The Court held that plaintiffs had failed to plead fraud with particularity, and dismissed their fraud claim pursuant to Rule 9(b) of the North Carolina Rules of Civil Procedure. Plaintiffs had attempted to plead both affirmative misrepresentations and fraud by concealment. With regard to the first, the Court held that the Complaint contained no specific allegations about the identity of the speaker, or the time or place when, or where, the supposedly fraudulent statements were made.
On the claim of fraud by concealment, the Court adopted the mutli-factor test adopted by the Court in Breeden v. Richmond Community College, 171 F.R.D. 189, 195 (M.D.N.C. 1997). It held that plaintiffs had presented no facts demonstrating what defendant would have gained by its alleged failure to disclose. Nor had plaintiff presented any facts showing why their reliance was reasonable and detrimental. Finally, plaintiffs’ claim of damages was questionable.
The Court also dismissed plaintiffs’ unfair and deceptive practices claims, on a variety of grounds. Plaintiffs were out of state residents, suing for an injury that had occurred in Texas. Their injury therefore did not arise from competition between the parties or from the consumption of goods or servies in North Carolina, and there was no substantial effect on North Carolina trade or commerce.