{ "id": 12130550, "name": "DUDLEY L. SIMMS, III, JOHN L. SIMMS, DLS FAMILY INVESTMENT PARTNERSHIP, and JLS FAMILY INVESTMENT PARTNERSHIP, Plaintiffs v. PRUDENTIAL LIFE INSURANCE COMPANY OF AMERICA and LARRY G. FRAZIER, Defendants", "name_abbreviation": "Simms v. Prudential Life Insurance Co. of America", "decision_date": "2000-11-07", "docket_number": "No. COA99-1130", "first_page": "529", "last_page": "536", "citations": [ { "type": "official", "cite": "140 N.C. App. 529" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "532 S.E.2d 175", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 2000, "opinion_index": 0 }, { "cite": "352 N.C. 343", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 684978 ], "year": 2000, "opinion_index": 0, "case_paths": [ "/nc/352/0343-01" ] }, { "cite": "511 S.E.2d 37", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1999, "pin_cites": [ { "page": "39" } ], "opinion_index": 0 }, { "cite": "132 N.C. App. 329", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11237734 ], "year": 1999, "pin_cites": [ { "page": "332" } ], "opinion_index": 0, "case_paths": [ "/nc-app/132/0329-01" ] }, { "cite": "522 S.E.2d 789", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1999, "pin_cites": [ { "page": "793" } ], "opinion_index": 0 }, { "cite": "135 N.C. App. 672", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11242573 ], "year": 1999, "pin_cites": [ { "page": "679" } ], "opinion_index": 0, "case_paths": [ "/nc-app/135/0672-01" ] }, { "cite": "527 S.E.2d 712", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2000, "pin_cites": [ { "page": "720-21" } ], "opinion_index": 0 }, { "cite": "137 N.C. App. 179", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11092650 ], "year": 2000, "pin_cites": [ { "page": "191" } ], "opinion_index": 0, "case_paths": [ "/nc-app/137/0179-01" ] }, { "cite": "472 S.E.2d 374", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1996, "pin_cites": [ { "page": "375" } ], "opinion_index": 0 }, { "cite": "123 N.C. App. 150", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11912274 ], "year": 1996, "pin_cites": [ { "page": "152" } ], "opinion_index": 0, "case_paths": [ "/nc-app/123/0150-01" ] }, { "cite": "513 S.E.2d 320", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1999, "pin_cites": [ { "page": "323-24", "parenthetical": "emphasis added" } ], "opinion_index": 0 }, { "cite": "350 N.C. 214", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 132102 ], "year": 1999, "pin_cites": [ { "page": "218", "parenthetical": "emphasis added" } ], "opinion_index": 0, "case_paths": [ "/nc/350/0214-01" ] }, { "cite": "516 S.E.2d 176", "category": "reporters:state_regional", "reporter": "S.E.2d", "case_ids": [ 44247 ], "year": 1999, "pin_cites": [ { "page": "179" } ], "opinion_index": 0, "case_paths": [ "/va-app/30/0176-01" ] }, { "cite": "133 N.C. App. 485", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11220348 ], "year": 1999, "pin_cites": [ { "page": "488" } ], "opinion_index": 0, "case_paths": [ "/nc-app/133/0485-01" ] }, { "cite": "524 S.E.2d 568", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2000, "opinion_index": 0 }, { "cite": "351 N.C. 330", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 1155607 ], "year": 2000, "opinion_index": 0, "case_paths": [ "/nc/351/0330-01" ] }, { "cite": "518 S.E.2d 17", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1999, "pin_cites": [ { "page": "21" } ], "opinion_index": 0 }, { "cite": "134 N.C. App. 391", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11144899 ], "year": 1999, "pin_cites": [ { "page": "394" } ], "opinion_index": 0, "case_paths": [ "/nc-app/134/0391-01" ] }, { "cite": "525 S.E.2d 441", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2000, "pin_cites": [ { "page": "445" } ], "opinion_index": 0 }, { "cite": "351 N.C. 331", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 1155610 ], "year": 2000, "pin_cites": [ { "page": "337-38" } ], "opinion_index": 0, "case_paths": [ "/nc/351/0331-01" ] }, { "cite": "307 S.E.2d 164", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 3, "year": 1983, "opinion_index": 0 }, { "cite": "309 N.C. 321", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4762957, 4765550, 4763995, 4764923, 4761023 ], "year": 1983, "opinion_index": 0, "case_paths": [ "/nc/309/0321-05", "/nc/309/0321-01", "/nc/309/0321-02", "/nc/309/0321-04", "/nc/309/0321-03" ] }, { "cite": "303 S.E.2d 565", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1983, "pin_cites": [ { "page": "568" } ], "opinion_index": 0 }, { "cite": "62 N.C. App. 695", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8524677 ], "year": 1983, "pin_cites": [ { "page": "698" } ], "opinion_index": 0, "case_paths": [ "/nc-app/62/0695-01" ] }, { "cite": "421 S.E.2d 386", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1992, "pin_cites": [ { "page": "389", "parenthetical": "quoting Libby Hill Seafood Restaurants, Inc. v. Owens, 62 N.C. App. 695, 698, 303 S.E.2d 565, 568, review denied, 309 N.C. 321, 307 S.E.2d 164 (1983)" } ], "opinion_index": 0 }, { "cite": "107 N.C. App. 584", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8527818 ], "year": 1992, "pin_cites": [ { "page": "589", "parenthetical": "quoting Libby Hill Seafood Restaurants, Inc. v. Owens, 62 N.C. App. 695, 698, 303 S.E.2d 565, 568, review denied, 309 N.C. 321, 307 S.E.2d 164 (1983)" } ], "opinion_index": 0, "case_paths": [ "/nc-app/107/0584-01" ] }, { "cite": "407 S.E.2d 178", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1991, "opinion_index": 0 }, { "cite": "329 N.C. 646", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2555838 ], "year": 1991, "opinion_index": 0, "case_paths": [ "/nc/329/0646-01" ] }, { "cite": "367 S.E.2d 609", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1988, "pin_cites": [ { "page": "612" } ], "opinion_index": 0 }, { "cite": "322 N.C. 200", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2516944 ], "year": 1988, "pin_cites": [ { "page": "206" } ], "opinion_index": 0, "case_paths": [ "/nc/322/0200-01" ] }, { "cite": "502 S.E.2d 897", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1998, "pin_cites": [ { "page": "899-900", "parenthetical": "emphasis added and emphasis in original" } ], "opinion_index": 0 }, { "cite": "130 N.C. App. 435", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11468112 ], "year": 1998, "pin_cites": [ { "page": "437-38", "parenthetical": "emphasis added and emphasis in original" } ], "opinion_index": 0, "case_paths": [ "/nc-app/130/0435-01" ] }, { "cite": "355 S.E.2d 838", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1987, "pin_cites": [ { "page": "840" }, { "page": "840", "parenthetical": "citations omitted" } ], "opinion_index": 0 }, { "cite": "85 N.C. App. 669", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 12170267 ], "weight": 2, "year": 1987, "pin_cites": [ { "page": "670" }, { "page": "670-71" } ], "opinion_index": 0, "case_paths": [ "/nc-app/85/0669-01" ] } ], "analysis": { "cardinality": 767, "char_count": 16131, "ocr_confidence": 0.741, "pagerank": { "raw": 3.076562064686372e-07, "percentile": 0.8577102371605448 }, "sha256": "b5fa9b78365ed840677beeaa19501da27d78f3991a604749fe8065c32a11165d", "simhash": "1:2fc958f8045c2a7e", "word_count": 2567 }, "last_updated": "2023-07-14T16:18:32.795698+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges LEWIS and WALKER concur." ], "parties": [ "DUDLEY L. SIMMS, III, JOHN L. SIMMS, DLS FAMILY INVESTMENT PARTNERSHIP, and JLS FAMILY INVESTMENT PARTNERSHIP, Plaintiffs v. PRUDENTIAL LIFE INSURANCE COMPANY OF AMERICA and LARRY G. FRAZIER, Defendants" ], "opinions": [ { "text": "HUNTER, Judge.\nPlaintiff-appellants Dudley L. Simms, III, John L. Simms, DLS Family Investment Partnership, and JLS Family Investment Partnership (collectively \u201cplaintiffs\u201d) appeal the trial court\u2019s orders of 16 June 1999, allowing defendants\u2019 Prudential Life Insurance Company of America and Larry G. Frazier (collectively \u201cdefendants\u201d) motion to dismiss, pursuant to N.C. Gen. Stat. \u00a7 1A-1, Rule 12(b)(6). We agree that plaintiffs have failed to state a claim upon which relief may be granted and, therefore, affirm the trial court\u2019s rulings.\nThe factual basis out of which this appeal arises began in April 1993 when Piece Goods Shop Company, L.P. (\u201cPiece Goods\u201d), of which Prudential was the principal creditor, filed for bankruptcy. More than two years later on 16 October 1995, Piece Goods was reorganized and renamed Silas Creek Retail Company, Inc. (\u201cSilas Creek\u201d). However in August 1995, before reorganization was completed, defendant Frazier (who at the time was president and chief operating officer of Piece Goods) informed Dudley Simms that \u201cthe equity value of the entity emerging from bankruptcy reorganization would be in excess of $31 million dollars, and that it would be in a debt free position except for a $9 million dollar line of credit and current trade debts.\u201d Dudley Simms conveyed this information to John Simms, DLS and JLS and, on 2 October 1995 (before reorganization was completed), plaintiffs \u201cchose to become creditors [of Piece Goods], by purchasing claims from one or more [of Piece Goods\u2019] general unsecured creditors ....\u201d This first purchase of claims, made by Dudley Simms and DLS, was for an investment of $1,650,000.00, which was later exchanged for 138,637 shares of stock in Silas Creek. (The debt reorganization plan allowed for \u201cthe issuance to General Unsecured Creditors [by the soon-to-be reorganized company] of one (1) share of New Common Stock for each $100.00 of each such Creditor\u2019s Allowed Claim.\u201d) However, we note that there is no allegation by plaintiffs \u2014 nor is there any evidence of record \u2014 that (at the time defendants conveyed and plaintiffs acted upon the information) defendants received any consideration or pecuniary gain from plaintiffs\u2019 (Dudley Simms and DLS) purchasing the claims of third-party unsecured creditors during the bankruptcy proceedings. On 20 November 1995 (after reorganization was completed), John Simms and JLS invested $567,321.33 in exchange for 47,277 shares of stock in Silas Creek. Again we note that there is no allegation by plaintiffs \u2014 or evidence of record \u2014 that defendants received any direct consideration or pecuniary gain from this investment by plaintiffs (John Simms and JLS) in the newly reorganized company.\nOn 15 March 1996, Silas Creek acquired Northwest Fabrics and Craft stores at a cost of $35 million, by incurring the cost as debt to its principal lender. Then in August 1996, it .was found that Silas Creek had an inventory shortage in excess of $8 million. Between the acquisition of Northwest Fabrics and the inventory loss, \u201cirreparable harm [was caused] to Silas Creek . . . from which th[e] entity was unable to recover. . . . [Thus,] [p]laintiffs lost the entirety of their investments in Silas Creek . . . .\u201d\nOn 29 July 1998, plaintiffs filed their complaint against defendants alleging: (1) that Frazier was at all times acting as an agent and servant of Prudential; (2) that Frazier negligently misrepresented the financial status of Piece Goods by failing to advise Dudley Simms that (a) \u201cthe entity emerging from bankruptcy was actively considering the acquisition of. . . Northwest Fabrics],]\u201d and (b) \u201cthe equity value [of the emerging company] was overstated by the amount of at least $8 million representing an actual shortage of physical inventory not reflected on the financial records\u201d; (3) that Prudential, which \u201cowned in excess of 60% of [Silas Creek,]\u201d made Frazier president and chief operating officer of Silas Creek, and therefore Frazier was acting on behalf of Prudential by gaining plaintiffs as investors; (4) that defendants failed to exercise reasonable care in obtaining and communicating the information to plaintiffs; (5) that defendants intended that plaintiffs rely on the information given them by Frazier; and (6) that plaintiffs did reasonably and justifiably rely on the information supplied by Frazier, to their severe detriment. In response, defendants filed a motion with the court to dismiss with prejudice pursuant to Rule 12(b)(6) of the North Carolina Rules of Civil Procedure, which motion the court allowed.\nPlaintiffs bring forth two assignments of error which we combine, the issue being whether the trial court committed reversible error by granting defendants\u2019 12(b)(6) motions. We hold that it did not.\nA motion to dismiss pursuant to Rule 12(b)(6) tests the legal sufficiency of a complaint. Harris v. NCNB, 85 N.C. App. 669, 670, 355 S.E.2d 838, 840 (1987). This Court has summarized the trial court\u2019s duty in ruling upon such a motion as follows:\n\u201cIn order to withstand [a 12(b)(6) motion], the complaint must provide sufficient notice of the events and circumstances from which the claim arises, and must state allegations sufficient to satisfy the substantive elements of at least some recognized claim. The question for the court 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, whether properly labeled or not. In general, \u2018a complaint should not be dismissed for insufficiency 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.\u2019 \u201d\nWerner v. Alexander, 130 N.C. App. 435, 437-38, 502 S.E.2d 897, 899-900 (1998) (emphasis added and emphasis in original) (quoting Harris v. NCNB, 85 N.C. App. at 670-71, 355 S.E.2d at 840 (citations omitted)). Thus, in the case at bar, where plaintiffs\u2019 claim is one of negligent misrepresentation, plaintiffs\u2019 complaint must have addressed each of the necessary elements of that claim.\nIt has long been held in North Carolina that\nThe tort of negligent misrepresentation occurs when [(1)] a party justifiably relies [(2)] to his detriment [(3)] on information prepared without reasonable care [(4)] by one who owed the relying party a duty of care.\nRaritan River Steel Co. v. Cherry, Bekaert & Holland, 322 N.C. 200, 206, 367 S.E.2d 609, 612 (1988), reversed on other grounds, 329 N.C. 646, 407 S.E.2d 178 (1991). Therefore, to withstand defendants\u2019 motion to dismiss, plaintiffs at bar must be able to show that they justifiably relied \u2014 to their detriment \u2014 on the information provided them by defendants and that defendants owed plaintiffs a duty of care to be certain that the information provided was complete and accurate.\nIn their complaint, plaintiffs allege \u201cFrazier made plaintiffs aware that Piece Goods... could emerge from bankruptcy reorganization as a new revitalized entity and that investment in the equity of the new revitalized entity should be extremely valuable and profitable.\u201d (Emphasis added.) Our courts have said that \u201c[w]here \u2018the purchaser has full opportunity to make pertinent inquiries but fails to do so through no artifice or inducement of the seller, an action in [negligent misrepresentation] will not lie.\u2019 \u201d C.F.R. Foods, Inc. v. Randolph Development Co., 107 N.C. App. 584, 589, 421 S.E.2d 386, 389 (1992) (quoting Libby Hill Seafood Restaurants, Inc. v. Owens, 62 N.C. App. 695, 698, 303 S.E.2d 565, 568, review denied, 309 N.C. 321, 307 S.E.2d 164 (1983)). The record is clear and plaintiffs freely admit that although Frazier conveyed the information to Dudley Simms in August 1995, plaintiffs did not make their first investment until October 1995 and their second investment until late November 1995. Yet plaintiffs offer no evidence, and there is none in the record, to show that they did not have \u201cfull opportunity to make pertinent inquiries\u201d as to the factual accuracy of Frazier\u2019s statements to them upon which they claim to have based their decision to invest. Id. We note that by the plain language admittedly used by Frazier, plaintiffs should have been put on notice that the fact of whether the revitalized entity would be profitable remained a risk. The fact that plaintiffs took the risk by acting on this \u201chot tip\u201d and it did not turn out to be profitable is unfortunate; however, we recognize it is often the result of a high risk investment.\nNevertheless, plaintiffs proceed to state specific things told to them and also withheld from them by Frazier, things which plaintiffs allege were misrepresentations of the true state of Piece Goods and its successor, Silas Creek. Plaintiffs further allege that it is upon these statements by Frazier (or the lack thereof) that they justifiably relied to their detriment. (It is undisputed that plaintiffs suffered injury \u2014 by way of their losing almost $2 million invested in Piece Goods and Silas Creek. However, Prudential also lost its investment when Silas Creek went bankrupt.) Yet, the record reflects that at no time and in no way do plaintiffs allege that defendants had a duty of care to them, a duty which required that they be certain the information they were giving plaintiffs was complete or accurate. Without an allegation that defendants owed plaintiffs a duty of care regarding the information given, plaintiffs\u2019 claim must necessarily fail. Id. See also Energy Investors Fund, L.P. v. Metric Constructors, Inc., 351 N.C. 331, 337-38, 525 S.E.2d 441, 445 (2000); Holshouser v. Shaner Hotel Grp. Props. One, 134 N.C. App. 391, 394, 518 S.E.2d 17, 21 (1999), aff\u2019d 351 N.C. 330, 524 S.E.2d 568 (2000); and, Hoisington v. ZT-Winston-Salem Assocs., 133 N.C. App. 485, 488, 516 S.E.2d 176, 179 (1999).\nPlaintiffs\u2019 complaint alleged that:\nDefendants supplied the . . . information to plaintiffs in the course of defendants\u2019 business, in transactions in which both plaintiffs and defendants had financial interest.\nDefendants intended that plaintiffs rely on the information supplied by them for guidance in particular financial transactions, that is, the acquisition of stock in the entity emerging from bankruptcy.\nPlaintiffs contend they have met their burden of showing a duty of care. We disagree. It is true that our Supreme Court has defined a breach of the duty owed in negligent misrepresentation as:\n\u201c. . . One who, in the course of his business, profession or employment, or in any other transaction in which he has a pecuniary interest, supplies false information for the guidance of others in their business transactions, [and thus] is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information.\u201d\nMarcus Bros. Textiles, Inc. v. Price Waterhouse, LLP, 350 N.C. 214, 218, 513 S.E.2d 320, 323-24 (1999) (emphasis added) (quoting Restatement (Second) of Torts \u00a7 552 (1977)). However, aside from plaintiffs\u2019 allegation that Frazier supplied the information in the course of his business, profession or employment, plaintiffs allege nothing that would bring a reasonable mind to believe that either he or Piece Goods (the company for which he worked at the time the information was given) was in the business of giving financial advice. Furthermore, the record reflects that at no time and in no way do plaintiffs allege that Frazier had a pecuniary interest or obtained any pecuniary gain from plaintiffs\u2019 investments or transactions. Thus, again, plaintiffs have failed to meet their burden of showing a duty of care owed them by Frazier, and their claim against him for negligent misrepresentation must necessarily fail. Id. We then hold that the trial court\u2019s grant of Frazier\u2019s 12(b)(6) motion was proper.\nWe further note that plaintiffs\u2019 complaint, on its face, has no allegation that Prudential provided them any information at all. Neither do plaintiffs allege Prudential owed them a duty of care. In fact, the only link plaintiffs make between Prudential and the misrepresentation is that \u201c[a]t all material times defendant Larry G. Frazier acted as an agent and servant of defendant Prudential . . . and his conduct which is the subject of this action was within the course and scope of this agency and employment.\u201d Therefore, because plaintiffs attempt to reach Prudential through an employer/employee or principal/agent relationship with Frazier under a theory of respondeat superior, plaintiffs\u2019 claim against Prudential must also necessarily fail. Long v. Giles, 123 N.C. App. 150, 152, 472 S.E.2d 374, 375 (1996). Our courts have long held that:\nA finding of liability against defendant. . . employer, is only possible if [the employee] is found liable, and the injuries arose out of and in the course of his [or her] employment [with defendant employer]. In other words, defendant [employer\u2019s] liability is derivative of [its employee\u2019s] liability, and the primary claim against the [employee] must first be determined before any claim against [defendant employer] is possible. . . .\nIf plaintiffs do not recover against [the employee], they cannot seek to recover against defendant [employer] under a respondeat superior theory....\nId. See also McLain v. Taco Bell Corp, 137 N.C. App. 179, 191, 527 S.E.2d 712, 720-21 (2000); Wrenn v. Maria Parham Hosp., Inc., 135 N.C. App. 672, 679, 522 S.E.2d 789, 793 (1999); and, Watson v. Dixon, 132 N.C. App. 329, 332, 511 S.E.2d 37, 39 (1999), aff\u2019d 352 N.C. 343, 532 S.E.2d 175 (2000).\nSince we have already held that plaintiffs have failed to state a claim for which relief may be granted as to Frazier, it is not possible then that we could hold otherwise as to plaintiffs\u2019 claim that Prudential, as Frazier\u2019s employer or principal, is liable under a theory of respondeat superior. Id. Thus, we hold that the trial court\u2019s grant of Prudential\u2019s motion to dismiss was also proper.\nAffirmed.\nJudges LEWIS and WALKER concur.", "type": "majority", "author": "HUNTER, Judge." } ], "attorneys": [ "Smith, James, Rowlett & Cohen, LLP, by Seth R. Cohen, for plaintiff-appellants.", "Smith Helms Mulliss & Moore, L.L.P., by Benjamin F. Davis, Jr. and Shannon R. Joseph; Weil, Gotshal & Manges, LLP, by Greg A. Danilow, for defendant-appellee Prudential Insurance Company of America.", "F. Kevin Mauney for defendant-appellee Larry G. Frazier." ], "corrections": "", "head_matter": "DUDLEY L. SIMMS, III, JOHN L. SIMMS, DLS FAMILY INVESTMENT PARTNERSHIP, and JLS FAMILY INVESTMENT PARTNERSHIP, Plaintiffs v. PRUDENTIAL LIFE INSURANCE COMPANY OF AMERICA and LARRY G. FRAZIER, Defendants\nNo. COA99-1130\n(Filed 7 November 2000)\nFraud\u2014 negligent misrepresentation \u2014 failure to state a claim\nThe trial court did not err by granting a Rule 12(b)(6) dismissal for defendants in an action for negligent misrepresentation arising from plaintiffs becoming creditors of a company emerging from bankruptcy by purchasing the claims of third party creditors and receiving stock in the new company. Plaintiffs do not allege that defendants had a duty of care to them to be certain the information they were giving plaintiffs was complete or accurate and plaintiffs should have been put on notice by the language used that whether the revitalized entity would be profitable remained a risk. Although plaintiffs alleged that the information was supplied in the course of defendant Frazier\u2019s business, profession, or employment, plaintiffs allege nothing that would bring a reasonable mind to believe that Frazier or the company he then worked for was in the business of giving financial advice and did not allege that Frazier had or gained a pecuniary interest from plaintiffs\u2019 investments. Finally, plaintiffs did not allege that defendant Prudential provided them any information or owed them any duty; and it is not possible to hold Prudential liable under respondeat superior for Frazier\u2019s actions since plaintiff failed to state a claim as to Frazier.\nAppeal by plaintiffs from orders entered 16 June 1999 by Judge William H. Freeman in Forsyth County Superior Court. Heard in the Court of Appeals 16 August 2000.\nSmith, James, Rowlett & Cohen, LLP, by Seth R. Cohen, for plaintiff-appellants.\nSmith Helms Mulliss & Moore, L.L.P., by Benjamin F. Davis, Jr. and Shannon R. Joseph; Weil, Gotshal & Manges, LLP, by Greg A. Danilow, for defendant-appellee Prudential Insurance Company of America.\nF. Kevin Mauney for defendant-appellee Larry G. Frazier." }, "file_name": "0529-01", "first_page_order": 561, "last_page_order": 568 }