Samberg v. Detroit Water & Sewer Company

Filing 16

OPINION and ORDER Granting 9 Defendant's Motion to Dismiss - Signed by District Judge Judith E. Levy. (FMos)

UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTICT OF MICHIGAN
SOUTHERN DIVISION
Robert Samberg,
Plaintiff,

Case No. 14-cv-13851
Hon. Judith E. Levy
Mag. Judge David R. Grand

v.
Detroit Water & Sewer Company,
Defendant.
__________________________________/
OPINION AND ORDER GRANTING DEFENDANT’S MOTION TO
DISMISS [9]
Robert Samberg files this complaint against the Detroit Water &
Sewer Company (the “DWSD”).1

The case arises out of defendant’s

tender offer to buy back bonds and plaintiff’s allegation that defendant
withheld material information until after plaintiff was required to make
his decision. (Dkt. 1.) Plaintiff brings claims of (1) fraud, (2) negligent
misrepresentation, (3) intentional infliction of emotional distress, and
(4) negligent infliction of emotional distress. (Id.)

Plaintiff incorrectly identified the defendant in his complaint as the Detroit Water
& Sewage Company. The proper defendant is the Detroit Water & Sewage
Department.
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Before the Court is defendant’s motion to dismiss.

Defendant

argues that the case should be dismissed because plaintiff has failed to
state an actionable claim upon which relief could be granted. (Dkt. 9.)
For the reasons set forth below, the Court grants defendant’s motion to
dismiss.
I. Facts
Plaintiff held bonds with the DWSD. On some unspecified date,
the DWSD made a tender offer to buy back their bonds and gave all the
bondholders until April 21, 2014, to act on the offer. (Dkt. 1 at ¶ 1.)
Plaintiff’s personal broker required that plaintiff provide the broker
with a response to this offer by April 20, 2014. (Id.) After plaintiff
informed his broker of his decision to accept the tender offer but before
the close of the April 21 deadline, the DWSD released additional
information that affected the value of the bonds. Plaintiff alleges that
this newly released information was “[c]ritical information affecting
[his] decision” and that he would not have accepted the offer to tender
his bonds had the information been provided sooner. (Id. at ¶ 3.) As a
result of this information being released after his broker’s deadline,

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plaintiff alleges that he tendered his bonds “at a significant loss.” (Id.
at ¶ 11.)
II. Legal Standard
When deciding a motion to dismiss under Fed. R. Civ. P. 12(b)(6),
the Court must “construe the complaint in the light most favorable to
the plaintiff and accept all allegations as true.” Keys v. Humana, Inc.,
684 F.3d 605, 608 (6th Cir.2012). “To survive a motion to dismiss, a
complaint must contain sufficient factual matter, accepted as true, to
state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009). A plausible claim need not contain “detailed
factual allegations,” but it must contain more than “labels and
conclusions” or “a formulaic recitation of the elements of a cause of
action[.]” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).
A pro se complaint, such as this one, is entitled to a liberal
construction and “must be held to less stringent standards than formal
pleadings drafted by lawyers[.]” Erickson v. Pardus, 551 U.S. 89, 94
(2007) (citation omitted).
III.

Analysis

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Defendant argues that all of plaintiff’s claims should be dismissed
because he failed to state a claim upon which relief could be granted.
(Dkt. 9 at 5.)
Plaintiff has failed to identify any action taken by defendant that
could be construed as fraudulent, negligent, or that could lead to
plaintiff suffering from emotional distress. Construing the complaint in
the light most favorable to Samberg, the following is alleged: (1) the
defendant issued an offer to tender bonds, (2) the defendant’s deadline
to respond to the offer was April 21, 2015, and (3) after plaintiff
provided a response in compliance with his personal broker’s deadline,
defendant released additional information that affected the value of the
bonds. (Dkt. 1.)
A. Fraud and Negligent Misrepresentation
With respect to plaintiff’s fraud claim, the complaint states that
defendant “made misrepresentations of fact” to defendant. (Dkt. 1 at 58.) Apart from these conclusory allegations, plaintiff’s complaint fails to
allege any specific fraudulent actions on the part of defendant.

As

required by Fed. R. Civ. P. 9(b), plaintiff does not allege who made the
fraudulent statements or omissions, what those statements were, when

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they were made, or how he relied on them. See Fed. R. Civ. P. 9(b);
Frank v. Dana Corp., 547 F.3d 564, 569–70 (6th Cir.2008) (internal
quotation marks and citation omitted). At a minimum, plaintiff “must
allege the time, place and contents of the misrepresentations upon
which they relied.” Id.

This threshold is not met by plaintiff’s

complaint.
Even granting plaintiff a more liberal construction of his pro se
complaint, and even if he were granted leave to amend it, his claims
would still not survive defendant’s motion to dismiss. Under Michigan
law a fraudulent misrepresentation claim requires a showing that the
defendant made a material misrepresentation that was known to be
false.

Hi–Way Motor Co. v. Int'l Harvester Co., 398 Mich. 330, 247

N.W.2d 813, 816 (Mich.1976). Similarly, a negligent misrepresentation
claim requires an allegation that defendant made a material
misrepresentation that was unintentionally false. See Sipes v. Kinetra,
LLC, 137 F. Supp. 2d 901, 910 (E.D. Mich. 2001).
In plaintiff’s response, he claims that “defendant’s purpose was to
coerce the plaintiff into tendering his bonds without the necessary
information to make an informed decision.”

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(Dkt. 15 at 2.)

This

statement, along with the allegations in plaintiff’s complaint, is in
direct contradiction with plaintiff’s description of the facts of the case.
Plaintiff acknowledges that the defendant was releasing information
“right up to the tender expiry date that could affect a bondholder’s
decision to tender.” (Id. at ¶ 8.) Defendant did, indeed, release material
information after plaintiff had accepted the offer by a deadline set by
his own broker, but plaintiff did not allege that any of the information
provided to him was false.
Accordingly, plaintiff’s fraud and negligent misrepresentation
claims will be dismissed for failure to state a claim upon which relief
could be granted.
B. Intentional Infliction of Emotional Distress
To establish a claim of intentional infliction of emotional distress,
a plaintiff must prove the following elements: “(1) extreme and
outrageous conduct, (2) intent or recklessness, (3) causation, and (4)
severe emotional distress.” Hayley v. Allstate Ins. Co., 262 Mich. App.
571, 577 (2004).
Plaintiff’s claim fails, in part, because he has not alleged any
conduct that was “extreme and outrageous.” Extreme and outrageous

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conduct is conduct that “must be so outrageous in character, and so
extreme in degree, as to go beyond all possible bounds of decency, and to
be regarded as atrocious and utterly intolerable in a civilized
community.” Hayley, 262 Mich. App. at 577. There is nothing about
defendant’s conduct that remotely rises to the level contemplated by
Michigan courts. On the contrary, defendant did exactly what it said it
would do when it made its initial offer – continue to offer information
up until the April 21 deadline.
Even if all of the other elements were met, plaintiff would still be
unable to establish a causal link between defendant’s conduct and
plaintiff’s alleged injury. Plaintiff indicates that he “would have waited
until August 21, 2014” to respond to defendant’s offer if his own
personal broker did not impose an earlier deadline. Plaintiff’s alleged
injury ultimately arose from the deadline established by his broker and
not by defendant’s conduct.
Accordingly, plaintiff has failed to state a claim for intentional
infliction of emotional distress.
C. Negligent Infliction of Emotional Distress
The elements of negligent infliction of emotional distress are:

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(1) serious injury threatened or inflicted on a person, not the
plaintiff, of a nature to cause severe mental disturbance to
the plaintiff, (2) shock by the plaintiff from witnessing the
event that results in the plaintiff's actual physical harm, (3)
close relationship between the plaintiff and the injured
person (parent, child, husband, or wife), and (4) presence of
the plaintiff at the location of the accident at the time the
accident occurred or, if not presence, at least shock “fairly
contemporaneous” with the accident.
Hesse v. Ashland Oil, Inc., 466 Mich. 21, 34 (2002).

Michigan has

refused “to apply the tort of negligent infliction of emotional distress
beyond the situation where a plaintiff witnesses negligent injury to a
third person and suffers mental disturbance as a result.” Duran v. The
Detroit News, 200 Mich. App. 622, 629 (1993) (emphasis added). Under
no circumstances could plaintiff’s complaint be construed as alleging
that he witnessed harm to a third person and suffered mental
disturbance as a result.

Thus, plaintiff’s negligent infliction of

emotional distress claim will be dismissed for failure to state a claim.
IV.

Conclusion2

While plaintiff uses California law as the basis for the claims in his complaint,
defendant points out that he acknowledges that the action arose in Wayne County,
Michigan. (Dkt. 1-1.) Defendant further argues correctly that the disposition of
this case would be the same regardless of whether the Court applied Michigan or
California law because under California law, a claim of fraud or negligent
misrepresentation also includes the element of a false statement, and an infliction
of emotional distress claim includes the element of causation. See Lazar v. Superior
Court, 12 Cal.4th 631, 638 (1996) (elements of fraud); Wells Fargo Bank, N.A. v.
FSI, Financial Solutions, Inc., 196 Cal.App.4th 1559, 1573 (2011) (elements of
2

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Accordingly, for the reasons set forth above, IT IS HEREBY
ORDERED that:
Defendant’s motion to dismiss (Dkt. 9) is GRANTED, and
plaintiff’s complaint is DISMISSED with PREJUDICE.
Dated: May 5, 2015
Ann Arbor, Michigan

s/Judith E. Levy
JUDITH E. LEVY
United States District Judge

CERTIFICATE OF SERVICE
The undersigned certifies that the foregoing document was served
upon counsel of record and any unrepresented parties via the Court’s
ECF System to their respective email or First Class U.S. mail addresses
disclosed on the Notice of Electronic Filing on May 5, 2015.
s/Felicia M. Moses
FELICIA M. MOSES
Case Manager

negligent misrepresentation); Christensen v. Superior Court, 54 Cal.3d 868, 903
(1991) (elements of intentional infliction of emotional distress); Huggins v. Longs
Drug Stores California, Inc., 6 Cal.4th 124, 129 (elements of negligent infliction of
emotional distress).
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