.2, at p. 31.) Accordingly, Plaintiff’s Director of Operations, Tiffany Skimmiehorn (“Skimmiehorn”), invited Gruenemeier to meet with Plaintiff’s
employees regarding potential employment with Med1 Plus. (Id. at pp. 23–24.)
Gruenemeier testified, without contradiction, that when the Robeson County
Contract changes providers, hiring the prior providers employees “is kind of a
given . . . [w]e always bring over the employees.” (Id. at p. 27.) On June 18, 2019,
Gruenemeier met with Plaintiff’s employees and provided interested individuals with
applications for employment with Med1 Plus. (Id. at pp. 26–28.)
20. At the June 18, 2019 meeting, Skimmiehorn gave Gruenemeier a “thick
manila envelope.” (ECF No. 53.2, at p. 28.) 3 Gruenemeier did not know the contents
of the envelope and did not open it until a few days later. (Id. at pp. 28–29.) When
Gruenemeier opened the envelope, she discovered that it contained Plaintiff’s
employee files including driver’s licenses, social security cards, and health records.
(Id. at p. 29.) Gruenemeier did not need the information and immediately resealed
the envelope and subsequently returned it to Skimmiehorn. (Id. at pp. 29–30.)
21. White’s last day working at Plaintiff’s facility was Friday, June 21, 2019.
(ECF No. 53.12, at pp. 20–21.) White was still employed with Plaintiff on Monday,
June 24, 2019, but did not report to Plaintiff’s facility. (Id. at pp. 21–22.) White
began employment with Med1 Plus as a dispatcher sometime after June 24, 2019.
(Id. at p. 22.) Plaintiff contends that when White left Plaintiff’s employment, she took
with her a blue notebook containing Plaintiff’s log-in credentials (including
passwords) for certain network accounts and websites. (ECF No. 61, at p. 10.) White
3 Skimmiehorn denies that she provided the envelope to Gruenemeier. (ECF No. 56.3, at p. 65.) admits that she took the notebook with her but claims that it also contained her
personal passwords. (ECF No. 53.12, at pp. 24–25.) When Skimmiehorn texted her
about the notebook, White replied “My notebook. Nobody else had their stuff in it. I
can’t use any of the passwords for anything for personal use or any other computer.
There is nothing in it that I can use. I did nothing wrong.” (ECF No. 53.12, at p. 26;
Text messages, ECF No. 53.19.)
22. Plaintiff also has produced evidence that someone logged into Plaintiff’s
computer network on June 24, 2019 using White’s credentials. Plaintiff contends that
White herself logged in (ECF No. 61, at p. 11), but White denies that she was the one
who logged in. (ECF No. 53.12, at pp. 31–32.)
23. After July 1, 2019, Plaintiff sought additional business in North
Carolina. In January 2020, Plaintiff secured a contract with Brunswick County
North Carolina to provide non-emergency ambulance services for that county. (ECF
No. 53.13, at p. 16.)
D. The lease between Plaintiff and Gruenemeier
24. At all times while it was party to the Robeson County Contract, Plaintiff
operated its business from a facility located at 2507 Elizabethtown Road in
Lumberton. Plaintiff rented the facility from Gruenemeier and another individual,
H. Jeffrey Stephens, under a lease executed on September 1, 2012. (“Lease
Agreement,” ECF No. 53.3.) Pursuant to the Lease Agreement, the initial lease term
was for three years and two months. (Id. at p. 2.) The Lease Agreement also
contained an “Evergreen Term,” providing that after the initial lease term, Plaintiff “shall occupy the premises for so long as they are in business in Robeson County,
North Carolina from and after November 1, 2015.” (Id.) The Lease Agreement also
contained a “Default” provision that provided in relevant part as follows:
(b) if TENANT fails to perform any other of the terms, conditions, or covenants contained in this lease to be observed or performed by TENANT and such failure of performance shall exist for ten (10) days, whether or not continuous or consecutive, and a written notice to cure same shall have been given TENANT pursuant to the further terms of this Lease or . . . then LANDLORD . . . shall have the immediate right of re-entry and may remove all persons and property from the PREMISES and such property may be removed and stored in a public warehouse of elsewhere at the cost of and for the account of TENANT,
...
In the event of a failure by TENANT to pay rent or failure to perform any other terms, conditions or covenants of this lease after a 10-day written notice to cure same shall have been given TENANT pursuant to the further terms of this Lease, then LANDLORD may terminate this lease and, notwithstanding a re-entry and reletting without termination, . . .
(Id. at pp. 6–7.)
25. On July 7, 2019, at 8:52 p.m., Gruenemeier sent Hicks an email stating
as follows:
Richard,
You are in violation of your lease as of July 6, 2019[.] I have attached the lease for your reference[.]
Donna Gruenemeier
(ECF No. 53.2, at p. 56; July 7, 2019 Email, ECF No. 53.5.) Gruenemeier testified
that she believed Plaintiff was in violation of the Evergreen Term because “[w]hen their contract ended, they were to be removed from the building. They were to leave
the building. It was only while they had a contract.” (ECF No. 53.2, at p. 51.)
Gruenemeier padlocked the gates to the facility before 8:00 a.m. on July 8, 2019. (Id.
at p. 56.) Gruenemeier was aware that Plaintiff still had property inside the facility.
(Id. at p. 51.)
E. The lawsuit and proceedings
26. On July 15, 2019, Plaintiff initiated this lawsuit by filing the Complaint
in the Superior Court of Robeson County making claims for: breach of contract;
tortious interference with contract; tortious interference with a prospective economic
advantage; unfair or deceptive trade practices in violation of the North Carolina
Unfair or Deceptive Trade Practices Act (“UDTPA”); misappropriation of trade
secrets in violation of the North Carolina Trade Secrets Protection Act (“TSPA”);
common law trademark infringement; breach of fiduciary duty; civil conspiracy; and
requesting a preliminary injunction. (Complaint, ECF No. 3.)
27. On July 24, 2019, this case was designated to the North Carolina
Business Court and assigned to the undersigned. (Designation Order, ECF No. 1;
Assignment Order, ECF No. 2.)
28. Defendants Common Capital, LLC, Morman, and White filed a Motion
to Dismiss (“CMW Motion,” ECF No. 11), and Med1 Plus, Bryant, and Gruenemeier
filed a Motion to Dismiss. (“MBG Motion,” ECF No. 14; collectively the CMW Motion
and the MBG Motion are the “Motions to Dismiss”.) 29. On February 26, 2020, the Court filed an Order and Opinion on
Defendants’ Motions to Dismiss. Med1 Services, LLC v. Med1 Plus, LLC, 2020 NCBC
LEXIS 24 (N.C. Super. Ct. Feb. 26, 2020) (“Dismissal Order”). In the Dismissal
Order, the Court dismissed all of the claims alleged against Common Capital and
Morman. The Court also disposed of the following claims: (i) tortious interference
with contract; (ii) all of the claims alleged against White except for civil conspiracy;
and (iii) common law trademark infringement against Gruenemeier. Id. at 40–41.
30. On December 7, 2020, Defendants filed their Motion for Summary
Judgment. (ECF No. 52.) Defendants move for summary judgment as to the
remaining claims for: (i) breach of the Lease Agreement against Gruenemeier; (ii)
tortious interference with prospective economic advantage against Med1 Plus,
Bryant, and Gruenemeier; (iii) violation of the UDTPA against Med1 Plus, Bryant,
and Gruenemeier; (iv) violation of the North Carolina Trade Secrets Protection Act
(“NCTSPA”) against Med1 Plus, Bryant, and Gruenemeier; and (v) civil conspiracy.
(ECF No. 52.) Defendants do not seek summary judgment as to Plaintiff’s claims for
breach of the Confidentiality Agreement (ECF No. 5, at ¶¶ 36–41) or for common law
trademark infringement against Bryant. (Id. at ¶¶ 91–98.)
II. STANDARD OF REVIEW
31. “Summary judgment is appropriate ‘if the pleadings, depositions,
answers to interrogatories, and admissions on file, together with affidavits, if any,
show that there is no genuine issue of material fact and that any party is entitled to
judgment as a matter of law.’” Variety Wholesalers, Inc. v. Salem Logistics Traffic Servs., LLC, 365 N.C. 520, 523 (2012) (quoting N.C.G.S. § 1A-1, N.C. R. Civ. P. 56(c)).
The moving party bears the burden of presenting evidence which shows that there is
no genuine issue of material fact and that the movant is entitled to judgment as a
matter of law. Hensley v. Nat’l Freight Transp., Inc., 193 N.C. App. 561 (2008).
Where the moving party is the defendant, they may meet this burden by “proving an
essential element of the opposing party’s claim does not exist, cannot be proven at
trial, or would have been barred by an affirmative defense.” Variety Wholesalers, Inc.,
365 N.C. at 523. An issue is “material” if “resolution of the issue is so essential that
the party against whom it is resolved may not prevail.” McNair v. Boyette, 282 N.C.
230, 235 (1972). “A ‘genuine issue’ is one that can be maintained by substantial
evidence.” Dobson v. Harris, 352 N.C. 77, 83 (2000).
32. “Once the party seeking summary judgment makes the required
showing, the burden shifts to the nonmoving party to produce a forecast of evidence
demonstrating specific facts, as opposed to allegations, showing that he can at least
establish a prima facie case at trial.” Gaunt v. Pittaway, 139 N.C. App. 778, 784–85,
(2000). As recently reiterated by the North Carolina Court of Appeals, the burden on
the non-movant goes beyond merely producing some evidence or a scintilla of evidence
in support of its claims. Rather,
If the movant meets this burden, the nonmovant must take affirmative steps to set forth specific facts showing the existence of a genuine issue of material fact. An adverse party may not rest upon the mere allegations or denials of his pleading. A genuine issue of material fact is one that can be maintained by substantial evidence. Substantial evidence is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion and means more than a scintilla or a permissible inference.
Khashman v. Khashman, No. COA16-765, 2017 N.C. App. LEXIS 715, at *15 (N.C.
Ct. App. Sept. 5, 2017) (citations and internal quotation marks and modifiers
omitted).
III. ANALYSIS
33. The Court will first address Defendants’ Motion to Strike, followed by
the Motion for Summary Judgment.
A. Motion to Strike
34. In the Motion to Strike, Defendants move to strike portions of the
Affidavit of Richard Hicks. (“Hicks’ Affidavit,” ECF No. 56.5.) Specifically,
Defendants move the Court to strike paragraphs 4, 9, 18-20, and 28 of Hicks’s
affidavit (ECF No. 57, at p. 2) arguing that Hicks had no personal knowledge of
Bryant approaching any of Plaintiff’s employees before the County awarded the
Contract to Med1 Plus, and that Hicks presented contradictory testimony regarding
the status of his operations and employees in Robeson County after the Contract was
awarded to Med1 Plus. (ECF No. 57.1, at p. 2.)
35. “A motion to strike is addressed to the sound discretion of the trial
court.” Kingsdown, Inc. v. Hinshaw, 2016 NCBC LEXIS 15, at *8 (N.C. Super. Ct.
Feb. 17, 2016) (citing Broughton v. McClatchy Newspapers, Inc., 161 N.C. App. 20, 25
(2003)).
36. The Court has thoroughly considered the arguments of the parties and
the Court does not find that Hicks’ affidavit contains statements that are beyond his personal knowledge or are contradictory with other statements in the record.
Therefore, the Court CONCLUDES, in its discretion, that the Motion to Strike should
be DENIED.
B. Motion for Summary Judgment
37. Defendants move for summary judgment on Plaintiff’s remaining claims
for: (i) breach of the Lease Agreement against Gruenemeier; (ii) tortious interference
with prospective economic advantage against Med1 Plus, Bryant, and Gruenemeier;
(iii) violation of the UDTPA against Med1 Plus, Bryant, and Gruenemeier; (iv)
violation of the NCTSPA against Med1 Plus, Bryant, and Gruenemeier; and (v) civil
conspiracy. The Court analyzes each claim in turn.
i. Breach of Lease Agreement against Gruenemeier
38. In its second cause of action, Plaintiff alleges a claim against
Gruenemeier for breach of contract. (ECF No. 3, at ¶¶ 49–55.) Plaintiff alleges that
Gruenemeier breached the Lease Agreement by sending the notice of breach on July
7, 2019 and locking Plaintiff out on July 8 without providing a required ten-day notice
to cure. (Id. at ¶¶ 52–53.)
39. In North Carolina, a party asserting breach of contract must show “(1)
existence of a valid contract; and (2) breach of the terms of that contract.” Cater v.
Barker, 172 N.C. App. 441, 445 (2005) (citing Poor v. Hill, 138 N.C. App. 19, 26
(2000)). “Whenever a court is called upon to interpret a contract[,] its primary
purpose is to ascertain the intention of the parties at the moment of its execution.”
Lane v. Scarborough, 284 N.C. 407, 409–10 (1973). “When a contract is clear and unambiguous, construction of the agreement is a matter of law for the court . . . and
the court cannot look beyond the terms of the contract to determine the intentions of
the parties.” Lynn v. Lynn, 202 N.C. App. 423, 431 (2010) (citation omitted). The
question of whether contractual language is ambiguous is for the court to determine.
Id. at 432.
40. The Court concludes that language in the Lease Agreement
unambiguously establishes the parties’ intent that Gruenemeier would provide at
least ten days’ notice of any default to Plaintiff before taking any action, including
entering the property or locking Plaintiff out. The evidence shows that Gruenemeier
provided less than one day’s notice to Plaintiff of an alleged default.
41. Defendants argue that Plaintiff violated the Evergreen Term of the
Lease Agreement because it was not “conducting business” in Robeson County after
the Robeson County Contract expired on June 30, 2019, and it did not immediately
vacate the facility upon losing the contract. (ECF No. 62, at p. 18.) This argument is
specious. At a minimum, Plaintiff has produced evidence that it continued to conduct
business from the facility after June 30, 2019 by seeking out, and then securing,
contracts to provide non-emergency ambulance services in other North Carolina
counties. Such activities certainly could constitute being “in business in Robeson
County.” (ECF No. 53.3, at p. 2.) In addition, Defendants do not explain how the
notice of default, sent to Plaintiff only seven days after it was no longer servicing the
Robeson County Contract, and locking Plaintiff out of the facility the next day,
comports in any way with the default and notice provisions of the Lease Agreement. 42. Therefore, to the extent Defendants seek summary judgment in their
favor on Plaintiff’s claim for breach of the Lease Agreement, the Motion should be
DENIED.
ii. Tortious Interference with Prospective Economic Advantage against Med1 Plus, Bryant, and Gruenemeier
43. Plaintiff alleges a claim for tortious interference with prospective
economic advantage against Med1 Plus, Bryant, and Gruenemeier. (ECF No. 3, at
¶¶ 67–75.) Plaintiff alleges that “Bryant, Med1 Plus and Gruenemeier intentionally
used confidential information acquired from Plaintiff . . . to secure the contract to
provide non-emergency ambulance services from Robeson County,” that they did so
“pursuant to common scheme or plan to destroy Plaintiff’s business,” and their
actions were “without justification” and “malicious.” (Id. at ¶¶ 69, 73, and 74.)
44. “An action for tortious interference with prospective economic
advantage is based on conduct by the defendants which prevents the plaintiffs from
entering into a contract with a third party.” Walker v. Sloan, 137 N.C. App. 387, 392–
93 (2000) (citing Owens v. Pepsi Cola Bottling Co., 330 N.C. 666, 680 (1992)).
“However, a plaintiff’s mere expectation of a continuing business relationship is
insufficient to establish such a claim. Instead, a plaintiff must produce evidence that
a contract would have resulted but for a defendant’s malicious intervention.”
Beverage Sys. of the Carolinas, LLC v. Associated Bev. Repair, LLC, 368 N.C. 693,
701 (2016) (citation omitted). A plaintiff must show that the defendant “interfere[d]
with a business relationship ‘by maliciously inducing a person not to enter into a
contract with [the plaintiff], which he would have entered into but for the interference, . . . if damage proximately ensues, when this interference is done not in
the legitimate exercise of the interfering person’s rights.’” Id. (quoting Spartan
Equip. Co. v. Air Placement Equip. Co., 263 N.C. 549, 559 (1965)). Defendants must
not be acting in the legitimate exercise of their own right, “but with a design to injure
the plaintiff or gain some advantage at his expense.” Owens, 330 N.C. at 680.
45. Defendants first argue that Med1 Plus, Bryant, and Gruenemeier are
entitled to summary judgment because Plaintiff has failed to present evidence that
Bryant or Gruenemeier used Plaintiff’s confidential information in preparing their
proposal for the Robeson County Contract. (ECF No. 62, at p. 16.) Defendants
contend that “Plaintiff only speculates that Bryant used Plaintiff’s information.” (Id.)
46. Defendants also seem to argue that Plaintiff has not provided evidence
that Med1 Plus, Bryant, and Gruenemeier acted with malice, and without
justification, in submitting a competing proposal for the Robeson County Contract.
They contend that Hicks and Gruenemeier formed Med1 Plus and submitted a
proposal for the Robeson County Contract because Bryant was not able to purchase
Plaintiff. (Id. at pp. 15–17.) Defendants apparently attempt to support this
argument by noting that “Robeson County’s Board made the ultimate decision” to
award the Robeson County Contract to Med1 Plus and it “is clear that the decision
by Robeson County to award the 2019 Contract was done publicly and after
consideration.” (Id. at pp. 16–17.)
47. Plaintiff responds to Defendants’ arguments by claiming that “[i]t is
clear that, but for Defendants’ interference, Plaintiff would have maintained its contract.” (ECF No. 61, at p. 19.) In support of this claim, Plaintiff contends that
Bryant’s admission that he “retained the services of [ ] Gruenemeier in early 2019 to
assist with developing and submitting a proposal to Robeson County . . . for Med1
Plus” demonstrates that Bryant and Gruenemeier were engaged in some sort of
unlawful “scheme” to steal the Robeson County Contract. (Id.) However, it is
undisputed that Plaintiff and Bryant did not have an agreement prohibiting Bryant
from competing with Plaintiff. In addition, it is undisputed that Bryant first retained
Gruenemeier to assist him with evaluating Plaintiff’s business during the purchase
negotiations, and not for the purpose of forming Med1 Plus.
48. Plaintiff argues that “[t]he record also shows that the Defendants had
to rely upon [Plaintiff’s confidential] information to acquire the contract and to obtain
the financing necessary to form Med1 Plus.” (Id.) However, Plaintiff has not
presented evidence that Bryant or Gruenemeier used Plaintiff’s confidential
information in formulating the Med1 Plus Proposal or to obtain financing for Med1
Plus. In fact, the Court notes that Plaintiff has not pointed to any information
contained in the Med1 Plus Proposal that would support an inference that it used
Plaintiff’s confidential information. For example, the Med1 Plus Proposal does not
contain information regarding the compensation Med1 Plus intends to offer its
employees, the rates that it expects to pay for insurance or to maintain its vehicles,
or any other financial information of any kind that could be linked to data provided
by Plaintiff to Bryant. Nor does Plaintiff present any evidence regarding how or from
whom Bryant obtained financing or the amount of such financing, let alone evidence showing that Bryant used Plaintiff’s confidential information to secure the financing.
In addition, the undisputed evidence also establishes that Bryant and Gruenemeier
had lengthy experience in the non-emergency ambulance service business and likely
were capable of preparing Med1 Plus’s Proposal without using Plaintiff’s information.
49. Finally, Plaintiff does not specifically address the issues of lack of
justification or malice necessary to sustain a claim for tortious interference with
prospective advantage. The malice required to overcome a justification of business
competition is legal malice, and not actual malice. Childress v. Abeles, 240 N.C. 667,
675 (1954) (“It is not necessary, however, to allege and prove actual malice in the
sense of personal hatred, ill will, or spite in order to make out a case for the recovery
of compensatory damages against the outsider for tortiously inducing the breach of
the third person’s contract with the plaintiff. The term ‘malice’ is used in this
connection in its legal sense and denotes the intentional doing of the harmful act
without legal justification.”). Interference is “justified if it is motivated by a
legitimate business purpose, as when the plaintiff and the defendant, an outsider,
are competitors.” Embree Constr. Grp., Inc. v. Rafcor, Inc., 330 N.C. 487 (1992). A
defendant’s actions are not justified “[i]f the defendant's only motive is a malicious
wish to injure the plaintiff.” Peoples Sec. Life Ins. Co. v. Hooks, 322 N.C. 216, 221
(1988) (emphasis added). If an individual has a sufficient lawful reason for
interfering in a prospective business relationship, such as in the interest of
competition, he or she is exempt from liability, regardless of his or her actual
malice. Robinson, Bradshaw, & Hinson, P.A. v. Smith, 129 N.C. App. 305, 318 (1998). “Even if plaintiff shows that defendant acted with ill intentions, legal
malice does not exist unless plaintiff can show that defendant had no legitimate
business justification for the interference.” Griffin v. Holden, 180 N.C. App. 129, 140
(2006); RCJJ, LLC v. RCWIL Enters., LLC, 2016 NCBC LEXIS 46, at *38 (N.C.
Super. Ct. June 20, 2016).
50. The Court concludes that Plaintiff has not raised an issue of disputed
fact as to whether Med1 Plus, Bryant, and Gruenemeier used Plaintiff’s confidential
information to unlawfully interfere with Plaintiff’s opportunity to win the Robeson
County Contract or that Med1 Plus, Bryant, and Gruenemeier acted without
justification and with malice in making Med1. Therefore, to the extent Defendants
seek summary judgment in their favor on Plaintiff’s claim for tortious interference
with prospective economic advantage, the Motion should be GRANTED.
iii. Misappropriation of Trade Secrets against Med1 Plus, Bryant, and Gruenemeier
51. Plaintiff alleges that the financial and other information it provided to
Bryant in connection with the negotiations for Bryant’s purchase of Plaintiff
constituted trade secrets, and that Bryant and Gruenemeier (and consequently Med1
Plus) violated the NCTSPA by using the information to prepare Med1 Plus’s Proposal
for the Robeson County Contract. (ECF No. 3, at ¶¶ 82–89.) Plaintiff alleges that
the trade secret information it provided to Bryant included “client and employee
records, detailed information regarding what each employee’s roles and
responsibilities were, the non-emergency ambulance services [Plaintiff] provided to
Robeson County, [Plaintiff]’s financial records, profit and loss statements, detailed malpractice and automobile insurance information, call volumes, clients’ [Non-
Emergency Ambulance Services] transport records, . . . vehicle records, and training
policies and procedures.” (Id. at ¶ 85.)
52. The elements of and burdens of proof regarding a claim for
misappropriation of trade secrets under the North Carolina statute are well
established. See Bldg. Ctr., Inc. v. Carter Lumber of the North, Inc., 2017 NCBC
LEXIS 85, at *17–25 (N.C. Super. Ct. Sept. 21, 2017).
53. Defendants’ argument in support of summary judgment on the NCTSPA
claim is as follows:
[T]he record shows that Defendants either already possessed this information or could have easily compiled it from public records. Moreover, Plaintiff provided this identical information to Robeson County. Plaintiff’s information was not subject to reasonable efforts to maintain its secrecy. The facts also show that Defendants could have compiled a similar database through public listings from the information obtained from the (sic) Robeson County and patients as Robeson County managed the Contract, such as the patient calls and appointments. Moreover, the Contract was exclusive to Robeson County and only one provider could operate under the Contract. Thus, the Contract obligated Plaintiff to turn over the operations Non-Emergency Ambulance Services to Med1 Plus effective July 1, 2020.
(ECF No. 62, at p. 22; case citations omitted.) Defendants do not cite any evidence in
the record in support of these claims, and the Court is not able to locate any such
evidence. In fact, some of these claims are demonstrably incorrect. For example,
Plaintiff’s proposal to Robeson County did not contain Plaintiff’s “profit and loss
statements, detailed malpractice and automobile insurance information, call volumes” or “vehicle records” other than identifying Plaintiff’s vehicles by make and
Vehicle Identification Number. (ECF No. 56.13.) There is no other evidence in the
record that Plaintiff provided this specific information to Robeson County.
54. In addition, to the extent that Defendants contend that Hicks did not
tell Bryant that any of Plaintiff’s information was confidential and that Bryant did
not sign the Confidentiality Agreement, there are disputed facts as to the adequacy
of Plaintiff’s measure to protect the secrecy of its information. These disputed facts
preclude granting summary judgment.
55. Finally, the Court notes that while Plaintiff has failed to produce
evidence that Bryant used its confidential information in preparing its proposal for
the Robeson County Contract, it is undisputed that he disclosed the information to
Gruenemeier. (ECF No. 53.14, at pp. 26–27.) Such disclosure could support a claim
for violation of the NCTSPA.
56. Therefore, to the extent Defendants seek summary judgment in their
favor on Plaintiff’s claim for misappropriation of trade secrets in violation of the
NCTSPA, the Motion should be DENIED.
iv. Unfair and Deceptive Trade Practices against Med1 Plus, Bryant, and Gruenemeier
57. Plaintiff alleges that Med1 Plus, Bryant, and Gruenemeier engaged in
unfair or deceptive trade practices in violation of the UDTPA. (ECF No. 5, at ¶¶ 77–
81.) Plaintiff alleges, inter alia, that the “use of Plaintiff’s confidential
information . . . in order to destroy Plaintiff’s business and successfully acquire the”
Robeson County Contract violates the UDTPA. (Id. at ¶¶ 78–79.) 58. “To establish a prima facie case of unfair and deceptive trade practices,
a plaintiff must show that (1) the defendant committed an unfair or deceptive act or
practice, (2) the act was in or affecting commerce, and (3) the act proximately caused
injury to the plaintiff.” White v. Consol. Planning, Inc., 166 N.C. App. 283, 303 (2004).
Whether an act or practice is unfair or deceptive is ultimately a question of law for
the Court. Songwooyarn Trading Co. v. Sox Eleven, Inc., 213 N.C. App. 49, 56 (2011).
59. Misappropriation of trade secrets may form the basis of a UDTPA claim
if it satisfies the required elements for an unfair trade practices claim. Drouillard v.
Keister Williams Newspaper Services, Inc., 108 N.C. App. 169, 172 (1992) (“If the
violation of the Trade Secrets Protection Act satisfies this three prong test, it would
be a violation of [G.S.] § 75-1.1.”). The Court has already concluded that issues of fact
remain for resolution by a jury regarding Plaintiff's claim for misappropriation of
trade secrets, and that claim could support Plaintiff's claim under the UDTPA.
Medical Staffing Network, Inc. v. Ridgway, 194 N.C. App. 649, 659 (2009) (A violation
of the NCTSPA “constitutes an unfair act or practice under [N.C.G.S.] § 75-1.1.”).
Since Plaintiff’s claim for misappropriation of trade secrets survives, to the extent
Defendants seek summary judgment in their favor on Plaintiff’s claim for violation of
the UDTPA, the Motion should be DENIED.
v. Civil Conspiracy
60. Plaintiff alleges a claim for civil conspiracy against Defendants. (ECF
No. 5, at ¶¶106–09.) Civil conspiracy is not an independent cause of action in North
Carolina; rather, liability for civil conspiracy must be alleged in conjunction with an underlying claim for unlawful conduct. Toomer v. Garrett, 155 N.C. App. 462, 483
(2002). To state a claim for civil conspiracy, a plaintiff must show: “(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.” Piraino Bros., LLC v. Atlantic
Fin. Grp., Inc., 211 N.C. App. 343, 350 (2011). “[S]ufficient evidence of the agreement
must exist to create more than a suspicion or conjecture in order to justify submission
of the issue to a jury.” Boyd v. Drum, 129 N.C. App. 586, 592 (1998) (internal
quotations omitted).
61. In the Complaint, Plaintiff makes boilerplate recitations of the key
elements for a claim of civil conspiracy. Plaintiff alleges that “there existed between
all the Defendants, a common plan or scheme to perform certain unlawful acts,” that
“as a result of agreement and conduct of Defendants, Plaintiff sustained an injury.”
(ECF No. 5, at ¶ 107.)
62. Defendants argue that the claim should be dismissed because “a
corporation cannot conspire with itself.” (ECF No. 61, at p. 11; citing e.g., Seguro-
Suarez v. Key Risk Ins. Co., 261 N.C. App. 200, 218 (2018) (“[A]n allegation that a
corporation is conspiring with its agents, officers or employees is tantamount to
accusing a corporation of conspiring with itself[,] and is therefore insufficient to
establish a claim for civil conspiracy.”). Defendants contend that
Plaintiff merely asserts that Defendants’ alleged unlawful actions were substantively pursuant to the direction of, employment by, or for the benefit of Med1 Plus. Plaintiff repeatedly alleges that Defendants were agents and employees of Med1 Plus. To the extent that Defendants were employed by Med1 Plus, they could not have conspired, as they were all one, i.e., Med1 Plus.
(Id. at p. 12; record citations omitted.)
63. Defendants also argue that Plaintiff has not produced evidence that
Defendants had an agreement to commit an unlawful act or that Bryant and
Gruenemeier had lawful reasons for working together to secure the Robeson County
Contract. (Id. at p. 13.)
64. Plaintiff argues that the Defendants are not protected by intra-corporate
immunity because the evidence shows that “White and Gruenemeier conspired with
Bryant and Med1 Plus prior to becoming employees of Med1 Plus.” (ECF No. 61, at
p. 22.) Plaintiff does not respond to Defendants’ argument that Plaintiff has failed to
produce evidence of an agreement.
65. This case is typical of many before this Court in which the plaintiff
alleges a civil conspiracy between various defendants as a barely considered
afterthought to its primary claims. Here—again, as is typical with most conspiracy
claims—Plaintiff has done nothing more than link a number of unrelated actions by
claiming that they were done in furtherance of a nefarious scheme to injure Plaintiff,
but has developed no proof that there was any type of agreement between the
Defendants to carry out an unlawful act. To the contrary, the evidence shows that
Bryant lawfully retained Gruenemeier to advise him during the negotiations to
purchase Plaintiff, and then to assist him with forming Med1 Plus and submitting
the Med1 Plus Proposal after the negotiations proved unsuccessful. Similarly, the evidence fails to show that White entered into an agreement with Med1 Plus, Bryant,
or Gruenemeier to do anything illegal, but instead that White became employed with
Med1 Plus only after it won the Robeson County Contract. The facts support the
conclusion that Bryant’s, Gruenemeier’s, and White’s actions were not part of a
common scheme.
66. Plaintiff has not put forth evidence in this case that Defendants entered
into any agreement with each other to misappropriate trade secrets or commit any
other unlawful act. At most, Plaintiff’s evidence shows that Defendants might have
had access to Plaintiff’s trade secrets and might have used this information in
preparing Med1 Plus’s bid. This is not, however, evidence that the individual
Defendants made an agreement to misappropriate Plaintiff’s trade secret or engage
in any other unlawful conduct. Therefore, to the extent Defendants seek summary
judgment on Plaintiff’s claim for civil conspiracy, the Motion for Summary Judgment
should be GRANTED.
IV. CONCLUSION
THEREFORE, IT IS ORDERED that the Motion to Strike is DENIED, and
that the Motion for Summary Judgment is GRANTED, in part, and DENIED, in part,
a. to the extent Defendants seek summary judgment on Plaintiff’s claims for
interference with prospective economic advantage and civil conspiracy, the
Motion is GRANTED; b. to the extent Defendants seeks summary judgment on Plaintiff’s claims for
breach of the Lease Agreement, misappropriation of trade secrets in
violation of the NCTSPA, and violation of the UDTPA, the Motion is
SO ORDERED, this the 24th day of June, 2021.
/s/ Gregory P. McGuire Gregory P. McGuire Special Superior Court Judge for Complex Business Cases