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Allen v. Ferrera12/29/2000
suit, perhaps indefinitely[.]" Insurance Co. v. Bank, 11 N.C. App. 444, 449, 181 S.E.2d 799, 803 (1971).
Defendant Ferrera contends that a declaratory judgment is unavailable where, as here, plaintiff seeks to have his personal guaranty declared invalid instead of merely interpreted by the court. However, our Court has stated that a trial court "certainly may determine the validity and enforceability of a contract under the Declaratory Judgment Act. To interpret this Act otherwise would render it useless." Bueltel v. Lumber Mut. Ins. Co., 134 N.C. App. 626, 630, 518 S.E.2d 205, 208, disc. rev. denied, 351 N.C. 186, ___ S.E.2d ___ (1999). Plaintiff's first individual claim for relief was dismissed in error.
B.
Plaintiff's second individual claim for relief alleges a civil conspiracy among the defendants to defraud both plaintiff and A&B; As described in Part II above, plaintiff is entitled to relief for his initial investment in A&B;if defendants' alleged wrongful behavior in fact induced him to provide that initial investment. Thus plaintiff's second claim for relief, to the extent of his original investment in A&B; states a valid individual cause of action and was dismissed in error.
C.
Plaintiff's third individual claim for relief is based on the fiduciary duty owed by defendants Eddie and Harold Brock to A&B; Because plaintiff alleges no breach of fiduciary duty owed to him personally in his capacity as a shareholder or as a guarantor of the corporation's loans, the claim is entirely derivative and, under Part I above, the trial court did not err in dismissing it. See Barger, supra.
D.
Plaintiff's fourth individual claim for relief alleges that defendants' actions constituted unfair and deceptive trade practices. "In order to establish a violation of N.C.G.S. § 75-1.1, a plaintiff must show: (1) an unfair or deceptive act or practice, (2) in or affecting commerce, and (3) which proximately caused injury to plaintiffs." Gray v. N.C. Ins. Underwriting Ass'n, 352 N.C. 61, 68, 529 S.E.2d 676, 681 (2000) (citation omitted). Plaintiff alleges no present monetary injury due to his personal guaranty of loans to A&B; and he therefore cannot recover under N.C. Gen. Stat. § 75-1.1. See Mayton v. Hiatt's Used Cars, 45 N.C. App. 206, 262 S.E.2d 860 (1980).
With respect to plaintiff's initial investment in A&B; our Supreme Court has held that securities transactions do not satisfy the "in or affecting commerce" requirement of N.C. Gen. Stat. § 75-1.1. See HAJMM Co. v. House of Raeford Farms, 328 N.C. 578, 594-95, 403 S.E.2d 483, 493 (1991). Plaintiff's initial investment was provided in exchange for fifty percent of the stock of A&B;and was thus part of a security transaction. See Stancil v. Stancil, 326 N.C. 766, 768, 392 S.E.2d 373, 375 (1990) (defining stock in a closely-held corporation as a "security"). Plaintiff therefore has no individual grounds to pursue a claim of unfair and deceptive trade practices against defendants, and we accordingly affirm the trial court's dismissal of plaintiff's fourth claim for relief.
In review, we affirm the trial court's dismissal of plaintiff's derivative claims for relief, as well as plaintiff's third and fourth individual claims for relief. The trial court erred in dismissing plaintiff's first and second individual claims for relief. We therefore affirm in part, reverse in part, and remand to the trial court for further proceedings consistent with this opinion.
Affirmed in part, reversed in part and remanded.
Judges WYNN and TIMMONS-GOODSON concur.
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