Hatteras/Cabo Yachts, LLC v. M/Y EPIC

• Citation: 423 F.Supp.3d 181
• Decision Date: 06 November 2019
• Docket Number: No. 4:17-CV-00025-BR,4:17-CV-00025-BR
• Court: U.S. District Court — Eastern District of North Carolina
• Parties: HATTERAS/CABO YACHTS, LLC, a foreign limited liability company, Plaintiff, v. M/Y EPIC (Official Number 747618, HIN: US-HATHR3021617), her engines, Boilers, tackle, apparel etc., in rem, and Acquaviva Ltd., a foreign company, Defendants.

423 F.Supp.3d 181

HATTERAS/CABO YACHTS, LLC, a foreign limited liability company, Plaintiff,

v.M/Y EPIC (Official Number 747618, HIN: US-HATHR3021617), her engines, Boilers, tackle, apparel etc., in rem, and Acquaviva Ltd., a foreign company, Defendants.

No. 4:17-CV-00025-BR

United States District Court, E.D. North Carolina, Eastern Division.

Signed November 6, 2019

Krista F. Acuna, Hamilton, Miller & Bithisel, LLP, Miami, FL, Matthew Thomas Houston, A. Lee Hogewood, III, K&L Gates LLP, Raleigh, NC, for Plaintiff.

J. Elizabeth Graddy, Graddy Law LLC, Atlanta, GA, Seth Peter Buskirk, Clark, Newton & Evans, PA, Wilmington, NC, for Defendants.

ORDER

W. Earl Britt, Senior U.S. District Judge

This matter is before the court on Hatteras/Cabo Yachts, LLC's ("Hatteras"), Brunswick Corporation's ("Brunswick"), and Versa Capital Management, LLC's ("Versa Capital") motions to dismiss Acquaviva Ltd. ("Acquaviva") and Daniel Spisso's ("Spisso") amended counterclaim pursuant to Federal Rule of Civil Procedure 12(b)(6). (DE # 59, 85, 87.) Also before the court are Brunswick's and Versa Capital's motions for a more definite statement. (DE ## 85, 87.) These motions have been fully briefed and are ripe for disposition.

I. BACKGROUND

This action arises out of disputes regarding two yachts manufactured by Hatteras, an entity owned by Brunswick [ ] until August 2013, and since by Versa Capital [ ]. Spisso, Acquaviva's agent, entered into a sales contract for the construction of the first yacht, a model GT63 ("Vessel No. 1"), on or about 12 December 2012. In December 2014, Spisso filed suit in the Southern District of Florida, Case No. 1:14-cv-24616-FAM, alleging breach of contract, breach of warranties, [and] violation of the Magnuson-Moss Warranty Act, and seeking rescission, revocation, and damages arising from the purchase of Vessel No. 1. On 8 April 2015, Spisso entered into a settlement agreement with Hatteras, Brunswick, and others, which purported to resolve the litigation surrounding Vessel No. 1 and constituted a purchase/sale of Vessel No. 2.

On 17 September 2016, the day after Spisso arrived to take possession of Vessel No. 2, the vessel caught fire with him and guests onboard, resulting in smoke damage to the vessel. Thereafter, Vessel No. 2 was returned to shore where Hatteras took custody of it. Hatteras offered to repair the damage to the vessel while it remained in Hatteras' custody. Spisso did not authorize Hatteras to complete the repairs, and Hatteras insisted that he retake possession of the vessel. Hatteras notified Spisso that expenses for necessaries were accruing while the vessel remained in its possession. Spisso alleges that Hatteras refused to allow him to properly inspect the vessel and otherwise acted inconsistently with his purported ownership. Ultimately, the vessel remained at Hatteras' dock until Spisso retook possession of the vessel in February 2017. During that five month period, Hatteras alleges that the costs associated with the provision of necessaries totaled $24,340.52.

Hatteras commenced this action against Vessel No. 2, in rem, and Acquaviva, in personam, on 2 March 2017. On 4 June 2018, the court denied Acquaviva's motion to dismiss. Acquaviva counterclaimed on 18 June 2018[.]

(Order, DE # 57, at 2–3 (citations omitted).)

On 24 August 2018, Hatteras moved to dismiss Acquaviva's 18 June 2018 counterclaim. (Id. at 3.) "Thereafter, Spisso filed a motion to intervene as defendant and counterclaim [against Hatteras] and attached an amended counterclaim on behalf of himself and Acquaviva." (Id. ) On 10 January 2019, this court allowed Spisso's motion to intervene by interlineation and allowed Acquaviva and Spisso to amend their counterclaim. (Id. ) As such, the court denied Hatteras' motion to dismiss the 18 June 2018 counterclaim. (Id. at 7.)

The fifteen-count amended counterclaim alleges the following: breach of the 2012 Purchase Agreement, (Am. Countercl., DE # 44-1, at 37); breach of the 2015 Settlement and Release Agreement, (id. at 39); breach of implied warranty relating to Vessel No. 1, (id. at 43); breach of express warranty relating to Vessel No. 1, (id. at 46); violations of the Magnuson-Moss Warranty Act for Vessel No. 1, (id. at 47); breach of implied warranty relating to Vessel No. 2, (id. at 49); breach of express warranty relating to Vessel No. 2, (id. at 54); violations of the Magnuson-Moss Warranty Act for Vessel No. 2, (id. at 56); negligent property damage, (id. at 59); negligent bodily injury, (id. at 60); civil theft and conversion, (id. at 61); abuse of process, (id. at 62); bad faith, (id. at 63); violations of North Carolina's Unfair and Deceptive Trade Practice Act ("UDTPA"), (id. at 64); and unjust enrichment, (id. at 67.)

II. DISCUSSION

"A district court should dismiss a complaint pursuant to Rule 12(b)(6) if, accepting all well-pleaded allegations in the complaint as true and drawing all reasonable factual inferences in the plaintiff's favor, the complaint does not allege enough facts to state a claim to relief that is plausible on its face." Vitol, S.A. v. Primerose Shipping Co., 708 F.3d 527, 539 (4th Cir. 2013). "[T]he court need not accept the [plaintiff's] legal conclusions drawn from the facts, nor need it accept as true unwarranted inferences, unreasonable conclusions, or arguments." Philips v. Pitt Cty. Mem'l Hosp., 572 F.3d 176, 180 (4th Cir. 2009) (internal quotation marks and citation omitted). "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, ... a plaintiff's obligation to provide the grounds of his entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ; accord Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).

A. Hatteras

Hatteras moves to dismiss Acquaviva and Spisso's amended counterclaim on six grounds. (See Mem. Supp. Mot. Dismiss, DE # 60, at 3.) First, "[t]he economic loss rule bars all of Acquaviva and Spisso's non-contractual claims[.]" (Id. ) Second, "Spisso fails to state a claim for personal injury as his alleged damages are speculative[.]" (Id. ) Third, "Acquaviva has expressly released Hatteras from all claims related to ‘Vessel [No.] 1’ pursuant to the Settlement Agreement between the parties[.]" (Id. ) Fourth, "Acquaviva and Spisso fail to state a claim for breach of contract based on the Uniform Commercial Code [ ("UCC") ]." (Id. ) Fifth, "Acquaviva and Spisso fail to allege a cause of action under [the UDTPA]." (Id. at 4.) Finally, Hatteras alleges "Acquaviva and Spisso improperly intermingle allegations against Hatteras with those against separate legal entities Brunswick [ ] and Versa Capital." (Id. )

1. Economic Loss Rule (Count 9)

Hatteras contends that Acquaviva and Spisso fail to state a claim as to Count 9—negligent property damage—because they brought their "non-contractual claim in tort for the same conduct and the same alleged damages giving rise to their beach of contract claims." (Mem. Supp. Mot. Dismiss, DE # 60, at 9.) As such, Hatteras contends Count 9 is barred by the economic loss rule, which it asserts "prohibits recovery for purely economic loss in tort, as such claims are instead governed by contract law." (Id. (citing Lord v. Customized Consulting Specialty, Inc., 182 N.C.App. 635, 643 S.E.2d 28, 30 (2007) ).) In response, Acquaviva and Spisso contend they have alleged facts to meet each of the four exceptions to the economic loss rule:

passengers suffered personal injuries[;] Mr. Spisso suffered personal injuries[;] injury was to the vessel that was the subject of the Settlement Agreement and arose from Hatteras's employee's leaving his tool bag of combustible items in the engine room when the vessel was still in the custody of Hatteras as bailee[;] injury was to the vessel that was the subject of the Settlement Agreement, and if, as Hatteras insists, it had been fully delivered at the time of the fire, then Hatteras's employee was trespassing with his tool bag of combustible items.

(Resp. Opp'n, DE # 67, at 15 (internal footnotes omitted).)

"The economic loss rule addresses the intersection between contract remedies (including warranty remedies) and tort remedies." Kelly v. Georgia-Pac. LLC, 671 F. Supp. 2d 785, 791 (E.D.N.C. 2009). Under the rule, "recovery for purely economic loss in tort [is prohibited] when a contract, a warranty, or the UCC operates to allocate risk." Id. (providing that a promisee and promisor do not become fiduciaries to one another by entering into a contract). Such economic loss should be recovered through contractual remedy as opposed to an action in tort. Id. at 794. However, there are four scenarios when the economic loss rule does not apply under North Carolina law where a contracting party could be liable for negligence:

(1) The injury, proximately caused by the promisor's negligent act or omission in the performance of his contract, was an injury to the person or property of someone other than the promisee[;] (2) The injury, proximately caused by the promisor's negligent, or wilful, act or omission in the performance of his contract, was to property of the promisee other than the property which was the subject of the contract, or was a personal injury to the promisee[;] (3) The injury, proximately caused by the promisor's negligent, or wilful, act or omission in the performance of his contract, was loss of or damage to the promisee's property, which was the subject of the contract, the promisor being charged by law, as a matter of public policy, with the duty to use care in the safeguarding of the property from harm, as in the case of a common carrier, an innkeeper or other bailee[;] (4) The injury so caused was a wilful injury to or a conversion of the property of the promisee, which was the subject of the contract, by the promisor.

...