SUPERIOR PERFORMERS, INC. v. FAMILY FIRST LIFE, LLC et al

Filing 22

MEMORANDUM OPINION AND ORDER signed by JUDGE JAMES A. BEATY, JR on 10/21/2014; the Court grants Plaintiff's Motion to Consolidate [Doc. # 6 ] as to Case Numbers 1:13CV1149, 1:14CV232, and 1:14CV382 and denies the Motion to Consolidate [Doc. # 6 ] as to Case Number 1:14CV283. ORDERED that Plaintiff's Motion to Consolidate is hereby GRANTED IN PART and DENIED IN PART. (Garland, Leah)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
SUPERIOR PERFORMERS, INC.
d/b/a NATIONAL AGENTS
ALLIANCE,
Plaintiff,

v.
FAMILY FIRST LIFE, LLC, SHAWN
L. MEAIKE, JERROD EWING,
MATTHEW SMITH, WILLIAM
MARTIN, KRISTOPHER KRAUSE
NICK THEODORE, and PAUL E.
MCCLAIN,

Defendants.

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1:14CV382

MEMORANDUM OPINION AND ORDER
BEATY, District Judge.
This matter is currently before the Court on the Motion to Consolidate1 [Doc. #6] filed
by Plaintiff Superior Performers, Inc. (“Plaintiff” or “NAA”). For the reasons discussed below,
the Court grants in part and denies in part Plaintiff’s Motion to Consolidate. All Defendants2
in the four cases (Cases Nos. 1:13cv1149, 1:14cv232, 1:14cv283, and 1:14cv382) (collectively
“Consolidation Defendants”), have filed Responses in Opposition to the Motion to Consolidate
[Doc. #13], to which, Plaintiff has filed a Reply [Doc. #17].

This same Motion and subsequent briefing is also filed in case numbers 1:13cv1149,
1:14cv232, and 1:14cv283. Memorandum Opinions and Orders will be entered as to each case.
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Defendant Joshua Sivak, a Defendant in Case Number 1:14CV232 did not file a
Response to the Motion to Consolidate, and was the only Defendant with separate
representation. The Plaintiff, however, voluntarily dismissed Defendant Sivik from this action
on August 5, 2014. (See Notice of Vol. Dismissal [Case No.1:14CV232, Doc. #39].)
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I.

BACKGROUND
This case is one of several related cases brought by Plaintiff in an attempt to, among

other things, enforce restrictive covenants entered into by current and former NAA agents and
managers. The Court previously granted Plaintiff’s Motion for Temporary Restraining Order
in Case Number 1:13CV1149 [Case No. 1:13CV1149, Doc. #36], and allowed the terms of that
injunctive relief to remain in effect from the March 5, 2014 hearing until its Memorandum
Opinion and Order [Case No. 1:13CV1149, Doc. #88] granting in part Plaintiff’s Motion for
Preliminary Injunction [Case No. 1:13CV1149, Doc. #13] was filed on April 11, 2014.
Plaintiff now brings a Motion to Consolidate the following federal cases: 1:13CV1149,
1:14CV232, 1:14CV283, 1:14CV382.3 Collectively, these cases contain a total of 36 separate
Defendants and 31 Causes of Action.4 In Case Number 1:13CV1149, Plaintiff asserts five
Causes of Action against six Defendants. These Causes of Action include those for breach of
contract based on alleged violations of the non-solicitation and non-competition5 agreements,
a claim for tortious interference with contract and business relationships, a claim for unfair and

The Court notes that there were originally five related cases filed with this Court,
including Superior Performers, Inc. v. Chism, Case No. 1:13CV1147. However, that case has
been voluntarily dismissed, and therefore is not included in Plaintiff’s Motion to Consolidate.
3

The Court notes that a Motion to Amend [Case No. 1:13CV1149, Doc. #62] in Case
Number 1:13CV1149 is pending, and if the Motion to Amend is granted, the Causes of Action
will increase to 39.
4

The Second Amended Complaint, attached to Plaintiff’s Motion to Amend [Case No.
1:13CV1149, Doc. #62] in Case Number 1:13CV1149, does not include any claims based on a
breach of the non-competition clauses of the parties’ agreements. If Plaintiff’s Motion to
Amend is granted, the only case involving claims for breach of the non-competition provisions
would be Case Number 1:14CV382.
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deceptive trade practices, a civil conspiracy claim, and a wiretapping claim.
Case Number 1:14CV232, includes 30 Defendants with 16 Causes of Action. Like
1:13CV1149, Case Number 1:14CV232 also includes breach of contract claims based on alleged
violations of the non-solicitation agreements, as well as claims for breach of contract based on
other parts of the agent and managerial agreements. Other claims involved in 1:14CV232
include claims for tortious interference, unfair and deceptive trade practices, unfair competition,
civil conspiracy, and wiretapping. None of the Defendants named in Case Number 1:13CV1149
are also named in Case Number 1:14CV232. The Court also notes that the Defendants in Case
Number 1:14CV232 have asserted counterclaims, and claims against Third-Party Defendants.
In Case Number 1:14CV283, Plaintiff asserts claims against Family First Life, LLC
(“Family First”) and Shawn Meaike based on these Defendants alleged use of NAA’s service
mark. These claims include, claims for breach of contract, unfair competition, service mark
infringement, unfair and deceptive business practices, and unfair competition and business
conversion based on use of the service mark. Both of the Defendants named in Case Number
1:14CV283 are also named in more than one of the other cases before the Court.
The most recent case filed by Plaintiff is Case Number 1:14CV382, which asserts five
Causes of Action against eight Defendants, all of who are named in other cases before the
Court. This case includes claims based on Defendants alleged unlawful competition with
Plaintiff. Based on these alleged actions, Plaintiff asserts claims for breach of contract, common
law unfair competition and business conversion, unfair and deceptive trade practices, tortious
interference with contract and business relationships, and civil conspiracy.

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Plaintiff contends that there are sufficient common questions of law or fact and
overlapping Defendants to merit consolidation of the above-described cases. Consolidation
Defendants assert, however, that the actions involve different facts as to each Defendant as well
as different legal claims. Further, Consolidation Defendants argue that any consolidation will
result in prejudice, insofar as each individual will incur costs and expenses related to claims that
are not central to his, her, or its defenses, confusion to the trier of fact, and imputation of
allegations onto the Consolidation Defendants as a group. In Plaintiff’s Reply, it asserts that
Consolidation Defendants’ argument fail to provide any substantive objection to consolidation
for the purposes of pre-trial motions and discovery. Accordingly, Plaintiff requests that
consolidation should at least be allowed until the close of discovery.
II.

DISCUSSION
Pursuant to Federal Rule of Civil Procedure 42(a)(2), district courts may consolidate cases

pending before it, if such cases “involve a common question of law or fact.” Fed. R. Civ. P.
42(a)(2). If this threshold requirement is met, a district court has “broad discretion” concerning
whether or not to consolidate cases before it. A/S J. Ludwig Mowinckles Rederi v. Tidewater
Constr. Co., 559 F.2d 928, 933 (4th Cir. 1977). When determining whether consolidation is
appropriate,
the court should weigh the risk of prejudice and possible confusion versus the
possibility of inconsistent adjudication of common factual and legal issues, the
burden on the parties, witnesses, and judicial resources by multiple lawsuits, the
length of time required to try multiple suits versus a single suit, and the relative
expense required for multiple suits versus a single suit.
In re Cree, Inc., Securities Litig., 219 F.R.D. 369, 371 (M.D.N.C. 2003) (citing Arnold v. Eastern

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Air Lines, 681 F.2d 186, 193 (4th Cir. 1982)).
Initially, the Court notes that Case Numbers 1:13CV1149, 1:14CV232, and 1:14CV382
most certainly involve common legal and factual questions concerning the validity of the
restrictive covenants contained in the parties’ agreements. Case Number 1:14CV382 specifically
involves the non-competition provisions, while the other two cases focus to a greater extent on
the non-solicitation provisions. Both non-competition and non-solicitation provisions, however,
are restrictive covenants and require the application of the same law. See Medical Staffing
Network, Inc. v. Ridgway,670 S.E. 2d 321, 327-328 (N.C. Ct. App. 2009) (applying the same law
to both non-competition and non-solicitation provisions).

As indicated in the Court’s

Memorandum Opinion and Order granting in part Plaintiff’s Motion for Preliminary Injunction
in Case Number 1:13CV1149, issues remain for discovery concerning the original contracts
entered into by the Defendants and whether or not the alleged consideration provided for the
later-signed contracts is legally sufficient pursuant to North Carolina law concerning restrictive
covenants. (See Mem. Opinion and Order [Case No. 1:13CV1149, Doc. #88], at 14-17.)
Further, as the Amended Complaint stands in Case Number 1:13CV1149, it also alleges breach
of the non-competition provisions of the agreements. While this may change as a result of any
ruling on Plaintiff’s pending Motion to Amend such Complaint in Case Number 1:13CV1149,
as stated above, the common questions concerning the restrictive covenants’ validity in general
remain.
While the Consolidation Defendants argue that each of the individual Defendants’ ability
to defend themselves will be prejudiced if the cases are consolidated, consolidating these three

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actions would not cause any greater prejudice than that which currently exists. Case Number
1:14CV232 involves 30 individually named Defendants with 16 separate Causes of Action. The
addition of six additional Defendants from Case Number 1:13CV1149 with similar if not the
same Causes of Action asserted against such Defendants will not result in any further prejudice
concerning the individual Defendants’ ability to defend themselves. Additionally, all eight
individual Defendants named in Case Number 1:14CV382 are also named in either Case
Number 1:13CV1149 or 1:14CV232. While the non-competition claims may differ based on the
type of facts needed to establish the breach of such provisions, the additional five claims are not
likely to hinder the Defendants’ ability to defend themselves against both the non-competition
claims and those based on the non-solicitation provisions. To the extent the Consolidation
Defendants also allege that consolidating the cases will result in juror confusion, the Court notes
that the consolidation itself will not considerably add more complexity or complication for the
jurors than currently exists. As stated above, all of the actions contain similar if not the same
claims and the cases also contain many of the same defendants. Furthermore, the Court finds
that any minor additional confusion or prejudice is outweighed by the remaining factors that the
Court must consider, including the possibility of inconsistent findings as to the validity of the
restrictive covenants, the judicial resources that would be expended entertaining multiple
lawsuits, and the length of time and expense required to try multiple lawsuits compared to a
single consolidated suit.
While the Consolidation Defendants argue that consolidation will create additional time
and expense requirements as to the individual Defendants, the Court finds that such argument

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is without merit. Instead, as stated above, the time and expense requirements actually weigh in
favor of consolidation. The Consolidation Defendants are all represented by the same attorneys
in all four cases. If three of the cases are consolidated the attorneys would only be required to
participate in one discovery plan and prepare and possibly participate in one trial, rather than
participate in three separate discovery plans and three separate trials for similar cases. It will be
the attorneys’ responsibility to allocate the expenses they incur between each individual
Defendant based on whether such work was done on behalf of that Defendant or whether such
work was based on claims or legal theories associated with that Defendant.
The Court, however, finds that the remaining case, Case Number 1:14CV283, should not
be consolidated with the other three cases. Such case specifically focuses on two Defendants,
Defendant Shawn Meaike and Defendant Family First, and these Defendants alleged unlawful
use of Plaintiff’s service mark. The claims in Case Number 1:14CV283 in no way concern the
restrictive covenants, which provide the basis for the above three cases. Instead, the only claim
that focuses on the parties’ agreement, focuses on a provision concerning the retention of
Plaintiff’s property, as Plaintiff claims that Defendant Meaike retained the service mark in
violation of such agreement. The other claims included in Case Number 1:14CV283 include
unfair competition, service mark infringement, unfair and deceptive business practices, and
unfair competition and business conversion based solely on the alleged unlawful use of the
service mark. Plaintiff asserts that the same Causes of Action are asserted in the other three
cases, that is claims for breach of contract and unfair and deceptive business practices. These
claims, however, are premised on the alleged breach of a completely separate provision of the

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parties’ agreements or the claims are based on the alleged infringement. Even if asserting the
same causes of action in name was sufficient to say that a common legal question is involved in
Case Number 1:14CV283, the Court finds that the differences in the law and facts to be applied
to the claims involving the service mark justify keeping Case Number 1:14CV283 separate and
not consolidated with Case Numbers 1:13CV1149, 1:14CV232, and 1:14CV382. Due to such
differences, any effect on judicial resources, the length of time required to try multiple suits, or
the relative expense required for multiple suits versus a single suit would be negligible. Further,
as stated above, the other three cases are complex. Adding additional claims based on a separate
body of law and completely different facts would unnecessarily complicate matters for the jury.
III.

CONCLUSION
In sum, for the reasons stated above, the Court grants Plaintiff’s Motion to Consolidate

[Doc. #6] as to Case Numbers 1:13CV1149, 1:14CV232, and 1:14CV382 and denies the Motion
to Consolidate [Doc. #6] as to Case Number 1:14CV283.

IT IS THEREFORE ORDERED that Plaintiff’s Motion to Consolidate is hereby
GRANTED IN PART and DENIED IN PART.
This the 21st day of October, 2014.

United States District Judge

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