UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

HENRY P. OSET, 

Plaintiff-Appellee,

v.  No. 00-1029

INTERSTATE BROKERAGE OF THE

SOUTHEAST, INCORPORATED,

Defendant-Appellant. 

HENRY P. OSET, 

Plaintiff-Appellant,

v.  No. 00-1109

INTERSTATE BROKERAGE OF THE

SOUTHEAST, INCORPORATED,

Defendant-Appellee. 

Appeals from the United States District Court

for the Eastern District of North Carolina, at Raleigh.

Terrence W. Boyle, Chief District Judge.

(CA-99-185-5-BO)

Argued: November 3, 2000

Decided: December 19, 2000

Before WIDENER, MICHAEL, and MOTZ, Circuit Judges.

Affirmed by unpublished per curiam opinion. 
COUNSEL

ARGUED: Margaret Cain Lumsden, UNTI, LUMSDEN & SMITH,

P.A., Raleigh, North Carolina, for Appellant. Steven Jay Vining,

GLASS & VINING, L.L.C., Cary, North Carolina, for Appellee. ON

BRIEF: Sharon L. Smith, UNTI, LUMSDEN & SMITH, P.A.,

Raleigh, North Carolina, for Appellant. 

Unpublished opinions are not binding precedent in this circuit. See

Local Rule 36(c). 

OPINION

PER CURIAM: 

Henry Oset sued Interstate Brokerage of the Southeast, Inc. (IBS),

alleging violations of the North Carolina Business Opportunities Sales

Act (BOSA) and Unfair and Deceptive Trade Practices Act

(UDTPA). He sought a refund of the purchase price he paid under a

licensing contract for a coffee service business. The district court

entered summary judgment in favor of Oset and awarded him treble

damages in the amount of $66,897. The court denied Oset’s motion

for attorneys’ fees. We affirm these decisions. 

I.

The essential facts are undisputed. In the winter of 1997-1998 Oset

became interested in starting a business in Raleigh, North Carolina,

because he and his family wanted to move there from New York.

Oset learned that IBS, a franchise broker located in Florida, was

offering business opportunities in North Carolina. In his first telephone conversation with an IBS representative, Oset learned that the

business opportunity involved purchasing, locating sites for, and servicing automated espresso/cappuccino machines placed mainly in

hotels and restaurants. Oset told IBS that he was interested in running

a business only in the Raleigh area. 

2 OSET v. INTERSTATE BROKERAGE OF THE SOUTHEAST
In March of 1998 IBS sent Oset written materials describing the

business offering in greater detail. A letter introducing the materials

said that IBS’s business offering is "most profitable" and that its marketing techniques "generate[ ] excellent revenue potential." The materials described IBS’s five-day training program in which IBS

representatives offer investors "suggestions for acquiring accounts"

and "personally assist the Purchaser in acquiring and installing their

first five (5) machines." The materials illustrated various earnings

scenarios. A disclaimer noted that there were no guarantees of income

and that the earnings computations were not meant as forecasts of

income. 

On March 24, 1998, Oset submitted an application to IBS, indicating his exclusive interest in the Raleigh area. An IBS sales representative went to Oset’s home in New York on March 26, 1998, where

Oset and the representative signed a licensing contract. The contract

stated that Raleigh was Oset’s "area of primary responsibility." Oset

paid IBS a total of $22,299, a purchase price of $18,799 and $3,500

for the training course. 

An IBS representative gave Oset his training course in Raleigh, and

the company representative helped Oset find initial locations for the

coffee machines. IBS sent all of the machinery and supplies that Oset

needed to North Carolina. About two months into operations, Oset

realized that the business was not as profitable as he believed IBS had

suggested. Oset contacted George Fry, president of IBS, to request a

refund, but Fry refused the request. 

Oset then sought the assistance of the North Carolina Attorney

General’s office, which wrote IBS two letters stating that Oset was

entitled to void the licensing contract because IBS had failed to comply with BOSA’s disclosure and registration provisions. See N.C.

Gen. Stat. § 66-100(a). The statute requires sellers of business opportunities to provide to purchasers a disclosure statement that conforms

to the specifications laid out in BOSA. The disclosure statement,

which is to be filed with the North Carolina Secretary of State, must

contain certain information about the seller and suggest that purchasers should seek the advice of a lawyer before entering into the deal.

See N.C. Gen. Stat. §§ 66-95, 66-97. BOSA also mandates that business opportunity contracts inform the purchaser that the North CaroOSET v. INTERSTATE BROKERAGE OF THE SOUTHEAST 3
lina Secretary of State has been designated as the seller’s agent for

service of process, as required by another provision of the statute. See

N.C. Gen. Stat. §§ 66-97, 66-99. In response to the Attorney General’s letter, IBS did not dispute that it had not complied with BOSA.

Instead, it asserted that North Carolina law did not apply. The Attorney General’s office did not pursue the matter further. 

In February 1999 Oset filed a complaint against IBS in Wake

County Superior Court, alleging violations of BOSA and UDTPA and

seeking to void the licensing contract. Because there is diversity of

citizenship, IBS removed the action to the Eastern District of North

Carolina. IBS then moved to dismiss on the ground that neither

BOSA nor UDTPA apply to a licensing contract entered into in New

York. IBS also moved to strike two paragraphs of Oset’s complaint,

claiming that one of the paragraphs contains information that is the

subject of privileged settlement negotiations and that the other inappropriately characterizes IBS’s litigation position. Oset moved for

summary judgment and for attorneys’ fees. 

The district court denied IBS’s motion to dismiss, holding that IBS

cannot rely on the rule that the law of the place of execution of a contract applies because the complaint does not allege a breach of the

licensing contract or raise a dispute about the meaning of its terms.

Rather, the complaint alleges violations of BOSA and UDTPA occurring in North Carolina. The district court also denied IBS’s motion to

strike because Oset’s complaint did not contain inappropriate or privileged information. The district court then granted Oset’s motion for

summary judgment, concluding that there was no dispute that IBS had

sold Oset a "business opportunity" as defined by BOSA and that IBS

had failed to comply with BOSA’s registration and disclosure requirements. Oset was therefore awarded a refund of the contract price, the

remedy provided for in BOSA. Because a violation of BOSA constitutes an unfair trade practice, the district court trebled Oset’s damages

under UDTPA. See N.C. Gen. Stat. §§ 66-100(e), 75-16. The court

denied Oset’s motion for attorneys’ fees, however, because Oset did

not show that IBS’s violations were willful or that its refusal to settle

the matter was unwarranted. IBS appeals the denials of its motions to

dismiss and to strike and the grant of Oset’s motion for summary

judgment. Oset appeals the denial of attorneys’ fees. 

4 OSET v. INTERSTATE BROKERAGE OF THE SOUTHEAST
II.

After reviewing the briefs and the joint appendix and considering

the oral arguments of counsel, we are persuaded that the district court

reached the correct result. Accordingly, we affirm substantially on the

reasoning of the district court. See Oset v. Interstate Brokerage of the

Southeast, Inc., No. 5:99-CV-185-BO(2) (E.D.N.C. Nov. 30, 1999).*

AFFIRMED

*IBS contends that it was not allowed to discover whether Oset made

any profit in the coffee service business. Thus, IBS says that awarding

Oset a refund of the contract price might result in unjust enrichment to

him, in violation of BOSA. See N.C. Gen. Stat. § 66-100(a) ("[The] purchaser shall not be entitled to unjust enrichment by exercising the remedies provided in this subsection."). We reject IBS’s unjust enrichment

argument. "Unjust enrichment of a person occurs when he has and

retains money or benefits which in justice and equity belong to another."

Am. Jur. 2d Restitution and Implied Contracts § 3 (1973). There is no

suggestion that Oset did not return the machines and any unused supplies

to IBS. Under BOSA, therefore, Oset is "entitled to receive from the

business opportunity seller [IBS] all sums paid to the business opportunity seller." N.C. Gen. Stat. § 66-100(a). BOSA’s language does not indicate that IBS is entitled to an offset for any net earnings Oset might have

realized from his work in the coffee service business. 

OSET v. INTERSTATE BROKERAGE OF THE SOUTHEAST 5