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Hongda Chem USA, LLC v. Shangyu Sunfit Chemical Company, Ltd.

United States District Court, M.D. North Carolina

March 15, 2018

HONGDA CHEMICAL USA, LLC, et al., Plaintiffs,
v.
SHANGYU SUNFIT CHEMICAL COMPANY, LTD., et al., Defendants /Third-Party Plaintiff,
v.
GARY DAVID MCKNIGHT, et al., Third-Party Defendants.

          MEMORANDUM OPINION AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE

          Joe L. Webster United States Magistrate Judge

         This matter is before the court upon several dispositive motions: Defendant YMS Agriculture International Corporation's ('YMS") motion for summary judgment (Docket Entry 129), Plaintiffs Hongda Chem USA, LLC ("Hongda Chem") and Hongda Group Limited, LLC's ("Hongda Group") (collectively "Hongda") motions for partial summary judgment (Docket Entries 143, 145), Third-Party Defendants Eco Agro Resources, LLC ("Eco Agro"), KaDi Resources, LLC ("KaDi"), Vasto Chemical Company, Inc. ("Vasto"), Gary David McKnight, Raymond P. Perkins, and Wei Xu's (collectively "Third Party Defendants") motions for summary judgment (Docket Entries 131, 133, 135, 137, 139, 141), and Defendant Shangyu Sunfit Chemical Company, Ltd.'s ("Sunfit") motion for partial summary judgment (Docket Entry 149). All motions are ripe for disposition.

         I. BACKGROUND

         This action arises from a contractual dispute regarding the sale of a chemical ingredient that enhances the performance of fertilizers. On September 29, 2011, Hongda and Sunfit entered into a 5-year contract ("the Agreement") according to which Sunfit agreed to produce N-(n-Butyl) thiophosphoric Triamide ("NBPT") exclusively for sale by Hongda in North America, and Hongda agreed to buy and sell NBPT only from Sunfit.[1] (See Sales Agreement, Docket Entry 37-1.) Paragraph 4 of the Agreement provides:

No material shall be sold in North America (USA and Canada) by Sunfit directly or [through] other representatives than Hongda Chem USA during the time frame this agreement is in effect.

(Id. ¶ 4.) According to the First Amended Complaint, Hongda purchased a significant amount of NBPT from Sunfit, and entered into a contract to sell NBPT to a client, Albemarle Corporation ("Albemarle"), in reliance on the Hongda-Sunfit Agreement. (First Am. Compl. ¶ 23, Docket Entry 37.) Hongda alleges that prior to entering into the Agreement, Sunfit created YMS in March 2011 to sell NBPT in North America. (Id. ¶ 24.) Sunfit eventually passed a shareholders resolution authorizing the sale of NBPT through YMS to North American buyers. (Id. ¶ 25.) As such, Hongda alleges that, while negotiating the Agreement, Sunfit "misrepresented its sales activities in North America and also misrepresented its intentions to use Hongda as its exclusive distributor of NBPT." (Id. ¶ 26.)

         Hongda further alleges that YMS had knowledge of, and intentionally interfered with, the Agreement, acting as Sunfit's vehicle for selling its NBPT product to purchasers in North America. (Id. ¶¶ 27-31.) For example, in January 2012, YMS representatives approached the U.S.-based company Agrium Advanced Technologies, Inc. ("Agrium") to sell NBPT to Agrium. (Id. ¶ 32.) Hongda alleges that YMS representatives told Agrium that YMS was formed by Sunfit to sell NBPT in North America, and arranged for Agrium's representatives to view Sunfit's facility in China. (Id. ¶¶ 33-34.) During this time, YMS falsely represented to Agrium that the Hongda-Sunfit Agreement did not apply to sales to Agrium, and also told Agrium that Hongda failed to pay its bills on time. (Id. ¶¶ 35-36.) YMS subsequently sold NBPT to Agrium and other customers in North America. (Id. ¶¶ 37-38.)

         As a result, Hongda alleges that it has suffered direct sales losses and future business opportunities, totaling an excess of $10, 000, 000. (Id. ¶ 40.) Hongda asserts six causes of action in this matter: (1) a declaratory judgment as to the rights and obligations of Hongda and Sunfit; (2) a breach of contract claim against Sunfit; (3) a claim for intentional interference with a contractual relationship against Sunfit; (4) a claim for intentional interference with a contractual relationship against YMS; (5) a claim for fraud against Sunfit; and (6) a claim under the North Carolina Unfair and Deceptive Trade Practices Act ("UDTPA") against Sunfit and YMS. (W.¶¶ 41-89.)

         Sunfit filed an Answer and also asserted counterclaims in this action. (Second Am. Countercls. & Third-Party Compl., Docket Entry 51.) According to Sunfit, Hongda has defaulted in the payment of material sums under the Agreement. (Second Am. Countercls. ¶ 4.) Sunfit states that it questioned Hongda about the failed payments, and Hongda representatives falsely misrepresented that it had no funds with which to pay because it was not receiving payment from its client, Albemarle. (Id. ¶ 16.) Sunfit thereafter contacted Albemarle and discovered that Albemarle was remitting timely payments to Hongda. (Id. ¶ 17.) When approached by Sunlit, Hongda falsely asserted that Sunlit was attempting to make a direct sale to Albemarle in violation of the Agreement. (Id. ¶ 18.) Sunfit eventually sent a final demand for all delinquent payments and threatened to terminate the Agreement if Hongda failed to pay the monies owed by October 26, 2012. (Id. ¶ 20.) In response, Hongda ignored the demand and filed the pending lawsuit. (Id.)

         Sunfit also alleges that, prior to execution of the Agreement, Hongda and its principals, McKnight (President and Chief Executive Officer of Hongda and managing member of Third-Party Defendant entities), Perkins (Officer of Hongda and managing member of Eco Agro), Xu (Officer of Hongda), in conjunction with several corporate entities including Eco Agro, Vasto, and KaDi, conspired to create a competing venture. (Id. ¶ 37.) They decided to create a new entity or entities through which they would manufacture NBPT in China, then ship it to the United States, and sell it through such entities. (Id. ¶ 38.) On September 21, 2011, Perkins e-mailed McKnight and Xu after learning that Sunfit wanted to add to the draft contract the requirement that Hongda purchase NBPT for sale in North America solely from Sunfit. (Id. ¶ 40.) In other words, Sunfit wanted the exclusivity provision in the contract to be reciprocal. (Id.) Perkins emphatically suggested to McKnight and Xu that someone had leaked their secret plans. (Id.) Nevertheless, with Third-Party Defendants having conspired to create a venture to manufacture and sell NBPT in competition with Sunfit, McKnight entered into the Agreement with Sunfit on behalf of Hongda and agreed to the reciprocal exclusivity provision. (See Sales Agreement ¶ 4.)

         Sunfit further asserts that Hongda and Third-Party Defendants also devised a scheme whereby they would induce Sunfit to manufacture and ship NBPT to Hongda which would sell it and, rather than pay Sunfit according to the contract terms, Hongda and Third-Party Defendants would transfer the sale proceeds from Hongda and invest them into their scheme, using Sunfit's money to build Hongda and Third-Party Defendants' new, competing distribution system. (Second Am. Countercls. ¶ 41.) In furtherance of this scheme, Hongda repeatedly requested additional deliveries of NBPT from Sunfit, knew that it had no intention of remitting the sale proceeds to Sunfit, subsequently refused to remit payment to Sunfit, and, instead, used the proceeds to create a competing venture. (Id. ¶ 42.) In its counterclaims, Sunfit asserts several causes of action: (1) a breach of contract claim for Hongda's failure to remit payment for sixteen invoices in excess of $5, 000, 000; (2) a claim for conversion; (3) a claim under the UDTPA; (4) a claim in quantum meruit for the reasonable value of goods provided by Sunfit for which it has not been paid; and (5) and claim under the Uniform Fraudulent Transfer Act ("UFTA"). (Id. ¶¶ 12-66.)

         Additionally, Sunfit filed a Third-Party Complaint against McKnight, Perkins, Xu, Eco Agro, Vasto and KaDi. (Am. Third-Party Compl., Docket Entry 51.) The factual allegations of the counterclaims serve, in large measure, as the factual allegations for the Amended Third-Party Complaint. (See Id. ¶¶ 6, 17, 18, 24, 25, 26.) The Third-Party Complaint seeks two causes of action against Third-Party Defendants: (1) a UDTPA claim; and (2) a UFTA claim.[2] (Id. ¶¶ 16-27.)

         II. DISCUSSION

         All parties have moved for summary judgment on several issues in this matter. (Docket Entries 129, 131, 133, 135, 137, 139, 141, 143, 145, 149.) Summary judgment is appropriate when there exists no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Zahodnick v. Int'l Bus. Machs. Corp., 135 F.3d 911, 913 (4th Cir. 1997). The party seeking summary judgment bears the initial burden of coming forward and demonstrating the absence of a genuine issue of material fact. Temkin v. Frederick County Comm'rs, 945 F.2d 716, 718 (4th Cir. 1991) (citing Celotex v. Catrett, 477 U.S. 317, 322 (1986)). Once the moving party has met its burden, the non-moving party must then affirmatively demonstrate that there is a genuine issue of material fact which requires trial. Matsushita Elec. Indus. Co. Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). There is no issue for trial unless there is sufficient evidence favoring the non-moving party for a fact finder to return a verdict for that party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986); Sylvia Dev. Corp. v. Calvert County, Md, 48 F.3d 810, 817 (4th Cir. 1995). Thus, the moving party can bear his burden either by presenting affirmative evidence or by demonstrating that the non-moving party's evidence is insufficient to establish his claim. Celotex, 477 U.S. at 331 (Brennan, dissenting).

         When making the summary judgment determination, the Court must view the evidence, and all justifiable inferences from the evidence, in the light most favorable to the non-moving party. Zahodnick, 135 F.3d at 913; Halperin v. Abacus Tech. Corp., 128 F.3d 191, 196 (4th Cir. 1997). However, the party opposing summary judgment may not rest on mere allegations or denials, and the court need not consider "unsupported assertions" or "self- serving opinions without objective corroboration." Evans v. Techs. Applications& Serv. Co., 80 F.3d 954, 962 (4th Cir. 1996); Anderson, 477 U.S. at 248-49. "When faced with cross-motions for summary judgment, the court must review each motion separately on its own merits 'to determine whether either of the parties deserves judgment as a matter of law.'" Rossignol v. Voorhaar, 316 F.3d 516, 523 (4th Cir. 2003) (citation omitted).

         A. Sunfit's Motion for Partial Summary Judgment/Hongda's Motion for Partial Summary Judgment

         Sunfit moves for partial summary judgment on all claims against it as alleged in Hongda's First Amended Complaint, and further moves for summary judgment on its first counterclaim against Hongda for breach of contract. (Docket Entry 149.) Hongda seeks judgment in its favors as it relates to its breach of contract claim in its First Amended Complaint, pocket Entry 145.) The parties have submitted a voluminous amount of evidence in support of the facts that are relevant to their accompanying motions. By joint stipulation, the parties agree to limited facts: (1) the identity of the parties; (2) the terms of the Agreement; (3) Hongda confronting Sunfit in March 2012 regarding NBPT sales in North America which Sunfit denied; (4) Sunfit's May 2012 notice indicating that it would no longer-ship NBPT to Hongda unless it paid past due amounts; (5) Sunfit stopping shipment of NBPT to Hongda in the summer of 2012; (6) Hongda's payments to Sunfit totaling approximately $3.6 million dollars between July and August 2012; (7) Sunfit's demand letter for all outstanding amounts on October 22, 2012; and (8) the filing of this lawsuit. (Docket Entry 198.) Many facts remaining are in dispute and the parties' positions are set forth herein.

         Sunfit asserts that, almost immediately after execution of the Agreement, Hongda began breaching the Agreement by failing to make payments on a timely basis. Sunfit, created by Weihang Wang ("Mr. Wang") and Ju Jin Wang ("Mrs. Wang")[3], was forced to make repeated demands for payment in late-2011 and throughout 2012 until Sunfit was ultimately forced to terminate its relationship with Hongda on October 26, 2012 after communicating that it could no longer afford to purchase the raw materials to manufacture NBPT without timely payment from Hongda. (See W. Wang Decl. ¶¶ 19-20, Docket Entry 150-1; Xu Dep. 79:12-80:22, Docket Entry 150-10.) Xu informed Sunfit that the reason Hongda was not paying Sunfit was that Albemarle, Hongda's primary customer, was not making timely payments to Hongda. (W. Wang Decl. ¶ 21; Xu Dep. 113:6-114:5.) Mr. Wang eventually contacted Albemarle directly about this payment issue and discovered that Albemarle had been paying Hongda on a timely basis, and therefore, not the reason for Hongda's own payment delinquencies. (W. Wang Decl. ¶ 21.) Mr. Wang then confronted Hongda about this and their response was to accuse him of unfairly contacting Albemarle. (Id. ¶ 22.)

         Outside of the initial contact, Mr. Wang had no additional contact with Albemarle, except for one instance, after communicating with Xu, to see if Sunfit could modify the arrangement so that Albemarle would pay Sunfit directly and pay Hongda its three percent commission directly after the accounts receivable reached approximately $9 million dollars. (Id. ¶ 24-25; Xu Dep. 131:9-132:7; 146:5-148:1.) After going back to Albemarle, it was Mr. Wang's understanding that Hongda, not Albemarle, was unwilling to agree to a direct payment from Albemarle to Sunfit. (Wang Decl. ¶ 26.) Mr. Wang states that neither he, nor anyone from Sunfit, ever encouraged Albemarle to breach its contract with Hongda. (Id. ¶ 47.)

         Contrary to Sunfit's position, Hongda asserts that the real breach occurred in this action when Sunfit orchestrated the sale of NBPT through YMS to Agrium. In March 2012, within several months of execution of the Agreement, Agrium visited Sunfit's plant in China. Mrs. Wang testified that she was aware that Matt Chen, YMS's owner, was meeting with a foreign company at the Sunfit plant, but that he kept the client's information confidential. (J. Wang Dep. 112:4-12, Docket Entry 146-2.) During the visit there was a lunch meeting, and at that time Mrs. Wang discovered that the client which Mr. Chen spoke of was a U.S. based company. (J. Wang Dep. 112:13-25.) During this same time in March, Perkins was in China meeting with Sunfit on behalf of Hongda. (W. Wang Dep. 98:18-99:22, Docket Entry 146-3.) He did not meet Mr. Wang at the Sunfit facility, but instead at a hotel. (Id.) A month later, Sunfit entered into an agency agreement with Mr. Chen. (J. Wang Dep. 113:10-15, Docket Entry 146-2; Corporation Agreement, Docket Entry 150-5.) The agency agreement permitted Mr. Chen to sell NBPT on behalf of Sunfit to a list of customers in Europe, but expressly prohibited any sales in North America. (W. Wang Decl. ¶ 43.)

         The record reflects that a sale of Sunfit's NBPT to Agrium occurred on or about July 12, 2012. (Agrium Email, Docket Entry 146-6 at 2; Agrium Purchase Order, Docket Entry 146-6 at 3.) Mrs. Wang states that it was YMS, not Sunfit, that sold the NBPT to Agrium which Sunfit discovered after the pending lawsuit was filed. (J. Wang Dep. 116:4-14, Docket Entry 146-5.) Mrs. Wang further states that Sunfit did not sell the NBPT to YMS; it was Mr. Chen and YMS that orchestrated the entire sale to Agrium. (J. Wang Dep. 116:6-8, 21-23.)

         Hongda takes issue with this assertion, particularly in light of the Agrium visit to Sunfit's facility in March 2012, and the fact that McKnight had confronted Mr. Wang and Mrs. Wang in March 2012 to ask them if they were supplying NBPT to North American customers through a Canadian company. (McKnight Dep. 57:15-58:8, Docket Entry 146-11.) Sunfit denied that it was selling NBPT to North American customers at that time. (Id.) This was also close in proximity to the time when Sunfit hosted Albemarle at the Sunfit plant. The May 14, 2012 summary notes from the meeting described Sunfit's relationship with Hongda as to having "worsened significantly" because of late payments, and that Sunfit would be willing to work directly with Albemarle and "find a way to terminate the relationship with Hongda." (Summary Notes, Docket Entry 146-4.)

         Hongda also presents evidence to cast further light on the YMS-Sunfit relationship. During the term of the Hongda-Sunfit Agreement, Mr. Chen made representations to Agrium regarding the joint business relationship between YMS and Sunfit. He referred to Mrs. Wang as one of "our" shareholders and as "our" chairwoman. (Exhibit 7, Docket Entry 144-8). Sunfit states that a shareholders' meeting resolution authorizing Mr. Chen to act as an agent for Sunfit and listing him as a shareholder was forged, but Sunfit gives no explanation for how Sunfit's letterhead, company seal, or Mrs. Wang's signature ended up on this alleged forgery. Q. Wang Dep. 130:8-132:5, Docket Entry 144-28; Shareholders' Meeting Resolution, Docket Entry 144-12.) Even though Sunfit disputes the authenticity of the March 2012 shareholders' meeting resolution, following the termination of the Agreement with Hongda, Sunfit listed Mr. Chen as a shareholder on a publicly filed document, which Mrs. Wang stated was a mistake as Mr. Chen's father should have been listed as the shareholder. (J. Wang Dep. 35:9-38:16, Docket Entry 157-6.)

         1. Sunfit's Motion for Partial Summary Judgment

         Hongda's First Cause of Action (Declaratory Judgment)

         Sunfit moves for summary judgment as to Hongda's cause of action for a declaratory judgment, pocket Entry 150 at 15-16.) The Declaratory Judgment Act, 28 U.S.C. § 2201(a), provides that a district court "may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought." The Act gives the Court discretionary authority to decline issuing the judgment. Aetna Cas. & Sur. Co. v. Ind-Com Elec. Co., 139 F.3d 419, 421 (4th Cii. 1998). The Court's discretion must take into account "considerations of federalism, efficiency, and comity." Volvo Const. Equip. N. Am., Inc. v. CLM Equip. Co., Inc., 386 F.3d 581, 594 (4th Or. 2004). "[A] declaratory judgment is appropriate when the judgment will serve a useful purpose in clarifying and settling the legal relations in issue, and . . . when it will terminate and afford relief from the uncertainty, insecurity, and controversy giving rise to the proceeding." United Capitol Ins. Co. v. Kapiloff, 155 F.3d 488, 493 (4th Or. 1998) (internal quotations and citations omitted). "Many courts have previously recognized that a declaratory judgment does not serve a useful purpose where that purpose is only to resolve an already-existing breach of contract claim." Sprint Commc'ns Co., L.P. v. FairPoint Commc'ns, Inc., No. 3:16-CV-00820-GCM, 2017 WL 2919015, at *6 (W.D. N.C. July 7, 2017) (unpublished) (collecting cases).

         Here, Sunfit argues that Hongda's cause of action seeking a declaratory judgment is duplicative of its breach of contract action. The Court agrees. Hongda seeks a judgment declaring that (1) Sunfit's sale of NBPT to third parties in North America constitutes a material breach of the Agreement; and (2) Hongda is entitled to damages as a result of Sunfit's alleged breach. (See Am. Compl. ¶ 44.) The parties are no longer engaged in any contractual relationship and Hongda's request simply mirrors its breach of contract claim; thus, a declaratory judgment here serves no useful purpose. See Sprint Commc'ns, 2017 WL 2919015, at *6 (finding that particular "sections of the declaratory [judgment] seek the resolution of issues which must be resolved in the course of litigating [the plaintiffs] other claims"); Nyhart v. PNC Bank, N.A., No. CV PX 15-2241, 2016 WL 6996744, at *3 (D. Md. Nov. 30, 2016) (unpublished) (granting summary judgment on the issue of declaratory relief because the plaintiffs sought declaration on whether the defendant breached the contract).

         Hongda's reliance upon Quorum Health Res., LLC v. Hugh Chatham Mem'l Hosp., Inc., 552 F.Supp.2d 527, 529 (M.D. N.C. 2007), is misplaced. Unlike Quorum Health, the Court here is not seeking to determine the meaning of an ambiguous term in a contract, but rather the question of whether a breach occurred. Also, the Court finds that Hongda's reliance upon Republic Servs., Inc. v. Texas Ecological Sews., Inc., 118 F.Supp.2d 775, 777 (S.D. Tex. 2000) is unpersuasive. The court in Texas Ecological reiterates that "even if the declaratory [judgment] action does share the same operative factual and legal issues as some other cause of action, this is not reason alone to warrant summary judgment." Id. at 776. This Court is not suggesting that the declaratory relief sought be dismissed solely because it relates to the breach of contract action. Indeed, "[t]he coexistence of both claims for breach of contract and declaratory judgment does not necessarily moot the need for a declaratory judgment, but when the same party brings both claims to obtain essentially identical relief, the declaratory judgment serves little useful purpose." Wenzel v. Knight, No. 3T4-CV-432, 2015 WL 3466863, at *3-4 (E.D. Va. June 1, 2015) (unpublished). Such is the case here. Thus, Sunfit's motion for summary judgment as to Hongda's first cause of action in the Amended Complaint should be granted.

         Hongda's Second Cause of Action (Breach of Contract)

         Sunfit and Hongda both move for summary judgment on Hongda's breach of contract claim. The parties do not dispute that any alleged breach of the Agreement is governed by North Carolina law. To establish liability for a breach of contract claim under North Carolina law, there must be (1) an existing valid contract and (2) breach of the terms of that contract. Poor v. Hill, 138 N.C.App. 19, 26, 530 S.E.2d 838, 843 (2000). Neither party here disputes whether a valid contract existed. However, the crux of this case surrounds the ultimate determination of whether the Agreement was breached. Under North Carolina law, when one party materially breaches a bilateral contract, the non-breaching party is excused from further performance. McClure Lumber Co. v. Helmsman Constr., Inc., 160 N.C.App. 190, 198, 585 S.E.2d 234, 239 (2003); Lake Mary Ltd. P'ship v. Johnston, 145 N.C.App. 525, 537, 551 S.E.2d 546, 555 (2001); Coleman v. Shirlen, 53 N.C.App. 573, 577-78, 281 S.E.2d 431, 434 (1981). "Whether a breach is material or immaterial is ordinarily a question of fact." McClure Lumber, 160 N.C.App. at 198, 585 S.E.2d at 239 (citation omitted). "Interpreting a contract requires the court to examine the language of the contract itself for indications of the parties' intent at the moment of execution." State v. Philip Morris USA Inc., 363 N.C. 623, 631, 685 S.E.2d 85, 90 (2009) (citation omitted). Thus, "[i]f the plain language of a contract is clear, the intention of the parties is inferred from the words of the contract." Walton v. City of Raleigh, 342 N.C. 879, 881, 467 S.E.2d 410, 411 (1996) (citation omitted).

         Here, Sunfit argues that the Court should find as a matter of law that it did not breach the Agreement because Sunfit had no knowledge of the one sale of NBPT to Agrium. (Docket Entry 150 at 17.) Hongda argues that Sunfit's actual knowledge is irrelevant and that Hongda only need to show that a breaching sale took place. (Docket Entry 166 at 13-14.) The evidence before the Court demonstrates that there is a genuine issue of material fact as to whether the sale of NBPT to Agrium was a breach of the Agreement. In order for the breach to occur, Sunfit would have had to sell directly, or through other representatives, NBPT to North American companies (outside of its sales to Hongda). A sale of NBPT to YMS, a Canadian corporation, would be a breach of the Agreement. The evidence shows that Agrium, who visited Sunfit's facility in March 2012, was the U.S. based company that ultimately purchased NBPT from YMS. Whether Sunfit sold the NBPT to YMS, or whether YMS was used as the vehicle to sell this NBPT to Agrium-both of which would have been a violation of the Agreement-is a question of fact for the jury. Mrs. Wang denies selling NBPT to Agrium, whether directly or through YMS. Mrs. Wang also denies selling NBPT to YMS. At the time of the sale to Agrium, there was an agency agreement between YMS and Sunfit which permitted Mr. Chen (YMS) to make sales in Europe and explicitly prohibited North American sales. All of these facts are material and create a genuine issue of material fact precluding summary judgment in favor of Sunfit.

         Hongda's Third Cause of Action (Intentional Interference with Contractual Relationship)

         Sunfit also moves for summary judgment on Hongda's claim for intentional interference with a contractual relationship. (Docket Entry 150 at 18-20.) To establish a claim for tortious interference with a contract, a party must show:

(1) a valid contract between the plaintiff and a third person which confers upon the plaintiff a contractual right against a third person; (2) the defendant knows of the contract; (3) the defendant intentionally induces the third person not to perform the contract; (4) and in doing so acts without justification; (5) resulting in actual damage to plaintiff.

White v. Cross Sales & Eng'g Co., 177 N.C.App. 765, 768-69, 629 S.E.2d 898, 901 (2006) (citing United Labs., Inc. v. Kujkendall,322 N.C. 643, 661, 370 S.E.2d 375, 387 (1988)). The determination of whether an actor's conduct is justified depends upon "the circumstances surrounding the interference, the actor's motive or conduct, the interests sought to be advanced, the social interest in protecting the freedom of action of the actor[, ] and the contractual interests of the other party." Peoples Sec. Life Ins. Co. v. Hooks,322 N.C. 216, 220-21, 367 S.E.2d 647, 650 (1988). "Generally speaking, interference with [a] contract is justified if it is motivated by a legitimate business purpose, as when the plaintiff and the defendant, an ...


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