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Caruthers v. Vitex, Inc.

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

June 1, 2018

VITEX, INC., Defendant.


          Graham C. Mullen, United States District Judge

         THIS MATTER is before the Court on the Motion to Dismiss Counterclaims (Doc. No. 6) filed by Plaintiff Thomas Caruthers (“Caruthers”). Defendant Vitex, Inc. (“Vitex”) has responded, and Plaintiff has filed a reply. This matter is now ripe for adjudication.

         For the following reasons, Plaintiff's Motion is granted in part, denied in part.

         I. BACKGROUND

         On or about January 21, 2014, Caruthers entered into a contract (the “Master Agreement”) with Vitex to provide consulting services as an independent contractor. Vitex is in the business of providing consulting services to banks for the evaluation and negotiation of contracts for financial technology services.

         As an independent contractor, Caruthers was responsible for generating and pursuing leads, preparing proposals, and finalizing the sale of Vitex services to client banks. For each aspect of the sale Caruthers completed (lead, proposal, and close), he was entitled to receive a five percent (5%) commission of the gross revenue received by Vitext from the client. Thus, he could earn up to fifteen percent (15%) of the revenue from any deal if he completed all three aspects of the sale. Once a sale was finalized, Vitex assigned an employee or a contractor to provide the technology consulting services for the client bank. A consultant performing this work typically received a forty percent (40%) commission of the gross revenue received by Vitex for that sale.

         On June 13, 2017, Caruthers filed a Complaint against Vitex, alleging that Vitex failed to provide him the full commission he was owed on two deals: a sale of services to two Maine-based banks (the “Maine Deal”), and both a sale and provision of services to an Alabama-based bank (the “Alabama Deal”). Caruthers alleges that Vitex unilaterally terminated the Master Agreement on June 22, 2016, and that Vitex failed to remit the full payment that Caruthers was owed for the work he previously completed. Accordingly, his Complaint seeks an award of compensatory damages, among other relief, under two alternative theories: (1) breach of contract, or (2) unjust enrichment.

         On August 18, 2017, Vitex filed an Answer and Counterclaim against Caruthers. Vitex alleges that while Caruthers was working as an independent contractor with Vitex, he became an officer of a competing financial technology services corporation, Insite Consulting Services Group, LLC (“Insite”). Vitex further alleges that Caruthers attended a banking conference and a Fiserv conference at Vitex's expense, but failed to provide any lead cards or client information generated from the conferences. Rather, Vitex claims that Caruthers retained the generated leads for the benefit of Insite. Further, Caruthers allegedly forwarded Vitex's confidential proposal templates to his personal email address and deleted all of his emails on Vitex's servers. Vitex alleges that Caruthers then requested to terminate the Master Agreement on June 6, 2016, but refused to provide his working papers related to the Alabama Deal to Vitex management. After failed negotiations, Vitex “confirmed” his request to terminate the Agreement on June 22, 2016. Thereafter, Caruthers failed to return Vitex property, including a company phone and computer.

         Accordingly, Vitex argues that Caruthers resigned his position and therefore forfeited any outstanding commission pursuant to the terms of the Master Agreement. Vitex also argues that it is entitled to damages stemming from Caruthers' actions under two counterclaims: (1) breach of contract, and (2) a violation of the Unfair and Deceptive Trade Practices Act. Caruthers has moved to dismiss these two counterclaims.


         When faced with a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure, the Court must “accept as true all well-pleaded allegations and . . . view the complaint in a light most favorable to the plaintiff.” Mylan Labs, Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993). The Court “assume[s] the[] veracity” of these factual allegations, and “determine[s] whether they plausibly give rise to an entitlement to relief.” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). However, the court “need not accept as true unwarranted inferences, unreasonable conclusions, or arguments.” E. Shore Mkts., Inc. v. J.D. Assocs. LLP, 213 F.3d 175, 180 (4th Cir. 2000). Thus, to survive a motion to dismiss, the complaint or counterclaim must contain “sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Iqbal, 556 U.S. at 678 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).


         A. Breach of Contract

         Vitex first alleges that Caruthers breached the terms of the Master Agreement. Under North Carolina law, “[t]he elements of a claim for breach of contract are (1) existence of a valid contract and (2) breach of the terms of that contract.” Poor v. Hill, 530 S.E.2d 838, 843 ( N.C. Ct. App. 2000). Because it is incorporated into the pleadings and there is no dispute as to the authenticity of the document, the Court may consider the ...

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