{ "id": 4152809, "name": "CHARLES M. WHITE and EARL ELLIS, individually and now or formerly d/b/a ACE FABRICATION AND WELDING, a North Carolina general partnership v. ANDREW THOMPSON, DOUGLAS THOMPSON, and FRAN LURKEE, alias", "name_abbreviation": "White v. Thompson", "decision_date": "2010-04-15", "docket_number": "No. 226A09", "first_page": "47", "last_page": "61", "citations": [ { "type": "official", "cite": "364 N.C. 47" } ], "court": { "name_abbreviation": "N.C.", "id": 9292, "name": "Supreme Court of North Carolina" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "676 S.E.2d 104", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2009, "opinion_index": -1 }, { "cite": "548 S.E.2d 704", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 3, "year": 2001, "pin_cites": [ { "page": "706, 711-12" }, { "page": "712" } ], "opinion_index": 0 }, { "cite": "353 N.C. 647", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 135724 ], "weight": 2, "year": 2001, "pin_cites": [ { "page": "649, 658" } ], "opinion_index": 0, "case_paths": [ "/nc/353/0647-01" ] }, { "cite": "400 S.E.2d 440", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 3, "year": 1991, "pin_cites": [ { "page": "443-44" }, { "page": "443" }, { "page": "443-44" } ], "opinion_index": 0 }, { "cite": "328 N.C. 240", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2541708 ], "year": 1991, "pin_cites": [ { "page": "245-46" } ], "opinion_index": 0, "case_paths": [ "/nc/328/0240-01" ] }, { "cite": "519 S.E.2d 308", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 4, "year": 1999, "pin_cites": [ { "page": "311", "parenthetical": "citation omitted" }, { "page": "309" }, { "page": "312" } ], "opinion_index": 0 }, { "cite": "351 N.C. 27", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 1155931 ], "weight": 3, "year": 1999, "pin_cites": [ { "page": "32", "parenthetical": "citation omitted" }, { "page": "29" } ], "opinion_index": 0, "case_paths": [ "/nc/351/0027-01" ] }, { "cite": "403 S.E.2d 483", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 8, "year": 1991, "pin_cites": [ { "page": "492" }, { "page": "492", "parenthetical": "citation omitted" }, { "page": "493" }, { "parenthetical": "emphasis added" }, { "page": "493" } ], "opinion_index": 0 }, { "cite": "328 N.C. 578", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2538399 ], "weight": 4, "year": 1991, "pin_cites": [ { "page": "592" }, { "page": "592" }, { "page": "594" }, { "page": "594-95" } ], "opinion_index": 0, "case_paths": [ "/nc/328/0578-01" ] }, { "cite": "676 S.E.2d 104", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 3, "year": 2009, "pin_cites": [ { "page": "108-09" }, { "page": "111-15", "parenthetical": "Ervin, J., concurring in part and dissenting in part" } ], "opinion_index": 0 }, { "cite": "1977 N.C. Sess. Laws 984", "category": "laws:leg_session", "reporter": "N.C. Sess. Laws", "opinion_index": 1 }, { "cite": "370 S.E.2d 375", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1988, "pin_cites": [ { "page": "389", "parenthetical": "citation omitted" }, { "page": "389" } ], "opinion_index": 1 }, { "cite": "322 N.C. 643", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2518481 ], "weight": 2, "year": 1988, "pin_cites": [ { "page": "665", "parenthetical": "citation omitted" }, { "page": "665" } ], "opinion_index": 1, "case_paths": [ "/nc/322/0643-01" ] }, { "cite": "333 S.E.2d 236", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1985, "pin_cites": [ { "page": "241" } ], "opinion_index": 1 }, { "cite": "314 N.C. 267", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4690671 ], "year": 1985, "pin_cites": [ { "page": "275" } ], "opinion_index": 1, "case_paths": [ "/nc/314/0267-01" ] }, { "cite": "292 S.E.2d 574", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1982, "opinion_index": 1 }, { "cite": "305 N.C. 759", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8573251, 8573289, 8573226, 8573201, 8573274 ], "year": 1982, "opinion_index": 1, "case_paths": [ "/nc/305/0759-03", "/nc/305/0759-05", "/nc/305/0759-02", "/nc/305/0759-01", "/nc/305/0759-04" ] }, { "cite": "289 S.E.2d 118", "category": "reporters:state_regional", "reporter": "S.E.2d", "pin_cites": [ { "page": "119-20" } ], "opinion_index": 1 }, { "cite": "56 N.C. App. 445", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8521757 ], "pin_cites": [ { "page": "448" } ], "opinion_index": 1, "case_paths": [ "/nc-app/56/0445-01" ] }, { "cite": "79 S.E.2d 735", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1954, "pin_cites": [ { "page": "738" } ], "opinion_index": 1 }, { "cite": "239 N.C. 121", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8626052 ], "year": 1954, "pin_cites": [ { "page": "124-25" } ], "opinion_index": 1, "case_paths": [ "/nc/239/0121-01" ] }, { "cite": "548 S.E.2d 704", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 3, "year": 2001, "pin_cites": [ { "page": "711", "parenthetical": "citation omitted" }, { "page": "711-12" } ], "opinion_index": 1 }, { "cite": "353 N.C. 647", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 135724 ], "weight": 3, "year": 2001, "pin_cites": [ { "page": "656", "parenthetical": "citation omitted" }, { "page": "657-58" }, { "page": "658" } ], "opinion_index": 1, "case_paths": [ "/nc/353/0647-01" ] }, { "cite": "400 S.E.2d 440", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 6, "year": 1991, "pin_cites": [ { "page": "442", "parenthetical": "\"If a violation of Chapter 75 is found, treble damages must be awarded.\" (citations omitted)" }, { "page": "443", "parenthetical": "citation omitted" }, { "page": "444" }, { "page": "444" }, { "page": "443" }, { "page": "444" } ], "opinion_index": 1 }, { "cite": "328 N.C. 240", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2541708 ], "weight": 5, "year": 1991, "pin_cites": [ { "page": "243", "parenthetical": "\"If a violation of Chapter 75 is found, treble damages must be awarded.\" (citations omitted)" }, { "page": "245" }, { "page": "246" }, { "page": "246" }, { "page": "244" } ], "opinion_index": 1, "case_paths": [ "/nc/328/0240-01" ] }, { "cite": "519 S.E.2d 308", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 4, "year": 1999, "pin_cites": [ { "page": "311-12" }, { "page": "312" }, { "page": "311" } ], "opinion_index": 1 }, { "cite": "351 N.C. 27", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 1155931 ], "weight": 3, "year": 1999, "pin_cites": [ { "page": "31-34" }, { "page": "31" }, { "page": "34" } ], "opinion_index": 1, "case_paths": [ "/nc/351/0027-01" ] }, { "cite": "403 S.E.2d 483", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 13, "year": 1991, "pin_cites": [ { "page": "492", "parenthetical": "citation omitted" }, { "page": "492" }, { "page": "594" }, { "page": "493" }, { "page": "493" }, { "page": "493", "parenthetical": "emphases added" }, { "page": "489" }, { "page": "492" }, { "page": "493", "parenthetical": "holding that \"[r] evolving fund certificates are a cooperative's functional equivalent of traditional corporate securities\" and \"therefore,. . . like more conventional securities, [the] issuance or redemption of revolving fund certificates are not 'in or affecting commerce' \"" } ], "opinion_index": 1 }, { "cite": "328 N.C. 578", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2538399 ], "year": 1991, "pin_cites": [ { "page": "592", "parenthetical": "citation omitted" } ], "opinion_index": 1, "case_paths": [ "/nc/328/0578-01" ] } ], "analysis": { "cardinality": 1213, "char_count": 37037, "ocr_confidence": 0.74, "pagerank": { "raw": 1.452715041145732e-07, "percentile": 0.6553802943723747 }, "sha256": "49dc9b41128e51298012f9d63bc42f49ee7d3b9b6524c838572b9ae2461a2a0a", "simhash": "1:9d291466242b30d2", "word_count": 5836 }, "last_updated": "2023-07-14T15:08:37.384656+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Justice TIMMONS-GOODSON joins in this dissenting opinion." ], "parties": [ "CHARLES M. WHITE and EARL ELLIS, individually and now or formerly d/b/a ACE FABRICATION AND WELDING, a North Carolina general partnership v. ANDREW THOMPSON, DOUGLAS THOMPSON, and FRAN LURKEE, alias" ], "opinions": [ { "text": "NEWBY, Justice.\nThis case presents the question whether the General Assembly intended unfair or deceptive conduct among partners contained solely within a single business to be \u201cin or affecting commerce\u201d such that a partner\u2019s breach of his fiduciary duty owed to his fellow partners violates North Carolina\u2019s unfair and deceptive practices act (\u201cthe Act\u201d), N.C.G.S. \u00a7 75-1.1. With the Act our General Assembly sought to prohibit unfair or deceptive conduct in interactions between different market participants. The General Assembly did not intend for the Act to regulate purely internal business operations. In the present case the breaching partner\u2019s unfair conduct was solely within a single partnership. Accordingly, we hold that his action is not \u201cin or affecting commerce\u201d as that term is used in N.C.G.S. \u00a7 75-1.1 and that such conduct is therefore not a violation of the Act. As such, we affirm the decision of the Court of Appeals.\nPlaintiffs Charles White and Earl Ellis, along with defendant Andrew Thompson, were partners in an entity known as Ace Fabrication and Welding (\u201cACE\u201d). The partners formed ACE in October of 2000 primarily for the purpose of performing specialty construction and fabrication work at a plant in Bladen County operated by Smithfield Packing Company, Inc. The three men agreed that each would own one-third of ACE, and each would also receive an hourly wage from ACE for the work each partner actually performed. Shortly after forming ACE, the men acquired certain assets needed to operate their business, including the necessary insurance policies and billing and advertising materials. Also, the partners hired defendant Douglas Thompson, defendant Andrew Thompson\u2019s father, as ACE\u2019s accountant.\nThe Smithfield Packing plant at which ACE sought to work used a bidding system to award jobs to either ACE or one of the \u201cfive or six\u201d other subcontractors performing specialty fabrication work in the plant. Defendant Andrew Thompson testified that Smithfield Packing would inform those interested in working in the plant of the available jobs. According to him, the three partners would evaluate the available job and then submit ACE\u2019s bid to the appropriate individual at Smithfield Packing. Barry White, an employee of Smithfield Packing, testified regarding the bidding process. Barry White stated that although four different individuals must approve purchase orders for jobs to be performed by outside subcontractors, all four individuals are \u201cnot necessarily [approving] who gets the job.\u201d Barry White \u201capprove[d] the way [the purchase order had] been coded\u201d; the \u201cplant engineer and plant superintendent\u201d approved the firm selected to complete the job; and the \u201cplant manager . . . basically [ensured that the] money\u2019s being paid.\u201d\nFrom the testimony presented at trial, it appears that ACE enjoyed initial success. Defendant Andrew Thompson testified that ACE won its first job roughly a week after it began submitting bids. Plaintiff White presented similar evidence, explaining that ACE successfully submitted bids and performed work at Smithfield Packing from late October of 2000 until January of 2001. However, ACE\u2019s initial success eventually fell victim to disagreements and infighting among the partners.\nThe partners described to the jury their disagreements while involved with ACE. Plaintiff White testified that defendant Andrew Thompson misinformed him of some days on which ACE was scheduled to perform specific jobs. Plaintiff White further explained that defendant Andrew Thompson \u201chad a little small crew that he liked to buddy with that he had hired\u201d despite the partners\u2019 agreement that \u201cany work was supposed to go between the three [partners] first because [the partners] made more money doing [their] own work.\u201d However, defendant Andrew Thompson claimed that the other two ACE partners were frequently unavailable for work. He stated that plaintiff White was frequently unavailable on weekends and was often \u201cat the beach\u201d with his wife. Defendant Andrew Thompson also relayed that plaintiff Ellis operated another business after ACE was formed and often \u201chad places to go.\u201d More specifically, he recalled one instance when ACE was \u201cworking on wet cement one day and [plaintiff Ellis] said my 40 hours [are] up, let me get out of here.\u201d Plaintiff Ellis, however, testified that during every week of ACE\u2019s operation, he worked \u201c40 to 50, sometimes 60\u201d hours. Also, plaintiff White explained to the jury that he informed the other two partners before forming ACE that he held another job and asked if either had a problem with his other employment. According to plaintiff White, neither man had any reservation about forming ACE.\nThe ACE partners\u2019 disagreements led to defendant Andrew Thompson\u2019s decision to leave the partnership and start his own business, PAL. According to defendant Andrew Thompson, he decided to sever his ties with ACE and begin his own business in January of 2001. Further, he testified that he informed his partners of this decision sometime between 10 January and 15 January 2001. He also stated that after he had informed his partners of his decision to leave ACE, plaintiffs White and Ellis asked him to complete under the ACE name certain jobs which had been awarded to ACE. Defendant Andrew Thompson acceded to plaintiffs\u2019 request, explaining that he \u201cfinished those jobs in [the] A[CE] name and was also working in the P[AL] name.\u201d Plaintiff White, however, testified that he first heard in early February 2001 that defendant Andrew Thompson was starting another business. Moreover, plaintiff White stated that it was defendant Fran Lurkee, a Smithfield Packing employee, who conveyed that defendant Andrew Thompson \u201cwanted to go on his own\u201d and had already been \u201cdoing ... a great job\u201d in the plant for defendant Lurkee.\nThe ACE partners experienced similar disharmony in attempting to distribute assets of the business. Apparently, plaintiffs were unable to communicate easily with defendants Douglas and Andrew Thompson after Andrew Thompson\u2019s departure from ACE. According to plaintiff White, \u201c[s]ome of the money [disbursed by Smithfield Packing for work ACE had performed] wasn\u2019t being deposited [into ACE\u2019s account].\u201d Plaintiffs White and Ellis changed the mailing address Smithfield Packing had on file for ACE, for the purpose of receiving payment for work ACE had completed. Plaintiff White also transferred the balance of the ACE bank account to his personal account, explaining that plaintiffs embarked on this course of action to preserve the status quo pending resolution of ACE\u2019s affairs. Furthermore, the partners hastily divided ACE\u2019s tools, leaving plaintiffs White and Ellis dissatisfied with the distribution. As explained by plaintiff White, defendant Andrew Thompson \u201cthrew [ACE\u2019s tools] on the floor and [plaintiffs White and Ellis] picked up what [they] had to have.\u201d\nAfter defendant Andrew Thompson disassociated himself from ACE, the three former ACE partners continued to work in the Smithfield Packing plant. Plaintiff White testified he and plaintiff Ellis decided to form another business named Whelco. This business, despite being awarded several jobs, remained viable for only a few months. Defendant Andrew Thompson continued to perform work at Smithfield Packing under his new business name, PAL, until roughly October of 2001.\nPlaintiffs filed the present lawsuit on 18 October 2002. In their complaint plaintiffs alleged that defendant Andrew Thompson: (1) \u201cacted in derogation of the interests of his partners and the partnership\u201d by, inter alia, forming PAL, to which he \u201cfunnel[ed] work originally intended for ACE\u201d; (2) conspired with former Smithfield Packing employees, defendants Fran Lurkee and Carl Barnes, \u201cto divert work originally contracted for by ACE ... to his separate business entity and, on information and belief, paid illegal and improper emoluments for their assistance in this regard\u201d; and (3) conspired with his father, defendant Douglas Thompson, \u201cto improperly keep and maintain the books of ACE.\u201d Plaintiffs also contended that the preceding allegations constituted unfair and deceptive trade, practices under the Act. Before the jury considered the case, defendant Carl Barnes apparently extinguished any potential liability on his part in a bankruptcy proceeding, and the trial court directed a verdict in favor of defendant Fran Lurkee. The jury returned a special verdict finding that defendant Andrew Thompson breached his fiduciary duty to plaintiffs \u201cby failing to act fairly, honestly, and openly,\u201d and it awarded $138,195.00 in damages against him. The jury also found that defendant Douglas Thompson breached his fiduciary relationship to plaintiffs \u201cby failing to act fairly, honestly, and openly\u201d and awarded $750.00 in damages against him. Pursuant to N.C.G.S. \u00a7 75-16, the trial court then, by judgment entered 12 February 2008, trebled these amounts to $414,585.00 and $2,250.00, respectively.\nDefendants Andrew Thompson and Douglas Thompson appealed from the trial court\u2019s judgment to the Court of Appeals. The majority of a divided panel of that court reversed the portion of the trial court\u2019s judgment trebling the damage award with respect to defendant Andrew Thompson. White v. Thompson, 196 N.C. App. \u2014, \u2014, 676 S.E.2d 104, 108-09 (2009). The majority concluded that Andrew Thompson\u2019s usurpation of partnership opportunities was not \u201cin or affecting commerce\u201d as that phrase is used in the Act, stating that his conduct had no impact on the marketplace. Id. The dissenting judge, after examining precedent from both this Court and the Court of Appeals, would have held to the contrary. 196 \u2014 N.C. App. at \u2014, 676 S.E.2d at 111-15 (Ervin, J., concurring in part and dissenting in part). The Court of Appeals otherwise affirmed the trial court\u2019s judgment. Plaintiffs appealed to this Court as of right based on the dissenting opinion filed in the Court of Appeals.\nBefore a plaintiff may avail itself of the Act\u2019s remedies, it must prove that a defendant\u2019s \u201cconduct falls within the statutory framework allowing recovery.\u201d HAJMM Co. v. House of Raeford Farms, Inc., 328 N.C. 578, 592, 403 S.E.2d 483, 492 (1991). The Act provides that \u201c[u]nfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are declared unlawful.\u201d N.C.G.S. \u00a7 75-1.1(a) (2009). Thus, a plaintiff must prove, inter alia, that a defendant\u2019s unfair or deceptive action was \u201cin or affecting commerce\u201d before the plaintiff may be awarded treble damages under N.C.G.S. \u00a7 75-16. Sara Lee Corp. v. Carter, 351 N.C. 27, 32, 519 S.E.2d 308, 311 (1999) (citation omitted); HAJMM Co., 328 N.C. at 592, 403 S.E.2d at 492 (citation omitted).\nIn HAJMM Co. this Court determined that our General Assembly demonstrated with the text of the Act that it intended the Act to regulate a business\u2019s regular interactions with other market participants. 328 N.C. at 594, 403 S.E.2d at 493. There, we observed that the Act defines \u201c \u2018commerce\u2019 \u201d as \u201c \u2018business activities.\u2019 \u201d Id. (quoting N.C.G.S. \u00a7 75-1.1(b) (1991)). We explained that the term \u201c \u2018[bjusiness activities\u2019... connotes the manner in which businesses conduct their regular, day-to-day activities, or affairs, such as the purchase and sale of goods, or whatever other activities the business regularly engages in and for which it is organized.\u201d Id. Ultimately, this Court determined that \u201cextraordinary event[s],\u201d such as raising capital, and internal operations of a single business, such as removing a \u201csecurity from the capital structure,\u201d are not business activities within the General Assembly\u2019s intended meaning of the term. Id. We concluded in HAJMM Co. that securities transactions \u201care not \u2018business activities\u2019 as that term is used in the Act. They are not, therefore, \u2018in or affecting commerce,\u2019 even under a reasonably broad interpretation of the legislative intent underlying these terms.\u201d Id. (emphasis added). Thus, any unfair or deceptive practices occurring in the conduct of extraordinary events of, or solely related to the internal operations of, a business will not give rise to a claim under the Act. 328 N.C. at 594-95, 403 S.E.2d at 493.\nFurthermore, in Bhatti v. Buckland, this Court observed that the history of the Act indicates that the General Assembly was targeting unfair'and deceptive interactions between market participants. 328 N.C. 240, 245-46, 400 S.E.2d 440, 443-44 (1991). The General Assembly originally stated the Act\u2019s purpose as follows:\nThe purpose of this section is to declare, and to provide civil legal means to maintain, ethical standards of dealings between persons engaged in business, and between persons engaged in business and the consuming public within this State, to the end that good faith and fair dealings between buyers and sellers at all levels of commerce be had in this State.\nN.C.G.S. \u00a7 75-1.1(b) (1975), quoted in Bhatti, 328 N.C. at 245, 400 S.E.2d at 443. Essentially, the General Assembly indicated through its original statement of purpose that the Act was designed to achieve fairness in dealings between individual market participants. To accomplish this goal, the General Assembly explained that the Act would regulate two types of interactions in the business setting: (1) interactions between businesses, and (2) interactions between businesses and consumers. The General Assembly sought for the Act to control any unfair or deceptive conduct occurring in one of these two types of interactions. In Bhatti we also observed that, despite a subsequent amendment to the Act, the General Assembly remained devoted to regulating unfair and deceptive conduct in interactions between market participants, both businesses and consumers. 328 N.C. at 245-46, 400 S.E.2d at 443-44.\nWe had occasion to apply these principles in Sara Lee Corp. v. Carter, 351 N.C. 27, 519 S.E.2d 308 (1999), and Dalton v. Camp, 353 N.C. 647, 548 S.E.2d 704 (2001). In Sara Lee an employee of the plaintiff corporation engaged in undisclosed self-dealing by purchasing on plaintiffs behalf computer parts and services supplied by firms in which the employee held a financial interest. 351 N.C. at 29, 519 S.E.2d at 309. We determined the defendant-employee\u2019s unfair or deceptive actions were within the Act\u2019s ambit because they did not occur solely within the employer-employee relationship, but rather occurred in interactions between the plaintiff and the defendant\u2019s outside businesses. Id. at 33-34, 519 S.E.2d at 312. In Dalton, on the other hand, we examined a situation in which the defendant, who was in the plaintiff\u2019s employ at the time of his conduct, formed a competing venture and successfully negotiated for the rights to publish a newspaper that had previously been published by the plaintiff. 353 N.C. at 649, 658, 548 S.E.2d at 706, 711-12. We determined that this conduct, the potential unfairness of which was confined to within a single business, was not within the Act\u2019s purview. Id. at 658, 548 S.E.2d at 712.\nOur prior decisions have determined that the General Assembly did not intend for the Act\u2019s protections to extend to a business\u2019s internal operations. As we determined in HAJMM Co. and Dalton, the Act is not focused on the internal conduct of individuals within a single market participant, that is, within a single business. To the contrary, as we observed in Bhatti and Sara Lee, the General Assembly intended the Act\u2019s provisions to apply to interactions between market participants. As a result, any unfair or deceptive conduct contained solely within a single business is not covered by the Act. As the foregoing indicates, this Court has previously determined that the General Assembly did not intend for the Act to intrude into the internal operations of a single market participant.\nIn the case sub judice the unfairness of defendant Andrew Thompson\u2019s conduct occurred in interaction among the partners within ACE. Plaintiffs were partners with Andrew Thompson in a single market participant. Plaintiffs alleged and proved that defendant Andrew Thompson breached his fiduciary duty as a partner in this single market participant. Plaintiff White\u2019s testimony demonstrated that defendant Andrew Thompson preferred to work with several men whom he had hired, rather than working with plaintiffs White and Ellis. Also, according to plaintiff White, defendant Andrew Thompson misinformed plaintiffs about the dates of certain projects ACE had contracted to perform and began working independently while still an ACE partner. Because defendant Andrew Thompson unfairly and deceptively interacted only with his partners, his conduct occurred completely within the ACE partnership and entirely outside the purview of the Act.\nPlaintiffs contend, however, that defendant Andrew Thompson\u2019s conduct is within the Act\u2019s ambit because his actions led to the demise of ACE as a viable entity and its removal from the market, thereby reducing competition and potentially affecting prices in that market. Plaintiffs appear to argue that defendant Andrew Thompson\u2019s conduct potentially affected the price Smithfield Packing would have to pay for specialty fabrication work. However, this argument overlooks that the unfairness of defendant Andrew Thompson\u2019s conduct did not occur in his dealings with Smithfield Packing. Defendant Andrew Thompson was found to have breached his fiduciary duty to his partners through his conduct within the ACE partnership. The General Assembly simply did not intend for such conduct to fall within the Act\u2019s coverage.\nWhile we appreciate the cogent, compelling analyses submitted in both the majority and dissenting opinions at the Court of Appeals, we believe the General Assembly did not intend to encompass within the Act defendant Andrew Thompson\u2019s conduct. Accordingly, we affirm the decision of the Court of Appeals.\nAFFIRMED.", "type": "majority", "author": "NEWBY, Justice." }, { "text": "Justice HUDSON\ndissenting.\nBecause I would conclude defendant Andrew Thompson\u2019s conduct was \u201cin or affecting commerce,\u201d as intended and articulated by our legislature in N.C.G.S. \u00a7 75-1.1,1 respectfully dissent.\nHere, as part of its unanimous verdict, the jury found and answered \u201cyes\u201d to the following pertinent special interrogatories:\nISSUE ONE:\nDid Andrew Thompson have a fiduciary relationship, that is, a relationship of trust and confidence as the Court has explained it to you, with the Plaintiffs?\nISSUE ONE-B:\nDid Andrew Thompson breach his fiduciary duty to the Plaintiffs in the handling of the business affairs of Ace Welding and Fabrication, by failing to act fairly, honestly, and openly?[]\nThe jury .then found that $138,195 in damages resulted from Andrew Thompson\u2019s conduct. The trial court entered judgment thereupon, stating:\nAnd the plaintiff having at all times asserted that the actions of the defendants constituted unfair and deceptive trade practices, and the jury by special interrogatories having found that the defendants [Andrew Thompson and Douglas Thompson] and each of them had engaged in violations of their fiduciary duties to persons, to wit: the plaintiffs to whom they had developed such relationship of trust and confidence and this court finding by the greater weight of the evidence that the business conducted by the parties, to wit: ACE Welding and Fabrication was a business which was in or affecting commerce, this Court concludes as a matter of law that the damages assessed must be trebled.\nAs required by law, the trial court then trebled the damages resulting from defendant Andrew Thompson\u2019s and defendant Douglas Thompson\u2019s conduct and entered judgment in the amounts of $414,585 and $2250 against these defendants, respectively. N.C.G.S. \u00a7 75-16 (2009); Bhatti v. Buckland, 328 N.C. 240, 243, 400 S.E.2d 440, 442 (1991) (\u201cIf a violation of Chapter 75 is found, treble damages must be awarded.\u201d (citations omitted)).\nUnder North Carolina\u2019s unfair and deceptive practices act (the \u201cAct\u201d), \u201c[u]nfair methods of competition in or affecting commerce, and unfair or- deceptive acts or practices in or affecting commerce, are declared unlawful.\u201d N.C.G.S. \u00a7 75-1.1(a) (2009). \u201cIn order to establish a prima facie claim for unfair [or deceptive] trade practices, a plaintiff must show: (1) defendant committed an unfair or deceptive act or practice, (2) the action in question was in or affecting commerce, and (3) the act proximately caused injury to the plaintiff.\u201d Dalton v. Camp, 353 N.C. 647, 656, 548 S.E.2d 704, 711 (2001) (citation omitted). We have noted that \u201c[p]Iaintiff must first establish that defendants\u2019 conduct was \u2018in or affecting commerce\u2019 before the question of unfairness or deception arises.\u201d HAJMM Co. v. House of Raeford Farms, Inc., 328 N.C. 578, 592, 403 S.E.2d 483, 492 (1991) (citation omitted).\nOur legislature has instructed that \u201c[f]or purposes of th[e Act], \u2018commerce\u2019 includes all business activities, however denominated, but does not include professional services rendered by a member of a learned profession.\u201d N.C.G.S. \u00a7 75-1.1(b) (2009). As noted by this Court, \u201cthis statutory definition of commerce is expansive\u201d; nevertheless, \u201cthe Act is not intended to apply to all wrongs in a business setting.\u201d HAJMM, 328 N.C. at 593, 403 S.E.2d at 492. N.C.G.S. \u00a7 75-1.1(b) \u201cdefines the term \u2018commerce\u2019 to mean \u2018business activities,\u2019 \u201d id. at 594, 403 S.E.2d at 493, and \u201c[t]he term \u2018business\u2019 generally imports a broad definition,\u201d Bhatti, 328 N.C. at 245, 400 S.E.2d at 443 (citation omitted). As explained by this Court, \u201c\u2018[business activities\u2019 is a term which connotes the manner in which businesses conduct their regular, day-to-day activities, or affairs, such as the purchase and sale of goods, or whatever other activities the business regularly engages in and for which it is organized.\u201d HAJMM, 328 N.C. at 594, 403 S.E.2d at 493.\nThe majority concludes here that: (1) the legislature intended the Act to regulate acts or conduct between businesses and consumers or between two or more businesses, but not between individuals within the same business; (2) prior decisions of this Court have determined that unfair or deceptive conduct contained within a single business is not covered under the Act; and (3) \u201c[b]ecause defendant Andrew Thompson unfairly and deceptively interacted only with his partners, his conduct occurred completely within the ACE partnership and entirely outside the purview of the Act.\u201d I disagree with these conclusions.\nFirst, our legislature has not indicated any intent to exclude unfair or deceptive conduct occurring between persons in the same business from coverage under the Act and in fact, has indicated the contrary. In support of its position, the majority primarily relies on a statement of purpose contained in a prior version of section 75-1.1(b), which states:\n(b) The purpose of this section is to declare, and to provide civil legal means to maintain, ethical standards of dealings between persons engaged in business, and between persons engaged in business and the consuming public within this State, to the end that good faith and fair dealings between buyers and sellers at all levels of commerce be had in this State.\nN.C.G.S. \u00a7 75-1.1(b) (1975) (emphasis added). In my view, however, this language on its face actually encompasses unfair or deceptive conduct that occurs between persons \u201cengaged in\u201d the same business and supports the legislature\u2019s intent to include such conduct under the Act. My conclusion that the legislature intended to include such conduct under the ambit of the Act is further reinforced by the broad definition of \u201c \u2018commerce\u2019 \u201d contained in the current version of N.C.G.S. \u00a7 75-1.1(b) and by section 75-16, which states:\nIf any person shall be injured or the business of any person, firm or corporation shall be broken up, destroyed or injured by reason of any act or thing done by any other person, firm or corporation in violation of the provisions of this Chapter, such person, firm or corporation so injured shall have a right of action on account of such injury done, and if damages are assessed in such case judgment'Shall be rendered in favor of the plaintiff and against the defendant for treble the amount fixed by the verdict.\nId. \u00a7 75-16. As a result, I must conclude that instead of applying the Act as our legislature intended, the majority decision significantly undercuts it.\nI conclude that Andrew Thompson\u2019s conduct here falls well \u201cwithin the ambit of the inclusive phrase \u2018business activities, however denominated,\u2019 \u201d as articulated in N.C.G.S. \u00a7 75-1.1 and as interpreted by this Court. Bhatti, 328 N.C. at 246, 400 S.E.2d at 444. \u201c \u2018Business activities\u2019 is a term which connotes the manner in which businesses conduct their regular, day-to-day activities, or affairs, such as the purchase and sale of goods, or whatever other activities the business regularly engages in and for which it is organized.\u201d HAJMM, 328 N.C. at 594, 403 S.E.2d at 493 (emphases added). In HAJMM we held that conduct involving the issuance, transfer, and retirement of revolving fund certificates \u201cis not a business activity which the issuing enterprise was organized to conduct\u201d and does not equate to \u201c \u2018business activities\u2019 as that term is used in the Act.\u201d Id. Here, unlike in HAJMM, the record contains ample evidence to support that ACE \u201cwas organized to conduct\u201d certain specialty fabrication jobs at Smithfieid Packing and that bidding for, .obtaining, and completing these jobs were \u201cactivities [that ACE] regularly engage[d] in and [reflected the purposes] for which it [was] organized.\u201d Id. The record also contains evidence suggesting that Andrew Thompson\u2019s conduct deprived plaintiffs of the ability to complete previously awarded speciality fabrication jobs and to obtain new jobs at Smithfieid Packing, which ultimately affected the nature and extent of the market for specialty fabrication products by eliminating ACE as a viable competitor in that market. Consequently, I would conclude, as the trial court did, that Andrew Thompson\u2019s conduct falls \u201cwithin the ambit of the inclusive phrase \u2018business activities\u2019 \u201d and is, therefore, \u201c \u2018in or affecting commerce\u2019 within the meaning and intent of that phrase as used in N.C.G.S. \u00a7 75-1.1(a).\u201d Bhatti, 328 N.C. at 246, 400 S.E.2d at 444; see also N.C.G.S. \u00a7 75-16.\nSecond, even if the majority has correctly concluded that the legislature did not intend to include unfair and deceptive conduct between individuals in the same business under the Act, defendant Andrew Thompson\u2019s conduct is still covered under the Act, in that other entities were involved. Here, the majority frames the issue before us as \u201cwhether the General Assembly intended unfair or deceptive conduct among partners contained solely within a single business to be \u2018in or affecting commerce\u2019 such that a partner\u2019s breach of his fiduciary duty owed to his fellow partners violates . . . N.C.G.S. \u00a7 75-1.1.\u201d Though plaintiffs White and Ellis and defendant Andrew Thompson were partners in an entity known as Ace Fabrication and Welding (\u201cACE\u201d), Andrew Thompson\u2019s conduct was not contained within a single business or market entity. Here, the record contains ample evidence to support that: (1) while Andrew Thompson was still a partner in ACE, he created his own separate, competing business, PAL, through which he obtained specialty fabrication work at Smithfieid Packing and funneled jobs that had been originally awarded to ACE; and (2) Andrew Thompson began to engage in these activities before notifying plaintiffs White and Ellis that he had created PAL and planned to withdraw from ACE. The jury here found that, by usurping these business opportunities for himself and PAL to the exclusion of plaintiffs, Andrew Thompson breached his fiduciary duties to plaintiffs and made himself and PAL a market competitor of plaintiffs. This conduct affected commerce in much the same way as the conduct at issue in Sara Lee Corp. v. Carter, in which we held the conduct was covered under the Act. 351 N.C. 27, 31-34, 519 S.E.2d 308, 311-12 (1999) (concluding that the defendant employee, who was responsible for purchasing computer hardware and services at the best possible price for his employer and had a fiduciary duty to his employer to act accordingly, was properly found liable under the Act when the defendant purchased computer parts and services at high prices from separate businesses he created and controlled while also employed with Sara Lee); see also HAJMM, 328 N.C. at 588, 403 S.E.2d at 489 (stating that \u201c[b]usiness partners ... are each other\u2019s fiduciaries as a matter of law\u201d (citing Casey v. Grantham, 239 N.C. 121, 124-25, 79 S.E.2d 735, 738 (1954) (\u201cIt is elementary that the relationship of partners is fiduciary and imposes on them the obligation of the utmost good faith in their dealings with one another in respect to partnership affairs. Each is the confidential agent of the other, and each has a right to know all that the others know, and each is required to make full disclosure of all material facts within his knowledge in any way relating to the. partnership affairs.\u201d (citation omitted)))).\nThird, notwithstanding the majority\u2019s assertion to the contrary, this Court\u2019s decisions have not held that \u201cany unfair or deceptive conduct contained within a single business\u201d is excluded from the purview of the Act. None of the cases cited by the majority are predicated.on whether said conduct was confined to a single business or market entity. Rather, this Court\u2019s analyses of whether the conduct was \u201cin or affecting commerce\u201d centered on the potential exclusion of the conduct from the Act, based on one of the following potential exceptions articulated in prior decisions of this Court or the Court of Appeals: (A) conduct involving an employer-employee relationship, Dalton, 353 N.C. at 657-58, 548 S.E.2d at 711-12 (citing HAJMM, 328 N.C. at 593, 403 S.E.2d at 492) stating that employer-employee relations are not covered under the Act)); Sara Lee, 351 N.C. at 31, 519 S.E.2d at 310 (citing Buie v. Daniel Int\u2019l Corp., 56 N.C. App. 445, 448, 289 S.E.2d 118, 119-20) (same), disc. rev. denied, 305 N.C. 759, 292 S.E.2d 574 (1982)); (B) conduct involving \u201csecurities transactions,\u201d HAJMM, 328 N.C. at 593, 403 S.E.2d at 492 (citing Skinner v. E. F. Hutton & Co., 314 N.C. 267, 275, 333 S.E.2d 236, 241 (1985)); or (C) conduct involving a \u201cprivate homeowner[] selling a residence,\u201d Bhatti, 328 N.C. at 244, 400 S.E.2d at 443. In Dalton we held that summary judgment in the defendants\u2019 favor on the employer\u2019s Chapter 75 claim was proper because, unlike the employee in Sara Lee, employee defendant Camp did not have a fiduciary duty to his employer, nor did he serve his employer in the capacity of a buyer or seller or \u201cin any alternative capacity suggesting that his employment. . . otherwise qualified as \u2018in or affecting commerce.\u2019 \u201d 353 N.C. at 658, 548 S.E.2d at 711-12.\nRather than supporting the majority\u2019s view, this Court\u2019s decision in Sara Lee strongly indicates that the type of self-dealing found by the jury here is exactly the type of conduct that is covered under the Act. See 351 N.C. at 34, 519 S.E.2d at 312 (holding that because the defendant employee breached his fiduciary duty to his employer to obtain computer parts and services at the lowest possible price and engaged in self-dealing and \u201c \u2018business activities\u2019 \u201d by purchasing these parts and services at inflated prices from companies in which he had a financial interest, \u201cdefendant\u2019s mere employee status . . . does not safeguard him from liability under the Act\u201d). Indeed, in its discussion of the very definition of \u201c \u2018commerce,\u2019 \"'this Court noted that the Act is subject to a \u201creasonably broad interpretation\u201d and that \u201c \u2018we have not limited [the Act\u2019s] applicability ... to cases involving consumers only. After all, unfair trade practices involving only businesses affect the consumer as well.\u2019 \u201d Id. at 32, 519 S.E.2d at 311 (quoting United Labs., Inc. v. Kuykendall, 322 N.C. 643, 665, 370 S.E.2d 375, 389 (1988) (citation omitted)). Further, this case is not analogous to HAJMM. 328 N.C. at 594-95, 403 S.E.2d at 493 (holding that \u201c[r] evolving fund certificates are a cooperative\u2019s functional equivalent of traditional corporate securities\u201d and \u201ctherefore,. . . like more conventional securities, [the] issuance or redemption of revolving fund certificates are not \u2018in or affecting commerce\u2019 \u201d). Moreover, in Bhatti this Court held that the conduct of an individual selling real estate could potentially be covered under the Act. 328 N.C. at 246, 400 S.E.2d at 444 (holding that on the \u201csparse'facts in th[e] record,\u201d the transaction \u201cinvolved a buyer and seller in a commercial context to which the protections afforded by section 75-1.1\u201d apply, and thus, \u201cthe sale fell within the ambit of the inclusive phrase .\u2018business activities, however denominated,\u2019 and was therefore \u2018in or affecting commerce\u2019 within the meaning and intent of that phrase as used in N.C.G.S. \u00a7 75-1.1(a)\u201d (internal citation omitted)). None of these cases can be read as compelling, or even pointing in the direction of, the conclusions reached by the majority.\nFinally, I disagree with the majority\u2019s conclusion that \u201cthe unfairness of defendant Andrew Thompson\u2019s conduct did not occur in his dealings with Smithfield Packing\u201d and as such, cannot be covered under the Act. As this Court has previously stated, \u201cunfair [and deceptive] trade practices involving only businesses affect the consumer as well.\u201d Kuykendall, 322 N.C. at 665, 370 S.E.2d at 389. And, as the record demonstrates, ACE\u2019s (and PAL\u2019s) business activities of bidding for, obtaining, and completing specialty fabrication work at Smithfield Packing necessarily involved Smithfield Packing as a potential or actual consumer.\nRegardless of whether Andrew Thompson committed unfair or deceptive acts directly against Smithfield Packing itself, neither the Act nor this Court\u2019s case law mandates that unfair or deceptive conduct committed by a person engaged in business against another person or persons engaged in business must occur in dealings with a consumer in order for the conduct and the resulting injury to be covered under the Act. See, e.g., N.C.G.S. \u00a7 75-16. By reversing the judgment against defendant Andrew Thompson, the majority, for the first time since Chapter 75 was enacted, has created out of whole cloth an exemption for a huge segment of business conduct. This decision has potentially widespread and damaging consequences for businesses and consumers alike, by essentially rewriting the statute to eliminate the accountability our legislature intended for unfair dealings within a business.\nFor these reasons, I would hold that defendant Andrew Thompson\u2019s conduct was \u201cin or affecting commerce\u201d and that the trial court correctly concluded that his conduct was actionable under the Act. I would reverse the Court of Appeals and reinstate the judgment based on the jury\u2019s verdict. Therefore, I respectfully dissent.\nJustice TIMMONS-GOODSON joins in this dissenting opinion.\n. The jury answered this same question \u201cyes\u201d regarding the conduct of defendant Douglas Thompson and \u201cno\u201d regarding the conduct of plaintiff Charles Michael White and plaintiff Earl Ellis.\n. The jury also found that $750 in damages resulted from Douglas Thompson\u2019s conduct. The conduct of these parties and the damages resulting therefrom are not before us on appeal.\n. This definition has been in place since 27 June 1977. Act of June 27, 1977, ch. 747, secs. 2, 5, 1977 N.C. Sess. Laws 984. 984. 987.", "type": "dissent", "author": "Justice HUDSON" } ], "attorneys": [ "Lee & Lee, by Junius B. Lee, III, for plaintiff-appellants.", "Ralph G. Jorgensen for defendant-appellees Andrew Thompson and Douglas Thompson." ], "corrections": "", "head_matter": "CHARLES M. WHITE and EARL ELLIS, individually and now or formerly d/b/a ACE FABRICATION AND WELDING, a North Carolina general partnership v. ANDREW THOMPSON, DOUGLAS THOMPSON, and FRAN LURKEE, alias\nNo. 226A09\n(Filed 15 April 2010)\nUnfair Trade Practices\u2014 allegations between partners \u2014 not in or affecting commerce \u2014 internal business operations\nThe Court of Appeals did not err in a case involving unfair and deceptive trade practice allegations between partners by concluding a partner\u2019s actions were not \u201cin or affecting commerce\u201d as that term is used under N.C.G.S. \u00a7 75-1.1, and thus not an unfair or deceptive trade practice, because: (1) the General Assembly sought to prohibit unfair or deceptive conduct in interactions between different market participants and did not intend for it to regulate purely internal business operations; and (2) in the instant case the breaching partner\u2019s unfair conduct was solely within a single partnership.\nJustice HUDSON dissenting.\nJustice TIMMONS-GOODSON joining in the dissenting opinion.\nAppeal pursuant to N.C.G.S. \u00a7 7A-30(2) from the decision of a divided panel of the Court of Appeals, 196 N.C. App. - \u2014 , 676 S.E.2d 104 (2009), affirming in part and reversing in part a judgment entered 12 February 2008 by Judge Douglas B. Sasser in Superior Court, Columbus County. Heard in the Supreme Court 18 November 2009.\nLee & Lee, by Junius B. Lee, III, for plaintiff-appellants.\nRalph G. Jorgensen for defendant-appellees Andrew Thompson and Douglas Thompson." }, "file_name": "0047-01", "first_page_order": 141, "last_page_order": 155 }