United States District Court, E.D. North Carolina, Southern Division
JAMES C. FOX, Senior United Judge.
This matter is before the court on the Motion to Dismiss [DE-13] filed by Defendants Vestar Corp, LLC ("Vestar") and Lee W. Tardivel ("Tardivel"), and the Motion for Leave to Amend Complaint [DE-24] filed by Plaintiff Polyquest, Incorporated ("Polyquest"). For the reasons stated herein, the Motion to Dismiss [DE-13] is DENIED in part and ALLOWED in part and the Motion for Leave to Amend Complaint [DE-24] is ALLOWED.
I. FACTUAL AND PROCEDURAL BACKGROUND
This action arises out of Defendants' alleged tortious interference with a Security Agreement entered into between Plaintiff Polyquest and a non-party to this action, EocPlas Polymers LLC ("Polymers).
Polyquest is a North Carolina corporation headquartered in Wilmington, North Carolina, which is engaged in the business of distributing PET resins, manufacturing and distributing recycled PET resins and processing PET scrap streams. See Marinelli Aff. [DE-22] ¶¶ 3, 6. PET resins are a plastic substance used in a wide variety of products, including plastic bottles. Id. ¶ 6.
Polyquest alleges that during the period from June 2012 through November 2012, Tardivel, a citizen of the United Kingdom who maintains a residence in New York, made several trips to North Carolina and attended multi-day meetings at Polyquest's headquarters for purposes of soliciting an investment by Polyquest into various joint ventures, including a proposed joint venture to operate a baled bottle recycling facility located in East Farmingdale, New York ("the Facility"). Compl. [DE-1] ¶ 9. The Facility's manufacturing operation consisted of taking recycled plastic bottles, and through a sorting and cleaning process, converting them into a plastic flake. Id. Tardivel is a member of Vestar, which is a Delaware limited liability company. Id. ¶ 2.
Following the negotiations, Vestar and Polyquest agreed to an arrangement under which a newly-formed Delaware limited liability company, Ecoplas Holdings, LLC ("Holdings") would own, as a wholly-owned subsidiary, another newly-formed Delaware limited liability company, Polymers. Holdings has two members: Defendant Vestar and PQ Capital Ventures, LLC ("PQ Capital"), a North Carolina limited liability company and affiliate of Polyquest. Compl. [DE-1] ¶ 10. In conjunction with this arrangement, Tardivel was appointed President of Holdings and Chief Executive Officer of Polymers. Id. ¶ 11. Additionally, Polymers and Vestar entered into a Management Services Agreement, under which Vestar was responsible for the day-to-day management of Polymer's business operations. Id. ¶ 18.
Polyquest alleges that the joint venture arrangement was at all times dependent upon a purchase of the operating assets of the Facility from a third party, the Coca Cola Company. Id. ¶ 12; Marinelli Aff. [DE-22] ¶ 8. In connection with this asset purchase transaction, Polyquest extended a $750, 000 loan to Polymers, evidenced by a Promissory Note and secured by a Security Agreement. Compl. [DE-1] ¶ 12; Exs. A (Promissory Note) & B (Security Agreement). Under the Security Agreement, Polymers agreed that it would:
Maintain all of its leases and conduct its business in an orderly and efficient manner in accordance with good business practices.
Maintain its assets, invoices, and checks separate from and not commingled with any of those of any other person or entity.
Not commingle its assets with the assets of any of its managers, members, affiliates, principals or any other entity.
Not, without the consent of Polyquest, pay management fees, salary, bonus, commission, consulting fees or other compensation to the members, managers and officers of Polymers, Holdings, or any entity that is a member of Holdings.
Pay all taxes and charges imposed on the collateral securing its indebtedness to Polyquest.
Compl. [DE-1] ¶¶ 13-17; Ex. B at ¶¶ 2A(b); 2A(c); 2B(c); 2B(e); 3.
Polyquest alleges that at some point in time, it became aware that Defendants were not performing their obligations under the Management Services agreement, to the detriment of Polymers and in apparent violation of the Security Agreement. Specifically, Polyquest alleges that Defendants intentionally caused Polymers to fail to pay rent owed to the landlord of the Polymers Facility; to fail to pay its utility providers and other trade creditors, and to fail to pay, withhold and remit applicable payroll and unemployment taxes. Compl. [DE-1] ¶ 25.
Polyquest also alleges that less than two weeks after the execution of the Note and Security Agreement by Polymers, Polymers contracted to sell Unifi Manufacturing, Inc. ("Unifi") five or more inventory loads of plastic flake owned by Polymers. Compl. [DE-1] ¶ 19. Per the terms of the contract, the product was to be shipped from Polymers' place of business in New York to Unifi's place of business in Yadkinville, North Carolina. Id. The Unifi Order was evidenced by a purchase order submitted by Unifi to Polymers. Id., Ex. D.
According to Polyquest, following the initiation of the Unifi Order, Defendants caused invoices for the Unifi Order to be submitted to Unifi in the name of Vestar, not Polymers, and directed that payment be made directly to Vestar rather than Polymers. Compl. [DE-1] ¶ 20. Polyquest alleges that Defendants' actions were for the purpose of intentionally converting Polymer's product, and the payments derived therefrom, to Defendant's use and benefit to the detriment of Polymers and Plaintiff, and were in violation of the Security Agreement. Id.
Accordingly, upon learning of the invoicing for the Unifi Order, Polymers sent a letter dated January 16, 2013 to Unifi, notifying it of the conversion and directing payment to Polymers at its North Carolina address. Id. ¶ 21; Ex. E. On that same date, the Management Services Agreement between Vestar and Polymers was terminated, and Tardivel was removed as an officer of Holdings and Polymers. Compl. [DE-1] ¶ 27; Ex. G. On the following day, January 17, 2013, Polyquest sent Polymers a Notice of Default. Compl. [DE-1] ¶ 26; Ex. F.
Polyquest alleges, notwithstanding the foregoing, that Tardivel still directed Unifi to wire payment for the Unifi Order to a Chase bank account of Polymers to which Tardivel had direct access and control. Compl. [DE-1] ¶ 22. Polyquest alleges that Tardivel promptly changed the passwords to the Polymers' Chase account, thereby denying Polymers' chief financial officer, Randy M. Bragg, and its chief operating officer, George Smilow, any ability to access or review activity in the Polymers' Chase account. Compl. Id. On or about January 22, 2013, Defendants initiated three electronic, online transfers from this Polymers' Chase account in the amounts of $20, 000, $50, 000, and $100, 000, respectively, to an account ending the digits "256." Id. ¶ 23. Polyquest contends that this account is maintained by Vestar or Tardivel. Id. 23.
On January 24, 2013, Polyquest, through its counsel, sent Tardivel a letter demanding return of the $170, 000 in withdrawn funds to Polymers. Id. ¶ 28; Ex. H. Tardivel failed to comply with this demand. Compl. [DE-1] ¶ 28. Polyquest contends that both Defendants have acknowledged that they authorized the transfer for these monies from Polymers' Chase account. Id. ¶ 24. According to Polyquest, Defendants claim, falsely, that the transfers were payment for Vestar's management fee. Id. Polyquest asserts that payment for any such fee would be owed, if at all, by Holdings, and not by Polymers. Id.
Polyquest then initiated this action in this court on January 31, 2013, alleging claims for tortious interference with contract and unfair and deceptive trade practices in violation of N.C. Gen. Stat. § 75-1.1. Defendants thereafter filed a Motion to Dismiss [DE-13], arguing that the action must be dismissed pursuant to Rule 12(b)(2) for lack of personal jurisdiction over the Defendants, or in the alternative, dismissed pursuant to Rule 12(b)(3) for improper venue. Defendants also argue that the Complaint must be dismissed pursuant to Rule 12(b)(6) for failure to state a claim. Polyquest has filed a response [DE-21] and Defendants have replied [DE-26], and the Motion to Dismiss is therefore ripe for disposition.
While the parties were briefing the Motion to Dismiss, Polyquest also filed a Motion for Leave to Amend Complaint [DE-24], whereby Polyquest seeks to file an Amended Complaint which adds an additional claim for conversion of security. Defendants ...