THE INTERCOLLEGIATE WOMEN'S LACROSSE COACHES ASSOCIATION v. CORRIGAN SPORTS ENTERPRISES, INC.

IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

THE INTERCOLLEGIATE WOMEN’S )

LACROSSE COACHES ASSOCIATION, )

)

Plaintiff, )

)

v. ) 1:20-cv-00425

)

CORRIGAN SPORTS ENTERPRISES, )

INC. and RICHARD LEE CORRIGAN, )

JR. in his individual and )

corporate capacities, )

)

Defendants. )

MEMORANDUM OPINION AND ORDER

THOMAS D. SCHROEDER, Chief District Judge.

This is a dispute over the unwinding of a relationship between

the parties related to sponsorship of high school lacrosse

tournaments nationwide following the impact of the novel

coronavirus in 2020. Before the court is the motion of Plaintiff

Intercollegiate Women’s Lacrosse Coaches Association (“IWLCA”) to

dismiss all counterclaims against it pursuant to Federal Rule of

Civil Procedure 12(b)(6). (Doc. 68.) Defendants Corrigan Sports

Enterprises, Inc. (“CSE”) and Richard Lee Corrigan, Jr. filed a

response in opposition (Doc. 70), and IWLCA filed a reply (Doc.

71). For the reasons set forth below, the motion will be granted

in part and denied in part.

I. BACKGROUND

A. Factual Background

The facts as outlined in CSE’s counterclaims, which are taken

as true for the purposes of the present motion, show the following:

CSE is an event hosting company that is experienced in

organizing, promoting, and operating sporting events across the

country, including lacrosse tournament events. (Doc. 66

countercls. ¶¶ 18-22.) Corrigan is CSE’s founder and president.

(Id. ¶ 18.) IWLCA is a professional association whose membership

is comprised of college lacrosse coaches within the National

Collegiate Athletic Association (“NCAA”) and the National

Association of Intercollegiate Athletics (“NAIA”). (Id. ¶ 24.)

In or around July 2009, CSE entered into discussions with

Gothard Lane, the then-Executive Director of IWLCA, regarding a

potential partnership to hold high school women’s lacrosse

tournaments.1 (Id. ¶¶ 25-26.) As part of these discussions, CSE

and Lane agreed that IWLCA would sponsor the tournaments while CSE

would organize, promote, plan, and operate them. (Id.)

1 IWLCA’s recitation of the facts does not reflect these initial

discussions. Rather, the amended complaint indicates that IWLCA began

hosting high school women’s lacrosse tournaments in 2006 and initially

worked with a different event management company. (See Doc. 15 ¶¶ 7.a.-

b.) The amended complaint further alleges that IWLCA began working with

CSE in December 2009 after CSE responded to IWLCA’s request for

proposals, without any reference to discussions or negotiations

allegedly conducted in July 2009. (Id. ¶ 7.c.) Regardless, for the

purposes of the present motion, the court accepts the facts as alleged

by Defendants as true unless they are contradicted by documents on which

Defendants rely.

Following these discussions and initial negotiations, CSE

presented IWLCA with a proposal for CSE to organize and host the

Presidents Cup in Naples, Florida in 2010 and 2011 — with an option

for 2012 — and the Capital Cup outside of Washington, D.C. in 2011,

2012, and 2013. (Id. ¶ 28.) In exchange, IWLCA would sponsor and

promote the tournaments to its member coaches. (Id. ¶ 30.) IWLCA

accepted the proposal, and the organizations agreed to split the

net profits of the tournaments 50-50. (Id. ¶¶ 29-30.)

In November 2013, CSE and IWLCA executed a contract (“the

2013 contract”) to formalize the terms for the organization,

promotion, and hosting of several high school women’s lacrosse

tournaments, including the Champions Cup from 2013 to 2015; the

Capital Cup from 2013 to 2016; the Western Cup from 2013 to 2015;

and the Presidents Cup from 2013 to 2015. (Id. ¶ 32.) Per the

contract, CSE’s responsibilities included, among other items,

organizing, processing, and executing the registration of all

teams; advertising and marketing the tournaments using the IWLCA

logo; creating and maintaining a website for the tournaments; and

hosting and administering the tournaments, including securing

event locations and equipment, staffing officials, researching

insurance, facilitating sponsorships and vendors, collecting fees,

paying tournament expenses, and accounting for all revenues and

expenses for each tournament. (Id. ¶ 33.) In exchange, IWLCA

agreed to promote the tournaments to college coaches, to facilitate

the establishment of sponsorships for and vendors at the

tournaments, to timely communicate with CSE, and to grant CSE the

exclusive right to organize and host the tournaments. (Id. ¶ 34.)

The contract further indicated that where circumstances may

require the cancellation of any tournament, “IWLCA and CSE shall

decide together to cancel a Tournament.” (Id. ¶ 35.)

In April 2014, CSE and IWLCA executed an addendum to the 2013

contract (“the 2014 addendum”) that extended the terms of the 2013

contract to the 2016 Champions, Capital, Western, and Presidents

Cups and added the 2014 through 2016 New England Cups to the

agreement. (Id. ¶ 36.) In April 2017, the parties executed a

second addendum (“the 2017 addendum”) that extended the terms of

the 2013 contract to the New England, Champions, Midwest, Capital,

and Presidents Cups for 2017 and 2018. (Id. ¶ 37.)

In 2017, IWLCA issued a Request for Proposals (“RFP”) for the

2018, 2019, and 2020 tournaments, to which CSE responded. (Id.

¶ 41-42.) IWLCA accepted CSE’s proposal, but the parties did not

execute a new contract or addendum for these tournaments. (Id.

¶¶ 42, 53.)

In 2018, Lane stepped down as Executive Director of IWLCA.

(Id. ¶ 44.) That same year, Samantha Ekstrand, IWLCA’s counsel

and leading business executive, informed CSE that IWLCA wanted to

negotiate a new long-term contract and make significant changes.

(Id. ¶¶ 10, 45.) In response, CSE prepared a draft proposal and

sent it to Ekstrand. (Id. ¶ 45.) However, Ekstrand denied the

proposal, allegedly without input or review of the IWLCA Board,

and the parties did not execute a new contractual agreement. (Id.)

In December 2018, IWLCA began to more closely monitor the

expenses associated with the tournaments and hired an outside firm

to inspect CSE’s accounting records. (Id. ¶¶ 46-48.) Although

the outside firm found no irregularities, Ekstrand allegedly

informed the IWLCA Board that CSE was taking advantage of IWLCA

and that certain fees were improper. (Id. ¶¶ 48-52.)

The 2019 tournaments were conducted without a written

agreement between the parties but performed “in accordance with

the terms of the 2013 Contract and subsequent amendments and the

course of performance and terms under which they had operated for

several years.” (See id. ¶ 54.)

Shortly after the 2019 tournaments, in August 2019, CSE opened

registration for the 2020 tournaments.2 (Id. ¶¶ 55-56.) As part

of the registration process, registrants were required to submit

a clearly identified, non-refundable deposit. (Id. ¶ 58.)

On April 18, 2020, IWLCA publicly announced, without any input

from CSE, that it had decided to cancel the 2020 tournaments and

that it had “directed” CSE to issue refunds to all registered

teams. (Id. ¶¶ 60, 62.) By that time, over 1,100 teams had

2 Excepted were the Presidents Cup and the Debut Tournament, for which

registration opened in March 2020. (Id. ¶ 56.)

registered or were waitlisted for the tournaments and CSE had

incurred significant expenses in planning the tournaments. (See

id. ¶¶ 59, 64.)

Rather than cancelling the tournaments, CSE announced that

IWLCA had decided to withdraw its sponsorship and official

involvement in the tournaments, but that CSE would continue to

host the tournaments to the extent possible in light of COVID-19

restrictions. (Id. ¶ 66.) CSE further gave registrants who could

not participate in the tournament for which they had registered

the option of transferring their registration to another 2020

tournament, requesting a deferment of their registration to a 2021

tournament, or requesting a partial refund, less their non-

refundable deposit. (Id. ¶¶ 69-70.)

In the months following the April 2020 announcements, IWLCA

allegedly began to actively lobby its member coaches not to attend

CSE’s tournaments or collaborate with CSE in any way. (Id. ¶¶ 72-

83.) IWLCA also allegedly began interfering with CSE’s relations

with sponsors, local municipalities, and tourism boards. (Id.

¶¶ 84-86, 94.) Finally, IWLCA allegedly contacted players, teams,

and coaches to discourage them from attending CSE tournaments and

made false statements indicating that “CSE runs low quality

tournaments,” “CSE’s president, Lee Corrigan, is dishonest,”

“participants w[ould] not receive the experience at CSE

tournaments” that they were promised, and “there w[ould] not be

many, if any, college coaches/recruiters in attendance.” (Id. ¶¶

87-91.)

Between July and November 2020, CSE hosted five high school

women’s lacrosse tournaments with COVID-19 protocols in place.

(Id. ¶¶ 98–99.) Ultimately, though, the number of teams in

attendance was significantly lower than prior years. (See id.

¶ 98.)

B. Procedural History

On May 6, 2020, IWLCA filed this action in a North Carolina

state court seeking declaratory, monetary, and injunctive relief.

(Doc. 1-1.) Defendants timely removed the lawsuit to this court

(Doc. 1) and moved to dismiss for lack of jurisdiction (Doc. 14).

IWLCA subsequently filed an amended complaint (Doc. 15), and the

motion to dismiss for lack of jurisdiction was denied (Doc. 42).

Defendants also filed a motion to dismiss pursuant to Rule

12(b)(6) (Doc. 23), which this court granted in part and denied in

part on December 4, 2020 (Doc. 63). Defendants then filed their

answer, affirmative defenses, and counterclaims in response to

IWLCA’s amended complaint. (Doc. 66.) Defendants allege five

counterclaims against IWLCA: (1) breach of contract; (2) tortious

interference with contract; (3) tortious interference with

prospective economic advantage; (4) unfair competition; and (5)

violations of the North Carolina Unfair and Deceptive Trade

Practices Act (“UDTPA”), N.C. Gen. Stat. § 75-1.1 et seq. (Id.

countercls. ¶¶ 102-52.) IWLCA now moves to dismiss all

counterclaims pursuant to Federal Rule of Civil Procedure

12(b)(6). (Doc. 68.) Defendants oppose the motion, which is fully

briefed and ready for resolution. (See Docs. 69, 70, 71.)

II. ANALYSIS

A. Standard of Review

Federal Rule of Civil Procedure 8(a)(2) provides that a

pleading must contain “a short and plain statement of the claim

showing that the pleader is entitled to relief.” Fed. R. Civ. P.

(8)(a)(2). Under Federal Rule of Civil Procedure 12(b)(6), a

complaint — or as is the case here, a counterclaim — must contain

“sufficient factual matter . . . to ‘state a claim to relief that

is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678

(2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570

(2007)); see also Hall v. Go To Team, Inc., No. 1:15-CV-295, 2016

WL 9440867, at *1 (M.D.N.C. Mar. 31, 2016). A claim is plausible

“when the plaintiff pleads factual content that allows the court

to draw the reasonable inference that the defendant is liable for

the misconduct alleged.” Iqbal, 556 U.S. at 678. In considering

a Rule 12(b)(6) motion, a court “must accept as true all of the

factual allegations,” Erickson v. Pardus, 551 U.S. 89, 94 (2007)

(per curiam), and all reasonable inferences must be drawn in the

complainant’s favor. Ibarra v. United States, 120 F.3d 472, 474

(4th Cir. 1997); Hall, 2016 WL 9440867, at *1. “Rule 12(b)(6)

protects against meritless litigation by requiring sufficient

factual allegation ‘to raise a right to relief above the

speculative level’ so as to ‘nudge[] the[] claims across the line

from conceivable to plausible.’” Sauers v. Winston-Salem/Forsyth

Cnty. Bd. Of Educ., 179 F. Supp. 3d 544, 550 (M.D.N.C. 2016)

(alteration in original) (quoting Twombly, 550 U.S. at 555). A

counterclaim is judged by the same standard and “must ‘state[] a

plausible claim for relief’ that permit[s] the court to infer more

than the mere possibility of misconduct based upon ‘its judicial

experience and common sense.’” Coleman v. Md. Ct. App., 626 F.3d

187, 190 (4th Cir. 2010) (alterations in original) (quoting Iqbal,

556 U.S. at 679); Hall, 2016 WL 9440867, at *1. Thus, mere legal

conclusions are not accepted as true, and “[t]hreadbare recitals

of the elements of a cause of action, supported by mere conclusory

statements, do not suffice.” Iqbal, 556 U.S. at 678.

In ruling on a motion to dismiss, courts may consider

documents attached to either the counterclaims or the motion to

dismiss without converting the motion into one for summary judgment

so long as the documents are integral to the counterclaims and

authentic. Philips v. Pitt Cnty. Mem. Hosp., 572 F.3d 176, 180

(4th Cir. 2009); Hall, 2016 WL 9440867, at *1.

B. Breach of Contract

Defendants first bring a counterclaim for breach of contract

against IWLCA. (Doc. 66 countercls. ¶¶ 102–17.) Under North

Carolina law, the essential elements for a breach of contract claim

are the existence of a valid contract and a breach of its terms.

Eli Rsch., Inc. v. United Commc'ns Grp., LLC, 312 F. Supp. 2d 748,

755 (M.D.N.C. 2004) (citing Poor v. Hill, 530 S.E.2d 838, 843 (N.C.

Ct. App. 2000)). A valid contract requires an agreement based on

a meeting of the minds and sufficient consideration. See Creech

ex rel. Creech v. Melnik, 556 S.E.2d 587, 591 (N.C. Ct. App. 2001).

As such, in order to state a claim for breach of contract,

Defendants must first show that the parties had an enforceable

agreement.

Defendants argue that the 2013 contract governed the

execution of the 2020 tournaments and that IWLCA breached its

terms. (Doc. 66 countercls. ¶¶ 110-11.) In response, IWLCA argues

that Defendants are estopped by their contrary representations to

this court from asserting that the 2013 contract governed the 2020

tournaments. (Doc. 69 at 6-7.) It further argues that, even if

Defendants are not estopped, the 2013 contract did not govern the

parties’ relationship because it expired prior to the 2020

tournaments and was not otherwise extended to the 2020 tournaments.

(Id.) Defendants respond that their prior representations are not

inconsistent with their current claim and that although the parties

did not extend the 2013 contract to the 2020 tournaments by any

written agreement, the parties established a contract implied in

fact through their continued adherence to the terms of the 2013

contract in relation to the 2020 tournaments. (Doc. 70 at 5-7.)

“[J]udicial estoppel or the doctrine of preclusion against

inconsistent positions” protects the integrity of the courts by

precluding parties from adopting inconsistent positions in the

course of a judicial proceeding. Guinness PLC v. Ward, 955 F.2d

875, 899 (4th Cir. 1992); see also Allen v. Zurich Ins. Co., 667

F.2d 1162, 1166 (4th Cir. 1982) (“In certain circumstances a party

may properly be precluded as a matter of law from adopting a legal

position in conflict with one earlier taken in the same or related

litigation.”); Duplan Corp. v. Deering Milliken, Inc., 397 F. Supp.

1146, 1177 (D.S.C. 1974) (“A party cannot have its cake and eat it

too.”). Although “[c]ourts have had difficulty in formulating a

specific test for determining when judicial estoppel should be

applied,” and though neither party here has brought it to the

court’s attention, the Fourth Circuit has identified three

elements that must be met before application of this doctrine.

See Lowery v. Stovall, 92 F.3d 219, 223-24 (4th Cir. 1996). First,

“the party sought to be estopped must be seeking to adopt a

position that is inconsistent with a stance taken in prior

litigation.” Id. at 224. Second, “the prior inconsistent position

must have been accepted by the court,” and third, “the party sought

to be estopped must have intentionally misled the court to gain

unfair advantage.” Id. (internal quotation marks omitted).

“Because of the harsh results attendant with precluding a party

from asserting a position that would normally be available to the

party, judicial estoppel must be applied with caution.” Id.

Here, Defendants previously sought to distance themselves

from the consent to jurisdiction provision of the 2013 contract by

asserting, in support of their motion to dismiss for lack of

jurisdiction, that the 2013 contract “expired after the conclusion

of the 2018 tournaments” and that “this action does not concern

the 2013 [c]ontract.” (Doc. 14 at 12.) Accordingly, Defendants

argued, the court could not exercise jurisdiction over them based

upon the consent contained in that agreement. (Id.) IWLCA

contends that these statements bar Defendants from now asserting

that the 2013 contract governed the 2020 tournaments.3 (Doc. 69

at 6-8.)

Defendants’ present position certainly conflicts with their

earlier statements regarding the relevance of the 2013 contract.

However, the court never accepted Defendants’ prior position. (See

Doc. 42 (finding the court has jurisdiction over Defendants without

reference to claims regarding the 2013 contract).) Further, IWLCA

has shown no facts that would suggest that Defendants have

3 Although IWLCA suggests that these inconsistent statements were

established by Corrigan’s sworn declaration (see Doc. 69 at 6 (citing

Doc. 14-1 ¶ 13)), his declaration merely recites the parties’ contracting

history (see Doc. 14-1 ¶¶ 13-15). While Defendants’ earlier filings

relied upon his declaration for factual support (see Doc. 14 at 12-13),

the declaration itself never characterizes the 2013 contract as expired

or otherwise inapplicable (see Doc. 14-1).

intentionally misled the court to gain an unfair advantage. So

even though speaking out of both sides of one’s mouth raises

natural credibility problems and may give rise to the use of a

judicial admission for evidentiary purposes, see Fraternal Ord. of

Police Lodge No. 89 v. Prince George's Cnty., MD, 608 F.3d 183,

190 (4th Cir. 2010), it is regrettably not a prohibited practice

for lawyers and is not alone a basis for imposing judicial

estoppel. As such, the application of judicial estoppel is not

appropriate here, and the court must consider whether Defendants

have successfully alleged a contract implied in fact and a breach

of that agreement.

A contract implied in fact “arises where the intention of the

parties is not expressed, but an agreement in fact, creating an

obligation, is implied or presumed from their acts, or, as it has

been otherwise stated, where there are circumstances which,

according to the ordinary course of dealing and the common

understanding of men, show a mutual intent to contract.” Snyder

v. Freeman, 266 S.E.2d 593, 602 (N.C. 1980) (quoting 17 C.J.S.

Contracts § 4b (1963)). Such a contract may be found where “a

contract lapses but the parties continued to act as if they are

performing under a contract,” and neither party “clearly and

manifestly indicates, through words or . . . conduct, that it no

longer wishes to continue to be bound” by the terms of the lapsed

agreement. See Celanese Acetate, LLC v. Lexcor, Ltd., 632 F. Supp.

2d 544, 550 (W.D.N.C. 2009). In evaluating a contract implied in

fact on a 12(b)(6) motion, “[w]hether mutual assent is established

and whether a contract was intended between parties are questions

for the trier of fact.” Synder, 266 S.E.2d at 602.

Here, Defendants argue that the parties’ continued adherence

to the terms of the 2013 contract in planning the 2020 tournaments

sufficiently establishes a contract implied in fact. (Doc. 70 at

6-7.) IWLCA argues in response that its decision not to execute

an addendum that extended the 2013 contract to the 2020 tournaments

establishes its intent not to be bound by the terms of that

contract. (Doc. 71 at 2.)

Reviewing the pleadings in light of the 2013 contract, the

court finds that Defendants have plausibly alleged that the 2020

tournaments were governed by the 2013 contract. It is undisputed

that the parties did not execute a consolidated contractual

agreement for the 2018, 2019, and 2020 tournaments. (See Doc. 15

¶ 11; Doc. 66 countercls. ¶¶ 41-43, 54.) Defendants’ pleadings

allege that both parties adhered to the terms of the 2013 contract

in planning and executing the 2018 and 2019 tournaments. (Doc. 66

countercls. ¶¶ 43, 54.) Further, there is some evidence that the

parties — at least initially — adhered to the terms of the 2013

contract in planning the 2020 tournaments. (See, e.g., id. ¶ 57.)

Although IWLCA contends that the failure to execute an addendum to

the 2013 contract for the 2018-20 tournaments shows an intent not

to be bound, the parties’ continued partnership in planning women’s

high school lacrosse tournaments in line with the terms of that

contract from 2018 to the start of 2020 – as alleged by Defendants

– plausibly alleges a contract implied in fact such that the 2020

tournaments could be governed by the terms of the 2013 contract.

Ultimately, whether the parties intended as much depends on the

development of the record and at this stage raises a question of

fact. See Synder, 266 S.E.2d at 602. At the present stage, the

pleadings are sufficient to allege a contract implied in fact based

on the material terms of the 2013 contract.

Because Defendants have plausibly alleged a contract implied

in fact, it must next be determined whether they have sufficiently

alleged a breach of that agreement. Defendants claim that IWLCA

has breached the agreement by unilaterally announcing the

cancellation of the 2020 tournaments; by actively discouraging

registered teams, players, and coaches from attending the 2020

tournaments; and by failing to promote the 2020 tournaments to its

member coaches. (Doc. 66 countercls. ¶¶ 112-14.) Defendants

support these allegations with specific facts. For example,

Defendants allege that IWLCA unilaterally decided and announced

the cancellation of the 2020 tournaments in April 2020 at the

outset of the coronavirus pandemic. (Id. ¶ 60.) They further

point to specific efforts made by IWLCA to discourage its coaches

from affiliating with CSE (see id. ¶¶ 73-83) and the significant

drop in attendance for the 2020 tournaments compared to years prior

(see id. ¶ 98).4 Meanwhile, the 2013 contract requires that IWLCA

“[p]romote the Tournaments to college coaches with the goal of

increasing attendance and participation,” and specifically states

that should a “condition exist that poses substantial risk to the

safety and well being of Tournament participants and attendees,

the IWLCA and CSE shall decide together to cancel a Tournament.”

(Doc. 66-2 at 4.) The allegations made by Defendants are

sufficient, at the present stage, to plead a plausible breach of

the parties’ agreement. Accordingly, IWLCA’s motion to dismiss

Defendants’ counterclaim for breach of contract will be denied.

C. Tortious Interference with Contract

Defendants next bring a claim of tortious interference with

contract. Defendants contend that IWLCA tortiously interfered

with contracts between Defendants and players, teams, and coaches

registered for the 2020 tournaments.5 (Doc. 66 countercls. ¶¶ 119-

4 To the extent that IWLCA argues that Defendants ignore the “obvious

alternative explanation” for decreased attendance and participation in

the 2020 tournaments – namely, the COVID-19 pandemic – it raises a fact

question that the court is constrained not to consider at the motion to

the dismiss stage. Erickson, 551 U.S. at 94 (2007) (a court “must accept

as true all of the factual allegations” in the counterclaim when

considering a Rule 12(b)(6) motion). For this reason, the court does

not address this argument here.

5 While Defendants argue in their response that this claim extends to

CSE’s contracts with other third parties, including IWLCA member coaches,

sponsors, and local municipalities (see Doc. 70 at 11-12), the

counterclaim as alleged is limited to CSE’s contracts with registered

teams, players, and coaches (see Doc. 66 countercls. ¶¶ 119-28

26.) IWLCA argues that this claim should be dismissed because

Defendants failed to adequately plead the cause of action in

several respects; specifically, that Defendants failed to

adequately allege that IWLCA induced any specific third party to

breach its contract, that any specific third party actually

breached its contract, that Defendants actually maintained

contracts with the third parties, or that any third party would

have performed under its contract but for IWLCA’s conduct. (Doc.

69 at 10.) Defendants respond that IWLCA has mischaracterized

their pleadings. (See Doc. 70 at 10-11.)

To state a claim for tortious interference with contract, a

complainant must show the following: (1) the existence of a valid

contract between the complainant and a third person which confers

upon the complainant a contractual right against a third person;

(2) the opposing party knew of the contract; (3) the opposing party

intentionally induced the third person not to perform the contract;

(4) the opposing party acted without justification in doing so;

(5) and actual damage resulted to the complainant. Beverage Sys.

of the Carolinas, LLC v. Associated Beverage Repair, LLC, 784

S.E.2d 457, 462 (N.C. 2016). A complainant need not allege that

the party’s actions caused an actual breach of the agreement, but

(discussing only registration contracts with 2020 tournament

participants and referring only to statements allegedly made by IWLCA

to “registered teams, players, and coaches”)).

that the party wrongfully interfered with the complainant’s rights

under the contract. See Lexington Homes, Inc. v. W.E. Tyson

Builders, Inc., 331 S.E.2d 318, 322 (N.C. Ct. App. 1985), accord

Eng. Boiler & Tube, Inc. v. W.C. Rouse & Son, Inc., 172 F.3d 862

(4th Cir. 1999).

Here, Defendants allege that IWLCA was aware that CSE entered

into registration contracts with teams, players, and coaches for

the 2020 tournaments (Doc. 66 countercls. ¶¶ 119-21) and that IWLCA

interfered with these contracts by “contact[ing] . . . players,

teams, and coaches and discourag[ing] them from partnering with

CSE and/or attending CSE tournaments” and encouraging registrants

to withdraw from the 2020 tournaments (id. ¶¶ 87, 122). In so

doing, IWLCA allegedly made false and disparaging statements

regarding the quality of CSE’s tournaments and the expected

attendance of college coaches and recruiters at those tournaments.

(Id. ¶¶ 88, 91, 122-24.) As a result of these statements — which

were allegedly made with “no justification” and were attributable

to IWLCA’s “personal animus” against CSE and Corrigan — “certain

of the statement recipients” broke their contracts with CSE by

failing to attend the 2020 tournaments, which ultimately had

historically low participation rates compared to prior years.6

6 As discussed supra, although IWLCA argues that Defendants ignore the

“obvious alternative explanation” for low attendance rates – namely, the

COVID-19 pandemic — the court must accept Defendants’ factual allegations

as true at the present stage.

(See id. ¶¶ 98, 125-27; Doc. 70 at 13.)

Although IWLCA contends that Defendants have failed to allege

sufficient facts to plausibly state this claim, Defendants have in

fact made certain specific factual allegations in support of their

claim. In particular, Defendants have alleged that IWLCA

representatives wrongfully contacted parties registered for the

2020 tournaments and made specific false statements to them in

order to induce them not to attend the 2020 tournaments in

violation of their registration agreements. Defendants further

allege that at least some recipients ultimately did not attend as

a result and that Defendants suffered damages due to the decreased

participation numbers and resulting decreased revenues. While

Defendants do not specifically identify the IWLCA representatives

or registered parties involved, a high level of specificity is not

required to state this claim. See, e.g., Mkt. Am., Inc. v. Rossi,

No. 1:97CV00891, 1999 WL 1939247, at *15 (M.D.N.C. Apr. 15, 1999)

(dismissing claim for tortious interference with contract, but

taking no issue with generalized assertions regarding “numerous”

distributors), modified, 104 F. Supp. 2d 606 (M.D.N.C. 2000),

aff'd, 238 F.3d 413 (4th Cir. 2000). “At this stage of the

proceeding, [a complainant] is not burdened with the task of

proving its claim; [a complainant] need only allege facts which

make its claim plausible.” BioSignia, Inc. v. Life Line Screening

of Am., Ltd., No. 1:12CV1129, 2014 WL 2968139, at *7 (M.D.N.C.

July 1, 2014). While far from robust, Defendants’ allegations are

sufficient to survive dismissal. Defendants’ ultimate task of

providing specific evidence in support of these claims will await

further demonstration.

To the extent IWLCA argues that Defendants’ claim should be

dismissed because Defendants did not allege that any specific

registrant actually breached its agreement, this argument fails.

It is not necessary for a party to plead an actual breach of an

agreement to state a claim for tortious interference with contract;

all that must be pleaded is wrongful interference. Lexington

Homes, 331 S.E.2d at 322. Defendants have sufficiently alleged

such interference here, such that dismissal is inappropriate. For

this same reason, IWLCA’s argument that Defendants have failed to

plead “but for” causation fails. (See Doc. 66 countercls. ¶ 125

(“The false statements made by IWLCA . . . induced certain of the

statement recipients to break their contracts with CSE.”).) In

light of IWLCA’s prior involvement in the tournaments as a sponsor

and its relationship with its member coaches, these allegations

are plausible. Defendants have also adequately alleged damages as

a result of IWLCA’s alleged wrongful interference such that the

claim survives.

Finally, IWLCA’s argument that Defendants did not maintain

the registration contracts, but rather that IWLCA did, fails.

Defendants specifically allege that CSE, not IWLCA, entered into

the contracts with registrants. (Doc. 66 countercls. ¶ 120.)

Although CSE did so in line with its agreement with IWLCA (id.),

this alone does not support IWLCA’s contention that CSE did not

maintain these contracts. As such, IWLCA’s suggestion that its

actions were privileged as it was an insider to the relevant

contracts fails. (See Doc. 69 at 14.) Taken collectively,

Defendants’ allegations are sufficient to state a claim for

tortious interference with contract to survive dismissal. To be

sure, IWLCA sees the legal relationship differently, but

resolution of these competing claims must await the development of

the factual record.

For all these reasons, IWLCA’s motion to dismiss Defendants’

tortious interference of contract claim will be denied.

D. Tortious Interference with Prospective Economic

Advantage

Defendants next bring a claim for tortious interference with

prospective economic advantage. Defendants allege that IWLCA

interfered with CSE’s plans to hold high school women’s lacrosse

tournaments in 2021 by encouraging teams, players, and coaches not

to attend these events and by making false statements regarding

the safety and effectiveness of the tournaments for college

recruitment. (Doc. 66 countercls. ¶¶ 131-35.) IWLCA argues that

this claim must be dismissed because Defendants’ allegations fail

in multiple respects; namely, that Defendants failed (1) to

identify a particular prospective contract with a particular third

party with which IWLCA allegedly interfered, (2) to allege that

IWLCA was aware of any prospective contract, (3) to allege that

any such inference was intentional, and (4) to allege that any

particular contract was not consummated. (Doc. 69 at 15.) IWLCA

further argues that the claim must be dismissed because it is based

only on Defendants’ expectation of continuing business

relationships. (Id. at 16-17.) In response, Defendants contest

IWLCA’s characterization of their pleadings as vague and further

contend that they had more than a mere expectancy of contracting

with teams, players, and coaches for the 2021 tournaments. (See

Doc. 70 at 16-20.)

A claim for tortious interference with prospective economic

advantage arises when a party interferes with a business

relationship “by maliciously inducing a person not to enter into

a contract with a third person, 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.” Spartan Equip. Co. v. Air Placement

Equip. Co., 140 S.E.2d 3, 11 (N.C. 1965) (citations omitted). A

complainant’s “mere expectation of a continuing business

relationship is insufficient to establish such a claim.” Beverage

Sys., 784 S.E.2d at 463. Rather, a complainant must allege that

“a contract would have resulted but for defendant's malicious

intervention.” Id. Conclusory indications that a contract would

have been formed but for a party’s conduct, without more, are not

sufficient to state a claim for relief. See William Ives

Consulting, Inc. v. Guardian It Sys., LLC, No. 3:19-CV-00336-GCM,

2020 WL 6495542, at *4 (W.D.N.C. Nov. 4, 2020).

Courts have acknowledged that North Carolina law “is not

crystal clear” on the level of specificity required to state a

claim for tortious interference with prospective economic

advantage. See The Bldg. Ctr., Inc. v. Carter Lumber, Inc., No.

16 CVS 4186, 2016 WL 6142993, at *7 (N.C. Super. Oct. 21, 2016)

(business court) (comparing Owens v. Pepsi Cola Bottling Co., 412

S.E.2d 636, 644–45 (N.C. 1992) with Dalton v. Camp, 548 S.E.2d

704, 710 (N.C. 2001)). Several courts have concluded that

pleadings which do not identify specific customers or specific

prospective contracts are insufficient to survive dismissal. See

id. at *8; Sec. Camera Warehouse, Inc. v. Bowman, No. 16 CVS 5385,

2017 WL 1718806, at *8 (N.C. Super. May 1, 2017) (business court);

see also DaimlerChrysler Corp. v. Kirkhart, 561 S.E.2d 276, 286

(N.C. Ct. App. 2002); Tucker Auto-Mation of N.C., LLC v. Russell

Rutledge & Rutledge Com., LLC, No. 1:15-CV-893, 2017 WL 2930926,

at *3 (M.D.N.C. July 10, 2017).

Here, the court need not determine whether Defendants have

adequately pleaded sufficient facts for many of the particulars of

this claim, which is at best dubious because Defendants fail to

identify any particular contract or any particular team, player,

or coach that was so dissuaded. The claim fails for another reason

- namely, that it is based on the “mere expectation of a continuing

business relationship.” See Beverage Sys., 784 S.E.2d at 463.

Defendants indicate that “teams, players, and coaches that

historically attend[ed] CSE’s recruiting tournaments” have failed

to register for the 2021 tournaments “as they ha[d] for several

years prior.” (Doc. 66 countercls. ¶¶ 132, 137; see also id. ¶ 90

(“CSE has [] not heard from numerous club teams, coaches, and

players who historically attended CSE tournaments and had positive

relationships with CSE.”).) Beyond the historic attendance of

these unspecified teams, players, and coaches, Defendants provide

no basis for their conclusion that contracts for the 2021

tournaments would have resulted but for IWLCA’s conduct.

Defendants’ expectation of a continuing business relationship with

these third parties alone is not sufficient to state a claim for

tortious interference with prospective economic advantage. As

such, IWLCA’s motion to dismiss this claim will be granted.

E. Violations of the UDTPA and Unfair Competition

Lastly, Defendants bring claims for violations of the UDTPA

and common law unfair competition. Defendants base these causes

of action on their underlying claims for breach of contract and

tortious interference with contract and prospective economic

advantage. (Doc. 66 countercls. ¶¶ 142-43, 149.) In response,

IWLCA argues that a breach of contract alone cannot support either

claim. (Doc. 69 at 19-22.) Further, it argues that Defendants

have failed to make any specific allegations that would support

these claims. (Id. at 22-23.)

The standard for violations of the UDTPA and common law unfair

competition are not “appreciably different.” BellSouth Corp. v.

White Directory Publrs., Inc., 42 F. Supp. 2d 598, 615 (M.D.N.C.

1999) (citing Carolina Aniline & Extract Co., Inc. v. Ray, 20

S.E.2d 59, 61–62 (N.C. 1942)). The tort of common law unfair

competition is recognized in North Carolina “as an offense

committed in the context of competition between business rivals.”

Pan-Am. Prod. & Holdings, LLC v. R.T.G. Furniture Corp., 825 F.

Supp. 2d 664, 697 (M.D.N.C. 2011) (quoting Henderson v. U.S. Fid.

& Guar. Co., 488 S.E.2d 234, 239 (N.C. 1997)). “The gravamen of

unfair competition is the protection of a business from

misappropriation of its commercial advantage earned through

organization, skill, labor, and money.” Henderson, 488 S.E.2d at

240. UDTPA violations require a plaintiff to show that (1) the

defendant committed an unfair or deceptive act or practice (2)

that was in or affecting commerce and (3) proximately caused

injury. Stack v. Abbott Lab’ys, Inc., 979 F. Supp. 2d 658, 666–

67 (M.D.N.C. 2013) (citing Dalton, 548 S.E.2d at 711). “An act or

practice is unfair ‘if it is immoral, unethical, oppressive,

unscrupulous, or substantially injurious to consumers,’ and is

deceptive ‘if it has the capacity or tendency to deceive.’” Id.

(quoting Ace Chem. Corp. v. DSI Transp., Inc., 446 S.E.2d 100, 106

(N.C. Ct. App. 1994)). “The determination of whether an act or

practice is an unfair or deceptive practice that violates [the

UDTPA] is a question of law for the court.” Gray v. N.C. Ins.

Underwriting Ass’n, 529 S.E.2d 676, 681 (N.C. 2000).

Defendants explicitly base these causes of action on their

underlying breach of contract and tortious interference claims.

(Doc. 66 countercls. ¶¶ 142-43, 149.) Although Defendants’

tortious interference with prospective economic advantage claim

has been dismissed, Defendants have sufficiently alleged claims

for breach of contract and tortious interference with contract.

The court must therefore consider the sufficiency of each to

support an unfair competition claim.

Tortious interference with contract claims may support unfair

competition claims. See Roane-Barker v. Se. Hosp. Supply Corp.,

392 S.E.2d 663, 670 (N.C. Ct. App. 1990) (“Because defendant's

acts did amount to tortious interference with contract . . . the

court did not err in finding an unfair or deceptive trade

practice.”); see also McDonald v. Scarboro, 370 S.E.2d 680, 685

(N.C. Ct. App. 1988) (finding tortious interference with contract

can support a breach of the UDTPA); Edmondson v. Am. Motorcycle

Ass'n, Inc., 7 F. App'x 136, 152-53 (4th Cir. 2001) (same);7 Clark

Material Handling Co. v. Toyota Material Handling U.S.A., Inc.,

No. 3:12-CV-00510-MOC, 2015 WL 3514339, at *14 (W.D.N.C. June 4,

2015) (same). Here, Defendants have alleged that IWLCA interfered

with CSE’s contracts with tournament attendees and that in doing

so, IWLCA made false and disparaging statements about the 2020

tournaments. Further, Defendants allege that IWLCA’s actions

caused certain individuals not to attend the tournaments, breaking

their contracts and causing harm to CSE in the form of lost

revenues and decreased tournament participation. At this early

stage, these allegations are sufficient to state a plausible claim

for unfair competition predicated on IWLCA’s tortious interference

with contract.

To the extent Defendants base their unfair competition claims

on IWLCA’s breach of contract, a higher standard must be met as

North Carolina courts “differentiate between contract and

deceptive trade practice claims, and relegate claims regarding the

existence of an agreement, the terms contained in an agreement,

and the interpretation of an agreement to the arena of contract

law.” Hageman v. Twin City Chrysler–Plymouth Inc., 681 F. Supp.

303, 306–07 (M.D.N.C. 1988). A “mere breach of contract, even if

7 Unpublished opinions of the Fourth Circuit are not precedential but

can be cited for their persuasive, but not controlling, authority. See

Collins v. Pond Creek Mining Co., 468 F.3d 213, 219 (4th Cir. 2006).

intentional,” is not sufficient to sustain a claim under the UDTPA.

Broussard v. Meineke Disc. Muffler Shops, Inc., 155 F.3d 331, 347

(4th Cir. 1998). Instead, a showing of “substantial aggravating

circumstances” is required. Id. “The type of conduct that has

been found sufficient to constitute a substantial aggravating

factor has generally involved forged documents, lies, and

fraudulent inducements.” Stack, 979 F. Supp. 2d at 668 (collecting

cases); see also LFM Real Est. Ventures, LLC v. SunTrust Bank, No.

5:11CV135-RLV, 2012 WL 6114242, at *9 (W.D.N.C. Dec. 7, 2012) (“The

courts have found that aggravating factors may include intentional

misrepresentation for the purpose of deceiving or injuring another

or actions that rise to the level of fraud.”). However, statements

that amount to “mere puffing, guesses, or assertions of opinions”

as opposed to “representations of material facts” are not

sufficient. See Watson v. Fleetwood Motor Homes of Ind., Inc.,

No. 1:06CV275, 2007 WL 2156351, at *4 (W.D.N.C. July 24, 2007);

see also Myers & Chapman, Inc. v. Thomas G. Evans, Inc., 374 S.E.2d

385, 389 (N.C. 1988) (“[A] statement of an opinion . . . could not

constitute fraud.”). Further, “[w]here the only acts alleged are

themselves a breach of the contract between the parties, they will

not support a UDTPA claim.” Stack, 979 F. Supp. 2d at 668.

Accordingly, for Defendants’ breach of contract claim to

support these claims, the breach must be accompanied by

“substantial aggravating circumstances.” Defendants contend that

certain of IWLCA’s actions – specifically discouraging teams,

players, and coaches from attending the 2020 tournaments,

disparaging CSE and Corrigan to coaches and attendees, and

spreading misinformation about the tournaments while using the

COVID-19 pandemic as pretext for severing their partnership –

constitute such circumstances. (See Doc. 70 at 21-22.) However,

these activities are themselves alleged to be breaches of the

parties’ contract and therefore cannot support a separate UDTPA

claim. (See Doc. 66 countercls. ¶¶ 113-15 (explaining that IWLCA

breached the parties’ contract by “failing to promote” and

“actively discouraging” teams, players, and coaches from attending

the 2020 tournaments).) Further, at least some of the alleged

behavior, such as IWLCA’s statements regarding the quality of CSE’s

tournaments and the trustworthiness of Corrigan, do not appear to

be misrepresentations of fact but rather statements of opinion

regarding a competing organization. As such, these allegations

are insufficient to show “aggravating circumstances” that elevate

the breach of contract claim to one of unfair competition. Watson,

2007 WL 2156351, at *4; see also Myers & Chapman, 374 S.E.2d at

389. Accordingly, to the extent Defendants base their unfair

competition claims on IWLCA’s breach of contract, IWLCA’s motion

to dismiss those claims will be granted and those claims will be

dismissed.

F. Request to Amend

Defendants argue that to the extent the court finds dismissal

of certain counterclaims appropriate, they should be permitted to

amend their counterclaims. (Doc. 70 at 22.) IWLCA opposes this

request principally because no proposed amended pleading has been

offered. (Doc. 71 at 12.)

Under Federal Rule of Civil Procedure 15(a)(2), once 21 days

elapses from service of a motion to dismiss, a plaintiff may amend

a pleading only with the opposing party’s consent or leave of

court. Leave should be freely given “when justice so requires.”

Fed. R. Civ. P. 15(a)(2). Leave to amend will be denied only if

(1) the amendment would prejudice the opposing party, (2) there is

bad faith on the part of the moving party, or (3) the amendment

would be futile. Laber v. Harvey, 438 F.3d 404, 426 (4th Cir.

2006) (en banc).

While leave may be freely granted, Federal Rule of Civil

Procedure 7(b)(1) requires that a “request for a court order must

be made by a motion” which states the grounds for seeking the order

and the relief sought. Further, this district’s local rules

require that leave to amend be requested in a separate motion and

be accompanied by a proposed amended pleading. See M.D.N.C. L.R.

7.3(a), 15.1. The purpose of these requirements “is to avoid

having cases thrust into limbo on such generalized requests that

may later prove unsupported.” Sullivan v. Lab'y Corp. of Am.

Holdings, No. 1:17CV193, 2018 WL 1586471, at *13 (M.D.N.C. Mar.

28, 2018). Accordingly, a request for leave to amend that is

brought as an alternative to dismissal and requested at the end of

a party’s brief opposing a motion to dismiss is not a proper

motion, does not comply with the local rules, and may be denied on

those grounds alone. Id. (citing Cozzarelli v. Inspire Pharm.

Inc., 549 F.3d 618, 630–31 (4th Cir. 2008) and Intellectual

Ventures I LLC v. Bank of Am., Corp., No. 3:13–CV–358–RJC–DSC,

2014 WL 868713, at *4 (W.D.N.C. Mar. 5, 2014)); U.S. ex rel.

Rostholder v. Omnicare, Inc., 745 F.3d 694, 703 (4th Cir. 2014).

Here, Defendants have not filed a motion to amend, nor have

they attached proposed amended pleadings. Without a proposed

amended pleading, the court cannot consider the effect or efficacy

of any hypothetical amendment to Defendants’ pleading. As such,

Defendants’ alternative request to amend their counterclaims will

be denied without prejudice. To permit otherwise would risk

delaying litigation for potentially speculative reasons.

III. CONCLUSION

For the reasons stated,

IT IS THEREFORE ORDERED that IWLCA’s motion to dismiss (Doc.

68) is GRANTED IN PART and DENIED IN PART as follows:

1. The motion to dismiss Defendants’ counterclaim for

tortious interference with prospective economic advantage is

GRANTED and the claim is DISMISSED;

2. The motion to dismiss Defendants’ counterclaims for

breach of contract and tortious interference with contract is

DENIED; and

3. The motion to dismiss Defendants’ counterclaims for

common law unfair competition and violations of the UDTPA is DENIED

to the extent the claims are based on Defendants’ claim for

tortious interference with contract, but is otherwise GRANTED.

IT IS FURTHER ORDERED that Defendants’ request to amend their

counterclaims (Doc. 70 at 22-23) is DENIED WITHOUT PREJUDICE.

/s/ Thomas D. Schroeder

United States District Judge

July 1, 2021