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Labor & Employment – Unpaid Commissions – Tort/Negligence – Interference with Contract

Although plaintiff alleges that defendants are all part of the same consortium, since he also alleges that defendants acted with malice by stringing plaintiff along in an effort to get him to accept less than he was owed, plaintiff’s claim for tortious interference with contract survives defendants’ motion to dismiss.

In this case involving plaintiff’s claim that defendants failed to pay him the sales commissions they owed him, the court denies defendants’ motion to dismiss plaintiff’s claims of (1) breach of contract, (2) quantum meruit/unjust enrichment and (3) tortious interference with contract. The court grants defendants’ motion to dismiss plaintiff’s claims for (1) account stated, (2) fraud, (3) negligent misrepresentation, (4) conversion, (5) unfair trade practices and (6) attorney’s fees.

Even though the parties did not sign a contract setting out plaintiff’s commission schedule, plaintiff may be able to prove an oral contract, and written communications between the parties could be considered negotiations as to a writing confirming the agreement. However, plaintiff has not shown that defendants’ emails constitute a judicial admission of liability.

Plaintiff’s alternative claim in quantum meruit/for unjust enrichment sufficiently alleges that the parties never entered into a final enforceable contract, but that defendants encouraged plaintiff’s continued efforts to obtain customer contracts by indicating the promise of commissions to be paid and then accepting the benefits of those contracts. The court rejects defendants’ argument that plaintiff failed to allege specifically that his base compensation alone was unreasonably low and therefore unjust. The services plaintiff provided with the expectation that he would be paid commission are in addition to, not in place of, the services he provided as a base employee.

In support of his claim for an account stated, plaintiff points to alleged concessions by defendants’ agents; however, plaintiff’s own allegations reflect that defendants’ agents disputed the amount owed and that defendants had no intent to pay the amount claimed. Plaintiff has not sufficiently alleged a claim of account stated.

In support of his fraud claim, plaintiff alleges that one of defendants’ representatives told him that defendants did not intend to pay plaintiff the amount he requested and hoped he would ultimately accept a lesser amount. However, this statement came well into communications as to what had already become a disputed claim and do not support a finding that they induced plaintiff’s employment. Plaintiff has failed to state a claim for fraud.

Where plaintiff’s negligent misrepresentation claim essentially alleges that defendants failed to perform their contractual duties, the economic loss rule bars his tort claim. His remedy lies in contract.

Plaintiff’s claim to commissions is based on an unfulfilled contract right, which is an intangible interest not subject to a conversion claim.

While plaintiff asserts that defendants’ failure to pay commissions affects the market by confusing the marketplace and preventing potential competition and plaintiff’s ability to market his own services separately, these allegations are not adequate to take his unfair trade practices claim beyond the context of the employment relationship and to demonstrate a claim arising “in commerce.”

Although plaintiff alleges that defendants are all members of a consortium of entities that operate as a single public-facing entity, he also alleges that any justification or legitimate business interest was lost when defendants acted with malice when refusing to pay monies they acknowledged were due in order to “string Plaintiff along” until he accepted a lesser offer. This allegation is a narrow ground on which to potentially ground liability based on acts which cannot be justified as a reasonable, good faith attempt to protect defendants’ legitimate interests. Plaintiff’s tortious interference claim survives the motion to dismiss.

Plaintiff agrees he is not entitled to attorneys’ fees under G.S. §§ 6-21 or 95-25.22(d). Since the court has dismissed his unfair trade practices claim, he is also not entitled to attorneys’ fees under G.S. § 75-16.1.

Motion granted in part, denied in part.

Kapur v. IMW EMR, LLC (Lawyers Weekly No. 020-092-20, 30 pp.) (James Gale, S.J.) Zachary Buckheit, Lee Hogewood and Matthew Houston for plaintiff; Matthew Nis Leerberg, Troy Shelton, Kendal Reed and Aaron Tobin for defendants. 2020 NCBC 92

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