The opinion
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
WESTERN DIVISION
No. 5:23-CV-110-D
CHARLES GRAHAM JOHNSON, )
Plaintiff,
v. ORDER
CRICKET COUNCIL USA, INC., and
MOHAMMED QURESHI, )
Defendants.
On February 7, 2023, Charles Graham Johnson (“Johnson” or “plaintiff”’) filed an action
against Cricket Council USA, Inc. and Mohammed Qureshi (collectively, “defendants”) in
Cumberland County Superior Court [D.E. 3-2]. On March 6, 2023, defendants removed the action
to this court based on diversity jurisdiction [D.E. 3]. On March 13, 2023, defendants moved to
dismiss the complaint for failure to state a claim upon which relief can be granted [D.E. 12]. See
Fed. R. Civ. P. 12(6)(6). On April 3, 2023, Johnson filed an amended complaint [D.E. 14].
On May 12, 2023, defendants moved to dismiss Johnson’ s amended complaint [D.E. 19] and
filed a memorandum in support [D.E. 20]. See Fed. R. Civ. P. 12(b)(6). On June 2, 2023, Johnson
responded in.opposition [D.E. 21]. As explained below, the court grants in part defendants’ motion
to dismiss [D.E. 19] and dismisses Johnson’s request for a declaratory judgment, Unfair and
Deceptive Trade Practices Act (““UDTPA”) claim, and request that the court pierce the corporate veil.
I.
On April 13, 2021, Johnson and Cricket Council USA, Inc. entered into a real property
contract (the Agreement”) for the purchase and sale of 69.94 acres of land in Fayetteville, North
Carolina for $1,259,460.00. See Am. Compl. [D.E. 14-1] 79 4, 11. The Agreement defined the
“Contract Date” as the date when the “Agreement ha[d] been fully executed by both Buyer and
Seller.” Id. at § 14. Thus, the contract date was April 13, 2021. Id. The Agreement defined the
“Examination Period” as “the period beginning on the first day after the Contract Date and extending
through 5:00 pm (based upon time at the locale of the Property) on 90 business days from the
contract date.” Id. at { 13. The Agreement stated that “Buyer may extend [the Examination Period]
up to three 30 day extensions, upon each extension buyer will deposit an additional $2,500 non
refundable.” Id, And the Agreement noted that “TIME IS OF THE ESSENCE AS TO THE
EXAMINATION PERIOD.” Id. The Agreement defined the “Closing Date” as 30 days after the
end of the Examination Period upon approval from the city. See id. at { 12. The Agreement did not
define “approval from the city,” and the Closing Date section did not include a “time is of the
essence” provision. See id.
In October 2021, defendants prepared an Amendment (the “Amendment”) to the Agreement,
and their agents presented the Agreement to Johnson. See id. at ff 17, 19. When Johnson received
the Amendment, he was not represented by an agent or attorney. See id. at § 19. The Amendment
redefined the Closing Date to be “on or before the day which is Thirty (30) days after Buyer obtains
all Governmental and Municipal Permits including but not limited to Master Site Plan and Building
Construction Plans that are required to build Multifamily Units including Commercial Development
and Sports Fields on the Subject Land.” Id. at { 22.
According to J ohnson, on November 15, 2021, he executed the Amendment but the
Amendment was dated October 28, 2021. See id. at ] 17. Johnson alleges that the Amendment is
unenforceable for various reasons, including a lack of consideration, the closing date is so vague and
ambiguous as to render it meaningless, the Agreement is not binding on defendants, and because
defendants failed to properly exercise the three 30-day extensions under the Agreement. See id. at
21-24.
Defendants respond that Cricket Council USA, Inc. extended the examination period three
times before seeking to amend the Agreement. See [D.E. 20] 9. According to defendants, the
extensions continued the examination period until Thursday, November 18, 2021. Moreover, 30
days from the end of that examination period was Saturday, December 18, 2021, which was then
extended until the next business day, Monday, December 20, 2021. See id. at 3. Defendants also
contend that when Cricket Council USA, Inc. signed the Amendment, Cricket Council USA, Inc.
paid $7,500.00 in nonrefundable extension funds in escrow to Johnson. See id. at 4. On January 23,
2023, Johnson notified defendants that he was terminating the Agreement. See Am. Compl. □ 28.
I.
To withstand a Rule 12(b)(6) motion, a pleading “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 (quotation omitted); see Bell Atl. Corp. v. Twombly, 550 U.S. 544, 554-63 (2007);
Coleman v. Md. Ct. of Appeals, 626 F.3d 187, 190 (4th Cir. 2010), aff'd, 566 USS. 30 (2012);
Giarratano v. Johnson, 521 F.3d 298, 302 (4th Cir. 2008). In considering the motion, the court must
construe the facts and reasonable inferences “in the light most favorable to the [nonmoving party].”
Massey v. Ojaniit, 759 F.3d 343, 352 (4th Cir. 2014) (quotation omitted); see Clatterbuck v. City of
Charlottesville, 708 F.3d 549, 557 (4th Cir. 2013), abrogated on other grounds by Reed v. Town of
Gilbert, 576 U.S. 155 (2015). A court need not accept as true a complaint’s legal conclusions,
“unwarranted inferences, unreasonable conclusions, or arguments.” Giarratano, 521 F.3d at 302
(quotation omitted); see Iqbal, 556 U.S. at 678-79. Rather, a plaintiff's factual allegations must
.
“nudge[ ] [his] claims,” Twombly, 550 U.S. at 570, beyond the realm of “mere possibility” into
“plausibility.” Iqbal, 556 U.S. at 678-79.
When evaluating a motion to dismiss, a court considers the pleadings and any materials
“attached or incorporated into the complaint.” E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc.,
637 F.3d 435, 448 (4th Cir. 2011); see Fed. R. Civ. P. 10(c); Goines v. Valley Cmty. Servs. Bd., 822
F.3d 159, 166 (4th Cir. 2016); Thompson v. Greene, 427 F.3d 263, 268 (4th Cir. 2005). A court may
also consider a document submitted by a moving party if it is “integral to the complaint and there
is no dispute about the document’s authenticity.” Goines, 822 F.3d at 166. Additionally, a court
may take judicial notice of public records without converting the motion to dismiss into a motion
for summary judgment. See, e.g., Fed. R. Evid. 201; Tellabs, Inc. v. Makor Issues & Rts., Ltd., 551
US. 308, 322 (2007); Philips v. Pitt Cnty. Mem’] Hosp., 572 F.3d 176, 180 (4th Cir. 2009).
As for Johnson’s request for declaratory judgment against Cricket Council USA, Inc., the
Declaratory Judgment Act permits a court to “declare the rights and other legal relations of any
interested party seeking such declaration” when there is “a case of actual controversy within [the
court’s] jurisdiction.” 28 U.S.C. § 2201. In determining whether an actual controversy exists, the
court focuses on whether the parties have a real controversy with adverse legal interests and whether
the dispute is hypothetical or abstract. See Babbitt v. United Farm Workers Nat’] Union, 442 U.S.
289, 298 (1979). A court has subject-matter jurisdiction over a claim for declaratory relief if “(1)
the complaint alleges an actual controversy between the parties of sufficient immediacy and reality
to warrant issuance of a declaratory judgment; (2) the court possesses an independent basis for
jurisdiction over the parties (e.g., federal question or diversity jurisdiction); and (3) the court does
not abuse its discretion in its exercise of jurisdiction.” Volvo Constr. Equip. N. Am., Inc. v. CLM
Equip. Co., 386 F.3d 581, 592 (4th Cir. 2004) (quotations omitted); see 28 U.S.C. § 2201; Steffel
v. Thompson, 415 U.S. 452, 458 (1974).
Johnson’s request for declaratory relief asks this court to determine whether the Agreement
‘is enforceable and whether Johnson is entitled to damages or other relief under the Agreement.
Johnson contends that Cricket Council USA, Inc. breached the Agreement, Johnson’s termination
was valid, and Johnson is entitled to damages. Defendants respond that Cricket Council USA, Inc.
did not breach the Agreement, Johnson breached the Agreement by terminating it invalidly, and
defendants are entitled to have the court dismiss Johnson’s amended complaint. Here, the parties
have an actual dispute. Nonetheless, declaratory relief is inappropriate because the dispute does not
require the court to clarify the parties’ ongoing relationship. The alleged breach of contract already
occurred, and the dispute concerns the alleged breach and damages. Thus, the court dismisses
Johnson’s request for declaratory relief. See Abbington SPE, LLC v. U.S. Bank, Nat’] Ass’n, 352
F.Supp. 3d 508, 520 (E.D.N.C. 2016); Hanback v. DRHI, Inc., 94 F. Supp. 3d 753, 758-59 (E.D.
Va. 2015); Galvatubing, Inc. v. Commonwealth Aluminum Tube Enters., LLC, No. 1:09CV3, 2009
WL 962254, at *7 (W.D.N.C. Apr. 7, 2009) (unpublished); Hipage Co. v. Access2Go, Inc., 589 F.
Supp. 2d 602, 615 (E.D. Va. 2008).
As for Johnson’s breach of contract claim against Cricket Council USA, Inc., Johnson must
plausibly allege “the existence of a contract between plaintiff and defendant, the specific provisions
breached, the facts constituting the breach, and the amount of damages resulting to plaintiff from
such breach.” RGK, Inc. v. U.S. Fid. & Guar, Co., 292 N.C. 668, 675, 235 S.E.2d 234, 238 (1977);
Cantrell v. Woodhill Enters., Inc., 273 N.C. 490, 497, 160 S.E.2d 476, 481 (1968). Johnson alleges
that Cricket Council USA, Inc. breached the Agreement by “(1) failing to pay the additional earnest
money deposits required to extend the original Examination Period; (2) failing to close within the
time allowed thereby, or within a commercially reasonable time under the circumstances; and (3)
such other acts and omissions as may be shown at trial.” Am. Compl. ] 34.
As for Johnson’s allegations about earnest money deposits, Johnson plausibly alleges that
Cricket Council USA, Inc. did not properly pay to extend the examination period of the Agreement.
See id. at ] 16. Specifically, Johnson alleges that the Agreement required Cricket Council USA, Inc.
to pay Johnson $2,500 before each 30-day extension of the examination period. See id. Johnson
also alleges that the Agreement required a $2,500 payment as consideration for the extension and
that Cricket Council USA, Inc. did not make the necessary $2,500 payment for any extension of the
examination period. See id. at Jf 16,21, 24. Johnson has plausibly alleged a breach of contract
claim against Cricket Council USA, Inc. See, e.g., Reynolds-Douglass v. Terhark, 381 N.C. 477,
481, 873 S.E.2d 552, 556 (2022),
As for Johnson’s allegations that Cricket Council USA, Inc. failed to close in a reasonable
time, absent a “time is of the essence” clause, the parties to a real property purchase agreement are
allowed a “reasonable time after the date set for closing to complete performance.” Ball v. Maynard,
184.N.C. App. 99, 102, 645 S.E.2d 890, 893 (2007); see Dishner Devs., Inc. v. Brown, 145 N.C.
App. 375, 378, 549 S.E.2d 904, 906, aff'd, 354 N.C. 569, 557 S.E.2d 528 (2001) (per curiam). The
Amendment states that Cricket Council USA, Inc. had 30 days to close after obtaining the necessary
permits and approvals. See Am. Compl. 7 22. On January 23, 2023, when Johnson purported to
terminate the Agreement, defendants argue that Cricket Council USA, Inc. had not obtained the
necessary permits. See [D.E. 20] 13-14. Johnson, however, alleges that he had heard nothing from □
defendants about their efforts toward closing, did not know if Cricket Council USA, Inc. obtained
any permits, and more than a year had passed between signing the Amendment and terminating the
Agreement. See Am. Compl. ff] 25-29. The parties dispute whether defendants told Johnson that
Cricket Council USA, Inc. would continue to honor the Agreement and whether defendants would
soon close. Compare [D.E. 20] 13-14 with [D.E. 21] 11-12 and Am. Compl. 25-29. Johnson
has plausibly alleged that Cricket Council USA, Inc. failed to close in a reasonable time. See, e.g.,
Red Apple Dev., LLC v. Rufus Rd. Partners, LLC, No. 3:19-cv-00157, 2022 WL 567844, at *6
(W.D.N.C. Feb. 24, 2022) (unpublished); Fletcher v. Jones, 314 N.C. 389, 390-91, 333 S.E.2d 731,
733-34 (1985).
As for Johnson’s UDTPA claim Boainet the defendants, a plaintiff must plausibly allege: (1)
an unfair or deceptive act or practice, (2) in or affecting commerce, and (3) which proximately
caused injury to the plaintiff. See Barbour v. Fid. Life Ass’n, 361 F. Supp. 3d 565, 573 (E.D.N.C.
2019); Kelly v. Ga.-Pac., LLC, 671 F. Supp. 2d 785, 798 (E.D.N.C. 2009); SciGrip, Inc. v. Osae, 373
N.C. 409, 426, 838 S.E.2d 334, 347 (2020); Walker v. Fleetwood Homes of N.C., Inc., 362 N.C. 63,
71-72, 653 S.E.2d 393, 399 (2007). “[W]hether an act or practice is an unfair or deceptive
practice ... is a question of law for the court.” Gray v. N.C. Ins. Underwriting Ass’n, 352 N.C. 61,
68, 529 S.E.2d 676, 681 (2000); see ABT Bldg. Prods. Corp. v. Nat’] Union Fire Ins. Co. of
Pittsburgh, 472 F.3d 99, 123 (4th Cir. 2006).
A “mere breach of contract, even if intentional, is not an unfair or deceptive act under [the
UDTPAJ.” Bob Timberlake Collection, Inc. v. Edwards, 176N.C. App. 33, 42, 626 S.E.2d 315, 323
(2006); see PCS Phosphate Co. v. Norfolk S. Co., 559 F.3d 212, 224 (4th Cir. 2009); Walker, 362 □
N.C. at 72, 653 S.E.2d at 399; Waddell v. U.S. Bank Nat’] Ass’n, 395 F. Supp. 3d 676, 684
(E.D.N.C. 2019); Gray, 352 N.C. at 75, 529 S.E.2d at 685; Branch Banking & Tr. Co. v. Thompson,
107N.C. App. 53, 61-62, 418 S.E.2d 694, 700 (1992). North Carolina law “does not permit a party
to transmute a breach of contract claim into a... UDTPA claim . . . because awarding punitive or
treble damages would destroy the parties’ bargain.” PCS Phosphate, 559 F.3d at 224; see Broussard
v. Meineke Disc. Muffler Shops, Inc., 155 F.3d 331, 347 (4th Cir. 1998). If substantial aggravating
circumstances accompany a breach of contract, then those circumstances can create an UDTPA
claim. Burrell v. Sparkkles Reconstruction Co., 189 N.C. App. 104, 111, 657 S.E.2d 712, 717
(2008); Branch Banking & Tr. Co., N.C. App. at 62, 418 S.E.2d at 700; see Bartolomeo v. S.B.
Thomas, Inc., 889 F.2d 530, 535 (4th Cir. 1989); United Roasters, Inc. v. Colgate-Palmolive Co.,
649 F.2d 985, 992 (4th Cir. 1981). Generally, such aggravating circumstances include some element
of deception, such as forged documents, lies, or fraudulent inducements. See Kerry Bodenhamer
Farms, LLC v. Nature’s Pearl Corp., No. 16 CVS 217, 2017 WL 1148793, at *7 (N.C. Super. Ct.
Mar, 27, 2017) (unpublished) (collecting cases).
Johnson alleges that defendants had superior bargaining power, that Johnson had no
experience with real estate, that defendants caused Johnson to “enter into the Amendment in an
unfair and deceptive □□□ and that defendants disguised their intentions during contract
negotiations. See Am. Compl. {J 19-21. Johnson also alleges upon information and belief that
defendants
made false representations to Plaintiff or concealed material facts from Plaintiff
concerning: ( 1) their true intentions with regard to Plaintiff's property; (2) their true
intentions with regard to whether they would actually close on the purchase of
Plaintiff's property; (3) their acts and omissions concerning moving forward with
obtaining Government and Municipal Permits and Construction Plans concerning the
Subject Property; (4) their ability to close on the Subject Property; and, (5) such other
acts and omissions as may be shown at trial.
Id, at]39.
Johnson’s allegations are conclusory and do not plausibly allege a UDTPA claim. See Iqbal,
556 U.S. at 678; Twombly, 550 U.S. at 554-63; Waddell, 395 F. Supp. 3d at 684-85; Rahamankhan
Tobacco Enters. Pvt, Ltd. v. Evans MacTavish Agricraft, Inc., 989 F. Supp. 2d 471, 477-78
(E.D.N.C. 2013); Kelly, 671 F. Supp. 2d at 798-99; Bob Timberlake Collection, Inc., 176N.C. App.
at 41-42, 626 S.E.2d at 323. Thus, the court dismisses Johnson’s UDTPA claim.
As for Johnson’s request to pierce the corporate veil, the court must assess whether Johnson
plausibly alleges sufficient facts that would, if believed, tend to establish the required elements to
pierce the corporate veil under North Carolina’s “instrumentality rule.” State ex rel. Cooper v.
Ridgeway Brands Mfg., LLC, 362 N.C. 431, 440, 666 S.E.2d 107, 113 (2008); Fischer Inv. Cap.,
Inc. v. Catawba Dev. Corp., 200 N.C. App. 644, 650-51, 689 S.E.2d 143, 147-48 (2009); see Green
v. Freeman, 367 N.C. 136, 146, 749 S.E.2d 262, 271 (2013). In order to prevail under the
instrumentality rule, the aggrieved party must establish three elements: “(1) stockholders’ control
of the corporation amount[s] to “complete domination” with respect to the transaction at issue; (2)
stockholders’ use of this control to commit a wrong .. . ; and (3) this wrong or breach of duty must
be the proximate cause of the injury.” State ex rel. Cooper, 362 N.C. at 441, 666S.E.2dat114.
Defendants contend that Johnson fails to plausibly allege these required elements. See [D.E.
20] 17. Johnson responds that he has sufficiently pled facts for the court to pierce Cricket Council
USA, Inc.’s corporate veil. See [D.E. 21] 14.
In Fischer, the North Carolina Court of Appeals cited numerous factual allegations in the
plaintiff's complaint that sufficiently pled a claim to pierce the corporate veil under the
instrumentality rule’s “control” element. See Fischer, 200 N.C. App. at 650-53, 689 S.E.2d at □
147-49. Tonamea few, the plaintiff cited specific asset transfers used to subvert the corporate form,
noted that the owner failed to file annual reports with the Secretary of State and otherwise comply
with corporate formalities, and alleged that the actions of the owner left the corporation in question
insolvent. Id., 689 S.E.2d at 147-49. The North Carolina Court of Appeals noted that these
allegations addressed three of the four elements of control: “inadequate capitalization,”
“noncompliance with corporate formalities,” and “complete domination and control of the
corporation so that it has no independent identity.” Id. at 653, 689 S.E.2d at 149.
Although the analysis of the control element does not depend on the presence or absence of
any particular factor, Johnson’s sole reliance on the factual allegations that Qureshi is the “sole or
dominant owner of Cricket Council,” “is the President of Cricket Council,” and “exercises complete
dominion and control over Cricket Council” does not suffice. See id. at 650-53, 689 S.E.2d at
147-49; cf. Am. Compl. J 43. Without more facts indicating “complete domination, not only of
finances, but of policy and business practice[s] . . . so that the corporate entity... had... no separate
mind, will or existence of its own,” Johnson’s allegations are conclusory and do not plausibly
support piercing the corporate veil. Fischer, 200 N.C. App. at 653, 689 S.E.2d at 149 (quotations
omitted); see Iqbal, 556 U.S. at 678; Twombly, 550 US. at 554-63. Because Johnson’s allegations
fail under the first “control” element of the instrumentality rule, the court need not address if the
breach of contract claim is within the “wrong[s]” contemplated by the second element or address
proximate cause. Thus, the court dismisses Johnson’s request to pierce the corporate veil.
I.
In sum, the court GRANTS IN PART defendants’ motions to dismiss [D.E. 19], and
DISMISSES WITHOUT PREJUDICE plaintiff's declaratory judgment, UDTPA, and piercing the
corporate veil claims. The sole remaining claim is plaintiff's breach of contract claim against
defendant Cricket Council USA, Inc. Mohammed Qureshi is DISMISSED WITHOUT PREJUDICE
as a defendant. The parties SHALL engage in a court-hosted settlement conference with United
States Magistrate Judge Robert B. Jones, Jr.
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SO ORDERED. This 24 day of August, 2023.
BWA
rates C. DEVER III
United States District Judge
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