LendingTree, LLC v. Anderson
| Decision Date | 11 April 2012 |
| Docket Number | 08 CVS 9108 |
| Citation | 2012 NCBC 21 |
| Court | Superior Court of North Carolina |
| Parties | LENDINGTREE, LLC, Plaintiff, v. DAVID N. ANDERSON, Defendant. |
K&L Gates, LLP by John H. Culver, III and Glenn E. Ketner, III for Plaintiff.
Bishop Capitano & Moss, P.A. by J. Daniel Bishop for Defendant.
AMENDED ORDER & OPINION
{1} THIS MATTER is before the Court upon Plaintiff LendingTree, LLC's ("Plaintiff") Motion to Amend Complaint ("Motion to Amend") and Defendant David N. Anderson's ("Defendant") Application for Determination of Improper Venue and Defective Claim Defenses and Objection to Plaintiff's Motion to Amend pursuant to Rule 12(d) of the North Carolina Rules of Civil Procedure ("Application for Improper Venue"). After considering the Complaint, the parties' motions and briefs, and the arguments and contentions of counsel at the Court's October 24, 2011, hearing, the Court GRANTS Plaintiff's Motion to Amend, and DENIES Defendant's Application for Improper Venue.
{2} In April 2008, Plaintiff brought this suit alleging that Defendant was involved in a scheme to steal information from Plaintiff's confidential computer system. (Compl. ¶¶ 35–38.) Pursuant to Business Court Rule 17, the parties conducted a Case Management Conference ("CMC") on June 18, 2008, where both Plaintiff and Defendant were represented by counsel. (Jt. Case Mgmt. Report 1.) The resulting Joint Case Management Report ("CMR") was submitted by the parties on June 20, 2008, and this Court entered a Case Management Order ("CMO") on June 26, 2008. (Jt. Case Mgmt. Report 10; Case Mgmt. Order 7.)
{3} On July 21, 2008, Defendant filed his Answer with the Court and soon afterwards began seeking discovery and noticing depositions for Plaintiff's employees. Prompted by pending criminal charges against co-defendant Jarrod Beddingfield ("Beddingfield"), the Court issued an order on August 4, 2008, staying all discovery in the case.
{4} The case remained stayed until September 2010, and on December 16, 2010, Plaintiff dismissed its claims against Defendant Beddingfield. (Pl.'s Notice of Dismissal 1.) Plaintiff filed its Motion to Amend on February 2, 2011, and Defendant responded with his Application for Improper Venue on March 10, 2011. (Def.'s Appl. Improper Venue 2.) Defendant's Application for Improper Venue included a Motion to Dismiss pursuant to Rule 12(b)(3) and Rule 12(b)(6) of the North Carolina Rules of Civil Procedure. The Court held a hearing on the parties' motions on October 24, 2011.
{5} While ordinarily the Court does not make findings of fact in connection with motions to dismiss, as such motions do "not present the merits, but only [determine] whether the merits may be reached, " Concrete Serv. Corp. v. Investors Group, Inc., 79 N.C.App. 678, 681, 340 S.E.2d 755, 758 (1986), for purposes of this Order and Opinion's Rule 12(b)(6) analysis, the Court recites those facts from the pleadings that are relevant to the Court's legal determinations.
{6} Plaintiff is a limited liability company organized under the laws of the State of Delaware, and headquartered in Charlotte, North Carolina. (Compl. ¶ 2.)
{7} Defendant Anderson is a resident of Waxhaw, Union County, North Carolina, and until June, 2006, was Senior Vice-President of New Business Development for Plaintiff in Charlotte, North Carolina. (Compl. ¶¶ 4, 30.)
{8} Plaintiff's claims revolve around alleged acts taken by Defendant to steal passwords and other confidential information from Plaintiff's proprietary computer system in violation of the parties' Employment Agreement, and the Computer Fraud and Abuse Act ("CFAA"). (Compl. ¶¶ 31–33, 53–58.) Plaintiff alleges that the Defendant's violations of the CFAA required Plaintiff's employees to "spen[d] a significant period of time working on the investigation into the intrusion, " and resulted in damages in excess of $10, 000.
{9} The Employment Agreement entered into by the parties included a forum and venue selection clause that contained the following provision:
This Agreement and the legal relations thus created between the parties hereto shall be governed by and construed under and in accordance with the laws of the State of Delaware without reference to the principles of conflicts of laws. Any and all disputes between the parties which may arise pursuant to this Agreement will be heard and determined solely before an appropriate federal court in Delaware, or, if not maintainable therein, then in an appropriate Delaware state court.
(Compl. Ex. B 3–4.)
{10} At the CMC conducted pursuant to Business Court Rule 17 of the General Rules of Practice and Procedure for the North Carolina Business Court, both parties were represented by counsel who participated in the drafting of the parties' CMR. (Jt. Case Mgmt. Report 1.)
{11} Neither party indicated in the CMR that they would be challenging venue. (Jt. Case Mgmt. Report 4.) To the contrary, the language included in the CMR was clear: "[t]he parties stipulate that venue is proper in this action." (Jt. Case Mgmt. Report 4.)
{12} Based upon the parties' stipulation, the Court entered a CMO finding that "[v]enue [was] proper in this action" (Case Mgmt. Order 3) and, neither party objected to the finding.
{13} After the CMO was entered, Defendant filed his Answer which, for the first time, asserted a defense of improper venue. (Answer 11.) From the time Defendant filed his Answer until March 10, 2011, Defendant made no attempt to have a hearing scheduled to address his challenge to venue nor did he move to dismiss this action because of the Employment Contract's forum selection clause.
{14} In North Carolina, the proper procedure for seeking enforcement of a contractual forum or venue selection clause is a motion to dismiss for improper venue pursuant to Rule 12(b)(3). See Hickox v. R&G Group Int'l, Inc., 161 N.C.App. 510, 511, 588 S.E.2d 566, 567 (2003) (citing Corbin Russwin, Inc. v. Alexander's HDWE, Inc., 147 N.C.App. 722, 726, 556 S.E.2d 592, 596 (2001)).
{15} Upon a motion made pursuant to Rule 12(b)(3), North Carolina courts will generally enforce a contractual forum selection clause if that clause is mandatory. Mark Group Int'l, Inc., 151 N.C.App. at 568, 566 S.E.2d at 162. "[M]andatory forum selection clauses recognized by our appellate courts have contained words such as 'exclusive' or 'sole' or 'only' which indicate that the contracting parties intended to make jurisdiction exclusive." Id.
{16} On a motion to dismiss pursuant to Rule 12(b)(6) of the North Carolina Rules of Civil Procedure, the question for the court is "'whether, as a matter of law, the allegations of the complaint, treated as true, are sufficient to state a claim upon which relief may be granted under some legal theory.'" Block v. County of Person, 141 N.C.App. 273, 277, 540 S.E.2d 415, 419 (2000) (quoting Harris v. NCNB Nat'l Bank, 85 N.C.App. 669, 670, 355 S.E.2d 838, 840 (1987)).
{17} "The complaint must be liberally construed, and the court should not dismiss the complaint 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." Id. at 277–78, 540 S.E.2d at 419.
{18} In considering a motion to dismiss for failure to state a claim upon which relief can be granted, "'the well-pleaded material allegations of the complaint are taken as admitted; but conclusions of law or unwarranted deductions of fact are not admitted.'" Pinewood Homes, Inc. v. Harris, 184 N.C.App. 597, 613, 646 S.E.2d 826, 837 (2007) (quoting Sutton v. Duke, 277 N.C. 94, 98, 176 S.E.2d 161, 163 (1970)).
{19} Defendant asks the Court to dismiss this action because the defense of improper venue was included in his Answer filed July 21, 2008. (Def.'s Br. Supp. Mot. Dismiss 6; Answer 11.) Plaintiff argues that Defendant waived the defense by failing to pursue it for almost three years. North Carolina's courts have found that a defendant can waive his defense of improper venue when it is made by motion. However, our courts have not determined whether the defense of improper venue can be waived if asserted in the defendant's answer. This question must be resolved before the Court can determine whether the forum selection clause in the parties' Employment Contract is enforceable.
{20} The North Carolina Rules of Civil Procedure require that "[e]very defense, in law or fact, to a claim for relief in any pleading, . . . be asserted in the responsive pleading thereto if one is required, except that the following defenses may at the option of the pleader be made by motion: . . . [i]mproper venue . . . ." N.C. R. Civ. P. 12(b)–(b)(3). Because "venue is not jurisdictional it may be waived by express or implied consent, . . . and a defendant's failure to press his motion to remove has been found to be a waiver." Miller v. Miller, 38 N.C.App. 95, 97, 247 S.E.2d 278, 279 (1978) (citing Jones v. Brinson, 238 N.C. 506, 78 S.E.2d 334 (1953); Oettinger v. Hill Live Stock Co., 170 N.C. 152, 86 S.E. 957 (1915)).
{21} Sutton, 277 N.C. at 99, 176 S.E.2d at 164 (citations omitted). "'Decisions under the federal rules are thus pertinent for guidance and enlightenment in developing the philosophy of the North Carolina rules.'" Brooks v. Giesey, 334 N.C. 303, 317, 432 S.E.2d 339, 347 (1993) (quoting Turner v. Duke Univ., 325 N.C. 152, 164, 381 S.E.2d 706, 713 (1989)).
{22} "[T]he locality of a law suit – the place where judicial authority may be exercised – though defined by legislation [or contract] relates to the convenience of litigants and as such is subject...
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