RICHARD STROUD,
Plaintiff,
v
.
Forsyth County
No. 02 CVS 7327
WILLIAMS, ROBERTS, YOUNG, INC.,
A North Carolina Corporation,
Defendant.
Robert B. Laws for plaintiff-appellee.
Constangy, Brooks & Smith, LLC, by W.R. Loftis, Jr. and
Kristine M. Howard, for defendant-appellant.
STEELMAN, Judge.
Defendant, Williams, Roberts, Young, Inc. (WRY), appeals the
trial court's order denying its motion to dismiss pursuant to Rule
12(b)(6) of the Rules of Civil Procedure, as well as its finding
that plaintiff, Richard Stroud, was entitled to recover monetary
damages for breach of contract.
Plaintiff began working for WRY in 1995 as the head of its
Information Technology (IT) Services Division. (T. 22, 32). As
part of his job, plaintiff hired individuals for IT contract labor
and placed them with companies temporarily, as well as acting as a
recruiting and placement agent for permanent IT positions. In
October 1999, due to decreased demand for its IT services, WYRnotified plaintiff it was eliminating its IT Division, which would
result in his termination. Plaintiff claimed he had been promised
a partnership in WYR, but agreed not to pursue any litigation
concerning the proposed partnership and agreed to resign in
exchange for receiving one-third of the “operating cash net income”
of the IT division from 1 January 1999 through 30 September 1999.
WYR agreed and both parties signed an agreement on 6 October 1999.
The agreement contained additional terms and provided that if
plaintiff breached the contract his right to be paid compensation
would be void.
Following plaintiff's resignation from WYR he started his own
company, Interior Solutions, Inc., which provided the same services
as WYR's IT division. On 7 October 1999, plaintiff obtained
passwords from one of WYR's employees, which provided him access to
public domain computer job search services. Plaintiff asserted
that he used the passwords to obtain information to base a decision
concerning which service to use in starting his business. WRY had
purchased a contract with each of the three web-based services in
order to gain access and utilize their services. Upon learning of
plaintiff's use of WYR's passwords, defendant notified plaintiff
demanding he cease and desist using the passwords. WYR further
notified plaintiff it considered his conduct a breach of the
“Agreement” and it would not pay plaintiff the sum due under the
agreement.
WYR never paid plaintiff the percentage of the operating cash
net income as provided in the Agreement, which amounted to$150,451.25. On 21 October 2002, plaintiff filed suit against WYR
for recovery of this sum based on a theory of breach of contract.
Defendant filed a motion to dismiss pursuant to Rule 12(b)(6) of
the Rules of Civil Procedure, asserting the action was barred by
the statute of limitations. Judge Russell G. Walker, Jr. denied
this motion on 21 January 2003. Defendant subsequently filed its
answer asserting eleven separate affirmative defenses and three
separate counterclaims. The counterclaims sought monetary damages
for: (1) misappropriation of WRY's property - the passwords; (2)
breach of contract; and (3) breach of implied conditions in the
agreement. This matter came on for trial before Judge Wood,
sitting without a jury. Judge Wood entered judgment finding that
defendant had breached its agreement with plaintiff and plaintiff
was entitled to recover $150,451.25 from defendant, together with
prejudgment interest and costs. The trial court also entered
judgment finding plaintiff misappropriated defendant's passwords
and was entitled to recover $440.44 from plaintiff. Defendant
appeals.
In defendant's first argument it contends the trial court
erred in denying its motion to dismiss pursuant to Rule 12(b)(6) of
the Rules of Civil Procedure.
It is well established that the denial of a Rule 12(b)(6)
motion to dismiss is not reviewable on appeal when there is a final
judgment on the merits. Shadow Grp v. Heather Hills Home Owners
Ass'n, 156 N.C. App. 197, 199, 579 S.E.2d 285, 286 (2003); Concrete
Service Corp. v. Investors Group, Inc., 79 N.C. App. 678, 682-83,340 S.E.2d 755, 758-59 (1986). Further, at the trial of this
matter defendant never submitted nor argued the statute of
limitations issue to the trial court. This argument is not
properly before this Court and is dismissed.
Defendant's second argument reads as follows: “The trial court
erred in finding that plaintiff breached the agreement, but that
plaintiff was entitled to recover one-third of the net operating
profits under the agreement.” We disagree.
We note that this argument encompasses two assignments of
error in which defendant asserts that two of the trial court's
conclusions of law were erroneous. Defendant failed to assign as
error any of the trial court's findings of fact. “Where no
exception is taken to a finding of fact by the trial court, the
finding is presumed to be supported by competent evidence and is
binding on appeal.” Koufman v. Koufman, 330 N.C. 93, 97, 408
S.E.2d 729, 731 (1991). Thus, our review is limited to whether the
trial court's findings of fact support its conclusions of law.
Justice for Animals, Inc. v. Lenoir County SPCA, Inc., ___ N.C.
App. ___, ___, 607 S.E.2d 317, 322 (2005). We also note that the
trial court made no finding of fact that plaintiff breached the
agreement, as is asserted in defendant's brief.
On appeal, defendant contends plaintiff's action of obtaining
and using its passwords after he resigned from WYR constituted a
material breach of the provision in the agreement, which stated:
“Confidential Information. . . . Stroud further agrees and commitsto return all materials, equipment, data and Company property
within 24 hours of the signature of this agreement.”
The pertinent findings of fact contained in the trial court's
judgment are as follows:
5. . . . The period of time in which Plaintiff
utilized said passwords was during the time
frame of October 7, 1999 through October 20,
1999. Plaintiff did not access any internal
databases of a proprietary nature owned by
Defendant, and no evidence was presented at
trial that Plaintiff made any job placements
as a result of information obtained via
utilization of passwords owned by Defendant,
nor did Plaintiff in any way disrupt any
postings listed by Defendant through each
service. Through the use of these passwords,
the Plaintiff was able to access data that he
could not have accessed without the benefit of
the passwords. . . .
6. Plaintiff never received payment pursuant
to the above described provision of the
“Agreement”, and further did not receive
written notification of Plaintiff's share of
the “operating cash net income” for the
Information Technology Services Division of
Defendant until April 8, 2004 when a document
summarizing the calculations, yielding a
figure of $150,451.25, was forwarded to
Plaintiff's counsel via correspondence.
7. The Defendant's evidence of damages caused
by the Plaintiff's use of its passwords was
that the monetary benefit to the Plaintiff
from his use of the Defendant's passwords
which was $440.44.
Defendant contends the trial court's award of a nominal sum of
money to defendant on its counterclaim is evidence that the trial
court impliedly found plaintiff breached the agreement.
Defendant's answer and counterclaims asserted three separate and
distinct counterclaims for misappropriation, breach of contract,
and breach of implied conditions of a contract. The trial courtruled in favor of defendant on the misappropriation theory and
awarded damages in the amount of $440.44 to defendant.
Significantly, the trial court found the misappropriation took
place on 7 October 1999, subsequent to the execution of the
agreement. Plaintiff did not misappropriate information he
obtained while working for defendant. Rather, he obtained the
passwords from one of defendant's employees after defendant
terminated his employment. The trial court did not find this to be
a breach of the parties' agreement, much less a material breach
that would have excused defendant's performance under the
agreement.
We hold that the trial court's findings of fact support its
conclusions of law that plaintiff was entitled to recover
$150,451.25 from defendant for breach of contract, and that
defendant was entitled to recover $440.44 from plaintiff for
misappropriation of defendant's Internet passwords. We thus affirm
the trial court's judgment.
AFFIRMED.
Judges TIMMONS-GOODSON and MCCULLOUGH concur.
Report per Rule 30(e).
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