Court Opinion

ID: 2729038
Source: CourtListenerOpinion
Date Created: 2014-09-08 21:38:28.80562+00
Date Added: 2024-06-11T09:53:17.322906
License: Public Domain

NO. COA13-1099

                       NORTH CAROLINA COURT OF APPEALS

                              Filed: 4 March 2014

AMERICAN OIL COMPANY, INC.,
     Plaintiff,

    v.                                      Mecklenburg County
                                            No. 13 CVS 1056
AAN REAL ESTATE, LLC,
     Defendant.

    Appeal by     plaintiff from order          entered 20 June 2013            by

Judge Eric L. Levinson in Mecklenburg County Superior Court.

Heard in the Court of Appeals 3 February 2014.

    Ferguson, Scarbrough, Hayes, Hawkins                &     DeMay,    P.A.,   by
    James E. Scarbrough, for plaintiff.

    Erwin, Bishop, Capitano & Moss, P.A., by Fenton T. Erwin,
    Jr., for defendant.

    ELMORE, Judge.

    Plaintiff     appeals     from     an   order    entered    20     June   2013

granting defendant’s motion to dismiss plaintiff’s complaint for

failure   to   state    a   claim    upon   which    relief    can   be   granted

pursuant to Rule 12(b)(6) of the North Carolina Rules of Civil

Procedure.     After careful consideration, we affirm the trial

court’s order.

                                     I. Facts
                                    -2-
    AAN     Real   Estate,   LLC   (defendant)         entered    into   a   lease

agreement (the lease) with American Oil Group (lessee) on 28

June 2012, whereby lessee agreed to lease the premises at 5320

and 5324 E. Independence Boulevard in Charlotte from defendant

for use as a car wash and vehicle maintenance business.                      On 22

January 2013, American Oil Company, Inc. (plaintiff) filed a

complaint alleging that defendant breached the lease terms by

failing to “install the vehicle lifts until on or about December

1, 2012” in violation of the lease’s “Lessor’s Work” provision.

Shortly thereafter, plaintiff filed an amended complaint on 14

February 2013 alleging       more lease breaches.                In addition to

attaching a copy of the lease as “Exhibit A” in the amended

complaint,   plaintiff   alleged    that:       1.)        its   party   name   was

“American    Oil   Company   Inc.[;]”     2.)         it   was   “a   corporation

organized and existing under the laws of the State of North

Carolina with a place of business in Mecklenburg County, North

Carolina[;]” and 3.)     defendant was “a limited liability company

organized and existing under the laws of the State of North

Carolina with a place of business in Mecklenburg County, North

Carolina.”     The amended complaint never referenced plaintiff’s

relationship to lessee.       In response to the amended complaint,

defendant filed a      12(b)(6) motion to dismiss for failure to
                                       -3-
state a claim upon which relief can be granted.                After a hearing

in Mecklenburg County Superior Court, Judge Eric L. Levinson

granted defendant’s motion to dismiss in an order entered 20

June 2013.    Plaintiff filed a timely notice of appeal on 18 July

2013 to this Court from Judge Levinson’s order.

                                   II. Analysis

      Plaintiff argues that the trial court erred in granting

defendant’s    motion    to   dismiss     for   failure   to   state    a   claim

pursuant to Rule 12(b)(6).            Specifically, plaintiff avers that

its differing party name in the amended complaint and the lease

was insufficient to dismiss the amended complaint.               We disagree.

      “The motion to dismiss under N.C.R. Civ. P. 12(b)(6) tests

the   legal   sufficiency     of    the   complaint.      In   ruling   on   the

motion[,] the allegations of the complaint must be viewed as

admitted, and on that basis the court must determine as a matter

of law whether the allegations state a claim for which relief

may be granted.”        Stanback v. Stanback, 297 N.C. 181, 185, 254

S.E.2d 611, 615 (1979) (citations omitted).                “This Court must

conduct a de novo review of the pleadings to determine their

legal sufficiency and to determine whether the trial court’s

ruling on the motion to dismiss was correct.”                   Leary v. N.C.

Forest Prods., Inc., 157 N.C. App. 396, 400, 580 S.E.2d 1, 4,
                                        -4-
aff’d   per    curiam,    357   N.C.    567,   597   S.E.2d       673    (2003).       A

dismissal     pursuant    to    Rule   12(b)(6)      is    appropriate         when   an

“insurmountable     bar    to   recovery”      exists     on   the      face    of    the

complaint.      Meadows v. Iredell County, 187 N.C. App. 785, 787,

653 S.E.2d 925, 927 (2007) (citation and quotation omitted).                           A

party   that    lacks    standing      to   bring    a    claim    constitutes        an

insurmountable bar to recovery, and a motion under Rule 12(b)(6)

is the proper legal mechanism to seek dismissal of a complaint

on such grounds.         Id.    Standing refers to “a party’s right to

have a court decide the merits of a dispute.”                     Teague v. Bayer

AG, 195 N.C. App. 18, 23, 671 S.E.2d 550, 554 (2009) (citation

and quotation omitted).           Without standing, the courts of this

State lack subject matter jurisdiction to hear a party’s claims.

Id.

      N.C. Gen. Stat. § 1-69.1(a)(1) states that

              [a]ll      unincorporated       associations,
              organizations or societies, or general or
              limited partnerships, foreign or domestic,
              whether organized for profit or not, may
              hereafter sue or be sued under the name by
              which they are commonly known and called, or
              under which they are doing business, to the
              same extent as any other legal entity
              established by law and without naming any of
              the individual members composing it.

N.C. Gen. Stat. § 1-69.1(a)(1) (2013).               N.C. Gen. Stat. § 66–68

“requires that a business operating under an assumed name file a
                                            -5-
certificate,      stating      the    name    of    the     business    and    name   and

address of the owner(s), in the office of the register of deeds

of the county in which business is conducted.”                          Highlands Twp.

Taxpayers Ass'n v. Highlands Twp. Taxpayers Ass'n, Inc., 62 N.C.

App. 537, 538-39, 303 S.E.2d 234, 235 (1983).                         Aside from some

narrow exceptions inapplicable to this case, an unincorporated

entity    that    seeks       to    bring    suit    must     “allege    the   specific

location of the [certificate’s] recordation” in its complaint.

N.C.    Gen.     Stat.    §    1-69.1(a)(3)         (2013);    see     Highlands      Twp.

Taxpayers Ass’n, 62 N.C. App. at 539, 303 S.E.2d at 236 (“The

statutory language of G.S. 1-69.1 is very clear and specific,

i.e.,     any    unincorporated         association         desiring     to    commence

litigation in its commonly held name must allege the location of

the recordation required by G.S. 66-68.”).                       The failure of an

unincorporated entity to meet this statutory requirement will

defeat its complaint.              Daniel v. Wray, 158 N.C. App. 161, 166,

580 S.E.2d 711, 715 (2003).

       In addition to the statutory requirements an unincorporated

entity must meet in order to bring a lawsuit, the entity must be

“[a] real party in interest[.]”                   Woolard v. Davenport, 166 N.C.

App.     129,    135,    601       S.E.2d    319,    323     (2004)     (citation     and

quotation omitted).            “[O]ur Supreme Court has stated that for
                                           -6-
purposes of reviewing a 12(b)(6) motion made on the grounds that

the plaintiff lacked standing, a real party in interest is a

party who is benefited or injured by the judgment in the case.”

Id. (citation and quotation omitted).                    In order for a breach of

contract claim to withstand a 12(b)(6) motion based on a lack of

standing, the plaintiff’s allegations must “either show it was

in privity of contract, or it is a direct beneficiary of the

contract.”      Lee Cycle Center, Inc. v. Wilson Cycle Center, Inc.,

143 N.C. App. 1, 8, 545 S.E.2d 745, 750 (2001).                        Privity is “a

[d]erivative interest founded on, or growing out of, contract,

connection,     or   bond    of    union     between       parties;    mutuality     of

interest.”       Id.    at     8-9,   545       S.E.2d    at   750    (citation      and

quotation omitted).          The law implies privity “[i]f a plaintiff

is an intended beneficiary to a contract[.]”                   Id. at 9, 545 S.E.

2d at 750 (citation omitted).

    We first note that upon defendant’s motion in the case at

bar, we take judicial notice that “American Oil Company, Inc.”

is neither a corporation existing within this state currently

nor at the time the amended complaint was filed.                           Thus, as an

unincorporated       entity,      plaintiff      was     required     to    allege   the

location of its certificate recordation in its amended complaint

pursuant   to    N.C.    Gen.      Stat.    §    1-69.1(a)(3).             The   amended
                                      -7-
complaint did not comply with this statutory requirement and

provided no indication of plaintiff’s commonly held name.

    Notwithstanding        the    mandates    of    N.C.   Gen.    Stat.    §   1-

69.1(a)(3), the amended complaint also fails because plaintiff

did not show that it was in privity of contract with lessee or a

beneficiary of any kind to the lease.               The name of the lessee,

American Oil Group, is different than the name of plaintiff,

American Oil Company, Inc., and no alleged facts in the amended

complaint    link   the    two    parties.         Accordingly,    the    amended

complaint did not sufficiently show that plaintiff suffered an

injury as a result of the alleged lease breach by defendant.

Since plaintiff’s amended complaint failed to show that it 1.)

met the requirements of N.C. Gen. Stat. § 1-69.1 and 2.) was in

privity of contract or a beneficiary of the lease, plaintiff

lacked standing to bring suit, and the trial court’s dismissal

of the amended complaint was without error.

                              III.   Conclusion

    The trial court did not err in granting defendant’s motion

to dismiss pursuant to Rule 12(b)(6) because plaintiff lacked

standing    to   bring    suit.    Thus,     we   affirm   the    trial   court’s

order.

    Affirmed.
                         -8-
Chief Judge MARTIN and Judge HUNTER, Robert N., concur.