IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NORTH CAROLINA WESTERN DIVISION CIVIL ACTION

NO. 5:13-CV-OO638-D

ADVANCED INTERNET TECHNOLOGIES, INC., Plaintiff, v. MARK MCGARRITY aka/dba MISSION 106 MARKETING Defendant _____________________________________________________________________________________ In this diversity litigation asserting a claim for breach of an executed internet services contract [EXHIBIT A, attached to DOC. 13, the Agreement] between the service provider and a customer, the service provider Advanced Internet Technologies Inc. (AIT or Plaintiff) OPPOSES the Motion to Dismiss [DOC. 12] pursuant to Fed. R. Civ. P. 12(b)(6) for failure to state a claim and the supporting Memorandum [DOC. 13] filed by Mark McGaritty (McGarrity or Defendant). Overview Defendant McGaritty seeks dismissal on the ground that he executed the Agreement as agent for non-party Mission106 Marketing, LLC, a Delaware limited liability company (the Company). Defendant contends the Company, not he, is the proper defendant because agents are not personally liable for Company debt. Plaintiff respectfully requests the Court to DENY the Motion [DOC. 12] because the Complaint alleges no conduct on the part of the Company; the Company does not feature in the Agreement; Defendant shows no connection between himself and the Company or between the Agreement and the Company; such that Defendant is personally liable for the Agreement he executed. Standard For purposes of dismissal for failure to state a claim, the allegation of the Complaint that Defendant entered into the Agreement without disclosing any entity which may maintain or defend an PLAINTIFFS RESPONSE OPPOSING DEFENDANTS MOTION TO DISMISS [DOC. 12] Local Civil Rule 7.1(e)

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action in its own name and right for which he was acting should be accepted as true and is sufficient to state a claim against the Defendant personally. COMP. 8; See Fed. R.Civ. P. 12(b)(6); Sidhu v. Cancer Ctrs. of N.C., P.C., Case No. 5:12-CV-603- FL, May 15, 2013, E.D.N.C. (unpublished) ([a]ssuming that defendants are correct plaintiff has nevertheless stated a valid claim) attached as EXHIBIT 1. Defendant devotes an entire Memorandum [DOC. 13] turning the correct standard on its head by seeking dismissal based on Defendants speculations that clearly alleged facts are other than as alleged. Discussion of Defendants Relevant Facts I. Defendants Memorandum [DOC. 13, p. 1] states as follows: As is clear from the face of the Agreement itself, McGaritty is not a party to the Agreement and signed the Agreement solely in his capacity of Chief Operating Officer of Mission106 Marketing, LLC (Mission106), which is a limited liability company formed under Delaware law. Either as fact or conclusion, this is incorrect. The one thing that is clear from the face of the Agreement is that the name Mission106 Marketing, LLC (the Company), is not there. The Agreement mentions only an unincorporated business with a Tennessee mailing address called Mission106 Marketing (sic) (the Business). Defendant contends that Plaintiff had inquiry notice that Defendant was somebody elses agent from the fact that when he executed the Agreement he provided the name of the Business; the internet domain name www.mission106.com; and the job title of C[hief] O[perating] O[fficer]which Defendant equates with disclosure of the Company. Defendant contends that these three facts should have prompted Plaintiff to conduct a fundamental investigation which would have led to the public records of the State of Delaware [DOC. 13, pp. 1-3; DEF. EX. B (THIS IS NOT A STATEMENT OF GOOD STANDING); DEF. EX. C (a document executed by a representative of legalzoom.com)] and had Plaintiff done so it would have learned that Defendant was the agent of the Company.

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Defendants facts are questionable and their inter-connections tenuous. Company perhaps exists or existed in Delaware, but in Tennessee, where Defendant and the Business are located, there is no such limited liability company. If Business and Company were one and the same, it is beyond explanation why Defendant executed the Agreement without using proper corporate designation for a limited liability company. See COMP. 2 (Upon information and belief [various business entities with similar-sounding names] are not registered as domestic or foreign entities or companies or corporations in the State of Tennessee. Defendant is properly named in this action); 6 Del. C. 18-102 (1) (LLC name [s]hall contain the LLC" or an equivalent designation); Tenn. Code Ann. 48 -249-903 (a foreign LLC doing business in Tennessee must include LLC or an equivalent designation in its name). The internet domain name, www.mission106.com, is lapsed and inactive. 1 Job titles such as COO signify nothing. See Lippert Tile Co. v. Int'l Union of Bricklayers & Allied Craftsmen, Dist. Council of Wis. & Its Local 5, 724 F.3d 939, 947 (7th Cir. Wis. 2013) (job title gives no indication of function). Collectively or individually, such snippets do not tie Defendant or his Business or the Agreement to the Company. 2 II. In a footnote on the very first page of his Memorandum, Defendant states [t]he instant motion could have been avoided through a substitution of the [Company] as the defendant in the case [but after reviewing the draft provided by Defendant, the undersigned] refused to consent to such substitution leaving McGaritty no choice but to move for dismissal [DOC. 13, p. 1 fn. 1]. Contrary to this assertion, Defendants dilemma is of his own making.

The domain could not be located on the internet on or about 10/30/2013 via Google Chrome. As of the same date, the URL http://www.ip-adress.com/whois/mission106.com data, indicated a Washingtonbased registrant apparently unrelated to the Company or the Business. 2 Most recently on or about 10/29/2013, Defendants own Linkedin.com profile identified only the unincorporated Business, exactly as in the Agreement he executed. See Vitality Anti-Aging Ctr. & Med Spa, LLC v. La Bella Donna Advanced Laser Med-Spas of N. Am., LLC, Case No. 5:08 CV 108, W.D.N.C., Feb. 11, 2009 (unpublished) (court took judicial notice of legalzoom.com) attached as EXHIBIT 2; but see Shkolnikov v. JPMorgan Chase Bank, Case No. 12-03996, N.D. Cal. Dec. 14, 2012, (unpublished) (court declined to take judicial notice of Linkedin profile) attached as EXHIBIT 3.

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Plaintiffs counsel (Counsel) called Defendants counsel, Renee Miller, Esq. (Ms. Miller) , on 9/10/2013, after reviewing the draft in question. Counsel sought assurance that the Company would participate in the litigation because Defendants draft, which did not provide for notice to the Company, could not result in an enforceable order. Further, Counsel could not consent to draft language stating McGarrity executed the Agreement on behalf of [the Company], but McGarrity was never a party to the Agreement. Finally, Counsel urged Ms. Miller to consider proceeding by way of joinder or intervention as the better course under the Federal Rules of Civil Procedure. Why this left Defendant no choice but to move for dismissal is unclear [DOC. 13, p. 1 fn. 1]. Defendant could have revised the draft. Defendant could have filed the motion if he still thought it would have efficiently resolved this dispute without waste of the Courts [time] [DOC. 13, p. 1 fn. 1]. Defendant could have answered and third-party complained. Or the phantom Company could just have saved everyone the trouble by intervening to stand beside its agent. Legal Analysis The general principle under which the agent of a corporation is relieved of liability for its debts is applicable only when the agent has given express notice of his or her agency by indicating the proper and complete corporate name including the designation LLC, Inc., or the like, or in more general terms, the principal is disclosed. See DeWitt v. Hutchins, 309 F. Supp. 2d 743, 752 (M.D.N.C. 2004) (When a corporate officer acts as an agent for the corporation and enters into a contract with a third party, providing notice that he is acting as the agent for the corporation, the corporate officer is not personally liable for corporation obligations arising from the contract). The agent who fails to give notice, or in other words disclose the principal, is personally liable. See United States v. Keitel, 211 U.S. 370, 388-389 (1908) (recognized general rule imposing personal liability on agents of undisclosed principals); Chase Manhattan Bank, N.A. v. Drysdale Sec. Corp., 587 F. Supp. 57, 58 (S.D.N.Y. 1984) (an agent for undisclosed principals: may be fully liable). Thus, the legal issue on which turns the correct outcome of the dismissal motion [DOC. 12] is whether such information as Defendant provided was sufficient to

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constitute the required notice or disclosure that he was acting as anyones agent . Courts in all three potentially relevant states have held that it was not. North Carolina courts have repeatedly found that an agent who fails to use the proper corporate name when signing a document, or who fails to disclose the principal, is personally liable and such an agent falls outside the general rule relieving agents of personal liability. See Tucker Materials, Inc. v. Safesound Acoustics, Inc., 725 S.E.2d 673 (N.C. Ct. App. 2012) (corporate officer was not personally liable because he signed in the name of Safesound Acoustics, Inc.); Bone International, Inc. v. Brooks, 304 N.C. 371, 376-377 (1981) (explaining that agent who does not expressly disclose principal is personally liable and disclosure of corporation requires use of the corporate name); Keels v. Turner, 45 N.C. App. 213, 216 (1980) (when corporate entity does not exist or does not use a corporate name ending in limited, company, corporation, incorporated or other words or abbreviations of similar import, the court will pierce the corporate veil and impose personal liability on the officer); Howell v. Smith, 261 N.C. 256 (1964) (in-depth discussion of the liability of agents of undisclosed principals under North Carolina law). Here, Defendant executed the Agreement without disclosing the Company. All he disclosed was an unincorporated Business in Tennessee. That is not notice of agency. Tennessee, where the Business appears to be located, follows the same principles as North Carolina. See Cone Oil Co. v. Green, 669 S.W.2d 662, 665 (Tenn. Ct. App. 1983) (agent personally liable when [i]t does not appear from the instrument or from competent evidence that the parties both understood that [defendant] was signing in a representative capacity only by using appropriate words in the body of the document or by the signature clearly indicating agency); Anderson v. Davis, 34 Tenn. App. 116, 120 (1950) (corporate officer liable when there was lacking [a] correct form of signature which is uniformly regarded as imposing no personal liability upon the officer signing is that of a signature containing the corporate name, followed by the word 'per' or 'by', which, in turn, is followed by the name of a corporation officer"). When there is no disclosed corporate principal, the agent is just as liable as any principal that afterwards comes to light. Siler v. Perkins, 126 Tenn. 380, 387 (1912) ([t]he seller may have his action for the price, at his election, against the agent or against the principal [not

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disclosed to the seller]; and this, though the seller at the time su pposed the agent to make the purchase for himself, as principal). Here, not even Defendant contends that the unincorporated Business in Tennessee, which is all he disclosed in the Agreement, would relieve him of personal liability. Defendants citation to the Delaware statute 6 Del. C. 18-303 (agents of limited liability company relieved of personal liability) [DOC. 13, p. 6] crumbles under the weight of Delaware case law thoroughly repudiating Defendants arguments that snippets of information--Tennessee-based unincorporated Business, an internet domain, an e-mail address, a job title, and Delaware public records-cumulatively placed Plaintiff on notice that Defendant was a Company agent. In Seaford Steel Prods. v. Taubler, Del. Super. Ct. Civil Action No. 86A-JN-3, Oct. 6, 1987 (unpublished) attached as EXHIBIT 4, where the issue decided was whether the defendants were personally liable for the debt , the state superior court stated: [a]n agent who transacts business on behalf of another is individually liable thereon if at the time of entering into the transaction he fails to disclose his agency as well as the identity of his principal. Seaford Steel Prods. Here the Agreement does not disclose the supposed principal, the Company in Delaware. All that is disclosed is an unincorporated Business in Tennessee. The Seaford Steel Prods. court noted that the plaintiff knew the business name of the defendant but did not know the business was incorporatedexactly as in the present litigation. Of the proposition that the public records would disclose the corporation, the court observed: [t]he fil ing is not sufficient notice to a party as to the identity of an undisclosed principal even though the defendant in the case, unlike the Defendant in the present litigation, was incorporated or registered in both the relevant states. Seaford Steel Prods. As for Defendants proposition that agency is inferable from an assortment of clues, the court stated: [i]t is the duty of the agent to disclose both the fact of the agency as well as the identity of his principal to the party with which he deals since this party has no duty to discover or make inquiries to discover these facts. Seaford Steel Prods. Delaware law does not abide Defendants belated efforts to hide behind the corporate veil of the Company whose advent did not happen until litigation was underway. Conclusion.

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Defendant seeks dismissal on the ground that he executed the Agreement as the agent of the Company [DOC. 12; DOC. 13]. This is not true. Defendant did not execute the Agreement in the Company name. Nor is it even relevant. He did not give notice that he was acting for the Company. The Complaint properly alleged personal liability against Defendant. Mr. McGaritty is a properly named defendant. The Company is not a proper defendant at present (but may be so in future if Plaintiff learns further information). The law in all three states potentially relevant to the present litigation would come to the same conclusion. The present litigation is not subject to dismissal. Respectfully Submitted, this the 30th day of October, 2013.

By:

/s/Bikash Roy A. Bikash Roy, NCSB # 28382 broy@ait.com Attorney for Plaintiff POB 1844 Fayetteville, NC 28302 Phone: (910) 222-4495

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CERTIFICATE OF SERVICE

I hereby certify that on October 30th, 2013, I electronically filed or caused to be filed the foregoing papers with the United States District Court for the Eastern District of North Carolina though the CM/ECF system which system will electronically notice the following parties or counsel: Paul Peralta, Esq., paulperalta@mvalaw.com Renee Miller, Esq., millerr@mvalaw.com Kara Bitar, Esq., karabitar@mvalaw.com Moore & Van Allen PLLC 100 North Tryon St. Suite 4700 Charlotte, NC 28202. By: /s/Bikash Roy A. Bikash Roy, NCSB # 28382 broy@ait.com Attorney for Plaintiff POB 1844 Fayetteville, NC 28302 Phone: (910) 222-4495

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