English Boiler v. WC Rouse & Son ( 1999 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
ENGLISH BOILER & TUBE,
INCORPORATED, A Virginia
Corporation,
Plaintiff-Appellant,
v.
W.C. ROUSE & SON, INCORPORATED,
No. 97-2397
A North Carolina Corporation;
THOMAS K. ROUSE, In his official
corporate capacity and his
individual capacity; THE
BABCOCK & WILCOX COMPANY, A
Delaware Corporation,
Defendants-Appellees.
Appeal from the United States District Court
for the Eastern District of North Carolina, at Raleigh.
W. Earl Britt, Senior District Judge.
(CA-96-516-5-BR)
Argued: October 30, 1998
Decided: February 23, 1999
Before WILKINSON, Chief Judge, WIDENER, Circuit Judge,
and WILSON, Chief United States District Judge for the
Western District of Virginia, sitting by designation.
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Affirmed by unpublished per curiam opinion.
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COUNSEL
ARGUED: Irving M. Blank, PARIS, BLANK & BROWN, P.C.,
Richmond, Virginia, for Appellant. Christopher Terry Graebe, WOM-
BLE, CARLYLE, SANDRIDGE & RICE, P.L.L.C., Raleigh, North
Carolina; J. Matthew Little, TEAGUE, CAMPBELL, DENNIS &
GORHAM, L.L.P., Raleigh, North Carolina, for Appellees. ON
BRIEF: William H.C. Venable, PARIS, BLANK & BROWN, P.C.,
Richmond, Virginia, for Appellant. James E.R. Rutledge, TEAGUE,
CAMPBELL, DENNIS & GORHAM, L.L.P., Raleigh, North Caro-
lina, for Appellees.
_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
_________________________________________________________________
OPINION
PER CURIAM:
Plaintiff-appellant English Boiler & Tube, Inc. ("English") brought
suit in the United States District Court for the Eastern District of
North Carolina against Defendants-appellees W.C. Rouse & Son
("Rouse") and Babcock & Wilcox Company ("B&W") for defama-
tion, tortious interference with contract, and statutory claims based on
N.C. Gen. Stat. § 75-1.1 (1996).1 The District Court concluded that
English's amended complaint did not relate back to the filing of the
original complaint and that the one year statute of limitations barred
one of English's claims for defamation. The District Court found that
the remaining defamation claims arose out of communications on
issues of public concern, and, consequently, required fault as a com-
ponent of liability. Because English could not demonstrate fault on
the part of Rouse or B&W, the District Court entered summary judg-
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1 The statutory claims encompassed claims for unfair trade practices, in
the form of civil conspiracy, tortious interference with contract, and defa-
mation.
2
ment for Rouse and B&W on those claims, as well. The District Court
granted summary judgment on English's claim for tortious interfer-
ence with contract, concluding that the conduct of Rouse and B&W
was justified as legitimate competition. Finally, the District Court
granted summary judgment on English's statutory claims because
there was no factual basis to support them. We affirm.
I.
In 1992, Appalachian State University ("ASU") began the process
of upgrading its power plant. ASU hired Mechanical Engineers Incor-
porated ("MEI") to consult on portions of the project, including con-
struction of a new boiler plant. In July 1995, ASU awarded the
contract for the mechanical portion of the project to JJ Kirlin Incorpo-
rated ("Kirlin"). Kirlin then solicited bids from English, B&W, and
others to supply the boilers. Moustafa Karmous ("Karmous"), an engi-
neer with the Office of State Construction ("OSC"), drafted the bid
specifications for the boilers. Karmous inserted the names of B&W
and two other boiler manufacturers in these specifications as exam-
ples of the quality and workmanship that OSC expected from its
bidders.2
On July 25, 1995, during the bidding process, Graham Hobbs, an
employee of Rouse who was also a representative of B&W, sent a let-
ter to Bryon Hamrick ("Hamrick"), president of MEI, lobbying MEI
to encourage Kirlin to select B&W. This letter contained disparaging
statements about the other bidders, including English.3 Despite the let-
ter, however, in September 1995, Kirlin selected English. Rouse and
B&W then began to encourage Kirlin to replace English with B&W.
In a meeting with officials from the OSC and ASU, Rouse and B&W
allegedly made disparaging claims about English's financial stability,
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2 The specifications stated that"[m]inimum performance standards for
boilers shall equal or exceed those boilers manufactured by" B&W and
two other boiler manufacturers.
3 The Hobbs letter stated, among other things, that "last year, the State
of Virginia refused (3) 150,000 LB/HR English Boilers ... based on a
review of their track record for meeting ship dates, along with design and
the experience factor.... They purchased B&Ws, to[e]nsure no problems.
English has NO qualified local NC service for the ASU project."
3
product, and timeliness. According to English, those claims caused
ASU and OSC officials to doubt English's suitability, and eventually,
an ASU official expressed his concerns in a letter to Karmous. Those
concerns prompted Kirlin to meet on November 29, 1995 with
English and Speros Fleggas, another OSC official. After airing the
concerns, Fleggas remained satisfied that English could handle the
job.
Rouse persisted. On December 6, 1995, it sent a letter to Karmous
essentially reiterating its earlier comments. Karmous forwarded this
letter to Dr. Clyde Robbins ("Robbins"), Vice Chancellor of Physical
Operations and head of the boiler upgrade project at ASU. The letter
stated that English had received poor evaluations in earlier projects
due to lateness, poor design, and inexperience. 4 The letter also
asserted that, because of its inexperience, English habitually rede-
signed its boilers. Rouse supported most of the allegations in the letter
with the names and phone numbers of persons Karmous could call for
confirmation.5 Where Rouse lacked information for further confirma-
tion or could not locate its source's contact information, it so stated
in the letter.6
After Robbins refused to show the letter to Kirlin, Kirlin sought a
copy of the letter from Rouse. Rouse repackaged the allegations in a
letter to Kirlin dated December 12th and added some allegations
about English's performance on other projects.7 Kirlin scheduled a
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4 For example, the letter stated that "[w]e have heard that [English] had
trouble at the NASA facility at Langley, VA -- problems with tube
alignment and quality control on the drum intervals.... The gentleman
that I need to talk to [to confirm the information] is out until Thursday,
but I will call him back."
5 The letter stated that "[d]elivery is critical on this project. To get an
idea of how John English met his delivery when building for IBW, you
can call Jeff Beals ... [who] was President at IBW...." The letter also
included the names and phone numbers of other persons whom Karmous
could call for information concerning other allegations.
6 "Even though English boiler[sic] had a much lower price, they were
eliminated in the first round.... Pat Lawler is no longer with the state and
I was not able to attain [sic] his phone number--but I am working on it."
7 The December 12th letter alleged that "[s]ince this is not English
Boilers' [sic] standard manufacture, they installed additional tubes at all
4
meeting to discuss the matter further. At the January 5, 1996 meeting
with ASU officials, Rouse and B&W essentially repeated what they
had said earlier. ASU then asked B&W and another interested bidder
to submit new bids for the project. The new bids were still higher than
English's original bid, and ASU retained English on the project.
On June 11, 1996, English filed its initial complaint against Rouse
and B&W, and it filed an amended complaint on March 5, 1997. The
District Court decided all claims adversely to English either on
motions to dismiss or for summary judgment. We address those rul-
ings, in turn.
II.
English's initial complaint alleged, among other things, that Rouse
defamed English by sending the December 6th and December 12th
letters (the "Rouse letters") to Karmous and Kirlin, respectively.
English's amended complaint additionally claimed defamation arising
out of Hobbs's July 25th letter to Hamrick (the"Hobbs letter"). The
District Court concluded that the statute of limitations barred this
additional claim because English filed its amended complaint after
North Carolina's one-year statute of limitations for defamation had
run. English, nevertheless, argues that because the additional defama-
tion alleged in its amended complaint occurred within the same time
period and under similar circumstances as the defamation alleged in
its original complaint, its amended complaint relates back to the filing
of its original complaint under Federal Rule of Civil Procedure 15(c)
so as to save those additional defamation claims from the statute of
limitations. Because English did not mention the Hobbs letter in its
original complaint or even allege a separate defamatory publication
that we could liberally construe to include the letter, we disagree. We
find, instead, that publication of the Hobbs letter does not arise out
of the same conduct, transaction, or occurrence described in the origi-
nal complaint, and, therefore, that the claim does not relate back to
the filing of the original complaint. Accordingly, we agree with the
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sorts of weird angles in order to meet the intent of the specifications. The
insulation was bad, causing hot spots which had to be field service cor-
rected. You can contact Mr. Terry Heil ... concerning this job."
5
District Court that North Carolina's one-year statute of limitations for
defamation bars the claim.
A claim, otherwise untimely, will relate back to the date of filing
of the original pleading if "the claim or defense asserted in the
amended pleading arose out of the conduct, transaction, or occurrence
set forth or attempted to be set forth in the original pleading...." Fed.
R. Civ. P. 15(c). A claim arises out of the same conduct, transaction,
or occurrence if: (1) there is a factual nexus between the original com-
plaint and the amendment;8 and (2) the defendants had notice of the
claim and would not be prejudiced by the amendment. See Grattan
v. Burnett, 710 F.2d 160, 163 (4th Cir. 1983). A plaintiff may not
baldly allege a broad course of conduct over a lengthy period of time
and later sue on any act that occurred during that time period.
Because the Hobbs letter is a separate instance of defamation arising
from "facts other than those originally pleaded," a claim based on that
letter does not relate back to the original filing date. Gibson v. Mutual
Life Ins. Co., 465 S.E.2d 56, 58 (N.C. 1996). Each act of defamation
is a separate tort that, in most instances, a plaintiff must specifically
allege. See id. (stating that "each publication of defamatory material
is a separate tort."); Rickman v. Cone Mills Corp., 129 F.R.D. 181,
186 (D. Kan. 1989) (stating that "[a]n amendment will not relate back
if it sets forth a new set of operational facts" and finding no relation
back where the new counts "named new parties to whom allegedly
defamatory words were published as well as new dates of publica-
tion."); Caudle v. Thomason, 942 F. Supp. 635, 638 (D. D.C. 1996)
("in order to plead defamation, a plaintiff should allege specific
defamatory comments [including] ``the time, place, content, speaker,
and listener of the alleged defamatory matter.'") (quoting Wiggins v.
Phillip Morris, Inc., 853 F. Supp. 458, 465 (D. D.C. 1994)).
The court would be nullifying the notice requirement of the relation
back doctrine if it were to permit a claim arising out of the Hobbs let-
ter to relate back. The Hobbs letter had a different author and recipi-
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8 The District Court assumed the existence of a nexus between the
amendment and the original complaint on the theory that all of the
defamatory statements derived from the same campaign to disparage
English. See English Boiler & Tube, Inc. v. W.C. Rouse & Son, Inc., No.
5:96-CV-516-BR(3) (E.D.N.C. Sept. 9, 1997). We will do the same.
6
ent than the Rouse letters, and was published on a different date. It
is a separate act of defamation. The court would be allowing English
to leave the statute of limitations open-ended for additional acts of
defamation, even though these acts involved different parties on dif-
ferent dates. Because English did not plead this separate act of defa-
mation in its original complaint, Rouse and B&W had insufficient
notice of the claim. The additional claim arising out of the Hobbs let-
ter, therefore, does not relate back to the filing date of the original
complaint, and the statute of limitations bars it. 9
III.
We next examine whether English raised a genuine issue of fact
concerning its other defamation claims against Rouse and B&W.
These defamation claims arise from the Rouse letters, which essen-
tially memorialize Rouse's various allegations about English
described in the initial complaint. In granting summary judgment
against English's claims, the District Court looked to the constitu-
tional boundaries for defamation set forth in Dun & Bradstreet, Inc.
v. Greenmoss Builders, Inc., 472 U.S. 749, 761 (1985), and Gertz v.
Robert Welch, Inc., 418 U.S. 323 (1974) (requiring fault as a compo-
nent of liability for statements of public concern). The District Court
concluded that because Rouse's statements addressed issues of public
concern, English was required to demonstrate negligence on the part
of Rouse and B&W as a component of liability. Because English
failed to offer any evidence that raised a triable issue of fact concern-
ing Rouse's and B&W's negligence, the District Court granted sum-
mary judgment against English's defamation claims. We agree with
much of the District Court's reasoning. However, we find it unneces-
sary to reach the constitutional issues that lie at the heart of the Dis-
trict Court's analysis. Although the District Court granted summary
judgment on a different ground, "we can affirm on any legal ground
supported by the record and are not limited to the grounds relied on
by the district court." Jackson v. Kimel, 992 F.2d 1318, 1322 (4th Cir.
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9 We note that even if English's defamation claim based on the Hobbs
letter is not time barred, it still suffers from the same substantive defects
as the claims relating to the Rouse letters. See infra Part III (finding that
English failed to demonstrate actual malice by Rouse and B&W, and
thus, could not pierce Rouse's and B&W's common law privilege).
7
1993). We find, instead, that North Carolina's common law qualified
privilege provides an adequate and independent basis for affirming
the District Court's grant of summary judgment against English's
claims. This common law privilege protected Rouse's statements
because those statements addressed matters of public interest, were
published on proper occasions, and were disseminated only to proper
parties that shared a common interest with Rouse and B&W. We
affirm the entry of summary judgment against English's defamation
claims because we conclude that English failed to demonstrate actual
malice and, thus, failed to pierce Rouse's and B&W's common law
privilege.
North Carolina recognizes a common law qualified privilege for
publication of statements that are
made in good faith on any subject matter in which the per-
son communicating has an interest, or in reference to which
he has a right or duty, if made to a person having a corre-
sponding interest or duty on a privileged occasion and in a
manner and under circumstances fairly warranted by the
occasion and duty, right, or interest.
Troxler v. Charter Mandala Ctr., Inc., 365 S.E.2d 665, 668 (N.C. Ct.
App. 1988) (quoting Gibby v. Murphy, 325 S.E.2d 673, 676 (N.C. Ct.
App. 1985)). North Carolina courts have defined the elements of a
qualified privilege as: "good faith, an interest to be upheld, a state-
ment limited in its scope to this purpose, a proper occasion, and publi-
cation in a proper manner and to proper parties only." Hanton v.
Gilbert, 486 S.E.2d 432, 437 (N.C. Ct. App. 1997) (quoting Stewart
v. Nationwide Check Corp., 182 S.E.2d 410, 415 (N.C. 1971)). A
proper occasion is "an occasion when for the public good and in the
interests of society one is freed from liability...[because of] the occa-
sion of its publication...." Ponder v. Cobb , 126 S.E.2d 67, 78 (N.C.
1962). To prevail against this privilege, a "plaintiff is required to
show that the defendant used the privileged occasion artfully and
knowingly to falsely defame the plaintiff." Kinloch v. News &
Observer Pub. Co., 314 F. Supp. 602, 606-07 (E.D.N.C. 1969). The
appropriate standard of fault is actual malice, and the court deter-
mines whether a statement is privileged as a matter of law. See
Hanton, 486 S.E.2d at 437. If the court determines that a statement
8
is privileged, then a "presumption arises in[the defendant's] favor
that the statements were made in good faith and without malice." Id.A plaintiff, therefore, would have "the burden of proving both the fal-
sity of the charge and that it was made with actual malice." Id.Rouse and B&W were participants in a public bidding process for
a government contract, and, as such, shared a common interest with
the state officials who supervised the project. Rouse addressed its
comments solely to these officials, all of whom were"proper parties
from or through whom redress might be expected." Ponder, 126
S.E.2d at 78 (applying privilege to a party chairman's criticism of
county election officials because the party chairman had a "right to
comment" and addressed his letters only to "proper parties"). Rouse's
allegations, therefore, were published "in a proper manner and to
proper parties only." Hanton, 486 S.E.2d at 437. Similarly, Rouse's
comments were published on a proper occasion. Rouse made its state-
ments as a bidder for a government contract seeking to promote itself,
but in a manner that also brought attention to potential shortcomings
of a competitor. More importantly, Rouse made these statements
entirely within the confines of the bidding process, and addressed an
appropriate subject matter for Rouse, B&W, and the state officials to
discuss. There is a strong public interest in allowing free comment
between potential contracting parties in a bidding process where pub-
lic funds are at stake, and where statements are narrowly confined to
the merits of individual bidders.10 There is also a strong public interest
in permitting persons to reveal information about the potential use, or
misuse, of government funds. Cf. Yancey v. Gillespie, 87 S.E.2d 210,
211-12 (N.C. 1955) (applying qualified privilege to statements relat-
ing to a city's excessive expenditure of public money on a lot of prop-
erty that was of questionable quality); Gattis v. Kilgo, 38 S.E. 931(N.C. 1901) (finding the existence of a qualified privilege for state-
ments by a college president about an investigation by the college
against him because the college "was, in one sense, a public institu-
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10 We do not intimate that a qualified privilege should apply to every
statement made about a potential government contractor by a competitor.
However, where a competitor makes a statement that addresses only
interests arising out of the bidding process, touches upon information of
potential pubic interest, and is disseminated only to the proper parties,
we are satisfied that North Carolina would apply the qualified privilege.
9
tion."); Mauk, Stastny & Rassam, P.A. v. Bicknell, 625 P.2d 1219,
1222 (N.M. Ct. App. 1980) (applying privilege of fair comment to
statements concerning a contractor's bid for a government contract).
We find that Rouse published its allegations in appropriate contexts
and on proper occasions where "for the public good and in the inter-
ests of society one is freed from liability ...[because of] the occasion
of its publication...." Ponder, 126 S.E.2d at 78.
We are confident that North Carolina would recognize a qualified
privilege that protects a competitor's ability to tout its own product,
and, more importantly, to point out the weaknesses of others that are
competing for public funds. This is consistent with the important goal
of allowing competitors to initiate robust debate concerning a public
works project that touches upon the financial and environmental wel-
fare of a community. To discourage the free flow of this potentially
important information would harm competition and undermine the
public's ability to hold the government accountable for public expen-
ditures. Accordingly, we find that Rouse's statements were privi-
leged. English, therefore, must meet "the burden of proving ... that
[the statements were] made with actual malice." Hanton, 486 S.E.2d
at 437. In the present case, the record provides uncontroverted evi-
dence that Rouse investigated and verified its information before
making any statements about English. Rouse included contact infor-
mation for its sources in its letters, and encouraged Karmous to verify
this information rather than simply to rely on Rouse's allegations.
Each of Rouse's sources was employed, or formerly employed, in a
position that provided reasonable access to information concerning
English's background and qualifications. Against this backdrop,
English was required to do more than offer bare allegations of malice.
Because English has not demonstrated malice by Rouse or B&W,11
we affirm the District Court's grant of summary judgment against
English's defamation claims.
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11 We note that, in light of Rouse's careful documentation of its sources
in its letters, English would likely fail to satisfy even the lighter burden
of demonstrating that Rouse was negligent under Dun & Bradstreet, 472
U.S. at 761, and Gertz, 418 U.S. at 323.
10
IV.
We next consider English's claim for tortious interference with
contract. English argues that Rouse and B&W wrongfully interfered
with its contract with Kirlin by persistently lobbying to replace
English and by disparaging English in the course of competition. We
find, however, that the actions of Rouse and B&W were justified as
legitimate business activity. Accordingly, we affirm the District
Court's grant of summary judgment on the claim.
In order to succeed on a claim for tortious interference with con-
tract, a plaintiff must show that: (1) there was a valid contract
between the plaintiff and a third person that conferred a contractual
right to the plaintiff against the third person; (2) the defendant knew
of the contract; (3) the defendant intentionally induced the third per-
son not to perform the contract;12 (4) in doing so, acted without justifi-
cation; and (5) caused actual damage to the plaintiff.13 See United
Labs., Inc. v. Kuykendall, 370 S.E.2d 375, 387 (N.C. 1988). An act
is justified, or privileged, if "the defendant is acting for a legitimate
business purpose" because "competition in business constitutes justi-
fiable interference in another's business relations and is not actionable
so long as it is carried on in furtherance of one's own interests and
by means that are lawful." Peoples Sec. Life Ins. Co. v. Hooks, 367
S.E.2d 647, 650 (N.C. 1988). This privilege is "lost if exercised for
a wrong purpose," which "exists where the act is done other than as
a reasonable and bona fide attempt to protect the interest of the defen-
dant which is involved." Id. In assessing whether a defendant's con-
duct is justified, courts examine the following factors: the
circumstances surrounding the interference, the actor's motive or con-
duct, the interests sought to be advanced, the social interest in protect-
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12 To satisfy this prong, the third person need not actually breach the
contract. See Lexington Homes, Inc. v. W.E. Tyson Builders, Inc., 331
S.E.2d 318, 322 (N.C. Ct. App. 1985).
13 We note that English successfully completed its contract with Kirlin,
and that, as a result, it is questionable whether English can demonstrate
any actual damage from the efforts of Rouse and B&W. We need not
reach this issue, however, because Rouse's and B&W's actions were oth-
erwise justified.
11
ing the freedom of action of the actor, and the contractual interests of
the other party. See id.In the present case, B&W competed with English for a boiler
replacement contract. Rouse and B&W sent letters and initiated meet-
ings with officials at ASU, OSC, and MEI in an attempt to convince
these entities to award them the contract. Rouse's and B&W's inter-
ference, in the form of letters and meetings, constitutes conduct that
"may be justified when the plaintiff and the defendant are competi-
tors." Peoples Sec., 367 S.E.2d at 650. The record does not indicate
that their actions were in any way "exercised for a wrong purpose,"
or that they acted for any reason "other than as a reasonable and bona
fide attempt to protect the interest of the defendant which is
involved." Id. Absent any evidence of a wrongful purpose, we must
conclude that the conduct of Rouse and B&W was justified as legiti-
mate business activity.
We note that, at its heart, this suit concerns the North Carolina bid-
ding process and the ability of a bidder to supply potentially pertinent
information concerning competitors, as well as the ability of a com-
petitor to engage in salesmanship in the course of bidding. This is a
state process that, in large part, relies on market forces as much as
judicial oversight. Absent proof that a competitor has acted mali-
ciously or otherwise unlawfully, courts should be reluctant to impose
liability for conduct that can be characterized fairly as legitimate com-
petition and salesmanship.14 We conclude, therefore, that, at most,
Rouse and B&W acted zealously, but lawfully, in their attempts to
procure the boiler replacement contract with Kirlin. Accordingly,
because the conduct of Rouse and B&W was justified, 15 we affirm the
judgment of the District Court.
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14 English argues that the actions of Rouse and B&W were not fair
because much of their information was untrue. English seeks to impose
a strict liability standard for truthfulness upon its competitors. This the-
ory of liability, if applied, would harm legitimate competition.
15 English argues that the principle that competitive conduct is justifi-
able if exercised for a legitimate business purpose is limited to cases
involving employment contracts. However, in Carolina Water Serv., Inc.
v. Town of Atlantic Beach, 464 S.E.2d 317, 320-21 (N.C. Ct. App. 1995),
the court utilized this very concept in a case involving a dispute between
a municipality and a private company over water supply contracts.
12
V.
Finally, we address English's statutory claims under section 75-1.1.
These statutory claims encompass claims for civil conspiracy, defa-
mation, and tortious interference with contract. English argues that
Rouse and B&W conspired with Karmous and Robbins to"lock" the
contract bid in B&W's favor. English also asserts that Rouse and
B&W defamed English and tortiously interfered with its contract by
lobbying to replace English and disparaging English in the course of
competition. English contends that these actions were unfair and
deceptive, and, therefore, violated section 75-1.1. We agree with the
District Court, however, that even when viewed in the light most
favorable to English, the facts do not support liability under section
75-1.1. Accordingly, we affirm the District Court's grant of summary
judgment on the statutory claims.
Section 75-1.1 applies to unfair and deceptive conduct, and pro-
vides a right of action against defendants who "engage[ ] in an unfair
or deceptive trade practice, in or affecting commerce, that proxi-
mately caused actual injury to the plaintiff." Canady v. Mann, 419
S.E.2d 597, 602 (N.C. Ct. App. 1992). Under section 75-1.1,
"[c]onduct is unfair if it has the capacity or tendency to deceive." Id.The court determines if conduct is unfair or deceptive by examining
"the surrounding circumstances of the transaction and the impact on
the marketplace ... and this determination is a question of law for the
court." Id.A.
English argues that Rouse and B&W conspired with Karmous and
Robbins to insert B&W's brand name into the bid specifications,
thereby providing an unfair advantage to B&W in violation of N.C.
Gen. Stat. §§ 133-2 & -3.16 English contends that this conspiracy was
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16 Sections 133-2 and -3 allow the use of brand names only in certain
circumstances. When brand names are used, the statute requires the pres-
ence of certain language explaining that the use of such name brands are
not designed to restrict competition. See N.C. Gen. Stat. § 133-3 (1996).
As the District Court noted, it appears that such language was in fact
13
unfair and deceptive, and thus violated section 75-1.1. We disagree.
To prove civil conspiracy, English must show "an agreement between
two or more individuals to do an unlawful act or to do a lawful act
in an unlawful way, resulting in injury inflicted by one or more of the
conspirators pursuant to a common scheme." Morrison-Tiffin v.
Hampton, 451 S.E.2d 650, 658 (N.C. Ct. App. 1995). English must
also demonstrate "that an overt act was committed pursuant to a com-
mon agreement and in furtherance of a common objective." Id. Nota-
bly,
Although liability may be established by circumstantial evi-
dence, the evidence of the agreement must be more than a
suspicion or conjecture to justify submission to the
jury....An adequately supported motion for summary judg-
ment by the defendant triggers the plaintiff's responsibility
to produce facts, as distinguished from allegations, suffi-
cient to show that he will be able to prove his claim at trial.
Id. English argues that Karmous and Robbins must have conspired
with Rouse and B&W because Karmous and Robbins favored B&W
over English, and because Karmous used B&W's brand name in the
bid specifications to illustrate the minimum performance standards for
prospective bidders. English argues that the inclusion of B&W's
brand name in the specifications "locked" the bid in B&W's favor,
giving an unfair advantage to B&W. Based upon these simple facts,
English concludes that Karmous and Robbins must have conspired
with Rouse and B&W to rig the bidding process. In the absence of
any supporting facts, however, this allegation is nothing more than
mere "suspicion or conjecture" by English, and is insufficient "to jus-
tify submission to the jury...." Id. On the one hand, Rouse and B&W
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included in the specifications, despite English's claims to the contrary.
See English Boiler, No. 5:96-CV-516-BR(3), slip op. at 37 (E.D.N.C.
Sept. 9, 1997).
Section 133-2 provides, in pertinent part, that"[i]t shall be unlawful
for any architect, engineer, designer or draftsmen, employed on ... State
... works, to employ or allow any manufacturer, his representatives or
agents, to write, plan, draw, or make specifications for such works or any
part thereof." N.C. Gen. Stat. § 133-2 (1996).
14
have offered testimony from several persons, including Karmous, that
no such agreement existed. English, on the other hand, has failed to
offer any testimony that either demonstrates the existence of a con-
spiracy or contradicts Karmous's testimony. English, therefore, is left
with speculation--a bare, factually unsupported assertion of a con-
spiracy to rig the bidding process. Speculation, however, is insuffi-
cient to create a triable issue of fact. See Beale, 769 F.2d at 214
(stating that the nonmoving party "cannot create a genuine issue of
material fact through mere speculation or the building one inference
upon another.").
B.
We also find that English has failed to raise a genuine issue of fact
concerning its statutory defamation and tortious interference with
contract claims.17 English's statutory claims18 fail for the same reasons
as English's common law claims. Cf. Pleasant Valley Promenade v.
Lechmere, 464 S.E.2d 47, 54 (N.C. Ct. App. 1995) (dismissing claim
for unfair trade practices that relied upon the same factual allegations
as those supporting underlying claims for civil conspiracy and tor-
tious interference with contract, where the court directed verdict
_________________________________________________________________
17 English contends that summary judgment is inappropriate because
unfair and deceptive conduct is an issue for the jury to decide. In particu-
lar, English points to a report submitted by English's expert witness stat-
ing that the Defendants' conduct was unfair and deceptive. This
argument is not persuasive, however, because although the question of
whether an act occurred is a factual issue for the jury, the question of
"[w]hether an act found by the jury to have occurred is an unfair or
deceptive practice ... is a question of law for the court." Ellis v. Northern
Star Co., 388 S.E.2d 127, 131 (N.C. 1990).
18 English's statutory defamation claim includes the Hobbs letter,
which is barred by the statute of limitations as a substantive claim on its
own, but which can still proceed as a claim under section 75-1.1. See
Ellis, 388 S.E.2d at 131 (stating that libel per se can be an unfair and
deceptive trade practice). Similar to the Rouse letters, however, Hobbs
detailed the sources of his information during deposition and offered evi-
dence that he engaged in a diligent investigation before publishing his
statements about English. As a result, English could not demonstrate
Rouse's and B&W's fault with respect to the Hobbs letter, and thus,
failed to pierce the common law privilege.
15
against the underlying claims for insufficient evidence). English
offered no evidence of unfair or deceptive trade practices beyond
those already detailed above. See supra Parts III, IV (discussing
English's common law claims for defamation and tortious interfer-
ence with contract). As noted above, we affirmed the District Court's
grant of summary judgment against English's claims for defamation
and tortious interference with contract because English failed to raise
any triable issues of fact concerning those claims. Absent any addi-
tional evidence that the actions of Rouse and B&W were improper,
unethical, or tortious, we find, as a matter of law, that Rouse's and
B&W's actions were not unfair or deceptive. Accordingly, we affirm
the District Court's grant of summary judgment.
VI.
For the reasons stated, we affirm the judgment of the District
Court.
AFFIRMED
16