In a lawsuit filed Friday, a prominent Wilmington-based luxury homebuilder alleges he’s been the victim of a defamation campaign aimed at destroying his reputation and businesses.

Attorneys for Mark Batson, owner of Tongue & Groove, filed the complaint in New Hanover County Superior Court, naming five other local businessmen and two companies as defendants.

According to a news release from the office of Batson’s attorneys, the defendants are “competing builders and associated individuals,” and the filing states they “undertook a coordinated effort to undermine” Batson and his companies. 

“Batson asserts that defendants, unable to compete on the business merits, engaged in a multi-pronged attack including a slander campaign, dissemination of false statements, and use of AI-generated imagery accusing Batson of having extramarital sex with clients at the clients’ homes,” Batson’s attorneys said in the release Friday.

The filing alleges that defendants spread lies “through multiple channels,” including texting, social media, word-of-mouth and AI-generated imagery.

Kenneth Edward Jeffries, Christopher Parker, Anthony James Kidd, Jason Ruegg, Ryan Marchi, Parker Construction Group, 360 Builders LLC and John Does 1-100 are listed as the defendants. The John Does, the complaint states, are people who repeated a “false and injurious rumor to third parties within the community and contributed to the damages suffered by Mark and the Batson family businesses.”

Patrick Mincey, Stephen Bell and Chad Rhoades, of Mincey Bell, an affiliate of Cranfill Sumner law firm, are representing Batson. Also named as plaintiffs in the complaint, in addition to Batson and Tongue & Groove LLC, are Tongue & Groove Property Services LLC, Tongue & Groove Realty LLC and Craft Studio PLLC.

After the lawsuit was filed, three of the defendants on Friday denied the accusations.

"I am deeply disappointed that Mr. Batson has chosen to accuse me and others of spreading false accusations about him. His lawsuit also includes false and salacious personal and professional accusations about my family and me," Jeffries said in an emailed statement Friday evening. "Sadly, this is consistent with a pattern of behavior that I have experienced for years, and it sounds as if others have, too. Of course, the allegations are categorically false.” 

In an email to the Business Journal on Friday afternoon, Marchi said, "I am compelled to address the fabricated allegations and legal maneuvers recently initiated by Mark Batson. This action is a clear continuation of a pattern of misrepresentation falsehoods that defines Mr. Batson’s history with many people. The claims against me are fabricated and misrepresented.”

In a statement from his attorney that Ruegg texted to the Business Journal on Friday, his attorney said, “Mr. Ruegg denies all allegations against him. He had no role in creating or disseminating any defamatory statements or AI-generated images about Mr. Batson.”

Later Friday, Reugg's attorney also stated, "Mr. Reugg is not in the homebuilding, construction or architectural business and is not a competitor of Mr. Batson. He has no reason or motive to engage in the conduct alleged in the lawsuit."

The other defendants did not return requests for comment as of 2:30 p.m. Friday. 

A lawsuit represents only one side of a dispute. To prove defamation in North Carolina, Batson’s attorneys will have to show the defendants shared – verbally or in writing – false statements they passed off as fact, and not opinion, to others.

Defendant connections

According to the complaint, Jeffries is a former client of Batson’s who owns Ken Jeffries & Associates, a Morrisville-based marketing firm. The filing describes the details of a deteriorating professional relationship between them. 

It alleges that Jeffries teamed up with Kidd, one of Tongue & Groove’s employees, to form Jeffries + Kidd Design Build, a company intended as “a direct competitor” of Tongue & Groove.

The complaint accuses Kidd of violating an employment agreement with Tongue & Groove that contains a noncompete clause. It also states that Kidd and Jeffries poached six of Tongue & Groove’s employees and alleges that they stole trade secrets from Batson’s company.

In the case of Parker, the owner of Parker Construction Group, the defendant “has a history of attempting to harm” Tongue & Groove, according to the complaint. Both Parker and Batson have a connection to The Black Pearl, the name of a steel, wood and concrete home off Wrightsville Beach’s Causeway Drive. Parker was the original builder, then sold it for $10 million in 2023.

According to the complaint, Tongue & Groove’s role in “gutting and remodeling” the home after the 2023 sale “amplified Parker’s hostility toward TG.”

The complaint alleges that Marchi, managing director of QC Capital Group, “accosted” Batson in public on two occasions, the first being a Kentucky Derby party on May 2 in Wrightsville Beach. The complaint states that Marchi stated loudly in front of private club members, guests and staff that Batson has oral sex with men and other “false statements.”

Marchi denies this allegation and said in an email Friday that an allegedly intoxicated Batson “initiated an unprovoked” altercation at the May 2 party.

“It is unfortunate that Mr. Batson has chosen to leverage the legal system to distort reality. We will not be intimidated by falsehoods,” Marchi said. “Because the definitive truth is preserved on video, we look forward to presenting this evidence in court, securing a swift dismissal of these frivolous claims, and pursuing all available legal remedies for defamation unless I am removed from this suit.”

Ruegg is the founder of Off the Hook Yachts, a publicly traded company on the NYSE American that recently changed its name to NextBoat Inc. (NYSE AMERICAN: NXB). 

Another of the plaintiffs, 360 Builders, is a North Carolina limited liability company doing business as Jeffries + Kidd Design Build.

According to the court filing by Batson’s attorneys, Ruegg, along with Jeffries, Parker and Kidd, “began and continued to spread false rumors that Mark was caught on a TG  jobsite performing oral sex on male clients.”

The complaint states that these rumors “are entirely false” and that “Mark Batson never had sex with his clients.”

Ruegg’s attorney said Ruegg “had no involvement in the matters alleged. He intends to defend himself vigorously.” Adding to the statement Friday, he said, "Mr. Reugg believes he has been mistakenly implicated based on inaccurate information."
 

An alleged AI component

Included in the complaint are exhibits showing what the filing calls AI-generated images, including a cover of WilmingtonBiz Magazine, a publication of the Greater Wilmington Business Journal. The cover, which originally featured Batson wearing a dark blazer, shirt and pants and was taken for a story about oceanfront homes, was changed to show Batson in what the complaint calls “an AI-generated flamboyant ‘Elton John inspired’ rainbow outfit.”

Another image included in the complaint shows Batson appearing to embrace an unidentified man over a restaurant logo.

“These AI-generated images were spread to dozens, if not hundreds or thousands, of individuals, clients or prospective clients of Plaintiff,” according to the complaint.
 

Claims for relief

The complaint includes eight “claims for relief,” which are the specific compensation, remedies or court orders a plaintiff is seeking.

In the case of Batson’s complaint, they include compensation for defamation/defamation per se damages “in an amount to be proven at trial” for what the complaint calls “false and malicious statements” that allegedly harmed Batson’s reputation and businesses and for alleged “unfair and deceptive trade practices.”

The other claims relate to breach of contract and misappropriation of trade secrets against Kidd; tortious interference with contract/tortious interference with prospective economic advantage against Jeffries, Kidd and JKDB; and punitive damages and civil conspiracy against all of the defendants. 

An eighth claim for relief seeks an injunction that prohibits the defendants “from making false and defamatory statements concerning Plaintiffs, from disseminating false and defamatory electronic or other written communications and imagery, and from using trade secrets stolen from Plaintiffs.”

The defendants have 30 days to respond to the complaint, according to civil summonses related to the case.