An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority.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 Procedure.

NO. COA05-783


Filed: 7 March 2006


v .                         Wake County
                            No. 03 CVS 14941

    Appeal by plaintiff from an order entered 3 March 2005 by Judge W. Osmond Smith, III in Wake County Superior Court. Heard in the Court of Appeals 25 January 2006.

    Jerry R. Everhardt for plaintiff-appellant.

    Everett Gaskins Hancock & Stevens, LLP, by Hugh Stevens and Ashley N. Matlock, for defendant-appellees.

    BRYANT, Judge.

    Coordinated Health Services, Inc. (plaintiff) appeals from an order entered 3 March 2005 granting partial summary judgment in favor of defendants Primary Health Choice, Inc., Thad J. Davis and Daryl E. Hagins (defendants). We affirm the trial court's order.


    Plaintiff and defendant Primary Health Choice, Inc. are competitor North Carolina corporations that contract with various county mental health agencies to provide in-home services to the agency's clients. The agency's clients must obtain the approval of the county mental health agency to change providers for their in-home services. Both plaintiff and defendants hold contracts with Southeastern Regional Mental Health, Developmental Disabilities and Substance Abuse Services (Southeastern Regional), an area program that provides mental health, developmental and substance abuse services to children and adults in Bladen, Columbus, Robeson, and Scotland counties. These contracts are non-exclusive and the program maintains contracts with several companies providing similar services as plaintiff and defendants. Several of plaintiff's employees responsible for providing in-home services have been hired by defendant Primary Health Choice, Inc.
    Defendants Davis and Hagins are Primary Health's principal officers and are former employees of plaintiff. Neither Davis nor Hagins were employed by plaintiff under a written employment contract, nor was either ever asked to sign any kind of anti-competitive agreement or covenant; both were “at-will” employees who were free to go to work for anyone they chose at any time. Plaintiff's general practice is not to have written contracts with its employees.
Procedural History

    Plaintiff filed its initial complaint on 3 November 2003 and an amended complaint on 24 February 2004. Plaintiff asserts claims for “Trespass to Chattels,” “Breach of Fiduciary Duty,” “Violation of Trade Secrets Protection Act,” “Tortious Interference with Contract,” “Unfair Trade Practices,” and “Civil Conspiracy.” In its Amended Complaint, plaintiff alleges, inter alia, that defendants are competing in the same business and in the samegeographic area where they were employed by plaintiff; that plaintiff has created training manuals and other business materials which it treats as trade secrets; that the individual defendants either removed or copied such materials and are using them in their new business; that other former employees of Coordinated have accepted employment with Primary Health; that the defendants removed or copied confidential client medical records and used them to solicit business from Coordinated clients; and that the defendants are now providing services to clients or consumers who formerly were served by Coordinated. Defendants filed an answer to plaintiff's amended complaint on 29 March 2004, denying all pertinent allegations.
    On 15 April 2004, defendants filed a Motion for Summary Judgment. On 3 March 2004, the trial court partially granted defendants' motion as to plaintiff's claims for breach of fiduciary duty, tortious interference with plaintiff's contracts with local mental health agencies, and tortious interference with plaintiff's contracts with its employees. The trial court's order denied defendants' motion for summary judgment as to plaintiff's claims for trespass to chattels, violations of the North Carolina Trade Secrets Protection Act, violations of the North Carolina Unfair and Deceptive Trade Practices Act, and civil conspiracy. Plaintiff filed a voluntary dismissal without prejudice on 30 March 2005 with respect to his four surviving claims and appeals the entry of summary judgment.
    Plaintiff raises the issues of whether the trial court erred in granting defendants' motion for summary judgment as to plaintiff's claims of: (I) breach of fiduciary duty; and (II) tortious interference with contract. For the reasons below, we affirm the trial court's order.
    We first note plaintiff has included a significant amount of material in the appendix to its brief that was not included in the record nor filed as exhibits to this appeal. Plaintiff includes excerpts from the treatise North Carolina Law of Torts, Executive Order No. 44 of the Governor of North Carolina, excerpts from the 1995 Annual Report of the North Carolina Commission on Business Laws & the Economy, and a 7 March 2001 Memorandum by North Carolina Supreme Court Chief Justice I. Beverly Lake, Jr. These materials are not properly before this Court and will not be considered. See Horton v. New South Ins. Co., 122 N.C. App. 265, 268, 468 S.E.2d 856, 858 (1996) (“[I]t [is] improper [for a party] . . . to attach a document not in the record and not permitted under N.C. R. App. P. 28(d) in an appendix to its brief.”); see also, N.C. R. App. P. 9(a) (stating that review is limited to the record and transcript), and N.C. R. App. P. 28(b) (describing proper contents of appellant's brief).
Standard of Review

    Under Rule 56(c) of the North Carolina Rules of Civil Procedure, summary judgment shall be granted if “there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law.” N.C. Gen. Stat. §1A-1, Rule 56(c) (2005). In ruling on a motion for summary judgment, “the court may consider the pleadings, depositions, admissions, affidavits, answers to interrogatories, oral testimony and documentary materials . . . .” Dendy v. Watkins, 288 N.C. 447, 452, 219 S.E.2d 214, 217 (1975). “All such evidence must be considered in a light most favorable to the non-moving party.” Howerton v. Arai Helmet, Ltd., 358 N.C. 440, 470, 597 S.E.2d 674, 693 (2004). “Where there are genuine, conflicting issues of material fact, the motion for summary judgment must be denied so that such disputes may be properly resolved by the jury as the trier of fact.” Id. at 468, 597 S.E.2d at 692.
    The purpose of summary judgment is to determine whether any issues of material fact exist and, if not, eliminate the necessity of a full trial where only questions of law are involved. Foster v. Winston-Salem Joint Venture, 303 N.C. 636, 641-42, 281 S.E.2d 36, 40 (1981). The movant has the burden of establishing the absence of any triable issues of fact. Id. This burden may be met in one of two ways: (1) “by proving an essential element of the opposing party's claim does not exist, cannot be proven at trial, or would be barred by an affirmative defense”; or (2) “by showing through discovery that the opposing party cannot produce evidence to support an essential element of her claim.” Dobson v. Harris, 352 N.C. 77, 83, 530 S.E.2d 829, 835 (2000) (citations omitted). If the moving party satisfies its burden of proof, the non-moving party cannot rest upon her pleadings, and “must set forth specific facts showing that there is a genuine issue for trial.” N.C. Gen.Stat. § 1A-1, Rule 56(e) (2005); Lowe v. Bradford, 305 N.C. 366, 369-70, 289 S.E.2d 363, 366 (1982). “The opposing party need not convince the court that he would prevail on a triable issue of material fact but only that the issue exists.” Id. at 370, 289 S.E.2d at 366.

    Plaintiff first asserts the trial court erred in granting defendants' motion for summary judgment as to its claim of breach of fiduciary duty by defendants Davis and Hagins. Plaintiff argues the responsibilities, the extent of their use and control of confidential patient information, and their written acknowledgment of their obligation to maintain the confidentiality of that information entailed the presence of a degree of trust and confidence beyond that of ordinary commercial dealings and establishes a fiduciary duty owed by them to plaintiff. We disagree.
    “For a breach of fiduciary duty to exist, there must first be a fiduciary relationship between the parties.” Dalton v. Camp, 353 N.C. 647, 651, 548 S.E.2d 704, 707 (2001). A fiduciary relationship
        has been broadly defined . . . as one in which “there has been a special confidence reposed in one who in equity and good conscience is bound to act in good faith and with due regard to the interests of the one reposing confidence . . . [and] it extends to any possible case in which a fiduciary relationship exists in fact, and in which there is confidence reposed on one side, and resulting domination and influence on the other.”
Id. at 651, 548 S.E.2d at 707-08 (quoting Abbitt v. Gregory, 201 N.C. 577, 598, 160 S.E. 896, 906 (1931)). Generally, “'the relation of employer and employee is not one of those regarded as confidential.'” Dalton, 353 N.C. at 651, 548 S.E.2d at 708 (quoting King v. Atlantic Coast Line R.R. Co., 157 N.C. 35, 49, 72 S.E. 801, 808 (1911)).
    In the instant case, defendants Davis and Hagins were “at- will” employees of plaintiff and neither had signed a covenant not to compete with plaintiff. Both Davis and Hagins were “qualified professionals” in plaintiff's Lumberton office supervising plaintiff's direct care staff and acting as liaison between the area mental health programs, patients and the patient's families. Defendant's Davis and Hagins each had access to confidential medical information of the patients served by plaintiff. However, these factors are not sufficient to establish a fiduciary duty on the part of Davis and Hagins. As in Dalton, they “merely serve to define the nature of virtually all employer-employee relationships; without more, they are inadequate to establish [an employee's] obligations as fiduciary in nature.” Dalton, 353 N.C. at 652, 548 S.E.2d at 708. There is no showing that plaintiff was “subjugated to the improper influences or domination” of either Davis or Hagins and thus we cannot conclude that a fiduciary relationship existed between plaintiff and Davis or Hagins. This assignment of error is overruled.
    Plaintiff next contends the trial court erred in granting defendants' motion for summary judgment as to its claims of tortious interference with contract. Plaintiff claims that defendants' hiring of technicians previously employed by plaintiff effectively induced the client's family to breach the contract by following the technician and thereby denying plaintiff the benefit of its contracts with Southeastern Regional. Plaintiff argues that defendants should not be permitted to accomplish indirectly what they could not do directly. Plaintiff also argues defendants have, through the same “scheme”, interfered with plaintiff's contracts with its own employees. We disagree.
    To establish a claim for tortious interference with contract, plaintiff must show:
        “(1) a valid contract between the plaintiff and a third person which confers upon the plaintiff a contractual right against a third person; (2) the defendant knows of the contract; (3) the defendant intentionally induces the third person not to perform the contract; (4) and in doing so acts without justification; (5) resulting in actual damage to plaintiff.”

Beck v. City of Durham, 154 N.C. App. 221, 232, 573 S.E.2d 183, 191 (2002) (quoting United Laboratories, Inc. v. Kuykendall, 322 N.C. 643, 661, 370 S.E.2d 375, 387 (1988)).    The North Carolina Supreme Court has further held that a competitor may hire an employer's former employees without being liable for tortious interference with contract. Peoples Security Life Ins. Co. v. Hooks, 322 N.C. 216, 367 S.E.2d 647 (1988). Under the Court's ruling in Hooks, a claim for tortious interference with contractwill not lie where a defendant has only “offered the plaintiff's employees job opportunities which induced them to terminate their terminable at will contracts and, by locating these employees in their previously assigned territories, induced them to breach the non-competition clauses contained in their contracts with the plaintiff.” Id. at 221, 367 S.E.2d at 650. The Court also held that “'[t]he privilege [to interfere] is conditional or qualified; that is, it is lost if exercised for a wrong purpose. In general, a wrong purpose exists where the act is done other than as a reasonable and bona fide attempt to protect the interests of the defendant which is involved.'” Id. at 220, 367 S.E.2d at 650 (quoting Smith v. Ford Motor Co., 289 N.C. 71, 91, 221 S.E.2d 282, 294 (1976)).
    In the instant case, plaintiff argues that “[t]he record in this case does not permit the Court to conclude that [d]efendants' conduct is justified by the 'wide latitude' that 'businesses should be given . . . to go about the normal competitive activity of recruiting the most qualified employees.'” However plaintiff does not support its statement with anything in the record and this Court can find nothing to support plaintiff's argument. Plaintiff's former employees were not employed under a contract, but rather were “at-will” employees free to leave plaintiff's employ at any time. Plaintiff's former employees had not signed any non-competition agreement with plaintiff and were thus free to leave their positions with plaintiff and immediately accept positions with a competitor doing the exact same work. Further,plaintiff has not forecast any evidence capable of establishing that defendants' conduct in hiring away plaintiff's former employees was done other than as a reasonable and bona fide attempt to develop defendants' business interests. Thus, plaintiff cannot establish the fourth element of their claims of tortious interference with contract: that defendants' acts were without justification. Accordingly, the trial court properly granted summary judgment for defendant as to plaintiff's claims of tortious interference with contract. This assignment of error is overruled.
    Judges CALABRIA and JOHN concur.
    Report per Rule 30(e).

*** Converted from WordPerfect ***