Opinion
No. 1:99cv48-T.
July 20, 1999.
MEMORANDUM AND RECOMMENDATION
THIS MATTER is before the court upon defendant's Motion to Dismiss. Having carefully considered that motion, reviewed the pleadings, and conducted a hearing, the undersigned enters the following findings, conclusions, and recommendation.
FINDINGS AND CONCLUSIONS
I. Background
This civil action stems from a multimillion-dollar larceny by an employee of the defendant armored car service. Soon after the larceny, plaintiff discovered in a dumpster at his place of business items which he believed were tied to the robbery. He immediately reported his find to the Henderson County Sheriff's Department, which, in turn, notified the Federal Bureau of Investigation (FBI). It appears undisputed that plaintiff's discovery was the linchpin to the FBI's almost immediate recovery of the stolen millions.
Plaintiff contends that he applied for the $500,000 reward offered by defendant " for the arrest and conviction of the person(s) responsible for the multimillion dollar robbery of the Jacksonville Loomis Fargo office and recovery of stolen funds" (emphasis added), but defendant failed to pay him the reward. Plaintiff has alleged that defendant offered the reward, he accepted the offer by providing the FBI with information leading to the recovery of the stolen millions, and that contract was breached when defendant refused to pay. In addition to breach of contract, plaintiff has also attempted to allege a cause of action for unfair and deceptive trade practices. It appearing that the parties are residents of different states and that the amount in controversy exceeds the jurisdictional minimum, the diversity jurisdiction of this court has been properly invoked.
II. Standard
Defendant has moved for dismissal pursuant to Rule 12(b), Federal Rules of Civil Procedure, and contended that plaintiff has 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 defendant's motion, the undersigned has accepted as true the facts alleged by plaintiff in the complaint and viewed them in a light most favorable to plaintiff.
III. Discussion
1. Choice of Laws
A. Breach of Contract
The briefs before the court discuss at length whether the law of Texas (where the alleged offer was made), Florida (where the robbery occurred), or North Carolina (where the offer was allegedly accepted) should apply. North Carolina's long-held rule of lex loci — the law of the situs of the claim — would dictate that the law of the state where the event occurred would apply. Bordreau v. Baughman, 368 S.E.2d 849 (1988).
We agree with plaintiffs that this jurisdiction follows the general rule that the validity and construction of a contract are to be determined by the law of the place where the contract is made. Davis v. Davis, 269 N.C. 120, 152 S.E.2d 306 (1967), and cases therein cited. Our Supreme Court has also held that the place at which the last act was done by either of the parties essential to a meeting of the minds determines the place where the contract was made. Fast v. Gulley, 271 N.C. 208, 411 155 S.E.2d 507 (1967), and cases therein cited.Suitt Construction Co., Inc. v. The Seaman's Bank for Savings, 30 N.C. App. 155, 159 (1976). Clearly, the unilateral offer was made in Texas. Plaintiff allegedly accepted the offer by providing the information in North Carolina, which led federal and state authorities to recover the funds in North Carolina. The last act leading to contract formation, if one was formed, was done in North Carolina, inasmuch as giving the performance requested is the standard means of acceptance of a unilateral offer. See Calamari Perillo, Contracts (2nd Ed.), at § 2-18. The court will apply the substantive law of North Carolina to plaintiff's breach-of-contract claim.
2. Breach of Contract
To allege a common-law claim for breach of contract in North Carolina, a party must allege that (1) defendant made an offer, (2) plaintiff accepted the offer, (3) a material breach occurred, and (4) plaintiff sustained damages. In moving to dismiss pursuant to Rule 12(b)(6), it is defendant's contention that plaintiff has failed to allege that he knew of the reward when he performed and could not do so because the reward had not in fact been offered at the time of his performance.
Defendant's point of law appears to be consistent with learned treatises, for commentators have long held, as follows:
[That] the offeree must know of the offer certainly applies to a unilateral contract because here there is no question of the offeror relying upon a promise of the offeree. Thus, if an offer of reward has been made to the public a person who has performed the act called for has no contractual claim against the offeror unless he knows of the offer.
Calamari, supra, at § 2-15. While no North Carolina reward cases exist as to knowledge by the offeree, the general contractual rule would certainly apply. Plaintiff does not contest the point, but argues that it is not a proper ground for dismissal in that it would require departure from a well-pleaded complaint to facts outside the pleadings.
In North Carolina, a complaint for breach of contract is sufficient when "it gives notice of the events and transactions and allows the adverse party to understand the nature of the claim and to prepare for trial." Smith v. N.C. Farm Bureau Mutual Ins. Co., 84 N.C. App. 120, 123, aff'd 321 N.C. 60 (1987). Rule 8(a), Federal Rules of Civil Procedure, is in accord in that it requires a complaint to contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Plaintiff's complaint contains a textbook example of a properly pleaded claim for breach of contract. There is no requirement that plaintiff allege either that the offer was made at any certain time or that he knew of the offer when he performed. This court finds that to hold in defendant's favor at this stage in the proceedings would require reaching beyond the allegations of the complaint for facts which are not in evidence — an act which is prohibited by Rule 12(b). In addition, it is plaintiff's contention that discovery may resolve this issue by determining when the offer was made, when plaintiff knew of the offer, and whether defendant had any standing, general offers of reward for information. Defendant's arguments are well taken and seem to present a formidable hurdle; however, they would be better asserted as affirmative defenses, which can be addressed on a motion for summary judgment or at trial. The undersigned, therefore, will recommend that defendant's Motion to Dismiss plaintiff's claim for breach of contract be denied without prejudice and plaintiff be allowed to go forward with that claim.
B. Unfair and Deceptive Trade Practices
Chapter 75-1.1 of the North Carolina General Statutes provides that an act or practice is unfair if it "is immoral, unethical, oppressive, unscrupulous, or substantially injurious to consumers." Marshall v. Miller, 302 N.C. 539, 548 (1981). A defendant's act is deceptive if it "has the capacity or tendency to deceive." Id., at 548. A mere breach of contract, even if intentional, is not an unfair or deceptive act under the North Carolina statute. Bartolomeo v. S.B. Thomas, Inc., 889 F.2d 530, 535 (4th Cir. 1989). Under Bartolomeo, a plaintiff "must show substantial aggravating circumstances attending the breach to recover under the Act."Id., at 535. In Jones v. Capitol Broadcasting Co., Inc., 128 N.C. App. 271 (1998), the North Carolina Court of Appeals found that in analogous circumstances, a claim for unfair and deceptive trade practices based on an underlying alleged breach of contract:
does not allege any aggravating circumstances. Plaintiff merely contends that defendants engaged in unfair and deceptive business practices by breaching its contract in failing to award him a truck. We conclude that these facts do not present aggravating circumstances surrounding defendant's breach of contract and are insufficient to raise a claim of unfair and deceptive practices pursuant to § G.S. 75-1.1.Id., at 275. In this case, there are no allegations of "aggravating circumstances surrounding" defendant's alleged breach; the only substantive allegation is that plaintiff believes a contract exists and defendant believes that one does not. The undersigned will recommend dismissal of this claim, without prejudice to amending the pleadings at a later date to conform to the evidence, if any can be presented, of aggravating circumstances.
RECOMMENDATION
IT IS, THEREFORE, RESPECTFULLY RECOMMENDED that
(1) defendant's Motion to Dismiss plaintiff's breach-of-contract claim be DENIED without prejudice as to resubmitting the substance of such issue at the close of discovery in the form of a motion for summary judgment;
(2) defendant's Motion to Dismiss plaintiff's unfair-and-deceptive-trade-practices claim be GRANTED, with leave to reassert such claim at a later date to conform to the evidence, if any can be presented, of aggravating circumstances.
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. Arn; 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 defendant's Motion to Dismiss (#3).