Stec v. Fuzion Investment Capital, LLC
| Decision Date | 30 April 2012 |
| Docket Number | 11 CVS 4241 |
| Citation | 2012 NCBC 24 |
| Court | Superior Court of North Carolina |
| Parties | JEFFREY R. STEC, Plaintiff, v. FUZION INVESTMENT CAPITAL, LLC, FUZION CAPITAL, LLC, FUZION CAPITAL HOLDINGS, LLC, EDWARD F. SAMPSON, Individually and on behalf of SAMPSON FAMILY TRUST, RON POLISENO, Individually, MICHELLE MICHAEL, Individually and on behalf of ALLSTATE FINANCIAL GROUP, INC., JOHN MICHAEL, Individually and on behalf of ALLSTATE FINANCIAL GROUP, INC., ALLSTATE FINANCIAL GROUP, INC., BF SOUTHEAST, LLC, DAN FAHEY, Individually, and LUMOUS HOLDINGS, LLC, Defendants. |
Martineau King, PLLC by L. Kristin King for Plaintiff.
Bishop, Capitano & Moss, P.A. by J. Daniel Bishop for Defendant Fuzion Investment Capital, LLC.
Wilson & Ratledge, PLLC by Michael A. Ostrander for Defendants Lumous Holdings, LLC; Dan Fahey; BF Southeast, LLC; Fuzion Capital, LLC; Fuzion Capital Holdings, LLC; Edward Sampson; Ron Poliseno; Michelle Michael; John Michael; Allstate Financial Group, Inc.; and the Sampson Family Trust.
Rayburn Cooper & Durham, P.A. by David S. Melin for Defendant Thomas Wilson.
Poyner & Spruill, LLP by Rick Kane for Defendant Thomas Wilson.
{1} THIS MATTER is before the Court upon Defendants Fuzion Investment Capital, LLC ("FIC"); Fuzion Capital, LLC ("FC"); Fuzion Capital Holdings, LLC ("FCH"); Edward F. Sampson ("Sampson"); Sampson Family Trust (" Sampson Trust"); Ron Poliseno; Michelle Michael ("M. Michael") and Allstate Financial Group, Inc. ("Allstate"); John Michael ("J. Michael"); BF Southeast, LLC ("BF"); Dan Fahey ("Fahey"); and Lumous Holdings, LLC's ("Lumous") (collectively "Defendants") Motion to Dismiss. After hearing from the parties on October 11, 2011, and having considered the matters of record and contentions of counsel, the Court, GRANTS in part, and DENIES in part, Defendants' Motion to Dismiss.
{2} Plaintiff first filed this action on January 31, 2011. (Defs.' Br. Supp. Mot. Dismiss 2.) The case was subsequently removed by Defendants to federal court on February 2, 2011, to have the federal court determine what relief, if any, might be available to Plaintiff under COBRA, 29 U.S.C. § 1161. (Defs.' Br. Supp. Mot. Dismiss 2.) After removal, the action was transferred to the United States Bankruptcy Court for the Western District of North Carolina and voluntarily dismissed by Plaintiff on March 1, 2011. (Defs.' Br. Supp. Mot. Dismiss 2–3.) The present action was filed on March 3, 2011, designated to the Business Court on April 6, 2011, and assigned to this Court on March 7, 2011. (Defs.' Br. Supp. Mot. Dismiss 3; Assignment Order 1.)
{3} Defendants' filed their Motion to Dismiss on June 10, 2011, Plaintiff filed his Response to Defendants' Motion on June 30, 2011, and Defendants replied to Plaintiff's Response on July 13, 2011.
{4} This Court heard Defendants' Motion to Dismiss on October 11, 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 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 resident of North Carolina and was employed by FIC as President and Chief Operating Officer ("COO") of its Charlotte based operations. Plaintiff is also the owner of Rascal Holdings, LLC, ("Rascal") which owned Fitness Management Group, Inc. ("FMG"). (Am. Compl. ¶ 1.)
{7} In late December 2009, FMG entered into Chapter 11 Bankruptcy and sold its assets to Defendant FIC. Expecting that the Bankruptcy Court would approve the sale, Plaintiff and FIC entered into the Amended and Restated Employment Agreement ("Employment Agreement"). The Employment Agreement named Plaintiff President and COO of FIC, served as the employment and operating agreement for FIC, detailed Plaintiff's employment benefits and responsibilities, and imposed restrictions on Defendants FC and Sampson Trust's ability to incur debt on behalf of the company or transfer equity. On September 23, 2010, Plaintiff was suspended with pay from his position as President and COO of FIC, and on December 8, 2010, Defendant FIC officially terminated Plaintiff's employment.
{8} Before being terminated, Plaintiff personally filed for Chapter 7 Bankruptcy on August 11, 2010. On February 11, 2011, Plaintiff listed his Employment Agreement as an executory contract on the Schedule G of his Bankruptcy petition. The Bankruptcy Trustee did not assume the Employment Agreement on or before April 12, 2011.
{9} Plaintiff's claims arise from alleged breaches of the Employment Agreement, the Membership Unit Transfer Agreement ("Transfer Agreement"), and the Amended and Restated Asset Purchase Agreement ("Asset Purchase Agreement"). The Employment Agreement was entered into by Plaintiff and FIC on December 29, 2009, and subsequently ratified by FIC affiliates Defendants FC, Sampson Trust, FCH, Fahey, and BF. The Transfer Agreement was entered into by Plaintiff and FCH and transferred Plaintiff's real property interests to FCH. The Asset Purchase Agreement was entered into by FMG and FIC and dealt with the sale of FMG's assets to FIC while FMG was in bankruptcy. (Am. Compl. ¶¶ 30, 32.)
{10} Plaintiff alleges that Defendants violated the Employment Agreement by: terminating his employment prior to the end of the agreement; entering into other agreements prohibited by the Employment Agreement without his consent; failing to provide financing as required under the Employment Agreement; hiring another President; entering into a financing agreement with Defendant Allstate; violating the compensation benefits owed to Plaintiff under the Employment Agreement; and eliminating Plaintiff's opportunity to earn equity in the company. Plaintiff has asserted claims for: (1) breach of contract, (2) tortious interference with contract, (3) intentional interference with business relations, (4) unfair and deceptive trade practices ("UDTP"), (5) usurpation of corporate opportunities, (6) violations of the North Carolina Wage and Hour Act ("Wage Act"), (7) intentional infliction of emotional distress ("IIED"), (8) breach of the implied covenant of good faith and fair dealing ("breach of good faith"), (9) fraud, and (10) punitive damages. (Am. Compl. pg. 23, 27–31, 33–37.)
{11} Plaintiff's breach of contract and tortious interference with contract claims arise from Defendants' actions with regard to the Employment Agreement. (Am. Compl. ¶¶ 128, 140.) Plaintiff's claim for intentional interference with business relations stems from allegations that particular Defendants induced other Defendants to breach the Employment Agreement, Transfer Agreement, and Asset Purchase Agreement. (Am. Compl. ¶¶ 146–47.) Plaintiff's claim for UDTP alleges that Defendants "conspired to prevent the performance of [Plaintiff's] Employment Agreement." (Am. Compl. ¶ 156.) Plaintiff's claim for usurpation of corporate opportunities stems from allegations that Defendant Simpson allowed or caused FIC to breach the Employment Agreement with Plaintiff. (Am. Compl. ¶ 164.) Plaintiff's claim for violation of the Wage Act is for both earned and unearned salary payments that would have been payable to him under the Employment Agreement if he had not been terminated. (Am. Compl. ¶ 175.) Plaintiff's claim for IIED and breach of the implied covenant of good faith and fair dealing are based on allegations that Defendants coerced Plaintiff into signing away his rights under the Employment Agreement. (Am. Compl. ¶¶ 180, 190.) Lastly, Plaintiff's claim for fraud is based on Defendants' alleged misrepresentations to Plaintiff that Defendants would perform their obligations under the Employment Agreement and Asset Purchase Agreement. (Am. Compl. ¶ 194.)
{12} The question for the court on a motion to dismiss 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, whether properly labeled or not." Harris v. NCNB Nat'l Bank, 85 N.C.App. 669, 670, 355 S.E.2d 838, 840 (1987) (citing Stanback v. Stanback, 297 N.C. 181, 254 S.E.2d 611 (1979)). "[T]he pleadings, when taken as true, [must be] legally sufficient to satisfy the elements of at least some . . . recognized claim." Arroyo v. Scottie's Prof'l Window Cleaning, Inc., 120 N.C.App. 154, 158, 461 S.E.2d 13, 16 (1995) (citing Harris, 85 N.C.App. 669, 355 S.E.2d 838).
{13} "'Dismissal of a complaint is proper under the provisions of Rule 12(b)(6) . . . when some fact disclosed in the complaint necessarily defeats the plaintiff's claim.'" Carlisle v. Keith, 169 N.C.App. 674, 681, 614 S.E.2d 542, 547 (2005) (quoting Hooper v. Liberty Mut. Ins. Co., 84 N.C.App. 549, 551, 353 S.E.2d 248, 250 (1987)).
{14} When 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)).
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