Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—M.D.N.C.: Mere breach of contract claims cannot support consumer protection claims, (Aug 9, 2013)

By Jody Coultas, J.D.

A contractor failed to state a North Carolina Unfair and Deceptive Trade Practices Act (UDTPA) claim against Apex Imaging Services, Inc. for allegedly engaging in a pattern and practice of contracting with small local contractors and paying them for only a fraction of the total work done, the federal district court in Winston-Salem has held (Campbell v. Apex Imaging Services, Inc., August 7, 2013, Beaty, J.).

The contractor alleged that Apex failed to pay for remodeling work, and that this was part of a pattern and practices. Apex also filed claims against the contractor for poor performance, seeking to regain money required to fix the construction issues created by the contractor.

Because the cases involved the same parties and issues, the court granted the contractor’s motion to consolidate the claims. However, the court denied Apex’s motion to transfer the case to the Southern District of Illinois.

Actions under the UDTPA are distinct from actions for breach of contract and mere breach of contract claims, even if intentional, are insufficient to state a UDTPA claim, the court held. Apex allegedly paid small contractors for some of the total work done and, when the contractor refused to perform work on new jobs until he was paid for the work done on earlier jobs, Apex terminates the services. However, the contractor failed to allege substantial aggravating circumstances that would elevate the breach of contract claim to a UDTPA claim. The allegations were based on information provided by an unnamed source without any apparent connection to the circumstances, and too speculative to survive the motion to dismiss.

The cases are Nos. 1:12CV1366 and 1:12CV1365.

Attorneys: B. Ervin Brown, II (Law Firm of B. Ervin Brown, II) for Joe Campbell. Greg K. Hafif (Law Offices of Herbert Hafif) for Apex Imaging Services, Inc.

Companies: Apex Imaging Services, Inc.

Cases: StateUnfairTradePractices NorthCarolinaNews