Intersal, Inc. v. Hamilton
| Decision Date | 01 November 2019 |
| Docket Number | No. 115PA18,115PA18 |
| Citation | 834 S.E.2d 404,373 N.C. 89 |
| Parties | INTERSAL, INC. v. Susi H. HAMILTON, Secretary, North Carolina Department of Natural and Cultural Resources, in her official capacity; North Carolina Department of Natural and Cultural Resources; State of North Carolina; and Friends of Queen Anne's Revenge, a Nonprofit Corporation |
| Court | North Carolina Supreme Court |
373 N.C. 89
834 S.E.2d 404
INTERSAL, INC.
v.
Susi H. HAMILTON, Secretary, North Carolina Department of Natural and Cultural Resources, in her official capacity; North Carolina Department of Natural and Cultural Resources; State of North Carolina; and Friends of Queen Anne's Revenge, a Nonprofit Corporation
No. 115PA18
Supreme Court of North Carolina.
Filed November 1, 2019
Linck Harris Law Group, PLLC, Durham, by David H. Harris Jr., for plaintiff-appellant.
Joshua H. Stein, Attorney General, by Matthew W. Sawchak, Solicitor General, Ryan Y. Park, Deputy Solicitor General, Brian D. Rabinovitz, Special Deputy Attorney General, and Kenzie M. Rakes, Assistant Solicitor General, for defendant-appellees Susi H. Hamilton, North Carolina Department of Natural and Cultural Resources, and State of North Carolina.
Hedrick Gardner Kincheloe & Garofalo LLP, by Joshua D. Neighbors, for defendant-appellee Friends of Queen Anne's Revenge.
HUDSON, Justice.
This case is before us pursuant to plaintiff's petition for writ of certiorari seeking review of the trial court's 13 October 2017 opinion and order dismissing plaintiff's second amended complaint. We allowed plaintiff's petition for writ of certiorari on 5 December 2018 and we now review whether "the trial court err[ed] in dismissing any or all of Plaintiff's claims for relief and Plaintiff's Second Amended Complaint under N.C. R. Civ. P. 12(b)(1), (2), (6), or other reasons stated in the order." Accordingly, we affirm in part, reverse in part, and remand to the trial court because we conclude that it: (1) correctly granted the State Defendants’1 motion to dismiss plaintiff's claims for breach of the 1998 Agreement; (2) correctly granted the motion filed by Friends of the Queen Anne's Revenge (FoQAR) to dismiss plaintiff's tortious interference with contract claim; (3) erred in granting the State Defendants’ motion to dismiss plaintiff's claim that the State Defendants breached the 2013 Settlement Agreement by violating plaintiff's media and promotional rights; and (4) erred in granting the State Defendants’ motion to dismiss plaintiff's claim that DNCR breached the 2013 Settlement Agreement by failing to renew plaintiff's El Salvador search permit.
Factual and Procedural Background
The facts of this case begin with, and are now woven into, the tales of two ships (1) Queen Anne's Revenge (QAR ) and (2) El Salvador .2 QAR is believed to be the flagship of pirate Blackbeard and was reported lost in 1718. El Salvador was a privately owned merchant vessel that was reported lost at sea, off the coast near Cape Lookout, North Carolina, during a storm in 1750.
In 1994, centuries after the disappearances of these two ships, plaintiff Intersal, Inc., a marine research and recovery corporation, received permits from the North Carolina Department of Natural and Cultural Resources (DNCR) to search for QAR and El Salvador in Beaufort Inlet
in Carteret County. On 21 November 1996, plaintiff discovered QAR just over a mile off Bogue Banks.
After discovering QAR , plaintiff entered into an agreement with DNCR on 1 September 1998 (1998 Agreement). As part of the
agreement, plaintiff agreed to forgo its entitlement to any share in "coins and precious metals" recovered from QAR . The ultimate disposition of all artifacts from QAR was a matter left to DNCR.
In return for plaintiff forgoing its rights to the artifacts from QAR , DNCR recognized plaintiff as a partner in all aspects of the "QAR Project." The 1998 Agreement defined the QAR Project as "all survey, documentation, recovery, preservation, conservation, interpretation and exhibition activities related to any portion of the shipwreck of QAR or its artifacts." Accordingly, plaintiff also obtained the following rights: (1) "the exclusive right to make and market all commercial narrative (written, film, CD Rom, and/or video) accounts of project related activities undertaken by the Parties"; (2) the reasonable cooperation of "[a]ll Parties ... in the making of a film and/or video documentary ... with regard to project activities"; (3) "reasonable access and usage, subject to actual costs of duplication, of all video and/or film footage generated in the making" of "a non commercial educational video and/or documentary" that "[a]ll Parties agree[d] to cooperate in [ ] making"; and (4) "exclusive rights to make (or have made) molds or otherwise reproduce (or have reproduced) any QAR artifacts of its choosing for the purpose of marketing exact or miniature replicas" subject to "standard museum practices," approval by the project's "Advisory Committee," and the requirement that the replicas "be made on a limited edition basis" and authenticated by individual numbering or some other means.
In addition, the 1998 Agreement provided that:
Subject to the provisions of Article 3 of Chapter 121 of the General Statutes of North Carolina and subchapter .04R of Title 7 of the North Carolina Administrative Code, [DNCR] agrees to recognize [plaintiff's] ... efforts and participation in the QAR project as sufficient to satisfy any performance requirements associated with annual renewal of [plaintiff's] permits for [ ] El Salvador ... for the life of this Agreement, renewal of said permits cannot be denied without just cause.
Plaintiff alleges that in 2013, DNCR breached the 1998 Agreement in a number of ways. First, plaintiff alleges that DNCR failed to recognize plaintiff's renewal of the 1998 Agreement. Plaintiff alleges that it validly
executed its option to renew the 1998 Agreement via letters sent on 28 October 2012 and 4 December 2012.
Second, plaintiff alleges that certain DNCR employees, who had the responsibility of overseeing the QAR Project, violated the 1998 Agreement's conflict of interest provisions—and its provisions granting plaintiff exclusive commercial media rights—by serving on the board of the nonprofit corporation FoQAR. Specifically, plaintiff alleges that the DNCR employees, serving in their roles as board members of FoQAR, contracted with an independent media company to produce videos and a website covering the QAR Project. Allegedly, the execution of this contract included a ten thousand dollar payment from FoQAR to the spouse of FoQAR's treasurer, and that payment was not reported on FoQAR's 2013 Form 990. FoQAR's treasurer was also a DNCR employee who oversaw the QAR Project. Plaintiff alleges that these actions also constituted tortious interference with contract by FoQAR. FoQAR filed Articles of Dissolution on 14 March 2016. However, this action continues under N.C.G.S. § 55A-14-06(b)(5) (2017).
Third, plaintiff alleges that DNCR breached the 1998 Agreement by obstructing and delaying the renewal of plaintiff's permit, which authorized it to search for El Salvador . Plaintiff also alleges that this obstruction of renewal of its permit implicates the 1998 Agreement's conflict of interest provisions because the DNCR employees who obstructed and delayed the renewal of its permit were also board members of FoQAR.
On 26 July 2013, plaintiff filed a petition for a contested case hearing with the Office of Administrative Hearings (the OAH) seeking a remedy for State Defendant's alleged violations of the 1998 Agreement and of plaintiff's intellectual property rights. Following that filing, plaintiff's El Salvador permit was renewed on 9 August 2013. Thereafter, the OAH ordered mediation in the matter and, as a result of the mediation,
plaintiff, DNCR, and plaintiff's long-time "QAR Video Designee," Nautilus Productions, LLC (Nautilus), entered into a settlement agreement on 15 October 2013 (2013 Settlement Agreement).
The parties expressly agreed that the 2013 Settlement Agreement would supersede the 1998 Agreement. Further, plaintiff and DNCR agreed to release each other from all claims that they could have asserted under the 1998 Agreement. Plaintiff also agreed to withdraw its petition for a contested case hearing within five business days of the execution of the agreement. Moreover, the agreement stated that, in the event of breach, the parties could "avail themselves of all remedies provided by law or equity."
Under the 2013 Settlement Agreement, the parties agreed that DNCR would "establish and maintain access to a website for the issuance of Media and Access Passes to QAR -project related artifacts and activities." The website would include, in pertinent part: (1) plaintiff's terms of use agreement, and (2) links to the websites of DNCR, plaintiff, and Nautilus. Further, the parties agreed that, regardless of the entity that produced the media,
[a]ll non-commercial digital media ... shall bear a time code stamp, and watermark (or bug) of Nautilus and/or D[N]CR, as well as a link to D[N]CR, [plaintiff], and Nautilus websites, to be clearly and visibly displayed at the bottom of any web page on which the digital media is being displayed.
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