Opinion

Implus Footcare, LLC v. Vore

2025 NCBC 55

Court: North Carolina Business Court
Filed: Sep 11, 2025
Status: Published
Author: Mark A. Davis
Cited by: 0 cases
Authority: More cited than 35.7%

stating that a court will look to the circumstances surrounding the second agreement to determine whether it is a novation “if the words [of the agreement] do not make it clear” (emphasis added)

How later courts described this case

stating that a court will look to the circumstances surrounding the second agreement to determine whether it is a novation “if the words [of the agreement] do not make it clear” (emphasis added)
concluding that “[t]he jury could have found it was not the intent of the parties to abrogate the first contract” where the subsequent contract did not explicitly “mention the . . . first contract”
affirming dismissal of an abuse of process claim based on the “totality of the circumstances” which included subpoenas “attached to a letter that conditioned an offer to settle upon plaintiff’s payment of money to defendants”
holding that “[o]nly where there is an underlying claim for unlawful conduct can a plaintiff state a claim for civil conspiracy by also alleging the agreement of two or more parties to carry out the conduct and injury resulting from that agreement”

Written by the judges who cited it.

The opinion

Implus Footcare, LLC v. Vore, 2025 NCBC 55.

STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE

SUPERIOR COURT DIVISION

WAKE COUNTY 24CV020659-910

IMPLUS FOOTCARE, LLC and IM

GROUP HOLDINGS

CORPORATION,

Plaintiffs,

ORDER AND OPINION ON

v. MOTION TO AMEND AND

MOTIONS TO DISMISS

TODD VORE, BLUE SAN, LLC, H.B.

SHOES CO., and THE MIKE HALE

COMPANY,

Defendants.

THIS MATTER is before the Court on Defendants H.B. Shoes Co. and The

Mike Hale Company’s Motion to Dismiss Second Amended Complaint (ECF No. 73);

Defendants Todd Vore and Blue San, LLC’s Motion to Dismiss Second Amended

Complaint (ECF No. 76); Plaintiffs Implus Footcare, LLC and IM Group Holdings

Corporation’s Motion to Dismiss Blue San, LLC’s Amended Counterclaims (ECF No.

68) (collectively, the “Motions to Dismiss”); and Plaintiffs Implus Footcare, LLC and

IM Group Holdings Corporation’s Motion for Leave to File Third Amended Complaint

(“Motion to Amend,” ECF No. 110, and together with the Motions to Dismiss, the

“Motions”).

Having considered the Motions, the parties’ briefs, the arguments of counsel,

the applicable law, and all other appropriate matters of record, the Court concludes

that the Motion to Amend should be GRANTED and that the Motions to Dismiss

should each be GRANTED in part and DENIED in part for the reasons set forth

below.

Kilpatrick Townsend & Stockton LLP by Elizabeth Winters, Richard Self, and

Jason Wenker for Plaintiffs Implus Footcare, LLC and IM Group Holdings

Corporation.

Foley Hoag LLP by Kristyn DeFilipp, Leah Rizkallah, and Jasmine Brown, and

Morningstar Law Group by Harrison Gates for Defendants Todd Vore and Blue

San, LLC.

Morningstar Law Group by Harrison Gates for Defendants H.B. Shoes Co. and

The Mike Hale Company.

Davis, Judge.

INTRODUCTION

1. The parties in this highly contentious case, involving competitors within

the footwear accessories and shoe care industry, have filed a veritable potpourri of

claims against each other. At its most basic level, two competitors accuse each other

of exceeding the limits of lawful competition while—not surprisingly—defending

their own conduct as being well within those very same limits. In order to resolve the

parties’ dueling arguments, the Court must dive into the murky waters separating

legitimate business conduct from unfair competition.

FACTUAL AND PROCEDURAL BACKGROUND

2. The Court does not make findings of fact in connection with a motion to

dismiss under Rule 12(b)(6) of the North Carolina Rules of Civil Procedure and

instead recites those facts contained in the pleading and in documents attached to,

referred to, or incorporated by reference in the pleading that are relevant to the

Court’s determination of the motion. See, e.g., Window World of Baton Rouge, LLC

v. Window World, Inc., 2017 NCBC LEXIS 60, at *11 (N.C. Super. Ct. July 12, 2017).1

I. Background

3. Implus Footcare, LLC (“Implus”) is a Delaware limited liability company

with its principal place of business in Durham County, North Carolina. (TAC ¶ 1;

Blue San, LLC’s Amended Counterclaims (“Amended Counterclaims”), ECF No. 54,

¶ 2.) Implus is in the business of designing and distributing footwear accessories and

shoe care products. (TAC ¶¶ 20–21; Am. Countercls. ¶ 11.)

4. IM Group Holdings Corporation (“IMGH”) is a Delaware corporation

with its principal place of business in Durham County, North Carolina. (TAC ¶ 2;

Am. Countercls. ¶ 3.) IMGH is the parent company of Implus. 2 (TAC ¶ 2; Am.

Countercls. ¶ 3.)

5. Defendant Todd Vore worked for Implus for decades in various

capacities and most recently served as its president. (TAC ¶¶ 24–26, 37–38; Am.

Countercls. ¶ 14.)

6. While working for Implus, Vore developed a professional relationship

with two individuals named Hugh Bates and Mike Hale. (TAC ¶ 72; Am. Countercls.

¶¶ 18–20.)

1 As noted below, the Court is electing—in furtherance of judicial economy—to consider

Defendants’ arguments in support of their respective Motions to Dismiss as applied to

Implus’s proposed Third Amended Complaint (“Third Amended Complaint” or “TAC,” ECF

No. 110.1 [sealed]). While the relevant factual allegations in the Third Amended Complaint

are identical to those in the Second Amended Complaint (“Second Amended Complaint” or

“SAC,” ECF No. 59)—for clarity—this Opinion cites only to the factual allegations contained

in the proposed Third Amended Complaint.

2 Throughout this Opinion, Implus and IMGH are collectively referred to as “Implus.”

7. Through their respective companies (Defendants H.B. Shoes Co. and

The Mike Hale Company), for nearly a decade Bates and Hale served as Implus’s

independent contractor sales representatives for select retailers in the “Specialty-

Family Channel” segment of the footwear accessories and shoe care market. (TAC

¶¶ 52–55, 58–59; Am. Countercls. ¶¶ 18–19.)

8. In early 2020, Vore decided to resign from his position as Implus’s

president and eventually terminated his employment with Implus altogether. (TAC

¶¶ 37–38; Am. Countercls. ¶ 14.)

9. The terms of Vore’s resignation were memorialized on 28 February 2020

in a separation letter (“Separation Agreement,” ECF No. 59.2) entered into between

Vore and Implus. (TAC ¶ 39; Am. Countercls. ¶ 58.)

10. Among other things, the Separation Agreement addressed stock that

Vore had received in IMGH by virtue of his position as Implus’s president. (ECF No.

59.2, at 1–2.) Specifically, the Separation Agreement stated that all stock Vore had

received in IMGH would be subject to the terms of the 30 April 2015 IM Group

Holdings Corporation Stockholders Agreement (“IMGH Stockholders Agreement,”

ECF No. 59.1). (ECF No. 59.2, at 2.)

11. Vore’s employment with Implus was effectively terminated on 4 March

2020. (TAC ¶ 38; Am. Countercls. ¶ 58.)

12. Following Vore’s termination, Implus decided to terminate its contracts

with H.B. Shoes Co. and The Mike Hale Company. (TAC ¶ 60; Am. Countercls. ¶¶

19–20.)

13. That same year, Vore joined with two former Implus employees, Richard

Chang and Merrick Jones, to create Defendant Blue San, LLC (“Blue San”). (TAC ¶

43; Am. Countercls. ¶¶ 6, 12–13.) Vore is currently a minority interest owner in Blue

San. (TAC ¶ 44; Am. Countercls. ¶ 10.)

14. Blue San is a North Carolina limited liability company with its principal

place of business in Durham County, North Carolina. (TAC ¶ 4; Am. Countercls. ¶

1.) Blue San designs, develops, and distributes various consumer products. (TAC ¶

45; Am. Countercls. ¶ 6.)

II. Implus’s Allegations

15. Implus alleges that beginning in 2023, Vore—working with Blue San

full-time as its Director of Sales, Marketing, and Operations—began preparing Blue

San to enter the footwear accessories and shoe care market to compete with Implus.

(TAC ¶¶ 46–47.)

16. At the same time and pursuant to the IMGH Stockholders Agreement,

however, Vore continued to receive quarterly “confidential” financial reports from

Implus concerning its performance. (TAC ¶¶ 42, 48.) This information included

management discussion and analysis, net revenue, gross margins, operating

expenses, financial data related to Implus’s customers, revenue and gross margins

for each of Implus’s brands, working capital and cash flow, EBITDA (earnings before

interest, taxes, depreciation, and amortization) data, assets, liabilities, marketing

expenses, personnel expenses, and financial results for each of IMGH’s subsidiaries.

(TAC ¶ 32.)

17. Implus alleges that Vore never informed it of his affiliation with Blue

San, continued to accept Implus’s confidential financial information, and then used

this information to assist Blue San in its efforts to compete with Implus. (TAC ¶¶

49–51.)

18. In early 2024, Vore contacted Bates and Hale to enlist their assistance

in marketing and selling Blue San’s forthcoming footwear accessories and shoe care

products. (TAC ¶ 73.)

19. Prior to their termination from Implus in 2020, Bates and Hale had been

responsible for serving as independent contractor sales representatives for specific

Implus customers in the Specialty-Family Channel market. (TAC ¶¶ 55, 59, 75, 82.)

20. Through their respective companies, Bates had entered into a 2012

Sales Representative Agreement (“2012 SRA,” ECF No. 59.3), and Hale had entered

into a substantively identical 2014 Sales Representative Agreement (“2014 SRA,”

59.4). (TAC ¶¶ 55, 58–59, 61.)

21. Both the 2012 and 2014 SRAs contained confidentiality clauses in which

Bates and Hale agreed to keep certain information relating to Implus and its clients

confidential. (TAC ¶¶ 56, 59; see also ECF No. 59.3, at 4; ECF No. 59.4, at 4.)

22. However, even after Implus had terminated their contracts in 2020,

Bates and Hale continued to “mistakenly” receive confidential brand overview reports

from two of Implus’s customers with whom they had previously worked. (TAC ¶¶ 75,

82; see also ECF No. 74.4 [sealed]; ECF No. 95 [public].) These brand overview

reports were in the form of spreadsheets that included data concerning the sales

performance of each of Implus’s products broken down by brand and style. (TAC ¶¶

76, 83; see generally ECF No. 74.4 [sealed]; ECF No. 95 [public].)

23. Having previously worked with Bates and Hale through Implus, Vore

knew the terms of the 2012 and 2014 SRAs. (TAC ¶¶ 72, 263.) Nonetheless, Vore

(among others at Blue San) allegedly repeatedly requested that Bates and Hale

violate their confidentiality agreements by sending Blue San copies of Implus’s

customers’ brand overview reports. (TAC ¶¶ 74, 78, 80, 84–85; see also ECF No. 74.4

[sealed]; ECF No. 95 [public].)

24. Implus contends that this wrongful conduct constituted a conspiracy to

misappropriate Implus’s confidential information and benefit Blue San as a market

competitor. (TAC ¶¶ 74, 280, 293.)

25. Not knowing about their affiliation with Vore and Blue San, in June

2024, Implus contacted Bates and Hale to discuss entering into new sales

representative contracts with them. (TAC ¶ 62.)

26. Subsequently, on 17 June 2024, Bates and Hale signed—on behalf of

their respective companies—the 2024 Sales Representative Agreements (“2024

SRAs,” ECF No. 74.2), whereby they agreed to serve exclusively as Implus’s sales

representatives for specific clients in the Specialty-Family Channel market. (TAC ¶

62–64; see also ECF No. 74.2.)

27. The 2024 SRAs were for a fixed three-year term and included various

non-competition, non-solicitation, and confidentiality provisions. (TAC ¶¶ 65–67; see

also ECF No. 74.2, at 3–4, 13.)

28. Implus alleges that Bates and Hale entered into the 2024 SRAs without

disclosing that they had already entered into competing agreements with Blue San

and had been providing Vore and Blue San with Implus’s confidential client

information. (TAC ¶¶ 68, 87.)

29. Indeed, the 2024 SRAs included an express warranty provision whereby

Bates and Hale represented that their signing of the 2024 SRAs would “not result in

any violation of any agreement, instrument or contract” to which they were parties.

(TAC ¶¶ 69, 282, 295; ECF No. 74.2, at 2, 11.) Based on the allegations raised in the

Amended Counterclaims—claiming that Bates and Hale were, in fact, subject to

“exclusive” agreements with Blue San—Implus contends that Bates and Hale knew

that these representations in the 2024 SRAs were false at the time they were made.

(TAC ¶¶ 69, 282–83, 295–96.)

30. Immediately upon entering into the 2024 SRAs, Implus began sharing

additional confidential information about its clients with Bates and Hale. (TAC ¶

71.)

31. Shortly thereafter, between 17 and 19 June 2024, Bates and Hale

informed Vore and Blue San about the 2024 SRAs. (TAC ¶ 87.)

32. Implus alleges that Vore immediately began efforts to convince Bates

and Hale to repudiate the 2024 SRAs. (TAC ¶¶ 87–89.)

33. On 19 June 2024, Vore informed Bates and Hale that he “sees the

financials” for Implus—referencing the confidential information he received as an

IMGH stockholder—and “cherry-picked” information to share with them, ultimately

deceiving Bates and Hale into believing that Implus was planning on “undercut[ting]”

them. (TAC ¶¶ 88–90.)

34. Vore’s efforts to persuade Bates and Hale were successful, and on that

same day Bates and Hale informed Implus that they “should not have entered” into

the 2024 SRAs and that they would not honor them. (TAC ¶¶ 91–92.)

35. This decision was confirmed by Bates and Hale’s then-counsel who

informed Implus that Bates and Hale had based their decision to repudiate the 2024

SRAs—at least in part—on information received from “third party sources” indicating

that Implus was planning to “undercut[]” Bates and Hale’s business. (TAC ¶¶ 93–

94; see also ECF No. 74.3, at 13.) Implus believes that Vore is the “third party source”

to which Bates and Hale’s then-counsel referred. (TAC ¶ 94.)

36. Through subsequent communications with Bates and Hale’s then-

counsel, Implus was also informed that Bates and Hale would not be “going to work

with Implus or [] Vore’s company or any other competitor of Implus” and that they

would instead pursue “unrelated business interests . . . as they ease into their

retirement.” (TAC ¶ 97; see also ECF No. 74.3, at 11.)

37. Despite this representation, Implus alleges, within months Bates and

Hale returned to work with Blue San and have continued to solicit Implus’s clients

and share Implus’s confidential customer information. (TAC ¶¶ 79, 86, 98, 286, 299.)

III. Blue San’s Allegations

38. Blue San, however, paints a very different picture of the events that

transpired between itself, Implus, Vore, Bates, and Hale.

39. After being terminated by Implus in 2020, Bates and Hale continued to

actively work as sales representatives for other clients in the footwear accessories

and shoe care industry, while Vore accepted a position as the Chief Executive Officer

for a “lifestyle products” distribution company. (Am. Countercls. ¶¶ 7, 21.)

40. However, in late 2023, Vore decided to join Blue San full-time as its

Director of Sales, Marketing, and Operations. (Am. Countercls. ¶¶ 7–8.)

41. Relying on Chang, Jones, and Vore’s decades of experience working at

Implus, Blue San began planning to expand its business to include footwear

accessories and shoe care products. (Am. Countercls. ¶¶ 6, 9, 11–15.)

42. Beginning in January 2024, Blue San began hearing market “chatter”

that Implus was struggling to fulfill its contractual obligations with retailers in the

Specialty-Family Channel segment of the market. (Am. Countercls. ¶ 39.)

43. Specifically, Blue San learned that Implus was experiencing delays in

delivering—or had failed to deliver altogether—certain products to Specialty-Family

Channel retailers, which resulted in those retailers suffering a significant amount of

lost sales. (Am. Countercls. ¶ 40.)

44. Blue San also learned that Implus had begun marketing and selling its

premium brands—which it had historically sold exclusively through Specialty-

Family Channel retailers—to “big-box” retailers in the Food, Drug, and Mass Retailer

Channel segment of the market, including at Walmart, CVS, Walgreens, and Costco.

(Am. Countercls. ¶¶ 41–42.) Given the importance of brand integrity in the market,

Specialty-Family Channel retailers repeatedly expressed their concerns about

Implus’s “brand dilution” affecting their ability to compete with “big-box” retailers.

(Am. Countercls. ¶¶ 43–44.)

45. Seeing this as an opportunity to compete with Implus, Vore—as the

former executive responsible for maintaining Implus’s relationships with its

independent contractor sales representatives—began meeting with Bates and Hale

to discuss the possibility of them working for Blue San. (Am. Countercls. ¶ 22.)

46. On or about 21 February 2024, Bates and Hale visited Blue San’s office

in Durham, North Carolina to review Blue San’s product designs. (Am. Countercls.

¶ 25.)

47. That same day, Blue San formally offered Bates and Hale roles as

independent contractor sales representatives to lead Blue San’s marketing and sales

efforts in the Specialty-Family Channel (the “Blue San Agreements”). (Am.

Countercls. ¶ 26.) Both Bates and Hale accepted Blue San’s offer. (Am. Countercls.

¶ 27.)

48. Under the terms of the Blue San Agreements, Bates and Hale were to

serve “exclusively” as sales representatives for Blue San and were not to provide any

services to competitors in the footwear accessories and shoe care products market.

(Am. Countercls. ¶ 26.)

49. However, the parties agreed not to memorialize the terms of the Blue

San Agreements in writing because they believed that their oral agreements were

sufficient. (Am. Countercls. ¶ 27.)

50. From that point forward, Bates and Hale worked on behalf of Blue San

by meeting with prospective customers, previewing Blue San’s anticipated product

line, and engaging in weekly meetings with Blue San’s leadership. (Am. Countercls.

¶¶ 28–31.)

51. Blue San, Bates, and Hale continued to hear rumors that Implus was

struggling in the market, as the representatives for various Specialty-Family

Channel retailers complained of poor order fulfilment rates, late deliveries, defective

products, and increasing prices. (Am. Countercls. ¶¶ 44–47.)

52. Blue San also began receiving information that Implus’s manufacturers

and other vendors were becoming frustrated due to Implus’s decisions to cut its

orders, reduce its production volume, and its delinquency in making payments. (Am.

Countercls. ¶¶ 48–50.)

53. Vore, Chang, and Jones were also informed by some of their former

colleagues who were still employed at Implus that Implus had engaged in repeated

layoffs. (Am. Countercls. ¶ 51.)

54. Further confirming Implus’s financial distress, Implus’s Vice President

of Account Strategies, Ken Linden, allegedly told Bates and Hale that Implus had

been forced to restructure its business to generate immediate short-term revenue.

(Am. Countercls. ¶¶ 52–53.)

55. Hoping to take advantage of Implus’s struggling position, by June 2024

Blue San was in the advanced stages of entering the footwear accessories and shoe

care products market—having developed product designs, completed sales pitch

decks, and scheduled meetings with prospective customers. (Am. Countercls. ¶¶ 36,

55.)

56. Around this same time, Implus learned of Blue San’s progress. (Am.

Countercls. ¶ 56.) Fearing the significant competitive threat to its Specialty-Family

Channel business posed by Blue San’s plans, Implus concocted a scheme to prevent,

or at least delay, Blue San from entering the market. (Am. Countercls. ¶¶ 56, 63–

64.)

57. The Amended Counterclaims allege that Implus’s scheme first became

apparent when Linden approached Bates and Hale at a Fashion Footwear

Association of New York conference in New York City in June 2024. (Am. Countercls.

¶¶ 64–65.)

58. Having confirmed that Bates and Hale were working with Blue San,

Implus—through Linden—offered to pay Bates and Hale between $1,000 and $1,500

per month if Bates and Hale would terminate their relationship with Blue San. (Am.

Countercls. ¶¶ 65, 67.) Linden did not offer Bates and Hale employment because

after their termination from Implus in 2020, Implus had transferred Bates and Hale’s

responsibilities to an “in-house” sales team. (Am. Countercls. ¶¶ 20, 66–67.)

59. Blue San contends that such an offer was nothing more than a “bribe[]”

to prevent Bates and Hale from assisting Blue San in its efforts to compete against

Implus. (Am. Countercls. ¶¶ 67, 116.)

60. Bates and Hale immediately rejected the offer, however, and Linden

asked that they “give him some time” to see what other agreements Implus would

authorize. (Am. Countercls. ¶¶ 67–68.)

61. Shortly thereafter, Linden—on behalf of Implus—proposed that Bates

and Hale sign new contracts to serve “exclusively” as independent contractor sales

representatives for Implus. (Am. Countercls. ¶¶ 68–69.) In mid-June 2024, he

provided Bates and Hale with proposed copies of the 2024 SRAs. (Am. Countercls. ¶

69.)

62. Blue San alleges that because Implus had been informed about the Blue

San Agreements, Implus structured the 2024 SRAs differently than the 2012 and

2014 SRAs for the purpose of preventing Bates and Hale from continuing to work

with Blue San. (Am. Countercls. ¶¶ 70–71, 73–74, 76.)

63. Implus also informed Bates and Hale that the 2024 SRAs were only

being offered on the contingency that both of them accept the offer, and that if either

of them refused, the offers to both would be rescinded. (Am. Countercls. ¶ 75.)

64. Eventually, both of them agreed, and on 17 June 2024 Bates and Hale—

on behalf of their respective companies—entered into the 2024 SRAs with Implus.

(Am. Countercls. ¶ 77.)

65. However, within forty-eight hours of signing the 2024 SRAs, Bates and

Hale “realized” that they had made a mistake and provided Implus with oral and

written notice that they would not adhere to the agreements. (Am. Countercls. ¶ 78.)

66. Despite the fact that Bates and Hale never actually started working for

Implus, Implus began aggressively pressuring them to comply with the restrictive

covenants in the 2024 SRAs. (Am. Countercls. ¶¶ 78–80.) As a result of Implus’s

threats, Bates and Hale “cut ties” with Blue San and Vore for more than two

months—during a critical time in Blue San’s development. (Am Countercls. ¶ 81.)

67. Having (temporarily) neutralized Bates and Hale, Implus then turned

its sights on threatening Vore by filing its initial Complaint in this lawsuit and

asserting claims against Vore therein (the “Vore Complaint,” ECF No. 3). (Am.

Countercls. ¶¶ 82–83; see also Vore Compl.)

68. Blue San contends that the Vore Complaint was a pretextual “sham”

that Implus has used to dissuade Vore, Chang, Jones, Bates, Hale, and Blue San’s

prospective customers from working with Blue San. (Am. Countercls. ¶¶ 87–88, 92,

121.) It contends that the Vore Complaint was designed primarily to deprive Blue

San of the opportunity to compete in the market. (Am. Countercls. ¶¶ 87, 92, 121.)

69. Blue San alleges that in furtherance of this scheme Implus has sent

document preservation letters to Chang and Jones as a means of intimidation and

has made unreasonable demands on Vore, Bates, and Hale not to compete with or

disparage Implus. (Am. Countercls. ¶¶ 89–91, 93–94, 121–25; see also ECF Nos. 46.3,

74.3.)

70. Blue San further asserts that the sales team at Implus has informed its

customers—who are also Blue San’s prospective customers—about the filing of the

Vore Complaint and have made misleading and inaccurate statements suggesting

that the litigation will prevent Blue San from being able to meet its business

obligations. (Am. Countercls. ¶¶ 94, 129.)

71. Most recently, in late 2024, Blue San was informed by a prospective

customer in the Specialty-Family Channel segment of the market that Implus had

directly informed it of the existence of this lawsuit. (Am. Countercls. ¶ 94.) As a

result, the prospective customer stated that it would not be placing orders with Blue

San due to its fear that Blue San would be unable to deliver its products. (Am.

Countercls. ¶¶ 94, 130.)

72. Around that same time, another prospective Specialty-Family Channel

retailer paused its discussions with Blue San despite having previously expressed

significant interest in placing orders for Blue San’s products. (Am. Countercls. ¶ 95.)

Blue San likewise attributes this result to Implus’s anti-competitive conduct. (Am.

Countercls. ¶¶ 95, 130.)

IV. Procedural History

73. The procedural history of this case is not for the faint of heart.

Nonetheless, the Court will attempt to provide a coherent roadmap of the winding

route this case has taken.

74. Implus initiated this action by filing the Vore Complaint in Wake

County Superior Court on 2 July 2024.

75. This case was designated as a mandatory complex business case the

same day and was subsequently assigned to the undersigned on 3 July 2024. (ECF

Nos. 1–2.)

76. On 30 August 2024, Blue San sought leave of this Court to intervene

pursuant to Rules 24(a) and (b) of the North Carolina Rules of Civil Procedure.

(“Motion to Intervene,” ECF No. 11.)

77. Four days later, Vore filed his initial motion to dismiss the Vore

Complaint. (ECF No. 13.)

78. However, while Vore’s initial Motion to Dismiss and the Motion to

Intervene were pending, Implus filed its first Amended Complaint on 21 October

2024, adding claims against Blue San. (“First Amended Complaint,” ECF No. 30.)

Accordingly, the Court denied the then-pending motions as moot. (ECF No. 31.)

79. In response to the First Amended Complaint, on 20 November 2024,

Blue San filed an Answer and Counterclaims against Implus (“Counterclaims,” ECF

No. 34), and Vore filed his second Motion to Dismiss (ECF No. 35).

80. Implus filed its initial motion to dismiss Blue San’s Counterclaims on

17 December 2024. (ECF No. 45.)

81. After Vore’s motion to dismiss the First Amended Complaint and

Implus’s motion to dismiss the Counterclaims had been fully briefed—but prior to the

Court scheduling a hearing on the motions—on 30 January 2025, Blue San filed its

Amended Counterclaims, and Implus sought leave to file the Second Amended

Complaint (ECF No. 55).

82. On 11 February 2025, the Court granted Implus leave to file the Second

Amended Complaint and denied Vore and Implus’s pending motions to dismiss as

moot. (ECF No. 58.)

83. That same day, Implus filed the Second Amended Complaint asserting

various claims for monetary relief against Vore, Blue San, H.B. Shoes Co., and The

Mike Hale Company.

84. Implus subsequently filed the present Motion to Dismiss the Amended

Counterclaims on 3 March 2025.

85. Defendants filed their respective Motions to Dismiss the Second

Amended Complaint on 13 March 2025.

86. The Motions to Dismiss came on for a hearing before the Court on 8 May

2025 at which all parties were represented by counsel. (See ECF No. 94.)

87. On 16 July 2025—prior to the Court ruling on the Motions to Dismiss—

Implus filed its present Motion to Amend and a copy of its proposed Third Amended

Complaint.

88. The proposed Third Amended Complaint reasserts the same claims and

allegations against each of the Defendants that were included in the Second Amended

Complaint without any additional factual enhancement or support. (Compare TAC

with SAC.)

89. The amendments in the proposed Third Amended Complaint consist of

new claims Implus seeks to assert against Blue San, Vore, and four new defendants—

Chang, Jones, Matthew Carter, and Sharon Fan.

90. Having been fully briefed, each of the Motions are now ripe for

resolution. 3

LEGAL STANDARD

91. Rule 15 of the North Carolina Rules of Civil Procedure states in

pertinent part as follows:

A party may amend his pleading once as a matter of course at any time

before a responsive pleading is served or, if the pleading is one to which

no responsive pleading is permitted and the action has not yet been

placed upon the trial calendar, he may so amend it at any time within

30 days after it is served. Otherwise, a party may amend his pleading

only by leave of court or by written consent of the adverse party; and

leave shall be freely given when justice so requires.

N.C. R. Civ. P. 15(a).

92. Our Supreme Court has held that “[t]here is no more liberal canon in

the [R]ules than that leave to amend shall be freely given when justice so requires.”

Vaughan v. Mashburn, 371 N.C. 428, 434 (2018) (cleaned up). “This liberal

amendment process under Rule 15 complements the concept of notice pleading

embodied in Rule 8 and reflects the legislature’s intent that decisions be had on the

merits and not avoided on the basis of mere technicalities.” Id. (cleaned up).

93. Nevertheless, “the [R]ules still provide some protection for parties who

may be prejudiced by liberal amendment.” Henry ex rel. Estate of Henry v. Deen, 310

N.C. 75, 82 (1984) (cleaned up). “Reasons justifying denial of an amendment include:

(1) undue delay, (2) bad faith, (3) undue prejudice, (4) futility of amendment, and (5)

3 Pursuant to North Carolina Business Court Rule 7.4, the Court elects to rule on the Motion

to Amend without a hearing. See BCR 7.4 (stating that “[t]he Court may rule on a motion

without a hearing”).

repeated failure to cure defects by previous amendments.” Howard v. IOMAXIS,

LLC, 2021 NCBC LEXIS 116, at *17 (N.C. Super. Ct. Dec. 22, 2021) (cleaned up).

“The burden is upon the opposing party to establish that [it] would be prejudiced by

the amendment.” Vitaform, Inc. v. Aeroflow, Inc., 2021 NCBC LEXIS 79, at *11 (N.C.

Super. Ct. Sept. 16, 2021) (cleaned up).

94. Motions to amend are “addressed to the discretion of the trial court.”

Vaughan, 371 N.C. at 433 (cleaned up).

95. In ruling on a motion to dismiss under Rule 12(b)(6), the Court may only

consider the complaint and “any exhibits attached to the complaint[,]” Krawiec v.

Manly, 370 N.C. 602, 606 (2018), in order to determine whether “as a matter of law,

the allegations of the complaint, treated as true, are sufficient to state a claim upon

which relief can be granted under some recognized legal theory,” Forsyth Mem’l

Hosp., Inc. v. Armstrong World Indus., Inc., 336 N.C. 438, 442 (1994) (cleaned up).

The Court must view the allegations in the complaint “in the light most favorable to

the non-moving party.” Christenbury Eye Ctr., P.A. v. Medflow, Inc., 370 N.C. 1, 5

(2017) (cleaned up).

96. “It is well established that dismissal pursuant to Rule 12(b)(6) is proper

when (1) the complaint on its face reveals that no law supports the plaintiff’s claim;

(2) the complaint on its face reveals the absence of facts sufficient to make a good

claim; or (3) the complaint discloses some fact that necessarily defeats the plaintiff’s

claim.” Corwin v. Brit. Am. Tobacco PLC, 371 N.C. 605, 615 (2018) (cleaned up).

ANALYSIS

97. There are four motions currently before the Court. In the first motion,

Implus has requested leave to file its proposed Third Amended Complaint. In the

second motion, H.B. Shoes Co. and The Mike Hale Company have moved to dismiss

all claims asserted against them in Implus’s Second Amended Complaint. In the

third motion, Vore and Blue San likewise seek dismissal of all claims asserted against

them by Implus in its Second Amended Complaint. Finally, in the fourth motion,

Implus seeks dismissal of Blue San’s Amended Counterclaims in full.

98. The Court will address each of the Motions in turn.

I. Implus’s Motion to Amend

99. As noted above, in its Motion to Amend, Implus seeks the Court’s

permission to file its proposed Third Amended Complaint to assert new claims

against Vore, Blue San, and four additional parties.

100. Vore and Blue San jointly oppose the Motion to Amend on the following

grounds: (1) undue delay, (2) unfair prejudice and bad faith, and (3) legal futility.

A. Undue Delay

101. “[A] trial court may appropriately deny a motion for leave to amend on

the basis of undue delay where a party seeks to amend its pleading after a significant

period of time has passed since filing the pleading and where the record or party

offers no explanation for the delay.” Rabon v. Hopkins, 208 N.C. App. 351, 354 (2010)

(cleaned up). “In deciding if there was undue delay, the trial court may consider the

relative timing of the proposed amendment in relation to the progress of the lawsuit.”

Draughon ex rel. Estate of Draughon v. Harnett Cnty. Bd. of Educ., 166 N.C. App. 464,

467 (2004) (cleaned up).

102. In arguing that Implus has unduly delayed in bringing the Motion to

Amend, Vore and Blue San point to the fact that the Vore Complaint was filed on 2

July 2024—more than twelve months prior to the Motion to Amend—and that the

Court’s original Case Management Order (ECF No. 28) set 30 January 2025 as the

deadline for the parties to file any motions to amend the pleadings or add parties.

103. In response, Implus asserts that the alleged conduct that forms the

bases for each of the new claims in the proposed Third Amended Complaint was only

discovered recently—through a review of rolling document productions, which were

produced by Blue San in May 2025 pursuant to Implus’s discovery requests. Implus

further asserts that key documents relevant to the allegations in the proposed Third

Amended Complaint were designated by Blue San as “highly confidential—attorneys’

eyes only,” meaning that Implus’s counsel could not share those documents with

Implus until the parties agreed to amend their original consent protective order with

regard to that subject. (See ECF Nos. 32–33, 108–09.)

104. Vore and Blue San dispute Implus’s assertions and insist that Implus

would have discovered the alleged conduct much sooner if it had been more diligent

in conducting an internal review of its own documents.

105. This Court addressed similar arguments in United Therapeutics Corp.

v. Liquidia Technologies, Inc. and stated as follows:

UTC seeks to add allegations regarding misappropriated trade secrets

that it contends it discovered by reviewing Liquidia’s document

production in this case. UTC argues that documents Liquidia produced

in February 2023 reveal that Roscigno took more trade secrets than UTC

originally believed. It proposes to amend its complaint to reflect this

discovery.

Defendants oppose the amendments and maintain that UTC has been

in possession of the documents on which it now relies since May 2021,

when the same documents were produced in earlier litigation. They

argue that the proposed amendments would result in additional

discovery, prolong the case, and increase the risk of damage to Dr.

Roscigno’s reputation. Thus, Defendants argue that the amendments

should be denied on grounds of both undue delay and undue prejudice.

Even if the documents on which UTC relies were included among the

thousands produced in earlier litigation, a protective order entered in

the earlier case created uncertainty about UTC’s ability to use those

documents in this litigation. Moreover, until they were produced in the

case sub judice, UTC’s counsel did not know of their existence. After

they became aware of the documents as a result of reviewing the

February 2023 document production, UTC moved promptly to amend.

Further, the proposed amendments to the misappropriation of trade

secrets cause of action do not fundamentally change the nature of the

claims against Defendants.

2023 NCBC LEXIS 88, at *9–10 (N.C. Super. Ct. July 20, 2023) (cleaned up).

106. Furthermore, the unique procedural posture of this case must be taken

into account. While it is true that this case has been ongoing for more than fourteen

months, the Court notes that (1) new claims, factual allegations, and parties were

added as recently as 11 February 2025; (2) none of the Defendants have yet filed

answers to the Second Amended Complaint; and (3) fact discovery is currently

ongoing.

107. Having carefully considered the record and the parties’ competing

arguments, the Court is satisfied that Implus has not unduly delayed filing its Motion

to Amend.

B. Unfair Prejudice and Bad Faith

108. “[I]t is not uncommon for a proposed amendment to impact the status

quo in a way that the nonmovant opposes. But not every impact constitutes undue

prejudice.” Howard v. IOMAXIS, LLC, 2023 NCBC LEXIS 159, at *14 (N.C. Super.

Ct. Nov. 29, 2023). A motion for leave to amend “should be freely allowed unless some

material prejudice to the other party is demonstrated.” Vaughan, 371 N.C. at 433

(emphasis added) (cleaned up). “[U]ndue prejudice is not presumed, even when the

proposed amendments are extensive.” Howard, 2023 NCBC LEXIS 159, at *14.

109. “[B]ad faith amendments are those which may be abusive or made in

order to secure some ulterior tactical advantage.” Columbus Life Ins. v. Wells Fargo

Bank, N.A., 2022 NCBC LEXIS 40, at *11 (N.C. Super. Ct. May 3, 2022) (cleaned up).

110. Vore and Blue San contend that the Motion to Amend has been brought

in bad faith and that they will be unfairly prejudiced if Implus is allowed to amend

its pleading. Specifically, Vore and Blue San argue that (1) Implus acted in bad faith

by not informing Vore and Blue San of its intention to file the Motion to Amend prior

to the depositions of Implus’s witnesses; (2) the allegations and claims in the proposed

Third Amended Complaint would require them to “build an entirely new defense

beyond the one already developed”; and (3) joining new parties and additional claims

would “move the parties back to day one” for purposes of discovery.

111. However, nothing in the record supports Vore and Blue San’s assertion

that Implus deceptively withheld its plan to file the Motion to Amend.

112. Likewise, Vore and Blue San have failed to make a persuasive showing

that the new claims contained in the proposed Third Amended Complaint would

require Vore or Blue San to abandon their current defense of the case. In each of its

successive pleadings, Implus’s overarching theory in this litigation has been premised

on the belief that its former employees have engaged in unlawful conduct in order to

help Blue San unfairly compete against Implus in the relevant market. Implus’s

claims in the proposed Third Amended Complaint—though perhaps more expansive

than its claims in its prior pleadings—continue to advance that theory. See Trail

Creek Invs. LLC v. Warren Oil Holding Co., 2023 NCBC LEXIS 128, at *8 (N.C.

Super. Ct. Oct. 13, 2023) (concluding that a proposed amended complaint did not raise

“a new theory[,]” requiring a new defense, when similar “fraud was alleged by

[plaintiff] in its original [c]omplaint”).

113. Furthermore, to the extent that Vore and Blue San express concern

regarding the potential impact to discovery in this case, they do not explain how they

will be prejudiced by any additional discovery that will be necessary to investigate

Implus’s allegations in the proposed Third Amended Complaint. 4 In any event, our

appellate courts have held that “[t]he fact that additional discovery may be required

or that additional counsel may be required to represent [a] new defendant does not

amount to prejudice[.]” Coffey v. Coffey, 94 N.C. App. 717, 723 (1989); see also

4 In considering Vore and Blue San’s argument regarding the potential delay that might

result from any additional discovery, the Court notes that Vore and Blue San have—either

jointly with Implus or on their own—requested that the Court extend various discovery

deadlines in this case on three different occasions, including as recently as 27 June 2025.

(See ECF Nos. 61, 97, 104.)

Vitaform, Inc., 2021 NCBC LEXIS 79, at *17 (noting that “permit[ting] additional

fact discovery . . . [will] alleviate any potential prejudice caused by the timing of

[d]efendants’ amendment”).

114. As such, Vore and Blue San have failed to demonstrate that they are

likely to suffer material prejudice if Implus is granted leave to file the proposed Third

Amended Complaint.

C. Legal Futility

115. “The futility standard under Rule 15 is essentially the same standard

used in reviewing a motion to dismiss under Rule 12(b)(6), but provides the Court

liberal discretion to find that an amendment lacks futility.” Simply the Best Movers,

LLC v. Marrins’ Moving Sys., Ltd., 2016 NCBC LEXIS 28, at *5–6 (N.C. Super. Ct.

Apr. 6, 2016) (cleaned up). “[A] motion to amend is not futile when the allegations of

the amendment, treated as true, are sufficient to state a claim upon which relief may

be granted under some legal theory, whether properly labeled or not.” Howard, 2023

NCBC LEXIS 159, at *15 (cleaned up). On the other hand, “[a] motion for leave to

amend is futile and appropriately denied when the proposed amendment could not

withstand a motion to dismiss for failure to state a claim.” Insight Health Corp. v.

Marquis Diagnostic Imaging of N.C., LLC, 2016 NCBC LEXIS 77, at *6 (N.C. Super.

Ct. Oct. 7, 2016) (cleaned up).

116. With respect to legal futility, Vore and Blue San argue that the Motion

to Amend should be denied because the claims Implus seeks to add in the proposed

Third Amended Complaint are insufficiently pled. In support of this argument, Vore

and Blue San repeat many of the same arguments made in support of their Motion to

Dismiss Implus’s claims in the Second Amended Complaint. As is apparent from the

Court’s lengthy analysis contained below with regard to the existing Motions to

Dismiss, however, such arguments require a detailed analysis of the specific factual

allegations made in support of each claim.

117. Based on the limited briefing the parties have submitted on this issue,

the Court is unable to say at the present time that allowing Implus’s new claims

would be legally futile. See Truist Fin. Corp. v. Rocco, 2023 NCBC LEXIS 117, at *4

(N.C. Super. Ct. Sept. 20, 2023) (concluding that “the fair and impartial

administration of justice and the interests of judicial efficiency and economy would

be best served . . . by granting the [m]otion to [a]mend, without prejudice to

[d]efendants’ rights to seek dismissal of the [f]irst [a]mended [c]omplaint under Rule

12”); Hopkins v. MWR Mgmt. Co., 2015 NCBC LEXIS 104, at *22 (N.C. Super. Ct.

Nov. 5, 2015) (“The [c]ourt is therefore not prepared to consider the proposed claims

as futile . . . and believes that their legal sufficiency is more properly tested through

later motions practice after amendment with appropriate briefing and argument”);

Deluca v. River Bluff Holdings II, LLC, 2015 NCBC LEXIS 12, at *9 (N.C. Super. Ct.

Jan. 28, 2015) (noting that “[t]he [c]ourt may, but is not required to, deny [p]laintiffs’

[m]otion to [a]mend based on futility” and preferring to “evaluate [the proposed

amendments’] validity” through a motion to dismiss).

D. Judicial Economy

118. Finally, the Court is satisfied that the interests of judicial economy

would be furthered by allowing Implus to add these new claims in the present case

as opposed to forcing Implus to assert them in a brand new lawsuit. To be sure, the

newly asserted claims and supporting factual allegations in the proposed Third

Amended Complaint go well beyond the relatively narrow scope of the shareholder

dispute first described in the Vore Complaint. However, those limited issues have

not been the primary focus of this litigation for nearly a year.

119. Since at least October 2024—through subsequent pleadings, the joinder

of new parties, and the assertion of counterclaims—this case has expanded to reflect

an ongoing and contentious dispute touching numerous aspects of Implus and Blue

San’s competitive operations.

120. Given the overwhelming overlap in background facts, witnesses,

evidence, and subject matter, the Court sees little to be gained in forcing Implus to

file a separate lawsuit to assert the new claims contained in the proposed Third

Amended Complaint. See Rfactr, Inc. v. McDowell, 2024 NCBC LEXIS 94, at *12

(N.C. Super. Ct. July 18, 2024) (granting a motion to amend and noting that

“permitting the two defamation claims—each arising from the same fire—to be tried

in the same action would promote judicial economy” (cleaned up)); see also Webster

Enters., Inc. v. Selective Ins. Co. of the Se., 125 N.C. App. 36, 46 (1997) (holding that

requiring separate trials for claims “aris[ing] from an interrelated nucleus of facts” is

“irreconcilable with the overriding interests of judicial economy”).

121. Having painstakingly reviewed and considered each of the parties’

arguments—including the allegations of finger-pointing and lack of cooperation

among counsel expressed by both sides—the Court concludes that the Motion to

Amend should be GRANTED. 5

122. Because the Court is granting the Motion to Amend, that would

ordinarily moot the existing motions to dismiss that have been raised by Vore, Blue

San, H.B. Shoes Co., and The Mike Hale Company with regard to claims asserted in

Implus’s Second Amended Complaint—meaning that Defendants would have to file

new motions to dismiss those claims (which would, in turn, require new briefing).

123. However, such a result would be inimical to notions of judicial economy

and would require the expenditure of significant attorneys’ fees by the parties and

consume considerable resources of the Court. The proposed Third Amended

Complaint does not assert any new material allegations relevant to any of the claims

asserted in the Second Amended Complaint.

124. Indeed, this Court was faced with similar circumstances in Stamatakos

v. Carolina Urology Partners, PLLC and stated as follows:

The parties have fully briefed and argued the issues upon which

Defendants’ Partial Motion to Dismiss is based. Moreover, as noted

above, the SAC contains no new allegations relevant to Plaintiff’s UDTP

claim, meaning that the arguments made by Defendants in the Partial

Motion to Dismiss as to the UDTP claim (and by Plaintiff in his response

brief) are unaffected by the Motion to Amend. . . .

However, the Court takes this opportunity to remind counsel of their ethical duty to litigate

this case in accordance with the principles of collegiality contemplated by the North Carolina

Rules of Professional Conduct. See, e.g., N.C. R. Prof. Conduct 0.1(m) (“Although a matter is

hotly contested by the parties, a lawyer should treat opposing counsel with courtesy and

respect.”).

Therefore, the Court, in the exercise of its discretion and its inherent

authority to control its docket in furtherance of judicial economy, will

proceed to address all of the arguments raised in both Motions. See

Gateway Mgmt. Servs., Ltd. v. Carrbridge Berkshire Grp., Inc., 2018

NCBC LEXIS 45, at *8 (N.C. Super. Ct. May 9, 2018) (“Although an

amended pleading would ordinarily moot a pending motion to dismiss,

the Court will consider Defendants’ Motions to Dismiss as to the

Amended Complaint because Defendants and Plaintiff both addressed

the sufficiency of the Amended Complaint in their respective briefs and

at the hearing.”).

2024 NCBC LEXIS 28, at *24–25 (N.C. Super. Ct. Feb. 20, 2024).

125. Accordingly, the Court will now address each of the Motions to Dismiss

in turn.

II. H.B. Shoes Co. and The Mike Hale Company’s Motion to Dismiss

126. Implus has brought claims against H.B. Shoes Co. and The Mike Hale

Company for breach of contract (alleging various breaches of the 2012, 2014, and 2024

SRAs) along with a claim for unfair and deceptive trade practices (“UDTP”).

A. Breach of Contract

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

contract and (2) breach of the terms of that contract. The elements of a valid contract

are offer, acceptance, consideration, and mutuality of assent to the contract’s

essential terms.” Davis v. Woods, 286 N.C. App. 547, 561 (2022) (cleaned up).

128. As an initial matter, the parties agree that the substantive terms of the

provisions at issue in the 2012 and 2024 SRAs between Implus and H.B. Shoes Co.

are substantively identical to those provisions at issue in the 2014 and 2024 SRAs

between Implus and The Mike Hale Company.

129. As such, the Court will consider the breach of contract claims against

both of these Defendants together.

1. Breach of the 2012 and 2014 SRAs

130. Implus’s first theory of breach of contract is that Bates and Hale violated

the terms of the confidentiality provisions contained in the 2012 SRA (between

Implus and H.B. Shoes Co.) and the 2014 SRA (between Implus and The Mike Hale

Company).

131. Specifically, Implus alleges that

[o]ver the years, because of H.B. Shoes’[s] contracts with Implus and on

behalf of H.B. Shoes, Hugh Bates received confidential Implus brand

overview reports from Customer 1 via email. Bates mistakenly

continued receiving these reports directly from Customer 1 after his

termination from Implus.

These reports H.B. Shoes received from Customer 1 contained, inter

alia, data regarding units of individual Implus products sold

enumerated by department, style name, and color; product pricing,

including sticker price and average price; and margins.

The bottom of each Customer 1 report was labeled “[Customer 1]

Proprietary Information - If you receive this email attachment by

mistake, please destroy it immediately.”

Upon information and belief based on discovery collected from third-

party subpoena to H.B. Shoes in December 2024 and January 2025,

Hugh Bates, on behalf of H.B. Shoes, forwarded the Implus/Customer 1

confidential reports at a minimum to Blue San’s Todd Vore, Matt Carter,

Rich Chang, and Merrick Jones in February 2024, and again to Matt

Carter and Todd Vore in March, June, and September 2024.

...

Blue San’s Matt Carter (formerly Vice President of International Sales

at Implus and who worked at Implus from roughly 2002 to 2020)

specifically asked Hugh Bates to forward the Customer 1/Implus

confidential information to Blue San, thanked Bates upon receipt of the

data several times, and met with Bates to discuss Customer 1.

...

Upon information and belief based on discovery collected from third-

party subpoena to The Mike Hale Company in December 2024 and

January 2025, The Mike Hale Company also engaged in similar activity

as H.B. Shoes. Over the years, as a result of The Mike Hale Company’s

contracts with Implus and on behalf of The Mike Hale Company, Mike

Hale received confidential Implus Sof Sole brand overview reports

relating to Customer 2 via email. Hale mistakenly continued receiving

these reports directly from Customer 2 after his termination from

Implus.

The Sof Sole brand overview reports Hale received from Customer 2

contained confidential Implus sales and product information, including

product breakdowns by store number, cost, color, design, and inventory.

Upon information and belief based on discovery collected from third-

party subpoena to The Mike Hale Company in December 2024 and

January 2025, Blue San’s Matt Carter asked Mike Hale, on behalf of

The Mike Hale Company, to forward those confidential Implus Sof

Sole/Customer 2 reports to Blue San several times. Hale complied, at a

minimum, twice in March 2024 and once in April 2024.

Upon information and belief based on discovery collected from third-

party subpoenas to H.B. Shoes and The Mike Hale Company in

December 2024 and January 2025, Bates and Hale also orally discussed

the confidential Implus/Customer 1 and Implus Sof Sole/Customer 2

reports with Blue San on behalf of H.B. Shoes and The Mike Hale

Company.

(TAC ¶¶ 75–78, 80, 82–85.)

132. As noted above, the confidentiality provisions in the 2012 and 2014

SRAs are identical and state as follows:

Disclosure of Confidential Information. Representative acknowledges

that by reason of this Agreement it will receive proprietary and

confidential information (“Trade Secrets”) related to Implus and its

business. It acknowledges that Implus’s Trade Secrets, including but

not limited to those related to Product development, manufacturing

techniques, sales activities, promotion and pricing techniques,

Customer List and financial information and requirements concerning

customers and suppliers, but excluding information publicly available,

are valuable assets of Implus, and have been and will continue to be

instrumental in Implus’s growth and business success. In recognition of

this fact, Representative agrees that it will not, from and after the date

hereof, disclose any Trade Secrets to any Person, or make use of such

Trade Secrets for the benefit of itself or any other Person, other than

Implus.

(ECF No. 59.3 at 4; ECF No. 59.4 at 4.)

133. Implus contends that the brand overview reports that Bates and Hale

mistakenly received following their termination from Implus in 2020 are subject to

the confidentiality restrictions in the 2012 and 2014 SRAs. Therefore, Implus argues

that Bates and Hale breached their agreements by sharing—and discussing—the

contents of those reports with Blue San.

134. Bates and Hale’s sole argument for dismissal of these claims is that any

claims arising under the 2012 and 2014 SRAs were extinguished upon the parties

entering into the 2024 SRAs. Specifically, Bates and Hale contend that the language

of Section 14 of the 2024 SRAs effectively novated their prior agreements with

Implus.

135. Section 14 states as follows:

Entire Agreement. The terms and conditions of this Agreement

supersede any and all previous agreements between the parties,

whether oral or written. This instrument contains the entire agreement

between the parties relating to the subject matter hereof and may not

be changed orally but only by agreement in writing signed by the

parties.

(ECF No. 74.2, at 5, 15.)

136. A novation is the “substitution of a new contract or obligation for an old

one which is thereby extinguished[.]” Bowles v. BCJ Trucking Servs., Inc., 172 N.C.

App. 149, 154 (2005) (cleaned up). “The essential requisites of a novation are a

previous valid obligation, the agreement of all the parties to the new contract, the

extinguishment of the old contract, and the validity of the new contract.” Anthony

Marano Co. v. Jones, 165 N.C. App. 266, 269 (2004) (cleaned up). “Whether a new

contract between the same parties discharges or supersedes a prior agreement

depends upon their intention as ascertained from the instrument, the relation of the

parties[,] and the surrounding circumstances.” Zinn v. Walker, 87 N.C. App. 325, 335

(1984) (cleaned up), disc. rev. denied, 321 N.C. 747 (1988). “The intention of the

parties to effectuate a novation must be clear and definite,” Kirby Bldg. Sys., Inc. v.

McNiel, 327 N.C. 234, 243 (1990) (cleaned up), and must be proven by “clear and

convincing evidence,” Zinn, 87 N.C. App. at 336–37 (cleaned up).

137. Bates and Hale assert that the phrase “supersede[s] any and all previous

agreements” is clear and unambiguous language reflecting the parties’ intent to

substitute the 2012 and 2014 SRAs with the 2024 SRAs—thus extinguishing any of

Implus’s claims under the prior agreements. In support of their argument, Bates and

Hale primarily rely on our Supreme Court’s decision in Intersal, Inc. v. Hamilton.

373 N.C. 89 (2019).

138. In Intersal, our Supreme Court affirmed this Court’s conclusion that the

parties—by entering into a settlement agreement—had intended to novate the

parties’ prior contract and stated the following regarding that issue:

The words of the 2013 Settlement Agreement themselves “make it clear

. . . the second contract supersedes the first.” Whittaker Gen. Med. Corp.

v. Daniel, 324 N.C. 523, 526 (1989). Specifically, the 2013 Settlement

Agreement states that it “supersedes the 1998 Agreement, attached as

Attachment A, and all prior agreements between D[N]CR, [plaintiff],

and Nautilus regarding the QAR project.” (emphases added). Because

the language of the 2013 Settlement Agreement so clearly demonstrates

the parties’ intent that it would function as a novation of the 1998

Agreement, our analysis can end with the plain wording of the

agreement. See Whittaker Gen. Med. Corp., 324 N.C. at 526 (stating that

a court will look to the circumstances surrounding the second agreement

to determine whether it is a novation “if the words [of the agreement] do

not make it clear” (emphasis added))[].

Because the 2013 Settlement Agreement was a novation of the 1998

Agreement, plaintiff’s breach of contract claims arising from the 1998

Agreement are “extinguished.” See Carolina Equip. & Parts Co. v.

Anders, 265 N.C. 393, 400 (1965) (citing Tomberlin v. Long, 250 N.C.

640, 644 (1959)).

373 N.C. at 99.

139. Here, however, the language of Section 14 is distinguishable from the

language at issue in Intersal such that the Court cannot conclude from the “plain

wording” of Section 14 alone that the parties intended the 2024 SRAs to substitute

the 2012 and 2014 SRAs.

140. First, in Intersal, the operative language in the subsequent agreement

specifically referenced the parties’ prior agreement and even attached it as an exhibit.

Here, however, neither Section 14—nor any other provision of the 2024 SRAs—

explicitly quotes, references, cites, incorporates by reference, or attaches the 2012 or

2014 SRAs. See Diverse Networks v. Time Warner Ent.-Advance/Newhouse P’ship,

2012 NCBC LEXIS 3, at *4, *10 (N.C. Super. Ct. Jan. 9, 2012) (concluding that a

contractual provision stating that the contract “supersedes any and all other

[a]greements, either oral or in writing between the parties hereto with respect to the

subject matter hereof” did not create a novation where the disputed provision did not

specifically reference the prior agreement); see also Whittaker Gen. Med. Corp., 324

N.C. at 527 (concluding that “[t]he jury could have found it was not the intent of the

parties to abrogate the first contract” where the subsequent contract did not explicitly

“mention the . . . first contract”).

141. Second, whereas the subsequent agreement in Intersal included a broad

release of claims, the 2024 SRAs do not purport to release any of the parties’ existing

claims. See Intersal, Inc. v. Hamilton, 2017 NCBC LEXIS 97, at *17 (N.C. Super. Ct.

Oct. 12, 2017) (noting that “[t]he 2013 Settlement Agreement also contains a broad

release of [p]laintiff’s claims under the 1998 Agreement”), aff’d in relevant part, 373

N.C. at 98–100. To the contrary, the 2012 and 2014 SRAs each contain a “Survival”

clause, which expressly states that Bates and Hale’s confidentiality obligations

survive the expiration or termination of those agreements. (ECF No. 59.3, at 7; ECF

No. 59.4, at 7; see also Alkemal Sing. PTE Ltd. v. DEW Glob. Fin., LLC, 2017 NCBC

LEXIS 112, at *43 (N.C. Super. Ct. Dec. 12, 2017) (concluding that “conflicting

evidence as to whether the parties intended to remain bound by the [prior agreement]

or intended the transaction to be governed by the [subsequent agreements] creates a

genuine issue of material fact that requires jury determination”).

142. Third, unlike the “clear intent” apparent in Intersal, the second sentence

of Section 14 indicates that the parties may have intended only to supersede prior

oral or written agreements concerning the 2024 SRAs—but not any other unrelated

agreement. See Pa. Nat’l Mut. Ins. v. Strickland, 178 N.C. App. 547, 550 (2006)

(noting that contractual provisions “must be interpreted in view of the whole contract

and not in isolation” (cleaned up)). Specifically, Section 14 provides that the 2024

SRAs are “entire agreement[s] between the parties relating to the subject matter

hereof[.]” (ECF No. 74.2, at 5, 15 (emphasis added).) Because the confidentiality

provisions of the 2012, 2014, and 2024 SRAs each apply to different information—

based on when the information was shared—as opposed to applying to all confidential

information ever shared, the confidentiality provisions of the 2012, 2014, and 2024

SRAs do not concern the same subject matter.

143. For these reasons, the Court believes that the parties’ arguments as to

their intentions are premature and that the Court would benefit from a more fully

developed factual record on this issue. See Oliver v. Brown & Morrison, Ltd., 2022

NCBC LEXIS 20, at *17 (N.C. Super. Ct. Mar. 3, 2022) (denying a motion to dismiss

where “it [was] not clear to the [c]ourt based on the facts alleged in the [c]omplaint,

as opposed to any position argued by [d]efendants[] . . . that there was an intent by

all the parties . . . that the second contract [] be substituted for the original contract”).

144. Based solely on the record properly before the Court at this early stage

of the litigation, the Court cannot conclude that the language of Section 14 establishes

an unambiguous intention of the parties to extinguish their rights and obligations

under the 2012 and 2014 SRAs.

145. It is true that “a merger clause in a second contract may cause a

novation[.]” Med. Staffing Network, Inc. v. Ridgway, 194 N.C. App. 649, 654 (2009).

However, any presumption created by the existence of a merger clause can be

rebutted through evidence of the “existence of fraud, bad faith, unconscionability,

negligent omission[,] or mistake in fact.” Zinn, 87 N.C. App. at 333 (cleaned up).

146. Implus alleges that—unbeknownst to it—Bates and Hale (1) continued

to receive Implus’s confidential customer information following their termination in

2020; (2) shared that information with Blue San; and (3) entered into the 2024 SRAs

without disclosing their conduct or contractual relationship with Blue San. Such

allegations, if proven true, may be sufficient to rebut any presumptive effect based on

the merger clause in Section 14.

147. Given the “relatively low bar” of notice pleading, the Court is satisfied

that Implus has alleged sufficient facts to sustain its claims for breach of the 2012

and 2014 SRAs. See, e.g., LFF IV Timber Holding LLC v. Heartwood Forestland Fund

IV, LLC, 2024 NCBC LEXIS 119, at *18 (N.C. Super. Ct. Sept. 6, 2024) (noting that

“[a]lthough [plaintiff] will, of course, have to make a more detailed showing at later

stages of this litigation, . . . its allegations are sufficient to pass muster under” the

“relatively low bar” of notice pleading for claims of breach of contract (cleaned up)).

148. Therefore, H.B. Shoes Co. and The Mike Hale Company’s Motion to

Dismiss Implus’s claims for breach of Section 11 of the 2012 and 2014 SRAs is

DENIED.

2. Breach of the 2024 SRAs

149. With respect to Implus’s second theory of breach of contract—alleging

breaches of various terms of the 2024 SRAs—H.B. Shoes Co. and The Mike Hale

Company concede that they are not seeking dismissal of these claims with respect to

their alleged breaches of Section 4 (Services Provision), Section 5 (Warranty

Provision), or Section 11 (Term Provision).

150. Instead, they are only seeking dismissal of these claims to the extent

that Implus has alleged breaches of Section 9 (Non-Solicitation Provision) and Section

10 (Confidentiality Provision).

(a) Section 9 (Non-Solicitation Provision)

151. With regard to the Non-Solicitation Provision, Implus has clarified that

it is not alleging breaches of Sections 9(b) or (c) and is instead solely alleging a breach

of Section 9(a).

152. Specifically, Implus alleges that Bates and Hale have breached the

terms of Section 9(a) by “attempt[ing] to solicit Implus’s customers on behalf of Blue

San[.]” (TAC ¶ 86; see also TAC ¶¶ 81, 286, 299.)

153. Section 9 states in relevant part as follows:

Representative further agrees, in order to preserve the goodwill and

ongoing business value of Implus, that during the term of this

Agreement and for a period of six (6) months after the date of

termination or expiration of this Agreement for any reason,

Representative will not, directly or indirectly, (a) attempt to divert or

take away any past or present Customers or solicit or hire any past or

present employee of Implus . . . .

(ECF No. 74.2, at 3, 13.)

154. In response, Bates and Hale assert that Section 9(a) is overly broad and

unenforceable because it prohibits the solicitation of Implus’s “past” employees,

including those with whom Bates and Hale never had contact.

155. This Court has previously stated the following with regard to the

enforceability of non-solicitation agreements:

“Courts in North Carolina have recognized that reasonable restrictions

on a former employee’s right to solicit an employer’s current employees

are enforceable[,]” as such provisions are simply “another means of

protecting the former employer’s interest in the good-will it has with its

customers.” Wells Fargo Ins. Servs. USA, Inc. v. Link, 2018 NCBC

LEXIS 42, at *26–28 (N.C. Super. Ct. May 8, 2018), aff’d, 372 N.C. 260

(2019); see also Jeffrey R. Kennedy, D.D.S., P.A. v. Kennedy, 160 N.C.

App. 1, 11 (2003) (“[T]he covenant prohibiting [defendant] from

soliciting and hiring plaintiff’s former employees for the three-year

period does not violate public policy.”)[.] Nevertheless, “[a] restriction

on solicitation of employees generally is subject to the same

requirements as other restrictive covenants.” Wells Fargo Ins. Servs.

USA, Inc., 2018 NCBC LEXIS 42, at *27. Thus, “[t]o establish that a

non-solicitation of employees covenant is reasonable, an employer must

establish that it has a protectable business interest in prohibiting

solicitation of former employees, and such prohibition must be no

broader than necessary to protect that interest.” Id., at *28; see, e.g.,

Med. Staffing Network, Inc., 194 N.C. App. at 657 (holding

unenforceable a prohibition on defendant’s solicitation of employees of

plaintiff’s affiliate for which defendant did not work).

Bite Busters, LLC v. Burris, 2021 NCBC LEXIS 26, at *15–16 (N.C. Super. Ct. Mar.

25, 2021).

156. At the 8 May hearing, counsel for Implus conceded that—as written—

Section 9(a) is overly broad because Implus has no legitimate business interest in

prohibiting Bates and Hale from soliciting Implus’s past employees. (Tr., at 130.)

157. Instead, Implus’s counsel argued that the deficiencies in Section 9(a) can

be remedied through “blue penciling” in order to remove the phrase “any past” that

immediately precedes the words “employee of Implus[.]” (Tr., at 129–30.) However,

Implus failed to request that the Court exercise its blue penciling authority in its

briefs in connection with the Motions to Dismiss. 6 (Tr., at 129–30.) As such, the

6 The Court will not consider arguments on a motion that are raised for the first time at a

hearing and were not briefed. See Charles Schwab & Co. v. Marilley, 2024 NCBC LEXIS 27,

at *16 n.4 (N.C. Super. Ct. Feb. 20, 2024), (refusing to consider an argument that “was not

briefed, and therefore inappropriately raised for the first time in oral argument”), aff’d per

curiam, 387 N.C. 185 (2025).

Court, in the exercise of its discretion, declines Implus’s late invitation to blue pencil

the unreasonable portions of Section 9(a). See, e.g., Elior, Inc. v. Thomas, 2024 NCBC

LEXIS 61, at *36 (N.C. Super. Ct. Apr. 22, 2024) (noting that “[u]ltimately,

application of the blue pencil doctrine is within the discretion of the [c]ourt” (cleaned

up)).

158. Therefore, because Section 9(a) is unenforceable on this basis alone, the

Court need not consider the parties’ remaining arguments as to this claim.

159. Accordingly, H.B. Shoes Co. and The Mike Hale Company’s Motion to

Dismiss Implus’s claims for breach of Section 9 of the 2024 SRAs is GRANTED, and

these claims are DISMISSED with prejudice.

(b) Section 10 (Confidentiality Provision)

160. As for Implus’s claims for breach of Section 10, Implus alleges that Bates

and Hale—on behalf of H.B. Shoes Co. and The Mike Hale Company—have breached

the confidentiality provisions of the 2024 SRAs by sharing and discussing Implus’s

confidential customer information with Blue San and its employees.

161. Section 10 states as follows: