Bianca Ellis v. Louisiana-Pacific Corporation

PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

BIANCA ELLIS, individually and on 

behalf of all others similarly

situated; MARK SROKA, individually

and on behalf of all others

similarly situated; JAQUELINE



SROKA, individually and on behalf

of all others similarly situated, No. 11-2319

Plaintiffs-Appellants,

v.

LOUISIANA-PACIFIC CORPORATION,

Defendant-Appellee.



Appeal from the United States District Court

for the Western District of North Carolina, at Charlotte.

Graham C. Mullen, Senior District Judge.

(3:11-cv-00191-GCM)

Argued: September 19, 2012

Decided: November 2, 2012

Before WILKINSON and THACKER, Circuit Judges, and

Michael F. URBANSKI, United States District Judge for

the Western District of Virginia, sitting by designation.

Affirmed by published opinion. Judge Thacker wrote the

opinion, in which Judge Wilkinson and Judge Urbanski

joined.

2 ELLIS v. LOUISIANA-PACIFIC CORP.

COUNSEL

ARGUED: Gary Edward Mason, WHITFIELD BRYSON &

MASON LLP, Washington, D.C., for Appellants. Richard

Thell Boyette, CRANFILL, SUMNER & HARTZOG, LLP,

Raleigh, North Carolina, for Appellee. ON BRIEF: Daniel K.

Bryson, Scott C. Harris, WHITFIELD BRYSON & MASON

LLP, Raleigh, North Carolina; Nicholas A. Migliaccio,

WHITFIELD BRYSON & MASON LLP, Washington, D.C.;

Joel R. Rhine, RHINE LAW FIRM, PC, Wilmington, North

Carolina; Auley M. Crouch, III, Christopher K. Behm,

BLOCK CROUCH KEETER BEHM & SAYED, LLP, Wil-

mington, North Carolina; Charles A. Schneider, Martha B.

Schneider, SCHNEIDER & SCHNEIDER, Washington, D.C.,

for Appellants. John Parker Sweeney, WOMBLE CARLYLE

SANDRIDGE & RICE LLP, Baltimore, Maryland; James E.

Weatherholtz, WOMBLE CARLYLE SANDRIDGE & RICE

LLP, Charleston, South Carolina; Meghan N. Knight, CRAN-

FILL, SUMNER & HARTZOG, LLP, Raleigh, North Caro-

lina; Scott Burnett Smith, J. Thomas Richie, BRADLEY

ARANT BOULT CUMMINGS LLP, Huntsville, Alabama,

for Appellee.

OPINION

THACKER, Circuit Judge:

Bianca Ellis, Mark Sroka, and Jaqueline Sroka (collec-

tively, the "Appellants") appeal the district court’s order dis-

missing their putative class action complaint. They claim that

Louisiana-Pacific Corp. ("LP" or the "Appellee") negligently

designed and manufactured Trimboard, a composite building

product designed and marketed for use as exterior trim around

windows and doors, and violated the provisions of the North

Carolina Unfair and Deceptive Trade Practices Act (the

"UDTPA"). Appellants also asked the district court for a

ELLIS v. LOUISIANA-PACIFIC CORP. 3

declaratory judgment that Trimboard is defective, prematurely

deteriorates, and that its warranty is unconscionable. The dis-

trict court dismissed the negligence and UDTPA claims pur-

suant to North Carolina’s economic loss rule, and it dismissed

the declaratory judgment claim because Appellants are pursu-

ing a breach of warranty claim in a separate class action suit.

For the reasons that follow, we affirm.

I.

A.

On April 18, 2011, Appellants filed this putative class

action lawsuit in the Western District of North Carolina based

on alleged latent and patent defects in Trimboard. Appellants

never directly purchased Trimboard themselves but, rather,

bought homes in which Trimboard had already been installed.

Ellis’s house was completed in 2005, and the Srokas’ house

was completed in 2006. Ellis discovered problems with Trim-

board on her house in 2010, and the Srokas discovered prob-

lems in 2009. They allege that the Trimboard on their houses

is either "failing" or "defective but has not yet manifested

signs of failure." Compl. ¶ 25.1

The complaint contains three counts: (1) a claim for negli-

gent design and manufacture (the "negligence claim"); (2) an

unfair or deceptive trade practices claim under N.C. Gen. Stat.

§ 75-1.1, et seq. (the "UDTPA claim"); and (3) a declaratory

relief claim concerning Trimboard’s alleged latent defects and

its warranty (the "declaratory judgment claim"). Specifically,

the complaint states as follows:

• LP "failed to provide adequate instructions for

the installation of the Trimboard for exterior use

. . . [including] fail[ing] to provide adequate

1

The complaint is found at J.A. 142-60. Citations to the "J.A." refer to

the Joint Appendix filed by the parties in this appeal.

4 ELLIS v. LOUISIANA-PACIFIC CORP.

instructions as to the need to seal and to prime

the site-cut ends of Trimboard";

• LP’s "installation instructions are misleading and

in some cases contrary to advisable construction

practices, specifically as they relate to flashing

and caulking";

• Class members’ builders and subcontractors "uti-

lized and followed the installation instructions

provided by [LP] for the installation of Trim-

board" or, in the alternative, "LP wrongly

assumed that typical construction site workers

would read, understand, and implement the com-

plex instructions supplied";

• LP’s Trimboard is "inherently defective for exte-

rior use and fails to perform as intended because

it prematurely deteriorates, rots, swells, buckles,

delaminates, absorbs water, warps, and/or bulges

under normal conditions and natural, outdoor

exposure; causes consequential water and struc-

tural damages; and promotes growth of mold,

mildew, fungi, and insect infestation in the struc-

tures in which it is installed"; and

• LP "engaged in unfair or deceptive acts or prac-

tices in violation of [the UDTPA] when, in sell-

ing and advertising the Trimboard for exterior

use, LP failed to give Plaintiffs and members of

the Classes adequate warnings and notices

regarding the defect in the Trimboard when used

in exterior applications despite the fact that LP

knew or should have known of this defect[.]"

Compl. ¶¶ 21-24, 62.

ELLIS v. LOUISIANA-PACIFIC CORP. 5

Per the complaint, LP provided an express warranty to "the

owners of the residences on which Trimboard was installed

and/or applied," Compl. ¶ 15, which stated the following:

[LP] warrants to the original purchaser and to any

subsequent owner of a structure on which its LP [ ]

Trimboard (the Product) is installed that the Product

substrate will not delaminate, check, split, crack, or

chip for a period of ten years from the date of instal-

lation under normal conditions of use and exposure,

provided the trim is properly stored, installed, main-

tained, and protected as specified in the . . . Trim-

board application instructions.

J.A. 161 (emphasis added). However, the complaint alleges

that "the consumer, in most cases, would not have been aware

of the warranty because it was only included in bundles of

Trimboard sent to the wholesaler or distributor and was most

likely not passed on through the contractor to the consumer."

Compl. ¶ 15. Ellis was able to obtain a copy of the warranty

and filed a warranty claim,2 but the Srokas did not, although

they do not dispute that they are covered by it.

The district court granted LP’s Rule 12(b)(6) motion to dis-

miss as to all three counts in the complaint on November 8,

2011. In its order, the court held, first, that the negligence

claim was barred by North Carolina’s economic loss rule (the

"ELR"); second, that the UDTPA claim was also barred by

the ELR; and third, that the declaratory judgment claim

should have been raised in a similar class action suit in the

Eastern District of North Carolina, explained directly below.

See Ellis v. Louisiana-Pacific Corp., No. 3:11-cv-191, 2011

WL 5402878 (W.D.N.C. Nov. 8, 2011). Appellants timely

noted this appeal.

2

LP denied Ellis’s warranty claim. LP stated, "Based upon the informa-

tion received, we do not find a warrantable issue with your trim. However,

it may be time for routine homeowner maintenance." Compl. ¶ 28.

6 ELLIS v. LOUISIANA-PACIFIC CORP.

B.

Prior to the filing of the complaint that is subject of this

appeal, in 2008, another group of plaintiffs filed a class action

suit against LP, which was removed to the Eastern District of

North Carolina. See Hart v. Louisiana-Pacific Corp., No.

2:08-cv-47-BO (E.D.N.C. Nov. 21, 2008). The Hart class

action was ongoing at the time Appellants chose to file the

instant case in the Western District of North Carolina.3 The

Hart complaint alleges that the Trimboard deteriorated or

failed too early, causing property damage and destruction in

their homes. It also alleges that LP "held itself out as knowl-

edgeable in the design and manufacture of exterior building

products and represented that Trimboard was a high quality

product that was superior to wood for use as exterior trim

[but] that Trimboard is actually defective in design and manu-

facture[.]" J.A. 188. Finally, the Hart complaint alleges that

the warranty is void as unconscionable for many reasons,

including that "installation instructions were defective so that

the installers would necessarily have to deviate from [them],

thereby voiding the warranty." Id. at 189. The Hart complaint

asserts only a breach of express warranty claim because North

Carolina’s statute of repose barred any tort claims that the

class plaintiffs could have asserted. Appellants concede that

they are also members of the Hart class and "acknowledge

that they have no express warranty claim in the present law-

suit because they are putative class members [in Hart]." Id. at

135.

II.

This court reviews the dismissal of a complaint de novo.

See Flood v. New Hanover Cnty., 125 F.3d 249, 251 (4th Cir.

1997). Because this case is in federal court based on diversity

jurisdiction, the law of the forum state — in this case, North

3

The Hart case remains ongoing.

ELLIS v. LOUISIANA-PACIFIC CORP. 7

Carolina — applies. See Erie R.R. Co. v. Tompkins, 304 U.S.

64, 78 (1938). We should determine

how the Supreme Court of [North] Carolina would

rule. If th[at] [court] has spoken neither directly nor

indirectly on the particular issue before us, we are

called upon to predict how that court would rule if

presented with the issue. In making that prediction,

we may consider lower court opinions in [North]

Carolina, the teachings of treatises, and the practices

in other states.

Twin City Fire Ins. Co. v. Ben Arnold-Sunbelt Beverage Co.

of S.C., 433 F.3d 365, 369 (4th Cir. 2005) (internal quotation

marks and citations omitted).4

III.

A.

Appellants first challenge the district court’s decision to

dismiss their negligence claim as barred by North Carolina’s

ELR. We hold that this claim is barred by the ELR, and thus

affirm.

1.

The ELR provides, "[o]rdinarily, a breach of contract does

not give rise to a tort action by the promisee against the prom-

isor." N.C. State Ports Auth. v. Lloyd A. Fry Roofing Co., 240

S.E.2d 345, 350 (N.C. 1978). Thus, the rule "prohibits the

purchaser of a defective product from bringing a negligence

action against the manufacturer or seller of that product to

4

We acknowledge that, unfortunately, the North Carolina Supreme

Court has no mechanism for receiving certified questions. See SunTrust

Bank, N.A. v. Macky, 669 F.3d 177, 182 n.* (4th Cir. 2012); MLC Auto.,

LLC v. Town of S. Pines, 532 F.3d 269, 284 (4th Cir. 2008).

8 ELLIS v. LOUISIANA-PACIFIC CORP.

recover purely economic losses sustained as a result of that

product’s failure to perform as expected." Wilson v. Dryvit

Sys., Inc., 206 F. Supp. 2d 749, 753 (E.D.N.C. 2002). Con-

versely, "where a defective product causes damage to prop-

erty other than the product itself, losses attributable to the

defective product are recoverable in tort rather than contract."

Ford v. All-Dry of the Carolinas, Inc., No. COA10-931, 2011

WL 1483726 at *3 (N.C. Ct. App. 2011) (internal quotation

marks and alteration omitted).

The North Carolina Court of Appeals has explained the

logic behind the ELR:

The rationale for the economic loss rule is that the

sale of goods is accomplished by contract and the

parties are free to include, or exclude, provisions as

to the parties’ respective rights and remedies, should

the product prove to be defective. To give a party a

remedy in tort, where the defect in the product dam-

ages the actual product, would permit the party to

ignore and avoid the rights and remedies granted or

imposed by the parties’ contract.

Moore v. Coachmen Indus., Inc., 499 S.E.2d 772, 780 (N.C.

Ct. App. 1998).

The rule is not without its exceptions, however. Ports

Authority provides four: tort actions are viable if the injury

proximately caused by the promisor’s negligence

(1) was an injury to the person or property of

someone other than the promisee[;]

(2) was to property of the promisee other than the

property which was the subject of the contract, or

was a personal injury to the promisee[;]

(3) was loss of or damage to the promisee’s prop-

erty, which was the subject of the contract, the prom-

ELLIS v. LOUISIANA-PACIFIC CORP. 9

isor being charged by law, as a matter of public

policy, with the duty to use care in the safeguarding

of the property from harm, as in the case of a com-

mon carrier, innkeeper or other bailee[; or]

(4) was a wilful injury to or a conversion of the

property of the promisee, which was the subject of

the contract, by the promisor.

240 S.E.2d at 350-51 (internal citations omitted). The North

Carolina Supreme Court noted that the list "is not all inclu-

sive," but continued, "our research has brought to our atten-

tion no case in which this Court has held a tort action lies

against a promisor for his simple failure to perform his con-

tract, even though such failure was due to negligence or lack

of skill." Id. at 351.

Two North Carolina cases carved out other exceptions to

the ELR. The first, Oates v. JAG, Inc., involved a plaintiff

who was not the original purchaser of his home but rather

bought a home built by the defendant. See 333 S.E.2d 222,

225-26 (N.C. 1985). After moving into the house, the plaintiff

discovered many defects, which led to expensive repairs and

renovations. He sued the defendant for negligent construction,

but the trial court granted the defendant’s motion to dismiss

because no contractual relationship existed between the par-

ties. See id. at 224. The North Carolina Supreme Court

reversed, holding that "an owner of a dwelling house who is

not the original purchaser has a cause of action against the

builder and general contractor for negligence in the construc-

tion of the house, when such negligence results in economic

loss or damage to the owner." Id. at 223-24. In so doing, the

Supreme Court "disagree[d] with the Court of Appeals’ rea-

soning in support of its decision that plaintiffs should be

denied relief solely because plaintiffs were subsequent pur-

chasers and lacked contractual privity with defendant-

builder." Id. at 225.

10 ELLIS v. LOUISIANA-PACIFIC CORP.

The second, Lord v. Customized Consulting Specialty, Inc.,

involved homeowners who sued Customized Consulting, the

construction company that facilitated the construction of their

home, and 84 Lumber, who provided allegedly defective

trusses that were used in building the house. See 643 S.E.2d

28, 29 (N.C. Ct. App. 2007). Although the Lords had a con-

tract with the construction company, they did not have a con-

tract with 84 Lumber, but by the time of trial, only a

negligence claim survived against that defendant. Id. at 30. 84

Lumber moved for a directed verdict, arguing that the ELR

barred recovery in negligence against them. The trial court

denied the motion, and the jury returned a verdict against 84

Lumber, which appealed. See id.

In affirming, the North Carolina Court of Appeals

explained that the trial court was "merely recogniz[ing] a

means of redress for those purchasers who suffer economic

loss or damage from improper construction but who have no

basis for recovery in contract." Lord, 643 S.E.2d at 32

(emphasis added) (internal quotation marks and alterations

omitted). It concluded, "[b]ecause there was no contract

between the Lords and the 84 Lumber Defendants, we further

find that the economic loss rule does not apply and therefore

does not operate to bar the Lords’ negligence claims." Id. at

33.

However, Ports Authority, Oates, and Lord do not squarely

address whether an explicit contract is required to invoke the

ELR, or whether a contractual remedy, such as by warranty,

will suffice. The Court of Appeals had an opportunity to

address this issue in Moore. See 499 S.E.2d at 772-80. There,

the plaintiffs sued the manufacturer of their RV and the sup-

plier of a defective part that caused a fire and destroyed the

vehicle. The plaintiffs suffered only economic losses and did

not have a contract with the RV manufacturer or component

manufacturer, but the vehicle was covered by a warranty. The

plaintiffs sued in negligence, breach of express warranty, and

breach of implied warranty. See id. at 774. The court affirmed

ELLIS v. LOUISIANA-PACIFIC CORP. 11

a grant of summary judgment in favor of the manufacturer

and component manufacturer based on the ELR, explaining

that "[t]o give a party a remedy in tort, where the defect in the

product damages the actual product, would permit the party

to ignore and avoid the rights and remedies granted or

imposed by the parties’ contract." Id. at 780; see also

Hospira, Inc. v. AlphaGary Corp., 671 S.E.2d 7, 14 (N.C. Ct.

App. 2009) (recognizing that Moore held "that owners of a

recreational vehicle were barred from recovering for pure eco-

nomic loss . . . under the economic loss rule . . . where . . .

the remote supplier was covered under the subsidiary manu-

facturer’s limited warranty"); Warfield v. Hicks, 370 S.E.2d

689, 694 (N.C. Ct. App. 1988) (applying ELR to bar original

homeowners from recovering from contractor in negligence

when contractor used beetle-infested beams in the construc-

tion of their home, and distinguishing Oates by stating that,

in that case, "the Court intended . . . to merely recognize a

means of redress for those purchasers who suffer economic

loss or damage from improper construction but who, because

not in privity with the builder, have no basis for recovery in

contract or warranty" (emphasis added)).

A North Carolina federal court has recently addressed the

issue with which we are presented. In Kelly v. Georgia-

Pacific LLC, 671 F. Supp. 2d 785 (E.D.N.C. 2009), Kelly

sued GP, designers and manufactures of PrimeTrim, a product

similar to Trimboard. PrimeTrim was used in the construction

of the plaintiff’s home and allegedly failed to work as prom-

ised. Kelly brought an express warranty claim, along with

negligence, UDTPA, and Magnuson-Moss Act claims against

GP. See id. at 787. He made no claims for damages other than

damage to his home. GP filed a partial motion to dismiss,

arguing, inter alia, that the ELR barred the negligence claim.

The district court granted the motion, explaining that the ELR

"focus[es] on the availability of a contractual remedy, includ-

ing a remedy for breach of warranty," rather than whether

there is an explicit contract. Id. at 794. The court continued,

"North Carolina courts have strived to keep tort and contract

12 ELLIS v. LOUISIANA-PACIFIC CORP.

law (including law related to warranties) within their separate

spheres." Id. at 791 (citations omitted).

In contrast to the case at hand, however, Kelly was the

original owner of the home. The district court found this fact

persuasive, explaining,

Although GP and Kelly did not enter a contract, the

warranty allocates risk between Kelly and GP, low-

ers the price of the PrimeTrim, and thereby lowers

the price of the home that Kelly built using the

PrimeTrim. . . . As the original owner, Kelly had the

opportunity to participate in such risk allocation with

an awareness of how such risk allocation impacts the

ultimate price of his home.

Kelly, 671 F. Supp. 2d at 795 (emphasis added). Nonetheless,

the court explained, "GP’s sale of a product with a limited

warranty that covers the down-the-stream owner of the prod-

uct . . . does not open GP to a negligence claim for purely

economic loss under North Carolina law once the product is

sold to a third party, incorporated into the new home, and

allegedly injures itself." Id. at 795-96.

2.

The complaint in this case claims only economic loss stem-

ming from the allegedly defective Trimboard. However,

Appellants argue that because they never saw the express

warranty for Trimboard, they should be viewed in a different

light than other plaintiffs, who were original purchasers able

to read the warranty or contract and bargain for its terms

before buying a product or home. After parsing the cases

mentioned above, however, we believe the relevant inquiry

under North Carolina case law is whether the plaintiff "ha[s]

[a] basis for recovery in contract or warranty." Warfield, 370

S.E.2d at 694. Clearly, here, Appellants do have a contractual

basis for recovery in warranty, which they are, in fact,

ELLIS v. LOUISIANA-PACIFIC CORP. 13

actively pursuing in the Hart action. Moreover, the North

Carolina Supreme Court has held that contractual privity is

not required for a plaintiff to recover for breach of express

warranty; therefore, whether the plaintiff had an explicit con-

tract does not affect his ability to recover for his losses under

a contractual theory. See Alberti v. Manufactured Homes,

Inc., 407 S.E.2d 819, 825 (N.C. 1991) ("[A] direct contractual

relationship in the sale of the product itself is not a prerequi-

site to recovery for breach of express warranty against the

manufacturer.").

We also do not believe that the fact that Appellants are

downstream purchasers makes a difference in the analysis. In

Moore, for example, the plaintiffs may have been the original

purchaser of the RV, but they had no occasion to bargain or

consider the terms of the defective component that caused the

RV to catch on fire; yet, the North Carolina Court of Appeals

held the ELR nonetheless barred the plaintiffs’ negligence

claim for loss of the RV. See 499 S.E.2d at 780.

Policy declarations from the United States Supreme Court

and this court have demonstrated the need for some degree of

protection of the manufacturer of an allegedly defective good

or component part. This court has observed,

If intangible economic loss were actionable under a

tort theory, the U.C.C. provisions permitting assign-

ment of risk by means of warranties and disclaimers

would be rendered meaningless. It would be virtually

impossible for a seller to sell a product "as is"

because if the product did not meet the economic

expectations of the buyer, the buyer would have an

action under tort law. The U.C.C. represents a com-

prehensive statutory scheme which satisfies the

needs of the world of commerce, and courts have

been reluctant to extend judicial doctrines that might

dislocate the legislative structure.

14 ELLIS v. LOUISIANA-PACIFIC CORP.

2000 Watermark Assoc., Inc. v. Celotex Corp., 784 F.2d 1183,

1186 (4th Cir. 1986). The Supreme Court has similarly

observed, "[p]ermitting recovery for all foreseeable claims for

purely economic loss could make a manufacturer liable for

vast sums. It would be difficult for a manufacturer to take into

account the expectations of persons downstream who may

encounter its product." E. River S.S. Corp. v. Transamerica

Delaval, Inc., 476 U.S. 858, 874 (1986).

For these reasons, the district court did not err in deciding

that Appellants’ negligence claims are barred by the ELR.

B.

Appellants also argue that their claims brought pursuant to

the North Carolina UDTPA were improperly dismissed. The

district court held that the ELR barred these claims as well.

Without reaching that issue, we affirm on the separate ground

that the complaint fails to state a UDTPA claim. This court is

"entitled to affirm the court’s judgment on alternate grounds,

if such grounds are apparent from the record." MM ex rel. DM

v. Sch. Dist. of Greenville Cnty., 303 F.3d 523, 536 (4th Cir.

2002).5

The UDTPA is meant to prevent "unfair or deceptive acts

or practices in or affecting commerce." Becker v. Graber

Builders, Inc., 561 S.E.2d 905, 910 (N.C. Ct. App. 2002)

(internal quotation marks omitted). In order to state a claim

under the UDTPA, a plaintiff must show "(1) defendant com-

mitted an unfair or deceptive act or practice; (2) the action in

question was in or affecting commerce; and (3) the act proxi-

5

Furthermore, the North Carolina courts have never addressed whether

UDTPA claims are subject to the ELR, and in the absence of such direc-

tion, we are well-advised to rely on other grounds. See Time Warner

Entm’t-Advance/Newhouse P’ship v. Carteret-Craven Elec. Membership

Corp., 506 F.3d 304, 315 (4th Cir. 2007) ("[A]s a court sitting in diversity,

we should not create or extend the North Carolina common law[.]").

ELLIS v. LOUISIANA-PACIFIC CORP. 15

mately caused injury to the plaintiff." Id. Whether conduct is

"unfair" or "deceptive" is a legal issue for the court to decide.

Gilbane Bldg. Co. v. FRB, 80 F.3d 895, 902 (4th Cir. 1996)

(applying North Carolina law).

We are mindful that a mere breach of contract claim "is not

unfair or deceptive, . . . absent substantial aggravating circum-

stances." Gilbane, 80 F.3d at 903 (internal quotation marks

omitted). The North Carolina Court of Appeals has further

explained,

Egregious or aggravating circumstances must be

alleged before the provisions of the [UDTPA] may

take effect. Aggravating circumstances include con-

duct of the breaching party that is deceptive. Finally,

in determining whether a particular act or practice is

deceptive, its effect on the average consumer is con-

sidered.

Becker, 561 S.E.2d at 910-11 (internal citations omitted).

Indeed, "it is unlikely that an independent tort could arise in

the course of contractual performance, since those sorts of

claims are most appropriately addressed by asking simply

whether a party adequately fulfilled its contractual obliga-

tions." Eastover Ridge L.L.C. v. Metric Constructors, Inc.,

533 S.E.2d 827, 833 (N.C. Ct. App. 2000) (internal quotation

marks omitted).

We have reviewed the complaint and find no allegations of

substantial aggravating circumstances sufficient to state a

UDTPA claim. Appellants alleged two unfair or deceptive

acts on the part of LP: (1) failing to give adequate warnings

and notices about the allegedly defective quality of Trim-

board, and (2) failing to insure that they were provided with

an express warranty.

The first allegation simply re-couches Appellants’ breach

of warranty claim. But North Carolina has held that a "breach

16 ELLIS v. LOUISIANA-PACIFIC CORP.

of contract, even if intentional, is not sufficiently unfair or

deceptive to sustain" a UDTPA claim. Wachovia Bank &

Trust Co. v. Carrington Dev. Assocs., 459 S.E.2d 17, 21 (N.C.

Ct. App. 1995) (internal quotation marks omitted). In short,

Appellants allege that LP knew that Trimboard would not live

up to the terms of the warranty and should have disclosed this

fact to consumers, but this is simply another way of claiming

that LP breached its express warranty to consumers — the

claim Appellants are pursuing in the Hart action.6 Cf. Barto-

lomeo v. S.B. Thomas, Inc., 889 F.2d 530, 535-36 (4th Cir.

1989) (applying North Carolina law) (finding that substantial

aggravating circumstances did not exist where plaintiff’s

employer allegedly breached an oral agreement by "deceiv-

[ing]" him about the status of his distributorship, as that claim

was "at most, [a] simple breach[ ] of contract").

The second allegation also fails. Failing to insure that all

consumers who would eventually own a structure containing

Trimboard received a copy of the warranty is neither unfair

nor deceptive. In fact, North Carolina courts have concluded,

"failure to perform an administrative act" is not a substantial

aggravating circumstance under the UDTPA. Ford, 2011 WL

1483726 at *5. Beyond that, Appellants allege no common

law or statutory requirement that LP must insure that their

warranties are provided to each and every downstream con-

sumer. That type of requirement would not only be illogical,

it would be nearly impossible.

We therefore affirm the district court’s dismissal of the

UDTPA claim.

6

To the extent Appellants argue that their claim is actually a misrepre-

sentation claim, this also falls flat because the complaint fails to allege

actual reliance, one of the elements of such a claim. See Sunset Beach

Dev. LLC v. AMEC, Inc., 675 S.E.2d 46, 53 (N.C. Ct. App. 2009).

ELLIS v. LOUISIANA-PACIFIC CORP. 17

C.

Finally, Appellants challenge the district court’s dismissal

of their declaratory judgment claim, which alleges that Trim-

board is defective, prematurely deteriorates, and that the war-

ranty is unconscionable. The court held, "[a]ny challenge to

the enforceability of the warranty or the operation of the war-

ranty program are issues which either are or could have been

raised in the pending breach of warranty lawsuit in [Hart]."

Ellis, 2011 WL 5402878 at *2.

"[A] district court’s decision to entertain a claim for declar-

atory relief is discretionary and, as such, reviewed for abuse

of discretion." Aetna Cas. & Sur. Co. v. Ind-Com Elec. Co.,

139 F.3d 419, 421 (4th Cir. 1998). The district court did not

abuse its discretion in refusing to entertain this claim.

This court has held that the Declaratory Judgment Act

"does not impose a mandatory obligation upon the federal

courts to . . . entertain a claim for declaratory relief." Aetna,

139 F.3d at 421. Over the years, this court has enumerated

several factors that the district court should consider in decid-

ing whether to dismiss a declaratory judgment action. Perti-

nent to this appeal, a declaratory judgment action should not

be used "to try a controversy by piecemeal, or to try particular

issues without settling the entire controversy, or to interfere

with an action which has already been instituted." Id. at 422

(internal quotation marks omitted). We have also emphasized

the need to promote "federalism, efficiency, [and] comity." Id.

at 423.

The district court aptly explained that the Hart action is the

proper place to raise issues with respect to the warranty and

LP’s alleged violation of it. To consider those claims in a

venue separate from the Eastern District of North Carolina,

where Hart is pending, and in which Appellants are also par-

ties, would be to disregard the concerns set forth in Aetna.

18 ELLIS v. LOUISIANA-PACIFIC CORP.

Therefore, we affirm the district court’s decision relative to

the declaratory judgment claim.

IV.

For the foregoing reasons, the judgment of the district court

is

AFFIRMED.