CALIBER PACKAGING & EQUIP., LLC v. SWARINGEN, 2023 NCBC 38

STATE OF NORTH CAROLINA
CABARRUS COUNTY
IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
22 CVS 3626
CALIBER PACKAGING AND
EQUIPMENT, LLC and CALIBER
PACKAGING GROUP, LLC,
Plaintiffs,
v.
CHERNELL SWARINGEN,
Defendant.
ORDER AND OPINION ON
DEFENDANT’S MOTION TO DISMISS
PLAINTIFFS’ CLAIMS OF THEFT BY
EMPLOYEE AND UNJUST
ENRICHMENT
1. 	Plaintiffs allege that a (formerly) trusted Assistant Operations Manager
who had broad access to its confidential and trade secret information violated that
trust by misappropriating, and then leveraging, its trade secret information with
competitors to entice employment offers and financial rewards. 	They assert eight
causes of action, among them claims for civil liability for theft by employee, (violation
of N.C.G.S. § 1-538.2), and unjust enrichment. 	The case is before the Court on
Defendant’s motion to dismiss these two claims.
Van Hoy, Reutlinger, Adams & Dunn, PLLC, by Bryan Adams, for
Plaintiffs 	Caliber 	Packaging 	and 	Equipment, 	LLC 	and 	Caliber
Packaging Group, LLC.
Bennett & Guthrie, PLLC, by Joshua H. Bennett and Mitchell Hendrix
Blankenship, for Defendant Chernell Swaringen.
Earp, Judge.
Caliber Packaging & Equip., LLC v. Swaringen, 2023 NCBC 38.

I. 	BACKGROUND
2. 	The Court does not make findings of fact when ruling on a motion to
dismiss. It recites below the factual allegations in the Complaint that are relevant to
the Motion before the Court.
3. 	Plaintiff Caliber Packaging and Equipment, LLC (“Caliber Packaging”)
is a North Carolina LLC with its principal place of business in Cabarrus County,
North Carolina. (Compl. ¶ 2, ECF No. 3.) Caliber Packaging “is a national distributor
of industrial packaging materials and equipment . . . that provides packaging
solutions for customers across the United States.” (Compl. ¶ 8.)
4. 	Plaintiff Caliber Packaging Group, LLC (“Caliber Group”) is also a
North Carolina LLC with its principal place of business in Cabarrus County, North
Carolina. (Compl. ¶ 3.) Caliber Group is owned by Caliber Packaging. (Compl. ¶ 10.)
5. 	Caliber Group was formed in 2017 as a holding company to organize
Caliber Packaging’s North Carolina, Florida, Georgia, and California affiliates
(collectively, the “Affiliates”). (Compl. ¶ 9.) Caliber Group provides business support
services to the Affiliates. 	Each Affiliate pays a fee in return for these business
support services. (Compl. ¶ 10.)
6. 	Prior to January 2022, Caliber Packaging had an affiliate in Chicago,
Illinois. 	However, “the Chicago location was removed from Caliber Packaging” in
January 2022. 	According to Plaintiffs, “[t]he removal of the Chicago location from
the group was acrimonious.” (Compl. ¶ 9.)

7. 	Chernell Swaringen is a resident of Rowan County, North Carolina, and
a former employee of Caliber Packaging. 	(Compl. ¶ 4.) 	Swaringen worked for the
company from 2016 through 2022, beginning as a temporary employee before
transitioning to a full-time role. (Compl. ¶ 22.)
8. 	When Swaringen became a full-time employee in September 2016, she
signed a “New Employee Confidentiality, Non-Competition, and Non-Solicitation
Agreement[.]” (Compl. ¶ 23.) After being promoted to Assistant Operations Manager
in 2018,1 Swaringen signed a second employment agreement. 	(Compl. ¶ 26.) 	Both
employment agreements have provisions requiring Swaringen to maintain the
confidentiality of Caliber Packaging’s confidential and trade secret information. (See
Compl. 	Ex. 	2 	[“2016 	Employment 	Agreement”], 	Ex. 	3 	[“2018 Employment
Agreement”].)
9. 	Plaintiffs allege that their confidential and trade secret information
includes:
[L]ists of Customers’ names, contacts, purchase and needs; lists of
Potential Customers; prices and pricing strategies; Employer’s costs;
Employer’s inventory information, promotional materials, marketing
strategies, 	Product 	development 	strategies; 	Product 	specifications;
Employer’s recommendations to Customers; research, development,
systems, 	operations, 	and business 	activities 	of 	the 	Employer; 	and
information received from any Customer regarding the Customer’s need
for Products that Employer provides or has attempted to provide.
(Compl. ¶ 24.)
1 While paragraph 22 of the Complaint states that Swaringen was promoted to Assistant
Operations Manager in October 2021, both the attached employment agreement Swaringen
signed and paragraph 26 of the Complaint state that she was promoted in October 2018.
(Compare Compl. ¶ 22, with ¶ 26; Ex. 3 [“2018 Employment Agreement”].)

10. 	Plaintiffs store their confidential and trade secret information on a
company computer system they call “Sage.” (Compl. ¶ 17.) Each Affiliate has access
to its own information on Sage, but it cannot access the business information
belonging to other Affiliates. Caliber Packaging has access to all the information in
Sage. (Compl. ¶ 18.)
11. 	Swaringen also had access to all of Sage’s modules except for the
banking module. (Compl. ¶ 19.) Additionally, Swaringen had access to the Employee
Drive, 	which 	included 	“customer 	information, 	customer 	purchase 	orders, 	new
customer forms, tool repair and service information, Customer consignment accounts
. . . and some Private Label Vendor information.” 	(Compl. ¶ 20.) 	In Swaringen’s
position as Assistant Operations Manager, she “routinely accessed Sage and the
Employee Drive.” (Compl. ¶ 27.)
12. 	Caliber Packaging stores some of its confidential and trade secret
information in a locked company file room. 	(Compl. 	¶ 40.) 	This locked file room
houses physical copies of customer and vendor invoices that are alleged to be “highly
sensitive” trade secrets. 	(Compl. ¶ 40.) 	Swaringen had access to the file room.
(Compl. ¶¶ 40–41.)
13. 	On 30 August 2022, Swaringen was laid off as part of a corporate
restructuring. 	(Compl. ¶ 54.) 	In the weeks leading up to Swaringen’s departure,
Plaintiffs allege that Swaringen engaged in “irregular and suspicious computer
activity” 	that 	caused 	Plaintiffs 	to 	initiate 	an 	investigation 	into 	her 	actions.
(Compl. ¶ 55.)

14. 	Based on their investigation, Plaintiffs claim that prior to being laid off,
“Swaringen began making inquiries into employment opportunities with competitors
of Plaintiffs,” including the Chicago Affiliate. 	(Compl. ¶ 43.) 	Plaintiffs believe that
Swaringen had frequent phone conversations with the Chicago Affiliate during which
she was given instructions to misappropriate specific confidential and trade secret
information. (Compl. ¶ 44.) They further allege upon information and belief that the
Chicago Affiliate promised to reward Swaringen financially if she misappropriated
and transferred Caliber Packaging’s confidential and trade secret information to
them. (Compl. ¶ 47.) Additionally, Plaintiffs allege that Swaringen used her access
to Plaintiffs’ trade secret information to “entice potential prospective employers” into
offering her a new job. (Compl. ¶ 47.)
15. 	In the weeks leading up to Swaringen’s departure date, Plaintiffs allege
that 	Swaringen 	accessed 	confidential 	information 	more 	frequently 	than 	was
necessary to complete her daily tasks. 	(Compl. ¶ 50.) 	Plaintiffs believe that
Swaringen misappropriated “substantial amounts of customer information, including
customer lists, invoicing and pricing, customer preferences, and numerous other
sensitive items[.]” 	(Compl. ¶ 49.) 	They allege that Swaringen has refused their
demand that she return this information and that she “continues to assume and
exercise the right of ownership over property belonging to Plaintiff, which includes
both hard paper copies of documents as well as electronic/digital copies of documents
that Plaintiffs have been unable to recover.” (Compl. ¶¶ 56–57, 86.)

16. 	As a result, Caliber Packaging and Caliber Group filed their Complaint
on 14 November 2022, asserting eight causes of action against Swaringen: (1) breach
of contract, (2) civil liability for theft by employee (N.C.G.S. § 1-538.2), (3) violation
of North Carolina’s Computer Trespass Act (N.C.G.S. § 14-458), (4) misappropriation
of trade secrets in violation of the Trade Secrets Protection Act (N.C.G.S. § 66-152 et
seq.), (5) conversion, (6) unfair and deceptive trade practices (N.C.G.S. § 75-1.1 et
seq.), (7) unjust enrichment, and (8) civil conspiracy. (See generally Compl.)
17. 	On 13 January 2023, Swaringen moved to dismiss the claims for civil
liability for theft by employee and unjust enrichment (the “Motion”), (ECF No. 16).
On 6 April 2023, the Court held a hearing on the Motion during which all parties
appeared and were heard through counsel. The Motion is now ripe for disposition.
II. 	STANDARD OF REVIEW
18. 	Dismissal of a claim is proper if “(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 discloses some
fact that necessarily defeats the plaintiff’s claim.” Corwin v. Brit. Am. Tobacco PLC,
371 N.C. 605, 615 (2018). 	Otherwise, “a complaint should not be dismissed for
insufficiency unless it appears to a certainty that plaintiff is entitled to no relief under
any state of facts which could be proved in support of the claim.” Sutton v. Duke, 277
N.C. 94, 103 (1970) (emphasis omitted).
19. 	When deciding a motion to dismiss, the Court construes the complaint
liberally and accepts all allegations as true. See, e.g., Sykes v. Health Network Sols.,

Inc., 372 N.C. 326, 332 (2019); Laster v. Francis, 199 N.C. App. 572, 577 (2009).
Nevertheless, the Court is not required “to accept as true allegations that are merely
conclusory, unwarranted deductions of fact, or unreasonable inferences.” Good Hope
Hosp., Inc. v. N.C. Dep’t of Health & Human Servs., 174 N.C. App. 266, 274 (2005)
(quoting Veney v. Wyche, 293 F.3d 726, 730 (4th Cir. 2002)).
III. 	ANALYSIS
20. 	The Court evaluates the sufficiency of the Complaint with respect to
Plaintiffs’ claim for civil liability for theft by employee under N.C.G.S. § 1-538.2
(Second Cause of Action), before moving to a review of Plaintiffs’ claim for unjust
enrichment (Seventh Cause of Action).
A. Civil Liability for Theft by Employee (N.C.G.S. § 1-538.2)
21. 	Pursuant to Section 1-538.2 of the North Carolina General Statutes, an
employer can pursue a civil claim for damages against an employee alleged to be
responsible for theft of the employer’s property. 	The claim must be predicated on a
violation of the criminal statutes for larceny, embezzlement, or a related criminal
offense. See N.C.G.S. § 1-538.2(a).
22. 	The statute reads, in relevant part: “Any person . . . who commits an act
that is punishable under G.S. 14‑72, 14‑72.1, 14‑72.11, 14‑74, 14‑86.6, 14‑86.7, 14‑90,
or 	14‑100 	is 	liable 	for 	civil 	damages 	to 	the 	owner 	of 	the 	property.”
N.C.G.S. § 1-538.2(a). 	An “action may be brought under this section regardless of
whether a criminal action is brought or a criminal conviction is obtained for the act
alleged in the civil action.” Id. § 1-538.2(c). If successful, a property owner is entitled

to the amount of any money lost by reason of the theft or embezzlement or fraud of
an employee, as well as to any consequential damages, punitive damages, and
reasonable attorneys’ fees. Id. § 1-538.2(a).
23. 	Plaintiffs 	allege 	that 	Swaringen 	committed 	employee 	larceny 	and
embezzlement—violating § 14-74 and § 14-90, respectively—when she took their
confidential and trade secret information for her personal use. (Compl. ¶¶ 66–67.)
24. 	Section 	14-74, 	prohibiting 	larceny 	by 	employee, 	lists 	the 	types 	of
property protected as: “any money, goods or other chattels, or any of the articles,
securities or choses in action mentioned in G.S. 14-75[.]” 	N.C.G.S. § 14-74. 	Section
14-75 includes a list of financial instruments such as checks, stock certificates, bonds,
and promissory notes, as well as other obligations, “either for the payment of money
or for the delivery of specific articles[.]” Elements of the crime are: “(1) the defendant
was an employee of the owner of the stolen goods; (2) the goods were entrusted to the
defendant for the use of the employer; (3) the goods were taken without the
permission of the employer; and (4) the defendant had the intent to steal the goods or
to defraud his employer.” State v. Fink, 252 N.C. App. 379, 384 (2017) (quoting State
v. Frazier, 142 N.C. App. 207, 209 (2001)).
25. 	Section 14-90 prohibits embezzlement by employee. Like Section 14-74,
it lists the property covered as: “any money, goods or other chattels, bank note, check
or order for the payment of money issued by or drawn on any bank or other
corporation, or any treasury warrant, treasury note, bond or obligation for the
payment of money issued by the United States or by any state, or any other valuable

security[.]” N.C.G.S. § 14-90(b)(2). To establish guilt in a criminal action, the State
must prove: “(1) that the defendant was the agent of the prosecutor, and (2) by the
terms of his employment had received property of his principal; (3) that he received
it in the course of his employment; and (4) knowing it was not his own, converted it
to his own.” State v. McCaskill, 47 N.C. App. 289, 292 (1980) (quoting State v. Block,
245 N.C. 661, 663 (1957)).
26. 	Swaringen argues that (1) because Section 1-538.2 requires violation of
a criminal statute, its language must be strictly construed; and (2) because there is
no reference to intellectual property such as confidential information or trade secrets
in the underlying criminal statutes, Section 1-538.2 was not intended to cover the
alleged theft of intellectual property. Summarily put, Swaringen argues that taking
confidential and trade secret information does not violate either § 14-74 or § 14-90;
consequently, she concludes, there can be no claim against her for civil damages
under § 1-538.2. (Def.’s Br. Supp. Mot. Dismiss 3-6 [“Def.’s Br.”], ECF No. 17.)
27. 	Undeterred, Plaintiffs respond that the phrase “goods or other chattels”
encompasses confidential and trade secret information when it is in tangible form,
such 	as 	printed 	customer 	and 	vendor 	invoices 	containing 	cost 	and 	pricing
information. 	Plaintiffs argue that the physical records they maintained in their
locked file room constitute chattels covered by the relevant criminal statutes.
(Pls.’ Resp. Def.’s Mot. Dismiss 3–5 [“Pls.’ Br.”], ECF No. 22.)
28. 	The Court determines that Plaintiffs have identified property that falls
within 	the 	ambit 	of 	Section 	1-538.2. 	Although 	confidential 	and 	trade 	secret

information itself is not referenced in the underlying criminal statutes, “hard” copies
of business records are chattels belonging to the employer, and the predicate crimes
cover 	theft 	of 	chattels. 	See 	Goods 	and 	Chattels, 	Black’s 	Law 	Dictionary
(11th ed. 2019) 	(“Loosely, 	personal 	property 	of 	any 	kind; 	occasionally, 	tangible
personal property only.”). Plaintiffs allege that some of the stolen information was in
the form of paper invoices filed in a locked room. 	They allege that Swaringen took
possession of the invoices for unauthorized purposes. 	These allegations satisfy the
requirements of the underlying criminal statutes.2
29. 	The Court therefore DENIES the Motion as to Plaintiffs’ claim for Civil
Liability for Theft by Employee (N.C.G.S. § 1-538.2).
B. 	Unjust Enrichment
30. 	“The general rule of unjust enrichment is that where services are
rendered and expenditures made by one party to or for the benefit of another, without
an express contract to pay, the law will imply a promise to pay a fair compensation
therefor.” Atlantic C. L. R. Co. v. State Highway Com., 268 N.C. 92, 95–96 (1966). To
state a claim for unjust enrichment, Plaintiffs must allege: (1) that it conferred a
benefit on another party; (2) that the other party consciously accepted the benefit;
2 The Court further determines that Plaintiffs have adequately alleged that Swaringen was
entrusted with possession of the invoices for use in her work prior to allegedly stealing them.
(Compl. ¶¶ 40, 86.) 	See Artistic Southern Inc. v. Lund, 2015 NCBC LEXIS 113, at **48
(N.C. Super. Ct. Dec. 9, 2015) (lawful possession established when defendant, who had
authority to collect customer payments, collected payments and then misappropriated them).
Plaintiffs’ claim is that Swaringen abused their trust and used her access to take possession
of documents containing confidential and trade secret information for unauthorized purposes.
(Compl. ¶¶ 48–53.) These allegations are sufficient to state a claim for civil liability for theft
by employee.

and (3) that the benefit was not conferred gratuitously or by an interference in the
affairs of the other party. See Southeastern Shelter Corp. v. BTU, Inc., 154 N.C. App.
321, 330 (2002).
31. 	Plaintiffs’ claim for unjust enrichment is based on Swaringen’s alleged
misappropriation of Caliber Packaging’s confidential and trade secret information.
Plaintiffs allege that Swaringen received a benefit when she was given access to their
confidential information and trade secrets, that she willingly accepted this benefit,
and that she was unjustly enriched when she exchanged the confidential information
and 	trade 	secrets 	for 	employment 	opportunities 	and 	financial 	rewards.
(Compl. ¶¶ 47, 53, 96–99.)
32. 	In response, Swaringen argues that Plaintiffs never conferred a benefit
on 	her, 	personally. 	To 	the 	contrary, 	according 	to 	Swaringen, 	the 	Complaint
establishes that she was provided access to Plaintiffs’ confidential information and
trade secrets so that she could do her job. 	Therefore, the access she was given was
for Plaintiffs’ benefit, not her own. (Def.’s. Br. 6–8.)
33. 	Plaintiffs respond that they have alleged that Swaringen received two
benefits as a result of taking the confidential information; namely, “promised
financial rewards” and “leverage or a tool to secure other employment.” (Pls.’ Br. 6.)
34. 	But 	the 	benefits 	identified 	by 	Plaintiffs 	were 	not 	ones 	that 	they
conferred on Swaringen; rather, the benefits they identify are the alleged ill-gotten
gains of her misconduct. Indeed, the gravamen of the Complaint is not that Caliber
transferred the confidential and trade secret information to Swaringen in exchange

for value and intending for her to use the information as she wished. 	Plaintiffs’
complaint 	is 	that 	Swaringen 	misappropriated 	confidential 	and 	trade 	secret
information that was to be used solely for Plaintiffs’ business purposes and used it to
her own advantage without Plaintiffs’ consent.
35. 	Plaintiffs allege a taking in violation of their ownership rights, not a
willing transfer of that ownership. See, e.g., Albritton v. Albritton, 2021 NCBC LEXIS
53, at **33–36 (N.C. Super. Ct. June 7, 2021) (“Neither the allegations nor the facts
in evidence support a claim for unjust enrichment. 	Movants have not alleged that
[Plaintiffs] conferred benefits upon Defendants, but, rather, that Defendants took
assets belonging to [Plaintiff].” (emphasis in original)); Klos Constr., Inc. v. Premier
Homes & Props., LLC, 2020 NCBC LEXIS 85, at *48–51 (N.C. Super. Ct. July
21, 2020) (dismissing a claim for unjust enrichment where “it is undisputed that the
UE Defendants took any benefit of Plaintiff’s goodwill”); KNC Techs., LLC v. Tutton,
2019 NCBC LEXIS 72, at *36 (N.C. Super. Ct. Oct. 9, 2019) (“Alleging merely that
the Defendants have taken for themselves some benefit to which Plaintiff believes it
is rightfully entitled does not state a claim for unjust enrichment.”); Chisum v.
Campagna, 2017 NCBC LEXIS 102, at *31–32 (N.C. Super. Ct. Nov. 7, 2017)
(“Plaintiff fails to allege a claim for unjust enrichment. He does not allege that he
conferred any benefit . . . but rather only that the [Defendants] ‘received’ or
‘wrongfully retained’ benefits from their alleged misconduct.”).

36. 	Accordingly, Defendant’s Motion with respect to the claim for unjust
enrichment shall be GRANTED, and the claim is DISMISSED with prejudice.3
However, the Court’s determination does not foreclose Plaintiffs from seeking to
recover damages for alleged misappropriation of their trade secrets.4
IV. 	CONCLUSION
37. 	WHEREFORE, the Court hereby ORDERS as follows:
a. 	Defendant’s Motion is GRANTED in part and DENIED in part.
i. 	Defendant’s motion to dismiss the Second Cause of Action (Civil
Liability for Theft by employee N.C.G.S. § 1-538.2) is DENIED.
ii. 	Defendant’s motion to dismiss the Seventh Cause of Action
(Unjust 	Enrichment) 	is 	GRANTED 	and 	the 	claim 	is
DISMISSED with prejudice.
3 “The decision to dismiss an action with or without prejudice is in the discretion of the trial
court and will not be disturbed on appeal absent an abuse of discretion.” First Fed. Bank v.
Aldridge, 230 N.C. App. 187, 191 (2013).
4 The claim for unjust enrichment should not be confused with the damage theory of unjust
enrichment resulting from the misappropriation of trade secrets. Compare Medical Staffing
Network, Inc. v. Ridgway, 194 N.C. App. 649, 661 (2009) (calculating damages for a claim of
misappropriation of trade secrets as the “economic loss or the unjust enrichment” defendants
gained); N.C.G.S. § 66-154(b) (“In addition to the relief authorized by subsection (a), actual
damages may be recovered, measured by the economic loss or the unjust enrichment caused
by misappropriation of a trade secret, whichever is greater.”), with Booe v. Shadrick, 322 N.C.
567, 570 (1988) (“In order to establish a claim for unjust enrichment, a party must have
conferred a benefit on the other party. The benefit must not have been conferred officiously,
that is it must not be conferred by an interference in the affairs of the other party in a manner
that is not justified in the circumstances. The benefit must not be gratuitous and it must be
measurable.” (citing Restatement of Restitution § 1)).

IT IS SO ORDERED, this the 31st day of May, 2023.
/s/ Julianna Theall Earp
Julianna Theall Earp
Special Superior Court Judge
for Complex Business Cases