United States District Court, E.D. North Carolina, Western Division
C. DEVER, III UNITED STATES DISTRICT JUDGE.
September 7, 2018, Fitzgerald Fruit Farms LLC
("Fitzgerald Farms" or "plaintiff) filed a
complaint against Aseptia, Inc. ("Aseptia"), Wright
Foods, Inc. ("Wright Foods"), and Worth Harris
("Harris"; collectively "defendants")
[D.E. I]. On November 13, 2018, Harris moved to
dismiss Fitzgerald Farms's complaint and moved to strike
portions of the complaint [D.E. 17] and filed a memorandum in
support [D.E. 18]. On December 18, 2018, Fitzgerald Farms
responded in opposition [D.E. 21]. On January 16, 2019,
Harris replied [D.E. 25]. On January 24, 2019, Fitzgerald
Farms moved for leave to file a sur-reply [D.E. 26]. On March
8, 2019, the court granted the motion and received Fitzgerald
Farm's sur-reply [D.E. 26-1] into the record [D.E. 31].
As explained below, the court grants Harris's motion to
Farms's complaint concerns an alleged agreement between
Fitzgerald Farms and defendants. Aseptia and Wright Foods are
North Carolina and Delaware corporations, respectively, and
Harris is the chairperson of Aseptia's board. See Compl.
[D.E. 1] ¶¶ 2-4. Fitzgerald Farms alleges that
defendants hired it "to assist [defendants] in the
purchase, delivery, storage, and treatment of apples for the
2014 apple pack." Id. ¶ 7. On September
10, 2014, Sean Lennon ("Lennon"), the president and
owner of Fitzgerald Farms, met with Harris and other
representatives of the defendants to discuss payment and
other terms of their relationship. See Id.
¶¶ 6, 8. According to Fitzgerald Farms, the parties
agreed that Fitzgerald Farms would assist defendants in
acquiring 8, 500, 000 pounds of apples by December 2014. See
Id. ¶ 9. Fitzgerald Farms would initially
"pay the growers for the apples and for services such as
shipping and treatment of the apples," and defendants
would pay Fitzgerald Farms "in accordance with the
agreed upon rates." Id.; see [D.E. 1-1] 3.
Because Fitzgerald Farms had "concerns regarding
payment," Harris assured Lennon that Fitzgerald Farms
"would be paid in full" for its work "with
'[Harris's] money.'" Compl. [D.E. 1] ¶
Farms alleges that it performed the work as defendants
instructed. See Id. ¶¶ 14-15. Fitzgerald
Farms submitted invoices for payment to Aseptia. See
Id. ¶ 16; [D.E. 1-5]. Defendants, however,
failed to pay Fitzgerald Farms in full. See Compl. [D.E. 1]
¶ 17. Fitzgerald Farms alleges that, during the summer
of 2015, defendants assured it that defendants would pay in
full after defendants sold Wright Foods and that any attempt
by Fitzgerald Farms to involve lawyers in the dispute would
complicate payment. See Id. ¶¶ 17-18. On
July 8, 2015, defendants instructed Fitzgerald Farms "to
dispose of hundreds of tons of left-over apples being held in
storage on [defendants' behalf." Id. ¶
19. Fitzgerald Farms did so, thereby incurring disposal
charges of $124, 150. See id.
defendants' representations, defendants failed to pay in
full. See Id. ¶¶ 17, 23. On September 18,
2015, defendants made their last payment to Fitzgerald Farms.
See Id. ¶ 20. On March 4, 2016, defendants
informed FitzgeraldFanns that Aseptia would pay the remaining
balance owed to Fitzgerald Farms. See Id. ¶ 22;
[D.E. 1-3]. Nevertheless, Aseptia did not pay the balance
owed to Fitzgerald Farms. See Id. ¶ 23.
September 7, 2018, Fitzgerald Farms filed a complaint against
defendants alleging seven causes of action: breach of
contract, open account, fraud, negligent misrepresentation,
quantum meruit and unjust enrichment, piercing the corporate
veil, and unfair trade practices in violation of the North
Carolina Unfair and Deceptive Trade Practices Act
("UDTPA"), N.C. Gen. Stat. § 75-1 etseq. See
Id. ¶¶ 27-64.
motion to dismiss under Rule 12(b)(6) tests the
complaint's legal and factual sufficiency. See
Ashcroft v. Iqbal, 556 U.S. 662, 677-80 (2009);
Bell Atl. Corp. v. Twombly., 550 U.S. 544, 555-63
(2007); Coleman v. Md. Court of Appeals, 626 F.3d
187, 190 (4th Cir. 2010), aff'd. 566 U.S. 30
(2012); Nemet Chevrolet Ltd. v. Consumeraffairs.com.
Inc., 591 F.3d 250, 255 (4th Cir. 2009); fliarratann v
Johnson, 521 F.3d 298, 302 (4th Cir. 2008). To withstand a
Rule 12(b)(6) motion, a pleading "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 (quotation omitted); see
Twombly. 550 U.S. at 570; Giarratano. 521
F.3d at 302. In considering the motion, the court must
construe the facts and reasonable inferences "in the
light most favorable to the [nonmoving party]."
Massey v Ojaniit, 759 F.3d 343, 352 (4th Cir. 2014);
see Clatterbuck v. City of Charlottesville, 708 F.3d
549, 557 (4th Cir. 2013), abrogated on other
grounds by Reed v. Town of Gilbert, 135 S.Ct.
2218 (2015). A court need not accept as true a
complaint's legal conclusions, "unwarranted
inferences, unreasonable conclusions, or arguments."
Giarratano. 521 F.3d at 302 (quotation omitted);
see Iqbal. 556 U.S. at 678-79. Rather,
plaintiffs' allegations must "nudge[ ] their
claims," Twombly, 550 U.S. at 570, beyond the
realm of "mere possibility" into
"plausibility." Iqbal, 556 U.S. at 678-79.
evaluating a motion to dismiss, a court considers the
pleadings and any materials "attached or incorporated
into the complaint." E.I. du Pont de Nemours &
Co. v. Kolon Indus., Inc., 637 F.3d 435, 448 (4th Cir.
2011); see Fed.R.Civ.P. 10(c); Thompson v. Greene,
427 F.3d 263, 268 (4th Cir. 2005). A court may also consider
a document submitted by a moving party if it is
"integral to the complaint and there is no dispute about
the document's authenticity." Goines v. Valley
Cmty. Servs. Bd., 822 F.3d 159, 166 (4th Cir. 2016). A
court also may take judicial notice of public records without
converting the motion to dismiss into a motion for summary
judgment. See, e.g.. Fed.R.Evid. 201(d);
Tellabs, Inc, v. Makor Issues & Rights, Ltd.,
551 U.S. 308, 322 (2007); Philips v. Pitt Cty. Mem'l
Hosp., 572 F.3d 176, 180 (4th Cir. 2009).
jurisdiction is based on diversity of citizenship, and the
court applies state substantive law and federal procedural
rules. See Erie R.R. v. Tompkins., 304
U.S. 64, 78-80 (1938); Dixon v. Edwards, 290 F.3d
699.710 (4th Cir. 2002). The parties agree that North
Carolina law applies. Accordingly, this court must predict
how the Supreme Court of North Carolina would rule on any
disputed state-law issue. See Twin City Fire Ins. Co. v.
Ben Arnold-Sunbelt Beverage Co. of S.C., 433 F.3d 365,
369 (4th Cir. 2005). In doing so, the court must look first
to opinions of the Supreme Court of North Carolina. See
Id. at 369. If there are no governing opinions from
that court, this court may consider the opinions of the North
Carolina Court of Appeals, treatises, and "the practices
of other states." Id. (quotation
omitted). In predicting how the highest court of a
state would address an issue, this court must "follow
the decision of an intermediate state appellate court unless
there [are] persuasive data that the highest court would
decide differently." Toloczko, 728 F.3d at 398
(quotation omitted). Moreover, in predicting how the highest
court of a state would address an issue, a federal court
"should not create or expand a [s]tate's public
policy." Time Warner Entm't-Advance/Newhouse
P'ship v. Carteret-Craven Elec. Membership Corp.,
506 F.3d 304, 314 (4th Cir. 2007) (alteration and quotation
omitted); Wade v. Danek. Inc., 182 F.3d 281, 286
(4th Cir. 1999).
Fitzgerald Farms's breach of contract claim in count one,
under North Carolina law, a breach of contract claim has two
elements: (1) the existence of a valid contract and (2) a
breach of the terms of that contract. See McLamb v. T.P.
Inc., 173 N.C.App. 586, 588, 619 S.E.2d 577, 580 (2005);
Cater v. Barker, 172 N.C.App. 441, 445, 617 S.E.2d
113, 116 (2005), aff'd, 360 N.C. 357, 625 S.E.2d 778
(2006); Poor v. Hill, 138 N.C.App. 19, 26, 530
S.E.2d 838, 845 (2000). Harris contends that he is not a
party to the contract in his individual capacity. Thus,
Harris argues that he cannot be held liable for any breach
a valid contract can exist, there must be mutual agreement
between the parties as to the terms of the contract."
Moselv v. WAM, Inc.,167 N.C.App. 594, 598, 606
S.E.2d 140, 143 (2004); see Walker v. Goodson Farms.
Inc.,90 N.C.App. 478, 486, 369 S.E.2d 122, 126 (1988).
"An authorized agent who enters into a contract on
behalf of a disclosed principal generally is not personally
liable to third parties since the contract is with the
principal." Baker v. Rushing. 104 N.C.App. 240, 248, 409
S.E.2d 108, 112 (1991); see Walston v. R. B. Whitley
& Co.,226 N.C. 537, 540-41, 39 S.E.2d 375, 377