Superior Performers, Inc. v. Phelps

154 F. Supp. 3d 237, 2016 U.S. Dist. LEXIS 977, 2016 WL 67699
CourtDistrict Court, M.D. North Carolina
DecidedJanuary 5, 2016
Docket1:15CV134
StatusPublished
Cited by5 cases

This text of 154 F. Supp. 3d 237 (Superior Performers, Inc. v. Phelps) is published on Counsel Stack Legal Research, covering District Court, M.D. North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Superior Performers, Inc. v. Phelps, 154 F. Supp. 3d 237, 2016 U.S. Dist. LEXIS 977, 2016 WL 67699 (M.D.N.C. 2016).

Opinion

MEMORANDUM OPINION AND ORDER

N. Carlton Tilley Jr., Senior United States District Judge

This matter is before the Court on a Motion to Dismiss Plaintiffs Amended Complaint (“Motion” or “Motion to Dismiss”) filed by Defendants Ryan J. Phelps (“Mr. Phelps”) and Bridget M. Phelps (“Ms. Phelps”) (collectively referred to as “Defendants”) [Doc. #23]. Specifically, Defendants move to dismiss each claim alleged in the' Amended Complaint [Doc. #21] — the first and second claims for breach of contract, the third claim for tor-tious interference with business relations, and the fourth claim for a violation of North Carolina General Statutes § 75-1.1 et seq.1 The parties have fully briefed the Motion,2 and it is ripe for review. For the reasons that follow, Defendants’ Motion is granted in part and denied in part.

[242]*242I.

Plaintiff Superior Performers, Inc. d/b/a National Agents Alliance (“NAA”) is a Virginia corporation with its principal place of business in Alamance County, North Carolina. (Am. Compl. ¶ 1 [Doc. #21].) It is an Independent Marketing Organization (“IMO”) and Managing General Agent (“MGA”) to various insurance companies (“Carriers”). (Id. ¶ 4.) As such, it recruits, screens, and trains independent contractors to sell insurance for those Carriers. (Id. ¶ 5.)

Defendants, alleged residents of Texas at the time the Amended Complaint was filed, contracted, with NAA and the Carriers to sell life insurance products. (Id. ¶¶ 2, 6.) The Carriers paid Defendants sales commissions, and NAA earned commissions from Defendants’ sales. (Id. ¶ 6.) As part of his work, Mr. Phelps entered into several contracts with NAA, including Agent Agreements on March 4, 2013 and October 31, 2013 (Am. Compl. Exs. A, C). (Am. Compl. ¶ 7.a., 7.c.) Ms. Phelps entered into numerous contracts with NAA, including Agent Agreements _ on. May 31, 2012 and February 21, 2014 (Am. Compl. Exs. H, L) and Management Marketing Agreements on September 25, 2012 and September 25, 2013 (Am, Compl. Exs. J, K). (Am. Compl. ¶ 8.e, S.g-S.i.) Ms. Phelps also signed a Secured Promissory Note on March 28, 2012 (Am. Compl. Ex. G). (Am. Compl. ¶ 8.d.)

In November 2014, NAA terminated its relationship with Defendants. (Id. ¶ 13.) Allegedly, Defendants continued to represent themselves as authorized agents of the Carriers after their positions with the Carriers had terminated. (Id. ¶ 14.) NAA alleges that Defendants violated their contracts with NÁA when they solicited sales to NAA’s customers; used NAA’s confidential information, including NAA’s sales leads, customer identities, and customers’ insurance needs, and proprietary information to offer and sell insurance products; and competed against NAA in the same geographic territory in which Defendants offered insurance products while associat-éd with NAA. (Id. ¶ 15.) Defendants allegedly also contacted then-current NAA customers, thirteen of whom are identified in the Amended Complaint, and made false representations that Defendants were" still the customers’ agents, that Defendants were still .NAA agents, and that if another person called claiming to be an NAA agent, it was a scam. (Id. ¶¶ 16, 17.) NAA alleges that numerous of its customers have terminated their relationships with NAA and its Carriers as a'result of Defendants’ actions. (Id. ¶ 23.) In addition, NAA alleges that Defendants have failed to pay debts they owe to NAA, including Ms. Phelps’ obligations under the terms of her Promissory Note. (Id. ¶¶ 30, 31.)

The instant action followed. NAA has alleged breach of contract against Mr. Phelps (first claim), breach of contract against Ms. Phelps (second claim), tortious interference with business relations against both Defendants (third claim), and a violation of North Carolina General Statutes § 75-1.1 et seq., North Carolinais Unfair and Deceptive Trade Practices Act (“UDTPA”) against both Defendants (fourth claim). Defendants have moved to dismiss each claim pursuant to Rule 12(b)(6) of the .Federal Rules of Civil Procedure.

II.

To survive a Rule 12(b)(6) motion, the complaint “must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 1974, 167 [243]*243L.Ed.2d 929 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference- that the defendant is liable for the misconduct alleged.” Id., 129 S.Ct. at 1949 (citing Twombly, 550 U.S. at 556, 127 S.Ct. at 1965); see also McCleary-Evans v. Md. Dep’t of Transp., State Highway Admin., 780 F.3d 582, 585 (4th Cir.2015) (noting that a complaint must “con-taint ] sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face in the sense that the complaint’s factual allegations must allow-a court to draw the reasonable inference that the defendant is liable for the misconduct alleged”). When evaluating whether the complaint states a claim that is plausible on its face, the facts are construed ,in the light most favorable to the plaintiff and all reasonable inferences are drawn in its favor. U.S. ex rel. Oberg v. Pa. Higher Educ. Assistance Agency, 745 F.3d 131, 136 (4th Cir.2014). Nevertheless, .“labels and conclusions[,]” “a formulaic recitation of the elements of a cause of acti'on[,]” and “naked assertions ... without some further factual enhancement” are insufficient. Twombly, 550 U.S. at 557, 127 S.Ct. at 1966; see also Massey v. Ojaniit, 759 F.3d 343, 353 (4th Cir.2014) (noting that the Court is not obligated to accept allegations that are “ ‘unwarranted inferences, unreasonable conclusions, or arguments’” or “ ‘that contradict matters properly subject to judicial notice or by exhibit’ ”) (quoting Blankenship v. Manchin, 471 F.3d 523, 529 (4th Cir.2006)).

III.

A

Defendants argue that NAA’s allegations that Defendants breached their contracts when they failed to pay NAA debts owed are conclusory and that, even if sufficiently alleged, any debts owed have been discharged in bankruptcy. Discharge of debt in bankruptcy wás among the list of affirmative defenses in Rule '8(c)(1)- of the Federal Rules of Civil Procedure until it was deleted, effective December 1, 2010. Fed. R.' Civ. P. 8(c)(1) advisory committee’s note to 2010 amendment. According to the advisory committee’s note, describing discharge as an affirmative defense was confusing because, under 11 U.S.C. § 524(a), a discharge operates like an injunction against an action to collect a discharged debt.. Id.

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Bluebook (online)
154 F. Supp. 3d 237, 2016 U.S. Dist. LEXIS 977, 2016 WL 67699, Counsel Stack Legal Research, https://law.counselstack.com/opinion/superior-performers-inc-v-phelps-ncmd-2016.