OSTEEN, JR., District Judge.
Presently before the court is Defendants' Motion to Dismiss the Amended Complaint (Doc. 31). Defendants have filed a memorandum ("Defs.' Mem.") (Doc. 32) in support of their motion, Plaintiffs have filed a response in opposition ("Pls.' Resp.") (Doc. 34), and Defendants have filed their reply (Doc. 37). Defendants' motion to dismiss is now ripe for adjudication, and for the reasons that follow, this court will grant the motion in part and deny the motion in part.
This lawsuit arises from the representation of and contract negotiation for Robert Quinn ("Quinn"), the fourteenth overall pick in the 2011 NFL Draft. The following allegations are taken from the Amended Complaint (Doc. 17).
At all relevant times, Plaintiff Carl E. Carey Jr., Ph.D. ("Plaintiff Carey"), was a certified National Football League Players Association ("NFLPA") contract advisor. (First Am. Compl. (Doc. 17) ¶ 12.) He became a certified agent in 2005 for the sole purpose of trying to enhance young athletes' lives and careers through proper and ethical representation and guidance. (Id. ¶ 13.) Plaintiff Champion Pro Consulting Group, Inc. ("Plaintiff Champion") is a management consulting company that specializes in the representation of professional football players. (Id. ¶ 14.) Plaintiff Carey served as president of Plaintiff Champion. (Id. ¶ 3.)
Defendant Impact Sports Football, LLC ("Defendant Impact") is a Florida limited liability company with its principal place of business in Boca Raton, Florida. (Id. ¶ 4.) Defendant Impact employed Defendant Tony Fleming ("Defendant Fleming") as a player-agent representative. (Id. ¶ 6.) Defendant Mitchell Frankel ("Defendant Frankel") was also a registered player-agent representative as well as an active officer and registered agent for Defendant Impact with direct and supervisory authority over Defendant Fleming. (Id. ¶ 5.) Defendant Christina White ("Defendant White"), Quinn's business manager, and Defendant Marvin Austin ("Defendant Austin") acted in concert with the other Defendants. (Id. ¶¶ 8-9.) Defendant Austin received monetary compensation for recruiting potential clients for Defendants Impact, Frankel, and Fleming. (Id. ¶ 84.)
A mutual friend introduced Plaintiff Carey to Quinn in November 2010. (Id. ¶ 19) Soon after, Quinn called Plaintiff Carey, and they had an introductory conversation. (Id. ¶ 21.) That conversation was the only contact between Plaintiff Carey and Quinn until December 4, 2010. (Id.) Plaintiff Carey also had a conversation
On or about December 4, 2010, Plaintiff Carey met with Quinn and several members of his family in North Carolina. (Id. ¶ 23.) At that meeting, Quinn and his father signed a Standard Representation Agreement ("SRA") with Plaintiff Carey. (Id.) The NFLPA requires the use of an SRA to memorialize the agreement between a player and player-agent representative for services to be provided in exchange for a commission on a player's contract. (Id. ¶ 24.) Based on this SRA, Carey was to receive a three percent commission on the value of Quinn's future contract. (Id. ¶ 25.)
Plaintiff Carey and Quinn also agreed to a separate contract for personal expenses. (Id. ¶ 26.) Under that contract, Plaintiff Carey would provide Quinn with money for personal expenses on the condition that Quinn repay the money if he terminated Carey within two years of the agreement. (Id.) If Quinn terminated the contract, the money he owed would revert to a loan. (Id.)
Throughout the following months Plaintiffs expended substantial time, effort, and money presenting Quinn in the best possible light, prepared him both physically and mentally for the NFL Draft, and performed various other personal services. (See id. ¶¶ 27-28, 30-31, 33-35, 37-38, 42.) In large part because of these efforts, Quinn was selected fourteenth overall in the 2011 NFL Draft. (Id. ¶ 43.) Plaintiff Carey also facilitated and arranged agreements for Quinn with Nike and trading card companies. (Id. ¶¶ 47-48.) He continued to perform personal services for Quinn, as well as his friends and family, after Quinn moved to St. Louis. (See id. ¶¶ 64-66.)
Because team owners and the NFLPA could not agree on a new collective bargaining agreement, NFL players were locked out from March 11 to July 25, 2011. (Id. ¶ 49.) As a result of the lockout, the NFLPA decertified as a union. (Id. ¶ 50.) During this period the NFLPA did not serve as a governing body over player representatives. (Id.)
When in effect, the NFLPA's rules prohibited agents from contacting or communicating with a player under contract with another agent. (Id. ¶ 51.) On or about March 11, 2011, the NFLPA sent out a memorandum stating that it was "discontinuing its agent regulation system" as a result of its decertification. (Id. ¶ 53.) Without the NFLPA's agent regulation rules in place, a number of agents began to contact and communicate with players under existing contracts with other agents. (Id. ¶ 52.)
Under the expired collective bargaining agreement, the NFLPA's arbitration procedure provided the exclusive method for resolving disputes among contract advisors regarding alleged inference with the contractual relationship of an advisor and a player. (Id. ¶ 55.) However, mandatory arbitration did not apply to actions arising during the NFLPA's decertification. (Id. ¶¶ 56-57.)
Between December 4, 2010 and May 2011, Quinn and Plaintiff Carey communicated on a daily basis, frequently through text messages. (Id. ¶¶ 44-45.) However, these communications started to decrease in May 2011. (Id. ¶ 45.)
Plaintiff Carey met Defendant White for the first time at a party in South Carolina on or about April 28, 2011. (Id. ¶ 40.) Defendant Austin introduced Quinn to Defendant White. (Id. ¶ 41.)
In June 2011 Plaintiff Carey started receiving text messages from Quinn demanding more marketing contracts. (Id. ¶ 58.) Quinn and Defendant White requested an
On or about July 20, 2011, a trainer from the St. Louis Rams called Plaintiff Carey regarding Quinn. (Id. ¶ 67.) When Plaintiff Carey informed Quinn of this call, Quinn terminated Plaintiff Carey as Quinn's player-agent representative. (Id. ¶ 68.) While terminating Plaintiff Carey, Quinn told him that Defendants Impact, Frankel, and Fleming had offered to pay Quinn $50,000 in addition to any amount Quinn owed Plaintiff Carey if he terminated his SRA with Plaintiff Carey and hired those Defendants. (Id. ¶ 73.)
According to the Amended Complaint, Defendants were "operating under a plan and scheme to terminate Carey immediately upon the beginning of any contact with the St. Louis Rams related to contract negotiations." (Id. ¶ 70.) Under this plan and scheme, Quinn was to remain under contract with Plaintiffs for as long as possible to extract as much money and as many services from Plaintiffs as possible before hiring Defendants as his agents. (Id. ¶¶ 71-72.)
Plaintiff Carey had prior experience with Defendants Frankel and Fleming from their attempts to sign student-athletes he had tutored. (Id. ¶ 75.) According to the Amended Complaint, Plaintiff Carey had witnessed unethical, illegal, and immoral business tactics and had expressed his concerns to student-athletes that Defendants Frankel and Fleming recruited. (Id.) Because he had expressed his concerns and recommended that student-athletes not sign with Defendants Frankel and Fleming, they targeted Plaintiff Carey for retaliation. (Id.)
Defendant Fleming had informed Quinn and Defendant Austin of his plans to form a sports agency and management company that would cater to athletes interested in the partying lifestyle and told them that they would be his primary clients. (Id. ¶ 76.)
On July 20, 2011, Quinn told Plaintiff Carey that he would make payments on their personal expense agreement. (Id. ¶ 77.) A few days later, Quinn agreed to be represented by Defendants Impact, Frankel, and Fleming. (Id. ¶ 78.) The SRA was terminable upon five days' notice. Defendant Fleming discussed contract terms with the St. Louis Rams within five days of Plaintiff Carey receiving Quinn's fax terminating their SRA. (Id. ¶ 79.)
On July 30, 2011, Quinn signed a four-year contract worth a maximum of $9,400,000, including a $5,300,000 signing bonus. (Id. ¶ 80.) Based on the provisions of the 2011 NFL collective bargaining agreement governing rookie contracts, little to no negotiation would have been required. (Id. ¶ 81.)
Before 2011, players rarely terminated representatives after the draft but before negotiating with an NFL team. (Id. ¶ 82.) While the NFLPA was decertified, however, several former UNC football players, including Quinn and Defendant Austin, did so. (Id. ¶ 83.)
Defendants told Quinn that Carey was not properly representing him. (Id. ¶ 85.)
Defendants have moved to dismiss Plaintiffs' Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). To survive a Rule 12(b)(6) motion, a plaintiff must allege "sufficient factual matter, accepted as true, to `state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). In order for a claim to be facially plausible, a plaintiff must "plead[] factual content that allows the court to draw the reasonable inference that the defendant is liable" and must demonstrate "more than a sheer possibility that a defendant has acted unlawfully." Id. (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955). When ruling on a Rule 12(b)(6) motion, a court must accept the complaint's factual allegations as true. Id. However, "the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions," and "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. (citing Twombly, 550 U.S. at 555, 127 S.Ct. 1955). Moreover, a 12(b)(6) motion can be granted in "the unusual case in which a plaintiff includes allegations that show on the face of the complaint that there is some insuperable bar to relief." E.g., First Fin. Sav. Bank, Inc. v. Am. Bankers Ins. Co. of Fl., Inc., 699 F.Supp. 1158, 1161 (E.D.N.C.1988); Lavender v. United Mine Workers of Am., 285 F.Supp. 869, 874 (S.D.W.Va.1968) ("It is axiomatic that a complaint may be dismissed for failure to state a claim.... [when] the disclosure of facts ... necessarily defeat[s] the claim.").
Plaintiffs allege claims against all Defendants under the following legal theories: (1) unfair methods of competition, (2) tortious interference with contract, (3) slander per se, and (4) civil conspiracy. The Amended Complaint also includes a fifth claim for unjust enrichment against Defendants Impact, Frankel, and Fleming. Defendants move to dismiss each count on various grounds.
Before turning to the claims raised in the Amended Complaint, this
State v. Summers, 351 N.C. 620, 623, 528 S.E.2d 17, 20 (2000). "Preclusive effect is not limited to court proceedings; it arises in the same manner from arbitration awards." Whitlock v. Triangle Grading Contractors Dev., Inc., 205 N.C. App. 444, 448, 696 S.E.2d 543, 546 (2010); see also Murakami v. Wilmington Star News, Inc., 137 N.C. App. 357, 360, 528 S.E.2d 68, 70 (2000) ("[C]ollateral estoppel will bar relitigation of the issues actually decided during the arbitration proceeding.").
Whitlock, 205 N.C.App. at 448, 696 S.E.2d at 546 (alteration in original) (quoting Whitacre P'ship v. Biosignia, Inc., 358 N.C. 1, 15, 591 S.E.2d 870, 880 (2004)).
This court may take judicial notice of the NFLPA arbitration opinion and award. This court does so "not for the truth of the facts recited therein, but for the existence of the opinion, which is not subject to reasonable dispute over its authenticity." See S. Cross Overseas Agencies, Inc. v. Wah Kwong Shipping Grp. Ltd., 181 F.3d 410, 426 (3d Cir.1999); see also Andrews v. Daw, 201 F.3d 521, 524 n. 1 (4th Cir.2000); Sun Chem. Trading Corp. v. CBP Res., Inc., No. 1:01CV00425, 2004 WL 1777582, at *3 (M.D.N.C. July 29, 2004). Plaintiffs have not disputed the authenticity of the arbitration opinion and award submitted by Defendants.
Plaintiff Carey and Quinn agreed to a stipulation of the issues to be resolved by the arbitrator. (See Defs.' Mem., Ex. 1 (Doc. 32-1) at 3.) The arbitrator held a hearing during which both parties "had the opportunity to examine and cross-examine witnesses as well as present evidence in support of their respective positions." (Id.) After that hearing, the arbitrator produced a written opinion and award. As potentially relevant to the present lawsuit, the arbitrator found that Plaintiff Carey was entitled to $17,500 in quantum meruit for the reasonable value of the services he performed as a contract advisor. (Id. at 35.) In reaching the decision, the arbitrator considered the broad range of services that are cited in the Amended Complaint. The arbitrator also found that Quinn properly terminated his SRA with Plaintiff Carey. (Id.)
Based on the foregoing, this court finds that the reasonable value of Plaintiff Carey's services and whether Quinn properly terminated the SRA were raised and actually litigated during the arbitration proceeding. Because the arbitrator's findings regarding these stipulated issues were incorporated in the arbitral award, they were material and relevant, as well as necessary and essential, to the disposition of the NFLPA arbitration and resulting
Accordingly, Plaintiffs are collaterally estopped from relitigating the reasonable value of their services and the issue of whether Quinn properly terminated the SRA. The extent to which these same issues are presented in this case will be addressed where relevant.
This court now considers whether Plaintiffs have adequately stated any of their claims. For the reasons that follow, Defendants' motion to dismiss will be granted as to the slander per se, tortious interference, and unjust enrichment claims. The motion will be denied as to the unfair methods of competition and civil conspiracy claims.
Defendants move to dismiss the slander per se claim, arguing that Plaintiffs have failed to allege an actionable defamatory statement. To state a claim for slander per se, a plaintiff must allege that: "(1) th[e] defendant's statement was slanderous per se, (2) the statement was false, and (3) the statement was published or communicated to and understood by a third person." Shillington v. K-Mart Corp., 102 N.C. App. 187, 194, 402 S.E.2d 155, 159 (1991) (citing West v. King's Dep't Store, Inc., 321 N.C. 698, 703, 365 S.E.2d 621, 624 (1988)). A statement impeaching one's trade or profession is actionable per se, but such statements "(1) must touch the plaintiff in his special trade or occupation, and (2) must contain an imputation necessarily hurtful in its effect on his business." Badame v. Lampke, 242 N.C. 755, 757, 89 S.E.2d 466, 468 (1955); see also Gibson v. Mut. Life Ins. Co. of N.Y., 121 N.C. App. 284, 289, 465 S.E.2d 56, 59-60 (1996). If a plaintiff states a claim for slander per se, "a prima facie presumption of malice and a conclusive presumption of damage arises, obviating the need for the plaintiff to plead and prove special damages." Eli Research, Inc. v. United Commc'ns Grp., LLC, 312 F.Supp.2d 748, 761 (M.D.N.C.2004) (citing Barker v. Kimberly-Clark Corp., 136 N.C. App. 455, 460, 524 S.E.2d 821, 825 (2000)).
Here, the slander per se claim will be dismissed because Plaintiffs have not alleged an actionable defamatory statement. There are "`constitutional limits on the type of speech' subject to a defamation action." Daniels v. Metro Magazine Holding Co., 179 N.C. App. 533, 539, 634 S.E.2d 586, 590 (2006) (quoting Milkovich v. Lorain Journal Co., 497 U.S. 1, 16, 110 S.Ct. 2695, 111 L.Ed.2d 1 (1990)). For example, "expressions of opinion not asserting provable facts are protected speech." Id. (citing Milkovich, 497 U.S. at 20, 110 S.Ct. 2695). "Although someone cannot preface an otherwise defamatory statement with `in my opinion' and claim immunity from liability, a pure expression of opinion is protected because it fails to assert actual fact." Id.
Plaintiffs rely on three allegedly defamatory statements: (1) that Plaintiff Carey "should have been getting endorsement deals for Quinn"; (2) that Defendants Impact, Fleming, and Frankel "could market Quinn better than Carey"; and (3) that Plaintiff Carey was "at fault for Quinn not being selected higher in the 2011 NFL Draft." (First Am. Compl. (Doc. 17) ¶ 85.) Although these statements touch Plaintiff Carey in his special trade or occupation as a player representative, they are not actionable because the statements are personal opinions that are
Because Plaintiffs have failed to allege an actionable defamatory statement, their slander per se claim will be dismissed.
Defendants have also moved to dismiss Plaintiffs' claim alleging that they tortiously interfered with the SRA between Quinn and Plaintiff Carey. Under North Carolina law, the elements of tortious interference with contract are:
United Labs., Inc. v. Kuykendall, 322 N.C. 643, 661, 370 S.E.2d 375, 387 (1988).
Here, Plaintiffs have failed to state a tortious interference claim. The SRA between Plaintiff Carey and Quinn was a valid contract which, although terminable at-will, conferred certain rights on Plaintiff Carey.
A person "acts without justification in inducing the breach of contract... if he has no sufficient lawful reason for his conduct." Childress v. Abeles, 240 N.C. 667, 675, 84 S.E.2d 176, 182 (1954). "Under North Carolina law, whether a defendant's conduct is justified depends upon the circumstances surrounding the interference, the defendant's motive or conduct, the interests sought to be advanced, the social interest in protecting the freedom of action of the defendant, and the contractual interests of the other party." Ga. Pac. Consumer Prods., LP v. Von Drehle Corp., 618 F.3d 441, 456 (4th Cir.2010) (citing Embree Constr. Grp., Inc. v. Rafcor, Inc.,
This court finds the analysis in Peoples controlling. In Peoples, the North Carolina Supreme Court stated:
Peoples, 322 N.C. at 220-22, 367 S.E.2d at 650.
According to the Amended Complaint, Defendants were acting under a plan or scheme to induce Quinn to terminate his SRA with Plaintiff Carey only after he had extracted as much financial assistance and as many services as possible before negotiating a professional contract. Specifically, Quinn told Plaintiff Carey that Defendants had offered to pay Quinn $50,000 in addition to any money Quinn owed Plaintiff Carey if he terminated the SRA and signed with Defendants. Quinn also admitted in part to Defendants' alleged plan and to having already hired Defendants, which would have been before the five-day notice period expired.
However, the Amended Complaint also alleges that the NFLPA decertified as a union and therefore was no longer a governing body over player representatives. (First Am. Compl. (Doc. 17) ¶ 50.) As a result, numerous agents began to contact and communicate with players already under contract. (Id. ¶ 52.) The Amended Complaint also alleges the following:
This court finds that the complaint reveals on its face that the alleged interference was justified or privileged.
Peoples, 322 N.C. at 221, 367 S.E.2d at 651.
Even assuming that Impact, Frankel, Fleming, Austin, and White all had a malicious motive for inducing Quinn to terminate his contract, that motive is insufficient to permit this case to proceed in light of the business justification. "If an outsider to the contract has sufficient lawful reason for inducing the breach of contract, he is exempt from any liability, no matter how malicious in actuality his conduct may
This court therefore finds that Defendants' motion to dismiss should be granted as to Plaintiffs' tortious interference claim because the complaint alleges on its face that Defendants had a legitimate business motive for inducing Quinn into terminating his contract with Plaintiffs.
Defendants also move to dismiss Plaintiffs' claim under N.C. Gen. Stat. § 75-1.1. That statute makes "[u]nfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce," illegal. N.C. Gen. Stat. § 75-1.1. "Commerce" is defined as including "all business activities, however denominated." Id. To state a claim for unfair trade practices under North Carolina law, a plaintiff must allege three elements: "(1) an unfair or deceptive act or practice, (2) in or affecting commerce, which (3) proximately caused actual injury to the claimant." Boyce & Isley, PLLC v. Cooper, 153 N.C. App. 25, 35, 568 S.E.2d 893, 901 (2002).
"A practice ... is deceptive if it has a tendency to deceive." Dalton v. Camp, 353 N.C. 647, 656, 548 S.E.2d 704, 711 (2001). "A practice is unfair when it... is immoral, unethical, oppressive, unscrupulous, or substantially injurious to consumers." Walker v. Fleetwood Homes of N.C., Inc., 362 N.C. 63, 72, 653 S.E.2d 393, 399 (2007) (quoting Marshall v. Miller, 302 N.C. 539, 548, 276 S.E.2d 397, 403 (1981)). "[O]nly practices that involve `[s]ome type of egregious or aggravating circumstances' are sufficient to violate the UTPA." S. Atl. Ltd. P'ship of Tenn., L.P. v. Riese, 284 F.3d 518, 535 (4th Cir.2002) (second alteration in original) (quoting Dalton, 353 N.C. at 657, 548 S.E.2d at 711); Dalton, 353 N.C. at 656-57, 548 S.E.2d at 711 (2001) ("Moreover, `[s]ome type of egregious or aggravating circumstances must be alleged and proved before the [Act's] provisions may [take effect].'" (alterations in original)(quoting Allied Distribs., Inc. v. Latrobe Brewing Co., 847 F.Supp. 376, 379 (E.D.N.C.1993))). "In determining the unfair or deceptive nature of an act or practice, each case is fact specific...." Carcano v. JBSS, LLC, 200 N.C. App. 162, 172, 684 S.E.2d 41, 50 (2009).
In light of both the broad definition of "unfair" practices and the allegations contained in the Amended Complaint, this court finds Defendants' motion should be denied. These allegations, inter alia, include that Defendants maliciously planned to extract as much money and services from Plaintiffs before terminating his SRA with Plaintiffs when NFL contract negotiations began. Plaintiffs allege that Defendants offered to pay Quinn over $50,000 if he terminated the SRA and signed with Defendants and, further, that Defendants Frankel and Fleming specifically targeted Plaintiff Carey in retaliation for Plaintiff Carey advising student-athletes to avoid entering contracts with Defendants Frankel and Fleming. This court finds that Plaintiffs have alleged at least a plausible claim for unfair or deceptive trade practices. Cf. Walker v. Sloan, 137 N.C. App. 387,
Defendants also move to dismiss the civil conspiracy claim. To state a civil conspiracy claim under North Carolina law, a plaintiff must allege "a conspiracy, wrongful acts done by certain of the alleged conspirators, and injury." Henry v. Deen, 310 N.C. 75, 87, 310 S.E.2d 326, 334 (1984). Because the unfair methods of competition claim survives and the Amended Complaint alleges that Defendants had an agreement to commit the acts underlying those claims, the Amended Complaint adequately states a claim for civil conspiracy. Accordingly, the motion to dismiss that claim will be denied.
Defendants Impact, Frankel, and Fleming move to dismiss the claim for unjust enrichment under the clean hands and collateral estoppel doctrines. For the reasons that follow, this court finds that Plaintiffs are collaterally estopped from raising their claim based on unjust enrichment. Therefore, that claim will be dismissed.
To state a claim for unjust enrichment, a plaintiff must allege that he
Booe v. Shadrick, 322 N.C. 567, 570, 369 S.E.2d 554, 556 (1988).
Plaintiffs base their claim for unjust enrichment on the services Plaintiff Carey provided to Quinn in preparing him for the NFL Draft and contract negotiations. (See First Am. Compl. (Doc. 17) ¶ 131 (alleging that Defendants Impact, Frankel, and Fleming "have been unjustly enriched in that they benefitted by not having to complete the necessary work for Quinn to agree to a contract with the St. Louis Rams and having all such work and effort completed by Plaintiffs"); Pls.' Resp. (Doc. 34) at 9 ("Plaintiffs alleged that they conferred a benefit upon Defendants in the form of exerting a tremendous amount of effort, energy, and money on helping Quinn's pre-draft status, specifically taking steps to get Quinn back in football-shape, helping Quinn deal with his public persona, and coaching him on issues that would come up such as his brain tumor and past indiscretions.").) For purposes of this motion, this court assumes that the Amended Complaint properly states an unjust enrichment claim.
However, this court finds that Plaintiffs are collaterally estopped from raising their unjust enrichment claim. As discussed above, Plaintiff Carey has already recovered in quantum meruit for the reasonable value of his services through the NFLPA arbitration process. "Quantum meruit `operates as an equitable remedy based upon a quasi contract or a contract implied in law' which provides `a measure of recovery for the reasonable value of services rendered in order to prevent unjust enrichment.'" Ron Medlin Constr. v. Harris, 364 N.C. 577, 580, 704 S.E.2d 486, 489 (2010) (quoting Paul L. Whitfield, P.A. v. Gilchrist, 348 N.C. 39, 42, 497 S.E.2d 412, 414-15 (1998)). Thus, Plaintiffs have already been compensated for the services upon which their unjust enrichment claim is based. "A `disappointing' result does not entitle a litigant to
Defendants Impact, Frankel, and Fleming also contend that the unjust enrichment claim is barred by the unclean hands doctrine because Plaintiff Carey violated the NFLPA's Junior Rule by contacting Quinn before December of his junior year. See Creech v. Melnik, 347 N.C. 520, 529, 495 S.E.2d 907, 913 (1998) ("One who seeks equity must do equity."). Plaintiffs contend that, because Quinn had been declared permanently ineligible by the NCAA, it is an open question whether the Junior Rule continued to apply.
On the record as it stands at this stage of the proceedings, there is no basis upon which to find that Plaintiffs violated the Junior Rule in recruiting Quinn or that unclean hands should apply. Thus, this court finds that a dismissal based on unclean hands at this stage of the proceedings is not proper. However, Plaintiffs' unjust enrichment claim will still be dismissed based on the finding of collateral estoppel.
For the reasons set forth herein,
As to Plaintiffs' tort claims brought under North Carolina law, this court is bound to apply North Carolina law as to substantive issues and federal law as to procedural issues. E.g., Hanna v. Plumer, 380 U.S. 460, 465, 85 S.Ct. 1136, 14 L.Ed.2d 8 (1965) ("[F]ederal courts sitting in diversity cases ... are to apply state substantive law and federal procedural law.").
