Estate of Chambers v. Vision Two Hospitality Mgmt., LLC

Estate of Chambers v. Vision Two Hospitality Mgmt., LLC 2013 NCBC 52.

STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
COUNTY OF IREDELL 12 CVS 2944

ESTATE OF JERRY CARL )
CHAMBERS; BETTIE BUCHANAN )
CHAMBERS; GEORGE COOLIDGE )
CHAMBERS, JR.; JUDY WARREN )
CHAMBERS; SUE CHAMBERS )
CAMPBELL; and KATHY )
CAMPBELL PARLIER; TRUSTEES )
UNDER THE WILL OF JAMES )
KENNETH CHAMBERS; NEWTON )
SANKEY GAITHER, III; JUNE )
NUTT GAITHER; JOHN DAVID )
GAITHER; ROBERT ROSSER )
CHAMBERS; SHIRLEY HAYES )
CHAMBERS; MISSY CHAMBERS )
KING; JOE KING; WILLIAM )
FRANKLIN CHAMBERS, II; ) ORDER AND OPINION
CAROLE CHAMBERS ADAMS; and )
JOHN G. ADAMS, )
)
Plaintiffs, )
)
v. )
)
VISION TWO HOSPITALITY )
MANAGEMENT, LLC, a North )
Carolina Limited Liability Company; )
FALGUN DHARIA; and PARU )
DHARIA, )
)
Defendants. )
)

{1} THIS MATTER is before the court on Defendants’ Motion to Dismiss
Plaintiffs’ Second Amended Complaint (“Motion”) pursuant to Rule 12(b)(6) of the
North Carolina Rules of Civil Procedure (“Rule(s)”). For the reasons stated below,
the Motion is GRANTED in part and DENIED in part.
Thad A. Throneburg, Attorney at Law by Thad A. Throneburg for Plaintiffs.
Erwin, Bishop, Capitano & Moss, P.A. by Lex M. Erwin for Defendants.

Gale, Judge.

I. PARTIES

{2} Plaintiffs Estate of Jerry Carl Chambers, Bettie Buchanan Chambers,
George Coolidge Chambers, Jr., Judy Warren Chambers, Sue Chambers Campbell,
and Kathy Campbell Parlier, Trustees under the will of James Kenneth Chambers,
Newton Sankey Gaither, III, June Nutt Gaither, and John David Gaither are
residents of Iredell County, North Carolina. (Second Am. Compl. ¶ 1.)
{3} Plaintiffs Robert Rosser Chambers and Shirley Hayes Chambers are
residents of DeKalb County, Georgia. (Second Am. Compl. ¶ 2.)
{4} Plaintiffs Missy Chambers King and Joe King are residents of
Richland County, South Carolina. (Second Am. Compl. ¶ 3.)
{5} Plaintiff William Franklin Chambers II is a resident of Monroe
County, Georgia. (Second Am. Compl. ¶ 4.)
{6} Plaintiffs Carole Chambers Adams and John G. Adams are residents of
Fulton County, Georgia. (Second Am. Compl. ¶ 5.)
{7} Defendants Falgun Dharia and Paru Dharia are residents of New
Jersey. (Second Am. Compl. ¶¶ 6–7.)
{8} Defendant Vision Two Hospitality Management, LLC ("Vision Two")
was a limited liability company formed under the laws of the State of North
Carolina with its principal place of business in Iredell County, North Carolina, but
it was dissolved on September 2, 2010. (Second Am. Compl. ¶¶ 8, 12; Second Am.
Compl. Ex. 2.)
II. FACTUAL BACKGROUND

{9} The court does not make findings of fact in connection with a motion to
dismiss, as a motion to dismiss “does not present the merits, but only [determines]
whether the merits may be reached.” Concrete Serv. Corp. v. Investors Grp., Inc., 79
N.C. App. 678, 681, 340 S.E.2d 755, 758 (1986). For the purposes of the Motion the
court assumes the facts alleged in the Second Amended Complaint are true and
makes inferences in Plaintiffs’ favor, but is not bound to legal conclusions asserted
therein. The court may consider documents which are the subject matter of the
action or which are specifically referred to in the complaint without converting a
Rule 12(b)(6) motion into a motion for summary judgment. Schlieper v. Johnson,
195 N.C. App. 257, 261, 672 S.E.2d 548, 551 (2009); Oberlin Capital, L.P. v. Slavin,
147 N.C. App. 52, 60–61, 554 S.E.2d 840, 847 (2001).
{10} Plaintiffs leased the land and premises at issue to Vision Two to
operate and manage a hotel. (Second Am. Compl. ¶¶ 13–20; Second Am. Compl. Ex.
3 (hereinafter “Lease”) 1.)1 Vision Two was required to maintain, repair, insure,
and pay taxes on the premises. (Second Am. Compl. ¶ 21; Lease 2–8.) Vision Two
could assign or sublet the premises, but it remained liable to Plaintiffs for failing to
perform terms binding it under the Lease. (Lease 17.) The Lease permitted
Plaintiffs to inspect and examine the premises during normal business hours.
(Lease 11.)
{11} Plaintiffs allege as follows. The Dharias are controlling members of
Vision Two who intended to siphon off as much revenue as possible without
performing under the Lease. (Second Am. Compl. ¶¶ 110–12.) They sublet the
premises to subtenants and charged excessive rent that prevented those subtenants
from being able to perform tenant duties under the Lease. (Second Am. Compl. ¶¶
93–95, 110–12.) Knowing that the subtenants’ excessive rent would not enable
them to perform, the Dharias nonetheless transferred assets from Vision Two to

1 Plaintiffs’ and Defendants’ predecessors-in-interest were the original landlords and tenants to the

Lease, which Plaintiffs and Vision Two modified on March 1, 2010.
themselves, thus intentionally undercapitalizing Vision Two. (Second Am. Compl.
¶¶ 94–95, 110–12; 116–22.) As a result, the hotel is in a state of substantial
disrepair. (Second Am. Compl. ¶ 102.) Vision Two also failed to pay Plaintiffs
amounts due under the Lease and misrepresented to Plaintiffs that certain repairs
were made to the land and premises. (Second Am. Compl. ¶¶ 126, 136–37.) Vision
Two is now insolvent, and the North Carolina Secretary of State dissolved it in 2010
for failing to file annual reports. (Second Am. Compl. ¶ 109; Second Am. Compl. Ex.
2.)
{12} On September 12, 2012 Plaintiffs faxed a letter to Vision Two alleging
that it had breached the Lease by failing to maintain, repair, or insure the
premises, and Plaintiffs would terminate the Lease in thirty days if Vision Two did
not cure the breach. (Second Am. Compl. ¶¶ 22–26; Second Am. Compl. Exs. 6–8.)
Claiming a failure to cure, Plaintiffs, via faxed letter, notified Vision Two of their
intent to terminate the Lease. (Second Am. Compl. ¶¶ 27–34; Second Am. Compl.
Exs. 9–11.) On October 25, 2012 Plaintiffs terminated the Lease with Vision Two
and demanded possession of the land and premises. (Second Am. Compl. ¶¶ 35–40;
Second Am. Compl. Exs. 12–14.) Plaintiffs continued to send Vision Two notices of
default and demands for possession of the land and premises over the next several
months. (Second Am. Compl. ¶¶ 48–91; Second Am. Compl. Exs. 15–26.)

III. PROCEDURAL BACKGROUND

{13} Plaintiffs initiated this lawsuit in Iredell County on October 26, 2012
by filing a Complaint in Summary Ejectment. After trial on November 26, 2012,
judgment was entered in Plaintiffs’ favor granting them possession of the premises
in question. Defendants appealed the judgment to the District Court Division. This
action was then transferred from the District Court Division to the Superior Court
Division on January 14, 2013. Plaintiffs filed an Amended Complaint on February
4, 2013. The case was designated a Business Court case by Chief Justice Sarah
Parker by Order dated February 11, 2013 and assigned to the undersigned on
February 13, 2013.
{14} Defendants filed a Motion to Dismiss the Amended Complaint on
March 14, 2013. Plaintiffs filed a Second Amended Complaint on April 19, 2013,
mooting the original Motion to Dismiss. In their Second Amended Complaint,
Plaintiffs allege claims for possession of the premises, fraud, fraudulent conveyance,
piercing the corporate veil, unfair and deceptive trade practices, civil conspiracy,
detention damages, compensatory damages, constructive trust, and attachment.
{15} Defendants filed the present Motion on June 21, 2013, seeking to
dismiss all claims except those for possession. Defendants contend that this case is
merely a landlord-tenant dispute between Plaintiffs and Vision Two. They seek
dismissal of all claims alleged against the Dharias personally. The Motion has been
fully briefed, a hearing was held, and the matter is ripe for disposition.

IV. ANALYSIS

{16} The appropriate inquiry on a motion to dismiss pursuant to Rule
12(b)(6) is “whether, as a matter of law, the allegations of the complaint, treated as
true, are sufficient to state a claim upon which relief may be granted under some
legal theory, whether properly labeled or not.” Crouse v. Mineo, 189 N.C. App. 232,
237, 658 S.E.2d 33, 36 (2008) (quoting Harris v. NCNB Nat’l Bank of N.C., 85 N.C.
App. 669, 670, 355 S.E.2d 838, 840 (1987)). A motion to dismiss may be granted if
the complaint reveals the absence of facts required to make out a claim for relief or
if the complaint reveals some fact that necessarily defeats the claim. Wood v.
Guilford Cnty., 355 N.C. 161, 166, 558 S.E.2d 490, 494 (2002).

A. Plaintiffs’ Fraud Claim Fails under Rule 9(b)

{17} Besides reincorporating other allegations of their Complaint, Plaintiffs
specifically allege that from 2009 to 2012 Vision Two and Paru Dharia
misrepresented that they had repaired the leased premises and that Plaintiffs
reasonably relied on those misrepresentations “in continuing to allow defendant
Vision Two to” lease the premises. (Second Am. Compl. ¶¶ 125–28.)
{18} To state a fraud claim, a party “must allege with particularity ‘(1) that
defendant made a false representation or concealment of a material fact; (2) that
the representation or concealment was reasonably calculated to deceive . . . ; (3) that
defendant intended to deceive . . . ; (4) that [the party] was deceived; and (5) . . .
damage resulting from defendant’s misrepresentations or concealment.” BDM Invs.
v. Lenhil, Inc., 2012 NCBC LEXIS 7, at *56–*57 (N.C. Super. Ct. Jan. 18, 2012)
(citing Claggett v. Wake Forest Univ., 126 N.C. App. 602, 610, 486 S.E.2d 443, 447
(1997)). In order to satisfy the heightened pleading requirements of Rule 9(b), fraud
claims must “allege the ‘time, place, and content of the fraudulent’” acts or
representations, identify “’the person making the representations[,] and [describe]
what was obtained as a result of the fraudulent acts or representations.’” Id. at *58
(citing Bob Timberlake Collection, Inc. v. Edwards, 176 N.C. App. 33, 39, 626 S.E.2d
315, 321 (2006)).
{19} Reliance on “allegedly false representations must be reasonable.”
Forbis v. Neal, 361 N.C. 519, 527, 649 S.E.2d 382, 387 (2007). When the party
relying on the allegedly fraudulent or misleading statement could have discovered
the truth, pleading reasonable reliance requires the party to allege either denial of
the opportunity to investigate or that a reasonably diligent inquiry would not have
revealed the truth. Oberlin Capital, L.P. v. Slavin, 147 N.C. App. 52, 59, 554 S.E.2d
840, 846–47 (2001) (citing Hudson-Cole Dev. Corp. v. Beemer, 132 N.C. App. 341,
346, 511 S.E.2d 309, 313 (1999)). In Oberlin Capital, L.P., the contract governing
the allegedly fraudulent transaction noted that plaintiffs had an opportunity to
inspect the premises and interview individuals involved in the transaction. Id. at
60; 554 S.E.2d at 847. The plaintiffs’ failure to allege either that defendants denied
them the opportunity to investigate or that a reasonably diligent inquiry would not
have revealed the truth warranted a Rule 12(b)(6) dismissal of their fraud claim for
failing to plead reasonable reliance. Id.
{20} Article XI of the Lease permits Plaintiffs, at any time during the lease
term, to inspect and examine the “premises during reasonable business hours[.]”
(Lease 11). Plaintiffs do not allege that Defendants prevented them from exercising
these inspection rights, nor do they allege that a reasonably diligent inspection
would not have revealed the true condition of the leased premises. Thus, Plaintiffs
have not satisfied Rule 9(b)’s heightened pleading requirements for reasonable
reliance.
{21} The court also concludes that the general allegations of the Complaint
and the specific allegation supporting the fraud count—that from 2009 to 2012
Vision Two and Paru Dharia misrepresented that they had repaired the premises—
fail to allege sufficiently the time, place, and manner of the allegedly fraudulent
acts as required by Rule 9(b) and the above-cited cases and further fail to
demonstrate reasonable reliance on the allegedly fraudulent statements. The fraud
claim is DISMISSED.

B. Plaintiffs Do Not State an Actionable Civil Conspiracy Claim

{22} A conspiracy claim “must allege ‘a conspiracy, wrongful acts done by
certain of the alleged conspirators, and injury.” S.N.R. Mgmt. Corp. v. Danube
Partners 141, LLC, 189 N.C. App. 601, 608, 659 S.E.2d 442, 449 (2008) (citing
Norman v. Nash Johnson & Sons’ Farms, Inc., 140 N.C. App. 390, 416, 537 S.E.2d
248, 265 (2000)). Importantly, plaintiffs must allege facts sufficient to show “that a
conspiracy in fact existed.” Id. at 609; 659 S.E.2d at 449 (emphasis in original).
Circumstantial evidence may establish an agreement, but mere “suspicion or
conjecture” does not warrant “submission to a jury.” Id.; see also Dickens v.
Puryear, 302 N.C. 437, 456–57, 276 S.E.2d 325, 337 (1981). At the pleading stage,
this means allegations that “defendants maliciously conspired together and acted in
concert, explicitly, impliedly or tacitly, to engage in the above-referenced fraudulent
and otherwise wrongful acts[,]” without additional supporting facts, are insufficient
to survive a Rule 12(b)(6) motion. S.N.R. Mgmt. Corp., 189 N.C. App. at 609, 659
S.E.2d at 449.
{23} Like the allegations supporting the fraud claim dismissed in the S.N.R.
Management Corp. case, Plaintiffs’ allegations here vaguely accuse “defendant
Vision Two, defendants Dharia, other members and managers of defendant Vision
Two and other persons unknown to the plaintiffs including multiple entities
including the name ‘Mantiff’ and ‘Vision’” of concocting “a multi-state and multi-
entity conspiracy under which they would, among other things and variously,
directly and through their alter egos” commit wrongful acts against Plaintiffs.
(Second Am. Compl. ¶ 93.) This allegation does not satisfy Plaintiffs’ burden to
plead allegations sufficient to show any agreement or conspiracy. Plaintiffs’ civil
conspiracy claim is DISMISSED.

C. Plaintiffs State an Actionable Veil Piercing Claim

{24} Under the “instrumentality rule,” veil piercing claims must allege
control of the corporate entity by another individual or entity that was used to
commit fraud or other wrongdoing against the plaintiff that proximately caused
plaintiff’s injury. See, e.g., Fischer Inv. Capital, Inc. v. Catawba Dev. Corp., 200
N.C. App. 644, 649–50, 689 S.E.2d 143, 147 (2009). Control may be shown by
inadequate capitalization, failing to follow corporate formalities, complete
domination of the corporation by another, or excessive fragmentation of a single
enterprise into separate corporate entities. Id. at 650–51; 689 S.E.2d at 147–48
(citing East Mkt. St. Square, Inc. v. Tycorp Pizza IV, Inc., 175 N.C. App. 628, 636,
625 S.E.2d 191, 198 (2006)). No one factor is determinative. Id. Plaintiffs must
allege some combination of factors such that the entity “had ‘no separate mind, will
or existence of its own’ and . . . was the ‘mere instrumentality or tool’ of the
dominant corporation.” Id. Mere recitations of the elements of a veil piercing claim
and the factors alleged to show control, without supporting factual allegations, are
“bare legal conclusions” not entitled to any deference in considering a motion to
dismiss a veil piercing claim. Blue Ridge Pediatric & Adolescent Med., Inc. v. First
Colony Healthcare, LLC, 2012 NCBC LEXIS 52, at *15 (N.C. Super. Ct. Oct. 3,
2012).
{25} Plaintiffs’ claim to pierce Vision Two’s corporate veil arises primarily
from allegations that the Dharias, members of Vision Two, dominated and
controlled its activities in a manner that prevented it from upholding its obligations
under the Lease. More specifically, Plaintiffs contend that the Dharias
intentionally undercapitalized Vision Two by draining its assets instead of
performing under the lease, ultimately resulting in its insolvency. Instead of
upholding its lease obligations and properly maintaining the hotel, Vision Two let
the hotel fall into substantial disrepair. Although Defendants deny the allegations,
they state a veil piercing claim. Defendants’ Motion is DENIED as to that claim.

D. Plaintiffs State a Fraudulent Conveyance Claim

{26} Plaintiffs allege that Vision Two’s distributions to the Dharias were
fraudulent transfers under North Carolina’s Uniform Fraudulent Transfer Act
(“UFTA”). Plaintiffs allege that their contractual relationship with Vision Two
creates a creditor-debtor relationship that gives them standing under the UFTA to
challenge Vision Two’s transfers, (Second Am. Compl. ¶¶ 116–17,) and that
Defendants “have had actual knowledge” of Plaintiffs’ contract claims since April
2009, (Second Am. Compl. ¶ 118.) Plaintiffs allege that Vision Two transferred
assets with intent to hinder, delay, or defraud Plaintiffs. (Second Am. Compl. ¶
119.) They also allege that Vision Two transferred assets without receiving
reasonably equivalent value in return from the Dharias, and that such transfers left
Vision Two with an unreasonably small amount of assets in relation to its business
(managing and maintaining the leased premises) or that Vision Two was insolvent
when it made the transfers (Second Am. Compl. ¶¶ 116–22.) Plaintiffs also allege
that the Dharias, as insiders of Vision Two, received transfers to satisfy debts owed
to them by Vision Two when they had reason to believe that Vision Two was
insolvent. (Second Am. Compl. ¶ 116.)
{27} Defendants contend Plaintiffs have no standing to sue because they
are not “creditors” possessing “claims” under the UFTA. Defendants further assert
that Plaintiffs have insufficiently pleaded UFTA claims, and that Plaintiffs’ claims
are barred by either the UFTA’s statute of limitations or the LLC Act’s statute of
limitations on wrongful distributions to LLC members. See N.C. Gen. Stat. §§ 39-
23.9; 57C-4-07(c).
{28} The court first considers Plaintiffs’ standing to sue under the UFTA.
Plaintiffs must be creditors of Vision Two or the Dharias in order to proceed under
the UFTA. See Maloney v. Alliance Dev. Group, LLC, 2006 NCBC LEXIS 14, at
*14–*15 (N.C. Super. Ct. Sept. 18, 2006) (citing N.C. Gen. Stat. §§ 39-23.4(a), 39-
23.5(a), 39-23.7(a)). One must have a “claim,” defined as a “right to payment,” to be
a creditor under the UFTA. N.C. Gen. Stat. § 39-23.1(3)–(4); see also id. A “right to
payment” can be unliquidated, contingent, unmatured, or disputed, and need not be
reduced to a judgment. N.C. Gen. Stat. § 39-23.1(3). The wrong causing an injury
that creates an enforceable obligation generates a right to payment under the
UFTA. See In re Rountree, 448 B.R. 389, 405–06 (Bankr. E.D. Va. 2011) (applying
North Carolina’s UFTA).
{29} Plaintiffs’ allegations that Vision Two failed to perform under the lease
are “claims” creating a creditor-debtor relationship under the UFTA. Plaintiffs
therefore have standing to pursue their UFTA claims.
{30} Plaintiffs have sufficiently pleaded UFTA claims, as well. Given the
UFTA’s broad definitions of debtor, creditor, claim, insider, and transfer, the court
concludes that the Second Amended Complaint states claims under UFTA sections
39-23.4(a) and 39-23.5 adequate to withstand a Rule 12(b)(6) motion. N.C. Gen.
Stat. § 39-23.1; see also Fischer Inv. Capital, Inc. v. Catawba Dev. Corp., 200 N.C.
App. 644, 658–63, 689 S.E.2d 143, 152–55 (2009).
{31} The court acknowledges tension between the UFTA and the LLC Act’s
limitations on member liability and restriction of distributions and will remain
sensitive to that tension as this case proceeds. See Russell M. Robinson II,
Robinson on North Carolina Corporation Law § 11.03, at 11-4–11-5 (7th ed. 2013).
It does not wish to and does not here encourage the pleading of claims under the
UFTA to override limited corporate liability in the absence of clearly alleged
egregious facts. Based upon the unique allegations of this particular case, and
accepting the allegations as true as it is required to do, the court ultimately
concludes that, at the pleading stage, the UFTA claims survive Rule 12(b)(6).
{32} Finally, the court cannot determine, based solely on allegations in the
Second Amended Complaint, whether the statutes of limitations cited above bar all
claims challenging Vision Two’s allegedly fraudulent transfers. This issue should
be revisited at summary judgment.
{33} Defendants’ Motion is DENIED as to the UFTA claims.

E. Plaintiffs State an Actionable Unfair & Deceptive Trade Practices Claim

{34} An unfair and deceptive trade practices claim requires showing an
unfair or deceptive act or practice, in or affecting commerce, that proximately
caused plaintiff’s injury. N.C. Gen. Stat. § 75-1.1(a); Bumpers v. Community Bank
of Northern Virginia, __ N.C. __, 747 S.E.2d 220, 226 (2013) (citing Dalton v. Camp,
353 N.C. 647, 646, 548 S.E.2d 704, 711 (2001)). Acts or practices that violate public
policy or are “immoral, unethical, oppressive, unscrupulous, or substantially
injurious to consumers” are unfair. Bumpers, __ N.C. at __, 747 S.E.2d at 228
(citing Walker v. Fleetwood Homes of N.C., Inc., 362 N.C. 63, 72, 653 S.E.2d 393,
399 (2007)). Breaches of contract support unfair or deceptive trade practice claims
only when accompanied with “substantial aggravating circumstances.”
Southeastern Shelter Corp. v. Btu, Inc., 154 N.C. App. 321, 330, 572 S.E.2d 200, 206
(2002) (citing Branch Banking & Trust Co. v. Thompson, 107 N.C. App. 53, 62, 418
S.E.2d 694, 700 (1992)).
{35} The court concludes that, based on the factual allegations discussed
above, Plaintiffs do not seek to cast a mere contract claim as a Chapter 75 claim but
allege other acts that, if proven, sustain a claim for unfair and deceptive trade
practices under section 75-1.1.

F. Plaintiffs May Seek Detention & Compensatory Damages

{36} Defendants also seek dismissal of Plaintiffs’ claims for compensatory
and detention damages alleged against the Dharias. The court concludes that
Plaintiffs may seek damages against the Dharias for breach of contract or
possession through Plaintiffs’ veil piercing and UFTA claims. The Motion is
DENIED as to these claims.

G. Plaintiffs May Not Seek a Constructive Trust

{37} Plaintiffs seek imposition of a constructive trust on “all property of
defendant Vision Two owed, diverted, secreted, received and converted by the
defendants and other Conspirators” as a “result of the defendant’s [sic] actions in
furtherance of the Conspiracy[.]” The court has dismissed the conspiracy claim.
Further, the court concludes that any of Defendants’ assets upon which it could
impose a constructive trust are recoverable through Plaintiffs’ UFTA and veil
piercing claims. Constructive trust is an improper remedy for claims redressed
through an adequate legal remedy. In re Gertzman, 115 N.C. App. 634, 640–41, 446
S.E.2d 130, 135 (1994) (constructive trust improper remedy where creditor-debtor
relationship gives adequate remedy at law); Branch Banking & Trust Co. v.
Lighthouse Fin. Corp., 2005 NCBC LEXIS 4, at *27–*28 (N.C. Super. Ct. Jul. 13,
2005) (dismissing constructive trust claim under Rule 12(b)(6) where remedies at
law exist for claims underlying constructive trust claim). The constructive trust
claim is DISMISSED.
H. Plaintiffs Have Not Shown Adequate Grounds for Prejudgment
Attachment

{38} Plaintiffs seek prejudgment attachment of unspecified property of the
Dharias to satisfy any judgment received in this case.2 See N.C. Gen. Stat. §§ 1-
440.2; 1-440.3. A party must demonstrate entitlement to an attachment through an
affidavit or verified complaint. N.C. Gen. Stat. § 1-440.11. An affidavit that fails
“to set forth supporting facts and circumstances in a definite and distinct manner”
cannot support prejudgment attachment. Connolly v. Sharpe, 49 N.C. App. 152,
154, 270 S.E.2d 564, 566–67 (1980) (reversing trial court’s failure to dismiss
prejudgment attachment); see also Nelson v. Hayes, 116 N.C. App. 632, 637, 448
S.E.2d 848, 851 (1994) (affirming dissolution of prejudgment attachment order
unsupported by specific factual allegations); RDLG, LLC v. RPM Group, LLC, No.
1:10cv204, 2011 U.S. Dist. LEXIS 56816, at *4–*5 (W.D.N.C. May 26, 2011)
(denying attachment where affidavit does not describe with particularity property
to be attached). A supporting affidavit must “give the sources of information and
recite positive facts reasonably supporting” the grounds for an attachment.
Connolly, 49 N.C. App. at 155, 270 S.E.2d at 567.
{39} Plaintiffs seek a prejudgment attachment of $1,500,000 of unspecified
assets or property of the Dharias, yet only declare that Vision Two “transferred
assets to Defendants Dharia while it was insolvent with the intent defraud [sic] the
Plaintiffs.” (Aff. In Attach. Proceeding.) This allegation does not contain any facts
reasonably supporting an attachment, nor does it specify which assets or property
to attach. Even if the court could consider Plaintiffs’ unsworn statements at the
hearing and in their brief, the court concludes that Plaintiffs do not describe with
sufficient particularity any conduct indicating intent to defraud that would merit

2 At the hearing on August 12, 2013 and in their brief opposing the Motion, Plaintiffs contend that

the court should attach any personal property, trade fixtures, or other property of Vision Two or the
Dharias remaining in the hotel. Plaintiffs also seek attachment of the accounts receivable or rent
money Vision Two receives from its sublessee. Defendants have indicated that no property has been
or will be removed from the hotel during the pendency of this litigation.
imposing the extraordinary remedy of prejudgment attachment. Plaintiffs’ request
for prejudgment attachment is DISMISSED.

V. CONCLUSION

{40} For the foregoing reasons, Defendants’ Motion is GRANTED as to
Plaintiffs’ claims for fraud, civil conspiracy, constructive trust, and attachment, but
is DENIED as to all other claims.

IT IS SO ORDERED, this the 21st day of November, 2013.