McKinnon v. CV INDUSTRIES, INC.
213 N.C. App. 328
N.C. Ct. App.2011Background
- McKinnon alleges CVI breached a 25 May 2000 Severance Agreement by failing to pay Plan A benefits after withdrawal from continuous competition.
- CVI is an ESOP holding company for Century Furniture and Valdese; Plan A depended on ESOP stock price exceeding the 1999 value when continuous competition ended.
- Plan B, C, and D provided specified periodic and one-time payments; Plan A would vest if competitive status ended with high stock price.
- Plaintiff resigned in 2000 to pursue JoAN Fabrics/Mastercraft; later held roles at Doblin, EBM, Circa related entities, continuing industry involvement.
- CVI determined Plan A benefits were not due because Plaintiff ceased continuous competition in 2001, before stock price exceeded the 1999 value.
- Trial court granted summary judgment for CVI; McKinnon appeals.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether there were genuine issues of material fact on breach of contract and specific performance | McKinnon remained continuously in competition until 2008 | No continuous competition occurred after 2001 | No genuine issues; CVI did not breach; no entitlement to Plan A. |
| Whether Plaintiff proved fraud | CVI intended to deceive by promising Plan A | No evidence of intent to deceive at contract formation | No fraud; insufficient intent evidence. |
| Whether unfair and deceptive trade practices claim exists | Plan A constitutes deception/undeclared restraint on trade | Severance Agreement not unlawful under common law | No UCL violation; contract restraint permissible. |
Key Cases Cited
- Poor v. Hill, 138 N.C.App. 19 (2000 NC) (elements of breach of contract; need valid contract and breach)
- N.C. Med. Soc'y v. N.C. Bd. of Nursing, 169 N.C.App. 1 (2005 NC) (specific performance requires breach of a valid contract)
- Hoyle v. Bagby, 253 N.C. 778 (1961 NC) (fraud requires intent at time of promise; later changes insufficient)
- Childress v. Nordman, 238 N.C. 708 (1953 NC) (duty to correct false statements discovered later; continuing misrepresentation rule)
- Mesimer v. Stancil, 52 N.C.App. 361 (1981 NC) (partial performance evidence against fraud claim)
- Forrest Paschal Mach. Co. v. Milholen, 27 N.C.App. 678 (1975 NC) (covenants not to compete analyzed for reasonableness and enforceability)