Tai Sports, Inc. v. Hall

Tai Sports, Inc. v. Hall, 2012 NCBC 62.

STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
COUNTY OF GASTON 09 CVS 2201

TAI SPORTS, INC.,

Plaintiff,

vs.

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, ORDER & FINAL JUDGMENT
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,

vs.

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.
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

1 The Court denied Plaintiff’s demand for accounting by its order entered on June 25, 2009.

TAI Sports, Inc. v. Hall, No. 09 CVS 2201 (N.C. Super. Ct. June 25, 2009) (order denying
Plaintiff’s Motion for Preliminary Injunction).
2 The Amended Complaint does not include a claim denominated (16).
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 him and to pay him for the products, but C. Vega never
communicated those expectations to Hall.
C.

THE EAST COAST DISTRIBUTION CENTER (ECDC)

{18} In October 2006, C. Vega informed Hall that he was looking for a place on
the east coast to open a warehouse and distribute “Elite” products, and wanted to
know if Hall was aware of any warehouse space available in the Gastonia area.
Hall informed C. Vega about warehouse spaces for sale on New Hope Road in
Gastonia. In November 2006, C. Vega traveled to Gastonia to look at spaces, and
after visiting two locations, he purchased a warehouse at 3400 New Hope Road,
Gastonia, North Carolina from the Lakhany family.
{19} While in Gastonia, C. Vega opened a bank account at Citizens South Bank
for the TAI East Coast Distribution Center (“ECDC”), and made Hall a signatory on
the account. Hall agreed to deposit funds in the account from monies he earned
from selling TAI products that had been shipped to him. Hall and C. Vega never
reduced their arrangement to writing and both men testified about different
understandings with respect to Hall’s role in the ECDC.
{20} In addition to promoting “Elite” products, Hall understood that he was
acting only as C. Vega’s friend by agreeing to: (a) oversee the operation of the
ECDC, (b) help with the hiring and management of personnel, (c) oversee the
maintenance of the facility, and (d) manage the collection and deposit of rents from
tenants of 3400 New Hope Road. According to Hall, C. Vega promised to give Hall a
share of the profit from the sale of the warehouse at some unspecified future time.
{21} C. Vega, on the other hand, described an arrangement whereby Hall would
be responsible for: (a) overseeing and operating the ECDC; and (b) signing checks
less than $10,000 for TAI-related business operations (checks over $10,000 required
two signatures). According to C. Vega, Hall would be rewarded for his efforts if and
when C. Vega sold the warehouse. But, no discussion or agreement was reached on
the specific amount, share, or nature of reward that Hall would receive. In addition
to a share from the sale of the warehouse, C. Vega testified that Hall would receive
free “Elite” brand products to wear, promote, and sell for his own benefit.
{22} C. Vega acknowledges that Hall was not hired initially as an employee of
TAI or the ECDC because C. Vega could not afford to pay Hall a salary. However,
according to C. Vega, in exchange for Hall agreeing to operate and manage the
ECDC, Hall would receive free TAI products to wear while promoting TAI, and TAI
would bring Hall on as a full-time employee when C. Vega could afford to pay Hall a
salary comparable to Hall’s earnings from C.H. & Sons. According to C. Vega, this
arrangement constitutes the foundation of the parties’ agreement upon which this
lawsuit is based, even though no specific duties were discussed or assigned to Hall
as the manager of the ECDC.
{23} C. Vega purchased the property at 3400 South New Hope Road in June
2007, in the name of Vega Real Estate Holdings, LLC (“Vega Real Estate”), a
company owned in equal shares by C. Vega and his wife. The total warehouse space
was divided into three separate parcels (A, B and C). Between January and June
2007, TAI leased Parcel B from the owner, Cougar, Inc. (the Lakhany’s business).
After the purchase, C. Vega leased Parcel A of the warehouse to Cougar, Inc., TAI
occupied Parcel B, and Parcel C remained subject to a pre-existing lease with an
unrelated business.
{24} C. Vega did not make inquiries into Hall’s background and experience, or
Hall’s ability to do the things C. Vega expected of him, before entrusting Hall with
the Gastonia checking account, the management and operation of the ECDC, and
the hiring of employees. C. Vega testified that he thought he could trust Hall
because Hall was the poster child for a $100 million dollar company (Worth) and
because C. Vega knew Hall’s reputation in the softball world was superb.
{25} In March 2007, Hall hired his cousin, Tammy Hall Smith (“Smith”), to help
in the ECDC 2–3 days per week taking orders, shipping product, and doing general
office work. At that time, there was a shipping computer in the warehouse, but
Smith used an excel spread sheet to enter and keep track of product inventory. All
sales were recorded on slips of paper that Smith retained. Within a few months,
Smith visited the QuickBooks internet website, researched the product and
purchased a QuickBooks computer bookkeeping program from Office Depot for the
ECDC’s office. Smith later purchased an updated version of QuickBooks because it
was a better product for distribution and warehouse purposes and allowed her to
keep up with inventory more efficiently. Smith had no prior experience with
QuickBooks before she purchased the program for the ECDC, and taught herself to
use the program without help from anyone at TAI. No one from TAI’s California
office ever inquired about the ECDC QuickBooks program, or sent anyone to review
the QuickBooks program or files, while Smith was employed.
{26} Smith’s responsibilities grew to include writing checks for accounts payable,
supplies, and temporary help wages. Smith wrote checks from the TAI bank
account and Hall signed them, although she recalled signing Hall’s name to a few
checks if Hall was out of town and accounts needed to be paid. Smith received no
training or instructions from Hall, C. Vega, or any other employee or representative
of TAI regarding shipping, receiving, bookkeeping, or other duties necessary for the
operation of a warehouse facility. While employed with TAI, Smith entered sales
orders and made financial entries into the QuickBooks program. Andrew Benfield
(“Benfield”) and Linda Ratchford were the only other individuals who entered sales
orders into the system. While Smith was an employee of TAI, no products entered
or left the warehouse without being accounted for and documented in QuickBooks.
{27} During the summer of 2007, Smith entered into QuickBooks all of the data
from the Excel spreadsheet she had been using, and transferred into the computer
program all product sales from the slips of paper she had maintained. Smith also
participated in an inventory of TAI products at the ECDC in October 2007. By that
time, all historical inventory and sales had been entered into the QuickBooks
program. Smith remained in her position until she quit in mid-April 2008.
{28} From April 18 through May 22, 2008, T. Hall served as the interim office
manager for the ECDC until a permanent office manger was hired. T. Hall also
provided occasional assistance and training to Smith, and later Traci Bradley
(“Bradley”) on QuickBooks. To better facilitate the training of TAI employees, in
January 2009, T. Hall was provided an electronic copy of TAI’s QuickBooks. T. Hall
was also given access to the ECDC’s computer and entered or recorded transactions
in both the ECDC’s QuickBooks program and the financial books and records of
Hall’s other businesses.
{29} In fall 2007, Hall hired Benfield to help Moe Neal with shipping and
receiving, unloading trucks, and stocking the ECDC warehouse with “Elite”
products. After a few months in the warehouse, Benfield began processing orders in
the office with Smith. Benfield made entries in QuickBooks, but had no prior
experience with the program. Most of the work Benfield did involved processing
California orders and doing business with “Elite” representatives, although he also
sold retail from the ECDC to customers. At all times, Benfield understood he was
an employee of TAI, but worked under Hall. For day-to-day matters, whenever
Benfield had questions about work, he took them to Smith.
{30} From time to time, Benfield would go over to C.H. & Sons to see Hall about
a question. If Hall was not available, Benfield would email C. Vega or one of his
employees in California. On occasion, Benfield called C. Vega directly with
questions.
{31} After Hall purchased a printer and some presses for the ECDC, Benfield
used the equipment to print and press “Elite” shirts that were sold as TAI products.
In January 2009, Benfield began working with Dewey McKinney (“McKinney”) in
the offices of C.H. & Sons doing printing and graphics work for “Elite” products,
among other things. Benfield understood that McKinney was also an employee of
TAI. Benfield remained an employee of TAI until March 3, 2009.
{32} On April 16, 2008, Hall hired Bradley to replace Smith as the ECDC office
manager. Bradley had a clerical background, but no experience with bookkeeping or
with QuickBooks. Bradley served as the ECDC’s office manager and managed the
company’s books and records, including its QuickBooks accounting software, with
assistance from T. Hall and Melissa Simons (“Simons”). T. Hall assisted with
training Bradley to enter transactions in QuickBooks, maintain inventory records,
prepare invoices for the sale of TAI products, enter invoices from California, pay
bills, maintain the checkbook register in QuickBooks, and do general office work.
{33} Hall hired Simons, a bookkeeper, to help Bradley with the books and
records. Prior to March 3, 2009, Bradley also performed services, and conducted
electronic transactions, for “Jeff Hall Sports Sales Division” and “Jeff Hall Sports”
while an employee of TAI. But Angie Crisp, an employee of C.H. & Sons, worked on
QuickBooks for Jeff Hall Sports. If Bradley had questions about her work, she
would go see Hall, and Hall would call C. Vega for instructions.
{34} Hall hired Defendant Brandon Roberts (“Roberts”) in late August 2008 to
help Bradley. Roberts received compensation as an employee of TAI from
September 2008 through March 3, 2009, although Roberts was never formally
added to TAI’s payroll. Instead, Roberts received a 1099 income tax statement
rather than being paid through TAI’s payroll service as did other employees at the
ECDC.
{35} While a TAI employee, Roberts also performed work for Hall and one or
more of Hall’s business entities (Jeff Hall Sports Sales Division and Jeff Hall
Sports) through March 3, 2009, when C. Vega’s brother, J. Vega, dismissed all TAI
employees from the ECDC. Roberts continued to perform work for Hall after the
closing. Plaintiff presented no credible evidence of the amount of time that Roberts
spent performing work for Hall’s business entities that were unrelated to TAI.
{36} According to Roberts, Jeff Hall Sports Sales Division and Jeff Hall Sports
were entities used by Jeff Hall to facilitate and promote sales of “Elite” sporting
apparel and equipment as well as other non-“Elite” products that Hall was
authorized to sell. Roberts had access to the ECDC computers and recorded or
facilitated entries for both TAI and one or more of the Hall entities in their
respective books and records.
{37} At Hall’s request, McKinney became an employee of TAI on January 2,
2009. At the time, McKinney owned Hawk Textiles, a fabric company that made
military shorts. Before coming to TAI, McKinney had been in the textile business
for many years and provided textile materials to customers who made athletic
uniforms for all types of sports. McKinney was intimately familiar with the
production of custom athletic uniforms, including the design, printing, and
embroidering of uniforms. McKinney had also owned a softball team for which Hall
played one season in 1998.
{38} During times relevant to this action, Defendant Rodney Walker (“Walker”)
worked for Hall and one or more of his entities, providing services related to sales of
sporting apparel and equipment over the internet via E-bay, under the username
“crestchargers13@yahoo.com.” Walker had access to the ECDC’s computers and
conducted or recorded transactions on the books and records of the ECDC and other
Hall entities. Walker attended only the first day of trial and did not testify.
{39} Defendant Caldwell was a part owner in C.H. & Sons and TKL. Although a
counter-claimant with Hall for property seized by TAI on March 3, 2009, Caldwell
acknowledged at trial that he had previously received all of his property from the
ECDC Warehouse.
{40} Hall hired Defendant Shelly A. “Moe” Neal (“Neal”) and Neal received
compensation as an employee of TAI from at least August 27, 2007, through March
3, 2009. Neal worked in TAI’s warehouse in sales and filled orders for shipping.
Neal also performed services for the Bat-R-Up batting cage business that Hall
installed on the premises of the ECDC warehouse. In addition, Neal occasionally
worked for Hall and one or more of Hall’s other business entities while an employee
of TAI. Neal borrowed $800 from TAI to purchase a motorized scooter. The debt
was carried on the ECDC’s books as an advance to Jeff Hall, but was repaid by Neal
via payroll deduction through the TAI payroll account at $50 per pay period until
paid in full. At the time of trial, Neal’s financial obligation to TAI had been fully
satisfied.
{41} Since at least 2006, Defendant Worth, a subsidiary of the Jarden
Corporation, has been a national or international manufacturer and distributor of
sporting goods, including the “Jeff Hall” signature series of softball bats. Worth
employed Defendant Mike Cornell (“Cornell”) as its regional sales representative
between 2006 and 2009, for the territory including Gastonia, North Carolina.
Cornell and Hall were friends during that time. By order dated June 3, 2010, the
Court dismissed all of Plaintiff’s claims against Defendants Worth and Cornell,
without prejudice. Neither Worth nor Cornell participated in the trial.
{42} At its inception, TAI did not provide the ECDC with any office equipment.
Hall provided a Gateway Laptop computer that was later determined to have a copy
of TAI’s QuickBooks program installed on it.
{43} Through C.H. & Sons’ account, Hall purchased two computers, a printer, a
router and office supplies for the ECDC. C.H. & Sons was fully reimbursed by TAI
for these expenditures.
{44} In the January 2008, Hall informed Pat Morrow (“Morrow”), a local
accountant who provided accounting services to C.H. & Sons, that C. Vega had
requested the production of a balance sheet and profit and loss statement for the
ECDC covering the period from March to December 2007 in order to consolidate the
financials for the ECDC with TAI’s financial records. According to Morrow, he
knew from experience what was needed to prepare the documents and did not
receive any input from Hall or Smith.
{45} Morrow was familiar with QuickBooks. He reviewed the QuickBooks
program and information on Smith’s computer, including a QuickBooks report and
balance sheet from TAI. Morrow determined that the ECDC QuickBooks
accounting was not good and contained mistakes and inaccuracies in inventory and
in accounts receivable. Morrow and Hall called C. Vega to communicate this
information, and Morrow expressed to C. Vega his concerns about the records. C.
Vega informed Morrow to contact TAI’s accountant in California – the Baroldi firm
– to work it out. Morrow called Baroldi and discussed with Baroldi the problems he
had identified with the records. Morrow testified that he was told to do the best he
could and send what he had, and that Baroldi would resolve any inventory problems
in California.
{46} Morrow also noted, and informed Jason Bennett at the Baroldi firm, that
the ECDC’s cash flow was insufficient to pay the ECDC warehouse mortgage and
other operating expenses. For the year ending December 31, 2007, the ECDC paid
$47,133.01 from its account for the benefit of Vega Real Estate. Bennett directed
Morrow to remove the mortgage expense from the ECDC balance sheet and Baroldi
would take care of it in California.
{47} With the understanding derived from his discussion with Baroldi, Morrow
made adjustments to sales in the amount of $165,989.32 in order to correct a
corresponding but erroneous characterization of ECDC sales as inventory in the
ECDC QuickBooks program. He also increased inventory by $11,708.00, and made
journal entries, including moving $11,721.54 of inventory to sales and debiting
inventory in the same amount, in order to produce a proper balance sheet and profit
and loss statement for the ECDC. The Court does not find that these adjustments
were made for the purpose of hiding sales as Plaintiff contends.
{48} Morrow also wrote off $47,133.01 in mortgage payments made by the ECDC
for the benefit of Vega Real Estate, as instructed by Jason Bennett, because that
was the amount Vega Real Estate should have been paying to the ECDC.
{49} After producing the balance sheet and profit and loss statement, Morrow
transmitted it to the Baroldi firm in May 2008. According to Morrow, the numbers
on the balance sheet were correct except for inventories because he could not make
sense of inventories. Morrow also suggested to Hall that Hall hire Melissa Simons
to provide QuickBooks training for Smith, and later for Bradley.
{50} For the 2008 ECDC QuickBooks, Morrow began adjusting inventory to zero
at the end of each month because sales did not result in either a reduction in
inventory or a credit to sales in the program. He took this course because the
QuickBooks program was not working correctly, not to hide sales.
{51} Morrow returned to the ECDC in September 2008 and made the same
adjustments that were made in 2007 to bring the inventory balance to zero. Hall
was not aware of what Morrow was doing. Morrow made the entries in the course
of providing professional services to TAI and the ECDC.
{52} In March 2007, Hall purchased polo shirts from Badger Sportswear to
satisfy a TAI sponsorship obligation to USSSA. Hall paid $12,052.80 for the shirts
using his own credit card. In May 2007, USSSA paid $24,023.60 to TAI for the
shirts and Hall caused a check to be issued from the ECDC account in that amount
to Hall. Hall maintains that he spoke with C. Vega about the arrangement and C.
Vega agreed that all the profits from this transaction belonged to Hall because Hall
made all the investment in locating and purchasing the shirts, getting them
embroidered and having them shipped to USSSA. C. Vega contends that he knew
about the sponsorship but did not know there would be profit from the shirts, and
did not agree that Hall would take all the profits. Hall stipulates and agrees that
he owes TAI a total of $3,810.00 ($3,000 for embroidery and $810 for freight) that
TAI paid in connection with the transaction, and that Hall has not reimbursed TAI
in that amount. The Court finds Halls position to be credible and resolves this
conflict in testimony in favor of Hall.
{53} During the summer of 2008, Hall authorized the construction of batting
cages in the ECDC warehouse space. Hall used his construction company to modify
the space to accommodate the cages. C. Vega agreed with constructing the cages so
long as they did not cost him anything, and once construction expenses had been
recovered, TAI and Hall would split the proceeds from the use of the cages. While
Hall derived some income from the use of the cages, Plaintiff’s evidence failed to
demonstrate the specific amount that was collected or whether amounts collected
exceeded construction expenses.
{54} In August 2008, Hall built and paid for a showroom in the ECDC to display
“Elite” and TAI products. Hall also displayed for sale his own personal signature
bats. In addition, Hall added a boxing ring for his brother to use to offer boxing
lessons at the facility.
{55} Hall entered into a sublease with the Lakhanys for space in Parcel A of the
warehouse to operate C.H. & Sons. Hall told the Lakhanys that C. Vega had
authorized the arrangement. The Lakhany’s written lease with Vega Real Estate,
however, did not permit subleasing. C.H. & Sons made significant alterations to
Parcel A by enclosing a stairwell, installing a window and creating second floor
offices to accommodate the construction company. C. Vega admits that Hall was
authorized to use space in Parcel B for the benefit of C.H. & Sons, but that C. Vega
would have objected to Hall subleasing space in Parcel A from the Lakhanys unless
Hall gave him a valid reason for entering the sub-lease. Hall made his lease
payments directly to the Lakhanys.
D.
JEFF HALL SPORTS
{56} Hall talked to Defendant McKinney about business opportunities for the
“Elite” brand and about custom uniforms for TAI. At Hall’s request, in October
2008, McKinney accompanied Hall to visit C. Vega in California. McKinney was
present when Hall and C. Vega discussed starting Jeff Hall Sports Division under
the umbrella of TAI. McKinney was convinced from the conversation between C.
Vega and Hall that C. Vega did not care if there was a “Jeff Hall” line of clothing as
long as C. Vega got a cut of the profits and the clothing had the “Elite” brand on it.
According to McKinney, Hall and C. Vega intended the “Jeff Hall” line to compete
against a company called “Boombah.” During the meeting, C. Vega instructed Hall
to consider hiring McKinney to source fabrics and garments.
{57} When McKinney and Hall returned to Gastonia, Hall offered McKinney
employment with TAI and, with some conditions, McKinney accepted and was an
employee of TAI from January 2009 until March 3, 2009, when J. Vega shut the
doors and evicted all TAI employees from the ECDC. Hall informed McKinney that
Hall and C. Vega were going to try to make custom uniforms, and Hall told the
ECDC employees that McKinney was going to help with the uniforms.
{58} McKinney and Hall had a conversation about the propriety of what Hall
was proposing. McKinney explained to Hall that the only way he could do what he
wanted was as a division of TAI. McKinney understood that Hall would not
compete as a separate company with TAI. With that understanding, McKinney
began working from a conference room on the premises of C.H. & Sons, set up a
computer system to make “Jeff Hall” signature custom uniforms for TAI, and began
ordering basic pants and shirts bearing the “Elite” logo from a company in the
Dominican Republic.
{59} C. Vega wanted a special fabric developed for uniforms to replace the cotton
material he was then using. McKinney arranged for the fabric to be produced in the
Dominican Republic, ordered 1600 yards of the material and traveled to the
Dominican Republic to accept delivery. McKinney returned to Gastonia on March 3,
2009, the day J. Vega shut down the ECDC. Between January 2, 2009, and March
3, 2009, McKinney observed that Hall and C. Vega had daily telephone
conversations with each other.
{60} Hall also formed and incorporated Jeff Hall Sports, Inc. as a North Carolina
Corporation on January 22, 2009, and thereafter purchased equipment with his own
funds to be used in the business. Hall and C. Vega talked about a franchise for
Hall, but the arrangement they settled on was more like a dealer, according to
McKinney. Hall wanted to purchase TAI inventory and sell “Elite” product under
his own name, like a franchise. Because Hall did not have any product inventory of
his own, it was to his advantage to acquire products from TAI at wholesale prices
and resell them at retail under the “Jeff Hall” line. Hall never arranged a franchise
agreement with TAI for the sale or resale of TAI products before the ECDC was
shut down on March 3, 2009.
{61} Hall used TAI employees to process sales of “Elite” merchandise through
Jeff Hall Sports.
E.
EXPERT EVIDENCE
1.
PAUL PRECIADO
{62} Plaintiff called as one of its expert witnesses Mr. Paul Preciado (“Preciado”)
who was tendered and received as a CPA and Certified Fraud Examiner from
California. Preciado conducted a forensic investigation of the year-end copy of
QuickBooks records that Pat Morrow provided to the Baroldi Firm and participated
in an inventory of merchandise at the ECDC warehouse. Based upon his
investigation and analysis, Preciado prepared a final fraud examination report of
Plaintiff’s losses. In Preciado’s opinion, Plaintiff sustained the following losses:
a. Thirty-nine (39) check disbursements to Hall from ECDC’s checking
account that were not approved or authorized by C. Vega in the amount of
$62,504.50;
b. Deposits of TAI funds into a Worth account maintained by Hall in the
amount of $22,047.00;
c. Use of TAI’s resources and client information to sell Worth products and
embezzle TAI inventory in the amount of $54,216.00;
d. Use of TAI assets and employees to promote Hall’s personal business
activities, at an estimated cost of $69,940.00, plus $27,000.00 in back rent
for Bat-R-Up floor space, for a grand total of $96,940.00
e. Missing, removed, or understated inventory from 2007 through 2009, in
the amount of $858,481.00.
TOTAL LOSSES: $1,094,188.50.
{63} In Preciado’s expert opinion, the willful misappropriation of TAI’s assets,
willful manipulation of TAI’s computer system, willful manipulation of TAI’s sales
transactions, and willful provision of misleading financial information to TAI’s
management constituted fraud.
{64} Preciado was introduced to C. Vega by Vince Baroldi, Plaintiff’s bookkeeper,
and was asked to meet J. Vega in Gastonia on March 8, 2009, to assist with an
inventory of TAI merchandise at the ECDC. Preciado had available to him at that
time a year-end copy of the ECDC QuickBooks records that Morrow provided to
Baroldi after Morrow’s year-end evaluation. The Court noted above the
adjustments made by Morrow to the ECDC QuickBooks records that were
forwarded to the Baroldi firm. Preciado used this version of QuickBooks to develop
and confirm his opinion of loss amounts, including lost revenue from inventory
pilferage and theft by Defendants in the amount of $497,898.00.
{65} With respect to loss item #1 above – 39 unauthorized checks – Preciado
acknowledges and agrees that if Hall and C. Vega had an agreement that the
checks would or could be issued, his loss computation of $62,504.50 would become
zero.
{66} With respect to his allocation of employee expenses to Hall, Preciado
acknowledges that $69,940.00 was merely an estimate and that he could not be
precise about the amount without knowing the actual time the TAI employees spent
on Hall’s personal business interests. No evidence of the actual time TAI
employees spent on Hall’s unrelated business interests was presented during trial.
And, the estimated back-rent attributed to Bat-R-Up is premised on Preciado’s
belief that C. Vega did not authorize Hall to install, and was unaware of the
presence of, batting cages on the ECDC premises.
{67} The Court further notes that: (i) J. Vega informed Preciado that no one
could give away or receive at no cost TAI products, including promotional items: (ii)
Preciado was unaware that Jeff Hall was authorized to have and wear TAI
promotional items at no charge to Hall, and for the foregoing reasons, Preciado held
Hall accountable for all promotional items given away at no charge; (iii) Preciado
was unaware that Jeff Hall or C.H. & Sons had an account with Worth to sell bats;
(iv) Preciado was unaware of any oral agreement between C. Vega and Hall
regarding the sale of bats; (v) Hall did not make entries in the ECDC QuickBooks
after Smith began as office manager in March 2007; (vi) it was Preciado’s
understanding that Morrow had made no “hard-coded” adjustments to the
QuickBooks that Preciado used to arrive at his conclusions and opinions,
notwithstanding the fact that the Baroldi firm had previously informed C. Vega
about the “massive journal entries” that appeared in the QuickBooks records sent to
Baroldi by Pat Morrow, and Baroldi wanted to know if the entries were authorized.
C. Vega told him they were not; and (vii) that $497,898.00 attributed to losses from
inventory irregularities are based upon profits TAI would have earned but for
pilferage of inventory attributed to Defendants, and not from actual costs of goods
to Hall.
{68} It appears to the Court that Preciado’s report outlining the fraudulent and
unlawful conduct of the Hall Defendants contains largely conclusive findings, and is
based upon a significant lack of information about the relationship between C. Vega
and Hall, and the journal entries made in the ECDC QuickBooks by Morrow.
{69} From Preciado’s analysis and report, the Court is unable to determine with
reasonable certainty what amounts of damages, if any, are reasonably attributable
to the individual defendants.
2.
EDWARD P. BOWERS
{70} In addition to Preciado, Plaintiff offered the expert opinion of Edward P.
Bowers (“Bowers”), a Certified Public Accountant, who is also certified in forensic
accounting. Bowers was hired by Plaintiff to review the books and records of
Plaintiff and the books and records of Defendants for the purpose of supplementing
the report of Preciado. Among the many records that Bowers examined were the
QuickBooks electronic data files for Jeff Hall Sports Sales Division.
{71} In Bowers’ opinion, Plaintiff incurred the following losses:
a. $53,199.00 from the sale of Plaintiff inventory by Jeff Hall d/b/a Jeff Hall
Sports Division,
b. $2,873.00 from the shipment of Plaintiff inventory sold by Jeff Hall d/b/a Jeff
Hall Sports Division,
c. $51,678.00 from the sale and transfer of Plaintiff inventory to Jeffrey Hall
and related parties, excluding Jeff Hall d/b/a Jeff Hall Sports Division, at less
than value,
d. $8,397.00 from the sale and transfer of Plaintiff inventory to John Daniels
a/k/a WSL, a/k/a WSL-World Softball League, a/k/a Long Haul Trucking,
a/k/a WSL-Ebay at less than value,
e. $13,242.00 from the unauthorized transfer of Plaintiff funds to Jeffrey Hall.
f. $96,940.00 from the Defendants use of Plaintiff’s employees and facilities,
and
g. $497,898.00 from the loss of inventory.
TOTAL LOSSES: $728,688.00
Bowers’ opinion regarding the losses associated with Hall’s use of Plaintiff’s
employees and facilities, and with loss of inventory, is based upon the Fraud
Examination Report of Preciado.
{72} The conclusions drawn by Bowers suffer from the same infirmities as those
drawn by Preciado, i.e., his loss calculation is predicated on the assumption that
there was no understanding between C. Vega and Hall by which Hall was
authorized to give away TAI products for promotional purposes, utilize TAI
employees and facilities, and resell TAI products via Jeff Hall Sales Division.
3.
KEVIN WALKER
{73} Defendant Hall called as his expert witness Mr. Kevin Walker, CPA and
Certified Fraud Examiner (“Walker”). Walker based his opinion of losses upon the
assumption that there existed an understanding between C. Vega and Hall that
Hall was authorized to give away TAI products for promotional purposes, utilize
TAI employees and facilities, and resell TAI products via Jeff Hall Sales Division.
{74} Based upon Walker’s analysis, TAI suffered losses, but not for the reasons
asserted by Plaintiff, as follows:
a. $11,730.00 from the sale of TAI Inventory by Jeff Hall Sports, Sales Division.
This loss was premised upon unsatisfied payables related to products
purchased by Jeff Hall Sports from TAI that were accounted for in the ECDC
QuickBooks.
b. $2,210.00 related to freight costs associated with Jeff Hall Sports
transactions that were not paid by either TAI or Jeff Hall Sports, Sales
Division.
c. $0 from the sale and or transfer of TAI inventory to Jeff Hall and related
parties,
d. $0 from the sale and transfer of TAI inventory to WSL and related parties,
and,
e. $4,461.00 from the unauthorized transfer of TAI funds to Hall. This amount
was predicated upon a USSSA transaction involving non-TAI shirts that Hall
obtained from Badger, Inc. and paid for himself. Hall acknowledged that he
owed TAI $3,000.00 as reimbursement for embroidery applied to the shirts
and freight costs in the amount of $810.00. From his review of the records,
Walker determined that Hall owed an additional amount of $651.00 from the
sale of 20 pairs of “Elite” brand pants.
TOTAL LOSS: $18,401.00.
{75} The Court finds Walker’s analysis persuasive and adopts his assessment of
Plaintiff’s damages.
III.
CONCLUSIONS OF LAW
A.
PRELIMINARY AND PERMANENT INJUNCTION
{76} In its Complaint, Plaintiff asked the Court to issue a preliminary injunction
to prevent Defendants from “further depleting or using TAI’s resources for their
personal use or the use of Defendant Hall and his various entities and aliases.”
(Am. Compl. ¶ 48.) Plaintiff also requested that at trial, a permanent injunction be
issued to permanently enjoin the Defendants from selling, removing, or otherwise
harming assets or property of TAI.
{77} By order issued on June 29, 2009, the Hon. Albert Diaz, Special Superior
Court Judge for Complex Business Cases, denied Plaintiff’s Motion for Preliminary
Injunction and for the Appointment of a Receiver, finding, inter alia, that Plaintiff
had not demonstrated irreparable harm. TAI Sports, Inc., No. 09 CVS 2201 (N.C.
Super. Ct. June 25, 2009) (order denying Plaintiff’s motion for preliminary
injunction).
{78} The case proceeded to trial and the Court heard eight weeks of evidence
from the parties, including testimony that on March 3, 2009, J. Vega came to
Gastonia, removed all ECDC employees from the work premises and took physical
possession of the business and most, if not all, of its records. Defendants were not
permitted to return to the premises or access any of TAI’s business records or
accounts thereafter.
{79} “It is well-settled law that where there is an adequate remedy at law,, an
injunction will not lie. This principle is applicable to all cases in which the
complaining party can have adequate relief by the prosecution of his remedy in the
courts . . . .” Lewis v. Goodman, 14 N.C. App. 582, 583, 188 S.E.2d 709, 710 (1972).
Having already denied Plaintiff’s motion for preliminary injunction, the only
remaining question is whether Plaintiff is entitled to a permanent injunction. The
Court concludes that after having had a full opportunity to prosecute its legal
claims before this Court, Plaintiff has not presented any evidence to support its
contention that a permanent injunction is warranted as a matter of law.
Accordingly, Plaintiff’s request for permanent injunctive relief is DENIED.
B.
DECLARATORY JUDGMENT
{80} “‘The Declaratory Judgment Act[] affords an appropriate procedure for
alleviating uncertainty in the interpretation of written instruments and for
clarifying litigation.’” Lynn v. Lynn, 202 N.C. App. 423, 430, 689 S.E.2d 198, 204,
review denied, 364 N.C. 613, 705 S.E.2d 736 (2010) (quoting Hejl v. Hood, Hargett
& Associates, Inc., 196 N.C. App. 299, 302, 674 S.E.2d 425, 427 (2009)). “Courts of
record . . . shall have power to declare rights, status, and other legal relations . . .
[,]” N.C. Gen. Stat. § 1-253 (2011), at their discretion. Id. at § 1-257; see also Augur
v. Augur, 356 N.C. 582, 585–87, 573 S.E.2d 125, 128–30 (2002) (adopting the abuse
of discretion standard when reviewing a trial court’s decision to decline a party’s
request for declaratory relief).
{81} A court should issue a declaratory judgment: “‘(1) when [it] will serve a
useful purpose in clarifying and settling the legal relations at issue, and (2) when it
will terminate and afford relief from the uncertainty, insecurity and controversy
giving rise to the proceeding. When these criteria are not met, no declaratory
judgment should issue.’” Calabria v. N. Carolina State Bd. of Elections, 198 N.C.
App. 550, 554, 680 S.E.2d 738, 743 (2009) (quoting Augur, 356 N.C. at 588, 573
S.E.2d at 130) (alteration in original). Here, the resolution of Plaintiff’s remaining
claims by the entry of this Order obviates the need for the Court to further consider
Plaintiff’s claim for declaratory relief. Accordingly, Plaintiff’s request for
declaratory relief is DENIED.
C.
BREACH OF CONTRACT
{82} In its Complaint, Plaintiff alleged that Defendants breached an “oral and/or
implied agreement with TAI, as well as [] numerous written contracts for the
delivery and sale of goods to TAI’s customers or potential customers.” (Am. Compl.
¶ 65.)
{83} First, the Court finds that Plaintiff has failed to present credible evidence of
the existence of an oral or implied agreement between any of the individual
Defendants, other than perhaps Hall, to do anything beyond what is customary in a
typical employer/employee relationship. Hall hired the individual Defendants to
work as employees of the ECDC. The only agreement between the individual
defendants and TAI were incidental to their employment relationship: each
defendant agreed to work for TAI and TAI agreed to pay each defendant for their
labors. Plaintiff does not allege that the individual Defendants failed to work for
the wages they received as employees of the ECDC.
{84} Second, the alleged written contracts for the delivery and sale of goods to
TAI’s customers or potential customers were sales via invoices between TAI and its
customers. If those invoices were in fact determined to be contracts, any claim of
breach of contract for failure to deliver the ordered goods, would belong to the
customer, not TAI.
{85} Lastly, C. Vega acknowledged during his trial testimony that, initially, Hall
was not hired as an employee of TAI or the ECDC because C. Vega could not afford
to pay Hall a salary. C. Vega contends that instead of becoming an employee, Hall
agreed to operate and manage the ECDC in exchange for free TAI products to wear
while promoting TAI, and the promise that TAI would bring Hall on as a full-time
employee when C. Vega could afford to pay Hall a salary comparable to Hall’s
earnings from C.H. & Sons. According to C. Vega, this arrangement constituted the
basis of the parties’ agreement even though no specific duties were discussed for
Hall as the manager of the ECDC.
{86} Hall, however, denies that he ever worked for TAI, received a salary from
Plaintiff, or served as President of the ECDC. Hall asserts that he agreed to help C.
Vega get TAI’s sporting goods business underway on the east coast as a favor to C.
Vega and that the only arrangement between the two was that in return for Hall
allowing C. Vega to capitalize on Hall’s popularity and name in the slow pitch
softball profession, TAI would provide Hall with various products free of charge and
allow Hall to sell Worth products through the ECDC. The parties never reduced any
of their alleged agreements or understandings to writing.
{87} To establish a breach of contract, a plaintiff must demonstrate: “(1)
existence of a valid contract and (2) breach of that contract.” Poor v. Hill, 138 N.C.
App. 19, 26, 530 S.E.2d 838, 843 (2000) (citing Jackson v. California Hardwood Co.,
120 N.C. App. 870, 871, 463 S.E.2d 571, 572 (1995)). A valid contract consists of a
meeting of the minds and consideration. Creech v. Melnik, 347 N.C. 520, 527, 495
S.E.2d 907, 912 (1998). A meeting of the minds is established by mutual assent;
substantiated “by an offer by one party and an acceptance by the other.” Id. (citing
Snyder v. Freeman, 300 N.C. 204, 218, 266 S.E.2d 593, 602 (1980)). “Consideration
‘consists of any benefit, right, or interest bestowed upon the promisor, or any
forbearance, detriment, or loss undertaken by the promisee.’” Sessler v. Marsh, 144
N.C. App. 623, 634, 551 S.E.2d 160, 167, writ denied, review denied, 354 N.C. 365,
556 S.E.2d 577 (2001) (quoting Lee v. Paragon Group Contractors, Inc., 78 N.C.
App. 334, 338, 337 S.E.2d 132, 134 (1985)). “A breach of contract occurs when a
party fails to perform a contractual duty that has become [due].” Salvaggio v. New
Breed Transfer Corp., 150 N.C. App. 688, 692, 564 S.E.2d 641, 644 (2002) (citing
Millis Construction Co. v. Fairfield Sapphire Valley, Inc., 86 N.C. App. 506, 510, 358
S.E.2d 566, 569 (1987)).
{88} Based upon the evidence presented at trial, the Court concludes that
Plaintiff has failed to show a meeting of the minds on any essential aspect of
Plaintiff and Hall’s business relationship sufficient for the Court to find the
existence of a mutual understanding between those parties. Therefore, the Court
concludes that a valid contract did not exist between Plaintiff and Hall, and as a
result no breach could have occurred. Accordingly, the Court DENIES Plaintiff
relief on its claim for breach of contract, as to Hall. The Court also concludes that
the only contract between Plaintiff and the remaining Defendants would be based
on their employer/employee relationship, and that Plaintiff did not prove by a
preponderance of the evidence that any of the Defendants breached their
employment contracts with Plaintiff. Therefore, the Court DENIES Plaintiff relief
on this claim as to the remaining Defendants.
D.
FRAUD
{89} Establishing fraud requires a plaintiff to prove that the defendant made a
“‘(1) False representation or concealment of a material fact, (2) reasonably
calculated to deceive, (3) made with intent to deceive, (4) which d[id] in fact deceive,
(5) resulting in damage to the injured party.’” S.N.R. Mgmt. Corp. v. Danube
Partners 141, LLC, 189 N.C. App. 601, 609, 659 S.E.2d 442, 449 (2008) (quoting
McGahren v. Saenger, 118 N.C. App. 649, 654, 456 S.E.2d 852, 855 (1995)).
{90} While Plaintiff’s fraud claim is directed at each of the defendants, Plaintiff’s
only allege that Defendant Hall made specific misrepresentations or concealments.
(Am. Compl. ¶ 69(a–n).) Plaintiff’s evidence to support this claim was gleaned
principally from the financial books and records of the ECDC.
{91} The facts of this case demonstrate that Hall sought the involvement of a
disinterested CPA to review the ECDC QuickBooks records for the purpose of
preparing and submitting to TAI’s California office a financial statement to be used
in preparing TAI’s 2007 and 2008 year-end tax returns. From Plaintiff’s experts’
review of the ECDC QuickBooks, and from the testimony of Plaintiff’s employees,
entries were consistently made in the ECDC QuickBooks records for all
transactions, including those between the ECDC and Jeff Hall Sports. Plaintiff’s
evidence fails to satisfy the Court that Defendants fraudulently transferred any of
Plaintiff’s assets to third parties, intentionally sought to conceal material facts or
transactions from Plaintiff, or made material misrepresentations to Plaintiff upon
which Plaintiff relied, or from which, upon reasonable inspection of the records,
Plaintiff could not have discovered the truth.
{92} The Court notes that none of the employees of the ECDC, including Hall,
had much, if any, familiarity with QuickBooks before becoming employees of TAI,
and as a result, record keeping errors were likely to occur. The fact of the matter is
that Plaintiff provided little, if any, training to the ECDC employees in QuickBooks
management, warehouse management, or the normal business practices, policies
and procedures of TAI. Plaintiff also failed to provide proper supervision of those
employees to ensure compliance with its practices, policies, and procedures. All of
those functions were left to the discretion of Defendant Hall, a soft-ball player and
construction company owner.
{93} Further, without direction from any of the named Defendants, Pat Morrow
made adjustments in inventory and journal entries for the purpose of producing a
balance sheet and profit and loss statement that significantly impacted the
information contained in the ECDC QuickBooks accounting records. And, even with
those adjustments, Mr. Morrow noted the system failed to accurately reflect
inventories of the ECDC.
{94} The Court concludes that Plaintiff has failed to show that a fraudulent
misrepresentation or concealment of material fact was made, or that any of the
Defendants made any representations with the intent to deceive. The Court
therefore DENIES Plaintiff relief on its claim for fraud.
E.
BREACH OF FIDUCIARY DUTY
1.
FIDUCIARY UMBRELLA
{95} “‘For a breach of fiduciary duty to exist, there must first be a fiduciary
relationship between the parties.’” Variety Wholesalers, Inc. v. Salem Logistics
Traffic Servs., LLC, 723 S.E.2d 744 (N.C. 2012) (quoting Dalton v. Camp, 353 N.C.
647, 651, 548 S.E.2d 704, 707 (2001)). North Carolina courts have retained
flexibility in imposing fiduciary duties where factually justified by declining to
adopt an exact definition. See Hajmm Co. v. House of Raeford Farms, Inc., 328 N.C.
578, 588, 403 S.E.2d 483, 489 (1991) (citing Abbitt v. Gregory, 201 N.C. 577, 598,
160 S.E. 896, 906 (1931)). Our Supreme Court in Dalton v. Camp, outlined a
fiduciary relationship as one in which
‘there has been a special confidence reposed in one who in equity and
good conscience is bound to act in good faith and with due regard to the
interests of the one reposing confidence . . . , [and] it extends to any
possible case in which a fiduciary relationship exists in fact, and in
which there is confidence reposed on one side, and resulting
domination and influence on the other.’
Dalton, 353 N.C. at 651–52, 548 S.E.2d at 707–08 (quoting Abbitt, 201 N.C. at 598,
160 S.E. at 906).
2.
BUSINESS PARTNER/CO-ADVENTURER
{96} Business partners owe each other a fiduciary duty as a matter of law.
Hajmm Co., 328 N.C. at 588, 403 S.E.2d at 489 (citing Casey v. Grantham, 239 N.C.
121, 79 S.E.2d 735 (1954)). A partnership can only be formed by an agreement.
Potter v. Homestead Pres. Ass’n, 330 N.C. 569, 576, 412 S.E.2d 1, 5 (1992). The
agreement need not be express, and may be implied “upon a rational consideration
of the acts and declarations of the parties, warranting the inference that the parties
understood that they were partners and acted as such.” Eggleston v. Eggleston, 228
N.C. 668, 674, 47 S.E.2d 243, 247 (1948) (citations omitted). The “hallmark of a
partnership is the sharing of ‘any profits, income, expenses, joint business property
or hav[ing] authority of any kind over each other.’” Azalea Garden Bd. & Care Inc.
v. Vanhoy, 2009 NCBC 8 ¶ 15 (N.C. Super. Ct. March 17, 2009),
http://www.ncbusinesscourt.net/opinions/2009_NCBC_9.pdf (quotingWilder v.
Hobson, 101 N.C. App. 199, 203, 398 S.E.2d 625, 628 (1990)).
{97} There is no credible evidence before the Court that Defendant Hall and C.
Vega agreed to share the profits, income, or expenses of TAI or the ECDC. Hall and
C. Vega shared no joint business property, and by their behavior, neither appeared
to have any authority over the other. Interpreted in a light most favorable to C.
Vega, at best the relationship between Plaintiff and Hall might be characterized as
one of joint venturers.
{98} A joint venture is essentially a partnership that is limited to a single
endeavor or purpose, compare Rhue v. Rhue, 189 N.C. App. 299, 308, 658 S.E.2d 52,
59–60 (2008), with Jones v. Shoji, 336 N.C. 581, 585, 444 S.E.2d 203, 205 (1994).
But, while partnerships and joint ventures are distinct relationships, under North
Carolina law, “‘they are governed by substantially the same rules.’” Jones, 336 N.C.
at 585, 444 S.E.2d at 203 (quoting Pike v. Trust Co., 274 N.C. 1, 9, 161 S.E.2d 453,
460 (1968)).
{99} For the same reasons set out above, the Court does not find that any of
the indicia of a joint venture existed between TAI and Hall. In addition, the
individual defendants were merely employees of Plaintiff and, therefore, are not
partners of, or joint venturers with, Plaintiff.
3.
OFFICER IN A CORPORATION
{100} Officers of a corporation owe a fiduciary duty to the corporation. Pierce
Concrete, Inc. v. Cannon Realty & Constr. Co., 77 N.C. App. 411, 413–14, 335
S.E.2d 30, 31 (1985) (citing Meiselman v. Meiselman, 309 N.C. 279, 307 S.E.2d 551
(1985)). An officer of a corporation “with discretionary authority” must
discharge his duties in good faith, conform to a reasonable standard of
care, and act in a manner he reasonably believes is in the best
interests of the corporation . . . . Additionally, in North Carolina, an
individual may owe a fiduciary duty to the corporation if he is
considered to be a de facto officer or director, with authority for tasks
such as signing tax returns, offering major input as to the company’s . .
. operation, or managing the company.
Kinesis Adver., Inc. v. Hill, 187 N.C. App. 1, 15–16, 652 S.E.2d 284, 295 (2007)
(internal citations omitted) (emphasis in original).
{101} There is ample evidence in the record from which the Court could
conclude that Defendant Hall served as a de facto officer of Plaintiff. Hall managed
the ECDC, he had authority to hire and fire employees, he signed checks for the
company, he authorized and made purchases on behalf of the ECDC, he had and
exercised discretionary authority over how much and to whom promotional products
were made available. As such, Hall was obligated to discharge his duties in good
faith and conform his actions to a reasonable standard of care. Hall contends that
his actions and decisions were done with the full knowledge, authorization, and
consent of C. Vega. While Hall and Vega disagree about the scope and extent of
Hall’s discretionary authority to act on behalf of Plaintiff’s ECDC operation, the
Court finds that Hall acted in what he reasonably believed to be the best interests
of the ECDC, and therefore did not breach the duty of care owed to Plaintiff.
4.
EMPLOYEE RELATIONSHIP
{102} North Carolina courts have repeatedly held that “the broad parameters
accorded the term [fiduciary duty] have been specifically limited in the context of
employment situations[,] and [u]nder the general rule, ‘the relation of employer and
employee is not one of those regarded as confidential.’” Dalton, 353 N.C. at 652, 548
S.E.2d at 708 (quoting King v. Atlantic Coast Line R.R. Co., 157 N.C. 44, 72 S.E.
801 (1911)). “Even when an employee is entrusted with substantial managerial
authority, a fiduciary relationship will not exist absent evidence that such authority
led . . . the employer [to become] subjugated to the ‘improper influences or
domination of [its] employee.’” Battleground Veterinary Hosp., P.C. v. McGeough,
2007 NCBC 33 (N.C. Super. Oct. 19, 2007), http://www.ncbusinesscourt.net/
opinions/ 101907 %20Order%20Webpage.pdf.
{103} As previously noted, the individual defendants were merely employees of
TAI. The Court does not find that they exercised any domination or influence over
the Plaintiff, and therefore the Court concludes that no fiduciary relationship
existed in the employment relationship between Plaintiff and the individual
defendants, with the exception of Hall. As to Hall, the Court concludes that Hall
acted in what he believed to be the best interests of Plaintiff and therefore did not
breach his duty to Plaintiff. Accordingly, the Court DENIES Plaintiff relief as to
this claim.
F.
CONSTRUCTIVE TRUST IN FAVOR OF PLAINTIFF
{104} A constructive trust is “‘imposed by courts . . . to prevent the unjust
enrichment of the holder of title to, or of an interest in, property which [was]
acquired through fraud, breach of duty or some other circumstance making it
inequitable for him to retain it against the claim of the beneficiary of the
constructive trust.’” United Carolina Bank v. Brogan, 155 N.C. App. 633, 636, 574
S.E.2d 112, 115 (2002). “A constructive trust does not arise where there is no
fiduciary relationship and there is an adequate remedy at law.” Security Nat’l Bank
v. Educators Mut. Life Ins. Co., 265 N.C. 86, 95, 143 S.E.2d 270, 276 (1965) (citing
Atkinson v. Atkinson, 225 N.C. 120, 33 S.E.2d 666 (1945)).
{105} To recover through the imposition of a constructive trust, there must be
facts and circumstances: “(1) which created the relation of trust and confidence, and
(2) [which] led up to and surrounded the consummation of the transaction in which
defendant is alleged to have taken advantage of his position of trust to the hurt of
plaintiff.” Terry v. Terry, 302 N.C. 77, 85, 273 S.E.2d 647, 679 (1981) (quoting
Rhodes v. Jones, 232 N.C. 547, 61 S.E. 2d 725 (1950)) (alteration in original).
{106} Having previously determined that no fiduciary relationship existed
between Plaintiff and the individual employee-defendants, the Court also concludes
that there was no relationship of trust or confidence between Plaintiff and the
individual Defendants.
{107} Having concluded that Plaintiff had an adequate remedy of fraud against
Hall, but that Hall acted in what he reasonably believed to be in the best interest of
the ECDC, and therefore did not breach his fiduciary duty to Plaintiff or otherwise
engage in fraudulent behavior with respect to Plaintiff, the Court DENIES Plaintiff
relief as to this claim.
G.
CONVERSION OF CHATTEL
{108} “‘The tort of conversion is an unauthorized assumption and exercise of the
right of ownership over goods or personal chattels belonging to another, to the
alteration of their condition or the exclusion of an owner’s rights.’” Lake Mary L.P.
v. Johnston, 145 N.C. App. 525, 531, 551 S.E.2d 546, 552, rev. denied, 354 N.C. 363,
557 S.E.2d 539 (2001) (quoting Peed v. Burleson’s, Inc., 244 N.C. 437, 439, 94
S.E.2d 351, 353 (1956)). At its core, conversion “is not the acquisition of property by
the wrongdoer, but a wrongful deprivation of it to the owner . . . .” Id. at 532, 551
S.E.2d at 552.
{109} If the deprivation occurs through a wrongful taking, the act of
dispossession establishes a conversion, Porter v. Alexander, 195 N.C. 5, 7, 141 S.E.
343, 344 (1928), however, “‘Where there has been no wrongful taking or disposal of
the goods, and the defendant has merely come rightfully into possession and then
refused to surrender them, demand and refusal are necessary to the existence of the
tort.’” White v. Consol. Planning, Inc., 166 N.C. App. 283, 310–11, 603 S.E.2d 147,
165 (2004), cert. denied, 359 N.C. 286, 610 S.E.2d 717 (2005). “Therefore, two
essential elements are necessary in a claim for conversion: (1) ownership in the
plaintiff, and (2) a wrongful deprivation by the defendant.” Bartlett Milling Co.,
L.P. v. Walnut Grove Auction & Realty Co., Inc., 192 N.C. App. 74, 86, 665 S.E.2d
478, 489, cert. denied, 362 N.C. 679, 669 S.E.2d 741 (2008) (citing Lake Mary Ltd.
P’ship., 145 N.C. App. at 532, 551 S.E.2d at 552).
{110} The uncontroverted evidence before the Court is that Defendants lawfully
came into possession of the property at issue in this lawsuit. There is no evidence
that Defendants wrongfully dispossessed Plaintiff of its property, but rather
Plaintiff alleged that Defendants exercised the “right of control over . . . personal
property belonging to Plaintiff by Defendants’ unauthorized exclusion of Plaintiff
from exercising their rights of ownership over their own property . . . .” (Am.
Compl. ¶ 81.) Plaintiff does not allege that Defendants came into possession of the
property unlawfully. As such, Plaintiff must also have alleged and proved at trial
that Plaintiff made a demand on the Defendants and that Defendants refused to
return the disputed property. There being neither allegation nor proof of demand
by Plaintiff, and refusal by Defendants, to return property belonging to Plaintiff,
Plaintiff’s claim for conversion fails as a matter of law. Accordingly, the Court
DENIES Plaintiff relief as to this claim.
H.
UNFAIR AND DECEPTIVE TRADE PRACTICES
{111} The Unfair and Deceptive Trade Practices Act is a distinct and
independent claim “directed toward maintaining ethical standards in dealings
between persons engaged in business and to promote good faith at all levels of
commerce.” Bhatti v. Buckland, 328 N.C. 240, 246, 400 S.E.2d 440, 444 (1991)
(citing United Roasters, Inc. v. Colgate-Palmolive Co., 485 F. Supp. 1041, 1046
(E.D.N.C. 1979)) (emphasis in original). “To prevail on a claim of unfair and
deceptive trade practice 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.” Spartan
Leasing Inc. v. Pollard, 101 N.C. App. 450, 460–61, 400 S.E.2d 476, 482 (1991)
(citing N.C. GEN. STAT. §§ 75-1.1, 75-16). “A practice is unfair when it offends
established public policy, as well as when the practice is immoral, unethical,
oppressive, unscrupulous, or substantially injurious to consumers,” Mitchell v.
Linville, 149 N.C. App. 71, 74, 557 S.E.2d 620, 623 (2001) (quoting Johnson v.
Phoenix Mut. Ins., 300 N.C. 247, 263, 266 S.E.2d 610, 621 (1980)).
{112} “Whether an act or practice is unfair is determined on a case-by-case
basis, and the fair or unfair nature of particular conduct is to be judged by viewing
it against the background of actual human experience and by determining its
intended and actual effects upon others.” Sunbelt Rentals, Inc. v. Head & Engquest
Equip., LLC, 2003 NCBC 4 ¶ 264 (N.C. Super. Ct. May 2, 2003) http://www.nc
businesscourt.net/opinions/2003%20NCBC%204.htm (citations omitted). “A trade
practice is deceptive if it ‘has the capacity or tendency to deceive.’” Branch Banking
& Trust Co. v. Thompson, 107 N.C. App. 53, 61–62, 418 S.E.2d 694, 700 (1992)
(internal quotations omitted). Whether a particular commercial act or practice
constitutes an unfair or deceptive trade practice is a question of law. Norman Owen
Trucking, Inc. v. Morkoski, 131 N.C. App. 168, 177, 506 S.E.2d 267, 273 (1998).
{113} A finding of liability on certain other causes of action, however, may
constitute an unfair and deceptive trade practice as a matter of law so long as the
offending conduct occurred in or affecting commerce. See Bhatti, 328 N.C. at 243,
400 S.E.2d at 442 (holding that fraud constitutes a per se violation of the UDTPA).
{114} As a general rule
there is a presumption against unfair and deceptive practice claims as
between employers and employees. Ordinarily, in such a context, the
claimant must make a showing of business related conduct that is
unlawful or of deceptive acts that affect commerce beyond the
employment relationship. The rationale behind this general rule is
that pure employer-employee disputes are not sufficiently ‘in or
affecting commerce’ to satisfy the second element of a UDTPA claim.
Gress v. Rowboat Co., 190 N.C. App. 773, 776–77, 661 S.E.2d 278, 281–82 (2008)
(internal citations omitted).
{115} Given the Court’s conclusion that the relationship between Plaintiff and
the individual-employee Defendants was nothing more than that of employer and
employee, Plaintiff has failed to satisfy the second element of a UDTPA claim
against Traci Hall, Brandon Roberts, Traci Bradley, Dewey McKinney and Shelly
“Moe” Neal. As for Hall, the Court concludes that Plaintiff has failed to prove by
the greater weight of the evidence that Hall himself engaged in any fraudulent,
unfair, deceptive, or unlawful acts. As such, Plaintiff is not entitled to relief as to
this claim.
I.
UNJUST ENRICHMENT
{116} Unjust enrichment has been defined as “a legal term characterizing the
‘result or effect of a failure to make restitution of, or for, property or benefits
received under such circumstances as to give rise to a legal or equitable obligation
to account therefor.’” Carcano v. JBSS, LLC, 200 N.C. App. 162, 179, 684 S.E.2d 41,
54 (2009) (quoting Ivey v. Williams, 74 N.C. App. 532, 534, 328 S.E.2d 837, 838–39
(1985)) (internal citation omitted).
{117} A claim for unjust enrichment is an equitable claim based on “quasi-
contract” or a contract “implied in law,” Atlantic and East Carolina Ry. Co. v.
Wheatley Oil Co., 163 N.C. App. 748, 753, 594 S.E.2d 425, 429 (2004), “to exact the
return of, or payment for, benefits received under circumstances where it would be
unfair for the recipient to retain them without the contributor being repaid or
compensated.” Collins v. Davis, 68 N.C. App. 588, 591, 315 S.E.2d 759, 761 (1984).
A court cannot imply a contract where an express agreement exists. Whitfield v.
Gilchrist, 348 N.C. 39, 42, 497 S.E.2d 412, 415 (1998). Therefore, “[i]f there is a
contract between the parties[,] the contract governs the claim and the law will not
imply a contract.” Booe v. Shadrick, 322 N.C. 567, 570, 369 S.E.2d 554, 556 (1988)
(citing Concrete Co. v. Lumber Co., 256 N.C. 709, 713–14, 124 S.E.2d 905, 908
(1962)).
{118} In order to recover on a claim for unjust enrichment, the evidence must
show “(1) plaintiff conferred a measurable benefit to the defendant, (2) the
defendant consciously accepted the benefit, and (3) the benefit was not conferred
gratuitously or by an interference in the affairs of the defendant.” S.E. Shelter
Corp. v. BTU, Inc., 154 N.C. App. 321, 330, 572 S.E.2d 200, 206 (2002). A key
element is that a benefit inure to the defendant. “Without enrichment, there can be
no ‘unjust enrichment’ and therefore no recovery on an implied contract.” Greeson
v. Byrd, 54 N.C. App. 681, 683, 284 S.E.2d 195, 196 (1995).
{119} As discussed above, Defendant Hall admits, and Defendants’ expert
confirms, that the following amounts are due Plaintiff: (a) $11,730.00 from the sale
of TAI Inventory by Jeff Hall Sports, Sales Division; (b) $2,210.00 related to freight
costs associated with Jeff Hall Sports transactions that were not paid by either TAI
or Jeff Hall Sports, Sales Division; and (c) $4,461.00 from the unauthorized transfer
of TAI funds to Jeffrey Hall for shirt embroidery, freight costs, and merchandise
sales. Having found above that the evidence presented by Defendants’ expert
provided the only credible measure of loss suffered by TAI, the Court concludes that
these amounts were not gratuitously conferred upon Hall and as a result, the total
loss of $18.401.00 should be reimbursed to TAI by Hall.
J.
QUANTUM MERUIT FOR RENT ON IMPLIED LEASE
{120} Plaintiff has asserted claims against Defendants “for the reasonable value
of the rent of Plaintiff’s premises [at the ECDC], including the use of its building,
grounds, equipment, goods, inventory, or services appurtenances and
improvements, from early 2007 through March 2, 2009,” upon the theory that
Defendants knew or had reason to know that TAI expected to be paid. (Am. Compl.
¶¶ 98, 100). “Quantum meruit is an equitable principle that allows recovery for
services based upon an implied contract.” Harrell v. Constr. Co., 41 N.C. App. 593,
595, 255 S.E.2d 280, 281 (1979). A court cannot imply a contract where an express
agreement exists. Whitfield, 348 N.C. at 42, 497 S.E.2d at 415.
{121} In North Carolina, “[w]hen any person occupies the land of another by the
permission of such other, without any express agreement for rent, . . . the landlord
may recover a reasonable compensation for such occupation . . . .” N.C. GEN. STAT. §
42-4 (2012); see also Raleigh-Durham Airport Auth. v. Delta Air Lines, Inc., 429 F.
Supp. 1069, 1084 (E.D.N.C. 1976) (holding the airline’s use of an airport can be
considered an occupation of land for purposes of N.C. Gen. Stat. § 42-4).
{122} It is abundantly clear to the Court that Defendants occupied Parcel B of
the ECDC premises not only with TAI’s permission, but also for TAI’s benefit. TAI
offered into evidence the Lease Agreement between Vega Real Estate and TAI for
both Parcel A and Parcel B. (Pl. Ex. # 151-E.) Parcel B was used by the ECDC to
carry on TAI’s sporting apparel distribution business. C. Vega does not dispute that
Hall was welcome to use additional space in Parcel B for storage of construction
materials and as an office for C.H. & Sons. C. Vega and Hall did not enter into a
sublease for that purpose, however. Under these circumstances, TAI did not have a
reasonable expectation of compensation from the Defendants for their use or
occupation of Parcel B to carry on activities benefiting TAI.
{123} All parties agree that TAI leased Parcel A to the Lakhanys pursuant to a
written sublease agreement. (Pl. Ex. # 151-C). The Lakhanys, therefore, were the
lawful possessors of Parcel A. Although the Lakhany’s sublease contained a
provision restricting the subletting or assignment of any portion of Parcel A,
without consulting C. Vega, the Lakhanys entered into a sublease with C.H. & Sons
for upstairs space in Parcel A. Hall then made structural alterations to Parcel A to
accommodate his business and made lease payments to the Lakhanys.
{124} The individual-employee defendants occupied both Parcel A and Parcel B
pursuant to executed lease and sublease agreements, and Hall made lease
payments pursuant to the sublease agreement between C.H. & Sons and the
Lakhanys. On these facts, it would be manifestly unreasonable for TAI to expect
additional payment from Defendants for the use and occupation of Parcel A or
Parcel B.
{125} “Absent some evidence of an expectation of payment, there can be no
recovery for quantum meruit.” JDH Capital, LLC v. Flowers, 2009 NCBC 4 ¶ 50
(N.C. Super. Ct. Mar. 13, 2009), http://www.ncbusinesscourt.net/opinions/2009_
NCBC_4.pdf. Accordingly, the Court DENIES Plaintiff relief on its claim for
quantum meruit for rent on an implied lease.
K.
TRESPASS
{126} Plaintiff’s claim for Trespass is premised upon allegations that: (1)
Defendants “purposely, intentionally, willfully, and by willful nondisclosure and/or
deceit entered or caused entry onto the [ECDC] and have remained present upon
the Plaintiff’s property without authority since sometime in 2007” (Am. Compl. ¶
103); (2) “Defendants’ refusal to vacate, repeated entry and/or continued presence is
and was unauthorized and without the consent of TAI, the lawful possessor” (Am.
Compl. ¶ 104); and (3) “Defendants have refused to leave after being asked to do so
and after having represented an intention to leave the premises.” (Am. Compl. ¶
104.)
{127} “[T]respass is a wrongful invasion of the possession of another.” Singleton
v. Haywood Elec. Membership Corp., 357 N.C. 623, 627, 588 S.E.2d 871, 874 (2003)
(quotation and citation omitted). Establishing a claim of trespass requires “(1)
possession of the property by plaintiff when the alleged trespass was committed; (2)
an unauthorized entry by defendant; and (3) damage to plaintiff.” Id.. A lawful
entry may become a trespass if acts are undertaken in excess or in abuse of the
lawful entry. Miller v. Brooks, 123 N.C. App. 20, 27–28, 472 S.E.2d 350, 355 (1996)
(citing Blackwood v. Cates, 297 N.C. 163, 167, 254 S.E.2d 7, 9 (1979)).
{128} A trespasser is “liable for all damage proximately resulting from [the
trespasser’s] wrongful entry and, at least, for nominal damages.” Smith v.
VonCannon, 283 N.C. 656, 660, 197 S.E.2d 524, 528 (1973) (citation omitted).
{129} For the reasons stated above, the Court finds that the Defendants entered
the premises of Parcel B to carry on the business of TAI. The individual defendants,
with the exception of Hall, were employees of Plaintiff. As such, all of the
individual defendants’ entries and continued presence upon the premises were both
impliedly and actually consented to and authorized by Plaintiff. The Court notes,
however, “that a party’s consent to another’s entry onto his land does not insulate
against liability for trespass when the other commits subsequent wrongful acts in
excess or abuse of his authority to enter . . . .” Keyzer v. Amerlink, Ltd., 173 N.C.
App. 284, 290, 618 S.E.2d 768, 772 (2005). In addition, a “[p]laintiff’s consent to
enter and remain on plaintiff’s property [i]s voided when plaintiff’s consent was
derived from defendant’s repeated fraud and deceit.” Id. at 296, 618 S.E.2d at 776
(citing Blackwood, 297 N.C. at 167, 254 S.E.2d at 9).
{130} TAI presented no credible evidence that Defendants made specific
misrepresentations, or engaged in acts of deception, to induce TAI to consent to
Defendants’ entry or continued presence in Parcel B of the ECDC. Nor was there
any evidence presented that, prior to March 9, 2009, TAI or its representative asked
or directed Defendants to vacate, leave, or stay away from the ECDC premises.
And, after being ejected on March 9, 2009, none of the Defendants returned to the
premises. With respect to Parcel B, there is no evidence that Defendants undertook
any acts in excess or abuse of their lawful entry, and, therefore, no trespass
occurred there.
{131} The Court is left to determine whether Defendant Hall’s access to, use,
and occupancy of Parcel A amounted to a trespass of real property, from which TAI
can recover. As noted previously, TAI leased Parcel A to the Lakhanys under a
written sublease agreement. (Pl. Ex. # 151-C.) The Lakhanys, therefore, were the
lawful possessors of Parcel A. Although the Lakhanys’ sublease prohibited
subletting or assignment of Parcel A without prior consultation of C. Vega, the
Lakhanys entered into a sublease with C.H. & Sons for space in Parcel A, and Hall
entered Parcel A with the Lakhanys’ consent. The question that the Court must
resolve is whether Hall’s representation to the Lakhanys that C. Vega consented to
Hall’s occupancy of Parcel A was either a misrepresentation or deception that might
vitiate the Lakhanys’ consent. However, the Lakhanys are not parties to this action
and, thus, have not raised the issue of deception or misrepresentation to void their
consent to Hall’s occupancy of Parcel A. Therefore, the Court concludes that
Plaintiff’s claim as to Parcel A fails because the Lakhanys were the rightful
possessors of Parcel A and the ones who were lawfully authorized to give consent to
Hall’s occupancy of Parcel A.
{132} Plaintiff cites a North Carolina Supreme Court case, McBryde v. Coggins-
McIntosh Lumber Co., for the proposition that all defendants are jointly and
severally liable for the trespass as aiders, abettors, or benefactors. 246 N.C. 415,
419, 98 S.E.2d 663, 666 (1957) (citing Horton v. Hensley, 23 N.C. 163, 166 (1840)).
However, in light of the Court’s determinations above that the claim for trespass
fails, there is no joint and several liability of Defendants as aiders, abettors, or
benefactors of trespass. For the foregoing reasons, the Court DENIES Plaintiff
relief on its claim for trespass to land.
L.
TRESPASS TO PERSONAL PROPERTY
{133} A claim of trespass to personal property is based on the “injury to
possession.” Fordham v. Eason, 351 N.C. 151, 155, 521 S.E.2d 701, 704 (1999)
(citation omitted). To satisfy a claim for trespass to personal property, the “plaintiff
must demonstrate that [plaintiff] had[: (1)] either actual or constructive possession
of the [personal property] in question at the time of the trespass, and [(2)] that there
was an unauthorized, unlawful interference or dispossession of the property.”
Kirschbaum v. McLaurin Parking Co., 188 N.C. App. 782, 786–87, 656 S.E.2d 683,
686 (2008) (internal quotation and citation omitted). “Actual damages, however, are
not an element of trespass to [personal property].” Id.
{134} Actual possession is a fact and constructive possession is a legal fiction.
Fordham, 351 N.C. at 155, 521 S.E.2d at 704. Actual possession is expressed
through the exercise of dominion over or making ordinary use of the personal
property, whereas constructive possession consists of a legal right to immediate
actual possession. Id.
{135} It is uncontroverted that all the disputed property belonging to TAI was
intentionally, knowingly, and voluntarily placed in Defendants’ possession by TAI
or its designated representative. The question for the Court to resolve is whether
Defendants thereafter, without authority, interfered with or dispossessed TAI of
that property by some artifice, fraud or ruse. Upon the facts presented, the Court
simply cannot reach that conclusion. The Court has previously noted that Hall and
C. Vega operated without the benefit of an agreement or mutual understanding
regarding Hall’s authority to act on behalf of TAI. Without such an agreement or
understanding, or without a determination that Hall acted fraudulently, criminally
or in violation of a fiduciary duty, the Court cannot conclude that Hall acted
without authority and unlawfully interfered with or dispossessed Plaintiff of its
property. Therefore, the Court DENIES Plaintiff relief on its claim for trespass to
personal property.
M.
CIVIL CONSPIRACY
{136} A conspiracy is generally defined as wrongful acts committed by persons
pursuant to an agreement. Dalton, 138 N.C. App. at 213, 531 S.E.2d at 266.
{137} In North Carolina, no independent cause of action exists for civil
conspiracy. See Shope v. Boyer, 268 N.C. 401, 404–05, 150 S.E.2d 771, 773–74
(1966). Therefore, recovery must be on the basis of an underlying claim of unlawful
conduct. Toomer v. Garrett, 155 N.C. App. 462, 483, 574 S.E.2d 76, 92 (2002) (citing
Muse v. Morrison, 234 N.C. 195, 198, 66 S.E.2d 783, 785 (1951)); see also Dove v.
Harvey, 168 N.C. App. 687, 690, 608 S.E.2d 798, 800 (2005) (“[R]ecovery must be on
the basis of sufficiently alleged wrongful overt acts.”) (quoting Fox v. Wilson, 85
N.C. App. 292, 301, 354 S.E.2d 737, 743 (1987)).
{138} To establish liability for a civil conspiracy a plaintiff must demonstrate,
“(1) an agreement between two or more individuals; (2) to do an unlawful act or to
do a lawful act in an unlawful way; (3) resulting in injury to plaintiff inflicted by
one or more of the conspirators; and (4) pursuant to a common scheme.” Strickland
v. Hedrick, 194 N.C. App. 1, 19, 669 S.E.2d 61, 72 (2008) (quotation and citation
omitted); see also State ex rel. Cooper v. Ridgeway Brands Mfg., LLC, 362 N.C. 431,
445, 666 S.E.2d 107, 116 (2008).
{139} The agreement to conspire may be established by sufficient circumstantial
evidence, but the evidence must demonstrate more than mere suspicion of an
agreement. Boyd v. Drum, 129 N.C. App. 586, 592, 501 S.E.2d 91, 96 (1998), aff’d,
350 N.C. 90, 511 S.E.2d 304 (1999) (citation omitted).
{140} Because damages in an action for civil conspiracy result from wrongful
acts committed pursuant to the agreement, rather than from the agreement itself,
the claimant must present evidence of an overt act committed by at least one
conspirator in furtherance of the common objective. Jones v. City of Greensboro, 51
N.C. App. 571, 583, 277 S.E.2d 562, 571 (1981), overruled on other grounds by,
Fowler v. Valencourt, 334 N.C. 345, 435 S.E.2d 530 (1993).
{141} Plaintiff alleges that the agreement at the heart of the conspiracy was to
“unlawfully occupy and convert the real and personal property of Plaintiff and to
deprive, destroy or severely limit the manner in which Plaintiff was conducting
business with TAI’s customers, vendors, suppliers and other third parties . . . .”
(Am. Compl. ¶ 35.) Plaintiff further alleges overt acts committed by Defendants in
furtherance of the conspiracy including “the conversion of goods, services,
equipment, utilities, supplies, customers, prospective customers, accounts, and
premises . . . .” (Am. Compl. ¶ 38.)
{142} Having previously determined that Plaintiff has failed to prove the
underlying claim for conversion of chattel, the Court considers whether a claim for
conversion of customers, prospective customers, accounts and premises will lie in
this case. However, “only goods and personal property are properly the subjects of
a claim for conversion. A claim for conversion does not apply to real property.”
Norman v. Nash Johnson & Sons’ Farms, Inc., 140 N.C. App. 390, 414, 537 S.E.2d
248, 264 (2000) (citing McNeill v. Minter, 12 N.C. App. 144, 146, 182 S.E.2d 647,
648 (1971)). “Nor are intangible interests such as business opportunities and
expectancy interests subject to a conversion claim.” Id. (citation omitted). As
intangibles and real property, customers, prospective customers, accounts and
premises all fall outside the usual and customary meaning of “goods and personal
property” and, thus, will not support a claim for conversion. Therefore, the Court
concludes that Plaintiff failed to establish an underlying claim of unlawful conduct
to support the alleged conspiracy. Accordingly, the Court DENIES Plaintiff relief
on its claim for civil conspiracy.
N.
NUISANCE
{143} “In order to establish a claim for nuisance, a plaintiff must show the
existence of a substantial and unreasonable interference with the use and
enjoyment of its property,” The Shadow Group, LLC v. Heather Hills Home Owners
Ass’n, 156 N.C. App. 197, 200, 579 S.E.2d 285, 287 (2003), that results in actual
damage. Hawkins v. Hawkins, 101 N.C. App. 529, 533, 400 S.E.2d 472, 475 (1991),
aff'd, 331 N.C. 743, 417 S.E.2d 447 (1992).
{144} The North Carolina Supreme Court has held substantial interference to
mean “a substantial annoyance, some material physical discomfort . . . or injury to
[the plaintiff’s] health or property,” The Shadow Group, LLC, 156 N.C. App. at 200,
579 S.E.2d at 287 (quoting Duffy v. Meadows, 131 N.C. 31, 34, 42 S.E. 460, 461
(1902)) (alteration original).
{145} A private nuisance may be classified as either per se or per accidens.
Morgan v. High Penn Oil Co., 238 N.C. 185, 191, 77 S.E.2d 682, 687 (1953). A
nuisance per se is an act or structure that “is a nuisance at all times and under any
circumstances,” whereas a nuisance per accidens only becomes a nuisance in certain
circumstances and under certain conditions. Id. “[A] lawful business may become a
nuisance per accidens because of its operation or other factors.” Rudd v. Electrolux
Corp., 982 F. Supp. 355, 368 (M.D.N.C. 1997) (referencing Morgan, 238 N.C. 185, 77
S.E.2d 682).
{146} Plaintiff alleges as the basis for its claim of nuisance that “Defendants
substantially interfered with Plaintiff’s use and enjoyment of its own property,
which resulted in significant annoyance, material physical discomfort or injury and
loss of rental income, profits, business and economic opportunity.” (Am. Compl. ¶
119.) In its ordinary meaning, a nuisance is “a condition, activity, or situation (such
as a loud noise or foul odor) that interferes with the use or enjoyment of property.”
BLACK’S LAW DICTIONARY 1096 (8th ed. 2004). It stands to reason that to be
compensable, a complainant must be aware of the “condition, activity or situation”
of which he complains in order for it to interfere with his use or enjoyment of
property. In this case, Plaintiff’s evidence was that C. Vega did not become aware
of the activities complained of until March 2009, and then promptly shut down
operation of the ECDC. If a nuisance existed, it was abated when J. Vega arrived in
Gastonia and dismissed all of the ECDC employees, including the individual
Defendants. Plaintiff’s annoyance with Defendants’ conduct arose shortly before,
contemporaneously with, or shortly after J. Vega shut down the ECDC.
Considering the void of evidence in support of the claim for nuisance, it is unclear to
the Court why Plaintiff pled this particular claim. Regardless, Plaintiff has failed
to prove the existence of either a nuisance per se or per accidens. Accordingly, the
Court DENIES Plaintiff relief on its claim for nuisance.
O.
TORTIOUS INTERFERENCE WITH BUSINESS RELATIONS AND PROSPECTIVE
ECONOMIC ADVANTAGE
1.
INTERFERENCE WITH BUSINESS RELATIONS
{147} Our Supreme Court has used the term “business relationships” to
embrace both tortious interference with contract and prospective economic
advantage. Sunbelt Rentals, Inc. v. Head & Engquist Equip., LLC, 2002 NCBC 4 ¶
47 (N.C. Super. Ct. July 10, 2002), http://www.ncbusinesscourt.net/opinions/
2002%20NCBC%204%20(Sunbelt).pdf (discussing Owens v. Pepsi Cola Bottling Co.
of Hickory, N.C., Inc., 330 N.C. 666, 412 S.E.2d 636 (1992)).
{148} To establish a claim for tortious interference with contract, the plaintiff
must show:
(1) a valid contract between the plaintiff and a third person which
confers upon the plaintiff a contractual right against a third person; (2)
the defendant knows of the contract; (3) the defendant intentionally
induces the third person not to perform the contract; (4) and in doing
so acts without justification; (5) resulting in actual damage to plaintiff.
United Laboratories, Inc. v. Kuykendall, 322 N.C. 643, 661, 370 S.E.2d 375, 387
(1988) (quoting Childress v. Abeles, 240 N.C. 67, 84 S.E.2d 176 (1954)).
{149} Whether or not justification exists depends on “the circumstances
surrounding the interference, the actor’s motive or conduct, the interests sought to
be advanced, the social interest in protecting the freedom of action of the actor, and
the contractual interests of the other party.” Embree Const. Group, Inc. v. Rafcor,
Inc., 330 N.C. 487, 498, 411 S.E.2d 916, 924 (1992) (quotation and alteration
omitted). In other words, justification exists where the interference is related to a
legitimate and lawful business interest. Fitzgerald v. Wolf, 40 N.C. App. 197, 200,
252 S.E.2d 523, 524 (1979); Childress, 240 N.C. 667, 84 S.E.2d 176.
{150} Plaintiff must first establish a valid contract between Plaintiff and a
third-party. Plaintiff presented virtually no evidence of the existence of a contract
between Plaintiff and a third-party, except perhaps with respect to its relationship
with Worth. Based on the testimony of C. Vega, the Court finds that during the
time period that Hall managed the ECDC, TAI purchased a substantial number of
bats, presumably through contract, from third-party Worth. However, at the time
Plaintiff met Hall, Hall had an existing contractual relationship with Worth. There
is no evidence before the Court that anything Hall did interfered with Plaintiff’s
relationship with Worth, and having previously concluded that Defendant Hall
acted in what he believed to be the best interest of TAI and the ECDC, the Court
now concludes that Hall acted with justification in his interactions with existing
customers of TAI. While Plaintiff has presented evidence that it had supplier-
customer relationships with a number of other individuals and entities, it has failed
to satisfy the Court that any of those relationships were encumbered, interrupted,
or altered by Hall’s behavior. Accordingly, Plaintiff is not entitled to relief upon its
claim for tortious interference with business relations, and this claim is hereby
DISMISSED.
2.
INTERFERENCE WITH PROSPECTIVE ECONOMIC ADVANTAGE
{151} A claim for tortious interference with prospective advantage requires a
plaintiff show that the defendant “induced a third party to refrain from entering
into a contract with the Plaintiff without justification.” DaimlerChrysler Corp. v.
Kirkhart, 148 N.C. App. 572, 585, 561 S.E.2d 276, 286 (2002). The plaintiff must
identify a specific potential contract and establish that the contract would have
ensued but for the interference. Id.
{152} The North Carolina Supreme Court has held unjustified interference to be
“not in the legitimate exercise of defendant’s own right, but with design to injure
the plaintiff, or gaining some advantage at his expense.” Owens, 330 N.C. at 680,
412 S.E.2d at 644 (quoting Coleman v. Whisant, 225 N.C. 494, 506, 35 S.E.2d 647,
656 (1945).
{153} Like Plaintiff’s claim for tortious interference with business relations, the
Court cannot find any credible evidence that either identifies the “specific potential
contract” or demonstrates that the identified contract would have ensued but for the
Defendants’ actions. The only contract Plaintiff specifically identifies is its existing
relationship with Worth, and, as stated above, none of the evidence presented
suggests that Defendant Hall unjustifiably interfered with that relationship. In
addition, the Court finds no evidence that Defendants induced any other third
parties to refrain from entering into a contract with Plaintiff. As such, Plaintiff is
not entitled to relief based on its claim for tortious interference with prospective
economic advantage.
P.
PUNITIVE DAMAGES
{154} The award of punitive damages is controlled by statute. N.C. GEN. STAT. §
1D-1 (2012). These damages are not compensatory in nature, but rather, intended
to deter future bad behavior by punishing a defendant for aggravating conduct in
the commission of a tort. Rhyne v. K-Mart Corporation, 149 N.C. App. 672, 678, 562
S.E.2d 82, 88 (2002), aff'd, 358 N.C. 160, 594 S.E.2d 1 (2004). “The claimant must
prove the existence of an aggravating factor by clear and convincing evidence. N.C.
GEN. STAT. § 1D-15(b) (2012).
{155} Aggravation is defined as a wrong “done willfully or under circumstances
of rudeness, oppression, or express malice, or in a manner evincing a wanton and
reckless disregard of the plaintiffs’ rights.” Connelly v. Family Inns of Am.,
Inc., 141 N.C. App. 583, 593, 540 S.E.2d 38, 44–45 (2000) (citation omitted). “An act
is willful when there exists a deliberate purpose not to discharge some duty
necessary to the safety of the person or property of another, a duty assumed by
contract or imposed by law[,]” Id. at 593, 540 S.E.2d at 45 (internal quotation
omitted), and “[a]n act is wanton when it is done of wicked purpose or when done
needlessly, manifesting a reckless indifference to the rights of others.” Id. at 593,
540 S.E.2d at 45 (quotation omitted).
{156} Punitive damages are not awarded for a breach of contract, N.C. Gen.
Stat. § 1D-15(d), without an identifiable independent tort and aggravating
circumstances. Strum v. Exxon Co., U.S.A., a Div. of Exxon Corp., 15 F.3d 327, 331
(4th Cir. 1994) (citing Newton v. Standard Fire Ins. Co., 291 N.C. 105, 229 S.E.2d
297, 301 (1976) and Asheville Contracting Co. v. City of Wilson, 62 N.C. App. 329,
303 S.E.2d 365, 373 (1983)). See also Stanback v. Stanback, 297 N.C. 181, 254
S.E.2d 611 (1979), distinguished on other ground by Dickens v. Puryear, 302 N.C.
437, 276 S.E.2d 325 (1981).
{157} When awarding punitive damages, the fact finder may only consider:
a. The reprehensibility of the defendant’s motives and conduct. b. The
likelihood, at the relevant time, of serious harm. c. The degree of the
defendant’s awareness of the probable consequences of its conduct. d.
The duration of the defendant’s conduct. e. The actual damages
suffered by the claimant. f. Any concealment by the defendant of the
facts or consequences of its conduct. g. The existence and frequency of
any similar past conduct by the defendant. h. Whether the defendant
profited from the conduct. i. The defendant’s ability to pay punitive
damages, as evidenced by its revenues or net worth.
N.C. GEN. STAT. § 1D-35 (2011).
{158} Having considered the relevant factors, and previously concluded that the
Defendants did not engage in unlawful, deceptive, or fraudulent conduct, the Court
further concludes that Defendants did not deliberately fail to discharge a duty owed
to Plaintiffs and, therefore, Plaintiff is not entitled to punitive damages.
Q.
DEFENDANTS’ COUNTERCLAIMS/CROSS-CLAIMS
{159} Defendants Worth and Cornell filed counterclaims against Plaintiff TIA
and cross-claims against C. Vega. By order dated June 9, 2010, the Court dismissed
without prejudice Worth and Cornell’s counterclaims against Plaintiff, however, no
dismissal was entered, or other disposition made, with respect to Worth and
Cornell’s cross-claims against C. Vega. Because their cross-claims were not
prosecuted during the trial of this case, the Court concludes that these claims
should be DISMISSED for failure to prosecute.
{160} By way of Counterclaim, Jeff Hall, C.H. & Sons, TKL, Jeff Hall Sports and
Caldwell (“Counterclaimants”), asserted claims for (a) conversion of repairs and
improvements made by C.H. & Sons and TKI at the ECDC, and for recovery of
items of personal property, including cash, in the amount of $74,672.98; (b) the
repayment of loans from Hall to C. Vega and TAI totaling $3,124.00; (c)
defamation;3 (d) breach of contract; (e) quantum meruit (alternatively); (f) claim and
delivery; (g) trespass to chattels; (h) declaratory judgment; and (i) tortious
interference with contract.
{161} By order of the Honorable Albert Diaz, TAI Sports, Inc. v. Hall, No. 09
CVS 2201 (N.C. Super. Ct. July 22, 2009) (order granting application for claim and
delivery), possession of the personal property claimed by Counterclaimants was
returned to them upon the posting of bond with the Gaston County Clerk of Court
in the amount of $108,944.00. Having resolved all other issues between the parties
in this Order, the Court concludes that Counterclaimants are entitled to permanent
possession of the items returned to them in Judge Diaz’s order, and are further
entitled to the release of their $108,944.00 bond.
{162} As to the remaining counterclaims, the Court can not find that any
credible evidence was produced sufficient to support the remaining claims and
accordingly the remainder of Counterclaimants claims are DISMISSED.
IV.
CONCLUSION
{163} The Court has both personal and subject matter jurisdiction over the
parties and claims, respectively.
{164} Plaintiff is not entitled to a permanent injunction as a matter of law.
{165} The resolution of Plaintiff’s claims by trial and the Court’s conclusion that
no valid contract exists between the parties obviates the need for the Court to
resolve Plaintiff’s claim for declaratory relief.

3 Counterclaimants claim for defamation was voluntarily dismissed on March 30, 2011.
{166} No valid contract existed between Plaintiff and Defendants. Absent a
valid contract, there could be no breach.
{167} Plaintiff has failed to sustain its burden of proof with respect to its claim
for fraud.
{168} No fiduciary relationship existed between Plaintiff and the individual
employee-defendants. Defendant Hall served as a de facto officer of Plaintiff and
owed Plaintiff a duty of care. However, the Court concludes that Hall acted in what
he reasonably believed to be the best interest of the ECDC, and therefore did not
breach the duty of care owed to Plaintiff.
{169} Plaintiff’s claim for imposition of a constructive trust is without merit.
{170} With respect to its claim of conversion, Plaintiff did not present any
evidence of demand by Plaintiff, and refusal by Defendants, to return property that
Plaintiff entrusted to Defendants.
{171} With respect to Plaintiff’s UDTPA claim, the relationship between
Plaintiff and the individual-employee defendants was nothing more than that of
employer and employee and, therefore, the actions of these defendants are not “in or
affecting commerce.”
{172} Plaintiff has failed to prove by a preponderance of the evidence that
Defendant Hall engaged in any fraudulent, deceptive or unlawful acts which
proximately caused actual injury to the plaintiff or to its business.
{173} With respect to Plaintiff’s Unjust Enrichment claim, Plaintiff conferred a
measurable benefit upon Hall in the amount of $18,401.00 that was not gratuitous
and for which Plaintiff is entitled to reimbursement.
{174} Plaintiff has failed to prove the existence of an implied lease.
{175} Plaintiff has failed to prove by a preponderance of the evidence its claim
for Trespass in Count 12 of the Amended Complaint.
{176} With respect to its Conspiracy claim, Plaintiff has failed to prove by a
preponderance of the evidence the object of the alleged conspiracy in Count 14 of the
Amended Complaint.
{177} Plaintiff has failed to prove any element of its claim for Nuisance.
{178} Plaintiff has failed to prove its claim for Tortious Interference with
Business Relations by a preponderance of the evidence, and there is no credible
evidence before the Court to support a claim of tortuous interference with
prospective economic advantage.
{179} Plaintiff has failed to prove by a preponderance of the evidence that
Defendants engaged in aggravating conduct in the commission of a tort to warrant
punitive damages.
V. JUDGMENT
IT IS, THEREFORE, ORDERED, ADJUDGED and DECREED as follows:
{180} Plaintiff’s claim for permanent injunctive relief is DENIED.
{181} Plaintiff’s claim for declaratory relief is DENIED..
{182} Plaintiff is not entitled to relief on its claim for breach of contract..
{183} Plaintiff is not entitled to relief on its claim for fraud.
{184} Plaintiff is not entitled to relief on its claim for breach of fiduciary duty.
{185} Plaintiff is not entitled to relief on its claim for imposition of a
constructive trust.
{186} Plaintiff is not entitled to relief on its claim for claim for conversion.
{187} Plaintiff is not entitled to relief on its claim for claim for UDTP.
{188} Upon its claim for unjust enrichment, Plaintiff shall have and recover of
Defendant Jeffrey Hall the sum of $18,401.00, plus interest at the legal rate
accumulated from the date of the Complaint. As to the remaining Defendants,
Plaintiff is not entitled to relief.
{189} Plaintiff is not entitled to relief on its claim for quantum meruit.
{190} Plaintiff is not entitled to relief on its claim for trespass.
{191} Plaintiff is not entitled to relief on its claim for trespass to personal
property.
{192} Plaintiff is not entitled to relief on its claim for civil conspiracy.
{193} Plaintiff is not entitled to relief upon its claim for nuisance.
{194} Plaintiff is not entitled to relief on its claims for tortious interference with
business relations, or tortious interference with prospective economic advantage..
{195} Plaintiff is not entitled to relief on its claim for punitive damages.
{196} Worth and Cornell’s cross-claims against C. Vega are DISMISSED.
{197} Counterclaimants shall have permanent possession of the items delivered
to them by virtue of Judge Diaz’s order of possession, and their bond in the amount
of $108,944.00 is hereby RELEASED.
{198} Counterclaimants Jeff Hall, C.H. & Sons, TKL, Jeff Hall Sports, Inc. and
Caldwell’s claims for (a) Conversion of repairs and improvements made by C.H. &
Sons and TKI at the ECDC warehouse, and for the recovery of other items of
personal property, including cash, in the amount of $74,672.98 and (b) the
repayment of loans from Hall to C. Vega and TAI totaling $3,124.00; (c) breach of
contract; (d) quantum meruit (alternatively); (e) claim and delivery; (f) trespass to
chattels; (g) declaratory judgment; and (h) tortious interference with contract are
DISMISSED.
{199} Each party, respectively, shall bear his/her own costs of this action.
SO ORDERED, this the 28th day of December 2012.