United States District Court, D. South Carolina, Charleston Division
C. NORTON, UNITED STATES DISTRICT JUDGE
matter is before the court on defendants Antler Road, LLC,
Crescent Homes SC, LLC, Park Investors, LLC, Jamin Hujik, and
Edward M. Terry's (“SCUPTA defendants”)
motion to dismiss and defendant Edward M. Terry's
(“Terry”) separate motion to dismiss. For the
reasons stated below, the court grants the SCUPTA
defendants' motion and denies Terry's motion.
Sinclair and Associates of Greenville, LLC
(“Sinclair”) is a design firm engaged in the
business of providing engineering, land surveying, and
project management services, with particular expertise in the
area of pool design and engineering. Compl. ¶¶ 5,
7. In or around 2004, Sinclair contracted with Summerville
Homes, LLC (“Summerville Homes”), the then-owner
of the Baker Plantation subdivision in North Charleston,
South Carolina, to prepare civil engineering and
architectural plans and technical drawings for a pool and
amenities center at Baker Plantation (the
“Works”). Id. ¶¶ 31, 32.
Sinclair then prepared and sealed the Works, and licensed the
Works to Summerville Homes. Id. ¶¶ 33, 40.
This license granted a non-transferable, limited right to use
the Works in connection with Summerville Homes's
construction of the amenities center and pool at Baker
Plantation. Id. ¶¶ 39-41. However,
Sinclair never sold the Works or any interest therein to any
party. Id. ¶ 39.
Homes never began construction on the pool and amenities, and
instead, conveyed the Baker Plantation property to defendant
CresCom Bank (“CresCom”) via a deed in lieu of
foreclosure. Id. ¶¶ 47, 48. Around the
time of this transaction, CresCom somehow obtained a copy of
the Works. Id. ¶ 49. CresCom
subsequently conveyed the Baker Plantation property and the
Works to defendant Antler Road, LLC (“Antler
Road”). Id. ¶¶ 57, 58, 61. In
December 2011, defendant Jamin Hujik, the vice president of
CresCom, and Terry, the manager of Antler Road and president
of Crescent Homes SC, LLC (“Crescent Homes”),
each asked Sinclair whether it would be willing to release
its copyrights in the Works. Id. ¶¶ 12,
14, 64-67, 76-79. On both occasions, Sinclair stated that it
would be willing to do so in exchange for payment, but none
of the defendants ever accepted this offer. Id.
¶¶ 65, 77-79. In fact, Terry personally rejected
the offer on December 29, 2011, stating that the Works were
not worth the amount Sinclair requested. Id. ¶
never having paid for the Works, Antler Road subsequently
used the Works to construct the pool and amenities center at
Baker Plantation. Id. ¶¶ 81, 82. After
purchasing the Baker Plantation property from Antler Road,
Crescent Homes also used the Works in this manner.
Id. ¶¶ 83, 84, 91. At some point, either
Antler Road or Crescent Homes provided defendants Park
Investors, LLC (“Park Investors”) and Robert E.
Sample (“Sample”) with copies of certain portions
of the Works, which Park Investors used to construct the
amenities center and Sample used to create derivative plans
for the pool. Id. ¶¶ 95-110. Sample's
derivative plans were later used to obtain a construction
permit for the pool from the Department of Health and
Environmental Control. Id. ¶ 112. At all times
relevant to this action, the various defendants were aware
that either Antler Road or Crescent Homes planned to use the
Works in this manner and that neither Antler Road nor
Crescent Homes had the right to so use the Works.
Id. ¶¶ 62, 68-76, 80, 85, 90, 91, 99-101,
106-109. Crescent Homes now markets the Baker Plantation
subdivision using the pool and amenities center, id.
¶ 117, and all defendants have profited from their use
or conveyance of the Works. Id. ¶ 118.
February 17, 2016, Sinclair filed the instant action bringing
claims for direct copyright infringement, contributory
copyright infringement, and conversion against all
defendants, and a claim for violation of the South Carolina
Unfair Trade Practices Act, SC Code §§ 39-5-10,
et seq. (“SCUPTA”) against the SCUPTA
defendants. On April 4, 2016, the SCUPTA defendants filed a
motion to dismiss Sinclair's SCUPTA claim, and on April
5, 2016, Terry filed a motion to dismiss all claims against
him. Sinclair filed responses to both motions on April 21,
2016. The motions are now ripe for the court's review.
Federal Rule of Civil Procedure 12(b)(6), a party may move to
dismiss for “failure to state a claim upon which relief
can be granted.” When considering a Rule 12(b)(6)
motion to dismiss, the court must accept the plaintiff's
factual allegations as true and draw all reasonable
inferences in the plaintiff's favor. See E.I. du Pont
de Nemours & Co. v. Kolon Indus., 637 F.3d 435, 440
(4th Cir. 2011). But “the tenet that a court must
accept as true all of the allegations contained in a
complaint is inapplicable to legal conclusions.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). On a
motion to dismiss, the court's task is limited to
determining whether the complaint states a “plausible
claim for relief.” Id. at 679. Although Rule
8(a)(2) requires only a “short and plain statement of
the claim showing that the pleader is entitled to relief,
” “a formulaic recitation of the elements of a
cause of action will not do.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007). The “complaint
must contain sufficient factual matter, accepted as true, to
‘state a claim to relief that is plausible on its
face.'” Iqbal, 556 U.S. at 678 (quoting
Twombly, 550 U.S. at 570). “Facts pled that
are ‘merely consistent with' liability are not
sufficient.” A Soc'y Without a Name v.
Va., 655 F.3d 342, 346 (4th Cir. 2011) (quoting
Iqbal, 556 U.S. at 678).
SCUPTA Defendants Motion to Dismiss
SCUPTA defendants argue that Sinclair's SCUPTA claim must
be dismissed because the complaint fails to allege that the
SCUPTA defendants' conduct has the potential for
repetition, and thus, Sinclair has failed to allege conduct
adversely affecting the public interest. SCUPTA Defs.'
Mot. 3-6. In response, Sinclair argues that it has alleged a
potential for repetition, and even if it has not, the SCUPTA
defendants' actions had a number of adverse impacts on
the public interest beyond their potential repetition.
Pl.'s SCUPTA Resp. 7-9.
SCUPTA prohibits “[u]nfair methods of competition and
unfair or deceptive acts or practices in the conduct of any
trade or commerce.” Health Promotion Specialists,
LLC v. S.C. Bd. of Dentistry, 743 S.E.2d 808, 815 (S.C.
2013) (quoting S.C. Code § 39-5-20(a)) (emphasis
omitted). The SCUPTA also provides for a private right of
action, when a plaintiff shows that: “(1) the defendant
engaged in an unfair or deceptive act in the conduct of trade
or commerce; (2) the unfair or deceptive act affected the
public interest; and (3) the plaintiff suffered monetary or
property loss as a result of the defendant's unfair or
deceptive act(s).” Id. at 816 (quoting
Wright v. Craft, 640 S.E.2d 486, 498 (S.C. Ct. App.
2006) (alterations omitted). It is well established that
“[t]he act is not available to redress a private wrong
where the public interest is unaffected, ” Bracken
v. Simmons First Nat. Bank, No. 6:13-cv-1377, 2014 WL
2613175, at *6 (D.S.C. June 9, 2014) (quoting Bessinger
v. Food Lion, Inc., 305 F.Supp.2d 574, 582 (D.S.C.
2003), aff'd sub nom. 115 F. App'x 636 (4th
Cir. 2004)) (internal quotation marks omitted). Consequently,
the act does not reach “unfair or deceptive act[s] or
practice[s] that affect only the parties to a trade or a
commercial transaction.” Id. (quoting
Noack Enterprises, Inc. v. Country Corner Interiors of
Hilton Head Island, Inc., 351 S.E.2d 347, 349-50 (S.C.
Ct. App. 1986)).
plaintiff may show that an unfair or deceptive act or
practice adversely affects the public interest by
demonstrating a potential for repetition. Bahringer v.
ADT Sec. Servs., Inc., 942 F.Supp.2d 585, 594 (D.S.C.
2013). Potential for repetition is generally demonstrated in
one of two ways: “(1) by showing the same kind of
actions occurred in the past, thus making it likely they will
continue to occur absent deterrence; or (2) by showing the
[defendants]'s procedures create a potential for
repetition of the unfair and deceptive acts.”
Id. (quoting Wright, 640 S.E.2d at 498).
However, these are not the only methods of proving a
potential for repetition, and a potential for repetition is
not the only method of proving a threat to the public
interest. See Daisy Outdoor Advert. Co. v. Abbott,
473 S.E.2d 47, 51 (S.C. 1996) (explaining that
“[s]ometimes, the potential for repetition or other
adverse impact on the public interest will be apparent,
” and “declin[ing] to hold . . . that [similar
past occurrences and defendant's procedures] are the only
means for showing potential for repetition/public
impact”) (emphasis added). Ultimately, the public
interest prong of the SCUPTA analysis is flexible enough that
“each case must be evaluated on its own merits.”
Id. Still, the requirement “must be proved by
specific facts.” Jefferies v. Phillips, 451
S.E.2d 21, 23 (S.C. Ct. App. 1994). “Without proof of
specific facts disclosing that members of the public were
adversely affected by the unfair conduct or that they were
likely to be so affected, the result is a ‘speculative
claim of adverse public impact  that will not suffice under
the [SCUPTA].'” Bracken, 2014 WL 2613175,
at *7 (quoting Jefferies, 451 S.E.2d at 23).
Potential for Repetition
first argues that the complaint alleges a potential for
repetition by alleging that “the [SCUPTA defendants]
engaged in the business of developing Baker Plantation and
are engaged in the development or construction business in
South Carolina.” Pl.'s SCUPTA Resp. 7. This
allegation is clearly insufficient. It does not provide any
indication that the SCUPTA defendants took similar actions in
the past or that any of “the [SCUPTA defendants']
procedures create a potential for repetition.”
Bahringer, 942 F.Supp.2d at 594 (emphasis added). To
the extent Sinclair suggests that a defendant's continued
engagement in commercial activity presents a potential for
repetition, its argument is unduly speculative. “The
mere proof that the actor is still alive and engaged in the
same business is not sufficient ...