There are undoubtedly many of the Rules of Civil Procedure that you remember by number. Certainly Rules 12, 56, and 65. But Rule 10(b)? What does that even say?
If you are reaching for your Rulebook, put it away. Rule 10 is titled "Form of Pleadings." Section (b) of that Rule says:
Paragraphs; separate statement. – All averments of claim or defense shall be made in numbered paragraphs, the contents of each of which be limited as far as practicable to a statement of a single set of circumstances; and a paragraph may be referred to by number in all succeeding pleadings. Each claim founded upon a separate transaction or occurrence and each defense other than denials shall be stated in a separate count or defense whenever a separation facilitates the clear presentation of the matters set forth.
I translate that as number the paragraphs of your pleadings, and keep them short. Rule 10 dovetails with Rule 8, which requires a "short and plain" statement of claims with averments that are "simple, concise, and direct."
But the counterclaim that was the subject of the Business Court’s ruling in Kingsdown, Inc. v. Hinshaw, 2015 NCBC 28 was anything but compliant with the Rules of Civil Procedure. Numbered paragraphs 2 and 3 were interrupted by several pages of single dspaced, rambling prose, which alluded to everything between Ray being asked by her employer during her employment to pick up lunches for salesmen, and not being allowed, after her termination, to transfer her old company phone number to her new cellphone or to have access to family photos on her company computer.
So, what is a lawyer to do when faced with responding to such lengthy assertions? Move to dismiss, of course. Kingsdown, doing exactly that, argued that Ray’s counterclaim was in violation of both Rules 8 and 10.
Judge Bledsoe stated that the usual Rule 8 challenge to a pleading was "based on the lack of specific detail in the complaint, not because the complaint is too detailed and voluminous." Op. Par. 20. He found no North Carolina decisions dismissing a complaint for it being overly "detailed," but cited several federal court decisions taking that action. Op ¶20 & n.6.
Even so, the Court denied the Motion to Dismiss on Rule 8 grounds, saying that the allegations of the counterclaims were not "so voluminous or incomprehensible to prevent Kingsdown from discerning the nature and basis" for the counterclaims "or otherwise formulating an answer to the Counterclaims." Op. ¶20.
Although Ray’s counterclaims survived a Rule 8 dismissal, they were dismissed without prejudice because of the violation of Rule 10. Judge Bledsoe "admonish[ed] Ms. Ray to follow the requirement under Rule 8 to advance ‘simple, concise, and direct’ allegations in the preparation and filing of her amended Counterclaims." Op. ¶21.
Despite the dismissal being without prejudice, Judge Bledsoe threw cold water on a number of Ray’s counterclaims and dismissed them with prejudice. Most of those counterclaims stemmed from the termination of her employment with Kingsdown.
Wrongful discharge: Wrongful discharge claims need to be pled with specificity. Op. ¶25 Ray’s "scattershot allegations" (Op. ¶26) fell short of what was necessary for the Court to determine whether Kingsdown had taken any improper action which was the "but for" cause of her termination. Op. ¶26. That claim was dismissed without prejudice.
Blacklisting: To make out a claim under the blacklisting statute (G.S. §14-355) a party must plead "(1) that she attempted to obtain employment with another entity; (2) that [her former employer] took affirmative steps by ‘words or writing of any kind’ to prevent her from obtaining employment with that entity; and (3) that whatever statements or writing that were made to the entity were false." Op. ¶30. The Court dismissed this counterclaim with prejudice because Ray had failed to plead any of the essential elements of her claim.
Intentional Infliction of Emotional Distress: Judge Bledsoe observed that:
our appellate courts have consistently held that ‘the mere firing of an employee can never be "extreme and outrageous’ conduct sufficient to state a claim for intentional infliction of emotional distress."
Op. ¶34 (quoting Sims-Campbell v. Welch, 2015 N.C. App. LEXIS 166, *11–12 (N.C. Ct. App. Mar. 3, 2015)).
This claim was also dismissed with prejudice because Ray’s allegations (that she was slighted or ignored by Kingsdown’s management from time to time, and her frustration and irritation with having to suffer various personal inconveniences resulting from the performance of her job) did not rise to the level of mistreatment that could give rise to a claim for intentional infliction of emotional distress.
Constructive Fraud/Fiduciary Duty: Ray’s claim for constructive fraud depended on Kingsdown owing her a fiduciary duty, because the existence of a fiduciary relationship is an element of a constructive fraud claim. Ray’s counsel argued that since Ray was an officer of Kingsdown, and thus owed the corporation a fiduciary duty, that the corporation therefore owed her a reciprocal fiduciary duty. Judge Bledsoe rejected this argument in a footnote, stating that this was "simply not the law." Op. ¶42 & n.9.
Unfair and Deceptive Practices: The Chapter 75 claim was dismissed with prejudice as it rested on facts which arose out of Ray’s employment and therefore involved "internal business disputes rather than interactions with businesses or consumers." Op. ¶45. It was therefore not "in or affecting commerce" which is the type of conduct targeted by G.S. §75-1.1(a).
If you are wondering if there could be any claims left in this hodge podge of counterclaims, the answer is unfortunately yes. But you are probably as tired of reading about this Opinion as I am writing about it. A part of a defamation counterclaim was dismissed without prejudice but a part of it with prejudice. A negligence counterclaim was dismissed with prejudice. A civil conspiracy counterclaim was dismissed with prejudice.