C&M PROPERTY MANAGEMENT LLC et al v. MOARK LLC

Filing 15

ORDER ON DEFENDANTS MOTION TO DISMISS granting in part and denying in part 7 Motion to Dismiss for Failure to State a Claim By JUDGE GEORGE Z. SINGAL. (lrc)

UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
C&M PROPERTY MANAGEMENT,
LLC and MICHAEL WARBIN,
Plaintiffs
v.
MOARK, LLC d/b/a MOARK MAINE,

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) Docket no. 2:15-cv-336-GZS
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Defendant.

ORDER ON DEFENDANT’S MOTION TO DISMISS

Before the Court is the Motion to Dismiss with Incorporated Memorandum of Law filed
by Defendant Moark, LLC (“Moark” or “Defendant”) (ECF No. 7) (the “Motion”). For the reasons
explained herein, the Court GRANTS IN PART AND DENIES IN PART the Motion.

I.

LEGAL STANDARD
The Federal Rules of Civil Procedure require only that a complaint contain “a short and

plain statement of the grounds for the court’s jurisdiction . . . a short and plain statement of the
claim showing that the pleader is entitled to relief; and a demand for the relief sought[.]” Fed. R.
Civ. P. 8(a)(1)-(3). The Court assumes the truth of the complaint’s well-pleaded facts and draws
all reasonable inferences in plaintiffs’ favor. Schatz v. Republican State Leadership Comm., 669
F.3d 50, 55 (1st Cir. 2012). Under Rule 12(b)(6), the Court “may consider only facts and
documents that are part of or incorporated into the complaint.” United Auto., Aero., Agric. Impl.
Workers of Am. Int’l Union v. Fortuno, 633 F.3d 37, 39 (1st Cir. 2011) (internal citations omitted).

A viable complaint need not proffer “heightened fact pleading of specifics,” but in order to
survive a motion to dismiss it must contain “enough facts to state a claim to relief that is plausible
on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). In considering a motion
to dismiss, the Court should “begin by identifying pleadings that, because they are no more than
conclusions, are not entitled to the assumption of truth.” Ashcroft v. Iqbal, 556 U.S. 662, 679
(2009). Plaintiffs must include enough facts supporting a claim for relief that “nudge[] their claims
across the line from conceivable to plausible.” Twombly, 550 U.S. at 570. “If the factual
allegations in the complaint are too meager, vague, or conclusory to remove the possibility of relief
from the realm of mere conjecture, the complaint is open to dismissal.” Haley v. City of Boston,
657 F.3d 39, 46 (1st Cir. 2011) (quoting SEC v. Tambone, 597 F.3d 436, 442 (1st Cir. 2010)); see
also Iqbal, 556 U.S. at 678 (stating that the Court need not accept “[t]hreadbare recitals of the
elements of a cause of action, supported by mere conclusory statements”). At this point in the
litigation, “the determination of whether an issue is trialworthy simply is not the same as the
determination of whether a plaintiff states a claim upon which relief can be granted.” Bodman v.
Me., Dept. of Health & Human Servs., 720 F. Supp. 2d 115, 121 (D. Me. 2010) (denying motion
to dismiss a hostile work environment claim).

II.

FACTUAL BACKGROUND
For the purposes of this Motion, the Court considers the facts as alleged in Plaintiffs’ First

Amended Complaint (ECF No. 10) (the “Complaint” or “Compl.”).
C&M Property Management, LLC (“C&M”) is a Connecticut limited liability company.
(Compl. ¶ 2.) Michael Warbin (“Warbin” and, together with C&M, “Plaintiffs”) is the sole
member of C&M. (Compl. ¶ 1.) On August 1, 2006, C&M entered into a contract (the “Contract”)

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with Kofkoff Egg Farms LLC, under which C&M agreed to provide rodent and other pest control
services at three facilities located in Connecticut. (Compl. ¶ 11.) Paragraph 13 of the Contract
provides, “This agreement may be terminated with 30 days written notice to the non-terminating
party.” (Compl. ¶ 21.) Defendant later acquired Kofkoff Egg Farms LLC and assumed the
Contract. (Compl. ¶ 12.) C&M subsequently became responsible for pest control at other of
Defendant’s properties, including a facility in Turner, Maine (the “Turner Facility”). (Compl. ¶
13.) C&M routinely used firearms in connection with its pest control services on Defendant’s
properties, and Defendant knew and approved of C&M’s use of firearms. (Compl. ¶¶ 14-15.)
On August 19, 2013, while C&M was engaged in pest control activities at the Turner
Facility, an employee of Defendant was shot and killed. (Compl. ¶ 17.) On that date and since
then, Defendant has allegedly made defamatory statements about C&M.

Specifically, the

Complaint alleges that in the course of the investigation into the shooting death, “Blair E. Hagy
and Gwen Gruver of Moark” repeatedly and falsely stated to law enforcement officials including
Maine State Police Officer Eric Paquette, as well as to “other people in the community,” that
“C&M was prohibited from using firearms at its facilities” and that “[Defendant] had no idea that
C&M was in fact using firearms to clear pests.” (Compl. ¶ 19.) Plaintiffs allege that these
statements have harmed their professional reputations, and that “it is now impossible for Plaintiffs
to find work in the pest control industry.” (Compl. ¶ 32.)
On August 20, 2013, Defendant verbally instructed C&M not to set foot on any of
Defendant’s properties. (Compl. ¶ 22.) Defendant then hired another contractor to provide pest
control services. (Compl. ¶ 24.) As of March 4, 2016, Defendant had not terminated the Contract
in writing. (Compl. ¶ 23.)

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On August 19, 2015, Plaintiffs filed a complaint in this Court (ECF No. 1) asserting causes
of action for breach of contract, defamation, and negligence. On February 12, 2016, Defendant
brought the Motion, advancing four separate arguments: (1) that Plaintiffs failed to establish this
Court’s subject-matter jurisdiction; (2) that Plaintiff Warbin alleged no cause of action against
Defendant; (3) that Plaintiff C&M failed to plausibly allege a cause of action for defamation; and
(4) that Plaintiff C&M failed to plausibly allege a cause of action for negligence. On March 4,
2016, Plaintiffs filed their amended Complaint (ECF No. 10) as a matter of course pursuant to Fed.
R. Civ. P. 15(a)(1)(B) and their Response (ECF No. 11) opposing Defendant’s Motion.

III.

DISCUSSION
In its Reply (ECF No. 13), Defendant concedes that the Complaint, as amended, adequately

sets forth this Court’s subject-matter jurisdiction based on the parties’ diversity of citizenship.
Defendant further admits that C&M has pleaded a cause of action for breach of contract against
Defendant. However, three further issues remain: whether C&M has plausibly stated a claim for
defamation, whether C&M has plausibly stated a negligence-based tort claim, and whether Warbin
has plausibly pleaded any claim against Defendant. The Court addresses each of these issues in
turn.
A. Defamation
A plaintiff must allege the following elements for a claim of defamation: first, that the
defendant made a false and defamatory statement concerning the plaintiff; second, that there was
an unprivileged publication of such statement to a third party; third, that the defendant possessed
a mental state of at least negligence; and fourth, that either the statement was defamatory per se or
that the publication of the statement caused the plaintiff to suffer special harm. Lester v. Powers,

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596 A.2d 65, 69 (Me. 1991). Plaintiffs allege that they were both defamed by statements made on
and since August 19, 2013. According to Plaintiffs, Blair E. Hagy and Gwen Gruver falsely told
law enforcement officials including Officer Eric Paquette, as well as others, that C&M was
prohibited from using firearms at Defendant’s facilities and that Defendant had no idea that C&M
was using firearms. (Compl. ¶ 19.)
Defendant disputes that either C&M or Warbin has stated a claim for defamation.
Defendant argues that Plaintiffs have failed to allege four different elements of defamation with
sufficient particularity. First, Defendant argues that the Complaint, which identifies the publishers
of the allegedly defamatory statements as two specific individuals “of Moark,” has not alleged the
legal relationship between these individuals and Defendant with sufficient particularity to establish
Defendant’s liability for the statements. (Def.’s Reply Mem. Law Supp. Mot. Dismiss at PageID
# 69.) In its other three objections, Defendant argues that Plaintiffs have failed to adequately allege
the content of each statement, the date of each statement, and the identity of each third party
listener, because for each element the Complaint includes a specific allegation coupled with a
general reference to other statements, other dates statements were made, and other third party
listeners beyond the ones specifically described in the Complaint. (Id. at PageID # 69-70.)
According to Defendants, each of these four objections is independently fatal to Plaintiffs’
defamation cause of action, because each objection reveals a failure to plead an essential fact
required to make out a claim for defamation. (Mot. Dismiss at PageID # 21.)
1. C&M’s Defamation Claim
Contrary to Defendant’s view, none of these alleged deficiencies undermine Plaintiff
C&M’s plausible statement of a claim for defamation. Defamation claims are subject to the
pleading requirements of Fed. R. Civ. P. 8, under which a plaintiff must put the defendant on notice

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of the issues that the defendant must meet in the case. Bishop v. Costa, 495 F. Supp. 2d 139, 14041 (D. Me. 2007). Plaintiff C&M has plainly met this standard as to Defendant. Under Maine
law, as a general matter, “An employer is subject to vicarious liability for a tort committed by its
employee acting within the scope of employment.” Picher v. Roman Catholic Bishop of Portland,
974 A.2d 286, 296 (Me. 2009).

C&M has specifically alleged that, in the course of the

investigation of the shooting death at the Turner Property, two particular persons “of Moark” made
allegedly defamatory statements about C&M to law enforcement officials. In making these
allegations, C&M plausibly pleads that the named individuals were employees of Defendant and
were acting in the scope of their employment when speaking to law enforcement about the
shooting.
Defendant’s further arguments fare no better. Plaintiffs have identified a specific third
person to whom the statements were published, specified a date on which statements were made,
and described the content of two allegedly false and defamatory statements. (Compl. ¶¶ 15-16 &
19.) Defendant seeks to rely upon cases where defamation claims were dismissed because specific
allegations on an element of the cause of action were omitted entirely. See, e.g., Decker v. Vt.
Educ. Television, Inc., 13 F. Supp. 2d 569, 574 (D. Vt. 1998) (dismissing a defamation claim
where the complaint failed to “identify even generally the [allegedly defamatory] communications,
or to whom they were communicated”); Pike v. City of Mission, Kan., 731 F.2d 655, 661 (10th
Cir. 1984) (refusing to recognize a defamation-related claim supported only by a “broad
conclusory allegation”); TracFone Wireless, Inc. v. Carson, No. 3:07-CV-1761-G, 2008 WL
4107584, at *9 (N.D. Tex. Aug. 28, 2008) (dismissing a defamation claim where the claimant
“failed to provide any specificity as to who made the statements or to whom the statements were
made”); Advanced Logistical Support, Inc. v. Fritz Companies, Inc., Civ. A. 02–2979, 2003 WL

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21459688, at *7 (E.D. La. June 18, 2003) (ordering a more definite statement of defamation
pleadings that did not provide “any specificity as to what statements were made . . . and how they
were false and defamatory”).

In the present case, however, Plaintiffs have made specific

allegations as to each element of the defamation cause of action. The sufficiency of these pleadings
is not undermined by the inclusion of additional and more general assertions.1
To the extent that Defendant seeks the clarification of the factual allegations underlying
each of the defamation elements, the appropriate course is for Defendant to utilize pretrial
discovery procedures, rather than for this Court to dismiss the defamation claim on the pleadings.
The Court DENIES the Motion as to C&M’s defamation claim.
2. Warbin’s Defamation Claim
While C&M has stated a claim for defamation, Warbin has not.2 To maintain a defamation
action under Maine law, a plaintiff must demonstrate that “at least one person actually and
reasonably interpreted” an allegedly defamatory statement to be “of and concerning” the plaintiff.
Lynch v. Christie, No. 2:11-cv-70-DBH, 2012 WL 5874841, at *3 (D. Me. Nov. 20, 2012) (internal
quotations omitted).

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Defendant also argues that C&M’s claim for defamation should be limited to the specific allegations made in the
Complaint regarding the precise date that statements were made, the identities of the speakers and the listener, and the
content of the defamatory statements. (Def.’s Reply Mem. Law Supp. Mot. Dismiss at PageID # 71.) However, this
argument overlooks the necessary role of the discovery process in developing the factual record upon which C&M’s
claim can ultimately be decided. It is not necessary that the Complaint include every possible fact which may
ultimately prove relevant to the outcome of Plaintiffs’ case, but rather that each Plaintiff plausibly state a claim upon
which relief can be granted. C&M has met this standard regarding its claim for defamation.

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It is not clear from the Complaint or from Plaintiffs’ Response to the Motion (ECF No. 11) whether Plaintiff Warbin
is asserting that he has standing to bring C&M’s defamation or negligence claim in his own name. To be clear,
Warbin, as the equityholder of C&M, does not have standing to do so. See Diva’s Inc. v. City of Bangor, 411 F.3d
30, 42 (1st Cir. 2005) (explaining that an action to redress an injury to a corporation “cannot be maintained by a
stockholder in his own name . . . even when there is only one shareholder in a corporation”) (internal quotation
omitted); Laverty v. Massad, 661 F. Supp. 2d 55, 61-62 (D. Mass. 2009) (applying the shareholder standing bar to a
member of a limited liability company).

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The Complaint asserts that Defendant has “published defamatory statements about
Plaintiffs [C&M and Warbin],” but the defamatory statements described in the Complaint concern
only C&M, and not Warbin. Warbin is identified in the Complaint as the sole member of C&M.
(Compl. ¶ 1.) No further facts are alleged as to Warbin. No allegations have been made in the
Complaint which would give rise to a plausible inference that any third party “actually and
reasonably interpreted” either of the allegedly defamatory statements to be “of and concerning”
Warbin. Therefore, the Court GRANTS the Motion as to Warbin’s defamation claim.
B. Negligence
Plaintiffs allege that Defendant breached a duty to C&M and its employees to “exercise
reasonable care to ensure that its facilities were safe for C&M’s pest control efforts.” (Compl. ¶
35.) More specifically, Plaintiffs assert that Defendant should have exercised reasonable care to
ensure that all of its employees were removed from the area where C&M conducted its pest control
operations. (Compl. ¶ 18.) Plaintiffs allege that Defendant breached this duty, and that Plaintiffs
suffered damages as a result. (Compl. ¶¶ 36-37.) Defendant counters that the claim should be
dismissed because it is barred by the “economic loss doctrine.”
1. C&M’s Negligence Claim
Defendant argues that this negligence-based tort claim should be dismissed because it is
barred by the “economic loss doctrine.” The “economic loss doctrine” has been adopted by the
Maine Supreme Judicial Court in the context of product liability. Oceanside at Pine Point Condo.
Owners Assoc. v. Peachtree Doors, Inc., 659 A.2d 267, 270 (Me. 1995) (barring a tort claim in a
product liability action because courts “generally . . . do not permit tort recovery for a defective
product’s damage to itself”). Applying Maine law, courts in this district have inferred that Maine’s
economic loss doctrine may apply to professional service contracts, such as the contract between

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C&M and Defendant. See Me. Rubber Int’l v. Envtl. Mgmt. Group, Inc., 298 F. Supp. 2d 133,
137-138 (D. Me. 2004); see also Banknorth, N.A. v. BJ’s Wholesale Club, Inc., 394 F. Supp. 2d
283, 287 (D. Me. 2005) (declining to apply the economic loss doctrine to dismiss a negligence
claim where the defendant arguably owed non-contractual duties to the plaintiff and disputed
issues “hinge[d] upon issues of fact as to the nature of the relationships between the parties”). This
Court recently applied the economic loss doctrine to dismiss a tort claim where a dispute existed
between parties to a bargained-for commercial contract and concerned the “value and quality of
what was purchased” under the contract. Schmid Pipeline Const., Inc. v. Summit Natural Gas of
Me., Inc., No. 1:13-cv-464-GZS, 2014 WL 3600437, at *4 (D. Me. June 22, 2014). Defendant
urges that this is such a case. (Def.’s Reply Mem. Law Supp. Mot. Dismiss at PageID # 72.)
In the present case, however, this Court cannot determine on the pleadings that Plaintiffs’
negligence claim, which is based on Defendant’s alleged duty to maintain safe premises for
C&M’s extermination activities, concerns the value and quality of goods or services over which
the parties bargained.3 As in Banknorth, Plaintiffs’ allegations may describe non-contractual
duties owed by Defendant that fall outside of Maine’s delineation of the economic loss doctrine.
Consequently, the Court DENIES the Motion as to C&M’s negligence claim.
2. Warbin’s Negligence Claim
While C&M has stated a claim for negligence, Warbin has not. Warbin lacks standing to
prosecute C&M’s claim for negligence, and Warbin, in his individual capacity, has failed to state
a claim for negligence. The Complaint alleges that Defendant owed a duty to C&M and to its
employees. However, the Complaint contains no allegations that indicate that Defendant owed a
duty to Warbin, who is identified in the Complaint only as the sole member of C&M. As Warbin

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The Court notes that the record does not include a copy of the Contract.

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has not pleaded an essential element of the negligence cause of action, the Court GRANTS the
Motion as to Warbin’s negligence claim.
C. Warbin’s Claims
The Complaint, by its own terms, states a claim for breach of contract only as to C&M.
(Compl. ¶¶ 27-29.) Warbin has failed to plausibly state a claim for defamation or negligence.
Therefore, as discussed above, the Court GRANTS the Motion as to Warbin’s defamation and
negligence claims, and all claims made by Warbin in the Complaint are dismissed.

IV.

CONCLUSION
For the reasons just stated, the Court GRANTS IN PART AND DENIES IN PART

Defendant’s Motion to Dismiss (ECF No. 7) and hereby DISMISSES all claims by Plaintiff
Warbin.
SO ORDERED.
/s/ George Z. Singal
United States District Judge
Dated this 31st day of March, 2016.

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