Miriam Equities, LLC v. Lb-Ubs 2007-C2 Millstream Rd., LLC

2020 NCBC 2

• Court: North Carolina Business Court
• Decided: January 9, 2020
• Docket: 19-CVS-8523
• Status: Published

Opinion

Miriam Equities, LLC v. LB-UBS 2007-C2 Millstream Rd., LLC, 2020 NCBC 2.

STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE SUPERIOR COURT DIVISION GUILFORD COUNTY 19 CVS 8523

MIRIAM EQUITIES, LLC, a New Jersey Limited Liability Company,

Plaintiff,

v. ORDER AND OPINION ON THE MOTION TO DISMISS LB-UBS 2007-C2 MILLSTREAM ROAD, LLC, a North Carolina Limited Liability Company,

Defendant.

1. THIS MATTER arises from the motion to dismiss claims related to a

dispute over the purchase of real property (the “Motion”). Following Plaintiff’s partial

voluntary dismissal of its Amended Complaint, the only remaining claim challenged

by the Motion is one for unjust enrichment. For the reasons stated below, the Court

GRANTS the Motion with respect to Plaintiff’s unjust enrichment claim WITHOUT

PREJUDICE.

Maitland & English Law Firm, PLLC, by Robert Maitland, for Plaintiff.

Kilpatrick Townsend & Stockton LLP, by James Heath Pulliam and Elizabeth Winters, for Defendant LB-UBS 2007-C2 Millstream Road, LLC.

Gale, Judge.

I. FACTUAL AND PROCEDURAL BACKGROUND

2. Plaintiff initiated this action on September 13, 2019, (see Verified

Compl. (“Compl.”), ECF No. 3), and subsequently amended its Complaint on October

21, 2019, stating claims for “specific performance,” “declaratory judgment,” “unjust enrichment,” “breach of contract,” and “constructive or equitable lien,” (see Am.

Verified Compl. (“Am. Compl.”), ECF No. 5).

3. The central contention driving Plaintiff’s claims is that Defendant LB-

UBS 2007-C2 Millstream Road, LLC (“Millstream Road, LLC”) breached a contract

between the parties for the sale of real property (the “Property”). According to the

Amended Complaint, Plaintiff paid a one-million-dollar deposit in accordance with

the terms of that contract, (Am. Compl. ¶ 9), Millstream Road, LLC frustrated the

closing by refusing to allow Plaintiff to enter the Property to conduct site inspections

and investigations as it was required to under the contract, (Am. Compl. ¶ 10), and

Millstream Road, LLC then purported to terminate the contract, informing Plaintiff

that it was in default for failing to close in a timely manner, (Am. Compl. ¶ 11).

Millstream Road, LLC later agreed to reinstate the contract for an additional fee but

continued to rebuff Plaintiff’s efforts to close on the Property. (Am. Compl. ¶¶ 12–

14.)

4. This case was designated as a mandatory complex business case on

November 1, 2019, (Designation Order, ECF No. 1), and assigned to the undersigned

on the same day, (Assignment Order, ECF No. 2).

5. Defendants answered Plaintiff’s Amended Complaint on November 4,

2019, preserving objections under Rule 12 of the North Carolina Rules of Civil

Procedure (“Rule(s)”). (Answer, ECF No. 7.) Defendants filed the Motion on

November 12, 2019, moving to dismiss all claims against now former Defendants

LNR Partners LLC (“LNR Partners”) and U.S. Bank N.A., as Trustee for the Registered Holders of LB-UBS Commercial Mortgage Trust 2007-C2, Commercial

Mortgage Pass-Through Certificates, Series 2007-C2 (“U.S. Bank”), and Plaintiff’s

claims for specific performance, unjust enrichment, and constructive or equitable

lien. (Mot. Dismiss Pl.’s Verified Am. Compl., ECF No. 8.)

6. On December 6, 2019, Plaintiff filed a voluntary dismissal without

prejudice, dismissing all claims against LNR Partners and U.S. Bank, and all claims

against remaining Defendant Millstream Road, LLC except the claims for declaratory

judgment, unjust enrichment, and breach of contract. (Voluntary Dismissal Without

Prejudice, ECF No. 11.)

7. The only remaining claim challenged by Defendant’s Motion is the one

for unjust enrichment. Plaintiff did not respond to Defendants’ Motion and the Court

took the Motion under advisement without holding a hearing. 1 The matter is now

ripe for determination.

II. STANDARD OF REVIEW

8. When ruling on a Rule 12(b)(6) motion, a court inquires “whether, as a

matter of law, the allegations of the complaint, treated as true, are sufficient to state

a claim upon which relief may be granted under some legal theory[.]” Harris v. NCNB

Nat’l Bank of N.C., 85 N.C. App. 669, 670, 355 S.E.2d 838, 840 (1987) (citing Stanback

v. Stanback, 297 N.C. 181, 185, 254 S.E.2d 611, 615 (1979)). A court must construe

the allegations in the pleading “in the light most favorable to the non-moving

1 Because Plaintiff did not respond to the Motion, it is deemed unopposed under this Court’s

local rules. See BCR 7.6. That the Motion was unopposed is not the basis for the Court’s decision. party[,]” Christenbury Eye Ctr., P.A. v. Medflow, Inc., 370 N.C. 1, 5, 802 S.E.2d 888,

891 (2017) (quoting Kirby v. N.C. Dep’t of Transp., 368 N.C. 847, 852, 786 S.E.2d 919,

923 (2016)), but is 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, 620

S.E.2d 873, 880 (2005) (quoting Veney v. Wyche, 293 F.3d 726, 730 (4th Cir. 2002)).

9. Dismissal of a claim pursuant to Rule 12(b)(6) is therefore only proper

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

the complaint reveals on its face the absence of fact[s] sufficient to make a good claim;

[or] (3) when some fact disclosed in the complaint necessarily defeats the . . .

claim.” Oates v. JAG, Inc., 314 N.C. 276, 278, 333 S.E.2d 222, 224 (1985) (citing

Forbis v. Honeycutt, 301 N.C. 699, 701, 273 S.E.2d 240, 241 (1981)); see Sutton v.

Duke, 277 N.C. 94, 103, 176 S.E.2d 161, 166 (1970) (stating dismissal is not

appropriate “unless it appears to a certainty that [the] plaintiff is entitled to no relief

under any state of facts which could be proved in support of the claim” (original

emphasis omitted)).

III. ANALYSIS

10. “The general rule of unjust enrichment is that where services are

rendered and expenditures made by one party to or for the benefit of another, without

an express contract to pay, the law will imply a promise to pay a fair compensation

therefor.” Atl. Coast Line R.R. Co. v. State Highway Comm’n, 268 N.C. 92, 95–96,

150 S.E.2d 70, 73 (1966) (citing Beacon Homes, Inc. v. Holt, 266 N.C. 467, 472, 146 S.E.2d 434, 438 (1966)). Therefore, “[i]f there is a contract between the parties, the

contract governs the claim and the law will not imply a contract.” Se. Shelter Corp.

v. BTU, Inc., 154 N.C. App. 321, 330–31, 572 S.E.2d 200, 206 (2002) (citing Vetco

Concrete Co. v. Troy Lumber Co., 256 N.C. 709, 714, 124 S.E.2d 905, 908 (1962)).

11. Plaintiff avers that Defendants were unjustly enriched because they

retained the one-million-dollar deposit after breaching the contract for the sale of the

Property as well as the subsequent Contract to Reinstate. (See Am. Compl. ¶¶ 34–

39.)

12. The Amended Complaint therefore makes plain that the disputed one-

million-dollar deposit is a term governed by an express contract for the sale of the

Property. (See, e.g., Am. Compl. ¶ 34 (“The parties had a valid and binding Contract

for the Purchase of the Property.”), ¶ 9 (“Plaintiff paid the $1,000,000.00 deposit by

May 22, 2019 in accordance with the terms of the contract.”).) 2 Defendants also

admitted that the dispute is governed by an express contract in their Answer to the

First Amended Complaint. (See Answer ¶ 43 (“[I]t is admitted that the Plaintiff and

[Millstream Road, LLC] entered into a valid and binding contract.”).)

13. While unjust enrichment may be pleaded alternatively to breach of

contract in certain instances, see, e.g., Sparrow Sys., Inc. v. Private Diagnostic Clinic,

PLLC, 2014 NCBC LEXIS 70, at *23 n.4 (N.C. Super. Ct. Dec. 24, 2014) (“[A]lthough

Plaintiff will not ultimately be able to recover under both an express and implied

contract theory, Plaintiff is not foreclosed from properly pleading these claims in the

2 Plaintiff also attached the contract to the original Complaint. (See Compl. 14–84.) alternative in its Complaint.”), here, Plaintiff did not plead unjust enrichment in the

alternative, the parties agree that the purchase of the Property is governed by an

express contract, and Plaintiff alleges no facts in support of its unjust enrichment

claim independent of that contract.

14. The unjust enrichment claim, as presently pleaded, should therefore be

dismissed. See McManus v. GMRI, Inc., No. 3:12-CV-009-DCK, 2012 U.S. Dist.

LEXIS 92094, at *24–26 (W.D.N.C. July 3, 2012) (dismissing unjust enrichment claim

under North Carolina law where it was not pleaded in the alternative, plaintiff

pleaded express contract, and answer admitted existence of express contract); KNC

Techs., LLC v. Tutton, 2019 NCBC LEXIS 72, at *35–37 (N.C. Super. Ct. Oct. 9, 2019)

(dismissing unjust enrichment claim where allegations of benefit conferred were

predicated on existence of an express contract); Krieger v. Johnson, 2014 NCBC

LEXIS 13, at *7–9 (N.C. Super Ct. Apr. 30, 2014) (dismissing unjust enrichment claim

where plaintiff alleged that defendant was unjustly enriched by receiving excessive

compensation under an express contract).

15. The decision whether to dismiss a claim with or without prejudice is one

vested in the sound discretion of the trial court. First Fed. Bank v. Aldridge, 230 N.C.

App. 187, 191, 749 S.E.2d 289, 292 (2013). The Court concludes, in the exercise of its

discretion, that dismissal of Plaintiff’s unjust enrichment claim should be without

prejudice. IV. CONCLUSION

16. WHEREFORE, for the reasons stated above, the Court hereby GRANTS

Defendants’ Motion and dismisses Plaintiff’s unjust enrichment claim WITHOUT

PREJUDICE to Plaintiff later asserting, if appropriate, an unjust enrichment claim

independent of its contract claim.

SO ORDERED, this the 9th day of January, 2020.

/s/ James L. Gale James L. Gale Senior Business Court Judge