Elite Vehicles, Inc. v. Lee

• Citation: 2022 NCCOA 460
• Decision Date: 05 July 2022
• Docket Number: COA21-730
• Parties: ELITE VEHICLES, INC., and BRIAN E. RICHARDS, individual and as the President of ELITE VEHICLES, INC., Plaintiffs, v. FRANCIS A. LEE, Defendant. FRANCIS A. LEE (individually and derivatively on behalf of ELITE VEHICLES, INC.), Counterclaim Plaintiff, v. BRIAN E. RICHARDS, Counterclaim Defendant, and ELITE VEHICLES, INC., Nominal Counterclaim Defendant.
• Court: Court of Appeal of North Carolina (US)

2022-NCCOA-460

ELITE VEHICLES, INC., and BRIAN E. RICHARDS, individual and as the President of ELITE VEHICLES, INC., Plaintiffs,
v.
FRANCIS A. LEE, Defendant.

FRANCIS A. LEE (individually and derivatively on behalf of ELITE VEHICLES, INC.), Counterclaim Plaintiff,
v.
BRIAN E. RICHARDS, Counterclaim Defendant,

and ELITE VEHICLES, INC., Nominal Counterclaim Defendant.

No. COA21-730

Court of Appeals of North Carolina

July 5, 2022

An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority. Citation is disfavored, but may be permitted in accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure.

Heard in the Court of Appeals 25 May 2022.

Appeal by plaintiffs from order entered 26 March 2021 by Judge William A. Long Jr. in Iredell County No. 19CVS627 Superior Court.

Devore, Acton & Stafford, P.A., by Joseph R. Pellington, for plaintiffs-appellants.

Veach Law, PLLC, by John B. Veach, III, for plaintiffs-appellants.

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Rosenwood, Rose &Litwak, PLLC, by Nancy S. Litwak and Erik M. Rosenwood, for defendant-appellee.

GORE, JUDGE.

¶ 1 Plaintiffs Elite Vehicles, Inc. ("Elite") and Brian E. Richards brought claims against defendant Francis E. Lee for trade secret misappropriation under the North Carolina Trade Secrets Protection Act (the "NCTSPA"), unfair and deceptive trade practices pursuant to Chapter 75 of the North Carolina General Statutes, and breach of fiduciary duty. Defendant filed a Motion for Summary Judgment and plaintiffs filed a Motion to Dismiss and/or Motion for Summary Judgment. The trial court entered its order (the "Order") on 26 March 2021 granting summary judgment in favor of defendant. Plaintiffs timely filed and served Notice of Appeal.

¶ 2 The trial court's Order constitutes a final disposition of the claims in this matter. This Court has jurisdiction to hear plaintiffs' appeal pursuant to N.C. Gen. Stat. § 7A-27(b)(1).

¶ 3 On appeal, plaintiffs waive their claim for breach of fiduciary duty. The only issues before this Court are whether the trial court erred by granting summary judgment in favor of defendant with respect to the NCTSPA and Chapter 75 claims. Upon review, we affirm the trial court's Order.

I. Background

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¶ 4 On 12 January 2015, the parties incorporated Elite for the initial purpose of building a high-performance automobile. At formation, Mr. Richards and Mr. Lee were joint shareholders of Elite, with Mr. Richards initially owning ninety percent and Mr. Lee owning the remaining ten percent. Mr. Richards's role with Elite was to design, develop, and build the vehicle. Mr. Lee was responsible for funding the startup capital of Elite, and he made an initial contribution of $170,000.00 for that purpose. Mr. Richards served as Elite's CEO and president. Mr. Lee was a director.

¶ 5 Shortly after formation, the primary purpose of Elite transitioned to the development of a luxury pontoon boat designed by Mr. Richards. Mr. Richards began designing the boat approximately five to six years before the parties formed Elite. The design included a unique fold-down platform that allowed passengers to have an unobstructed 180-degree swim platform extending from the rear of the boat. According to Mr. Richards, the "primary design innovation" was "[t]he folding swim platform extension." The trade secret, Mr. Richards testified, was primarily the connection between the fold-down sides and the rear swim platform as an extension of the whole entertainment area of the boat.

¶ 6 Between 2009...