Johnson v. The Capital Offset Company, Inc. et al
Filing
35
///ORDER granting 13 Partial Motion to Dismiss by ACME Bookbinding Company, Inc. in that the plaintiffs negligence claim against Acme in Count III is dismissed without prejudice; granting 15 Partial Motion to Dismiss by Stew art and Capital Offset; plaintiff's demands for enhanced compensatory damages as to Stewart and Capital Offset and the negligence claim against Capital Offset in Count III are dismissed; denying 20 Stinehour's Partial Motion to Dismiss. So Ordered by Judge Joseph A. DiClerico, Jr.(dae)
UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF NEW HAMPSHIRE
Alford Johnson, as Trustee
of the Martha Wood Trust
v.
The Capital Offset Company, Inc., et al.
and
Civil No. 11-cv-459-JD
Opinion No. 2012 DNH 052
The Capital Offset Company, Inc.
v.
Susan Cox
O R D E R
Alford Johnson, as the Trustee of the Martha Wood Trust,
brought suit against The Capital Offset Company, Inc.; its
president, Jay Stewart; a consultant who later worked for Capital
Offset, Stephen Stinehour; and Acme Bookbinding Company, alleging
claims arising from the publication of a photography book,
Spiritual Passports.
Capital Offset brought a third-party action
against Susan Cox, who was a graphic designer for the
publication.
Acme, Capital Offset, Stewart, and Stinehour have
filed partial motions to dismiss.
In response, Johnson agrees to
dismiss his negligence claim against Capital Offset and Acme and
otherwise objects to the motions.
Acme seeks dismissal of only the negligence claim.
Johnson
has agreed to dismissal of that claim as to Acme and filed a
notice of voluntary dismissal without prejudice pursuant to
Federal Rule of Civil Procedure 41(a)(1).
to the notice of voluntary dismissal.
Acme did not respond
Therefore, Acme’s partial
motion to dismiss is granted to the extent that Johnson’s
negligence claim against Acme is dismissed without prejudice.
Standard of Review
To survive a motion to dismiss pursuant to Federal Rule of
Civil Procedure 12(b)(6), “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, 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007)).
The Rule 12(b)(6) standard
“demands more than an unadorned, the-defendant-unlawfully-harmedme accusation.
A pleading that offers labels and conclusions or
a formulaic recitation of the elements of a cause of action will
not do.
Nor does a complaint suffice if it tenders naked
assertion[s] devoid of further factual enhancement.”
S. Ct. at 1949.
Iqbal, 129
Plausibility in this context does not mean
probability but is more than a mere possibility.
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Id.
I.
Motion by Capital Offset and Stewart
Capital Offset and Stewart move to dismiss Johnson’s demands
in Counts I through VII for enhanced compensatory damages.
They
contend that the complaint lacks allegations to support the
demands.
Capital Offset also moves to dismiss the negligence
claim against it.
Johnson agrees that the complaint cannot
sustain the negligence claim against Capital Offset and asks that
the claim be dismissed without prejudice.
Johnson objects to
dismissal of his demands for enhanced compensatory damages.
Under New Hampshire law, enhanced compensatory damages are
awarded only in exceptional cases.
75, 87 (2006).
Stewart v. Bader, 154 N.H.
These cases must involve wanton, malicious, or
oppressive actions.
Id.
Wanton conduct means that the actor is
aware that his actions are causing a great risk of harm to
others.
Thompson v. Forest, 136 N.H. 215, 220 (1992).
Conduct
is malicious or oppressive when it involves “ill will, hatred,
hostility, or evil motive.”
Stewart, 154 N.H. at 87.
Generally,
circumstances that would support enhanced compensatory damages
may arise in the context of torts but not in contract actions.
DCPB, Inc. v. City of Lebanon, 957 F.2d 913, 915 (1st Cir. 1992);
Jimenez v. Verdicchia, 2000 WL 1752803, at *1 (D.N.H. Nov. 22,
2000).
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In a diversity case, courts apply state substantive law and
federal procedural law.
(1965).
Hanna v. Plumer, 380 U.S. 460, 465
Therefore, in this case, the court applies New Hampshire
law as to the substantive elements for compensatory damages and
federal law as to the requirements under Rule 12(b)(6).
To the
extent Johnson relies on the pleading standard used in Crowley v.
Global Realty, Inc., 124 N.H. 814, 818-19 (1978), his argument is
inapposite.
All of the claims in Johnson’s complaint arise from his
dissatisfaction with the printing and binding of Spiritual
Passports.1
In Counts I through VII, Johnson alleges breach of
contract, breach of the implied covenant of good faith and fair
dealing, negligence, negligent misrepresentation, intentional
misrepresentation, fraudulent misrepresentation, and fraudulent
concealment.
In each count, except Count IV for negligent
misrepresentation, Johnson includes a paragraph that states:
“Said actions constitute wanton, malicious, and oppressive
conduct, warranting enhanced compensatory damages.”
Capital Offset and Stewart argue that despite the different
claims alleged, the underlying cause of action for each count is
1
Spiritual Passports is an art photography book that is a
compilation of the photographs taken by Johnson’s wife, Martha
Wood, in Peru just before she died.
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breach of contract, which does not support a claim for enhanced
damages.
In addition, Capital Offset and Stewart contend that
the complaint lacks allegations to support an inference of
wanton, malicious, or oppressive conduct.
Further, relying on
the reasoning in Malone v. Cemetery Street Dev., 1995 WL 85288
(D.N.H. Feb. 17, 1995), the defendants contend that the
allegations in the complaint do not show any connection between
the allegedly poor quality of the books and the standard
necessary for enhanced damages.
In response, Johnson defends his demand for enhanced damages
for the tort claims but appears to abandon the demand for his
contract claims in Counts I and II.
To support enhanced damages
for his tort claims, Johnson points to his allegations (1) that
Capital Offset and Stewart represented that every sheet and every
book had been inspected and were consistent with Johnson’s
specifications when the books were defective in a number of
respects and (2) that the defendants breached their duties
because they should have known that Capital Offset and Acme were
not qualified to print and bind the book and did not do so in a
manner consistent with the specifications.
The cited allegations
taken as true do not provide the exceptional circumstances that
are necessary for enhanced damages.
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Instead, the allegations
suggest negligence and perhaps some sloppy or sharp business
practices.
In the absence of allegations that taken as true would show
conduct that was wanton, malicious, or oppressive, Johnson’s
demands for enhanced compensatory damages are dismissed.
II.
Stinehour’s Motion
Stinehour moves to dismiss the breach of fiduciary duty
claim, Count VIII, against him.
In support, he argues that
Johnson has not alleged any facts to show that he owed a
fiduciary duty to Johnson.
Johnson objects, contending that
Stinehour owed him a fiduciary duty while Stinehour worked as an
independent printing and production consultant advising Johnson
on how to have Spiritual Passports published.
Under New Hampshire law, “a fiduciary relationship has been
defined as a comprehensive term and exists wherever influence has
been acquired and abused or confidence has been reposed and
betrayed.”
Brzica v. Trs. of Dartmouth Coll., 147 N.H. 443, 447
(2002) (internal quotation marks omitted).
Therefore, “[a]
fiduciary relationship exists between two persons when one has
gained the confidence of the other and purports to act or advise
with the other’s interest in mind.”
Clark & Lavey Benefits, Inc.
v. Educ. Dev. Ctr., Inc., 157 N.H. 220, 227 (2008).
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“Once a
person becomes a fiduciary, the law places him in the role of a
moral person and pressures him to behave in a selfless fashion
while contract law does not go beyond the morals of the market
place where self-interest is the norm.”
Lash v. Cheshire County
Savings Bank, 124 N.H. 435, 438 (1984).
Johnson alleges that he hired Stinehour, who was an
independent printing and production consultant, in 2006 to help
Johnson arrange for publishing and distributing Spiritual
Passports.
Stinehour recommended that Johnson hire Capital
Offset to print the book and represented that Capital Offset was
qualified and able to print the book in a manner that was
consistent with industry standards.
Johnson relied on Stinehour
and chose Capital Offset in 2009 based on his recommendation.
Immediately after Johnson decided to use Capital Offset for
printing, Stinehour disclosed that Capital Offset had hired him
as its account executive and sales representative.
Johnson
further alleges that contrary to Stinehour’s recommendation,
Capital Offset was not qualified or able to print the book to
industry standards.
Taking Johnson’s allegations as true, he states a basis for
a fiduciary relationship with Stinehour.
Stinehour’s arguments
to dismiss the claim would be better addressed in a properly
supported motion for summary judgment.
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Conclusion
For the foregoing reasons, the partial motion to dismiss
filed by defendant Acme (document no. 13) is granted in that the
plaintiff’s negligence claim against Acme in Count III is
dismissed without prejudice.
The partial motion to dismiss filed
by Stewart and Capital Offset (document no. 15) is granted, and
the plaintiff’s demands for enhanced compensatory damages as to
Stewart and Capital Offset and the negligence claim against
Capital Offset in Count III are dismissed.
Stinehour’s partial
motion to dismiss (document no. 20) is denied.
SO ORDERED.
____________________________
Joseph A. DiClerico, Jr.
United States District Judge
March 6, 2012
cc:
Jennifer Turco Beaudet, Esquire
Elsabeth D. Foster, Esquire
Thomas J. Pappas, Esquire
Arnold Rosenblatt, Esquire
Mark W. Shaughnessy, Esquire
William N. Smart, Esquire
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