Castillo v. Rrd Fin., LLC

Castillo v. RRD Fin., LLC, 2025 NCBC 53.

STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
MECKLENBURG COUNTY 25CV007822-590

JOSE A. MARRUFO CASTILLO
and JORGE ABRAHAM ALVAREZ
MARRUFO,

Plaintiffs,
ORDER AND OPINION ON MOTIONS
v. FOR JUDGMENT ON THE
PLEADINGS
RRD FINANCIAL, LLC; DAVID
ALGOOD; and RYAN
ESKANDARI,

Defendants.

1. This matter is before the Court on Defendants’ partial motions for judgment

on the pleadings, both of which seek judgment on the pleadings as to Plaintiffs’

Fourth Claim for Relief for purported violations of Chapter 75 of the North Carolina

General Statutes and Seventh Claim for Relief for negligent misrepresentation.

2. Defendants have filed answers to Plaintiffs’ complaint, (ECF Nos. 11, 12),

and the pleadings are therefore closed.

3. Defendants RRD Financial, LLC and Ryan Eskandari filed their motion for

judgment on the pleadings on 2 June 2025, (ECF No. 15), and defendant David Algood

filed his motion four days later, (ECF No. 23).

4. Having reviewed and considered the motions, the briefs, and the applicable

pleadings, the Court determines that the motion filed by defendants RRD and

Eskandari should be GRANTED and the motion filed by defendant Algood should be

DENIED at this time.

Fox Rothschild LLP, by Kip D. Nelson and Camryn Rohr, for Plaintiffs
Jose A. Marrufo Castillo and Jorge Abraham Alvarez Marrufo.
Lord & Lindley, PLLC, by Harrison A. Lord and Trey Lindley, for
Defendants RRD Financial, LLC and Ryan Eskandari.

Knox, Brotherton, Knox & Godfrey, by Allen C. Brotherton and J. Gray
Brotherton, for Defendant David Algood.

Houston, Judge.

I. BACKGROUND

5. The Court does not make findings of fact on motions for judgment on the

pleadings. The Court does, however, summarize and recite certain of the relevant,

well-pleaded allegations of the complaint, which are taken as true for purposes of the

motions.

6. RRD operates and finances a network of used car dealerships around the

United States. Between 2019 and 2022, it employed plaintiff Jose A. Marrufo Castillo

as the general manager of two of its dealerships, having first hired him to work as a

sales associate in 2018. Satisfied with Marrufo Castillo’s performance, RRD also

hired his cousin, plaintiff Jorge Abraham Alvarez Marrufo. (Compl. ¶¶ 9, 12, 15–18,

ECF No. 3).

7. In September 2022, after certain management disagreements, Marrufo

Castillo resigned from his position as general manager, and Alvarez Marrufo

conveyed his intent to do the same. (Compl. ¶ 21).
8. After Defendants 1 asked both men to reconsider, Marrufo Castillo agreed to

remain with RRD but only if he became a “partner” in the company—a condition to

which he and Defendants agreed. (Compl. ¶¶ 23–24).

9. In December 2022, the parties ultimately negotiated and executed an

“operating agreement” to document their purported partnership or, alternatively,

joint venture. In the course of negotiating that agreement, Mohammed Reza

Eskandari (defendant Ryan Eskandari’s brother) and defendant David Algood, a

member and manager of RRD, told Plaintiffs that Plaintiffs’ compensation structure

would consist of a base salary and other compensation, including the profits of any

dealerships Plaintiffs operated. Algood also represented that Defendants would assist

Plaintiffs in opening and operating dealerships in Columbia, South Carolina “and

elsewhere” by providing “working capital and other assistance.” Despite these

representations, Plaintiffs conclusorily assert that Defendants never intended to

provide the working capital and other assistance as promised. (Compl. ¶¶ 22–25, 82–

85).

10. After the agreement was reached, new issues soon arose. For example,

according to Plaintiffs, Defendants limited Plaintiffs’ access to corporate records and

“impeded Plaintiffs’ ability to open new facilities pursuant to the” agreement between

the parties. Nonetheless, Plaintiffs insist that they continued to perform under the

operating agreement, opening one dealership in Greer, South Carolina in early 2023

and another in Columbia, South Carolina about a year later—on both occasions with

1 Plaintiffs largely fail to distinguish between the individual defendants and the entity
defendant in their complaint.
funding from RRD. The two locations generated a substantial sales portfolio of

approximately $14 million under Plaintiffs’ management. (Compl. ¶¶ 26–29).

11. Around June 2024, defendant Eskandari and his brother Mohammed

requested that Plaintiffs review the financial records of RRD’s dealership in Houston,

Texas for signs of mismanagement by Algood. Plaintiffs agreed to do so and

ultimately concluded that Algood had, in fact, mismanaged the dealership, bringing

to RRD’s attention a number of alleged “abnormalities” in the location’s financial

records. (Compl. ¶¶ 30–32).

12. According to Plaintiffs, at Algood’s behest, RRD then promptly terminated

Plaintiffs’ access to RRD’s corporate records, stopped “providing support to Plaintiffs’

operation of the Columbia location,” and began withholding payments owed to

Plaintiffs. Algood also accused Plaintiffs of misappropriating funds from RRD. To

further exclude Plaintiffs from the business and its operations, Defendants seized a

computer containing Plaintiffs’ only copy of the parties’ “operating agreement.”

(Compl. ¶¶ 33–36, 95).

13. Plaintiffs also assert that Algood “wielded the threat of a lawsuit to demand”

that Alvarez Marrufo sign a release of Plaintiffs’ rights to the Greer Auto Finance

Center, though Plaintiffs do not detail the threatened basis (or lack of basis) for the

lawsuit or plead facts indicating that the threat was wrongful or baseless. (Compl.

¶¶ 34, 36).

14. On 13 February 2025, Plaintiffs brought suit against Defendants, suing for

breach of the operating agreement, breach of fiduciary duty, accounting, unfair or
deceptive trade practices under N.C. Gen. Stat. § 75-1.1, unjust enrichment,

fraudulent misrepresentation, negligent misrepresentation, and defamation. RRD

and Eskandari, jointly represented by counsel, filed their answer in April 2025, (ECF

No. 12), as did Algood, who is separately represented, (ECF No. 11).

15. In early June 2025, RRD, Eskandari, and Algood moved for judgment on the

pleadings as to Plaintiffs’ Fourth Claim for Relief for purported violations of Chapter

75 of the North Carolina General Statutes and Seventh Claim for Relief for negligent

misrepresentation.

16. While RRD and Eskandari submitted substantive briefing in support of

their motion with both an opening brief and a reply brief in support, (ECF Nos. 16,

29), Algood failed to do so, instead submitting an opening “brief” that reads, in its

entirety other than the caption, signature block, and certificate of service, as follows:

DEFENDANT DAVID ALGOOD, by and through undersigned
counsel and in support of his Motion for Judgment on the
Pleadings, states as follows:

Defendant Algood hereby incorporates by reference all factual
recitations, standards of review, and substantive arguments set
forth in the Brief in Support of Motion for Judgment on the
Pleadings of Defendants RRD Financial, LLC and Ryan
Eskandari (“RRD Brief”), filed in this matter on June 2, 2025.
(ECF No. 16). Said incorporations apply equally to Defendant
Algood, and, for the same reasons cited therein, Defendant Algood
is entitled to judgment on the pleadings as to Plaintiffs’ Fourth
and Seventh Claims for Relief. Id.

Further, dismissal for failure to state a claim upon which relief
can be granted is proper where either “the complaint on its face
reveals the absence of facts sufficient to make a good claim, or the
complaint discloses some fact that necessarily defeats the
plaintiff’s claim.” Bissette v. Harrod, 226 N.C. App. 1, 7, 738
S.E.2d 792, 797 (2013). As detailed in the RRD Brief, Plaintiffs’
Fourth Claim for Relief is based on breaches of a partnership
agreement, the existence of which precludes a finding that the
intra-business activities were in and affecting commerce. (ECF
No. 16 at pp. 3-6). Plaintiffs’ Fourth Claim for Relief for unfair
and deceptive business practices is thus “necessarily defeat[ed].”
Bissette, 226 N.C. App. at 7. Finally, the Plaintiffs’ failure to
satisfy Rule 9(b)’s heightened pleading standard for their
negligent misrepresentation claim constitutes “the absence of
facts sufficient to make a good claim”, and this claim is likewise
subject to dismissal. Id.

Therefore, and in reliance on the incorporated RRD Brief,
Defendant Algood is entitled to judgment on the pleadings as to
Plaintiff’s Fourth and Seventh Claims for Relief, including
without limitation for failure to state a claim for which relief can
be granted.

(ECF No. 24 (emphasis added)). Algood did not file and serve a reply in support of his

motion.

17. The motions are now ripe for decision, and, pursuant to Rule 7.4 of the

Business Court Rules, the Court elects in its discretion to resolve the motions without

a hearing.

II. ALGOOD’S MOTION

18. The Court first addresses Algood’s motion and his failure to comply with the

Business Court Rules.

19. Under the version of Rule 7.2 of the Business Court Rules in effect at the

time the briefs on this motion were filed, 2 “[a]ll motions must be accompanied by a

brief (except for those motions listed in BCR 7.10),” and “[a] motion unaccompanied

2 The Business Court Rules were subsequently amended effective 2 September 2025 to
streamline the text of the Rules, but the substance of the Rules (and the Court’s
determination) is the same with respect to the matters at issue. Indeed, amended BCR 7.1(c)
expressly notes that “[t]he Court has discretion to disregard or strike a filing that does not
comply with these rules.” BCR 7.1(c).
by a required brief may, in the discretion of the Court, be summarily denied.” BCR

7.2 (“The function of all briefs required or permitted by this rule is to define clearly

the issues presented to the Court and to present the arguments and authorities upon

which the parties rely in support of their respective positions. A party should

therefore brief each issue and argument that the party desires the Court to rule upon

and that the party intends to raise at a hearing.”).

20. The parties are expected to clearly cite in their briefs to the materials

supporting their argument (including affidavits, cases, and other such support for the

argument) where possible. BCR 7.5.

21. Similarly, Rule 7.8 of the Business Court Rules expressly provides that “[a]

party may not incorporate by reference arguments made in another brief or file

multiple motions to circumvent [word] limits.” BCR 7.8.

22. Across the spectrum, this Court has repeatedly made clear that the Business

Court Rules preclude a party from adopting or incorporating by reference the party’s

earlier-filed briefing or briefing by another party without the Court’s leave. This is

not limited to situations of word-count gamesmanship and applies to any situation in

which a brief is required. See, e.g., Howard v. IOMAXIS, LLC, 2023 NCBC LEXIS

159, at *16 n.5 (N.C. Super. Ct. Nov. 29, 2023) (“The IOMAXIS Defendants seek to

incorporate their earlier Rule 12(c) motion and brief. Such a practice is contrary to

BCR 7.8.”); Anderson v. Beresni, 2022 NCBC LEXIS 125, at *1 (N.C. Super. Ct. Oct.

25, 2022) (striking brief where defendants “attempt[ed] to incorporate by reference

arguments previously made by them in their brief in opposition to” a preliminary
injunction motion); Wright v. LoRusso, 2023 NCBC LEXIS 66, at *3 (N.C. Super. Ct.

May 4, 2023) (striking summary judgment motions and related briefing, exhibits, and

other filings).

23. Here, Algood’s briefing does not comply with the Business Court Rules.

24. First, in violation of Business Court Rule 7.8, Algood purports to incorporate

by reference “all factual recitations, standards of review, and substantive arguments”

in RRD and Eskandari’s brief and then acknowledges that the substance of Algood’s

argument is made “in reliance on the incorporated RRD Brief.” (ECF No. 24 at 1–2).

25. Second, in violation of then-applicable Business Court Rules 7.2 and 7.5, the

“brief” fails to clearly identify the issues or to present the arguments and authorities

upon which Algood relies and fails to substantively brief each issue and argument

that Algood apparently would have the Court consider. In short, while Algood’s filing

is captioned as a “brief,” it lacks any of the substance expected and required in a brief,

citing only a single case setting forth the standard for the Court’s consideration of a

motion for judgment on the pleadings. (ECF No. 24 at 2 (quoting Bissette v. Harrod,

226 N.C. App. 1, 7, 738 S.E.2d 792, 797 (2013))).

26. Thus, Algood’s filing violates the Business Court Rules, and, in its

discretion, the Court determines that it is appropriate for the Court to STRIKE the

purported brief, (ECF No. 24), and DENY Algood’s motion for judgment on the

pleadings, (ECF No. 23). 3

3 The Court endeavors to ensure efficiency for the parties and the Court in each case. While

the Court could, in its discretion, permit re-briefing of the motion, see, e.g., Anderson, 2022
NCBC LEXIS 125, at *1, the Court declines to do so, as it would be neither efficient nor
III. RRD AND ESKANDARI’S MOTION

27. The Court next addresses the motion for judgment on the pleadings filed by

RRD and Eskandari.

28. “The purpose of . . . Rule 12(c) is to dispose of baseless claims or defenses

when the formal pleadings reveal their lack of merit,” and it “is appropriately

employed where all the material allegations of fact are admitted in the pleadings and

only questions of law remain.” DiCesare v. Charlotte-Mecklenburg Hosp. Auth., 376

N.C. 63, 70 (2020) (citation and internal quotation marks omitted). As with a motion

to dismiss for failure to state a claim upon which relief can be granted, a trial court

should grant a motion for judgment on the pleadings “when a complaint fails to allege

facts sufficient to state a cause of action or pleads facts which deny the right to any

relief.” Robertson v. Boyd, 88 N.C. App. 437, 440 (1988); see also DiCesare, 376 N.C.

at 70 (noting that judgment on the pleadings is appropriate when the movant

“show[s] that ‘the complaint . . . fails to allege facts sufficient to state a cause of action

or admits facts which constitute a complete legal bar thereto’” (citation omitted)).

29. “The trial court is required to view the facts and permissible inferences in

the light most favorable to the nonmoving party. All well pleaded factual allegations

in the nonmoving party’s pleadings are taken as true and all contravening assertions

in the movant’s pleadings are taken as false.” Ragsdale v. Kennedy, 286 N.C. 130, 137

economical, particularly where Algood seeks only partial judgment on the pleadings. Algood
may, if appropriate, renew any applicable arguments at summary judgment if the claims are
not sooner dismissed by Plaintiffs.
(1974). “Judgment on the pleadings is a summary procedure and the judgment is

final.” Id. (citation omitted).

30. The Court addresses each of Plaintiffs’ claims at issue in turn.

31. Plaintiffs’ Fourth Claim for Relief—Purported Chapter 75

Violations. Section 75-1.1 of the North Carolina General Statutes prohibits “unfair

or deceptive acts or practices in or affecting commerce.” N.C. Gen. Stat. § 75-1.1. The

statute broadly defines “commerce” to include “all business activities, however

denominated,” id. § 75-1.1(b), 4 but the term “business activities” reaches only “a

business’s regular interactions with other market participants,” White v. Thompson,

364 N.C. 47, 51 (2010); see also HAJMM Co. v. House of Raeford Farms, Inc., 328 N.C.

578, 594 (1991) (“‘Business activities’ is a term which connotes the manner in which

businesses conduct their regular, day-to-day activities, or affairs, such as the

purchase and sale of goods, or whatever other activities the business regularly

engages in and for which it is organized.”).

32. Thus, the phrase “business activities” does not include acts that relate solely

to the “internal operations of a single business.” White, 364 N.C. at 52. Accordingly,

North Carolina courts have determined that otherwise unfair or deceptive conduct

generally does not fall within the scope of section 75-1.1 if it occurs solely within a

single partnership, joint venture, or other business enterprise. See, e.g., id. at 53–54;

Morris Int’l, Inc. v. Packer, 2021 NCBC LEXIS 99, at *30–31 (N.C. Super. Ct. Nov. 2,

2021); see also Jones v. Shoji, 336 N.C. 581, 585 (1994) (“A joint venture is in the

4 The statute excepts from this definition “professional services rendered by a member of a

learned profession.” N.C. Gen. Stat. § 75-1.1(b).
nature of a kind of partnership, and although a partnership and a joint venture are

distinct relationships, they are governed by substantially the same rules.” (citation

and internal punctuation omitted)). This is true even when the market participant

consists of multiple business entities; “[t]he ‘fact that separate entities comprise [a]

single market participant does not’ make external what is otherwise internal to the

business.” LLG-NRMH, LLC v. N. Riverfront Marina & Hotel, LLLP, 2018 NCBC

LEXIS 105, at *12 (N.C. Super. Ct. Oct. 9, 2018) (second alteration in original)

(quoting Polyquest, Inc. v. Vestar Corp, LLC, 2014 U.S. Dist. LEXIS 14905, at *35

(E.D.N.C. Feb. 6, 2014)).

33. In determining whether such an internal dispute is before the Court, the

relevant inquiry is whether the alleged unfair or deceptive conduct “inheres in the

relationship between” plaintiff and defendant as partners, co-owners, managers, or

employees of a single business enterprise or otherwise as actors internal to the

business enterprise. McFee v. Presley, 2022 NCBC LEXIS 74, at *17 (N.C. Super. Ct.

July 11, 2022) (citation omitted) (collecting cases); see also Potts v. KEL, LLC, 2018

NCBC LEXIS 24, at *15 (N.C. Super. Ct. Mar. 27, 2018); Poluka v. Willette, 2021

NCBC LEXIS 105, at *16–17 (N.C. Super. Ct. Dec. 2, 2021).

34. If so, the conduct at issue is not in or affecting commerce and thus not within

the scope of section 75-1.1. See White, 364 N.C. at 54 (determining that section 75-1.1

did not encompass the defendant’s conduct even though that conduct “reduc[ed]

competition and potentially affect[ed] prices”); see also McFee, 2022 NCBC LEXIS 74,
at *17; Potts, 2018 NCBC LEXIS 24, at *15; Poluka, 2021 NCBC LEXIS 105, at *16–

17.

35. Here, accepting Plaintiffs’ factual, non-conclusory allegations as true, the

pleadings establish that Plaintiffs and the individual Defendants were members of a

single business enterprise—the entity Defendant—and that the dispute at issue is

ultimately a dispute internal to that singular business enterprise and the formation

of that enterprise.

36. Plaintiffs expressly allege that they engaged in a joint business enterprise

with Defendants either as partners or, alternatively, as participants in a joint venture

and that the purpose of the enterprise was to open and operate used car dealerships

for profit. (Compl. ¶¶ 25, 63, 70). The Greer dealership operated as “Auto Finance

Center,” the same name under which RRD operated dealerships around the country,

and was under Plaintiffs’ management pursuant to the parties’ purported

partnership agreement. (Compl. ¶¶ 10, 28–29). Further, Plaintiffs assert that RRD

financed the opening of the Columbia dealership and continued funding it for a time

after it opened. (Compl. ¶¶ 28, 33).

37. According to Plaintiffs, RRD had sole “control of the corporate documents

necessary to open new dealerships and operate existing dealerships” (i.e., the very

dealerships around which this dispute centers in large part) and “the sole power to

ensure accuracy in the accounting statements of the various dealerships,” including

the Greer and Columbia dealerships that Plaintiffs were operating. (Compl. ¶ 64).
38. Defendants also were allegedly entitled to a share of the profits from the

dealerships that Plaintiffs managed, (Compl. ¶ 75), and Plaintiffs assert that their

business activities inured to Defendants’ benefit, (Compl. ¶ 77).

39. As alleged in the complaint, RRD’s and Eskandari’s purported unfair or

deceptive conduct occurred between the parties solely with respect to their

involvement in the automobile-focused partnership or joint venture. The section 75-

1.1 claim arises in significant part from Defendants’ control over “corporate

documents.” For example, Defendants allegedly restricted Plaintiffs’ access to

documents and “conceal[ed] information regarding financial status and management

of the other RRD dealerships.” (Compl. ¶ 66). In other words, Plaintiffs complain of

Defendants’ failure to grant them access to records to which Plaintiffs, as members

of the same enterprise, contend they were entitled.

40. Plaintiffs’ other allegations also concern conduct arising from the shared

enterprise. After Plaintiffs reported that Algood had mismanaged the Houston

dealership, Defendants allegedly “seiz[ed] Plaintiffs’ work computer” and froze

“Plaintiffs out of the joint venture.” (Compl. ¶ 67). Algood also allegedly told

“employees of Auto Finance Center and of RRD” that Plaintiffs had “embezzled funds

from RRD.” (See Compl. ¶¶ 95, 98). Plaintiffs complain of no conduct involving

interactions between separate businesses or between businesses and consumers, see

White, 364 N.C. at 52–53 (noting that the purpose of section 75-1.1 is to regulate

“unfair and deceptive conduct in interactions between market participants, both
businesses and consumers”). 5 Even to the extent Plaintiffs allege that they were

misled into the parties’ arrangement, the factual allegations simply do not rise to the

level necessary to show conduct in or affecting commerce or otherwise subject to

Chapter 75 regulation.

41. Further, though Plaintiffs assert a defamation claim against Algood and a

valid claim for defamation can support a claim for unfair or deceptive trade practices,

see, e.g., Boyce & Isley, PLLC v. Cooper, 153 N.C. App. 25, 35–36 (2002), Plaintiffs

plead no facts and make no argument suggesting that the alleged defamation would

constitute unfair or deceptive practices or acts under the circumstances of this case,

nor do Plaintiffs otherwise make any attempt to link the defamation and Chapter 75

claims. (See Compl. ¶¶ 62–73, 94–100). Moreover, the alleged defamatory statement

by Algood was purportedly made in the context of a discussion regarding internal

documents and financial “abnormalities” and in the presence of employees of the

company—not customers or other third parties who might otherwise be engaged in

commerce. (Compl. ¶¶ 95, 98).

42. Accordingly, Defendants’ alleged conduct falls outside the scope of section

75-1.1, and the Court will grant the motion for judgment on the pleadings as to

Plaintiffs’ claim for purported violations of Chapter 75 against Defendants.

5 In their brief opposing RRD and Eskandari’s motion, Plaintiffs contend that “[i]f each car

dealership is a distinct joint venture, then this dispute by definition cannot involve a single
entity.” (ECF No. 27 at 6–7). The complaint, however, alleges that the parties created a single
partnership or joint venture. (See, e.g., Compl. ¶¶ 25, 63). Further, if each dealership were a
distinct venture, the unfair or deceptive nature of Defendants’ conduct would still be internal
(to each joint venture or enterprise) rather than arising from any interaction between the
dealerships and others as market participants.
43. Plaintiffs’ Seventh Claim for Relief—Purported Negligent

Misrepresentation. To state a claim for negligent misrepresentation, a plaintiff

must allege that he “justifiably relie[d] to his detriment on information prepared

without reasonable care by one who owed the relying party a duty of care.” Raritan

River Steel Co. v. Cherry, Bekaert & Holland, 322 N.C. 200, 206 (1988); Sullivan v.

Mebane Packaging Grp., Inc., 158 N.C. App. 19, 33 (2003). The complaint must allege

negligent misrepresentation with particularity by setting forth the “time, place,

speaker, [and] specific contents of the alleged misrepresentation.” Value Health Sols.,

Inc. v. Pharm. Rsch. Assocs., Inc., 385 N.C. 250, 265–66 (2023).

44. Defendants argue that Plaintiffs have failed to plead their claim for

negligent misrepresentation with the requisite particularity. The Court agrees.

45. First, there are no individualized, direct allegations of misrepresentation as

to Eskandari in any capacity. Without facts suggesting that Eskandari (rather than

his brother Mohammed) made false statements to Plaintiff, the claim necessarily fails

as to Eskandari. See Ragsdale, 286 N.C. at 138 (noting that the first element of a

fraud claim is a “[f]alse representation or concealment of a material fact”); Sullivan,

158 N.C. App. at 33 (noting that negligent misrepresentation requires a showing that

the claimant relied “on information prepared without reasonable care”); (see generally

Compl.).

46. Second, as to the allegations actually asserted, Plaintiffs allege that

“Defendants had a duty to exercise reasonable care in preparing the financial

information regarding their business activities” but “did not exercise reasonable care
in preparing the financial information communicated to Plaintiffs in the course of

negotiating the Partnership Agreement.” (Compl. ¶¶ 90–91). That is all—Plaintiffs

do not specify the purported “financial information” at issue, who misrepresented it,

or when or where it was misrepresented. In fact, no other part of the complaint alleges

that Defendants misrepresented “financial information” concerning their business

activities while the parties were negotiating their agreement. (See generally Compl.).

47. In their briefing, Plaintiffs attempt to supplement their claim by arguing

that Plaintiffs were “presented with false statements regarding profits, accounts in

the portfolio, and insurance payments” at unspecified times. (ECF No. 27 at 12–13).

In making this argument, however, Plaintiffs cite to paragraphs 83 and 84 of their

complaint, which allege that, in December 2022, Algood and non-party Mohammed

Eskandari affirmatively misrepresented the amounts of Plaintiffs’ future

compensation under the purported partnership agreement and that “[t]hese

representations were false when made, and Defendants had no intention to pay

Plaintiffs what they were promised.” (Compl. ¶¶ 82–83).

48. Defendants further allege that “Algood represented to Plaintiffs that

Defendants would provide working capital and other assistance to Plaintiffs for the

opening and operation of car dealerships in Columbia, South Carolina and elsewhere,

for shared profit” and that, as above, Defendants did not intend to fulfill that promise.

(Compl. ¶¶ 84–85).

49. These purportedly intentional misrepresentations regarding compensation

and financial support, however, are promises or statements of intent and cannot form
the basis of a negligent misrepresentation claim. See Trana Discovery, Inc. v. S. Rsch.

Inst., 915 F.3d 249, 254 (4th Cir. 2019) (“A promise is a statement of intention, not

fact, meaning it is false only if the promisor never honestly intended to carry it out.

It can be intentionally false, but not negligently so.” (citations omitted)); Hills Mach.

Co. v. Pea Creek Mine, LLC, 265 N.C. App. 408, 420 (2019) (“The general rule is that

an unfulfilled promise cannot be the basis for an action for fraud unless the promise

is made with no intention to carry it out.” (quoting Nw. Bank v. Rash, 74 N.C. App.

101, 105 (1985))).

50. Further, consistent with the lack of pleading detail throughout the

complaint, Plaintiffs also assert that Defendants had the “opportunity to make

representations regarding” certain matters to Plaintiff, though there are no non-

conclusory, factual allegations that Defendants took advantage of this alleged

“opportunity.” (Compl. ¶ 65 (emphasis added)). Without factual allegations

demonstrating that Plaintiffs “justifiably relie[d] to [their] detriment on information

prepared without reasonable care by [RRD and Eskandari]” and that RRD and

Eskandari owed a duty of care not to make such statements, this claim fails as to

RRD and Eskandari. See Raritan, 322 N.C. at 206.

51. Accordingly, the Court will grant RRD and Eskandari’s motion for judgment

on the pleadings as to Plaintiffs’ claim for negligent misrepresentation.

IV. CONCLUSION

52. Therefore, the Court GRANTS the partial motion for judgment on the

pleadings filed by defendants RRD and Eskandari and enters judgment on the
pleadings in favor of RRD and Eskandari with respect to Plaintiffs’ Fourth Claim for

Relief for purported violations of Chapter 75 of the North Carolina General Statutes

and Seventh Claim for Relief for purported negligent misrepresentation.

53. The Court STRIKES the purported “brief” filed by defendant Algood in

support of his partial motion for judgment on the pleadings, (ECF No. 24).

54. The Court DENIES the partial motion for judgment on the pleadings filed

by defendant Algood, without prejudice to Algood’s ability to renew his arguments at

a later stage of the case.

SO ORDERED, this 3rd day of September 2025.

/s/ Matthew T. Houston
Matthew T. Houston
Special Superior Court Judge
for Complex Business Cases