United States District Court, E.D. North Carolina, Western Division
OLD SOUTH APPAREL, LLC and JAMES T. HAIR, Plaintiffs,
JEB DESIGNS, INC. and KEITH and ROSE PRESLEY, Defendants.
TERRENCE W. BOYLE UNITED STATES DISTRICT JUDGE
matter is before the Court on defendants' motions to
dismiss pursuant to Rule 12(b)(6) of the Federal Rules of
Civil Procedure [DE 15, 17] and plaintiffs' motion for a
preliminary injunction [DE 1-7]. The matter has been fully
briefed and is ripe for ruling. For the reasons discussed
below, the motions to dismiss are granted. As such,
plaintiffs' motion for a preliminary injunction is
dismissed as moot.
James T. Hair and Old South Apparel, his clothing company,
based in Fayetteville, North Carolina, contracted with JEB
Designs, a printing company, to print t-shirts bearing the
phrase "Old South." Plaintiffs would inspect the
printed shirts, rejecting those that were misprinted or
defective. In 2016, Plaintiffs decided to change the way the
t-shirts were tagged. The new process, called 'inside
tagging, ' involved printing the contents of the putative
tag on the inside of the shirt, instead of attaching a nylon
tag. Plaintiffs and Defendant JEB Designs agreed to split the
cost of the specialized retagging machine needed for this new
these new shirts were completed, plaintiffs rejected 1, 498
of them due to their quality. Plaintiffs signed a release
regarding the rejected shirts, which read that JEB Designs
"could dispose of them as they chose." JEB Designs,
in exchange, reimbursed plaintiffs for their contribution to
the retagging machine. Then, JEB Designs sold the 1, 498
shirts to the Presleys, who sold them at their shop. After
the Presleys bought the 'inside tagged' shirts, JEB
Designs also sold the Presleys a second batch of 240 shirts
which plaintiffs had also declined to accept.
sued in Cumberland County Superior Court, alleging federal
trademark infringement, state trademark infringement, fraud,
deceptive trade practices and conversion. Judge Claire Hill
granted a temporary restraining order on June 5, 2017.
Defendants removed the case to this Court on the basis of
federal question jurisdiction, as plaintiffs have alleged a
Lanham Act violation, 15 U.S.C. § 1114. This Court
exercises supplemental jurisdiction over the attendant state
law claims under 28 U.S.C. § 1367.
12(b)(6) motion to dismiss tests the legal sufficiency of the
complaint. Papasan v. Attain, 478 U.S. 265,
283(1986). When acting on a motion to dismiss under Rule
12(b)(6), "the court should accept as true all
well-pleaded allegations and should view the complaint in a
light most favorable to the plaintiff." Mylan Labs.,
Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993). A
complaint must allege enough facts to state a claim for
relief that is facially plausible. Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 570 (2007). Facial plausibility
means that the facts pled "allow the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged, " and mere recitals of the elements
of a cause of action supported by conclusory statements do
not suffice. Ashcroftv. Iqbal, 556 U.S. 662, 678
(2009). A complaint must be dismissed if the factual
allegations do not nudge the plaintiffs claims "across
the line . from conceivable to plausible."
Twombly, 550 U.S. at 570. The complaint must plead
sufficient facts to allow a court, drawing on judicial
experience and common sense, to infer more than the mere
possibility of misconduct. Nemet Chevrolet, Ltd. v.
Consumeraffairs.com, Inc., 591 F.3d 250, 256 (4th Cir.
2009). The court need not accept the plaintiffs legal
conclusions drawn from the facts, nor need it accept as true
unwarranted inferences, unreasonable conclusions, or
arguments. Philips v. Pitt County Mem. Hosp., 572
F.3d 176, 180 (4th Cir. 2009).
considering a motion to dismiss pursuant to Rule 12(b)(6),
the Court may consider documents attached to the complaint,
as well as those attached to the motion to dismiss so long as
they are integral to the complaint and authentic.
Fed.R.Civ.P. 10(c); Sec 'y of State for Defence v.
Trimble Navigation Ltd., 484 F.3d 700, 705 (4th Cir.
2007); Philips v. Pitt County Mem 7 Hosp.,
572 F.3d 176, 180 (4th Cir. 2009). A court ruling on a motion
to dismiss under Rule 12(b)(6) may also properly take
judicial notice of matters of public record. Sec'y of
State for Defense, 484 F.3d at 705.
claims must be separated into two categories: the first 1,
498 shirts, and the second group of 240 shirts.
1, 498 Shirts
plaintiffs' claims regarding the 1, 498 'inside
tagged' shirts are dismissed because plaintiff Hair
signed a release disclaiming all rights in the shirts.
contract's meaning is clear and unambiguous, the text of
the contract will govern. Prichard Enterprises, Inc. v.
Adkins, 858 F.Supp.2d 576, 586 (E.D. N.C. 2012).
Interpretation of an unambiguous contract is a question of
law. Briggs v. Am. & Efird Mills, Inc., 251 N.C.
642, t 644, 111 S.E.2d 841, 843 (1960). A valid contract
requires consideration. Restatement (Second) of
the text of the release plaintiff Hair signed is clear and
unambiguous: "JEB Designs, Inc. does hereby assume
ownership of the returned merchandise and as sole owner of
this merchandise may dispose of it in any manner. Tyler Hair
and Old South Apparel relinquish all claims, rights and
ownership to this returned inventory." [Dkt. 1-7].
Second, plaintiffs received consideration for signing ...