Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Goodwill Industries of Northwest North Carolina, Inc. v. Stuart Rags, Inc.

United States District Court, M.D. North Carolina

May 21, 2015



WILLIAM L. OSTEEN, Jr., District Judge.

Plaintiff Goodwill Industries of Northwest North Carolina, Inc. ("Goodwill") commenced this action by filing a Complaint (Doc. 4) in Forsyth County Superior Court on October 17, 2013 against Defendants Stuart Rags, Inc. ("Stuart Rags"), Stuart F. Tromberg ("Tromberg"), and American Clothing Exchange ("ACE") (collectively "Defendants").[1] Defendants petitioned to remove the action to federal court on November 21, 2013, based on diversity jurisdiction.[2] (Doc. 1.) On the same day they petitioned for removal, Defendants filed an Answer including affirmative defenses and counterclaims. (Doc. 2.) Presently before this court is Goodwill's Motion to Dismiss Defendants' Counterclaims. (Doc. 13.)

This court has carefully considered Goodwill's Motion (Doc. 13) and all related replies and responses, [3] and for the reasons stated fully below, will grant Goodwill's Motion to Dismiss Counterclaims (Doc. 13) in part, in that Defendants' claim under the North Carolina Unfair and Deceptive Trade Practices Act ("UDTPA")[4] is dismissed, and deny the motion in part, in that this court will allow Defendants to pursue their breach of contract counterclaim.[5]


The present action stems from a contract dispute between Goodwill and Defendants regarding the sale of salvage goods by Goodwill to Stuart Rags. (Compl. (Doc. 4) at 1.) Goodwill is a non-profit corporation based in Winston-Salem, North Carolina. (Id. at 2.) Goodwill's mission is to provide jobs and workforce development in Forsyth County and the surrounding areas. (Id. at 3.) Goodwill funds this work through the accepting and selling of donations of clothing, housewares, and other goods. (Id.)

Sometime in 2011, Defendant Tromberg, acting as an officer of Stuart Rags, executed an agreement with Goodwill regarding Stuart Rags purchasing Goodwill's salvage items, (the "Agreement"). (Id. at 4.) The Agreement between Goodwill and Defendants included a commitment by Stuart Rags to purchase all of Goodwill's inventory of textile salvage, shoe salvage, and miscellaneous salvage. (Id.) The Agreement also provided that Goodwill would sell the products to Stuart Rags "as is." (Id.) The Agreement provided no definition of salvage. Specifically, the Agreement stated:

Sale and Purchase
Subject to the terms of this Agreement, the Seller hereby agrees to sell the Purchaser and the Purchaser hereby agrees to buy from the Seller during the Term of this Agreement (as defined below) all of Seller's inventory, if any, of textile salvage, shoe salvage (both single and pairs) and miscellaneous salvage (purses and belts) (collectively, the "Products"). It is expressly understood and agreed that the Products will be sold "AS IS" and the Seller makes no warranties whatsoever with respect thereto. The Seller expressly disclaims all implied warranties of merchantability and fitness for a particular purpose and all other warranties, express or implied, with respect to any and all Products sold to the Purchasers.

(Compl., Ex. A, Exclusive Purchase Agreement ("Agreement") (Doc. 4-1) at 1.)

The Agreement is at the center of the current dispute. Goodwill asserts that Defendants "now refuse to pay for approximately 56 loads of salvage materials purchased under the Agreement and invoiced by Goodwill NWNC between May 10, 2013 and July 2, 2013." (Compl. (Doc. 4) at 5.) Defendants admit that they refused to pay the invoices submitted to them by Goodwill between May 10, 2013 and July 2, 2013, but deny that these invoices were for items purchased. (Defs.' Ans., Affirmative Defenses, and Counterclaim ("Ans.") (Doc. 2) at 4.) The invoices in question total $563, 828.77. (Compl. (Doc. 4) at 5; Ans. (Doc. 2) at 4.) In addition, both parties agree that Defendants made some attempt to contact Goodwill during the invoice period with concerns regarding the quality of the product supplied by Goodwill to Defendants. (Ans. (Doc. 2) at 4.)

Defendants claim that Goodwill breached the Agreement with Defendants by not supplying "all" of Goodwill's inventory, as required by the Agreement. (Id.) Defendants assert that Goodwill offered what Defendants contend is "all" of the salvage for sale at outlets, before selling to Defendants what was obligated under the contract, leaving Defendants with the "left-overs." (Id. at 4-5.) Goodwill claims that Stuart Rags sent Goodwill a letter on or about July 10, 2013 purporting to reject or revoke acceptance of the salvage goods because the goods did not meet the contracted standards. (Compl. (Doc. 4) at 5.)

In July 2013, Stuart Rags and ACE sued Goodwill in state court in Florida alleging various causes of action surrounding this chain of events. (Id. at 6.) On October 2, 2013, after the action was transferred to North Carolina, Stuart Rags, and ACE dismissed their claims without prejudice prior to any answer or counterclaim being filed by Goodwill. (Id.) Goodwill asserts that also on October 2, 2013, Stuart Rags sent Goodwill another letter rejecting the salvage materials and demanding that Goodwill remove the materials. (Id.) Defendants deny this allegation. (Ans. (Doc. 2) at 5.) This contract dispute is the matter currently before this court.


"A motion to dismiss under Rule 12(b)(6) tests the sufficiency of a complaint; importantly, it does not resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses." Republican Party of N. Carolina v. Martin, 980 F.2d 943, 952 (4th Cir. 1992). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.