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Cheryl Lloyd Humphrey Land Investment Co., LLC v. Resco Products, Inc.

Court of Appeals of North Carolina

July 16, 2019

CHERYL LLOYD HUMPHREY LAND INVESTMENT COMPANY, LLC, Plaintiff,
v.
RESCO PRODUCTS, INC. and PIEDMONT MINERALS COMPANY, INC., Defendants.

          Heard in the Court of Appeals 22 May 2019.

          Appeal by Plaintiff from order entered 1 October 2018 by Judge Michael J. O'Foghludha in Orange County No. 17 CVS 139 Superior Court.

          Manning Fulton & Skinner, P.A., by Charles L. Steel, IV, and J. Whitfield Gibson, for the Plaintiff-Appellant.

          McGuireWoods LLP, by Abbey M. Krysak, for the Defendants-Appellees.

          BROOK, JUDGE.

         Plaintiff appeals the dismissal of its complaint by the trial court. Because the trial court dismissed Plaintiff's complaint under Rule 12(b)(6) of the North Carolina Rules of Civil Procedure, our recitation of the facts is based on the allegations in Plaintiff's complaint.

         I. Background

         A. Factual Background

         Plaintiff Cheryl Lloyd Humphrey Land Investment Company, LLC ("Plaintiff") is a limited liability company that owns real estate in Orange County, North Carolina. In the summer of 2013, Plaintiff entered negotiations with Braddock Park Homes, Inc. ("Braddock Park Homes") to sell Braddock Park Homes approximately 45 acres of real property located on Orange Grove and Enoe Mountain Road in Hillsborough, North Carolina. Braddock Park Homes planned to develop a 118 unit townhome subdivision similar in style to the existing Braddock Park townhome development located in Hillsborough. However, the proposed development could not be completed as planned unless the Town of Hillsborough ("the Town") agreed to annex the property and make certain zoning changes.

         A series of meetings took place in the fall of 2013 in which the Town and its planning board considered whether to annex and re-zone the property as proposed. Defendants Resco Products, Inc. and Piedmont Minerals Company, Inc. ("Defendants"), owners of real property adjacent to the proposed development, participated in these meetings, opposing approval of the project by the Town. During the course of these proceedings, Defendants made various representations to the Town and its planning board regarding the dangers posed by fly rock, air blasts, and ground vibrations resulting from their operations of a mine on land adjacent to the proposed townhome development and, specifically, blasting conducted at the mine. Despite Defendants' opposition to the project, however, the meetings before the Town and its planning board culminated in the Town approving Braddock Park Homes's request that the property be annexed by the Town, and making the required zoning changes.

         After securing approval of the project from the Town, Plaintiff entered into a Purchase and Sale Agreement ("the Agreement") with Braddock Park Homes, the negotiation of which had been ongoing throughout the time of the proceedings before the Town and its planning board in fall of 2013 and early 2014. Defendants were aware of these negotiations.

         The Agreement Plaintiff entered into with Braddock Park Homes contemplated two development phases. In Phase I, Braddock Park Homes agreed to purchase approximately 41 acres of real estate from Plaintiff for $85, 000 per acre. In Phase II, Braddock Park Homes was granted a "free look" for a specified period of time to purchase an additional 5.5 acres, which was directly adjacent to land owned by Defendants, near the location of their mining operation. Under the Agreement, Braddock Park Homes enjoyed the right to terminate Phase II of the project. Although Phase I was consummated, Braddock Park Homes exercised its right to modify the Agreement on 9 October 2014, terminating Phase II. Braddock Park Homes cited the representations made by Defendants to the Town during the approval process as the reason for terminating Phase II.

         B. Procedural History

         On 27 October 2017, Plaintiff initiated this action. In its complaint, Plaintiff alleges a single cause of action for tortious interference with prospective economic advantage. Plaintiff's claim for tortious interference with prospective economic advantage is based on representations made by Defendants to the Town and its planning board during the approval process. Plaintiff asserts that these representations were in fact misrepresentations, and that these misrepresentations were made by Defendants maliciously, intentionally, and without justification, proximately resulting in the termination by Braddock Park Homes of Phase II of the Agreement, and injuring Plaintiff in an amount equal to the $85, 000 per acre price of Phase I.

         In lieu of an answer, Defendants filed a motion to dismiss Plaintiff's complaint for failure to state a claim upon which relief can be granted under Rule 12(b)(6) of the North Carolina Rules of Civil Procedure. The motion came on for hearing before the Honorable Michael J. O'Foghludha in Orange County Superior Court on 1 October 2018. The trial court granted Defendants' motion in an order entered the same day. Plaintiff entered timely notice of appeal on 29 October 2018.

         II. Analysis

         A. Standard of Review

         A motion to dismiss under Rule 12(b)(6) of the North Carolina Rules of Civil Procedure "tests the legal sufficiency of the complaint by presenting the question whether, as a matter of law, the allegations of the complaint, treated as true, are sufficient to state a claim upon which relief can be granted under some recognized legal theory." Cage v. Colonial Bldg. Co., Inc., 337 N.C. 682, 683, 448 S.E.2d 115, 116 (1994) (internal marks and citation omitted). A motion to dismiss for failure to state a claim upon which relief can be granted should not be granted unless it "appears to a certainty that plaintiff is entitled to no relief under any state of facts which could be proved in support of the claim." Sutton v. Duke, 277 N.C. 94, 103, 176 S.E.2d 161, 166 (1970).

         Our review of the decision by a trial court to grant a motion to dismiss under Rule 12(b)(6) is de novo. Ventriglia v. Deese, 194 N.C.App. 344, 347, 669 S.E.2d 817, 819-20 (2008). In determining whether "the allegations of the complaint, if treated as true, are sufficient to state a claim upon which relief can be granted under some legal theory[, ] . . . [we] must construe the complaint liberally[.]" Hinson v. City of Greensboro, 232 N.C.App. 204, 208, 753 S.E.2d 822, 826 (2014) (internal marks and citation omitted). We will not affirm the dismissal of a complaint under Rule 12(b)(6) "unless it appears beyond a doubt that the plaintiff could not prove any set of facts to support his claim which would entitle him to relief." Enoch v. Inman, 164 N.C.App. 415, 417, 596 S.E.2d 361, 363 (2004) (internal marks and citation omitted).

         B. The Noerr-Pennington Doctrine

         This appeal first presents the question of the applicability of the Noerr-Pennington doctrine. Defendants contend that the trial court did not err in concluding that Plaintiffs' complaint fails to state a claim upon which relief can be granted because the allegations in Plaintiffs' complaint are insufficient, as a matter of law, under the Noerr-Pennington doctrine. We disagree.

         i. Introduction

         We note at the outset that this case is not a dispute between competitors in the marketplace, nor does it arise in a context in which concerns about the consolidation of market power detrimentally impacting consumers animate a statutory or regulatory framework under which any claim at issue in this case arises. In the discussion that follows we summarize the origins of the Noerr-Pennington doctrine and its application in North Carolina. We go on to hold that the Noerr-Pennington doctrine does not apply to this case. ...


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