Plasman v. Decca Furniture (Usa), Inc.

Plasman v. Decca Furniture (USA), Inc., 2016 NCBC 78.

STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE

SUPERIOR COURT DIVISION

CATAWBA COUNTY 12 CVS 2832

CHRISTIAN G. PLASMAN, in his

individual capacity and derivatively

for the benefit of, on behalf of and

right of nominal party BOLIER &

COMPANY, LLC,

Plaintiff,

v.

DECCA FURNITURE (USA), INC.,

DECCA CONTRACT FURNITURE,

LLC, RICHARD HERBST, WAI

THENG TIN, TSANG C. HUNG,

DECCA FURNITURE, LTD., DECCA

HOSPITALITY FURNISHINGS,

LLC, DONGGUAN DECCA ORDER AND OPINION ON

FURNITURE CO. LTD., DARREN DEFENDANTS’ MOTION TO DISMISS

HUDGINS, DECCA HOME, LLC, SECOND AMENDED COMPLAINT AND

and ELAN BY DECCA, LLC, MOTION TO DISMISS

Defendants, SUPPLEMENTED AND AMENDED

THIRD PARTY COUNTERCLAIMS

and BOLIER & COMPANY, LLC,

Nominal

Defendant,

v.

CHRISTIAN J. PLASMAN a/k/a

BARRETT PLASMAN,

Third-Party

Defendant.

1. THIS MATTER is before the Court upon Defendants Decca Furniture

(USA), Inc. (“Decca USA”), Decca Contract Furniture, LLC (“Decca Contract”),

Decca Hospitality Furnishings, LLC (“Decca Hospitality”), Decca Home, LLC

(“Decca Home”), Elan by Decca, LLC (“Elan,” together with Decca USA, Decca

Contract, Decca Hospitality, Decca Home, and Elan, the “Decca Defendants”),

Richard Herbst (“Herbst”), Darren Hudgins (“Hudgins”), Wai Theng Tin (“Tin”), and

nominal defendant Bolier & Company, LLC’s (“Bolier,” together with the Decca

Defendants, Herbst, Hudgins, and Tin, the “Defendants”) (i) Motion to Dismiss

Plaintiff Christian G. Plasman’s (“Chris Plasman” or “Plaintiff”) Second Amended

Complaint (the “Motion to Dismiss Complaint”) and (ii) Motion to Dismiss Third

Party Defendant Christian J. Plasman’s (“Barrett Plasman,” together with Chris

Plasman, the “Plasmans”) Supplemented and Amended Third Party Counterclaims

(the “Motion to Dismiss Counterclaims”, collectively, the “Motions”) in the above-

captioned case.1

2. The Court, having considered the Motions, briefs in support of and in

opposition to the Motions, and arguments of counsel made at a hearing on the

Motions, hereby GRANTS the Motions.

Law Offices of Matthew K. Rogers, PLLC, by Matthew K. Rogers, for

Plaintiff Christian G. Plasman, and Third-Party Defendant Christian

J. Plasman a/k/a Barrett Plasman.

McGuireWoods LLP, by Robert A. Muckenfuss, Jodie H. Lawson,

Andrew D. Atkins, Elizabeth Zwickert Timmermans, and Anita M.

Foss, for Defendants Decca Furniture (USA), Inc., Decca Contract

Furniture, LLC, Richard Herbst, Wai Theng Tin, Tsang C. Hung,

Decca Furniture, Ltd., Decca Hospitality Furnishings, LLC, Dongguan

Decca Furniture Co. Ltd., Darren Hudgins, Decca Home, LLC, Elan by

Decca, LLC, and Nominal Defendant Bolier & Company, LLC.

Bledsoe, Judge.

1 Defendants Tsang C. Hung (“Tsang”), Decca Furniture Ltd. (“Decca China”), and

Dongguan Decca Furniture Co. Ltd. (“Decca China Plant”) have not yet joined the Motions

because Plaintiff has not yet filed proof of service for those Defendants. (Def.’s Mot.

Dismiss Compl. 1 n.1.)

I.

PROCEDURAL HISTORY

3. Plaintiff Chris Plasman originally filed this action in October 2012, and

Defendants subsequently removed the matter to the United States District Court

for the Western District of North Carolina (Voorhees, J.) in December 2012. The

federal court entered a preliminary injunction in February 2013 (the “P.I. Order”),

and, in September 2014, the federal court dismissed Chris Plasman’s federal

copyright infringement claim, declined to exercise supplemental jurisdiction, and

remanded the case to this Court for all further proceedings.

4. Upon remand, the parties filed a number of substantive motions, which

this Court resolved in a May 26, 2015 order and opinion. Bolier & Co., LLC v.

Decca Furniture (USA), Inc., 2015 NCBC LEXIS 55 (N.C. Super. Ct. May 26, 2015).

In that opinion, the Court ruled on Plaintiff’s Motion to Amend Complaint,

Defendants’ Motion to Dismiss Plaintiff’s First Amended Complaint, Defendants’

Motion to Strike Supplemental Pleadings, Defendants’ Motion to Dismiss Barrett

Plasman’s Counterclaims, along with various other motions not relevant to the

present matter.

5. This Court concluded in its May 26, 2015 Order that the “First Amended

Complaint and proposed Second Amended Complaint reveal[ed] fatal deficiencies on

their face.” Bolier, 2015 NCBC LEXIS 55, at *9. The First Amended Complaint

also asserted claims “in a confusing, unfocused manner” by grouping claims

together illogically and failing to make clear whether claims were brought

individually or on Bolier’s behalf and which Defendants were allegedly liable for

which claims. Id. at *11. Nevertheless, the Court, in the exercise of its discretion

and under the specific circumstances in this case, determined that it was

appropriate “to provide Chris Plasman another chance to amend the operative

complaint to attempt to state legally cognizable claims in this action.” Id. at *13.

Therefore, the Court granted Chris Plasman’s Motion to Amend and denied in part

as moot Defendants’ Motion to Dismiss Plaintiff’s First Amended Complaint. The

Court also denied in part as moot Defendants’ Motion to Dismiss Barrett Plasman’s

Counterclaims.

6. Chris Plasman filed his Second Amended Complaint on June 25, 2015.

Barrett Plasman filed his Supplemented and Amended Third Party Counterclaims

on the same day.2 In lieu of filing an answer, Defendants filed the present Motions

2 The Court did not technically grant Barrett Plasman leave to amend. Instead, the Court

anticipated that Barrett Plasman would refile any counterclaims at a procedurally

appropriate time, if Defendants elected to file any third-party claims after answering the

Second Amended Complaint:

[G]iven that the Court has permitted Chris Plasman to file a revised second

amended complaint, the Court notes that Defendants will thereafter be

required to answer or otherwise respond and may or may not elect to include

third-party claims against Barrett Plasman, depending on the revised

complaint allegations and Defendants’ ability to assert third-party claims

under N.C. R. Civ. P. 14 against “a person not a party to the action who is or

may be liable to [the party] for all or part of the [party's] claim against him.”

N.C. R. Civ. P. 14(a) (2014). Accordingly, in light of the current procedural

context, the Court concludes, in its discretion, that Defendants’ Motion to

Dismiss Barrett Plasman’s Counterclaims in his individual capacity should

be denied as moot at this time, without prejudice to Defendants’ right to

move to dismiss any individual claims or third-party counterclaims that

Barrett Plasman may file against Defendants in this action, as Defendants

may deem appropriate.

Bolier, 2015 NCBC LEXIS 55, at *17. Nevertheless, Defendants did not challenge the

timeliness of Barrett Plasman’s filing, and the Court elects to evaluate Barrett Plasman’s

pleading on the merits.

on September 22, 2015. The Motions have been fully briefed, and the Court held a

hearing on the Motions on December 17, 2015, at which all parties were represented

by counsel. The Motions are now ripe for resolution.

II.

FACTUAL BACKGROUND

7. The Court does not make findings of fact on motions to dismiss under Rule

12(b)(6), but only recites those allegations in the Second Amended Complaint that

are relevant and necessary to the Court’s determination of the Motions.3

8. Chris Plasman alleges that he is an experienced furniture executive, who

in 2002 started Bolier, a furniture business whose name is a Plasman family name.

(SAC ¶¶ 35–38.) Chris Plasman approached Defendants Tsang, Herbst, and Decca

China, who manufactured furniture, about partnering to run Bolier.4 (SAC ¶¶ 42–

43.) Plaintiff alleges that Decca China become Bolier’s sole supplier and then

“insisted” that its affiliated entity, Decca USA, own part of Bolier. (SAC ¶ 56.)

Plaintiff contends that Herbst promised him that Bolier would operate as a 50/50

partnership, although on paper Decca USA would own the majority interest. (SAC

¶¶ 57–65.) In August of 2013, Chris Plasman and Decca USA executed Bolier’s

Operating Agreement, which identified Chris Plasman and Decca USA as Bolier’s

only members. (SAC ¶¶ 81–84.) Under the express terms of the written Operating

3 The Second Amended Complaint alleges specific conduct occurring between 2002 and

2015, contains 515 numbered paragraphs, asserts 21 separate claims, and attaches 53

exhibits.

4 Plaintiff alleges that Tsang is now Chairman of the Board of Decca USA. (SAC ¶ 2.)

Agreement, Chris Plasman is a 45% owner, and Decca USA is a 55% owner of

Bolier. (SAC ¶¶ 331.)

9. At the end of August 2003, by written resolution, Chris Plasman began

serving as Bolier’s President and CEO, and Herbst began serving as Bolier’s Vice

President, Secretary, and Treasurer. (SAC ¶¶ 88–89.) Chris Plasman signed an

employment agreement, which addressed his job duties, salary, and grounds for

termination. (SAC Ex. 12.) In 2005, Chris Plasman hired his son, Barrett Plasman,

as Bolier’s Operations Manager. (SAC ¶ 105.)

10. Decca USA provided legal, accounting, and administrative services to

Bolier, and invoiced Bolier for the cost of these services.5 (SAC ¶ 104.) The cost of

these Contract Services became a point of contention between Chris Plasman, as

Bolier’s President, and Decca USA. (SAC ¶ 111.) Nevertheless, Chris Plasman

licensed Bolier’s name and designs to Decca China.6 (SAC ¶¶ 135–36.) Under the

licensing agreements, Decca China and its subsidiaries and affiliates would sell

Bolier products in foreign markets and pay royalties to Bolier based on sales. (SAC

¶ 137–38.)

11. Continuing through 2012, Chris Plasman and Decca USA clashed over the

cost of the Contract Services, the amount of the royalties paid to Bolier, and

5 Plaintiff alleges that Decca USA entered into contracts with Bolier to provide

Administrative Services, Legal Services and Accounting Services, which he collectively

defines and references as “Contract Services.” (SAC ¶ 104.) The Court will use “Contract

Services” hereafter as defined by Plaintiff in the Second Amended Complaint.

6 Regarding the role of Decca China, Plaintiff alleges that “[u]nder Tsang and Herbst’s

control, Decca China controls Decca Group, and causes Decca China Plant to manufacture

furniture for Bolier, and ships and causes to be shipped furniture manufactured for Bolier.”

(SAC ¶ 29.)

numerous other matters regarding the operation of Bolier. (SAC ¶¶ 139–74.) On

October 19, 2012, Herbst informed Chris Plasman that Decca USA was terminating

the employment of both Chris and Barrett Plasman, citing the cost of their salaries

as untenable. (SAC ¶¶ 198–99, 211.) Chris Plasman alleges that Decca USA lacked

the authority to terminate either of the Plasmans. (SAC ¶¶ 208–09.)

12. Despite receiving notice of their terminations, the Plasmans contend that

they continued to work for Bolier. (SAC ¶¶ 216.) On January 14, 2013, Decca USA

locked out the Plasmans from Bolier’s premises. (SAC ¶ 220.) Barrett Plasman

attempted to enter Bolier’s offices, but Tin and Hudgins—whom the Second

Amended Complaint identifies as officers and directors of Decca USA—along with

Defendants’ counsel and the High Point Police Department denied him entry and

told him that his employment was terminated and that he was no longer allowed on

Bolier’s property. (SAC ¶¶ 222–27.) Shortly thereafter, Defendants informed

Bolier’s employees at an employee meeting that the Plasmans’ employment had

been terminated. (SAC ¶ 228.) Defendants also sent a letter to Bolier customers

regarding the Plasmans’ employment termination, and Defendants’ counsel sent a

letter to Bank of North Carolina informing the bank that the Plasmans lacked the

authority to make transactions in Bolier’s name. (SAC ¶¶ 237, 469.) The Plasmans

allege that Defendants made numerous defamatory statements about them at the

employee meeting and in the letters to Bolier customers and Bank of North

Carolina employees.

13. In the Second Amended Complaint, filed after the issuance of the P.I.

Order, Chris Plasman alleges that his relationship with Decca USA has

deteriorated. Specifically, Plaintiff alleges that Decca USA routinely rejects or

refuses to vote on matters he proposes at Bolier’s bi-annual member meetings,

contrary, he alleges, to the Operating Agreement and the terms of the P.I. Order.

(SAC ¶¶ 309, 319, 325.)

III.

LEGAL STANDARD

14. The question for the Court on a motion to dismiss under N.C. R. Civ. P.

12(b)(6) is “whether, as a matter of law, the allegations of the complaint, treated as

true, are sufficient to state a claim upon which relief may be granted under some

legal theory, whether properly labeled or not.” Harris v. NCNB Nat’l Bank, 85 N.C.

App. 669, 670, 355 S.E.2d 838, 840 (1987) (citation omitted). “The complaint must

be liberally construed, and the court should not dismiss the complaint unless it

appears beyond a doubt that the plaintiff could not prove any set of facts to support

his claim which would entitle him to relief.” Block v. Cnty. Of Person, 141 N.C.

App. 273, 277–78, 540 S.E.2d 415, 419 (2000) (citing Dixon v. Stuart, 85 N.C. App.

338, 354 S.E.2d 757 (1987)).

15. Rule 12(b)(6) dismissal is proper in any of three scenarios: “(1) when the

complaint on its face reveals that no law supports plaintiff’s claim; (2) when the

complaint reveals on its face the absence of fact sufficient to make a good claim; [or]

(3) when some fact disclosed in the complaint necessarily defeats the plaintiff’s

claim.” Oates v. JAG, Inc., 314 N.C. 276, 278, 333 S.E.2d 222, 224 (1985) (citations

omitted).

16. The Court may consider documents attached to the pleadings without

converting Defendants’ Motions under Rule 12(b)(6) into a motion for summary

judgment under Rule 56. See, e.g., Laster v. Francis, 199 N.C. App. 572, 577, 681

S.E.2d. 858, 862 (2009) (stating “documents attached, specifically referred to, or

incorporated by reference in the complaint” may properly be considered in a Rule 12

motion to dismiss without converting it to a motion for summary judgment)

(citation omitted). A “trial court can reject allegations that are contradicted by the

documents attached, specifically referred to, or incorporated by reference in the

complaint.” Id.

IV.

ANALYSIS

A. Motion to Dismiss Second Amended Complaint

17. The Second Amended Complaint asserts twenty-one claims for relief, many

of which are identified as both direct and derivative claims, and Defendants move

for dismissal of all claims under Rules 8 and 12(b)(6).7

(1) Dismissal Under Rule 8

18. Defendants contend, and the Court agrees, that the Second Amended

Complaint has failed to fully cure those defects identified in the Court’s prior order

and opinion. The Second Amended Complaint still fails to “specify against which

7The Second Amended Complaint enumerates twenty claims for relief, but in doing so

numbers two distinct claims as the nineteenth claim for relief.

Defendant or Defendants the alleged claims are asserted” and “asserts a number of

claims for relief in a confusing, unfocused manner.” Bolier, 2015 NCBC LEXIS 55,

at *11. As an example of the former, Plaintiff captions his misappropriation of

trade secrets claim as against Decca USA, Decca China, Decca Contract, Decca

Hospitality, and Decca Home, but the allegations in support of that claim for relief

fail to identify any involvement by Decca Contract or Decca Hospitality and instead

focus on conduct by Defendants Tin and Hudgins. 8 (SAC ¶¶ 474–80.) As an

example of the latter, the Second Amended Complaint groups together allegations

under the heading “Seventh and Eighth Claims for Relief: Self-Dealing and

Misappropriation of Corporate Opportunities – Derivatively for the Benefit of Bolier

and Directly on behalf of Plasman as Minority Member[.]” (SAC ¶ 379.) This

convoluted method of grouping claims is exacerbated by the Second Amended

Complaint’s repeated failure to distinguish between harm suffered by Bolier and

harm suffered by Chris Plasman, despite the well-established rule that

“shareholders . . . generally may not bring individual actions to recover what they

consider their share of the damages suffered by the corporation.” Barger v. McCoy

8

As a further example, the Second Amended Complaint relies on broad allegations that the

Plaintiff intends to hold most of the Defendants liable for most of the causes of action:

Herbst, Tin, Hudgins, and Tsang are officers and directors of one or more of

Decca China, Decca USA, Decca Contract, Decca Hospitality, Decca Home,

Decca Classic, and Decca China Plant, and do not distinguish between actions

taken by or for specific entities. For most of the allegations herein, each of the

forgoing individuals and purported business entities are jointly and severally

liable, and the actions and omissions of one or more of the named parties is

attributable to one or more of the individuals and business entities because

they act as agents and representatives of the other defendants.

(SAC ¶ 23.)

Hillard & Parks, 346 N.C. 650, 660, 488 S.E.2d 215, 220–21 (1997). See also

Atkinson v. Lackey, 2015 NCBC LEXIS 21, at *14 (N.C. Super. Ct. Feb. 27, 2015)

(applying the Barger rule to LLCs).

19. In addition, the Second Amended Complaint has not fully cured its

“fail[ure] to make clear which claims are brought by Chris Plasman and which

claims are purportedly brought by Bolier.” Bolier, 2015 NCBC LEXIS 55, at *11.

For instance, while Plaintiff has separately captioned his individual and derivative

breach of fiduciary duty claims, several of the allegations under each section state

that various Defendants breached “fiduciary duties to Bolier and [Chris] Plasman”

without distinction. (See SAC ¶¶ 336, 337, 347.)

20. As a whole, and despite its length, the Second Amended Complaint is

generally imprecise, and the peculiarities of this pleading have made the

consideration of Defendants’ Motions exceedingly burdensome. The Court therefore

concludes that the Second Amended Complaint is not “sufficiently particular to give

the court and the parties notice of the transactions, occurrences, or series of

transactions or occurrences, intended to be proved showing that the pleader is

entitled to relief.” N.C. R. Civ. P. 8(a)(1). After having already afforded Plaintiff

the opportunity to re-plead his claims and specifically identified the ways in which

Plaintiff’s First Amended Complaint and Proposed Second Amended Complaint

were insufficient, the Court, in the exercise of its discretion, concludes that the

Second Amended Complaint’s noncompliance with Rule 8 provides an alternate

basis for dismissal in addition to the grounds identified under Rule 12(b)(6).

(2) Dismissal Under Rule 12(b)(6)

a. Breach of Contract

21. In order to establish a claim for breach of contract, Plaintiff must show the

existence of a valid contract and the breach of the terms of that contract. Poor v.

Hill, 138 N.C. App. 19, 26, 530 S.E.2d 838, 843 (2000). Plaintiff brings an

individual and a derivative breach of contract claim.

i. Breach of Contract – Individual Claim

22. In his individual breach of contract claim, Chris Plasman alleges that

Decca China and Decca USA breached contracts with him by refusing to make him

a 50% member, terminating his employment, making hiring decisions without his

approval, and refusing to allow him to collect accounts receivable. (SAC ¶ 370–76.)

All of the alleged acts of breach, however, are defeated by the actual terms of

Bolier’s Operating Agreement and other documents attached to the Second

Amended Complaint.

23. First, Chris Plasman alleges that section 5.1(c) of the Operating

Agreement, in addition to other contract provisions, prohibited his termination and

guaranteed him lifetime employment with Bolier. That provision of the Operating

Agreement, however, only addresses capital contributions, and states in its entirety

that “Chris[] Plasman will work for the Company and $450.00 shall be withheld

from his first monthly paycheck and will constitute his Capital Contribution.”

(SAC, Ex. 10, hereinafter “Operating Agreement,” § 5.1(c).)

24. Chris Plasman likewise contends that he is entitled to lifetime

employment under section 6.4 of the Operating Agreement, which states that “[t]he

Members shall devote to the Company as much time as they deem necessary for the

proper performance of their duties hereunder, and [Chris] Plasman, during the

period of his employment by the Company, shall be expected to devote his full time

to such duties.” (Operating Agreement § 6.4.) Plaintiff’s reading of that provision is

contrary to the plain meaning of the language; section 6.4 does not address the

issue of lifetime employment, and the qualifying phrase “during the period of his

employment” naturally implies that there may be a time when he is not employed

by the Company. Indeed, the joint resolution electing Chris Plasman as President

of Bolier, which is one of the contracts Chris Plasman alleges was breached, clearly

envisions that his employment will only last “until his successor is duly chosen and

qualified.” (SAC Ex. 9.)

25. Chris Plasman additionally alleges in his individual claim that various

Defendants breached sections 6.1(c), 6.5, and 6.6 of the Operating Agreement.

Those provisions provide that: “the Members, subject to the terms, provisions and

restrictions of this Agreement, are hereby authorized to make [a wide variety of

management and business] decisions[,]” (Operating Agreement § 6.1(c)); “the

Members may appoint individuals [as] president, Vice President, Treasurer and

Secretary[,]” (Operating Agreement § 6.5); and “[t]he Members may at any time

employ any other Persons . . . to perform services for the Company and its

business[.]” (Operating Agreement § 6.6.)

26. Plaintiff’s theory is that Decca USA breached these provisions of the

Operating Agreement by terminating his employment and making business

decisions with which he disagreed in frustration of his own ability to act under

these provisions of the Operating Agreement. Plaintiff’s interpretation, however,

ignores clear language in the Operating Agreement giving ultimate decision-making

authority to the Majority in Interest: “Except as otherwise provided in this

Agreement . . . all decisions or actions of the Company, the Company’s ‘managers’

(as such term is defined in the [LLC] Act) or the Members shall require the

approval, consent, agreement, or vote of the Majority in Interest.” (Operating

Agreement § 6.1(a).) Because the documents attached to the Second Amended

Complaint reveal that Decca USA was the Majority in Interest, it had the ultimate

authority to undertake the actions about which Chris Plasman complains.

Therefore, Plaintiff’s allegations are insufficient to sustain an individual breach of

contract claim on those provisions.

27. Chris Plasman’s flawed assumption that Decca USA cannot cause Bolier to

act without his consent, despite accepting a minority interest in an Operating

Agreement that explicitly grants control to the Majority in Interest, is a common

vein that runs throughout his opposition to Defendants’ Motion to Dismiss the

Second Amended Complaint. As seen below, a number of the claims in the Second

Amended Complaint depend on Chris Plasman’s belief that he and Decca USA were

equal owners of Bolier, a belief squarely in conflict with the unambiguous terms of

the Operating Agreement.

28. In addition to these specific contractual provisions, Chris Plasman alleges

that various Defendants breached other oral and unidentified contracts ensuring

that Chris Plasman would be a 50% owner of Bolier and always be its top officer.

(SAC ¶¶ 370–71.) Chris Plasman alleges that these contracts arose from the

parties’ course of dealings, Meiselman-type expectations, and other inexact sources.

(SAC ¶ 370.) Plaintiff’s attempts to rely on these contracts must fail for several

reasons. First, the Second Amended Complaint makes only conclusory and non-

specific statements that such contracts existed, and “[a]n allegation that a valid

contract exists between parties is a legal conclusion” not entitled to a presumption

of validity. Charlotte Motor Speedway, LLC v. Cnty. of Cabarrus, 230 N.C. App. 1,

6, 748 S.E.2d 171, 175 (2013). Second, even if Plaintiff had sufficiently pleaded the

existence of oral or implied contracts, the written documents repeatedly speak to

the contrary, and our case law clearly holds that “an express contract precludes an

implied contract with reference to the same matter.” Keith v. Day, 81 N.C. App.

185, 198, 343 S.E.2d 562, 570 (1986) (quoting Vetco Concrete Co. v. Troy Lumber

Co., 256 N.C. 709, 713–14, 124 S.E.2d 908, 908 (1962)).

29. As noted above, Chris Plasman’s allegations are contrary to the

unambiguous terms of the Operating Agreement; section 6.1(a) vests the Majority

in Interest, here Decca USA, with the final authority over officers and employees.

Moreover, in a letter attached to the Second Amended Complaint and dated August

23, 2003, Richard Herbst proposed to Chris Plasman the terms of the Operating

Agreement, including a term that “Decca will hold 55% of the capital of the new

‘Bolier & Company, LLC’. You will hold 45%.” (SAC Ex. 7.) As explained more fully

below, in the face of the explicit language of the Operating Agreement and in the

absence of any language supporting Chris Plasman’s claims that he could not be

terminated, the Court concludes that Chris Plasman’s attempts to rely on oral and

unidentified contracts fail as a matter of law.

30. At the time when Bolier was formed, the LLC Act provided that “[t]he

articles of organization or written operating agreement may require that all

agreements of the members constituting the operating agreement shall be in

writing, in which case the term ‘operating agreement’ shall not include oral

agreements of the members.” N.C. Gen. Stat. § 57C-3-05 (2013).9 Bolier’s Articles

of Organization contains such a requirement, which states in clear terms that “[t]he

Company shall be operated pursuant to a written operating agreement. No

purported oral operating agreement among the members shall be enforceable.”

(SAC Ex. 1.) (emphasis added.) The Second Amended Complaint alleges that “Chris

Plasman signed the Bolier Operating Agreement provided to him without change,”

(SAC ¶ 82), and he is therefore bound to its terms. N.C. Gen. Stat. § 57C-3-05 (“A

member shall be bound by any operating agreement . . . to which the member has

expressly assented.”). As a result, the alleged oral and unidentified contracts

containing terms contrary to the Operating Agreement cannot sustain Chris

Plasman’s individual claim for breach of contract.

9 Chapter 57C of the General Statutes was repealed and replaced by Chapter 57D, effective

on January 1, 2014. The Court has the discretion to apply either chapter in resolving the

present motions. See N.C. Gen. Stat. § 57D-11-03(b) (2015) (“Any proceeding commenced

before January 1, 2014, may be completed in accordance with the law then in effect.”).

ii. Breach of Contract – Derivative Claim

31. Chris Plasman’s derivative claim for breach of contract must fail as well.

Similar to his individual claim, Chris Plasman alleges that Decca USA breached

specific sections of the Operating Agreement by terminating his employment. (SAC

¶ 364.) Plaintiff alleges that this conduct violated Bolier’s rights under the

Operating Agreement and under implied covenants of good faith and fair dealing.

(SAC ¶¶ 359, 364.) As explained above, Plaintiff’s allegations cannot give rise to a

breach of contract claim on the basis of Chris Plasman’s termination from

employment because they ignore section 6.1(a), which clearly vests Decca USA as

the Majority in Interest with ultimate decision-making authority on many matters,

including Bolier’s employment decisions. See Woods-Hopkins Contracting Co. v.

N.C. State Ports Auth., 284 N.C. 732, 738, 202 S.E.2d 473, 476 (1974) (holding that

general contract provisions must yield to specific provision).

32. Plaintiff likewise cannot premise Boiler’s claim on an alleged breach of a

covenant of good faith and fair dealing implicit in Bolier’s Operating Agreement,

because “[a] breach of good faith and fair dealing claim ‘cannot be used to contradict

the express terms of a contract.’” Heron Bay Acquisition, LLC v. United Metal

Finishing, Inc., 2014 NCBC LEXIS 16, at *42 (N.C. Super. Ct. May 7, 2014)

(quoting Rezapour v. Earthlog Equity Grp., Inc., No. 5:12CV105-RLV, 2013 U.S.

Dist. LEXIS 92124, at *11 (W.D.N.C. July 1, 2013)).

33. Chris Plasman’s derivative breach of contract claim additionally alleges

that Decca USA entered into and breached alleged contracts with Bolier to provide

Contract Services. (SAC ¶¶ 355–361.) Where a complaint alleges (1) the existence

of a valid contract and (2) breach of the terms of the contract, it is error to dismiss a

breach of contract claim under N.C. R. Civ. P. 12(b)(6). McLamb v. T.P. Inc., 173

N.C. App. 586, 588, 619 S.E.2d 577, 580 (2005). A valid contract requires (1) assent,

(2) mutuality of obligation, and (3) definite terms. Schlieper v. Johnson, 195 N.C.

App. 257, 265, 672 S.E.2d 548, 553 (2009). In alleging the existence of the contracts

to provide Contract Services, the Second Amended Complaint only alleges that

Decca China and Decca USA “demanded that Bolier receive administrative

services,” (SAC ¶ 99); “demanded that Bolier receive accounting services,” (SAC ¶

100); and “demanded that Bolier receive legal services,” provided by Decca USA,

(SAC ¶ 101). The pleadings suggest that Decca USA did in fact provide these

services. (SAC ¶ 108.)

34. Those limited allegations are insufficient, however, to state a claim that

Decca USA and Bolier had a contract to provide the Contract Services. Plaintiff has

not alleged any facts which would support the existence of assent on the part of

Bolier, mutuality of obligation, or definite terms with regard to the Contract

Services. As such, the Court cannot accept as true the conclusory allegation that

valid contracts existed, and the derivative claim for breach of the alleged

agreements to provide Contract Services must fail. See, e.g., Charlotte Motor

Speedway, 230 N.C. App. at 6, 748 S.E.2d at 175 (“An allegation that a valid

contract exists between parties is a legal conclusion.”); Guarascio v. New Hanover

Health Network, Inc., 163 N.C. App. 160, 165, 592 S.E.2d 612, 614 (2004) (affirming

12(b)(6) dismissal of breach of contract claim premised upon conclusory allegation

that an employment manual was part of plaintiff’s employment contract); FCX, Inc.

v. Bailey, 14 N.C. App. 149, 151, 187 S.E.2d 381, 382 (1972) (affirming 12(b)(6)

dismissal of contract claim premised upon conclusory allegation that third-party

plaintiff was a third-party beneficiary to the contract).

35. For the reasons stated above, Chris Plasman’s individual and derivative

breach of contract claims each fail to state a claim as a matter of law.

b. Breach of Fiduciary Duty and Constructive Fraud

36. Plaintiff bundles together claims for breach of fiduciary duty and

constructive fraud and asserts these claims individually and derivatively. To state

a claim for breach of fiduciary duty, a plaintiff must allege (1) the existence of a

fiduciary relationship, (2) a breach of that duty, and (3) that the breach injured

plaintiff. See Green v. Freeman, 367 N.C. 136, 749 S.E.2d 262, 268 (2013). The

Court discusses these claims together because “[t]he primary difference between

pleading a claim for constructive fraud and one for breach of fiduciary duty is” that

constructive fraud requires allegations that the defendant benefitted himself

through the breach. White v. Consol. Planning, Inc., 166 N.C. App. 283, 294, 603

S.E.2d 147, 156 (2004). Plasman brings both the individual and derivative claims

against Tsang, Decca China, Herbst, Decca USA, Tin, and Hudgins.

i. Individual Breach of Fiduciary Duty

37. In Chris Plasman’s individual claims, he alleges that these Defendants

breached fiduciary duties owed to him by forcing him to accept a 45% membership

interest in Bolier, (SAC ¶¶ 330–33), refusing to later make him a 50% member,

(SAC ¶ 339), failing to provide business information “as required by statute,

fiduciary duties, and court order,” (SAC ¶ 334), allocating business away from

Bolier, (SAC ¶ 336, 341, 346), refusing to combine Bolier profits with Decca

Hospitality, (SAC ¶ 337), refusing to vote on matters he noticed for vote, (SAC ¶

342), and terminating Plasman without a member or manager meeting, (SAC ¶

341).

38. As an initial matter, the Second Amended Complaint fails to allege facts

sufficient to show a fiduciary relationship with many of the Defendants identified as

liable under these claims. A fiduciary relationship exists when “there has been

special confidence reposed in one who in equity and good conscience is bound to act

in good faith and with due regard to the interests of the one reposing confidence.”

Dalton v. Camp, 353 N.C. 647, 651–52, 548 S.E.2d 704, 707–08 (2001) (citation

omitted). ‘“Only when one party figuratively holds all the cards — all the financial

power or technical information, for example — have North Carolina courts found

that the special circumstances of a fiduciary relationship has arisen.’” S.N.R.

Mgmt. Corp. v. Danube Partners 141, LLC, 189 N.C. App. 601, 613, 659 S.E.2d 442,

451 (2008) (quoting Broussard v. Meineke Discount Muffler Shops, Inc., 155 F.3d

331, 348 (4th Cir. 1998)).

39. As a majority member of Bolier, Decca USA owed Chris Plasman a

fiduciary duty as a minority member. Kaplan v. O.K. Techs., LLC, 196 N.C. App.

469, 473, 675 S.E.2d 133, 137 (2009) (holding that under the LLC act a manager

owes fiduciary duties to the LLC and a controlling owner owes fiduciary duties to

minority owners). Otherwise, however, Chris Plasman has not alleged

circumstances showing that other Defendants he interacted with exerted sufficient

“domination or control” over him to give rise to a fiduciary duty. It appears to the

Court that Chris Plasman attempts to lump all of the Defendants other than Decca

USA into the fiduciary duty claim on the basis of the following allegation:

Herbst, Tin, Hudgins, and Tsang are officers and directors of one or

more of Decca China, Decca USA, Decca Contract, Decca Hospitality,

Decca Home, Decca Classic, and Decca China Plant, and do not

distinguish between actions taken by or for specific entities. For most

of the allegations herein, each of the forgoing individuals and

purported business entities are jointly and severally liable, and the

actions and omissions of one or more of the named parties is

attributable to one or more of the individuals and business entities

because they act as agents and representatives of the other

defendants.

(SAC ¶ 23.) Even taking that allegation as true, it is insufficient here in the

absence of other compelling factual allegations to show either that Chris Plasman

placed special trust or confidence in Tin, Hudgins, Herbst, Tsang, and Decca China,

or that they exerted domination and control sufficient to create a fiduciary

relationship. See Dalton, 353 N.C. at 652, 548 S.E.2d at 708 (stating that

domination and control are essential aspects of a fiduciary relationship). Indeed,

the Second Amended Complaint alleges that Chris Plasman “was an experienced

furniture executive,” (SAC ¶ 35), and that he approached Tsang and Herbst about

developing the Bolier brand, (SAC ¶ 42).

40. Chris Plasman argues that certain of these Defendants exerted domination

and control over him because they promised him that Bolier would be run as a 50/50

partnership and that he would only be a minority member “on paper.” That

argument, however, fails. As stated above, Bolier’s Articles of Organization

disclaimed any oral agreement between the members, and Chris Plasman admits

that he voluntarily entered into the written Operating Agreement as a 45% owner.

Plaintiff’s voluntary actions in entering into this relationship defeat his contention

that the Defendants exerted domination and control over him. See, e.g., Dallaire v.

Bank of Am., N.A., 367 N.C. 363, 368, 760 S.E.2d 263, 266 (2014) (stating that arm’s

length transactions do not typically give rise to fiduciary duties). Therefore, Chris

Plasman has failed to allege that any Defendant other than Decca USA owes him a

fiduciary duty.

41. Many of the alleged breaches of fiduciary duty by Decca USA depend on

Chris Plasman’s contention that he was promised a 50% ownership interest in

Bolier, that he was entitled to lifetime employment with Bolier, and that under the

Operating Agreement he enjoys the right to manage Bolier’s business coequal with

Decca USA. Plaintiff’s argues that he was promised a 50% ownership in Bolier by

Tsang and Herbst prior to the creation of Decca USA. (SAC ¶ 63.) Because the

Court has concluded that Tsang and Herbst did not owe Plaintiff fiduciary duties,

however, no claim for breach can lie on those allegations. Decca USA’s authority to

act unilaterally on behalf of Bolier and to terminate Plaintiff is set forth in Bolier’s

Operating Agreement, as explained by the Court in dismissing Plaintiff’s breach of

contract claims. Because Plaintiff’s allegations and the exhibits attached to the

Complaint show that Decca USA acted pursuant to the Operating Agreement,

Plaintiff has failed to allege any conduct on the part of Decca USA in breach of a

fiduciary duty owed to Plaintiff.

ii. Derivative Breach of Fiduciary Duty

42. Much of Chris Plasman’s derivative breach of fiduciary duty claim is

repetitive of allegations in his individual breach of fiduciary duty claim. In addition

to those allegations, Plaintiff alleges that Defendants breached fiduciary duties

owed to Bolier by “making numerous unilateral decisions designed to reduce

Bolier’s business,” (SAC ¶ 346), terminating the Plasmans’ access to Bolier’s

computer software, (SAC ¶ 347), refusing to provide Contract Services and return

records, (SAC ¶ 348), failing to introduce new Bolier designs, (SAC ¶ 349), and

“causing Decca Defendants” to compete with Bolier, (SAC ¶ 352).

43. It is true that Decca USA, as a manager and majority member, owes

fiduciary duties to Bolier. Kaplan, 196 N.C. App. at 473, 675 S.E.2d at 137.

Nevertheless, Chris Plasman’s specific allegations regarding Decca USA boil down

essentially to allegations that Decca USA made management decisions for Bolier

without obtaining his consent. Yet, as discussed above, Chris Plasman voluntarily

entered into an Operating Agreement which gave the Majority in Interest (i.e.,

Decca USA) the ultimate authority to act, including without his consent.

44. Furthermore, even if the contract documents supported Chris Plasman’s

allegations, North Carolina law is clear that parties to a contract “generally owe no

special duty to one another beyond the terms of the contract[.]” Branch Banking &

Trust Co. v. Thompson, 107 N.C. App. 53, 61, 418 S.E.2d 694, 699 (1992) (holding

that parties to a contract do not thereby become each other’s fiduciaries). Here,

Chris Plasman has essentially alleged that the acts he contends to be contractual

breaches were de facto breaches of fiduciary duties. Without more, such allegations

are insufficient to demonstrate that Defendants’ actions breached fiduciary duties

to Bolier.

45. Plaintiff fully premises his constructive fraud claims on his breach of

fiduciary duty claims. (Pl.’s Mem. Opp. Mot. Dismiss 6.) Because the breach of

fiduciary duty claims fail, Plaintiff’s constructive fraud claims, both individually

and derivatively, must also fail. See, e.g., Levin v. Jacobson, 2016 NCBC LEXIS 66,

at *12 (N.C. Super. Ct. Aug. 25, 2016) (dismissing constructive fraud claim when

the breach of fiduciary duty claim on which it relied failed).

c. Conspiracy to Defraud and Fraud; Fraud and Obtaining Property

Under False Pretenses

46. The Second Amended Complaint asserts several combined fraud claims:

“Conspiracy to Defraud and Fraud,” which is brought derivatively, and “Fraud and

Obtaining Property Under False Pretenses,” which is brought both derivatively and

directly.

47. To state a claim for fraud, a plaintiff must show: a (1) false representation

or concealment of a material fact; that is (2) reasonably calculated to deceive; (3)

made with intent to deceive; (4) does deceive; and (5) injures the complaining party.

Ragsdale v. Kennedy, 268 N.C. 130, 138, 209 S.E.2d 494, 500 (1974). The

circumstances constituting fraud must be pleaded with particularity, N.C. R. Civ. P.

9(b), and these circumstances include the “time, place, and content of the fraudulent

representation, identity of the person making the misrepresentation and what was

obtained as a result of the fraudulent acts or representations.” Terry v. Terry, 302

N.C. 77, 85, 273 S.E.2d 674, 678 (1981).

48. The Second Amended Complaint alleges that various Defendants

committed fraud by failing to pay Bolier, (SAC ¶ 418–19), withholding financial

information from Bolier and Chris Plasman, (SAC ¶ 421–23), and excluding Chris

Plasman from the Bolier premises and financial accounts after his termination,

(SAC ¶¶ 427–29, 432–35). With respect to allegations relating to the failure to pay

Bolier and the withholding of information, Plaintiff fails to allege any detail about

the allegedly fraudulent acts or statements, including their time and place,

sufficient to meet the pleading standard under Rule 9(b).

49. As for the allegations that Defendants committed fraud in excluding Chris

Plasman from Bolier’s presence and financial accounts, Plaintiff alleges that

Defendants made misrepresentations about their own authority to third parties,

including the police and the bank, and that those third parties relied on the

purported misrepresentations in barring Chris Plasman from accessing Bolier’s

premises or accounts. As pleaded, these allegations attempt to premise a fraud

claim on actions directed towards and relied upon by non-parties.

50. “A pleading setting up fraud must allege the facts relied upon to constitute

fraud, and that the alleged false representation was made with intent to deceive

plaintiff.” Calloway v. Wyatt, 246 N.C. 129, 133, 97 S.E.2d 881, 884 (1957)

(emphasis added). “Where the facts are insufficient as a matter of law to constitute

reasonable reliance on the part of the complaining party, the complaint is properly

dismissed under Rule 12(b)(6).” Hudson-Cole Dev. Corp. v. Beemer, 132 N.C. App.

341, 346, 511 S.E.2d 309, 313 (1999) (emphasis added). Here, the Second Amended

Complaint fails to allege that Chris Plasman or Bolier relied on alleged

misrepresentations intended to deceive either of them. See also RD&J Props. v.

Lauralea-Dilton Enters., LLC, 165 N.C. App. 737, 744, 600 S.E.2d 492, 498 (2004)

(“Plaintiff’s reliance on any misrepresentations must be reasonable.”) (emphasis

added). Therefore, the Second Amended Complaint fails to state a claim for fraud

on that basis.

51. Plaintiff’s “conspiracy to defraud” claim must also fail. “It is well

established that ‘there is not a separate civil action for civil conspiracy in North

Carolina.’” Esposito v. Talbert & Bright, Inc., 181 N.C. App. 742, 747, 641 S.E.2d

695, 698 (2007) (quoting Dove v. Harvey, 168 N.C. App. 687, 690, 608 S.E.2d 798,

800 (2005)). In a civil conspiracy, ‘“recovery must be on the basis of sufficiently

alleged wrongful overt acts,’” and the conspiracy charge is simply a mechanism for

associating the defendants and broadening the admissible evidence. Dove, 168 N.C.

App. at 690, 608 S.E.2d at 800 (quoting Fox v. Wilson, 85 N.C. App. 292, 301, 354

S.E.2d 737, 743 (1987)). “The existence of a conspiracy requires proof of an

agreement between two or more persons.” Henderson v. LeBauer, 101 N.C. App.

255, 261, 399 S.E.2d 142, 145 (1991). Here, the underlying fraud claim has failed,

and Plaintiff asserts only in conclusory fashion that various Defendants at

unspecified times conspired to commit fraud or conspired to withhold information.

(SAC ¶¶ 418, 420, 421.) As such, Plaintiff’s purported claim for conspiracy to

defraud must also fail.

52. Together with his fraud claim, Plaintiff asserts a claim for obtaining

property under false pretenses. In support of that claim, Plaintiff alleges that Tin’s

and Hudgins’s actions in excluding Chris Plasman from Bolier’s premises and

cutting off his access to Bolier’s financial accounts amounted to “felonious violations

of N.C. Gen. Stat. § 14-100.” (SAC ¶ 436.) The statutory offense is defined as “(1) a

false representation of a subsisting fact or a future fulfillment or event, (2) which is

calculated and intended to deceive, (3) which does in fact deceive, and (4) by which

one person obtains or attempts to obtain value from another.” State v. Cronin, 299

N.C. 229, 242, 262 S.E.2d 277, 286 (1980).10 Plaintiff has alleged that statements

made to exclude Chris Plasman from Bolier’s premises and bank accounts following

the termination of his employment are the underlying false representations.

However, as the Court has stated, the Operating Agreement gave Decca USA

authority to terminate Chris Plasman as an employee of Bolier. Therefore, the

Second Amended Complaint fails to allege any requisite false misrepresentations

10 While N.C. Gen. Stat. § 14-100 is a criminal statute, a person who obtains property by

false pretenses in violation of that statute is liable for civil damages to the owner of the

property. N.C. Gen. Stat. § 1-538.2(a).

which were intended to deceive, and Plaintiff’s claim for obtaining property by false

pretenses must be dismissed.11

d. Self-Dealing and Misappropriation of Corporate Opportunities

53. The Second Amended Complaint asserts together a derivative and direct

claim for “self-dealing and misappropriation of corporate opportunities.” Plaintiff

alleges that Decca USA and Decca China engaged in self-dealing by employing

individuals, including Herbst, Tin, and Hudgins, who also worked for other Decca

entities. (SAC ¶¶ 382–85.) Plaintiff also appears to allege that the provision of

Contract Services by entities in which Decca USA had an interest amounts to self-

dealing. Plaintiff contends that Decca USA and Decca China misappropriated

corporate opportunities by operating Decca-affiliated entities in furniture markets

in which Bolier could have participated or was participating. (SAC ¶¶ 380–81, 386–

89.)

54. Corporate directors breach the fiduciary duties owed to their corporations

when they engage in self-dealing and conflict of interest transactions. Lecann v.

Cobham, 2012 NCBC LEXIS 58, at *18 (N.C. Super. Ct. Nov. 7, 2012). Plaintiff’s

response brief clarifies that it alleges Defendants owed a duty not to engage in

conflict of interest transactions akin to that owed by corporate directors under N.C.

Gen. Stat. § 55-8-31. (Pl.’s Mem. Opp. Mot. Dismiss 19–20.) The fiduciary duties

owed by corporate directors, however, are not identical to the fiduciary duties owed

by an LLC manager.

11

Section 1-538.2(c) sets forth specific demand requirements that the Second Amended

Complaint does not allege have been satisfied, providing a separate basis for dismissal of

Plaintiff’s claim.

The [LLC] Act contains numerous “default” provisions or rules that

govern an LLC only in the absence of an explicitly different

arrangement in the LLC’s articles of organization or written operating

agreement. Because these default provisions can be changed in

virtually any way the parties wish, an LLC is primarily a creature of

contract.

Stainless Valve Co. v. Safefresh Techs., LLC, 231 N.C. App. 286, 291, 753 S.E.2d

331, 335 (2013) (quoting Russell M. Robinson, II, Robinson on North Carolina

Corporation Law § 34.01 (7th ed. 2012). Indeed, “the provisions of the [LLC Act]

and common law will apply only to the extent contrary or inconsistent provisions

are not made in, or not otherwise supplanted, varied, disclaimed, or nullified by, the

operating agreement.” N.C. Gen. Stat. § 57D-2-30(a). An LLC manager’s duty of

loyalty to act in the best interest of the LLC is specifically “subject to the operating

agreement.” N.C. Gen. Stat. § 57D-3-21(b)(iii).

55. Here, the Operating Agreement allowed Bolier’s managers to employ

individuals and entities despite the potential for conflicts of interest. Although the

Second Amended Complaint alleges that the provision of the Contract Services by

Decca-affiliated entities amounts to self-dealing by Decca USA, the Operating

Agreement specifically allowed Bolier’s members:

to employ or retain from time to time, on such terms and for such

compensation as agreed to by a Majority in Interest, such persons,

firms, or corporations, including without limitation attorneys,

accountants, bookkeepers, [and other professionals] who may also

provide such services to the Members and persons, firms or

corporations in which any Member may have an interest.

(Operating Agreement § 6.1(c)(ii).) The last clause of that provision clearly

contemplates that Bolier’s members may have an interest in the individuals or

entities providing Contract Services to Bolier.

56. The Second Amended Complaint also alleges that Decca USA engaged in

self-dealing by employing individuals to work for Bolier who also worked for other

Decca-affiliated entities. The Operating Agreement, however, allows for that

conduct as well: “The Members may at any time employ any other Persons,

including Persons employed by, affiliated with or related to them or any Member, to

perform services for the Company and its business.” (Operating Agreement § 6.6.)

Chris Plasman therefore entered into an Operating Agreement, which expressly

permitted Decca USA to contract with and employ affiliated individuals and

entities. He cannot now allege that such conduct to which he voluntarily consented

in contract amounts to self-dealing, and his claim therefore must fail. See, e.g.,

HCW Ret. & Fin. Servs., LLC v. HCW Emp. Benefit Servs., LLC, 2015 NCBC

LEXIS 73, at *46–47 (N.C. Super. Ct. July 14, 2015) (holding that an LLC member

could not claim that he was a minority member owed a fiduciary duty where he

voluntarily entered into an Operating Agreement indicating otherwise).

57. Misappropriation of corporate opportunity “is a species of the duty of a

fiduciary to act with undivided loyalty; . . . in general, a corporate officer or director

is under a fiduciary obligation not to divert corporate business opportunity for his

own personal gain.” Meiselman v. Meiselman, 309 N.C. 279, 307, 307 S.E.2d 551,

568 (1983) (quotation omitted). Misappropriation of corporate opportunities is

logically a derivative claim, but not an individual claim, because the injury is to the

corporation, not to an individual shareholder. Id. at 307, 307 S.E.2d at 567

(identifying as an essential element that defendant “breached a fiduciary duty owed

to the corporate defendants not to usurp a corporate opportunity”). The Court

concludes that these principles are equally applicable in the limited liability

company context, and, therefore, Plaintiff’s individual claim for misappropriation of

corporate opportunity must fail as a matter of law.

58. Moreover, the Second Amended Complaint alleges that Defendants

misappropriated corporate opportunities by making various management decisions,

selling Bolier products through other Decca-affiliated entities, and allowing other

Decca-affiliated entities to sell furniture in markets where Bolier operated. (SAC ¶

380–401.) Plaintiff’s allegations that these actions breached a fiduciary duty owed

to Bolier are in conflict with Plaintiff’s admission that he caused Bolier to enter into

licensing agreements with Decca China and its affiliates, by which those entities

agreed to pay Bolier royalties for sales of its products in certain markets. (SAC ¶

135–37.) Accordingly, the Second Amended Complaint fails to state a derivative

claim for misappropriation of corporate opportunities, and that claim must be

dismissed as well.

e. Tortious Interference

59. Chris Plasman brings a claim for “tortious interference” derivatively on

behalf of Bolier. The Second Amended Complaint does not identify whether the

claim is for tortious interference with contract or for tortious interference with

prospective economic advantage, and so the Court evaluates the claim under both

causes of action.

60. The elements for tortious interference with contract are:

(1) a valid contract between the plaintiff and a third person which

confers upon the plaintiff a contractual right against a third person; (2)

the defendant knows of the contract; (3) the defendant intentionally

induces the third person not to perform the contract; (4) and in doing

so acts without justification; (5) resulting in actual damage to plaintiff.

Beck v. City of Durham, 154 N.C. App. 221, 232, 573 S.E.2d 183, 191 (2002)

(quotation omitted). Tortious interference with prospective economic advantage is a

similar claim in which a plaintiff “must allege facts showing that the defendants

acted without justification in ‘inducing a third party to refrain from entering into a

contract with them which contract would have ensued but for the interference.”

Walker v. Sloan, 137 N.C. App. 387, 393, 592 S.E.2d 236, 242 (2000) (citation

omitted). In support of this claim, Chris Plasman alleges that Decca China, Decca

USA, Tin, and Herbst tortiously interfered with Bolier’s contracts or prospective

contracts by diverting containers of furniture meant for Bolier, (SAC ¶ 441),

refusing to process payroll or authorize Bolier to process payroll, (SAC ¶ 442), and

refusing to return furniture or deposits belonging to Bolier customers, (SAC ¶

445).12

12 The caption states that this claim is also brought against Decca Contract and Decca

Hospitality, yet neither party is mentioned in the paragraphs within that section. The

substance of a complaint controls over its internal captions, and after consideration of the

Second Amended Complaint as a whole, the Court concludes that Plaintiff has failed to

state a claim for tortious interference against those parties. See Taylor v. Ashburn, 112

N.C. App. 604, 607, 436 S.E.2d 276, 279 (1993) (holding that a complaint’s caption is not

determinative of the capacity in which a defendant is actually being sued).

61. Claims for tortious interference are justified by the “overwhelming

authority” allowing for recovery against “an outsider who knowingly, intentionally,

and unjustifiably induces one party to a contract to breach it to the damage of the

other party.” Childress v. Abeles, 240 N.C. 667, 674, 84 S.E.2d 176, 181 (1954)

(emphasis added) (citations omitted). As pleaded, Plaintiff alleges that the named

Defendants have tortiously interfered with Bolier’s contracts and prospective

contracts by taking allegedly unlawful acts on behalf of Bolier or by causing Bolier

not to perform its contractual obligations to third-parties. “A party to a contract,

including the party’s managing agent, cannot be liable for wrongful interference of

the contract.” Palles v. Hatteras Inv. Partners LLC, 2009 NCBC LEXIS 37, at *15

(citing Wagoner v. Elkin City Sch. Bd. of Educ., 113 N.C. App. 579, 587, 440 S.E.2d

119, 124 (1994)). Because Decca USA is the managing member of Bolier, it can be

considered a party to Bolier’s contracts and cannot be liable for tortious interference

with Bolier’s contracts or its prospective economic advantage.

62. Decca China, Tin, and Herbst, on the other hand, can be considered “non-

outsiders” to Bolier’s contracts. “A non-outsider is one who, though not a party to

the terminated contract, had a legitimate business interest of his own in the subject

matter.” Smith v. Ford Motor Co., 289 N.C. 71, 87, 221 S.E.2d 282, 292 (1976)

(holding that Ford Motor Co. was a non-outside who had a legitimate business

interest in the success of a Ford dealer). A non-outsider enjoys qualified immunity

from liability on a tortious interference claim. Combs v. City Elec. Supply Co., 203

N.C. App. 75, 84, 690 S.E.2d 719, 725 (2010). Nevertheless, a non-outsider may be

liable for tortious interference if the non-outsider acted with “legal malice.” Varner

v. Bryan, 113 N.C. App. 697, 702, 440 S.E.2d 295, 298 (1994). “A person acts with

legal malice if he does a wrongful act or exceeds his legal right or authority in order

to prevent the continuation of the contract between the parties.” Id.

63. Herbst, Tin, and Decca China, as officers, owners, and affiliates of Decca

USA, have a legitimate business interest in the success of Bolier and are therefore

non-outsiders to its contracts. Plaintiff advances conclusory allegations that these

Defendants’ actions were “maliciously intended” to interfere with Bolier’s contracts.

(SAC ¶¶ 441–43.) However, “[g]eneral allegations of malice are insufficient as a

matter of pleading.” Pinewood Homes, Inc. v. Harris, 184 N.C. App. 597, 605, 646

S.E.2d 826, 833 (2007) (citing Spartan Equipment Co. v. Air Placement Equipment

Co., 263 N.C. 549, 559, 140 S.E.2d 3, 11 (1965)). The Second Amended Complaint

makes no further allegations that these Defendants acted with legal malice in

allegedly interfering with Bolier’s contracts and prospective contracts, so Plaintiff’s

claim must therefore fail. See also Stec v. Fuzion Inv. Capital, LLC, 2012 NCBC

LEXIS 24, at *23–24 (N.C. Super. Ct. Apr. 30, 2012) (dismissing tortious

interference claim for failure to state a claim where the complaint only advanced

conclusory allegations that non-outsiders acted maliciously).

f. Intellectual Property Claims

64. Plaintiff asserts a derivative and an individual cause of action for

“trademark, trade dress, and misappropriation of intellectual property.” Plaintiff’s

brief in response to the Motion to Dismiss clarifies that the rights Plaintiff seeks to

protect are primarily Chris Plasman’s “common law right to use Bolier in commerce

relating to furniture.” (Pl.’s Br. Opp. Mot. Dismiss SAC 13.)

65. Chris Plasman advances conclusory statements that certain Defendants

“are unlawfully and without Bolier’s permission using Bolier’s designs, trademarks

and trade names in violation of agreement with Bolier,” “conspiring to

misappropriate Bolier’s intellectual property,” and “infringing Bolier’s common law

intellectual property rights.” (SAC ¶¶ 414–15.) In the absence of “specific,

supportive, factual allegations, the [C]ourt need not accept as true general

conclusory allegations of the elements of a cause of action for purposes of a motion

to dismiss.” Global Promotions Grp., Inc. v. Danas, Inc., 2012 NCBC LEXIS 41, at

*12 (N.C. Super. Ct. June 22, 2012) (citing Manning v. Manning, 20 N.C. App. 149,

154, 201 S.E.2d 46, 50 (1973).

66. Despite these general allegations, Plasman acknowledges in the Second

Amended Complaint that he licensed the use of Bolier’s name and designs to Decca

China and its related entities. (SAC ¶¶ 135–38.) Furthermore, Bolier’s Operating

Agreement makes clear that Bolier has an interest in the name “Bolier” until the

company “decide[s] to cease operations, wind up its affairs, and seek to be

dissolved,” at which point it will transfer those rights to Chris Plasman. (SAC, Ex.

10, hereinafter “Operating Agreement” § 2.2.) Although Chris Plasman alleges that

he sought to cause Bolier to unilaterally transfer rights in the name “Bolier” back to

himself after his termination, (SAC ¶ 213; Ex. 30), the Second Amended Complaint

does not aver that Bolier has engaged in any of the activities set forth in section 2.2

of the Operating Agreement requiring transfer of the name back to Plaintiff. In

particular, a decision to cease operations and wind up Bolier required the written

consent of all of Bolier’s members, consent Plaintiff never alleges was given.

(Operating Agreement § 8.1(a)(ii).)

67. Therefore, the Second Amended Complaint discloses specific facts

indicating that the Decca Defendants acquired and continue to possess lawful

interests in Bolier’s intellectual property. Those specific facts necessarily defeat

Plaintiff’s conclusory allegations of misappropriation and unlawful use, and so

Plaintiff’s claim must be dismissed. See Oates v. JAG, Inc., 314 N.C. 276, 278, 333

S.E.2d 222, 224 (1985) (holding that dismissal is proper under 12(b)(6) “when some

fact disclosed in the complaint necessarily defeats the plaintiff’s claim”).

g. Conversion

68. Plaintiff asserts a derivative claim for conversion alleging that Decca USA,

Tin, and Hudgins converted furniture intended for Bolier’s customers “to control by

Decca USA,” (SAC ¶ 452), converted funds including customer payments “to

exclusive control by Decca USA,” (SAC ¶ 455), and converted the Bolier website

owned by Chris Plasman, (SAC ¶ 458). To state a claim for conversion, a plaintiff

must allege (1) ownership in the plaintiff and (2) wrongful possession or conversion

by the defendant. Variety Wholesalers, Inc. v. Salem Logistics Traffic Servs., LLC ,

365 N.C. 520, 523, 723 S.E.2d 744, 747 (2012) (citation omitted).

69. Under the Operating Agreement, Decca USA’s status as the Majority in

Interest allows it to exercise control over Bolier’s products and funds. (See

generally, Operating Agreement § 6.1(c).) Plaintiff’s allegations that Decca USA

exerted “control” over those items fails to state that Decca USA has deprived Bolier

of its ownership rights in the property. Variety Wholesalers, 365 N.C. at 530, 723

S.E.2d at 751 (“The essence of conversion is not the acquisition of property by the

wrongdoer, but a wrongful deprivation of it to the owner.”). Without more, Plaintiff

has failed to allege that Decca USA wrongfully possessed or converted Bolier

property to its own use, and the conversion claim must fail on that basis.

70. With regard to the website, Plaintiff alleges that “at all times prior to

January 14, 2013, the website www.bolierco.com was registered and owned by

Plasman in his personal capacity.” (SAC ¶ 219.) The Second Amended Complaint

further states that Decca China “high-jacked the www.bolierco.com website owned

by Plasman” and committed conversion in doing so. (SAC ¶¶ 250, 458.) The Second

Amended Complaint only states the conversion claim, derivatively, however.

Because the website was alleged to be owned by Plasman, Bolier cannot state a

claim that any of the Decca Defendants deprived Bolier of ownership over the

website. Plaintiff’s derivative claim for conversion must therefore fail with respect

to the www.bolierco.com website.

h. Defamation

71. Chris Plasman brings a direct claim for defamation against Decca China,

Tsang, Herbst, Decca USA, Tin, and Hudgins.13 Chris Plasman alleges that

13 The claim’s heading identifies all of these defendants as liable for defamation, but

Plaintiff fails to attribute any defamatory statements to Decca China. The allegedly

slanderous statements were made by Tin and Hudgins. (SAC ¶ 467.) The letter to Bolier

customers was signed by Tin, as COO of Decca USA, and was allegedly “approved” by

Defendants made slanderous statements to Bolier employees in a company meeting

and made libelous statements in separate letters to Bolier customers and to the

Bank of North Carolina following Decca USA’s termination of the Plasmans’

employment. In the meeting with Bolier employees, Plaintiff contends that Tin

made statements that the Plasmans had misused Bolier funds and that Chris

Plasman claimed to own 100% of Bolier. (SAC ¶¶ 462–65.) In the letter to Bolier

customers, Tin, as COO of Decca USA, apologized for recent customer service issues

and stated that the Plasmans had improperly held themselves out as Bolier

employees since their termination on October 19, 2012. (SAC Ex. 34.)

72. To state a claim for defamation, a plaintiff must allege “that the defendant

made false, defamatory statements of or concerning the plaintiff, which were

published to a third person, causing injury to the plaintiff's reputation.” Tyson v.

L'eggs Prods., Inc., 84 N.C. App. 1, 10–11, 351 S.E.2d 834, 840 (1987). Truth is a

defense to a defamation claim. Holleman v. Aiken, 193 N.C. App. 484, 496, 668

S.E.2d 579, 587 (2008). Defamation can take the form of libel, which is written, or

slander, which is oral. Tallent v. Blake, 57 N.C. App. 249, 251, 291 S.E.2d 336, 338

(1982).

73. North Carolina law recognizes three classes of libel: “(1) publications

obviously defamatory which are called libel per se; (2) publications susceptible of

two interpretations one of which is defamatory and the other not; and (3)

publications not obviously defamatory but when considered with innuendo,

Tsang and Herbst. (SAC ¶ 238.) The letter to Bank of North Carolina was written by

Decca USA’s legal counsel on their behalf. (SAC Ex. 51.)

colloquium, and explanatory circumstances become libelous, which are termed libels

per quod.” Arnold v. Sharpe, 296 N.C. 533, 537, 251 S.E.2d 452, 455 (1979). North

Carolina law also recognizes two classes of slander: (i) slander per se and (ii)

slander per quod. Donovan v. Fiumara, 114 N.C. App. 524, 527, 442 S.E.2d 572,

574 (1994).

74. With regard to the statements in question, the Plasmans contend that

Defendants are liable on both a per se and a per quod basis. Libel per se occurs

when the publication “considered alone without explanatory circumstances: (1)

charges that a person has committed an infamous crime; (2) charges a person with

having an infectious disease; (3) tends to impeach a person in that person's trade or

profession; or (4) otherwise tends to subject one to ridicule, contempt or disgrace.”

Nucor Corp. v. Prudential Equity Grp., LLC, 189 N.C. App. 731, 736, 659 S.E.2d

483, 486 (2008) (quoting Boyce & Isley, PLLC v. Cooper, 153 N.C. App. 25, 29, 568

S.E.2d 893, 898 (2002)). Similarly, slander per se occurs when false remarks, which

in and of themselves, amount to “(1) an accusation that the plaintiff committed a

crime involving moral turpitude; (2) an allegation that impeaches the plaintiff in his

trade, business, or profession; or (3) an imputation that the plaintiff has a

loathsome disease.” Phillips v. Winston-Salem/Forsyth Cnty. Bd. of Educ., 117 N.C.

App. 274, 277, 450 S.E.2d 753, 756 (1994).

75. Most of the allegedly defamatory statements here are not actionable

because the Second Amended Complaint and its attached exhibits reveal them to be

true. In the meeting with Bolier employees and in the letter to Bank of North

Carolina, Defendants stated the Plasmans had wrongfully taken and used Bolier

funds. In a response letter sent by Plaintiff’s counsel to the Bank of North Carolina,

Plaintiff’s counsel acknowledges that “Chris Plasman and Barrett Plasman on

behalf of Bolier & Company, LLC opened the bank account with Bank of North

Carolina on October 24, 2012 to facilitate Bolier & Company, LLC’s continued

operation.” (SAC Ex. 52.)

76. While Plaintiff disputes that Decca USA had the authority to terminate

the Plasmans on October 19, 2012, the Court has already held that the Operating

Agreement clearly entitled Decca USA as the Majority in Interest to terminate the

Plasmans’ employment. Chris Plasman alleges that even if he was terminated

when he opened a bank account in Bolier’s name with Bolier’s funds, he was

entitled to do so under the Operating Agreement, which provides that Bolier’s bank

accounts “shall be maintained in the bank approved by the Managers.” (Operating

Agreement § 7.10.) That provision cannot fairly be read, however, to allow a

minority member-manager to unilaterally open a bank account in Bolier’s name

with Bolier’s funds, particularly in light of the requirement that “all decisions or

actions of the Company, the Company’s [managers] or the Members” require the

approval of the Majority in Interest. (Operating Agreement § 6.1(a).) Therefore,

the Second Amended Complaint asserts facts defeating Plaintiff’s allegations that

Defendants made false statements that the Plasmans had misused Bolier funds.

77. The statements made in the letter to Bolier customers are likewise not

defamatory because the Second Amended Complaint reveals their truth. The letter

to Bolier customers states that the Plasmans were terminated on October 19, 2012

and have misrepresented themselves as employees and officers of Bolier since that

time. Those statements are only false under the Plasmans’ theory that Decca USA

lacked the authority to terminate them. Because the Court has already determined

that Decca USA terminated the Plasmans on October 19, 2012 pursuant to its

rights as the Majority in Interest, the statements in the letter to Bolier customers

are not false and therefore cannot support a claim for libel.

78. Finally, the statement made to Bolier employees that Chris Plasman

claimed to own 100% of Bolier fails to state a claim as slander per se or slander per

quod. That statement is not slanderous per se because it does not specifically

impeach Chris Plasman in his trade or profession. Words are slanderous per se

when they are “susceptible of but one meaning and of such nature that the court can

presume as a matter of law that they tend to disgrace and degrade the party or hold

him up to public hatred, contempt, or ridicule, or cause him to be shunned and

avoided.” Boyce & Isley, PLLC v. Cooper, 153 N.C. App. 25, 30–31, 568 S.E.2d 893,

898–99 (2002).

79. With that high bar in mind, “North Carolina cases have held consistently

that alleged false statements made by [a former employer], calling [a former

employee] ‘dishonest’ or charging that plaintiff was untruthful and an unreliable

employee, are not actionable per se.” Pierce v. Atl. Grp., Inc., 219 N.C. App. 19, 23,

724 S.E.2d 568, 572 (2012). On its face, a statement that Chris Plasman claimed to

own 100% of Bolier when he in fact did not fails to meet the high bar for slander per

se; such a statement only attacks his professional reputation to the extent it

charges him with being dishonest, which is not actionable on a per se theory under

Pierce.

80. Slander per quod, on the other hand, occurs when a statement that is not

defamatory on its face nevertheless reveals itself as harmful “in consequence of

extrinsic, explanatory facts showing its injurious effect.” Donovan, 114 N.C. App. at

527, 442, S.E.2d at 574. To succeed on a per quod basis, “the injurious character of

the words and some special damage must be pleaded and proved.” Beane v.

Weiman Co., Inc., 5 N.C. App. 276, 277, 168 S.E.2d 236, 237 (1969). A plaintiff

must allege special damages “so as to fairly inform the defendant of the scope of

plaintiff’s demand.” Nguyen, 200 N.C. App. at 393, 684 S.E.2d at 475.

81. Chris Plasman does not allege any extrinsic or explanatory circumstances

causing the allegedly defamatory statement to be injurious. Indeed, Chris Plasman

only states that this statement “is false and intended to defame, and impeach Chris

[Plasman] in his profession.” (SAC ¶ 463.) Nor does Chris Plasman allege special

damages, advancing only a general claim that he has been damaged in excess of

$20,000. (SAC ¶ 473.) See, e.g., Skinner v. Reynolds, 764 S.E.2d 652, 657 (N.C. Ct.

App. 2014) (dismissing libel per quod claim because conclusory allegation of “lost

wages” and “expenses” failed to state “facts indicating the circumstances of the

alleged special damages or the amount claimed”); Pierce, 219 N.C. App. at 35, 724

S.E.2d at 579 (holding that a general allegation that defamatory statements

“damaged . . . [Plaintiff’s] economic circumstances” was insufficient to allege special

damages).

82. Because Plaintiff has not identified any statements or special damages

that can support his defamation claim, Plaintiff’s claim must be dismissed.

i. Misappropriation of Trade Secrets

83. To state a claim for misappropriation of trade secrets, “a plaintiff must

identify a trade secret with sufficient particularity so as to enable a defendant to

delineate that which he is accused of misappropriating and a court to determine

whether misappropriation has or is threatened to occur.” VisionAir, Inc. v. James,

167 N.C. App. 504, 510–11, 606 S.E.2d 359, 364 (2004) (citation omitted). “[A]

complaint that makes general allegations in sweeping and conclusory statements,

without specifically identifying the trade secrets allegedly misappropriated, is

insufficient to state a claim for misappropriation of trade secrets.” Washburn v.

Yadkin Valley Bank & Trust Co., 190 N.C. App. 315, 327, 660 S.E.2d 577, 585–86

(2008).

84. North Carolina’s Trade Secret Protection Act defines a trade secret as:

business or technical information . . . that: (a) Derives independent

actual or potential commercial value from not being generally known

or readily ascertainable through independent development or reverse

engineering by persons who can obtain economic value from its

disclosure or use; and (b) is the subject of efforts that are reasonable

under the circumstances to maintain its secrecy.

N.C. Gen. Stat. § 66-152(3). Defendants argue, and the Court agrees, that Plaintiff

has not identified its trade secrets with sufficient particularity. Plaintiff identifies

as its trade secrets “Bolier’s business records kept at 2009 Fulton Place,” (SAC ¶

475), and its “confidential pricing information[.]” (SAC ¶ 478.) These brief

allegations squarely fall within the bounds of allegations that our courts have

regularly deemed too “sweeping and conclusory” to state a claim for

misappropriation of trade secrets. See Washburn, 190 N.C. App. at 327, 660 S.E.2d

at 586 (holding that allegations of “knowledge of [party’s] business methods; clients,

their specific requirements and needs; and other confidential information pertaining

to [party’s] business” failed to sufficiently identify a trade secret); Aecom Tech.

Corp. v. Keating, 2012 NCBC LEXIS 9, at *8 (N.C. Super. Ct. Feb. 6, 2012) (holding

that broad allegations of customer lists, customer contact information, pricing

information, and product information failed to identify trade secrets); Akzo Nobel

Coatings, Inc. v. Rogers, 2011 NCBC LEXIS 42, at *68–69 (N.C. Super. Ct. Nov. 3,

2011) (holding allegation of “proprietary formulas, methodologies, customer and

pricing data and other confidential information” was too broad and vague to

constitute a trade secret). The Court therefore concludes that Plaintiff has failed to

sufficiently allege or identify its trade secrets, so the claim for misappropriation of

trade secrets fails as a matter of law.14

j. Unfair and Deceptive Trade Practices

85. Chris Plasman asserts an individual and a derivative claim for violation of

the Unfair and Deceptive Trade Practices Act, N.C. Gen. Stat. § 75-1.1. Chris

Plasman brings this claim against Decca China, Decca USA, Decca Contract, Decca

14 In its response brief, Plaintiff did not challenge Defendants’ arguments concerning

dismissal of his misappropriation of trade secrets claim. As an additional basis for

dismissal, therefore, the Court treats Defendants’ motion as uncontested with regard to this

claim.

Hospitality, Decca Home, Tsang, Herbst, Tin, and Hudgins.15 Like many of his

claims, it fails to distinguish between harm allegedly done directly to Plasman and

harm allegedly done to Bolier. To successfully state a claim for unfair and deceptive

trade practices, a plaintiff must allege “(1) 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 the plaintiff or to his business.” McLamb v. T.P. Inc., 173

N.C. App. 586, 593, 619 S.E.2d 577, 582 (2005) (citing N.C. Gen. Stat. § 75-1.1). In

construing the phrase “in or affecting commerce,” our Supreme Court has held that

“the General Assembly did not intend for the [Unfair and Deceptive Trade

Practices] Act to intrude in the internal operations of a single market participant.”

White v. Thompson, 364 N.C. 47, 53, 691 S.E.2d 676, 680 (2010).

86. Here, Plaintiff’s allegations cover much of the same conduct of which

Plaintiff complains in his breach of fiduciary duty and misappropriation of

corporate opportunities claims. Chris Plasman alleges that the operation of other

Decca entities in competing markets is an unfair or deceptive trade practice. (SAC

¶ 488.) Chris Plasman additionally alleges that the provision of Contract Services

to Bolier and the sending of an allegedly defamatory letter to Bolier customers rise

to the level of unfair and deceptive trade practices.

87. As an initial matter, the Court dismisses the defamation claim in full as

explained above, and Plaintiff has not alleged facts showing that sending the

allegedly defamatory letter to Bolier customers is otherwise unfair or deceptive.

15 Here, again, the claim’s heading identifies Tin and Hudgins as liable defendants, but the

supporting allegations fail to mention conduct by those individuals.

Therefore, Plaintiff’s Chapter 75 claim must fail to the extent it is premised on

Plaintiff’s defamation claim.

88. Likewise, the provision of Contract Services to Bolier—whether or not

pursuant to a binding contract—does not, as pleaded, state a claim for violation of

section 75-1.1. The Second Amended Complaint reveals that Plaintiff’s primary

grievance with the provision of Contract Services is that he believed those services

could be performed by others for less money. (SAC ¶¶ 109, 111, 140, 302.) In other

words, Plaintiff complains that Decca USA has engaged in unfair or deceptive

conduct by failing to negotiate for more favorable pricing terms on behalf of Bolier.

As pleaded, Plaintiff has alleged that any unfair or deceptive conduct on the part of

Decca USA with regard to the Contract Services was contained solely within Bolier.

89. In White v. Thompson, the Supreme Court held that unfair or deceptive

conduct was not “in or affecting commerce” when it occurred only among the

partners of a single business. 364 N.C. at 53, 691 S.E.2d at 680. In reaching its

conclusion, the Court noted that the unfair or deceptive conduct was the same

conduct alleged to be a breach of fiduciary duty to the partnership, and that the

plaintiff had only acted unfairly or deceptively towards his partners. Id. Here,

Plaintiff alleges that the provision of the Contract Services, which it also alleges

was an act of self-dealing in breach of Decca USA’s fiduciary duties to Bolier, was

unfair and deceptive conduct directed towards Bolier. Plaintiff’s allegations that

the Contract Services were not a good business deal for Bolier describe “the internal

operations of a single market participant,” and, as such, cannot be actionable under

Chapter 75. Id.

90. The Court acknowledges that the allegations regarding the provision of the

Contract Services bear some similarity to the facts in Sara Lee Corp. v. Carter, 351

N.C. 27, 32–33, 519 S.E.2d 308, 311–12 (1999). In Sara Lee, the Supreme Court

held that N.C. Gen. Stat. § 75-1.1 would apply to the defendant’s self-dealing

activities wherein he sold goods and services to his employer from companies owned

by him. Id. The Court’s decision in Sara Lee, however, relied on the trial court’s

award of damages on the claim of self-dealing and its finding that the defendant

had not informed the plaintiff-employer of his self-interest. Id. In this case,

however, this Court has already dismissed Plaintiff’s self-dealing claim. In light of

this Court’s conclusion that the provision of the Contract Services was permissible

under the Operating Agreement, and that the Operating Agreement disclosed that

such services could be provided by an interested party, the allegations regarding the

provision of Contract Services does not, as pleaded here, allege unfair or deceptive

conduct.

91. Regarding the allegations of unfair market competition, the Second

Amended Complaint reveals that these actions cannot fairly be alleged as unfair or

deceptive. A practice is unfair when “it offends established public policy as well as

when the practice is immoral, unethical, oppressive, unscrupulous, or substantially

injurious to consumers.” Pinehurst, Inc. v. O’Leary Bros. Realty, Inc., 79 N.C. App.

51, 59–60, 338 S.E.2d 918, 923 (1986). Here, Plaintiff has alleged simply that the

act of selling competing furniture in markets in which Bolier operates rises to the

level of unfairness. Without more, the mere participation of a competitor in a

marketplace is not unfair or deceptive. Sunbelt Rentals,Inc. v. Head & Engquist

Equip., LLC, 2003 NCBC LEXIS 6, at *145–46 (N.C. Super. Ct. May 2, 2003) (“The

appellate court decisions dealing with unfair competition . . . demonstrate an

awareness that competition is healthy and not to be unduly discouraged.”) aff’d 174

N.C. App. 49, 620 S.E.2d 222 (2005). Thus, those entities who do not owe fiduciary

duties to Bolier are entitled to lawfully compete with it in the marketplace. As a

result, Plaintiff’s claim that the sale “of competitive furniture products by Decca

Home and Decca Classic” fails to allege unfair or deceptive conduct.

92. Furthermore, Plaintiff’s argument is inconsistent with its admission that

Bolier entered into licensing agreements for Decca China to manufacture Bolier

products and sell them through other Decca entities. (SAC ¶¶ 135–37.) In essence,

Plaintiff is complaining of the effects of contracts that Bolier entered into, without

alleging that the contracts themselves are unlawful or impermissible.16 In fact,

Chris Plasman admits that he personally caused Bolier to enter into these licensing

agreements in order to maintain a relationship with Decca China. (SAC ¶¶ 135–

36.) Without more detail, Plaintiff has not sufficiently alleged unfair or deceptive

conduct on the part of Defendants. In light of the above, Plaintiff has failed to state

a claim for unfair and deceptive trade practices.

16 The Court has found no provision in the Operating Agreement restricting Bolier’s ability

to enter into licensing agreements.

k. Violations of the LLC Act

93. Chris Plasman asserts individual and derivative claims against Decca

USA for alleged “Violations and Breaches of N.C.G.S. § 57D.” Plaintiff alleges that

Decca USA’s refusal to provide him with requested information and refusal to vote

on items he noticed for vote at member meetings amounts to violations of N.C. Gen.

Stat. §§ 57D-2-32, 57D-3-04, and 57D-3-20 through 57D-3-23. (SAC ¶ 496.) Most of

those provisions, however, simply set out default rules under which an LLC may

act. Section 57D-2-32 outlines what types of remedies an operating agreement may

provide for breach of the operating agreement. Section 57D-3-20 sets out and

explains the role of “managers.” Section 57D-3-22 gives managers the power to

delegate authority to others. Section 57D-3-23 substitutes the term “company

officials” for “managers” in some instances. Plaintiff has not alleged that Bolier’s

Operating Agreement was drafted contrary to these provisions, and these provisions

do not impose liability such that Chris Plasman could recover under them as he has

attempted to plead here.

94. Section 57D-3-04 discusses members’ information rights under the LLC

Act, and section 57D-3-04(a) identifies specific categories of information that an

LLC member has the right to access. The Second Amended Complaint advances no

more than conclusory allegations that Decca USA has violated Chris Plasman’s

information rights. Furthermore, the Second Amended Complaint is entirely devoid

of any allegation that Chris Plasman made an appropriate demand under the

statute, which requires a member to deliver written notice to the LLC seven days

before he intends to exercise his information rights. N.C. Gen. Stat. § 57D-3-04(d).

Chris Plasman’s conclusory allegations and failure to allege that he satisfied the

demand requirement defeats his claim under section 57D-3-04. To the extent Chris

Plasman’s allegations seek to enforce the P.I. Order, the appropriate avenue for

enforcement is through a motion to compel or a motion for contempt in this action.

95. Finally, section 57D-3-21 simply sets forth the standard for a manager’s

fiduciary duty to the LLC, providing that a manger shall discharge his or her duties

“(i) in good faith, (ii) with the care an ordinary prudent person in a like position

would exercise under similar circumstances, and (iii) subject to the operating

agreement, in a manner the manager believes to be in the best interests of the

LLC.” N.C. Gen. Stat. § 57D-3-21(b). Chris Plasman’s claim that Decca USA

breached this statutory provision is identical to his derivative claim for breach of

fiduciary duty against Decca USA. Having already determined that the Second

Amended Complaint fails to state a claim for breach of fiduciary duty, this claim

must also fail.

l. Violations of the Wage and Hour Act

96. Chris Plasman alleges that he “was entitled to employment and wages as

Bolier’s CEO and President” and seeks to recover “wages from January 1, 2013 until

the present” under North Carolina’s Wage and Hour Act, N.C. Gen Stat. § 95-25.1 et

seq. The Second Amended Complaint alleges that Decca USA attempted to

terminate Chris Plasman on October 19, 2012. (SAC Ex. 28.) Plaintiff contends

that Decca USA lacked the authority to cause Bolier to terminate Plasman’s

employment. (SAC ¶ 209.) As stated above, the Operating Agreement reveals that

Decca USA was entitled as the Majority in Interest to make final employment

decisions, including with regard to Chris Plasman. Therefore, the Second Amended

Complaint fails to allege facts showing that Chris Plasman has served as an

employee of Bolier since January 1, 2013. Chris Plasman’s claim for wages due

since that date must therefore fail.17

m. Dissolution/Buyout

97. In the alternative, Chris Plasman seeks judicial dissolution of Bolier under

the LLC Act. The Court may order judicial dissolution in a proceeding brought by

an LLC member “if it is established that (i) it is not practicable to conduct the LLC’s

business in conformance with the operating agreement and this Chapter or (ii)

liquidation of the LLC is necessary to protect the rights and interests of the

member.” N.C. Gen. Stat. § 57D-6-02(2).18 Having dismissed the numerous claims

brought by Chris Plasman, it appears to the Court that judicial dissolution is not

warranted. Any difficulty in conducting the business of Bolier and any perceived

17 The Wage and Hour Act is discussed in greater detail below in association with Barrett

Plasman’s counterclaims. Barrett Plasman’s counterclaims invoke specific statutory

provisions of the Wage and Hour Act, whereas Chris Plasman’s claim states that he is

generally owed wages under the Act. The Court also need not go into such detail with Chris

Plasman’s Wage and Hour Act claim in light of its prior analysis concluding that Chris

Plasman failed to state a claim for breach of contract with regard to the termination of his

employment.

18 Chris Plasman requests that the Court order a buyout of his interest and invokes N.C.

Gen. Stat. § 55-6-40(h) and § 57D-6-04(d). Neither of those statutes permit the Court to

order a buyout of Chris Plasman’s interest. That remedy is not available to Chris Plasman

under section 55-6-40(h) because Bolier is not a corporation organized under Chapter 55.

Under the LLC Act, the Court can only order the judicial dissolution of an LLC, at which

point the other LLC members can elect to stave off dissolution by making an offer to

purchase the complaining member’s interest for fair market value. N.C. Gen. Stat. § 57D-6-

04(d).

harm to Chris Plasman’s rights appears to arise from Chris Plasman’s erroneous

belief that he is or should be a 50% owner of Bolier and his erroneous interpretation

of how the Operating Agreement delegates authority between member-managers

and the Majority in Interest. The Court therefore dismisses Chris Plasman’s

request for judicial dissolution.

n. Piercing the Corporate Veil

98. Chris Plasman purports to assert a claim for piercing the corporate veil.

However, piercing of the corporate veil “is not a theory of liability. Rather, it

provides an avenue to pursue legal claims against corporate officers or directors

who would otherwise be shielded by the corporate form.” Green v. Freeman, 367

N.C. 136, 146, 749 S.E.2d 262, 271 (2013). Because the Court dismisses all of the

causes of action in the Second Amended Complaint, there are no remaining grounds

for Plaintiff’s recovery under a theory of piercing the corporate veil.

B. Motion to Dismiss Barrett Plasman’s Supplemented and Amended Third

Party Counterclaims

99. Barrett Plasman’s Supplemented and Amended Third Party

Counterclaims assert claims against various Defendants for (i) violation of North

Carolina’s Wage and Hour Act, (ii) tortious interference with contract and

prospective economic advantage, (iii) defamation, and (iv) piercing the corporate

veil. Defendants move the Court to dismiss Barrett Plasman’s counterclaims on the

merits pursuant to Rules 8 and 12(b)(6) of the North Carolina Rules of Civil

Procedure. (Defs.’ Mem. Supp. Mot. Dismiss Suppl. and Am. Third Party

Countercls. 2.)19

a. Wage and Hour Act Violations

100. Barrett Plasman admits that Bolier paid him for work performed through

October 19, 2012, (Suppl. and Am. 3d Party Countercls. ¶ 22), but alleges that

Decca USA violated sections 95-25.6 and 95-25.7 of North Carolina’s Wage and

Hour Act in failing to pay him for work performed for Bolier from October 19, 2012

to January 14, 2013. (Suppl. and Am. 3d Party Countercls. ¶¶ 29–34.) That

window of time runs from the date that Bolier delivered Barrett Plasman a notice of

termination to the time when he was locked out of Bolier’s facilities. (Suppl. and

Am. 3d Party Countercls. ¶¶ 20, 23, 26.) Barrett Plasman’s claim is simply one for

unpaid wages; N.C. Gen. Stat. § 95-25.6 mandates that employers pay employees

“all wages and tips accruing to the employee,” while N.C. Gen. Stat. § 95-25.7 sets

forth the process by which an employer must pay outstanding wages to a

terminated employee.

101. Barrett Plasman’s claim for violation of the Wage and Hour Act fails for

several reasons.20 First, although Barrett Plasman’s counterclaims state that he

19 Barrett Plasman’s Supplemented and Amended Third-Party Counterclaims incorporate

by reference the Second Amended Complaint. Therefore, to the extent that Barrett

Plasman’s Counterclaims depend on the allegations of the Second Amended Complaint, the

Court’s discretionary determination that Rule 8 provides an alternate basis for dismissal of

the Second Amended Complaint also applies to Barrett Plasman’s Counterclaims.

20 The Court notes that Barrett Plasman has brought this claim against Decca USA, who

was not his employer. The Court believes that alone is sufficient grounds for dismissal.

Regardless, the substance of Barrett Plasman’s allegations would mandate dismissal even

if the claim was brought against Bolier.

believes Decca USA lacked the authority to terminate him, as the Court has

discussed at length previously, Bolier’s Operating Agreement gives Decca USA the

authority as the Majority in Interest to make such decisions on behalf of Bolier.

(Operating Agreement § 6.1(a).)21

102. The counterclaims also fail to overcome our state’s presumption that an

employee is terminable at will. “North Carolina follows the at-will employment

doctrine, which dictates that ‘in the absence of a contractual agreement . . .

establishing a definite term of employment, the relationship is presumed to be

terminable at the will of either party without regard to the quality of performance

of either party.’” Brackett v. SGL Carbon Corp., 158 N.C. App. 252, 259, 580 S.E.2d

757, 761 (2003) (quoting Kurtzman v. Applied Analytical Industries, Inc., 347 N.C.

329, 331, 493 S.E.2d 420, 422 (1997)).

103. Although the Counterclaims advance a conclusory allegation that Barrett

Plasman had an oral employment contract with Bolier, Barrett Plasman does not

allege that his contract established a definite term of employment. (Suppl. and Am.

3d Party Countercls. ¶ 37.) Instead, Barrett Plasman merely alleges that after he

received notice of termination on October 19, 2012, he “believed and continued to

believe” that Decca USA lacked the authority to terminate him and that he “was

told by Chris [Plasman] that Decca USA’s attempt to terminate him was

ineffective.” (Suppl. and Am. 3d Party Countercls. ¶¶ 18–19.) Such allegations

alone are insufficient to bar application of the employment-at-will doctrine.

21 The Amended Third-Party Counterclaims incorporate by reference the entirety of the

Second Amended Complaint, which includes Bolier’s Operating Agreement.

Moreover, the express provision in Bolier’s Operating Agreement specifically grants

the Majority in Interest broad power over employment decisions. (Operating

Agreement § 6.1(a), (c)(ii).) Therefore, Barrett Plasman’s claim for violation of the

Wage and Hour Act must fail.

b. Tortious Interference

104. Barrett Plasman asserts a claim for tortious interference with contract

and/or prospective economic advantage against Decca USA and Decca China.

Despite including Decca China in the claim’s caption, the pleading fails to allege

any conduct by Decca China in the relevant paragraphs, and the Court concludes

that this claim should be dismissed against Decca China.

105. Having laid out above the elements for tortious interference with contract

and prospective economic advantage, the Court need not repeat them in full here.

In order to state a claim, both claims require the allegation that Decca USA acted

without justification in inducing a third-party to breach a contract or not enter a

contract. See supra ¶ 59.

106. The only contract identified by the pleadings is Barrett Plasman’s alleged

employment contract with Bolier. (Suppl. and Am. 3d Party Countercls. ¶ 37.) The

Court has already stated the rule that “[a] party to a contract, including the party’s

managing agent, cannot be liable for wrongful interference of the contract.” Palles,

2009 NCBC LEXIS 37, at *15. Because Decca USA is the managing member of

Bolier, it can be considered a party to Bolier’s contracts and cannot be liable for

tortious interference with Barrett Plasman’s employment contract with Bolier.

Therefore, Barrett Plasman’s claim for tortious interference with contract must fail.

107. In support of his tortious interference with prospective economic

advantage claim, Barrett Plasman alleges that Decca USA, by filing a third-party

claim against him, has interfered with Barrett Plasman’s “other employment

opportunities.” (Suppl. and Am. 3d Party Countercls. ¶ 41.) To maintain an action

for tortious interference with prospective economic advantage, a plaintiff must

identify a specific contract between itself and a third party. DaimlerChrysler Corp.

v. Kirkhart, 148 N.C. App. 572, 585, 561 S.E.2d 276, 286 (2002) (granting dismissal

where plaintiff “failed to identify any particular contract that a third party has been

induced to refrain from entering into”). Because Barrett Plasman has failed to

identify a particular contract, his claim for tortious interference with prospective

economic advantage must be dismissed. See Artistic S., Inc. v. Lund, 2015 NCBC

LEXIS 113, at *31 (N.C. Super. Ct. Dec. 9, 2015) (dismissing tortious interference

with prospective advantage claim where the plaintiff failed to identify a specific

potential contract the defendants induced a third party not to enter).

c. Defamation

108. Barrett Plasman’s defamation claim is nearly a word-for-word

reproduction of Chris Plasman’s defamation claim, as many of the statements

alleged to be defamatory were made about both Plasmans. Thus, the Court

dismisses Barrett Plasman’s defamation claim as to those statements for the same

reasons it dismisses Chris Plasman’s defamation claim as previously discussed.

109. Only one of the alleged defamatory statements applies to Barrett Plasman

alone. Barrett Plasman alleges that in the meeting with Bolier employees after the

Plasmans were terminated from employment, Tin “stated Barrett is power hungry

and ruled the employees with an iron fist.” (Suppl. and Am. Third-Party

Countercls. ¶ 46.) North Carolina law recognizes that “[r]hetorical hyperbole and

expressions of opinion not asserting provable facts are protected speech.” Daniels v.

Metro Magazine Holding Co., 179 N.C. App. 533, 539, 634 S.E.2d 586, 590 (2006).

Rhetorical hyperbole may appear to assert a statement of fact, “but a reasonable

reader or listener would not construe that assertion seriously.” Id. In Daniels, the

Court dismissed as opinion or rhetorical hyperbole statements that the plaintiff—an

insurance adjuster—(i) spoke “in a Gestapo voice,” (ii) acted like “the former Soviet

security police,” (iii) was a fascist, and (iv) intended to take the defendant “to the

gas chamber”. Id. at 540–41, 634 S.E.2d at 591. Statements that Barrett Plasman

was “power hungry” and “ruled employees with an iron fist” clearly fall in line with

those statements dismissed in Daniels. The statements are unactionable opinion

or, alternatively, rhetorical hyperbole, which any reasonable listener would not

construe seriously. Barrett Plasman cannot maintain a defamation claim on the

basis of those statements.

d. Piercing the Corporate Veil

110. Barrett Plasman asserts a claim for piercing the corporate veil. The Court

dismisses that purported claim for the same reason it dismisses Chris Plasman’s

purported claim for piercing the corporate veil.

V.

CONCLUSION

111. For the reasons stated herein, the Court hereby GRANTS Defendants’

Motion to Dismiss Plaintiff’s Second Amended Complaint, and GRANTS

Defendants’ Motion to Dismiss Barrett Plasman’s Supplemented and Amended

Third-Party Counterclaims.

112. As a result, Plaintiff’s Second Amended Complaint and Barrett Plasman’s

Supplemented and Amended Third-Party Counterclaims, and all claims and

counterclaims stated therein, are hereby DISMISSED with prejudice.

SO ORDERED, this the 21st day of October, 2016.

/s/ Louis A. Bledsoe, III

Louis A. Bledsoe, III

Special Superior Court Judge

for Complex Business Cases