Opinion
1:99cv162
January 14, 2000
MEMORANDUM AND RECOMENDATION
THIS MATTER is before the court upon the Motion to Dismiss of Shelley's Jewelry, Inc., Joette M. Humphrey, John F. Laughter, Billy R. Ramsey, Keith G. Shelley, Stanley R. Shelley ("auction-company defendants"), which was filed October 4, 1999, but not accompanied by a brief. On October 12, 1999, plaintiffs filed their response to defendants' unsupported motion, captioning their pleading as a "Motion to Oppose Defendants' Motion to Dismiss Complaint." On November 3, 1999, the auction-company defendants filed their "Reply to Plaintiff's response to Defendant's Motion to Dismiss." Soon after such briefing was completed, Linda The Lady of Shalford sent a letter to the court requesting that consideration of "any motions filed in this case" be delayed until she could find counsel. On November 22, 1999, the undersigned granted such request in part, stayed consideration until December 22, 1999, and instructed plaintiffs that "[b]y that date, counsel for plaintiff or plaintiffs shall enter their appearance and any further response; otherwise, the court will move forward and dispose of the pending motions." Linda The Lady of Shalford's request was predicated upon "her husband's health circumstances. . . ." Neither plaintiff has filed any further response within the time allowed, and the auction-company defendants' motion is ripe for disposition.
The court notes that Local Rule 7.2 provides that "briefs shall be filed with the motion. . . ." An exception exists for boilerplate motions to dismiss included in the answer. Where a party files a motion to dismiss in lieu of an answer, such motion must be accompanied by a brief.
II. Factual Background
As discussed infra, the facts alleged in the complaint, as amended, must be taken in a light most favorable to plaintiffs. To summarize plaintiffs' 37-page second amended complaint, plaintiffs contend that Shelley's Jewelry, Inc., and its officers and employees breached a contract which purportedly provided for the pre-death auction of plaintiffs' estate. Included among the personalty that was to be auctioned was purportedly "the lordship of an ancient land barony, honor or manor of England." Complaint, at ¶ 10.
Plaintiffs allege that they contacted the auction-company defendants during the summer of 1998 based upon a full-page add in a reliable trade publication. In preliminary discussions, defendants assured plaintiffs that they were experienced, reputable, and had a million-dollar insurance policy. According to the complaint, plaintiffs and the auction-company defendants contracted to transport plaintiffs' estate items from Raleigh to Hendersonville and thereupon sell such items. In their factual allegations, plaintiffs detail and allege problems from the inception of the agreement, including inadequate pre-transportation inspection, unprofessional transportation of their effects, careless unpacking, and failure to inventory.
Plaintiffs state that in initial discussions, they told the auction-company defendants that their personal effects should fetch $100,000 and the lordship title should be worth $150,000 at auction.
After the contents of plaintiffs' estate were transported to Hendersonville, plaintiffs contend that the auction-company defendants breached the written auction contract by refusing to go forward with the sale. After the items had been inspected in Hendersonville, the auction-company defendants determined that neither the plaintiffs nor their personal effects were what they were portrayed to be and that the sale value was not more than $70,000. Complaint, ¶¶ 33-35. Plaintiffs allege that the auction-company defendants demanded that plaintiffs remove their property from their premises and pay a $1,000 pick-up fee. Plaintiffs assert claims of common-law fraud (Claims 1, 2, 3), conspiracy (Claim 4), unfair and deceptive trade practices (Claim 5), violation of Chapter 14-100 of the North Carolina General Statutes (a criminal provision) (Claim 6), constructive trespass to chattels (Claim 7), constructive conversion of chattels (Claim 8), gross negligence (Claim 9), breach of fiduciary duty (Claim 10), professional or regulated occupation malpractice (Claim 11), breach of contract (Claim 12), breach of warranty (Claim 13), breach of covenant of good faith and fair dealing (claim 14), reckless conduct (Claim 15), personal injury by intentional misconduct (Claim 16), and emotional distress (Claim 17).
III. Standard Applicable to Rule 12(b) Motions
The auction-company defendants have moved for dismissal pursuant to Rules 12(b)(4),(5), and (6), Federal Rules of Civil Procedure, contending insufficiency of process and service of process and that plaintiffs have failed to state a cognizable claim. Rule 12(b) authorizes dismissal based upon a dispositive issue of law. Neitzke v. Williams, 490 U.S. 319, 109 S.Ct. 1827, 1832 (1989); Hishon v. King Spalding, 467 U.S. 69, 73 (1984); Conley v. Gibson, 355 U.S. 41 (1957). As the Court discussed in Neitzke:
This procedure [for dismissal], operating on the assumption that the factual allegations in the complaint are true, streamlines litigation by dispensing with needless discovery and fact finding. Nothing in Rule 12(b)(6) confines its sweep to claims of law which are obviously insupportable. On the contrary, if as a matter of law "it is clear that no relief could be granted under any set of facts . . . a claim must be dismissed, without regard to whether it is based on outlandish legal theory. . . . What Rule 12(b)(6) does not countenance are dismissals based on a judge's disbelief of a complaint's factual allegations."Id., at 1832 (citation omitted). For the limited purpose of making a recommendation as to disposition of such motion, the undersigned has accepted as true the facts alleged by plaintiffs in the complaint and viewed those facts in a light most favorable to plaintiffs.
IV. Discussion
A. Rule 12(b)(4) (5) Motion
Taking issue with service of process, the auction-company defendants contend that they never returned plaintiffs' Rule 4(d) request for waiver of service and that "[n]o other service of process has been attempted besides this waiver request, including mailing of a summons." Defendants' Brief, at 3. Review of the pleadings reveals that plaintiffs filed their Complaint on June 29, 1999, and that they had 120 days from that date within which to effectuate service of process. Fed.R.Civ.P. 4(m). Inasmuch as only approximately 97 days had passed when defendants filed their motion on October 4, 1999, their motion was premature.
Defendants filed their brief on November 3, 1999, which was beyond the 120-day period.
Despite the prematurity of defendants' motion (and the lack of a supporting brief), plaintiffs filed a response, contending in paragraph (c) therein that they served each defendant via certified mail with a copy of the complaint, a Notice of Lawsuit and request for Waiver of Service of Summons, Waiver of Service of Summons, and other documents required by the local rules. Plaintiffs have provided the court with the return receipts indicating that each defendant received the waiver packets. See docket entries 13 through 18.
Even if plaintiffs had failed to effectuate service within the time allowed, Rule 4(d) provides that when a party "receives notice of an action in the manner provided . . . [the party] has a duty to avoid unnecessary costs of serving the summons." Nowhere is that more true than here, where plaintiffs are proceeding
pro se and defendants are represented by a member of the Bar of this court. The only reason for not executing the waiver would be to cause unnecessary delay in the hopes that, somehow, the plaintiffs would not otherwise perfect service. The Court of Appeals for the Fourth Circuit has long held, as follows:
"[T]he real purpose of service of process is to give notice to the defendant that he is answerable to the claim of the plaintiff" and that "where actual notice of the commencement of the action and the duty to defend has been received by the one served," service under Rule 4(d) "should be liberally construed to effectuate service and uphold the jurisdiction of the court.Karlsson v. Rabinowitz, 318 F.2d 666, 668-669 (4th Cir. 1963). Where, as here, the litigation was transferred from another jurisdiction
we would generally expect the transferee court to find "good cause" to extend the period for service for an "appropriate period" under the last clause of the first sentence in Rule 4(m). The length of any such appropriate period is committed to the district court's discretion.Harding v. Williams Property Co., 163 F.3d 598 (table case) 1998 WL 637414, 5 (4th Cir. 1998). Finally, the appellate court has made clear that when
the process gives the defendant actual notice of the pendency of the action, the rules, in general, are entitled to a liberal construction. When there is actual notice, every technical violation of the rule or failure of strict compliance may not invalidate the service of process. But the rules are there to be followed, and plain requirements for the means of effecting service of process may not be ignored.Armco, Inc. v. Penrod-Stauffer Building Systems. Inc., 733 F.2d 1087, 1089 (4th Cir. 1984).
In this case, defendants' motion is premature by approximately 23 days, making it nonjusticiable. The undersigned, therefore, must recommend that defendants' Motion to Dismiss pursuant to Rules 12(b)(4) and (5) be denied as premature and such defendants be required to elect between waiver of service under Rule 4(d) or personal service by the United States Marshal (at defendants' own expense) as provided by Rule 4 (d)(5).
The undersigned is concerned that such motion was filed without first determining that the time provided by Rule 4(m) had elapsed.
B. Rule 12(b)(6) Motion
The auction-company defendants next move to dismiss the 17 substantive claims in the complaint. The court will consider such claims in the groupings argued by defendants.
1. Fraud Claims
Defendants contend that plaintiffs have failed to allege their claims of fraud with the particularity required by state law. Claims based upon fraud include claims one, two, three, four, five, six, and seven. The court agrees with defendants that plaintiffs must make allegations of fraud with particularity and cannot rely upon generalities and conclusory allegations.
a. Claim One
As to claim one, plaintiffs attached what appears to be a copy of a letter from an unsatisfied customer to support their contention that defendants made a false representation concerning their business reputation. Further allegations concerning false representations made concerning the auction house's staff, equipment, and facility resources are not the type contemplated by state law that would support a claim for fraud. See Trull v. Central Community Bank, 117 N.C. App. 220, 224 (1994). While undeserved "puffing" of one's prowess in a profession or trade can lead to insatiable expectations (and lawsuits for breach of contract), it is not enough to form the basis of allegations of fraud, especially where, as here, plaintiffs held themselves out to be knowledgeable in the field of auctioneering. See Complaint, ¶ 28.
b. Claim Two
As to claim two, plaintiffs contend that an employee of defendant held himself out as capable of contractually binding when he was no longer the person designated with the state licensing board as authorized to do business. The nexus between the licensing board and the ability to bind or contract for a business has not been alleged, and plaintiffs have in no way asserted that such representation was intended to be false or to deceive. Whether a person has the actual or apparent authority to bind a business is a matter of agency law.
c. Claim Three
As to claim three, it appears to simply reassert the substance of claims one and two, ascribing bad intent by association to the employee who allegedly drafted the contract. Again, alleged failure to perform a contract, breach of contract, and puffing, are not fraud under North Carolina law, inasmuch as an intent to deceive cannot be sufficiently pleaded.
d. Claim Four
As to claim four — conspiracy — the court agrees with defendants that plaintiffs cannot rely upon conclusory allegations, but must be particular in their claims. In addition, a claim of conspiracy cannot be founded upon the acts of several employees within the same corporation, for a corporation can only act through its employees and, therefore, does not conspire with itself. The intracorporate conspiracy doctrine stems from an antitrust case based upon an alleged conspiracy between a corporation, its officers, employees, and agents. In dismissing that action, the appellate court held, as follows:
It is basic in the law of conspiracy that you must have two persons or entities to have a conspiracy. A corporation cannot conspire with itself any more than a private individual can, and it is the general rule that the acts of the agent are the acts of the corporation. 200 F.2d at 914.Nelson Radio Supply Co. v. Motorola. Inc., 200 F.2d 911 (5th Cir. 1952), cert. denied, 345 U.S. 925 (1953). Plaintiffs' fourth claim for relief, sounding in conspiracy, should, therefore, be dismissed.
e. Claims Seven, Thirteen, and Fifteen
Plaintiffs' seventh claim for relief — constructive trespass to chattels — is dependent upon the element of fraud, inasmuch as there can be no trespass where plaintiffs gave defendants permission to take, carry away, and hold their personal belongings. Again, plaintiffs' claims of fraudulent inducement must fail because it cannot be particularly alleged that representations made were in fact false and intended to deceive.
In the thirteenth cause of action, plaintiffs allege that as a result of such fraud, defendants breached their warranty of performance concerning the services which they promised to deliver. As to the fifteenth cause of action, plaintiffs allege recklessness in the making of representations by defendants. Fraud is an essential element of such causes of action, and the inability to allege fraudulent acts with specificity is fatal to plaintiffs' thirteenth and fifteenth causes of action. Unfulfilled expectations of parties to an allegedly breached contract do not easily translate to allegations of fraud.
2. Other Claims
a. Claim Five
Claim five is asserted under the North Carolina Unfair and Deceptive Trade Practices Act ("UDTPA"), Chapter 75 of the North Carolina General Statutes. Without question, the UDTPA is only applicable to contracts involving the "sale of goods," not to those involving the rendering of professional services. Review of the pleadings indicates that the parties did not contract for the sale of goods, but for the rendition of professional auctioneering services for a percentage fee.
b. Claim Six
In claim six, plaintiffs allege that defendants violated Chapter 14-100 of the North Carolina General Statutes by obtaining money by false pretenses. Unless the Legislature makes clear that it is affording individuals a private right of action, plaintiffs cannot create a right in tort from a provision of criminal law. Such claim, therefore, must be dismissed.
c. Eighth Claim
Plaintiffs' eight claim is for constructive conversion, which is dependent upon an allegation that defendants retained property that was not theirs and converted it to their own use. The allegations of the complaint are antithetical to such a claim. Specifically, it is alleged in the complaint that defendants (1) took possession of such goods in accordance with the contract, (2) breached the contract, and (3) demanded that plaintiffs remove their goods from defendants' property. The alleged mishandling of goods does not provide the element of scienter necessary to state a cognizable claim for conversion.
d. Ninth and Claim
In the ninth claim, plaintiffs contend that defendants were grossly negligent in the handling of plaintiffs' personal goods. While plaintiffs may have perceived incompetence on the part of defendants, mere inattention and ineptitude do not amount to the type of wanton and willful conduct such intentional tort action is designed to curb and punish. Sitting in diversity, a federal court must look to the law of the forum state in determining substantive issues. Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1938). In Butt v. Goforth Properties. Inc., 95 N.C. App. 615 (1989), the North Carolina Court of Appeals held, as follows:
The established law in North Carolina regarding the recovery of punitive damages in tort actions is that "the tortious conduct must be accompanied by or partake of some element of aggravation before punitive damages will be allowed". . . . When the underlying action is grounded in negligence, punitive damages may be recovered where the negligence is gross or wanton. Conduct is wanton when in conscious and intentional disregard of or indifference to the rights and safety of others.Id., at 618 (citing Paris v. Kreitz, 75 N.C. App. 365, 373-74, review denied, 315 N.C. 185 (1985)). Conscious and intentional disregard of or indifference to the rights of others could suffice. Butt v. Goforth Properties, Inc., supra. Such a level of callous disregard is not alleged where, as here, it is contended that defendants were not as careful as they should have been, did not search boxes thoroughly, damaged goods in transit, and did not provide the level of safekeeping usual within the profession. If such allegations could amount to gross negligence, every household move would be actionable. By the very nature of the act, damages to goods are quantifiable and may find an adequate remedy at law without resort to the drastic step of punitive damages.
e. Sixteenth Claim
In their sixteenth claim, plaintiffs allege that they sustained personal injury because defendants refused to help them remove their personal goods. Apparently, it is plaintiffs' contention that defendants are responsible for personal injury plaintiffs sustained in removing their own goods from defendants' property despite knowing of their own limits and medical conditions. North Carolina does not provide a cause of action for those who choose, for whatever reason, to expose themselves to activities which can cause personal injury. It has long been held that a person who leaves a place of safety to save personal property has no cause of action under the rescue doctrine. Westbrook v. Cobb, 105 N.C. App. 64 (1992). The North Carolina appellate courts routinely have held that the law imposes upon every person the duty to exercise ordinary care to protect oneself from injury and avoid a known danger. Where a person sees a dangerous situation and there is an opportunity to avoid such known danger, failure of that person to take that opportunity is contributory negligence. Lenz v. Ridgewood Associates, 55 N.C. App. 115 (1981), review denied, 305 N.C. 300 (1982). This is especially so where a person places himself or herself in harm's way. In this case, there is no allegation of any affirmative act by defendants causing injury to plaintiffs, and defendants simply cannot be held liable for any injury plaintiffs sustained in attempting to pack and remove their goods.
f. Seventeenth Claim
In their seventeenth claim, plaintiffs contend that the action of defendants amounted to intentional infliction of emotional distress. Intentional infliction of emotional distress consists of (1) extreme and outrageous conduct, (2) which is intended cause and does cause (3) severe emotional distress. In Denning-Boyles v. WCES. Inc., 123 N.C. App. 409 (1996), the North Carolina Court of Appeals held, as follows:
[It] is a question of law whether the alleged conduct on the part of defendant "may be reasonably regarded as extreme and outrageous;" however, once shown, "it is for the jury to determine . . . whether the conduct complained of is, in fact, sufficiently extreme and outrageous to result in liability."Id., at 412-13 (citation omitted). In this case, the conduct alleged — breach of contract and allegations of fraud not meeting the specificity requirements of North Carolina law — cannot be reasonably regarded as "extreme and outrageous" conduct. Review of North Carolina case law reveals that "extreme and outrageous" conduct is a classification reserved for acts which "shock the conscience" or amount to conduct intolerable in "decent society." See West v. King's Department Store, Inc., 321 N.C. 698 (1988). Examples drawn from the cases included firing a weapon into an occupied vehicle; intentional shoving of an elderly man; and, in a number of cases, the nonconsensual sexual touching of female workers by male supervisors. See Dickens v. Puryear, 302 N.C. 437 (1981); Hogan v. Forsyth Country Club Co., 79 N.C. App. 483, disc, review denied, 317 N.C. 334 S.E.2d 140 (1986). A reasonable person could not consider a decision to allegedly breach a contract based upon a subjective evaluation of the value of the res and alleged mishandling of such goods to be "extreme or outrageous" conduct intended to cause severe emotional distress. The undersigned, therefore, will recommend that defendants' Motion to Dismiss plaintiffs' claim of intentional infliction of emotional distress for failure to state a cognizable claim be granted in accordance with Rule 12(b)(6).
3. Conclusion
The claims remaining, including ten, eleven, twelve, and fourteen, provide plaintiffs with the potential for sufficient relief. Even when this court reads the entire complaint in a light most favorable to plaintiffs, the factual allegations are not there to support much more than breach of contract, professional malpractice, breach of fiduciary duty, and a claim for breach of the duty of good faith and fair dealing implicit in all commercial transactions.
RECOMMENDATION
IT IS, THEREFORE, RESPECTFULLY RECOMMENDED that the auctioncompany defendants' Motion to Dismiss be ALLOWED in part and DENIED in part as follows:
(1) defendants' Motion to Dismiss pursuant to Rules 12 (b)(4) and (5) be DENIED and defendants be required to elect between Rule 4(d) waiver of service or personal service at their own expense; and
(2) defendants' Motion to Dismiss pursuant to Rule 12 (b)(6) be GRANTED as to claims one, two, three, four, five, six, seven, eight, nine, and thirteen, fifteen, sixteen, and seventeen and that such claims be DISMISSED; and
(3) defendants' Motion to Dismiss pursuant to Rule 12 (b)(6) be DENIED as to claims ten, eleven, twelve, and fourteen.
The parties are hereby advised that, pursuant to 28, United States Code, Section 636(b)(1)(C), written objections to the findings of fact, conclusions of law, and recommendation contained herein must be filed within ten (10) days of service of same. Failure to file objections to this Memorandum and Recommendation with the district court will preclude the parties from raising such objections on appeal. Thomas v. Am, 474 U.S. 140 (1985), reh'g denied, 474 U.S. 1111 (1986); United States v. Schronce, 727 F.2d 91 (4th Cir.), cert. denied, 467 U.S. 1208 (1984).
This Memorandum and Recommendation is entered in response to the auction-company defendants' Motion to Dismiss (#11).
This, the 14th day of January, 2000.