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All opinions are subject to modification and technical correction prior to official publication in the North Carolina Reports and North Carolina Court of Appeals Reports. In the event of discrepancies between the electronic version of an opinion and the print version appearing in the North Carolina Reports and North Carolina Court of Appeals Reports, the latest print version is to be considered authoritative.
WESTON GRIFFITH, JR., Plaintiff, v. GLEN WOOD COMPANY, INC. d/b/a
WOOD BROTHERS, and ROUSH CORPORATION, d/b/a ROUSH RACING, and PAT
TRYSON, Defendants
NO. COA06-635
Filed: 19 June 2007
1. Contracts_breach_testing of NASCAR part_summary judgment
Conflicting evidence was sufficient to raise a genuine issue of fact in a breach of contract
claim concerning metallurgical testing on a NASCAR part, and the trial court should not have
granted summary judgment for defendant.
2. Corporations_foreign_not suspended in N.C._defense to breach of contract not
applicable
There was no evidence that the State of North Carolina had suspended the articles of
incorporation or certificate of authority of the Illinois corporation of which plaintiff was the sole
shareholder (it had been involuntarily dissolved and reinstated), and the defendant's affirmative
defense that a contract was invalid did not apply.
3. Contracts_interference with_prohibited testing of NASCAR part_summary
judgment
The trial court did not err by granting summary judgment for a NASCAR crew chief on a
claim for tortious interference with contract regarding prohibited metallurgical testing on a
NASCAR part. There was no evidence that he induced his codefendant to breach the contract
(which forbade the testing).
4. Conversion_NASCAR part_serious departure from lease_issue of fact
The trial court erred by granting summary judgment for defendants on a claim for
conversion where a NASCAR crew chief retained possession of a leased part when he began
working for a competitor and conducted testing prohibited by a contract. The parties'
disagreement about whether these actions amounted to a major or serious departure from the
terms of the lease creates a genuine issue of material fact.
5. Conversion_respondeat superior_scope of employment_issue of fact
Summary judgment against defendant Wood Brothers was not appropriate on a
respondeat superior claim for conversion of a NASCAR part by a crew chief working for Wood
Brothers. Reasonable minds could differ on whether the crew chief's action was within the
scope of his employment.
6. Trade Secrets_misappropriation_ascertainable through reverse engineering_not a
trade secret
The trial court did not err by granting summary judgment for defendant on a claim for
misappropriation of trade secrets regarding a NASCAR part. There was testimony that the part
was readily ascertainable through reverse engineering; the idea cannot therefore be defined as a
trade secret.
7. Unfair Trade Practices_NASCAR part_metallurgical testing
The trial court did not err by granting summary judgment for defendant on a claim for
unfair and deceptive trade practices arising from a NASCAR crew chief retaining, sampling, and
analyzing the metal in a leased part.
Appeal by plaintiff from judgments entered 27 December 2005 by
Judge W. Erwin Spainhour in Superior Court, Cabarrus County. Heard
in the Court of Appeals 10 January 2007.
Katten Muchin Rosenman LLP, by Jeffrey C. Grady and
Christopher A. Hicks, for plaintiff-appellant.
Hartsell & Williams, by Christy E. Wilhelm, for defendant-
appellee Glenn Wood Company, Inc.
Helms Mullis & Wicker, PLLC, by Tracy Strickland, for
defendant-appellee Pat Tryson.
STROUD, Judge.
Plaintiff Weston Griffith, Jr. (Griffith) appeals from the
trial court order granting summary judgment in favor of defendants
Glen Wood Company, Inc., and Pat Tryson (Tryson) as to all claims.
For the reasons that follow, we affirm in part, reverse in part,
and remand.
I. Facts
The evidence in the record, drawing all inferences in favor of
plaintiff,
Collingwood v. G. E. Real Estate Equities, 324 N.C. 63,
66, 376 S.E.2d 425, 427 (1989), tends to show the following:
Solid Steel Company, Inc. (Solid Steel) was an Illinois corporation
involved in metal recycling. Griffith was the sole shareholder and
president of Solid Steel. Solid Steel was involuntarily dissolved
on 2 March 1998 and reinstated on 26 February 2004. Glen WoodCompany, Inc., a Virginia corporation doing business as Wood
Brothers, competed in NASCAR automobile racing. Defendant Wood
Brothers was headquartered in Virginia. Eddie Wood was a manager
in Wood Brothers. Roush Racing
(See footnote 1)
(Roush) was a competitor of
defendant Wood Brothers on the NASCAR racing circuit. Defendant
Tryson was employed by defendant Wood Brothers as the crew chief
for the 2003 NASCAR season. As crew chief, defendant Tryson was
responsible for maximizing the performance of the race car. (R.
275)
Griffith, through Solid Steel, re-engineered a truck arm (Part
X or truck arm), part of the suspension, to improve the speed and
performance of a race car. Solid Steel assigned its rights in Part
X to Griffith on 15 March 2004, and Griffith is the sole plaintiff
in this case.
At a test session at the Kansas Speedway in September 2003,
Part X was installed on a race car owned by defendant Wood
Brothers. On 29 September 2003, after the test at the Kansas
Speedway, Griffith, on behalf of Solid Steel, entered into a lease
contract with defendant Wood Brothers for Part X.
Pursuant to the contract, defendant Wood Brothers leased four
(4) sets of Part X from 29 September 2003 to 17 November 2003. In
the lease contract, defendant Wood Brothers agree[d] to not cut,
punch, form, deform, . . . or test (in any metallurgical way),
[Part X], [without] written consent by Solid Steel. DefendantWood Brothers also agree[d] to not 'share' any information
obtained [from Part X] with . . . any fellow NASCAR competitor.
Defendant Wood Brothers installed a set of Part X on one of its
race cars.
After the NASCAR race at Phoenix, defendant Wood Brothers
entered an agreement with Roush for the final two races of 2003.
As part of the agreement, defendant Pat Tryson, still employed by
defendant Wood Brothers, worked as crew chief for Roush for the
last two races of 2003. Defendant Tryson took at least one set of
Part X with him to Roush.
Defendant Wood Brothers' lease contract with Solid Steel for
Part X terminated on 17 November 2003. Defendant Wood Brothers
then returned to Griffith and Solid Steel three (3) of the four (4)
sets of Part X leased under the contract, but not the set defendant
Tryson took to Roush. Plaintiff requested return of the fourth set
of Part X, but it was not immediately returned.
Before the fourth set of Part X was returned to Solid Steel,
Eddie Wood, in casual conversation with defendant Tryson, remarked,
I wonder what the trick [to Part X] is. Even though Eddie Wood
testified in his deposition that he meant nothing by this remark,
intending to return Part X to Solid Steel intact, defendant Tryson
interpreted this comment as an order to drill a hole in Part X and
test it metallurgically. Defendant Tryson drilled a core sample
out of one set of Part X and gave the core sample to an engineer
for Roush. The final set of Part X, minus the core sample, was
returned to Griffith in December 2003.
II. Procedural History
Plaintiff filed a complaint on 24 January 2005, seeking
damages from defendant Wood Brothers for misappropriation of trade
secrets, conversion, unfair and deceptive trade practices (UDTP),
and breach of contract. In the same complaint, he sought damages
from defendant Tryson for misappropriation of trade secrets,
conversion, UDTP, and interference with contractual relationship.
Defendant Tryson answered on or about 31 March 2005, denying the
material allegations of the complaint. Defendant Wood Brothers
answered on or about 28 April 2005, also denying the material
allegations in the complaint.
Defendant Wood Brothers filed a motion for summary judgment on
or about 30 November 2005. Defendant Tryson filed a motion for
summary judgment on or about 2 December 2005. The trial court
entered summary judgment in favor of both defendants as to all
claims on or about 27 December 2005. Plaintiff appeals from entry
of summary judgment in favor of defendants.
III. Standard of Review
The trial court must grant summary judgment upon a party's
motion when there is no genuine issue as to any material fact and
. . . any party is entitled to a judgment as a matter of law.
N.C. Gen. Stat. § 1A-1, Rule 56. (2005) On appeal, an order
granting summary judgment is reviewed
de novo.
Howerton v. Arai
Helmet, Ltd., 358 N.C. 440, 470, 597 S.E.2d 674, 693 (2004).
Summary judgment is appropriate if: (1) the non-moving party
does not have a factual basis for each essential element of itsclaim; (2) the facts are not disputed and only a question of law
remains,
McNair v. Boyette, 282 N.C. 230, 235, 192 S.E.2d 457, 460
(1972); or (3) if the non-moving party is unable to overcome an
affirmative defense
(See footnote 2)
offered by the moving party,
Bonestell v.
North Topsail Shores Condominiums, 103 N.C. App. 219, 222, 405
S.E.2d 222, 224 (1991) (holding that summary judgment was properly
granted when the claim was filed after the statute of limitations
had run).
On the other hand, summary judgment is not appropriate when
there are conflicting versions of the events giving rise to the
action, or when there is no conflict about the events that
occurred, but the legal significance of those events is determined
by a reasonable person test.
Lopez v. Snowden, 96 N.C. App. 480,
482-83, 386 S.E.2d 65, 66 (1989).
IV. Issues
A. Breach of Contract
[1] Plaintiff contends that the trial court erred when it
granted summary judgment in favor of defendant Wood Brothers on the
breach of contract claim. We agree.
The elements of a claim for breach of contract are (1)
existence of a valid contract and (2) breach of the terms of that
contract.
Poor v. Hill, 138 N.C. App. 19, 26, 530 S.E.2d 838, 843(2000). The record contains a contract signed by officers of Solid
Steel and defendant Wood Brothers on 29 September 2003 for the lease
of four sets of Part X, which plaintiff purports to be a valid
contract. In that contract, defendant Wood Brothers agree[d] to
not cut, punch, form, deform, . . . or test (in any metallurgical
way), [Part X], [without] written consent by Solid Steel.
Defendant Wood Brothers also agree[d] to not 'share' any
information obtained [from Part X] with . . . any fellow NASCAR
competitor. The record contains evidence that a core sample was
drilled out of Part X and that the core sample was given to a Roush
engineer for testing. Defendant Wood Brothers denied drilling out
a core sample and giving it to a Roush engineer. If plaintiff
proves that defendant Wood Brothers, through its agents, drilled out
a core sample or gave any part of it to a Roush engineer for
testing, either action would be a breach of an express term of the
lease contract. This evidence is sufficient to raise a genuine
issue of material fact as to the breach of contract claim.
Defendant is therefore not entitled to summary judgment on the
breach of contract claim unless it asserts an affirmative defense
which plaintiff cannot overcome.
[2] Defendant asserts the affirmative defense that Solid Steel
was subject to revenue suspension per N.C. Gen. Stat. § 105-230 at
the time the contract was signed, thereby making the contract
invalid. If Solid Steel was in fact under revenue suspension per
N.C. Gen. Stat. § 105-230, the contract it entered into with
defendant Wood Brothers would be invalid under North Carolina law.
South Mecklenburg Painting Contr'rs, v. Cunnane Grp., 134 N.C. App.
307, 312, 517 S.E.2d 167, 170 (1999) (holding that a contract
entered into during a period of revenue suspension per G.S. § 105-
230 is invalid and may not be enforced). However, N.C. Gen. Stat.
§ 105-230
(See footnote 3)
applies only to entities whose articles of
incorporation, articles of organization, or certificate of
authority have been suspended by the State of
North Carolina. It
does not apply to entities that have been subject to similar actions
in other states. N.C. Gen. Stat. § 105-230.
The record contains evidence that Solid Steel was incorporated
in Illinois, not North Carolina. There is no evidence that Solid
Steel was doing business in North Carolina when the contract wasentered,
(See footnote 4)
and no evidence that Solid Steel ever had a certificate of
authority from the State of North Carolina. Drawing inferences from
these facts in plaintiff's favor, as we must for purposes of summary
judgment,
Collingwood, 324 N.C. at 66, 376 S.E.2d at 427, there is
no evidence that the State of North Carolina suspended the articles
of incorporation or certificate of authority of Solid Steel, thereby
invalidating the lease contract. If proved, these inferences show
that plaintiff is able to overcome defendant Wood Brothers'
affirmative defense to the lease contract. Therefore, defendant
Wood Brothers has not shown that it is entitled to summary judgment
on the basis of its affirmative defense. Because defendant Wood
Brothers has not shown that it is entitled to summary judgment on
either the elements of plaintiff's claim or on its own affirmative
defense, we reverse entry of summary judgment in favor of defendant
Wood Brothers on the breach of contact claim.
B. Tortious Interference with Contract
[3] Plaintiff contends that the trial court erred when it
granted summary judgment on his claim for tortious interference with
contract in favor of defendant Tryson. We disagree.
Plaintiff argues that defendant Tryson interfered with the
lease contract between defendant Wood Brothers and Solid Steel by
drilling a core sample out of Part X. Defendant Tryson responds
that the contract was not breached, or alternatively, if it was
breached, there is no evidence that defendant Tryson induceddefendant Wood Brothers to breach the contract. An essential
element of a claim for tortious interference with a contract is that
the defendant intentionally induces the third person not to perform
the contract.
United Laboratories, Inc. v. Kuykendall, 322 N.C.
643, 661, 370 S.E.2d 375, 387 (1988).
Drawing all inferences from the evidence in plaintiff's favor,
we conclude there is no evidence in the record that defendant Tryson
induced defendant Wood Brothers not to perform the lease contract.
Because plaintiff has not presented evidence to support an essential
element of his claim for tortious interference with contract, the
trial court did not err in granting summary judgment in favor of
defendant Tryson on the claim of tortious interference with
contract. Accordingly, we affirm the judgment of the trial court
on this claim.
C. Conversion
[4] Plaintiff contends that the trial court erred when it
granted summary judgment in favor of defendant Wood Brothers and
defendant Tryson on the claim for conversion. We agree as to both
defendants.
Plaintiff alleged that defendant Tryson converted Part X when,
without authorization, he (1) retained possession of the part, and
(2) drilled a core sample out of it. Plaintiff argued that
defendant Tryson is personally liable for conversion and also that
defendant Wood Brothers is liable for conversion under the doctrine
of
respondeat superior. Defendant Tryson responded that he did not
convert Part X because (1) his possession of Part X was authorizedby a lease contract between Solid Steel and defendant Wood Brothers,
and (2) he did not know that removing the core sample was a
violation of that lease contract.
Conversion is defined as an
unauthorized assumption and
exercise of the right of ownership over goods or personal chattels
belonging to another, to the alteration of their condition or the
exclusion of an owner's rights.
Lake Mary Ltd. Part. v. Johnston,
145 N.C. App. 525, 531, 551 S.E.2d 546, 552 (citation omitted)
(emphasis added),
disc. review denied, 354 N.C. 363, 557 S.E.2d 538-
39 (2001). A lease of goods authorizes the right to possession and
use of goods for a term. N.C. Gen. Stat. § 25-2A-103 (2005). A
lease of goods to a corporation impliedly authorizes the employees
or agents of the corporation to possess and use the goods for the
lease term, because a corporation can act only through its employees
and agents.
See State v. Southern Ry. Co., 145 N.C. 359, 403, 59
S.E. 570, 591 (1907) (Clark, C.J., dissenting); 2 William Meade
Fletcher et al.,
Fletcher Cyclopedia of the Law of Corporations §
275 (rev. vol. 2006);
accord Cedric Kushner Promotions, Ltd. v.
King, 533 U.S. 158, 165-66, 150 L. Ed. 2d 198, 206 (2001).
When possession and use of goods is authorized by a lease, an
action for conversion may lie if the lessee retains possession of
the goods beyond the term authorized by the lease, provided the
lessor demands the goods after the end of the lease term and the
lessee refuses to return them.
See Hoch v. Young, 63 N.C. App. 480,
483, 305 S.E.2d 201, 203-04 (holding that because the defendant's
possession was initially authorized, the jury could find that thestatute of limitations for conversion does not begin to run until
the owner's lawful demand for the goods is refused),
disc. review
denied, 309 N.C. 632, 308 S.E.2d 715 (1983); W. Page Keeton et al.,
Prosser and Keeton on the Law of Torts § 15, at 98-100 (5th ed.
1984) [hereinafter
Prosser]; Restatement of Torts (Second) § 237
cmt. g (1965);
accord Guaranty Nat. Ins. Co. v. Mihalovich, 435 P.2d
648, 652 (Wash. 1967) (holding that absent demand and refusal, or
some other decisive repudiation of the owner's rights, merely
retaining a rental car beyond the return date specified in the
contract did not establish conversion). If the defendant's refusal
to return the goods is not expressed, it may be implied from the
defendant's conduct. Restatement of Torts (Second) § 237 cmt. g
(1965). The determination of whether a defendant has impliedly
refused to return leased goods is generally a factual determination
for a jury.
Id.
According to the lease between defendant Wood Brothers and
Solid Steel, Part X was to be returned to Solid Steel on 17 November
2003. Defendant Tryson had possession of Part X after that date.
Plaintiff alleged that defendant Tryson would not return phone calls
and that an unidentified employee of defendant Wood Brothers ignored
his demand to return Part X in early December. From this evidence,
we conclude that whether defendant Tryson refused plaintiff's demand
for return of Part X by implication raises a genuine issue of
material fact, which creates a jury question.
An action for conversion may also lie if leased goods are used
in a manner that is a major or serious departure from the useauthorized by the lease.
Prosser § 15, at 101. Whether an action
is a major or serious departure from a lease depends wholly on the
facts of the case and is a determination best suited for a jury.
See Radford v. Norris, 63 N.C. App. 501, 503, 305 S.E.2d 64, 65
(1983) (whether a party's behavior is reasonable under the
circumstances is a jury question);
see also 1 Dan B. Dobbs,
The Law
of Torts § 64, at 136-37 (2001) (whether use of property amounts to
conversion is determined by an objective standard).
Under the terms of the lease, defendant Wood Brothers agree[d]
to not cut, punch, form, deform, . . . or test (in any
metallurgical way), [Part X], [without] written consent by Solid
Steel. Defendant Wood Brothers also agree[d] to not 'share' any
information obtained [from Part X] with . . . any fellow NASCAR
competitor. It is undisputed that defendant Tryson transported
Part X to Roush Racing and that defendant Tryson drilled a core
sample out of Part X. The parties disagree, however, about whether
these actions amount to a major or serious departure from the terms
of the lease. We conclude that this disagreement creates a genuine
issue of material fact, appropriate for a jury to determine at
trial.
Because there are genuine issues of material fact as to whether
defendant Tryson converted Part X by (1) retaining it beyond the
term authorized in the lease, or (2) using it in a manner not
authorized by the lease, we conclude that the trial court erred when
it granted summary judgment in favor of defendant Tryson on the
conversion claim. Accordingly, we reverse. [5] Next we consider whether plaintiff's claim for conversion
against defendant Wood Brothers under the doctrine of
respondeat
superior created a genuine issue of material fact sufficient to
survive summary judgment.
(See footnote 5)
Under the doctrine of
respondeat
superior, an employer may be held vicariously liable for the torts
of its employee who is acting within the scope of his employment.
Creel v. N. C. Dep't of Health & Human Servs., 152 N.C. App. 200,
203, 566 S.E.2d 832, 834 (2002),
cert. denied, 357 N.C. 163, 580
S.E.2d 363 (2003). The question as to whether an employee is acting
within the scope of his employment is generally a factual
determination for the jury.
Edwards v. Akion, 52 N.C. App. 688,
698, 279 S.E.2d 894, 900,
aff'd per curiam, 304 N.C. 585, 284 S.E.2d
518 (1981). Summary judgment is not appropriate on this question
unless reasonable minds could not differ as to whether the actions
of the employee were undertaken in the scope of his employment. 52
N.C. App. at 698, 279 S.E.2d at 900;
see also Boudreau v. Baughman,
322 N.C. 331, 346, 368 S.E.2d 849, 860 (1988).
It is undisputed that defendant Tryson was employed by
defendant Wood Brothers during the time relevant to this lawsuit.
Defendant Tryson was responsible to maximize performance of
defendant Wood Brothers' race car. Plaintiff contends thereforethat drilling a core sample from Part X to determine why it
performed the way it did was within the scope of Tryson's
employment. Eddie Wood, on the other hand, testified in his
deposition that defendant Tryson acted completely on his own when
he drilled out the core sample. We conclude that reasonable minds
could differ as to whether or not this action was within the scope
of defendant Tryson's employment. Summary judgment was therefore
not appropriate as to defendant Wood Brothers' liability for
defendant Tryson's actions under the doctrine of
respondeat
superior. Accordingly, we reverse.
D. Misappropriation of Trade Secret
[6] Plaintiff contends that the trial court erred when it
granted summary judgment on his claim for misappropriation of trade
secret in favor of defendant Wood Brothers and defendant Tryson.
We disagree.
Plaintiff argues that Part X meets the statutory definition of
a trade secret, and that defendant Wood Brothers and defendant
Tryson misappropriated that trade secret to improve performance on
their race cars without paying Solid Steel for it. In response,
defendant Wood Brothers and defendant Tryson argue that Part X is
not a trade secret because it can be reverse engineered, and that
even if it is a trade secret, there is no evidence that either
defendant Wood Brothers or defendant Tryson ever learned the secret,
or that they ever used the secret to profit themselves.
A trade secret is
business or technical information, including
but not limited to a formula, pattern, program,device, compilation of information, method,
technique, or process that:
a. Derives independent actual or potential
commercial value from
not being generally known
or
readily ascertainable through independent
development or
reverse engineering by persons
who can obtain economic value from its
disclosure or use; and
b. Is the subject of efforts that are
reasonable under the circumstances to maintain
its secrecy.
N.C. Gen. Stat. . 66-152 (2005) (emphasis added).
As discussed above, summary judgment is appropriate if the
facts are undisputed and only a question of law remains. Griffith
admitted in his deposition that his idea for Part X was readily
ascertainable through reverse engineering. Therefore, Griffith's
idea cannot be defined as a trade secret as a matter of law, and
we affirm the trial court's grant of summary judgment in favor of
both defendants on this issue.
E. Unfair and Deceptive Trade Practices
[7] Plaintiff contends that the trial court erred when it
granted summary judgment on his claim for unfair and deceptive trade
practices in favor of defendant Wood Brothers and defendant Tryson.
We disagree.
Plaintiff argues that breach of contract, retention of the core
sample drilled out of Part X for three years, together with
misappropriation of a trade secret support a claim for UDTP. In
response, defendants argue that plaintiff has not presented evidence
that defendants committed an unfair or deceptive act or practice.
They further argue that plaintiff has not proved any damagesresulting from any unfair and deceptive trade practices on the part
of defendants.
To succeed on a claim for UDTP, a plaintiff must prove: (1)
defendants committed an unfair or deceptive act or practice; (2) in
or affecting commerce; and (3) that plaintiff was injured thereby.
First Atl. Mgmt. Corp. v. Dunlea Realty Co., 131 N.C. App. 242, 252,
507 S.E.2d 56, 63 (1998); N.C. Gen. Stat. . 75-1.1 (2005). A
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. Marshall
v. Miller, 302 N.C. 539, 548, 276 S.E.2d 397, 403 (1981). Mere
breach of contract is not sufficient to sustain an action for UDTP,
but if the breach is surrounded by substantial aggravating
circumstances, it may sustain an action for UDTP. Branch Banking
and Trust Co. v. Thompson, 107 N.C. App. 53, 62, 418 S.E.2d 694,
700, disc. review denied, 332 N.C. 482, 421 S.E.2d 350 (1992); see
also Garlock v. Henson, 112 N.C. App. 243, 246, 435 S.E.2d 114, 115
(1993) (holding that when the defendant forged a bill of sale and
lied for three years in order to deprive plaintiff of a sum of money
owed under a contract, the defendant's actions were sufficient to
sustain a claim for UDTP); Foley v. L & L International, 88 N.C.
App. 710, 714, 364 S.E.2d 733, 736 (1988) (holding that evidence the
defendant retained plaintiff's down payment for seven months and
continually maintained that the car was on its way even though it
had not been ordered supported a claim for UDTP); Mapp v. Toyota
World, Inc., 81 N.C. App. 421, 426, 344 S.E.2d 297, 301, disc.review denied, 318 N.C. 283, 347 S.E.2d 464 (1986) (holding that
when agreement to a contract is fraudulently induced by a promise
to allow rescission of the contract, breach of that promise is
sufficient to sustain an action for UDTP). Plaintiff has presented
no evidence of substantial aggravating circumstances surrounding the
alleged breach of contract. We already determined that plaintiff's
trade secret claim is without merit. There is no evidence in the
record that defendants deceived plaintiff to induce him to enter the
contract. Additionally, plaintiff has not forecast evidence which
would demonstrate that retaining a small core sample from a leased
part for three years is immoral, unethical, oppressive,
unscrupulous, or substantially injurious to consumers. Marshall,
302 N.C. at 548, 276 S.E.2d at 403. In sum, plaintiff has failed
to support an essential element of his UDTP claim and summary
judgment was therefore properly granted on the claim. Accordingly,
we affirm the trial court's grant of summary judgment in favor of
both defendants on the UDTP claim.
V. Conclusion
The grant of summary judgment by the trial court is affirmed
in part and reversed in part. We affirm the trial court orders
granting summary judgment in favor of defendants on the trade secret
claim, the tortious interference with contract claim, and the UDTP
claim. We reverse the trial court orders granting summary judgment
in favor of defendant Wood Brothers on the breach of contract claim,
and in favor of defendant Wood Brothers and defendant Tryson on the
conversion claim, and remand. AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.
Judges TYSON and STEPHENS concur.
Footnote: 1
The original complaint in this case named Roush Racing as a
defendant, but plaintiff did not appeal from summary judgment
granted in favor of Roush Racing.
Footnote: 2
An affirmative defense is a defense that introduces a new
matter in an attempt to avoid a claim, regardless of whether the
allegations of the claim are true.
Williams v. Pee Dee Electrical
Membership Corp., 130 N.C. App. 298, 301-02, 502 S.E.2d 645, 647-
48 (1998).
Footnote: 3
N.C. Gen. Stat. § 105-230 (2005) reads in pertinent part:
(a) If a corporation or a limited liability
company fails to file any report or return or
to pay any tax or fee required by this
Subchapter for 90 days after it is due, the
Secretary shall inform the Secretary of State
of this failure. The Secretary of State shall
suspend the articles of incorporation,
articles of organization, or certificate of
authority, as appropriate, of the corporation
or limited liability company. . . . The
powers, privileges, and franchises conferred
upon the corporation or limited liability
company by the articles of incorporation, the
articles of organization, or the certificate
of authority terminate upon suspension.
(b) Any act performed or attempted to be
performed during the period of suspension is
invalid and of no effect, unless the Secretary
of State reinstates the corporation or limited
liability company pursuant to G.S. 105-232.
(Emphasis added.)
Footnote: 4
At the date of the contract, Wood Brothers was headquartered
in Virginia, though it moved its headquarters to North Carolina
before this lawsuit was filed.
Footnote: 5
In its brief, defendant Wood Brothers' only defense to the
conversion claim was that the lease contract for Part X was
invalid; therefore, no conversion claim can be based on a purported
use of Part X beyond what was authorized in the lease. However,
considering the lease contract to be invalid
weakens defendant Wood
Brothers' argument for summary judgment in its favor, because the
most fundamental question in this action for conversion is whether
the undisputed possession and use of Part X by defendant Tryson and
defendant Wood Brothers was authorized by its owner, Solid Steel.
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