Hatteras/Cabo Yachts, LLC v. M/Y Epic (official Number 747618, HIN: US-HATHR3021617), her engines, boilers, tackle, apparel, etc., in rem et al
Filing
98
ORDER denying 59 Motion to Dismiss; granting in part and denying in part 85 Motion to Dismiss; granting in part and denying in part 87 Motion to Dismiss. Signed by Senior Judge W. Earl Britt on 11/6/2019. (Herrmann, L.)
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
EASTERN DIVISION
No. 4:17–CV–00025–BR
HATTERAS/CABO YACHTS, LLC,
a foreign limited liability company,
Plaintiff,
v.
M/Y EPIC (Official Number 747618,
HIN: US-HATHR3021617), her engines,
Boilers, tackle, apparel etc., in rem, and
ACQUAVIVA LTD., a foreign company,
Defendants.
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ORDER
This matter is before the court on Hatteras/Cabo Yachts, LLC’s (“Hatteras”), Brunswick
Corporation’s (“Brunswick”), and Versa Capital Management, LLC’s (“Versa Capital”) motions
to dismiss Acquaviva Ltd. (“Acquaviva”) and Daniel Spisso’s (“Spisso”) amended counterclaim
pursuant to Federal Rule of Civil Procedure 12(b)(6). (DE # 59, 85, 87.) Also before the court
are Brunswick’s and Versa Capital’s motions for a more definite statement. (DE ## 85, 87.)
These motions have been fully briefed and are ripe for disposition.
I.
BACKGROUND
This action arises out of disputes regarding two yachts manufactured by
Hatteras, an entity owned by Brunswick [] until August 2013, and since by Versa
Capital []. Spisso, Acquaviva’s agent, entered into a sales contract for the
construction of the first yacht, a model GT63 (“Vessel No. 1”), on or about 12
December 2012. In December 2014, Spisso filed suit in the Southern District of
Florida, Case No. 1:14-cv-24616-FAM, alleging breach of contract, breach of
warranties, [and] violation of the Magnuson-Moss Warranty Act, and seeking
rescission, revocation, and damages arising from the purchase of Vessel No. 1. On
8 April 2015, Spisso entered into a settlement agreement with Hatteras, Brunswick,
and others, which purported to resolve the litigation surrounding Vessel No. 1 and
constituted a purchase/sale of Vessel No. 2.
On 17 September 2016, the day after Spisso arrived to take possession of
Vessel No. 2, the vessel caught fire with him and guests onboard, resulting in smoke
damage to the vessel. Thereafter, Vessel No. 2 was returned to shore where
Hatteras took custody of it. Hatteras offered to repair the damage to the vessel
while it remained in Hatteras’ custody. Spisso did not authorize Hatteras to
complete the repairs, and Hatteras insisted that he retake possession of the vessel.
Hatteras notified Spisso that expenses for necessaries were accruing while the
vessel remained in its possession. Spisso alleges that Hatteras refused to allow him
to properly inspect the vessel and otherwise acted inconsistently with his purported
ownership. Ultimately, the vessel remained at Hatteras’ dock until Spisso retook
possession of the vessel in February 2017. During that five month period, Hatteras
alleges that the costs associated with the provision of necessaries totaled
$24,340.52.
Hatteras commenced this action against Vessel No. 2, in rem, and
Acquaviva, in personam, on 2 March 2017. On 4 June 2018, the court denied
Acquaviva’s motion to dismiss. Acquaviva counterclaimed on 18 June 2018[.]
(Order, DE # 57, at 2–3 (citations omitted).)
On 24 August 2018, Hatteras moved to dismiss Acquaviva’s 18 June 2018 counterclaim.
(Id. at 3.) “Thereafter, Spisso filed a motion to intervene as defendant and counterclaim [against
Hatteras] and attached an amended counterclaim on behalf of himself and Acquaviva.” (Id.) On
10 January 2019, this court allowed Spisso’s motion to intervene by interlineation and allowed
Acquaviva and Spisso to amend their counterclaim. (Id.) As such, the court denied Hatteras’
motion to dismiss the 18 June 2018 counterclaim. (Id. at 7.)
The fifteen-count amended counterclaim alleges the following: breach of the 2012
Purchase Agreement, (Am. Countercl., DE # 44-1, at 37); breach of the 2015 Settlement and
Release Agreement, (id. at 39); breach of implied warranty relating to Vessel No. 1, (id. at 43);
breach of express warranty relating to Vessel No. 1, (id. at 46); violations of the Magnuson-Moss
Warranty Act for Vessel No. 1, (id. at 47); breach of implied warranty relating to Vessel No. 2,
(id. at 49); breach of express warranty relating to Vessel No. 2, (id. at 54); violations of the
Magnuson-Moss Warranty Act for Vessel No. 2, (id. at 56); negligent property damage, (id. at
59); negligent bodily injury, (id. at 60); civil theft and conversion, (id. at 61); abuse of process,
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(id. at 62); bad faith, (id. at 63); violations of North Carolina’s Unfair and Deceptive Trade
Practice Act (“UDTPA”), (id. at 64); and unjust enrichment, (id. at 67.)
II.
DISCUSSION
“A district court should dismiss a complaint pursuant to Rule 12(b)(6) if, accepting all
well-pleaded allegations in the complaint as true and drawing all reasonable factual inferences in
the plaintiff’s favor, the complaint does not allege enough facts to state a claim to relief that is
plausible on its face.” Vitol, S.A. v. Primerose Shipping Co., 708 F.3d 527, 539 (4th Cir. 2013).
“[T]he court need not accept the [plaintiff’s] legal conclusions drawn from the facts, nor need it
accept as true unwarranted inferences, unreasonable conclusions, or arguments.” Philips v. Pitt
Cty. Mem’l Hosp., 572 F.3d 176, 180 (4th Cir. 2009) (internal quotation marks and citation
omitted). “While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need
detailed factual allegations, . . . a plaintiff’s obligation to provide the grounds of his
entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of the
elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555
(2007); accord Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
A.
Hatteras
Hatteras moves to dismiss Acquaviva and Spisso’s amended counterclaim on six
grounds. (See Mem. Supp. Mot. Dismiss, DE # 60, at 3.) First, “[t]he economic loss rule bars
all of Acquaviva and Spisso’s non-contractual claims[.]” (Id.) Second, “Spisso fails to state a
claim for personal injury as his alleged damages are speculative[.]” (Id.) Third, “Acquaviva has
expressly released Hatteras from all claims related to ‘Vessel [No.] 1’ pursuant to the Settlement
Agreement between the parties[.]” (Id.) Fourth, “Acquaviva and Spisso fail to state a claim for
breach of contract based on the Uniform Commercial Code [(“UCC”)].” (Id.) Fifth, “Acquaviva
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and Spisso fail to allege a cause of action under [the UDTPA].” (Id. at 4.) Finally, Hatteras
alleges “Acquaviva and Spisso improperly intermingle allegations against Hatteras with those
against separate legal entities Brunswick [] and Versa Capital.” (Id.)
1.
Economic Loss Rule (Count 9)
Hatteras contends that Acquaviva and Spisso fail to state a claim as to Count 9—
negligent property damage—because they brought their “non-contractual claim in tort for the
same conduct and the same alleged damages giving rise to their beach of contract claims.”
(Mem. Supp. Mot. Dismiss, DE # 60, at 9.) As such, Hatteras contends Count 9 is barred by the
economic loss rule, which it asserts “prohibits recovery for purely economic loss in tort, as such
claims are instead governed by contract law.” (Id. (citing Lord v. Customized Consulting
Specialty, Inc., 643 S.E.2d 28, 30 (N.C. Ct. App. 2007)).) In response, Acquaviva and Spisso
contend they have alleged facts to meet each of the four exceptions to the economic loss rule:
passengers suffered personal injuries[;] Mr. Spisso suffered personal injuries[;]
injury was to the vessel that was the subject of the Settlement Agreement and arose
from Hatteras’s employee’s leaving his tool bag of combustible items in the engine
room when the vessel was still in the custody of Hatteras as bailee[;] injury was to
the vessel that was the subject of the Settlement Agreement, and if, as Hatteras
insists, it had been fully delivered at the time of the fire, then Hatteras’s employee
was trespassing with his tool bag of combustible items.
(Resp. Opp’n, DE # 67, at 15 (internal footnotes omitted).)
“The economic loss rule addresses the intersection between contract remedies (including
warranty remedies) and tort remedies.” Kelly v. Georgia-Pac. LLC, 671 F. Supp. 2d 785, 791
(E.D.N.C. 2009). Under the rule, “recovery for purely economic loss in tort [is prohibited] when
a contract, a warranty, or the UCC operates to allocate risk.” Id. (providing that a promisee and
promisor do not become fiduciaries to one another by entering into a contract). Such economic
loss should be recovered through contractual remedy as opposed to an action in tort. Id. at 794.
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However, there are four scenarios when the economic loss rule does not apply under North
Carolina law where a contracting party could be liable for negligence:
(1) The injury, proximately caused by the promisor’s negligent act or omission in
the performance of his contract, was an injury to the person or property of someone
other than the promisee[;] (2) The injury, proximately caused by the promisor’s
negligent, or wilful, act or omission in the performance of his contract, was to
property of the promisee other than the property which was the subject of the
contract, or was a personal injury to the promisee[;] (3) The injury, proximately
caused by the promisor’s negligent, or wilful, act or omission in the performance
of his contract, was loss of or damage to the promisee’s property, which was the
subject of the contract, the promisor being charged by law, as a matter of public
policy, with the duty to use care in the safeguarding of the property from harm, as
in the case of a common carrier, an innkeeper or other bailee[;] (4) The injury so
caused was a wilful injury to or a conversion of the property of the promisee, which
was the subject of the contract, by the promisor.
N.C. State Ports Auth. v. Lloyd A. Fry Roofing Co., 240 S.E.2d 345, 350–51 (N.C. 1978)
(internal citations omitted).
As pled, Acquaviva and Spisso state a claim as to the third exception. Specifically,
Acquaviva and Spisso claim “Hatteras and Mr. Rice[, a Hatteras employee,] breached their duty
of care when Mr. Rice left combustible items in a tool bag in the engine room of a ship at sea.”
(Am. Countercl., DE # 44-1, ¶ 271.) At that time, Acquaviva and Spisso, allege Vessel No. 2
was in its delivery stage from Hatteras to Spisso. (Id. ¶¶ 86–89). This allegation supports the
conclusion that Hatteras was a bailee at the time. See Pennington v. Styron, 153 S.E.2d 776, 779
(N.C. 1967) (finding a bailor/bailee relationship when the plaintiff and the defendant had agreed
“that the plaintiff [could] store[] his boat with the defendant, and that the defendant was to keep
it tied up, pump the rain water out of it, and generally to protect it during the winter”). As only
one exception to the economic loss rule is needed in order for Acquaviva and Spisso to state a
claim as to negligent property damage, the court will not address the other three exceptions.
Hatteras’ motion as to Count 9 will be denied.
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2.
Bodily Personal Injury (Count 10)
Hatteras contends Acquaviva and Spisso have failed to state a claim as to Count 10—
negligent bodily injury—because Spisso’s claims that he “inhaled noxious smoke and
‘experience[d] severe emotional distress” do not sufficiently allege damages for a prima facie
case of negligence. (See Mem. Supp. Mot. Dismiss, DE # 60, at 11.) Further, Hatteras contends
Spisso’s claim that he inhaled noxious smoke does not meet the pleading requirements of
Twombly and Iqbal because “[h]e has not alleged that inhaling smoke has caused him any bodily
injury.” (Id.) Additionally, Hatteras contends “Spisso has failed to allege any facts that, if
proven, would support a claim for emotional distress” because he alleges “mere temporary
fright[.]” (Id. at 11–12.)
“To make out a prima facie case of negligence, a plaintiff must show that: (1) the
defendant owed the plaintiff a duty of care; (2) the defendant’s conduct breached that duty; (3)
the breach was the actual and proximate cause of the plaintiff’s injury; and (4) damages resulted
from the injury.” Parker v. Town of Erwin, 776 S.E.2d 710, 729–30 (N.C. Ct. App. 2015)
(internal citation and quotation marks omitted). On the other hand,
to state a claim for negligent infliction of emotional distress [(“NIED”)], a plaintiff
must allege that (1) the defendant negligently engaged in conduct, (2) it was
reasonably foreseeable that such conduct would cause the plaintiff severe emotional
distress . . . , and (3) the conduct did in fact cause the plaintiff severe emotional
distress.
Johnson v. Ruark Obstetrics & Gynecology Assocs., P.A., 395 S.E.2d 85, 97 (N.C. 1990).
Severe emotional distress is an essential element of a claim for NIED, but it is wholly distinct
from the emotional suffering that may be part of a claim seeking damages for general pain and
suffering. See Iadanza v. Harper, 611 S.E.2d 217, 221–22 (N.C. Ct. App. 2005). As such, a
plaintiff may plead damages for emotional distress as part of a negligence claim without proving
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severe emotional distress. See Owens v. Dixie Motor Co., No. 5:12–CV–389–FL, 2014 WL
12703392, at *14 (E.D.N.C. Mar. 31, 2014) (finding that plaintiff’s failure to demonstrate severe
emotional distress did not preclude her claim for negligence); Wheeless v. Maria Parham Med.
Ctr., Inc., No. COA13–1475, 2014 WL 3510602, at *4 (N.C. Ct. App. July 15, 2014) (table
decision). Additionally, plaintiff need not plead physical injury in order to claim emotional
distress damages. See Iadanza, 611 S.E.2d at 221 (“Pain and suffering damages are intended to
redress a wide array of injuries ranging from physical pain to anxiety, depression, and the
resulting adverse impact upon the injured party’s lifestyle.”) (internal citation omitted).
In their amended counterclaim, Aquaviva and Spisso bring a general negligence claim as
opposed to a claim for NIED. As such, the court will not impose the psychological distress
standard for an NIED claim on the emotional distress damages requested with plaintiff’s
negligence claim. Further, Acquaviva and Spisso’s allegations in the amended complaint state a
claim as to negligent bodily injury:
As a proximate cause of Hatteras’s and Mr. Rice’s negligence, Mr. Spisso
sustained personal injuries, including inhaling noxious and toxic smoke and
experiencing emotional distress.
Mr. Spisso’s emotional distress was intensified due to Hatteras’s conduct
before and after the fire.
(Am. Countercl., DE # 44-1, ¶¶ 279, 280.) Hatteras’ motion as to Count 10 will be denied.
3.
Settlement Agreement (Counts 1, 3, 4, 5, and 14)
Hatteras contends that Acquaviva and Spisso’s claims relating to Vessel No. 1, namely
counts 1, 3, 4, 5, and 14, should be dismissed because such claims were “expressly released” in
the 2015 settlement agreement between the parties (the Settlement and Release Agreement).
(See Mem. Supp. Mot. Dismiss, DE # 60, at 13.) Further, Hatteras contends that “Vessel [No.] 2
was not an ‘attempt to cure the total non-conformity of Vessel No. 1’ as alleged by the Plaintiff,
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but was a fully new contract for purchase of a second vessel which subsumed and extinguished
all claims related to Vessel [No.] 1.” (Id. at 16–17.) In response, Spisso and Acquaviva contend
that Hatteras’ breach of the Settlement and Release Agreement, including its failing to deliver a
new vessel with the proper specifications, was a complete breach of the agreement, thereby
rescinding the agreement as a whole, along with Spisso’s obligations contained therein. (See
Resp. Opp’n, DE # 67, at 20.)
“To state a claim for breach of contract, the complaint must allege that a valid contract
existed between the parties, that defendant breached the terms thereof, the facts constituting the
breach, and that damages resulted from such breach.” Grich v. Mantelco, LLC, 746 S.E.2d 316,
319 (N.C. Ct. App. 2013) (internal citation omitted). “As a general rule, if either party to a
bilateral contract commits a material breach of the contract, the non-breaching party is excused
from the obligation to perform further. Whether a breach is material or immaterial is ordinarily a
question of fact.” McClure Lumber Co. v. Helmsman Const., Inc., 585 S.E.2d 234, 239 (N.C.
Ct. App. 2003) (internal quotation marks and citations omitted). “Not every breach of a contract
justifies a cancellation and rescission. The breach must be so material as in effect to defeat the
very terms of the contract.” Childress v. C. W. Myers Trading Post, Inc., 100 S.E.2d 391, 395
(N.C. 1957); accord Boss Urgent Care, PLLC v. Urgent Care Works, LLC, No. 7:11–CV–
00071–FL, 2012 WL 1825328, at *8 (E.D.N.C. May 18, 2012). “Rescission does not merely
terminate the contract so as to release the parties from further obligations to each other; rather, it
abrogates the contract from its beginning and restores the parties to the position they would have
been in had the contract not been made.” Johnson v. Smith, Scott & Assocs., Inc., 335 S.E.2d
205, 207 (N.C. Ct. App. 1985).
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Here, Acquaviva and Spisso allege that Hatteras breached the Settlement and Release
Agreement by failing to perform a variety of its provisions. (See Am. Countercl., DE # 44-1, ¶¶
175–176, 181.) Specifically, Acquaviva and Spisso claim:
Hatteras breached the Settlement and Release Agreement in that Hatteras did not
provide a vessel that conformed to the terms of the Settlement and Release
Agreement. Among other non-conformities, the vessel was not a ‘New Vessel’ or
a 2017 model year vessel because it was fire-damaged, suffering a significant
diminution in value in 2016 and could not be considered a 2017 model year ‘New
Vessel.’ Among other non-conformities, the vessel was not equipped with a
properly working fire suppression system.
(Id. ¶ 175.) Further, Acquaviva and Spisso allege the purpose of “[t]he Settlement and Release
Agreement was to serve as a cure of Hatteras’ breaches of the Purchase Agreement entered into
on December 12, 2012.” (Id. ¶ 170.) Two excerpted provisions of the Settlement and Release
Agreement read:
[O]n the terms of this Agreement, Hatteras shall build and sell to Buyer, and Buyer
shall purchase from Hatteras, a 2017 model year 70MY vessel (the “New Vessel”).
(Id. at Ex. 3 ¶ E.)
3.
Transfer of Trade Vessel. On or before April 8, 2015, Buyer shall deliver
to Hatteras the Trade Vessel and shall execute all necessary and appropriate
documentation to transfer and assign title and ownership of the Trade Vessel to
Hatteras free and clear of all liens, claim and encumbrances. Hatteras shall have
no obligation under this Agreement until (i) it receives title and ownership of the
Trade Vessel free and clear of all liens, claims and encumbrances and (ii) Buyer
has complied with its obligations set forth in Section 2 of this Agreement.
(Id. ¶ 3.) As such, Acquaviva and Spisso have stated a claim of breach of contract as to the
Settlement and Release Agreement and that said breach relieves Spisso of all obligations under the
contract. If the contract were rescinded, all provisions would not be enforceable. See Johnson,
335 S.E.2d at 207. Hatteras’ motion will be denied as to Counts 1, 3, 4, 5, and 14.
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4.
UCC (Counts 1 and 2)
Hatteras requests “to the extent Counts 1 and 2[, breach of contract claims,] are premised
upon allegations of conduct that breached the UCC, but which did not also breach any identified
contractual obligation, they should be dismissed.” (Mem. Supp. Mot. Dismiss, DE # 60, at 18.)
“Federal pleading rules call for a short and plain statement of the claim showing that the pleader
is entitled to relief, Fed. R. Civ. P. 8(a)(2); they do not countenance dismissal of a complaint for
imperfect statement of the legal theory supporting the claim asserted.” Johnson v. City of
Shelby, Miss., 574 U.S. 10, 11 (2014) (internal quotation marks omitted). “One must not dismiss
the complaint ‘unless it appears to a certainty that the plaintiff would not be entitled to relief
under any legal theory which might plausibly be suggested by the facts alleged.’” Harrison v.
U.S. Postal Serv., 840 F.2d 1149, 1152 (4th Cir. 1988) (internal citation omitted). However,
“courts (and defendants) should not be forced to sift through a complaint in a search for a cause
of action.” Clendenin v. Wells Fargo Bank, N.A., No. 2:09–cv–00557, 2009 U.S. Dist. LEXIS
109952, at *9 (S.D. W. Va. Nov. 24, 2009) (finding failure to identify contract provisions, what
types of fees illegal or unauthorized, when or how the entity discouraged payment, and how the
entity serviced their loan did not meet pleading requirements).
Acquaviva and Spisso, in Counts 1 and 2, provide a short and plain statement of their
breach of contract claims showing that they are entitled to relief. (See Am. Countercl., DE # 441, ¶¶ 156–187.) At this juncture, they are not required to provide a perfect statement of all legal
theories entitling them to relief; rather, only that any legal theory would entitle them to relief.
Hatteras’ motion as to Counts 1 and 2 will be denied.
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5.
North Carolina’s UDTPA (Count 14)
Hatteras contends “Acquaviva and Spisso rely on the same allegations pled in support of
their breach of contract claims to form the basis for their claim under UDTPA[.]” (Mem. Supp.
Mot. Dismiss, DE # 60, at 19.) Additionally, Hatteras contends that Acquaviva and Spisso fail to
allege actions that are “immoral, unethical, oppressive, unscrupulous, or substantially injurious
to consumers,’ or ‘amounts to an inequitable assertion of . . . power or position” to constitute a
UDTPA violation. (Id. at 20.)
To prevail on a claim of unfair and deceptive trade practice[s] a plaintiff must show
(1) an unfair or deceptive act or practice, or an unfair method of competition, (2) in
or affecting commerce, (3) which proximately caused actual injury to the plaintiff
or to his business. A practice is deceptive if it has the capacity or tendency to
deceive the average consumer, but proof of actual deception is not required.
Whether the practice is unfair or deceptive usually depends upon the facts of each
case and the impact the practice has in the marketplace. The plaintiff need not show
fraud, bad faith, deliberate acts of deception or actual deception, but must show that
the acts had a tendency or capacity to mislead or created the likelihood of deception.
Spartan Leasing Inc. v. Pollard, 400 S.E.2d 476, 482 (N.C. Ct. App. 1991) (internal quotation
marks and citations omitted). “An act is unfair ‘if it offends established public policy,’ ‘is
immoral, unethical, oppressive, unscrupulous, or substantially injurious to consumers,’ or
‘amounts to an inequitable assertion of . . . power or position.” Champion Pro Consulting Grp.,
Inc. v. Impact Sports Football, LLC, 845 F.3d 104, 109 (4th Cir. 2016) (internal quotation marks
and citations omitted).
“[A] mere breach of contract claim ‘is not unfair or deceptive, . . . absent substantial
aggravating circumstances.’” Ellis v. Louisiana-Pac. Corp., 699 F.3d 778, 787 (4th Cir. 2012)
(internal citation omitted); see also S. Atl. Ltd. P’ship of Tennessee, L.P. v. Riese, 284 F.3d 518,
536 (4th Cir. 2002) (finding that conduct related to a breach of contract rarely violates the
UDTPA, rather the breach must be particularly egregious to permit recovery under North
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Carolina’s UDTPA.). “Generally, ‘[t]he type of conduct that has been found sufficient to
constitute a substantial aggravating factor has generally involved forged documents, lies, and
fraudulent inducements.” Champion Pro Consulting Grp., LLC v. Impact Sports Football, LLC,
116 F. Supp. 3d 644, 659 (M.D.N.C. 2015), aff’d, 845 F.3d 104 (4th Cir. 2016); Foley v. L & L
Int’l, Inc., 364 S.E.2d 733, 736 (N.C. Ct. App. 1988) (finding a car salesman’s choice to keep a
customer’s down-payment on a car for seven months without attempting to get the car it had
promised to the customer, while falsely claiming that the car had been obtained and would be
delivered shortly, as evidence of a deceptive trade practice). “Where the only acts alleged are
themselves a breach of the contract between the parties, they will not support a UDTPA claim.”
Stack v. Abbott Labs., Inc., 979 F. Supp. 2d 658, 668 (M.D.N.C. 2013) (internal quotation marks
and citations omitted).
Here, Acquaviva and Spisso claim the following acts violate the UDTPA:
a)
b)
c)
d)
e)
f)
g)
h)
Hatteras refused, without a reasonable basis in fact or law, to recognize
rejection, or revocation of acceptance, of Vessel No. 1;
Hatteras refused, without a reasonable basis in fact or law, to recognize
Counterclaim Plaintiffs’ rejection, or revocation of acceptance, of Vessel
No. 2;
Hatteras forced Counterclaim Plaintiffs repeatedly to take legal action to
enforce their rights and remedies, which were clear under the law;
Hatteras made material misrepresentations and omitted material
information it was under an obligation to reveal under the circumstances, in
negotiating with Mr. Spisso to settle the action he filed regarding Vessel
No. 1;
Hatteras failed to preserve evidence that it was under an obligation to
preserve under the Uniform Commercial Code;
Hatteras spoiled evidence that it was under a duty to preserve in recognition
of the rights of personal injury claimants as to which it had been given
notice;
Hatteras interfered with inspection rights under the Uniform Commercial
Code that arose due to its breaches of the Settlement and Release
Agreement;
Hatteras sought to make a claim under an insurance policy purchased by
and benefitting Counterclaim Plaintiffs when Hatteras had no right to do so;
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i)
j)
k)
l)
m)
n)
o)
Hatteras exercised ownership and control over Vessel No. 2 after insisting
that Counterclaim Plaintiffs owned it;
Hatteras exercised ownership and control over Vessel No. 2, in which
Counterclaim Plaintiffs had a security interest, constituting civil theft and
conversion;
Hatteras threatened unwarranted legal action in the form of an arrest to bully
Counterclaim Plaintiffs into foregoing rights and remedies to which they
are entitled under the law;
Hatteras wrongfully claimed a maritime lien;
Hatteras instigated a wrongful arrest to retaliate against Counterclaim
Plaintiffs for exercising their rights and remedies under the law and to bully
them into abandoning those rights and remedies;
Hatteras abused procedural exceptions to the due process requirements of
notice by obtaining an arrest warrant ex parte and without notice when the
facts and circumstances did not authorize benefitting from the exception;
and
Hatteras made false and materially misleading representations to this Court
to cause the seizure of Counterclaim Plaintiffs’ property, damaging its value
and forcing Counterclaim Plaintiffs to respond.
(Am. Countercl., DE # 44-1, ¶ 297.) While some of the alleged violations appear to be solely
contractual, others sufficiently implicate deception, fraudulent inducement of a consumer into
legal settlement, and falsification of documents through destruction of evidence. As such,
Acquaviva and Spisso have stated a claim as to Count 14 and Hatteras’ motion as to this count
will be denied.
6.
Intermingled Allegations (All Counts)
Hatteras contends that Acquaviva and Spisso’s amended counterclaim does not specify
which entities “are claimed to be liable for what [conduct].” (Mem. Supp. Mot. Dismiss, DE #
60, at 21.) Specifically, Hatteras argues, while
[t]he Amended Counterclaim alleges that Brunswick and Versa Capital are ‘alter
egos of Hatteras and vice versa’ and further allege that ‘(w)here liability for conduct
is attributable to all three entities, they are referred to . . . collectively as the
‘Hatteras Entities.’ Thereafter, the Complaint makes no mention of the ‘Hatteras
Entities’ but does, in varying ways, seem to attempt to hold all three entities liable,
without any discernable distinction as to which claims are brought against which
entities.
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(Id. at 21 (citation omitted).)
Despite Hatteras’ contentions to the contrary, the claims in the amended counterclaim
against it are clear. While Acquaviva and Spisso do use the phrase “Hatteras Entities,” such
phrase is only employed in the “Parties and Key Persons” section as background information.
(See Am. Countercl., DE # 44-1, ¶ 8.) Each of Acquaviva and Spisso’s fifteen claims directly
mention Hatteras by name and contain factual allegations against it. (Id. ¶¶ 156, 168, 188, 203,
214, 224, 243, 258, 259, 269, 282, 286, 281, 291, 304, 307.) Hatteras’ motion as to all counts
will be denied.
B.
Brunswick and Versa Capital
Brunswick moves to dismiss on three grounds:
(1) Acquaviva and Spisso do not allege a legally cognizable basis for liability
against Brunswick Corporation; (2) Acquaviva and Spisso expressly released
Brunswick from all claims related to ‘Vessel [No.] 1’ pursuant to the Settlement
and Release Agreement; [and] (3) Acquaviva and Spisso do not allege a basis to
rescind the Settlement and Release Agreement as a matter of law.
(DE # 86, at 3.) Versa Capital moves on the same grounds as to its own interests. (DE # 88, at
3.) Both parties also alternatively move for a more definite statement.
1.
Basis for Liability (All Counts)
In the amended complaint, Acquaviva and Spisso raise allegations against Hatteras,
Brunswick, and Versa Capital. Each count, one through fifteen, specifically names the entity
against whom the claim is made except for counts 5, 8, 10, and 14. As to those counts, in
addition to Hatteras, Acquaviva and Spisso bring their claims against unspecified “Counterclaim
Defendants.” (Am. Countercl., DE # 44-1, ¶¶ 214, 258, 259, 281, 304.) It is not clear whether
Acquaviva and Spisso mean to hold Brunswick and Versa Capital liable in those counts. Rather
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than dismiss those counts, the court will require Acquaviva and Spisso to provide a more definite
statement under Rule 12(e).
2.
Settlement Contract (Counts 1, 3, 4, 5)
Similar to Hatteras’ argument above, Brunswick and Versa Capital contend all claims
related to Vessel No. 1 were expressly released pursuant to the Settlement and Release
Agreement. (DE # 86, at 12; DE # 88, at 12.) Further, Brunswick contends that under North
Carolina law, the right to rescind a contract is built upon fraud, mutual mistake or mistake of one
party induced by the fraudulent or false representation of the other, none of which have been
established as a threshold matter here. (Id. at 20.) For the reasons previously stated regarding
Hatteras’ similar motion to dismiss, Brunswick’s and Versa Capital’s motions will be denied as
to counts 1, 3, 4, and 5.
III.
CONCLUSION
For the foregoing reasons, Hatteras’ motion to dismiss is DENIED; Brunswick’s and
Versa Capital’s motions to dismiss are DENIED; and, Brunswick’s and Versa Capital’s motions
for a more definite statement are GRANTED as to counts 5, 8, 10, and 14.
This 6 November 2019.
__________________________________
W. Earl Britt
Senior U.S. District Judge
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