MEMORANDUM OF DECISION
Plaintiffs, Farmers Chemical Association, Inc. (FCA) and CF Industries, Inc. (CFI), brought this diversity action against defendant Transcontinental Gas Pipe Line Corporation (Transco) on May 18, 1977. FCA and CFI are both agricultural cooperative corporations. FCA as owner and CFI as lessee operate a large fertilizer plant at Tunis, North Carolina, which uses natural gas as a raw material in the manufacture of nitrogen-based fertilizer. 1 Transco is a major interstate natural gas pipeline company which transports gas from fields in the Gulf of Mexico and the southwest to states along the eastern seaboard as far as New York. It is the only interstate pipeline company serving North Carolina. North Carolina Natural Gas Corporation (NCNG), a material participant in the events at issue but not a party in this case, is an intrastate natural gas distribution company which serves eastern North Carolina, including the Tunis area.
The complaint sets out four claims based on a series of dealings among the parties and third persons from 1965 to the present: (1) breach by Transco of a contract to deliver to NCNG certain quantities of natural gas on an uninterruptible basis to be used at plaintiffs’ Tunis plant; (2) negligent performance of that contract resulting in foreseeable injury to plaintiffs’ operations; (3) fraud arising out of negotiations from 1965 to 1969 between Transco and FCA concerning the location and construction of the Tunis plant; and (4) violation by Transco of North Carolina’s Monopolies, Trusts and Consumer Protection Act, N.C.G.S. § 75-1.-1. Plaintiffs seek damages of $16.5 million on each of the first three claims and the same amount trebled on their fourth claim.
The case came before the court on defendant’s motion for dismissal under Rule 12(b)(6) or in the alternative for summary judgment under Rule 56. The parties filed lengthy briefs and numerous affidavits and other documents and a hearing was conducted on September 8, 1977. Based upon the materials presented by the parties the court has been able to treat the motion as one for summary judgment on the first *478 claim only. The supporting affidavits and documents do not address the issues raised by plaintiffs’ remaining claims and the motion is therefore treated as one under Rule 12(b)(6) as to those claims.
For the reasons set out below defendant’s motion was granted in part and denied in part, by order entered October 11, 1977.
I. Facts
The Tunis plant was constructed in 1969 following four years of investigation and study by FCA. FCA’s principal concern in planning the complex had been to locate the plant in an area having an assured uninterruptible natural gas supply, such supply being crucial since there was (and is) no commercially feasible alternative to natural gas in the manufacturing process used by the plant. During the same time Transco had become interested in extending from its main north-south pipeline a lateral branch through southeastern Virginia and into northeastern North Carolina. On the basis of existing demand and without a large commitment from new customers in the area, however, it could not justify the extension. Letters and other documents filed by plaintiffs suggest that Transco became actively involved in securing the location of the FCA plant in the area of the proposed pipeline extension and offered assurances to FCA that its natural gas requirements could be met by the new Transco pipeline.
Transco had a general policy not to compete at retail with the local intrastate distribution companies which it also supplied on a wholesale basis; it was therefore not willing to sell directly to FCA. This policy was reinforced by certain tax considerations favorable to Transco and by the fact that Transco’s tariffs filed with the Federal Power Commission did not cover direct retail sales of gas. Accordingly, Transco participated with FCA in investigating and selecting among several possible distribution companies in southeastern Virginia and northeastern North Carolina. There is some suggestion in the record that it was immaterial to Transco whether FCA bought its natural gas through an established distribution company or through a shell company organized by FCA to supply only the Tunis plant. Such a company was in fact organized by FCA. However, after discussions with the North Carolina Utilities Commission (which desired the expansion of natural gas service into the northeastern part of the state) and with NCNG, the latter was selected as the distribution company and received permission from the Utilities Commission to serve the area.
By letter of intent dated October 3, 1967, Transco and NCNG agreed to the sale of certain additional gas volumes to be supplied to the new service area. Among other things the agreement was conditioned on NCNG’s obtaining a firm commitment to supply gas to the FCA plant and upon Transco’s obtaining a certificate of public convenience and necessity to construct its new pipeline extension. The letter recited that the parties were to execute Transco’s “CD-2 Service Agreement” on the standard form contract filed with the Federal Power Commission. On November 10, 1967, the contract between FCA and NCNG was signed, providing for a daily maximum supply to FCA of 50,000 Mcf (fifty million cubic feet) of gas. This contract referred to a “companion agreement” to be executed between NCNG and Transco and was apparently drafted to minimize the risks to NCNG of its intermediary status. NCNG’s representative in the contract negotiations has characterized the contract as a “ ‘transportation agreement’ drafted in the form of a purchase and sale.” (Affidavit of Raymond A. Ransom.) Transco reviewed the FCA-NCNG contract and suggested one or two changes.
Four days later on November 14, 1967, Transco applied to the Federal Power Commission for a certificate of public convenience and necessity to construct the pipeline extension into northeastern North Carolina. In its application Transco specifically represented that the additional pipeline was needed to service the FCA Tunis complex and that the existence of that plant made the pipeline economically feasible. The required Commission approval was *479 obtained in May, 1968, and on October 2, 1968, Transco and NCNG executed the contemplated standard form contract adding the new gas volumes required for the northeastern area. This latter document made no reference to FCA or to any other customer of NCNG.
NCNG was to receive under the amended contract a total maximum daily volume of 141,000 Mcf (141 million cubic feet) of gas, of which 50,000 Mcf (fifty million cubic feet) had been committed to FCA. FCA alleges that the Tunis plant is by far the largest customer of NCNG and is the largest single industrial customer on the Trans-co system.
From 1971 onward the Tunis plant has been subjected to increasingly severe gas curtailments, forcing cutbacks in production and lay-offs. Plaintiffs allege that as a result of projected future curtailments they will have to close permanently a portion of the Tunis complex. The natural gas curtailments have been system wide, and Transco claims it no longer has or can purchase sufficient gas to meet contract demands.
II. Status of FCA and CFI as Third Party Beneficiaries of the Transco-NCNG Contract
The heart of plaintiffs’ complaint is the allegation that they are intended third party beneficiaries of the Transco-NCNG contract, entitled to sue for its breach. The North Carolina Supreme Court has adopted the analytical framework of the
Restatement (First) of Contracts
§ 133 which recognizes rights of action for “donee” and “creditor” beneficiaries but excludes “incidental” beneficiaries from those rights.
Matternes v. City of Winston-Salem,
“ . . . [T]he determining factor as to the rights of a third party beneficiary is the intention of the parties who actually made the contract.”
The threshold problem in this case is whether the court can look outside the “four corners” of the October 2, 1968, standard form contract between Transco and NCNG in order to determine the intent of the parties. Defendant contends that where a contract’s terms are clear an unambiguous the parties will not be permitted to adduce extrinsic evidence to explain or enlarge the provisions of the contract.
E. g., Lane v. Scarborough,
In any event, it is significant in this case that there are several documents, not one only, which recorded the relationship between Transco and NCNG. The October 3, 1967, letter of intent
does
specifically mention FCA and looks ahead to an expected ratification of the agreement reached in that letter by execution of the October 2, 1968, standard form service contract. At this stage no good reason has been shown for ignoring the October 3, 1967, letter agreement or for treating the October 2, 1968, amended standard form contract as anything more than the last in a series of documents defining the contractual relationship between Transco and NCNG.
American Trust Co. v. Catawba Sales
&
Processing Co.,
Looking beyond the confines of the October 2, 1968, contract, then, the court cannot say there is no material issue as to the intention of Transco and NCNG to benefit FCA. For this reason summary judgment on claim one should be denied.
Defendant, however, has argued that regardless of the outcome on the general issue of intention, plaintiffs cannot be classed as either “creditor” or “donee” beneficiaries. In support defendant turns to the specific language of the Restatement. A party may be a “creditor” beneficiary if “ . . . performance of the promise will satisfy an actual or supposed or asserted duty of the promisee to the beneficiary . .” Restatement § i33(l)(b). The perceived difficulty is that the promisor must apparently render the promised performance directly to the beneficiary; it is not enough that the promisor’s performance merely enables the promisee to satisfy his obligation to the beneficiary. Restatement § 133(l)(b), illustration 9; 4 Corbin on Contracts § 779D; Williston on Contracts § 402 (3d ed. 1959). Translated into the present context, it is claimed that FCA could not be a “creditor” beneficiary since Transco delivered gas to NCNG and not to FCA directly.
Defendant further argues that FCA cannot qualify as a “donee” beneficiary since there is no intention to make a gift of the natural gas to FCA. This is true but also misleading. The actual language of the Restatement requires only that “ . the purpose of the promisee in obtaining the promise of all or part of the performance thereof is to make a gift to the beneficiary or to confer upon him a right against the promisor to some performance neither due nor supposed or asserted to be due from the promisee to the beneficiary.” Restatement § 133(l)(a) (emphasis supplied).
The restriction of this clause to cases connoted by the term “gift” is clearly not warranted. See Restatement § 133, comment c. It is thus immaterial that FCA was to pay for the natural gas supplied by NCNG so long as the intent to “confer a right against the promisor” is established. What remains problematic about the quoted portion of the formula is that it, like the companion provision governing “creditor” beneficiaries, seems to contemplate that the performance will be rendered by the promisor directly to the beneficiary. 3
The court is persuaded that technical difficulties in classifying plaintiffs as “creditor” or “donee” beneficiaries should *481 not undermine the overriding emphasis in the North Carolina cases and in the Restatement placed on the intention of the parties as manifested in all the circumstances. In this regard the reformulation of section 133 in the Restatement (Second) is significant. Although the North Carolina courts have not expressly accepted this revision of the Restatement, its treatment of third party beneficiaries is fully consistent with the decided cases. The Restatement (Second) abandons the terms “creditor” and “donee” and their connotations and substitutes instead a class called “intended” beneficiaries. A party may qualify as such “ . . .if recognition of a right to performance in the beneficiary is appropriate to effectuate the intention of the parties and . . .(b) the promise manifests an intention to give the beneficiary the benefit of the promised performance.” Restatement (Second) § 133(l)(b). Applying this language and assuming for the moment the existence of the requisite intent, it is obvious that FCA was to receive the benefit of the promised performance. As the record now stands there is no evidence that the delivery to NCNG of an additional volume of 50,000 Mcf of gas per day had any other purpose except to enable NCNG to fulfill its contract to supply the Tunis facility.
Despite some similarity in the facts this case is not controlled by the specific holding in Vogel, supra. What distinguishes the FCA-NCNG-Transco relationship is the special status of NCNG and the fact that the record at this point suggests active and direct dealings between FCA and Transco concerning the location of and the supply of gas to the complex. Plaintiffs contend that NCNG was only a “paper distributor” and not an independent intervening agent. In contrast, the landowner in Vogel had not dealt directly with the subcontractor nor was the contractor viewed as merely a formal party to the various contracts. If plaintiffs should succeed in establishing their contentions on these points and on the more general question of intent, they will have shown an entitlement to sue as third party beneficiaries.
Plaintiffs have called to the court’s attention the series of North Carolina cases upholding the rights of citizens to sue, sometimes as third party beneficiaries in contract and sometimes in tort, upon breach of a contract between a water company and a municipality to supply water to the latter.
E. g., Gorrell v. Greensboro Water Supply Co.,
Recently, however, some question has been raised as to the continued vitality of the
Gorrell
rule in North Carolina. In
Matternes v. City of Winston-Salem,
“ . . . there the contract between the city and the water supply company granted to the company a franchise to carry on within the city a public utility business. One accepting and operating under such a franchise assumes duties and incurs obligations more extensive that those incurred by the promisor in an ordinary contract.”
It is the court’s conclusion that Gorrell and its progeny are still applicable to cases of the present type and that the Gorrell rationale provides an independent source of authority supporting plaintiffs’ claim to third party beneficiary status. 4
The foregoing conclusions also control the disposition of defendant’s motion to dismiss the second claim. Defendant apparently concedes that if plaintiffs have standing to sue as third party beneficiaries, then the Transco-NCNG contract creates a legal duty owing from Transco to plaintiffs whose breach is actionable in tort. The right of qualified third party beneficiaries to sue
ex delicto
as well as
ex contractu
where the allegation is that negligent performance of the contract resulted in foreseeable injury to the beneficiary is recognized in North Carolina.
Toone v. Adams,
Several decisions have gone further: a party who may not qualify as a third party beneficiary has been held entitled to sue in tort where the defendant negligently performed contractual obligations owing to his promisee. In
Council v. Dickerson’s, Inc.,
tions concerning the existence of the contract, holding that the contract created an occasion for commission of the tort and that it was immaterial whether the tortfeasor was acting in his own behalf or under contractual obligation.
This distinction between “nonfeasance” and “misfeasance” has been criticized by Professor Prosser in the context of the “water supply” cases:
“The defendant has in fact entered upon performance of the undertaking and supplied water, so that there is misfeasance, and not nonfeasance at all. By doing so, it has taken on the status of a public utility, and has entered into a relation with individual members of the public which imposes the duty. By its undertaking, and performance, it has induced the city, and the plaintiff, to rely upon it, and to forego opportunities for other protection to which they might have resorted.”
Prosser on Torts
§ 99 (3d ed. 1964). In this regard North Carolina’s unique
Gorrell
line is directly in point; those cases have occasionally relied on a tort theory
independently
of the discussion of third party beneficiary contract principles.
E. g., Potter v. Carolina Water Co.,
III. Fraud
Plaintiffs’ third claim turns on allegations that Transco falsely and knowingly or recklessly represented to FCA that it could supply sufficient gas to service the Tunis plant and that in reasonable reliance on such representations FCA constructed the plant and began operations. Defendant’s motion rests on several grounds, all without merit and only two of which deserve treatment here. Defendant argues that the representation of “sufficient gas” is not actionable under North Carolina law since it lacks the required definiteness and specificity and since it is not a representation of a past or existing fact but is an opinion or prediction about the future.
See Ragsdale v. Kennedy,
In
Ragsdale
the court held that representing a business to be a “gold mine” and a “going concern” was sufficiently specific to constitute actionable fraud and noted more generally that the requirement of specificity “depends upon the tendency of the statements to deceive under the circumstances.”
Defendant’s second contention is that the complaint on its face shows FCA’s reliance on the representations to be unreasonable. As sole support for this argument defendant contends that FCA knew that the ability of Transco to supply natural gas destined for use at Tunis was dependent on variables beyond the control of either party — specifically, the independent actions of NCNG and the regulatory intervention of the Federal Power Commission and the North Carolina Utilities Commission. Again, however, the question of reasonable reliance and the corollary question of plaintiffs’ diligence in investigating facts available to them are matters of fact not generally appropriate for treatment under Rule 12(b)(6).
Johnson v. Owens,
IV. Unfair Trade Practices Claim
In 1969 North Carolina amended its Monopolies and Trusts Act, N.C.G.S. *484 §§ 75-1 et seq., to add a new provision banning “unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce." N.C.G.S. § 75-1.1; see generally Aycock, “Antitrust and Unfair Trade Practice Law in North Carolina — Federal Law Compared,” 50 N.C.L.Rev. 199 (1972); Comment, “Consumer Protection and Unfair Competition in North Carolina — The 1969 Legislation,” 48 N.C.L.Rev. 896 (1960). Plaintiffs here seek shelter under that portion of the act prohibiting unfair acts in the conduct of trade or commerce and claim the bounty of treble damages and attorneys’ fees allowable under §§ 75-16 and 75-16.1. The basic allegations are that Transeo’s efforts from 1965 to 1969 to induce FCA to construct its proposed complex at Tunis followed by Transco’s intentional failure to purchase sufficient gas to meet its contract obligations to NCNG constitute an unfair practice. Plaintiffs do not suggest that Transco engaged in any “unfair method of competition.”
The court has had difficulty fulfilling its Erie mandate as to this claim; the number of reported decisions construing the statute is extremely small, and the legislative material is non-existent. There is no administrative agency in North Carolina specially charged with defining the range of conduct covered by a statute which, on its face, purports to prohibit unethical business practices as well as those more traditionally viewed as illegal. 6 See N.C.G.S. § 75-1.1(b).
In the most recent case involving § 75-1.1 the North Carolina Supreme Court held that the debt collection activities of a major retailer were not within the compass of the statute.
State ex rel. Edmisten v. J. C. Penney Co.,
Considering the very narrow definition of “trade or commerce” adopted in Penney, the court has serious doubts whether plaintiffs have alleged acts or practices “in the conduct of any trade or commerce.” Stripped of all the allegations concerning events prior to June 12, 1969, the effective date of § 75-1.1, plaintiffs’ fourth claim reduces to a statement that Transco has intentionally refused to purchase available gas supplies which could be used to meet its contractual commitments. As thus defined the cause of action does not appear to involve acts which “surround” or “affect” or “induce” a sale. 7
*485
A further defect in the claim as stated is its failure to allege an
unfair
practice. Whether an act or practice is unfair or deceptive within the meaning of § 75-1.1 is a question of law for the court to determine.
Hardy v. Toler,
“ . . . false advertising, misnaming and misrepresentation, misleading trade or products names, simulation of well known products or trade names, ‘free’ goods, deceptive nondisclosures • • •, false disparagement of competing products, misrepresentation of business status or connections, misuse of the term ‘guarantee,’ misuse of ‘seal of approval,’ fraudulent sales schemes, deceptive pricing and lottery merchandising.”
Plaintiffs’ theory in this case, on the other hand, threatens to make every intentional breach of a commercial contract an unfair trade practice subjecting the breaching party to treble damages. It can hardly be doubted that most, if not all, sellers who fail to deliver in a rising market or buyers who refuse delivery in a falling market do so intentionally, yet these ordinary commercial breaches are wholly foreign to the purposes of § 75-1.1.
It may well be, as the dissenters in
Penney
suggest, that the practical effect of the
Penney
decision is not only to give a narrow construction to the phrase “trade or commerce” but also to read the word “unfair” out of § 75-1.1 and limit the statute to acts or practices involving some element of deception.
Plaintiffs argued before the court that their fourth claim could stand without regard to any of the dealings among the parties occurring before the effective date of § 75-1.1. In the alternative, however, plaintiffs contended that Transco’s efforts to induce location of the FCA plant in North Carolina, all of which took place before 1969, could be considered if necessary to support the unfair trade practices claim.
Plaintiffs’ contention must be carefully distinguished from the separate claim for fraud based on the pre-1969 dealings, and plaintiffs themselves acknowledge that their fourth claim for relief is narrower than the fraud claim. Under plaintiffs’ proposed construction it is not material whether the inducements and representations by Transco were in fact false or were known to be so, only that Transco’s activities created a relationship among the parties in light of which the subsequent refusal to procure and supply natural gas must be considered “unfair.” The emphasis remains on the conduct subsequent to 1969. But the existence of any special relationship based *486 on pre-1969 dealings does not change the court’s conclusion regarding the insufficiency of the fourth claim. All that has been added is an allegation that FCA acted in reliance on promises which were subsequently unfulfilled. This alone fails to distinguish plaintiffs’ claim from countless other contract breaches; it adds nothing which could be called some special element of “unfairness.”
If the fourth claim is read broadly to include the allegations of pre-1969
misrepresentation,
a different situation is presented. Such misrepresentations would supply some additional element of unfairness or deception and would also involve events leading up to the formation of a contract. However, the court is convinced that to sustain plaintiff’s fourth claim on the basis of this third alternative construction would be to give a retroactive interpretation to § 75-1.1 without any legislative sanction.
See In Re Mitchell,
The court is mindful of the general rule that a statute is not rendered retroactive merely because it depends on antecedent facts for its subsequent operation.
Lewis v. Fidelity Co.,
The court therefore concludes that defendant is exempt from the statute’s coverage and that plaintiff’s fourth claim should be dismissed. This conclusion does not reflect upon the viability of the separate common law tort and fraud claims. The court holds only that plaintiffs have not come within the more limited pale of § 75-1.1.
Finally, and independently of the conclusion reached above, the court also finds that so much of plaintiffs’ fourth claim as relates to acts occurring more than one year before the filing date of this suit is barred by the applicable statute of limitations. Although there has been no direct North Carolina ruling on the statute of limitations applicable to actions under §§ 75-1.1 and 75-16, it seems clear that an action for treble damages is an action for a penalty subject to the one-year limitation of N.C.G.S. § 1-54.
North Carolina Theatres, Inc. v. Thompson,
IT IS THEREFORE ORDERED:
1. Defendant’s motion for summary judgment on the first claim is denied without prejudice.
2. Defendant’s motion to dismiss the second and third claims under Rule 12(b)(6) is denied.
3. Defendant’s motion to dismiss the fourth claim under Rule 12(b)(6) is allowed.
Notes
. In 1973 CFI assumed management of the Tunis complex under the terms of an agreement with FCA. This agreement was transformed into a lease in 1976. By the terms of the lease FCA assigned to CFI all its rights under the contract with NCNG. Defendant has argued that for various reasons CFI has no standing to complain of the acts which form the basis of this suit. Since both FCA and CFI are joined as plaintiffs, the court sees no reason to consider that argument further.
. Defendant points to
Gorrell v. Greensboro Water Supply Co.,
. It is, of course, possible by some manipulations of language to make the quoted portion of § 133(l)(a) fit the present facts exactly. Plaintiffs could be said to have a right against Transco to have natural gas delivered to NCNG and this performance is not one due or supposed or asserted to be due from NCNG to plaintiffs.
. Plaintiffs add in their brief, presumably by way of afterthought to the complaint, two additional theories under this general topic. First, they invoke the doctrine of judicial estoppel to contend that Transco should not be permitted to take a position in this suit inconsistent with that adopted in the quasi-judicial proceeding before the Federal Power Commission where Transco represented that its proposed pipeline extension was needed to service the Tunis plant. Second, plaintiffs suggest the applicability of promissory estoppel on the ground that Transco’s representation that it could furnish sufficient gas through NCNG induced FCA to construct the Tunis plant. The latter argument is not strictly relevant to the third party beneficiary issue and appears to present a basis for relief not set out in the complaint. The court finds it unnecessary to express an opinion on either of these arguments at this time.
. The actual ground of decision in Potter is not clear. The opinion endorsed both contract and tort theories and reflects the general merger of these two forms of action in the reasoning of the North Carolina “water supply” cases.
. The North Carolina Attorney General is given powers to enforce § 75-1.1 by civil action, but there is no state analogue to the Federal Trade Commission charged with interpreting the statute. N.C.G.S. §§ 75-9 to 75-15.
. The court has considered and rejected defendant’s argument that Penney restricted the scope of § 75-1.1 to what are commonly thought of as consumer sales. The plain words of the section belie any such construction:
*485 “ . . . [T]he purpose of this section is to declare, and to provide civil legal means to «maintain, ethical standards of dealings between persons engaged in business, and between persons engaged in business and the consuming public within this State, to the end that good faith dealings between buyers and sellers at ail levels of commerce be had in this State.”
N.C.G.S. § 75-1.1(b) (emphasis supplied). Penney does not hold otherwise.