Graham v. Hubbs Machine and Manufacturing, Inc. et al

Filing 78

MEMORANDUM AND ORDER: IT IS HEREBY ORDERED that plaintiffs motion to dismiss defendants amended counterclaims [Doc. #69] is denied. Signed by District Judge Carol E. Jackson on 6/25/2015. (KMS)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
TONYA GRAHAM,

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Plaintiff,
vs.
HUBBS MACHINE AND
MANUFACTURING, INC., et al.,
Defendants.

Case No. 4:14-CV-419 (CEJ)

MEMORANDUM AND ORDER
This matter is before the Court on plaintiff’s motion to dismiss the amended
counterclaims of defendant Hubbs Machine and Manufacturing, Inc. Defendant has
responded in opposition, and the issues are fully briefed.
I.
Tonya

Background
Graham

was

employed

by

defendant

Hubbs

Machine

and

Manufacturing, Inc. from February 1996 until her termination in July 2013. At the
time of her termination, Graham was vice president and corporate officer of the
company, and had worked in that capacity since July 2008. In the second amended
complaint, plaintiff asserts a claim against defendant Hubbs Machine for wrongful
termination in violation of Missouri public policy (Count I). Plaintiff alleges that she
was harassed and ultimately terminated for reporting to her supervisor violations of
the Financial Industry Regulation Authority (FINRA) rules, ethical codes and
regulations, and the Employee Retirement Income Security Act of 1974 (ERISA), 29
U.S.C. § 1001, et seq.

Plaintiff also asserts a claim against defendants Hubbs

Machine, Rick Benward, and William Hubbs for retaliation under section 510 of
ERISA, 29 U.S.C. § 1140 (Count III).1
In its answer to the second amended complaint, defendant Hubbs Machine
asserts amended counterclaims against Graham for tortious interference with a
business expectancy and breach of fiduciary duty, alleging that plaintiff divulged
confidential information and induced customers to cease or reduce business with
the company prior and subsequent to her termination.

In the instant motion,

plaintiff moves to dismiss the counterclaims pursuant to Rule 12(b)(6) of the
Federal Rules of Civil Procedure.
II.

Legal Standard

The purpose of a motion to dismiss under Rule 12(b)(6) of the Federal Rules
of Civil Procedure is to test the legal sufficiency of the complaint.

The factual

allegations of a complaint are assumed true and construed in favor of the plaintiff,
“even if it strikes a savvy judge that actual proof of those facts is improbable.” Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 556 (2007) (citing Swierkiewicz v.
Sorema N.A., 534 U.S. 506, 508 n.1 (2002)); Neitzke v. Williams, 490 U.S. 319,
327 (1989) (“Rule 12(b)(6) does not countenance . . . dismissals

based on a

judge’s disbelief of a complaint’s factual allegations”); Scheuer v. Rhodes, 416 U.S.
232, 236 (1974) (a well-pleaded complaint may proceed even if it appears “that a
recovery is very remote and unlikely”). The issue is not whether the plaintiff will
ultimately prevail, but whether the plaintiff is entitled to present evidence in
support of his claim. Id. A viable complaint must include “enough facts to state a
claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570; see also id.
1

 Count II and portions of Count I were previously dismissed for failure to state a
claim.   

2

at 563 (stating the “no set of facts” language in Conley v. Gibson, 355 U.S. 41, 4546 (1957), “has earned its retirement.”). “Factual allegations must be enough to
raise a right to relief above the speculative level.” Id. at 555.
III.

Discussion
A.

Tortious Interference with Business Expectancy

Plaintiff argues that defendant’s tortious interference claim fails, because it
consists of legal conclusions without supporting facts.

Specifically, plaintiff asserts

that defendant failed to plead who the customers were with whom the company
had an alleged business expectancy, the nature of any contract or business
expectancy, plaintiff’s knowledge of such expectancies, the actual breach induced
or caused by plaintiff’s conduct, the absence of justification, the actual damages
sustained by the company, and when and where such damages occurred.
“A claim for tortious interference with a contract or business expectancy
requires proof of each of the following:

(1) a contract or a valid business

expectancy; (2) defendant's knowledge of the contract or relationship; (3)
intentional interference by the defendant inducing or causing a breach of the
contract or relationship; (4) absence of justification; and, (5) damages resulting
from defendant's conduct.” Cmty. Title Co. v. Roosevelt Fed. Sav. & Loan Ass’n,
796 S.W.2d 369, 372 (Mo. banc 1990).

“For a corporate officer or agent to be

liable for tortuously interfering with a contract of a corporation, he or she must
have [both] acted out of self interest, [and] also have used improper means.”
Mackey v. ACL Transp., LLC, No. 4:09-CV-1159 (CEJ), 2009 WL 3517534, *2 (E.D.
Mo. Oct. 23, 2009) (quoting Meyer v. Enoch, 807 S.W.2d 156, 159 (Mo. Ct. App.
1991)).

“Improper means are those that are independently wrongful, such as

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threats, violence, trespass, defamation, misrepresentation of fact, restraint of
trade, or any other wrongful act recognized by statute or the common law.”
Western Blue Print Co., LLC v. Roberts, 367 S.W.3d 7, 20 (Mo. banc 2012) (quoting
Stehno v. Sprint Spectrum, L.P., 186 S.W.3d 247, 252 (Mo. banc 2006)).
In its amended counterclaims, defendant alleges that it had purchase orders,
valid business expectancies, and a long business history or relationship with its
customer Hexagon/Leica. As a former vice president and corporate officer of the
company, defendant further alleges that plaintiff had knowledge of defendant’s
business expectancies with Hexagon/Leica.

Subsequent to her termination from

Hubbs Machine, defendant asserts that plaintiff contacted Hexagon/Leica and
persuaded it to increase business with and utilize the services of defendant’s direct
competitor. Additionally, defendant alleges that plaintiff connected with a corporate
officer of Hexagon/Leica through social media sites to induce and influence it to
cease or reduce its ordering of laser tracker equipment, material, and support from
Hubbs Machine. Defendant cites a specific date on which Hexagon/Leica informed
Hubbs Machine it was providing more business opportunities to defendant’s
competitor because of plaintiff’s statements to defendant’s customers. Finally, as a
result of plaintiff’s actions, defendant alleges that in the 2014 fiscal year it
experienced a reduction in orders from Hexagon for the first time in six years,
totaling $96,000, and a 25% reduction in orders from Leica.
Accepting the factual allegations in the counterclaim as true, the Court finds
that defendant has adequately stated a claim for tortious interference with its
business expectancy. See Coons v. Mineta, 410 F.3d 1036, 1039 (8th Cir. 2005)
(“When ruling on a motion to dismiss, the court must accept the allegations

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contained in the complaint as true and draw all reasonable inferences in favor of
the nonmoving party.”).

In contrast to plaintiff’s contentions, defendant has

provided a sufficiently specific supporting set of facts for each element of its
tortious interference claim.
B.

Breach of Fiduciary Duty

To assert a breach of fiduciary duty claim, a proponent must show that a
fiduciary duty existed between the proponent and the defending party, the
defending party breached the duty, and the breach caused harm to the proponent.
Hallquist v. United Home Loans, Inc., 715 F.3d 1040 (8th Cir. 2013); Western Blue
Print Co., LLC, 367 S.W.3d at 15. With respect to defendant’s second counterclaim,
plaintiff concedes that she had a duty to protect Hubbs Machine’s interests, but
argues that defendant fails to plead specifically how plaintiff breached her duty to
Hubbs Machine and the damages the company suffered as a result.
Contrary to plaintiff’s assertions, defendant has adequately alleged acts
performed by plaintiff during her employment as a vice president of Hubbs Machine
as examples of how plaintiff breached her fiduciary duties to Hubbs Machine,
including intentionally divulging confidential information concerning personnel
matters

to

defendant’s

customers,

publicly

disparaging

defendant

and

its

employees, and usurping business opportunities that belonged to defendant. As a
result of plaintiff’s conduct, defendant alleges that its reputation was so damaged in
the industry that its direct competitor offered to buy Hubbs Machine and defendant
incurred fiscal damage in 2014 totaling $96,000 in reduced business or sales from
Hexagon and a 25% decrease in business or sales to Leica.

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The factual allegations asserted in defendant’s second counterclaim are
sufficient to support a claim that plaintiff breached her fiduciary duties of good
faith, fair dealing, due care, candor and loyalty to defendant. As reiterated by the
Supreme Court in a summary reversal issued two weeks after Twombly, the federal
rules require “only ‘a short and plain statement of the claim showing that the
pleader is entitled to relief.’ Specific facts are not necessary; the statement need
only ‘give the defendant fair notice of what the . . . claim is and the grounds upon
which it rests.’” Erickson v. Pardus, 551 U.S. 89, 93 (2007) (quoting Fed. R. Civ. P.
8(a)(2) and Twombly, 550 U.S. at 555).

Defendant’s counterclaims meet the

standard of fair notice.
*

*

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*

*

For the reasons set forth above,
IT IS HEREBY ORDERED that plaintiff’s motion to dismiss defendants’
amended counterclaims [Doc. #69] is denied.

____________________________
CAROL E. JACKSON
UNITED STATES DISTRICT JUDGE
Dated this 25th day of June, 2015.

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