Window World of St. Louis, Inc. v. Window World, Inc.

• Decision Date: 06 October 2021
• Docket Number: 15 CVS 2
• Court: Superior Court of North Carolina
• Parties: WINDOW WORLD OF ST. LOUIS, INC.; WINDOW WORLD OF KANSAS CITY, INC.; WINDOW WORLD OF SPRINGFIELD/PEORIA, INC.; JAMES T. LOMAX III; JONATHAN GILLETTE; B&E INVESTORS, INC.; WINDOW WORLD OF NORTH ATLANTA, INC.; WINDOW WORLD OF CENTRAL ALABAMA, INC.; MICHAEL EDWARDS; MELISSA EDWARDS; WINDOW WORLD OF CENTRAL PA, LLC; ANGELL P. WESNERFORD; KENNETH R. FORD, JR.; WORLD OF WINDOWS OF DENVER, LLC; RICK D. ROSE; CHRISTINA M. ROSE; WINDOW WORLD OF LEXINGTON, INC.; TOMMY R. JONES; JEREMY T. SHUMATE; WINDOW WORLD OF PHOENIX LLC; JAMES BALLARD; and TONI BALLARD, Plaintiffs, v. WINDOW WORLD, INC.; WINDOW WORLD INTERNATIONAL, LLC; and TAMMY WHITWORTH, individually and as trustee of the Tammy E. Whitworth Revocable Trust, Defendants and Counterclaim Plaintiffs, and WINDOW WORLD OF ROCKFORD, INC.; WINDOW WORLD OF JOLIET, INC.; SCOTT A. WILLIAMSON; JENNIFER L. WILLIAMSON; and BRIAN C. HOPKINS, Plaintiffs and Counterclaim Defendants, v. WINDOW WORLD OF BLOOMINGTON, INC., Counterclaim Defendant.

2021 NCBC 65

WINDOW WORLD OF ST. LOUIS, INC.; WINDOW WORLD OF KANSAS CITY, INC.; WINDOW WORLD OF SPRINGFIELD/PEORIA, INC.; JAMES T. LOMAX III; JONATHAN GILLETTE; B&E INVESTORS, INC.; WINDOW WORLD OF NORTH ATLANTA, INC.; WINDOW WORLD OF CENTRAL ALABAMA, INC.; MICHAEL EDWARDS; MELISSA EDWARDS; WINDOW WORLD OF CENTRAL PA, LLC; ANGELL P. WESNERFORD; KENNETH R. FORD, JR.; WORLD OF WINDOWS OF DENVER, LLC; RICK D. ROSE; CHRISTINA M. ROSE; WINDOW WORLD OF LEXINGTON, INC.; TOMMY R. JONES; JEREMY T. SHUMATE; WINDOW WORLD OF PHOENIX LLC; JAMES BALLARD; and TONI BALLARD, Plaintiffs, and WINDOW WORLD OF ROCKFORD, INC.; WINDOW WORLD OF JOLIET, INC.; SCOTT A. WILLIAMSON; JENNIFER L. WILLIAMSON; and BRIAN C. HOPKINS, Plaintiffs and Counterclaim Defendants,
v.
WINDOW WORLD, INC.; WINDOW WORLD INTERNATIONAL, LLC; and TAMMY WHITWORTH, individually and as trustee of the Tammy E. Whitworth Revocable Trust, Defendants and Counterclaim Plaintiffs,
v.
WINDOW WORLD OF BLOOMINGTON, INC., Counterclaim Defendant.

No. 15 CVS 2

Superior Court of North Carolina, Wilkes

October 6, 2021

Brooks, Pierce, McLendon, Humphrey & Leonard LLP, by Andrew L. Rodenbough, Charles E. Coble, Robert J. King III, and Benjamin R. Norman, and Keogh Cox & Wilson, Ltd., by John P. Wolff, III, Virginia J. McLin, and Richard W. Wolff, for Plaintiffs Window World of St. Louis, Inc., Window World of Kansas City, Inc., Window World of Springfield/Peoria, Inc., James T. Lomax III, Jonathan Gillette, B&E Investors, Inc., Window World of North Atlanta, Inc., Window World of Central Alabama, Inc., Michael Edwards, Melissa Edwards, Window World of Central PA, LLC, Angell P. Wesnerford, Kenneth R. Ford, Jr., World of Windows of Denver, LLC, Rick D. Rose, Christina M. Rose, Window World of Rockford, Inc., Window World of Joliet, Inc., Scott A. Williamson, Jennifer L. Williamson, Brian C. Hopkins, Window World of Lexington, Inc., Tommy R. Jones, Jeremy T. Shumate, Window World of Phoenix LLC, James Ballard, and Toni Ballard and Counterclaim Defendant Window World of Bloomington, Inc.

Manning, Fulton & Skinner, P.A., by Judson A. Welborn, Michael T. Medford, Natalie M. Rice, and Jessica B. Vickers, and Laffey, Leitner & Goode LLC, by Joseph S. Goode, Mark M. Leitner, Jessica L. Farley, Sarah E. Thomas Pagels, and John W. Halpin, for Defendants Window World, Inc. and Window World International, LLC.

Bell, Davis & Pitt, P.A., by Andrew A. Freeman and Alan M. Ruley, for Defendant Tammy Whitworth.

ORDER AND OPINION ON PLAINTIFFS AND COUNTER CLAIM DEFENDANTS' MOTION TO DISMISS ADDITIONAL COUNTER CLAIMS

Louis A. Bledsoe, III Chief Business Court Judge

1. THIS MATTER is before the Court on Plaintiffs and Counterclaim Defendants Scott A. Williamson ("Williamson"), Jennifer L. Williamson, Brian C. Hopkins ("Hopkins"), Window World of Rockford, Inc. d/b/a Window World of Rockford ("WW Rockford"), and Window World of Joliet, Inc. d/b/a Window World of Joliet ("WW Joliet"; collectively, the "Williamson Plaintiffs") and additional Counterclaim Defendant Window World of Bloomington, Inc.'s ("WW Bloomington") Motion to Dismiss Additional Counterclaims (the "Motion") filed 16 November 2020. (ECF No. 848.)

2. The Motion seeks the dismissal of Defendants and Counterclaim Plaintiffs Window World, Inc. ("WW"), Window World International, LLC ("WWI"; together, the "Window World Defendants"), and Tammy Whitworth's ("Whitworth"; collectively, the "Defendants") four newly asserted counterclaims (the "Additional Counterclaims"), which allege that Defendants are entitled to declaratory, monetary, and injunctive relief arising from Williamson's purported breach of the release and non-disparagement provisions of an agreement Williamson entered into with WW in June 2013.

3. Having considered the Motion, the related briefs, the arguments of counsel at the hearing on the Motion, and other appropriate matters of record, the Court hereby GRANTS in part and DENIES in part the Motion as set forth below.

I.

FACTUAL AND PROCEDURAL BACKGROUND

A. Factual Background

4. The Court does not make findings of fact on motions to dismiss under Rule 12(b)(6) of the North Carolina Rules of Civil Procedure ("Rule(s)"). Rather, the Court recites only those facts alleged in Defendants' counterclaims relevant to the Court's determination of the Motion.

5. WW markets and distributes vinyl replacement windows, doors, and siding by licensing independently owned and operated businesses to market and sell Window World products. (Am. Answer, Countercls., & Additional Countercls. Window World Defs. to Third Am. Compl. ¶ 3 [hereinafter "Additional Countercls."], ECF No. 836.)^[1] WW now operates as a franchise system, (see Additional Countercls. ¶ 101), and Plaintiffs in this action are various Window World franchisees and franchisee owners, (Additional Countercls. ¶ 7; see also Third Am. Compl. ¶¶ 12-49 [hereinafter "TAC"], ECF Nos. 275 (under seal), 280 (public)).

6. Since 2005, Williamson has been the sole owner of WW Rockford and, through that entity, has operated a Window World store in Rockford, Illinois. (Additional Countercls. ¶¶ 111-13.) Similarly, since 2010, Williamson and Hopkins have been co-owners of WW Joliet and, through that entity, have operated a Window World store in Joliet, Illinois. (Additional Countercls. ¶¶ 123-26.) Williamson was also the sole owner of WW Bloomington, through which he operated a Window World store in Bloomington, Illinois from 2007 until WW Bloomington was transferred to a third party in 2013. (Additional Countercls. ¶¶ 121-22, 194.) While each of these locations was organized as a separate entity, they worked together, shared resources, and were otherwise associated. (Additional Countercls.¶¶ 127-28, 194.)

7. Williamson served as the President of all three entities. (Additional Countercls. ¶¶ 134-36.) Defendants also allege that Jennifer Williamson- Williamson's wife-was an officer, representative, and agent of each entity, (Additional Countercls. ¶¶ 102, 159-69), and that Hopkins-Williamson's business partner and the Williamsons' in-law-was likewise an agent and representative of each, (Additional Countercls. ¶¶ 103, 140-45).

8. In 2013, Williamson decided to transfer ownership of WW Bloomington to a third party. (Additional Countercls. ¶ 205.) Under WW's agreement with WW Bloomington, the transfer required WW's prior written consent. (Additional Countercls. ¶ 212; see Additional Countercls. Ex. T, ECF No. 835.20.) In June 2013, WW's President and Williamson, as President of WW Bloomington, executed an agreement permitting the transfer of WW Bloomington to a third-party purchaser (the "June 2013 Agreement"). (Additional Countercls. ¶¶ 213-20; Additional Countercls. Ex. A [hereinafter "June 2013 Agreement"], ECF No. 835.1.)

9. Significantly for present purposes, the June 2013 Agreement contains a provision titled "Release of Franchisor," which provides as follows:

Seller [Williamson and WW Bloomington] for itself and its affiliates, employees, officers, directors, successors assigns, and other representatives, hereby fully and forever unconditionally release and discharge Franchisor [WW], and its affiliates, parents, subsidiaries, area directors and agents and its employees, shareholders, members, officers directors, successors, assigns, guarantors and other representatives (the "Released Party"), from any and all claims, demands, obligations, actions, liabilities and damages of every kind or nature whatsoever, in law or in equity, whether known or unknown to them, which they may have against the Released Party as of the date of this Agreement or which may thereafter be discovered, accrued, or sustained in connection with, as a result of, or in any way arising from, any relations or transactions with the Released Party, however characterized or described, including but not limited to, any claims arising from the Seller Licensing Agreement or the Purchase Agreement or the transactions described herein.

(June 2013 Agreement ¶ 3.)

10. Defendants allege that at the time Williamson signed the June 2013 Agreement, (i) Jennifer Williamson, Hopkins, WW Rockford, and WW Joliet were each "an affiliate, employee, officer, director, successor, assign, and/or other representative" of Williamson and WW Bloomington, (Additional Countercls. ¶¶238- 45), (ii) Williamson had "actual or apparent authority" to bind Jennifer Williamson, Hopkins, WW Rockford, and WW Joliet, (Additional Countercls. ¶¶ 261-64), and (iii) the Window World Defendants and Whitworth (WW's Chief Executive Officer) were "Released Part[ies]" under the June 2013 Agreement, (Additional Countercls. ¶¶ 100, 256, 259, 317; see June 2013 Agreement ¶ 3).

11. The June 2013 Agreement also contains a non-disparagement provision. That provision provides as follows:

In consideration of the accommodations provided to Seller and concessions made by Franchisor and its affiliates under this Agreement, Seller agrees not to, and to use their best efforts to cause their current and former shareholders, officers, directors, principals, agents, partners, employees, representatives, attorneys, spouses, and successors and assigns not to, disparage or otherwise speak or write negatively, directly or indirectly, of Franchisor or the Released Parties or their respective current and former agents, principals, officers, directors, attorneys, parents, predecessors, affiliates, subsidiaries, divisions, and successors and assigns, the WINDOW WORLD brand, the WINDOW WORLD system, or any other service-marked or trademarked concept of Franchisor, or which would subject the WINDOW WORLD brand to ridicule, scandal, reproach, scorn, or indignity or which would negatively impact the goodwill of Franchisor or its brand.

(June 2013 Agreement ¶ 8.)

12. Defendants contend that the Williamson Plaintiffs have breached the release provision of the June 2013 Agreement and...