Brady v. Van Vlaanderen

Brady v. Van Vlaanderen, 2013 NCBC 37.

STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
COUNTY OF CUMBERLAND 12 CVS 7552

PATRICIA M. BRADY, )
)
Plaintiff, )
)
v. )
)
BRYANT C. VAN VLAANDEREN; )
RENEE M. VAN VLAANDEREN; )
)
MARC S. TOWNSEND; LINDA M. )
TOWNSEND; UNITED TOOL & ) ORDER ON MOTION TO DISMISS
STAMPING COMPANY OF NORTH )
CAROLINA, INC.; UNITED )
REALTY OF NORTH CAROLINA, )
)
LLC; ENTERPRISE REALTY, LLC; )
and WATERS EDGE TOWN )
APARTMENTS, LLC, )
)
Defendants. )
)

{1} THIS MATTER is before the court on Defendants’ Motion to Dismiss
Plaintiff’s Amended Complaint (“Motion”) pursuant to Rule 12(b)(6) of the North
Carolina Rules of Civil Procedure (“Rule(s)”). For the reasons stated below, the
Motion is GRANTED in part and DENIED in part, and Plaintiff is granted leave to
file a Second Amended Complaint.

Bain, Buzzard, & McRae, LLP by Edgar R. Bain for Plaintiff.
Shanahan Law Group, PLLC by Brandon S. Neuman and John E. Branch, III
for Defendants.

Gale, Judge
I. PARTIES

{2} Plaintiff Patricia Brady is a citizen and resident of Cumberland
County, North Carolina. Plaintiff has a one-third ownership interest in each of the
corporate defendants, and was formerly an employee of Defendant United Tool &
Stamping Company of North Carolina, Inc. (“United Tool”). (Am. Compl. ¶¶ 1, 3–9,
86.)
{3} Defendants Bryant C. Van Vlaanderen, Renee M. Van Vlaanderen,
Marc S. Townsend, and Linda M. Townsend (collectively “Individual Defendants”)
are citizens and residents of Cumberland County, North Carolina. (Am. Compl. ¶
2.) The Individual Defendants collectively own the remaining two-third ownership
interest in the corporate defendants. (Am. Compl. ¶¶ 3–6.) Plaintiff and the
individual female Defendants are sisters; the individual male Defendants are
Plaintiff’s brothers-in-law. (Am. Compl. ¶¶ 7, 9.)
{4} Defendant United Tool is a North Carolina corporation with its
principal place of business in Cumberland County, North Carolina. (Am. Compl. ¶
3.) United Tool is engaged in the manufacture of metal stampings, and also
provides tooling, engineering, tapping, assembly, and other services. (Am. Compl. ¶
10.)
{5} Defendant United Realty of North Carolina, LLC (“United Realty”) is a
North Carolina limited liability company with its principal place of business in
Cumberland County, North Carolina. (Am. Compl. ¶ 4.) United Realty owns the
real estate and manufacturing building where United Tool is located, and leases the
property to United Tool. (Am. Compl. ¶ 11.)
{6} Defendant Enterprise Realty, LLC (“Enterprise”) is a North Carolina
limited liability company with its principal place of business in Cumberland
County, North Carolina. (Am. Compl. ¶ 5.) Enterprise owns several lots and
residential units located in Kure Beach and Carolina Beach, North Carolina. (Am.
Compl. ¶ 12.)
{7} Defendant Waters Edge Town Apartments, LLC (“Waters Edge”) is a
North Carolina limited liability company with its principal place of business in
Cumberland County, North Carolina. (Am. Compl. ¶ 6.) Waters Edge owns a 30-
unit apartment complex located at 500 Mill Cove Court, Fayetteville, North
Carolina. (Am. Compl. ¶ 13.)
{8} United Tool, United Realty, Enterprise, and Waters Edge will
collectively be referred to as the “Corporate Defendants.”
{9} Plaintiff and the Individual Defendants are directors and shareholders
of United Tool (Am. Compl. ¶ 39), and Bryant C. Van Vlaanderen is president and
general manager. (Am. Compl. ¶ 19.)

II. PROCEDURAL BACKGROUND

{10} Plaintiff filed the Complaint in Cumberland County on August 24,
2012. The case was designated as a mandatory complex business case on
September 12, 2012 by Order of Chief Justice Sarah Parker, and assigned to the
undersigned on September 19, 2012.
{11} Plaintiff filed an Amended Complaint on September 27, 2012, bringing
claims for: (1) access to information and records of United Tool; (2) inspection and
copying of records of United Realty, Enterprise, and Waters Edge; (3) restoration of
her rights and interests, a buy-out of her interests, or involuntary dissolution of
United Tool; (4) appointment of a receiver for United Tool; (5) appraisal of United
Tool; (6) liquidation of United Tool pursuant to N.C. Gen. Stat. § 55-14-30; (7)
judicial dissolution of United Realty, Enterprise, and Waters Edge pursuant to N.C.
Gen. Stat. § 57C-6-02; and (8) wrongful termination–retaliation.
{12} Defendants filed this Motion on November 21, 2012. On March 25,
2013, the court entered a Protective Order allowing the exchange of corporate
documents and records. The Motion has been fully briefed, the court held oral
argument, and the matter is ripe for disposition.
III. FACTUAL BACKGROUND

{13} The court does not make findings of fact in connection with a motion to
dismiss, as a motion to dismiss “does not present the merits, but only [determines]
whether the merits may be reached.” Concrete Serv. Corp. v. Investors Grp., Inc.,
79 N.C. App. 678, 681, 340 S.E.2d 755, 758 (1986). For the purposes of this Motion,
the court accepts the allegations of the Amended Complaint as true and draws
reasonable inferences from those facts in Plaintiff’s favor. See, e.g., Sutton v. Duke,
277 N.C. 94, 98, 176 S.E.2d 161, 164 (1970); Crouse v. Mineo, 189 N.C. App. 232,
237, 658 S.E.2d 33, 36 (2008).
{14} Prior to January 2, 2012, all of the voting stock of United Tool was
owned by Anthony Moschella, the father of the Plaintiff and the individual female
Defendants. (Am. Compl. ¶ 7.) On January 2, 2012, Anthony Moschella sold his
100 shares of voting stock in United Tool to the corporation, and United Tool
executed a promissory note to Anthony Moschella in the sum of $1,100,000.00. (Am.
Compl. ¶ 8.) As a result of transfers on January 2, 2012 and Plaintiff’s subsequent
divorce, the voting shares of United Tool are currently held as follows:
Patricia M. Brady 300 shares1
Bryant C. Van Vlaanderen 150 shares
Renee M. Van Vlaanderen 150 shares
Marc S. Townsend 150 shares
Linda M. Townsend 150 shares
(Am. Compl. ¶ 9, Ex. 1.)
{15} Plaintiff was an employee of United Tool on a fairly consistent basis
from 2001 until she was fired on May 24, 2012. (Am. Compl. ¶¶ 15, 25.) Plaintiff
asserts that each family of shareholders shared an expectation of salary and
benefits by reason of their ownership. In February 2012, following the Parties’
purchase of the voting stock of United Tool, Plaintiff alleges that she began
receiving a salary of $3,000.00 per week from United Tool, the same salary paid to
1
Plaintiff obtained 150 shares from her husband upon divorce.
the two shareholder families. Plaintiff alleges that the Individual Defendants made
suggestions that she need not show up for work or come to the office in order to
receive her salary. (Am. Compl. ¶ 18.) Plaintiff contends that while an employee
she requested and was denied access to any accounting, money transactions,
financial records, or any information related to disbursements, distributions, and
values of the businesses, and has been denied the opportunity to participate in any
business decisions. (Am. Compl. ¶¶ 19–20.)
{16} Plaintiff contends that she retained counsel to help secure documents
and records of the Corporate Defendants after being denied any participation or
access to information, and did so to determine if there were any improper
expenditures. (Am. Compl. ¶¶ 21–22, 41, 51, Ex. 5.) Plaintiff’s counsel over the
next few months attempted to help her secure the documents and records through
discussions with Defendants’ counsel. (Am. Compl. ¶¶ 21–36.)
{17} On May 19, 2012, a special meeting of the stockholders and interested
parties was called at the corporate offices for United Tool. Plaintiff alleges that this
meeting was held to discuss terminating her employment. (Am. Compl. ¶¶ 23–25.)
Plaintiff was terminated from United Tool on May 24, 2012, and has since been
barred from the company premises. (Am. Compl. ¶¶ 25–26.) Plaintiff contends that
after her termination she no longer received health insurance coverage,
distributions, or any of the benefits the other family members, directors, owners,
and employees of the business continue to receive. (Am. Compl. ¶¶ 31, 69, 71.)
{18} Beginning in May 2012 and continuing through the filing of this suit,
the Parties had several disputes regarding the inspection of corporate records. (Am.
Compl. ¶¶ 27–29, 32–36.) While Plaintiff has yet to receive certain documents, the
disputes appear to have been resolved, with Defendants’ counsel stating in open
court that Plaintiff will be given the requested documents which are in Defendants’
possession and that additional documents may be obtained from third parties at
Plaintiff’s expense.
{19} In sum, Plaintiff alleges that she has been frozen out of participation
in the Corporate Defendants, improperly denied salary and benefits, and that the
Individual Defendants have misappropriated business assets. (Am. Compl. ¶¶ 17,
37, 39–41, 67.)

IV. STANDARD OF REVIEW

{20} The appropriate inquiry on a motion to dismiss pursuant to Rule
12(b)(6) 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.” Crouse, 189 N.C. App. 232, 237, 658
S.E.2d 33, 36 (2008) (quoting Harris v. NCNB Nat’l Bank of N.C., 85 N.C. App. 669,
670, 355 S.E.2d 838, 840 (1987)). A motion to dismiss may be granted if the
complaint reveals the absence of facts required to make out a claim for relief or if
the complaint reveals some fact that necessarily defeats the claim. Wood v.
Guilford Cnty., 355 N.C. 161, 166, 558 S.E.2d 490, 494 (2002). The court in ruling
on the motion should consider exhibits attached to the complaint because they are a
part of the pleading for all purposes. Woolard v. Davenport, 166 N.C. App. 129,
133–34, 601 S.E.2d 319, 322 (2004); N.C. Gen. Stat. § 1A-1, Rule 10(c) (2012).

V. ANALYSIS

A. Plaintiff’s First and Second Causes of Action Each State a Claim.

{21} Plaintiff requested access to information and records of United Tool
pursuant to N.C. Gen. Stat. § 55-16-05, and to inspect and copy records of United
Realty, Enterprise Realty, and Waters Edge pursuant to N.C. Gen. Stat. § 57C-3-04.
Defendants now acknowledge that Plaintiff sufficiently alleged the statutory
requirements necessary to satisfy the requirements of Rule 12(b)(6). Defendants
instead contest the breadth of the requests to the extent that the claims are not now
moot. However, the Rule 12(b)(6) motion inquires only whether a claim has been
stated. The Motion to dismiss claims one and two is DENIED.
B. Plaintiff Is Allowed to Amend her Third, Sixth, and Seventh Causes of Action
to Clarify Her Meiselman Claims.

{22} In her third and seventh claims, Plaintiff requests dissolution based on
Meiselman v. Meiselman, 309 N.C. 279, 298, 307 S.E.2d 551, 562 (1983). (Am.
Compl. ¶¶ 62–77; Pl.’s Mem. of Law in Opp’n to Defs.’ Mot. to Dismiss (hereinafter
“Mem. in Opp’n”) 8.) The third claim relates to United Tool, a corporation. The
seventh claim relates to the LLCs, and asserts mismanagement and waste in
addition to a Meiselman claim. Defendants challenge the Meiselman claim as being
improperly based on conclusory allegations without the specificity they contend is
required by Meiselman’s holding that, “before it can be determined whether, in any
given case, it has been “established” that liquidation is “reasonably necessary” to
protect the complaining shareholder’s “rights or interest[s]”, the particular “rights
or interests” of “the complaining shareholder” must be articulated.” 309 N.C. at
298, 307 S.E.2d at 562.
{23} High Point Bank v. Sapona Mfg. Co., N.C. App. , 713 S.E.2d
12, 15 (2011) stated a test for Meiselman claims as follows:
For plaintiff to obtain relief under the expectations[] analysis, he must
prove that (1) he had one or more substantial reasonable expectations
known or assumed by the other participants; (2) the expectation has
been frustrated; (3) the frustration was without fault of plaintiff and
was in large part beyond his control; and (4) under all of the
circumstances of the case plaintiff is entitled to some form of equitable
relief.

{24} During the discussion at oral argument whether Plaintiff has made
allegations adequate to meet this test, while contending that she has, Plaintiff’s
counsel alternatively requested leave to amend if the court concluded that the
allegations should be stated more precisely. The court concludes that further
specificity would be appropriate and Plaintiff is given leave to amend. This leave is
without prejudice to Defendants’ right to then challenge the amended claims
pursuant to Rule 12(b)(6).
{25} To the extent that the seventh claim is instead or additionally
premised on allegations of mismanagement or corporate waste, the amendment
should clarify the basis of her claims.
C. Plaintiff’s Fourth Cause of Action for the Appointment of Receiver for United
Tool is Dismissed Without Prejudice.

{26} Plaintiff’s fourth claim in the Amended Complaint requests the court
to appoint a receiver pursuant to N.C. Gen. Stat. § 55-14-32 in order to protect the
assets of United Tool pending trial. (Am. Compl. ¶ 79; Mem. in Opp’n 9.) In
Plaintiff’s response to this Motion and at oral argument, Plaintiff stated that she is
not currently pursuing this cause of action and does not intend to ask for the
appointment of a receiver unless the conduct of the Defendants becomes more
egregious. (Mem. in Opp’n 17.) Under this circumstance, the court concludes that
the request for a receiver should only be made if necessary. Therefore, this claim is
DISMISSED without prejudice.

D. Plaintiff Has Abandoned her Fifth Cause of Action for an Appraisal of United
Tool.

{27} In Plaintiff’s Memorandum in Opposition to Defendant’s Motion to
Dismiss, Plaintiff states “…Plaintiff is not of the opinion she will ultimately be able
to prevail upon her request for an appraisal of United Tool. Consequently, the
Plaintiff will take a voluntary dismissal of the fifth claim for relief….” (Mem. in
Opp’n 17.) As she has not yet done so, this claim is DISMISSED.

E. Plaintiff’s Eighth Cause of Action in Contract for Wrongful Termination
Should be Dismissed.

{28} Plaintiff did not have a contract with United Tool providing
employment for a definite term or requiring termination of employment only for
cause. Nevertheless, Plaintiff asserts a claim for wrongful retaliatory termination,
contending that Defendants wrongfully terminated her for attempting to exercise
her rights to inspect documents as a shareholder/director. (Am. Compl. ¶ 91.) This
contract claim is stated separate and apart from her request for salary and benefits
protected by her alleged Meiselman expectations.
{29} North Carolina is an employment-at-will state, such that absent an
agreement providing for a definite term, employment is terminable at will absent a
provision mandating termination only for cause. Kurtzman v. Applied Analytical
Indus., Inc., 347 N.C. 329, 331, 493 S.E.2d 420, 422 (1997); see also Soles v. City of
Raleigh Civil Serv. Comm’n, 345 N.C. 443, 446, 480 S.E.2d 685, 687 (1997); Harris
v. Duke Power Co., 319 N.C. 627, 629, 356 S.E.2d 357, 359 (1987). The North
Carolina courts have recognized very narrow exceptions to the terminable at will
doctrine where the termination was for an unlawful reason or a purpose that
contravenes public policy. See, e.g., Pierce v. Atl. Grp., Inc., N.C. App. ,
724 S.E.2d 568, 575 (2012); Ridenhour v. IBM, 132 N.C. App. 563, 568, 512 S.E.2d
774, 778 (1999)).
{30} North Carolina courts have not established a definitive list of actions
that may contravene public policy, and they have not yet addressed the question
whether the firing of a shareholder whose employment was otherwise terminable at
will violates public policy because it was a result of a shareholder’s demand of
inspection rights. Other states have addressed the issue, with holdings which favor
the corporation. See, e.g., Campbell v. Ford Indus. Inc., 274 Ore. 243, 250, 546 P.2d
141, 146 (1976) (noting the primary basis for the right of inspection of books and
records of a corporation by its shareholders is the protection of their private and
proprietary interests as owners of the corporation, and an attempt to exercise rights
as a shareholder has no direct relation to rights as an employee); King v. Driscoll,
418 Mass. 576, 584, 638 N.E.2d 488, 493 (1994) (noting that the financial well being
of the corporation and its shareholders does not rise to the level of importance
required to justify an exception to the general rule regarding termination of
employees at will); see generally Joel E. Smith, Right of Corporation to Discharge
Employee Who Asserts Rights as Stockholder, 84 A.L.R.3d 1107 (1978).
{31} The court concludes that here Plaintiff should pursue her claim for
salary and benefits, if at all, through her Meiselman claim, and that this court
should not and does not now adopt an additional public policy exception to North
Carolina’s terminable at will doctrine.
{32} Therefore, Plaintiff’s eighth claim for wrongful termination of an
employment contract is DISMISSED.

VI. CONCLUSION

{33} For the foregoing reasons, Defendants’ Motion is GRANTED as to
Plaintiff’s Fifth and Eighth causes of action, DENIED as to Plaintiff’s First and
Second causes of action, Plaintiff’s Fourth cause of action is DISMISSED without
prejudice, and the court will allow Plaintiff thirty (30) days from the entry of this
Order to amend her Third, Sixth, and Seventh causes of action.

IT IS SO ORDERED, this the 24th day of July, 2013.