United States District Court, E.D. North Carolina, Western Division
TERRENCE W. BOYLE UNITED STATES DISTRICT JUDGE
matter is before the Court on plaintiffs motion to dismiss
defendant's amended counterclaims pursuant to Rule
12(b)(6) of the Federal Rules of Civil Procedure [DE 16]. The
matter has been fully briefed and is ripe for ruling. For the
reasons discussed below, the motion to dismiss is granted in
part and denied in part.
produces and sells tobacco in Pitt County, North Carolina.
Defendant and plaintiff entered into an Asset Purchase
Agreement relating to a tobacco production enterprise in
2014. Plaintiff agreed to sell office equipment, intellectual
property, and a federal tobacco permit, as well as loose
tobacco, to defendant. In 2015, defendant stopped making
payments, and plaintiff sued in state court. That case was
settled, though the parties decided to keep doing business
together. They committed to a settlement agreement that still
contemplated the transfer of the equipment, intellectual
property, and the tobacco permit, as well as the sale of
early 2017, defendant again stopped making payments.
Plaintiff again sued defendant in state court, alleging $100,
000 in damages. Defendant removed the case to federal court
on the basis of diversity jurisdiction and filed several
counterclaims, which are the subject of plaintiff s motion to
dismiss. Defendant's counterclaims arise out of the
purported transfer of the federal tobacco permit. Such
permits are governed by the Department of the Treasury's
Alcohol and Tobacco Tax and Trade Bureau ("TTB").
Defendant alleges four separate counterclaims against
plaintiff: breach of contract, unjust enrichment, actual
fraud, and unfair and deceptive trade practices.
motion to dismiss the counterclaims is made under Rule
12(b)(6) of the Federal Rules of Civil Procedure. A Rule
12(b)(6) motion tests the legal sufficiency of the complaint.
Papasan v. Allain, 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.
Ashcroft v. 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.
the Court need not accept a complaint's "legal
conclusions, elements of a cause of action, and bare
assertions devoid of further factual enhancement."
Nemet Chevrolet Ltd. v. Consumeraffairs.com, Inc.,
591 F.3d 250, 255 (4th Cir. 2009). Although complete and
detailed factual allegations are not required, "a
plaintiffs obligation to provide the 'grounds' of his
'entitle[ment] to relief requires more than labels and
conclusions." Twombly, 550 U.S. at 555
(citations omitted). "Threadbare recitals of the
elements of a cause of action, supported by mere conclusory
statements, do not suffice." Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S.
Defendant's Breach of Contract Claim
sufficiently alleges facts such that the breach of contract
claim is not dismissed. In North Carolina, the elements of a
breach of contract are the presence of a valid contract, the
breach of the terms of that contract, and damages.
Supplee v. Miller-Motte Bus. Coll., Inc., 768 S.E.2d
582, 590 (2015).
complaint, defendant alleges that plaintiff and defendant
entered into two contracts: an Asset Purchase Agreement,
followed by the Settlement Agreement after their first
dispute. Defendant alleges that the Section 1.1 of the
contract, which reads, "Seller hereby agrees to sell,
transfer, convey, assign and deliver to Buyer... the federal
tobacco permit" was a contract to transfer the existing
federal tobacco permit in plaintiffs name to defendant.
Defendant further alleges that the permit was never
transferred, and so he suffered damages by paying for
something he never received.
and defendant's dispute appears to boil down to one
question: what their contract to "transfer" a
tobacco permit means. Plaintiff argues in its motion that
their contract was in fact to "maintain the tobacco
permit and sell tobacco to Defendant" until the TTB
approved defendant's application, and defendant's
status with the TTB was a risk defendant agreed to bear.
However, plaintiff has failed to show why the word
"transfer, " which is used in the Agreement, in all
settlement materials from the previous lawsuit, and in its
motions before this Court, should be understood to mean
something other than the actual transfer of the existing
has pled sufficient facts to show that a contract to transfer
a permit, where the permit is never transferred, could
constitute a breach of contract. Defendant ...