Diiorio-Sterling v. Capstone Mgmt., LLC
| Decision Date | 31 March 2022 |
| Docket Number | Civil No. 21-cv-569-LM |
| Citation | 596 F.Supp.3d 306 |
| Parties | Christina DIIORIO-STERLING v. CAPSTONE MANAGEMENT, LLC, et al. |
| Court | U.S. District Court — District of New Hampshire |
Beth R. Myers, Myers Law Office, Ellen Zucker, Laura L. Carroll, Burns & Levinson LLP, Boston, MA, for Christina DiIorio-Sterling.
Beth A. Deragon, Terri L. Pastori, Pastori Krans PLLC, Concord, NH, for Capstone Management, LLC.
Brian J.S. Cullen, Cullen Collimore Shirley PLLC, Nashua, NH, for Rochester Precision Optics, LLC.
Mark T. Broth, Drummond Woodsum & MacMahon P.A., Manchester, NH, for OnPoint Systems, LLC, Kenneth Solinsky.
Plaintiff Christina DiIorio-Sterling, as representative of the estate of her late husband Scott Sterling, sues defendants Capstone Management, LLC; Rochester Precision Optics, LLC; and OnPoint Systems, LLC (collectively, the "Corporate Defendants"); and Kenneth Solinsky, the owner of Capstone. Plaintiff asserts claims for breach of contract and breach of the implied covenant of good faith and fair dealing1 against all defendants, and a claim for violation of the Americans with Disabilities Act ("ADA") against the Corporate Defendants as a single, integrated enterprise. Solinsky, Capstone, and Rochester Precision separately move to dismiss each claim against them under Federal Rule of Civil Procedure 12(b)(6). OnPoint moves to dismiss the ADA claim, but not the breach of contract claim against it.
While those motions to dismiss were pending, plaintiff moved to amend her complaint to add allegations to support her existing claims and to add a new claim for promissory estoppel against Solinsky and Capstone. Doc. no. 43.2 All defendants object to plaintiff's motion to amend on the grounds that it would be futile because plaintiff's additional allegations do not save her original claims. Solinsky and Capstone further argue that plaintiff's motion is futile because her new claim against them for promissory estoppel fails as a matter of law.
In short, there are five pending motions before the court: the four defendants’ individual motions to dismiss and plaintiff's motion to amend. For the following reasons, the court grants in part and denies in part Rochester Precision's motion to dismiss and denies the other defendants’ motions to dismiss. The court also grants in part and denies in part plaintiff's motion to amend.
To survive a Rule 12(b)(6) motion to dismiss, a complaint must include allegations that would plausibly entitle the plaintiff to relief. Bell Atl. v. Twombly, 550 U.S. 544, 599, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). In evaluating a motion to dismiss, the court must accept all factual allegations as true and draw all reasonable inferences in the plaintiff's favor. Langadinos v. Am. Airlines, Inc., 199 F.3d 68, 68 (1st Cir. 2000). The court must determine whether the allegations are sufficient to support a reasonable inference that the defendant is liable to the plaintiff. Garcia-Catalan v. United States, 734 F.3d 100, 103 (1st Cir. 2013). In addition, although courts are generally prohibited from considering documents outside of the complaint on a motion to dismiss, courts may consider documents whose authenticity the parties do not dispute, official public records, documents central to plaintiff's claim, and documents sufficiently referred to in the complaint. Watterson v. Page, 987 F.2d 1, 3 (1st Cir. 1993).
Where a defendant objects to a motion to amend a complaint on the grounds it would be futile, "the district court applies the same standard of legal sufficiency as applies to a Rule 12(b)(6) motion." Glassman v. Computervision Corp., 90 F.3d 617, 623 (1st Cir. 1996). In other words, the district court must determine whether the allegations in the amended complaint support the claims therein under the 12(b)(6) standard.
Defendants have challenged the claims in plaintiff's proposed amended complaint on Rule 12(b)(6) grounds. Specifically, defendants challenge both the original claims (breach of contract and violation of the ADA) and the new claim for promissory estoppel. Accordingly, the court will evaluate each of the challenged claims in the proposed amended complaint and dismiss any claim which does not survive review under the motion to dismiss standard.3
In 2002, Sterling started working as a business developer for Insight Technology, Inc., a defense-industry business. Having previously served in the United States military, Sterling appreciated working in the defense industry. Eventually, Sterling became the vice-president of Insight Technology. Defendant Kenneth Solinsky was the president and founder of Insight Technology.
In 2010, an unaffiliated company, L-3 Communications, bought Insight Technology. After the acquisition, Solinsky became an executive for L-3 Communications. Around this time, Solinsky hired Sterling as vice-president of business development. While the two men were in these positions, Solinsky expressed an intention to work with Sterling on future corporate endeavors.
Sometime in 2014, Sterling left L-3 Communications and began working for Gentex Corporation, another defense-industry business, as the director of business development. He subsequently became a vice president at Gentex
. In the fall of 2014, shortly after Sterling started working at Gentex, Solinsky spoke to Sterling about starting a new business venture in the defense industry.
At some point prior to 2015, Solinsky started a new company—Capstone—which he incorporated as a New Hampshire limited liability company. Capstone's certificate of incorporation provides that its corporate purpose is "the operation and management of an office for family-controlled businesses." Doc. no. 43-1 ¶ 5. Capstone's registered agent is Rebecca Hunzeker, a Capstone employee. Solinsky and his wife are the owners of Capstone. In addition, Capstone wholly owns defendant Rochester Precision, another New Hampshire limited liability company that primarily manufactures optical lenses.
In the spring of 2015, Solinsky asked Sterling to join a new business that Solinsky was planning to incorporate as a subsidiary of Capstone. Solinsky represented that, as an incentive to joining the proposed business, Solinsky would grant Sterling a substantial equity stake in it. Solinsky told Sterling that the business would focus on defense-related technology and products. Based on these representations, Sterling agreed to work for the proposed business venture. In anticipation of assuming this new position, Sterling resigned from Gentex
.
After Sterling quit Gentex
, Solinsky disclosed that he could not enter the defense industry at that time, apparently due to a non-compete agreement with a prior employer. Nevertheless, Solinsky told Sterling that the two could work together on projects within Capstone or Capstone-owned businesses. Specifically, Solinsky planned to create a new company that would design and manufacture invisible dog fences. Solinsky asked Sterling to work for this proposed company.
Sterling was initially hesitant about Solinsky's offer because he had experience in the defense industry and was not familiar with consumer products. To persuade Sterling to work at this new business, Solinsky told Sterling that after launching the dog fence product, he planned to start a new defense-industry venture. Solinsky explained that if he worked on the dog fence, Sterling could later work for the new defense-industry venture. In addition, Solinsky told Sterling that he would be well compensated upon the launch of the dog fence and would receive a share in that company's profits.
At some point prior to April 16, 2015, Solinsky, through Capstone, incorporated a new company for the dog-fence venture: OnPoint.5 Capstone wholly owns and controls OnPoint. OnPoint is a New Hampshire limited liability company and its business email address on file with the New Hampshire Secretary of State is a Capstone corporate email address. Hunzeker is also the registered agent for OnPoint.
On April 16, 2015, Solinsky sent Sterling an offer letter for the new position with OnPoint. Doc. no. 12-1.6 The letter was on OnPoint letterhead, and Solinsky signed the document as OnPoint's manager. The letter stated that Sterling's annual salary would be $250,000 and provided that "this salary [would be] guaranteed for three years from the date of employment unless such employment [was] terminated for cause as determined by" OnPoint's managers. Id. The letter also provided that Sterling would be eligible for an employee bonus program, which would be tied to OnPoint's profitability. Finally, the letter stated that Sterling would be eligible for standard employee benefits and that Sterling would receive further details about the benefits after assuming employment.
Sterling signed the offer letter and accepted the position with OnPoint. From May 2015 to September 2019, Sterling served as president of OnPoint. In that role, he was responsible for the overall design, development, and market introduction of the dog fence.
While Sterling served as the president of OnPoint, employees at Solinsky's two other companies, Capstone and Rochester Precision, played an important role in establishing and administering OnPoint's policies and benefits, managing the company, and manufacturing the dog fence. At the time Sterling joined OnPoint, Hunzeker emailed Sterling and explained that she handled all accounting and financial matters for Solinsky and his wife. She also told Sterling that she would handle Sterling's payroll while he was president of OnPoint. Although Hunzeker used a Capstone email address for this correspondence, in her signature she referred to herself as a "manager" of OnPoint. Doc. no. 43-1 ¶ 33.
Soon after Sterling started at OnPoint, Hunzeker sent him an employee benefits brochure. The benefits brochure was for employees at Rochester Precision. Hunzeker informed...
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