Bolier & Co., LLC v. Decca Furniture (USA), Inc.
| Decision Date | 26 May 2015 |
| Docket Number | 12 CVS 2832 |
| Court | Superior Court of North Carolina |
| Parties | BOLIER & COMPANY, LLC and CHRISTIAN G. PLASMAN, Plaintiffs, v. DECCA FURNITURE (USA), INC., DECCA CONTRACT FURNITURE, LLC, RICHARD HERBST, WAI THENG TIN, TSANG C. HUNG, DECCA FURNITURE, LTD., DECCA HOSPITALITY FURNISHINGS, LLC, DONGGUAN DECCA FURNITURE CO. LTD., DARREN HUDGINS and DECCA HOME, Defendants, v. CHRISTIAN J. PLASMAN a/k/a BARRETT PLASMAN, Third-Party Defendant. |
Law Offices of Matthew K. Rogers, PLLC by Matthew K. Rogers for Plaintiffs Bolier & Company, LLC and Christian G. Plasman and Third-Party Defendant Christian J. Plasman a/k/a Barrett Plasman.
McGuireWoods LLP by Robert A. Muckenfuss, Elizabeth Zwickert Timmermans, and Andrew D. Atkins for Defendants Decca Furniture (USA), Inc., Decca Contract Furniture, LLC, Richard Herbst, Wai Theng Tin, Tsang
C. Hung, Decca Furniture, Ltd., Decca Hospitality Furnishings, LLC, Dongguan Decca Furniture Co. Ltd., Darren Hudgins, and Decca Home.
{1} THIS MATTER is before the Court upon (i) Plaintiffs Bolier & Company, LLC ("Bolier" or the "Company") and Christian G. Plasman's ("Chris Plasman") (collectively, "Plaintiffs") Motion to Amend Complaint ("Motion to Amend Plaintiffs' First Amended Complaint" or "Motion to Amend Complaint"); (ii) Defendants Decca Furniture (USA), Inc. ("Decca USA"), Decca Contract Furniture, LLC, Decca Hospitality Furnishings, LLC, Richard Herbst ("Herbst"), Darren Hudgins, and Wai Theng Tin's (collectively, "Defendants")[1] Motion to Dismiss Plaintiffs' First Amended Complaint ("Motion to Dismiss Plaintiffs' First Amended Complaint" or "Motion to Dismiss Complaint"); (iii) Defendants' Motion to Strike Supplemental Pleadings ("Motion to Strike"); (iv) Defendants' Motion to Dismiss Third-Party Defendant Christian J. Plasman a/k/a Barrett Plasman's ("Barrett Plasman") Counterclaims ("Motion to Dismiss Counterclaims"); (v) Defendant Decca USA's Motion to Disqualify Counsel and Motion for Sanctions ("Motion to Disqualify Plaintiffs' Counsel and for Sanctions" or "Motion to Disqualify"); (vi) Defendant Decca USA's Motion to Enforce Order, Motion for Contempt, and Motion for Sanctions ("Decca USA's Motion to Enforce Order, for Contempt, and for Sanctions" or "Motion to Enforce"); and (vii) Plaintiffs' Motion to Amend Preliminary Injunction, to Dissolve Portions of the Preliminary Injunction and Award Damages, and Motion for Sanctions ("Motion to Amend the P.I. Order, for Damages, and for Sanctions" or "Motion to Amend or Dissolve") (collectively, the "Motions") in the above-captioned case.
{2} Having considered the parties' Motions, the briefs in support of and in opposition to the Motions, the evidence of record, and the arguments of counsel made at the March 26, 2015 hearing held in this matter, the Court hereby GRANTS Plaintiffs' Motion to Amend Plaintiffs' First Amended Complaint, consistent with the Court's Order and Opinion; GRANTS in part and DENIES as moot in part Defendants' Motion to Dismiss Plaintiffs' First Amended Complaint; DENIES as moot Defendants' Motion to Strike; GRANTS in part and DENIES as moot in part Defendants' Motion to Dismiss Counterclaims; GRANTS in part and DENIES in part Defendant Decca USA's Motion to Disqualify Plaintiffs' Counsel and for Sanctions; GRANTS in part and DENIES in part Defendant Decca USA's Motion to Enforce Order, for Contempt, and for Sanctions; and DENIES Plaintiffs' Motion to Amend the P.I. Order, for Damages, and for Sanctions.
{3} Bolier is a North Carolina LLC. In this case, Chris Plasman – the minority 45% owner of Bolier under the relevant operating agreement – has pled claims, both individually and directly by Bolier, against Decca USA – the majority 55% owner of Bolier under the relevant operating agreement – and others for alleged misconduct and wrongdoing.[2] The case was originally filed in October 2012, assigned to this Court (Murphy, J.), and subsequently removed to the United States District Court for the Western District of North Carolina (Voorhees, J.) in December 2012.[3] The federal court entered a preliminary injunction in February 2013 ("P.I. Order"), concluding that Chris Plasman had improperly acted for Bolier without Decca USA's authorization or consent and restricting Chris Plasman's further involvement with the LLC. After the federal court dismissed Plaintiffs' federal copyright infringement claim in September 2014 and declined to exercise supplemental jurisdiction over the remaining state law claims, the federal court remanded the case to this Court in September 2014 for all further proceedings.
{4} The Motions have been fully briefed, and the Court held a hearing on the Motions on March 26, 2015, at which all parties were represented by counsel. The Motions are now ripe for resolution.
{5} The Court does not make findings of fact on motions to dismiss under Rule 12(b)(6), but only recites those facts included in the First Amended Complaint that are relevant to the Court's determination of Defendants' Motion to Dismiss Complaint. See, e.g., Concrete Serv. Corp. v. Investors Grp., Inc., 79 N.C.App. 678, 681, 340 S.E.2d 755, 758 (1986). The Court recites relevant facts from the First Amended Complaint and the other evidence of record as those facts and that evidence are relevant and properly considered for the determination of the other Motions before the Court.
{6} In 2003, Chris Plasman and Defendant Tsang C. Hung ("Tsang") agreed to jointly own, manage and operate Bolier, a business previously established by Chris Plasman. (Am. Compl. ¶¶ 39–42.) Bolier was a family name of Chris Plasman. (Am. Compl. ¶ 41.) Barrett Plasman is Chris Plasman's son (together with Chris Plasman, "the Plasmans") and served as Bolier's Operations Manager. (Third Party Compl. ¶ 12; Am. Compl. ¶ 162.) According to Plaintiffs, Tsang directed that Decca USA own Tsang's interest in Bolier. (Am. Compl. ¶ 43.)
{7} Decca USA is a wholly-owned subsidiary of Decca China, and Defendant Herbst is an officer of Decca China and president of Decca USA. (Am. Compl. ¶¶ 7, 17–18, 43.)
{8} Plaintiffs contend that Herbst informed Chris Plasman that Tsang and Herbst intended Bolier to be operated as a "50/50 partnership for operations and profitability, " but that on paper, Decca China was required to have a majority ownership interest in Bolier (through its wholly-owned subsidiary Decca USA) due to certain Hong Kong Stock Exchange rules that required Decca China to be the majority owner of all of its subsidiary ownerships. (Am. Compl. ¶¶ 51–52.)
{9} Under Bolier's Operating Agreement, Decca USA owns a fifty-five percent (55%) majority ownership in Bolier and Chris Plasman a forty-five percent (45%) minority ownership in Bolier. (Am. Compl. Ex. 5, p. 4.)[4]
{10} Chris Plasman served as Bolier's President and Chief Executive Officer from 2003 until October 19, 2012, when Herbst advised Chris Plasman that the Plasmans' employment with Bolier was terminated because the Company's revenues were insufficient to support the Plasmans' annual salaries. (See Am. Compl. ¶¶ 68, 151–63.) Chris Plasman contends that Decca USA, acting through Herbst, did not have authority to terminate his employment because he was a 50/50 partner in Bolier, despite the fact that Bolier's Operating Agreement expressly provided that he held a 45% minority ownership interest. (See Am. Compl. ¶¶ 152, 241; Oper. Agmt., p. 4.) The Plasmans refused to acknowledge their termination and continued to report to work at Bolier through January 14, 2013, when they were finally locked out of Bolier's offices. (Am. Compl. ¶¶ 166–77.) Plaintiffs further contend that Decca USA overcharged Bolier for administrative, legal, and accounting services (Am. Compl. ¶¶ 234–35), and that Decca USA reduced Bolier's profitability by usurping Bolier's business opportunities and shifting profits away from Bolier for the benefit of Decca USA, Decca China, and other Decca Group businesses (Am. Compl. ¶¶ 235–49).
{11} Plaintiffs allege claims against Defendants for (i) Breach of Contract, (ii) Fraud and Constructive Fraud, (iii) Self-Dealing, (iv) Misappropriation of Corporate Opportunities, (v) Trademark, Trade Dress and Copyright Infringement and Misappropriation of Intellectual Property, (vi) Conspiracy to Defraud, (vii) Fraud, (viii) Fraud and Obtaining Property Under False Pretenses, (ix) Tortious Interference, (x) Conspiracy to Tortiously Interfere, (xi) Conversion, (xii) Conspiracy to Convert, (xiii) Defamation, (xiv) Misappropriation of Trade Secrets, (xv) Piercing the Corporate Veil, (xvi) Unfair and Deceptive Trade Practices, (xvii) Distribution to Shareholders Pursuant to N.C. Gen. Stat. § 55-6-40, and (xviii) Purchase of Chris Plasman's Interests or Dissolution Pursuant to N.C. Gen. Stat. § 57C-6-02.
{12} Defendants contend that Plaintiffs' First Amended Complaint contains numerous deficiencies that require its dismissal. In response, Plaintiffs seek to amend their Complaint for a second time to add additional parties and allege facts and claims that Plaintiffs allege arose after this action was remanded from federal court. Defendants argue that none of the fatal flaws in the First Amended Complaint have been remedied in the proposed Second Amended Complaint, [5] that Plaintiffs' Motion to Amend Complaint should therefore be denied as futile, and that this action should accordingly be dismissed.
{13} The Court agrees with Defendants that Plaintiffs' First Amended Complaint and proposed Second Amended Complaint reveal fatal deficiencies on their face. First, while alleging that a derivative demand has been made, Plaintiffs have pled and captioned this action as asserting direct claims by both Chris...
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