An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority. Citation is disfavored, but may be permitted in accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Proced ure.

NO. COA04-1302


Filed: 05 July 2005


v .                         Forsyth County
                            No. 02 CVS 7327
A North Carolina Corporation,

    Appeal by defendant from judgment entered 16 July 2004 by Judge William Z. Wood, Jr. in Forsyth County Superior Court. Heard in the Court of Appeals 12 May 2005.

    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.
    Report per Rule 30(e).

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