Austin Maintenance & Construction, Inc. v. Crowder Construction Co.
224 N.C. App. 401
N.C. Ct. App.2012Background
- Timken operates the Asheboro tapered roller bearing plant; Sanders Brothers had a Master Service Agreement (MSA) with Timken via Plaintiff pre-acquisition, Sanders Brothers’ rights later assigned to Plaintiff in June 2010.
- Mr. Lanier, an hourly foreman, supervised a four-person crew and handled crew-specific duties at the Timken site, reporting to Plaintiff’s manager; no non-compete or confidentiality agreements were signed.
- In mid-2010, dissatisfied crew members began exploring other employment; Lanier discussed concerns with Timken and Plaintiff representatives, including potential transfer to Crowder accompanied by salary/benefits discussions.
- Crowder proposed to hire Lanier’s crew; by late September 2010 the crew decided to quit Plaintiff and join Crowder, and began working for Crowder on October 18, 2010.
- Plaintiff filed suit November 2010 asserting breach of fiduciary duty (against Lanier) and tortious interference with a Timken contract, plus unfair/deceptive practices, civil conspiracy, and injunctive relief requests.
- Trial court granted Defendants summary judgment on all claims; Plaintiff appealed challenging the sufficiency of factual issues to defeat summary judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a fiduciary duty existed between Lanier and Plaintiff | Lanier owed a fiduciary duty by virtue of control and trust within Timken site operations. | Employer-employee relationship here is not fiduciary; Lanier lacked dominion over Plaintiff. | No fiduciary relationship; Lanier owed no fiduciary duty to Plaintiff. |
| Whether Lanier breached fiduciary duty through self-dealing or domination | Sara Lee/ Dalton framework suggests Lanier’s position enabled self-dealing and domination harming Plaintiff. | No evidence Lanier had managerial power or acted beyond his job duties; resignation and move were personal choices. | No breach; no domination or self-dealing by Lanier established. |
| Whether Plaintiff can prove tortious interference with the MSA/Timken contract | MSA and verbal arrangements created rights, and Defendants caused breach by steering Timken to Crowder. | MSA does not obligate Timken to contract with Plaintiff; no enforceable contract rights against third parties exist without a Purchase Order. | No tortious interference; MSA did not confer a contractual right to Plaintiff. |
| Whether Defendants’ conduct supports unfair or deceptive trade practices | Lanier and crew raided Plaintiff’s workforce; actions violated NC UDTP statute. | Disputes over employment choices and market competition do not automatically constitute uncivil or deceptive acts affecting commerce. | No UDTP liability; conduct did not rise to egregious, deceptive conduct under Dalton. |
| Whether civil conspiracy and injunctive relief were properly denied | There was a covert agreement to replace Plaintiff and injunctive relief should be issued. | Record lacked actionable evidence of conspiracy and no basis for injunction beyond existing claims. | Affirmed summary judgment; no reversible error on conspiracy or injunctive relief. |
Key Cases Cited
- Dalton v. Dalton, 353 N.C. 651 (N.C. 1999 (Supreme Court)) (employer-employee relation not fiduciary absent domination/influence)
- Sara Lee Corp. v. Carter, 351 N.C. 27 (N.C. 1999) (fiduciary duty for self-dealing in procurement; fact pattern distinguished)
- Hajmm Co. v. House of Raeford Farms, 328 N.C. 578 (N.C. 1991) (fiduciary relationship requires more than manager duties; domination/influence)
- United Laboratories, Inc. v. Kuykendall, 322 N.C. 643 (N.C. 1988) (elements of tortious interference with contract)
- Sunbelt Rentals, Inc. v. Head & Engquist Equip., LLC, 174 N.C. App. 49 (N.C. App. 2005) (employment disputes; surmounting UDTP liability requires egregious conduct)