Willard v. Barger,
2019 NCBC 33.
STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
DAVIE COUNTY 19 CVS 182
CHARLES WILLARD and TRACY
BARNES BLIMP WORKS, LLC,
Plaintiffs, ORDER AND OPINION ON
PLAINTIFF CHARLES WILLARD’S
v. MOTION TO DISMISS CONVERSION
COUNTERCLAIM
WILLIAM BARGER, individually;
WILLIAM BARGER AS EXECUTOR
OF THE ESTATE OF TRACY
BARNES; and BLIMP WORKS, INC.,
Defendants.
1. THIS MATTER is before the Court upon Plaintiff Charles Willard’s
(“Willard”) Motion to Dismiss Conversion Counterclaim (the “Motion”) in the above-
captioned case.
2. The Court, having considered the Motion, the briefs in support of and in
opposition to the Motion, and the arguments of counsel at the hearing on the Motion,
hereby GRANTS the Motion.
Bennett Guthrie Latham, PLLC, by Jasmine M. Pitt, for Plaintiff Tracy
Barnes Blimp Works, LLC.
Fitzgerald Litigation, by Andrew L. Fitzgerald, D. Stuart Punger, and
Lee D. Denton, for Plaintiff Charles Willard.
Eisele Ashburn Green & Chapman, PA, by Douglas G. Eisele, for
Defendants William Barger, individually and as Executor of the Estate
of Tracy Barnes, and Blimp Works, Inc.
Bledsoe, Chief Judge.
I.
BACKGROUND
3. The Court does not make findings of fact when ruling on a motion to dismiss
under Rule 12(b)(6). See, e.g., Concrete Serv. Corp. v. Inv’rs Grp., Inc., 79 N.C. App.
678, 681,
340 S.E.2d 755, 758 (1986). Rather, the Court recites the relevant
allegations in the pleading asserting the challenged claim—here, Defendants William
Barger (“Barger”), individually and as Executor of the Estate of Tracy Barnes (the
“Estate of Barnes” or the “Estate”), and Blimp Works, Inc.’s (“BW”) (together,
“Defendants”) Answer and Counterclaims. (See Answer and Countercls. [hereinafter
“Countercls.”], ECF No. 6.)
4. Willard and Plaintiff Tracy Barnes Blimp Works, LLC (“TBBW”) initiated
this action against Defendants on April 1, 2019, alleging claims for fraudulent
conveyance, declaratory judgment, conversion, breach of fiduciary duty, unjust
enrichment, breach of contract, unfair and deceptive trade practices, attorneys’ fees,
and tortious interference with contract arising out of various dealings among and
between Tracy Barnes, Willard, Barger, TBBW, and BW.
5. On April 16, 2019, Defendants filed their Answer and Counterclaims. The
first counterclaim is asserted by the Estate of Barnes against Willard and is titled
“Conversion of 2014 Subaru” (the “Conversion Counterclaim”). On April 30, 2019,
Willard filed the Motion pursuant to Rules 12(b)(6) and 12(b)(1) of the North Carolina
Rules of Civil Procedure, arguing that the Conversion Counterclaim should be
dismissed because the Estate has pleaded that it does not own the 2014 Subaru. On
that basis, Willard asserts that the Estate lacks standing to bring the Conversion
Counterclaim against him.
6. After full briefing, the Court held a hearing on the Motion on May 24, 2019
(the “May 24 Hearing”), at which all parties were represented by counsel. The Motion
is now ripe for resolution.
II.
LEGAL STANDARD
7. In ruling on a motion to dismiss under Rule 12(b)(6), the Court’s inquiry is
“whether, as a matter of law, the allegations of the complaint, treated as true, are
sufficient to state a claim upon which relief may be granted under some legal
theory[.]” Harris v. NCNB Nat’l Bank of N.C., 85 N.C. App. 669, 670,
355 S.E.2d 838,
840 (1987) (citing Stanback v. Stanback,
297 N.C. 181, 185,
254 S.E.2d 611, 615
(1979)). The Court will not grant a motion to dismiss “unless it appears to a certainty
that plaintiff is entitled to no relief under any state of facts which could be proved in
support of the claim.” Sutton v. Duke,
277 N.C. 94, 103,
176 S.E.2d 161, 166 (1970)
(emphasis omitted). Therefore, dismissal of a claim pursuant to Rule 12(b)(6) is only
proper “(1) when the complaint on its face reveals that no law supports [the] claim;
(2) when the complaint reveals on its face the absence of fact sufficient to make a good
claim; [or] (3) when some fact disclosed in the complaint necessarily defeats the
plaintiff’s claim.” Oates v. JAG, Inc.,
314 N.C. 276, 278,
333 S.E.2d 222, 224 (1985).
8. The Court construes the allegations in the pleading “in the light most
favorable to the non-moving party.” Christenbury Eye Ctr., P.A. v. Medflow, Inc.,
370
N.C. 1, 5,
802 S.E.2d 888, 891 (2017). The Court is not, however, required “to accept
as true allegations that are merely conclusory, unwarranted deductions of fact, or
unreasonable inferences.” Good Hope Hosp., Inc. v. N.C. Dep’t of Health & Human
Servs.,
174 N.C. App. 266, 274,
620 S.E.2d 873, 880 (2005); see also McCrann v.
Pinehurst, LLC,
225 N.C. App. 368, 377,
737 S.E.2d 771, 777 (2013).
III.
ANALYSIS
9. Willard argues that the Conversion Counterclaim should be dismissed
under Rule 12(b)(6) because the party asserting the claim, the Estate of Barnes, does
not own the 2014 Subaru. The Court agrees.
10. Under North Carolina law, “[t]he tort of conversion is well defined as ‘an
unauthorized assumption and exercise of the right of ownership over goods or
personal chattels belonging to another, to the alteration of their condition or the
exclusion of an owner’s rights.’” Variety Wholesalers, Inc. v. Salem Logistics Traffic
Servs., LLC, 365 N.C. 520, 523,
723 S.E.2d 744, 747 (2012) (quoting Peed v.
Burleson’s, Inc.,
244 N.C. 437, 439,
94 S.E.2d 351, 353 (1956)). Thus, “[t]here are, in
effect, two essential elements of a conversion claim: ownership in the plaintiff and
wrongful possession or conversion by the defendant.” Id.
11. Our courts have emphasized that “[t]he essence of conversion is not the
acquisition of property by the wrongdoer, but a wrongful deprivation of it to the
owner[.]” Bartlett Milling Co. v. Walnut Grove Auction &; Realty Co.,
192 N.C. App.
74, 86,
665 S.E.2d 478, 488 (2008) (quoting Lake Mary Ltd. P’ship v. Johnston,
145
N.C. App. 525, 532,
551 S.E.2d 546, 552 (2001)). In short, “there is no conversion
until some act is done which is a denial or violation of the plaintiff's dominion over or
rights in the property.” Mace v. Pyatt,
203 N.C. App. 245, 256,
691 S.E.2d 81, 90
(2010) (quoting Lake Mary Ltd. P’ship,
145 N.C. App. at 532,
551 S.E.2d at 552).
12. In pleading the Conversion Counterclaim here, the Estate alleges first that
the “2014 Subaru automobile [is] owned by [BW],” and then (i) that the “Estate of
Tracy Barnes has made demand on Willard for return of the 2014 Subaru to the
Estate of Barnes;” (ii) that Willard’s failure “to return the Subaru to the Estate of
Barnes constitutes a conversion by Willard of the property owned by the Estate of
Barnes;” and (iii) that the Estate of Barnes is entitled to a Court order requiring
Willard to either “return the Subaru to the Estate of Barnes, or “pay to the Estate of
Barnes for the purchase of said Subaru the . . . fair market value of the Subaru.”
(Countercls. ¶¶ 1–5.)
13. Although it does not own the 2014 Subaru, the Estate contends, without
citation to legal authority, that because it owns all of the outstanding shares of BW—
the entity that actually owns the 2014 Subaru—the Estate may properly recover the
2014 Subaru for the Estate. According to the Estate, “[i]t is fundamental that the
right of an executor to sue for and acquire corporate stock in the administration of an
estate includes the right of the executor to demand the possession of an asset
represented by the corporate stock that is an asset of the estate.” (Br. of Barnes
Estate Replying to Pl. Willard’s Mot. Dismiss 4, ECF No. 17.)
14. The Estate’s argument is without legal support. Under longstanding
principles of North Carolina law, a “corporation is treated as an entity separate from
its stockholder or stockholders under all ordinary circumstances.” Dep’t of Transp. v.
Airlie Park, Inc., 156 N.C. App. 63, 67,
576 S.E.2d 341, 344 (2003) (citing Glenn v.
Wagner,
313 N.C. 450, 454,
329 S.E.2d 326, 330 (1985)). The Estate pleads that BW
is an entity separate and distinct from the Estate. The Estate’s ownership of BW’s
shares may give the Estate the practical ability to control BW’s affairs, including the
disposition of BW’s assets, but ownership in BW’s shares does not equate to direct
ownership in BW’s assets. Thus, the Estate has no direct ownership interest in the
2014 Subaru, and without ownership in the Estate, the Estate has no legal right to
recover the 2014 Subaru for the Estate.
15. Accordingly, the Court concludes that the Estate lacks standing to assert
the Conversion Counterclaim against Willard to seek recovery of the 2014 Subaru for
the Estate, requiring dismissal of the counterclaim as pleaded. The Court’s ruling,
however, is without prejudice to any right the Estate may have to cause BW, as the
owner of the 2014 Subaru, to assert a conversion claim seeking the recovery of the
2014 Subaru for BW.1
1 After the Court forecast it would grant the Motion during the May 24 Hearing, Defendants’
counsel made an oral motion seeking leave to amend the Answer and Counterclaims to permit
the Conversion Counterclaim to be asserted by BW rather than the Estate. With Plaintiffs’
consent, the Court granted the oral motion for leave to amend at the May 24 Hearing. The
Court will memorialize its ruling on the oral motion for leave to amend by separate order.
IV.
CONCLUSION
16. WHEREFORE, for the foregoing reasons, the Court hereby GRANTS
Plaintiff Charles Willard’s Motion to Dismiss Conversion Counterclaim and
DISMISSES the Estate of Barnes’ Conversion Counterclaim against Willard with
prejudice.
SO ORDERED, this the 29th day of May, 2019.
/s/ Louis A. Bledsoe, III
Louis A. Bledsoe, III
Chief Business Court Judge
