BIVINS v. PACHECO, 2023 NCBC 40

STATE OF NORTH CAROLINA
BUNCOMBE COUNTY
IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
22 CVS 4135
KRISTIE BIVINS; RYAN BIVINS;
KRYB LAUNCH, LLC, individually,
and on behalf of KJ ENDEAVORS, LLC
and KJ LAUNCH PROPERTIES, LLC,
Plaintiffs,
v.
JENNIFER PACHECO; Z LAUNCH
LLC; KJ ENDEAVORS, LLC; and KJ
LAUNCH PROPERTIES, LLC,
Defendants.
ORDER AND OPINION ON
DEFENDANTS’ MOTION TO DISMISS
AND
MOTION FOR MORE DEFINITE
STATEMENT
I. 	INTRODUCTION
1. 	In 2015, Kristie and Ryan Bivins, along with Jennifer and Bret Pacheco,
decided to open a trampoline park in Asheville, North Carolina. 	They formed KJ
Launch Properties, LLC (“KJ Launch”) to own the real property, and KJ Endeavors,
LLC (“KJ Endeavors”) to operate the park. 	Years later, after discovering financial
irregularities, the Bivins seek relief for misconduct that they attribute to Jennifer
Pacheco (“Pacheco”), formerly the bookkeeper for the business. The Bivins request a
judgment declaring that Pacheco’s alleged misconduct triggered the involuntary
withdrawal of both Pacheco and her company, Z Launch, LLC (“Z Launch”) pursuant
to the operating agreements for the jointly owned LLCs.1 	They also seek judicial
dissolution of the LLCs, an accounting, and damages.
1 Bret Pacheco is not named as a defendant.
Bivins v. Pacheco, 2023 NCBC 40.

2. 	The case is before the Court on Pacheco and Z Launch’s motion to dismiss
the Bivins’ claims. 	Alternatively, Pacheco and Z Launch seek a more definite
statement of any claims that survive. (Defendants Jennifer Pacheco’s and Z Launch,
LLC’s Motion to Dismiss the Claims of the Plaintiffs, or in the Alternative, Motion
for a More Definitive Statement, “Mot. Dismiss,” [“Motion”], ECF No. 11.) 	For the
reasons stated below, the Court GRANTS in part and DENIES in part the Motion
to Dismiss and DENIES the Motion for More Definite Statement.
Fitzgerald, Hanna & Sullivan, PLLC, by Andrew L. Fitzgerald and D.
Stuart 	Punger, 	Jr. 	for 	Plaintiffs 	Kristie 	Bivins, 	Ryan 	Bivins, 	KJ
Endeavors, LLC and KJ Launch Properties, LLC.
Marshall, 	Roth 	& 	Gregory, 	PC, 	by 	Clifford 	C. 	Marshall, 	Jr. 	for
Defendants Jennifer Pacheco and Z Launch LLC.
Earp, Judge.
II. 	FACTUAL BACKGROUND
3. 	When ruling on a motion to dismiss pursuant to Rule 12(b)(6) of the North
Carolina Rules of Civil Procedure (“Rule[s]”), the Court does not find facts but rather
recites the facts as alleged. Therefore, the following facts are drawn from Plaintiffs’
Verified Amended Complaint, (Am. Compl., ECF No. 8), and its attached exhibits,
(ECF Nos. 8.1-8.7).
4. 	KRYB Launch, LLC (“KRYB”) is a North Carolina limited liability company
with its principal place of business in Buncombe County, North Carolina. 	(Am.
Compl. ¶ 5.) It is managed by Kristie and Ryan Bivins. (Am. Compl. ¶ 5.)

5. 	Z Launch is a North Carolina limited liability company with its principal
place of business in Buncombe County, North Carolina. 	(Am. Compl. ¶ 7.) 	It is
“principally controlled” by Jennifer Pacheco and Bret Pacheco. (Am. Compl. ¶ 7.)
6. 	KRYB and Z Launch are both 50 percent members in, and managers of, KJ
Endeavors, a North Carolina limited liability company that manages the trampoline
park. (Am. Compl. ¶ 9.)
7. 	Another North Carolina limited liability company, KJ Launch, owns the
property on which the trampoline park is located. (Am. Compl. ¶¶ 11-12.)
8. 	KJ Launch’s Operating Agreement, executed on 22 January 2015, states
that Ryan Bivins, Kristie Bivins, Jennifer Pacheco and Bret Pacheco each own 25
percent of the company. (Am. Compl. ¶ 15.) Plaintiffs believe, however, that in March
2017, Jennifer Pacheco obtained Bret’s twenty five percent interest as a result of a
separation and property settlement agreement in their divorce. (Am. Compl. ¶¶ 17,
28.) Kristie and Ryan complain that Jennifer hid the transfer of Bret’s interest from
them and breached the KJ Launch operating agreement by not giving them an
opportunity to purchase his interest. (Am. Compl. ¶ 18.)
9. 	The Bivins allege that Pacheco was given responsibility for maintaining the
financial records of both KJ Endeavors and KJ Launch. 	(Am. Compl. ¶ 19.) 	In
addition 	to 	bookkeeping, 	her 	duties 	included 	overseeing 	the 	check 	writing,
accounting, and tax compliance for both companies. (Am. Compl. ¶¶ 19, 37-38.)
10. 	Plaintiffs 	allege 	that 	Pacheco 	used 	her 	position 	to 	misappropriate
thousands of dollars from the trampoline park. (Am. Compl. ¶ 20.) The Bivins believe

that the transfers occurred prior to the Pachecos’ 2017 divorce. 	(Am. Compl. ¶¶ 25,
28.)
11. 	Aside from keeping the books, the Bivins complain that Pacheco did not
“meaningfully assist” with the day-to-day operation of the trampoline park. 	(Am.
Compl. ¶ 27.)
12. 	Through counsel, Kristie Bivins, Ryan Bivins, and KRYB made a derivative
demand on behalf of KJ Endeavors and KJ Launch on 1 September 2022. (ECF No.
8.6.) 	Jennifer Pacheco and Z Launch responded with their own derivative demand.
(ECF No. 8.7.) 	Both sides claim that the other has engaged in misappropriation of
funds, among other wrongs.
III. 	PROCEDURAL BACKGROUND
13. 	Plaintiffs initiated this action on 4 November 2022. 	(Verified Complaint,
ECF No. 3.) 	On 8 November 2022, the case was designated a mandatory business
case. 	(Designation Order, ECF No. 1.) 	On 8 December 2022, Defendants moved to
dismiss the original action. (Motion to Dismiss, ECF No. 6.) Plaintiffs responded by
amending their pleading on 29 December 2022. (See generally Am. Compl.)
14. 	The Amended Complaint purports to allege eight claims against Jennifer
Pacheco and Z Launch: 	(1) breach of fiduciary duty; (2) fraudulent conveyance; (3)
fraud; 	(4) 	breach 	of 	both 	companies’ 	operating 	agreements; 	(5) 	involuntary
withdrawal of Z Launch from KJ Endeavors; (6) involuntary withdrawal of Jennifer
Pacheco from KJ Launch Properties; (7) “derivative action”; and (8) dissolution and
accounting of KJ Launch Properties and KJ Endeavors.

15. 	On 17 January 2023, Jennifer Pacheco and Z Launch filed the Motion.
Following briefing, on 21 February 2023, the Court entertained arguments during a
hearing at which the parties participated through counsel. (Notice of Hr’g, ECF No.
13.) The Motion is now ripe for disposition.
IV. 	ANALYSIS
A. Standing
16. 	Defendants move pursuant to Rule 12(b)(1) to dismiss any cause of action
that Plaintiffs attempt to assert as a direct claim because they lack standing.
“Standing is a necessary prerequisite to a court’s proper exercise of subject matter
jurisdiction.” Aubin v. Susi, 149 N.C. App. 320, 324 (2002) (citation omitted). It refers
to whether a party has “sufficient stake in an otherwise justiciable controversy such
that he or she may properly seek adjudication of the matter.” Am. Woodland Indus.,
Inc. v. Tolson, 155 N.C. App. 624, 626 (2002); see also Leonard v. Ast, 2022 NCBC
LEXIS 76, at **7 (N.C. Super. Ct. July 13, 2022) (“Standing is a question of subject
matter jurisdiction, which is a prerequisite to the exercise of any authority by the
state courts.” (quoting Phillips & Jordan v. Bostic, 2012 NCBC LEXIS 36, at *7 (N.C.
Super. Ct. June 1, 2012))).
17. 	Defendants argue that Plaintiffs lack standing to bring any direct action
against them because they have not alleged a legally cognizable “special duty” or
“separate and distinct injury” as required by Barger v. McCoy Hillard & Parks, 346
N.C. 650, 658 (1997). 	(Defs.’ Mem. of Law in Supp. of Mot. to Dismiss Pls.’ Am.
Verified Compl., [“Defs.’ Br.”] 5, ECF No. 13.) However, with respect to the first three

causes of action (breach of fiduciary duty, fraudulent conveyance, and fraud), the
Court observes that Plaintiffs specify that the claims are brought derivatively on
behalf of KJ Endeavors and KJ Launch and not as direct causes of action. (See Am.
Compl. ¶ 63.)
18. 	In 	contrast, 	Plaintiffs 	characterize 	their 	fourth 	(breach 	of 	operating
agreements), fifth (involuntary withdrawal of Z Launch from KJ Endeavors), sixth
(involuntary 	withdrawal 	of 	Jennifer 	Pacheco 	from 	KJ 	Launch), 	and 	eighth
(dissolution and accounting of KJ Launch and KJ Endeavors) claims as “likely” direct
claims, as well as derivative ones. (Am. Compl. ¶¶ 74, 106, 117, 129.)2 Accordingly,
the Court addresses Plaintiffs’ standing to bring each of these claims directly.
19. 	The general rule is that shareholders may not bring individual actions to
recover what they consider to be their portion of the damages suffered by a
corporation. Barger, 346 N.C. at 660. This rule also applies in the LLC context. See,
e.g., Bennett v. Bennett, 2019 NCBC LEXIS 19, at *13 (N.C. Super. Ct. Aug. 6, 2019)
(“These rules apply equally to LLCs and their members because the members are, for
this purpose, functionally equivalent to corporate shareholders.” (cleaned up)); see
also SCA-Blue Ridge, LLC v. WakeMed, 2016 NCBC LEXIS 2, at **23 (N.C. Super.
Ct. Jan. 4, 2016) (members of an LLC are treated like corporate shareholders).
20. 	However, “an LLC member may maintain an individual action against a
fellow LLC member for harm that ‘directly affects’ the member if he can show ‘that
the wrongdoer owed him a special duty or that the injury suffered by the member is
2 Claim seven is not a claim but is rather a restatement of Plaintiffs’ request that Defendants
take the actions set forth in Plaintiffs’ derivative demand.

separate and distinct from the injury sustained by the other members or the LLC
itself.’ ” Sivadhanam v. 7 Hills Learning, LLC, 2021 NCBC LEXIS 74, at *13 (N.C.
Super. Ct. Sept. 8, 2021) (quoting Barger, 346 N.C. at 659.) Defendants contend that
neither of the two Barger exceptions is applicable in the present case. 	(Defs.’ Br. 5-
6.) The Court disagrees.
21. 	The fourth cause of action is for various breaches of the KJ Endeavors and
the KJ Launch operating agreements. Whether the claim is derivative or direct turns
on whether the relevant term in the operating agreement gives rise to a duty owed
generally to the company or only to a member. 	See, e.g., 759 Ventures, LLC v. GCP
Apt. Inv’rs, LLC, 2018 NCBC LEXIS 82, at *10-11 (N.C. Super. Ct. Aug. 13, 2018)
(“To the extent the relevant term in an operating agreement gives rise to a duty owed
to the company, a claim for breach of that duty is one belonging to the company, and
not generally to its members or managers.”). If the harm is the same to the company
and its members, the claim is derivative. See, e.g., White v. Hyde, 2016 NCBC LEXIS
74, at **24-25 (N.C. Super. Ct. Oct. 4, 2016) (no direct claim for breach of operating
agreement 	where 	harm 	to 	company 	and 	individual 	was 	the 	same); 	Miller 	v.
Burlington Chem. Co., LLC, 2017 NCBC LEXIS 6, at *15 (N.C. Super. Ct. Jan. 27,
2017) (no direct claim where alleged injury affected all members equally).
22. 	Here, Plaintiffs allege breaches that impacted all members of the LLCs
equally (giving rise to derivative claims), but they also allege at least one breach of
the KJ Launch operating agreement that impacted only Kristie and Ryan Bivins.
That breach, which supports a direct claim for a distinct injury, allegedly occurred

when Pacheco accepted the transfer of Bret’s membership interest without giving
Kristie and Ryan Bivins the opportunity to purchase Bret’s interest. (Am. Compl. ¶
82.) 	Having been denied that opportunity, Kristie and Ryan Bivins have a direct
cause of action against Pacheco. 	See, e.g., Corwin v. British Am. Tobacco PLC, 371
N.C. 605, 612 (2018).
23. 	As for the balance of claim four, as well as claims five, six, and eight
Plaintiffs have standing to assert them regardless of Barger. 	Although not stated
with clarity, in claims four, five and six Plaintiffs seek a judgment that Pacheco,
individually and as manager for Z Launch, breached the operating agreements of KJ
Launch and KJ Endeavors by engaging in misconduct sufficient to result in the
involuntary withdrawal of Jennifer Pacheco from KJ Launch (triggering purchase
rights 	for 	the 	Bivins), 	and 	the 	involuntary 	withdrawal 	of 	Z Launch 	from 	KJ
Endeavors (triggering purchase rights for KRYB). (ECF No. 8.1 ¶ 34, ECF No. 8.2 ¶
33.) 	Plaintiffs have standing to pursue an action to declare these rights. 	See, e.g.,
Epic Chophouse, LLC v. Morasso, 2019 NCBC LEXIS 55, at *13 (N.C. Super. Ct. Sept.
3, 2019) (by statute, parties to an operating agreement have standing to seek an
interpretation of its terms); see also N.C.G.S. § 1-254 (“Any person interested under
a . . . written contract . . . may have determined any question of construction or
validity arising under the . . . contract . . . and obtain a declaration of rights, status,
or other legal relations thereunder.”)3
3 However, a declaratory judgment is unavailable “if the statute of limitations bars any claim,
because ‘jurisdiction under the Declaratory Judgment Act may be invoked only in a case in
which there is an actual or real existing controversy between parties having adverse interests

24. 	As for claim eight, demanding that both KJ Launch and KJ Endeavors be
dissolved, it is unnecessary to resort to the Barger exceptions. A current member of
an LLC has standing to bring an action for dissolution. 	N.C.G.S. § 57D-6-02(2).
Therefore, Plaintiffs have standing and the Court has jurisdiction over this claim.
B. Statute of Limitations
25. 	Defendants next move pursuant to Rule 12(b)(6) to dismiss each claim on
statute of limitations grounds. 	(Defs.’ Br. 10-15.) 	“A statute of limitations defense
may properly be asserted in a Rule 12(b)(6) motion to dismiss if it appears on the face
of the [complaint] that such a statute bars the claim.” Futures Grp., Inc. v. Brosnan,
2022 NCBC LEXIS 150, at **10-11 (N.C. Super. Ct. Dec. 7, 2022) (citing Horton v.
Carolina Medicorp, 344 N.C. 133, 136 (1996)).
26. 	The Court’s inquiry at the Rule 12(b)(6) stage is “whether, as a matter of
law, the allegations of the complaint, treated as true, are sufficient to state a claim
upon which relief may be granted under some legal theory, whether properly labeled
or not.” Harris v. NCNB Nat’l Bank, 85 N.C. App. 669, 670 (1987) (citation omitted).
The Court is not constrained to analyze each claim as it is titled in the Amended
Complaint. Rather, it treats the well-pleaded allegations of the pleading as true and
views the facts and permissible inferences in the light most favorable to the non-
moving party when determining whether a claim exists. 	See, e.g., Ford v. Peaches
Entm’t Corp., 83 N.C. App. 155, 156 (1986) (“A motion to dismiss for failure to state
a claim . . . is addressed to whether the facts alleged in the complaint, when viewed
in the matter in dispute.’ ” Ludlum v. State, 227 N.C. App. 92, 94 (2013) (quoting State ex
rel. Edmisten v. Tucker, 312 N.C. 326, 338 (1984).

in the light most favorable to the plaintiffs, give rise to a claim for relief on any
theory.”).
27. 	Beginning with the breach of fiduciary duty claim, the applicable statute of
limitations is three years. 	See N.C.G.S. § 1-52(1). The action accrues when a party
knew or should have known of the facts giving rise to the claim. See Toomer v. Branch
Banking & Tr. Co., 171 N.C. App. 58, 66-67 (2005).4
28. 	Likewise, the statute of limitations for fraud is three years, see N.C.G.S. §
1-52(9), and fraud actions “shall not be deemed to have accrued until the discovery
by the aggrieved party of facts constituting the fraud[.]” Id. “ ‘Discovery’ is defined
as actual discovery or the time when the fraud should have been discovered in the
exercise of due diligence.” Carlisle v. Keith, 169 N.C. App. 674, 683 (2005).
29. 	Contract actions are no different. Under N.C.G.S. § 1-52(1), the applicable
statute of limitations is three years. As with the tort claims, our Supreme Court has
held that “a claim for breach of contract accrues when the plaintiff knew or should
have known that the contract had been breached[.]” Chisum v. Campagna, 376 N.C.
680, 720 (2021); accord Christenbury Eye Ctr., P.A. v. Medflow, Inc., 370 N.C. 1, 5
4 Plaintiffs rely on Wortman v. Hutaff, 2016 NCBC LEXIS 37 (N.C. Super. Ct. May 11, 2016)
to argue that Defendants Pacheco and Z Launch, as managers, had a continuing fiduciary
duty to reimburse their respective companies for any monies misappropriated. According to
Plaintiffs, this continuing duty prevents the running of the statute of limitations. (Pls.’ Resp.
Br. 12.) However, Wortman does not support their position. The continuing-wrong doctrine
“applies when there is a wrong that was ‘occasioned by continual unlawful acts’ but it does
not apply when there are only continual harmful effects from an earlier singular wrongful
act.” Wortman, 2016 NCBC LEXIS 37, at *13 (quoting Williams v. Blue Cross Blue Shield of
N.C., 357 N.C. 170, 179 (2003)). Plaintiffs allege individual acts of theft resulting in continual
harmful effects.

(2017) (“We have long recognized that a party must initiate an action within a certain
statutorily prescribed period after discovering its injury to avoid dismissal of a
claim.”).
30. 	Determining when the wrong should have been discovered is ordinarily a
question reserved for the fact-finder. 	See, e.g., Forbis v. Neal, 361 N.C. 519, 524
(2007) (“Ordinarily, a jury must decide when fraud should have been discovered in
the 	exercise 	of 	reasonable 	diligence 	under 	the 	circumstances.”). 	Dismissal 	is
appropriate, however, if the Amended Complaint on its face discloses facts defeating
Plaintiffs’ claims. See Carlisle, 169 N.C. App. at 681.
31. 	Defendants 	observe 	that 	the 	improper 	transfers 	of 	money 	are 	dated
between November 2015 and January 2019. 	They argue that Plaintiffs, as co-
managers who claim they were allegedly forced to handle the day-to-day operations
of the companies because of Pacheco’s lack of effort, should have discovered the fraud
when it occurred through the exercise of ordinary diligence. (Defs.’ Br. 12-13.)
32. 	Plaintiffs respond that they discovered the wrongdoing as a result of an
investigation that took place at some point after the misappropriation occurred.
(Resp. Br. Opp’n Mot. Dismiss or For More Definite Statement, [“Pls.’ Resp. Br.”] 10,
ECF No. 14.) 	The Amended Complaint is silent, however, regarding when they
conducted the investigation and made the discovery. 	Plaintiffs state only in the
passive voice that “[i]nvestigation has shown” that Pacheco “secreted thousands of
dollars of money from both companies.” Nevertheless, at the Rule 12(b)(6) stage, our
Court of Appeals has held that a plaintiff’s silence with respect to the facts necessary

to determine the date of discovery is not a sufficient basis for dismissal. 	Russell v.
Adams, 125 N.C. App. 637, 641 (1997).5
33. 	As 	for 	Plaintiffs’ 	allegation 	that 	Pacheco 	breached 	the 	KJ 	Launch
operating agreement by not giving the Bivins an opportunity to purchase Bret’s
membership, Plaintiffs allege that they now believe that the transfer happened in
March 2017 “via a Separation and Property Settlement Agreement” and after
criminal charges were brought against Bret in 2017. (Am. Compl. ¶¶ 17, 28.) Again,
however, they do not allege when they discovered the breach, and they benefit from
their silence at the Rule 12(b)(6) stage. 	Accordingly, as to the first four claims,
Defendants’ motion to dismiss shall be DENIED.6
5 Writing separately, Judge Wynn disagreed with the majority’s reasoning:
I disagree with the majority’s position that a silent complaint may afford
plaintiff the benefit of a discovery rule such as N.C.G.S. § 1-52(16). In my view,
a complaint which indicates two specific acts occurring outside the statute of
limitations, such as the complaint at hand which alleges that the acts causing
severe emotional distress took place in June 1989 and on 8 September 1992,
must further set forth in the pleadings facts sufficient to show when the “bodily
harm to the claimant . . . [became] or ought reasonably to have become
apparent to the claimant.” N.C.G.S. § 1-52(16). Since the discovery rule of
N.C.G.S. § 1-52(16) provides that the cause of action will not accrue until this
time, the complaint should indicate the time the injury occurred or reasonably
manifested itself to plaintiff.
Russell v. Adams, 125 N.C. App. 637, 642 (1997) (Wynn, concurring).
6 Plaintiffs argue that they should be permitted to conduct discovery to determine the
applicability of equitable estoppel. 	(Pls.’ Resp. Br. 11.) 	However, “[i]n order for equitable
estoppel to bar application of the statute of limitations, a plaintiff must have been induced to
delay filing of the action by the misrepresentations of the defendant.” Loray Master Tenant,
LLC v. Foss N.C. Mill Credit, 2021 NCBC LEXIS 15, at *22 (N.C. Super. Ct. Feb. 18, 2021).
Although Plaintiffs allege that Jennifer Pacheco duped them into believing that she was
handling the books “in good faith and in the best interest of [the] companies,” (Am. Compl.
¶ 56), nowhere in the Amended Complaint do Plaintiffs allege that they were aware of their
claims but were induced not to file them. Equitable estoppel, therefore, does not apply under
the facts alleged here. See A.H. Beck Found. Co. v. Jones Bros., 166 N.C. App. 672, 683 (2004)

34. 	In addition, while not enumerated as a claim, the Court observes that
Plaintiffs have alleged that they trusted Pacheco and her company, Z Launch, with
the trampoline park’s finances and that she abused that trust for her own personal
gain. (Am. Compl. ¶¶ 1, 19, 21-25, 49, 57, 61, 70, 81, 90, 99, 110.) These allegations
are sufficient to state derivative claims on behalf of KJ Endeavors and KJ Launch for
constructive fraud. 	See Barger, 346 N.C. at 666 (“In order to maintain a claim for
constructive fraud, plaintiffs must show that they and defendants were in a relation
of trust and confidence which led up to and surrounded the consummation of the
transaction in which defendant is alleged to have taken advantage of his position of
trust to the hurt of plaintiff . . . . [T]he defendant must seek his own advantage in the
transaction; that is, the defendant must seek to benefit himself.”) (cleaned up); Fox v.
Fox, 283 N.C. App. 336, 352 (2022) (“[t]he primary difference between pleading a
claim for constructive fraud and one for breach of fiduciary duty is the intent and
showing that the defendant benefitted from his breach of duty.”). This is true despite
Plaintiffs’ failure to identify the claim per se. See Bradshaw v. Maiden, 2022-NCCOA-
917, ¶ 47 (2022) (“labels as to legal theories which a plaintiff gave his claims in the
complaint are not controlling” (quoting Haynie v. Cobb, 2017 N.C. App. 143, 148-49
(2010) (cleaned up))).
35. 	The statute of limitations for constructive fraud is ten years. 	Babb v.
Graham, 190 N.C. App. 463, 480-81 (2008) (citing N.C.G.S. § 1-56). 	Given that the
(“In order for equitable estoppel to bar application of the statute of limitations, a plaintiff
must have been induced to delay filing of the action by the misrepresentations of the
defendant.”).

alleged misconduct necessarily occurred at some point after the parties began their
venture in 2015, this claim remains well within the ten-year statute of limitations.
Plaintiffs may proceed with derivative claims for constructive fraud.
C. Rule 9(b)
36. 	Returning to the fraud counts, Defendants contend that Plaintiffs have not
satisfied the pleading requirements of Rule 9(b). 	(Defs.’ Br. 15-16.) 	They cite
Ragsdale v. Kennedy, 286 N.C. 130, 138 (1974) for the proposition that Pacheco’s
alleged promise to operate the finances and books of the companies in good faith was
simply an aspirational, forward-looking opinion rather than a statement of material
fact. (Defs.’ Br. 16.)
37. 	Plaintiffs rely on detail provided in the exhibits, including redacted checks,
(ECF No. 8.3), credit card statements, (ECF No. 8.4), and a health insurance ledger,
(ECF No. 8.5), to support their contention that they have satisfied Rule 9(b)’s
particularity requirements. (Pls.’ Resp. Br. 7.) They contend that the allegations in
paragraphs 55-61 of their Amended Complaint that defendants “claimed they would
behave in one way, but they knew all along that they would not, and then they looted
the companies co-owned with the plaintiffs,” is a misrepresentation of material fact
giving rise to an actionable fraud. (Pls.’ Resp. Br. 14.)
38. 	When asserting a claim for fraud, Rule 9(b) requires allegations of “the
time, place and contents of the fraudulent representation, the identity of the person
making 	the representation and what was 	obtained by the fraudulent 	acts 	or

representations” to be pleaded with particularity. Terry v. Terry, 302 N.C. 77, 85
(1981) (emphasis omitted).
39. 	When 	evaluating 	the 	Amended 	Complaint, 	the 	Court 	may 	consider
documents “attached to and incorporated within the pleadings without converting a
Rule 12(b)(6) or Rule 12(c) motion into one for summary judgment.” Brown v. Secor,
2017 NCBC LEXIS 65, at **11 (N.C. Super. Ct. July 28, 2017) (quoting Weaver v. St.
Joseph of the Pines, Inc., 187 N.C. App. 198, 204 (2007) (cleaned up)).
40. 	As stated previously, some of the attached exhibits are dated, but others
lack sufficient detail to determine when the transaction occurred. The pleading fails
to 	meet 	Rule 	9(b)’s 	particularity 	requirements 	with 	respect 	to 	the 	undated
transactions. 	Accordingly, Defendants’ motion to dismiss the fraud claims with
respect to the undated transactions shall be GRANTED, without prejudice. 	With
respect to the dated transactions, the Motion to Dismiss shall be DENIED.7
41. 	As 	for 	Pacheco’s 	alleged 	representation 	that 	she 	would 	“operate 	the
finances, books and records of KJ Endeavors and KR Launch Properties in good faith
and in the best interest of those companies,” such a promise is not an opinion. If, as
alleged, the promise was made knowing that it was false and with the intention to
7 Plaintiffs also attempt a claim for “fraudulent conveyance,” but the facts alleged do not
support such a claim. Most apparently, Plaintiffs fail to plead that the Pacheco Defendants
were debtors or that Plaintiffs were creditors. 	Nor do they cite the Uniform Voidable
Transactions Act, N.C.G.S. § 39-23.1 et seq. 	Moreover, as Defendants argue, Rule 9(b)’s
heightened pleading requirements also apply to claims for fraudulent conveyance. See Azure
Dolphin, LLC v. Barton, 2017 NCBC LEXIS 90, at *26 (N.C. Super. Ct. Oct. 2, 2017).
Consequently, to the extent it relies on the undated transactions, Plaintiffs’ second claim for
relief fails on this basis as well.

deceive, Ragsdale does not support dismissal at this stage. 	See, e.g., Vincent v.
Corbett, 244 N.C. 469, 471 (1956) (“[A] promissory representation containing all the
elements of fraud, made merely to induce the promisee to act to his disadvantage,
with intent not to comply, wherein the intent is regarded as a subsisting fact, will
support an action in fraud.”).
42. 	However, 	just 	as 	Plaintiffs 	have 	not 	met 	Rule 	9(b)’s 	particularity
requirements with respect to the undated transactions, they have not met them with
respect to the promissory representation. Therefore, Defendants’ Motion to Dismiss
the fraud claim premised on this representation is GRANTED, without prejudice.
V. 	Motion for More Definite Statement
43. 	Alternatively, Plaintiffs move pursuant to Rule 12(e) for a more definite
statement of any surviving claims. 	This motion requires the Court to consider
whether the Amended Complaint “is so vague or ambiguous that a party cannot
reasonably be required to frame a responsive pleading.” Leonard, 2022 NCBC LEXIS
76, at **17 (quoting N.C. R. Civ. P. 12(e)). 	These motions are “not favored by the
courts and are sparingly granted because pleadings may be brief and lacking in
factual detail, and because of the extensive discovery devices available to the
movant.” Id. (cleaned up).
44. 	“[A] statement of claim is adequate if it gives sufficient notice of the claim
asserted to enable the adverse party to answer and prepare for trial, to allow for the
application of the doctrine of res judicata, and to show the type of case brought.”
Sutton v. Duke, 277 N.C. 94, 102 (1971) (internal quotation omitted). “If the contested

pleading meets the standards of North Carolina Rule of Civil Procedure 8 and the
opposing party is adequately notified of the nature of the claim, a motion for a more
definite statement should be denied.” Leonard, 2022 NCBC LEXIS 76, at **17.
45. 	While not a model of clarity, the Court determines that the surviving claims
meet the requirements of Rule 8 and enable Defendants to conduct the necessary
discovery. Accordingly, Defendants’ Motion for More Definite Statement is DENIED.
VI. 	CONCLUSION
46. 	WHEREFORE, 	for 	the 	reasons 	stated 	herein, 	the 	Court 	hereby
ORDERS as follows:
a. 	Defendants’ Motion to Dismiss is GRANTED in part and DENIED in
part.
i. 	The Motion to Dismiss is GRANTED as to Claim 2 (fraudulent
conveyance), and that claim is DISMISSED with prejudice;
ii. 	The Motion to Dismiss is GRANTED as to Claim 3 (fraud) to the
extent the claim is based on either the undated transactions or the
promissory 	representation, 	and 	to 	that 	extent 	the 	claim 	is
DISMISSED without prejudice;8
iii. 	The Motion to Dismiss is DENIED as to the remaining claims.
b. 	Defendants’ Motion for More Definite Statement is DENIED.
8 “The decision to dismiss an action with or without prejudice is in the discretion of the trial
court[.]” First Fed. Bank v. Aldridge, 230 N.C. App. 187, 191 (2013).

IT IS SO ORDERED, this the 2nd day of June, 2023.
/s/ Julianna Theall Earp
Julianna Theall Earp
Special Superior Court Judge
for Complex Business Cases