Newton v. Barth , 248 N.C. App. 331 ( 2016 )


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  •                 IN THE COURT OF APPEALS OF NORTH CAROLINA
    Nos. COA15-1209, COA15-1210
    Filed: 19 July 2016
    Wake County, Nos. 14 CVS 6788
    JOHN       NEWTON,  HARRY   SCHATMEYER,      CHERYL     SCHATMEYER,
    JUANVELASQUEZ, ROBERT THOMPSON, KRISTI THOMPSON, DALE F.
    CAMARA, A.J. RICE, VIOLANE RICE, RANDALL SLAYTON, MARIE PALADINO,
    MARCAR ENTERPRISES, INC., MAYNARD SIKES, NANCY SIKES, BILLY
    BACON, BEVERLY BACON, SABINA HOULE, KENNETH COURNOYER,
    LAWANNA COURNOYER, GARY GROSS, ELKE GROSS, JACK DONNELLY, and
    JOSEPH KINTZ, on behalf of themselves and all persons similarly situated,
    Plaintiffs,
    RICHARD B. SPOOR, Plaintiff,
    v.
    JOHN BARTH, JR., and JOHN BARTH, (SR.), Defendants.
    Wake County, No. 14 CVS 10215
    DIORIO FOREST PRODUCTS, INC., 919 MARKETING COMPANY, INC., and
    JAMES B. ENTERPRISES, INC., formerly EPPERSON LUMBER SALES, INC., on
    behalf of themselves and all entities similarly situated, Plaintiffs,
    and RICHARD B. SPOOR, Plaintiff,
    v.
    JOHN BARTH, JR., and JOHN BARTH (SR.), Defendants.
    Appeals by Plaintiffs John Newton, et al., from Order and Judgment entered 8
    June 2015 and Plaintiffs Diorio Forest Products, Inc., et al., from Order and
    Judgment entered 18 June 2015 by Judge Robert T. Sumner in Wake County
    Superior Court. Heard in the Court of Appeals 9 June 2016.
    NEWTON V. BARTH; DIORIO FOREST PRODS., INC. V. BARTH
    Opinion of the Court
    Barry Nakell, and Smith Moore Leatherwood LLP, by Matthew Nis Leerberg,
    for Plaintiffs.
    Manning Fulton & Skinner, P.A., by Judson A. Welborn and J. Whitfield
    Gibson, for Defendant John M. Barth, Jr.
    Wilson & Ratledge, PLLC, by Reginald B. Gillespie, Jr., and N. Hunter Wyche,
    Jr., and Foley & Lardner LLP, by Michael J. Small and David B. Goroff, for
    Defendant John M. Barth.
    STEPHENS, Judge.
    Plaintiffs John Newton, et al., and Diorio Forest Products, Inc., et al., appeal
    from the trial court’s Orders and Judgments dismissing their claims against
    Defendants John M. Barth, Jr. (“Junior”), and John M. Barth (“Senior”), based on
    lack of subject matter jurisdiction and failure to state a claim upon which relief could
    be granted. Plaintiffs argue that the trial court erred in determining they lacked
    standing to assert their claims and that their claims were barred by the applicable
    statutes of limitations. We agree, and we consequently reverse the trial court’s Orders
    and Judgments.
    Factual Background and Procedural History
    This case arises from two separate class action lawsuits filed in Wake County
    Superior Court alleging claims for fraud, unfair and deceptive trade practices
    (“UDTP”), civil conspiracy, and punitive damages against Junior and Senior by the
    customers, vendors, and suppliers of AmerLink, Ltd., a North Carolina corporation
    that engaged in the business of selling materials and contracts for the construction
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    NEWTON V. BARTH; DIORIO FOREST PRODS., INC. V. BARTH
    Opinion of the Court
    of log homes. The Newton Plaintiffs were customers of AmerLink, and the Diorio
    Plaintiffs were vendors and suppliers of AmerLink. Junior was AmerLink’s president
    and CEO from 2006 to 2008. Senior is Junior’s father, and although he never held
    any formal position with AmerLink, the Newton and Diorio Plaintiffs allege that
    beginning in 2007 and continuing until October 2009, Junior and Senior engaged in
    a fraudulent scheme to acquire control of AmerLink at a depreciated price by
    falsifying financial statements and other documents, secretly infusing over $2 million
    into AmerLink to prop up the corporation and conceal the falsified financial
    statements, and misrepresenting AmerLink’s distressed financial condition.
    The facts underlying the allegations of the Newton and Diorio Plaintiffs’
    complaints were previously discussed at length in this Court’s opinion in a related
    action brought against Junior and Senior by AmerLink’s founder, chairman, and
    former majority shareholder, Richard B. Spoor. See Spoor v. Barth, __ N.C. App. __,
    
    781 S.E.2d 627
    , disc. review and cert. denied, __ N.C. __, __ S.E.2d __ (2016). As
    detailed therein, after becoming president and CEO of AmerLink in September 2006,
    Junior sought to purchase Spoor’s controlling interest in the company using funds
    from Senior, who inspected AmerLink’s facilities, inquired into the company’s
    financial situation with its principal lender, and drafted terms for a potential
    purchase agreement in 2007. 
    Id.
     at __, 781 S.E.2d at 629. No agreement was reached
    at that time, but Junior and Spoor eventually agreed to form a new corporation which
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    NEWTON V. BARTH; DIORIO FOREST PRODS., INC. V. BARTH
    Opinion of the Court
    would serve as a vehicle for Junior to purchase Spoor’s majority interest in AmerLink
    using $8 million in funds from Senior in exchange for shares Spoor deposited into the
    new corporation. Id. at __, 781 S.E.2d at 629-30. Spoor alleged that by January 2008,
    “Junior became aware that based on his mismanagement, AmerLink was facing
    financial difficulty,” and he thereafter took steps to conceal this from Spoor and others
    by falsifying sales and delivery reports. Id. at __, 781 S.E.2d at 629. In June 2008,
    “Junior became aware that AmerLink was insolvent and was unable to purchase
    materials to fulfill its contracts,” but he nevertheless continued to falsify financial
    and delivery reports, “directed AmerLink staff to encourage customers to enter into
    sales agreements with AmerLink, to send deposits and additional funds to AmerLink,
    and to schedule deliveries,” and infused funds in excess of $2 million to prop up the
    company, with half of those funds coming from Senior. Id. In October 2008, after
    Spoor discovered Junior had been falsifying reports to conceal AmerLink’s rapidly
    deteriorating financial situation, Junior was removed from his position as CEO but
    remained president, promised Senior would loan the corporation up to $3 million, and
    directed staff to continue to tell customers that new investment funds were on the
    way. Id. at __, 781 S.E.2d at 630. However, Senior provided only $300,000 in funding,
    and on 15 December 2008, Spoor shut down AmerLink after learning its financial
    situation was even worse than Junior had represented in October. Id. at __, 781
    S.E.2d at 631.
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    NEWTON V. BARTH; DIORIO FOREST PRODS., INC. V. BARTH
    Opinion of the Court
    On 12 February 2009, AmerLink filed for Chapter 11 bankruptcy. Id. In the
    months that followed, Junior continued to represent that additional investments of
    up to $8 million would be forthcoming from Senior, and at one point forged a bank
    statement to reflect that such loans had been deposited. Id. However, in August 2009,
    Senior informed AmerLink’s bankruptcy attorney that he had no intention of
    providing any further financing for the company. Id. Thereafter, AmerLink’s Chapter
    11 bankruptcy proceeding was converted to a Chapter 7 bankruptcy proceeding, and,
    on 13 May 2010, Junior pleaded guilty to felony bankruptcy fraud. Id. at __, 781
    S.E.2d at 631-32. On 23 April 2011, AmerLink’s bankruptcy trustee filed an
    adversary proceeding against Junior, Senior, Spoor, and other AmerLink directors
    alleging claims for, inter alia, fraudulent conveyances, preferential transfers, breach
    of fiduciary duties, constructive trust, unjust enrichment, and civil conspiracy. Id. at
    __, 781 S.E.2d at 636. These charges were based on the trustee’s allegations that
    Junior, Spoor, and other AmerLink directors
    engaged in the creation of new companies and transfer of
    assets to companies in an effort to sell a substantial portion
    of [Spoor’s] ownership interest in AmerLink. The trustee
    also alleged that an employee stock option plan was
    adopted at the urging of [Spoor] and Junior effective 1
    October 2005 and that [Spoor], Junior, and AmerLink’s
    directors’ actions were solely for the purpose of creating a
    means for [Spoor] to extract as much cash as possible from
    the business and for Junior to be in a position to take
    control of the company. This adversary proceeding was
    settled on 6 September 2011. The trustee dismissed with
    prejudice all claims and causes of action against Senior,
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    NEWTON V. BARTH; DIORIO FOREST PRODS., INC. V. BARTH
    Opinion of the Court
    Junior, and [Spoor] and released them from claims by the
    trustee or bankruptcy estate.
    Id. Although the bankruptcy settlement included a waiver by Spoor releasing all
    claims against AmerLink’s bankruptcy estate, on 5 October 2011, Spoor filed a
    complaint alleging claims against Junior in his individual capacity for, inter alia,
    breach of contract, breach of contract as third party beneficiary, breach of fiduciary
    duty, fraud, punitive damages, UDTP, and civil conspiracy. Id. at __, 781 S.E.2d at
    632. On 14 February 2012, Spoor filed his first amended complaint adding Senior as
    a defendant. Id.
    That same day, the Newton Plaintiffs filed a complaint in Wake County
    Superior Court alleging their claims for fraud, UDTP, civil conspiracy, and punitive
    damages against Junior and Senior in their individual capacities. The Newton
    Plaintiffs voluntarily dismissed their complaint without prejudice on 23 May 2013,
    refiled their complaint on 22 May 2014, and filed an amended complaint on 9 June
    2014. The Diorio Plaintiffs filed a substantially similar complaint on 30 July 2014. In
    their complaints, the Newton and Diorio Plaintiffs alleged that by infusing funds into
    AmerLink, falsifying corporate financial statements, and directing AmerLink staff to
    assure customers, vendors, and suppliers that AmerLink would either comply with
    its contracts or receive funds that would allow it to comply with those contracts,
    Junior and Senior intentionally misrepresented and concealed AmerLink’s financial
    distress in order to deceive and induce the Newton and Diorio Plaintiffs into entering
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    NEWTON V. BARTH; DIORIO FOREST PRODS., INC. V. BARTH
    Opinion of the Court
    into contracts with and providing funds, materials, and services to AmerLink, thus
    leaving them unable to protect themselves from the company’s financial problems.
    The Newton and Diorio Plaintiffs also alleged that they could not have discovered the
    facts constituting Junior’s and Senior’s alleged fraud and UDTP through the exercise
    of reasonable diligence before 1 January 2012, given that much of the information
    supporting those facts was not produced until after Spoor filed his lawsuit against
    Junior and Senior.1
    On 11 July and 19 August 2014, our Supreme Court’s Chief Justice entered
    separate orders designating these cases as exceptional pursuant to Rule 2.1 of the
    General Rules of Practice for the Superior and District Courts. Junior and Senior
    subsequently filed motions to dismiss both complaints pursuant to Rules 12(b)(1) and
    12(b)(6) of our State’s Rules of Civil Procedure. Specifically, Junior and Senior
    contended that: (1) the Newton and Diorio Plaintiffs lacked standing to sue, thereby
    depriving the trial court of subject matter jurisdiction, because the claims they
    alleged in their complaints were wholly derivative of claims that properly belonged
    to the corporation and were already asserted, litigated, and settled by the adversary
    proceeding that had been brought by AmerLink’s bankruptcy trustee; and (2) the
    claims were barred by the applicable statutes of limitations, failed to comply with the
    1Although Spoor was included as a plaintiff in the initial complaints filed by both the Newton and
    Diorio Plaintiffs, the Newton and Diorio Plaintiffs voluntarily dismissed Spoor without prejudice from
    both actions on 15 October 2014.
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    NEWTON V. BARTH; DIORIO FOREST PRODS., INC. V. BARTH
    Opinion of the Court
    heightened pleading requirements for alleging fraud as required by N.C.R. Civ. P.
    9(b), and otherwise failed to state any basis upon which relief could be granted.
    After a hearing held in Wake County Superior Court on 2 March 2015, the
    Honorable Robert T. Sumner, Judge presiding, the trial court concluded that the
    Newton and Diorio Plaintiffs lacked standing and that their claims were barred by
    the applicable statutes of limitations, and consequently dismissed their claims with
    prejudice by written orders entered 8 and 18 June 2015. The Newton and Diorio
    Plaintiffs filed timely notice of appeal to this Court.
    Analysis
    A. Standing
    The Newton and Diorio Plaintiffs argue first that the trial court erred in
    dismissing their claims against Junior and Senior based on its conclusion that they
    lacked standing to sue. Specifically, the Newton and Diorio Plaintiffs contend that
    the adversary proceeding filed by the AmerLink bankruptcy trustee does not preclude
    their claims for fraud, UDTP, civil conspiracy, and punitive damages against Junior
    and Senior in their individual capacities because these claims were never asserted
    during the adversary proceeding and because these claims belong to the Newton and
    Diorio Plaintiffs, rather than the AmerLink bankruptcy estate. We agree.
    “In order for a court to have subject matter jurisdiction to hear a claim, the
    party bringing the claim must have standing.” Revolutionary Concepts, Inc. v.
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    NEWTON V. BARTH; DIORIO FOREST PRODS., INC. V. BARTH
    Opinion of the Court
    Clements Walker PLLC, 
    227 N.C. App. 102
    , 106, 
    744 S.E.2d 130
    , 133 (2013) (citation
    omitted). “[S]tanding to sue means simply that the party has a sufficient stake in an
    otherwise justiciable controversy to obtain judicial resolution of that controversy.”
    Mitchell, Brewer, Richardson, Adams, Burge & Boughman, PLLC v. Brewer, 
    209 N.C. App. 369
    , 379, 
    705 S.E.2d 757
    , 765 (citation and internal quotation marks omitted),
    disc. review denied, 
    365 N.C. 188
    , 
    707 S.E.2d 243
     (2011). “[T]his Court’s review of an
    order granting a Rule 12(b)(1) motion to dismiss is de novo.” Munger v. State, 
    202 N.C. App. 404
    , 410, 
    689 S.E.2d 230
    , 235 (2010), disc. review improvidently allowed,
    
    365 N.C. 3
    , 
    705 S.E.2d 734
     (2011).
    “When a corporation enters bankruptcy, any legal claims that could be
    maintained by the corporation against other parties become part of the bankruptcy
    estate, and claims that are part of the bankruptcy estate may only be brought by the
    trustee in the bankruptcy proceeding.” Keener Lumber Co. v. Perry, 
    149 N.C. App. 19
    ,
    25, 
    560 S.E.2d 817
    , 822 (citations omitted; emphasis in original), disc. review denied
    and appeal dismissed, 
    356 N.C. 164
    , 
    568 S.E.2d 196
     (2002). Federal law authorizes
    the bankruptcy trustee to: (1) bring suit on behalf of the bankruptcy estate; and (2)
    avoid or recover fraudulent conveyances of property from the bankrupt debtor for the
    benefit of all creditors of the bankruptcy estate. See 
    11 U.S.C. §§ 541
    (a), 544, 548
    (2012). However, as the United States Supreme Court recognized in Caplin v. Marine
    Midland Grace Tr. Co., 
    406 U.S. 416
    , 433-34, 
    32 L. Ed. 2d 195
    , 206-07 (1972), the
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    NEWTON V. BARTH; DIORIO FOREST PRODS., INC. V. BARTH
    Opinion of the Court
    trustee’s authority to bring suit on behalf of the bankruptcy estate does not extend to
    state law claims by the estate’s creditors against third parties.2 Thus, an action that
    is “personal” to a creditor is not property of the bankruptcy estate. See, e.g., In re
    Bostic Constr., Inc., 
    435 B.R. 46
    , 60 (M.D.N.C. 2010). The issue of whether a claim is
    personal to a creditor depends on state law. See id.; see also Keener, 149 N.C. App. at
    26, 
    560 S.E.2d at 822
    .
    The North Carolina Supreme Court has recognized that, as a general matter,
    a corporate officer “can be held personally liable for torts in which he actively
    participates,” even when such torts were “committed when acting officially” and
    “regardless of whether the corporation is liable.” Wilson v. McLeod Oil Co., Inc., 
    327 N.C. 491
    , 518, 
    398 S.E.2d 586
    , 600 (1990) (citations omitted), reh’g denied, 
    328 N.C. 336
    , 
    402 S.E.2d 844
     (1991). In the context of a bankruptcy proceeding,
    [s]hareholders, creditors, or guarantors of corporations
    generally may not bring individual actions to recover what
    they consider their share of the damages suffered by the
    corporation. Recovery is available, naturally, when the
    defendant owes an individual shareholder, creditor, or
    guarantor a special duty, or when the individual suffered
    an injury separate and distinct from that suffered by other
    shareholders, creditors, or guarantors.
    2 Although Caplin was decided prior to the enactment of the federal Bankruptcy Code, it remains good
    law, see, e.g., E.F. Hutton & Co., Inc. v. Hadley, 
    901 F.2d 979
    , 986 (11th Cir. 1990) (“Caplin has been
    held to remain the law under the revised bankruptcy statutes.”), and was recently cited by the United
    States Court of Appeals for the Second Circuit to support its holding that the bankruptcy trustee in
    proceedings arising from the liquidation of Bernie Madoff’s investment firm lacked standing to sue
    several third parties on behalf of individual customers defrauded by Madoff’s Ponzi scheme. See In re
    Bernard L. Madoff Inv. Secs. LLC, 
    721 F.3d 54
    , 67 (2d Cir. 2013).
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    NEWTON V. BARTH; DIORIO FOREST PRODS., INC. V. BARTH
    Opinion of the Court
    Barger v. McCoy Hillard & Parks, 
    346 N.C. 650
    , 660, 
    488 S.E.2d 215
    , 220-21 (1997)
    (citations and ellipsis omitted). Therefore, the creditors of a bankruptcy estate may
    prosecute individual actions against a third party if they “can show either (1) that the
    wrongdoer owed [them] a special duty, or (2) that the injury suffered by the [creditors]
    is personal to [them] and distinct from the injury sustained by the corporation itself.”
    Id. at 661, 
    488 S.E.2d at 221
    .
    In the present case, the Newton and Diorio Plaintiffs do not allege that Junior
    or Senior owed them any special duty, so our analysis on the standing issue focuses
    solely on whether the injuries they have alleged are personal and belong to them.
    During the hearing on their motion to dismiss and in their briefs and oral arguments
    to this Court, Junior and Senior argued that the Newton and Diorio Plaintiffs lacked
    standing to bring these claims because the harms they alleged were generalized
    injuries to AmerLink and had already been litigated by the bankruptcy estate trustee
    during the adversary proceeding. However, this Court rejected a strikingly similar
    argument in Spoor v. Barth, where we reversed the trial court’s grant of summary
    judgment in favor of Junior and Senior, based in part on our conclusion that the court
    erred in concluding that Spoor lacked standing to bring suit. See Spoor, __ N.C. App.
    at __, 781 S.E.2d at 636. As demonstrated in Spoor, the adversary proceeding brought
    by the AmerLink bankruptcy trustee focused on allegations that by setting up an
    employee stock option plan and creating and transferring assets into new companies
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    NEWTON V. BARTH; DIORIO FOREST PRODS., INC. V. BARTH
    Opinion of the Court
    in order to facilitate the sale of Spoor’s majority ownership interest in AmerLink,
    Junior, Senior, and Spoor improperly diverted corporate assets for their own benefit.
    See id. Because these claims for, inter alia, fraudulent conveyances and preferential
    transfers were rooted in conduct that depleted the AmerLink bankruptcy estate at
    the expense of all its creditors, they properly belonged to the trustee. However, there
    was no indication that the AmerLink bankruptcy trustee ever settled, brought, or
    even discovered, any claims based on the fraudulent acts that Spoor alleged in his
    complaint as the basis for his breach of contract, fraud, and UDTP claims against
    Junior and Senior. See id. Indeed, because Spoor’s claims were based on Junior’s and
    Senior’s conduct in their individual capacities to mislead Spoor by concealing
    AmerLink’s dire financial condition and induce Spoor, in his individual capacity, to
    invest his majority interest in AmerLink into a newly created company in exchange
    for $8 million Junior and Senior promised but never paid, we concluded that the
    injuries Spoor alleged were separate and distinct from any generalized harm suffered
    by AmerLink or its shareholders. See id. We therefore held that the claims belonged
    to Spoor alone, and we consequently rejected Junior’s and Senior’s argument that
    AmerLink’s bankruptcy trustee had any, let alone exclusive, standing to bring those
    claims. See id.
    Here, the Newton and Diorio Plaintiffs’ claims against Junior and Senior in
    their individual capacities arise from essentially the same set of facts as alleged in
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    NEWTON V. BARTH; DIORIO FOREST PRODS., INC. V. BARTH
    Opinion of the Court
    Spoor—namely, the cash infusions and falsified financial statements Junior and
    Senior engaged in throughout 2008 to conceal AmerLink’s financial distress, as well
    as Junior’s repeated assurances to Spoor and AmerLink’s staff, customers, vendors,
    and suppliers that the company would receive additional funds and continue to
    perform its contractual obligations. As in Spoor, despite characterizations by Junior
    and Senior to the contrary, there is no indication in the record before us that the
    AmerLink bankruptcy trustee brought or settled any action related to, or ever
    discovered, the facts underlying these allegations.
    Junior and Senior nevertheless contend that, unlike in Spoor, the injuries the
    Newton and Diorio Plaintiffs allege are injuries to AmerLink itself, shared by all its
    creditors, and therefore properly belonged to the bankruptcy trustee. In support of
    their argument, Junior and Senior rely on cases holding that bankruptcy estate
    creditors were barred from suing third parties for injuries arising from pre-
    bankruptcy conveyances of corporate assets because such fraudulent conveyances
    and preferential transfers resulted in injuries to the corporations themselves, and
    thus, were injuries shared in common by every creditor to the bankruptcy estate, for
    which federal law expressly vests the trustee with exclusive standing to bring suit.
    See, e.g., Nat’l Am. Ins. Co. v. Ruppert Landscaping Co., 
    187 F.3d 439
    , 441 (4th Cir.
    1999) (holding that sureties of bankrupt corporation lacked standing to sue third
    party to whom corporate property was conveyed prior to bankruptcy filing because
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    NEWTON V. BARTH; DIORIO FOREST PRODS., INC. V. BARTH
    Opinion of the Court
    their claim had the same underlying focus as the bankruptcy trustee’s claim for
    avoiding the conveyance), cert. denied, 
    528 U.S. 1156
    , 
    145 L. Ed. 2d 1073
     (2000); In
    re Bridge Info. Sys., Inc., 
    344 B.R. 587
    , 594 (E.D. Mo. 2006) (finding no standing for
    bankruptcy estate creditors to bring claims for fraud against corporate shareholders,
    who prior to bankruptcy caused the corporation to acquire a target company and then
    transferred the corporation’s interest in that company to themselves, because their
    suit was no different from the bankruptcy trustee’s claim for fraudulent conveyance).
    We are not persuaded. To be sure, the allegations in the Newton and Diorio
    Plaintiffs’ complaints do relate to conduct that undoubtedly harmed AmerLink itself.
    However, the gravamen of the Newton and Diorio Plaintiffs’ fraud and UDTP claims
    is not merely that they were injured by AmerLink’s collapse and the resulting breach
    of its contractual obligations to them, but instead that they never would have suffered
    any injury if they had not been fraudulently induced into entering into contracts with
    AmerLink as a result of misrepresentations made by AmerLink staff acting at
    Junior’s direction throughout 2008, when Junior was already aware of the company’s
    financial distress. In their complaints, the Newton and Diorio Plaintiffs detail how
    each member of their respective classes of AmerLink’s customers, vendors, and
    suppliers relied on the alleged misrepresentations when entering into their
    individual contracts with AmerLink on various dates and for varying amounts,
    thereby resulting in injuries to themselves in their individual capacities. Junior and
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    NEWTON V. BARTH; DIORIO FOREST PRODS., INC. V. BARTH
    Opinion of the Court
    Senior argue that these alleged injuries are not separate and distinct because nearly
    every creditor of AmerLink had a contract that AmerLink breached, and they
    complain that if the Newton and Diorio Plaintiffs have standing to pursue their
    claims, then so could every other creditor exposed to AmerLink’s financial distress,
    which they insinuate would undermine the central purpose of bankruptcy to provide
    an orderly process for disposing of claims against the estate. But this argument
    ignores the fact that the United States Supreme Court expressly contemplated
    exactly this sort of creditor class action suit when it reasoned in Caplan that there
    was no need to empower a bankruptcy trustee to bring actions on behalf of creditors
    against third parties because “Rule 23 of the Federal Rules of Civil Procedure, which
    provides for class actions, avoids some of the[] difficulties” that would ensue from
    allowing individual creditors to sue separately. Caplin, 
    406 U.S. at 433
    , 
    32 L. Ed. 2d at 206
    . Moreover, Junior and Senior cite no authority to support their implicit
    premise that the AmerLink bankruptcy proceeding ought to somehow immunize
    them from liability for prior acts of fraud undertaken in their individual capacities.
    Because we conclude that the injuries arising from the alleged fraudulent
    misrepresentations that induced each class member’s individual contract are
    separate and distinct from any injury to AmerLink or any other creditor of the
    bankruptcy estate, we hold that these claims belong to the Newton and Diorio
    Plaintiffs, rather than the AmerLink trustee. Consequently, we hold that the Newton
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    NEWTON V. BARTH; DIORIO FOREST PRODS., INC. V. BARTH
    Opinion of the Court
    and Diorio Plaintiffs have standing to sue, and that the trial court erred in granting
    Junior’s and Senior’s motion to dismiss for lack of subject matter jurisdiction.
    B. Statute of limitations
    The Newton and Diorio Plaintiffs argue next that the trial court erred in
    granting Junior’s and Senior’s Rule 12(b)(6) motion to dismiss their claims because
    they failed to bring suit within the applicable statute of limitations. We agree.
    This Court reviews de novo an order dismissing an action pursuant to N.C.R.
    Civ. P. 12(b)(6). See State Emps. Ass’n of N.C., Inc. v. N.C. Dep’t of State Treasurer,
    
    364 N.C. 205
    , 210, 
    695 S.E.2d 91
    , 95 (2010). In doing so, we must “determine whether,
    as a matter of law, the allegations of the complaint, treated as true, are sufficient to
    state a claim upon which relief may be granted under some legal theory. In ruling
    upon such a motion, the complaint is to be liberally construed.” 
    Id.
     (citation, internal
    quotation marks, and ellipsis omitted). “Dismissal is warranted if an examination of
    the complaint reveals that no law supports the claim, or that sufficient facts to make
    a good claim are absent, or that facts are disclosed which necessarily defeat the
    claim.” 
    Id.
     (citation omitted).
    “In general a cause or right of action accrues, so as to start the running of the
    statute of limitations, as soon as the right to institute and maintain a suit arises.”
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    NEWTON V. BARTH; DIORIO FOREST PRODS., INC. V. BARTH
    Opinion of the Court
    Pierson v. Buyher, 
    330 N.C. 182
    , 186, 
    409 S.E.2d 903
    , 905 (1991) (citation and ellipsis
    omitted). An action alleging claims for fraud and related conspiracy must be brought
    within three years, and “the cause of action shall not be deemed to have accrued until
    the discovery by the aggrieved party of the facts constituting the fraud . . . .” 
    N.C. Gen. Stat. § 1-52
    (9) (2015). “For purposes of [section] 1-52(9), discovery means either
    actual discovery or when the fraud should have been discovered in the exercise of
    reasonable diligence under the circumstances.” Forbis v. Neal, 
    361 N.C. 519
    , 524, 
    649 S.E.2d 382
    , 386 (2007) (internal quotation marks omitted). “[W]here a person is
    aware of facts and circumstances which, in the exercise of due care, would enable him
    or her to learn of or discover the fraud, the fraud is discovered for purposes of the
    statute of limitations.” Jennings v. Lindsey, 
    69 N.C. App. 710
    , 715, 
    318 S.E.2d 318
    ,
    321 (1984). “Ordinarily, a jury must decide when fraud should have been discovered
    in the exercise of reasonable diligence under the circumstances. This is particularly
    true when the evidence is inconclusive or conflicting.” Forbis, 361 N.C. at 524, 
    649 S.E.2d at 386
    . The statute of limitations for a UDTP claim is four years. 
    N.C. Gen. Stat. § 75-16.2
     (2015). “Under North Carolina law, an action [for UDTP] accrues at
    the time of the invasion of [the] plaintiff’s right. For actions based on fraud, this
    occurs at the time the fraud is discovered or should have been discovered with the
    exercise of reasonable diligence.” Nash v. Motorola Commc’ns & Elecs., Inc., 
    96 N.C. App. 329
    , 331, 
    385 S.E.2d 537
    , 538 (1989) (citations and internal quotation marks
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    NEWTON V. BARTH; DIORIO FOREST PRODS., INC. V. BARTH
    Opinion of the Court
    omitted; emphasis in original), affirmed per curiam, 
    328 N.C. 267
    , 
    400 S.E.2d 36
    (1991).
    In the trial court, Junior and Senior argued that the Newton and Diorio
    Plaintiffs’ actions were barred by the statute of limitations since they should have
    discovered the conduct underlying their fraud and UDTP claims in December 2008
    when AmerLink closed its doors, because it was clear at that point that AmerLink
    would breach its contractual obligations to them. We rejected a similar argument in
    Spoor. There, we reversed the trial court’s grant of summary judgment in favor of
    Senior based on a lapse of the statute of limitations, reasoning based on our Supreme
    Court’s holding in Forbis that because the evidentiary forecast presented a genuine
    issue of material fact as to when Spoor discovered or should have discovered the
    alleged fraudulent conduct, the issue was one for the jury’s determination. __ N.C.
    App. at __, 781 S.E.2d at 635.
    Here, we reach a similar result. The Newton and Diorio Plaintiffs are suing for
    fraud and UDTP based on a conspiratorial course of conduct by Junior and Senior
    that they allege began in 2007, continued until at least August 2009, and could not
    have been discovered until 1 January 2012. While the injuries the Newton and Diorio
    Plaintiffs suffered may have been apparent once they learned that AmerLink could
    not perform its contractual obligations in December 2008, our General Statues make
    clear that the statute of limitations is triggered not upon discovery of an injury, but
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    NEWTON V. BARTH; DIORIO FOREST PRODS., INC. V. BARTH
    Opinion of the Court
    upon “the discovery by the aggrieved party of the facts constituting the fraud . . . .”
    
    N.C. Gen. Stat. § 1-52
    (9). We find it difficult to discern how AmerLink’s mere act of
    closing its doors somehow laid plain the existence of a fraudulent scheme that the
    Newton and Diorio Plaintiffs allege had not even been completed yet, especially in
    light of the fact that neither the AmerLink bankruptcy trustee, who brought the
    adverse proceeding, nor the United States Attorney, who prosecuted Junior for
    bankruptcy fraud, discovered the actions underlying these claims, either. In their
    complaints, the Newton and Diorio Plaintiffs allege that as corporate outsiders, they
    could not have discovered any of the facts underlying their claims before Spoor, a
    corporate insider, exposed them by filing his initial complaint against Junior in
    October 2011 and his first amended complaint adding Senior as a defendant in
    February 2012. Taking these allegations as true—as we must, given the procedural
    posture of this case, see State Emps. Ass’n of N.C., Inc., 364 N.C. at 210, 
    695 S.E.2d at
    95—we conclude that because they filed their respective complaints well within
    three years of Spoor’s initial complaint, the Newton and Diorio Plaintiffs commenced
    their actions within the three-year statute of limitations for fraud claims and the
    four-year statute of limitations for UDTP claims. Consequently, we hold that the trial
    court erred in granting Junior’s and Senior’s motion to dismiss based on a lapse of
    the applicable statutes of limitations.
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    NEWTON V. BARTH; DIORIO FOREST PRODS., INC. V. BARTH
    Opinion of the Court
    Junior and Senior present a series of related arguments as independent bases
    to upold the trial court’s dismissal pursuant to N.C.R. Civ. P. 12(b)(6), but they are
    unavailing. Specifically, Senior contends that dismissal of the fraud claims was
    proper as to him because the Newton and Diorio Plaintiffs’ complaints failed to allege
    their claims for fraud with sufficient particularity as required by N.C.R. Civ. P. 9(b).
    “The elements of fraud are: (1) False representation or concealment of a material fact,
    (2) reasonably calculated to deceive, (3) made with intent to deceive, (4) which does
    in fact deceive, (5) resulting in damage to the injured party.” S.N.R. Mgmt. Corp. v.
    Danube Partners 141, LLC, 
    189 N.C. App. 601
    , 609, 
    659 S.E.2d 442
    , 449 (2008)
    (citation omitted); see also Terry v. Terry, 
    302 N.C. 77
    , 85, 
    273 S.E.2d 674
    , 678 (1981)
    (“[I]n pleading actual fraud the particularity requirement [imposed by N.C.R. Civ. P
    9(b)] is met by alleging time, place and content of the fraudulent representation,
    identity of the person making the representation and what was obtained as a result
    of the fraudulent acts or representations.”). Senior argues that the Newton and Diorio
    Plaintiffs failed to state a claim for fraud against him because their complaints
    contain no specific allegations that Senior himself ever personally made any
    representations to, intended to deceive, deceived, or caused any injury to any member
    of the plaintiff classes in either action. Senior contends that the UDTP claims against
    him fail to state a UDTP claim “for the same reasons.”
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    NEWTON V. BARTH; DIORIO FOREST PRODS., INC. V. BARTH
    Opinion of the Court
    These two arguments both depend on the validity of Senior’s argument that
    the Newton and Diorio Plaintiffs also failed to properly plead their claims for civil
    conspiracy. Our case law makes clear that “to state a claim for civil conspiracy, a
    complaint must allege a conspiracy, wrongful acts done by certain of the alleged
    conspirators, and injury.” Norman v. Nash Johnson & Sons’ Farms, Inc., 
    140 N.C. App. 390
    , 416, 
    537 S.E.2d 248
    , 265 (2000) (citations and internal quotation marks
    omitted), disc. review denied, 
    353 N.C. 378
    , 
    547 S.E.2d 14
    , appeal withdrawn, 
    354 N.C. 219
    , 
    553 S.E.2d 684
     (2001). Moreover, it is well established that “[i]f two or more
    persons conspire or agree to engage in an unlawful enterprise, each is liable for acts
    committed by any of them in furtherance of the common design and the manner or
    means used in executing the common design; the fact that one conspirator is the
    instigator and dominant actor is immaterial on the question of the guilt of the other.”
    Curry v. Staley, 
    6 N.C. App. 165
    , 169, 
    169 S.E.2d 522
    , 525 (1969) (citations omitted).
    Senior’s argument on this point appears to be based on selective quotations from the
    subsections in both complaints that formally allege causes of action for civil
    conspiracy by stating:
    The acts and agreements of [Senior] and [Junior] constitute
    a civil conspiracy, which existed for wrongful acts to be
    committed, and which were actually committed, by said
    [Senior] and [Junior] for the purpose of said civil
    conspiracy.
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    NEWTON V. BARTH; DIORIO FOREST PRODS., INC. V. BARTH
    Opinion of the Court
    Senior contends these allegations are conclusory and legally insufficient because they
    fail to allege any specific details of any conspiratorial agreement he made with Junior.
    This argument fails, however, because it ignores the fact that the relevant
    paragraphs in both complaints expressly incorporate all prior allegations made,
    including, inter alia, that Junior and Senior “acted in concert and each acted as the
    agent of the other in a plan or scheme” to acquire Spoor’s majority stake in AmerLink.
    The complaints also provide dozens of paragraphs of allegations extensively detailing
    the specific actions both Junior and Senior took over a period of several years to
    further this scheme by concealing AmerLink’s financial distress, as well as Junior’s
    directions to AmerLink staff throughout 2008, when he knew the company was nearly
    insolvent, to continue entering into contracts with the Newton and Diorio Plaintiffs
    and to assure them that AmerLink had or would soon receive funds that would allow
    it to honor its contractual obligations to them. The allegations in both complaints
    further outline the specific dates when the Newton and Diorio Plaintiffs entered their
    contracts and the specific amounts of damages suffered by each member of the class
    when Junior’s and Senior’s scheme finally unraveled. Because the complaints are
    “replete with allegations of a conspiracy by and between the defendants, acts done by
    some or all of the defendants in furtherance of that alleged conspiracy, and injury” to
    the Newton and Diorio Plaintiffs, we reject Senior’s argument that their complaints
    failed to state a claim for civil conspiracy. Norman, 140 N.C. App. at 416, 537 S.E.2d
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    NEWTON V. BARTH; DIORIO FOREST PRODS., INC. V. BARTH
    Opinion of the Court
    at 265. Further, given the extensive details provided in the complaints regarding the
    nature and circumstances surrounding Junior’s misrepresentations and the injuries
    the Newton and Diorio Plaintiffs suffered as a result, we also reject Senior’s argument
    that the complaints failed to state a claim for fraud with sufficient particularity, as
    well as Senior’s argument that the Newton and Diorio Plaintiffs failed to state a claim
    for UDTP. See, e.g., Bhatti v. Buckland, 
    328 N.C. 240
    , 243, 
    400 S.E.2d 440
    , 442 (1991)
    (“The case law applying Chapter 75 holds that a plaintiff who proves fraud thereby
    establishes that unfair or deceptive acts have occurred. Proof of fraud would
    necessarily constitute a violation of the prohibition against unfair and deceptive
    acts.”) (citation, internal quotation marks, and ellipsis omitted).
    Finally, we reject Junior’s and Senior’s argument that the claims for civil
    conspiracy and punitive damages must be dismissed. Junior and Senior are correct
    that these cannot survive as separate causes of action. See, e.g., Dove v. Harvey, 
    168 N.C. App. 687
    , 690, 
    608 S.E.2d 798
    , 800 (2005) (“[T]here is not a separate civil action
    for civil conspiracy in North Carolina.”) (citation omitted), disc. review denied, 
    360 N.C. 289
    , 
    628 S.E.2d 249
     (2006); Watson v. Dixon, 
    352 N.C. 343
    , 348, 
    532 S.E.2d 175
    ,
    178 (2000) (“As a rule, you cannot have a cause of action for punitive damages by
    itself. If the complainant fails to plead or prove his cause of action, then he is not
    allowed an award of punitive damages because he must establish his cause of action
    as a prerequisite for a punitive damage award.”). However, their argument on this
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    NEWTON V. BARTH; DIORIO FOREST PRODS., INC. V. BARTH
    Opinion of the Court
    point fails because it presumes the trial court was correct in determining that the
    Newton and Diorio Plaintiffs’ complaints for fraud and UDTP should be dismissed.
    Accordingly, we hold that the trial court erred in dismissing the Newton and
    Diorio Plaintiffs’ complaints, and that its Orders and Judgments must be, and hereby
    are,
    REVERSED.
    Judges McCULLOUGH and ZACHARY concur.
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