K2 Asia Ventures v. Krispy Kreme Doughnut Corp. ( 2020 )

IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA19-314
Filed: 1 September 2020
Forsyth County, No. 09 CVS 2766
K2 ASIA VENTURES, Plaintiff,
v.
KRISPY KREME DOUGHNUT CORPORATION, AND KRISPY KREME
DOUGHNUTS, INC., Defendants.
Appeal by plaintiff from order entered 13 November 2018 by Judge Anderson
D. Cromer in Forsyth County Superior Court. Heard in the Court of Appeals 7
January 2020.
Broocks Law Firm, PLLC, by Ben C. Broocks, pro hac vice, and Blanco,
Tackabery & Matamoros, P.A., by Chad A. Archer, and Peter J. Juran, for
plaintiff-appellants.
Kilpatrick Townsend & Stockton LLP, by Adam H. Charnes, Jason M. Wenker,
and Chris W. Haaf, for defendant-appellees.
BRYANT, Judge.
Where K2 Asia Ventures failed to establish that it was a real party in interest,
we affirm the trial court’s 13 November 2018 order dismissing the action pursuant to
Rules 17(a) and 41(b).
On 7 April 2009, in Forsyth County Superior Court, K2 Asia Ventures (“K2
Asia”), Ben C. Broocks, and James G.J. Crow filed a complaint (amended 7 February
2011) against Robert Trota; Veronica Trota; Joselito Saludo; Carolyn T. Salud;
K2 ASIA VENTURES V. KRISPY KREME DOUGHNUT CORP.
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Roland V. Garcia; Cristina T. Garcia; Jim Fuentebella; Mavis Fuentebella; Sharon
Fuentebella; Max’s Baclaran Inc.; Chickens R. Us, Inc.; Max’s Makati Inc.; Max’s
Ermita, Inc.; Max’s of Manila, Inc.; The Real American Doughnut Company Inc.; Trofi
Ventures, Inc.; Ruby Investment Company Holdings, Inc.; Krispy Kreme Doughnut
Corporation; and Krispy Kreme Doughnut, Inc. Broocks and Crow were the
principals of K2 Asia. K2 Asia’s company, whose principal place of business was in
Austin, Texas, was founded to facilitate and promote the opening of Krispy Kreme
Doughnuts franchises in Asia. Other than Krispy Kreme Doughnut Corporation and
Krispy Kreme Doughnuts, Inc., (“Krispy Kreme”), a company whose principal place
of business was in Winston-Salem, North Carolina, the other putative defendants
were companies, company owners, or investment companies with business interests
in the Philippines.
Per the amended complaint, K2 Asia was founded with the objective of bringing
Krispy Kreme’s franchises to countries in Asia. Believing that Krispy Kreme would
require a partnership with a fast-food business operator in each of the target
countries, plaintiff contacted representatives of a restaurant group––Max’s Group––
in regard to potential operations in the Philippines. Max’s Group was receptive to
the prospect of partnering with Krispy Kreme. K2 Asia enticed representatives of
Krispy Kreme to travel to the Philippines and meet with representatives of Max’s
Group. K2 Asia provided analysis concerning projected product pricing, product
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volumes, ingredient costs, sources for potential alternative ingredients, and potential
franchise locations. K2 Asia asserted that during negotiations, it was agreed that
should a Krispy Kreme franchise be granted to Max’s Group, K2 Asia would receive a
management fee of one percent (1%) of the gross revenue and a ten percent (10%)
equity interest in the operations (with 5% received after the third year and 5%
received after the fifth year). Moreover, K2 Asia would be granted the right to acquire
additional equity in exchange for contributing twenty-five percent (25%) of the
budgeted capital requirements. In cooperation with Max’s Group, K2 Asia would be
allowed to raise capital from outside investors. Eventually, Krispy Kreme granted
K2 Asia exclusive rights to negotiate agreements for franchise rights in the
Philippines (the “K2 Asia/Krispy Kreme Exclusivity Agreement”). Plans were
developed to create a business entity known as “The Real American Doughnut
Company, Inc.” between Krispy Kreme, Max’s Group, and K2 Asia. Max’s Group
provided a “Memorandum of Understanding” (“MOU”) which documented the
agreement between K2 Asia and Max’s Group with regard to K2 Asia’s interest in the
yet to be formed “The Real American Doughnut Company, Inc.” The MOU recited
the agreed-upon management fee (1%) but differed as to the previously agreed upon
equity interest, which had been ten percent (10%). The MOU stated that K2 Asia’s
equity interest would be five percent (5%). It was also communicated that K2 Asia
need not immediately raise capital funds (which were to be in exchange for additional
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equity). Thereafter, Max’s Group communicated that K2 Asia would not be granted
a management fee and would not receive any equity interest. K2 Asia alleged that
the decision to forego paying K2 Asia the management fee and allowing K2 Asia an
equity interest was based on the recommendation of Krispy Kreme.
Krispy Kreme and Max’s Group ultimately executed a development agreement
and a franchise agreement for Krispy Kreme franchises in the Philippines. The
franchise agreement listed the ownership interests in Krispy Kreme Philippines
franchises. K2 Asia did not receive an ownership interest. The Real American
Doughnut Company, Inc., was formed, but K2 Asia was not included as an interested
party. K2 Asia alleged that Krispy Kreme required that Max’s Group periodically pay
Krispy Kreme development fees, franchise fees, royalties, and other fees for each
store; submit weekly sales reports for each store; submit annual development plans,
sales forecasts, line item margin reviews, and marketing plans; and purchase certain
mixes, products, equipment, and fixtures from Krispy Kreme. Representatives of
Max’s Group traveled to North Carolina for training with Krispy Kreme in July 2006
and for a franchise convention in 2007. K2 Asia contended that Max’s Group provided
large monetary payments to Krispy Kreme and frequently communicated with
representatives of Krispy Kreme regarding its ongoing business operations.
Per the complaint, K2 Asia, Broock, and Crow sought to recover monetary
damages from Krispy Kreme based on theories of breach of contract; intentional
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interference with a contractual relationship and/or prospective economic advantage;
promissory estoppel; violation of principles of partnership, joint venture, and
fiduciary duty; fraud, constructive fraud, and fraudulent inducement; unfair and
deceptive trade practices; aiding and abetting breach of fiduciary duty; civil
conspiracy; quantum meruit/unjust enrichment; and punitive damages.
Though the motions were not included in the record, court orders in the record
state that Krispy Kreme moved to dismiss K2 Asia’s complaint. The trial court
granted the motions in part. The court dismissed all claims asserted by individuals
Broocks and Crow, as well as K2 Asia’s claims for fraud and unfair and deceptive
trade practices against Krispy Kreme.
Krispy Kreme filed its answer to K2 Asia’s complaint on 11 April 2011.
Following a joint motion by Krispy Kreme and K2 Asia, on 23 September 2011,
then Chief Justice Sarah Parker designated this matter as exceptional and assigned
it to the Honorable Anderson Cromer, Superior Court Judge.
On 7 May 2015, Krispy Kreme filed a motion for summary judgment. In its
brief filed in support of its motion for summary judgment, Krispy Kreme references
an order of the trial court entered on 26 July 2013. Per Krispy Kreme (and
acknowledged by K2 Asia) the trial court dismissed all non-resident defendants. Per
Krispy Kreme, by the 26 July 2013 order, the court “reduced the case to a few
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remaining claims against Krispy Kreme by a purported company called ‘K2 Asia
Ventures.’ ”
In its motion for summary judgment, Krispy Kreme contended that K2 Asia
lacked standing to bring a claim.
2. [K2 Asia] is not an entity that signed the purported
contracts at issue, and the entities that signed those
contracts are not parties to the suit.
3. Further, there is no evidence that [K2 Asia] exist[ed].
Indeed, there is no evidence that the entities that signed
the purported contracts exist[ed].
More specifically, Krispy Kreme argued that the MOU—which documented the
agreement between K2 Asia and Max’s Group with regard to K2 Asia’s interest in the
then yet to be formed The Real American Doughnut Company, Inc.—was executed by
“K2 Asia Ventures, Ltd., a limited partnership, by K2 Asia Management, LLC, general
partner, by . . . Broocks, Member and Manager.” Krispy Kreme points out that in the
26 July 2013 order, the trial court found “neither K2 Asia Ventures, Ltd. nor K2 Asia
Management LLC [wa]s a named plaintiff in this civil action.” As to K2 Asia’s claim
against Krispy Kreme for breach of contract, Krispy Kreme argued that “the contract
. . . which is referred to in the Amended Complaint as the ‘Exclusivity Agreement’—
also was executed by ‘K2 Asia Ventures, Ltd.’ ” Moreover, Krispy Kreme contended
that the only evidence of the existence of K2 Asia related to an entity named K2 Asia
Ventures G.P., a Cayman Island company, which was not a party to the civil suit.
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Krispy Kreme argued that it was entitled to summary judgment on all claims because
K2 Asia had failed to produce any evidence that it existed or had standing to bring
the asserted claims.
On 28 May 2015, in response to Krispy Kreme’s motion for summary judgment,
K2 Asia argued that it was a real party in interest.
o K2 Asia Ventures is K2 Asia Ventures G.P. [a Cayman
Island company] and any failure to include the suffix
“G.P.” in the caption was a misnomer;
o K2 Asia Ventures G.P. ratified the pre-incorporation
[MOU], making it the proper party to sue on the claims
that arise from such contract;
o K2 Asia Ventures G.P. is K2 Asia Ventures, Ltd.
o Krispy Kreme is judicially estopped from contending K2
Asia is not the real party in interest because it has
admitted that K2 Asia exists and is the proper party to
this litigation.
In all events, under North Carolina Rules of Civil
Procedure and applicable case law, no action shall be
dismissed on the ground that it is not prosecuted in the
name of the real party in interest.
K2 Asia further contended that the Certificate of Incorporation for K2 Asia
Ventures G.P., as well as a Memorandum & Articles of Association of K 2 Asia
Ventures G.P., had been provided to Krispy Kreme. K2 Asia acknowledged that at
the time the MOU was executed, K2 Asia Ventures Ltd. did not exist. Broock,
president of K2 Asia Ventures, “believed that he would, in the near future, create a
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company called K2 Asia Ventures Ltd.” Based on this belief, Broock drafted the K2
Asia/Krispy Kreme Exclusivity Agreement using K2 Asia Ventures Ltd. as the name
of the party to the agreement. However, when the Cayman Island entity was created,
it was incorporated as K2 Asia Ventures G.P., rather than K2 Asia Ventures Ltd. K2
Asia further acknowledged that “no such entity with the name of K2 Asia Ventures
Ltd. was ever registered in the Cayman Islands.” Yet, K2 Asia argued that Krispy
Kreme should be judicially estopped from arguing that K2 Asia did not have standing.
Alternatively, K2 Asia argued that should the trial court rule K2 Asia was not a real
party in interest, “a trial court should either correct [K2 Asia]’s error itself or refuse
to hear the motion for summary judgment until the real party in interest is
substituted for the plaintiff.”
Over three years later, on 13 November 2018, the trial court entered its order
on Krispy Kreme’s motion for summary judgment. The court stated that it would not
“substitute a party on its own motion or upon the invitation extended by [K2 Asia] in
its brief before the trial court.” The court noted that the case had been pending since
2009 and that K2 Asia had not filed a motion to substitute the Cayman Island
company named K2 Asia Ventures G.P. as the real party in interest since 2009 or in
the three years since Krispy Kreme raised a clear objection in 2015. The court found
this delay not reasonable.
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Considering Krispy Kreme’s motion for summary judgment made pursuant to
Rule 56 as a motion to dismiss pursuant to Rule 41(b),
[t]he [c]ourt interprets Krispy Kreme’s motion for
summary judgment, described as a Rule 56 motion, as a
motion for dismissal of the action brought by [K2 Asia] for
failure to prosecute or to comply with the rules of civil
procedure, namely failure to comply with Rule 17(a) and
prosecute its claims in the name of the real party in
interest. As such, the [c]ourt treats [Krispy Kreme’s]
motion as one made under Rule 41(b). The [c]ourt finds
and concludes that, based on the papers submitted and the
protracted history of this case, K2 Asia Ventures (nothing
else appearing), is not the real party in interest. However,
the case will be dismissed without prejudice. It is the
[c]ourt’s view that this result captures the spirit and letter
of Rules 17(a) and 41(b) of the North Carolina Rules of Civil
Procedure.
K2 Asia appeals.
__________________________________________________
On appeal, K2 Asia argues that the trial court erred by denying K2 Asia’s right
to amend its complaint and failing to address the issue of misnomer.
Motion to Amend complaint
K2 Asia argues that the trial court erred by denying its motion to amend the
complaint to reflect the real party in interest. K2 Asia contends that once Krispy
Kreme moved for summary judgment on the basis that K2 Asia was not the real party
in interest, K2 Asia moved the court to amend the complaint to reflect the real party
in interest, but three years later, the trial court denied K2 Asia’s motion. We disagree.
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“[O]ur standard of review for motions to amend pleadings
requires a showing that the trial court abused its
discretion.” Delta Envtl. Consultants of N.C., Inc. v. Wysong
& Miles Co., 132 N.C. App. 160, 165, 510 S.E.2d 690, 694
(1999). . . . Proper reasons for denying a motion to amend
include undue delay, unfair prejudice, bad faith, futility of
amendment, and repeated failure of the moving party to
cure defects by other amendments. Delta, 132 N.C. App. at
166, 510 S.E.2d at 694.
Revolutionary Concepts, Inc. v. Clements Walker PLLC, 227 N.C. App. 102, 110, 744
S.E.2d 130, 136 (2013); see also Key Risk Ins. Co. v. Peck, 252 N.C. App. 127, 133–34,
797 S.E.2d 354, 358 (2017) (“Where a case is not brought by the real party in interest,
it is within the discretion of the trial court to allow a motion to substitute under Rule
17(a)” (citation omitted)).
In Revolutionary Concepts, Inc., 227 N.C. App. 102, 744 S.E.2d 130, this Court
considered whether the trial court erred in failing to permit the plaintiff (a post-
merger surviving corporation) to substitute itself as the real party in interest
pursuant to Rule 17 for the previous merging corporation—which had been a real
party in interest. Prior to the merger, the merging corporation filed a complaint and
voluntarily dismissed its claims pursuant to Rule 41(a). After the voluntary dismissal
but prior to the merger, the would-be surviving corporation timely re-filed the claims
the merging corporation had voluntarily dismissed. But at that time, the would-be
surviving corporation lacked standing to do so. For more than three years following
the merger, the merger surviving corporation failed to take any action to assert its
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standing to bring the claims it had filed pre-merger on the basis that it was the
survivor of the merging corporation—the real party in interest. “[W]ithout some
action by [the surviving corporation] post-merger to assert those claims as the
surviving entity of the merger, its claims brought in [pre-merger] do not
automatically incorporate any claims [the merging corporation] could have brought
but failed to do so simply by virtue of the merger.” Id. at 110, 744 S.E.2d at 136.
Thus, the trial court denied the merger surviving corporation’s motion to substitute
itself as the real party in interest pursuant to Rule 17. Id. at 112, 744 S.E.2d at 137.
On appeal, this Court held that it
[could] discern no abuse of discretion in denying the Rule
17 motion because [the] plaintiffs could have substituted
[the] post-merger [company] at any point after the August
2008 merger. However, they did not attempt to do so for
over three years, until the hearing in January 2012.
Although our Courts generally permit liberal amendment
of pleadings, here, we believe that the trial court’s decision
to not allow [the] post-merger [plaintiff] to be substituted
as the real party in interest at the summary judgment
hearing does not constitute an abuse of discretion. [The
p]laintiffs have failed to offer any compelling reason why
they failed to do so in a reasonable time after the merger. .
. . Therefore, we conclude that the trial court did not abuse
its discretion in denying [the plaintiffs’] motion to
substitute itself as the real party in interest pursuant to
Rule 17.
Id.; see also Street v. Smart Corp., 157 N.C. App. 303, 309, 578 S.E.2d 695, 700 (2003)
(affirming a trial court’s dismissal of an action where the record reflected no attempt
or request by the plaintiff to substitute the real party in interest where the plaintiff
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“was aware of the real party in interest defense for approximately seven months
before the hearing based on defendant’s answer and for approximately three weeks
based on the motion to dismiss”); Narron v. Union Camp Corp., 81 N.C. App. 263,
269, 344 S.E.2d 64, 68 (1986) (upholding the trial court’s dismissal of the action where
the plaintiffs failed to prosecute their claims and the record reflected “a long history
of foot-dragging by [the] plaintiffs”).
Here, the record reflects that on 7 May 2015, Krispy Kreme filed its motion for
summary judgment and a brief in support of said motion. Krispy Kreme contended
that K2 Asia lacked standing to bring the lawsuit because it was not a real party in
interest in any of the claims asserted in the amended complaint. Moreover, K2 Asia
was not the entity which signed the K2 Asia/Krispy Kreme Exclusivity Agreement or
the MOU. In its brief, Krispy Kreme referenced the trial court’s 26 July 2013 order
in which the trial court made findings of fact that the MOU—which K2 Asia had
described as the agreement between K2 Asia and Max’s Group—was executed by “K2
Asia Ventures, Ltd., a limited partnership, by K2 Asia Management, LLC, general
partner, by . . . Broocks, Member and Manager” and that “neither K2 Asia Ventures,
Ltd. nor K2 Asia Management LLC [wa]s a named plaintiff in this civil action.” As
to K2 Asia’s claim(s) against Krispy Kreme based on the K2 Asia/Krispy Kreme
Exclusivity Agreement—which K2 Asia described as the agreement in which Krispy
Kreme granted K2 Asia exclusive rights to negotiate agreements for franchise rights
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in the Philippines—Krispy Kreme argued that “the contract . . . which [wa]s referred
to . . . as the ‘Exclusivity Agreement’—also was executed by ‘K2 Asia Ventures, Ltd.’ ”
Moreover, Krispy Kreme contended that the only evidence of the existence of K2 Asia
related to an entity named K2 Asia Ventures G.P., a Cayman Island company, which
was not a party to the civil suit. Krispy Kreme argued that it was entitled to
summary judgment on all claims because K2 Asia had failed to produce any evidence
that K2 Asia Ventures existed.
On 28 May 2015, K2 Asia filed its brief in opposition to Krispy Kreme’s motion
for summary judgment. In pertinent part, K2 Asia argued that if the trial court
determined that K2 Asia was not a real party in interest, Krispy Kreme was still not
entitled to summary judgment. K2 Asia quoted General Statutes, section 1A-1, Rule
17(a), as follows: “[n]o action shall be dismissed on the ground that it is not
prosecuted in the name of the real party in interest until a reasonable time
has been allowed after objection for ratification of commencement of the action
by, or joinder or substitution of, the real party in interest; and such ratification,
joinder, or substitution shall have the same effect as if the action had been
commenced in the name of the real party in interest.” After stating that “the
court should order a continuance” to allow the real party in interest a reasonable time
to be brought in and plead, K2 Asia asserted that
[o]n a motion for summary judgment for lack of the real
party in interest, a trial court should either correct [K2
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Asia]’s error itself or refuse to hear the motion for summary
judgment until the real party in interest is substituted for
the plaintiff.
....
Therefore, even if the [c]ourt believes that K2 Asia
Ventures is not the real party in interest in this action,
pursuant to Rule 17, it must permit [the real party in
interest] to be substituted in.
....
. . . [I]n the event that the [c]ourt finds that K2 Asia
Ventures is not the real party in interest, [K2 Asia]
respectfully reserves its right to substitute K2 Asia
Ventures G.P. as the real party in interest.
Over three years later, on 13 November 2018, the trial court entered its order
in response to Krispy Kreme’s motion for summary judgment. The court noted that
Krispy Kreme’s motion for summary judgment, filed 7 May 2015, raised the issue of
what entity was the real party in interest; however, “[i]nterestingly, neither the
named [K2 Asia] nor Defendant[ Krispy Kreme] have calendared the matter for
hearing.” The court summarized K2 Asia’s arguments in opposition to Krispy Kreme’s
motion as follows:
o K2 Asia Ventures is K2 Asia Ventures G.P. [a Cayman
Island company incorporated on 30 July 2004] and any
failure to include the suffix “G.P.” in the caption was a
misnomer;
o K2 Asia Ventures G.P. ratified the pre-incorporation
[MOU], making it the proper party to sue on the claims
that arise from such contract;
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o K2 Asia Ventures G.P. is K2 Asia Ventures, Ltd.
o Krispy Kreme is judicially estopped from contending K2
Asia is not the real party in interest because it has
admitted that K2 Asia exists and is the property party
to this litigation[.]
The court stated that upon its review of the arguments presented, “the primary basis
for [K2 Asia]’s argument that K2 Asia Ventures is K2 Asia Ventures G.P. and that K2
Asia Ventures G.P. is K2 Asia Ventures Ltd.; is ‘it’s because we say it is.’ ”
The court cited Rule 17 of our Rules of Civil Procedure.
No action shall be dismissed on the ground that it is not
prosecuted in the name of the real party in interest until a
reasonable time has been allowed after objection for
ratification of commencement of the action by, or joinder or
substitution of, the real party in interest; and such
ratification, joinder, or substitution shall have the same
effect as if the action had been commenced in the name of
the real party in interest.”
N.C. Gen. Stat. § 1A-1, Rule 17(a) (2019).
In its order, the court stated that
[it declines] to substitute a party on its own motion or upon
the invitation extended by [K2 Asia] in its brief. This case
has been pending since 2009. [K2 Asia] has not filed a
motion to substitute the Cayman Island company named
K2 Asia Ventures G.P. as the real party in interest.
However, [K2 Asia] did . . . “reserve its right to substitute
K2 Asia Ventures G.P. as the real party in interest” in the
event the [c]ourt found that K2 Asia Ventures is not the
real party in interest.
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It is not reasonable, in the [c]ourt’s view or opinion, for [K2
Asia] to wait more than nine years after [K2 Asia]’s case
was filed, and more than three years after a clear objection
was voiced by [Krispy Kreme] that the case was not being
prosecuted in the name of the real party in interest, to
exercise its right to substitute the name of the real party
in interest.
The court then stated that it interpreted Krispy Kreme’s motion for summary
judgment as a motion to dismiss the action for K2 Asia’s failure to prosecute or to
comply with the Rules of Civil Procedure, namely Rule 17(a), and the failure to
prosecute its claims in the name of the real party in interest. “The [c]ourt finds and
concludes that, based on the paper submitted and the protracted history of this case,
K2 Asia Ventures (nothing else appearing), is not the real party in interest.” The
court elected to treat Krispy Kreme’s motion for summary judgment as a Rule 41(b)
motion for involuntary dismissal.
We hold that the trial court did not abuse its discretion by declining to ex mero
motu substitute the real party in interest for K2 Asia or by denying K2 Asia’s
reservation of the right to substitute K2 Asia Ventures G.P. as the real party in
interest, where K2 Asia failed to do so pursuant to Rule 17 over a three year period.
Accordingly, on this argument, K2 Asia is overruled.
Misnomer of a party
K2 Asia argues that the trial court erred by failing to address the issue of
misnomer of a party. We disagree.
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K2 Asia contends that there was never a question that it was incorporated in
the Cayman Islands and asserts the following: “while in the [Exclusivity Agreement]
[Broock] used ‘K2 Asia Ventures Ltd.’ instead of ‘K2 Asia Ventures, G.P.,’ ” there is
no indication Krispy Kreme was misled about the entity with which it was
contracting. “[Though] the trial court concluded that the only way it could tell that
K2 Asia Ventures, Ltd. is the same as K2 Asia Ventures G.P., was because [Broock]
said so. That is of course true, as no one can know my thoughts as to the use of the
‘K2 Asia Ventures, Ltd.’ as [Broock] did except [Broock].”
In essence, K2 Asia argues that K2 Asia Ventures, Ltd.—named in the
Exclusivity Agreement with Krispy Kreme and the MOU with Max’s Group—is not a
registered corporation1 but is the same entity as K2 Asia Ventures G.P., which is a
company registered in the Cayman Islands. K2 Asia Ventures G.P. is the same entity
as K2 Asia—the named plaintiff in the current civil suit—and all three entities
represent the real party in interest.
In support of its argument that corporate misnomers are insufficient to
warrant dismissal of an action, K2 Asia cites Troy & N. Carolina Gold Mining Co. v.
Snow Lumber Co., 170 N.C. 273, 277, 87 S.E. 40, 42 (1915) (reasoning that in the
context of the transference of property by deed, “[a] misnomer does not vitiate [the
deed], provided the identity of the corporation with that intended to be named by the
1 In its brief to this Court, plaintiff asserts that Krispy Kreme reserved the name K2 Asia
Ventures Ltd. in the Cayman Islands before filing its motion for summary judgment.
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parties is apparent”); and Tomika Invs., Inc. v. Macedonia True Vine Pent. Holiness
Ch. of God, 136 N.C. App. 493, 524 S.E.2d 591 (2000) (discussing Troy & N. Carolina
Gold Mining Co., 170 N.C. 273, 87 S.E. 40). In reviewing “the disparity in the
corporate name, our Supreme Court stated that ‘[a]s to the plaintiff being described
by the wrong name in the deed, this is at most but a misnomer or latent ambiguity,
which can be explained by parol evidence so as to fit the description to the person or
corporation intended. . . . A corporate name is essential, but the inadvertent or
mistaken use of the name is ordinarily not material if the parties really intended the
corporation by its proper name.’ ” Tomika Invs., 136 N.C. App. at 496, 524 S.E.2d at
594 (alterations in original) (citation omitted); see also id. at 497, 524 S.E.2d at 594
(“[T]here is only a latent ambiguity in the deed, and no evidence that [the] defendant
was prejudiced by the misstatement of Tomika’s corporate name. [The d]efendant
knew it was dealing with a corporation named ‘Tomika Investment’ or ‘Tomika
Investments,’ of which [the] defendant Latimer was President. Concurrently with the
execution of the deed, Tomika executed a lease with option to buy to the defendant,
and impressed its corporate seal bearing its correct corporate name on the lease. We
hold that the error in designating the grantee in the deed from [the] defendant
Macedonia was not sufficient to void the deed as a matter of law, and hold that the
trial court correctly granted summary judgment on this issue.”).
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K2 Asia’s argument regarding misnomer of party names is well taken. There
is no dispute that Krispy Kreme contracted with Broock’s business entity or for that
matter, that Max’s Group contracted with Broock’s business entity. However,
Broock’s business entity with which Krispy Kreme and Max’s Group contracted is not
the business entity Broock registered. Moreover, the business entity Broock
registered is not the entity in the current civil suit named in the complaint as
plaintiff, K2 Asia. Nothing else appearing, for this Court to hold K2 Asia to be a real
party in interest, we would necessarily endorse the existence of a business entity for
which there is no evidence of existence other than “because we say it is.” We do not
so hold. Therefore, K2 Asia’s argument,on this point, is overruled and the trial court’s
13 November 2018 order is
AFFIRMED.
Judges ZACHARY and COLLINS concur.
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