ROCKINGHAM CNTY. v. NTE ENERGY, LLC, 2024 NCBC 23

Rockingham Cnty. v. NTE Energy, LLC, 2024 NCBC 23.
STATE OF NORTH CAROLINA
COUNTY OF ROCKINGHAM
IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
23 CVS 1504
ROCKINGHAM COUNTY,
Plaintiff,
v.
NTE ENERGY, LLC; NTE
CAROLINAS II LLC; NTE
CAROLINAS II HOLDINGS, LLC;
CASTILLO INVESTMENT
HOLDINGS II, LLC; NTE ENERGY
SERVICES COMPANY, LLC; JOHN
DOE, NATURAL PERSON; and
JOHN DOE, CORPORATE ENTITY,
Defendants.
ORDER AND OPINION
ON MOTIONS TO DISMISS
THIS MATTER comes before the Court on Defendant Castillo Investment
Holdings II, LLC’s Amended Motion to Dismiss (ECF No. 27), Defendant NTE
Carolinas II Holdings, LLC’s Motion to Dismiss (ECF No. 31), Defendant NTE
Carolinas II LLC’s Motion to Quash Service of Process and Motion to Dismiss (ECF
No. 33), and Defendants NTE Energy, LLC and NTE Energy Services Company,
LLC’s Motion to Dismiss Amended Complaint, or, in the Alternative, for a More
Definite Statement (ECF No. 36) (collectively, the “Motions”).
THE COURT concludes that the Motions should be GRANTED, in part,
DENIED AS MOOT, in part, and DEFERRED, in part, as set forth below.
Frazier, Hill & Fury, RLLP, by William Hill and Clyde B. Albright, for
Plaintiff Rockingham County.

Nelson Mullins Riley & Scarborough LLP, by Lee D. Wedekind & Kelly
Reid, for Defendants NTE Energy LLC and NTE Energy Services Co.
LLC.
Rayburn Cooper & Durham, P.A., by Matthew Tomsic & Rachel E.
Brinson, for Defendants Castillo Investment Holdings II LLC, NTE
Carolinas II Holdings LLC, and NTE Carolinas II LLC.
Davis, Judge.
INTRODUCTION
1. This case arises out of a failed economic development project. Plaintiff
Rockingham County entered into a series of agreements with a company called NTE
Carolinas II LLC (“Carolinas”) in which the County agreed to provide economic
development assistance to Carolinas in exchange for Carolinas’ construction of a 500-
megawatt natural gas electric generating facility in Rockingham County. The County
contends that pursuant to the project agreements, it agreed to make certain
infrastructure improvements for which it would be reimbursed by Carolinas in the
event that Carolinas terminated the project.
2. The project has stalled, and it is unclear when—if ever—it will resume.
As a result, Rockingham County has brought the present lawsuit seeking various
forms of relief, including reimbursement of its infrastructure improvement costs
(which allegedly total $1,573,429.18), from Carolinas. In addition to suing Carolinas,
however, Rockingham County has also named as defendants four additional
companies that, according to Rockingham County, are affiliated with Carolinas and
are likewise liable to the County.
3. The primary issue raised by the present Motions is whether the case
should proceed against these additional defendants in addition to Carolinas. In order

to resolve this question, the Court must apply North Carolina law regarding
corporate veil piercing, joint enterprise liability, and conspiracy.
FACTUAL AND PROCEDUAL BACKGROUND
4. The Court does not make findings of fact on a motion to dismiss under
Rule 12(b)(6) of the North Carolina Rules of Civil Procedure and instead recites
pertinent facts contained in the Complaint and in documents attached to, referred to,
or incorporated by reference in the Complaint that are relevant to the Court’s
determination of the motion.
5. On 13 October 2015, representatives from “NTE Energy”1 contacted the
Rockingham County Manager about plans to develop a power plant in North
Carolina. Over the next several months, meetings took place between county officials
and NTE Energy representatives. NTE Energy represented that it was planning to
build a 500-megawatt natural gas electric generating facility in Rockingham County
that would be known as the Reidsville Energy Center (“REC”) and would ultimately
be capable of providing power to approximately 450,000 homes. NTE Energy
represented to county officials that the REC Project would involve a $500 million
investment that would, among other things, provide increased revenues from the
County’s sale of water and treatment of wastewater and serve as a substantial
addition to the local tax base. (See Am. Compl. ¶¶ 1–6, 28–29, ECF No. 20.)
1 As discussed in detail later in this Opinion, details concerning the legal status of NTE
Energy, the principals behind it, and its precise relationship to Carolinas (and to the other
named Defendants in this action) are presently unclear. (See Am. Compl. ¶ 6.)

6. Rockingham County ultimately entered into an “economic development
package” with Carolinas consisting of a series of written agreements, including a
Letter of Intent (Am. Compl. Ex. 36), an Economic Development Incentive
Performance Agreement (the “Performance Agreement,” Am. Compl. Ex. 38a), an
Agreement for Infrastructure Improvements (the “Infrastructure Agreement,” Am.
Compl. Ex. 39a), and a Utilities Agreement (Am. Compl. Ex. 40). (See Am. Compl. ¶¶
35–40.)
7. Pursuant to the Infrastructure Agreement, the County agreed to provide
specified water and wastewater infrastructure improvements by 1 September 2019
and that it would make certain preliminary expenditures in order to meet this
deadline. (Am. Compl. ¶ 39.) The Infrastructure Agreement also provided that if
Carolinas terminated the REC Project, it would reimburse Rockingham County for
expenditures incurred through the date of termination. (Am. Compl. ¶ 39.)
8. Rockingham County issued a Special Use Permit for a Public Utilities
Facility to Carolinas on 27 October 2016. (Am. Compl. ¶ 31; Am. Compl. Ex. 31.) In
addition, the North Carolina Utilities Commission issued Carolinas a Certificate of
Convenience and Public Necessity for the REC on 19 January 2017. (Am. Compl. ¶
41; Am. Compl. Ex. 41.)
9. On 16 June 2017, Rockingham County proceeded to execute an
Installment Financing Contract with Branch Banking and Trust Company (“BB&T”)
for funding in the amount of $1,452,000 for the design of water and wastewater
infrastructure improvements in connection with the REC Project. (Am. Compl. ¶ 44.)

10. On or about 8 November 2017, Carolinas entered into a Large Generator
Interconnection Agreement (“LGIA”) with Duke Energy.2 (Am. Compl. ¶ 45.)
Carolinas subsequently defaulted on its obligations under the LGIA, resulting in the
filing of a lawsuit by Duke Energy against Carolinas. (Am. Compl. ¶¶ 45–47, 51–54.)
11. At some point during its dispute with Duke Energy, Carolinas made the
decision to suspend work on the REC Project. (Am. Compl. ¶ 52.)
12. On or about 20 September 2019—after Carolinas halted work on the
REC Project and after Duke Energy filed its lawsuit against Carolinas—Rockingham
County completed its preliminary work on the engineering and design of the project,
for which it spent $1,294,842.23 of funds from the Installment Financing Contract.
(Am. Compl. ¶ 61.)
13. In an email sent to the Rockingham County Manager on 3 March 2020,
an individual affiliated with NTE Energy provided assurance that the REC “[P]roject
would be resumed as soon as possible[.]” (Am. Compl. ¶ 62; Am. Compl. Ex. 62.) A
letter offering similar reassurance to the County was sent by an attorney associated
with Carolinas on 13 May 2022. (Am. Compl. ¶ 68; Am. Compl. Ex. 68.)
14. To date, no construction activities have begun on the REC Project. (Am.
Compl. ¶ 72.) On 8 March 2023, Carolinas “withdrew from North Carolina and
represented to the NC Secretary of State that it was no longer doing business in the
2 Pursuant to the Federal Power Act, the nature of the REC Project required the execution of
the LGIA between Carolinas and Duke Energy, which “establish[es] the terms and conditions
under which public utilities that own, control, or operate facilities for transmitting electric
energy in interstate commerce must provide interconnection service to large generating
facilities.” Reform of Generator Interconnection Procedures and Agreements, Order No. 845,
83 FR 21,342 (May 9, 2018), 163 FERC ¶ 61,043 (2018).

state.” (Am. Compl. ¶ 74.) However, Carolinas has never informed Rockingham
County that the project has been terminated. (Am. Compl. ¶ 74.)
15. Rockingham County initiated this action by filing a Complaint in
Rockingham County Superior Court on 21 July 2023. (Compl., ECF No. 3.) On 21
November 2023, this case was designated a mandatory complex business case and
assigned to the undersigned. (ECF Nos. 1, 2.)
16. On 26 October 2023, Rockingham County filed an Amended Complaint.
(Am. Compl., ECF No. 20.) The Amended Complaint asserts the following claims: (1)
declaratory judgment (against Carolinas); (2) breach of contract (against Carolinas);
(3) breach of the duty of good faith and fair dealing (against Carolinas); (4) breach of
fiduciary duty/constructive fraud (against Carolinas); (5) account stated (against
Carolinas); (6) unjust enrichment (against Carolinas); (7) promissory estoppel
(against Carolinas); (8) negligent misrepresentation (against Carolinas); (9) unfair
and deceptive trade practices (against Carolinas); (10) piercing the corporate veil
(against all Defendants); (11) civil conspiracy/facilitation of fraud (against all
Defendants); (12) fraudulent inducement (against all Defendants); and (13)
attachment (against Carolinas). (Am Compl. ¶¶ 75–212.)
17. In addition to Carolinas, the Amended Complaint also named the
following additional Defendants3: NTE Energy, LLC; NTE Carolinas II Holdings,
3 All but one of the named entity Defendants in this case (as well as the joint enterprise in
which these entities are alleged to have participated) have very similar names. In this
Opinion, the Court has strived to provide some degree of clarity when distinguishing between
these various entities, but it is unfortunately impossible to completely eliminate the
confusion resulting from the similarity of their names.

LLC (“Holdings”); Castillo Investment Holdings II, LLC (“Castillo”); NTE Energy
Services Company, LLC (“NTE Energy Services”); John Doe, Natural Person; and
John Doe, Corporate Entity.4
18. Each of the named Defendants subsequently filed Motions to Dismiss.
In its Motion, Carolinas seeks dismissal only as to several of the claims asserted
against it. However, the Remaining Defendants5 contend that the dismissal of all
claims asserted against them is proper based on the failure to state a valid claim for
relief against them pursuant to Rule 12(b)(6). In addition, three of the Remaining
Defendants—NTE Energy, LLC, NTE Energy Services, and Castillo—also seek
dismissal for lack of personal jurisdiction under Rule 12(b)(2).
19. A hearing on the pending Motions was held on 20 March 2024. The
Motions are now ripe for resolution.
LEGAL STANDARD
20. In ruling on a motion to dismiss under Rule 12(b)(6), the Court may only
consider the pleading and “any exhibits attached to the [pleading,]” Krawiec v. Manly,
370 N.C. 602, 606 (2018), in order to determine whether “as a matter of law, the
allegations of the complaint, treated as true, are sufficient to state a claim upon which
relief can be granted under some recognized legal theory.” Forsyth Mem’l Hosp., Inc.
4 The Amended Complaint also named as an additional Defendant Vitis Energy, LLC
(“Vitis”). However, on 26 March 2024, Rockingham County took a voluntary dismissal as to
its claims against Vitis. (Vol. Dismiss., ECF No. 57.) As a result, Vitis is no longer a party
to this action.
5 Throughout this Opinion, the Court refers to the entity Defendants other than Carolinas as
the “Remaining Defendants.”

v. Armstrong World Indus., Inc., 336 N.C. 438, 442 (1994) (cleaned up). The Court
must view the allegations in the complaint “in the light most favorable to the non-
moving party.” Christenbury Eye Ctr., P.A. v. Medflow, Inc., 370 N.C. 1, 5 (2017)
(cleaned up).
21. “It is well-established that dismissal pursuant to Rule 12(b)(6) is proper
when (1) the complaint on its face reveals that no law supports the plaintiff’s claim;
(2) the complaint on its face reveals the absence of facts sufficient to make a good
claim; or (3) the complaint discloses some fact that necessarily defeats the plaintiff’s
claim.” Corwin v. British Am. Tobacco PLC, 371 N.C. 605, 615 (2018) (cleaned up).
Additionally, the Court may “reject allegations [in the complaint] that are
contradicted by the documents attached, specifically referred to, or incorporated by
reference in the complaint.” Laster v. Francis, 199 N.C. App. 572, 577 (2009); see also
Oberlin Capital, L.P v. Slavin, 147 N.C. App. 52, 60 (2001) (stating that in deciding
a Rule 12(b)(6) motion, the Court may consider documents to which the complaint
specifically refers).
ANALYSIS
I. Summary of Defendant Companies
22. At the outset, it is helpful to understand the general nature of the
companies Rockingham County has sued in this action and how they are alleged to
be affiliated with each other. The Amended Complaint contains the following
pertinent allegations about these entities:

23. Carolinas is a Delaware company with its principal place of business in
Florida. It is a wholly-owned subsidiary of Holdings and an affiliate of NTE Energy,
LLC. Filings on its behalf with the North Carolina Secretary of State were made in
March of 2023 by Stephanie Clarkson, who signed the filings as the Manager of
Holdings. (Am. Compl. ¶ 10.)
24. NTE Energy, LLC is a Florida limited liability company. The sole
member of the company was formerly Seth Shortlidge, but he was later replaced by
Clarkson, Michael Green, and Timothy Eves. NTE Energy, LLC is the managing
member of NTE Energy Services. (Am. Compl. ¶ 11.)
25. NTE Energy Services is a Florida limited liability company. Its
registered agent is Shortlidge. The sole manager of NTE Energy Services is NTE
Energy, LLC. (Am. Compl. ¶ 12.)
26. Holdings is a Delaware company with its principal place of business in
Florida. It is wholly owned by Castillo. (Am. Compl. ¶ 13.)
27. Castillo is a Florida limited liability company. As noted above, it is the
sole owner of Holdings. Shortlidge is the manager of Castillo. (Am. Compl. ¶ 14.)
II. The Remaining Defendants’ Motions to Dismiss Under Rule 12(b)(6)
28. As noted above, the Remaining Defendants seek dismissal of all claims
against them in this action for failure to state a valid claim for relief under Rule
12(b)(6). In addition, NTE Energy, LLC, NTE Energy Services, and Castillo have
moved for dismissal based on lack of personal jurisdiction pursuant to Rule 12(b)(2).
Normally, the Court would address the personal jurisdiction arguments first.

However, the Court, in the exercise of its discretion and in accordance with its
inherent authority to do all things reasonably necessary for the proper administration
of justice, instead deems it appropriate to analyze the Remaining Defendants’
motions under Rule 12(b)(6) and defer ruling on their Rule 12(b)(2) motions. See
Adams v. Aventis, S.A., 2003 NCBC LEXIS 10, at **25 (N.C. Super. Ct. Aug. 26, 2003)
(ruling on defendants’ motion to dismiss under Rule 12(b)(6) and deferring ruling on
defendants’ motion to dismiss for lack of personal jurisdiction under Rule 12(b)(2)).
29. The Amended Complaint alleges a contractual relationship solely
between Rockingham County and Carolinas. (See Am. Compl. ¶ 10.) Of the thirteen
claims in the Amended Complaint, the only ones asserted against the Remaining
Defendants are the County’s claims for piercing the corporate veil, civil
conspiracy/facilitation of fraud, and fraudulent inducement. (See Am. Compl. ¶¶
166–207.) The Court will discuss each of these in turn.
A. Veil Piercing
30. As discussed in detail below, Rockingham County has failed to plead the
traditional elements of a veil piercing claim. Instead, it seeks to pierce the corporate
veil of the Remaining Defendants by alleging that they—along with Carolinas—were
engaged at all relevant times in a joint enterprise known as NTE Energy.6 The
County’s present allegations, however, are legally insufficient to support such a
theory of recovery against them.
6 For clarity, it is important to note that the Amended Complaint uses the name “NTE
Energy” to refer to the alleged joint enterprise that allegedly existed between the various
Defendants. The Amended Complaint separately uses the name “NTE Energy, LLC” to refer
to the named Defendant who bears that actual name.

31. As an initial matter, this Court has recognized that “piercing the
corporate veil is not a theory of liability.” Gallaher v. Ciszek, 2022 NCBC LEXIS 131,
at **34 (N.C. Super. Ct. Nov. 4, 2022). Instead, “it provides an avenue to pursue legal
claims against corporate officers or directors who would otherwise be shielded by the
corporate form. . . . [T]he party that seeks to disregard the corporate form must also
establish an independent claim on which to hold the controlling person or entity
liable.” Id. at **34–35 (cleaned up).
32. It is well settled that “a corporation is an entity distinct from its
shareholders, even if all of its stock is owned by a single individual or corporation.”
Griffin Mgmt. Corp. v. Carolina Power & Light Co., 2009 NCBC LEXIS 28, at **7
(N.C. Super. Ct. Nov. 12, 2009) (citing Troy Lumber Co. v. Hunt, 251 N.C. 624, 627
(1960)). “That a parent company wholly owns the capital stock of its subsidiary and
members of the board of directors of both corporations are the same, nothing else
appearing, ‘is not sufficient to render the parent corporation liable for the contracts
of its subsidiary.’ ” Id. (quoting Whitehurst v. FCX Fruit and Vegetable, 224 N.C. 628,
637 (1944)). “Indeed, there must be additional circumstances showing fraud, actual
or constructive, or agency, to establish such liability.” Id. As this Court has
explained:
The parent-subsidiary relationship exists, in part, to limit the liability
of a corporation’s shareholders. Excel Staffing Serv., Inc. v. HP
Reidsville, 172 N.C. App. 281, 290, 616 S.E.2d 349 (2005). Indeed, “a
shareholder of a corporation is not personally liable for the acts or debts
of the corporation except that he may become personally liable by reason
of his own acts or conduct.” N.C. Gen. Stat. § 55-6-22. The limited
liability rule applies whether the shareholders are individuals or
another corporation. Excel at 290, 616 S.E.2d 349.

Id. at **7–8.
33. This Court has summarized the doctrine of veil piercing as follows:
In North Carolina, “[t]he general rule is that in the ordinary course of
business, a corporation is treated as distinct from its shareholders.”
Ridgeway Brands Mfg., LLC, 362 N.C. at 438, 666 S.E.2d 107. In proper
circumstances, however, a court can look behind the corporate form and
disregard the corporation’s separate and independent existence. Id. at
438–39, 666 S.E.2d 107. Our appellate courts have repeatedly cautioned
that disregarding the corporate form, or piercing the corporate veil, is a
remedy that “should be invoked only in an extreme case where necessary
to serve the ends of justice.” Dorton v. Dorton, 77 N.C. App. 667, 672,
336 S.E.2d 415 (1985). “Piercing the corporate veil . . . allows a plaintiff
to impose legal liability for a corporation’s obligations, or for torts
committed by the corporation, upon some other company or individual
that controls and dominates a corporation.” Green v. Freeman, 367 N.C.
136, 145, 749 S.E.2d 262 (2013). Courts will pierce the corporate veil to
prevent the misuse of the corporate form for a fraudulent purpose or to
avoid an unconscionable result. See Ridgeway Brands Mfg., LLC, 362
N.C. at 438–39, 666 S.E.2d 107.
In order to pierce the corporate veil, a party must show “that the
corporation is so operated that it is a mere instrumentality or alter ego
of the sole or dominant shareholder and a shield for his activities in
violation of the declared public policy or statute of the State.” Green,
367 N.C. at 145, 749 S.E.2d 262 (citation omitted). The “instrumentality
rule” inquiry involves three elements:
(1) Control, not mere majority or complete stock control, but complete
domination, not only of finances, but of policy and business practice in
respect to the transaction attacked so that the corporate entity as to this
transaction had at the time no separate mind, will or existence of its
own; and
(2) Such control must have been used by the defendant to commit fraud
or wrong, to perpetrate the violation of a statutory or other positive legal
duty, or a dishonest and unjust act in contravention of [a] plaintiff’s legal
rights; and

(3) The aforesaid control and breach of duty must proximately cause the
injury or unjust loss complained of.
Id. at 145–46, 749 S.E.2d 262 (internal citations omitted). Factors
relevant to the Court’s analysis include “inadequate capitalization,
noncompliance with corporate formalities, lack of a separate corporate
identity, excessive fragmentation, siphoning of funds by the dominant
shareholder, nonfunctioning officers and directors, and absence of
corporate records.” Id. at 145, 749 S.E.2d 262 (internal citations
omitted).
State ex rel. Cooper v. Western Sky Fin., LLC, 2015 NCBC LEXIS 87, *13–17 (N.C.
Super. Ct. Aug. 27, 2015).
34. North Carolina also recognizes the related doctrine of “reverse veil
piercing.” Under this doctrine, “where one entity is the alter-ego, or mere
instrumentality, of another entity, shareholder, or officer, the corporate veil may be
pierced to treat the two entities as one and the same, so that one cannot hide behind
the other to avoid liability.” Fischer Inv. Capital, Inc. v. Catawba Dev. Corp., 200
N.C. App. 644, 650 (2009) (cleaned up).
35. In the Amended Complaint, Rockingham County does not allege that
complete control is exercised by any of the Remaining Defendants over Carolinas (or
vice versa). Moreover, rather than specifically stating which corporate forms the
Court should disregard, the County instead asks the Court to treat each of the
Defendant entities “as one and the same.” (Am. Compl. ¶ 186.)
36. Thus, Rockingham County’s allegations do not properly allege the
elements of veil piercing as that doctrine has been historically recognized by North
Carolina courts. See Blue Ridge Pediatric & Adolescent Med., Inc. v. First Colony
Healthcare, 2012 NCBC LEXIS 52, at *38 (N.C. Super. Ct. Oct. 3, 2012) (holding that

plaintiffs “fail[ed] to point to specific acts of control or domination by the Individual
Defendants over [Corporate] Subsidiaries” in dismissing veil piercing claim); see also
W&W Partners, Inc. v. Ferrell Land Co., LLC, 2018 NCBC LEXIS 52, *25–26 (N.C.
Super. Ct. May 22, 2018) (dismissing claim for piercing the corporate veil when
allegations consisted of “rote recitation of the factors enunciated by North Carolina’s
appellate courts” without any supporting facts).
37. Rockingham County does not seriously dispute the Remaining
Defendants’ argument that it has not properly alleged a standard theory of veil
piercing.7 Instead, it contends that veil piercing should be permitted in this case
because all of the named Defendants have operated as a joint enterprise under the
name “NTE Energy” and that all of the acts alleged in the Amended Complaint were
carried out pursuant to the affairs of this joint enterprise.
38. This Court has stated the following regarding liability under a joint
enterprise theory:
Like conspiracy, claims of joint enterprise . . . do not constitute
independent causes of action in North Carolina; these claims form the
basis of an agency relationship whereby one party’s conduct may be
imputed to another. Pike v. Wachovia Bank & Trust Co., 274 N.C. 1,
10–11, 161 S.E.2d 453, 461 (1968).
A joint enterprise is an alliance between two or more people in pursuit
of a common purpose. Slaughter v. Slaughter, 93 N.C. App. 717, 720,
379 S.E.2d 98, 100 (1989). “Parties may be said to be engaged in a joint
enterprise when there is a community of interest in the objects or
purposes of the undertaking, and an equal right to direct and govern the
movement of each with respect thereto.” Id.
7 At the 20 March hearing, Rockingham County’s counsel admitted that the County is not
disputing the compliance of the named Defendants with requisite corporate formalities. (Hr’g
Tr., at 74.)

BDM Investments v. Lenhil, Inc., 2012 NCBC LEXIS 7, at **70–71 (N.C. Super. Ct.
Jan. 18, 2012); see also BDM Invs. v. Lenhil, Inc., 2014 NCBC LEXIS 6, at **46–48
(N.C. Super. Ct. Mar. 20, 2014). “When the parties to a joint enterprise . . . agree to
pursue illegal activity, there is a conspiracy, and each conspirator is jointly and
severally liable for any resulting harm from the overt act of one of the parties.” State
ex rel. Cooper v. Orion Processing, LLC, 2017 NCBC LEXIS 20, at **18–19 (N.C.
Super. Ct. Mar. 7, 2017).
39. As with veil piercing claims generally, joint enterprise liability is not a
standalone claim. See BDM Investments, 2012 NCBC LEXIS 7, at **70–72 (“[C]laims
of joint enterprise . . . do not constitute independent causes of action in North
Carolina; these claims form the basis of an agency relationship whereby one party’s
conduct may be imputed to another.”).
40. Here, although Rockingham County seeks to litigate this action under a
theory of joint enterprise liability, it has not properly made allegations that are
sufficient to invoke this doctrine. Notably, there are no specific allegations of a right
on the part of each Defendant to govern and direct the actions of all the other
Defendants in furtherance of the aims of the enterprise.
41. To be sure, the Amended Complaint contains allegations as to various
statements and representations made in press releases, articles, and public filings
purporting to be on behalf of “NTE Energy” relating to the operation of power plants
throughout the country, including the REC Project. Indeed, attached to the Amended
Complaint are numerous exhibits containing such statements. Moreover,

Rockingham County has alleged a degree of commonality in ownership of the
companies that comprise the Remaining Defendants. Rockingham County has raised
legitimate questions as to what exactly “NTE Energy” is and who the principals are
behind it, as well as their potential involvement in the events described in the
Amended Complaint. Rockingham County will have the opportunity to explore these
issues in depth during discovery and potentially seek leave from the Court to further
amend its pleading based on new information obtained therein.
42. But that does not mean that the Remaining Defendants must continue
to remain in the case as Defendants in the meantime. Despite filing a pleading that
contains 212 separate paragraphs along with hundreds of pages of attached exhibits,
Rockingham County has largely lumped the Remaining Defendants together in its
allegations without meaningfully differentiating between them or alleging specific
and tangible acts of wrongdoing by them. The closest the County comes to a tangible
theory of wrongdoing is its assertion that the assets of Carolinas have been
intentionally depleted by the Remaining Defendants in order to render Carolinas
judgment-proof and prevent the County from recovering its alleged losses from
Carolinas in this action. However, this theory fails for lack of specificity in the
County’s allegations.
43. In short, Rockingham County has alleged that it has been injured not
merely by Carolinas but also by NTE Energy. It is presently unclear, however, which
natural persons or entities are legally responsible for any wrongful acts that may

have been committed through the use of the NTE Energy brand name (if, in fact, it is
properly deemed to be a brand name).
44. Therefore, the Court agrees with the Remaining Defendants that the
veil piercing allegations against them should be dismissed. However, the Court
possesses discretion as to whether a dismissal pursuant to Rule 12(b)(6) will be with
or without prejudice. See First Fed. Bank v. Aldridge, 230 N.C. App. 187, 191 (2013)
(“The decision to dismiss an action with or without prejudice is in the discretion of
the trial court[.]”). Here, the Court elects to exercise that discretion by dismissing
the claims against the Remaining Defendants without prejudice such that
Rockingham County shall retain the ability to seek leave to file a new amended
complaint in the event it obtains facts during discovery that would provide it with a
good faith basis for seeking to hold one or more of the Remaining Defendants liable
in this action.8
45. Therefore, Rockingham County’s claim for veil piercing is DISMISSED
WITHOUT PREJUDICE.
B. Fraudulent Inducement
46. Our Supreme Court has recently observed that the elements of fraud
and fraudulent inducement are identical. Value Health Sols., Inc. v. Pharm. Res.
Assocs., Inc., 385 N.C. 250, 264 (2023). Those elements consist of the following:
To state a claim for fraud in the inducement, a claimant must allege: (i)
that the defendant made a false representation or concealed a material
8 In the event that scenario occurs, NTE Energy, LLC, NTE Energy Services, and Castillo
will be free to renew their personal jurisdiction arguments pursuant to Rule 12(b)(2) at that
time.

fact he had a duty to disclose; (ii) that the false representation related
to a past or existing fact; (iii) that the defendant made the
representation knowing it was false or made it recklessly without
knowledge of its truth; (iv) that the defendant made the representation
intending to deceive the claimant; (v) that the claimant reasonably
relied on the representation and acted upon it; and (vi) the claimant
suffered injury.
Vestlyn BMP, LLC v. Balsam Mt. Group, LLC, 2016 NCBC LEXIS 48, at *17 (N.C.
Super. Ct. June 22, 2016) (citing Harton v. Harton, 81 N.C. App. 295, 298–99 (1986)).
47. Defendants make several arguments as to why Rockingham County’s
fraudulent inducement claim should be dismissed, including the assertion that its
allegations do not satisfy the heightened pleading requirement for such claims as
required by Rule 9(b) of the North Carolina Rules of Civil Procedure. The Court
agrees.
48. Rule 9(b) requires that “the circumstances constituting fraud” be alleged
“with particularity.” N.C. R. Civ. P. 9(b). “The purpose of Rule 9(b) is to provide a
defendant with sufficient notice of the fraud alleged in order to meet the charges.”
Provectus Biopharm., Inc. v. RSM US LLP, 2018 NCBC LEXIS 101, at *63 (N.C.
Super. Ct. Sept. 28, 2018) (cleaned up). Our Supreme Court has held that “in
pleading actual fraud[,] the particularity requirement is met by alleging time, place[,]
and content of the fraudulent representation, identity of the person making the
representation[,] and what was obtained as a result of the fraudulent acts or
representations.” Terry v. Terry, 302 N.C. 77, 85 (1981).

49. Here, the Amended Complaint fails to comply with the requirements of
Rule 9(b). Rockingham County’s broad and conclusory allegations that Defendants
acted fraudulently in connection with the REC Project are legally insufficient.
50. Therefore, the County’s claim for fraudulent inducement against the
Remaining Defendants is DISMISSED WITHOUT PREJUDICE.
C. Civil Conspiracy/Facilitation of Fraud
51. In Rockingham County’s eleventh cause of action, it combines a claim
for civil conspiracy with a claim for facilitation of fraud. These claims are not
dissimilar.
52. “The law permits one defrauded to recover from anyone who facilitated
the fraud by agreeing for it to be accomplished.” Brown v. Secor, 2020 NCBC LEXIS
134, at *26 (N.C. Super. Ct. Nov. 13, 2020). “A claim based upon facilitation of fraud
extends liability to those persons where (a) they operate under an agreement to do an
unlawful act, or to do a lawful act in an unlawful way; (b) wrongful acts were in fact
done in furtherance of that agreement; and (c) that resulted in injury to plaintiff.”
Estate of Capps v. Blondeau, 2015 NCBC LEXIS 41, at **41–42 (N.C. Super. Ct. Mar.
5, 2015). Thus, on a meritorious facilitation of fraud claim, “all of the conspirators
are liable, jointly and severally, for the act of any one of them done in furtherance of
the agreement.” Bucci v. Burns, 2018 NCBC LEXIS 37, at *14 (N.C. Super. Ct. Apr.
25, 2018) (cleaned up).
53. This Court has stated that in order to establish liability under a theory
of civil conspiracy,

the plaintiff must first offer “proof of an agreement between two or more
persons.” Sellers, 191 N.C. App. at 83, 661 S.E.2d 915. Second, the
plaintiff “must present evidence of an ‘overt act’ committed by at least
one conspirator in furtherance of the ‘common objective.’ ” Holt v.
Williamson, 125 N.C. App. 305, 319, 481 S.E.2d 307 (1997) (citation
omitted). Third, the plaintiff must prove that the overt act committed
in furtherance of the conspiracy resulted in damages to the plaintiff.
Slattery v. Appycity, LLC, 2021 NCBC LEXIS 24, at *27 (N.C. Super. Ct. Mar. 24,
2021).
54. Moreover, civil conspiracy “must be alleged in conjunction with an
underlying claim for unlawful conduct” because it “is not an independent cause of
action in North Carolina.” Global Textile Alliance, Inc. v. TDI Worldwide, LLC, 2018
NCBC LEXIS 104, at **18 (N.C. Super. Ct. Oct. 9, 2018).
55. Both of these claims fail for essentially the same reasons. Rockingham
County makes general allegations against the “NTE Energy components,” asserting
that “[e]ach member of the conspiracy committed an overt act in furtherance of the
conspiracy by fraudulently accepting funds from [Carolinas] when they knew that
these funds should have been preserved.” (Am. Compl. ¶ 195.)
56. However, these allegations fail to satisfy the above-quoted pleading
requirements. For one thing, they beg the question as to who NTE Energy actually
is. In addition, the Amended Complaint is devoid of any specific allegation that goes
beyond a rote and conclusory assertion that the Remaining Defendants actually
entered into an agreement for this purpose. In addition, it does not provide sufficient
specificity regarding the acts committed by each of the members of the alleged
conspiracy that were committed in furtherance of said conspiracy. As such, the

County’s allegations are legally deficient. See Worley v. Moore, 2017 NCBC LEXIS
15, at *78 (N.C. Super. Ct. Feb. 28, 2017) (dismissing civil conspiracy claim because
allegation that defendants “agreed, colluded and conspired among themselves . . . to
defraud Plaintiffs, which scheme or artifice included fraudulent inducement,
constructive fraud, and common law fraud” was merely a legal conclusion).
57. Finally, the Court notes that the Amended Complaint is vague as to
whether Carolinas even does, in fact, lack the ability to reimburse the County for the
sums for which the County seeks repayment under the contracts. It merely states
that “[u]pon information and belief, . . . Carolinas . . . does not possess the present
ability to reimburse Rockingham County for its expenditures as required by the
Agreements[,]” (Am. Compl. ¶ 73.) Notably, at the 20 March hearing, counsel for
Rockingham County candidly admitted that the County does not know whether
Carolinas is actually insolvent. (Hr’g Tr., at 70.)
58. Accordingly, Rockingham County’s civil conspiracy and facilitation of
fraud claims against the Remaining Defendants are DISMISSED WITHOUT
PREJUDICE.9
III. Carolinas’ Motion to Dismiss Under Rule 12(b)(6)
59. Unlike the Remaining Defendants, Carolinas does not seek the
dismissal of all claims asserted against it in this action. Instead, it seeks only the
9 Moreover, to the extent that Rule 9(b) likewise applies to a facilitation of fraud claim—
which is logical—Rockingham County’s failure to comply with this Rule serves as an
additional basis for dismissing the facilitation of fraud claim.

dismissal of Rockingham County’s claims for account stated, promissory estoppel,
piercing the corporate veil, civil conspiracy/facilitation of fraud, and attachment.10
60. The defects in the Amended Complaint discussed above regarding
Rockingham County’s attempt to state claims for piercing the corporate veil and civil
conspiracy/facilitation of fraud apply equally to Carolinas. Each of those claims is
therefore also DISMISSED WITHOUT PREJUDICE as to Carolinas. Similarly,
although Carolinas has not overtly moved for dismissal of the claim for fraudulent
inducement, it would make little sense for the Court to allow that claim to survive in
light of the Court’s analysis above explaining the deficiencies with the claim.
Accordingly, the County’s fraudulent inducement claim against Carolinas is likewise
DISMISSED WITHOUT PREJUDICE.
61. The Court now turns its attention to the claims as to which Carolinas
expressly seeks dismissal in its Motion.
A. Account Stated
62. “There are four basic elements to an account stated cause of action: (1)
a calculation of the balance due; (2) submission of a statement to the party to be
charged; (3) acknowledgment of the correctness of that statement by the party to be
charged; and (4) a promise, express or implied, by the party to be charged to pay the
balance due.” Mast et al. v. Lane, 228 N.C. App. 294, 296–97 (2013) (cleaned up); see
also Carroll v. McNeill Indus., Inc., 296 N.C. 205, 209 (1978) (“An account stated is
10 Carolinas initially contended that it was not properly served with process in this case and,
based on this assertion, filed a Motion to Quash Service of Process. However, at the 20 March
hearing in this matter, counsel for Carolinas conceded that proper service had subsequently
been effectuated. Therefore, the Motion to Quash Service of Process is DENIED as moot.

by nature a new contract to pay the amount due based on the acceptance of or failure
to object to an account rendered.”).
63. Rockingham County has alleged the following in support of its claim for
account stated:
131. On February 10, 2023, Rockingham County calculated the balance
due under the Infrastructure Improvements Agreement, which was
$1,573,429.18. This letter is attached as Exhibit 131.
132. That balance due October 18, 2023, was submitted to Defendant
[Carolinas], the party to be charged, in a February 10, 2023 letter to its
General Counsel, Maribel Zambrana-Garcia from Clyde B. Albright,
Rockingham County Attorney.
133. Defendant [Carolinas] never challenged the accuracy of the balance
due to Rockingham County.
134. Defendant [Carolinas] acknowledged the correctness of the balance
due when neither Ms. Zambrana-Garcia nor any other [Carolinas]
representative objected to it.
135. Defendant [Carolinas] by its contractual agreement promised to
pay the $1,573,429.18 balance due as set forth in the letter.
136. Defendant [Carolinas] also implicitly agreed to pay the balance due
when neither Ms. Zambrana-Garcia nor any other NTE Energy
representative objected to it.
137. Defendant [Carolinas] owes the balance due to Rockingham County
plus accruing interest.
138. Defendant [Carolinas] failed to pay the balance due.
(Am. Compl. ¶¶ 131–38.)
64. The Court agrees with Carolinas that this claim should be dismissed.
The question of whether Carolinas is required to reimburse Rockingham County for
the infrastructure improvement sums is one of the central issues in this lawsuit and
one of the questions as to which the County seeks a declaratory judgment in its

Amended Complaint. Moreover, a number of the exhibits attached to the Amended
Complaint expressly state Carolinas’ position that the project has not actually been
terminated but rather has been merely delayed by the Duke Energy litigation.
Therefore, Carolinas’ liability for the sums sought by Rockingham County remains a
disputed issue.
65. For these reasons, Rockingham County’s claim for account stated is
DISMISSED WITHOUT PREJUDICE. See Kapur v. IMW EMR, LLC, 2020 NCBC
LEXIS 148, at *19 (N.C. Super. Ct. Dec. 18, 2020) (holding that even taking the
plaintiff’s allegations as true, dismissal of claim for account stated was proper where
it was clear a dispute existed as to amounts owed).
B. Promissory Estoppel
66. Although the Amended Complaint attempts to state a claim for
promissory estoppel, North Carolina courts have made clear that promissory estoppel
cannot exist as an affirmative claim for relief. TG Equip. & Supply, LLC v. EBay,
Inc., 2015 NCBC LEXIS 9, at *12 n.24 (N.C. Super. Ct. Jan. 23, 2015) (cleaned up);
see, e.g., Value Health Sols. Inc. v. Pharm. Res. Assocs., Inc., 2020 NCBC LEXIS 65,
at *34–35 (N.C. Super. Ct. May 22, 2020) (refusing to recognize promissory estoppel
as an affirmative claim); Haddock v. Volunteers of Am., Inc., 2021 NCBC LEXIS 8, at
*18–19 (N.C. Super. Ct. Jan. 22, 2021) (same).

67. Accordingly, Rockingham County’s claim for promissory estoppel is
DISMISSED WITH PREJUDICE.11
C. Attachment
68. Finally, Rockingham County has also asserted a claim for prejudgment
attachment against Carolinas. In support of this claim, the Amended Complaint
requests “that the Court issue an order for attachment in the amount of $4.5 million
in order to bring property of Defendant [Carolinas] within the legal custody of the
court in order that it may subsequently be applied to the satisfaction of any judgment
for money which may be rendered against Defendant [Carolinas].” (Am. Compl.
¶ 210.)
69. “The attachment of property owned by a defendant is proper when the
plaintiff seeks a money judgment in the principal action and shows a need for a
prejudgment remedy in order to insure that funds will be available to satisfy that
judgment.” Loman Garrett, Inc. v. Timco Mech., Inc., 93 N.C. App. 500, 502 (1989).
70. In order to comply with N.C.G.S. § 1-440.11—the statute authorizing
attachment as a remedy—a claimant “must submit an affidavit setting forth that
plaintiff has commenced an action to secure a judgment for money, the amount of the
potential judgment, the nature of the action, and the grounds for the attachment.”
GMAC Mortg., LLC v. Mathews, 2011 U.S. Dist. LEXIS 75275, at *2 (W.D.N.C. July
12, 2011).
11 To be clear, nothing herein shall preclude Rockingham County from asserting the doctrine
of promissory estoppel in this case in the event the need should arise. Rather, the Court’s
ruling is simply that North Carolina law does not recognize an offensive claim for monetary
damages premised solely upon a theory of promissory estoppel.

71. Prejudgment attachment has been described as an “extraordinary
remedy[.]” RDLG, LLC v. RPM Group, LLC, 2011 U.S. Dist. LEXIS 56816, **4–5
(W.D.N.C. May 26, 2011).
72. Rockingham County concedes in its briefing that it has not yet filed an
affidavit, as required, in order to show an entitlement to the remedy of attachment.
Moreover, even assuming that the Amended Complaint (as to which Rockingham
County filed a belated verification) could potentially serve as the type of affidavit
required under N.C.G.S. § 1-440.11, the broad and conclusory allegations contained
therein about the alleged depletion of Carolinas’ assets are insufficient to show the
propriety of prejudgment attachment at the present time. Nor does the Amended
Complaint explain how it arrives at the requested $4.5 million figure or identify the
specific property of Carolinas as to which it is seeking attachment.
73. Therefore, this claim is DISMISSED WITHOUT PREJUDICE. See
Estate of Chambers v. Vision Two Hospitality Mgmt., LLC, 2013 NCBC LEXIS 49,
**19-22 (N.C. Super. Ct. Nov. 21, 2013) (dismissing plaintiff’s request for
prejudgment attachment in amount of $1,500,000 premised on allegation that
defendant had transferred assets while insolvent with intent to defraud plaintiffs and
observing that plaintiff’s request failed to “specify . . . assets or property” of
defendants for which attachment was being sought).

CONCLUSION
THEREFORE, IT IS ORDERED as follows:
1. The Remaining Defendants’ Motions to Dismiss pursuant to Rule
12(b)(6) are GRANTED, and all claims asserted against them are DISMISSED
WITHOUT PREJUDICE;
2. The Court DEFERS ruling on Defendants NTE Energy, LLC, NTE
Energy Services, and Castillo’s Motions to Dismiss pursuant to Rule 12(b)(2) without
prejudice to their right to refile said Motions, if necessary, at a later date if Plaintiff
seeks leave to file a new amended pleading containing claims against them;
3. Defendant Carolinas’ Motion to Dismiss is GRANTED as to the claims
against it for account stated, piercing the corporate veil, civil conspiracy/facilitation
of fraud, fraudulent inducement, and attachment, and those claims are DISMISSED
WITHOUT PREJUDICE;
4. Defendant Carolinas’ Motion to Dismiss as to the claim against it for
promissory estoppel is GRANTED, and that claim is DISMISSED WITH
PREJUDICE;
5. Defendant Carolinas’ Motion to Quash Service of Process is DENIED
AS MOOT; and
6. The parties are DIRECTED to use a caption on all future filings in this
matter that is consistent with the Court’s rulings contained herein.

SO ORDERED, this the 15th day of April, 2024.
/s/ Mark. A. Davis
Mark A. Davis
Special Superior Court Judge
for Complex Business Cases