CONSERVATION STATION, INC. v. BOLESKY, 2023 NCBC 85

STATE OF NORTH CAROLINA
WAKE COUNTY
IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
21 CVS 17162
CONSERVATION STATION, INC.,
Plaintiff,
v.
MATTHEW BOLESKY and
CONSERVATION TECHNOLOGY &
SOLUTIONS, LLC,
Defendants.
FINAL JUDGMENT
1. 	THIS MATTER came on for trial without a jury before the undersigned
commencing on 2 October 2023 and concluding on 3 October 2023. The matter is now
ripe for final determination, in accordance with Rule 55(b)(2) of the North Carolina
Rules of Civil Procedure (the “Rule(s)”), and the Court herein issues its Final
Judgment.
Revolution Law Group, by C. Scott Meyers, for Plaintiff.
Defendant Matthew Bolesky, pro se.
Robinson, Judge.
I. 	PROCEDURAL POSTURE
2. 	The 	Court 	entered 	default 	against 	Defendants 	Matthew 	Bolesky
(“Mr. Bolesky”) 	and 	Conservation 	Technology 	& 	Solutions, 	LLC 	(“CTS”) 	on
26 July 2022.1 (ECF Nos. 53–54.) “Generally, there is first an interlocutory entry of
default, and then a final judgment by default only after the requisites to its entry,
1 Plaintiff later took voluntary dismissals of several other Defendants, leaving Mr. Bolesky
and CTS as the sole remaining Defendants. (ECF Nos. 60, 71.)
Conservation Station, Inc. v. Bolesky, 2023 NCBC 85.

including a jury trial on damages, have occurred.” Duncan v. Duncan, 102 N.C. App.
107, 111 (1991) (cleaned up).
3. 	Following entry of default, the Court entered its Pretrial Scheduling Order,
(ECF 	No. 	89), 	and 	held 	its 	final 	pretrial 	conference 	and 	hearing 	(“Pretrial
Conference”) on 11 September 2023, (see ECF No. 95). 	At the Pretrial Conference,
Plaintiff’s counsel waived its demand for a jury trial as to CTS. Following the Pretrial
Conference, Plaintiff Conservation Station, Inc. (“CSI”) and Mr. Bolesky held their
final 	pretrial 	conference, 	as 	required 	by 	the 	Pretrial 	Scheduling 	Order, 	on
25 September 2023. (See ECF No. 103.) Following the final pretrial conference, CSI,
through its counsel, and Mr. Bolesky stipulated “to a bench trial in this matter, and
both 	CSI 	and 	Mr. 	Bolesky 	waive[d] 	their 	right 	[to] 	a 	jury 	trial 	pursuant 	to
Rule 38(d)[.]” 	(ECF No. 103.) The pair also stipulated that Defendant CTS has not
made an appearance in this action. (ECF No. 103.)
4. 	“A demand for trial by jury . . . may not be withdrawn without the consent
of the parties who have pleaded or otherwise appear[ed] in the action.” N.C.G.S. § 1A-
1, Rule 38(d). 	“Thus, a plaintiff who has requested a jury trial may withdraw that
request, without the consent of the defendant, at any time before an answer is filed
or before [a] filed [appearance] is made by the defendant.” Cabe v. Worley, 140 N.C.
App. 250, 253 (2000). “A defendant does not have to directly respond to the complaint
in order to ‘appear’ in an action, but makes an ‘appearance’ when the defendant
‘takes, seeks, or agrees to some step in the proceedings that is beneficial to himself or
detrimental to the plaintiff.’ ” Id. at 253 (quoting Roland v. Motor Lines, 32 N.C. App.

288, 289 (1977)). 	Filing a motion to set aside entry of default constitutes an
appearance which prevents a plaintiff from unilaterally withdrawing the jury
request. Id.
5. 	Given that Mr. Bolesky’s consent was required for CSI to withdraw its
request for a jury trial, and that CSI and Mr. Bolesky agreed to waive the demand
for a jury trial, the Court concluded, and restates herein, that the jury trial was
properly waived. 	Further, since CTS did not make an appearance in this action
through counsel, the Court concluded and restates herein that CSI’s unilateral waiver
of the jury trial as to CTS was proper. 	See LexisNexis v. Travishan Corp., 155 N.C.
App. 205, 207–08 (2002) (holding that a corporation must be represented by a licensed
attorney and cannot appear pro se).
6. 	Where default is established, defendants have no further standing to
contest the merits of plaintiff’s right to recover, and instead, the only recourse is to
show good cause for setting aside the default and, failing that, to contest the amount
of recovery. Bell v. Martin, 299 N.C. 715, 721 (1980). “[T]he substantive allegations
raised by plaintiff’s complaint are no longer in issue, and for the purposes of . . .
default judgment are deemed admitted.” Id.
7. 	A default “admits only the allegations contained within the complaint, and
a defendant may still show that the complaint is insufficient to warrant plaintiff's
recovery.” Hunter v. Spaulding, 97 N.C. App. 372, 377 (1990).
8. 	“Although defendant may not then attack the factual allegations of the
complaint, 	he 	does 	not 	admit 	the 	legal 	conclusions. 	Thus, 	despite 	occasional

statements to the contrary[,] a default is not treated as an absolute confession by the
defendant of his liability and of the plaintiff’s right to recover.” Weft, Inc. v. G.C. Inv.
Assocs., 630 F. Supp. 1138, 1141 (E.D.N.C. 1986) (cleaned up). “The Court is bound
. . . to consider whether plaintiff’s allegations are sufficient to state a claim for relief.”
Id.
9. 	The Court conducted a two-day bench trial from 2–3 October 2023 (“Trial”).
(See ECF Nos. 89, 105.) The Court thereafter provided each side the opportunity to
submit proposed findings of fact and conclusions of law for use in this Final
Judgment, based on the record before the Court at Trial, including the evidence
properly admitted during Trial. 	CSI’s counsel timely submitted such proposed
findings and conclusions. 	Mr. Bolesky did not submit any proposed findings and
conclusions.
10. 	It is through this lens that the Court enters this Final Judgment.
II. 	FINDINGS OF FACT2
11. 	“When default is entered due to a defendant’s failure to answer, the
substantive allegations contained in plaintiff’s complaint are no longer in issue[.]”
Luke v. Omega Consulting Grp., LC, 194 N.C. App. 745, 751 (2009). 	In the present
case, the allegations of the Complaint are deemed admitted and not in dispute, and
while they are treated as true, the Court does not make a determination as to the
veracity of the statements in the Complaint.
2 Any determination later stated as a Conclusion of Law that should have been stated as a
finding of fact is incorporated in these Findings of Fact.

A. 	The Parties
12. 	CSI is a North Carolina corporation with its principal office in Wake
County, North Carolina. (Compl. ¶ 1.)
13. 	Mr. Bolesky is a resident of Orange County, North Carolina. (Compl. ¶ 2.)
14. 	CTS is a North Carolina limited liability company with its principal office
in Orange County, North Carolina. (Compl. ¶ 8.)
B. 	CSI’s Early Years and Its Relationships with Manufacturers
15. 	In 1994, CSI was incorporated by Doraine Michaud (“Ms. Michaud”) in the
State of New Jersey. (Compl. ¶ 18.) It was formed to engage in the distribution and
sale of energy-efficient commercial lighting products. 	(Compl. ¶ 18.) 	“Ms. Michaud
was the sole shareholder at formation and has remained the sole shareholder
throughout its corporate existence.” (Compl. ¶ 18.)
16. 	During 	CSI’s 	early 	years, 	Ms. 	Michaud 	was 	its 	only 	employee.
(Compl. ¶ 19.) After forming CSI, Ms. Michaud married Mr. Bolesky in March 1994.
(Compl. ¶ 31; Equitable Distribution J. ¶ 11, ECF No. 107.5 [“ED Final J.”].)
17. 	In 1996, Mr. Bolesky became a CSI employee. (Compl. ¶ 32.) Mr. Bolesky
was primarily responsible for sales and account management while Ms. Michaud
remained responsible for day-to-day management and operations, and she was CSI’s
primary salesperson. (Compl. ¶ 32.)
18. 	Mr. Bolesky and Ms. Michaud were CSI’s sole employees throughout its
corporate existence. (Compl. ¶ 33.)

19. 	Through the mid-2000s, CSI won vendor contracts with departments of
transportation in Florida, Maryland, Massachusetts, New York, North Carolina,
Pennsylvania, and Virginia, as well as with transportation companies, including
Amtrak, CSX, the Metropolitan Transit Authority in New York, Norfolk Southern,
and the Southeastern Pennsylvania Transit Authority. (Compl. ¶ 22.)
20. 	CSI 	maintained 	vendor/supplier 	relationships 	with 	GELcore, 	LLC
(“GELcore”), a manufacturer of LED and transportation lighting products. 	(Compl.
¶ 23.) 	CSI credits this relationship with GELcore as “one of the keys to [its]
success[.]” (Compl. ¶ 23.)
21. 	Current Solutions Lighting, LLC, also known as Current by GE (“Current”),
was another long-time lighting products provider with a close relationship to CSI.
(Compl. ¶ 23.) CSI was an exclusive distributor of Current’s products for the State of
New York, meaning New York purchasers of transportation-related LED products
made by Current, like traffic and rail signs, had to be purchased from CSI.
(Compl. ¶ 26.)
22. 	In some years, as much as eighty percent of the products sold by CSI were
procured from Current. (Compl. ¶ 27.) As a result of this relationship, CSI was able
to buy Current products on credit rather than providing immediate payment.
(Compl. ¶ 28.)
23. 	With these agreements, secured and sustained by Ms. Michaud, CSI grew
a network of customers and routinely produced multi-million-dollar revenue years by
the mid-2000s. (Compl. ¶ 29.)

C. 	Shift in Day-to-Day Leadership of CSI
24. 	Between 1996 and the mid-2000s, Mr. Bolesky became familiar with CSI’s
business and gained Ms. Michaud’s trust and confidence with respect to business
matters. 	(Compl. ¶ 34.) 	As a result, Mr. Bolesky was entrusted with additional
responsibilities, including (1) access to and shared control of CSI’s finances and
customer lists, and (2) reporting CSI’s annual tax filings and filing annual reports
required by 	state 	law. 	(Compl. 	¶ 34.) 	By 	2008, 	Mr. 	Bolesky 	had access 	to
Ms. Michaud’s signature stamp to carry out these responsibilities. (Compl. ¶ 34.)
25. 	Ms. Michaud and Mr. Bolesky moved from New Jersey to North Carolina
in 2005. (Compl. ¶ 36.) The pair had children, and as CSI became more established
and profitable, the couple shifted their respective responsibilities. (Compl. ¶ 37.) In
2007, Mr. Bolesky assumed primary responsibility for the day-to-day operations of
and sales for CSI, while Ms. Michaud assumed primary responsibility of the family’s
domestic life but remained CSI’s sole owner and president. (Compl. ¶ 37.)
26. 	In 	2009, 	CSI 	was 	reincorporated 	as 	a 	North 	Carolina 	corporation.
(Compl. ¶ 39.)
27. 	Throughout 2005 to 2009, CSI’s primary contact at Current was Patrick
Rossetti (“Mr. Rossetti”). 	(Compl. ¶ 40.) 	Mr. Rosetti was Current’s sales manager
and he acted as the “gatekeeper” for CSI’s access to Current lighting products.
(Compl. ¶ 40.) 	Aside from their professional relationship, Mr. Rossetti and Mr.
Bolesky developed a personal friendship and went on vacations and golfing trips
together. (Compl. ¶ 42.)

28. 	In 	2011, 	Ms. 	Michaud 	grew 	concerned 	when 	she 	discovered 	that
Mr. Bolesky and Mr. Rossetti developed what she described as a “kickback scheme,”
which she believed was likely to jeopardize CSI’s distributorship with Current.
(Compl. ¶ 43.) 	The purported scheme operated through Mr. Rosetti’s receipt of free
sample products from Current, which were used to fill regularly priced orders from
CSI customers and resulted in Mr. Bolesky and Mr. Rossetti sharing the proceeds
from the sales. (Compl. ¶ 43.)
29. 	Ms. 	Michaud, 	in 	her 	capacity 	as 	president 	of 	CSI, 	demanded 	that
Mr. Bolesky end this practice. (Compl. ¶ 44.)
D. 	Mr. Bolesky’s Management of CSI and the Divorce Proceeding
30. 	In July 2013, CSI received notice of administrative dissolution from the
North Carolina Secretary of State for its failure to provide annual reports as required
by North Carolina law. (Compl. ¶ 45.)
31. 	Around this time, Ms. Michaud noticed irregularities in CSI’s accounting
that suggested Mr. Bolesky was “funneling corporate funds” to and purchasing
expensive items for Mr. Rossetti. (Compl. ¶ 46.) Upon noticing these irregularities,
Ms. Michaud demanded that Mr. Bolesky “rectify” the problem. 	(Compl. ¶ 47.)
Mr. Bolesky defended these actions, arguing they were necessary to keep Mr. Rossetti
happy and protect CSI’s relationship with Current. (Compl. ¶ 47.)
32. 	In November 2014, Mr. Bolesky and Ms. Michaud began taking steps to end
their marriage, (Compl. ¶ 49), and the pair entered into a separation agreement on
15 January 2015 (the “Separation Agreement”), (Compl. ¶¶ 50–51). The Separation

Agreement provided, in relevant part, that Ms. Michaud would transfer the entirety
of her ownership interest in CSI to Mr. Bolesky on 15 September 2021, and in the
interim, that Mr. Bolesky would continue to run CSI’s daily operations with complete
control of its operations and management of the company. (Compl. ¶ 50.) According
to the terms of the Separation Agreement, Mr. Bolesky was entitled to reasonable
compensation which he, in his sole discretion, could determine. 	(Compl. ¶ 50.)
Ms. Michaud was entitled to a $43,000 salary and 50% of CSI’s annual profits until
she transferred her ownership interest in CSI to Mr. Bolesky in 2021. (Compl. ¶ 50.)
33. 	Mr. Bolesky became CSI’s sole officer in 2015, as is reflected in the 2016
and 	2017 	annual 	reports 	filed 	with 	the 	North 	Carolina 	Secretary 	of 	State.
(Compl. ¶ 52.) Mr. Bolesky also obtained signature authority on CSI’s bank accounts.
(Compl. ¶ 54.)
34. 	In September 2016, Ms. Michaud took a sales position with Fintronix, a
manufacturer of general illumination products. (Compl. ¶ 57.) Ms. Michaud sought
“to broaden CSI’s focus from transportation lighting into general illumination by
establishing CSI as a distributor of Fintronix’s products[.]” 	(Compl. ¶ 57.) 	Both
Mr. Bolesky 	and 	Fintronix’s 	principals 	knew 	of 	and 	agreed 	to 	this 	plan.
(Compl. ¶ 57.)
35. 	Neither Mr. Bolesky nor Ms. Michaud followed the terms of the Separation
Agreement. 	(Compl. ¶¶ 55, 58.) 	Ms. Michaud attempted to transfer the entirety of
her shares in CSI to Mr. Bolesky prior to 15 September 2021, and Mr. Bolesky did
not cooperate in effectuating the transfer. (Compl. ¶ 55.) For his part, Mr. Bolesky

failed to make the salary and profit payments to Ms. Michaud, as he contended that
her employment with Fintronix was a violation of the Separation Agreement’s non-
competition clause. (Compl. ¶ 58.)
36. 	On 3 June 2016, Ms. Michaud filed a lawsuit in North Carolina District
Court against Mr. Bolesky, seeking to enforce the terms of the Separation Agreement
(the 	“Divorce 	Proceeding”). 	(Compl. 	¶ 59; 	see, 	e.g., 	ECF 	No. 	107.5.) 	On
25 August 2016, in his response to the complaint in that suit, Mr. Bolesky asked the
Court to invalidate the Separation Agreement. (Compl. ¶ 60.)
37. 	Through discovery in the Divorce Proceeding, Ms. Michaud learned that, on
12 April 2016, Mr. Bolesky formed CTS. 	(Compl. ¶¶ 63–64.) 	CTS was involved in
substantially the same line of work as CSI. (Compl. ¶ 65.)
38. 	Ms. Michaud also learned that two businesses with names similar to CTS
were formed in Florida between 17 February and 16 September 2014. (Compl. ¶ 66.)
Ms. Michaud suspected that Mr. Bolesky and Mr. Rossetti were engaged in a new
scheme, using the Florida companies to funnel products and funds. 	(Compl. ¶ 67.)
This practice by the pair appeared to continue into February 2017. (Compl. ¶ 67.)
39. 	At some time between 2014 and 2017, Ms. Michaud discovered that
Mr. Bolesky did not service CSI’s credit account with Current. 	(Compl. ¶ 82.) 	This
meant that CSI’s account with Current accrued a large debt, and that CSI was not
making timely payments. (Compl. ¶ 82.) As a result, in May 2017, Current emailed
Mr. Bolesky to inform him that CSI’s future orders were on hold until the issues with
the credit account were resolved. (See Compl. ¶ 82.)

40. 	Mr. Bolesky also failed to timely file CSI’s annual reports with the North
Carolina Secretary of State for the years 2015, 2016, and 2017, and did not file an
annual report for 2018. (Compl. ¶ 84.) Further, Mr. Bolesky did not file or cause to
be filed corporate tax returns for CSI. (Compl. ¶ 85.)
41. 	In April 2017, Ms. Michaud authorized CSI to file suit against Mr. Bolesky
and CTS, but later dismissed the lawsuit in June 2017. 	(Compl. ¶ 89; see Def.’s
Ex. 256, ECF No. 107.4.)
E. 	The Progression of the Divorce Proceeding, Impact on CSI, and
Mr. Bolesky’s Taking of CSI Customers to CTS
42. 	On 31 January 2018, the district court judge overseeing the Divorce
Proceeding invalidated the Separation Agreement. 	(Compl. ¶ 90.) 	Mr. Bolesky
retained de facto control of CSI, (Compl. ¶ 91), and while Ms. Michaud attempted to
re-involve herself in CSI, Mr. Bolesky prevented her access to CSI’s email and phone
numbers, (Compl. ¶ 93). 	Mr. Bolesky also obtained an order of the Court in the
Divorce Proceeding which barred Ms. Michaud from any involvement in CSI. (Compl.
¶¶ 96, 117.)
43. 	On 13 April 2018, Mr. Bolesky emailed the New York State Department of
Transportation an invoice, identifying CTS as the entity purporting to replace CSI.
(Compl. ¶ 98.)
44. 	On 18 April 2018, Mr. Bolesky emailed Mary Marino, an agent of Traffic
Systems, Inc., a CSI client, indicating that CSI was being dissolved and that the new
company email information was included. (Compl. ¶ 99.) The email stated, “[w]e are

in the process of ‘dissolving’ Conservation Station, Inc. 	Below is the new company
information – Mailing, etc.” (Compl. ¶ 99.)
45. 	On 24 April 2018, Mr. Bolesky emailed longtime CSI client CSX, requesting
that it change the supplier name and federal tax ID from CSI to CTS. (Compl. ¶ 100.)
46. 	All three emails were sent from Mr. Bolesky’s CSI email address and were
not authorized or known at the time by Ms. Michaud. (Compl. ¶¶ 101–02.)
47. 	Mr. Bolesky was not authorized to use CSI’s customer list for any purpose
other than facilitating procurement, sales, and payments with CSI’s vendors and
customers for CSI’s benefit. (Compl. ¶ 35.)
48. 	On 25 April 2018, Mr. Bolesky emailed Mr. Rossetti requesting that CTS
be considered for a distributorship with General Electric’s Traffic and Rail Signaling
products. (Compl. ¶ 104.) This distributorship was one of CSI’s core business assets.
(Compl. ¶ 105.)
49. 	During an 8 May 2018 hearing in the Divorce Proceeding, Mr. Bolesky
testified that he was “the only guy working” at CSI, “the only guy selling stuff,” and
that he was not diminishing its value. 	(Compl. ¶ 112.) 	When questioned by
Ms. Michaud’s counsel in that action and asked whether Mr. Bolesky’s plan was to
“wind down CSI[,]” Mr. Bolesky responded, “Yes.” (Compl. ¶ 113.)
50. 	Thereafter, the district court judge ordered that Ms. Michaud was required
to execute documents that designated Mr. Bolesky as president of CSI, and that
Ms. Michaud was restrained from interfering with CSI, including refraining from any
contact with its vendors and customers. (Compl. ¶ 117.)

51. 	Effective 1 January 2019, Mr. Bolesky and Mr. Rossetti finalized the
replacement of CSI with CTS as Current’s distributor in New York. (Compl. ¶ 120.)
52. 	Between March 2019 and July 2019, longtime CSI clients Genesee &
Wyoming, Inc. and California Northern Railroad began purchasing products from
CTS. (Compl. ¶¶ 122–23.)
53. 	On 	15 	March 	2019, 	Mr. 	Bolesky 	contacted 	the 	Metropolitan 	Transit
Authority Procurement Office about changing its vendor relationship from CSI to
CTS, providing them with a change of company name and a new tax ID number.
(Compl. ¶ 124.)
54. 	The final order on equitable distribution in Ms. Michaud and Mr. Bolesky’s
domestic dispute was issued on 12 June 2019. 	(Compl. ¶ 131; ED Final J. 1.)
Ms. Michaud was vested sole control of CSI, and she immediately ousted Mr. Bolesky
from the business and sought to retake control of the business. 	(Compl. ¶ 132; ED
Final J. 22–23.)
55. 	Following the events occurring between 2015 and the Final Equitable
Distribution Judgment/Order on 12 June 2019, CSI lost (1) its ability to procure
products from Current, and (2) numerous valuable and longtime clients to CTS or
other distributors. (Compl. ¶¶ 147–48.)
56. 	From the evidence presented and the admissions of record by CTS, the
Court finds that much, if not all, of Mr. Bolesky’s wrongful actions were taken as
agent of, and in furtherance of a plan to benefit CTS at CSI’s expense as a result of
Mr. Bolesky’s misconduct.

III. 	CONCLUSIONS OF LAW
57. 	This case was properly designated as a mandatory complex business case
and assigned to the undersigned. 	The Court has authority to make its Findings of
Fact following the completion of the trial and the submission of all disputed issues
for resolution by the Court without a jury. Based on the foregoing Findings of Fact,
the Court makes the following Conclusions of Law. 	Any Findings of Fact that are
more appropriately deemed Conclusions of Law are incorporated by reference into the
Court’s Conclusions of Law.
58. 	While the Court has entered default, the Court is required to consider the
sufficiency of the allegations contained in the Complaint prior to awarding damages,
if any, to CSI. 	See Tradewinds Airlines, Inc. v. C-S Aviation Servs., 222 N.C. App.
834, 844 (2012). 	The Complaint must be sufficient to state a claim, id., because a
default is not treated as an absolute confession by the defendant of his liability and
of the plaintiff’s right to recover[,]” Weft, Inc., 630 F. Supp. at 1141.
59. 	Plaintiff CSI contends that: (1) Mr. Bolesky is liable to CSI for breach of
fiduciary duty, fraud, and constructive fraud; (2) Defendants are liable to CSI for
conversion and tortious interference; and (3) Defendants have admitted to the
conduct that underlies Plaintiff’s claim for unfair and deceptive trade practices
pursuant to N.C.G.S. § 75-1.1. (ECF No. 109.)
A. 	Counts One and Two: Breach of Fiduciary Duty and Constructive
Fraud
60. 	A breach of fiduciary duty claim requires (1) a fiduciary duty owed by the
defendant to the plaintiff; (2) a breach of that duty by the defendant; and (3) the

defendant’s 	conduct 	proximately 	causing 	injury 	to 	the 	plaintiff. 	Chisum 	v.
Campagna, 376 N.C. 680, 706 (2021) (citation omitted).
61. 	“A successful claim for constructive fraud requires proof of facts and
circumstances ‘(1) which created the relation of trust and confidence [between the
parties], 	and (2) 	[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.’ ” 	Id. at 706–07 (citing Terry v. Terry, 302 N.C. 77, 83
(1981)).
62. 	CSI alleges that Mr. Bolesky is liable to CSI for breach of fiduciary duty
and constructive fraud. (Compl. ¶¶ 151–72.)
63. 	It is admitted that Mr. Bolesky was an officer of CSI and therefore owed
CSI a fiduciary duty as its officer from 2016 through 12 June 2019. (Compl. ¶¶ 152–
53.) Mr. Bolesky breached that duty by: (1) neglecting CSI’s relationship and credit
account with Current, (Compl. ¶ 158); (2) having CTS apply for a distributorship with
Current that directly competed with CSI, (Compl. ¶ 159); (3) converting CSI’s
business assets, which enabled Mr. Bolesky and CTS to enjoy economic advantages,
(Compl. ¶ 160); and (4) failing to file CSI’s annual tax returns, (Compl. ¶ 161). These
breaches proximately caused injury to CSI.
64. 	Mr. Bolesky sought to benefit himself, and did in fact benefit, by profiting
from all revenues generated by CTS, including revenues generated from CTS’s
distributorship with Current. (Compl. ¶¶ 168, 170.)

65. 	Based on the evidence presented, the Court concludes that Mr. Bolesky
engaged in misconduct that badly damaged CSI and that proximately resulted in
significant 	financial 	damage. 	The 	Court 	also 	concludes 	that 	Mr. 	Bolesky’s
misconduct, as alleged, was engaged in his capacity as agent of CTS and that CTS is
jointly and severally liable for Mr. Bolesky’s misconduct.
66. 	CSI requests actual damages in the amount of $8,048,593.91, contending
that its damages are the lost profits it would have earned but for the actions of
Defendants, which included intentionally harming CSI’s relationships with its
supplier and customers.
67. 	Courts in North Carolina will not award damages for lost profits based only
on “hypothetical or speculative forecasts of losses.” Iron Steamer, Ltd. v. Trinity Rest.,
Inc., 110 N.C. App. 843, 847 (1993). 	“[A]bsolute certainty is not required[,] but
evidence of damages must be sufficiently specific and complete to permit the fact
finder to arrive at a reasonable conclusion.” 	Van-Go Transp., Inc. v. Sampson City,
254 N.C. App. 836, 845 (2017) (cleaned up).
68. 	“The risk of speculative lost profits calculations is greatest in situations
where parties must estimate revenues that they likely would have earned in an
uncertain industry with numerous variables.” Id. at 847 (citing in relevant part Iron
Steamer, 110 N.C. App. at 847).
69. 	At trial, CSI’s evidence on lost profits included the facts deemed admitted
in the Complaint, the testimony of Ms. Michaud concerning CSI’s history of revenues,

and her testimony concerning the Company’s historical profit margin. 	(See ECF
No. 107.2.)
70. 	While the Court determines that the lost profit requested by CSI is too
speculative, the Court concludes that Mr. Bolesky’s conduct as an officer of CSI
caused significant financial damage to CSI. 	However, the Court must balance that
conclusion with evidence of record that between 2016 and 2019, the period where
Mr. Bolesky was an officer of CSI, Mr. Bolesky and Ms. Michaud were engaged in the
Divorce Proceedings, which may have also resulted in some of the decline in
profitability.
71. 	As a result, CSI is entitled to recover Two Hundred Thousand Dollars
($200,000.00) in damages from Mr. Bolesky and CTS for the breach of fiduciary duty
and constructive fraud claims. Considering the evidence presented, CSI has failed to
satisfy its burden of proving that its damages were more than the amount determined
herein.
72. 	CSI 	also 	seeks 	punitive 	damages 	pursuant 	to 	N.C.G.S. 	§ 1D-15 	for
Mr. Bolesky’s breach of fiduciary duty. 	(See Compl. ¶ 165.) 	As a result, the Court
next considers whether there is sufficient evidence to support an award of punitive
damages.
73. 	The purpose of punitive damages is to “punish a defendant for egregiously
wrongful acts and to deter the defendant and others from committing similar
wrongful acts.” N.C.G.S. § 1D-1.

74. 	Where there has been an entry of default, such as here, our Court of Appeals
has required that “to recover punitive damages, Plaintiff’s complaint must allege
facts or elements showing the aggravating circumstances which would justify the
award of punitive damages. 	Those aggravating factors are (1) fraud; (2) malice; or
(3) willful or wanton conduct.” 	Wiley v. L3 Communs. Vertex Aero., 251 N.C. App.
354, 367 (2016) (cleaned up). 	The aggravating factors “shall be averred with
particularity.” N.C.G.S. § 1A-1, Rule 9(k).
75. 	Here, CSI alleges that Mr. Bolesky’s breaches of fiduciary duty and other
misconduct were “willful, wanton, malicious, and in reckless disregard of CSI’s
rights[.]” (Compl. ¶ 165.)
76. 	“[I]t is well established that merely nominal damages may support a
substantial award of punitive damages. 	Once a cause of action is established, a
plaintiff is entitled to recover, as a matter of law, nominal damages, which in turn
support an award of punitive damages.” 	Chisum, 376 N.C. at 704 (quoting Mace v.
Pyatt, 203 N.C. App. 245, 255 (2010)).
77. 	When determining whether to award punitive damages, the Court may
consider, in addition to the purposes of punitive damages set forth in N.C.G.S. § 1D-
1, evidence relating to:
a. The reprehensibility of the defendant’s motives and conduct.
b. The likelihood, at the relevant time, of serious harm.
c. The degree of the defendant’s awareness of the probable consequences
of its conduct.
d. The duration of the defendant’s conduct.
e. The actual damages suffered by the claimant.
f. Any concealment by the defendant of the facts or consequences of its
conduct.

g. The existence and frequency of any similar past conduct by the
defendant.
h. Whether the defendant profited from the conduct.
i. The defendant’s ability to pay punitive damages, as evidenced by its
revenues or net worth.
N.C.G.S. § 1D-35.
78. 	“Punitive damages awarded against a defendant shall not exceed three
times the amount of compensatory damages or two hundred fifty thousand dollars
($250,000), whichever is greater.” N.C.G.S. § 1D-25(b).
79. 	The Court concludes that Mr. Bolesky is liable for punitive damages.
80. 	The Court, as finder of fact, is struck by the severity of the misconduct
engaged in by Mr. Bolesky as agent of CTS. 	The breaches of fiduciary duty appear
from the evidence to have been carefully calculated and intended to destroy CSI’s
ability to compete in an otherwise lucrative market built by Ms. Michaud, as its
agent. 	Whether as a result of the animosity between the pair arising from their
marital discord or otherwise, Mr. Bolesky’s conduct, as proven by the admissions of
record and documentary evidence before the Court, clearly justifies the imposition of
substantial punitive damages.
81. 	Therefore, the Court concludes that it is appropriate, given the evidence at
trial, 	to 	award 	CSI 	Six 	Hundred 	Thousand 	Dollars 	($600,000.00) 	in 	punitive
damages.
B. 	Counts Three and Four: Fraud
82. 	CSI alleges that Mr. Bolesky is liable to it for fraud. (Compl. ¶¶ 175–79.)

83. 	CSI must allege the five essential elements of a fraud claim: “(1) [f]alse
representation or concealment of a material fact, (2) reasonably calculated to deceive,
(3) made with intent to deceive, (4) which does in fact deceive, [and] (5) resulting in
damage to the injured party.” 	Ragsdale v. Kennedy, 286 N.C. 130, 138 (1974)
(citations omitted). A plaintiff’s reliance on the fraudulent misrepresentation “must
be reasonable.” 	Forbis v. Neal, 361 N.C. 519, 527 (2007) (citing Johnson v. Owens,
263 N.C. 754, 757 (1965)). 	Reliance is not reasonable if a plaintiff exercising
reasonable diligence fails to make any independent investigation as to the truth of
the allegedly fraudulent assertion. Calloway v. Wyatt, 246 N.C. 129, 130 (1957).
84. 	There is an additional requirement. Rule 9 requires that fraud be pleaded
with particularity. N.C.G.S. § 1A-1, Rule 9(b). “A pleader meets the requirements of
[Rule 9] when its fraud claim alleges the ‘time, place, and content of the fraudulent
representation, identity of the person making the representation, and what was
obtained as a result of the fraudulent acts or representations.’ ” Lawrence v. UMLIC-
Five Corp., 2007 NCBC LEXIS 20, at **6 (N.C. Super. Ct. June 18, 2007) (quoting
Bob Timberlake Collection, Inc. v. Edwards, 176 N.C. App. 33, 39 (2006)).
1. 	Count Three
85. 	Based on the allegations of the Complaint, it is deemed admitted that
Mr. Bolesky testified at an 8 May 2018 hearing in the Divorce Proceeding as follows:
Ms. Peek: So your plan is to wind down CSI to zero?
Mr. Bolesky: CSI is winded - - your client wound CSI down [by] taking
the mail and the checks.

Ms. Peek: Well, let me rephrase that. Is it your plan to wind down CSI
to zero?
Mr. Bolesky: Yes.
Ms. Peek: And then you’re going to start working in CTS?
Mr. Bolesky: I don’t know what I’m going to do. I’m going to get through
this divorce and figure it out.
(Compl. ¶¶ 110, 113 (alteration in original).)
86. 	CSI alleges at Count Three of the Complaint that Mr. Bolesky’s testimony
that he did not know whether he would use CTS to engage in the same type of
business as CSI was a material misrepresentation. (Compl. ¶ 175.) This testimony
was false at the time he gave it, and Mr. Bolesky knew it was false. (Compl. ¶¶ 114,
177.)
87. 	Based on the Court’s careful review of the operative allegations in the
Complaint, it concludes that CSI has failed to adequately state a cause of action for
fraud at Count Three. 	The Complaint does not include allegations of how this
statement was reasonably calculated to deceive. (See Compl. ¶¶ 116, 175–76.)
88. 	“A complaint which fails to state a cause of action is not sufficient to support
a . . . judgment for plaintiff.” Brown v. Cavit Scis., Inc., 230 N.C. App. 460, 467 (2013).
Therefore, the Court concludes that CSI is not entitled to recover on its claim for
fraud against Mr. Bolesky because the allegations at Count Three are deficient.
2. 	Count Four
89. 	CSI also alleges a cause of action for fraud at Count Four, alleging that
Mr. Bolesky made “material misrepresentations to CSI’s customers regarding the

relationship between CSI and CTS and the reasons to shift their business to CTS
from CSI.” (Compl. ¶ 183.)
90. 	The Complaint does not allege the time, place, and content of the fraudulent
representation by Mr. Bolesky. 	There are numerous statements by Mr. Bolesky
deemed admitted, but the Complaint fails to set forth which of those statements
provides the basis for this cause of action for fraud.
91. 	Therefore, the Court concludes that CSI is not entitled to recover on its
claim for fraud contained in Count Four because the allegations are deficient.
C. 	Count Seven: Conversion
92. 	In Count Seven of its Complaint, CSI alleges a claim for conversion against
Defendants. (Compl. ¶¶ 214–24.)
93. 	Conversion is the “unauthorized assumption and exercise of the right of
ownership over goods or personal chattels belonging to another, to the alteration of
their condition or the exclusion of an owner’s rights.” 	Peed v. Burleson’s, Inc., 244
N.C. 437, 439 (1956) (citation and quotation marks omitted). 	“There are, in effect,
two essential elements of a conversion claim: ownership in the plaintiff and wrongful
possession or conversion by the defendant.” 	Variety Wholesalers, Inc. v. Salem
Logistics Traffic Servs., LLC, 365 N.C. 520, 523 (2012). 	“North Carolina does not
recognize 	a 	claim 	for 	conversion 	of 	‘intangible 	interests 	such 	as 	business
opportunities and expectancy interests.’ ” McFee v. Presley, 2022 NCBC LEXIS 142,
at *9 (N.C. Super. Ct. Nov. 29, 2022) (quoting Norman v. Nash Johnson & Sons’
Farms, Inc., 140 N.C. App. 390, 414 (2000)).

94. 	The 	Complaint 	alleges 	that 	“Defendants 	Bolesky 	and 	CTS 	willfully,
knowingly, and fraudulently converted CSI’s Business Assets for the use and benefit
of all Defendants.” 	(Compl. ¶ 215.) 	“CSI’s Business Assets” was defined in the
Complaint to include “funds, accounts receivable, distributorship with Current,
business relationship with customers, and good will.” (Compl. ¶ 192.)
95. 	Since intangible interests cannot properly be the subject of a conversion
claim, 	Defendants 	could 	not 	have 	converted 	CSI’s 	distributorship 	rights 	with
Current, CSI’s business relationships, or goodwill. See Willard v. Barger, 2020 NCBC
LEXIS 117, at **23 (N.C. Super. Ct. Oct. 9, 2020) (determining that goodwill is an
intangible asset and thus the conversion claim failed); Norman, 140 N.C. App. at 414
(business opportunities and expectancy interests cannot be the subject of a conversion
claim).
96. 	Regarding the allegation that Defendants converted CSI’s “funds [and]
accounts receivable,” our Supreme Court requires “evidence of the specific source,
specific 	amount, 	and 	specific 	destination 	of 	the 	funds 	in 	question.” 	Variety
Wholesalers, 365 N.C. at 529. A claimant “cannot maintain a claim for conversion of
money unless the funds in question can be specifically traced and identified.” Id. at
528. CSI has provided neither sufficiently specific allegations nor adequate evidence
at trial to allow the Court to trace the funds as required by controlling law.
97. 	Therefore, the Court concludes that CSI is not entitled to recover on its
claim for conversion against Defendants.

D. 	Count Twelve: Tortious Interference
98. 	CSI alleges a claim for tortious interference with prospective economic
advantage against Defendants. (Compl. ¶¶ 251–62.)
99. 	“To 	state 	a 	claim 	for 	tortious 	interference 	with prospective 	economic
advantage, a plaintiff must show that the defendant, without justification, induced a
third party to refrain from entering into a contract with the plaintiff and which would
have been entered into absent the defendant’s interference.” 	Silverdeer, LLC v.
Berton, 2013 NCBC LEXIS 21, at **31 (N.C. Super. Ct. Apr. 24, 2013). “Our Supreme
Court has held that a plaintiff must identify a specific contractual opportunity that
was lost as a result of the defendant’s allegedly tortious conduct in order to sustain a
claim for interference with prospective economic advantage.” 	MarketPlace 4 Ins.,
LLC v. Vaughn, 2023 NCBC LEXIS 31, at **37 (N.C. Super. Ct. Feb. 24, 2023) (citing
Beverage Sys. of the Carolinas v. Associated Bev. Repair, LLC, 368 N.C. 693,
701 (2016); Bldg. Ctr., Inc. v. Carter Lumber, Inc., 2016 NCBC LEXIS 79, at *29 (N.C.
Super. Ct. Oct. 21, 2016)).
100. 	The Complaint is devoid of any reference to specific contracts that would
have resulted but for Defendants’ alleged tortious interference. Therefore, CSI is not
entitled to recover on its claim for tortious interference with prospective economic
advantage.

E. 	Count Thirteen: Violation of N.C.G.S. § 75-1.1
101. 	CSI alleges a claim against Defendants for violations of the North Carolina
Unfair and Deceptive Trade Practices Act, N.C.G.S. § 75.1.1 et seq. (“UDTPA”).
(Compl. ¶¶ 264–77.)
102. 	To recover under the UDTPA, a plaintiff must establish that: “(1) 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.” Dalton
v. Camp, 353 N.C. 647, 656 (2001); Nobel v. Foxmoor Group, 380 N.C. 116, 120 (2022).
103. 	CSI alleges that “[t]he wrongful acts of Defendants . . . constitutes [sic]
unfair and deceptive trade practices.” (Compl. ¶ 264.)
104. 	Claims 	for 	breach 	of 	fiduciary 	duty 	and 	constructive 	fraud 	may 	in
appropriate circumstances support a claim for violations of the UDTPA. See White v.
Thompson, 196 N.C. App. 568, 574 (2009), aff’d, 364 N.C. 47 (2010).
105. 	However, on the facts presented in this case, Mr. Bolesky’s self-dealing is
not conduct “in or affecting commerce” under the UDTPA. 	This case is factually
analogous to the Court’s recent decision in Langley v. Autocraft, Inc., where the Court
held Plaintiff’s claim for violations of the UDTPA failed because Defendant’s wrongs
“allegedly committed are alleged to have harmed [plaintiff business], not external
market participants.” 2023 NCBC LEXIS 95, at **21 (N.C. Super. Ct. Aug. 7, 2023).
There, even where defendant formed a competing entity and used that entity to usurp
corporate opportunities, it did not “transform the misconduct into an unfair or
deceptive trade practice that affected commerce.” Id. at **22.

106. 	Here, Mr. Bolesky’s formation of CTS and usurpation of CSI’s corporate
opportunities was not in or affecting commerce for purposes of the UDTPA. Rather,
CTS was “used merely as an instrument . . . to facilitate harm” within CSI. Howard
v. IOMAXIS, LLC, 2021 NCBC LEXIS 116, at *31 (N.C. Super. Ct. Dec. 22, 2021).
107. 	Therefore, CSI is not entitled to recover on its claim for violations of the
UDTPA.
IV. 	CONCLUSION
108. 	THEREFORE, for the reasons set forth herein, the Court hereby ENTERS
FINAL JUDGMENT against Matthew Bolesky and Conservation Technology &
Solutions, LLC jointly and severally as follows:
a. 	In the amount of $200,000.00, plus pre- and post-judgment interest
at the legal rate of 8% from 30 December 2021 until satisfied. See N.C.G.S.
§§ 24-1, 24-5(b).
b. 	In the amount of $600,000.00, plus post-judgment interest at the
legal rate of 8% from the date of the filing of this Final Judgment until
satisfied. Id.
109. 	To the extent any claims not addressed herein may remain in this action,
those claims are now DISMISSED with prejudice.
110. 	Each side shall bear their own costs and attorney’s fees.

IT IS SO ORDERED, this the 12th day of December, 2023.
/s/ Michael L. Robinson
Michael L. Robinson
Special Superior Court Judge
for Complex Business Cases