Bianca Ellis v. Louisiana-Pacific Corporation

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
BIANCA ELLIS, individually and on 
behalf of all others similarly
situated; MARK SROKA, individually
and on behalf of all others
similarly situated; JAQUELINE

SROKA, individually and on behalf
of all others similarly situated, No. 11-2319
Plaintiffs-Appellants,
v.
LOUISIANA-PACIFIC CORPORATION,
Defendant-Appellee.

Appeal from the United States District Court
for the Western District of North Carolina, at Charlotte.
Graham C. Mullen, Senior District Judge.
(3:11-cv-00191-GCM)
Argued: September 19, 2012
Decided: November 2, 2012
Before WILKINSON and THACKER, Circuit Judges, and
Michael F. URBANSKI, United States District Judge for
the Western District of Virginia, sitting by designation.
Affirmed by published opinion. Judge Thacker wrote the
opinion, in which Judge Wilkinson and Judge Urbanski
joined.
2 ELLIS v. LOUISIANA-PACIFIC CORP.
COUNSEL
ARGUED: Gary Edward Mason, WHITFIELD BRYSON &
MASON LLP, Washington, D.C., for Appellants. Richard
Thell Boyette, CRANFILL, SUMNER & HARTZOG, LLP,
Raleigh, North Carolina, for Appellee. ON BRIEF: Daniel K.
Bryson, Scott C. Harris, WHITFIELD BRYSON & MASON
LLP, Raleigh, North Carolina; Nicholas A. Migliaccio,
WHITFIELD BRYSON & MASON LLP, Washington, D.C.;
Joel R. Rhine, RHINE LAW FIRM, PC, Wilmington, North
Carolina; Auley M. Crouch, III, Christopher K. Behm,
BLOCK CROUCH KEETER BEHM & SAYED, LLP, Wil-
mington, North Carolina; Charles A. Schneider, Martha B.
Schneider, SCHNEIDER & SCHNEIDER, Washington, D.C.,
for Appellants. John Parker Sweeney, WOMBLE CARLYLE
SANDRIDGE & RICE LLP, Baltimore, Maryland; James E.
Weatherholtz, WOMBLE CARLYLE SANDRIDGE & RICE
LLP, Charleston, South Carolina; Meghan N. Knight, CRAN-
FILL, SUMNER & HARTZOG, LLP, Raleigh, North Caro-
lina; Scott Burnett Smith, J. Thomas Richie, BRADLEY
ARANT BOULT CUMMINGS LLP, Huntsville, Alabama,
for Appellee.
OPINION
THACKER, Circuit Judge:
Bianca Ellis, Mark Sroka, and Jaqueline Sroka (collec-
tively, the "Appellants") appeal the district court’s order dis-
missing their putative class action complaint. They claim that
Louisiana-Pacific Corp. ("LP" or the "Appellee") negligently
designed and manufactured Trimboard, a composite building
product designed and marketed for use as exterior trim around
windows and doors, and violated the provisions of the North
Carolina Unfair and Deceptive Trade Practices Act (the
"UDTPA"). Appellants also asked the district court for a
ELLIS v. LOUISIANA-PACIFIC CORP. 3
declaratory judgment that Trimboard is defective, prematurely
deteriorates, and that its warranty is unconscionable. The dis-
trict court dismissed the negligence and UDTPA claims pur-
suant to North Carolina’s economic loss rule, and it dismissed
the declaratory judgment claim because Appellants are pursu-
ing a breach of warranty claim in a separate class action suit.
For the reasons that follow, we affirm.
I.
A.
On April 18, 2011, Appellants filed this putative class
action lawsuit in the Western District of North Carolina based
on alleged latent and patent defects in Trimboard. Appellants
never directly purchased Trimboard themselves but, rather,
bought homes in which Trimboard had already been installed.
Ellis’s house was completed in 2005, and the Srokas’ house
was completed in 2006. Ellis discovered problems with Trim-
board on her house in 2010, and the Srokas discovered prob-
lems in 2009. They allege that the Trimboard on their houses
is either "failing" or "defective but has not yet manifested
signs of failure." Compl. ¶ 25.1
The complaint contains three counts: (1) a claim for negli-
gent design and manufacture (the "negligence claim"); (2) an
unfair or deceptive trade practices claim under N.C. Gen. Stat.
§ 75-1.1, et seq. (the "UDTPA claim"); and (3) a declaratory
relief claim concerning Trimboard’s alleged latent defects and
its warranty (the "declaratory judgment claim"). Specifically,
the complaint states as follows:
• LP "failed to provide adequate instructions for
the installation of the Trimboard for exterior use
. . . [including] fail[ing] to provide adequate
1
The complaint is found at J.A. 142-60. Citations to the "J.A." refer to
the Joint Appendix filed by the parties in this appeal.
4 ELLIS v. LOUISIANA-PACIFIC CORP.
instructions as to the need to seal and to prime
the site-cut ends of Trimboard";
• LP’s "installation instructions are misleading and
in some cases contrary to advisable construction
practices, specifically as they relate to flashing
and caulking";
• Class members’ builders and subcontractors "uti-
lized and followed the installation instructions
provided by [LP] for the installation of Trim-
board" or, in the alternative, "LP wrongly
assumed that typical construction site workers
would read, understand, and implement the com-
plex instructions supplied";
• LP’s Trimboard is "inherently defective for exte-
rior use and fails to perform as intended because
it prematurely deteriorates, rots, swells, buckles,
delaminates, absorbs water, warps, and/or bulges
under normal conditions and natural, outdoor
exposure; causes consequential water and struc-
tural damages; and promotes growth of mold,
mildew, fungi, and insect infestation in the struc-
tures in which it is installed"; and
• LP "engaged in unfair or deceptive acts or prac-
tices in violation of [the UDTPA] when, in sell-
ing and advertising the Trimboard for exterior
use, LP failed to give Plaintiffs and members of
the Classes adequate warnings and notices
regarding the defect in the Trimboard when used
in exterior applications despite the fact that LP
knew or should have known of this defect[.]"
Compl. ¶¶ 21-24, 62.
ELLIS v. LOUISIANA-PACIFIC CORP. 5
Per the complaint, LP provided an express warranty to "the
owners of the residences on which Trimboard was installed
and/or applied," Compl. ¶ 15, which stated the following:
[LP] warrants to the original purchaser and to any
subsequent owner of a structure on which its LP [ ]
Trimboard (the Product) is installed that the Product
substrate will not delaminate, check, split, crack, or
chip for a period of ten years from the date of instal-
lation under normal conditions of use and exposure,
provided the trim is properly stored, installed, main-
tained, and protected as specified in the . . . Trim-
board application instructions.
J.A. 161 (emphasis added). However, the complaint alleges
that "the consumer, in most cases, would not have been aware
of the warranty because it was only included in bundles of
Trimboard sent to the wholesaler or distributor and was most
likely not passed on through the contractor to the consumer."
Compl. ¶ 15. Ellis was able to obtain a copy of the warranty
and filed a warranty claim,2 but the Srokas did not, although
they do not dispute that they are covered by it.
The district court granted LP’s Rule 12(b)(6) motion to dis-
miss as to all three counts in the complaint on November 8,
2011. In its order, the court held, first, that the negligence
claim was barred by North Carolina’s economic loss rule (the
"ELR"); second, that the UDTPA claim was also barred by
the ELR; and third, that the declaratory judgment claim
should have been raised in a similar class action suit in the
Eastern District of North Carolina, explained directly below.
See Ellis v. Louisiana-Pacific Corp., No. 3:11-cv-191, 2011
WL 5402878 (W.D.N.C. Nov. 8, 2011). Appellants timely
noted this appeal.
2
LP denied Ellis’s warranty claim. LP stated, "Based upon the informa-
tion received, we do not find a warrantable issue with your trim. However,
it may be time for routine homeowner maintenance." Compl. ¶ 28.
6 ELLIS v. LOUISIANA-PACIFIC CORP.
B.
Prior to the filing of the complaint that is subject of this
appeal, in 2008, another group of plaintiffs filed a class action
suit against LP, which was removed to the Eastern District of
North Carolina. See Hart v. Louisiana-Pacific Corp., No.
2:08-cv-47-BO (E.D.N.C. Nov. 21, 2008). The Hart class
action was ongoing at the time Appellants chose to file the
instant case in the Western District of North Carolina.3 The
Hart complaint alleges that the Trimboard deteriorated or
failed too early, causing property damage and destruction in
their homes. It also alleges that LP "held itself out as knowl-
edgeable in the design and manufacture of exterior building
products and represented that Trimboard was a high quality
product that was superior to wood for use as exterior trim
[but] that Trimboard is actually defective in design and manu-
facture[.]" J.A. 188. Finally, the Hart complaint alleges that
the warranty is void as unconscionable for many reasons,
including that "installation instructions were defective so that
the installers would necessarily have to deviate from [them],
thereby voiding the warranty." Id. at 189. The Hart complaint
asserts only a breach of express warranty claim because North
Carolina’s statute of repose barred any tort claims that the
class plaintiffs could have asserted. Appellants concede that
they are also members of the Hart class and "acknowledge
that they have no express warranty claim in the present law-
suit because they are putative class members [in Hart]." Id. at
135.
II.
This court reviews the dismissal of a complaint de novo.
See Flood v. New Hanover Cnty., 125 F.3d 249, 251 (4th Cir.
1997). Because this case is in federal court based on diversity
jurisdiction, the law of the forum state — in this case, North
3
The Hart case remains ongoing.
ELLIS v. LOUISIANA-PACIFIC CORP. 7
Carolina — applies. See Erie R.R. Co. v. Tompkins, 304 U.S.
64, 78 (1938). We should determine
how the Supreme Court of [North] Carolina would
rule. If th[at] [court] has spoken neither directly nor
indirectly on the particular issue before us, we are
called upon to predict how that court would rule if
presented with the issue. In making that prediction,
we may consider lower court opinions in [North]
Carolina, the teachings of treatises, and the practices
in other states.
Twin City Fire Ins. Co. v. Ben Arnold-Sunbelt Beverage Co.
of S.C., 433 F.3d 365, 369 (4th Cir. 2005) (internal quotation
marks and citations omitted).4
III.
A.
Appellants first challenge the district court’s decision to
dismiss their negligence claim as barred by North Carolina’s
ELR. We hold that this claim is barred by the ELR, and thus
affirm.
1.
The ELR provides, "[o]rdinarily, a breach of contract does
not give rise to a tort action by the promisee against the prom-
isor." N.C. State Ports Auth. v. Lloyd A. Fry Roofing Co., 240
S.E.2d 345, 350 (N.C. 1978). Thus, the rule "prohibits the
purchaser of a defective product from bringing a negligence
action against the manufacturer or seller of that product to
4
We acknowledge that, unfortunately, the North Carolina Supreme
Court has no mechanism for receiving certified questions. See SunTrust
Bank, N.A. v. Macky, 669 F.3d 177, 182 n.* (4th Cir. 2012); MLC Auto.,
LLC v. Town of S. Pines, 532 F.3d 269, 284 (4th Cir. 2008).
8 ELLIS v. LOUISIANA-PACIFIC CORP.
recover purely economic losses sustained as a result of that
product’s failure to perform as expected." Wilson v. Dryvit
Sys., Inc., 206 F. Supp. 2d 749, 753 (E.D.N.C. 2002). Con-
versely, "where a defective product causes damage to prop-
erty other than the product itself, losses attributable to the
defective product are recoverable in tort rather than contract."
Ford v. All-Dry of the Carolinas, Inc., No. COA10-931, 2011
WL 1483726 at *3 (N.C. Ct. App. 2011) (internal quotation
marks and alteration omitted).
The North Carolina Court of Appeals has explained the
logic behind the ELR:
The rationale for the economic loss rule is that the
sale of goods is accomplished by contract and the
parties are free to include, or exclude, provisions as
to the parties’ respective rights and remedies, should
the product prove to be defective. To give a party a
remedy in tort, where the defect in the product dam-
ages the actual product, would permit the party to
ignore and avoid the rights and remedies granted or
imposed by the parties’ contract.
Moore v. Coachmen Indus., Inc., 499 S.E.2d 772, 780 (N.C.
Ct. App. 1998).
The rule is not without its exceptions, however. Ports
Authority provides four: tort actions are viable if the injury
proximately caused by the promisor’s negligence
(1) was an injury to the person or property of
someone other than the promisee[;]
(2) was to property of the promisee other than the
property which was the subject of the contract, or
was a personal injury to the promisee[;]
(3) was loss of or damage to the promisee’s prop-
erty, which was the subject of the contract, the prom-
ELLIS v. LOUISIANA-PACIFIC CORP. 9
isor being charged by law, as a matter of public
policy, with the duty to use care in the safeguarding
of the property from harm, as in the case of a com-
mon carrier, innkeeper or other bailee[; or]
(4) was a wilful injury to or a conversion of the
property of the promisee, which was the subject of
the contract, by the promisor.
240 S.E.2d at 350-51 (internal citations omitted). The North
Carolina Supreme Court noted that the list "is not all inclu-
sive," but continued, "our research has brought to our atten-
tion no case in which this Court has held a tort action lies
against a promisor for his simple failure to perform his con-
tract, even though such failure was due to negligence or lack
of skill." Id. at 351.
Two North Carolina cases carved out other exceptions to
the ELR. The first, Oates v. JAG, Inc., involved a plaintiff
who was not the original purchaser of his home but rather
bought a home built by the defendant. See 333 S.E.2d 222,
225-26 (N.C. 1985). After moving into the house, the plaintiff
discovered many defects, which led to expensive repairs and
renovations. He sued the defendant for negligent construction,
but the trial court granted the defendant’s motion to dismiss
because no contractual relationship existed between the par-
ties. See id. at 224. The North Carolina Supreme Court
reversed, holding that "an owner of a dwelling house who is
not the original purchaser has a cause of action against the
builder and general contractor for negligence in the construc-
tion of the house, when such negligence results in economic
loss or damage to the owner." Id. at 223-24. In so doing, the
Supreme Court "disagree[d] with the Court of Appeals’ rea-
soning in support of its decision that plaintiffs should be
denied relief solely because plaintiffs were subsequent pur-
chasers and lacked contractual privity with defendant-
builder." Id. at 225.
10 ELLIS v. LOUISIANA-PACIFIC CORP.
The second, Lord v. Customized Consulting Specialty, Inc.,
involved homeowners who sued Customized Consulting, the
construction company that facilitated the construction of their
home, and 84 Lumber, who provided allegedly defective
trusses that were used in building the house. See 643 S.E.2d
28, 29 (N.C. Ct. App. 2007). Although the Lords had a con-
tract with the construction company, they did not have a con-
tract with 84 Lumber, but by the time of trial, only a
negligence claim survived against that defendant. Id. at 30. 84
Lumber moved for a directed verdict, arguing that the ELR
barred recovery in negligence against them. The trial court
denied the motion, and the jury returned a verdict against 84
Lumber, which appealed. See id.In affirming, the North Carolina Court of Appeals
explained that the trial court was "merely recogniz[ing] a
means of redress for those purchasers who suffer economic
loss or damage from improper construction but who have no
basis for recovery in contract." Lord, 643 S.E.2d at 32(emphasis added) (internal quotation marks and alterations
omitted). It concluded, "[b]ecause there was no contract
between the Lords and the 84 Lumber Defendants, we further
find that the economic loss rule does not apply and therefore
does not operate to bar the Lords’ negligence claims." Id. at
33.
However, Ports Authority, Oates, and Lord do not squarely
address whether an explicit contract is required to invoke the
ELR, or whether a contractual remedy, such as by warranty,
will suffice. The Court of Appeals had an opportunity to
address this issue in Moore. See 499 S.E.2d at 772-80. There,
the plaintiffs sued the manufacturer of their RV and the sup-
plier of a defective part that caused a fire and destroyed the
vehicle. The plaintiffs suffered only economic losses and did
not have a contract with the RV manufacturer or component
manufacturer, but the vehicle was covered by a warranty. The
plaintiffs sued in negligence, breach of express warranty, and
breach of implied warranty. See id. at 774. The court affirmed
ELLIS v. LOUISIANA-PACIFIC CORP. 11
a grant of summary judgment in favor of the manufacturer
and component manufacturer based on the ELR, explaining
that "[t]o give a party a remedy in tort, where the defect in the
product damages the actual product, would permit the party
to ignore and avoid the rights and remedies granted or
imposed by the parties’ contract." Id. at 780; see also
Hospira, Inc. v. AlphaGary Corp., 671 S.E.2d 7, 14 (N.C. Ct.
App. 2009) (recognizing that Moore held "that owners of a
recreational vehicle were barred from recovering for pure eco-
nomic loss . . . under the economic loss rule . . . where . . .
the remote supplier was covered under the subsidiary manu-
facturer’s limited warranty"); Warfield v. Hicks, 370 S.E.2d
689, 694 (N.C. Ct. App. 1988) (applying ELR to bar original
homeowners from recovering from contractor in negligence
when contractor used beetle-infested beams in the construc-
tion of their home, and distinguishing Oates by stating that,
in that case, "the Court intended . . . to merely recognize a
means of redress for those purchasers who suffer economic
loss or damage from improper construction but who, because
not in privity with the builder, have no basis for recovery in
contract or warranty" (emphasis added)).
A North Carolina federal court has recently addressed the
issue with which we are presented. In Kelly v. Georgia-
Pacific LLC, 671 F. Supp. 2d 785 (E.D.N.C. 2009), Kelly
sued GP, designers and manufactures of PrimeTrim, a product
similar to Trimboard. PrimeTrim was used in the construction
of the plaintiff’s home and allegedly failed to work as prom-
ised. Kelly brought an express warranty claim, along with
negligence, UDTPA, and Magnuson-Moss Act claims against
GP. See id. at 787. He made no claims for damages other than
damage to his home. GP filed a partial motion to dismiss,
arguing, inter alia, that the ELR barred the negligence claim.
The district court granted the motion, explaining that the ELR
"focus[es] on the availability of a contractual remedy, includ-
ing a remedy for breach of warranty," rather than whether
there is an explicit contract. Id. at 794. The court continued,
"North Carolina courts have strived to keep tort and contract
12 ELLIS v. LOUISIANA-PACIFIC CORP.
law (including law related to warranties) within their separate
spheres." Id. at 791 (citations omitted).
In contrast to the case at hand, however, Kelly was the
original owner of the home. The district court found this fact
persuasive, explaining,
Although GP and Kelly did not enter a contract, the
warranty allocates risk between Kelly and GP, low-
ers the price of the PrimeTrim, and thereby lowers
the price of the home that Kelly built using the
PrimeTrim. . . . As the original owner, Kelly had the
opportunity to participate in such risk allocation with
an awareness of how such risk allocation impacts the
ultimate price of his home.
Kelly, 671 F. Supp. 2d at 795 (emphasis added). Nonetheless,
the court explained, "GP’s sale of a product with a limited
warranty that covers the down-the-stream owner of the prod-
uct . . . does not open GP to a negligence claim for purely
economic loss under North Carolina law once the product is
sold to a third party, incorporated into the new home, and
allegedly injures itself." Id. at 795-96.
2.
The complaint in this case claims only economic loss stem-
ming from the allegedly defective Trimboard. However,
Appellants argue that because they never saw the express
warranty for Trimboard, they should be viewed in a different
light than other plaintiffs, who were original purchasers able
to read the warranty or contract and bargain for its terms
before buying a product or home. After parsing the cases
mentioned above, however, we believe the relevant inquiry
under North Carolina case law is whether the plaintiff "ha[s]
[a] basis for recovery in contract or warranty." Warfield, 370
S.E.2d at 694. Clearly, here, Appellants do have a contractual
basis for recovery in warranty, which they are, in fact,
ELLIS v. LOUISIANA-PACIFIC CORP. 13
actively pursuing in the Hart action. Moreover, the North
Carolina Supreme Court has held that contractual privity is
not required for a plaintiff to recover for breach of express
warranty; therefore, whether the plaintiff had an explicit con-
tract does not affect his ability to recover for his losses under
a contractual theory. See Alberti v. Manufactured Homes,
Inc., 407 S.E.2d 819, 825 (N.C. 1991) ("[A] direct contractual
relationship in the sale of the product itself is not a prerequi-
site to recovery for breach of express warranty against the
manufacturer.").
We also do not believe that the fact that Appellants are
downstream purchasers makes a difference in the analysis. In
Moore, for example, the plaintiffs may have been the original
purchaser of the RV, but they had no occasion to bargain or
consider the terms of the defective component that caused the
RV to catch on fire; yet, the North Carolina Court of Appeals
held the ELR nonetheless barred the plaintiffs’ negligence
claim for loss of the RV. See 499 S.E.2d at 780.
Policy declarations from the United States Supreme Court
and this court have demonstrated the need for some degree of
protection of the manufacturer of an allegedly defective good
or component part. This court has observed,
If intangible economic loss were actionable under a
tort theory, the U.C.C. provisions permitting assign-
ment of risk by means of warranties and disclaimers
would be rendered meaningless. It would be virtually
impossible for a seller to sell a product "as is"
because if the product did not meet the economic
expectations of the buyer, the buyer would have an
action under tort law. The U.C.C. represents a com-
prehensive statutory scheme which satisfies the
needs of the world of commerce, and courts have
been reluctant to extend judicial doctrines that might
dislocate the legislative structure.
14 ELLIS v. LOUISIANA-PACIFIC CORP.
2000 Watermark Assoc., Inc. v. Celotex Corp., 784 F.2d 1183,
1186 (4th Cir. 1986). The Supreme Court has similarly
observed, "[p]ermitting recovery for all foreseeable claims for
purely economic loss could make a manufacturer liable for
vast sums. It would be difficult for a manufacturer to take into
account the expectations of persons downstream who may
encounter its product." E. River S.S. Corp. v. Transamerica
Delaval, Inc., 476 U.S. 858, 874 (1986).
For these reasons, the district court did not err in deciding
that Appellants’ negligence claims are barred by the ELR.
B.
Appellants also argue that their claims brought pursuant to
the North Carolina UDTPA were improperly dismissed. The
district court held that the ELR barred these claims as well.
Without reaching that issue, we affirm on the separate ground
that the complaint fails to state a UDTPA claim. This court is
"entitled to affirm the court’s judgment on alternate grounds,
if such grounds are apparent from the record." MM ex rel. DM
v. Sch. Dist. of Greenville Cnty., 303 F.3d 523, 536 (4th Cir.
2002).5
The UDTPA is meant to prevent "unfair or deceptive acts
or practices in or affecting commerce." Becker v. Graber
Builders, Inc., 561 S.E.2d 905, 910 (N.C. Ct. App. 2002)
(internal quotation marks omitted). In order to state a claim
under the UDTPA, a plaintiff must show "(1) defendant com-
mitted an unfair or deceptive act or practice; (2) the action in
question was in or affecting commerce; and (3) the act proxi-
5
Furthermore, the North Carolina courts have never addressed whether
UDTPA claims are subject to the ELR, and in the absence of such direc-
tion, we are well-advised to rely on other grounds. See Time Warner
Entm’t-Advance/Newhouse P’ship v. Carteret-Craven Elec. Membership
Corp., 506 F.3d 304, 315 (4th Cir. 2007) ("[A]s a court sitting in diversity,
we should not create or extend the North Carolina common law[.]").
ELLIS v. LOUISIANA-PACIFIC CORP. 15
mately caused injury to the plaintiff." Id. Whether conduct is
"unfair" or "deceptive" is a legal issue for the court to decide.
Gilbane Bldg. Co. v. FRB, 80 F.3d 895, 902 (4th Cir. 1996)
(applying North Carolina law).
We are mindful that a mere breach of contract claim "is not
unfair or deceptive, . . . absent substantial aggravating circum-
stances." Gilbane, 80 F.3d at 903 (internal quotation marks
omitted). The North Carolina Court of Appeals has further
explained,
Egregious or aggravating circumstances must be
alleged before the provisions of the [UDTPA] may
take effect. Aggravating circumstances include con-
duct of the breaching party that is deceptive. Finally,
in determining whether a particular act or practice is
deceptive, its effect on the average consumer is con-
sidered.
Becker, 561 S.E.2d at 910-11 (internal citations omitted).
Indeed, "it is unlikely that an independent tort could arise in
the course of contractual performance, since those sorts of
claims are most appropriately addressed by asking simply
whether a party adequately fulfilled its contractual obliga-
tions." Eastover Ridge L.L.C. v. Metric Constructors, Inc.,
533 S.E.2d 827, 833 (N.C. Ct. App. 2000) (internal quotation
marks omitted).
We have reviewed the complaint and find no allegations of
substantial aggravating circumstances sufficient to state a
UDTPA claim. Appellants alleged two unfair or deceptive
acts on the part of LP: (1) failing to give adequate warnings
and notices about the allegedly defective quality of Trim-
board, and (2) failing to insure that they were provided with
an express warranty.
The first allegation simply re-couches Appellants’ breach
of warranty claim. But North Carolina has held that a "breach
16 ELLIS v. LOUISIANA-PACIFIC CORP.
of contract, even if intentional, is not sufficiently unfair or
deceptive to sustain" a UDTPA claim. Wachovia Bank &
Trust Co. v. Carrington Dev. Assocs., 459 S.E.2d 17, 21 (N.C.
Ct. App. 1995) (internal quotation marks omitted). In short,
Appellants allege that LP knew that Trimboard would not live
up to the terms of the warranty and should have disclosed this
fact to consumers, but this is simply another way of claiming
that LP breached its express warranty to consumers — the
claim Appellants are pursuing in the Hart action.6 Cf. Barto-
lomeo v. S.B. Thomas, Inc., 889 F.2d 530, 535-36 (4th Cir.
1989) (applying North Carolina law) (finding that substantial
aggravating circumstances did not exist where plaintiff’s
employer allegedly breached an oral agreement by "deceiv-
[ing]" him about the status of his distributorship, as that claim
was "at most, [a] simple breach[ ] of contract").
The second allegation also fails. Failing to insure that all
consumers who would eventually own a structure containing
Trimboard received a copy of the warranty is neither unfair
nor deceptive. In fact, North Carolina courts have concluded,
"failure to perform an administrative act" is not a substantial
aggravating circumstance under the UDTPA. Ford, 2011 WL
1483726 at *5. Beyond that, Appellants allege no common
law or statutory requirement that LP must insure that their
warranties are provided to each and every downstream con-
sumer. That type of requirement would not only be illogical,
it would be nearly impossible.
We therefore affirm the district court’s dismissal of the
UDTPA claim.
6
To the extent Appellants argue that their claim is actually a misrepre-
sentation claim, this also falls flat because the complaint fails to allege
actual reliance, one of the elements of such a claim. See Sunset Beach
Dev. LLC v. AMEC, Inc., 675 S.E.2d 46, 53 (N.C. Ct. App. 2009).
ELLIS v. LOUISIANA-PACIFIC CORP. 17
C.
Finally, Appellants challenge the district court’s dismissal
of their declaratory judgment claim, which alleges that Trim-
board is defective, prematurely deteriorates, and that the war-
ranty is unconscionable. The court held, "[a]ny challenge to
the enforceability of the warranty or the operation of the war-
ranty program are issues which either are or could have been
raised in the pending breach of warranty lawsuit in [Hart]."
Ellis, 2011 WL 5402878 at *2.
"[A] district court’s decision to entertain a claim for declar-
atory relief is discretionary and, as such, reviewed for abuse
of discretion." Aetna Cas. & Sur. Co. v. Ind-Com Elec. Co.,
139 F.3d 419, 421 (4th Cir. 1998). The district court did not
abuse its discretion in refusing to entertain this claim.
This court has held that the Declaratory Judgment Act
"does not impose a mandatory obligation upon the federal
courts to . . . entertain a claim for declaratory relief." Aetna,
139 F.3d at 421. Over the years, this court has enumerated
several factors that the district court should consider in decid-
ing whether to dismiss a declaratory judgment action. Perti-
nent to this appeal, a declaratory judgment action should not
be used "to try a controversy by piecemeal, or to try particular
issues without settling the entire controversy, or to interfere
with an action which has already been instituted." Id. at 422(internal quotation marks omitted). We have also emphasized
the need to promote "federalism, efficiency, [and] comity." Id.
at 423.
The district court aptly explained that the Hart action is the
proper place to raise issues with respect to the warranty and
LP’s alleged violation of it. To consider those claims in a
venue separate from the Eastern District of North Carolina,
where Hart is pending, and in which Appellants are also par-
ties, would be to disregard the concerns set forth in Aetna.
18 ELLIS v. LOUISIANA-PACIFIC CORP.
Therefore, we affirm the district court’s decision relative to
the declaratory judgment claim.
IV.
For the foregoing reasons, the judgment of the district court
is
AFFIRMED.