Eli Global, LLC v. Heavner
794 S.E.2d 820
N.C. Ct. App.2016Background
- Eli Global, managed by Greg Lindberg, and Lindberg’s company UDX purchased certain commercial loans previously held by Harrington Bank/Bank of North Carolina; the UD Entities (owned by James Heavner) later filed Chapter 11 after UDX gave notices of default.
- Heavner issued a press release characterizing Lindberg/UDX as engaging in a “hostile takeover,” calling them “predators,” and alleging they intended to declare other loans in default, which was republished by local media.
- Eli Global (and Lindberg) sued Heavner alleging defamation (libel, slander, per se and per quod) and unfair and deceptive trade practices under N.C. Gen. Stat. § 75-1.1.
- Heavner moved to dismiss under Rule 12(b)(6); the trial court dismissed the complaint and awarded Heavner attorneys’ fees under § 75-16.1.
- The Court of Appeals reviewed whether the complaint pleaded actionable defamation (including libel/slander per se) and a § 75-1.1 claim, and whether the fee award was proper.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the complaint stated a claim for defamation (libel/slander) | Press release contained false, defamatory statements of fact (e.g., “predator,” “hostile takeover,” intent to default other loans) that impeach plaintiffs’ business and are actionable per se | Statements are business terms/opinion/rhetorical hyperbole or non-actionable because they do not allege specific wrongful or illegal acts | Reversed: complaint sufficiently pleaded defamation per se (libel and slander) to survive 12(b)(6) |
| Whether the statements fit libel per se vs. opinion or non-actionable rhetoric | Words impute dishonorable conduct in plaintiffs’ trade (investing/acquiring businesses), touching their special business | Comparable cases (e.g., Nucor) show similar statements are non-actionable opinion; terms are recognized business terms | Rejected Nucor defense: several statements are verifiable or defamatory in context; average reader could view them as imputing wrongdoing; not mere rhetorical hyperbole |
| Whether plaintiffs stated a claim under N.C. Gen. Stat. § 75-1.1 (unfair/deceptive practices) | Libel per se that injures business reputation constitutes an unfair or deceptive act affecting commerce causing proximate injury | If no defamation claim, no § 75-1.1 claim; defendant also argued statements were truthful or opinion | Reversed: because defamation per se was pleaded, the § 75-1.1 claim survives dismissal |
| Whether trial court properly awarded attorneys’ fees to defendant under § 75-16.1 | Plaintiffs argued dismissal and fee award were improper because claims were not frivolous and were adequately pleaded | Trial court awarded fees as prevailing party based on finding claims frivolous/malicious | Reversed: fee award premised on erroneous dismissal; court erred in awarding fees |
Key Cases Cited
- R.H. Bouligny, Inc. v. United Steelworkers of Am., 270 N.C. 160 (recognizes businesses can sue for defamation)
- Boyce & Isley, PLLC v. Cooper, 153 N.C. App. 25 (defamation elements and libel/slander distinction)
- Ellis v. Northern Star Co., 326 N.C. 219 (libel categories; libel per se affecting business)
- Renwick v. News & Observer Pub. Co., 310 N.C. 312 (interpretation of publication within four corners; second class libel standard)
- Badame v. Lampke, 242 N.C. 755 (defamation per se when imputing dishonorable conduct in trade)
- Nucor Corp. v. Prudential Equity Grp., LLC, 189 N.C. App. 731 (distinguishes non-actionable opinion/rhetorical statements in business context)
- Daniels v. Metro Magazine Holding Co., 179 N.C. App. 533 (statements not reasonably interpreted as factual cannot support defamation)
- Andrews v. Elliot, 109 N.C. App. 271 (Rule 12(b)(6) standard; plaintiff entitled to offer evidence)
- Craven v. Cope, 188 N.C. App. 814 (rhetorical hyperbole doctrine)