COLE v. MONTGOMERY

IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

CAROLYN COLE, )

)

Plaintiff, )

)

v. ) 1:22CV734

)

GERALD V. MONTGOMERY and )

DOROTHY J. MCMICHEN, ESQ., )

)

Defendants. )

)

MEMORANDUM OPINION AND ORDER

LORETTA C. BIGGS, District Judge.

Pro se Plaintiff Carolyn Cole brings this action alleging that her former husband,

Defendant Gerald Montgomery, and his divorce lawyer, Defendant Dorothy McMichen, acted

unlawfully during a sixteen-year divorce proceeding in Florida Family Court. (See generally ECF

No. 1.) Before the Court is Defendant’s Motion to Dismiss the Complaint made pursuant to

Rules 9(b), 12(b)(1), 12(b)(2), and 12(b)(6) of the Federal Rules of Civil Procedure. (ECF No.

8.) For the following reasons, the Court will grant Defendant’s motion.

I. BACKGROUND

According to the Complaint, Plaintiff Cole initiated divorce proceedings against

Defendant Montgomery in Florida in 2006.1 (ECF No. 1 ¶ 1.) A Florida court granted a

1 Because Plaintiff is pro se, the Court “must construe her complaint liberally, thus permitting a

potentially meritorious case to develop if one is present.” Chrisp v. Univ. of N.C.-Chapel Hill, 471 F.

Supp. 3d 713, 715–16 (M.D.N.C. 2020) (citing Erickson v. Pardus, 551 U.S. 89, 94 (2007)).

divorce in 2009, however, under a bifurcated process, the court retained jurisdiction to oversee

division of marital property. (Id. ¶¶ 1, 18.) As of the September 2022 filing of the Complaint

in this case, the division of assets had not yet been completed in Florida. (Id. ¶ 1.)

Plaintiff alleges here that over the past decade and a half that the divorce proceeding

has been pending in Florida, the Defendants Montgomery and McMichen worked together to

hide and squander assets that ought to be subject to equitable division in Florida. (See generally

id.) The Complaint sets out two strands of alleged conduct through which Plaintiff alleges the

hiding and squandering of assets occurred. First, Plaintiff alleges that there were improper

sales of her real property in North Carolina and/or that her real property in North Carolina

was used to commit various frauds including mortgage fraud.2 (Id. ¶ 6.) Second, Plaintiff

alleges that Defendants then made false representations to the Florida court about the

disposition of the real property in North Carolina.3 (See, e.g., id. ¶ 18.) The Court notes that

the Complaint also alludes to events in South Carolina involving an ethics and/or election

issue, (id. ¶ 68), however, the Court has been unable to determine what the connection may

be between the ethics and/or election issue in South Carolina and the claims asserted in the

Complaint.

Plaintiff’s Complaint lists seventeen4 causes of action denominated as follows:

2 The Complaint frequently alleges that Defendant Montgomery was an uncharged co-conspirator in

a mortgage fraud case that was prosecuted in this district, United States v. Oasis Mortgage Co., Inc., No.

03-CR-454 (M.D.N.C.). (E.g., ECF No. 1 ¶ 17.)

3 Relatedly, Plaintiff also alleges that Defendants bribed court officers in Florida to treat Defendant

Montgomery favorably in the divorce proceedings. (ECF No. 1 ¶¶ 23, 25, 86–88.)

4 The last cause of action in the Complaint is titled a “Nineteenth” cause of action. (ECF No. 1 at

20.) The Complaint’s numbering skips causes fourteen and fifteen, (id. at 18–19); thus, there are only

seventeen causes of action listed in the Complaint.

1. Violation of False Identification of Crime Control Act of 1982, 18 U.S.C. §§ 1028, 1738

2. Fraud

3. Breach of Contract Accompanied by Fraudulent Acts

4. Defamation of Credit

5. Slander of Title

6. Trespass to Try Title

7. Unfair Trade Practices under North Carolina, South Carolina, and Florida law

8. Violation of Federal Trade Commission Act, 15 U.S.C. 45 § 5

9. Unfair Debt Collection Practices, 15 U.S.C. § 45

10. Violation of the First Amendment, 42 U.S.C. § 1983

11. Violation of Fourth Amendment Due Process, 42 U.S.C. § 1983

12. Deprivation of Property, 42 U.S.C. § 1983

13. Conspiracy

14. Obstruction of Justice, 42 U.S.C. § 1985

15. Depriving Person of Rights, 42 U.S.C. § 1985

16. Deprivation of Rights, 42 U.S.C. § 1986

17. Abuse of Process, Malicious Prosecution, 42 U.S.C. § 1983

(Id. ¶¶ 28–85.)

Based on these claims, Plaintiff seeks damages, injunctive relief, attorney’s fees, and for

the Florida divorce action to be removed to this Court. (Id. ¶¶ 22, 95.)

Defendants argue that all of Plaintiff’s claims should be dismissed pursuant to Rule

12(b)(1) because this Court lacks subject matter jurisdiction; pursuant to Rule 12(b)(2) because

this Court lacks personal jurisdiction; pursuant to Rule 12(b)(6) because Plaintiff has failed to

state any claims upon which relief can be granted; and pursuant to Rule 9(b) because, to the

extent Plaintiff alleges fraud, the Complaint does not state the circumstances of the fraud with

sufficient particularity. (ECF No. 8 at 1–2.)

II. STANDARD OF REVIEW

A. Rule 12(b)(1)

Under Rule 12(b)(1), a party may seek dismissal based on a court’s “lack of subject-

matter jurisdiction.” Fed. R. Civ. P. 12(b)(1). A motion under Rule 12(b)(1) raises the question

of “whether [the claimant] has a right to be in the district court at all and whether the court

has the power to hear and dispose of [the] claim.” Holloway v. Pagan River Dockside Seafood, Inc.,

669 F.3d 448, 452 (4th Cir. 2012). A defendant may present a motion to dismiss for lack of

subject matter jurisdiction either by contending that the complaint does not sufficiently allege

jurisdiction, or by contending that the allegations in the complaint are not true. Adams v. Bain,

697 F.2d 1213, 1219 (4th Cir. 1982). Unless a defendant pursues the latter method and attacks

the truth of the allegations, a court takes them as true and “in effect, . . . afford[s] the same

procedural protection as [the plaintiff] would receive under a Rule 12(b)(6) consideration.” Id.

A court should grant a motion under Rule 12(b)(1) “only if the material jurisdictional facts are

not in dispute and the moving party is entitled to prevail as a matter of law.” Richmond,

Fredericksburg & Potomac R.R. Co. v. United States, 945 F.2d 765, 768 (4th Cir. 1991).

B. Rule 12(b)(2)

A challenge to personal jurisdiction under Rule 12(b)(2) of the Federal Rules of Civil

Procedure is a question of law, and the plaintiff bears the ultimate burden of proving

jurisdiction. See Grayson v. Anderson, 816 F.3d 262, 267 (4th Cir. 2016); Carefirst of Md., Inc. v.

Carefirst Pregnancy Ctrs., Inc., 334 F.3d 390, 396 (4th Cir. 2003). The Fourth Circuit has observed

that the plaintiff’s burden of proof “varies according to the [procedural] posture of [the] case

and the evidence that has been presented to the court.” Grayson, 816 F.3d at 268.

Where the court decides a pretrial personal jurisdiction question without conducting

an evidentiary hearing—“reviewing only the parties’ motion papers, affidavits attached to the

motion, supporting legal memoranda, and the allegations in the complaint”—a plaintiff “need

only make a prima facie showing of personal jurisdiction” to withstand a jurisdictional

challenge. Id. “[A] plaintiff makes a prima facie showing of personal jurisdiction by presenting

facts that, if true, would support jurisdiction over the defendant.” Universal Leather, LLC v.

Koro AR, S.A., 773 F.3d 553, 561 (4th Cir. 2014) (citing Mattel, Inc. v. Greiner & Hausser GmbH,

354 F.3d 857, 862 (9th Cir. 2003)). When considering whether the plaintiff has made a prima

facie showing of jurisdiction, the court “must construe all relevant pleading allegations in the

light most favorable to the plaintiff, assume credibility, and draw the most favorable inferences

for the existence of jurisdiction.” Id. at 558 (quoting Combs v. Bakker, 886 F.2d 673, 676 (4th

Cir. 1989)).

C. Rule 12(b)(6)

A motion made under Rule 12(b)(6) challenges the legal sufficiency of the facts in the

complaint, specifically whether the complaint satisfies the pleading standard under Rule

8(a)(2). Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir. 2009). Rule 8(a)(2) requires a “short

and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P.

8(a)(2). “[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 Atl. Corp. v. Twombly, 550 U.S 544, 570 (2007)). A claim is plausible when the complaint

alleges sufficient facts to allow “the court to draw the reasonable inference that the defendant

is liable for the misconduct alleged.” Johnson v. Am. Towers, LLC, 781 F.3d 693, 709 (4th Cir.

2015) (quoting Iqbal, 556 U.S. at 678). The court “view[s] the complaint in a light most

favorable to the plaintiff.” Mylan Lab’ys, Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993).

When considering a motion to dismiss, “a [district] court evaluates the complaint in its

entirety, as well as documents attached [to] or incorporated into the complaint.” E.I. du Pont

de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d 435, 448 (4th Cir. 2011). Generally, on a Rule

12(b)(6) motion to dismiss, a court cannot consider documents beyond the complaint without

converting the motion into a motion for summary judgment. See Occupy Columbia v. Haley, 738

F.3d 107, 116 (4th Cir. 2013). The court can, however, properly consider documents attached

to or referenced in the complaint, as well as those attached to the motion to dismiss, so long

as those documents are “integral to and explicitly relied on in the complaint.” Am. Chiropractic

Ass’n v. Trigon Healthcare, Inc., 367 F.3d 212, 234 (4th Cir. 2004) (quoting Phillips v. LCI Int’l,

Inc., 190 F.3d 609, 618 (4th Cir. 1999)).

D. Rule 9(b)

Where a Plaintiff alleges fraud or mistake, “[n]ot only must the[] elements [of fraud] be

pled, but under Fed. R. Civ. P. 9(b) ‘the circumstances constituting fraud or mistake shall be

stated with particularity . . . .’” TSC Rsch., LLC v. Bayer Chems. Corp., 552 F. Supp. 2d 534, 543

(M.D.N.C. 2008). “Courts construe this to mean that plaintiffs must set out the ‘time, place,

and contents of the alleged fraudulent misrepresentation, as well as the identity of each person

making the misrepresentation and what was obtained thereby.’” Id. (quoting Breeden v.

Richmond Cmty. Coll., 171 F.R.D. 189, 195 (M.D.N.C. 1997)). In applying this rule, the Fourth

Circuit has cautioned that “[a] court should hesitate to dismiss a complaint under Rule 9(b) if

the court is satisfied (1) that the defendant has been made aware of the particular

circumstances for which [it] will have to prepare a defense at trial, and (2) that plaintiff has

substantial prediscovery evidence of those facts.” Harrison v. Westinghouse Savannah River Co.,

176 F.3d 776, 784 (4th Cir. 1999).

III. DISCUSSION

A. The Court has subject matter jurisdiction except with respect to

Plaintiff’s attempt to bring criminal charges against Defendants.

Initially, the Court notes that its federal question jurisdiction is implicated by the claims

that Plaintiff purports to bring pursuant to various federal statutes. The Court also appears to

have diversity jurisdiction over Plaintiff’s state law claims because Plaintiff has alleged that she

is a resident of North Carolina, the Defendants are residents of Florida, and there is an amount

in controversy in this case of at least $75,000. (ECF No. 1 ¶¶ 4–5, 18.)

Regarding subject matter jurisdiction, Defendants first argue that the Complaint should

be dismissed in its entirety because it is an “attempt to circumvent any negative ruling

[Plaintiff] might incur in the equitable distribution proceeding in [Florida].” (ECF No. 9 at 9.)

Plaintiff responds that this Court “is not being asked to address any matters the Florida Family

Court acted upon in its final order in the dissolution of marriage case.”5 (ECF No. 11 at 1.)

“[D]istrict courts have no original diversity jurisdiction to grant a divorce, to award

alimony, to determine child custody, or to decree visitation.” Cole v. Cole, 633 F.2d 1083, 1087

(4th Cir. 1980). Sometimes, “court[s] perceive[ ] an attempt de facto to reopen and relitigate [a]

prior judicial determination [of a domestic relations matter] by casting the case otherwise

formally, but substantially pleading a divorce or property allocation case.” Id. at 1087–88

5 Plaintiff filed her response in opposition to Defendants’ motion after the deadline for filing such an

opposition had passed. (See ECF Nos. 8 (Defendants’ motion filed Oct. 6, 2022); 10 (Roseboro letter

sent to Plaintiff informing her of her right to file a response within 21 days of service of Defendants’

motion); 11 (Plaintiff’s opposition brief filed Jan. 12, 2023).) Because Plaintiff is pro se and states in

her response that she experienced health issues that prevented her from attending to this matter, (ECF

No. 11 at 4), the Court finds that Plaintiff’s response was filed late due to excusable neglect and will

consider it. See L.R. 7.3(k) (“The failure to file a brief or response within the time specified . . . shall

constitute a waiver of the right thereafter to file such brief or response, except upon a showing of

excusable neglect.”).

(emphasis in original). While “federal courts will be alert to preclude what are genuinely

divorce, alimony, or child custody and support cases from creeping around the barrier,” “[n]ot

all family feuds . . . fall directly into the specialized category of true domestic relations cases

(primarily divorce, alimony, child custody and support).” Id. at 1088. The Fourth Circuit has

instructed that “[a] district court may not simply avoid all diversity cases having intrafamily

aspects . . . [r]ather it must consider the exact nature of the rights asserted or of the breaches

alleged.” Id. A district court must focus on whether a claim alleges a breach of a duty, whether

tortious or contractual in nature, that arose solely from family relations law. Id. If a claim

“could have arisen between strangers,” then federal courts may not deny jurisdiction based on

the domestic relations exception. Id. at 1089.

The Court finds that the domestic relations exception does not apply here. The Court

finds that, despite the request to remove the Florida divorce action to federal court, Plaintiff

does not seek a divorce decree or alimony, and Plaintiff’s state law claims are not based on

alleged violations of duties that arose from her marital relationship. Instead, Plaintiff’s state

law claims all appear to be variations on a claim that Defendants wrongfully took Plaintiff’s

property, (see ECF No. 1 ¶¶ 28–51), and that is a claim that can arise between strangers.

Accordingly, Defendants’ first subject-matter jurisdiction argument is not persuasive.

Defendants’ other subject matter jurisdiction argument is that all of Plaintiff’s claims

that allege fraud are, in essence, criminal claims that should be dismissed because they are not

appropriately brought by a private individual in a civil lawsuit. (ECF No. 9 at 9.) Plaintiff

responds that she “believes the Court has subject matter jurisdiction relative to criminal

activities,” but does not explain why she believes this. (ECF No. 11 at 3.)

It is well-established that “a private citizen lacks a judicially cognizable interest in the

prosecution or nonprosecution of another.” Linda R.S. v. Richard D., 410 U.S. 614, 619 (1973).

The Court finds that Plaintiff’s Complaint, read liberally, alleges only one claim that is clearly

criminal in nature—her first claim for violations of 18 U.S.C. § 1028 and 1738. (ECF No. 1

at 9.) The Court will therefore dismiss this claim and only this claim for lack of subject matter

jurisdiction.

B. The Court has personal jurisdiction over Defendant Montgomery

with respect to claims arising out of his alleged business in North

Carolina; the Court otherwise lacks personal jurisdiction.

Plaintiff has alleged that the Defendants in this case are individuals who reside in Florida.

(ECF No. 1 ¶ 2–3, 5.) Defendants argue that this Court therefore lacks personal jurisdiction over

them, and that the Complaint must be dismissed. (ECF No. 9 at 8–9.)

“The Due Process Clause of the Fourteenth Amendment constrains a State’s authority to

bind a nonresident defendant to a judgment of its courts.” Walden v. Fiore, 571 U.S. 277, 283

(2014). A federal district court can exercise personal jurisdiction over a nonresident defendant

only if “(1) such jurisdiction is authorized by the long-arm statute of the state in which the district

court sits; and (2) application of the relevant long-arm statute is consistent with the Due Process

Clause of the Fourteenth Amendment.” Universal Leather, 773 F.3d at 558. North Carolina’s long-

arm statute “permits the exercise of personal jurisdiction . . . to the outer limits allowable under

federal due process.” Id.; Dillon v. Numismatic Funding Corp., 231 S.E.2d 629, 630 (N.C. 1977)

(holding that, by enacting North Carolina’s long arm statute, the North Carolina General

Assembly “intended to make available to the North Carolina courts the full jurisdictional powers

permissible under federal due process”). The two-prong test, therefore, “merges into [a] single

question,” allowing the court to proceed directly to the constitutional analysis. Universal Leather,

773 F.3d at 558–59.

Under the Due Process Clause of the Fourteenth Amendment, two paths permit a court

to exercise personal jurisdiction over a nonresident defendant. Id. at 559. One path is general

jurisdiction, “which permits a court to assert jurisdiction over a defendant based on a forum

connection unrelated to the underlying suit.” Walden, 571 U.S. at 283 n.6. “For an individual, the

paradigm forum for the exercise of general jurisdiction is the individual’s domicile.” Goodyear

Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 924 (2011). The other path is specific

jurisdiction, which “depends on an ‘affiliatio[n] between the forum and the underlying

controversy.’” Walden, 571 U.S. at 283 n.6. (alteration in original) (quoting Goodyear, 564 U.S. at

919). The Fourth Circuit employs a three-prong test to determine whether the exercise of specific

jurisdiction comports with the requirements of due process: “(1) the extent to which the defendant

purposefully availed itself of the privilege of conducting activities in the forum state; (2) whether

the plaintiff’s claims [arose] out of those activities; and (3) whether the exercise of personal

jurisdiction is constitutionally reasonable.” Universal Leather, 773 F.3d at 559 (alteration in original)

(quoting Tire Eng’g & Distrib., LLC v. Shandong Linglong Rubber Co., 682 F.3d 292, 302 (4th Cir.

2012)).

The Court first finds that it does not have general personal jurisdiction over the

Defendants because they are Florida residents. The Court therefore turns to specific personal

jurisdiction.

As the Court turns to specific personal jurisdiction, the Court notes that there are

essentially two controversies set out in Plaintiff’s Complaint: (1) improperly disposing of property;

and (2) lying to a Florida court about improperly disposing of property. The Court uses the phrase

“improperly dispose of” here to encompass all allegations regarding fraudulently claiming title to

property owned by another, selling such property without authorization, using such property for

the purpose of mortgage fraud, alienating property in violation of a court order, and similar acts.

(See, e.g., ECF No. 1 ¶¶ 6, 15, 17, 20, 25, 27.) Plaintiff argues that this Court has specific personal

jurisdiction because her Complaint alleges that Defendants improperly disposed of property that

included real property in Greensboro, North Carolina. (ECF No. 11 at 3.) Plaintiff has not argued

that there is specific personal jurisdiction over the Defendants based on the Florida proceedings.6

(See id.)

The Court concludes that acts such as selling real property located in North Carolina

constitute availment of the privilege of doing business in North Carolina. Further, to the extent

that a claim arises out of such availment, it would be constitutionally reasonable for a court in

North Carolina to assert specific personal jurisdiction over a defendant—one who involves

himself in transactions involving real property in North Carolina could reasonably expect to be

haled into court in North Carolina based on those transactions.

In contrast, participating in divorce proceedings in a Florida state court is not availment of

the privilege of doing business in North Carolina. Similarly, to the extent that the Complaint

alleges vague ethics and/or election issues in South Carolina, these activities are not a basis for this

Court to exercise specific personal jurisdiction over the Defendants in this action.

6 Plaintiff also argues that this Court has personal jurisdiction because she herself is a resident of North

Carolina, (ECF No. 11 at 3)—however, it is well-settled that a connection between a plaintiff and the forum

state is insufficient to create personal jurisdiction over a defendant. Walden, 571 U.S. at 284 (“We have

consistently rejected attempts to satisfy the defendant-focused ‘minimum contacts’ inquiry by

demonstrating contacts between the plaintiff (or third parties) and the forum State.”).

Applying the above analysis to the allegations and claims in this case, the Court concludes

that it has specific personal jurisdiction over Defendant Montgomery with respect to most claims

against him. Read liberally, all but one of the claims against Defendant Montgomery arise from

transactions involving real property in North Carolina. The one exception is Plaintiff’s claim for

“Abuse of Process, Malicious Prosecution, § 1983.” (ECF No. 1 at 20). Although the caption of

this claim appears to refer to a federal statute, specifically, 42 U.S.C. § 1983, the Court understands

it to be a claim of abuse of process under South Carolina common law, (id. ¶ 84 (discussing

abuse of process under South Carolina common law)), based on Defendant Montgomery

allegedly causing contempt charges to be issued against Plaintiff in the Florida divorce

proceedings, (id. ¶ 81 (allegations regarding contempt charges issued in the Florida divorce)),

by allegedly lying to the Florida court about events or circumstances occurring partly in North

Carolina and partly in South Carolina, (id. ¶¶ 80, 83). While this claim is tangentially related to

alleged conduct in North Carolina, it arises from the Florida divorce proceedings.

Accordingly, this Court lacks specific jurisdiction over Defendant Montgomery with respect

to this claim. This Court will therefore dismiss this claim for lack of personal jurisdiction.

As for Defendant McMichen, the Court finds that it lacks specific jurisdiction over her

with respect to all claims. She is allegedly Defendant Montgomery’s attorney for the Florida

divorce proceedings, (id. ¶ 3), and the factual allegations in the Complaint that mention her relate

to that representation, (see id. ¶¶ 18, 24, 33, 80). This Court will therefore dismiss all claims against

Defendant McMichen for lack of personal jurisdiction.

Having dismissed the 18 U.S.C. § 1028 and § 1738 claim for lack of subject matter

jurisdiction, the abuse of process claim against Defendant Montgomery for lack of personal

jurisdiction, and all claims against Defendant McMichen for lack of personal jurisdiction, the

Court now proceeds to a Rule 12(b)(6) analysis for the remaining fifteen claims against Defendant

Montgomery.

C. Plaintiff fails to state plausible claims against Defendant Montgomery.

With respect to Rule 12(b)(6), Defendants generally argue that the Complaint “is rife

with conclusory statements [and] innuendo without any evidentiary support [for] any of the

claims presented.” (ECF No. 9 at 6.) The Court addresses each remaining claim in turn.

1. Fraud

“Under North Carolina law, fraud requires a ‘(1) false representation or concealment

of a material fact, (2) reasonably calculated to deceive, (3) made with intent to deceive, (4)

which does in fact deceive, (5) resulting in damage to the injured party.’” Topshelf Management,

Inc. v. Campbell-Ewald Co., 117 F. Supp. 3d 722, 726 (M.D.N.C. 2015) (quoting Forbis v. Neal,

649 S.E.2d 382, 387 (N.C. 2007)). The heightened pleading requirement of Rule 9(b) of the

Federal Rules of Civil Procedure applies to such a claim when it is brought in federal court. Id.

Reading the Complaint liberally, Plaintiff identifies Defendant Montgomery as the

person who allegedly made the fraudulent misrepresentations of which she complains. (ECF

No. 1 ¶ 33.) However, there are no allegations specifically addressing the time, place, and

contents of any alleged fraudulent misrepresentation, or what Defendant Montgomery

allegedly obtained. Plaintiff argues, without any citation to allegations in the Complaint, that

“the specific fraudulent activity is captured in mortgage loan, and bank loan documents,” and

asks for “time to provide these documents to the Court for review and inspection.” (ECF

No. 11 at 3.) However, under the standard of review applicable to motions made under Rule

12(b)(6), this Court does not review materials beyond the Complaint unless they are integral

to and explicitly relied upon by the Complaint. The Court therefore finds that Plaintiff has

not stated a plausible claim of fraud.

2. Breach of Contract, Accompanied by Fraudulent Acts

“The elements of a claim for breach of contract are (1) existence of a valid contract and

(2) breach of the terms of that contract.” Poor v. Hill, 530 S.E.2d 838, 843 (N.C. Ct. App.

2000).

The Complaint alleges that Plaintiff and Defendant Montgomery “as a married couple,

entered into legal mortgage loans on rental properties wherein they were jointly responsible

for the mortgages, insurance, property taxes, maintenance and other expenses.” (ECF No. 1

¶ 38.) The Complaint also alleges Defendant Montgomery “in violation of that agreement . . .

refinanced and cashed out on the existing mortgage loans[,] incurring bank fees, appraisal fees,

realtor’s commissions, and other expenses.” (Id. ¶ 39.) Plaintiff additionally alleges that

Defendant Montgomery committed fraudulent acts related to the breach of contract, and that

she is therefore entitled to punitive as well as actual damages. (Id. ¶ 40.)

The Court finds that Plaintiff has not stated a plausible claim for breach of contract.

First, Plaintiff has not alleged facts supporting the existence of a valid contract; she has only

asserted a legal conclusion that there was a contract. See Jones v. Nationwide Advantage Mortg.

Co., No. 17-CV-189, 2018 WL 1569835, at *5 (M.D.N.C. Mar. 27, 2018) (dismissing breach of

contract claim because there were “no factual allegations that there was a ‘meeting of the

minds’ between the parties to enter into a contract” with the claimed terms). Additionally,

Plaintiff has not alleged any term of the mortgage agreements that Defendant Montgomery

breached by refinancing or cashing out any mortgages that they entered into together. See

Birtha v. Stonemor, N.C., LLC, 727 S.E.2d 1, 9 (N.C. Ct. App. 2012) (affirming dismissal of

breach of contract claims “because the allegations failed to provide even general terms of the

contract which were necessary to determine whether a breach occurred”).

3. Defamation of Credit

“To state a claim of defamation, a plaintiff must allege the following four elements: ‘[1]

defendant made false, defamatory statements, [2] of or concerning the plaintiff, [3] which were

published to a third person, [4] causing injury to the plaintiff’s reputation.’”7 Davis v. Lewis,

No. 16-CV-340, 2018 WL 1473426, at *6 (E.D.N.C. Mar. 26, 2018) (alterations in original)

(quoting Tyson v. L’Eggs Prods., Inc., 351 S.E.2d 834, 840 (N.C. Ct. App. 1987)). “A statement

is defamatory if it tends ‘to prejudice another in his reputation, office, trade, business, or means

of livelihood.’” Jolly v. Acad. Collection Serv., Inc., 400 F. Supp. 2d 851, 861 (M.D.N.C. 2005)

(quoting Donovan v. Fiumara, 442 S.E.2d 572, 574 (N.C. Ct. App. 1994)). At the motion to

dismiss stage, while “the court must of course credit the plaintiff’s allegation of the factual

falsity of a statement,” it is not enough for a plaintiff to “couch[ ] [her] allegations of falsity in

vague, conclusory terms.” Chapin v. Knight-Ridder, Inc., 993 F.2d 1087, 1092 (4th Cir. 1993); see

also Jolly, 400 F. Supp. 2d at 861 (“In pleading a cause of action for defamation, a plaintiff must

recount the allegedly defamatory statement either verbatim or at least with enough specificity

to allow the Court to decide if the statement is defamatory.”).

7 The Court was unable to locate any North Carolina authority discussing, specifically, “defamation of

credit” as a cause of action. At least one federal district court in this state has cast doubt on whether

North Carolina recognizes “defamation of credit” as a distinct cause of action. McGahren v. First

Citizens Bank & Trust Co., No. CIV. 93-CV-143, 1997 WL 1050726, at *4 (W.D.N.C. Aug. 1, 1997)

(noting that its analysis “applie[d] to the ninth cause of action for defamation of credit, if indeed such

a cause of action exists”), aff’d, 165 F.3d 19 (4th Cir. 1998) (unpublished). The Court therefore

construes the claim that Plaintiff has denominated “Defamation of Credit” as a general defamation

claim.

Under North Carolina law, a defamatory statement “that charges a plaintiff with a crime

involving moral turpitude, impeaches his or her trade or business, or accuses him or her of

having a ‘loathsome disease’” is considered defamation per se. Jolly, 400 F. Supp. 2d at 861.

Other defamatory statements are considered defamation per quod. Id. A plaintiff who claims

defamation per quod must additionally allege and prove malice and special damages (in a case

of defamation per se, malice and special damages are presumed). Id. The special damages must

be for a pecuniary loss, not for humiliation. Araya v. Deep Dive Media, LLC, 966 F. Supp. 2d

582, 599 (W.D.N.C. 2013). “Emotional distress and mental suffering are not sufficient

allegations to establish a basis for relief in cases which are only actionable per quod.” Id.

(quoting Johnson v. Bollinger, 356 S.E.2d 378, 384 (N.C. Ct. App. 1987)).

Here, Plaintiff alleges that the defamatory activity was “publish[ing] to third parties the

false allegations that Plaintiff’s mortgage loan accounts with [Defendant Montgomery] were

delinquent.” (ECF No. 1 ¶ 42.) Plaintiff claims damages for “extreme emotional distress and

anguish, lost income, and incurred damage to her credit and reputation.” (Id. ¶ 43.)

The Court finds that Plaintiff has not alleged sufficient facts to make out a plausible

claim for defamation under North Carolina law. Plaintiff has not set out how the allegedly

false statements about the status of her accounts with Defendant Montgomery injured her

reputation. Additionally, most of the damages that Plaintiff claims are non-pecuniary damages

for which she cannot recover under North Carolina law; the only pecuniary damages she seeks

are for lost income, but she has not explained how Defendant Montgomery’s alleged

statements affected her income.

4. Slander of Title

“To establish a claim of slander of title, a plaintiff must show: ‘(1) the uttering of

slanderous words in regard to the title of someone’s property; (2) the falsity of the words; (3)

malice; and (4) special damages.” Kellis v. U.S. Bank, N.A., No. 16-CV-395, 2017 WL 1194360,

at *7 (M.D.N.C. Mar. 30, 2017) (quoting Broughton v. McClatchy Newspapers, Inc., 588 S.E.2d 20,

30 (N.C. Ct. App. 2003)).

For her slander of title claim, Plaintiff alleges “[t]hat Defendant did disparage the

Plaintiff’s good title, falsely and maliciously questioning and attacking her title to the aforesaid

property and denying her rights to use and dominion thereover.” (ECF No. 1 ¶ 45.) Plaintiff

additionally alleges that “as a direct result and consequence of the Defendants’ willful

defamation, Plaintiff suffered extreme emotional distress and anguish, loss of income, and

damage to her credit and reputation.” (Id. ¶ 46.)

The Court finds that Plaintiff has not alleged a plausible claim for slander of title. The

above quoted statements are only legal conclusions. Focusing on factual allegations in the

Complaint, the Court has been unable to identify the alleged slander at issue, much less any

facts setting out how that alleged slander caused the alleged damages.

5. Trespass to Try Title

In an action for trespass to try title under North Carolina law, a plaintiff “must allege

and prove both title in [herself] and trespass by defendants.” Keller v. Hennessee, 180 S.E.2d

452, 454 (N.C. Ct. App. 1971). A plaintiff “must rely on the strength of [her] own title, and

not on the weakness of defendant’s title.” Id.

According to the Complaint, “Defendants did disparage and diminish the Plaintiff’s title

and right to the aforesaid property,” and as a result “Plaintiff was denied the full use and

enjoyment of her property aforesaid, suffered extreme emotional distress and anguish and

damage to her credit and reputation.” (ECF No. 1 ¶¶ 48–49.)

The Court finds that Plaintiff has not alleged a plausible claim for trespass to try title.

The Complaint alleges that Plaintiff and Defendant Montgomery jointly owned the properties

at issue. (Id. ¶ 6.) Thus, Plaintiff essentially claims that Defendant Montgomery trespassed

on his own property. To potentially advance with such a claim, Plaintiff must allege far more

than the mere legal conclusions quoted above, but she does not.

6. Unfair Trade Practices under North Carolina, South Carolina, and

Florida law

The Court notes that Defendants treat this claim as a claim brought under South

Carolina law only. (ECF No. 9 at 7.) Although the Complaint uses a South Carolina caption

and quotes only sections of the South Carolina Code of Laws, it also states that this claim is

for violations of “North Carolina, South Carolina, and Florida laws.” (ECF No. 1 at 13; id. at

¶ 50.) Because Plaintiff is pro se, the Court construes this claim liberally as brought under the

laws of all three states. However, as previously discussed, specific personal jurisdiction over

Defendant Montgomery in this action is based on his real estate dealings in North Carolina

only. This Court lacks personal jurisdiction over Defendant Montgomery for actions arising

out of his business in other states. Thus, the only claim properly before the Court here is one

for violations of North Carolina’s Unfair and Deceptive Trade Practices Act.

“To state a claim for unfair and deceptive trade practices a plaintiff must show: ‘(1) that

the defendant committed an unfair or deceptive act or practice, or an unfair method of

competition; (2) in or affecting commerce; (3) which proximately caused actual injury to

plaintiff.’” Dealers Supply Co., Inc. v. Cheil Indus., Inc., 348 F. Supp. 2d 579, 591 (M.D.N.C. 2004)

(quoting Furr v. Fonville Morisey Realty, Inc., 503 S.E.2d 401, 408 (N.C. Ct. App. 1998)).

“Whether a particular act is unfair or deceptive, depends on the facts surrounding the

transaction and the impact on the marketplace.” Id.

In her Complaint, Plaintiff has identified a list of things that she claims that Defendant

Montgomery did that were unfair or deceptive acts or practices. (ECF No. 1 ¶ 50.) The list

includes things such as false billing, attempted extortion, and threats to wrongfully foreclose

on properties. (Id.) However, the list is recited in only a conclusory fashion and Plaintiff has

not alleged sufficient facts that would make the claims plausible. For example, there are no

allegations describing the communications about foreclosure that Plaintiff claims were threats.

The Court therefore finds that Plaintiff has not stated a plausible claim for a violation of the

North Carolina Unfair and Deceptive Trade Practices Act.

7. 15 U.S.C. § 45 Claims

Pursuant to the Federal Trade Commission Act, 15 U.S.C. § 45(a)(1), “[u]nfair methods

of competition in or affecting commerce, and unfair or deceptive acts or practices in or

affecting commerce” are unlawful. There is no private right of action to enforce this provision.

E.g., Baum v. Great W. Cities, Inc., of N.M., 703 F.2d 1197, 1209 (10th Cir. 1983) (“[P]rivate

litigants cannot invoke the jurisdiction of the district courts by alleging violations of business

practices proscribed by 15 U.S.C.A. § 45(a)(1).”); J.R. v. Walgreens Boots Alliance, Inc., No. 20-

1767, 2021 WL 4859603, at *8 (4th Cir. 2021 Oct. 19, 2021) (unpublished) (noting that

“[t]hough we have not yet addressed this issue, other Circuits have uniformly found the FTCA

does not contain an implied private right of action” and collecting cases). Plaintiff therefore

has not stated any claims under the Act. (See ECF No. 1 at 13–14 (attempting to bring claims

pursuant to 15 U.S.C. § 45 for “unfair trade practice[s]” and “unfair debt collection

practices”).)

8. 42 U.S.C. § 1983 Claims

“To prevail on a § 1983 claim, [a plaintiff] must show that (1) they were deprived of a

federal statutory or constitutional right; and (2) the deprivation was committed under color of

state law.” Lytle v. Doyle, 326 F.3d 463, 471 (4th Cir. 2003). “‘[M]erely private conduct, no

matter how discriminatory or wrongful,’ fails to qualify as [an action taken under color of state

law].” Philips v. Pitt Cnty. Mem’l Hosp., 572 F.3d 176, 181 (4th Cir. 2009).

Plaintiff has brought three claims against Defendant Montgomery under 42 U.S.C.

§ 1983. Specifically, Plaintiff claims that Defendant Montgomery deprived her of rights

guaranteed to her by the First, Fourth, and Fifth Amendments. (ECF No. 1 ¶¶ 59–71.) Read

liberally, the Complaint also brings a fourth § 1983 claim for conspiracy to deprive her of

rights guaranteed by the Fifth and Fourteenth Amendments.8 (Id. ¶¶ 72–75.) In all four claims,

Plaintiff generally alleges that Defendant Montgomery deprived her of constitutional rights by

actions including but not limited to: identity theft, tax fraud, mortgage fraud, intimidation,

causing charges to be filed against her in legal proceedings, interfering with her ability to

manage properties committed to her care by the Florida court in the divorce proceeding,

diminishing the value of Plaintiff’s real property, and also conspiring with unnamed third

parties to do all of these things. (See id. ¶¶ 59–75.)

8 The Complaint refers to this claim simply as “Conspiracy,” describes the conspiracy as one to

“commit illegal acts and/or to commit legal acts by illegal means to harm the Plaintiff,” and does not

refer to § 1983. (ECF No. 1 ¶¶ 72–75.) The Court understands this to be a § 1983 claim because this

section of the Complaint cites Qwest Communications Corporation v. City of Greensboro, 440 F. Supp. 2d 480

(M.D.N.C. 2006). (ECF No. 1 ¶ 74.) Qwest was an action brought pursuant to § 1983. 440 F. Supp.

2d at 483.

The Court finds that Plaintiff has not plausibly alleged any claim under 42 U.S.C. § 1983

because she has alleged no facts that support that Defendant Montgomery acted under color

of state law in the course of his dealings in North Carolina. Additionally, Plaintiff’s allegations

generally do not describe actual violations of her constitutional rights—for example, although

she alleges for her Fourth Amendment claim that Defendant Montgomery acted “without . . .

probable cause,” her allegations do not in any way relate to a search or a seizure, or to the

issuance of a warrant. (See ECF No. 1 ¶ 68.)

9. 42 U.S.C. § 1985 Claims

A victim of a conspiracy to interfere with his or her civil rights has a civil remedy in 42

U.S.C. § 1985. This statute “proscribe[s] conspiracies that interfere with (a) the performance

of official duties by federal officers; (b) the administration of justice in federal courts; (c) the

administration of justice in state courts; (d) the private enjoyment of ‘equal protection of the

laws’ and ‘equal privileges and immunities under the laws’; and (e) the right to support

candidates in federal elections.” Kush v. Rutledge, 460 U.S. 719, 724 (1983). “[T]he law is well

settled that to prove a section 1985 ‘conspiracy,’ a claimant must show an agreement or a

‘meeting of the minds’ by defendants to violate the claimant’s constitutional rights.” Simmons

v. Poe, 47 F.3d 1370, 1377 (4th Cir. 1995). The Fourth Circuit has “specifically rejected section

1985 claims whenever the purported conspiracy is alleged in a merely conclusory manner, in

the absence of concrete supporting facts.” Id.

In this case, the Complaint alleges that Defendant Montgomery conspired to obstruct

the due course of justice in North Carolina, Florida, and South Carolina, and that Defendant

Montgomery conspired to deprive Plaintiff of the equal protection of the laws.9 (ECF No. 1

¶¶ 76–77 (citing 42 U.S.C. § 1985).)

The Court finds that Plaintiff has not plausibly alleged any claim under § 1985 because

the Complaint lacks any factual allegations tending to show a meeting of the minds. Moreover,

a plaintiff must allege concrete supporting facts to proceed on a § 1985 claim. Simmons, 47 F.3d at

1377. There are no concrete supporting facts in the Complaint here.

10. 42 U.S.C. § 1986 Claim

Under 42 U.S.C. § 1986, “[e]very person who, having knowledge that any of the wrongs

conspired to be done, and mentioned in [42 U.S.C. § 1985], are about to be committed, and

having power to prevent or aid in preventing the commission of the same, neglects or refuses

so to do, if such wrongful act be committed, shall be liable to the party injured.” “A cause of

action based upon § 1986 is dependent upon the existence of a claim under § 1985.” Trerice v.

Summons, 755 F.2d 1081, 1085 (4th Cir. 1985). Therefore, because this Court has found that

Plaintiff has not plausibly alleged any claim under § 1985, this Court also finds that Plaintiff

has not plausibly alleged any claim under § 1986. See id. (affirming dismissal of a § 1986 claim

based on dismissal of a § 1985 claim).

The Court therefore concludes that Plaintiff has failed to state any claim upon which

relief can be granted and that this action must be dismissed.

For the reasons stated herein, the Court enters the following:

9 The Court reiterates that it does not have personal jurisdiction over Defendant Montgomery to the

extent this claim arises out of alleged business in Florida or South Carolina.

ORDER

IT IS THEREFORE ORDERED that Defendants’ Motion to Dismiss, (ECF No.

8), is GRANTED, and this action is DISMISSED.

This, the 8th day of August 2023.

/s/Loretta C. Biggs

United States District Judge