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COA Clarifies 12(b)(6) Dismissal Motion Requirements

By Sean E. Andrussier

In the unpublished Austin Hatcher Realty, Inc. v. Hazel Gaither et al., the COA yesterday clarified what's required when making a 12(b)(6) motion, though perhaps upped what's needed to allege an unjust enrichment claim.

In Austin Hatcher, a real estate listing agreement was entered into, and the property was ultimately sold. The plaintiff sought a commission, and the defendants refused to pay. Plaintiff sued for breach of contract and unjust enrichment, and the defendants moved for 12(b)(6) dismissal of both claims. The trial court granted the motion, and plaintiff appealed.

The first issue on appeal was whether the defendant's 12(b)(6) motion stated with sufficient particularity the grounds on which the motion was based. As practitioners know, Civil Procedure Rule 7 requires that motions state with particularity the grounds on which they're based, not least so that the defending party and court are on notice as to what's at issue and aren't sand-bagged at the hearing on the motion. Apparently, the motion filed in this case stated that the complaint "fail[ed] to state a claim upon which relief can be granted." The COA held that this is the essence of a 12(b)(6) motion, that to defend the motion, the plaintiff need only state that the complaint alleges facts to support the legal claims, and that nothing else was therefore required. While the COA indicates that an affirmative defense, for example, must be specifically identified in a 12(b)(6) motion, there are surely many non-obvious legal arguments to defeat claims that are not affirmative defenses but that per Austin may not need to be revealed until the movant serves its hearing brief 2 days before the 12(b)(6) hearing -- or at the hearing itself.

The COA also held that the complaint stated facts to support the elements of a breach of contract claim such that the court erred in tossing that claim. However, the COA upheld the trial court's dismissal of the plaintiff's unjust enrichment claim. The COA noted that an unjust enrichment claim must set forth a benefit conferred on the defendant non-gratuitously and accepted by the defendant. Here, the COA held, among other things, that the only benefit alleged was the provision of services that were accepted but for which payment was refused. Those services included assistance in preparing for a sale hearing. The COA held that this was not a benefit, including because there was no allegation that the property would not have been sold without those services. An analysis that may give us services providers pause. Tell your decorator, for example, that their help in making your house look good is not a benefit because the house would have looked good anyway, even with that velvet Elvis on the wall...

Full post as published by North Carolina Appellate Blog on June 04, 2008 (boomark / email).