Tai Sports, Inc. v. Hall

CourtSuperior Courts of Law and Equity of North Carolina
Citation2012 NCBC 62
Decision Date28 December 2012
Docket Number09 CVS 2201
PartiesTAI SPORTS, INC., Plaintiff, v. JEFFREY LEE HALL, TRACI HALL, JEFF HALL SPORTS, INC., JEFFREY LEE HALL d/b/a WORTH SPORTS, BAT-R-UP, WSL, and/or JEFF HALL GRAPHICS, TKL ELECTRICAL SERVICES, INC., C.H. & SONS CONSTRUCTION, INC., BRANDON ROBERTS RODNEY WALKER a/k/a crestchargers13@ yahoo.com, MIKE CALDWELL, TRACI P. BRADLEY, SHELLY A. (MOE) NEAL, ANDREW BENFIELD, and DEWEY McKINNEY,, Defendants. AND JEFFREY LEE HALL, JEFF HALL SPORTS, INC., C.H. & SONS CONSTRUCTION, INC., TKL ELECTRICAL SERVICES, INC., and MIKE CALDWELL, Counterclaimants, v. CARLOS G. VEGA, VEGA REAL ESTATE HOLDINGS, LLC and TAI SPORTS, INC., Counterclaim Defendants.

Gray, Layton, Kersh, Solomon, Furr & Smith, P.A., by William E. Moore, Jr. for Plaintiff/Counterclaim Defendant TAI Sports, Inc.; and Counterclaim Defendants Carlos G. Vega and Vega Real Estate Holdings, LLC.

Baucom, Claytor, Benton, Morgan & Wood, P.A., by Rex C. Morgan for Defendants Jeffrey Lee Hall individually and d/b/a Worth Sports, LLC; Bat-R-Up; WSL; Jeffery Hall Graphics; TKL Electrical Services, Inc.; C.H. & Sons Construction, Inc.; Traci Hall; Mike Caldwell; Rodney Walker; and Jeff Hall Sports, Inc.

Brandon Roberts, Traci P. Bradley, Dewey McKinney, and Shelly A. ("Moe") Neal appearing pro se.

ORDER & FINAL JUDGMENT

Murphy, Judge.

I.

STATEMENT OF THE CASE

{1} THIS MATTER came before the Court for trial without a jury during the April 4, 2011, term of civil Superior Court in Gaston County. In its 40-page Amended Complaint filed May 21, 2009, Plaintiff alleges seventeen (17) claims for relief: (1) preliminary and permanent injunctive relief, (2) demand for accounting, [1](3) declaratory judgment, (4) breach of contract, (5) fraud, (6) breach of fiduciary duty and constructive trust, (7) constructive trust in favor of Plaintiff, (8) conversion of personal property, (9) unfair and deceptive trade practices, (10) unjust enrichment, (11) quantum meruit for rent on implied lease, (12) trespass, (13) trespass to personal property, (14) civil conspiracy, (15) nuisance, (17) tortious interference with business relations and the prospective economic advantage of Plaintiff, and (18) punitive damages.[2]

{2} Plaintiff dismissed with prejudice all claims against Defendant Ted W. Harris on March 15, 2011. Although Plaintiff had previously dismissed with prejudice all claims against Defendant Andrew Benfield ("Benfield") on May 21, 2009, Benfield appeared as a witness and testified during the trial of this case.

{3} Beginning April 4, 2011, and concluding June 3, 2011, the Court received evidence, including 311 Exhibits, and sworn testimony from twenty (20) witnesses (live, by deposition, and by video conferencing), including three (3) expert witnesses. What was represented by the parties to be a three (3) week bench trial morphed into a tedious eight-week presentation of evidence, principally by Plaintiff, that tended more to obscure the salient facts of the case rather than enlighten the Court. Nonetheless, after an inordinately time-consuming, arduous, and painstaking consideration of the record, the evidence presented, and the arguments and contentions of counsel and the parties, the Court makes the following:

II. FINDINGS OF FACT

A. BACKGROUND

{4} In 2005, Carlos Vega ("C. Vega"), a citizen and resident of the state of California, formed TAI Sports, Inc., ("TAI"), a California corporation, which he has owned and operated since 2005.

{5} At all relevant times, TAI's operation was physically located at 446 West Meats Avenue in Orange, California. C. Vega was the owner and President of TAI, and his brother, Jose Vega ("J. Vega"), was Vice-President. TAI had two office workers who processed virtually all orders and sales of sporting products coming through the California office, Elizeth "Elly" Armenta and Lupe' Ramirez. In addition to TAI, C. Vega owned and operated Turbine Airmotive, Inc, a separate California corporation also supported by J. Vega, Elly Armenta, and Lupe' Ramirez.

{6} During the first quarter of 2006, TAI developed a product line of "Elite" brand sports apparel initially consisting of bat bags and "Turf" shoes. The brand eventually developed into a more complete line of sporting apparel that included shirts, pants, hats, uniforms, etc.

{7} Defendant Jeffrey Lee Hall ("Hall"), a citizen and resident of Gastonia, North Carolina, is a well-known, amateur softball player who has numerous batting titles and was the first active player inducted into the United States Specialty Sports Association (USSSA) Slow Pitch Softball Hall of Fame in 2006. Hall describes himself as "the most recognizable name in the game of amateur softball."

{8} Before meeting C. Vega, Hall had enjoyed endorsement contracts with several different sporting goods equipment and apparel manufacturers, including Worth Sports, LLC ("Worth"). At the time Hall met C. Vega, Hall was sponsored by Worth and was an authorized seller of Worth bats. Worth paid Hall a salary, plus expenses, and a percentage of revenue from the sale of "Jeff Hall" signature bats sold by Worth. In 2006, Hall also had a personal account with Worth to occasionally sell bats for himself, but he was not in the business of selling bats until 2007.

{9} In addition to his softball activities, Hall was a minority owner of C.H. & Sons Construction, Inc. ("C.H. & Sons"), a North Carolina corporation that he started in June 2005 with Defendant Mike Caldwell ("Caldwell") and William Cooper (not a party to this action). Hall also owned a majority interest in Defendant TKL Electrical Services, Inc. ("TKL"). William Cooper was a minority owner of TKL until his interest was purchased by C.H. & Sons during the course of an unrelated, internal company dispute.

{10} Defendant Traci Hall ("T. Hall") is the wife of Defendant Hall. T. Hall is the majority owner of C.H. & Sons and, from the inception of the business, has served as its bookkeeper. T. Hall also performed bookkeeping services for TKL and various other Hall entities, and managed her family's personal financial affairs. T. Hall worked principally from an office over the garage of the Halls' residence at 2004 Tomshire Drive, Gastonia, North Carolina.

B. PROMOTIONAL ARRANGEMENT BETWEEN TAI AND JEFF HALL

{11} In September 2006, Mike Turney, a Worth representative, introduced C. Vega to Hall at the 2006 Softball World Series in Orlando, Florida. After becoming aware of Hall's prowess and notoriety as a star softball player, C. Vega asked Hall to wear and promote TAI's "Elite" brand products (turf shoes, dry-fit shirts, bags and jackets) during Hall's softball appearances around the country. C. Vega did not have any samples with him. About a week after meeting Hall, C. Vega called Hall and arranged to have several pair of "Elite" turf shoes delivered to Hall's home address.

{12} Hall was receptive to the arrangement and agreed to wear and promote "Elite" products. The parties did not enter into a formal written agreement, but agreed that Hall would receive free TAI "Elite" brand products to wear for promotional purposes at softball tournaments and appearances, and that TAI could use Hall's name to promote its products.

{13} As the relationship developed, TAI paid expenses associated with Hall's participation in high-level softball tournaments and events, including sponsorship of the "Long Haul Bombers Tour", the World Softball League ("WSL") and the U.S. Slow Pitch Softball Association ("USSSA"). TAI obtained Worth's permission for Hall to promote "Elite" products. As agreed, Hall wore and promoted "Elite" products at several hitting exhibitions that he participated in around the country. The relationship between C. Vega and Hall evolved over time by way of verbal and electronic communications between themselves, and via personal interactions, until March 2009.

{14} Neither C. Vega nor TAI provided Hall with any guidelines or limitations regarding the use, sale, or distribution of promotional items. Hall had discretion to give away or to sell below cost TAI's products for promotional purposes. Although TAI complains that Hall was excessive in giving away promotional items and providing steep discounts to customers, by default TAI left those decisions regarding promotional goods entirely to the discretion and judgment of Hall (Exhibit 147-I, p.168, L18–25).

{15} Hall maintains that the only merchandise C. Vega sent to him in October and November 2006, was sample packages sent to Hall personally, and that Hall never sold merchandise from his home.

{16} According to C. Vega, he and Hall talked by telephone in September or October 2006. Hall was going to a tournament and requested that C. Vega send him "Elite" products to sell. Hall did not say what or how much merchandise to send. C. Vega presented shipping manifests for approximately 220 packages of TAI merchandise, each package weighing between twenty-two (22) and forty-eight (48) pounds, shipped via Federal Express from TAI to Jeff Hall, 116 Hunter Lane, Gastonia, North Carolina on or about October 12, 2006. (Plaintiff's Exhibit 155-P -Federal Express shipping records). As of November 4, 2006, the amount due to Federal Express for shipping was overdue. C. Vega also presented Plaintiff's Exhibit 155-P1 (Invoice #8-479-58875 dated October 20, 2006, in the amount of $55, 750.00) which tends to confirm his assertion that merchandise was shipped to Hall. Hall denied receiving the merchandise, and did not account for any sale proceeds. From the evidence presented, the Court finds C. Vega's testimony to be credible regarding the shipment of merchandise to Hall.

{17} C. Vega acknowledges that he and Hall never discussed: (a) Hall's responsibilities with respect to the merchandise, (b) how the invoice was to be paid, or (c) what Hall's share of the sales proceeds would be. C. Vega expected Hall to be honest and fair with...

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