MilitaryHomeLink.com, LLC v. Hunt Companies, Inc. et al

Filing 34

MEMORANDUM AND ORDER denying 26 Motion to Dismiss. So Ordered by Chief Judge William E. Smith on 8/28/2018. (Jackson, Ryan)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
___________________________________
)
)
)
Plaintiff,
)
)
v.
)
)
HUNT COMPANIES, INC.; and
)
HUNT MILITARY COMMUNITIES MGMT.,
)
LLC,
)
)
Defendants.
)
___________________________________)
MILITARYHOMELINK.COM, LLC,

C.A. No. 18-011 WES

MEMORANDUM AND ORDER
WILLIAM E. SMITH, Chief Judge.
I.

Introduction
Before the Court is Defendants Hunt Companies, Inc., and Hunt

Military Communities

Management,

LLC‘s

(collectively,

“Hunt” or

“Defendants”) Motion to Dismiss (ECF No. 26) (“Motion”) Plaintiff
MilitaryHomeLink.com’s (“MHL”) Third Amended Complaint (ECF No. 25).
In a hearing on July 23, 2018, the Court denied Defendants’ Motion
and indicated that its reasoning would be explained in this brief
memorandum and order.

II.

Background 1
Defendants provide housing to military and civilian families

located near or within military bases.

(Third Am. Compl. (“Compl.”)

¶ 11, ECF No. 25.)

Plaintiff MHL launched and kept up a website to

serve

which

Defendants,

included

“a

comprehensive

forms

and

documents solution (the ‘Document Centers’), along with relevant
community information for United States military personnel and/or
their respective family members.”

(Id. ¶ 12.)

MHL alleges that, beginning in 2008, it agreed orally with
Defendants to provide access to and use of its web portal, while
creating and maintaining Document Centers for each of Defendants’
(Id. ¶ 13.)

military properties.

to two stages of work:

Specifically, the parties agreed

in stage one, MHL created unique Document

Centers for Defendants’ military housing properties, making the
transmission
efficient;

of

housing

then,

in

documents

stage

two,

for
MHL

military
regulated

families
and

more

maintained

Defendants’ Document Centers and provided around-the-clock customer
service support for applicants. (Id. ¶ 14.) In exchange, Defendants
agreed

to

provide

MHL

daily

move-in

reports

for

the

military

properties, which allowed MHL to earn lucrative commissions “by

1

Because this is a motion to dismiss and the Court “assume[s]
the truth of all well-pleaded facts and indulge[s] all reasonable
inferences therefrom that fit the Plaintiff’s stated theory of
liability,” Arruda v. Sears, Roebuck & Co., 310 F.3d 13, 18 (1st
Cir. 2002), this section describes the facts from the vantage point
of MHL.
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cross-selling related third-party provider products and services to
[Defendants’] housing prospects.”

(Id. ¶ 16.)

MHL alleges that the parties’ relationship persisted for a
(Id. ¶¶ 21, 23.)

number of years without incident.

This was true,

despite the parties’ failure to memorialize the Document Centers
contract in writing, as MHL had requested.

(Id. ¶ 25.)

Plaintiff

alleges that “Hunt strung MHL along for many months by promising to
review and sign a contract and preying upon MHL’s mistaken belief of
(id. ¶ 39.); and further, that

a long-term relationship with Hunt,”
“[s]ince

at

least

February

2017,

however,

and

presumably

much

earlier, unbeknownst to MHL, Hunt was developing its own online
document solution, had no intention of reviewing and signing a
contract and planned to terminate its relationship with MHL.”

(Id.

¶ 40.)
In

September

of

2017,

after

nearly

together, MHL noticed a major change:
application

submissions

for

Hunt

nine

of

working

“its daily new housing

properties

approximately 30-40 per day to zero.”

years

suddenly

(Id. ¶ 46.)

went

from

MHL discovered

that Defendants removed MHL from their website without any notice,
and replaced it with their own, newly minted document platform, one
that appeared substantially similar to MHL’s.
MHL sums up:

(Id. ¶ 47.)

“with no advance notice at all, Hunt terminated

the Document Services Contract and cut over to its own online
document solution that it had been surreptitiously developing while

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at the same time concealing its plan to terminate the parties’
contract and misrepresenting its intent to review and sign a contract
and continue the relationship.”

(Id. ¶ 57.)

And from these factual

allegations, MHL advances nine causes of action against Hunt.
III.

Legal Standard
In assessing a motion to dismiss under Rule 12(b)(6) of the

Federal Rules of Civil Procedure, “the district court must ‘accept
as true the well-pleaded factual allegations of the complaint, draw
all reasonable inferences therefrom in the plaintiff’s favor, and
determine whether the complaint, so read, limns facts sufficient to
justify recovery on any cognizable theory.’” Rivera v. Centro Medico
de Turabo, Inc., 575 F.3d 10, 15 (1st Cir. 2009) (quoting LaChapelle
v. Berkshire Life Ins. Co., 142 F.3d 507, 508 (1st Cir. 1998)).

To

overcome a motion to dismiss, a complaint must possess “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) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
(2007)).
IV.

Discussion
Hunt volleys several arguments in attempt to undercut MHL’s

breach-of-contract claim (Count I); none is persuasive.
A. Breach of Contract (Count I)
First, Hunt suggests that no contract was formed because the
“alleged promises are so ‘indefinite’ that they lack ‘sufficient

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explicitness so that a court can perceive what are the respective
obligations of the parties.”

(Defs.’ Mem. in Supp. Mot. to Dismiss

(“Defs.’ Mem.”) 18 (quoting Soar v. Nat’l Football League Players’
Ass’n, 550 F.2d 1287, 1289-90 (1st Cir. 1977)).
MHL sets forth sufficient facts to fulfill “the relaxed pleading
standards of Rule 8, which apply to claims for breach of contract.”
Western Reserve Life Assur. Co. of Ohio v. Conreal LLC, 715 F. Supp.
2d 270, 288 (D.R.I. 2010).

“A court asked to declare a contract

binding must determine that the contract is definite enough that the
court can be ‘reasonably certain’ of the scope of each party’s
duties.”

Ross-Simons of Warwick, Inc. v. Baccarat, Inc., 182 F.R.D.

386, 395 (D.R.I. 1998).
just that:

MHL’s allegations allow the Court to do

in consideration for MHL’s website development and

maintenance work, specifically as to the Hunt Document Centers, and
its customer/employee support services, Hunt agreed to provide MHL
with daily move-in reports for its properties.

These allegations

more than suffice at this stage to allege what is required to form
a

contract,

i.e.,

“competent

parties,

subject

matter,

a

legal

consideration, mutuality of agreement, and mutuality of obligation.”
See DeAngelis v. DeAngelis, 923 A.2d 1274, 1279 (R.I. 2007); see
also Restatement (Second) of Contracts § 33(2) (Am. Law Inst. 1981)
(“The terms of a contract are reasonably certain if they provide a
basis for determining the existence of a breach and for giving an
appropriate remedy.”).

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In the end, “the resolution of a dispute concerning if and when
contract negotiations materialize into a mutual understanding and
result[] [in a] binding contract is ordinarily a question of fact
for the factfinder.”

Cote v. Aiello, 148 A.3d 537, 546 (R.I. 2016)

(quoting Marshall Contractors, Inc. v. Brown University, 692 A.2d
665, 670 (R.I. 1997)).

For that reason, Hunt’s motion to dismiss

Count I is denied. 2
B. Breach of the Covenant of Good Faith and Fair Dealing
(Count II)
Whether MHL states a claim on this count largely turns on
whether it states a claim for breach of contract.

See Bisbano v.

Strine Printing Co., 737 F.3d 104, 111 (1st Cir. 2013) (In Rhode
Island, a claim for violation of a covenant of good faith and fair
dealing “only comes into existence ancillary to a binding contract.”)
(citing Centerville Builders, Inc. v. Wynne, 683 A.2d 1340, 1342

2

Hunt’s other arguments with respect to Count I, including
that the claim is barred by the statute of frauds, fare no better.
In this context, “[t]he question is not whether performance ‘would
likely not occur’ within one year, but whether performance cannot
occur within one year.” Gerffert Co. v. William J. Hirten Co., 815
F. Supp. 2d 521, 527 (D.R.I. 2011).
“Under Rhode Island law, a
contract of uncertain duration and terminable at the will of either
party is not within the statute of frauds, because it ‘could by
possibility [be] fully performed within a year from the time it was
made.’” Gupta v. Customerlinx Corp., 385 F. Supp. 2d 157, 165-66
(D.R.I. 2005) (quoting Powless v. Pawtucket Screw Co., 352 A.2d 643,
646 (R.I. 1976)). Because it is not impossible that the parties’
agreement could terminate, by some foreseeable reason, sooner than
one year, MHL’s claim does not violate the Statute of Frauds.
6

(R.I. 1996) (per curiam)).

The facts as alleged suffice to clear

Hunt’s motion on MHL’s breach-of-contract claim, and to support MHL’s
Count II claim as well.
C. Fraud Claims (Counts III-V)
MHL’s

claims

of

misrepresentation

(Count

III),

fraudulent

concealment (Count IV), and fraudulent non-disclosure (Count V) also
survive. Rule 9(b) of the Federal Rules of Civil Procedure provides,
“In alleging fraud or mistake, a party must state with particularity
the circumstances constituting fraud or mistake.

Malice, intent,

knowledge and other conditions of a person’s mind may be alleged
generally.”

In other words, the complaint must specify “the time,

place, and content of an alleged false representation.”

Doyle v.

Hasbro, Inc., 103 F.3d 186, 194 (1st Cir. 1996); see also Backman v.
Smirnov, No. 08-11148-RGS, 2008 WL 4874949, at *2 (D. Mass. Nov. 12,
2008) (“Rule 9(b) does not impose a duty on [the plaintiff] to
recount each and every representation that he now alleges was made
fraudulently – he need only plead fraud with the particularity
necessary to place defendants on fair notice.”).

In addition, the

First Circuit has said that the requirement of specificity “extends
only to the particulars of the allegedly misleading statement itself.
The other elements of fraud, such as intent and knowledge, may be
averred in general terms.”

Rodi v. S. New England Sch. of Law, 389

F.3d 5, 15 (1st Cir. 2004).

7

The

complaint’s

allegations

detail

a

“string

along

fraud

scheme” sufficient to clear Rule 9’s specificity requirement.
MHL also states a claim for fraudulent concealment (Count IV)
and fraudulent non-disclosure (Count V).
concealment

arises

where

one

party

“Liability for fraudulent
to

a

transaction

who

by

concealment or other action intentionally prevents the other from
acquiring material information.”

French v. Isham, 801 F. Supp. 913,

922

specifically

(D.R.I.

1992).

MHL

has

alleged

that

Hunt

intentionally prevented MHL from realizing its plan to terminate the
parties’

Document

Centers

fraudulent concealment.

Contract.

This

is

enough

to

plead

See Johnson v. Capital Offset Co., No. 11-

cv-459-JD, 2013 WL 5406613, at *5 (D.N.H. Sept. 25, 2013) (fraudulent
concealment applies when “the defendant intentionally concealed or
suppressed a known fact for the purpose of misleading the plaintiff
when

the

plaintiff

did

not

have

equal

means

of

obtaining

the

information”).
A fraudulent-non-disclosure claim requires a duty to disclose.
The

Restatement

(Second)

of

Torts

§

551

(Am.

Law

Inst.

1977)

provides:
(2) One party to a business transaction is under a duty to
exercise reasonable care to disclose to the other before
the transaction is consummated,
. . .
(b) matters known to him that he knows to be necessary to
prevent his partial or ambiguous statement of the facts
from being misleading; and
(c) subsequently acquired information that he knows will
make untrue or misleading a previous representation that
when made was true or believed to be so; and
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(d) the falsity of a representation not made with the
expectation that it would be acted upon, if he subsequently
learns that the other is about to act in reliance upon it
in a transaction with him; and
(e) facts basic to the transaction, if he knows that the
other is about to enter into it under a mistake as to them,
and that the other, because of the relationship between
them, the customs of the trade or other objective
circumstances, would reasonably expect a disclosure of
those facts.
MHL sets forth facts that fit this standard with specificity:
e.g., the fact that MHL did not disclose that it intended to
terminate the parties’ relationship and had planned not to enter
into a written contract despite repeated representations to the
contrary.

Hunt’s arguments to the contrary inappropriately ask this

Court to draw inferences in its favor.

See, e.g., Van Wagner Bos.,

LLC v. Davey, 770 F.3d 33, 40 (1st Cir. 2014) (“At this early stage,
we are bound to accept the well-pleaded factual allegations in the
complaint

and

draw

all

[plaintiff’s] favor.”).

reasonable

inferences

therefrom

in

Accordingly, Hunt’s motion as to Counts

III-V is denied.
D. Tortious Interference (Count VI)
Hunt offers two reasons to dismiss this count.
complaint

lacks

allegations

“that

Hunt

contacted

First, that the
any

of

MHL’s

customers to discourage or prevent them from dealing with MHL”;
instead, the claim entirely hinges on Hunt’s refusal to deal with
MHL. (Motion 33.)

Second, Hunt argues, “Count VI does not allege

that Hunt acted with ‘malice’ in the sense that it acted with the

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‘intent

to

itself.’”

harm’

MHL

rather

than

‘with

the

intent

to

benefit

(Id. at 34.)

Hunt’s first argument fails.

“[I]nterference by the defendant

with the plaintiff’s performance of its contractual obligations with
the third party” may suffice for tortious interference.

O’Donnell

v. Boggs, 611 F.3d 50, 54 (1st Cir. 2010).
Hunt’s second argument fails too because determining whether
Hunt’s actions were justified is a fact-driven question.

Steward

Health Care Sys., LLC v. Blue Cross & Blue Shield of R.I., 997 F.
Supp. 2d 142, 164 (D.R.I. 2014) (citing Belliveau Bldg. Corp. v.
O’Coin, 763 A.2d 622, 628 n.3 (R.I. 2000)); Getty Petro. Mktg. v.
2211 Realty, LLC, No. 11-40003-FDS, 2012 WL 527655, at *6 (D. Mass.
Feb. 16, 2012) (“Of course, it is possible that Green Valley acted
pursuant to legitimate business considerations and did not intend to
harm defendants’ business relationship with their customers . . . .
Such issues, however, cannot be decided on a motion to dismiss.”).
E. Promissory Estoppel (Count VII)
The elements of promissory estoppel in Rhode Island are:

(1)

“A clear and unambiguous promise;” (2) “Reasonable and justifiable
reliance upon the promise;” and (3) “Detriment to the promisee,
caused by his or her reliance on the promise.”
547.

Cote, 148 A.3d at

MHL plausibly alleges this standard in this way:

(1) Hunt, by

its conversations and conduct, repeatedly promised MHL that it would
take steps to enter a written contract and continue the parties’

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long-term relationship (see Compl. ¶¶ 43, 44); and (2) (which is not
disputed) MHL reasonably relied on Hunt’s promises to its detriment,
(see id. ¶¶ 97, 99, 100).

Thus, Hunt’s motion to dismiss as to

promissory estoppel is denied (Count VII).
F. Quantum Meruit (Count VIII) and Unjust Enrichment (Count
IX)
“To recover for unjust enrichment, a claimant must prove:

(1)

that he or she conferred a benefit upon the party from whom relief
is sought; (2) that the recipient appreciated the benefit; and (3)
that the recipient accepted the benefit under such circumstances
that it would be inequitable for [the recipient] to retain the
benefit without paying the value thereof.”

S. Cty. Post & Beam,

Inc. v. McMahon, 116 A.3d 204, 210-11 (R.I. 2015).

Likewise, “a

plaintiff may recover in an action in quantum meruit if the plaintiff
can show that a defendant derived some benefit from the services and
would be unjustly enriched without making compensation therefor.”
Id. at 211.

“[A]ctions brought upon theories of unjust enrichment

and quasi-contract are essentially the same.”

Accordingly, proof of

quantum meruit and unjust enrichment implicates the same three
elements.

Id.

Plaintiff’s allegations with respect to both claims clears the
plausibility threshold.

As to quantum meruit, MHL alleges that it

“provided valuable services to Hunt in connection with the Hunt
Document Centers,” that MHL was not paid the “full value” of its
services, and that Hunt was unjustly enriched in light of its
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wrongful conduct, namely its “string along fraud scheme” where it
repeatedly made material misrepresentations and omissions to MHL.
(Compl. ¶¶ 45, 103, 105, 106.)

Similarly, with respect to unjust

enrichment, MHL alleges that it “conferred a benefit on Hunt by
providing it valuable resources and property in the form of the Hunt
Document Centers as well as MHL’s maintenance and support work
associated with the Hunt Document Centers” (Compl. ¶ 110), and for
the same reasons as above, Hunt’s wrongful conduct has led to its
unjust enrichment.

These factual averments suffice to state claims

for quantum meruit and unjust enrichment; consequently, Defendants’
motion as to these counts (Counts VIII and IX) is denied.
V.

Conclusion
For these reasons, Hunt’s Motion to Dismiss (ECF No. 26) is

DENIED.
IT IS SO ORDERED.

William E. Smith
Chief Judge
Date: August 28, 2018

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