MARKET AMERICA, INC., Plaintiff v. ROBIN CHRISTMAN-ORTH, Defendant
No. COA98-1118
(Filed 20 July 1999)
1. Libel and Slander--qualified privilege--summary judgment
The trial court did not err in an action arising from defendant working with two multi-
level sales companies by granting summary judgment for plaintiff-Market America on
defendant's counterclaim for libel where the communication was protected by a qualified
privilege and defendant did not come forward with any evidence of actual malice or excessive
publication.
2. Libel and Slander--employer not vicariously liable for torts of independent
contractor--uncertainty as to what was said
The trial court did not err in action arising from defendant working with two multi-level
sales companies by granting summary judgment for plaintiff-Market America on defendant's
counterclaim for slander relating to independent distributors for Market America. An employer
is not vicariously liable for the torts of an independent contractor and defendant could not recall
when she listened to the voicemail in question, she did not remember whose voicemail she
listened to, she could not remember precisely what was said, and she had no witnesses or
recordings.
3. Unfair Trade Practices--non-competition clause--valid
The trial court did not err by granting summary judgment for plaintiff-Market America
on defendant's counterclaim that a non-competition clause violated N.C.G.S.§ 75-1. Although
defendant contended that the covenant did not apply to her because she was an independent
distributor, non-competition clauses are applicable to independent contractor relationships.
Although there was language in the covenant which referred to resignation or termination as an
independent distributor and defendant had neither resigned nor been terminated, an agreement
encompasses implied provisions necessary to effect the intention of the parties and plaintiff
certainly intended to prohibit competition by those still working as distributors for the company.
Finally, although defendant contended that there was no legitimate business purpose for
restricting participation in other ventures which used a similar matrix marketing system,
plaintiff's interest in protecting the integrity and viability of its business is legitimate.
4. Unfair Trade Practices--libel--qualified privilege--no damages
The trial court did not err by granting summary judgment for plaintiff on defendant's
counterclaim for an unfair and deceptive trade practice based upon libel where defendant's
reliance on Ellis v. Northern Star Co., 326 N.C. 219, was unfounded because the communication
here was protected by a qualified privilege and there was no evidence that defendant sufferedactual injury.
5. Wrongful Interference--summary judgment--no business relationship--no malice
The trial court properly granted summary judgment for plaintiff on defendant's
counterclaim for tortious interference with business relations in an action arising from defendant
working with two multi-level sales companies. Defendant maintained throughout the litigation
that her involvement with the second company (CAT) was as an assistant to her husband and she
thus had no CAT business with which plaintiff could interfere. As to her Market America
business, defendant did not show how the publication in question interfered with her economic
relationship with Market America, and the prior conclusion that defendant failed to show any
actual malice by Market America in distributing the bulletin necessarily causes defendant's
counterclaim to fail.
Appeal by defendant from order entered 2 June 1998 by Judge William H. Freeman in
Guilford County Superior Court. Heard in the Court of Appeals 9 June 1999.
Womble Carlyle Sandridge & Rice, PLLC, by Keith W. Vaughan, Pressly M. Millen, and
Christine Sandez, for plaintiff-appellee.
Smith Helms Mulliss & Moore, L.L.P., by Jon Berkelhammer and John J. Korzen, for
defendant-appellant.
TIMMONS-GOODSON, Judge.
Robin Christman-Orth (defendant) appeals from an order granting summary judgment to
Market America, Inc. (Market America) on defendant's counterclaims for libel, slander, unfair
trade practices, tortious interference with business relations, and restraint of trade. In addition,
defendant challenges the trial court's ruling which permitted Market America to amend its reply
to include various affirmative defenses. Having judiciously examined the record before us, we
affirm the order of the trial court.
Market America, a North Carolina corporation, is a multi-level product brokerage
company which distributes approximately 300 consumer products through a network of
approximately 75,000 independent distributors. The distributors earn money by purchasingproducts from Market America at wholesale prices and then selling those products to consumers
at retail prices. Distributors also build sales organizations of other independent distributors and
earn commissions from training and managing those sales organizations. Market America's
distribution system is based on a binary matrix marketing plan whereby each distributor recruits,
trains, and manages two sales organizations of other independent distributors.
Defendant is a citizen and resident of Pennsylvania. Prior to working for Market
America, defendant operated a travel agency and worked as a regional sales representative for
J&J Snack Food Corporation. On 18 March 1995, defendant executed an Independent
Distributor Application and Agreement (the Agreement) with Market America defining the
relationship between the company and its independent distributors. Under Paragraph 21 of the
Agreement, defendant accepted the following terms:
I agree that the marketing plan, genealogy reports, distributor list
and official literature are proprietary information and are
considered trade secrets of the company as construed [in] N.C.G.S.
§ 66-152. I agree not to enter into competition with Market
America by participating as a[n] Independent Contractor,
consultant, officer, shareholder, director, employee or participant
of another company or direct sales program using a similar matrix
marketing structure or handling similar products to that of Market
America or involving a Distributor of Market America in such a
program for a period of six months from my written resignation or
termination as an Independent Distributor of Market America. I
agree that if I breach this covenant that Market America shall be
entitled to a restraining order in a court of competent jurisdiction
and I shall be liable to pay no less than $2,000.00 in damages per
breach and legal cost.
When this lawsuit arose, defendant had not resigned, nor had she been terminated as an
Independent Distributor of Market America. Club Atlanta Travel, Inc. (CAT) is also a
multi-level sales company using a binary marketing plan. CAT sells travel services such as
vacations and airline flights. In September of 1996, defendant's husband became anindependent distributor for CAT, and while defendant did not become a CAT distributor, she
admittedly participated in marketing the company's travel products and encouraged other Market
America distributors to take advantage of CAT's business opportunities. On 13 December 1996,
general counsel for Market America sent a letter to defendant stating that her involvement with
CAT's commercial enterprise violated the terms of the Agreement. Defendant, through her
attorney, replied that she had done nothing in contravention of the Agreement by participating in
the CAT venture, because CAT did not market any of the same products as did Market America.
Defendant further indicated that she would continue to engage in CAT business.
On 29 January 1997, Market America filed a complaint against defendant seeking a
temporary restraining order, a permanent injunction, and money damages for breach of contract
and misappropriation of Market America's trade secrets. A temporary restraining order
requiring defendant to refrain from recruiting Market America distributors into other business
ventures was issued that same day. On 7 February 1997, Market America's President and Chief
Executive Officer, J.R. Ridinger, sent a Follow-Up Bulletin (the bulletin) to Market America's
Advisory Counsel Members, which consisted of the company's top twenty independent
distributors, and the Certified Trainers, which consisted of approximately sixty-five independent
distributors who were responsible for training other distributors. The bulletin stated that
defendant was one of two individuals against whom Market America had prevailed in North
Carolina's courts. Although the bulletin mistakenly referred to the temporary restraining order
against defendant as an injunction, a copy of the actual order was attached to and distributed
with the bulletin.
On 8 April 1997, defendant filed an answer asserting, in addition to her defenses,
counterclaims for (1) libel, (2) slander, (3) unfair trade practices under section 75-1.1 of theNorth Carolina General Statutes, (4) interference with business relations, (5) restraint of trade in
violation of section 75-1 of the General Statutes, and (6) money owed in the amount of $200.
The libel claim is based on the bulletin, which defendant contends defamed her by allegedly
likening her to termites, parasites, and vermin, by stating that she had been attempting to
dissuade Distributors from Market America into CAT, and by stating that Market America had
obtained an injunction, as opposed to a temporary restraining order, against defendant.
The counterclaim for slander is based on two voicemail messages. The first message is
one allegedly left by Scott Tucker, an independent distributor for Market America. According to
defendant, Tucker contacted individuals within his business organization and stated that
defendant was involved with CAT but would end such involvement within six months and go on
to something else. The message also discouraged other distributors from becoming involved in
CAT, stating that defendant was only motivated by self-interest and greed. The second
voicemail message is one allegedly left by Ridinger which supposedly compared Defendant to
members of the recently departed Heaven's Gate cult in California. As to defendant's
unfair trade practices claim, she generally contends that Market America's alleged libel of
defendant and its attempt to enforce Paragraph 21 of the Agreement constituted unfair and
deceptive acts or practices under section 75-1.1 of the General Statutes. Similarly, defendant's
counterclaim for interference with business relations alleges that Market America prevented
people from doing business with defendant by threats and intimidation. Lastly, defendant's
claim for restraint of trade asserts that Market America had no legitimate business purpose for
attempting to use Paragraph 21 of the Agreement to prevent defendant from entering into other
business ventures which do not involve competing products.
Market America's original reply, filed 10 June 1997, averred only that defendant'scounterclaims failed to state claims for relief. Then, on 7 May 1998, Market America filed a
motion to amend its reply to add several affirmative defenses, including (1) truth, (2) qualified
privilege, and (3) lack of effect on any North Carolina business operations of defendant.
Plaintiff moved for summary judgment as to defendant's counterclaims on 22 May 1998. Both
motions were heard on 1 June 1998, and on 2 June 1998, the trial court entered an order granting
the motions. Defendant appeals.
___________________________________
[1]By her first assignment of error, defendant contends that the trial court improvidently
entered summary judgment for Market America on defendant's libel claim. We cannot agree.
The device known as summary judgment is appropriate when the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the affidavits, if any, show that
there is no genuine issue as to any material fact and that any party is entitled to judgment as a
matter of law. N.C.R. Civ. P. 56(c). For a defending party to prevail on a motion for summary
judgment, the party must demonstrate that '(1) an essential element of [the claimant's] claim is
nonexistent . . . (2) [the claimant] cannot produce evidence to support an essential element of
[her] claim, or . . . (3) [the claimant] cannot surmount an affirmative defense which would bar
the claim.'
Clark v. Brown, 99 N.C. App. 255, 260, 393 S.E.2d 134, 136-37, (quoting
Shuping
v. Barber, 89 N.C. App. 242, 244, 365 S.E.2d 712, 714 (1988))
disc. review denied, 327 N.C.
426, 395 S.E.2d 675 (1990),
quoted in Gibson v. Mutual Life Ins. Co. of N.Y., 121 N.C. App.
284, 286, 465 S.E.2d 56, 58 (1996). In determining whether summary judgment is proper, the
trial court, and the reviewing court, must construe the evidence in the light most favorable to the
non-moving party, who must be given the benefit of all favorable inferences regarding the
evidence.
Id. Therefore, the question confronting us is whether, taken in the light mostfavorable to defendant, the evidence sufficiently established any genuine issue of fact as to
whether Market America libeled defendant. We hold that it did not.
Defendant contends that statements made by Ridinger in the 7 February 1997 bulletin
were libelous
per se, in that they impeached defendant in her profession and otherwise subjected
her to contempt. The statements in question include insinuations that by participating in the
CAT enterprise, defendant behaved in a manner that constituted unfair competition and was
blatantly unethical and illegal. Defendant further takes exception to statements that allegedly
compared her to termites, parasites, and vermin who act out of pure greed. Equally offensive
to defendant was the statement that she had been attempting to dissuade Distributors from
Market America into CAT. Market America, on the other hand, argues that assuming, without
conceding, that the challenged statements were libelous
per se, the same were qualifiedly
privileged.
Libel is defined as written defamation.
Phillips v. Winston-Salem/Forsyth County Bd. of
Educ., 117 N.C. App. 274, 277, 450 S.E.2d 753, 756 (1994).
[A] publication is libelous
per se, or actionable
per se, if, when
considered alone without innuendo: (1) It charges that a person has
committed an infamous crime; (2) it charges a person with having
an infectious disease; (3) it tends to subject one to ridicule,
contempt, or disgrace, or (4) it tends to impeach one in his trade or
profession.
Martin Marietta Corp. v. Wake Stone Corp., 111 N.C. App. 269, 276, 432 S.E.2d 428, 433
(1993)(quoting
Ellis v. Northern Star Co., 326 N.C. 219, 224, 388 S.E.2d 127, 130 (1990)).
However, even where a statement is found to be actionable
per se, the law regards certain
communications as privileged. A qualified privilege will prevent liability for a defamatory
statement, when the statement is made: (1) on subject matter (a) in which the declarant has an interest, or
(b) in reference to which the declarant has a right or duty, (2) to a
person having a corresponding interest, right, or duty, (3) on a
privileged occasion, and (4) in a manner and under circumstances
fairly warranted by the occasion and duty, right, or interest.
Phillips, 117 N.C. App. at 278, 450 S.E.2d at 756 (quoting
Clark, 99 N.C. App. at 262, 393
S.E.2d at 138). The essential elements for the qualified privilege to exist are good faith, an
interest to be upheld, a statement limited in its scope to this purpose, a proper occasion and
publication in a proper manner and [to] the proper parties only.
Long v. Vertical Technologies,
Inc., 113 N.C. App. 598, 602, 439 S.E.2d 797, 800 (1994). Whether a communication is
privileged is a question of law for the court to resolve, unless a dispute concerning the
circumstances of the communication exists, in which case it is a mixed question of law and fact.
Phillips, 117 N.C. App. at 278, 450 S.E.2d at 756. Where the privilege is applicable, a
presumption arises that the communication was made in good faith and without malice.
Id.
The burden then falls upon the claimant to show either actual malice on the part of the declarant
or excessive publication.
Harris v. Proctor & Gamble, 102 N.C. App. 329, 332, 401 S.E.2d
849, 851 (1991).
In the instant case, the record indicates that Ridinger, as President of Market America,
had legitimate interests in protecting the company against unfair competition through the
unauthorized use of its trade secrets, encouraging company loyalty, and reassuring independent
distributors that the company had been actively working to protect the integrity of their
organizations. To apprise managing distributors of the threat posed by individuals seeking to
recruit Market America distributors into CAT and the steps taken to eliminate the threat,
Ridinger forwarded a bulletin to Market America's Advisory Counsel Members and Certified
Trainers describing the relevant circumstances while attempting to boost morale. Defendantcontends that the bulletin could have been distributed to as many as 500 people. She bases this
contention on the testimony of Marc Ashley, Market America's Vice President of
Administration, that he did not recall whether the bulletin was sent to anyone other than the
named recipients. Defendant, however, has not presented any evidence to show that the bulletin
was forwarded to anyone outside of the 85 Advisory Council Members and Certified Trainers.
We conclude that under these circumstances, the communication was protected by a qualified
privilege, and since defendant has failed to come forward with any evidence of actual malice or
excessive publication, the trial court did not err in entering summary judgment for Market
America on defendant's libel claim.
[2]Defendant further argues that the trial court erred in granting Market America's
motion for summary judgment with regard to her slander claim. We must disagree.
Slander is defined as 'the speaking of base or defamatory words which tend to prejudice
another in his reputation, office, trade, business, or means of livelihood.'
Lee v. Lyerly, 120
N.C. App. 250, 252, 461 S.E.2d 775, 777 (1995)(quoting
Long, 113 N.C. App. at 601, 439
S.E.2d at 800),
rev'd on other grounds, 343 N.C. 115, 468 S.E.2d 60 (1996). Slander is
actionable either
per se or
per quod.
Id. Statements that are slanderous
per se include
accusation[s] of crimes or offenses involving moral turpitude, defamatory statements about a
person with respect to [her] trade or profession, and imputation[s] that a person has a loathsome
disease.
Gibby v. Murphy, 73 N.C. App. 128, 131, 325 S.E.2d 673, 675 (1985). To fall within
the class of slander
per se as concerns a person's trade or profession, the defamatory statement
must do more than merely harm a person in [her] business. The false statement '(1) must touch
the plaintiff in [her] special trade or occupation, and (2) must contain an imputation necessarily
hurtful in its effect on [her] business.'
Lee, 120 N.C. App. at 253, 461 S.E.2d at 777 (quoting
Tallent v. Blake, 57 N.C. App. 249, 253, 291 S.E.2d 336, 339 (1982)).
Defendant contends that voicemail messages left by Mike Davis and Scott Tucker, both
independent distributors for Market America, constituted slander
per se. The trial court,
however, was correct in granting summary judgment to Market America on defendant's claim as
it related to these individuals, because the rule is well settled in North Carolina that an employer
is not vicariously liable for the torts of an independent contractor.
Hartrick Erectors, Inc. v.
Maxson-Betts, Inc., 98 N.C. App. 120, 389 S.E.2d 607 (1990). Moreover, regarding defendant's
claim that Ridinger, Market America's President, left voicemail messages comparing her to
members of the Heaven's Gate cult, defendant's evidence was fatally insufficient to establish a
genuine issue of fact. The evidence consists of defendant's claim that at some point in time (she
could not recall when), she listened to someone's voicemail (she could not recall whose) and
heard Ridinger compare her to the man from Mars what had all the people killed. She could
not remember precisely what was said, and she had no witnesses or recordings to verify the
existence of the message. Accordingly, we hold that the trial court committed no error in
allowing summary judgment for Market America on defendant's slander claim.
[3]Defendant additionally assigns as error the trial court's grant of Market America's
motion for summary judgment on defendant's claim for restraint of trade. Defendant contends
that the non-competition clause contained in the Agreement violates section 75-1 of the General
Statutes. We disagree.
Under section 75-1 of the North Carolina General Statutes, contracts in restraint of trade
are illegal. N.C. Gen. Stat. § 75-1 (1994).
However, our courts have recognized the rule that a covenant not
to compete is enforceable in equity if it is: (1) in writing; (2)
entered into at the time and as part of the contract of employment;(3) based on valuable consideration; (4) reasonable both as to time
and territory embraced in the restrictions; (5) fair to the parties;
and (6) not against public policy.
Starkings Court Reporting Services v. Collins, 67 N.C. App. 540, 541, 313 S.E.2d 614, 615
(1984). Even if the covenant not to compete is permissible in all other respects, the restraint is
unreasonable and void if it is greater than is required for the protection of the promisee or if it
imposes an undue hardship upon the person who is restricted.
Id. To be enforceable, a
covenant not to compete 'must be no wider in scope than is necessary to protect the business of
the employer.'
Hartman v. Odell and Assoc., Inc., 117 N.C. App. 307, 316, 450 S.E.2d 912,
919 (1994)(quoting
Manpower of Guilford County, Inc. v. Hedgecock, 42 N.C. App. 515, 521,
257 S.E.2d 109, 114 (1979)). If the covenant restraining competition is too broad to be a
reasonable protection to the employer's business it will not be enforced.
Whitaker General
Medical Corp. v. Daniel, 324 N.C. 523, 528, 379 S.E.2d 824, 828 (1989).
Defendant challenges Market America's covenant not to compete on three grounds:
First, defendant contends that the covenant is void as to her because she was not an employee of
Market America, but an independent distributor. However, this Court has held that non-
competition clauses are applicable to independent contractor relationships.
See Starkings, 67
N.C. App. 540, 313 S.E.2d 614 (finding that although otherwise permissible, covenant not to
compete was unreasonable restraint of trade because provided for greater restraint than
reasonably required for protection of promisee);
see also Baker v. Hooper, No. 03A01-9707-
CV-00280, 1998 WL 608285 (Tenn. App. Aug. 6, 1998)(relying on
Starkings decision, found
that covenants not to compete apply to independent contractor relationships);
Renal Treatment
Centers v. Braxton, 945 S.W.2d 557 (Mo. App. E.D. 1997)(citing our decision in
Starkings,
concluded that non-compete clauses valid against independent contractors). Secondly, defendant argues that the covenant was factually inapplicable to her because at
the time of the actions giving rise to this litigation, she had neither resigned nor been terminated
from her distributorship with Market America. Relying on the language that reads, I agree not
to enter into competition with Market America . . . for a period of six months from my written
resignation or termination as an Independent Distributor of Market America[,] defendant takes
the position that the covenant would become operative only after termination or resignation and,
thus, did not apply while she was still a distributor. This construction of the Agreement is
contrary to reason, as Market America certainly intended to prohibit competition by those still
working as distributors for the company. In North Carolina, an agreement 'encompasses not
only its express provisions but also all such implied provisions as are necessary to effect the
intention of the parties unless express terms prevent such inclusion.'
Strader v. Sunstates
Corp., 129 N.C. App. 562, 569, 500 S.E.2d 752, 755-56, (quoting
Lane v. Scarborough, 284
N.C. 407, 410, 200 S.E.2d 622, 624 (1973))
disc review denied, ___ N.C. ___, 514 S.E.2d 274
(1998). Inasmuch as the non-compete provision was impliedly operative while defendant
remained a distributor with Market America, defendant's argument is without merit.
Lastly, defendant contends that there can be no legitimate business purpose for restricting
distributors from participating in a business venture with a similar matrix marketing system.
Market America, however, asserts that this provision of the Agreement serves three basic goals:
[F]irst, independent distributors of Market America simply cannot
divide their efforts by working for more than one direct sales
company. Second, by using a binary marketing structure itself,
market America is vulnerable to distributors leaving and going to
another binary company and removing not only themselves, but
the critical parts of their sales organization as well. Third, many
companies in the direct sales industry have regulatory problems
and problems with legal compliance and Market America does not
want to see its distributors and all or parts of their salesorganizations going to companies that do not comply with the law.
Unquestionably, Market America's interest in protecting the integrity and viability of the
business is legitimate. Moreover, we note that the covenant expired six months from the date of
termination or resignation. Thus, we hold that the non-competition clause was valid, and the
court did not err in granting Market America's motion for summary judgment on defendant's
claim for restraint of trade.
[4]With her next assignment of error, defendant asserts that the trial court improperly
entered summary judgment for Market America on defendant's claim for unfair and deceptive
trade practice. Again, we disagree.
Pursuant to section 75-1.1 of the North Carolina General Statutes, [u]nfair methods of
competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting
commerce, are declared unlawful. N.C. Gen. Stat. § 75-1.1 (1994). To prevail on a claim of
unfair and deceptive trade practice a [claimant] 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 [claimant] or to his business.
Spartan Leasing v.
Pollard, 101 N.C. App. 450, 460-61, 400 S.E.2d 476, 482 (1991). 'A [trade] 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.'
Opsahl v. Pinehurst, Inc.,
81 N.C. App. 56, 69, 344 S.E.2d 68, 76 (1986)(quoting
Johnson v. Insurance Co., 300 N.C. 247,
263, 266 S.E.2d 610, 621 (1980)),
quoted in Bolton Corp. v. T.A. Loving Co., 94 N.C. App. 392,
411, 380 S.E.2d 796, 808 (1989). Additionally, '[a] party is guilty of an unfair act or practice
when it engages in conduct which amounts to an inequitable assertion of its power or position.'
Opsahl, 81 N.C App. at 69, 344 S.E.2d at 76 (quoting
Johnson, 300 N.C. App at 264, 266S.E.2d at 622),
quoted in Bolton, 94 N.C. App. at 411-12, 380 S.E.2d at 808. The question of
whether a particular practice is unfair or deceptive is a legal one, reserved for the court.
Wake
Stone, 111 N.C. App. at 282-83, 432 S.E.2d at 436.
Defendant contends that pursuant to our Supreme Court's holding in
Ellis, 326 N.C. 219,
388 S.E.2d 127, libel
per se directed toward a claimant in regards to the conduct of his business
constitutes an unfair and deceptive trade practice in violation of section 75-1.1. Defendant,
therefore, argues that because the 7 February 1997 bulletin was libelous
per se, summary
judgment for Market America on defendant's claim for unfair and deceptive trade practice was
unwarranted.
In
Ellis, the plaintiff, Ellis Brokerage Company, Inc., was a food broker whose function
was to convince large-quantity food buyers, such as hospitals and school systems, to place
orders with the company's clients who [were] in the business of selling foods.
Id. at 221, 388
S.E.2d at 128. The defendant, Northern Star Company, was one of the plaintiff's clients. After
the defendant terminated its brokerage contract with the plaintiff, the defendant's president sent
the following letter to several buyers who had received an earlier price list from the plaintiff:
Dear Sir:
We have recently received copies of a price list sent to you
from Ellis Brokerage Company regarding pricing on Northern Star
potato products. These prices were noted for
bids only, delivered
by Northern Star.
We at Northern Star Company did not authorize such a
price list and therefore cannot honor the prices as quoted[.]
Id. at 222, 388 S.E.2d at 129. The plaintiff instituted an action against the defendant alleging
that the letter was libelous
per se and constituted an unfair and deceptive trade practice affecting
commerce under section 75-1.1. At the close of the plaintiff's evidence, the trial court grantedthe defendant's motions for directed verdicts on all claims but libel. The libel claim was
submitted to the jury, which found that the defendant had maliciously libeled the plaintiff and
awarded compensatory and punitive damages.
On appeal, the defendant argued that the letter [was] not defamatory at all or,
alternatively, it [was] susceptible of both defamatory and nondefamatory interpretations.
Id. at
224, 388 S.E.2d at 130. The Court held that the letter was libelous
per se, because under any
reasonable interpretation, it impeached the plaintiff in its trade as a food broker. The Court
further held that a libel
per se of a type impeaching a party in its business activities is an unfair
or deceptive act in or affecting commerce in violation of N.C.G.S. § 75-1.1, which will justify
an award of damages under N.C.G.S. § 75-16 for injuries proximately caused.
Id. at 226, 388
S.E.2d at 131. To recover, however, a plaintiff must have 'suffered actual injury as a
proximate result of defendant's deceptive statement or misrepresentation.'
Id. (quoting
Pearce
v. American Defender Life Ins. Co., 316 N.C. 461, 471, 343 S.E.2d 174, 180 (1986)).
The holding in
Ellis has no bearing on the present set of facts. Unlike the 7 February
1997 bulletin in the case
sub judice, the defamatory letter was not determined to be protected by
a qualified privilege. In fact, the defendant in
Ellis did not even assert that such a privilege
existed; instead, the defendant argued that the communication was not libelous. Furthermore,
the record in the instant case contains no evidence to show that defendant 'suffered actual
injury as a proximate result of [the Follow-Up Bulletin].'
Id. Accordingly, we hold that
defendant's reliance on
Ellis is unfounded.
Defendant also argues that Market America inequitably asserted its power and position
by seeking to enforce a non-competition clause which defendant contends was legally void.
Given our determination that the non-competition clause was valid and enforceable, we rejectdefendant's contention as unpersuasive. Furthermore, because defendant has presented no facts
to show any immoral, unethical, oppressive, unscrupulous, or substantially injurious conduct
on the part of Market America, we hold that defendant failed to establish a triable issue of fact as
to her claim for unfair or deceptive trade practice.
See Bolton, 94 N.C. App. at 411, 380 S.E.2d
at 808. This assignment of error, then, fails.
[5]By her next assignment of error, defendant argues that the trial court erroneously
awarded summary judgment to Market America with respect to defendant's claim for tortious
interference with business relations. Again, we cannot agree.
'As a general proposition any interference with free exercise of another's trade or
occupation, or means of livelihood, by preventing people by force, threats, or intimidation from
trading with, working for, or continuing [her] in their employment is unlawful.'
Coleman v.
Whisnant, 225 N.C. 494, 506, 35 S.E.2d 647, 656 (1945)(quoting
Kirby v. Reynolds, 212 N.C.
271, 281, 193 S.E. 412, 418 (1937)),
quoted in Cameron v. New Hanover Memorial Hospital, 58
N.C. App. 414, 440, 293 S.E.2d 901, 917 (1982). Typically, a [defending party's] motive or
purpose is the determining factor as to liability in actions for interference with economic
relations, 'and sometimes it is said that bad motive is the gist of the action.'
Id. at 439, 293
S.E.2d at 916 (quoting Prosser § 129, pp. 927-28). Therefore, to maintain an action for
interference with business relations in North Carolina, [the complainant] must show that [the
defending party] 'acted with malice and for a reason not reasonably related to the protection of a
legitimate business interest of [the defending party].'
Id. (quoting
Smith v. Ford Motor Co.,
289 N.C. 71, 94, 221 S.E.2d 282, 296 (1976)).
Defendant contends that the threatening and intimidating tone of the 7 February 1997
bulletin prevented unnamed individuals from transacting business with her. Defendant assertsthat as a result of the publication, her Market America business and her husband's CAT
enterprise suffered. Throughout this litigation, however, defendant has maintained that she
herself was not an independent distributor for CAT and that her only involvement with the
organization was as an assistant to her husband. Thus, she had no CAT business with which
Market America could interfere, and her claim in that regard fails. As to her Market America
business, defendant has not shown how the 7 February 1997 publication interfered with any such
economic relations. Furthermore, our prior conclusion that defendant failed to show any actual
malice on the part of Market America in distributing the bulletin necessarily causes defendant's
claim to fail. The trial court correctly granted summary judgment to Market America on her
claim for wrongful interference with business practice.
For the foregoing reasons, the order of the trial court is affirmed.
Affirmed.
Judges JOHN and HUNTER concur.
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