NEW RESTORATION & RECOVERY SERVS., LLC v. DRAGONFLY POND WORKS, 2023 NCBC 43

STATE OF NORTH CAROLINA
WAKE COUNTY
IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
23 CVS 905
NEW RESTORATION AND
RECOVERY SERVICES, LLC, d/b/a
AQUALIS CO.,
Plaintiff,
v.
DRAGONFLY POND WORKS, LLC,
Defendant.
ORDER AND OPINION ON
DEFENDANT’S MOTION TO DISMISS
1. 	THIS MATTER is before the Court upon Defendant Dragonfly Pond Works,
LLC’s Motion to Dismiss (the “Motion”) under Rule 12(b)(6) of the North Carolina
Rules of Civil Procedure (the “Rule(s)”), filed 24 March 2023 in the above-captioned
case.1
2. 	After considering the Motion, the parties’ briefs in support of and in
opposition to the Motion, the relevant pleadings, and the arguments of counsel at the
hearing on the Motion, the Court hereby GRANTS in part and DENIES in part
the Motion as set forth below.
McGuireWoods LLP, by T. Richmond McPherson, III, Abigail Golden,
and 	Elizabeth 	Peters, 	for 	Plaintiff 	New 	Restoration 	and 	Recovery
Services LLC d/b/a Aqualis Co.
Bell, Davis, & Pitt, P.A., by Marc E. Gustafson and Carson D. Schneider,
for Defendant Dragonfly Pond Works, LLC.
Bledsoe, Chief Judge.
1 (ECF No. 8.)
New Restoration & Recovery Servs., LLC v. Dragonfly Pond Works, 2023 NCBC
43.

I.
FACTUAL AND PROCEDURAL BACKGROUND
3. 	The Court does not make findings of fact on a motion to dismiss under Rule
12(b)(6). Rather, the Court recites the allegations asserted and documents referenced
in Plaintiff New Restoration and Recovery Services, LLC’s (“Aqualis”) Complaint that
are relevant to the Court’s determination of the Motion.
4. 	This case arises from the alleged actions of a disgruntled former employee.
Dragonfly Pond Works, LLC (“Dragonfly”) and Aqualis are direct competitors who
provide stormwater management services.2 	Aqualis performs its projects using a
competitive bidding process, which involves technical drawings and sensitive pricing
assumptions.3
5. 	On 20 May 2019, Aqualis hired P.J. Bogensberger (“Bogensberger”) as a
business development manager4 and promoted him to the position of Vice President,
Business Development – National Accounts on 1 January 2021.5 	As part of this
promotion, Bogensberger signed and agreed to a non-competition, non-solicitation,
and non-disclosure agreement with Aqualis (the “NDA”), in which he agreed to
2 (Compl. ¶ 12, ECF No. 3.)
3 (Compl. ¶¶ 26–27.)
4 (Compl. ¶ 29.)
5 (Compl. ¶ 32.)

protect Aqualis’s confidential trade information during and after his employment
with the company.6
6. 	On 3 January 2022, Bogensberger was laid off by Aqualis.7 	Around that
same time, Bogensberger began communicating with Dragonfly’s CEO, Grant Todd
(“Todd”).8 On 5 January 2022, without Aqualis’s knowledge or consent, and in alleged
violation 	of 	the 	NDA,9 	Bogensberger 	began 	emailing 	Aqualis’s 	confidential
documents, 	bids, 	and 	pricing 	information 	to 	Dragonfly.10 	In 	an 	email 	to
Bogensberger, Todd referred to these documents as a “gold mine.”11
7. 	At the same time, Bogensberger was negotiating with Aqualis over the
terms of his termination. 	Ultimately, Bogensberger and Aqualis entered into a
settlement agreement under which Bogensberger represented that he had not
divulged any proprietary or confidential information, and that he would “continue to
maintain the confidentiality of [Aqualis’s confidential and proprietary information]
consistent with [his] agreements with Aqualis (the “Settlement”).12 	Bogensberger
signed the Settlement on 17 March 2022, and joined Dragonfly in a senior sales
6 (Compl. ¶¶ 33–37.)
7 (Compl. ¶ 39.)
8 (Compl. ¶ 52.)
9 Aqualis pleads that Bogensberger’s actions violated the NDA, (see Compl. ¶ 100), but neither
party has placed the full NDA and its terms into the record before the Court.
10 (Compl. ¶ 41.)
11 (Compl. ¶ 61.)
12 (Compl. ¶¶ 46–48.)

position and as Director of Corporate Accounts less than a week later on 23 March
2022.13 	Before offering Bogensberger a job, Dragonfly reviewed the Settlement.14
When Dragonfly hired Bogensberger, Todd texted Bogensberger that “[w]e’re going
to destroy Aqualis and Apex. So excited.”15
8. 	Through March and April 2022, Bogensberger provided to Dragonfly at least
19 other Aqualis documents containing alleged trade secrets.16 Aqualis alleges that
Dragonfly used the confidential information from Bogensberger to solicit business
from six of Aqualis’s customers.17 Dragonfly fired Bogensberger on 5 May 2022 and
issued a statement that Dragonfly had only then become aware that Aqualis claimed
that Bogensberger had provided Aqualis’s confidential information to Dragonfly.18
9. 	Aqualis filed the above-captioned action on 20 January 2023.19 	Aqualis
asserts six claims against Dragonfly: misappropriation of trade secrets,20 tortious
interference 	with 	contract,21 	tortious 	interference 	with 	prospective 	economic
13 (Compl. ¶¶ 47, 69.)
14 (Compl. ¶ 70.)
15 (Compl. ¶ 74.)
16 (Compl. ¶ 77.)
17 (Compl. ¶¶ 82–89.)
18 (Compl. ¶¶ 93–94.)
19 (See Compl.)
20 (Compl. ¶¶ 97–108.)
21 (Compl. ¶¶ 109–15.)

advantage,22 	unfair 	and 	deceptive 	trade 	practices 	under 	N.C.G.S. 	§ 	75-1.1
(“UDTPA”),23 civil conspiracy,24 and unjust enrichment.25 	Dragonfly moved to
dismiss the Complaint on 24 March 2023.26 After receiving full briefing in support of
and in opposition to the Motion, the Court convened a hearing on 9 May 2023, at
which all parties were represented by counsel (the “Hearing”). 	The Motion is now
ripe for determination.
II.
LEGAL STANDARD
10. 	When deciding whether to dismiss for failure to state a claim under Rule
12(b)(6), the Court considers “whether the allegations of the complaint, if treated as
true, are sufficient to state a claim upon which relief can be granted under some legal
theory.” 	Corwin v. British Am. Tobacco PLC, 371 N.C. 605, 615 (2018) (quoting
CommScope Credit Union v. Butler & Burke, LLP, 369 N.C. 48, 51 (2016)).
11. 	“[D]ismissal 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
22 (Compl. ¶¶ 116–21.)
23 (Compl. ¶¶ 122–26.)
24 (Compl. ¶¶ 127–31.)
25 (Compl. ¶¶ 132–37.)
26 (Mot. Dismiss.)

discloses some fact that necessarily defeats the plaintiff’s claim.’ ” Id. (quoting Wood
v. Guilford Cnty., 355 N.C. 161, 166 (2002)).
12. 	When 	considering 	a 	motion 	under 	Rule 	12(b)(6), 	“the 	complaint 	is
construed liberally, viewing the allegations as true and in the light most favorable to
the non-moving party, and the claim is not dismissed unless it appears beyond doubt
that the plaintiff could prove no set of facts in support of his claim which would entitle
him to relief.” Krawiec v. Manly, 370 N.C. 602, 618 (2018) (cleaned up). While “the
well-pleaded material allegations of the complaint are taken as true[,] conclusions of
law or unwarranted deductions of fact are not admitted.” 	Azure Dolphin, LLC v.
Barton, 371 N.C. 579, 599 (2018) (quoting Arnesen v. Rivers Edge Golf Club &
Plantation, Inc., 368 N.C. 440, 448 (2015)).
III.
ANALYSIS
13. 	Dragonfly has moved to dismiss all of Aqualis’s claims.27 	The Court
examines each claim in turn, beginning with misappropriation of trade secrets.
A. 	Misappropriation of Trade Secrets
14. 	To properly plead misappropriation of trade secrets, and in addition to
meeting other definitional requirements under N.C.G.S. § 66-152, a plaintiff must
“identify a trade secret with sufficient particularity so as to enable a defendant to
delineate that which he is accused of misappropriating and a court to determine
27 (See generally Mem. Supp. Mot. Dismiss [hereinafter “Br. Supp.”], ECF No. 9.) Dragonfly’s
brief is not paginated. 	Citations to specific pages of Dragonfly’s brief are therefore to the
pages of the PDF version on the Court’s electronic docket.

whether misappropriation has or is threatened to occur.” Krawiec, 370 N.C. at 609.
The alleged trade secret must also be “the subject of efforts that are reasonable under
the circumstances to maintain its secrecy.” N.C.G.S. § 66-152(3)(b).
15. 	Dragonfly challenges Aqualis’s trade secrets claim as failing to plead these
two requirements: that Aqualis has not sufficiently described its trade secrets, and
that Aqualis has failed to plead its reasonable efforts to maintain secrecy over the
alleged trade secrets.28 The Court finds each argument unpersuasive.
16. 	First, Krawiec clarified that “customer lists, pricing formulas[,] and bidding
formulas” can be trade secrets. 	Krawiec, 370 N.C. at 610. 	Aqualis describes its
alleged trade 	secrets 	as 	“large 	amounts 	of 	information 	relating 	to 	customers,
including 	customer 	contact 	information, 	copies 	of 	bid 	proposals, 	client-specific
spreadsheets containing Aqualis’s pricing for all of the client’s projects,” and “bids on
client 	projects 	and 	project 	completion 	summaries 	prepared 	by 	Aqualis 	after
completing client projects.”29 	Aqualis’s description of its alleged trade secrets
therefore falls well within the language of Krawiec.
17. 	Aqualis also identifies specific emails, sent on specific dates, which contain
this information.30 Aqualis’s description is thus very similar to the language found
sufficient to identify a trade secret in Krawiec, and the description is delineated and
identified sufficiently under that decision and those that have followed.
28 (See Br. Supp. 4–9.)
29 (Compl. ¶¶ 51, 78.)
30 (Compl. ¶¶ 53–59, 77.)

18. 	Dragonfly contends, however, that none of the material Aqualis identifies
can constitute a trade secret because much of the information was necessarily shared
with at least one third party and that Aqualis has not alleged that it attempted to
bind these third parties to any confidentiality agreements.31 Specifically, Dragonfly
argues that information known to a third party cannot constitute a trade secret; thus,
because Aqualis’s pricing information on a given project was necessarily shared with
that project’s customer, that information therefore was not kept secret.32 	This
argument has an intuitive appeal at first glance but does not withstand scrutiny.
19. 	First, some of the cases Dragonfly cites for this proposition do not support
the point. 	For example, in Amerigas Propane LP v. Coffey, 2015 NCBC LEXIS 98
(N.C. Super. Ct. Oct. 15, 2015),33 this Court held merely that the names and addresses
of the business’s customers were not trade secrets, and resolved the plaintiff’s trade
secrets 	claims 	premised 	on 	“historical 	usage, 	credit 	information, 	and 	pricing
information” on other grounds after expressly declining to reach the question of
whether the plaintiff had adequately defined the information. 	See id. at *33–37.
Names and addresses are inherently much more public than pricing and other
information 	related 	to 	particular 	business 	projects, 	so 	Coffey 	is 	readily
distinguishable.
31 (See Br. Supp. 5–6.)
32 (Br. Supp. 5–6.)
33 (Br. Supp. 5.)

20. 	Second, Dragonfly’s primary support, Edgewater Servs. v. Epic Logistics,
Inc., 2009 NCBC LEXIS 21, at *11–16 (N.C. Super. Ct. Aug. 11, 2009), is in tension
with then-extant and subsequently decided appellate precedent.34
21. 	For example, in Byrd’s Lawn & Landscaping, Inc. v. Smith, 142 N.C. App.
371 	(2001), 	the 	North 	Carolina 	Court 	of 	Appeals 	stated 	that 	“historical 	cost
information” and bidding records could constitute trade secrets, even though they
“may have been ascertainable by anyone in the [same] business[.]” 	Id. at 375–76.
Thus, even if, as Dragonfly contends, Aqualis’s bidding and project information were
known to customers and thereafter conceivably ascertainable by others in the same
business, even this broader range of third party knowledge does not necessarily
preclude such information from constituting a trade secret under Byrd’s Lawn.
22. 	Furthermore, the Supreme Court of North Carolina has recognized that
some subsets of information that customers would know, such as customers’ own
social security numbers, account numbers, and financial status, might constitute
trade secrets even by themselves. See Wells Fargo Ins. Servs. USA, Inc. v. Link, 372
N.C. 260, 280 (2019). 	Thus, Link belies Dragonfly’s argument that information
cannot constitute a trade secret if even a single third party, such as a customer, is
privy to the information.35
34 The Court recognizes that Edgewater was affirmed on direct appeal. See Edgewater Servs.,
Inc. v. Epic Logistics, Inc., No. COA11-176, 2011 N.C. App. LEXIS 2494 (N.C. Ct. App. 2011),
disc. rev. denied, 366 N.C. 400 (2012) (mem.). However, the Court of Appeals declined to rule
on the trade secrets issue due to a procedural default by the appellant. See id. at *8. The
affirmance therefore lends Edgewater no additional weight on this particular issue.
35 (Br. Supp. at 5.)

23. 	Third, Link held that “sprawling lists” of information can form trade secrets
in the aggregate, even if some pieces of information do not qualify as trade secrets in
isolation. 	See id. 	Therefore, even if Dragonfly’s argument were correct that some
parts of Aqualis’s claimed trade secrets cannot qualify as such, the claimed secrets go
beyond information actually shared with customers,36 and thus may still qualify as
trade secrets in the aggregate under Link. 	See id. 	The Court therefore rejects
Dragonfly’s argument that Aqualis’s alleged trade secrets, as pleaded here, are
insufficiently defined for this additional reason.
24. 	Next, Dragonfly argues that Aqualis did not plead that it made reasonable
efforts to maintain the confidentiality of its trade secrets.37 A trade secrets plaintiff
must make reasonable efforts to maintain secrecy, N.C.G.S. § 66-152(3)(b), and must
allege such efforts in its complaint. See, e.g., BIOMILQ, Inc. v. Guiliano, 2023 NCBC
LEXIS 24, at *20 (N.C. Super. Ct. Feb. 10, 2023).
25. 	Dragonfly contends that Aqualis’s sole effort to maintain secrecy was to
require Bogensberger to sign the NDA and that this limited measure does not satisfy
Aqualis’s 	pleading 	burden.38 	However, 	this 	contention 	does 	not 	accurately
characterize Aqualis’s pleaded efforts to maintain secrecy. Aqualis has alleged that
it agreed to the NDA with Bogensberger, and in addition reminded him of his
confidentiality 	obligations 	and 	attempted 	to 	reinforce 	“any” 	confidentiality
36 (Compl. ¶¶ 58, 78.)
37 (Br. Supp. 7–9.)
38 (Br. Supp. 7–9.)

agreement(s) he had entered into with Aqualis by incorporating them into the
Settlement.39
26. 	Thus, the Court need not consider Dragonfly’s contention that the NDA,
standing alone, did not constitute a reasonable effort to protect secrecy and instead
holds that Aqualis’s pleaded use of the NDA and repeated attempts to reinforce any
confidentiality agreement(s) Bogensberger entered into with Aqualis were reasonable
efforts to maintain secrecy sufficient to sustain Aqualis’s trade secrets claim under
Rule 12(b)(6). See Thortex, Inc. v. Standard Dyes, Inc., 177 N.C. App. 814, 814 (2006)
(affirming dismissal of a trade secret claim asserted “[w]ithout any allegation” of
efforts to maintain secrecy); Bldg. Ctr., Inc. v. Carter Lumber, Inc., 2016 NCBC
LEXIS 79, at *14 (N.C. Super. Ct. Oct. 21, 2016) (noting that a trade secret claim
should be dismissed at the 12(b)(6) stage only when “efforts to maintain secrecy of
the allegedly misappropriated trade secrets were completely absent” (emphasis
added)); see also States Mortg. Co. v. Bond, 2023 NCBC LEXIS 33, at *17 (N.C. Super.
Ct. Mar. 6, 2023) (to similar effect); AYM Techs., LLC v. Rodgers, 2018 NCBC LEXIS
14, at *40–41 (N.C. Super. Ct. Feb. 9, 2018) (same).40
39 (Compl. ¶¶ 37, 44, 46–48.)
40 Even if the pleaded facts placed at issue the sufficiency of the NDA alone as a reasonable
method of maintaining secrecy, this Court’s precedent would direct that Dragonfly’s motion
still be denied. 	See, e.g., Se. Anesthesiology Consultants, PLLC v. Charlotte-Mecklenburg
Hosp. Auth., 2019 NCBC LEXIS 107, at *16 (N.C. Super. Ct. Dec. 13, 2019) (holding that
signed confidentiality agreements alone were sufficient to sustain trade secrets claim under
Rule 12(b)(6)); Window Gang Ventures, Corp. v. Salinas, 2019 NCBC LEXIS 24, at *44–45
(N.C. Super. Ct. Apr. 2, 2019) (concluding that obtaining a signed confidentiality agreement
constituted reasonable efforts at the pleading stage).
Interestingly, courts across the nation have divided on whether a confidentiality agreement,
standing alone, may supply the reasonable efforts to maintain secrecy necessary to support

27. 	In sum, the Court rejects Dragonfly’s arguments that Aqualis does not
advance its trade secrets claim with sufficient particularity or with accompanying
allegations of reasonable efforts to maintain secrecy, and the Motion will therefore be
denied insofar as it seeks dismissal of Aqualis’s misappropriation claim.
B. 	Tortious Interference with Contract
28. 	To state a claim for tortious interference with contract, a plaintiff must
allege that “(1) a valid contract between plaintiff and a third party [exists] . . . (2) the
defendant knows of the contract; (3) the defendant intentionally induces the third
person not to perform the contract; (4) and in doing so he acts without justification;
(5) resulting in actual damages to the plaintiff.” Link, 372 N.C. at 282.
29. 	Dragonfly argues that Aqualis has failed to plead that Dragonfly knew of
the NDA or that Dragonfly induced Bogensberger to breach it.41
30. 	The Court turns first to the knowledge element. 	Dragonfly argues that
Aqualis pleaded that Dragonfly reviewed the Settlement, not the NDA, and that the
a trade secrets claim. Compare Steve Silveus Ins., Inc. v. Goshert, 873 N.E.2d 165, 179–80
(Ind. Ct. App. 2007) (holding that information protected solely by a confidentiality agreement
constituted trade secrets under Indiana’s analogous trade secret statute), Assessment Techs.
Inst., LLC v. Parkes, 588 F. Supp. 3d 1178, 1215–16 (D. Kan. 2022) (to similar effect under
Kansas law), and Pre-Paid Legal Servs., Inc. v. Harrell, No. CIV-06-019, 2008 U.S. Dist.
LEXIS 1773, at *29 (E.D. Okla. Jan. 8, 2008) (same under Oklahoma law), with Electro-Craft
Corp. v. Controlled Motion, Inc., 332 N.W.2d 890, 901–02 (Minn. 1983) (holding that a
confidentiality agreement alone is insufficient under Minnesota law), Arcor, Inc. v. Haas, 842
N.E.2d 265, 271 (Ill. App. Ct. 2005) (same under Illinois law), and Diamond Power Int’l, Inc.
v. Davidson, 540 F. Supp. 2d 1322, 1333 (N.D. Ga. 2007) (same under Georgia law).
41 (Br. Supp. 10.)

Settlement 	cannot be 	read to impute 	knowledge 	of 	the NDA 	or its terms 	to
Dragonfly.42
31. 	To 	evaluate 	this 	argument, 	the 	Court 	examines 	the 	specifics 	of 	the
Settlement, as pleaded. 	The Settlement provides that “any” non-disclosure, non-
solicitation, or similar agreements would remain “in full force and effect according to
their terms[,]”43 that Bogensberger had not disclosed any confidential information
prior to the Settlement’s 17 March 2022 execution,44 and that Bogensberger had
returned all of Aqualis’s confidential information and property that had remained in
his possession.45
32. 	The Court concludes that these terms do not impute knowledge of the NDA
to Dragonfly. 	The plain language of the Settlement provides only that “any” non-
disclosure agreements remained in force, not whether any such agreements existed
or, if so, what their terms were, much less that Bogensberger had entered the NDA
with Aqualis.
33. 	Aqualis places much weight on the Rule 12(b)(6) standard, which requires
the Court to treat facts and inferences from the Complaint in the light most favorable
to the non-movant.46 But even under that generous standard, the plain language of
42 (Br. Supp. 10.)
43 (Compl. ¶ 46.)
44 (Compl. ¶ 47.)
45 (Compl. ¶ 48.)
46 (Pl.’s Mem. Opp’n Def.’s Mot. Dismiss 15–16 [hereinafter “Br. Opp’n”], ECF No. 16.)

the Settlement does not impute knowledge of the NDA to Dragonfly and the facts
Aqualis pleads do not demonstrate that Dragonfly knew of the NDA—from the
Settlement or otherwise.
34. 	Aqualis also relies upon Sides v. Duke Univ., 74 N.C. App. 331, 346 (1985),
which is similarly unpersuasive. 	Aqualis seizes upon language in Sides that
“[t]hough not specifically alleged, that [defendants] knew about [plaintiff’s] contract
is clearly established by other allegations.” 	Id.47 	But this brief statement was the
only examination of the knowledge element in Sides and, even read in its full context,
the meaning of the reference to “other allegations” is unclear. 	Given that no North
Carolina decisions in the nearly forty years since Sides have adopted Dragonfly’s
proffered interpretation, the Court declines to do so here.48
35. 	Similarly, the Court rejects Aqualis’s argument that emphasizes Todd’s
statement that information the company received from Bogensberger was a “gold
mine.”49 	The information’s utility to Dragonfly does not speak to Dragonfly’s
knowledge of the NDA or its contents.
36. 	Finally, Aqualis cites language from United Labs., Inc. v. Kuykendall, 322
N.C. 643 (1988), that a defendant can be liable for tortious interference if he has
47 (Br. Opp’n 16.)
48 That the appellants in Sides appear not to have raised the knowledge element in their
appeal fortifies the conclusion that this sentence in Sides was dicta and not imbued with the
interpretative force Dragonfly contends. See Sides, 74 N.C. App. at 346–48 (summarizing
and lengthily examining the appellants’ arguments on this claim after observing briefly that
the knowledge argument was met).
49 (Br. Opp’n 16.)

knowledge of the facts concerning the plaintiff’s contractual rights, “even though he
is mistaken as to their legal significance and believes that there is no contract or that
the contract means something other than what it is judicially held to mean.”50 Id. at
663.
37. 	But that case arose at the directed verdict stage, after the “uncontradicted
evidence” at trial had established that the defendant knew of the relevant contracts.
See id. at 660. 	In addition, United Labs. drew the language Aqualis cites from an
earlier case, Childress v. Abeles, 240 N.C. 667 (1954), which in turn expounded this
principle in quotation directly from the original Restatement of Torts. See id. at 674.
But the pertinent section of the Restatement provides that “the actor does not induce
or otherwise purposely cause that [contractual] failure if he has no knowledge of the
contract.” Restatement of Torts § 766(e) (Am. Law. Inst. 1939).
38. 	In context, this language therefore stands for the point that the knowledge
element is satisfied if an actor knows of a supposed contract, but believes it to be void
or otherwise unenforceable, or incorrectly believes that its terms do not cover the
situation at hand. Indeed, in United Labs. itself, the court applied this language to a
party who knew the contracts in question existed but had a “good faith belief” that
they “were unenforceable[,]” rather than to one who had no idea that the contracts
existed in the first place. See United Labs., 322 N.C. at 663.
39. 	This language, as carried forward to Childress and United Labs., does not
support the proposition that an actor can be liable for allegedly inducing breach of a
50 (Br. Opp’n 17.)

contract of which that actor has no knowledge. 	Aqualis’s interpretation of this
ambiguous language would clash with our appellate courts’ clear statements that “the
defendant[’s] know[ledge] of the contract” is an element of the claim. E.g., Link, 372
N.C. at 282.
40. 	Courts from other jurisdictions have recognized this distinction. 	See, e.g.,
Daugherty v. Kessler, 286 A.2d 95, 98–99 (Md. 1972) (quoting the Restatement
language in a case in which the defendants knew of the contract and noting that a
defendant “must know of the contract”); Ginn v. Stonecreek Dental Care, 30 N.E.3d
1034, 1041 (Ohio Ct. App. 2015) (noting that identical language from the Second
Restatement is applicable only if the actor knows of the contract).
41. 	Finally, Reichhold Chems., Inc. v. Goel, 146 N.C. App. 137 (2001) does not
save Aqualis’s claim.51 	Goel upheld a tortious interference counterclaim when the
plaintiff lacked actual knowledge of the contract between the defendant and the third
party 	because 	the 	trial 	court 	made 	an 	uncontested 	finding 	of 	fact 	that 	the
“[counterclaim defendant] knew of the business relationship between [counterclaim
plaintiff] and [the third party].” Id. at 151. But here, nothing in Aqualis’s Complaint
demonstrates that Dragonfly knew of any ongoing business relationship between
Bogensberger and Aqualis.
42. 	Because the Court concludes that the Complaint does not adequately plead
that Dragonfly had knowledge of the NDA between Bogensberger and Aqualis, the
Court will grant Dragonfly’s Motion insofar as it seeks dismissal of the tortious
51 Neither party raised Goel in briefing or at the Hearing, but the Court believes it prudent
to discuss a case which could conceivably be read to control the result here.

interference with contract claim on this ground. The Court therefore need not reach
Dragonfly’s arguments for dismissal based on the inducement element.
C. 	Tortious Interference with Prospective Economic Advantage
43. 	To 	state 	a 	claim 	for 	tortious 	interference 	with 	prospective 	economic
advantage, a plaintiff must plead that a defendant interfered with a business
relationship “by maliciously inducing a person not to enter into a contract with a third
person, which he would have entered into but for the interference, if damage
proximately ensues, when this interference is done not in the legitimate exercise of
the interfering person’s rights.” 	Beverage Sys. of the Carolinas, LLC v. Associated
Beverage Repair, LLC, 368 N.C. 693, 701 (2016) (cleaned up).
44. 	Dragonfly 	contests 	only 	the 	malice 	element 	of 	Aqualis’s 	claim.52
Significantly for present purposes, “[i]t is not necessary . . . to allege and prove actual
malice in the sense of personal hatred, ill will, or spite . . . the term ‘malice’ is used in
this connection in its legal sense, and denotes the intentional doing of the harmful
act without legal justification.” 	Childress, 240 N.C. at 675. 	In this context,
interference with a potential business relationship is justified if it is for a legitimate
business purpose, such as competition. 	Link, 372 N.C. at 284. 	But this right to
interfere with a business competitor is “lost if exercised for a wrong purpose . . . [such
as] where the act is done other than as a reasonable and bona fide attempt to protect
the interest of the defendant.” Peoples Sec. Life Ins. Co. v. Hooks¸ 322 N.C. 216, 220
(1988).
52 (Br. Supp. 13–17.)

45. 	Aqualis has pleaded facts here that, taken as true, are sufficient to show
that Dragonfly competed against Aqualis through unlawful means. 	In particular,
Aqualis pleads that Dragonfly competed against Aqualis through Dragonfly’s receipt
and use of Aqualis’s trade secrets,53 and as discussed above, Aqualis has adequately
pleaded its misappropriation of trade secrets claim against Dragonfly. 	This Court
has previously held, at least at the 12(b)(6) phase, that misappropriation of trade
secrets is not a lawful means of competition. See Marketplace 4 Ins., LLC v. Vaughn,
2023 NCBC LEXIS 31, at *33–36 (N.C. Super. Ct. Feb. 24, 2023); Mech. Sys. & Servs.,
Inc. v. Howard, 2021 NCBC LEXIS 69, at *13 (N.C. Super. Ct. Aug. 11, 2021). Indeed,
if a defendant could simply claim competitive justification regardless of the means it
employed, “it would be virtually impossible for a plaintiff to ever succeed on a tortious
interference claim[.]” 	Vaughn, 2023 NCBC LEXIS 31, at *35–36 (emphasis in
original).
46. 	Because Aqualis has pleaded facts showing that Dragonfly’s competitive
conduct was not justified under North Carolina law, Dragonfly’s motion to dismiss
Aqualis’s claim for tortious interference with prospective economic advantage must
be denied.
D. 	Unjust Enrichment
47. 	A claim for unjust enrichment has five elements. 	First, one party must
“confer a benefit upon the other party . . .; [s]econd, the benefit must not have been
conferred officiously . . .; [t]hird, the benefit must not be gratuitous . . .; [f]ourth, the
53 (Compl. ¶¶ 64–68, 82–90.)

benefit must be measurable . . .; [l]ast, the defendant must have consciously accepted
the benefit.” 	JPMorgan Chase Bank, Nat’l Ass’n v. Browning, 230 N.C. App. 537,
541–42 (2013) (cleaned up). Dragonfly challenges only conferral, the first element of
Aqualis’s claim.54
48. 	Dragonfly’s 	argument 	is 	simple. 	Dragonfly 	contends 	that 	an 	unjust
enrichment claim requires a conferral of the benefit directly from a plaintiff to a
defendant, and that here, any benefits that Dragonfly received in the form of trade
secrets or other commercially useful information came not from Aqualis, but from
Bogensberger, a third party then unaffiliated with Aqualis.55 	As such, Dragonfly
claims that Aqualis cannot sustain its unjust enrichment claim against Dragonfly.
49. 	The 	Supreme 	Court 	of 	North 	Carolina, 	however, 	has 	not 	imposed 	a
requirement that a plaintiff directly confer the benefit required to state an unjust
enrichment claim. See Krawiec, 370 N.C. at 615 (“[To sustain an unjust enrichment
claim], a party must have conferred a benefit on the other party.” (emphasis added));
Booe v. Shadrick, 322 N.C. 567, 570 (1988) (“a party” (emphasis added)).
50. 	Moreover, the North Carolina courts have upheld unjust enrichment claims
even where a third party, rather than the plaintiff, conferred a benefit. For example,
in New Prime, Inc. v. Harris Transp. Co., 222 N.C. App. 732 (2012), a single purchaser
contracted with two trucking companies to deliver bagged ice. 	The purchaser
mistakenly paid the defendant company for deliveries the plaintiff company had
54 (See Br. Supp. 18–20.)
55 (See Br. Supp. 18–20.)

made, and the Court of Appeals confirmed that the plaintiff company could bring an
unjust enrichment claim against the defendant company, even though a third party,
the purchaser, had conferred the benefit on the defendant company. 	See id. 	This
Court has applied this principle in subsequent cases. See, e.g., Bandy v. Gibson, 2017
NCBC LEXIS 66, at *12–16 (N.C. Super. Ct. July 26, 2017); Lau v. Constable, 2017
NCBC LEXIS 10, at *13–16 (N.C. Super. Ct. Feb. 7, 2017).56
51. 	The North Carolina cases are consistent with the overwhelming weight of
authority from around the country. 	In the circumstances of this action, the Court
finds cases addressing unjust enrichment arising from embezzlement especially
instructive. 	For example, in Bank of Am. Corp. v. Gibbons, 918 A.2d 565 (Md. Ct.
Spec. App. 2007), a husband embezzled over a million dollars from his employer, the
plaintiff, and used the money to fund a “lavish lifestyle” for his wife and family. Id.
at 567. 	Even though the wife had no knowledge of the embezzlement or any
wrongdoing by her husband, id., the Maryland court upheld the bank’s unjust
enrichment claim against the wife, concluding that “a cause of action for unjust
enrichment may lie against a transferee with whom the plaintiff had no contract,
transaction, or dealing, either directly or indirectly.” Id. at 570. The Maryland court
reasoned that the “benefit may be conferred by the wrongdoer or the plaintiff seeking
56 The Court recognizes that Effler v. Pyles, 94 N.C. App. 349 (1989) appeared to create a
direct benefit requirement. However, this Court and others have noted that Effler has been
abrogated by Embree Constr. Grp., Inc. v. Rafcor, Inc., 330 N.C. 487 (1992), New Prime, and
other cases. 	See Bandy, 2017 NCBC LEXIS 66, at *14–16; Lau 2017 NCBC LEXIS 10, at
*14–15; Metric Constructors, Inc. v. Bank of Tokyo-Mitsubishi, Ltd., 72 F. App’x 916, 921 (4th
Cir. 2003).

restitution[,]” and that to hold otherwise would result in inequitable windfalls for
both the transferee and the wrongdoer. See id. at 573, 574 (emphasis in original).
52. 	Courts in other states have reached similar conclusions under similar fact
patterns. 	See, e.g., In re Marriage of Allen, 724 P.2d 651, 654, 659–60 (Colo. 1986)
(upholding a claim for unjust enrichment and constructive trust against an innocent
transferee who unknowingly benefited from the acts of a third-party wrongdoer); Fed.
Ins. Co. v. Smith, 144 F. Supp. 2d 507, 516, 523 (E.D. Va. 2001) (upholding a claim
for unjust enrichment under Virginia law against an innocent transferee who
unknowingly benefitted from a third party’s insurance fraud scheme), aff’d, 63 F.
App’x 630 (4th Cir. 2003).57
53. 	Even in broader fact patterns, courts have overwhelmingly rejected any
strict “directness of transfer” requirement.58
57 Although the Fourth Circuit’s decision affirmed on an alternative ground which rendered
a discussion of unjust enrichment unnecessary, one member of the panel addressed the
unjust enrichment claim in full and voted to affirm specifically on that ground. See Smith,
63 F. App’x at 639–40 (Traxler, J., concurring in part) (“It is under the theory of unjust
enrichment that I believe this case should be categorized.”).
58 See, e.g., Town of New Hartford v. Conn. Res. Recovery Auth., 970 A.2d 592, 618 (Conn.
2009) (“[Unjust enrichment] may be indirect, involving, for example, a transfer of a benefit
from a third party to a defendant.”); Freeman Indus., LLC v. Eastman Chem. Co., 172 S.W.3d
512, 525 (Tenn. 2005) (“[W]e conclude that to recover for unjust enrichment, a plaintiff need
not establish that the defendant received a direct benefit from the plaintiff.”); State ex rel.
Palmer v. Unisys Corp., 637 N.W.2d 142, 155 (Iowa 2001) (“[B]enefits can be direct or indirect,
and can involve benefits conferred by third parties.”); HPI Health Care Servs., Inc. v. Mt.
Vernon Hosp., Inc., 545 N.E.2d 672, 679 (Ill. 1989); Lumford v. Yoshio Ota, 434 P.3d 1215,
1222 (Haw. Ct. App. 2018); Grimstad v. Knudsen, 386 P.3d 649, 658 (Or. Ct. App. 2016)
(“[Oregon precedent] unavoidably establishes that, in at least some circumstances, a plaintiff
can bring an unjust enrichment claim even if the plaintiff did not confer a benefit on the
defendant.”); Cox v. Microsoft Corp., 778 N.Y.S.2d 147, 149 (N.Y. App. Div. 2004); Smith v.
Whitener, 856 S.W.2d 328, 330 (Ark. Ct. App. 1993) (“[T]he enrichment need not have come
directly from [plaintiff], but could come from a third source[.]”).

54. 	Finally, the North Carolina courts have emphasized that unjust enrichment
is a claim based in equity. E.g., Whitfield v. Gilchrist, 384 N.C. 39, 42 (1998); Bartlett
Milling Co, LP v. Walnut Grove Action & Realty Co., Inc., 192 N.C. App. 74, 80 (2008).
The Court agrees with the Maryland court in Gibbons that accepting Dragonfly’s
argument would exalt form over substance by enabling parties to evade and defeat
equitable remedies through creative technicalities. 	See Gibbons, 918 A.2d at 573.
Because “[e]quity disregards mere forms, and looks at the substance of things[,]”
Moring v. Privott, 146 N.C. 558, 558 (1908), the Court rejects Dragonfly’s argument
for the additional reason that it would subvert the purposes and application of
equitable claims and remedies. 	See also Hoke Cnty. Bd. of Educ. v. State, 382 N.C.
386, 462 (2022) (“[A]dministering equity . . . prohibits the elevation of form over
substance.”).
55. 	Thus, the Court rejects Dragonfly’s argument that an unjust enrichment
claim cannot stand on an indirect transfer of a benefit, and concludes that Aqualis
has adequately alleged that Dragonfly received and used a measurable benefit, even
indirectly through the alleged wrongdoing of Bogensberger. 	Aqualis states in its
Complaint that the information Bogensberger conveyed from Aqualis to Dragonfly
had 	value,59 	that 	Dragonfly 	consciously 	accepted 	the 	information,60 	and 	that
Dragonfly used that value for its own gain.61 	Furthermore, neither the Complaint
59 (See Compl. ¶¶ 61, 63.)
60 (See Compl. ¶¶ 61, 63, 134.)
61 (See Compl. ¶¶ 82–90.)

nor any argument from Dragonfly demonstrates that the benefit was officiously or
gratuitously 	conferred. 	These 	allegations 	are 	sufficient 	to 	sustain 	an 	unjust
enrichment claim, at least through the 12(b)(6) stage. 	See PDF Elec. & Supply Co.,
LLC v. Jacobsen, 2020 NCBC LEXIS 103, at *29–30 (N.C. Super. Ct. Sept. 9, 2020)
(sustaining an unjust enrichment claim under Rule 12(b)(6) based on allegations that
the defendant had derived value from its use of confidential information).
E. 	UDTPA
56. 	To sustain a UDTPA claim, a plaintiff must plead that “(1) [the] defendant
committed an unfair or deceptive act or practice, (2) the action in question was in or
affecting commerce, and (3) the act proximately caused injury to the plaintiff.”
Krawiec, 370 N.C. at 612. Aqualis’s Complaint asserts that the first element is met
because its claims for misappropriation of trade secrets and tortious interference with
contract constitute unfair and deceptive acts.62 	Dragonfly’s sole argument on the
UDTPA claim is that because these claims should be dismissed, Aqualis’s UDTPA
claim does not satisfy the first element, and should also be dismissed.63
57. 	The Court has concluded, as discussed above, that Aqualis’s claim for
tortious interference with contract should be dismissed, but that its claim for
misappropriation of trade secrets should proceed to discovery. 	It follows therefore
that the UDTPA claim should be dismissed as it pertains to tortious interference with
62 (Compl. ¶ 123.)
63 (Br. Supp. 17–18.)

contract, 	but 	permitted 	to 	proceed 	to 	discovery 	insofar 	as 	it 	is 	based 	on 	a
misappropriation of trade secrets.
F. 	Civil Conspiracy
58. 	There is no standalone claim for civil conspiracy under North Carolina law;
instead, this claim requires a separate, underlying tort. 	E.g., Shope v. Boyer, 268
N.C. 401, 405 (1966); Williams v. United Comm. Bank¸ 218 N.C. App. 361, 371 (2012).
Aqualis bases its civil conspiracy claim on its underlying misappropriation of trade
secrets claim.64 	In turn, Dragonfly’s sole argument to dismiss the civil conspiracy
claim is that, because the trade secrets claim should be dismissed, the civil conspiracy
claim must meet the same end.65 	But because the Court has determined that
Aqualis’s trade secrets claim shall survive dismissal under Rule 12(b)(6), this
argument fails, and the Court will correspondingly deny the Motion as it pertains to
the civil conspiracy claim.
IV.
CONCLUSION
59. 	WHEREFORE, the Court GRANTS in part and DENIES in part the
Motion and hereby ORDERS as follows:
a. 	The Motion is DENIED as to the following of Aqualis’s claims, which
shall proceed to discovery:
(1) 	Misappropriation of trade secrets;
64 (Compl. ¶ 129; Br. Opp’n 23–24 (arguing against dismissal of the civil conspiracy solely on
grounds of the trade secrets claim).)
65 (Br. Supp. 18.)

(2) 	Tortious interference with prospective economic advantage;
(3) 	Unjust enrichment;
(4) 	UDTPA insofar as it is based on Aqualis’s misappropriation of
trade secrets claim; and
(5) 	Civil conspiracy;
b. 	The Motion is GRANTED as to the following of Aqualis’s claims, which
are hereby DISMISSED with prejudice:
(1) 	Tortious interference with contract; and
(2) 	UDTPA insofar as it is based on Aqualis’s tortious interference
with contract claim.
SO ORDERED, this the 15th day of June, 2023.
/s/ Louis A. Bledsoe, III
Louis A. Bledsoe, III
Chief Business Court Judge