KNOWLTON v. SHAW et al

Filing 75

ORDER denying 69 Motion for Reconsideration of Motion for Summary Judgment. By JUDGE JOHN A. WOODCOCK, JR. (MFS)

UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
ALAN N. KNOWLTON,
Plaintiff,
v.
JUDITH SHAW, et al.,
Defendant.

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1:09-cv-00334-JAW

ORDER DENYING MOTION FOR RECONSIDERATION
On June 13, 2011, the Court issued a seventy-nine page opinion in which it
granted in part and denied in part the Defendants‟ motion for summary judgment.
Order Granting in Part and Denying in Part Defs.’ Mot. for Summ. J. (Docket # 68)
(Order).

Disappointed they did not get everything they were seeking, the

Defendants quickly filed a motion for reconsideration, asserting that the Court
committed multiple “manifest error[s] of law.” Defs.’ Mot. for Recons. of Mot. for
Summ. J. Ruling at 1 (Docket # 69) (Defs.’ Mot.). First, the Defendants claim that
despite its exhaustive Order, the Court gave short shrift to their contention that the
misrepresentation claim must be summarily dismissed. Id. at 2-3. Second, they
assert that the Court committed obvious error in allowing the punitive damages
claim to proceed. Id. at 3-6. Third, they complain that the Court misapplied its
own local rule. Id. at 3 n.1. Well satisfied with the parts of the Order he won, the
Plaintiff defends it.

Pl.’s Reply to Defs.’ Mot. for Recons. of Mot. for Summ. J.

Ruling (Docket # 73) (Pls.’ Opp’n).

In reply, the Defendants reiterate their

complaints. Defs.’ Reply to Pl.’s Reply to Defs.’ Mot. for Recons. of Mot. for Summ. J.
(Docket # 74) (Defs.’ Reply). The Court is unmoved.
I.

MISREPRESENTATION
The Defendants are perturbed that, in ruling on their motion, the Court did

not parse each asserted misrepresentation and resolve each statement in their
favor. They say the First Circuit requires no less of each trial judge; they assert
that, on pain of manifest legal error, in order to properly appraise any motion for
summary disposition of a misrepresentation claim, the district court must hold each
statement up, expressly examine it, and explicitly discuss its contours, its context,
and its supposed misrepresentational quality, and then move studiously to the next
dissection. Otherwise, the Defendants claim, the Court is not doing its job and is
manifestly wrong.1
The Court disagrees. The Defendants rely on Uncle Henry’s, Inc. v. Plaut
Consulting Co., 399 F.3d 33, 42-43 (1st Cir. 2005) for the proposition that, in a
misrepresentation claim, the Court must expressly analyze each individualized
statement when it rules on a motion for summary judgment. On this point, Plaut
was critical of appellant having “presented its challenge to these rulings at so high a
level of generality, and in such an all-or-nothing manner, as to render any

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Before the lawyers can insist the Court do its job, they must do theirs. At a minimum, if they seek
a dispositive ruling based on undisputed facts, they must present the Court with facts that are
undisputed. Here, to the contrary, the lawyers handed the Court a messy, contentious, and
undifferentiated pile of evidence complete with countless quibbles, denials, disputes, and
equivocations. Combined they proposed 130 statements of undisputed material fact of which they
jointly admitted a grand total of 16. The Court resisted the temptation to dismiss the entire matter
and to tell them to return to Court with a more orderly motion. Ironically, Bankers Life now
complains about the Court‟s arduous attempt to create a semblance of order out of their chaos.

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individualized assessment of each of the magistrate judge's specific rulings an
exercise in guesswork.” Id. at 42. It emphasized the need for counsel to make a
specific, not general argument, since “[s]uch an individualized assessment of the
various statements is critical, as the various representations are of different types
and were made at different times, and some could conceivably qualify as actionable
under the relevant legal standards while others may not.” Id. at 42-43. The First
Circuit maintained its often-repeated admonition to counsel that the failure to
present more than a perfunctory argument amounts to a waiver. Id. at 43. The
Plaut opinion is consistent with a long line of First Circuit caselaw that warns
litigants that an undeveloped argument is no argument at all, a principle especially
applicable to misrepresentation claims.
The Court is not convinced that the First Circuit‟s admonition to counsel is
also an appellate warning to trial judges about the absolute need to engage in recipe
jurisprudence. More specifically, the Court does not read Plaut as directing the
trial

courts

that,

in

denying

a

motion

for

summary

judgment

on

a

misrepresentation claim, the failure to make a similar detailed checklist
explanation of a denial amounts to reversible error.
Be this as it may, the Court will do as the Defendants wish and explain its
denial of their motion more thoroughly. To begin, taking the facts in the light most
favorable to the Plaintiff, the Defendants played a brazen and dishonest double
game with a loyal and productive employee, a scheme that itself was built on a
fundamental misrepresentation: the Defendants knew that Alan Knowlton was not

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involved in the scheme to defraud Bankers Life customers in Maine but they also
knew that senior state of Maine bureaucrats who were fully capable of causing
significant economic damage to Bankers Life were out to get him. The higher ups at
Bankers Life knew that Mr. Knowlton had done nothing wrong and there was no
legally justifiable reason to terminate or even transfer him; yet, they made the
conscious decision to placate the vindictive state officials by handing up Mr.
Knowlton, firing him from his Maine position, and transferring him to an imaginary
job in Boston, Massachusetts, where they knew he was doomed to failure, and thus
could be justifiably axed. During this unseemly process, the Bankers Life officials
made repeated misrepresentations to Mr. Knowlton in an effort to play on his sense
of company loyalty, to take advantage of his naïve belief that they were telling him
the truth, and to ultimately unload him, a man who had—through no fault of his
own—become a liability to Bankers Life. This in sum is Mr. Knowlton‟s complaint
against Bankers Life, a complaint that resonates in a multi-layered series of
misrepresentations.
In their motion, the Defendants highlight the statement that Mr. Knowlton
says it made to him to encourage him to take the Massachusetts job: that the
position represented a “great opportunity for him in Massachusetts to build a
Branch Sales Office on the North Shore.” Pl.’s Statement of Additional Material
Fact ¶ 100 (Docket # 62); Defs.’ Resp. to Pl.’s Statement of Additional Material Fact)
¶ 100 (Docket # 67).

The Defendants insist that “the alleged statement that

Bankers Life had a „great opportunity‟ for Plaintiff in Massachusetts clearly

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constitutes „puffery,‟ which is not actionable fraud.” Defs.’ Mot. to Recons. at 2.
They cite Schott Motorcycle Supply, Inc. v. American Honda Motor Co., 976 F.2d 58,
65

(1st

Cir.

1992)

for

the

proposition

that

puffery

cannot

constitute

misrepresentation. Id.
Schott, however, is a markedly different case. In Schott, a failed motorcycle
dealership sued American Honda Motor Co., Inc., claiming that Honda had “reduced
its commitment to the motorcycle market after its representatives had promised
otherwise.” Id. at 60. The dealer pointed to statements from Honda that it “would
continue to be just as committed to the motorcycle market as it had been in the past
in terms of support for dealerships and advertising” and that despite the loss of the
Harley Davidson and golf cart businesses, “the products that Honda was coming
forward with, including motorcycles, scooters and other products would definitely
cause an increase in sales over previous years.”

Id. at 65.

The First Circuit

concluded that these general statements were “nothing more than „puffing‟ or „trade
talk,‟ upon which no reasonable person would rely.” Id.
The Schott Court itself differentiated between business projections subject to
uncontrollable economic influences and “fraudulent misrepresentations of past or
existing facts on which plaintiff justifiably relied to its detriment.” Id. (quoting
Kelly Tire Serv. Inc. v. Kelly-Springfield Tire Co., 338 F.2d 248, 253 (8th Cir. 1964)).
The difference here is apparent. Mr. Knowlton says that Bankers Life‟s decision to
transfer him to Boston was part of a cynical plot to remove him from the state of
Maine where he had become a problem, place him in unfamiliar territory where he

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was sure to fail, and fire him when he did. In that context, the statement that
Massachusetts was a “great opportunity” and that he had the chance to build a
“branch office” were, arguably, not mere puffery about future events but affirmative
statements about existing facts, which were false and upon which a reasonable
person would justifiably rely.
A second aspect of a “puffery” analysis is the relative positions of the parties
and “the opportunity afforded for an investigation and the reliance.” Plaut, 399
F.3d at 43 (quoting Veilleux v. Nat’l Broadcasting Co., 206 F.3d 92, 120 (1st Cir.
2000)).

Here, Bankers Life was dealing with its employee, not a competing or

independently viable business, and it was making representations about matters
uniquely within its control to a person whose job was on the line.
The Defendants go on to say that even Mr. Knowlton admitted that the
statement was true. Id. (citing Defs.’ Statement of Material Fact ¶ 54 (Docket #
60)). This assertion, like so much of this motion, is clouded in confusion. In its
Statement of Material Fact 53, Bankers Life made the following assertion:
Mr. Knowlton alleged in the amended complaint that Mr. Buckley
represented to him that Bankers Life had a great employment
opportunity for him in Massachusetts.
Defs.’ Statement of Material Fact ¶ 53 (Docket # 60) (DSMF). Bankers Life then
asserted:
Mr. Knowlton admitted in his deposition, however, that this statement
was true.
Id. ¶ 54.

Mr. Knowlton‟s identical responses to these statements were non-

responsive:
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Qualified. The Consent Agreement between Bankers Life and the
State of Maine that indicates that Mr. Knowlton is an incompetent and
dishonest person continues to be published by the Defendants and the
State of Maine (Exhibit L, Knowlton Dep. at 208:23-25; 209:1-5).
Based on Mr. Knowlton‟s past experience with individuals terminated
form (sic) Bankers Life, Mr. Knowlton believes that Messrs. Buckley
and Valdez continued to repeat the statements that he was
incompetent and dishonest to other (sic) after July 2007.
Pl.’s Resp. to Def.’s Statement of Material Fact ¶ 54 (Docket # 62) (PRDSMF). The
Plaintiff‟s response makes no sense. The Court could hold the Plaintiff to his nonresponsive answer, accept his admission, and conclude that Bankers Life made no
misrepresentation. However, rather than hold the Plaintiff to an obvious mistake,
the Court has resolved to dig deeper.
To determine what to make of Bankers Life‟s assertion, the Court reviewed
the Bankers Life record citation: Mr. Knowlton‟s deposition, Exhibit F page 152.
DSMF ¶ 54. During his July 29, 2010 deposition, counsel for Bankers Life pointed
to the allegation in paragraph 154 of his Complaint, which alleged that Mr. Buckley
told him that Bankers Life had a great opportunity for him in Massachusetts to
build a branch office on the North Shore, and asked Mr. Knowlton: “What‟s false
about that statement?” DSMF Ex. F 151:24-25; 152:1-3 (Dep. of Alan Knowlton).
After some equivocation, Mr. Knowlton responded: “There‟s nothing -- nothing false
about that statement.

That was the statement he made to me that primarily

motivated me to go to Massachusetts.” Id. at 152:7-9. He was asked again whether
there was “anything untrue about that statement” and responded, “No.”
152:18-19.

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Id. at

These answers are problematical for Mr. Knowlton since they strike at the
very heart of his contentions about the North Shore job offer.2 If Mr. Buckley‟s
statements about the North Shore opportunity were true, they can hardly form the
basis for a misrepresentation claim. But Mr. Knowlton‟s admissions jar with the
rest of his case against Bankers Life.

Elsewhere he says that Bankers Life

promised him a Branch Manager position on the North Shore, that he agreed to
accept a demotion to Unit Sales Manager on a temporary basis on the promise that
Bankers Life needed a little time to set up the North Shore office, that he performed
reasonably well as a Unit Sales Manager, that Bankers Life never raised
performance issues with him, that Bankers Life never made him Branch Manager,
that during this time, Bankers Life supervisors continually disparaged him behind
his back, and that Bankers Life, which had not made him a Branch Manager as
promised, effectively forced him out by cutting his salary because he was not a
Branch Manager. PRSMF ¶¶ 100, 109-18, 125-26.
Unaided by any explanation from Mr. Knowlton, the Court does not know
what to make of the stark contrast between Mr. Knowlton‟s admission that the
Buckley statement was true and the entire rest of his argument. It is possible that
Mr. Knowlton understood the question to ask whether it was true that Mr. Buckley
made the statement, rather than whether the Buckley statement was true. The
difference between the accuracy and truth of a statement sometimes eludes
witnesses. This is suggested at least by his response that “[t]hat was the statement

That Mr. Knowlton‟s counsel has never made even a passing reference to this apparent admission
is distinctly unhelpful.
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he made to me that primarily motivated me to go to Massachusetts.” Here, viewing
the evidence in the light most favorable to Mr. Knowlton, the Court will not
conclude that Mr. Knowlton‟s admission effectively waives his misrepresentation
claim against Bankers Life.
In sum, analyzing Mr. Buckley‟s statement under Plaut in the manner the
Defendants demand, the result is the same. Viewing his statement as an integral
part of Bankers Life‟s plot against Mr. Knowlton, Mr. Buckley‟s promise of a “great
opportunity” to build a branch office on the North Shore was neither innocuous
puffery nor true; it was cynically intended as a first step in a deliberate process to
remove Mr. Knowlton from the state of Maine, to place him in a disadvantageous
position in Massachusetts, and to terminate him once he failed to perform an
impossible and fictitious assignment. None of this is to say that a jury will agree
with Mr. Knowlton‟s version of these hotly contested facts. But it is to reiterate
that Mr. Knowlton has presented sufficient evidence to create a jury question on
this and other factual issues. See Rand v. Bath Iron Works, 2003 ME 122, ¶13, 832
A.2d 771, 775 (stating that whether a misrepresentation has been made “is a
question for the fact-finder”).
II.

PUNITIVE DAMAGES
In its motion for reconsideration, the Defendants re-emphasize to the Court

the familiar standard for punitive damages under Maine law:
Under Maine law, malice may be implied only if the plaintiff presents
“clear and convincing evidence” that the defendant acted in a manner
“so outrageous that malice toward a person injured as a result of that
conduct can be implied.”
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Defs.’ Mot. for Recons. at 3 (quoting Galarneau v. Merrill, Lynch, Pierce, Fenner &
Smith, 504 F.3d 189, 204 (1st Cir. 2007) (emphasis added in Defendants‟ motion)).
Bankers Life relies heavily on Galarneau which it says is a case “very analogous to
the present one.” Id.
In Galarneau, the First Circuit overturned a punitive damages award against
a brokerage firm which had filed a form with the National Association of Securities
Dealers called a U-5 that it knew contained false information about the plaintiff and
the events that led to her termination. Galarneau, 504 F.3d at 192, 204-05. What
differentiates this case from Galarneau, however, is that in Galarneau, the First
Circuit concluded there was “no evidence that Merrill Lynch made the statement in
the U-5 with the intent to deprive Galarneau of a job.” Id. at 205.
Here, the situation is markedly different. Viewing Mr. Knowlton‟s case from
his perspective, he has demonstrated that Bankers Life acted intentionally in
setting about to destroy him in order to save itself from Maine regulators. Mr.
Knowlton has plausibly alleged that Bankers Life engaged in an elaborate
conspiracy, involving lies to him about what it was saying to state officials, lies to
the state officials about Mr. Knowlton, lies to him about the restrictions the state
officials had imposed on him, lies to him about a non-existent job in Massachusetts,
lies to others about his competence and honesty, and lies to him about his
performance as an employee both in Maine and Massachusetts. Mr. Knowlton has
presented sufficient evidence to create a jury question as to whether Bankers Life
did in fact engage in this multi-layered course of deception to save Bankers Life‟s
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skin in Maine by easing him out of state and forcing his resignation in order to rid
itself of the inconvenience of his continued employment. If the jury concludes that
Mr. Knowlton has made out this case, it seems beyond argument that Bankers
Life‟s conduct fits well within the Maine standard for the imposition of punitive
damages. The question here is not whether Mr. Knowlton will be successful in
proving his claims but whether he should be allowed to present them to a jury. The
Court concludes, once again, that he should.
III.

LOCAL RULE 56
The Defendants claim that the Court misapplied its own local rule when it

refused to consider additional statements of material fact that they submitted with
their reply statement of material fact. Def.’s Mot. for Recons. at 3 n.1. Here, the
Defendants filed a statement of material facts in support of their motion, consisting
of fifty-eight paragraphs, and the Plaintiff responded with seventy-two paragraphs
of his own. The Defendants then replied to the Plaintiff‟s response but added six
new facts.

The Plaintiff did not respond to the new facts because there is no

provision in the Rule for a sur-reply. Applying Local Rule 56 and noting that “by
the time of the reply, everything that should have been said, has been said,” the
Court refused to accept the Defendants‟ last set of facts. Order at 44 n.4.
Surprisingly, despite the Court‟s ruling, the Defendants insist that “these
facts fall squarely within Rule 56(d) and should be considered by the Court.” Defs.’
Mot. for Recons. at 3 n.1. They say that Local Rule 56(d) “permits parties to submit
a reply statement of material facts that is „limited to any additional facts submitted

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by the opposing party.‟” Id. Citing no legal authority other than their own

interpretation of a portion of the language of Local Rule 56(d), they maintain
that they were only filing a statement permitted by the Local Rules.
The Defendants are flat-out wrong. The full text of Local Rule 56(d) reads:

A party replying to the opposition to a motion for summary
judgment shall submit with its reply a separate, short, and
concise statement of material facts which shall be limited to any
additional facts submitted by the opposing party. The reply
statement shall admit, deny or qualify such additional facts by
reference to the numbered paragraphs of the opposing party‟s
statement of material facts and unless a fact is admitted, shall
support each denial or qualification by a record citation as
required by subsection (f) of this rule. Each such reply statement
shall begin with the designation ”Admitted,” ”Denied,” or
“Qualified” and, in the case of an admission, shall end with such
designation.
D. ME. LOC. R. 56(d). The clear language of Local Rule 56(d) requires the movant to
limit its reply statement to admitting, denying or qualifying the responsive
statement. It does not allow the movant to add new facts at this late stage.
The overall rationale of the rule is clear: there must be an end point. The
Rule requires the movant for summary judgment to set forth those undisputed facts
it contends entitle it to summary judgment; it permits the non-movant to put into
play any facts, which the non-movant contends require trial. Finally, it permits the
movant to respond to the non-movant‟s facts. But the Rule does not permit the
movant to add yet another set of facts. If the movant were allowed to posit new
facts in its reply, the movant‟s final document would be an unanswered set of
factual assertions, which would run contrary to the requirement that the facts must

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be interpreted in a manner most congenial to the non-movant. In other words, if
the rule were interpreted in the Defendants‟ fashion, to comply with Rule 56, the
Local Rule would have to permit the non-movant to sur-reply. However there is no
provision in the local rule for the non-movant to file a sur-reply precisely because
the movant is not allowed to posit a new set of facts with its reply statement.
Finally, movants would be encouraged to hide their most salient statements of fact
until the very end of the point-counterpoint process so that there would be no
counter to their final point.
The Court emphatically rejects the Defendants‟ contention as contrary to the
express language of the local rule, contrary to the design of the local rule, and
contrary to the local rule‟s implementation of Federal Rule 56. Its prior ruling on
the Defendants‟ unauthorized set of new facts stands.
IV.

CONCLUSION
The Court DENIES the Defendants‟ Motion for Reconsideration of Motion for

Summary Judgment Ruling (Docket # 69).
SO ORDERED.

/s/ John A. Woodcock, Jr.
JOHN A. WOODCOCK, JR.
CHIEF UNITED STATES DISTRICT JUDGE
Dated this 24th day of August, 2011

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