CHRISTIAN G. PLASMAN, in his individual capacity and derivatively for the benefit of, and on behalf of and right of nominal party BOLIER & COMPANY, LLC, Plaintiff,
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; DECCA HOME, LLC; and ELAN BY DECCA, LLC, Defendants,
BOLIER & COMPANY, LLC, Nominal Defendant,
CHRISTIAN J. PLASMAN a/k/a/ BARRETT PLASMAN, Third-Party Defendant.
Court of Appeals of North Carolina
February 6, 2018
Heard in the Court of Appeals 21 August 2017.
Appeal by Plaintiff Christian G. Plasman and Third-Party Defendant Christian J. Plasman from order dated 21 October 2016 by Judge Louis A. Bledsoe, III, in Superior Court, Catawba County. No. 12 CVS 2832
Nexsen Pruet, PLLC, by David S. Pokela; and Law Offices of Matthew K. Rogers, PLLC, by Matthew K. Rogers, for Plaintiff-Appellant and Third-Party Defendant Appellant.
McGuireWoods LLP, by Robert A. Muckenfuss and Jodie H. Lawson, for Defendants-Appellees.
McGEE, Chief Judge.
This matter was filed more than five years ago and has been considered by both state and federal courts. Multiple appeals have been filed from orders of the trial court to this Court and our Supreme Court, including appeals that have already been decided by this Court, Bolier & Co., LLC v. Decca Furniture (USA), Inc., __ N.C.App. __, 792 S.E.2d 865 (2016) ("Bolier I"), disc. review denied, __ N.C. __, 799 S.E.2d 620 (2017); and Plasman v. Decca Furniture (USA), Inc., __ N.C.App. __, 800 S.E.2d 761 (2017) ("Bolier II"). The following factual and procedural background is taken from the record before us, and from prior opinions of this Court.
Christian G. Plasman ("Plasman"), "in his individual capacity and derivatively for the benefit of, on behalf of and right of nominal party" Bolier & Company, LLC ("Bolier" or the "Company"), initiated the present action (the "Action") by filing a complaint in Superior Court, Catawba County, on 22 October 2012. The named Defendants ("Defendants") in that initial complaint were Defendant Decca Contract Furniture, LLC ("Decca China"), Decca Furniture (USA), Inc. ("Decca"), a wholly-owned subsidiary of Decca China, and Richard Herbst ("Herbst"), the president of Decca.1
Plasman's son, Christian J. Plasman, a/k/a Barrett Plasman ("Barrett") (together with Plasman, "the Plasmans, " together with Plasman and Bolier, "Plaintiffs"), is a third-party Defendant, who joins Plasman as an Appellant in this matter.2
I. Factual and Procedural Background
Bolier is a closely held North Carolina company in the business of selling furniture. Bolier was originally founded and owned by Plasman. Plasman and Decca entered into an operating agreement (the "Operating Agreement") on 31 August 2003, pursuant to which Plasman conferred a fifty-five percent ownership interest in Bolier to Decca while retaining a forty-five percent interest for himself. In return, Decca agreed to supply Bolier with furniture for retail sale. The Operating Agreement also vested Decca with the authority to make all employment decisions related to Bolier. Bolier II, __ N.C.App. at __, 800 S.E.2d at 764. According to Plasman, prior to the execution of the Operating Agreement, Herbst and Tsang represented to him that while it was necessary for Decca to own a majority ownership interest in Bolier "on paper, " due to certain rules of the Hong Kong Stock Exchange, Bolier would, in reality, be operated as a 50/50 partnership between Decca and Plasman. Plasman and Bolier entered into an employment agreement in November 2003 (the "Employment Agreement"), which provided, inter alia, that Plasman could be terminated without cause. Id.
Following execution of the Operating and Employment Agreements, Plasman served as Bolier's president and chief executive officer while Barrett worked as Bolier's operations manager. According to Decca, despite the significant investments of Decca and Decca China in Bolier's operations, Bolier sustained losses in excess of $2, 000, 000.00 between 2003 and 2012. As a result, Decca terminated the employment of Plasman and Barrett on 19 October 2012. Id. The Plasmans, however, refused to accept their terminations and continued to work out of Bolier's office space. During this time, the Plasmans set up a new bank account in Bolier's name, and they diverted approximately $600, 000.00 in Bolier customer payments to that account. From these diverted funds, Plasman and Barrett paid themselves, respectively, approximately $33, 170.49 and $17, 021.66 in salaries and personal expenses. Plasman also wrote himself a $12, 000.00 check, dated 5 December 2012, from the new account for "Bolier Legal Fees." Id. Decca eventually changed the locks to Bolier's offices, thereby preventing Plasman and Barrett from entering.
Plaintiffs filed the Action in Catawba County Superior Court on 22 October 2012, alleging claims for dissolution; breach of contract; fraud; constructive fraud; misappropriation of corporate opportunities; trademark, trade dress and copyright infringement; conspiracy to defraud; and unfair trade practices. The Action was designated as a mandatory complex business case on 24 October 2012, and assigned to the North Carolina Business Court. Id. Decca removed the Action to the United States District Court for the Western District of North Carolina on 29 October 2012. Bolier I, __ N.C. App. at __, 792 S.E.2d at 867. On that same date, Decca filed a motion for a temporary restraining order and preliminary injunction against the Plasmans pursuant to Rule 65 of the Federal Rules of Civil Procedure seeking, inter alia, to prohibit any additional diversion of Bolier funds and to recover the funds that had already been diverted. Id. Decca moved to dismiss Barrett's counterclaims on 10 December 2012 and on that same date Defendants Decca, Decca China, and Herbst filed amended counterclaims, and Decca filed an amended third-party complaint, which included, inter alia, a request for a temporary restraining order and preliminary and permanent injunctive relief against the Plasmans. Plaintiffs moved to "supplement and amend [their] complaint" on 3 January 2013, and attached their "[P]roposed First Amended Complaint" thereto.
A hearing on Decca's motion was held before federal district court judge Richard L. Voorhees ("Judge Voorhees"). Judge Voorhees entered an order ("Judge Voorhees' Order") on 27 February 2013, granting Decca's motion by entering a preliminary injunction that barred the Plasmans from taking any further actions on Bolier's behalf, directed the Plasmans to return all diverted funds to Bolier within five business days, and provide an accounting of those funds to Decca. Id.
Plaintiffs filed a document entitled "Plaintiffs' and Third Party Defendant's Response to Court Order" on 6 March 2013. In this document, they represented that they had "fully complied to the best of their ability with the Court Order signed on February 27, 2013." In addition, they stated that "Plaintiffs['] response herein is intended to comply with the spirit of [Judge Voorhees' Order], and by complying herein, Plaintiffs are not waiving Plaintiffs' rights to request reconsideration or appeal." Id.
Plaintiffs never made any attempt to appeal Judge Voorhees' Order to the United States Court of Appeals for the Fourth Circuit. Nor did they file a motion for reconsideration of Judge Voorhees' Order. Id. Plaintiffs filed a "Renewed Motion to Amend Complaint to Include New Parties, Facts and Claims for Relief on 6 November 2013, and included therein their "Second Proposed First Amended Complaint." Judge Voorhees allowed Plaintiffs motion to amend on 9 January 2014, and Plaintiffs filed their "First Amended Complaint" on 10 January 2014. Defendants filed a "Motion to Dismiss the First Amended Complaint" on 24 January 2014, and Plaintiffs filed a "Motion to Remand to Catawba County Superior Court" on 20 March 2014. Judge Voorhees heard these motions, and entered an order on 19 September 2014, dismissing Plaintiffs' federal copyright claims and declining to exercise supplemental jurisdiction over Plaintiffs' state law claims. As a result, the Action was remanded to our Business Court for consideration of "[a]ll remaining claims and motions[.]"...