Davis et al v. Zuccarello, et al

MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM

M.D.N.C.December 12, 2016

IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF NORTH CAROLINA KENT MCCARTY DAVIS, ) CYPRESS INTERNATIONAL INC. ) ) Plaintiffs, ) ) v. ) Case No. 1:16-cv-1086-WO-JLW ) DEAN ZUCCARELLO, ) CYPRESS ADVISORS INC. d/b/a ) THE CYPRESS GROUP, ) ) Defendants. ) DEFENDANTS’ MOTION TO DISMISS VERIFIED AMENDED COMPLAINT Defendants Dean Zuccarello (“Zuccarello”) and Cypress Advisors Inc. d/b/a The Cypress Group (the “The Cypress Group,” and collectively with Zuccarello the “Defendants”) respectfully submit this Motion to Dismiss Verified Amended Complaint (“Motion”). In support of the Motion, the Defendants state as follows: 1. Defendants respectfully request that this Court dismiss the Plaintiffs’ Verified Amended Complaint, without prejudice, so that the parties can litigate their dispute in the action commenced in the Colorado United States District Court. Alternatively, the Defendants seek: (a) to dismiss, with prejudice, pursuant to Fed. R. Civ. P. 12(b)(6), the Plaintiffs’ breach of contract and breach of fiduciary duty claims because those claims are time barred; and (b) to dismiss, with prejudice, pursuant to Fed. R. Civ. P. 12(b)(6), the Plaintiffs’ claims under the North Carolina Uniform Partnership Act because the alleged partnership between the Plaintiffs and the Defendants is located in Colorado, and therefore the North Carolina Partnership Act does not apply as a matter of law. Case 1:16-cv-01086-WO-JLW Document 19 Filed 12/12/16 Page 1 of 4 2 2. When the same parties pursue similar litigation in two separate federal courts, principles of comity dictate that the case should proceed in only one of the two courts. Remington Arms Co., Inc. v. Alliant Techsystems, Inc., Case 1:03CV1051, 2004 U.S. Dist. LEXIS 3848, at *4 (M.D.N.C. Feb. 25, 2004) (citations omitted). Generally, the Courts defer to the case that was first filed; however, in certain special circumstances, the first filed court should defer to the second filed action. Family Dollar Stores, Inc. v. Overseas Direct Imp. Co., Case 3:10CV278, 2011 U.S. Dist. LEXIS 4680, at *5-9 (W.D.N.C. Jan. 18, 2011) (citations omitted). Here, two special circumstances warrant departing from the first-filed rule: (1) Davis filed this suit in the midst of settlement negotiations; and (2) Davis’ Complaint constitutes an “anticipatory filing” that mandates departure from the first-filed rule. See, Remington Arms, 2004 U.S. Dist. LEXIS 3848, at *7-10 (describing special circumstances for which a court may depart from the first-filed rule). Furthermore, given that this dispute concerns an alleged partnership that is situated in Colorado, the balance of convenience weighs in favor of the Colorado Action. Learning Network, Inc. v. Discovery Communications, Inc., 11 Fed. Appx. 297, 302 (4th Cir. 2001). 3. Alternatively, Davis’ North Carolina Partnership Act claims, breach of contract claims and breach of fiduciary duty claims are improper and should be dismissed, with prejudice, under Federal Rule of Civil Procedure 12(b)(6). First, Davis’ breach of contract and breach of fiduciary duty claims (Counts One, Two, Three, Four, and Twelve) are time barred under North Carolina’s three- year statute of limitations. N.C. Gen. Stat. § 1-52(1); Toomer v. Branch Banking & Trust Co., 171 N.C. App. 58, 66 (2005). Because Davis concedes that he was well aware of the alleged wrongs since 2011, he was required to bring his claims by no later than 2014, which he failed to do. Next, any alleged partnership or joint venture created between Zuccarello, The Cypress Group Case 1:16-cv-01086-WO-JLW Document 19 Filed 12/12/16 Page 2 of 4 3 and/or Davis would be governed by Colorado law. Accordingly, any claims brought under the North Carolina Partnership Act fail as a matter of law. WHEREFORE, Defendants Dean Zuccarello and Cypress Advisors Inc. respectfully request that the Court dismiss this action without prejudice in deference to the Colorado Action, or in the alternative, dismiss Plaintiffs’ breach of contract, breach of fiduciary duties, and claims under the North Carolina Uniform Partnership Act with prejudice. Respectfully submitted this 12th day of December, 2016. /s/ Paul J. Peralta Paul J. Peralta MOORE & VAN ALLEN PLLC 100 N. Tryon Street, Suite 4700 Charlotte, NC 28202-4003 Telephone: (704) 331-1024 Facsimile: (704) 339-5869 Email: paulperalta@mvalaw.com N.C. Bar No. 34622 Case 1:16-cv-01086-WO-JLW Document 19 Filed 12/12/16 Page 3 of 4 4 CERTIFICATE OF SERVICE I hereby certify that on December 12, 2016, I electronically filed the foregoing with the Clerk of the Court using the CM/ECF system and have verified that such filing was sent electronically using the CM/ECF system to the following: Kieran J. Shanahan Brandon S. Neuman Christopher S. Battles Shanahan Law Group, PLLC 128 E. Hargett St., Third Floor Raleigh, NC 27601 kieran@shanahanlawgroup.com bneuman@shanahanlawgroup.com cbattles@shanahanlawgroup.com Respectfully submitted, /s/ Paul J. Peralta Paul J. Peralta MOORE & VAN ALLEN PLLC 100 N. Tryon Street, Suite 4700 Charlotte, NC 28202-4003 Telephone: (704) 331-1024 Facsimile: (704) 339-5869 Email: paulperalta@mvalaw.com N.C. Bar No. 34622 Case 1:16-cv-01086-WO-JLW Document 19 Filed 12/12/16 Page 4 of 4