Joshua Arnold et al. v. Tradewind Flight Services, Inc., et al.
Craven County, No. 22CVS001525-240
Court of Appeals of North Carolina
No. COA25-1011
The Court of Appeals of North Carolina has affirmed the decision of the Carteret County Superior Court to deny a defendant’s motion to dismiss. The opinion was issued September 2, 2026.
Background
This is an appeal from a Rule 12(b)(6) motion to dismiss.
Plaintiffs are all former students in the Craven Community College’s (“CCC”) Aviation Management and Career Pilot Training Program (“Program”). In January 2019, CCC promoted the Program as a Part 141 program under federal regulation, in partnership with Defendant Tradewind Flight Services, Inc. (“Tradewind”). This program would allow graduates to complete the requirements necessary to earn a Restricted Airline Transport Pilot certificate (“R-ATP”).
In its course catalog for the 2019-2020 academic year, CCC put a “notice to students” stating the catalog was not a contract or an offer to enter into a contract. The catalog stated the Program would prepare individuals for a variety of aviation-related careers.
On July 3, 2019, CCC and Tradewind entered into an agreement (“Training Agreement”) in which Tradewind agreed to provide flight training services in accordance with Part 141. During this time, the Federal Aviation Administration (“FAA”) notified CCC that its application for Part 141 approval would be returned for corrections. Students started the Program during fall 2019 and fall 2020, but by January 2021, the FAA still had not given CCC its approval for the Program. As a result, CCC notified its students they were not eligible for an R-ATP certificate and offered remedial options to the students including tuition refunds, a scholarship equal to tuition paid, or paid training at Tradewind to obtain further flight hours and instrument training.
Plaintiffs filed suit against CCC, Tradewind, and others (“Defendants”) for unfair and deceptive trade practices, unjust enrichment, breach of contract (third-party beneficiary), breach of implied contract, constructive fraud, gross negligence, and negligent misrepresentation. In December 2024, Defendants moved to dismiss the complaint and the motion was granted in part and denied in part.
The trial court held Plaintiffs were allowed to proceed for claims of breach of implied contract and breach of contract as third-party beneficiaries. CCC appealed, arguing that its motion to dismiss should have been allowed in its entirety based on governmental immunity. CCC raises two issues on appeal.
Contract Terms
First, CCC claims the former Program students did not state a claim against CCC for breach of contract because CCC did not offer contract terms to them. CCC enjoys governmental immunity, which it can agree to waive.
Supreme Court has held that when the State of North Carolina, through authorized officers and agencies, enters into a valid contract, the State implicitly consents to be sued for damages in the event it breaches the contract.
A contract may be express or implied. To determine whether an implied-in-fact contract exists, courts look to whether the parties’ conduct would be understood to create legal obligations in the ordinary course of dealing. CCC offered students courses which would result in R-ATP eligibility. Students accepted this offer by paying tuition and beginning the coursework. Because there are sufficient factual allegations, the trial court did not err in denying the motion for summary judgment pertaining to the breach of implied contract claim.
Third-Party Beneficiary
Second, Defendant argues the former students did not state a claim for breach of contract (third-party beneficiary) based on CCC’s contract with Tradewind.
North Carolina recognizes the right of a third-party beneficiary to sue for breach of a contract executed for his benefit. To assert rights under a contract as third-party beneficiaries, one must show:
- (1) that a contract exists between two persons or entities;
- (2) that the contract is valid and enforceable; and
- (3) that the contract was executed for the direct, and not incidental, benefit of the third-party.
There are ample factual allegations to support the argument that the prospective students were third-party beneficiaries of the contract referred to as the “Training Agreement” for properly enrolled students. The trial court did not err in denying the motion for summary judgment pertaining to the breach of contract (third-party beneficiary) claim against CCC.
Conclusion
We affirm the trial court’s order denying CCC’s motion to dismiss Plaintiffs’ claims for breach of implied contract and breach of contract (third-party beneficiary).
Bryson attorneys: Scott Harris and Michael Dunn