Morris Int’l, Inc. v. Packer, 2020 NCBC 75.
STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE SUPERIOR COURT DIVISION MECKLENBURG COUNTY 20 CVS 2156
MORRIS INTERNATIONAL, INC.,
Plaintiff,
v.
ANTHONY WILLIAM PACKER; PACKER INVESTMENT COMPANY, INC.; PA&K, LLC; OLDE BEAU GENERAL ORDER AND OPINION ON BARRY PARTNERSHIP; KPP, LLC; POOLE’S MOTION TO DISMISS AND KENNINGTON INVESTMENT LAURA POOLE’S AMENDED MOTION COMPANY, INC.; BARRY POOLE; TO DISMISS AND MOTION FOR LAURA POOLE; SHERRI ATTORNEYS’ FEES KENNINGTON FAGAN; KRISTI KENNINGTON HALL; and KATHY KENNINGTON DAVIS,
Defendants.
THIS MATTER comes before the Court on Defendant Barry Poole’s Motion to
Dismiss Pursuant to Rule 12(b)(6) (“Barry Poole’s Motion,” ECF No. 19) and
Defendant Laura Poole’s Amended Motion to Dismiss (“Motion to Dismiss”) and
Motion for Attorney’s Fees Pursuant to N.C.G.S. §§ 6-21.5, 75-16.1, and Motion for
Rule 11 Sanctions (“Motion for Attorneys’ Fees”) (ECF No. 21)1 (collectively, Barry
Poole’s Motion, the Motion to Dismiss, and Motion for Attorneys’ Fees are “the
Motions.”).
1 Laura Poole filed a motion for attorney’s fees and motion for sanctions within the same
document as her Motion to Dismiss. At the hearing, the Court advised Laura Poole’s counsel that it intended to grant her Motion for Attorneys’ Fees and asked counsel to submit an appropriately documented request. The Court will address the amount of fees and costs awarded to Laura Poole by separate order. 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 on the Motions,
the applicable law, and other appropriate matters of record, CONCLUDES that the
Motions should be GRANTED for the reasons set forth below.
Morris Law Firm, PLLC, by Bradley C. Morris, for Plaintiff Morris International, Inc.
Jerry Meek, Attorney at Law, PLLC, by Gerald F. Meek, for Defendants Barry Poole and Laura Poole.
James, McElroy & Diehl, P.A., by Fred B. Monroe, for Defendants Sherri Kennington Fagan, Kristi Kennington Hall, Kathy Kennington Davis, and Kennington Investment Company, Inc.
Vann Law Firm, P.A., by Christopher M. Vann, for Defendants Anthony William Packer, Packer Investment Company, Inc., PA&K, LLC, Olde Beau General Partnership, and KPP, LLC.
McGuire, Judge.
I. FACTS
1. The Court does not make findings of fact on motions to dismiss under
Rule 12(b)(6), but only recites those facts included in the complaint that are relevant
to the Court’s determination of the Motions. See, e.g., Concrete Serv. Corp. v. Inv’rs
Grp., Inc., 79 N.C. App. 678, 681, 340 S.E.2d 755, 758 (1986). The facts relevant to
the determination of the Motions are drawn from the Amended Complaint.
(“Amended Complaint,” ECF No. 4.)
2. This matter arises from the development of property in the Olde Beau
Subdivision in Alleghany County, North Carolina. The Olde Beau Golf and Country
Club is part of the Olde Beau Subdivision. Defendant Olde Beau General Partnership (“OBGP”) owned the Olde Beau Subdivision. (Id. at ¶ 4.) The General Partners in
OBGP are Defendants Packer Investment Company, Inc. (“PIC”) and Kennington
Investment Company, Inc. (“KIC”). Defendant Anthony William Packer (“Packer”) is
the President of PIC. (Id. at ¶¶ 5–6.)
3. Packer is also a member of PA&K, LLC (“PA&K”). PA&K is in the
business of developing residential properties and was involved in developing,
managing, constructing, and selling property in the Olde Beau Subdivision. (Id. at ¶
3.)
4. Plaintiff Morris International, Inc. (“Plaintiff”) specializes in the
development and marketing of real estate. (Id. at ¶ 1.) Sid Morris (“Morris”) is a
“representative” of Plaintiff, but his specific role with Plaintiff is not alleged. (Id. at
¶ 17.)
5. On May 20, 2015, Plaintiff, PA&K, and OBGP executed an “Agreement
with PA&K, LLC and Morris International, Inc. Olde Beau Golf and Country Club
Development Project.” (“Agreement,” Id. at ¶ 18.) The Agreement “contemplated
creating a luxury RV resort wherein a portion of the Olde Beau Subdivision would be
developed for sales of individual lots to be owned and used by owners of luxury
motorhome coaches, with improvements, appropriate amenities, and golf club
membership.” (Id. at ¶¶ 14 and 18, Ex. B at pp. 3–4.) 2 The Agreement was signed
on behalf of PA&K by Packer, and on behalf of Plaintiff by Morris. (Id.) Although
not mentioned in or a signatory to the Agreement, Plaintiff alleges that OBGP was
2 In the Amended Complaint, Plaintiff misidentifies the Agreement as Exhibit A. also a party to the Joint Venture. 3 On September 15, 2015, PA&K and Plaintiff
signed an addendum to the Agreement. (Id. at pp. 4–6.) The parties referred to the
project as the “Olde Beau Joint Venture.” (hereinafter “Joint Venture”).
6. Defendant Barry Poole is involved in developing, marketing, and selling
real estate as recreational vehicle (“RV”) resort properties. (Id. at ¶ 8.) Plaintiff
alleges that:
During the active phase of the [Joint Venture], [Barry Poole] [was] directly and personally involved with [Plaintiff], PA&K[,] and OBGP in negotiations of an agreement for [Barry Poole] to serve, under contract to the [Joint Venture], as the construction manager of the RV resort at Olde Beau. These negotiations included discussions of confidentiality and non-competition of [Barry Poole] relating to other RV resorts that he was involved with at the time. Thus, [Barry Poole] had actual, detailed knowledge of the plans and opportunities that the Joint Venture was pursuing, and specifically of [Plaintiff]’s interest in the venture.
(Id. at ¶ 38.)
7. Plaintiff only alleges that the Joint Venture was negotiated with Barry
Poole, but not that the parties entered into any type of contract or that Barry Poole
was hired as the construction manager for the Joint Venture.
8. In January 2016, faced with an organized group of Olde Beau
community members opposing the project, Packer and Morris agreed to “hold off on
further development until the threat of legal action was resolved.” (Id. at ¶¶ 28–31.)
3 Plaintiff alleges that “Packer, as President of PIC, a general partner in OBGP, and on behalf
of OBGP, entered into this agreement and committed the real estate to the Olde Beau Joint Venture and to the JV Agreement with the knowledge and authority of OBGP and all its other partners.” (ECF No. 4, at ¶ 21.) Packer also stated that he “likely would put the property up for auction.” (Id. at ¶
31.)
9. By the end of August 2016, Plaintiff “believe[d] and understood that the
RV project and other objectives of the [Joint Venture] would not proceed, and that
Packer, PA&K, and OBGP would pursue other opportunities to develop or sell
components of the Olde Beau property.” (ECF No. 4, at ¶¶ 34–35.)
10. Unbeknownst to Plaintiff, in July 2017, Packer and Barry Poole formed
Defendant KPP, LLC (“KPP”), a North Carolina limited liability company, to act as
the developer of the RV resort project that had been the subject of the Joint Venture
(the “New Venture”). (Id. at ¶ 37.)
11. In November 2017, Morris learned that Packer and Barry Poole were
developing of the RV resort project. Morris visited the property and saw that
excavation and other land improvements were underway in accordance with the
design that Plaintiff had prepared for the Joint Venture. (Id. at ¶ 36.)
12. The sole allegation regarding Laura Poole contained in the Amended
Complaint is that she “is an individual residing in Alleghany County, North Carolina”
and “is a licensed real estate broker involved in marketing and selling RV resort
properties, including the real property involved in this lawsuit.” (ECF No. 4, at ¶ 9.)
Plaintiff does not allege when Laura Poole was involved in marketing and selling the
property and does not make any allegations of specific conduct by Laura Poole. II. PROCEDURAL BACKGROUND
13. On January 30, 2020, Plaintiff filed the Complaint in this matter
(ECF No. 3), and on March 2, 2020, Plaintiff filed the Amended Complaint. (ECF No.
4.) On March 3, 2020, this case was designated as a mandatory complex business
case and assigned to the undersigned. (Designation Order, ECF No. 1; Assignment
Order, ECF No. 2.)
14. In the Amended Complaint, Plaintiff alleges claims against PA&K and
OBGP for: breach of contract (Count I); breach of fiduciary duties (Count II); and
dissolution and accounting (Count VIII). Plaintiff alleges a claim for a constructive
trust against PA&K, KPP, OBGP, PIC, and Defendant Kennington Investment
Company, Inc. (“KIC”) (Count III); a claim against OBGP and KPP for an equitable
lien (Count IX); and a claim for tortious interference with a business contract and
relationship against Barry Poole, Laura Poole, Defendant Sherri Kennington Fagan,
Defendant Kristi Kennington Hall, Defendant Kathy Kennington Davis, KPP, KIC,
and PIC (Count VI). Plaintiff alleges claims against all Defendants for:
“misappropriation/conversion” (Count IV); violation of North Carolina’s Unfair and
Deceptive Trade Practices Act, N.C.G.S. § 75-1.1 (“UDTPA”) (Count V); and civil
conspiracy (Count VII).
15. On March 30, 2020, Barry Poole filed Barry Poole’s Motion and Laura
Poole filed the Motion to Dismiss, and the Motion for Attorneys’ Fees. On the same
date, Barry Poole filed a Brief in Support of Barry Poole’s Motion, (B. Poole Br. Supp.
Mot., ECF No. 20), and Laura Poole filed a Brief in Support of the Motion to Dismiss and the Motion for Attorneys’ Fees. (L. Poole Br. Supp., ECF No. 23). On June 1,
2020, Plaintiff filed its Brief in Opposition to Defendants’ Respective Motions to
Dismiss (ECF No. 37), and on June 10, 2020, Barry Poole and Laura Poole filed
replies. (ECF Nos. 38, 39).
16. On July 16, 2020, the Court held a hearing on the Motions, which are
now ripe for resolution.
III. ANALYSIS
A. Standard of Review
17. In ruling on a motion to dismiss pursuant to Rule 12(b)(6), the Court’s
inquiry is “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, whether properly labeled or not.” Harris v. NCNB Nat’l Bank, 85 N.C. App.
669, 670, 355 S.E.2d 838, 840 (1987). Our appellate courts frequently reaffirm that
North Carolina is a notice pleading state. See, e.g., Feltman v. City of Wilson, 238
N.C. App. 246, 252, 767 S.E.2d 615, 620 (2014) (“Under notice pleading, a statement
of claim is adequate if it gives sufficient notice of the claim asserted to enable the
adverse party to answer and prepare for trial, to allow for the application of the
doctrine of res judicata, and to show the type of case brought.”) (quoting Wake Cty. v.
Hotels.com, L.P., 235 N.C. App. 633, 647, 762 S.E.2d 477, 486 (2014)).
18. “It 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, 821 S.E.2d 729, 736–
37 (2018) (quoting Wood v. Guilford County, 355 N.C. 161, 166, 558 S.E.2d 490, 494
(2002)).
19. In ruling on a 12(b)(6) motion, the court construes the complaint
liberally and accepts all allegations as true. See Laster v. Francis, 199 N.C. App. 572,
577, 681 S.E.2d 858, 862 (2009). However, the Court 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) (citation omitted).
20. In addition, “when ruling on a Rule 12(b)(6) motion, a 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, 554 S.E.2d 840,
847 (2001).
B. Barry Poole’s Motion
21. Plaintiff makes the following claims against Barry Poole:
misappropriation/conversion, unfair and deceptive trade practices, tortious
interference with a business contract and relationship, and civil conspiracy. Barry
Poole seeks dismissal of these claims on the grounds that the allegations of the
Amended Complaint fail to state any claim against him. (ECF No. 19, at p. 1.) i. Misappropriation/Conversion
22. Plaintiff alleges that:
“[t]he [Joint Venture] had substantial assets that were contributed by [Plaintiff] in the form of intellectual property, marketing strategy and plans, site planning, slope analysis, zoning approval and other valuable and material components of a viable venture . . . In violation of [Plaintiff]’s rights and without its knowledge, participation or consent, the Defendants joined forces to wrongfully appropriate these assets to their own benefit, and to the detriment of [Plaintiff] and the [Joint Venture].”
(ECF No. 4, at ¶¶ 75–76.)
23. Plaintiff does not allege any specific conduct by Barry Poole in support
of the conversion claim.
24. Preliminarily, Barry Poole argues that to the extent Plaintiff, by titling
its claim “Conversion/Misappropriation,” purports to make a claim for
misappropriation of trade secrets in violation of the North Carolina Trade Secrets
Protection Act (“NCTSPA”), N.C. G. S. § 66-152 et seq., the Amended Complaint fails
to allege the necessary elements. (ECF No. 20, at pp. 4–5.) However, Plaintiff
concedes that it is not attempting to state a NCTSPA claim against Defendants, (ECF
No. 37, at p. 15), and, therefore, any claim for violation of the NCTSPA is
DISMISSED.
25. Under North Carolina law, conversion is the “unauthorized assumption
and exercise of the right of ownership over goods or personal chattels belonging to
another, to the alteration of their condition or the exclusion of an owner's rights.”
Variety Wholesalers, Inc. v. Salem Logistics Traffic Servs., LLC, 365 N.C. 520, 523, 723 S.E.2d 744, 747 (2012) (citation omitted). There are two elements in a claim
for conversion: (1) the plaintiff's ownership, and (2) the defendant's wrongful
possession. Id.
26. In seeking dismissal of the claim for conversion, Barry Poole contends,
inter alia, that “Plaintiff has failed to allege ownership of the . . . converted property,”
and instead alleges that the property was owned by the Joint Venture. (ECF No. 20,
at pp. 7–8.).
27. A joint venture is a type of partnership and therefore governed by
partnership law, as codified in the Uniform Partnership Act. See Jones v. Shoji, 336
N.C. 581, 585, 444 S.E.2d 203, 205 (1994); see also N.C. Gen. Stat. § 59-36 (defining
a partnership as “an association of two or more persons to carry on as co-owners a
business for profit”). By statute, any property that the Plaintiff “originally brought
into the partnership stock” or that was “subsequently acquired by purchase or
otherwise, on account of the partnership, is partnership property.” N.C. Gen. Stat. §
59-38. Since the property that was allegedly converted was partnership property,
only the partnership–not the individual partners–can assert the claim for conversion.
Ron Medlin Constr. v. Harris, 364 N.C. 577, 704 S.E.2d 486 (2010) (“[W]hen property
is owned by a partnership, the partnership is the real party in interest for purposes
of pursuing a civil action pertaining to the partnership property”); BDM Invs. v.
Lenhil, Inc., 2012 NCBC LEXIS 7, at *27 (N.C. Super. Ct. Jan. 18, 2012) (same).
Plaintiff alleges it contributed the converted property to the Joint Venture and,
therefore the property belonged to the Joint Venture. (ECF No. 4, at ¶ 75.) 28. In response to Barry Poole’s argument, Plaintiff does not dispute that
the property at issue was owned by the Joint Venture and not by Plaintiff. Rather,
Plaintiff contends that it has a right to sue in its individual capacity because it was
owed a “special duty” and suffered a “separate and distinct injury.” (ECF No. 37, at
p. 16.) In Gaskin v. J.S. Procter Co., LLC, the Court of Appeals held:
The general rule of partner standing to sue individually is stated in Energy Investors [Fund, L.P. v. Metric Constructors, Inc.]: “It is settled law in this State that one partner may not sue in his own name, and for his benefit, upon a cause of action in favor of a partnership.” 351 N.C. [331], at 336-37, 525 S.E.2d [441] at 445 (2000) (citation and quotation marks omitted). The rule includes a cause of action against other partners in the partnership, Jackson v. Marshall, 140 N.C. App. 504, 508, 537 S.E.2d 232, 235 (2000), disc. review denied, 353 N.C. 375, 547 S.E.2d 10 (2001), as well as a cause of action against an unrelated third party, Energy Investors, 351 N.C. at 336-37, 525 S.E.2d at 445. “The only two exceptions to this rule are: (1) a plaintiff alleges an injury ‘separate and distinct’ to himself, or (2) the injuries arise out of a ‘special duty’ running from the alleged wrongdoer to the plaintiff." 351 N.C. at 335, 525 S.E.2d at 444 (emphasis added) (recognizing the two exceptions in a suit brought by a limited partner and citing Barger v. McCoy Hillard & Parks, 346 N.C. 650, 660, 488 S.E.2d 215, 220 (1997), which recognized the same two exceptions in a suit brought by shareholders in a corporation).
196 N.C. App. 447, 451, 675 S.E.2d 115, 117-118 (2009).
29. While Plaintiff contends that the other alleged partners to the Joint
Venture, PA&K and OBGP, owed Plaintiff fiduciary duties, it does not allege or
contend that Barry Poole owed Plaintiff any duty. See Energy Investors, 351 N.C.
at 335, 525 S.E.2d at 444 (stating plaintiff must allege a special duty “running from
the alleged wrongdoer to the plaintiff”) (emphasis added). 30. Similarly, while Plaintiff claims it has suffered a “separate and distinct”
injury from the Joint Venture and from PA&K and OBGP, it does not point the Court
to any facts alleged in the Complaint supporting this claim. In fact, it is hard to
imagine how Barry Poole’s alleged conversion of the Joint Venture’s “intellectual
property, marketing strategy and plans, site planning, slope analysis, zoning
approval, and other valuable and material components of a viable venture” would not
equally harm the other partners. To the extent Plaintiff is attempting to argue that
because Packer is a member of the new entity currently developing the property,
(KPP), he personally benefits from the alleged conversion and, therefore, was not
harmed in the same way as Plaintiff, that does not establish that Plaintiff’s injury is
distinct from the injury suffered by PA&K and OBGP.
31. Therefore, to the extent Barry Poole’s Motion seeks dismissal of the
claim for misappropriation/conversion, the motion should be GRANTED.
ii. Tortious Interference with Contract
32. In its claim for tortious interference with contract, Plaintiff again makes
no specific allegations regarding Barry Poole or his conduct but instead pleads that
“[w]ith wrongful intent to induce PA&K and OBGP to breach their joint venture
agreement and partnership with [Plaintiff], the Defendants, and each of them,
interfered in the relationship and induced PA&K and OBGP to breach the Agreement
to the harm of [Plaintiff], and the [Joint Venture].” (ECF No. 4, at ¶ 93.) Plaintiff
further alleges that Defendants' conduct was “willful, malicious and wanton.” (Id. at
¶ 94.) 33. To establish a claim for tortious interference with contract, a plaintiff
must show: “(1) a valid contract between the plaintiff and a third person which confers
upon the plaintiff a contractual right against a third person; (2) the defendant knows
of the contract; (3) the defendant intentionally induces the third person not to perform
the contract; (4) and in doing so acts without justification; (5) resulting in actual
damage to plaintiff.” United Lab., Inc. v. Kuykendall, 322 N.C. 643, 661, 370 S.E.2d
375, 387 (1988) (citing Childress v. Abeles, 240 N.C. 667, 84 S.E.2d 176 (1954)).
34. Barry Poole argues that the claim for tortious interference should be
dismissed for several reasons, including Plaintiff’s failure to allege that Barry Poole
acted without justification in interfering with the Agreement. (ECF No. 20, at pp.
10–11.) The North Carolina Supreme Court has held that if the defendant's
interference is “for a legitimate business purpose, his actions are
privileged. Competition in business constitutes justifiable interference in another's
business relations and is not actionable so long as it is carried on in furtherance of
one's own interests and by means that are lawful.” Peoples Sec. Life Ins. Co. v. Hooks,
322 N.C. 216, 220, 367 S.E.2d 647, 650 (1988). However, the “privilege [to interfere]
is conditional or qualified; that is, it is lost if exercised for a wrong purpose. In
general, a wrong purpose exists where the act is done other than as a reasonable
and bona fide attempt to protect the interest of the defendant which is involved.” Id.
“If the defendant's only motive is a malicious wish to injure the plaintiff, his actions
are not justified.” Id. 35. The malice required to overcome a justification of business competition
is legal malice, and not actual malice. Childress, 240 N.C. at 675, 84 S.E.2d at 182 (“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.”); Murphy v. McIntyre, 69 N.C. App. 323, 328-29, 317 S.E.2d 397, 401
(1984) (noting that legal malice “means intentionally doing a wrongful act or
exceeding one’s legal right or authority in order to prevent the making of a contract
between two parties” and the act “must be taken with the design of injuring one of
the parties to the contract or of gaining some advantage at the expense of a party”).
36. The Court of Appeals has held that in order to survive dismissal, a
complaint alleging tortious interference “must admit of no motive for interference
other than malice.” Pinewood Homes, Inc. v. Harris, 184 N.C. App. 597, 605, 646
S.E.2d 826, 832-33 (2007); Filmar Racing, Inc. v. Stewart, 141 N.C. App. 668, 674,
541 S.E.2d 733, 738 (2001) (“[W]e have held that the complaint must admit of no
motive for interference other than malice”); Sides v. Duke Hospital, 74 N.C. App. 331,
346, 328 S.E.2d 818, 829 (1985) (“[T]he complaint in an action for malicious
interference with contract must clearly allege that the actions of the defendant were
the cause of the plaintiff's damages and that the complaint admits of no other motive
for those actions than malice.”). 37. Barry Poole argues that not only does Plaintiff fail to allege facts
showing that Barry Poole acted without justification, the Amended Complaint
contains allegations establishing that Barry Poole had a legitimate business interest
in participating in the New Venture. (ECF No. 20, at pp. 9–10.) Plaintiff alleges that
Barry Poole was in the business of developing “RV resort properties” and that the
partners had negotiated with him about acting as the construction manager for the
Joint Venture project (but apparently did not reach an agreement for his services).
(Id.) Accordingly, the Amended Complaint alleges that Barry Poole had a legitimate
business interest in the New Venture and a motive other than malice for interfering
with the Agreement. (Id.)
38. In response, Plaintiff contends that it sufficiently pleads lack of
justification by alleging that Barry Poole knew about the Joint Venture and that he
“succeeded to an equity position in the [N]ew [V]enture as a result of the breach of
the . . . Agreement by PA&K and OBGP,” which was “achievable only as a result of
actively urging the violation of [Plaintiff]’s rights.” (ECF No. 37, at p. 19.)
39. The Amended Complaint, however, contains only the conclusory
allegation that the Defendants, including Barry Poole, “induce[d]” PA&K and OBGP
to breach, and “interfered” with, the Agreement. (ECF No. 4, at ¶93.) It does not
allege facts as to the nature of any conduct by Barry Poole that would have induced
PA&K and OBGP, or how Barry Poole interfered with the Agreement. Plaintiff does
not expressly allege that Defendants or Barry Poole lacked a justification for the
interference, but only that such interference was “willful, malicious, and wanton.” (Id. at ¶ 94.) Again, Plaintiff does not allege in what way Defendants’, or Barry
Poole’s, conduct was malicious. In the absence of “specific, supportive, factual
allegations, the [C]ourt need not accept as true general conclusory allegations of the
elements of a cause of action for purposes of a motion to dismiss.” Plasman v. Decca
Furniture (USA), Inc., 2016 NCBC LEXIS 80, *43-44 (N.C. Super. Ct. Oct. 21, 2016)
(quoting Global Promotions Grp., Inc. v. Danas, Inc., 2012 NCBC LEXIS 40, at *12
(N.C. Super. Ct. June 22, 2012); see also Livingston v. Bakewell, No. COA13-748, 232
N.C. App. 337, 757 S.E.2d 525, 2014 N.C. App. LEXIS 141, at *15 (N.C. Ct. App.
2014) (unpublished) (“By not providing some factual foundation for these conclusory
allegations, plaintiff's complaint, on its face, is insufficient to defeat defendants’
motion to dismiss.”).
40. Plaintiff has not alleged any facts explaining what Barry Poole did to
induce PA&K or OBGP to breach the Agreement or facts supporting the assertion
that his conduct was without justification or malicious. Therefore, to the extent Barry
Poole’s Motion seeks dismissal of the claim for tortious interference with the
Agreement, the motion should be GRANTED.
iii. UDTPA
41. Plaintiff alleges that Defendants committed an unfair or deceptive act
by “concealing” the New Venture and “excluding” Plaintiff from participation in the
New Venture. (ECF No. 4, at ¶ 83.) Plaintiff further alleges that “PA&K's and
OBGP's conduct constitutes breach of fiduciary duties and constructive fraud which
supports” the UDTPA claim, but does not allege how Barry Poole engaged in any unfair or deceptive act other than claiming that Defendants knew about Plaintiff’s
previous involvement in the Joint Venture and acted in “their own selfish interests.”
(Id. at ¶¶ 84–87.)
42. The law regarding the elements of a cognizable claim for violation of the
UDTPA is well established. See e.g. Kane v. Moore, 2018 NCBC LEXIS 184, *10-13
(N.C. Super. Ct. Dec. 4, 2018). Whether an act “constitute[s] an unfair or deceptive
trade practice” is a question of law for the court. RD&J Props. v. Lauralea-Dilton
Enters., LLC, 165 N.C. App. 737, 748, 600 S.E.2d 492, 501 (2004).
43. Barry Poole argues that Plaintiff’s failure to allege that Barry Poole had
any duty to disclose the New Venture to Plaintiff causes Plaintiff’s claim of unfair or
deceptive conduct to fail. (ECF No. 20, at pp. 11–12.) Generally, a duty to disclose
arises (a) when the parties have a fiduciary relationship, (b) where a party to an arms-
length transaction “has taken affirmative steps to conceal material facts from the
other,” or (c) where a party knows of a “latent defect in the subject matter of the
negotiations about which the other party is both ignorant and unable to discover
through reasonable diligence.” Harton v. Harton, 81 N.C. App. 295, 297-98, 344
S.E.2d 117 (1986); see also Friedland v. Gales, 131 N.C. App. 802, 807, 509 S.E.2d 793
(1998).
44. Plaintiff does not allege that Barry Poole owed a fiduciary duty or any
other type of legal duty to Plaintiff, nor that Barry Poole engaged with Plaintiff in
any negotiations involving the New Venture that might impose an obligation for him
to disclose facts to Plaintiff. Instead, Plaintiff asserts that it has pleaded a claim for violation of the UDTPA against Barry Poole because Defendants “knew or should
have known that the New Venture was being concealed from [Plaintiff]. Each of the
Defendants nevertheless pursued their [sic] own respective selfish interests in the
new venture to the exclusion of and in violation of [Plaintiff]’s rights.” (ECF No. 37,
at pp. 17–18.)
45. Plaintiff’s argument is frivolous. There are no facts alleged in the
Amended Complaint that would support a claim that Barry Poole had an obligation
to disclose the New Venture to Plaintiff, or that Barry Poole engaged in any conduct
towards Plaintiff that violated the UDPTA. Accordingly, to the extent Barry Poole’s
Motion seeks dismissal of the claim for violation of the UDTPA, the motion should be
GRANTED.
iv. Civil Conspiracy
46. “There is no independent cause of action for civil conspiracy. Only when
there is an underlying claim for unlawful conduct can a plaintiff state a claim for civil
conspiracy by also alleging the agreement of two or more parties to carry out the
conduct and injury resulting from the agreement.” Toomer v. Garrett, 155 N.C. App.
462, 483, 574 S.E.2d 76, 92 (2002). “The charge of conspiracy itself does nothing more
than associate the defendants together and perhaps liberalize the rules of evidence
to the extent that under proper circumstances the acts and conduct of one might be
admissible against all.” Shope v. Boyer, 268 N.C. 401, 405, 150 S.E.2d 771, 774
(1966); see also GoRhinoGo, LLC v. Lewis, 2011 NCBC LEXIS 39, at *20 (N.C. Super.
Ct. Sept. 9, 2011) (“Having joined the conspiracy, [two individual defendants] became exposed to liability with [co-defendant] and any other co-conspirators for damages
caused by any act in furtherance of the common scheme.”).
47. To plead a claim for civil conspiracy, a plaintiff must allege: “(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, 712 S.E.2d 328, 333 (2011).
48. With regard to the claim for civil conspiracy, Plaintiff alleges the
following:
97. The Defendants all entered an agreement to pursue the [New Venture], with knowledge that their actions were unlawful as relating to [Plaintiff] and its interest in the [Joint Venture].
98. Each of the Defendants willfully and wantonly participated in pursuit of the goal of their agreement.
99. Each of the Defendants, acting in concert with the others, caused damage to [Plaintiff].
(ECF No. 4, at ¶¶ 97–99.)
49. Barry Poole argues that “[b]ecause dismissal is proper as to the
Plaintiff’s other claims against Barry Poole, it should also be granted as to the
ancillary claim of civil conspiracy,” citing Piraino Bros., LLC, 211 N.C. App. at 350,
712 S.E.2d at 334 in support. (ECF No. 20, at p. 13.) Barry Poole’s argument is
incorrect. In Piraino Bros., the underlying tort claim had been dismissed by the
Court. Id. at 350, 712 S.E.2d at 333-334. Therefore, there was no underlying claim
of wrongful conduct on which the civil conspiracy claim could be sustained. Id. 50. In this case, while the Court is dismissing the tort claims against Barry
Poole, there remain unresolved claims of tortious conduct against the other
Defendants. In Chisum v. MacDonald, this Court held:
Hardison argues that Plaintiff cannot maintain a claim for civil conspiracy because the other claims against Hardison fail . . . Hardison's . . . argument is incorrect. The dismissal of the claims against Hardison for breach of fiduciary duty and professional negligence does not bar him from liability for damages resulting from the other conspirators’ acts.
2018 NCBC LEXIS 34, *32 (N.C. Super. Ct. April 18, 2018)
51. Nevertheless, as with the other claims Plaintiff has brought against
Barry Poole, the Amended Complaint does not contain any factual allegations
involving him that support the conclusory allegations of civil conspiracy. Even if
Plaintiff has sufficiently alleged tort claims against other Defendants, the allegations
do not suggest how Barry Poole was involved in an agreement to commit any wrongful
conduct. Thus, the Court concludes that the allegations fail to state a cause of action
for civil conspiracy against Barry Poole. See Bottom v. Bailey, 238 N.C. App. 202,
213, 767 S.E.2d 883, 890 (2014) (affirming dismissal of claim for civil conspiracy
holding that while “[t]he claim suggests that defendants . . . conspired, [it] fails to
allege how this conspiracy came to be, or when, or where, or why. The complaint
asserts mere conclusions concerning the elements of civil conspiracy, without offering
a scintilla of factual allegation in support of the claim.”).
52. Therefore, to the extent Barry Poole’s Motion seeks dismissal of the
claim for civil conspiracy, the motion should be GRANTED.
C. Laura Poole’s Motions 53. The only allegations regarding Laura Poole in the Amended Complaint
are that she “is an individual residing in Alleghany County, North Carolina” and “is
a licensed real estate broker involved in marketing and selling RV resort properties,
including the real property involved in this lawsuit.” (ECF No. 4, at ¶ 9.) Although
the Amended Complaint makes certain allegations against unspecified Defendants
and purports to make claims against Laura Poole for conversion, (Id. at ¶¶ 73–79),
unfair and deceptive trade practices, (Id. at ¶¶ 80-90), “tortious interference with a
business contract and relationship” (Id. at ¶¶ 91-95), and civil conspiracy (Id. at ¶¶
96-100), Plaintiff does not allege that Laura Poole engaged in any specific conduct or
took any action. Laura Poole moves for dismissal on the grounds that the Amended
Complaint fails to allege any claims against her. She also contends that she is
entitled to an award of attorney’s fees pursuant to N.C.G.S. §§ 6-21.5 and 75-16.1
and/or for an award of sanctions (including the reasonable expenses incurred by her
because of the filing of this claim) pursuant to Rule 11. (ECF No. 22, at pp. 1–2.)
54. Plaintiff’s only response to Laura Poole’s contentions is its claim that it
possesses facts suggesting that she “participated in meetings with the partners in the
[Joint Venture] where the concepts and ideas for the Luxury RV Resort were
discussed,” and that she is listed on an internet website for the New Venture as the
contact person for interested parties and prospective purchasers. (ECF No. 37, pp.
22–23.) Even if these facts were somehow sufficient to bolster Plaintiff’s allegations
regarding Laura Poole, they are not alleged in the Amended Complaint. Finally,
Plaintiff admits that it named Laura Poole as a Defendant in this lawsuit despite the fact that it “has no further specific information of [Laura] Poole’s actual conduct in
this matter.” (Id. at p. 23.)
i. Motion to Dismiss
55. In the Amended Complaint, Plaintiff names Laura Poole as a Defendant
in this action and makes claims against her for conversion, violation of the North
Carolina Unfair and Deceptive Trade Practices Act (UDTPA), tortious interference
with contract, and civil conspiracy.
56. With regard to the claim for conversion, Plaintiff alleges that the “Joint
Venture” owned “substantial assets” “in the form of intellectual property, marketing
strategy and plans, site planning, slope analysis, zoning approval and other valuable
and material components of a viable venture,” and that “Defendants joined forces to
wrongfully appropriate these assets to their own benefit.” (ECF No. 4, at ¶ 75).
57. North Carolina law on conversion is set out above in the discussion of
Barry Poole’s Motion. Plaintiff does not allege facts suggesting how Laura Poole could
conceivably be liable for conversion. “On a motion to dismiss under Rule 12(b)(6), the
court is not . . . required to accept mere conclusory allegations, unwarranted
deductions of fact, or unreasonable inferences as true.” Estate of Vaughn v. Pike Elec.,
LLC, 230 N.C. App. 485, 493, 751 S.E.2d 227, 233 (2013); see also Global Promotions
Grp., Inc., 2012 NCBC LEXIS 40, at *12 (“Absent specific, supportive, factual
allegations, the court need not accept as true general conclusory allegations of the
elements of a cause of action for purposes of a motion to dismiss”). The claim for
conversion against Laura Poole should be dismissed. 58. Regarding the claim for tortious interference, the Amended Complaint
makes the conclusory allegation that “the Defendants, and each of them, interfered
in the relationship and induced PA&K and OBGP to breach the Agreement to the
harm of MI.” (ECF No. 4, at ¶ 93.) As previously stated, to plead a claim for tortious
interference with contract, a plaintiff must allege that: (1) a valid contract existed
between the plaintiff and a third party that conferred upon plaintiff contractual
rights against the third party; (2) the defendant was aware of the contract; (3) the
defendant intentionally induced the third party not to comply with the contract; (4)
the defendant did so without justification; and (5) actual injury to plaintiff resulted.
United Labs., Inc., 322 N.C. at 661, 370 S.E.2d at 387. This Court has interpreted
“induce” to mean “purposeful conduct,” “active persuasion, request, or petition.” KRG
New Hill Place, LLC v. Springs Inv'rs, LLC, 2015 NCBC LEXIS 20, at *14, 15 (N.C.
Super. Ct. Feb. 27, 2015) (quoting Inland Am. Winston Hotels, Inc. v. Crockett, 212
N.C. App. 349, 354, 712 S.E.2d 366, 369-70 (2011)); Southeast Anesthesiology
Consultants, PLLC v. Rose, 2019 NCBC LEXIS 52, *28-29 (N.C. Super. Ct. Aug. 20,
2019); Charah, LLC v. Sequoia Servs. LLC, 2019 NCBC LEXIS 18, *18 (N.C. Super.
Ct. March 11, 2019).
59. The Amended Complaint does not allege any facts about how Laura
Poole engaged in “purposeful conduct,” or “active persuasion, request, or petition,” or
in any other way induced, or attempted to induce, PA&K and OBGP to breach the
Agreement. The claim against Laura Poole for tortious interference should be
dismissed. 60. The same holds true for the claim for unfair and deceptive trade
practices. Again, Plaintiff alleges that unspecified Defendants were “actually aware
of [Plaintiff]’s interest in the [Joint Venture] and its previous efforts in pursuit of the
RV resort” but “conceal[ed] their actions” in pursuing the project from Plaintiff, and
“readily participated in pursuing the RV resort in violation of [Plaintiff]’s rights and
interests.” (ECF No. 4, at ¶¶ 83–85.) However, Plaintiff does not allege that Laura
Poole owed any duty to Plaintiff to refrain from acting as the real estate broker for
the project, that she had any duty to disclose her involvement to Plaintiff, or how she
“concealed” any information from Plaintiff. There simply is no basis for alleging that
Laura Poole engaged in an unfair trade practice in violation of the UDTPA. Thus,
this claim against Laura Poole also fails.
61. Finally, Plaintiff’s conclusory allegations in support of the claim for civil
conspiracy do not allege any facts that would implicate Laura Poole in any unlawful
misconduct, and the civil conspiracy claim against Laura Poole should be dismissed.
62. Therefore, the Motion to Dismiss should be GRANTED.
ii. Motion for Attorney’s Fees
63. Laura Poole contends that she is entitled to an award of attorney’s fees
pursuant to N.C.G.S. §§ 6-21.5 and 75-16.1 and/or for an award of sanctions
(including the reasonable expenses incurred by her because of the filing of this claim)
pursuant to Rule 11. Since the Court concludes that an award of attorneys’ fees under
N.C.G.S. § 6-21.5 is warranted, it does not consider Laura Poole’s requests under
N.C.G.S. § 77-16.1 or under Rule 11, and those motions are therefore DENIED. 64. N.C. Gen. Stat. § 6-21.5 provides, in relevant part,
In any civil action, . . . , the court, upon motion of the prevailing party, may award a reasonable attorney's fee to the prevailing party if the court finds that there was a complete absence of a justiciable issue of either law or fact raised by the losing party in any pleading.
N.C. Gen. Stat. § 6-21.5.
65. A justiciable issue is one that is “real and present, as opposed to
imagined or fanciful.” Sunamerica Financial Corp. v. Bonham, 328 N.C. 254, 257,
400 S.E.2d 435, 437 (1991) (citations omitted). “In order to find a complete absence
of a justiciable issue it must conclusively appear that such issues are absent even
giving the pleadings the indulgent treatment they receive on motions for summary
judgment or to dismiss.” K & K Development Corp. v. Columbia Banking Fed. Savings
& Loan, 96 N.C. App. 474, 479, 386 S.E.2d 226, 229 (1989) (citations omitted). The
presence or absence of justiciable issues in the pleadings is a question of law. Wayne
St. Mobile Home Park, LLC v. N. Brunswick Sanitary Dist., 213 N.C. App. 554, 561,
713 S.E.2d 748, 753 (2011).
66. The Court has reviewed the Amended Complaint and, based on the
discussion regarding the Motion to Dismiss above, concludes that Plaintiff wholly
fails to state anything resembling a cognizable cause of action against Laura Poole.
Plaintiff has failed to allege any facts regarding Laura Poole’s involvement in the
events underlying this lawsuit which would give rise to a claim against her. In
addition, Plaintiff admits that it lacked specific information about Laura Poole’s
involvement beyond the fact that she participated in unspecified meetings regarding, and served as the broker for, the New Venture but sued her nonetheless. (ECF No.
37, at p. 23.) Therefore, there is a complete absence of a justiciable issue as to Laura
Poole, warranting an award of a reasonable attorney’s fee to her, and to the extent
the Motion for Attorneys’ Fees seeks an award of attorney’s fees and costs against
Plaintiff under N.C.G.S. § 6-21.5, the motion should be GRANTED. The Court will
address the amount of fees and costs by separate order.
THEREFORE, IT IS ORDERED that:
1. Barry Poole’s Motion is GRANTED.
2. Laura Poole’s Motion to Dismiss is GRANTED.
3. Laura Poole’s for Attorneys’ Fees is GRANTED.
SO ORDERED, this the 15th day of October, 2020.
/s/ Gregory P. McGuire Gregory P. McGuire Special Superior Court Judge for Complex Business Cases