Moch v. A.M. Pappas & Associates, LLC

IN THE COURT OF APPEALS OF NORTH CAROLINA

No. COA16-642

Filed: 20 December 2016

Orange County, No. 15 CVS 1475

KENNETH I. MOCH, Plaintiff,

v.

A.M. PAPPAS & ASSOCIATES, LLC, ART M. PAPPAS, and FORD S. WORTHY,
Defendants.

Appeal by plaintiff from order entered 25 February 2016 by Judge James E.

Hardin, Jr. in Orange County Superior Court. Heard in the Court of Appeals 15

November 2016.

Spilman Thomas & Battle, PLLC, by Jeffrey D. Patton, Nathan B. Atkinson,
and Erin Jones Adams, for plaintiff-appellant.

Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P., by Michael W.
Mitchell, Christopher G. Smith, and Clifton L. Brinson for defendants-
appellees.

ZACHARY, Judge.

Kenneth I. Moch (plaintiff) appeals from an order dismissing his claims against

A.M. Pappas & Associates, LLC, Art M. Pappas, and Ford S. Worthy (defendants) for

abuse of process and unfair or deceptive trade practices. Plaintiff’s complaint was

dismissed pursuant to N.C. Gen. Stat. § 1A-1, Rule 12(b)(6), for failure to state a claim

upon which relief can be granted. On appeal plaintiff argues that the trial court erred
 MOCH V. A.M. PAPPAS & ASSOCS., LLC

Opinion of the Court

and that his complaint included factual allegations that established all of the

elements of both claims. We conclude that the trial court’s order should be affirmed.

I. Factual and Procedural History

Defendant A.M. Pappas & Associates, LLC, is a company that manages

investment funds and specializes in investments in the life sciences sector. Defendant

Art M. Pappas is the company’s managing partner, and defendant Ford S. Worthy is

the company’s chief financial officer. Beginning in 2011, defendants managed funds

that included investments in Chimerix, Inc., a corporation involved in the

development of anti-viral medical treatments. Plaintiff was the president and CEO

of Chimerix, Inc. from April 2010 until April 2014, when he left Chimerix.

On 22 October 2014, plaintiff sent an anonymous email to the North Carolina

State Treasurer, using an email account that plaintiff had created under the name

“pappasventureswhistleblower@gmail.com.” The email stated the following:

To whom it may concern:

I am writing this because of my concerns about the
activities of Arthur Pappas at Pappas Ventures. I want to
bring 3 things to your attention:

1. Potential misuse and misappropriation of funds. I have
reason to believe that Mr. Pappas has diverted somewhere
around $2 million of funds over the course of time, via
expenses and payments to others. Mr. Worthy may know
of this and be involved. I believe this would require an
audit of the Pappas Ventures financials, as Mr. Pappas is
skilled in hiding this misuse.

-2-
 MOCH V. A.M. PAPPAS & ASSOCS., LLC

Opinion of the Court

2. High employee turnover at Pappas Ventures. This is due
to the instability and unpredictability of Mr. Pappas. There
has been a very high turnover of personnel - partners and
investment professionals, more than other venture funds.
People leave this fund and do not trust him.

3. Perhaps not relevant, but there have been whispers of
issues of domestic violence/hitting women. This would
further damage the viability of the fund. I do not wish to be
a gossip, but this is relevant to Mr. Pappas’s moral code.

Since there is no whistleblower hotline, I felt an obligation
to contact people involved with Pappas Ventures and A.M.
Pappas. I have now done all that I can to bring these issues
to light, and my conscience is clear. What those of you
copied on this email do individually or collectively is up to
you.

Plaintiff later exchanged follow-up emails with an employee of the Department

of State Treasurer and forwarded his email to others whom plaintiff describes as

“investors in or collaborators with the funds managed by” defendants.

On 4 June 2015, defendants filed suit against the sender of the anonymous

emails, whom defendants identified as “John Doe or Jane Doe,” seeking damages for

libel per se and libel per quod. On 12 October 2015, the law firm of Smith, Anderson,

Blount, Dorsett, Mitchell & Jernigan, L.L.P. (hereafter “Smith Anderson”) sent a

letter to plaintiff on the law firm’s letterhead. The letter bore the heading

“CONFIDENTIAL” and “FOR PURPOSES OF SETTLEMENT ONLY.” (use of all

capital letters and underlining in original). The letter stated the following:

Re: A.M. Pappas & Associates, LLC, et al. v. John Doe or
Jane Doe

-3-
 MOCH V. A.M. PAPPAS & ASSOCS., LLC

Opinion of the Court

In the Superior Court of Durham County, North County;
15 CVS 3383

Dear Mr. Moch:

This law firm represents Pappas Capital, LLC (f/k/a A.
M. Pappas & Associates, LLC), its affiliates, Arthur Pappas
and Ford Worthy. We obtained evidence demonstrating
that you are responsible for the defamatory and malicious
emails from the previously anonymous email account:
pappasventureswhistleblower@gmail.com, as described in
the “Doe” lawsuit that we filed June 4 in Durham County
Superior Court. A copy of that lawsuit is enclosed.

We will amend the “Doe” Complaint and name you as a
defendant and immediately commence public litigation
against you unless you agree to the following material
settlement terms in principle by Friday, October 16, 2015:

[1.] A written retraction and apology;

[2.] Payment of $10 million, which is a figure discounted
for settlement purposes of the net present value of the
economic harm done to our clients. At trial, we will seek at
least $25 million;

[3.] Complete disclosure and sharing of information that
identifies anyone else involved with you in the defamatory
emails. Based on the nature and quality of this
information, we may be willing to compromise the financial
settlement demand; and

[4.] Our clients will refrain from reporting you to law
enforcement authorities or regulatory agencies for
violation of [N.C. Gen. Stat. §] 14-196.3 and all other
potential criminal violations, including federal violations.

Also enclosed with this letter is a document subpoena to
you. That subpoena requires you to produce certain
materials to us at our offices on October 20, 2015. You may

-4-
 MOCH V. A.M. PAPPAS & ASSOCS., LLC

Opinion of the Court

not destroy or alter any evidence identified in the subpoena
or that is relevant to this matter. You are obligated by law
to preserve all relevant evidence. Failure to comply with
this obligation is a criminal offense. You are on notice of
this duty by virtue of receipt of this correspondence. We
are, however, willing to work with you on the timing, scope,
and method of production to ensure that the subpoena does
not impose any undue burden and to protect the
confidentiality of your personal information.

Also enclosed is a testimony subpoena requiring you to
appear at our offices on Saturday, October 24, 2015 to give
your testimony in the lawsuit under oath.

Separately, we are serving your spouse with a document
subpoena for any relevant electronic and documentary
evidence she may possess.

This is a very serious matter.

The defamatory, baseless accusations have caused serious
damage to our clients and their business partners and they
will be made whole.

I urge you or your counsel to contact me immediately to
begin the process of addressing this matter. My office
number is on the letterhead. My cellphone is [omitted].

(emphasis in original).

On 19 October 2015, the law firm of Nelson Mullins Riley & Scarborough LLP

(hereafter “Nelson Mullins”) sent a letter to a Smith Anderson attorney, stating that

the Nelson Mullins firm represented plaintiff, and objecting to the subpoenas issued

by defendants on various grounds, including attorney-client privilege, spousal

privilege, and an assertion that the subpoenas’ production requests were unduly

-5-
 MOCH V. A.M. PAPPAS & ASSOCS., LLC

Opinion of the Court

burdensome. On 6 November 2015, defendants filed a motion to compel plaintiff’s

production of the documents sought in their subpoenas. On the same day, Smith

Anderson sent a letter to an attorney with the law firm Spilman Thomas & Battle,

PLLC.1 The letter was headed “SETTLEMENT CONFIDENTIAL” and “FOR YOUR

EYES AND YOUR CLIENTS’ EYES ONLY” and stated that:

Re: A.M. Pappas & Associates, LLC, et al. v. John Doe or
Jane Doe
Durham County - 15 CVS 3383

Dear Jeff:

Thank you for our conversation Wednesday
afternoon. Our clients are very frustrated at the pace and
the missed expectations and were prepared to take decisive
action prior to your last minute phone call. But you
provided meaningful information which has altered our
trajectory in a way that preserves for a very short period
the possibility of keeping the horse in the barn. In
particular, you confirmed that Mr. Moch is the malicious
emailer and that he will acknowledge that.

From here, there are two possible paths forward.
The first is the settlement path which to be successful must
be completed by November 30th. We are willing to meet
November 17 and the incentive to Mr. Moch and Ms.
Stolzman is that our clients will negotiate a significant
reduced cap on damages -- including potentially a minimal
settlement amount -- if you will provide the information
that I mentioned to you on the phone. The document that I
previously mentioned when we first spoke is Exhibit C to
the complaint filed in the business court. You will want to
look at paragraph 11. You and I can arrive at a method to
ensure that your clients will receive the value for the

1 The contents of the letter indicate that on 6 November 2015 plaintiff was represented by this
law firm.

-6-
 MOCH V. A.M. PAPPAS & ASSOCS., LLC

Opinion of the Court

information if it is disclosed and that they will not be in the
position of giving information without receiving any
promised value, nor us giving value for information that is
not valuable.

That is the basic path to settlement. What follows is
the immediate litigation alternative.

We have noticed your motion to quash the Google
subpoena before Judge Hudson in Durham Superior Court
on Monday, November 16. That notice is enclosed. That
notice makes no reference to your client. Upon receiving
your motion, we reviewed the Tolling Agreement to see if
your action constituted a breach and concluded as you must
have that the Tolling Agreement has no effect whatsoever
on the Doe litigation.

Accordingly, we also enclose with this letter our
motions to compel on the subpoenas to Mr. Moch and Ms.
Stolzman, which do reference your clients. We have not
filed these with the Court, but if we do not receive a
satisfactory response from your clients by close of business
Wednesday of next week, we will file them with the Court
and bring these on for hearing also.

At the hearing on the 16th, we will definitively
identify Mr. Moch as the malicious emailer using cyber-
fingerprints that definitively place him at the FedEx
Kinko’s at 114 West [Franklin Street,] Chapel Hill[,] on
January 23 and accessing the Gmail account from that
location, as well as the bevy of AT&T geolocation data
placing Mr. Moch’s cellphone in The Siena Hotel and the
Durham South Regional Library when he conducted his
malicious email activities from those locations.

We are pursuing every option and will exhaust them
all. I also include the subpoena for video surveillance of the
Public Storage self-storage facility at 515 S. Greensboro
Road visited by Ms. Stolzman the day after she and her
husband received their subpoenas, and the day before one

-7-
 MOCH V. A.M. PAPPAS & ASSOCS., LLC

Opinion of the Court

of their vehicles went to Eubanks Road, the location of the
Chapel Hill dump. I previously raised a concern about
document preservation with your clients’ prior counsel. If
there is an issue, we will pursue every remedy.

We will also report Mr. Moch to the appropriate law
enforcement authorities for cyberstalking. As we’ve
discussed, Mr. Moch’s email campaign, which was intended
to harass and embarrass Mr. Pappas and Mr. Worthy,
constitutes criminal cyberstalking in violation of N.C. Gen.
Stat. 14-196.3. Mr. Pappas and Mr. Worthy have thus far
refrained from reporting Mr. Moch to law enforcement.
And, consistent with 2008 Formal Ethics Opinion 15, Mr.
Pappas and Mr. Worthy are prepared as part of a
settlement permanently to refrain from reporting Mr.
Moch to law enforcement. If, however, we are unable to
agree on the next steps in the settlement process as set
forth in this letter, Mr. Moch’s conduct will immediately be
reported to the proper authorities.

In addition to all of the foregoing, by at latest
November 30 we will have no choice but to file a complaint
publicly identifying Mr. Moch as the anonymous emailer
and describing in detail his malicious intent and his failed
attempts to hide his tracks. At that point, we will bring this
matter to the attention of Chimerix for indemnity to which
Mr. Pappas is entitled, and Mr. Moch is contractually
obligated to respond to Chimerix’ requests for information.
So we will be able to get by right through the Court or
potentially Chimerix all information for which we
presently are willing to give your clients significant value
in order to avoid full litigation.

We will stand down on all these immediate litigation
issues for the Tolling Period and withdraw our notice of
hearing for November 16 on all issues if we can follow the
roadmap that we initially discussed, i.e., (i) you provide
fulsome document production as we have discussed before
our November 17 meeting, which includes third party
involvement (indicating and fully disclosing whether you

-8-
 MOCH V. A.M. PAPPAS & ASSOCS., LLC

Opinion of the Court

have the Linsley information we are requesting, but not
producing the information yet); (ii) we simultaneously give
[you] our detailed damages disclosure; (iii) we meet
November 17 and discuss a method to ensure value is
received for third-party information to be provided by Mr.
Moch by both Mr. Moch and us, and we address the
required acknowledgement.

All of this would be settlement confidential
disclosures and discussions.

On 18 November 2015, defendants filed an amended complaint naming

plaintiff as the defendant instead of “John Doe or Jane Doe.” On the same date,

plaintiff filed suit against defendants, asserting claims for abuse of process and unfair

or deceptive trade practices. On 30 November 2015, defendants filed a motion to

dismiss plaintiff’s complaint pursuant to N.C. Gen. Stat. § 1A-1 Rule 12(b)(6).

Plaintiff filed an amended complaint on 7 January 2016 and defendants filed an

amended motion for dismissal on 8 January 2016. Following a hearing conducted on

13 January 2016, the trial court entered an order on 25 February 2016, granting

defendants’ motion and dismissing plaintiff’s claims with prejudice. Plaintiff noted a

timely appeal to this Court.

II. Standard of Review

N.C. Gen. Stat. § 1A-1, Rule 12(b)(6) (2015) allows a party to move for dismissal

of a claim or claims based on the complaint’s “[f]ailure to state a claim upon which

relief can be granted[.]” “The motion to dismiss under N.C. R. Civ. P. 12(b)(6) tests

the legal sufficiency of the complaint. In ruling on the motion the allegations of the

-9-
 MOCH V. A.M. PAPPAS & ASSOCS., LLC

Opinion of the Court

complaint must be viewed as admitted, and on that basis the court must determine

as a matter of law whether the allegations state a claim for which relief may be

granted.” Stanback v. Stanback, 297 N.C. 181, 185, 254 S.E.2d 611, 615 (1979)

(citations omitted). “[T]he well-pleaded material allegations of the complaint are

taken as admitted; but conclusions of law or unwarranted deductions of fact are not

admitted.” Sutton v. Duke, 277 N.C. 94, 98, 176 S.E.2d 161, 163 (1970) (internal

quotation omitted). “When the complaint on its face reveals that no law supports the

claim, reveals an absence of facts sufficient to make a valid claim, or discloses facts

that necessarily defeat the claim, dismissal is proper.” Arnesen v. Rivers Edge Golf

Club & Plantation, Inc., 368 N.C. 440, 448, 781 S.E.2d 1, 7-8 (2015) (citing Wood v.

Guilford Cty., 355 N.C. 161, 166, 558 S.E.2d 490, 494 (2002) (other citation omitted)).

“This Court must conduct a de novo review of the pleadings to determine their legal

sufficiency and to determine whether the trial court’s ruling on the motion to dismiss

was correct.” Leary v. N.C. Forest Prods., Inc., 157 N.C. App. 396, 400, 580 S.E.2d 1,

4, aff’d per curiam, 357 N.C. 567, 597 S.E.2d 673 (2003).

“When documents are attached to and incorporated into a complaint, they

become part of the complaint and may be considered in connection with a Rule 12(b)

(6) motion without converting it into a motion for summary judgment.” Schlieper v.

Johnson, 195 N.C. App. 257, 261, 672 S.E.2d 548, 551 (2009). Moreover:

Although it is true that the allegations of [the plaintiff’s]
complaint are liberally construed and generally treated as

- 10 -
 MOCH V. A.M. PAPPAS & ASSOCS., LLC

Opinion of the Court

true, the trial court can reject allegations that are
contradicted by the documents attached, specifically
referred to, or incorporated by reference in the complaint.
Furthermore, the trial court is “not required . . . to accept
as true allegations that are merely conclusory,
unwarranted deductions of fact, or unreasonable
inferences.”

Laster v. Francis, 199 N.C. App. 572, 577, 681 S.E.2d 858, 862 (2009) (citing Schlieper

and quoting Strickland v. Hedrick, 194 N.C. App. 1, 20, 669 S.E.2d 61, 73 (2008)).

“When reviewing pleadings with documentary attachments on a Rule 12(b)(6) motion,

the actual content of the documents controls, not the allegations contained in the

pleadings[.]” Schlieper at 265, 672 S.E.2d at 552 (citing Oberlin Capital, L.P. v.

Slavin, 147 N.C. App. 52, 60, 554 S.E.2d 840, 847 (2001)).

III. Plaintiff’s UDTPA Claim

N.C. Gen. Stat. § 75-1.1 (2015) provides in relevant part that:

(a) Unfair methods of competition in or affecting commerce,
and unfair or deceptive acts or practices in or affecting
commerce, are declared unlawful.

(b) For purposes of this section, “commerce” includes all
business activities, however denominated, but does not
include professional services rendered by a member of a
learned profession.

“In order to establish a prima facie claim for unfair trade practices, a plaintiff

must show: (1) [the] defendant committed an unfair or deceptive act or practice, (2)

the action in question was in or affecting commerce, and (3) the act proximately

caused injury to the plaintiff.” Dalton v. Camp, 353 N.C. 647, 656, 548 S.E.2d 704,

- 11 -
 MOCH V. A.M. PAPPAS & ASSOCS., LLC

Opinion of the Court

711 (2001) (citation omitted). In the present case, we conclude that plaintiff’s

complaint discloses on its face that the acts upon which plaintiff rests his claim were

not “in or affecting commerce.”

As noted above, N.C. Gen. Stat. § 75-1.1(b) provides that, for purposes of the

statute, “commerce” “does not include professional services rendered by a member of

a learned profession.” “[T]he practice of law has traditionally been considered a

learned profession, as indeed it is. Furthermore, this Court has . . . applied the

exemption in the context of a law firm. Thus, we conclude that . . . a law firm and its

attorneys . . . are members of a learned profession.” Reid v. Ayers, 138 N.C. App. 261,

266, 531 S.E.2d 231, 235 (2000) (citing Sharp v. Gailor, 132 N.C. App. 213, 217, 510

S.E.2d 702, 704 (1999). “Although no bright line exists, we think that the exemption

applies anytime an attorney or law firm is acting within the scope of the traditional

attorney-client role.” Reid, 138 N.C. App. at 267, 531 S.E.2d at 236.

We have carefully examined the allegations of plaintiff’s complaint and have

accepted as true the factual allegations in the complaint. We have, however,

disregarded conclusory allegations that state legal conclusions or unwarranted

inferences of fact, such as plaintiff’s assertion that defendants acted “in retaliation

for [plaintiff’s] exercising his First Amendment rights[.]” We have also disregarded

allegations with no obvious relevance to the issue of whether plaintiff’s complaint

states a claim for unfair or deceptive trade practices. For example, the complaint

- 12 -
 MOCH V. A.M. PAPPAS & ASSOCS., LLC

Opinion of the Court

contains a number of allegations that appear to be included in order to establish

matters such as (1) the basis for plaintiff’s alleged concerns about defendants’

business practices; (2) the fact that the policies of the North Carolina State Treasurer

support transparency and accountability; (3) the sufficiency of an audit conducted by

defendants in response to plaintiff’s anonymous emails; (4) plaintiff’s speculations as

to the amount of damages that defendants incurred as a result of the emails; and (5)

whether defendants’ counsel acted in violation of the Code of Professional

Responsibility. Allegations addressed to these issues or to similarly peripheral

matters do not contribute to the determination of whether the material factual

allegations of plaintiff’s complaint state a claim for relief.

Moreover, we have disregarded allegations that are directly contradicted by

the documents attached to or referenced in plaintiff’s complaint. For example,

plaintiff’s complaint alleges that the letters from defendants’ counsel regarding

settlement negotiations “falsely threaten[ed]” plaintiff that failure to obey their

subpoenas would “be a criminal offense.” In fact, the letters do not state that “failure

to obey” a subpoena is a criminal offense, but only that the destruction of evidence

that had been subpoenaed is a violation of criminal law. Having conducted a detailed

review of plaintiff’s complaint, accepting its well-pleaded factual allegations as true

while disregarding other allegations as discussed above, we conclude that plaintiff’s

- 13 -
 MOCH V. A.M. PAPPAS & ASSOCS., LLC

Opinion of the Court

claim for unfair or deceptive acts rests entirely upon the contents of the two letters

sent from defendants’ counsel to plaintiff or plaintiff’s counsel.

This Court has held that a party may not bring a claim for unfair or deceptive

practices based upon the actions of the defendant’s counsel. In Davis Lake

Community Ass’n v. Feldmann, 138 N.C. App. 292, 530 S.E.2d 865 (2000), the

plaintiff, the homeowners’ association of a planned development community, sued

residents of the community to recover delinquent homeowners’ assessments. The

homeowners filed a counterclaim against the plaintiff for unfair debt collection and

later sought to amend their counterclaim to join plaintiff’s counsel as a required

party. The Davis Lake opinion reviewed Reid v. Ayers, in which this Court held that

in order to state a claim for unfair debt collection, a complaint must not only allege

facts stating a violation of the specific regulations applicable to debt collection but

must also satisfy “the more generalized requirements of all unfair or deceptive trade

practice claims,” which exclude from the definition of “commerce” the “professional

services rendered by a member of a learned profession.” Davis Lake, 138 N.C. App. at

296, 530 S.E.2d at 868-69. The Davis Lake Court held that the exception for learned

professions stated in N.C. Gen. Stat. § 75-1.1 precluded the defendants from joining

plaintiff’s counsel in their counterclaim. We then held that:

We again emphasize that defendants only have a valid
claim against plaintiff, not its counsel. Thus, in proceeding
with their claim, defendants must focus on those alleged
unfair debt collection practices employed exclusively by

- 14 -
 MOCH V. A.M. PAPPAS & ASSOCS., LLC

Opinion of the Court

plaintiff. Any acts engaged in by plaintiff’s counsel, even if
cloaked in terms of a principal-agent relationship, fall
within the learned profession exemption and thus outside
the purview of the NCDCA.

Davis Lake, 138 N.C. App. at 297, 530 S.E.2d at 869 (emphasis added). We conclude

that Davis Lake is controlling on the issue of whether plaintiff can bring a claim

against defendants based upon letters sent by defendants’ counsel, and that plaintiff

may not do so.

In arguing for a different result, plaintiff does not cite controlling authority to

the contrary. Plaintiff makes the conclusory assertion that the holding of Davis Lake

“was not unbridled or without limits,” but fails to articulate how the present case

exceeds the “limits” of that case. Plaintiff also identifies factual differences between

the alleged actions of the counsel in Davis Lake and those of counsel in the present

case, without proffering a basis upon which these factual differences would change

our legal analysis. In addition, plaintiff cites Huff v. Gallagher, 521 B.R. 107 (Bankr.

E.D.N.C. 2014), in support of his position. “We note initially that a decision of the

Bankruptcy Court is not binding on this Court.” In re Foreclosure of Bass, 217 N.C.

App. 244, 254, 720 S.E.2d 18, 26 (2011), rev’d on other grounds, 366 N.C. 464, 738

S.E.2d 173 (2013). Furthermore, the opinion in Huff fails to acknowledge our holding

in Davis Lake, or to distinguish it. As a result, Huff is neither controlling nor

persuasive authority.

- 15 -
 MOCH V. A.M. PAPPAS & ASSOCS., LLC

Opinion of the Court

Moreover, plaintiff fails to identify any specific acts alleged in his complaint

that (1) were undertaken by defendants alone and not by defendants’ counsel, and (2)

could support a claim for unfair or deceptive practices. In his reply brief, plaintiff

states that his complaint “asserted various acts undertaken directly by Defendants

that underlie his claims,” citing paragraphs Nos. 1, 26, 38, 41, 45, 46, 59, 72, 81, 82,

and 86. We have examined these allegations and conclude that they consist of general

background information, the discussion of irrelevant matters such as plaintiff’s

speculation on the extent of the damages suffered by defendants, conclusory

assertions that are not supported by factual allegations, and the merits of the terms

of settlement that were offered by defendants’ counsel in their letters. We hold that

plaintiff’s complaint failed to allege facts that, if true, would establish that the acts

complained of were “in commerce” as the term is defined in N.C. Gen. Stat. § 75-

1.1(b), and that the trial court did not err by dismissing this claim. As a result, we

need not address the parties’ arguments regarding whether plaintiff’s complaint

stated facts supporting the other elements of a claim for unfair or deceptive trade

practices.

IV. Plaintiff’s Claim for Abuse of Process

“Abuse of process is the misapplication of civil or criminal process to

accomplish some purpose not warranted or commanded by the process.” Pinewood

Homes, Inc. v. Harris, 184 N.C. App. 597, 602, 646 S.E.2d 826, 831 (2007) (internal

- 16 -
 MOCH V. A.M. PAPPAS & ASSOCS., LLC

Opinion of the Court

quotation omitted). “Two elements must be proved to find abuse of process: (1) that

the defendant had an ulterior motive to achieve a collateral purpose not within the

normal scope of the process used, and (2) that the defendant committed some act that

is a ‘malicious misuse or misapplication of that process after issuance to accomplish

some purpose not warranted or commanded by the writ.’ ” Id. (quoting Stanback, 297

N.C. at 200, 254 S.E.2d at 624) (emphasis in original). However, “[t]here is no abuse

of process where it is confined to its regular and legitimate function in relation to the

cause of action stated in the complaint.” Stanback at 201, 254 S.E.2d at 624.

On appeal, plaintiff makes a number of arguments to support his contention

that the letters sent by defendants’ counsel and defendants’ issuance of subpoenas

constitute “abuse of process in violation of North Carolina law.” Plaintiff asserts that

defendants should not have issued subpoenas in connection with their “John Doe”

lawsuit, given that defendants had information indicating that plaintiff was the

person who had sent the emails; that the subpoenas were issued with the “ulterior

motive” of “forc[ing plaintiff] to the negotiating table,” or, alternatively, were issued

with the “ulterior purpose” of pressuring plaintiff to provide testimony for defendants

in another civil case. However, at the hearing on this matter, plaintiff’s counsel made

the following argument regarding plaintiff’s claim for abuse of process:

PLAINTIFF’S COUNSEL: To touch on the abuse of process
very quickly: The defendants want to characterize it as a
mere issuance of a subpoena. That’s not the im-- that’s not
the abuse of the process. It’s the totality of the

- 17 -
 MOCH V. A.M. PAPPAS & ASSOCS., LLC

Opinion of the Court

circumstances and the idea that you have to appear within
-- appear on a Saturday for a deposition, produce some 55
subsets of documents and, oh, yeah, by the way, this is all
coming under the context of a letter which will demand
money again as we have alleged that you’re not entitled to.
That’s the abuse of the process.

“Our appellate courts have ‘long held that where a theory argued on appeal was not

raised before the trial court, the law does not permit parties to swap horses between

courts in order to get a better mount [on appeal].’ ” State v. Portillo, __ N.C. App. __,

__, 787 S.E.2d 822, 832 (2016) (quoting State v. Sharpe, 344 N.C. 190, 194, 473 S.E.2d

3, 5 (1996) (internal quotation omitted)). Before the trial court, plaintiff argued that

the “totality of the circumstances” of the issuance of subpoenas constituted an abuse

of process, based on the facts that the subpoenas required the taking of a deposition

on a Saturday, the subpoenas requested the production of numerous documents, and

the subpoenas were attached to a letter that conditioned an offer to settle upon

plaintiff’s payment of money to defendants. Having relied upon this argument at

trial, plaintiff may not raise new arguments on appeal, to which defendants had no

chance to respond at trial and on which the trial court had no opportunity to rule. On

appeal, plaintiff fails to articulate how the facts noted above would support a claim

for abuse of process, and we conclude that plaintiff is not entitled to relief on the basis

of this argument.

For the reasons discussed above, we conclude that the trial court did not err by

dismissing plaintiff’s complaint, and that its order should be

- 18 -
 MOCH V. A.M. PAPPAS & ASSOCS., LLC

Opinion of the Court

AFFIRMED.

Judges CALABRIA and INMAN concur.

- 19 -