Rick v. Profit Management Associates East, Inc.
Magistrate Judge Judith G. Dein: ORDER entered. MEMORANDUM OF DECISION AND ORDER on 37 Individual Defendants' Motion to Dismiss. (Dambrosio, Jolyne)
UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
ERROL RICK, Assignee of COMFORT
BEDDING AND FURNITURE, INC.,
PROFIT MANAGEMENT ASSOCIATES, INC.
d/b/a PROFIT MANAGEMENT PROMOTIONS
and/or PROFIT MANAGEMENT ASSOCIATES
EAST, INC.; MICHAEL J. EGAN, as President
and Individually; JOHN “HECTOR” MUSTAFA,
Individually; and RONALD COOPER, Individually,
MEMORANDUM OF DECISION AND ORDER
ON INDIVIDUAL DEFENDANTS’ MOTION TO DISMISS
March 13, 2017
The pro se plaintiff, Errol Rick, was the former President and 50% owner of Comfort
Bedding and Furniture, Inc. (“Comfort Furniture”), a company that was liquidated pursuant to a
Chapter 7 Bankruptcy Proceeding in the United States District Court, District of Massachusetts
(No. 11-42740-MSH). He brings this action by virtue of an assignment from Comfort Furniture
authorized by the Bankruptcy Court dated January 20, 2014.
On or about February 24, 2011, Comfort Furniture entered into a Sales Promotion
Agreement with Profit Management Associates, Inc. d/b/a Profit Management Promotions
(“PMP”) pursuant to which PMP was to conduct a high impact promotional sale on behalf of
Comfort Furniture for 60 days, commencing on March 24, 2011. Problems arose virtually
immediately. By April 18, 2011, Comfort Furniture served PMP a Notice and Demand letter
pursuant to Mass. Gen. Laws ch. 93A. According to the individual defendants, but denied by
the plaintiff, PMP and Comfort Furniture entered into a Sales Promotion and Settlement
Agreement dated May 16, 2011, which addressed their issues.1 Comfort Furniture filed for
bankruptcy on June 28, 2011.
Plaintiff commenced this action on March 24, 2015 against PMP. The complaint was
subsequently amended to add the individual defendants, Michael Egan, John “Hector” Mustafa,
and Ronald Cooper, to the claims originally brought against PMP, namely breach of contract,
fraudulent misrepresentation, and violation of Mass. Gen. Laws ch. 93A. PMP never filed a
responsive pleading. The individual defendants contend that PMP is no longer in business,
although the plaintiff contends that it is continuing to do business under various other “Profit
Management” names. A default has been entered against PMP.
This matter is presently before the court on the individual defendants’ motion to dismiss
the amended complaint. (Docket No. 37). The parties have agreed to have this motion finally
resolved by a Magistrate Judge pursuant to 28 U.S.C. § 636(c). (Docket No. 46). After
consideration of the parties’ oral and written filings, including the supplemental materials filed
after the hearing, the motion to dismiss is ALLOWED WITHOUT PREJUDICE. The plaintiff may
file a motion to amend his complaint consistent with this decision, if appropriate, within 30
days of the date of this order.
While the individual defendants moved to dismiss the complaint against them on the grounds of the
release contained in the Settlement Agreement, they withdrew this grounds at oral argument on the
motion to dismiss.
II. STATEMENT OF FACTS
Scope of the Record
When ruling on a motion to dismiss, the court must accept as true all well-pleaded facts,
and give the plaintiff the benefit of all reasonable inferences. See Cooperman v. Individual Inc.,
171 F.3d 43, 46 (1st Cir. 1999). Where, as here, the plaintiff is proceeding pro se, the court
must construe his allegations liberally. See Estelle v. Gamble, 429 U.S. 97, 106, 97 S. Ct. 285,
292, 50 L. Ed.2d 251 (1976) (a pro se complaint, however inartfully pleaded, must be liberally
construed). Of significance in the instant case, “[o]rdinarily, a court may not consider any
documents that are outside of the complaint, or not expressly incorporated therein, unless the
motion is converted into one for summary judgment.” Alt. Energy, Inc. v. St. Paul Fire & Marine
Ins. Co., 267 F.3d 30, 33 (1st Cir. 2001). “There is, however, a narrow exception ‘for documents
the authenticity of which are not disputed by the parties; for official public records; for documents central to plaintiff[‘s] claim; or for documents sufficiently referred to in the complaint.’”
Id. (quoting Watterson v. Page, 987 F.2d 1, 3 (1st Cir. 1993)). Here, the parties have submitted
affidavits and various documents which go beyond those which are appropriately considered in
connection with a motion to dismiss. As detailed below, this court has only considered those
materials which fall within this narrow exception. This court has not converted the motion to
dismiss to one for summary judgment.
The Sales Promotion Agreement
Comfort Furniture sold furniture and home furnishings at its retail store located in
Lowell, Massachusetts. On February 24, 2011, “Comfort Bedding & Furniture, Inc.” entered into
a Sales Promotion Agreement (the “Agreement”) with “Profit Management Associates East,
Inc., d/b/a Profit Management Promotions (‘PMP’)” to conduct “a high impact promotional
sale” at the store. See Agreement2 at recital; Amended Complaint (Docket No. 34) (“Compl.”)
¶ 7.3 Comfort Furniture was experiencing financial difficulties, and PMP promoted itself as a
business with the expertise to run a promotional sale that would get Comfort Furniture out of
its financial troubles. See Compl. ¶ 29. The Agreement provides that it “shall be construed and
interpreted under the laws of the State of Pennsylvania.” Agreement ¶ 13.4.
Pursuant to the Agreement, PMP was to provide personnel and funding for the sale,
among other things, in exchange for which it was to be paid a commission. See Agreement
¶¶ 1-3, 8, 10. From the outset, Comfort Furniture was dissatisfied with the personnel PMP
provided, and with its business practices. Compl. ¶¶ 9-16. Comfort Furniture felt that PMP was
running a “going out of business” or liquidation sale, instead of helping Comfort Furniture stay
in business. Id. ¶ 12. In particular, but without limitation, PMP priced inventory in such a way
that PMP received a large commission, but Comfort Furniture ended up with a deficiency. Id.
¶ 13. PMP also allegedly failed to pay bills it was contractually obligated to pay, and failed to
obtain necessary lines of credit to be able to obtain product from manufacturers to fill
customer orders. Id. ¶¶ 14, 16. In addition, Comfort Furniture contends that PMP employees
were disrespectful and abusive, in addition to being incompetent, thereby causing Comfort
Furniture to sustain significant losses. Id. ¶¶ 10-11, 15.
It is undisputed that a copy of the Agreement is attached to the Memorandum in Support of Defendants’ Motion to Dismiss Plaintiff’s Amended Complaint” (Docket No. 38) as Attachment 2 to the
Affidavit of Ronald Cooper (Docket No. 38-1). Since the Agreement forms the basis of, and is referenced
in, the Amended Complaint it is appropriately considered in connection with the motion to dismiss.
While the Amended Complaint states that the Agreement was signed on March 24, 2011, that appears
to be a typographical error. See Compl. ¶ 7. The parties agree that it was signed on February 24, 2011,
with the sale to begin on March 24, 2011.
As a result of PMP’s conduct, Comfort Furniture allegedly suffered damages. According
to Comfort Furniture, these damages are in the form of (a) sales taxes and delivery costs that
were collected by PMP but not turned over to Comfort Furniture, which was liable for the
expenses ($23,445); (b) $25,000 in “cash advances” taken by PMP employees without
authorization; (c) the balance of the parties’ joint bank account, which was created for the
promotional event and which PMP wrongfully retained for its own use ($8,727.01); (d) costs
paid by Comfort Furniture for promotion items that were properly the responsibility of PMP
($4,707); (e) refunds to customers paid by Comfort Furniture on sales proceeds retained by
PMP ($54,929.71); (f) pre-promotion invoices PMP had promised to pay in consideration for the
Agreement ($134,000); (g) a check that was improperly issued by a PMP employee to himself
($3,179); (h) lost profits from the sale ($318,733.50); and (i) lost profits from sales lost due to
PMP’s improper sales practices ($320,000). Id. ¶ 18. For their part, the defendants argue that
damages are capped, and point to ¶ 13.6 of the Agreement, which provides:
In the event that Client has a claim against PMP for any reason, PMP’s
liability shall in all circumstances and for all claims be limited to the amounts
actually paid by Client to PMP hereunder.
Id. ¶ 13.6. The defendants contend that these amounts are far below the $75,000 threshold
necessary to support the diversity jurisdiction of the federal court.
It is undisputed that Comfort Furniture filed for protection under Chapter 11 of the
United States Bankruptcy Code on June 28, 2011. Defs. Mem. (Docket 38) Ex. D (Docket Sheet
for Bankruptcy Petition #11-42740, United States Bankruptcy Court, District of Massachusetts
(Worcester)).4 On August 5, 2011, the motion of the debtor, Comfort Furniture, to convert its
case to Chapter 7 was allowed, and “an order for relief under Chapter 7” was entered on that
date. Id. Ex. E (Bankruptcy Trustee’s Motion) at ¶ 1. On August 9, 2011, David Nickless
accepted his appointment as Trustee in Bankruptcy for the estate of Comfort Furniture. On
December 27, 2013, the Trustee filed a motion to sell the claims of the estate of Comfort
Furniture against Profit Management Associates Inc. to Errol Rick. Id. Ex. E. The sale was
subject to any defenses of PMP. Id. Ex. E at ¶ 15. The motion was allowed on January 30, 2014.
Id. Ex. F. Rick commenced this action on March 24, 2015.
Additional facts will be provided below.
Motion to Dismiss Standard of Review
The individual defendants have moved to dismiss the complaint against them on the
grounds that this court lacks subject matter jurisdiction due to an alleged insufficient amount in
controversy, and because the complaint allegedly fails to state a claim upon which relief can be
granted. Motions to dismiss for failure to state a claim test the sufficiency of the pleadings.
Thus, when confronted with such a motion, the court accepts as true all well-pleaded facts and
draws all reasonable inferences in favor of the plaintiff. Cooperman, 171 F.3d at 46. Dismissal
is only appropriate if the complaint, so viewed, fails to allege a “plausible entitlement to relief.”
Rodriguez-Ortiz v. Margo Caribe, Inc., 490 F.3d 92, 95 (1st Cir. 2007) (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 559, 127 S. Ct. 1955, 1967, 167 L. Ed. 2d 929 (2007)).
The court may take judicial notice of the docket of another court. In addition, the Bankruptcy Court
pleadings cited herein were submitted by both parties either as an attachment to the defendants’
memorandum, or to the Affidavit of Errol Rick filed after the hearing on the motion to dismiss.
“The plausibility inquiry necessitates a two-step pavane.” Garcia-Catalan v. United
States, 734 F.3d 100, 103 (1st Cir. 2013). “First, the court must distinguish ‘the complaint’s
factual allegations (which must be accepted as true) from its conclusory legal allegations (which
need not be credited).’” Id. (quoting Morales-Cruz v. Univ. of P.R., 676 F.3d 220, 224 (1st Cir.
2012)). “Second, the court must determine whether the factual allegations are sufficient to
support ‘the reasonable inference that the defendant is liable for the misconduct alleged.’” Id.
(quoting Haley v. City of Boston, 657 F.3d 39, 46 (1st Cir. 2011)) (additional citation omitted).
This second step requires the reviewing court to “draw on its judicial experience and common
sense.” Id. (quoting Ashcroft v. Iqbal, 556 U.S. 662, 679, 129 S. Ct. 1937, 1950, 173 L. Ed. 2d 868
(2009)). “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.” Morales-Cruz, 676 F.3d at 224 (quoting SEC v. Tambone, 597 F.3d 436, 442 (1st Cir.
2010)). As detailed herein, this court finds that it has jurisdiction over this case, but the
complaint must be dismissed for failure to state a claim upon which relief can be granted.
Subject Matter Jurisdiction
The plaintiff contends that this court has jurisdiction under 28 U.S.C. § 1332(a)(1) on the
grounds that there is diversity between the parties and the amount in controversy is in excess
of $75,000. The defendants admit that there is diversity, but challenge the damages. In
particular, they rely on ¶ 13.6 of the Agreement that limits “PMP’s liability . . . in all circumstances and for all claims . . . to the amounts actually paid by [Comfort Furniture] to PMP[.]”
The individual defendants set this amount at approximately $19,000. See Defs. Mem. at 11.
During oral argument, Rick indicated that the amount could be approximately $44,000.5 See
Defs. Resp. (Docket No. 53) at 2. Obviously, either amount is below the jurisdictional threshold.
Assuming, arguendo, that this clause is enforceable and applies to the claims raised in
the complaint (about which this court expresses no opinion), it is not controlling in connection
with the instant motion to dismiss. As the individual defendants argue, they are not parties to
the Agreement. The contractual limitation on damages, by its terms, limits PMP’s liability. It
has no application to the individual defendants’ liability. According to the plaintiff, and as
detailed in the complaint, the damages Comfort Furniture suffered far exceeded $75,000.
Thus, if the individual defendants are liable to the plaintiff, it is not clear that the amount in
controversy is below the jurisdictional level. Therefore the complaint against the individual
defendants will not be dismissed for lack of jurisdiction.
Challenge to the Sufficiency of the Pleadings
The individuals have also moved to dismiss all three counts of the complaint for failure
to state a claim upon which relief can be granted. For the reasons detailed herein, this motion
will be allowed although the plaintiff will be permitted to attempt to re-plead some of the
Count I: Breach of Contract
Count I of the Amended Complaint purports to state a claim for breach of contract. As
the plaintiff has alleged:
20. Plaintiff’s assignor and the Defendants had an agreement to conduct a
high impact promotional sale on Comfort Furniture’s premises for a sixty day
[period] following March 24, 2011.
This court will assume for present purposes, although it is not clear, that this was a sufficiently
affirmative representation to constitute a binding admission.
21. Defendants, without legal excuse, failed to satisfy their obligations under
the contract by withholding or otherwise failing to provide competent
personnel during the sale.
Compl. ¶¶ 20-21.
This count must be dismissed against the individual defendants because they are not
parties to the Agreement. It is clear that the Agreement was “between Profit Management
Associates East, Inc., d/b/a Profit Management Promotions (‘PMP’), and Comfort Bedding &
Furniture, Inc. (‘Client’).” It was signed by Michael Egan in his capacity as President of Profit
Management Associates East, Inc., d.b.a. Profit Management Promotions. There is no basis in
the complaint to bind the individual defendants to the terms of the Agreement. See Lumax
Indus., Inc. v. Aultman, 543 Pa. 38, 41-42, 669 A.2d 893, 895 (1995) (“there is a strong
presumption in Pennsylvania against piercing the corporate veil” and “the general rule [is] that
the corporate entity should be recognized and upheld” (quotation omitted)).
Plaintiff argues as follows:
At the time of the preparation of the original Complaint, Plaintiff named the
corporate parties that he knew at the time were part of PMP. However,
after further review and investigation, the Plaintiff discovered that PMP and
the three individually named defendants continually and systemically reorganized PMP under similar names with the intention of obfuscating liability
and responsibility for the actions and activities of the PMP and the individually named defendants by altering the corporate name and the responsible
parties of each. In all re-organizations, the same three individually named
defendants are designated as corporate officers or members.
Pl. Opp. (Docket No. 41) at 6. This argument is insufficient to defeat the individual defendants’
motion to dismiss.
The individual defendants argue that the plaintiff is attempting to state a claim for
piercing the corporate veil of PMP, and that these allegations are insufficient. See Lieberman v.
Corporacion Experienca Unica, S.A., Civil Action Nos. 14-3393, 14-5102, 2016 WL 7450464,
at*11-14 (E.D. Pa. Dec. 27, 2016) (discussing standard for piercing the corporate veil) (and cases
cited). It seems that the plaintiff also may be attempting to state a claim for successor corporate liability. See Childers v. Power Line Equip. Rentals, Inc., 452 Pa. Super. 94, 115-16, 681
A.2d 201, 212 (1996) (discussing standard for successor liability) (and cases cited). In any event,
all parties are relying on affidavits and alleged facts that are not included in the complaint, and
are not properly considered in connection with a motion to dismiss. While there may be a
theory for holding the individual defendants, and other Profit Management entities, liable
under the Agreement, it has not been pleaded in the complaint. Therefore, Count I will be
dismissed without prejudice. The plaintiff may attempt to re-plead the breach of contract
claim, if appropriate, within thirty (30) days of the date of this order.
Count III: Intentional Misrepresentation/Fraud
In Count III of the complaint, plaintiff alleges as follows:
29. With the intention that Comfort Furniture would rely upon the
statement, the Defendants represented that it would conduct a
“promotional sale” that would get Comfort Furniture out of its financial
troubles [and this] was a material fact relied upon by Comfort Furniture.
30. By making this statement, contrary to Defendants’ ability to do so, and
the additional bad acts of theft and fraud engaged in by personnel of PMP,
the Defendants acted with conscious indifference to the truth and/or with
the knowledge of the falsity of its statement and criminality of the acts of its
31. Plaintiff/Comfort Furniture relied upon the Defendants’ intentional,
malice, purposeful misrepresentations to their detriment and the Defendants
exploited Comfort Furniture’s reliance by wrongly retaining all income,
profits and monies during the sale period and failing to provide an
accounting or perform any of the obligations under the contract. PMP’s
behavior was unconscionable.
Compl. ¶¶ 29-31. The individual defendants have moved to dismiss this Count on the grounds
that it fails to state a claim, and is barred by the statute of limitations. This court agrees, and
the claim of fraud will be dismissed with prejudice.
As an initial matter, this court must address which law should apply to this tort claim. It
is well settled that “[a] federal Court sitting in diversity must apply the choice of law principles
of the forum state,” and, thus, this court “must look to Massachusetts choice of law rules.”
Dunfey v. Roger Williams Univ., 824 F. Supp. 18, 20 (D. Mass. 1993). Relying on the choice of
law provision in the contract, the defendants argue that Pennsylvania law should apply. The
plaintiff, on the other hand, argues that the misrepresentations related to a sale that was to
take place in Massachusetts, and that the injury was sustained here, so that Massachusetts law
should be applied. Applying the “functional” approach of the Restatement (Second) of Conflict
of Laws, this court finds that the law of Massachusetts should apply since no other state has a
more significant relationship to the underlying cause of action, and the injury occurred in
Massachusetts. See Geshke v. Crocs, Inc., 889 F. Supp. 2d 253, 260 (2012) (even under the
“functional” approach, “unless another state has a more significant relationship to the
underlying cause of action, tort claims remain governed by the law of the state in which the
alleged injury occurred”) (and cases cited). Nevertheless, as detailed below, the claim of
fraudulent misrepresentation must be dismissed under either state’s laws.
Under both Massachusetts and Pennsylvania law, to prevail on a claim for fraudulent
misrepresentation, the plaintiff “must establish that the defendant ‘made a false representation of a material fact with knowledge of its falsity for the purpose of inducing the plaintiff to
act thereon, and that the plaintiff reasonably relied upon the representation as true and acted
upon it to his damage.’” Russell v. Cooley Dickinson Hosp., Inc., 437 Mass. 443, 458, 772 N.E.2d
1054, 1066 (2002) (quoting Danca v. Taunton Sav. Bank, 385 Mass. 1, 8, 429 N.E.2d 1129 (1982)
(additional citation omitted)). See also In re LMcD, LLC, 405 B.R. 555, 562-63 (M.D. Pa. 2009)
(citing Delahanty v. First Pa. Bank, N.A., 318 Pa. Super. 90, 464 A.2d 1243 (1983)). Pursuant to
Fed. R. Civ. P. 9(b), a party alleging fraud or mistake “must state with particularity the circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b). Thus, the party claiming fraud
“must specify the time, place, and content of an alleged false representation sufficiently to put
[the opposing party] on notice and enable them to prepare meaningful responses.” OrbusNeich
Med. Co., Ltd., BVI v. Boston Sci. Corp., 694 F. Supp. 2d 106, 118 (D. Mass. 2010). Moreover,
where there are multiple defendants, the specific role of each must be alleged. See Taylor v.
Moskow, Civil Action No. 13-12675-FDS, 2014 WL 2573990, at *5 (D. Mass. June 6, 2014)
(complaint for misrepresentation dismissed where allegations were “vague as to which of the
defendants made the purportedly misleading statements”); Beram v. Ceaco, Inc., Civil Action
No. 16-10569-PBS, --- F. Supp. 3d ---, 2016 WL 7030427, at *5 (D. Mass. Dec. 1, 2016) (complaint for fraudulent misrepresentation dismissed where “[t]he complaint does not state what
fraudulent misrepresentations were made, when, where, or by whom.”); DiVittorio v. Equidyne
Extractive Indus., Inc., 822 F.2d 1242, 1247 (2d Cir. 1987) (“Where multiple defendants are
asked to respond to allegations of fraud, the complaint should inform each defendant of the
nature of his alleged participation in the fraud.”).
In the instant case, the only specific fraudulent misrepresentation alleged is that PMP
“would conduct a ‘promotional sale’ that would get Comfort Furniture out of its financial
troubles[.]” Compl. ¶ 29. As an initial matter, it is questionable whether this is a statement of
fact that can give rise to a claim of misrepresentation. Where a company’s representation is
merely “normal commercial puffing,” it is an inactionable statement of opinion. Cummings v.
HPG Int’l, Inc., 244 F.3d 16, 21 (1st Cir. 2001). In any event, the complaint fails to give the
specifics of who made the statement, or where or when it was made. The complaint also fails
to delineate the role of each defendant in connection with the alleged fraudulent
misrepresentations. Thus, the complaint fails to comply with the pleading requirements of Rule
9(b), and the claim of fraud must be dismissed.
The claim is also barred by the statute of limitations, making any future attempt to
replead this claim futile. Pennsylvania has a two-year statute of limitations for fraud, while
Massachusetts has a three-year statute. 42 Pa. C.S.A. § 5524(7); Mass. Gen. Laws ch. 260, § 2A.
Any statements were made, and the damage incurred, before Comfort Furniture filed for
bankruptcy on June 28, 2011. However, suit was not filed until March 24, 2015. Since this was
well beyond the three-year statute of limitations, it is untimely.
The plaintiff argues that the fact that Comfort Furniture was in bankruptcy somehow
tolled the statute of limitations. This is not correct. Pursuant to Bankruptcy Code § 108(a), the
trustee named in the bankruptcy is permitted “to commence an action, for which the applicable
statute of limitations had not expired before the date when the bankruptcy case was filed,
before the later of the time period provided under the applicable non-bankruptcy law statute
of limitations or two years after the Order for Relief commencing the bankruptcy case.” In re
Stanley J. Segal, Debtor, 510 B.R. 753, 766 (E.D. Pa. 2014) (citing 11 U.S.C. § 108(a)). This provision is applicable in the instant case, since the tort statute of limitations had not expired as of
the date the bankruptcy was filed. If “the later of the time” is two years after the commence13
ment of the bankruptcy case, the extension may be exercised by either a trustee or a debtor-inpossession. Motor Carrier Audit & Collection Co. v. Lighting Prods., Inc., 113 B.R. 424, 426 (N.D.
Ill., E. Div. 1989).
In the instant case, the non-bankruptcy (Massachusetts) law statute of limitations of
three-years for fraud would have expired sometime in 2014. The “order for relief commencing
the bankruptcy case” was issued on August 5, 2011, so the two year period would have expired
on August 5, 2013. Under either scenario, the filing in 2015 was untimely. Therefore, Count III
will be dismissed with prejudice.
Count II: Mass. Gen. Laws ch. 93A
In Count II of the complaint, the plaintiff alleges that the defendants violated Mass. Gen.
Laws ch. 93A by committing unfair and deceptive acts and practices in connection with the
promotional sale by making misrepresentations, misappropriating funds and failing to properly
allocate funds, among other things. See Compl. ¶¶ 24-26. As noted above, the sale took place
beginning on March 24, 2011, and suit was commenced on March 24, 2015. The individual
defendants have moved to dismiss this claim on the grounds that it is untimely. This court does
not agree. There is a four year statute of limitations under Mass. Gen. Laws ch. 93A. See Mass.
Gen. Laws ch. 260, § 5A.6 Since the plaintiff is challenging the defendants’ conduct in
conducting the sale, it appears that most, if not all of of the allegedly wrongful conduct took
place within the limitations period.
The defendants simply argue that Count II should be dismissed under the two year Pennsylvania
statute of limitations for torts. See Defs. Mem. at 12-13. They have not provided any reason why the
express four year statute of limitations governing 93A claims should not apply.
Nevertheless, this court finds that the claim against the individual defendants under ch.
93A must be dismissed, albeit without prejudice, in light of the plaintiff’s failure to identify the
allegedly wrongful conduct of the individual defendants. Under Massachusetts law, common
law claims for deceit or fraudulent misrepresentation may form the basis of a claim under
Mass. Gen. Laws ch. 93A, as may other unscrupulous business practices. See Rodi v. S. New
England Sch. of Law, 389 F.3d 5, 20 (1st Cir. 2004); Datacomm Interface, Inc. v. Computerworld,
Inc., 396 Mass. 760, 778, 489 N.E.2d 185, 197 (1986). In addition, even a person who is acting
within the scope of his authority as an officer of a company may be held personally liable for his
own misrepresentations under Mass. Gen. Laws ch. 93A. See Standard Register Co. v. BoltonEmerson, Inc., 38 Mass. App. Ct. 545, 551, 649 N.E.2d 791, 794-95 (1995). A 93A claim
sounding in fraud must satisfy the heightened pleading requirement of Fed. R. Civ. P. 9(b).
Watkins v. Omni Life Sci., Inc., 692 F. Supp.2d 170, 177 (D. Mass 2010). In the instant case,
however, the allegations in the complaint refer only to PMP or to unnamed PMP personnel.
For the reasons detailed more fully in connection with the plaintiff’s claim of fraud, the
allegations are insufficient to state a claim against the individual defendants for their own
personal wrongdoing, nor does it state a basis for disregarding the corporate entity. The
plaintiff shall be given 30 days to file a motion to amend the complaint if the facts so warrant.
For all the reasons detailed herein, the defendants’ motion to dismiss (Docket No. 37) is
allowed with prejudice as to Count III, and without prejudice as to Counts I and II. If appropriate, plaintiff may file a motion to amend the complaint within thirty (30) days of the date of
/ s / Judith Gail Dein
Judith Gail Dein
United States Magistrate Judge
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?