Powell Manufacturing Co. v. Harrington Manufacturing Co.

ARNOLD, Judge. Appellant contends that its Mecklenburg County complaint is not a compulsory counterclaim because it does not arise out of the same transaction or occurrence as that alleged in appel-lee’s Bertie County claim. We disagree. G.S. 1A-1, Rule 18(a), provides in pertinent part that: “A pleading shall state as a counterclaim any claim which at the time of serving the pleading the pleader has against any opposing party, if it arises out of the transaction or occurrence that is the subject matter of the opposing party’s claim and does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction. But the pleader need not state the claim .if (1) At the time the action was commenced the claim was the subject of another pending action, or (2) The opposing party brought suit upon his claim by attachment or other process by which the court did not acquire jurisdiction to render a personal judg [100] ment on that claim, and the pleader is not stating any counterclaim under this rule.” Here, a critical reading of the pleadings indicates that all of the allegations relate to and arise out of the same competitive advertising practices regarding technically sophisticated mechanical tobacco harvesters. Both parties have packaged sales programs designed to reach the same markets, and whether unlawful acts were committed in the course of these endeavors is a subject matter which ought to be litigated and resolved in the context of one lawsuit. See: Hy-way Heat Systems, Inc. v. Jadair, Inc., 311 F. Supp. 454 (E.D. Wis. 1970); United Fruit Co. v. Standard Fruit and Steamship Co., 282 F. Supp. 338 (Mass. 1968). As the Federal District Court, analyzing the similarly drawn Federal rule, stated at page 456 in the apparently analogous case of Hy-way Heat Systems, “ . . . [b]oth claims deal with misrepresentation of the defendants’ products, although from divergent standpoints . . . [and] [b]oth parties are competing for the same customers . . . [while allegedly] using basically the same unfair methods.” Appellant’s action in Mecklenburg County involves purported false advertising concerning mechanical tobacco harvesters. The relationship of its claim to appellee’s action in Bertie County, also involving purported false advertising of mechanical tobacco harvesters, is so logical that it must be asserted as a counterclaim in the Bertie action. A compulsory counterclaim is not limited to facts alleged in the original complaint, but includes logically related acts and conduct involving the parties. United Fruit Co., supra, at 339. We have considered appellant’s remaining contentions and find them to be without merit. Appellant’s action must be asserted as a compulsory counterclaim in defendant’s action filed in Bertie County [74CVS459]. Therefore, defendant’s motion to dismiss on grounds that the action constituted a compulsory counterclaim should have been allowed. The matter is remanded to Superior Court of Mecklenburg County for entry of an order of dismissal in accordance with this opinion. Remanded. Chief Judge Brock and Judge Britt concur.