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Preservation Professional Services, LLC v. M2 Pictures, LLC

United States District Court, W.D. North Carolina, Charlotte Division

June 12, 2015

PRESERVATION PROFESSIONAL SERVICES, LLC, and JOURNEY INVESTMENT GROUP, LLC, Plaintiffs,
v.
M2 PICTURES, LLC, and SCRIPPS NETWORKS INTERACTIVE, INC. Defendants.

ORDER

ROBERT J. CONRAD, Jr., District Judge.

THIS MATTER comes before the Court on Defendant Scripps' Motion to Dismiss for Failure to State a Claim, (Doc. No. 3), and supporting brief, (Doc. No. 4); Defendant M2's Motion to Dismiss for Failure to State a Claim, (Doc. No. 6), and supporting brief, (Doc. No. 7); the Magistrate Judge's Memorandum and Recommendation ("M&R"), (Doc. No. 15); the Plaintiffs' Objection to the M&R (Doc. No. 16); and the Defendants' Replies to Plaintiffs' Objection (Doc. Nos. 17, 18).

In the M&R, the Magistrate Judge recommended that Defendants' Motions to Dismiss be granted. Plaintiffs filed an Objection to the M&R of the Magistrate Judge on May 22, 2015, Defendant M2 filed a Reply to Plaintiffs' Objection on June 5, 2015, and Defendant Scripps filed a Reply to Plaintiffs' Objection on June 8, 2015. It is ripe for review.

I. BACKGROUND

Plaintiffs Preservation Professional Services, LLC ("PresPro") and Journey Investment Group, LLC ("Journey") (together, "Plaintiffs") are limited liability companies organized and existing under the laws of North Carolina, with common principals, and doing business in Mecklenburg County, North Carolina. (Doc. No. 1-1 at 4). PresPro is in the business of providing general contracting services for residential properties, and Journey is in the business of purchasing, improving, and selling and/or renting residential properties. (Doc. No. 1-1 at 4-5). Defendant M2 is a limited liability company organized and existing under the laws of Virginia, and Defendant HGTV (or "Scripps") is an Ohio corporation. (Doc. No. 1-1 at 4). Relevant to the matters in this action, Defendants are alleged to have been doing business in North Carolina. Id.

According to Plaintiffs, HGTV hired M2 to provide production services on an HGTV television program called Flip It Forward ("FIF"). (Doc. No. 1-1 at 5). The premise of FIF was to find people (the "Cast Members") to purchase homes and repair and improve them with the help of the show's hosts, David and Jason Benham, thus increasing the value of the homes to the Cast Members' advantage. Id . Defendants were referred to PresPro to assist with production of FIF, in or around March 2014. (Doc. No. 1-1 at 6). PresPro, at the request of FIF's executive producer Stephen Alvarez ("Alvarez"), became an HGTV approved contractor so it could provide services for FIF. Id . "HGTV and M2 promised PresPro that, in exchange for work on FIF, PresPro would be featured in FIF episodes as the general contractor on some of the homes and that Defendants would promote PresPro on FIF." Id.

Plaintiff Journey purchased homes located at 504 Ford Street, Kannapolis, North Carolina, and 6700 Duncroft Lane, Charlotte, North Carolina, on or about April 9 and 14, 2014, respectively. (Doc. No. 1-1 at 5). Journey sold these properties to Cast Members so they could be used on FIF. (Doc. No. 1-1 at 6). In addition, PresPro provided contracting services to these properties and to an additional property at 525 N. Rose Street, Kannapolis, North Carolina (together, the "PresPro Properties"). Id.

Plaintiffs allege that PresPro spent "hundreds of hours communicating and meeting with Defendants to work up and revise estimates for renovations on the PresPro Properties." (Doc. No. 1-1 at 7). Defendants repeatedly asked PresPro to perform work for reduced compensation in exchange for promotion and advertising on FIF. Id . Induced by Defendants' promises, PresPro performed renovations on the PresPro Properties for reduced compensation. Id . Plaintiffs further allege that in addition to construction services and scouting homes, Plaintiffs assisted production of FIF in many other ways, including by: providing additional properties for filming; scheduling construction work to facilitate filming of FIF; performing work for Cast Members that was outside their respective contracts; and assisting in general management of construction for FIF. Id.

Plaintiffs also engaged in more than thirty (30) meetings with Defendants and Cast Members to discuss renovation of another property at 11001 Holly Tree Lane, Charlotte, North Carolina, as well as 1463 Greenwood Lane, Rock Hill, South Carolina. (Doc. No. 1-1 at 7-8). Ultimately, Defendants hired a different contractor at the Holly Tree Lane property. (Doc. No. 1-1 at 8). In addition to the time and resources Plaintiffs allegedly spent on various properties possibly related to FIF, they also engaged a public relations firm and spent money on promotional t-shirts in conjunction with FIF. Id.

In or around May 2014, HGTV cancelled FIF without notice or warning to PresPro or Journey, and Defendants abruptly stopped production of FIF and left North Carolina. Id . Afterwards, Plaintiffs allege they spent extensive time and resources assisting the Cast Members and performed additional work for them at cost, or at a loss, to avoid damage to PresPro's reputation. Id . Thus, Plaintiffs contend they suffered damages that Defendants have failed and refused to compensate. Id.

Plaintiffs' Amended Complaint, (Doc. No. 1-1), was then filed on September 23, 2014 with the Mecklenburg County Superior Court. The Amended Complaint asserts multiple claims against M2 Pictures, LLC ("M2") and Scripps Networks Interactive, Inc. ("Scripps") d/b/a Home and Garden Television ("HGTV") (together "Defendants"), including claims for: breach of contract; breach of implied covenant of good faith and fair dealing; and unjust enrichment. (Doc. No. 1-1, at 9-13). On October 22, 2014, Defendant M2, with the consent of Defendant Scripps, filed its Notice of Removal to this Court. Defendants' Motions to Dismiss, (Doc. Nos. 3 and 6), were filed on October 29, 2014.

II. STANDARD OF REVIEW

The Federal Magistrate Act provides that a district court "shall make a de novo determination of those portions of the report or specific proposed findings or recommendations to which objection is made." 28 U.S.C. ยง 636(b)(1); Camby v. Davis, 718 F.2d 198, 200 (4th Cir. 1983). De novo review is not required by the statute when an objecting party makes only general or conclusory objections that do not direct the court to a specific error in the magistrate judge's recommendations. Orpiano v. Johnson, 687 F.2d 44 (4th Cir. 1982). Further, the statute does not on its face require any review at all of issues that are not the subject of an objection. Thomas v. Arn, 474 U.S. 140, 149 (1985); Camby, 178 F.2d at 200. ...


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