Brown v. Ferrone, et al

MOTION to Dismiss for Lack of Jurisdiction , MOTION to Dismiss for Failure to State a Claim

W.D.N.C.November 21, 2016

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF NORTH CAROLINA CHARLOTTE DIVISION CASE NO. 16-cv-00678-RJC-DCK CHRISTOPHER BROWN, D.D.S., Plaintiff, v. MICHAEL FERRONE and INNOVATIVE FOOD HOLDINGS, INC., Defendants. / DEFENDANT INNOVATIVE FOOD HOLDINGS INC.’S MOTION TO DISMISS OR, IN THE ALTERNATIVE, TO TRANSFER VENUE Pursuant to Fed. R. Civ. P. 12(b)(2), Fed. R. Civ. P. 12(b)(6) and 28 U.S.C. § 1404, Defendant Innovative Food Holdings, Inc. (“IVFH”), by and through undersigned counsel, hereby respectfully requests that the Court dismiss with prejudice all claims asserted by Plaintiff Christopher Brown (“Plaintiff”) against IVFH in Plaintiff’s Amended Complaint, ECF No. 1-1, for lack of personal jurisdiction by this Court over IVFH and for failure to state a claim, or in the alternative, that the Court transfer this action to the United States District Court for the Middle District of Florida (Case No. 16-cv-00843-UA-CM), and in support thereof states as follows: Case 3:16-cv-00678-RJC-DCK Document 9 Filed 11/21/16 Page 1 of 30 ii TABLE OF CONTENTS TABLE OF AUTHORITIES ......................................................................................................... iii INTRODUCTION .......................................................................................................................... 1 RELEVANT ALLEGATIONS ....................................................................................................... 1 DOCUMENTS INCORPORATED BY REFERENCE ................................................................. 2 A. The Court Should Consider the Settlement Agreement and the IVFH Agreements Incorporated by Plaintiff Into His Amended Complaint. .............................2 B. The Settlement Agreement ...............................................................................................3 C. The IVFH Agreements ......................................................................................................4 LEGAL STANDARD ..................................................................................................................... 6 A. Lack of Personal Jurisdiction ............................................................................................6 B. Failure to State a Claim.....................................................................................................7 C. Transfer of Venue .............................................................................................................9 ARGUMENT .................................................................................................................................. 9 A. The Court Lacks Personal Jurisdiction Over IVFH. .........................................................9 1. General Jurisdiction Requires Continuous, Systematic Contact With the Forum. ......................................................................................................................9 2. IVFH Has No Contact With North Carolina And Any Contacts By Its Subsidiaries Would Not Confer Jurisdiction Over It. ............................................11 B. Plaintiff Cannot State a Claim Against IVFH for Tortious Interference With A Contract. ..........................................................................................................................12 1. A Claim For Tortious Interference Must Plausibly Allege That The Defendant Had No Motive Other Than Malice. ....................................................12 2. IVFH Had Legitimate Contractual Interests Directly Impacted by the Settlement Agreement, Justifying Any Alleged “Interference.” ...........................15 3. Additionally, Plaintiff’s Allegations of “Interference” Are Implausible. ..............17 C. Alternatively, This Action Should Be Transferred to Florida. .......................................18 CONCLUSION ............................................................................................................................. 20 Case 3:16-cv-00678-RJC-DCK Document 9 Filed 11/21/16 Page 2 of 30 iii TABLE OF AUTHORITIES Cases Action NC v. Strach, --- F. Supp. 3d ---, 2016 WL 6304731 (M.D.N.C. Oct. 27, 2016) ............................................. 8 Advantor Sys. Corp. v. DRS Tech. Servs., Inc., 2014 WL 3747667 (M.D. Fla. July 29, 2014) .......................................................................... 20 Alacrity Renovation Servs., LLC v. Long, 2016 WL 4150011 (W.D.N.C. Aug. 3, 2016) ............................................................................ 9 ALS Scan, Inc. v. Digital Serv. Consultants, Inc., 293 F.3d 707 (4th Cir. 2002) ...................................................................................................... 9 Am. Marble Corp. v. Crawford, 351 S.E.2d 848 (N.C. App. 1987) ......................................................................................... 13, 17 Amirotech, Inc. v. Srg Tech., LLC, 2016 WL 3219880 (W.D.N.C. Jun. 7, 2016) ............................................................................ 18 Area Landscaping, L.L.C. v. Glaxo-Wellcome, Inc., 586 S.E.2d 507 (N.C. App. 2003) ......................................................................................... 13, 17 Ash v. Burnham Corp., 343 S.E.2d 2 (N.C. App. 1986) ................................................................................................. 10 Ashcroft v. Iqbal, 556 U.S. 662 (2009) .............................................................................................................. 8, 18 Atlantic Marine Const. Co. v. U.S. Dist. Court for W. Dist. of Tex., 134 S.Ct. 568 (2013) ................................................................................................................... 9 Barker v. Kimberly-Clark Corp., 524 S.E.2d 821 (N.C. App. 2000) ............................................................................................... 12 Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) .................................................................................................................... 8 Benjamin v. Sparks, 173 F. Supp. 3d 272 (E.D.N.C. 2016) ............................................................................. 13, 14, 15 Bennett v. OmniSource Corp., 2015 WL 6743866 (W.D. Va. Nov. 4, 2015) ........................................................................... 11 BeoCare Grp., Inc. v. Morrissey, 124 F. Supp. 3d 696 (W.D.N.C. 2015) ....................................................................................... 6 Case 3:16-cv-00678-RJC-DCK Document 9 Filed 11/21/16 Page 3 of 30 iv Biricik v. Wal-Mart Stores E., LP, 2014 WL 3955085 (E.D.N.C. Aug. 13, 2014 .............................................................................. 14 Branch v. Tunnel, 14 F.3d 449 (9th Cir. 1994) ........................................................................................................ 3 Cannon Mfg. Co. v. Cudahy Packing Co., 267 U.S. 333 (1925) ............................................................................................................ 10, 12 Carefirst of Maryland, Inc. v. Carefirst Pregnancy Centers, Inc., 334 F.3d 390 (4th Cir. 2003) ...................................................................................................... 6 Celgard, LLC v. LG Chem, Ltd., 2015 WL 2412467 (W.D.N.C. May 21, 2015 .......................................................................... 19 CEM Corp. v. Pers. Chemistry AB, 192 F. Supp. 2d 438 (W.D.N.C. 2002), aff’d, 55 F. App’x 621 (4th Cir. 2003) ...................................................................................... 10 Childress v. Abeles, 84 S.E.2d 176 (N.C. 1954) ......................................................................................................... 12 Clark v. Remark, 993 F.2d 228 (4th Cir. 1993) ................................................................................................ 6, 11 Combs v. Baker, 886 F.2d 673 (4th Cir. 1989) ...................................................................................................... 6 Corry v. CFM Majestic Inc., 16 F. Supp. 2d 660 (E.D. Va. 1998) ........................................................................................... 9 Cortec Indus., Inc. v. Sum Holding L.P., 949 F.2d 42 (2d Cir. 1991) ......................................................................................................... 3 Electronics for Imaging, Inc. v. Coyle, 340 F.3d 1344 (Fed. Cir. 2003) .................................................................................................. 7 Erickson v. Pardus, 551 U.S. 89 (2007) ...................................................................................................................... 8 Filmar Racing, Inc. v. Stewart, 541 S.E.2d 733 (N.C. App. 2001) ................................................................................... 13, 14, 17 Franklin v. Yancey Cty., 2010 WL 317804 (W.D.N.C. Jan. 19, 2010) ........................................................................ 8, 18 Glynn v. EDO Corp., 536 F. Supp. 2d 595 (D. Md. 2008) .......................................................................................... 10 Gray v. Riso Kagaku Corp., 82 F.3d 410 (4th Cir. 1996) ................................................................................................ 10, 12 Case 3:16-cv-00678-RJC-DCK Document 9 Filed 11/21/16 Page 4 of 30 v Griffin v. Holden, 636 S.E.2d 298 (N.C. App. 2006) ................................................................................... 13, 15, 17 Gunn v. Simpson, Schulman & Beard, LLC, 2011 WL 4431739 (N.C. Super. Sept. 23, 2011) ........................................................................ 14 Harrison v. Westinghouse Savannah River Co., 176 F.3d 776 (4th Cir. 1999) ...................................................................................................... 8 Holloway v. Pagan River Dockside Seafood, Inc., 669 F.3d 448 (4th Cir. 2012) ...................................................................................................... 7 Hubbard v. N. Carolina State Univ., 789 S.E.2d 915 (N.C. App. 2016) ............................................................................................... 12 IMO Indus., Inc. v. SEIM s.r.l., 2006 WL 3780422 (W.D.N.C. Dec. 20, 2006) ..................................................................... 7, 12 In re PEC Sols., Inc. Sec. Litig., 418 F.3d 379 (4th Cir. 2005) ................................................................................................ 7, 12 Innovative Food Holdings, Inc. v. Ferrone, et al., Case No. 16-cv-00843-UA-CM (M.D. Fla. 2016) ...................................................................... 20 Jaffe v. LSI Corp., 874 F. Supp. 2d 499 (E.D. Va. 2012) ....................................................................................... 18 Kelly v. Harvester Co., 179 S.E.2d 396 (N.C. 1971) ....................................................................................................... 13 Kimble v. U.S. Bank Nat. Ass’n, 2009 WL 3152034 (W.D.N.C. Sept. 24, 2009) .......................................................................... 3 Lexington Homes, Inc. v. W.E. Tyson Builders, Inc., 331 S.E.2d 318 (N.C. App. 1985) ............................................................................................... 13 McIntosh v. Harbour Club Villas Condo. Ass’n, 468 So. 2d 1075 (Fla. 3d DCA 1985) ....................................................................................... 20 Moorehead v. Keller, 845 F. Supp. 2d 689 (W.D.N.C. 2012) ................................................................................. 3, 16 Mylan Labs., Inc. v. Akzo, N.V., 2 F.3d 56 (4th Cir. 1993) ............................................................................................................ 6 Nishimatsu Constr. Co., Ltd. v. Houston Nat’l Bank, 515 F.2d 1200 (5th Cir. 1975) .................................................................................................... 3 Norwood v. Kirkpatrick, 349 U.S. 29 (1955) ...................................................................................................................... 9 Case 3:16-cv-00678-RJC-DCK Document 9 Filed 11/21/16 Page 5 of 30 vi Olympus Managed Health Care, Inc. v. Am. Housecall Physicians, Inc., 662 F. Supp. 2d 427 (W.D.N.C. 2009) ................................................................................... 2, 9 Otto Container Mgmt., LLC v. Greenkraft, Inc., 2016 WL 831325 (W.D.N.C. Mar. 3, 2016) ............................................................................... 6 Painter’s Mill Grille, LLC v. Brown, 716 F.3d 342 (4th Cir. 2013) ...................................................................................................... 8 Palm Beach County Health Care Dist. v. Prof’l Med. Educ., Inc., 13 So. 3d 1090 (Fla. 4th DCA 2009) ........................................................................................ 19 Papasan v. Allain, 478 U.S. 265 (1986) .................................................................................................................... 8 Pierce v. Ocwen Loan Servicing, 2006 WL 1994571 (M.D.N.C. July 14, 2006) ...................................................................... 3, 16 Pinewood Homes, Inc. v. Harris, 646 S.E.2d 826 (N.C. App. 2007) ................................................................................... 13, 15, 17 Pol v. Fed. Reserve Bank of N.Y., 2009 WL 4017164 (W.D.N.C. Nov. 18, 2009) .......................................................................... 6 Privette v. Univ. of N. Carolina at Chapel Hill, 385 S.E.2d 185 (N.C. App. 1989) ................................................................................... 14, 15, 17 Rebel Debutante LLC v. Forsythe Cosmetic Grp., Ltd., 799 F. Supp. 2d 558 (M.D.N.C. 2011) ..................................................................................... 18 Ridolfo v. BK Beverages, LLC, 2008 WL 686225 (W.D.N.C. Mar. 7, 2008) ....................................................................... 10, 12 Robinson v. American Honda Motor Co., Inc., 551 F.3d 218 (4th Cir. 2009) ...................................................................................................... 8 Saudi v. Northrop Grumman Corp., 427 F.3d 271 (4th Cir. 2005) .................................................................................................... 11 ScanSource, Inc. v. Mitel Networks Corp., 2011 WL 2550719 (D.S.C. June 24, 2011) .............................................................................. 10 Setra of N. Am., Inc. v. Motorcoach Financial, Inc., 367 F. Supp. 2d 853 (E.D.N.C. 2005) ................................................................................ 10, 12 Smith v. Dade Behring Holdings, Inc., 2007 WL 152119 (W.D.N.C. Jan. 16, 2007) ............................................................................ 11 Smith v. Ford Motor Co., 221 S.E.2d 282 (N.C. 1976) ....................................................................................................... 13 Case 3:16-cv-00678-RJC-DCK Document 9 Filed 11/21/16 Page 6 of 30 vii Speed Trac Techs., Inc. v. Estes Express Lines, Inc., 567 F. Supp. 2d 799 (M.D.N.C. 2008) ..................................................................................... 19 T. Harris Young & Assoc. v. Marquette Electronics, 931 F.2d 816 (11th Cir. 1991) .................................................................................................. 19 Tamiami Trail Tours, Inc. v. Cotton, 463 So. 2d 1126 (Fla. 1985) ..................................................................................................... 19 Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308 (2007) .................................................................................................................... 2 Thompson Everett, Inc. v. Nat’l Cable Advert., L.P., 57 F.3d 1317 (4th Cir. 1995) ...................................................................................................... 14 TomTom, Inc. v. AOT Sys. GmbH, 893 F. Supp. 2d 785 (E.D. Va. 2012) ......................................................................................... 7 Torres v. Steel Network, Inc., 2009 WL 2220064 (N.C. Super. Jul. 27, 2009) ........................................................................... 14 Treco Int’l S.A. v. Kromka, 706 F. Supp. 2d 1283 (S.D. Fla. 2010) ..................................................................................... 19 U.S. ex rel. Oberg v. Pennsylvania Higher Educ. Assistance Agency, 745 F.3d 131 (4th Cir. 2014) ...................................................................................................... 2 Underdue v. Wells Fargo Bank, N.A., 2014 WL 3952612 (W.D.N.C. Aug. 13, 2014), aff’d, 599 F. App’x 499 (4th Cir. 2015) ...................................................................................... 12 Universal Leather, LLC v. Koro AR, S.A., 773 F.3d 553 (4th Cir. 2014) ................................................................................................ 6, 10 US Airline Pilots Ass’n v. Velez, 2015 WL 3506052 (W.D.N.C. Apr. 2, 2015) ............................................................................. 7 Varner v. Bryan, 440 S.E.2d 295 (N.C. App. 1994) ......................................................................................... 14, 17 Vision Motor Cars, Inc. v. Valor Motor Co., 981 F. Supp. 2d 464 (M.D.N.C. 2013) ........................................................................... 7, 10, 12 Watters v. Kirk, 2012 WL 831452 (D.S.C. Mar. 12, 2012) .................................................................................. 6 White v. Wells Fargo & Co., 2014 WL 868756 (W.D.N.C. Mar. 5, 2014) ......................................................................... 8, 18 Wolf v. Richmond Cty. Hosp. Auth., 745 F.2d 904 (4th Cir. 1984) ................................................................................................ 7, 11 Case 3:16-cv-00678-RJC-DCK Document 9 Filed 11/21/16 Page 7 of 30 viii Wright v. Bank of Am., 2014 WL 1775992 (W.D.N.C. May 5, 2014) ............................................................................. 2 Yates v. Mun. Mortg. & Equity, LLC, 744 F.3d 874 (4th Cir. 2014) ...................................................................................................... 7 Statutes 28 U.S.C. § 1404 .......................................................................................................................... i, 9 Rules Fed. R. Civ. P. 12(b)(2)................................................................................................................ i, 6 Fed. R. Civ. P. 12(b)(6)........................................................................................................ i, 2, 3, 8 Fed. R. Civ. P. 8 .............................................................................................................................. 8 Fed. R. Evid. 201(b)(2) ................................................................................................................... 7 Case 3:16-cv-00678-RJC-DCK Document 9 Filed 11/21/16 Page 8 of 30 1 INTRODUCTION IVFH does not belong in this forum or in this action. This Court lacks personal jurisdiction over IVFH. IVFH is a holding company that does not conduct, and has never conducted, any business at all in North Carolina. In any event, Plaintiff has abjectly failed to state a claim for tortious interference against IVFH. Even if IVFH did “interfere” with the Settlement Agreement as Plaintiff alleges, Plaintiff himself admits that IVFH was privileged to do so in order to protect its contractual rights restricting the transfer of Ferrone’s IVFH shares implicated by the Settlement Agreement. Accordingly, whatever IVFH did in connection with that contract was by definition justifiable, precluding a claim for tortious interference. Alternatively, should the Court decline to dismiss Plaintiff’s claims against IVFH, this action should continue in Florida, where IVFH is located and where whatever IVFH is alleged to have done took place. RELEVANT ALLEGATIONS Plaintiff improperly includes IVFH in a breach of contract dispute between himself and Defendant Michael Ferrone (“Ferrone”). IVFH accepts, as it must, Plaintiff’s allegations as true only for purposes of this Motion. Plaintiff alleges that in September, 2014, he and Ferrone executed a Settlement Agreement resolving a litigated dispute between them. Am. Compl. ¶¶ 7-9. Pursuant to that Agreement, Ferrone agreed to transfer one hundred and fifty thousand (150,000) shares of IVFH common stock to Plaintiff, and represented that he had the right and capacity to do so. Id. ¶¶ 11- 12. Ferrone has not transferred those shares to Plaintiff. Id. ¶¶ 15, 21. Plaintiff claims that only after entering into the Settlement Agreement did he discover that Ferrone had previously executed agreements with IVFH (what Plaintiff refers to as the “IVFH Agreements”) under which Ferrone agreed to certain restrictions on Ferrone’s shares of IVFH, Case 3:16-cv-00678-RJC-DCK Document 9 Filed 11/21/16 Page 9 of 30 2 including transfer restrictions. Id. ¶¶ 16-17. This, despite Plaintiff having been a former member of IVFH’s Board of Directors. Id. ¶ 19. Plaintiff asserts that the transfer restrictions emplaced by the IVFH Agreements expired as of either December 31, 2014 or December 31, 2015, and that currently there are no valid restrictions on Ferrone’s shares of IVFH. Id. ¶¶ 18, 21. Plaintiff nonsensically alleges that IVFH knew about the Settlement Agreement “[a]t all relevant times” – ostensibly when IVFH and Ferrone agreed to those certain restrictions on Ferrone’s shares, prior to the Settlement Agreement. Id. ¶ 20. Plaintiff further alleges that IVFH, perhaps with Ferrone, prevented or interfered with Ferrone’s transfer of his shares in IVFH to Plaintiff or otherwise deprived Plaintiff of those shares. Id. ¶¶ 22-24. Plaintiff asserts only one cause of action against IVFH, for tortious interference with contract (Count V of the Amended Complaint). Id. ¶¶ 52-57. DOCUMENTS INCORPORATED BY REFERENCE A. The Court Should Consider the Settlement Agreement and the IVFH Agreements Incorporated by Plaintiff Into His Amended Complaint. On a Rule 12(b)(6) motion to dismiss, courts properly consider documents incorporated into the complaint by reference. Olympus Managed Health Care, Inc. v. Am. Housecall Physicians, Inc., 662 F. Supp. 2d 427, 431-32 (W.D.N.C. 2009) (Conrad, J.) (citing Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007) (“[C]ourts must consider the complaint in its entirety, as well as . . . documents incorporated into the complaint by reference . . . .”) (emphasis added)); U.S. ex rel. Oberg v. Pennsylvania Higher Educ. Assistance Agency, 745 F.3d 131, 136 (4th Cir. 2014) (considering “documents incorporated into the complaint by reference”); Wright v. Bank of Am., 2014 WL 1775992, at *3 (W.D.N.C. May 5, 2014) (Conrad, J.) (courts consider “documents attached to the complaint, documents incorporated by reference in the complaint, or matters of judicial notice”). Case 3:16-cv-00678-RJC-DCK Document 9 Filed 11/21/16 Page 10 of 30 3 Where a document incorporated into the complaint contradicts the plaintiff’s allegations, the document, not the allegation, controls. Moorehead v. Keller, 845 F. Supp. 2d 689, 693 n.1 (W.D.N.C. 2012) (“When a document attached to the pleadings contradicts the allegations of the complaint, the document controls in a Rule 12(b)(6) motion to dismiss.”) (citing Nishimatsu Constr. Co., Ltd. v. Houston Nat’l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975)); Pierce v. Ocwen Loan Servicing, 2006 WL 1994571, at *2 (M.D.N.C. July 14, 2006) (“[T]he court may [] disregard allegations in a complaint if contradicted by facts established in documents exhibited to or referenced in the complaint, or documents that are central to a plaintiff’s claim even though not referenced.”) (citing, inter alia, Branch v. Tunnel, 14 F.3d 449, 454 (9th Cir. 1994); Cortec Indus., Inc. v. Sum Holding L.P., 949 F.2d 42, 47 (2d Cir. 1991)); see Kimble v. U.S. Bank Nat. Ass’n, 2009 WL 3152034, at *3 (W.D.N.C. Sept. 24, 2009) (Conrad, J.) (“[W]here [the p]laintiff ha[s] made a factual allegation that is clearly refuted by the documents which give rise to the disputed transaction, the Court may consider those documents.”). B. The Settlement Agreement The Settlement Agreement is referenced throughout and is central to Plaintiff’s Amended Complaint – Plaintiff sues Ferrone for breach of that agreement, and sues IVFH for interfering with its consummation. The Court should consider the Settlement Agreement, attached as Exhibit 2 to the S. Klepfish Declaration filed in support of this Motion, ECF No. 10 (hereinafter “Klepfish Decl.”). The Settlement Agreement contradicts Plaintiff’s allegations. Section 4 of the Settlement Agreement pertains to Ferrone’s transfer of 150,000 shares of IVFH to Plaintiff. That section provides, in relevant part, that Ferrone “makes no representation about whether IVFH will maintain a restrictive legend on this stock or not.” Settlement Agreement (Ex. 2 to Klepfish Decl.) p. 2, § 4 (emphasis added). Thereby, Plaintiff acknowledged that there were restrictions in Case 3:16-cv-00678-RJC-DCK Document 9 Filed 11/21/16 Page 11 of 30 4 place on Ferrone’s IVFH stock, and further acknowledged that IVFH could, at its discretion, maintain such restrictions on those shares. That contradicts Plaintiff’s allegations both that he only discovered the transfer restrictions after entering into the Settlement Agreement, and that there were no valid restrictions on the relevant IVFH stock. Contra Am. Compl. ¶¶ 16, 21. C. The IVFH Agreements Plaintiff also makes extensive reference throughout his Amended Complaint, and relies for his claim against IVFH, on what he describes as the IVFH Agreements – “various agreements” between Ferrone and IVFH “regarding Ferrone’s IVFH shares” “which purported to place restrictions on Ferrone’s shares, including but not limited to Ferrone’s ability to transfer those shares.” Am. Compl. ¶ 16. The Court should consider those agreements, attached as Exhibits 3 thru 7, to the Klepfish Declaration filed in support of this Motion. As relevant to this matter, the IVFH Agreements provide as follows: In 2005, IVFH and Ferrone agreed to restrict any transfer of Ferrone’s IVFH shares for a period of six months after an effective registration of those shares, which said registration never took place. See Limited Standstill Agreement (Ex. 3 to Klepfish Decl.) § 2. Ferrone acknowledged, ratified and reaffirmed that those transfer restrictions were still in place in February, 2014. See Selling Agreement (Ex. 4 to Klepfish Decl.), first recital para. Ferrone also at that time agreed to further restrictions on the transfer and disposition of his IVFH shares. Id. §§ 1, 4 (10,000 shares per month restriction); § 2 (agreement to sell those shares only on the open market, to IVFH, or to an officer or director of IVFH); § 3 (daily and weekly volume restrictions). The IVFH Agreements provide no expiration date for any of the transfer restrictions – the six-months post-registration standstill restriction, the volume restrictions, the selling restrictions, etc. Case 3:16-cv-00678-RJC-DCK Document 9 Filed 11/21/16 Page 12 of 30 5 In 2012, Ferrone also agreed to further restrict his shares with a voting proxy. See 2012 Settlement Agreement (Ex. 5 to Klepfish Decl.) § 5. The proxy agreement was to expire on December 31, 2014. Id. Ferrone, however, agreed to extend the proxy agreement to December 31, 2015. See Extension Agreement (Ex. 6 to Klepfish Decl.) § 3. Finally, on June 24, 2015, IVFH and Ferrone entered into a Share Transfer Agreement in order to accommodate the Settlement Agreement between Plaintiff and Ferrone. Share Transfer Agreement, (Ex. 7 to Klepfish Decl.) first recital para. That agreement provides, in relevant part: [IVFH] hereby agrees to release the Restrictions on transfer covering [Ferrone’s] shares of [IVFH’s] common stock to the extent of 150,000 shares (the “Shares”), provided all of the terms and provisions herein are agreed to and complied with by Ferrone. The Shares shall be delivered to [Plaintiff] after this agreement has been signed and upon confirmation of the specific restrictions in place and agreement to continue such restrictions, in writing, by all parties involved in the transfer. Id. § 1 (emphasis added). In other words, IVFH agreed to remove only certain of the restrictions on the 150,000 IVFH shares connected to the Settlement Agreement, and only so that Ferrone could transfer said shares to Plaintiff, provided that Ferrone and Plaintiff confirmed and agreed to maintain the all of the restrictions on those shares as specified in the Limited Standstill and Selling Agreements and legended on those shares, including all transfer restrictions, once transfer of the shares to Plaintiff was effectuated. The IVFH Agreements contradict the Amended Complaint in several respects. First, restrictions on transfer continue in place to this day on Ferrone’s IVFH stock. Contra Am. Compl. ¶ 21. They did not expire, neither in December 2014, nor in December 2015. Contra Am. Compl. ¶ 18. Perhaps, by confusion or intentionally, Plaintiff attempts to impose the expiration of the proxy agreement on the transfer restrictions. Second, IVFH, rather than preventing Plaintiff and Ferrone from consummating their settlement, attempted to accommodate that settlement by permitting Ferrone to transfer 150,000 of his IVFH shares to Plaintiff despite Case 3:16-cv-00678-RJC-DCK Document 9 Filed 11/21/16 Page 13 of 30 6 the transfer restrictions on those shares. Contra Am. Compl. ¶¶ 22-25. However, IVFH required, in accordance with its contractual rights, that the transfer restrictions and other share restrictions remain in place and on the shares’ legends after Plaintiff accepted their transfer. Contra Am. Compl. ¶¶ 25. LEGAL STANDARD A. Lack of Personal Jurisdiction “On a defendant’s motion to dismiss for lack of personal jurisdiction pursuant to Rule 12(b)(2), the burden is on the plaintiff to prove the grounds of jurisdiction by a preponderance of the evidence.” Pol v. Fed. Reserve Bank of N.Y., 2009 WL 4017164, at *6 (W.D.N.C. Nov. 18, 2009) (Conrad, J.) (citing Mylan Labs., Inc. v. Akzo, N.V., 2 F.3d 56, 59-60 (4th Cir. 1993); Combs v. Baker, 886 F.2d 673, 676 (4th Cir. 1989)); see Otto Container Mgmt., LLC v. Greenkraft, Inc., 2016 WL 831325, at *2 (W.D.N.C. Mar. 3, 2016) (Conrad, J.) (“[T]he plaintiff bears the burden of setting forth facts sufficient to demonstrate personal jurisdiction.”). At the pleading stage, the plaintiff must make a “prima facie showing” to support jurisdiction over the defendant. See Universal Leather, LLC v. Koro AR, S.A., 773 F.3d 553, 558 (4th Cir. 2014); Carefirst of Maryland, Inc. v. Carefirst Pregnancy Centers, Inc., 334 F.3d 390, 396 (4th Cir. 2003); BeoCare Grp., Inc. v. Morrissey, 124 F. Supp. 3d 696, 699 (W.D.N.C. 2015). “To satisfy that threshold, [the p]laintiff must present at least some evidence in support of its position . . . based on affirmative proof beyond the pleadings, such as affidavits, testimony or other competent evidence of specific facts.” Watters v. Kirk, 2012 WL 831452, at *2 (D.S.C. Mar. 12, 2012) (quotation omitted); see Clark v. Remark, 993 F.2d 228 (4th Cir. 1993) (“The plaintiff [] must present affidavits or other evidence if the defendant counters plaintiff’s allegations with evidence that minimum contacts do not exist.”). Case 3:16-cv-00678-RJC-DCK Document 9 Filed 11/21/16 Page 14 of 30 7 The Court should not accept the plaintiff’s allegations as to personal jurisdiction where controverted by the defendant through proper submissions. See Wolf v. Richmond Cty. Hosp. Auth., 745 F.2d 904, 908 (4th Cir. 1984); TomTom, Inc. v. AOT Sys. GmbH, 893 F. Supp. 2d 785, 787 (E.D. Va. 2012) (citing Electronics for Imaging, Inc. v. Coyle, 340 F.3d 1344, 1349 (Fed. Cir. 2003)); US Airline Pilots Ass’n v. Velez, 2015 WL 3506052, at *2 (W.D.N.C. Apr. 2, 2015) (“The plaintiff . . . may not rest on mere allegations where the defendant has countered those allegations with evidence that the requisite minimum contacts do not exist [but rather] must come forward with affidavits or other evidence to counter that of the defendant factual conflicts must be resolved in favor of the party asserting jurisdiction.”) (quotation omitted); Vision Motor Cars, Inc. v. Valor Motor Co., 981 F. Supp. 2d 464, 468 (M.D.N.C. 2013) (“Once a defendant presents evidence indicating that the requisite minimum contacts do not exist, the plaintiff must come forward with affidavits or other evidence in support of its position.”); IMO Indus., Inc. v. SEIM s.r.l., 2006 WL 3780422, at *1 (W.D.N.C. Dec. 20, 2006) (“[A] plaintiff may not rest on mere allegations where the defendant has countered those allegations with evidence that the requisite minimum contacts do not exist.”).1 B. Failure to State a Claim “A complaint may fail to state a claim upon which relief may be granted in two ways: first, by failing to state a valid legal cause of action, i.e., a cognizable claim, see Holloway v. Pagan River Dockside Seafood, Inc., 669 F.3d 448, 451 (4th Cir. 2012); or second, by failing to allege sufficient facts to support a legal cause of action, see Painter’s Mill Grille, LLC v. Brown, 1 The Court may also take judicial notice of publicly available documents, such as disclosures filed with the U.S. Securities and Exchange Commission (“SEC”). In re PEC Sols., Inc. Sec. Litig., 418 F.3d 379, 389 (4th Cir. 2005) (taking judicial notice of SEC filings); Yates v. Mun. Mortg. & Equity, LLC, 744 F.3d 874, 881 (4th Cir. 2014) (“tak[ing] judicial notice of the content of relevant SEC filings and other publicly available documents”); see also FED. R. EVID. 201(b)(2). Case 3:16-cv-00678-RJC-DCK Document 9 Filed 11/21/16 Page 15 of 30 8 716 F.3d 342, 350 (4th Cir. 2013).” Action NC v. Strach, --- F. Supp. 3d ---, 2016 WL 6304731, at *4 (M.D.N.C. Oct. 27, 2016). The United States Supreme Court and the Fourth Circuit have emphasized the need to carefully scrutinize pleadings at the motion to dismiss stage. To satisfy the Rule 8 pleading requirements, a complaint must provide “more than labels and conclusions” or “a formulaic recitation of the elements of a cause of action.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). A complaint cannot rest on “‘naked assertion[s]’ devoid of ‘further factual enhancement.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 557 (alteration in original)). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements . . . do not suffice.” Iqbal, 556 U.S. at 678. Rather, “[t]o survive a motion to dismiss a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Id. at 697 (quoting Twombly, 550 U.S. at 570); see also Robinson v. American Honda Motor Co., Inc., 551 F.3d 218, 222 (4th Cir. 2009). “Although the Court must consider all well-pled allegations in the complaint as true, Erickson v. Pardus, 551 U.S. 89, 94 (2007), and must construe all factual allegations in the light most favorable to the plaintiff, Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 783 (4th Cir. 1999), the Court is ‘not bound to accept as true a legal conclusion couched as a factual allegation.’ Papasan v. Allain, 478 U.S. 265, 286 (1986).” White v. Wells Fargo & Co., 2014 WL 868756, at *1 (W.D.N.C. Mar. 5, 2014) (Conrad, J.). “The presence of a few conclusory legal terms does not insulate a complaint from dismissal under Rule 12(b)(6) when the facts alleged in the complaint cannot support the legal conclusion.” Franklin v. Yancey Cty., 2010 WL 317804, at *6 (W.D.N.C. Jan. 19, 2010) (Keesler, M.J.). Case 3:16-cv-00678-RJC-DCK Document 9 Filed 11/21/16 Page 16 of 30 9 C. Transfer of Venue As the Supreme Court recently explained, 28 U.S.C. § 1404(a) “is merely a codification of the doctrine of forum non conveniens for the subset of cases in which the transferee forum is within the federal court system.” Atlantic Marine Const. Co. v. U.S. Dist. Court for W. Dist. of Tex., 134 S.Ct. 568, 580 (2013). “Transfer pursuant to § 1404(a) requires ‘a lesser showing’ than dismissal for forum non conveniens;” the statute provides that “[f]or the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.” Corry v. CFM Majestic Inc., 16 F. Supp. 2d 660, 666 (E.D. Va. 1998) (quoting Norwood v. Kirkpatrick, 349 U.S. 29, 32 (1955)); 28 U.S.C. § 1404(a). ARGUMENT A. The Court Lacks Personal Jurisdiction Over IVFH. This Court does not have personal jurisdiction over IVFH. IVFH, a holding company, conducts no business in North Carolina. 1. General Jurisdiction Requires Continuous, Systematic Contact With the Forum. “General personal jurisdiction exists . . . if the non-resident defendant has had continuous and systematic contact with the forum state.” Olympus Managed Health Care, Inc. v. Am. Housecall Physicians, Inc., 662 F. Supp. 2d 427, 436 (W.D.N.C. 2009) (Conrad, J.). That standard – continuous and systematic contacts – is significantly more demanding than is necessary to establish specific jurisdiction. See ALS Scan, Inc. v. Digital Serv. Consultants, Inc., 293 F.3d 707, 712 (4th Cir. 2002); Alacrity Renovation Servs., LLC v. Long, 2016 WL 4150011, at *4 (W.D.N.C. Aug. 3, 2016) (“general jurisdiction [] requires a more demanding showing of continuous and systematic activities in the forum state”) (citing Universal Leather, LLC v. Koro Case 3:16-cv-00678-RJC-DCK Document 9 Filed 11/21/16 Page 17 of 30 10 AR, S.A., 773 F.3d 553, 559 (4th Cir. 2014)). See also ScanSource, Inc. v. Mitel Networks Corp., 2011 WL 2550719, at *5 (D.S.C. June 24, 2011) (finding no personal jurisdiction, explaining that “fact that [defendant], like other sophisticated parent companies, shares administrative functions and some executives with its subsidiaries, guarantees its subsidiaries, and has a Web site that lists its and its subsidiaries’ business partners, is not enough to subject it to this Court’s general jurisdiction”); Vision Motor Cars, Inc. v. Valor Motor Co., 981 F. Supp. 2d 464, 473-74 (M.D.N.C. 2013) (holding that “a small number of sales to customers within the forum state” where defendant had “no office, employees, or agents in North Carolina” was insufficient to establish general personal jurisdiction); CEM Corp. v. Pers. Chemistry AB, 192 F. Supp. 2d 438, 441 (W.D.N.C. 2002), aff’d, 55 F. App’x 621 (4th Cir. 2003) (“de minimus sales and meeting activities” in the forum insufficient); Glynn v. EDO Corp., 536 F. Supp. 2d 595, 606 (D. Md. 2008) (finding no personal jurisdiction despite that it was undisputed that defendant (1) consistently recruits from two institutions of higher education in the forum state, (2) “derives some revenue from sales and operations” in the forum state, (3) has an employee and “several online job listing” in the forum state, and (4) owns or leases property in the forum state). “It is settled law that the mere presence of a subsidiary in North Carolina, standing alone, is not enough to impute personal jurisdiction over the parent corporation.” Ridolfo v. BK Beverages, LLC, 2008 WL 686225, at *4 (W.D.N.C. Mar. 7, 2008); Setra of N. Am., Inc. v. Motorcoach Financial, Inc., 367 F. Supp. 2d 853, 859 (E.D.N.C. 2005) (citing Ash v. Burnham Corp., 343 S.E.2d 2, 4 (N.C. App. 1986)); see Cannon Mfg. Co. v. Cudahy Packing Co., 267 U.S. 333, 336 (1925) (holding no personal jurisdiction over defendant in North Carolina despite that defendant’s subsidiary did business and had an office in the state); Gray v. Riso Kagaku Corp., 82 F.3d 410 (4th Cir. 1996) (“[T]he mere fact that [defendant’s] subsidiaries do business Case 3:16-cv-00678-RJC-DCK Document 9 Filed 11/21/16 Page 18 of 30 11 in South Carolina does not confer personal jurisdiction over [defendant].”); Saudi v. Northrop Grumman Corp., 427 F.3d 271, 276 (4th Cir. 2005) (“the contacts of a corporate subsidiary cannot impute jurisdiction to its parent entity”); Bennett v. OmniSource Corp., 2015 WL 6743866, at *3 (W.D. Va. Nov. 4, 2015) (dismissing for lack of personal jurisdiction where plaintiff could not establish that defendant exercised “extraordinary control” over subsidiary with contacts in forum); see also Smith v. Dade Behring Holdings, Inc., 2007 WL 152119, at *9 (W.D.N.C. Jan. 16, 2007) (“No principle is more firmly embedded in corporation law than that a corporation exists separately and independently from its principals, and business people are entitled to rely upon the maintenance of that principle in structuring and managing their affairs.”) (quotation omitted). 2. IVFH Has No Contact With North Carolina And Any Contacts By Its Subsidiaries Would Not Confer Jurisdiction Over It. Plaintiff makes only a single allegation to attempt to assert jurisdiction over IVFH: that “upon information and belief . . . IVFH conducts substantial business in North Carolina.” Am. Compl. ¶ 3. In other words, Plaintiff asserts that this Court has general jurisdiction over IVFH. As the Klepfish Declaration filed in support of this Motion makes clear, IVFH is a holding company, IVFH has no offices or employees in North Carolina, and IVFH conducts no business (and has never conducted any business) at all in North Carolina. See Klepfish Decl. ¶¶ 5-6. As Plaintiff himself points out, IVFH is a publicly-traded company. Am. Compl. ¶ 27. That IVFH is a holding company that does no business in North Carolina is supported by more than a decade of IVFH’s publicly filed and SEC-regulated disclosures. See Ex. 1 to Klepfish Decl., ECF No. 10. The Court cannot accept Plaintiff’s conclusory and unsubstantiated allegations in the face of the well-supported Declaration and incontrovertible SEC filings. See Clark v. Remark, 993 F.2d 228, 1993 WL 134616 at *2; Wolf v. Richmond Cty. Hosp. Auth., 745 F.2d at 908; Vision Motor Case 3:16-cv-00678-RJC-DCK Document 9 Filed 11/21/16 Page 19 of 30 12 Cars, 981 F. Supp. 2d at 468; IMO Indus., 2006 WL 3780422, at *1; see also PEC Sols, 418 F.3d at 389. To the extent Plaintiff means to imply that a subsidiary of IVFH has some contact with North Carolina, well-settled law precludes exerting jurisdiction over IVFH based on the activity of its subsidiaries or affiliates. See Cannon, 267 U.S. at 336; Gray, 82 F.3d 410, 1996 WL 181488 at *2; Ridolfo, 2008 WL 686225, at *4; Setra, 367 F. Supp. 2d at 859. Plaintiff comes nowhere close to meeting the “more demanding showing” required to assert general personal jurisdiction over IVFH. Plaintiff has not and cannot subject IVFH to the jurisdiction of this Court. Therefore, his claim against IVFH must be dismissed. B. Plaintiff Cannot State a Claim Against IVFH for Tortious Interference With A Contract. Even if IVFH was properly before this Court, Plaintiff’s own allegations eviscerate his claim for tortious interference. 1. A Claim For Tortious Interference Must Plausibly Allege That The Defendant Had No Motive Other Than Malice. Under North Carolina law, “[t]he elements of tortious interference are: (1) the existence of a valid contract between plaintiff and a third party; (2) knowledge by defendant of the contract; (3) acts by defendant to intentionally induce the third party not to perform the contract; (4) that defendant’s acts were committed without justification; and, (5) actual damage to the plaintiff.” Underdue v. Wells Fargo Bank, N.A., 2014 WL 3952612, at *3 (W.D.N.C. Aug. 13, 2014), aff’d, 599 F. App’x 499 (4th Cir. 2015) (Conrad, J.) (citing Barker v. Kimberly-Clark Corp., 524 S.E.2d 821, 826 (N.C. App. 2000)). Critically for these purposes, the fourth element requires that the defendant be an “outsider” who acted “without justification.” See Hubbard v. N. Carolina State Univ., 789 S.E.2d 915, 922 (N.C. App. 2016) (citing, inter alia, Childress v. Abeles, 84 S.E.2d 176, 181-82 (N.C. 1954)). Case 3:16-cv-00678-RJC-DCK Document 9 Filed 11/21/16 Page 20 of 30 13 “An ‘outsider’ is not party to the contract and has ‘no legitimate business interest of [his or her] own in the subject matter thereof.’ Conversely, any party that ‘had a legitimate business interest . . . in the subject matter’ is a ‘non-outsider.’” Benjamin v. Sparks, 173 F. Supp. 3d 272, 289 (E.D.N.C. 2016) (emphasis added) (quoting Smith v. Ford Motor Co., 221 S.E.2d 282, 292 (N.C. 1976)). This follows the recognition that “[o]ne is privileged purposely to cause another not to perform a contract, or enter into or continue a business relation, with a third party by in good faith asserting or threatening to protect properly a legally protected interest of his own which he believes may otherwise be impaired or destroyed by the performance of the contract or transaction.” Am. Marble Corp. v. Crawford, 351 S.E.2d 848, 850 (N.C. App. 1987) (emphasis added) (quoting Kelly v. Harvester Co., 179 S.E.2d 396 (N.C. 1971); see Lexington Homes, Inc. v. W.E. Tyson Builders, Inc., 331 S.E.2d 318, 323 (N.C. App. 1985) (“As to the element of justification, to be actionable interference with contract must be otherwise than in the legitimate exercise of one’s own equal or superior right.”). Accordingly, “[i]n order to demonstrate the element of acting without justification, the action must indicate ‘no motive for interference other than malice.’” Area Landscaping, L.L.C. v. Glaxo- Wellcome, Inc., 586 S.E.2d 507, 510 (N.C. App. 2003) (emphasis added) (quoting Filmar Racing, Inc. v. Stewart, 541 S.E.2d 733, 738 (N.C. App. 2001)); Pinewood Homes, Inc. v. Harris, 646 S.E.2d 826, 832-33 (N.C. App. 2007) (“complaint must admit of no motive for interference other than malice”). “Even if plaintiff shows that defendant acted with ill intentions, legal malice does not exist unless plaintiff can show that defendant had no legitimate business justification for the interference.” Griffin v. Holden, 636 S.E.2d 298, 306 (N.C. App. 2006); see Pinewood Homes, 646 S.E.2d at 832 (no claim for tortious interference if interference is “reasonably related to the protection of a legitimate business interest of the defendant” and therefore justified) (emphasis added); Varner v. Case 3:16-cv-00678-RJC-DCK Document 9 Filed 11/21/16 Page 21 of 30 14 Bryan, 440 S.E.2d 295, 299 (N.C. App. 1994) (“legal malice” exists only where “defendant acted without any legal justification for his action”) (emphasis added); Biricik v. Wal-Mart Stores E., LP, 2014 WL 3955085, at *2 (E.D.N.C. Aug. 13, 2014) (“interference with contract is justified if it is motivated by a legitimate business purpose”); Benjamin, 173 F. Supp. 3d at 290 (malice exists only where interference “not reasonably related to the protection of a legitimate business interest”). Of course, among those legally protected legitimate business interests which preclude a claim for tortious interference are the defendant’s pre-existing contractual interests. See Thompson Everett, Inc. v. Nat’l Cable Advert., L.P., 57 F.3d 1317, 1327 (4th Cir. 1995) (“rights under the exclusive contracts are legally protected interests”); Gunn v. Simpson, Schulman & Beard, LLC, 2011 WL 4431739, at *9 (N.C. Super. Sept. 23, 2011) (dismissing claim for tortious interference because pleadings did not allege that defendant “acted in a manner unrelated to its legitimate business interest” where defendant acted to protect its rights under a lease agreement) (emphasis added); Torres v. Steel Network, Inc., 2009 WL 2220064, at *2 (N.C. Super. Jul. 27, 2009) (dismissing complaint with “bare allegations” that defendant acted “without justification” where complaint’s supporting documents showed that defendant was “motivated by justifiable interests in protecting pre-existing legitimate contractual interests”). Therefore, to survive a Rule 12(b)(6) dismissal, the plaintiff’s allegations may not support a justifiable motive on the part of the defendant in interfering with the third-party contract. See Privette v. Univ. of N. Carolina at Chapel Hill, 385 S.E.2d 185, 190 (N.C. App. 1989) (dismissing where complaint revealed that alleged “interference” was “reasonably related to the protection of a legitimate business [contractual] interest of the defendant”); Filmar Racing, Inc. v. Stewart, 541 S.E.2d 733, 738 (N.C. App. 2001) (dismissing where, “on the face of the complaint [plaintiff] alleges Case 3:16-cv-00678-RJC-DCK Document 9 Filed 11/21/16 Page 22 of 30 15 that defendants have a legitimate business interest both in [plaintiff’s] contract with [the third party]”). 2. IVFH Had Legitimate Contractual Interests Directly Impacted by the Settlement Agreement, Justifying Any Alleged “Interference.” Plaintiff’s own allegations make explicit that IVFH had legitimate, legally protected interests at stake in the Settlement Agreement. Even if IVFH interfered to prevent consummation of the Settlement Agreement (which IVFH denies), Plaintiff still could not maintain an action for tortious interference. The Settlement Agreement calls for the transfer of Ferrone’s shares in IVFH to Plaintiff. Am. Compl. ¶ 11. But – as Plaintiff’s Amended Complaint itself makes clear – IVFH had previously entered into the IVFH Agreements with Ferrone preventing Ferrone’s transfer of his shares in IVFH. Am. Compl. ¶¶ 16-17. Indeed, the only specific acts of interference that Plaintiff has pled relate to IVFH acting to protect its rights under the IVFH Agreements. Had IVFH, as Plaintiff alleges, acted to prevent or interfere with Ferrone’s transfer of his IVFH shares to Plaintiff under the Settlement Agreement, Plaintiff explicitly concedes that IVFH would have been acting to protect its pre-existing contractual rights under the IVFH Agreements.2 That is the very definition of interference reasonably related to protecting a legally cognizable, legitimate business interest, thereby preventing Plaintiff from asserting the fourth element required to state his cause of action. See, e.g., Privette, 385 S.E.2d at 190; Griffin, 636 S.E.2d at 306; Pinewood Homes, 646 S.E.2d at 832; Benjamin, 173 F. Supp. 3d at 290. Plaintiff attempts to plead around IVFH’s legally protected justification for interfering in the Settlement Agreement by alleging that the transfer restrictions on Ferrone’s shares emplaced by the 2 It’s also worth noting that the securities at issue are shares of IVFH. That is, IVFH acted to protect the unrestricted transfer of its own common stock. Surely a company has a legitimate business interest in its own ownership. Case 3:16-cv-00678-RJC-DCK Document 9 Filed 11/21/16 Page 23 of 30 16 IVFH Agreements expired in December of 2014 or 2015, and that there are no longer any valid restrictions on Ferrone’s ability to transfer his IVFH shares. Am. Compl. ¶¶ 18, 21.3 However, those allegations are flatly contradicted by the agreements Plaintiff himself incorporates into his Amended Complaint. First, in the Settlement Agreement, Plaintiff explicitly acknowledged that he knew about transfer and other restrictions emplaced on the IVFH shares Ferrone was to transfer to him, and that IVFH could maintain those transfer restrictions on those shares after their transfer to Plaintiff at IVFH’s discretion. See Settlement Agreement (Ex. 2 to Klepfish Decl.) § 4. Second, the IVFH Agreements make clear that, at the time of and after Plaintiff and Ferrone entered into the Settlement Agreement, Ferrone’s IVFH shares had valid transfer restrictions, and that those restrictions were never due to, and never did, expire. See Limited Standstill Agreement (Ex. 3 to Klepfish Decl.) § 2; Selling Agreement, (Ex. 4 to Klepfish Decl.) first recital para., §§ 1, 3; Share Transfer Agreement (Ex. 7 to Klepfish Decl.). This Court cannot accept Plaintiff’s allegations – that all restrictions on “Ferrone’s ability to transfer his IVFH shares expired” and that there are “no valid restrictions on Ferrone’s IVFH shares,” ostensibly offsetting IVFH’s interest in preventing consummation of the Settlement Agreement – when the very documents Plaintiff incorporates into and relies on throughout his Amended Complaint state the opposite. See Moorehead, 845 F. 3 Plaintiff does not explicitly allege that IVFH’s rights under the IVFH Agreements expired – a fact critical to his claim for tortious interference – only that restrictions on Ferrone’s ability to transfer expired, and that (presumably, as a result) there are no longer any valid restrictions on Ferrone’s IVFH shares. As explained here, those allegations are false, contradicted by the IVFH Agreements to which they make reference. Equally important, the IVFH Agreements place more than transfer restrictions on Ferrone’s IVFH shares. Even if the transfer restrictions Plaintiff discusses in his Amended Complaint were lifted or expired, Ferrone’s IVFH shares still would be subject to further and continuing limitations and restrictions, which alone would have justified IVFH in preventing the transfer of those shares to Plaintiff unless Plaintiff confirmed and agreed in writing to adhere to all limitations and restrictions. See Share Transfer Agreement (Ex. 7 to Klepfish Decl.) § 1. In other words, while Plaintiff’s Amended Complaint fails on its own terms, a facial but full consideration of the IVFH Agreements (proper on this Motion) makes clear that IVFH had rights other than the transfer restrictions at stake in the Settlement Agreement, also justifying any alleged “interference.” Case 3:16-cv-00678-RJC-DCK Document 9 Filed 11/21/16 Page 24 of 30 17 Supp. 2d at 693 n.1; Pierce, 2006 WL 1994571, at *2. The Settlement Agreement and the IVFH Agreements establish that IVFH had a legitimate, legally recognized interest in preventing the transfer of Ferrone’s IVFH shares, precluding a claim for tortious interference. Even if it were not perfectly clear from the face of the IVFH Agreements that Ferrone’s IVFH shares were at all relevant times and still are subject to transfer restrictions (it is), IVFH still could not be liable for tortious interference with the Settlement Agreement because Plaintiff cannot plead legal malice. “Legal malice” required for tortious interference exists only where “defendant acted without any legal justification for his action.” Varner, 440 S.E.2d at 299 (emphasis added); Griffin, 636 S.E.2d at 306. There must be “no motive for interference other than malice.” Area Landscaping, 586 S.E.2d at 510; Filmar Racing, 541 S.E.2d at 738. And interference in a contract is justifiable if it is “reasonably related to the protection of a legitimate business interest.” Pinewood Homes, 646 S.E.2d at 832 (emphasis added); Privette, 385 S.E.2d at 190. Plaintiff admits that IVFH understood that it had a legitimate motive other than malice reasonably protected by preventing the unrestricted transfer of Ferrone’s IVFH shares, i.e., IVFH’s good faith belief that the shares were subject to the IVFH Agreements’ transfer (and other) restrictions. See Am. Marble, 351 S.E.2d at 850. Even crediting Plaintiff’s misinterpretation of the IVFH Agreements, IVFH could not have acted with legal malice in interfering with the Settlement Agreement by virtue of the existence of such IVFH Agreements. Under the circumstances Plaintiff himself alleges and based on the documents he includes in his Amended Complaint, Plaintiff cannot (even by re-pleading) maintain an action against IVFH for tortious interference with the Settlement Agreement, requiring dismissal with prejudice. 3. Additionally, Plaintiff’s Allegations of “Interference” Are Implausible. Beyond Plaintiff’s fatal and incurable inability to even state the elements of tortious interference, Plaintiff cannot plausibly allege that IVFH did, in fact, interfere with the Settlement Case 3:16-cv-00678-RJC-DCK Document 9 Filed 11/21/16 Page 25 of 30 18 Agreement. Again, his allegations are contradicted by the documents he incorporates into his pleading. The Share Transfer Agreement makes abundantly clear that IVFH did not stand in the way of Ferrone’s transfer of the 150,000 IVFH shares to Plaintiff. To the contrary, IVFH attempted to accommodate that transfer. IVFH simply required that Plaintiff adhere to the same transfer restrictions which had been in place on the shares since 2005. And the Settlement Agreement makes clear that Plaintiff knew that there were transfer restrictions on the shares, and that IVFH at its discretion could decide to maintain them. Plaintiff’s conclusory allegations – that IVFH interfered to prevent consummation of the Settlement Agreement – is implausible, belied by the very documents he incorporates into and which are necessary to support his Amended Complaint. See Iqbal, 556 U.S. at 697; White v, 2014 WL 868756, at *1; Franklin, 2010 WL 317804, at *6. For this additional reason, Plaintiff’s claim against IVFH must be dismissed, with prejudice. C. Alternatively, This Action Should Be Transferred to Florida. Plaintiff cannot establish jurisdiction of this Court over IVFH, and cannot state a claim for tortious interference against IVFH. But if the Court is inclined to permit Plaintiff’s claim against IVFH to continue, it should transfer the action to Florida. A motion to transfer, once venue is established in the transferee forum, is based on three factors: (1) the plaintiff’s choice of venue, (2) the convenience of the parties and witnesses, and (3) the interests of justice. Amirotech, Inc. v. Srg Tech., LLC, 2016 WL 3219880, at *4 (W.D.N.C. Jun. 7, 2016); Jaffe v. LSI Corp., 874 F. Supp. 2d 499, 502 (E.D. Va. 2012) (citation omitted); Rebel Debutante LLC v. Forsythe Cosmetic Grp., Ltd., 799 F. Supp. 2d 558, 564 (M.D.N.C. 2011). Courts weigh the following discretionary factors in considering the relative conveniences: Case 3:16-cv-00678-RJC-DCK Document 9 Filed 11/21/16 Page 26 of 30 19 (1) the plaintiff’s initial choice of forum; (2) relative ease of access to sources of proof; (3) availability of compulsory process for attendance of unwilling witnesses, and the cost of obtaining attendance of willing and unwilling witnesses; (4) possibility of a view of the premises, if appropriate; (5) enforceability of a judgment, if one is obtained; relative advantage and obstacles to a fair trial; (6) other practical problems that make a trial easy, expeditious, and inexpensive; (8) administrative difficulties of court congestion; (9) local interest in having localized controversies settled at home; (10) appropriateness in having a trial of a diversity case in a forum that is at home with the state law that must govern the action; and (11) avoidance of unnecessary problems with conflicts of law. Speed Trac Techs., Inc. v. Estes Express Lines, Inc., 567 F. Supp. 2d 799, 802 (M.D.N.C. 2008); see Celgard, LLC v. LG Chem, Ltd., 2015 WL 2412467, at *6 (W.D.N.C. May 21, 2015). Plaintiff in essence alleges that IVFH prevented Ferrone from transferring his IVFH shares to Plaintiff in fulfillment of the Settlement Agreement in order to protect IVFH’s rights based in agreements between IVFH and Ferrone as to transfer restrictions on Ferrone’s shares. The Settlement Agreement may be connected to North Carolina, but none of the allegations involving IVFH or its agreement with Ferrone are. The subject matter of IVFH’s alleged involvement in this case is shares of IVFH, a Florida corporation. The basis for IVFH’s alleged involvement is agreements between IVFH and Ferrone – neither of whom are from North Carolina. Those agreements were negotiated and executed outside of North Carolina and are not governed by North Carolina law. Whatever “interference” IVFH allegedly engaged in took place outside of North Carolina. Plaintiff theoretically could sue IVFH in a Florida court (if he had a viable claim).4 This Court does not have personal jurisdiction over IVFH or its officers, directors and employees. Florida 4 Under Florida law, like North Carolina law, tortious interference requires proof of an unjustified interference by an outsider without any beneficial interest in the contract. See T. Harris Young & Assoc. v. Marquette Electronics, 931 F.2d 816, 825-26 (11th Cir. 1991) (quoting Tamiami Trail Tours, Inc. v. Cotton, 463 So. 2d 1126, 1127 (Fla. 1985)) (element of tortious interference with a contract is “an intentional and unjustified interference with the relationship”); Treco Int’l S.A. v. Kromka, 706 F. Supp. 2d 1283, 1289 (S.D. Fla. 2010) (quoting Palm Beach Case 3:16-cv-00678-RJC-DCK Document 9 Filed 11/21/16 Page 27 of 30 20 courts presumably do.5 Witnesses and documents relevant to IVFH’s alleged connection to the dispute between Plaintiff and Ferrone are not located in North Carolina. If Plaintiff’s claim against IVFH has any merit, relevant information would most likely be in Florida. Critically, North Carolina law will not apply to the transferability of IVFH shares generally, or to the agreements between IVFH and Ferrone. The courts in Florida, not in North Carolina, have a vested interest in determining the issues Plaintiff attempts to raise here. Finally, in response to this suit, IVFH has sued Ferrone and Brown – for violation of and wrongdoing in connection with the IVFH Agreements – in Florida. See Innovative Food Holdings, Inc. v. Ferrone, et al., Case No. 16-cv-00843-UA-CM, ECF No. 1 (M.D. Fla. 2016). To the extent Plaintiff’s action against IVFH survives, it can be transferred and consolidated into the Florida action. Plaintiff’s claim against IVFH should be dismissed, with prejudice. In the alternative, the conveniences strongly favor transferring venue to Florida. CONCLUSION As a threshold matter, this Court lacks personal jurisdiction over IVFH, who has no contacts with North Carolina. Beyond that, Plaintiff’s own allegations make clear that IVFH cannot be liable for tortious interference with the Settlement Agreement. Had IVFH acted to prevent Ferrone from transferring his IVFH shares under that Agreement, it would have been County Health Care Dist. v. Prof’l Med. Educ., Inc., 13 So. 3d 1090, 1094 (Fla. 4th DCA 2009)) (“A defendant is not a stranger to a business relationship if the defendant has any beneficial or economic interest in, or control over, that relationship.”) (emphasis added); Advantor Sys. Corp. v. DRS Tech. Servs., Inc., 2014 WL 3747667, at *2 (M.D. Fla. July 29, 2014) (“An interested third-party accused of tortious interference is essentially ‘interfering’ with its own interests. That is not interference; it is freedom of contract.”) (quotation omitted); McIntosh v. Harbour Club Villas Condo. Ass’n, 468 So. 2d 1075, 1080 (Fla. 3d DCA 1985) (no tortious interference where defendant was “justified in protecting its own financial interest” affected by the contract). 5 Ferrone is subject to the jurisdiction of Florida courts, including as a result of the wrongdoing alleged by IVFH in the Florida action. Case 3:16-cv-00678-RJC-DCK Document 9 Filed 11/21/16 Page 28 of 30 21 protecting its own legally protected, legitimate contractual rights under pre-existing agreements with Ferrone restricting the transfer of those IVFH securities. Dismissal with prejudice is required for either reason. However, if Plaintiff’s claim against IVFH survives, it should be transferred to Florida, where the evidence, actions and governing law are located. WHEREFORE, IVFH respectfully requests that the Court dismiss, with prejudice, all claims asserted by Plaintiff against IVFH for lack of personal jurisdiction or for failure to state a claim, or in the alternative transfer such claims to the United States District Court for the Middle District of Florida, and grant IVFH such further relief as the Court deems just and proper. November 21, 2016 Respectfully submitted, JOHNSTON, ALLISON & HORD, P.A. 1065 East Morehead Street Charlotte, North Carolina 28204 Telephone: 704-332-1181 Facsimile: 704-376-1628 By: /s/ Martin L. White Martin L. White NC Bar No. 23330 mwhite@jahlaw.com Kenneth Lautenschlager NC Bar No. 23246 klauten@jahlaw.com STEARNS WEAVER MILLER WEISSLER ALHADEFF & SITTERSON, P.A. Museum Tower, Suite 2200 150 West Flagler Street Miami, Florida 33130 Telephone: 305-789-3200 Facsimile: 305-789-3395 By: /s/Maria A. Fehretdinov Maria A. Fehretdinov FL Bar No. 52084, admitted Pro Hac Vice mfehretdinov@stearnsweaver.com Jason S. Koslowe FL Bar No. 122758, admitted Pro Hac Vice jkoslowe@stearnsweaver.com Attorneys for IVFH Case 3:16-cv-00678-RJC-DCK Document 9 Filed 11/21/16 Page 29 of 30 22 CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing was served via CM/ECF or by appropriate methods on this 21st day of November, 2016, on all counsel or parties of record on the Service List below. /s / Jason S. Koslowe SERVICE LIST John R. Brickley James, McElroy & Diehl, P.A. 600 South College Street Charlotte, North Carolina 28202 jbrickley@jmdlaw.com Counsel to Plaintiff Gilbert J. Andia Higgins Benjamin PLLC 301 North Elm Street, Suite 800 Greensboro, North Carolina 27401 bandia@greensborolaw.com Counsel to Ferrone Case 3:16-cv-00678-RJC-DCK Document 9 Filed 11/21/16 Page 30 of 30