# MYSTIC RETREAT MED SPA & WEIGHT LOSS CENTER v. ZELTIQ AESTHETICS LLC

> District Court, M.D. North Carolina · August 17, 2022

URL: https://www.frixlaw.com/law-library/cases/10254072

## Case

- **Court:** District Court, M.D. North Carolina
- **Decided:** August 17, 2022
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10254072

## How later opinions describe it (automated extraction)

- noting that “the grant or denial of an opportunity to amend is within the discretion of the District Court”

## Opinion text

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

MYSTIC RETREAT MED SPA & )
WEIGHT LOSS CENTER, and MISTY )
SINCLAIR, M.D., )
)
Plaintiffs, )
)
v. ) 1:21-cv-00515
)
ASCENTIUM CAPITAL LLC, ZELTIQ )
AESTHETICS LLC, and ALLERGAN )
USA, INC., )
)
Defendants. )

MEMORANDUM OPINION AND ORDER

THOMAS D. SCHROEDER, Chief District Judge.
This is an action involving a contract for “CoolSculpting”
weight loss equipment that uses cold temperatures to kill fat cells
in an effort to improve one’s appearance. Plaintiffs Mystic
Retreat Med Spa & Weight Loss Center, PLLC, (“Mystic”) and Misty
Sinclair, M.D., move for leave to file an amended complaint. (Doc.
46.) Defendants Zeltiq Aesthetics, Inc. (“Zeltiq”) and Allergan
USA, Inc. (“Allergan”) (collectively, the “Allergan Defendants”)
filed a response. (Doc. 47.) Defendant Ascentium Capital, LLC
(“Ascentium”) did not file a response. Plaintiffs filed a reply
(Doc. 48), attaching a “Revised Proposed Amended Complaint” (Doc.
48-1). In response, the Allergan Defendants moved for leave to
file a surreply. (Docs. 49, 49-1.) Plaintiffs have responded in
opposition. (Doc. 50.)
For the reasons set forth below, Plaintiffs’ motion to amend
(Doc. 46) will be denied and the Allergan Defendants’ motion for
leave to file a surreply (Doc. 49) will be denied as moot.
I. BACKGROUND

The basic facts, as relevant to the motions before the court,
are as follows:
Zeltiq sold, and Ascentium financed, the purchase of medical
devices designed to assist with weight loss. (Doc. 7 ¶ 8.) On
June 22, 2016, Sinclair and her business partner, Marcia Ballard,
met with Wes Lev, Zeltiq’s sales manager, to execute a Master Sales
Agreement (“MSA”) with Zeltiq1 for Mystic’s purchase of
CoolSculpting System equipment and services. (Doc. 29-3.) Lev
presented, and Sinclair and Ballard signed, a single-page MSA Sales
Order.2 (Doc. 29-3, Doc. 34-1 ¶ 13, Doc. 34-2 ¶ 12.)
As demand for the CoolSculpting System declined, Plaintiffs

refused to make additional payments to Defendants and sought to
return the device and terminate the business relationship.
(Doc. 7 ¶¶ 25-26.) Plaintiffs allege Ascentium took possession of
the device but wrongfully demanded the balance due under the

1 Allergan USA, Inc. acquired Zeltiq in 2017. (Doc. 16 ¶ 5.)

2 The parties dispute whether additional terms to the MSA (including a
provision mandating arbitration of disputes) were incorporated by
reference based on attachments that the Allergan Defendants maintain
were emailed to Plaintiffs before the execution of the MSA. (See Doc.
73 (memorandum opinion and order denying motion to compel arbitration
without prejudice).)
equipment financing agreements. (Id. ¶¶ 27, 31.)
On May 10, 2021, Plaintiffs filed their complaint against
Defendants in The General Court of Justice, Superior Court

Division, in Moore County, North Carolina. (Doc. 7.) Ascentium’s
counsel accepted service of the complaint on June 7, 2021 (Doc. 1-
1 at 15), and on June 23 the Allergan Defendants, with Ascentium’s
consent, timely filed a notice of removal in this court. (Doc. 1
¶ 8.) On March 15, 2022, the final day the court’s scheduling
order permitted motions to amend pleadings (Doc. 31), Plaintiffs
moved for leave to file an amended complaint (Doc. 46) to add
factual allegations and a claim for breach of fiduciary duty
against the Allergan Defendants (Doc. 46-1). After the Allergan
Defendants responded and challenged the adequacy of the proposed
amended complaint, Plaintiffs attached a “Revised Proposed Amended
Complaint” to their reply brief. (Doc. 48-1.) This prompted the

Allergan Defendants to seek leave to file a surreply in response.
(Doc. 49.)3
II. ANALYSIS
A. Legal Standard
Federal Rule of Civil Procedure 15 provides that a plaintiff
may amend a complaint once as a matter of course within 21 days

3 Because Ascentium did not oppose Plaintiffs’ motion to amend,
Plaintiffs requested that the court “deem Ascentium’s right to contest
Plaintiffs’ Motion to be waived.” (Doc. 48 at 2 n.1.) However, on
August 5, 2022, Plaintiffs notified the court that they settled their
claims against Ascentium. (Doc. 74; Doc. 80.)
after the earlier of (1) service of a responsive pleading or (2)
service of a motion under Federal Rule of Civil Procedure 12(b),
(e), or (f). After that period, a party may amend only with either

the opposing party’s written consent or leave of court. Fed. R.
Civ. P. 15(a)(1)(2); Foman v. Davis, 371 U.S. 178, 182 (1962)
(noting that “the grant or denial of an opportunity to amend is
within the discretion of the District Court”). While district
courts have discretion to grant or deny a motion to amend, the
Fourth Circuit has interpreted Rule 15(a) to provide that “leave
to amend a pleading should be denied only when the amendment would
be prejudicial to the opposing party, there has been bad faith on
the part of the moving party, or the amendment would have been
futile.” Laber v. Harvey, 438 F.3d 404, 426 (4th Cir. 2006)
(citation omitted); Foman, 371 U.S. at 182 (same).
“[I]f the proposed change advances a claim or defense that is

legally insufficient on its face, the court may deny leave to
amend.” Williams v. Little Rock Municipal Water Works,
21 F.3d 218, 225 (8th Cir. 1994) (citing Charles A. Wright & Arthur
Miller, Fed. Prac. & Proc.: Civil, § 1487, at 637 (1991))
(alterations adopted); see Joyner v. Abbott Labs, 674 F. Supp.
185, 190 (E.D.N.C. 1987) (same). “To determine whether a proposed
amended complaint would be futile, the Court reviews the revised
complaint under the standard used to evaluate a motion to dismiss
for failure to state a claim.” Amaya v. DGS Construction, LLC,
326 F.R.D. 439, 451 (D. Md. 2018) (citing Katyle v. Penn National
Gaming, Inc., 637 F.3d 462, 471 (4th Cir. 2011)). Thus, “[a]
motion to amend a complaint is futile ‘if the proposed claim would

not survive a motion to dismiss.’” Pugh v. McDonald, 266 F. Supp.
3d 864, 866 (M.D.N.C. 2017) (quoting James Madison Ltd. v. Ludwig,
82 F.3d 1085, 1099 (D.C. Cir. 1996)).
A Rule 12(b)(6) motion to dismiss is meant to “test[] the
sufficiency of a complaint” and not to “resolve contests
surrounding the facts, the merits of a claim, or the applicability
of defenses.” Republican Party of North Carolina v. Martin, 980
F.2d 943, 952 (4th Cir. 1992). To survive such a motion, “a
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 (2009) (quoting Bell Atlantic
Corp. v. Twombly, 550 U.S. 544, 570 (2007)). In considering a

Rule 12(b)(6) motion, a court “must accept as true all of the
factual allegations contained in the complaint,” Erickson v.
Pardus, 551 U.S. 89, 94 (2007) (per curiam), and all reasonable
inferences must be drawn in the non-moving party’s favor, Ibarra
v. United States, 120 F.3d 472, 474 (4th Cir. 1997).
Rule 12(b)(6) and Rule 15 should be balanced against Federal
Rule of Civil Procedure 8(a)(2), which provides that a complaint
need only contain a “short and plain statement of the claim showing
that the pleader is entitled to relief.” Rule 12(b)(6), and thus
Rule 15, protect against meritless litigation by requiring
sufficient factual allegations “to raise a right to relief above
the speculative level” so as to “nudge[] the[] claims across the

line from conceivable to plausible.” Twombly, 550 U.S. at 545,
570 (2007); see Iqbal, 556 U.S. at 678 (2009). When considering
whether a Rule 15 motion to amend is futile, the court “need not
accept as true unwarranted inferences, unreasonable conclusions,
or arguments.” Giarratano v. Johnson, 521 F.3d 298, 302 (4th Cir.
2008).
B. Motion to Amend
1. Proposed amended complaint
Plaintiffs move to amend their complaint to add a claim for
breach of fiduciary duty arising from an alleged partnership
agreement. (Doc. 46; Doc. 46-1 ¶¶ 68-73.) The Allergan Defendants
argue that Plaintiffs’ new claim is futile because the amended

complaint does not sufficiently plead the existence of a
partnership. (Doc. 47 at 5-9.) The Allergan Defendants also
contend that Plaintiffs’ request to file an amended complaint, 309
days after their original complaint, is “unduly delayed.”4 (Id.
at 9-10.) In reply, Plaintiffs argue that their partnership
allegation satisfies the requirements of notice pleading. (Doc.

4 The Allergan Defendants further maintain that amendment is precluded
by their motion to compel arbitration pursuant to an arbitration clause
in the MSA. (Doc. 47 at 4-5.) However, the court has denied without
prejudice the Allergan Defendants’ motion to compel arbitration. (Doc.
73.)
48 at 8-11.) Additionally, Plaintiffs argue that their motion for
leave to amend is not untimely because it was filed on the last
day the court’s scheduling order expressly permits amended

pleadings. (Id. at 11-12; see Doc. 31.)
The North Carolina Uniform Partnership Act defines a
partnership as “an association of two or more persons to carry on
as co-owners a business for profit.” N.C. Gen. Stat. § 59–36. A
partnership is also described as
a combination of two or more persons of their property,
effects, labor, or skill in a common business or venture,
under an agreement to share the profits or losses in
equal or specified proportions, and constituting each
member as an agent of the others in matters appertaining
to the partnership and within the scope of its business.

Zickgraf Hardwood Co. v. Seay, 298 S.E.2d 208, 211 (N.C. Ct. App.
1982). A partnership does not require an express agreement; a de
facto partnership may be inferred by the parties’ conduct and an
examination of all the facts and circumstances. Best Cartage,
Inc. v. Stonewall Packaging, LLC, 727 S.E.2d 291, 299 (N.C. Ct.
App. 2012) (citing Potter v. Homestead Preservation Assn., 412
S.E.2d 1, 5 (N.C. 1992)). The parties are not required to know
that their actions will have the effect of creating a partnership,
that a partnership has been created, or that they have become
partners. Dealers Supply Co. v. Cheil Industries, Inc., 348 F.
Supp. 2d 579, 588 (M.D.N.C. 2004).
There are “two indispensable elements for a partnership:
sharing of any actual profits and co-ownership of the business,”
and the “[f]ailure to plead these elements (through these factors)
is fatal to any claim based on the existence of a partnership.”

VRX USA, LLC v. VRX Ventures, Ltd., No. 3:20CV409-GCM, 2020 WL
7229672, at *5 (W.D.N.C. Dec. 8, 2020); see Best Cartage, 727
S.E.2d at 299. Factors such as holding an association out to the
public as a partnership, the contribution of capital, and state
licensing may demonstrate that a partnership exists. See In re
Brokers, Inc., 363 B.R. 458, 469 (Bankr. M.D.N.C. 2007) (collecting
cases); Compton v. Kirby, 577 S.E.2d 905, 912–14 (N.C. Ct. App.
2003). So may the filing of partnership tax returns and the
establishment of partnership bank accounts. Dealers Supply, 348
F. Supp. 2d at 588; In re Brokers, 363 B.R. at 469.
Here, Plaintiffs’ proposed amended complaint does not allege
any facts which demonstrate the existence of a partnership.

Plaintiffs do not allege that the parties entered into an express
partnership agreement, nor do they allege the “indispensable
requisites for a [de facto] partnership” of co-ownership and
sharing of profits. Best Cartage, 727 S.E.2d at 299 (citation
omitted). Rather, Plaintiffs’ proposed amended complaint merely
alleges that “Zeltiq formed a partnership with Mystic to provide
Coolsculpting services to members of the public.” (Doc. 46-1 ¶ 18;
see id. ¶ 69 (“After entering into partnership with Mystic for the
sale of Coolsculpting services to the public, Defendants Zeltiq
and Allergan owed fiduciary duties to Mystic.”).) This conclusory
allegation is insufficient to plausibly establish the existence of
a partnership. VRX USA, 2020 WL 7229672, at *5 (“Failure to plead

[the two indispensable] elements . . . is fatal to any claim based
on the existence of a partnership.”); cf. Twombly, 550 U.S. at
555, 557 (“[C]ourts are not bound to accept as true a legal
conclusion couched as a factual allegation[.] . . . [A] naked
assertion of conspiracy . . . gets the complaint close to stating
a claim, but without some further factual enhancement it stops
short of the line between possibility and plausibility.” (citation
omitted)). Thus, Plaintiffs’ motion to amend to add a claim for
breach of fiduciary duty against the Allergan Defendants based on
the existence a partnership is futile.
2. Revised Proposed Amended Complaint
In their reply brief, ostensibly in response to the Allergan

Defendants’ arguments, Plaintiffs attached a “Revised Proposed
Amended Complaint” (Doc. 48-1), which includes “additional
allegations detailing the formation and contours of the Zeltiq-
Mystic partnership.” (Doc. 48 at 8-9.) This prompted the Allergan
Defendants to move for leave to file a surreply “to address the
procedural impropriety of the revised amended complaint and
futility of such an amendment.” (Doc. 49 ¶ 9.) Plaintiffs oppose
the Allergan Defendants’ motion. (Doc. 50.)
Local Rule 7.3(h) provides that “[a] reply brief is limited
to discussion of matters newly raised in the response.”
L.R. 7.3(h); see Henry v. N.C. Acupuncture Licensing Board, No.
1:15CV831, 2017 WL 401234, at *4 (M.D.N.C. Jan. 30, 2017). Courts

in this district “have consistently held that ‘[r]eply
briefs . . . may not inject new grounds . . . [and that an]
argument [that] was not contained in the main brief . . . is not
before the Court.’” Tyndall v. Maynor, 288 F.R.D. 103, 108
(M.D.N.C. 2013) (quoting Triad International Maintenance Corp. v.
Aim Aviation, Inc., 473 F. Supp. 2d 666, 670 n.1 (M.D.N.C. 2006)).
It is improper, under Local Rule 7.3(h), to wait until a reply
brief to provide support for an unsupported argument made in a
party’s first motion. See Jarvis v. Stewart, No. 1:04CV00642,
2005 WL 3088589, at *1 (M.D.N.C. Nov. 17, 2005). In sum, Rule
7.3(h) “exists to give the replying party a chance to rebut newly
raised arguments, not to give the replying party an unfair

advantage in having a chance to make new arguments that should
have been raised initially.” Pouncey v. Guilford County, No.
1:18CV1022, 2020 WL 1274264, at *5 (M.D.N.C. Mar. 17, 2020). Thus,
because these grounds for leave to amend were advanced for the
first time in a reply brief, the court need not consider
Plaintiffs’ “Revised Proposed Amended Complaint.”
In addition, Plaintiffs’ request for leave to amend contained
in their reply brief is not accompanied by a motion. A “request
for a court order must be made by motion,” which must state the
grounds for seeking the order and state the relief sought. Fed.
R. Civ. P. 7(b)(1). A request for further leave to amend, in the
event that any part of the proposed amended complaint is dismissed,

appearing at the end of a plaintiffs’ reply brief supporting a
motion to amend is not a proper motion for leave to amend; a court
may deny the request on these grounds alone. See Cozzarelli v.
Inspire Pharmaceuticals Inc., 549 F.3d 618, 630–31 (4th Cir. 2008).
Additionally, this court’s local rules require a proposed amended
pleading to be attached to any motion for leave to amend a
pleading. L.R. 15.1. The purpose of this rule is to avoid having
cases thrust into limbo on such generalized requests that may later
prove unsupported. Robinson v. Pepsi Bottling Group, No.
1:13CV729, 2014 WL 2048127, at *4 (M.D.N.C. May 19, 2014). It is
within the discretion of a district court to deny a motion for
leave to amend where the moving party fails to comply with Local

Rule 15.1. See U.S. ex rel. Rostholder v. Omnicare, Inc., 745
F.3d 694, 703 (4th Cir. 2014).
Here, Plaintiffs have not made a proper motion for further
leave to amend. Plaintiffs’ urging that the court accept their
Revised Proposed Amended Complaint “[o]ut of an abundance of
caution and to conserve judicial resources” would circumvent the
local rules and demonstrates the confusion that it engenders by
causing the filing of yet further briefing. Thus, Plaintiffs’
request for leave to amend to file the “Revised Proposed Amended
Complaint” through their reply brief will be denied.
Furthermore, even if the court were to consider the Revised

Proposed Amended Complaint, Plaintiffs have failed to allege a
plausible fiduciary duty claim. The Revised Proposed Amended
Complaint does not allege either of the indispensable requisites
of a partnership: a sharing of profits, and co-ownership between
the parties. VRX USA, 2020 WL 7229672, at *5. Plaintiffs merely
allege that the Allergan Defendants controlled the price of each
CoolSculpting treatment such that they “cost approximately 50% of
the price providers [like Plaintiffs] were allowed to charge
patients.” (Doc. 48-1 ¶ 24.) Plaintiffs conclude that it was a
partnership “because Zeltiq only made money if Mystic made money
from providing Coolsculpting cycles” to patients. (Id. ¶ 25.)
But this merely alleges a sales campaign, devoid of any profit

sharing.
The Revised Proposed Amended Complaint also does not allege
any of the other factors courts have recognized as indicia of a
partnership, such as contribution of capital, partnership tax
returns, or a partnership bank account. Instead, Plaintiffs allege
a series of general statements by the Allergan Defendants’
representatives indicating they believed they were in a
“partnership” with their distributors, like Plaintiffs. (See id.
¶¶ 21-39.) However, these private declarations alone cannot
create a partnership. VRX USA, 2020 WL 7229672, at *5. Therefore,
Plaintiffs’ Revised Proposed Amended Complaint would be futile.
For these reasons, Plaintiffs’ motion to amend will be denied

as futile, and the Allergan Defendants’ motion to file a surreply
will be denied as moot.
III. CONCLUSION
For the reasons stated,
IT IS THEREFORE ORDERED that Plaintiffs’ motion to amend (Doc.
46) is DENIED.
IT IS FURTHER ORDERED that the Allergan Defendants’ motion
for leave to file a surreply (Doc. 49) is DENIED as moot.

/s/ Thomas D. Schroeder
United States District Judge

August 17, 2022

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10254072. Public record. Not legal advice.