VITAFORM, INC. v. AEROFLOW, INC., 2024 NCBC 65

STATE OF NORTH CAROLINA
BUNCOMBE COUNTY
IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
24 CVS 1165
VITAFORM, INC. d/b/a BODY
AFTER BABY,
Plaintiff,
v.
AEROFLOW, INC. and MOTIF
MEDICAL, LLC,
Defendants.
ORDER AND OPINION ON
DEFENDANTS’ MOTION FOR
JUDGMENT ON THE PLEADINGS
1. 	THIS MATTER is before the Court upon Defendants’ Motion for
Judgment on the Pleadings (“the “Motion”), filed pursuant to Rule 12(c) of the North
Carolina Rules of Civil Procedure (the “Rule(s)”) on 26 July 2024 in the above-
captioned case.
2. 	Having considered the Motion, the parties’ briefs and materials offered
in support of and in opposition to the Motion, the arguments of counsel at the hearing
on the Motion, and other appropriate matters of record, the Court hereby DENIES
the Motion.
Asheville Legal, by Jake A. Snider and Isable W. Carson, for Plaintiff
Vitaform, Inc. d/b/a Body After Baby.
Ward and Smith, P.A., by Joseph A. Schouten, Hayley R. Wells, and
Jordan M. Spanner, for Defendants Aeroflow, Inc. and Motif Medical,
LLC.
Bledsoe, Chief Judge.
Vitaform, Inc. v. Aeroflow, Inc., 2024 NCBC 65.

I.
FACTUAL AND PROCEDURAL BACKGROUND
3. 	The Court does not make findings of fact when ruling on a motion for
judgment on the pleadings under Rule 12(c) of the North Carolina Rules of Civil
Procedure (the “Rule(s)”) and instead recites only those allegations in the pleadings
that are relevant and necessary to the Court’s determination of the motion.
4. 	This is the second lawsuit between these parties. 	Plaintiff Vitaform,
Inc. 	d/b/a 	Body 	After 	Baby 	(“Plaintiff” 	or 	“BAB”) 	previously 	sued 	Defendants
Aeroflow, Inc. and Motif Medical, LLC (collectively, “Defendants”) in August 2019,
alleging misappropriation of trade secrets, breach of the duty of good faith and fair
dealing, 	joint 	venture, 	Lanham 	Act 	violations, 	fraud, 	fraudulent 	concealment,
constructive fraud, unjust enrichment, and unfair and deceptive trade practices.1
5. 	The Court dismissed and limited a number of Plaintiff’s claims in
partially granting Defendants’ Motion to Dismiss,2 and after extensive discovery
followed by full briefing and hearing, the Court granted in part and denied in part
Defendants’ Motion for Summary Judgment (the “SJ Order”).3
1 See Vitaform, Inc. v. Aeroflow, Inc., et al., 2019 CVS 3707 (Mecklenburg County Superior
Court) (“Vitaform I”).
2 See Vitaform, Inc. v. Aeroflow, Inc., 2020 NCBC LEXIS 132 (N.C. Super. Ct. Nov. 4, 2020);
(Order and Opinion on Defs.’ Mot. to Dismiss Pl.’s First Am. Compl. (“Vitaform I MTD
Order”), Vitaform I ECF No. 57.)
3 See Vitaform, Inc. v. Aeroflow, Inc., 2022 NCBC LEXIS 128 (N.C. Super. Ct. Oct. 27, 2022);
(Order and Opinion on Defs.’ Mot. Summ. J. (“Vitaform I SJ Order”), Vitaform I ECF No.
138.)

6. 	In 	the 	SJ 	Order, 	the 	Court 	dismissed 	Plaintiff’s 	claims 	for
misappropriation of trade secrets, breach of the duty of good faith and fair dealing,
violation of the federal Lanham Act, and most of Plaintiff’s claims for fraudulent
misrepresentation, fraudulent concealment, common law unfair competition, and
unfair and deceptive trade practices.4 	In so doing, the Court made a number of
determinations upon which Defendants rely on the Motion, including:
a. 	“[T]he undisputed evidence shows that BAB’s entire business model was
publicly in use and known to Defendants prior to the July 19 Call
[between 	BAB’s 	principal, 	Don 	Francisco, 	and 	Aeroflow’s
representative].”5
b. 	“[A]ll of the components of BAB’s alleged trade secret were publicly
available prior to the July 19 Call.”6
c. 	“The undisputed evidence shows that all of the components of BAB’s
alleged trade secret were intended to be shared with third parties and
were available in the public domain prior to BAB’s first contact with
Defendants.”7
d. 	“The undisputed evidence shows that by 18 July 2018, Defendants had
discovered that other DME distributors were selling BAB’s post-partum
4 (Vitaform I SJ Order, ¶¶ 107(a), (b), (c), and (e).)
5 (Vitaform I SJ Order, ¶ 46.)
6 (Vitaform I SJ Order, ¶ 53.)
7 (Vitaform I SJ Order, ¶ 55.)

compression garments online; viewed the product descriptions, images,
sizing information, and benefits and features; determined that the
products qualified for DME reimbursement; and were actively engaged
in finding the applicable codes.”8
e. 	“Although Defendants did not have the relevant codes prior to the July
19 Call, Aeroflow, as a DME distributor, regularly determined which
codes should be used to obtain insurance coverage for products as part
of its routine business practices. 	And Francisco conceded that he does
not know if Aeroflow used the codes BAB provided and acknowledged
that determining the appropriate insurance codes is the ‘nature of
[Aeroflow’s] business’ and that it would have been ‘prudent’ for Aeroflow
to conduct its own due diligence to verify the appropriate reimbursement
codes.”9
7. 	Shortly after the SJ Order was entered, the Court set the following
claims for trial:10 (i) Plaintiff’s claim for fraudulent misrepresentation “to the extent
that claim was based on an alleged promise made by Aeroflow during the July 19 Call
to 	maintain 	the 	confidentiality 	of 	BAB’s 	comprehensive 	business 	plan”11; 	(ii)
8 (Vitaform I SJ Order, ¶ 45.)
9 (Vitaform I SJ Order, ¶ 45.)
10 The Court set Vitaform I for trial commencing on 17 April 2023. (Vitaform I Not. Jury
Trial, ECF No. 142.)
11 (Vitaform I SJ Order, ¶ 107(c).)

Plaintiff’s claim for fraudulent concealment “to the extent that claim was based on
BAB’s allegations in connection with and arising from the July 19 Call”12; (iii)
Plaintiff’s claims for common law unfair competition and violations of N.C.G.S. § 75-
1.1 “to the extent those claims were based on Aeroflow’s alleged promise during the
July 19 Call to maintain the confidentiality of BAB’s comprehensive business plan
and Aeroflow’s alleged fraudulent concealment in connection with and arising from
the July 19 Call”13; (iv) unjust enrichment14; and (v) punitive damages and attorneys’
fees.15
8. 	Shortly before the scheduled trial date, the Court entered an Amended
Order on Cross-Motions to Exclude Experts on 13 March 202316 and an Order on
Motions in Limine on 6 April 2023.17 	The first of these orders determined that
Plaintiff’s expert would “not be permitted to testify or offer the opinions contained in
his Report at trial” and that Plaintiff would “be precluded from offering other
evidence of its alleged damages at trial.”18 	Among other things, the second order
provided that Plaintiff would “not be permitted to elicit testimony from witnesses or
12 (Vitaform I SJ Order, ¶ 107(d).)
13 (Vitaform I SJ Order, ¶ 107(e).)
14 (Vitaform I SJ Order, ¶ 107(f).)
15 (Vitaform I SJ Order, ¶ 107(g).)
16 (Vitaform I Am. Order & Op. Cross-Mots. Excl. Experts, Vitaform I ECF No. 165.)
17 (Vitaform I Order on Mots. in Limine, Vitaform I ECF No. 187.)
18 (Vitaform I Am. Order & Op. Cross-Mots. Excl. Experts, ¶¶ 43(a)(1), (2); see Vitaform, Inc.
v. Aeroflow, Inc., 2023 NCBC LEXIS 38, at *20 (N.C. Super. Ct. Mar. 10, 2023).)

make argument upon [certain categories of documents] to show Plaintiff’s actual
damages, nor [would] the Court permit Plaintiff to introduce these documents as
exhibits in a manner that presents or suggests Plaintiff’s actual damages.”19
9. 	On 10 April 2023, Plaintiff took a voluntary dismissal of its remaining
claims without prejudice.20 	Two days later, on 12 April 2023, Defendants took a
voluntary dismissal of their counterclaims, also without prejudice.21 	In light of the
parties’ dismissal of all claims and counterclaims without prejudice, the Court
cancelled the jury trial set for 17 April 2023.
10. 	Eleven months later, on 20 March 2024, Plaintiff filed its Complaint
initiating this action. Plaintiff purports to assert the same claims in this action that
were pending for trial in the prior action at the time of Plaintiff’s voluntary
dismissal—fraud and fraudulent concealment based on the July 19 Call, unfair and
deceptive trade practices based on the July 19 Call, unjust enrichment, and punitive
damages and attorneys’ fees.22
19 (Vitaform I Order on Mots. in Limine, ¶ 21, see Vitaform, Inc. v. Aeroflow, Inc., 2023 NCBC
LEXIS 57, at *9–10 (N.C. Super. Ct. Apr. 6, 2023).)
20 (Vitaform I Pl.’s Not. Vol. Dism’l w/o Prej., Vitaform I ECF No. 188.)
21 (Vitaform I Defs.’ Vol. Dism’l w/o Prej., Vitaform I ECF No. 191.)
22 (Compl. ¶¶ 78–115, ECF No. 3.)

11. 	Defendants filed their Answer and Counterclaim on 10 April 2024,23
followed by their First Amended Answer and Counterclaim on 5 June 2024.24
Defendants timely filed their Reply.25
12. 	Defendants filed the current Motion on 26 July 2024. Defendants argue
that, based on the Court’s findings in the SJ Order, “any alleged misrepresentations
or concealment could not have been the proximate cause of any damage to BAB or
unjust enrichment to Defendants”26 because “BAB is collaterally estopped from
challenging the Court’s prior judgment on these issues.”27 	As a result, Defendants
contend 	that 	Plaintiff’s 	Complaint 	should 	be 	dismissed 	in 	its 	entirety 	with
prejudice.28 	Alternatively, Defendants contend that BAB is entitled to, at most,
nominal damages on its claims.29
13. 	Plaintiff argues in opposition that Defendants’ Motion should be denied
“because it seeks to sweepingly apply the Court’s narrow summary judgment findings
23 (Defendants’ Answer and Counterclaims, ECF No. 4.)
24 (Defendants’ First Amended Answer and Counterclaims, ECF No. 15.)
25 (Plaintiff’s Reply to Defendants’ Counterclaims, ECF No. 14; see also Stipulation to Filing
of Pleadings, ECF No. 16.)
26 (Defs.’ Br. Supp. Mot. J. Pleadings [hereinafter, “Defs.’ Br. Supp.”] 1, ECF No. 23.)
27 (Defs.’ Br. Supp. 1.)
28 (Defs.’ Br. Supp. 3.)
29 (Defs.’ Br. Supp. 3.)

on a specific statutory claim to bar all of Plaintiff’s damages on Plaintiff’s remaining
claims.”30
14. 	After full briefing, the Court held a hearing on Defendants’ Motion on
17 September 2024 (the “Hearing”), at which all parties were represented by counsel.
The Motion is now ripe for resolution.
II.
LEGAL STANDARD
15. 	Rule 12(c) provides that “[a]fter the pleadings are closed but within such
time as not to delay the trial, any party may move for judgment on the pleadings.”
N.C. R. Civ. P. 12(c). Rule 12(c) is intended “to dispose of baseless claims or defenses
when the formal pleadings reveal their lack of merit and 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., 375 N.C.
63, 70 (2020) (quoting Ragsdale v. Kennedy, 286 N.C. 130, 137 (1974)).
16. 	In considering a motion for judgment on the pleadings:
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. As with a motion to dismiss, the trial court
is required to view the facts and permissible inferences in the light more
favorable to the nonmoving party. A Rule 12(c) movant must show that
the complaint fails to allege facts sufficient to state a cause of action or
admits facts which constitute a complete legal bar to a cause of action.
Tully v. City of Wilmington, 370 N.C. 527, 532 (2018) (cleaned up).
30 (Pl.’s Resp. Br. Defs.’ Mot. J. Pleadings [hereinafter, “Pl.’s Br. Opp’n”] 6, ECF No. 17.)

17. 	Under Rule 12(c), the trial court may consider “[a]n exhibit, attached to
and made a part of the [complaint],” Wilson v. Crab Orchard Dev. Co., 276 N.C. 198,
206 (1970), and documents that are “the subject of the action and specifically
referenced in the complaint,” Erie Ins. Exch. v. Builders Mut. Ins. Co., 227 N.C. App.
238, 242 (2013). 	Where a document is attached to a pleading, “[t]he terms of such
exhibit control other allegations of the pleading attempting to paraphrase or construe
the exhibit, insofar as these are inconsistent with its terms.” Wilson, 276 N.C. at 206.
“The party moving for judgment on the pleadings must show that no material issue
of fact exists and that he is entitled to judgment as a matter of law.” 	Daniels v.
Montgomery Mut. Ins. Co., 320 N.C. 669, 682 (1987). Moreover, a “motion under Rule
12(c) must be carefully scrutinized lest the nonmoving party be precluded from a full
and fair hearing on the merits.” Newman v. Stepp, 376 N.C. 300, 305 (2020) (citation
and internal quotation marks omitted).
III.
ANALYSIS
18. 	Defendants 	seek 	dismissal 	of 	BAB’s 	Complaint 	based 	on 	two
interrelated contentions: first, that “BAB is collaterally estopped from challenging
that Defendants had access to—and knowledge of—[BAB’s] ‘comprehensive business
plan’ before they allegedly tricked BAB into providing it during a July 19, 2018
telephone call between their representatives (the ‘July 19 Call’)”31; and second, that
“with these facts conclusively established, BAB cannot show that the alleged fraud
31 (Defs. Br. Supp. 1, 9–14.)

proximately 	caused 	any 	damages 	to 	[BAB] 	or 	any 	unjust 	enrichment 	to
Defendants.”32 Defendants argue that because all of Plaintiff’s claims require BAB
to show proximate cause,33 they are legally deficient as a matter of law and must be
dismissed. 	Furthermore, since “BAB’s claims for punitive damages and attorneys’
fees depend upon its fatally flawed fraud and [unfair and deceptive trade practice]
claims,” Defendants contend that those claims must be dismissed as well.34
19. 	As an initial matter, the Court agrees with Defendants that Plaintiff is
collaterally estopped from relitigating the factual issues the Court decided in
Vitaform I.
20. 	Collateral estoppel “is designed to prevent repetitious lawsuits over
matters which have once been decided and which have remained substantially static,
factually and legally.” 	State v. Summers, 351 N.C. 620, 622–23 (2000) (citation
omitted). 	Under the doctrine, “a final judgment on the merits prevents relitigation
of issues actually litigated and necessary to the outcome of the prior action in a later
suit involving a different cause of action between the parties or their privies.” State
ex rel. Tucker v. Frinzi, 344 N.C. 411, 414 (1996). 	Stated differently, collateral
estoppel “precludes the subsequent adjudication of a previously determined issue,
32 (Defs. Br. Supp. 2–3, 14–21.)
33 See, e.g., Jay Grp., Ltd. v. Glasgow, 139 N.C. App. 595, 599–601 (2000) (noting that a fraud
claim “requires that plaintiff establish the element of proximate causation”); Spartan
Leasing, Inc. v. Pollard, 101 N.C. App. 450, 460–61 (1991) (including proximate cause as an
element of an unfair and deceptive trade practices claim); Booe v. Shadrick, 322 N.C. 567,
570 (1988) (requiring a “measurable benefit” conferred upon and accepted by the defendant
for an unjust enrichment claim).
34 (Defs. Br. Supp. 3, 21.)

even if the subsequent action is based on an entirely different claim.” Whitacre P’ship
v. BioSignia, Inc., 358 N.C. 1, 15 (2004) (citation omitted). 	“The issues resolved in
the prior action may be either factual issues or legal issues,” Doyle v. Doyle, 176 N.C.
App. 547, 549 (2006), and:
[t]he party alleging collateral estoppel must demonstrate that the
earlier suit resulted in a final judgment on the merits, that the issue in
question was identical to an issue actually litigated and necessary to the
judgment, and that both the party asserting collateral estoppel and the
party against whom collateral estoppel is asserted were either parties to
the earlier suit or were in privity with parties.
Frinzi, 344 N.C. at 414.
21. 	For issues to be considered “identical” to ones “actually litigated and
necessary” to a previous judgment:
(1) the issues must be the same as those involved in the prior action, (2)
the issues must have been raised and actually litigated in the prior
action, (3) the issues must have been material and relevant to the
disposition of the prior action, and (4) the determination of the issues in
the prior action must have been necessary and essential to the resulting
judgment.
Summers, 351 N.C. at 623 (citation omitted). 	A “very close examination of matters
actually litigated must be made in order to determine if the underlying issues are in
fact identical. 	If they are not identical, then the doctrine of collateral estoppel does
not apply.” Beckwith v. Llewellyn, 326 N.C. 569, 574 (1990).
22. 	“The burden is on the party asserting [collateral estoppel] to show with
clarity and certainty what was determined by the prior judgment.” Miller Bldg. Corp.
v. NBBJ N.C., Inc., 129 N.C. App. 97, 100 (1998). Significantly for present purposes,
“[i]n general, a cause of action determined by an order for summary judgment is a

final judgment on the merits.” 	Green v. Dixon, 137 N.C. App. 305, 310, aff’d per
curiam, 352 N.C. 666 (2000); see also, e.g., Waters v. Pumphrey, 286 N.C. App. 151,
153 (2022) (recognizing that “the trial court’s order granting summary judgment is a
final judgment”).
23. 	Here, the Court’s SJ Order became a final judgment once the parties
took their voluntary dismissals. See, e.g., Green, 137 N.C. App. at 310. In addition,
the issues to which Defendants seek to apply collateral estoppel are issues for
determination in the current action and are identical to those the Court resolved in
its SJ Order in Vitaform I. 	These issues were actually litigated, were necessary to
the Court’s determinations, and were actually determined in the Court’s SJ Order.
The Court therefore agrees with Defendants that the Court’s conclusions that
Plaintiff’s entire “comprehensive business plan” was “known to Defendants” and
“publicly available” prior to the July 19 Call are binding determinations in this action.
24. 	The Court cannot agree with Defendants, however, that these findings
necessarily preclude Plaintiff from establishing proximate cause or actual injury from
Defendants’ alleged conduct. 	While the amount of any provable damages may well
be small, Plaintiff still may be able to show that Defendants gained value from
receiving the plan from Plaintiff—such as proof of its viability—or from using the
plan 	in 	some 	way 	from 	which 	Defendants 	gained 	an 	advantage, 	such 	as 	by
accelerating their entry into the relevant market by obtaining BAB’s instruction and
guidance on the plan’s implementation. Indeed, BAB alleges at paragraph 89 of the
Complaint 	that 	“[w]ithout 	BAB’s 	divulged 	information, 	including 	all 	of 	the

documentation 	given 	and 	Francisco’s 	specialized 	training 	and 	experience, 	the
Defendants would not have been able to successfully market and sell the Motif
maternity garments alone on their own.”35 	Although Defendants contend that the
Court’s findings establish that “any of BAB’s alleged losses and Defendants’ gains
would have happened regardless of the alleged fraud,” the Court did not make that
specific finding in Vitaform I and concludes that it is a matter for discovery whether
Defendants took any action that they would not have taken but for the alleged
fraud.36
25. 	For these same reasons, the Court cannot conclude, as Defendants urge
for their alternative relief, that Plaintiff is entitled to no more than nominal damages
as a matter of law.
26. 	Accordingly, based on the above, the Court concludes that Defendants’
Motion should be denied.
IV.
CONCLUSION
27. 	WHEREFORE, the Court hereby DENIES the Motion.
SO ORDERED, this the 25th day of September, 2024.
/s/ Louis A. Bledsoe, III
Louis A. Bledsoe, III
Chief Business Court Judge
35 (Compl. ¶ 89.)
36 The Court notes that the case upon which Defendants principally rely for their contention
that Plaintiffs cannot show proximate cause as a result of the Court’s findings, Self v. Yelton,
201 N.C. App. 653 (2010), was decided on the evidence of record at summary judgment, not,
as sought here, on the allegations in the pleadings under Rule 12(c).