Doyle v. Hasbro, Inc.

• Citation: 884 F. Supp. 35
• Decision Date: 19 April 1995
• Docket Number: Civ. A. No. 94-11982-WGY.
• Parties: Patrick J. DOYLE and H.P. Leasing, Inc., Plaintiffs, v. HASBRO, INC., Alan Hassenfeld, Izzi Laudon, Mimi Laudon, David Thibideau, Hugh Maxwell and Michael Oliva d/b/a Transport Services, Defendants, and Merrill Lynch, Trustee Defendant.
• Court: U.S. District Court — District of Massachusetts

884 F. Supp. 35

Patrick J. DOYLE and H.P. Leasing, Inc., Plaintiffs, v. HASBRO, INC., Alan Hassenfeld, Izzi Laudon, Mimi Laudon, David Thibideau, Hugh Maxwell and Michael Oliva d/b/a Transport Services, Defendants, and Merrill Lynch, Trustee Defendant.

Civ. A. No. 94-11982-WGY.

United States District Court, D. Massachusetts.

April 19, 1995.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Jeffrey S. Entin, Sahady, Entin & Entin, Fall River, MA, for plaintiffs.

John A. Tarantino, Patricia K. Rocha, Adler, Pollock & Sheehan, Inc., Providence, RI, for defendants Alan Hassenfeld, Hasbro, Inc., Hugh Maxwell.

Neil D. Warrenbrand, Looney & Grossman, Boston, MA, John A. Tarantino, Adler, Pollock & Sheehan, Inc., Stephen H. Burke, Temkin & Stone, Providence, RI, for defendant Izzi Laudon, Mimi Laudon.

John A. Tarantino, Adler, Pollock & Sheehan, Inc., William A. Jacobson, Kaplan, Perry & Jacobson, Inc., Providence, RI, for defendant David Thibodeau.

John A. Tarantino, Adler, Pollock & Sheehan, Inc., John E. Wall, David Shaughnessy, Wall & Shaughnessy, Boston, MA, for defendant Michael Oliva, d/b/a Transport Services.

MEMORANDUM AND ORDER

YOUNG, District Judge.

This is a civil racketeering action brought by a Massachusetts trucking company, H.P. Leasing, Inc. ("Leasing"), and its principal, Patrick J. Doyle (collectively "Doyle"), against the toy manufacturer Hasbro, Inc. ("Hasbro"); Alan Hassenfeld ("Hassenfeld"), Hasbro's President, Chairman of the Board of Directors, and Chief Executive Officer; Israel "Izzi" Laudon ("Laudon"), Vice President of Hasbro's Traffic Department; Laudon's wife, Mimi Laudon; David Thibodeau,¹ Laudon's assistant; Hugh Maxwell, an Executive Vice President at Hasbro; and another trucking concern and its principal, Michael Oliva d/b/a Transport Services ("Oliva"). Doyle alleges in his Amended Complaint that from 1980 to 1992, Laudon and other executives in Hasbro's Traffic Department responsible for contracting for trucking services extorted kickbacks from him and Leasing, in the form of so-called "commissions," in exchange for substantial business from Hasbro. Doyle claims that Leasing was driven out of business in 1993 by the defendants' activity, and seeks damages under federal racketeering law. See 18 U.S.C.A. §§ 1962(c), (d) (West 1984 & Supp.1993). Doyle also asserts various pendent state law causes of action: breach of contract against all defendants (Count I); civil conversion and civil larceny against Laudon, Oliva, and Thibodeau (Count II); intentional and malicious interference with the plaintiff's advantageous business relationships against Laudon, Oliva, and Thibodeau (Count III); intentional infliction of emotional distress against Laudon, Oliva, and Thibodeau (Count IV); fraud, deceit and misrepresentation against Laudon, Thibodeau, Hassenfeld, and Hasbro (Count V); and negligent entrustment or negligent supervision against Hasbro (Count VI).

At a hearing held on February 7, 1995, the Court allowed the motions of certain defendants other than the Laudons to dismiss the federal racketeering claims. Nonetheless, the Court gave Doyle thirty days to file a motion for leave to file an amended complaint. Doyle duly filed such a motion.

Hasbro and Hassenfeld then filed a joint opposition to Doyle's motion and Thibodeau also filed an opposition. Oliva moved to dismiss the Amended Complaint. Pursuant to an agreement between the Court and the parties, the Court treated the oppositions as motions to dismiss the Amended Complaint. At a hearing on the motions on March 27, 1995, the Court dismissed the federal racketeering claims against the moving defendants, Hasbro, Hassenfeld, Oliva, and Thibodeau (collectively, "movants"), but retained jurisdiction over those defendants' state law claims. The Court took under advisement the movants' motions to dismiss the state claims, and hereby allows those motions, with one exception, for the reasons set forth below.

I. Count I

Doyle has not stated a claim for breach of contract against any of the movants. Their allegations do not state with sufficient clarity the nature of the contract claimed to have been breached, its terms, the duties allegedly imposed upon each of the defendants, their failure to perform those duties, or damages attributable to the alleged breach. See Telephone Answering Serv. of Boston, Inc. v. New England Tel. & Tel. Co., 358 Mass. 822, 823, 267 N.E.2d 918 (1971) (rescript); Singarella v. City of Boston, 342 Mass. 385, 387, 173 N.E.2d 290 (1961) (Kirk, J.); see also Petricca v. Simpson, 862 F.Supp. 13, 17 (D.Mass.1994) (Gorton, J.). A conclusory allegation of the existence of a long-term "contractual relationship" is insufficient. Doyle's twice-stated assertion² that all he must do to state a cause of action for breach of contract is to "put the defendants on notice of a contractual relationship" is flatly incorrect under Massachusetts pleading requirements.

The individual movants are also shielded from liability on Count 1, even if such a cause of action were stated, because an agent for a disclosed principal, i.e. an employee acting on behalf of an employer, cannot be personally liable on the principal's contract. See Byors & Sons, Inc. v. Board of Water Comm'rs of Northborough, 358 Mass. 354, 362, 264 N.E.2d 657 (1970) (Tauro, C.J.); Porshin v. Snider, 349 Mass. 653, 655, 212 N.E.2d 216 (1965) (Spalding, J.); see also Paterson-Leitch Co. v. Massachusetts Mun. Wholesale Elec. Co., 840 F.2d 985, 993 (1st Cir.1988).

II. Count II

Count II charges Laudon, Oliva and Thibodeau with "civil conversion and civil larceny." Although the plaintiffs failed in their briefs to oppose the motions to dismiss as they pertain to Count II, the Court must nonetheless apply the appropriate legal standard to determine whether Count II has been properly plead. See Hall v. Gonfrade, No. 93-2368, 1994 WL 527165, at *1 (1st Cir. Sept. 29, 1994). To state a cause of action for conversion under Massachusetts law, a plaintiff must plead that (1) the defendant intentionally and wrongfully exercised control or dominion over personal property; (2) the plaintiff had an ownership or possessory interest in the property at the time of the alleged conversion; (3) the plaintiff was damaged by the defendant's conduct; and (4) if the defendant legitimately acquired possession of the property under a good-faith claim of right, the plaintiff's demand for its return was refused. Evergreen Marine Corp. v. Six Consignments of Frozen Scallops, 4 F.3d 90, 95 (1st Cir.1993) (citing Magaw v. Beals, 272 Mass. 334, 172 N.E. 347 1930). Doyle fails to allege that he had any ownership or possessory interest in any property over which the defendants wrongfully exercised control. One who pays kickbacks or bribes relinquishes the property interest in the funds necessary to sustain an action for conversion. Cf. Clark v. United States, 102 U.S. 322, 331-32, 26 L.Ed. 181 (1880) (briber may not recover money paid); United States v. Thomas, 75 F.2d 369, 371 (5th Cir.1935) (same); United States v. Farino, 483 F.Supp. 651, 652 (E.D.N.Y.), aff'd, 633 F.2d 207 (2d Cir.1980) (government, as possessor or recipient of bribe paid to federal agent, entitled to keep the money as its possessory right is stronger than the rights of the briber). To allow the plaintiffs' conversion claim to go forward would undermine the venerable principle that a court should not aid either party to an illegal contract. See St. Louis, Vandalia and Terre Haute R.R. v. Terre Haute and Indianapolis R.R., 145 U.S. 393, 407, 12 S.Ct. 953, 957, 36 L.Ed. 748 (1892); Farino, 483 F.Supp. at 652.³ Therefore, the conversion count must be dismissed as to Oliva and Thibodeau.

The "civil larceny" claim meets a similar fate. The Court is unaware of any such common law cause of action recognized in the Commonwealth of Massachusetts, and Doyle has not attempted to assist the Court in its search. As defendant Thibodeau points out, the statutory civil cause of action for larceny applies only in limited circumstances not here present. See MASS.GEN.LAWS ANN. ch. 231, § 85R½ (West Supp.1994); MASS.GEN. LAWS ANN. ch. 266, § 30A (West 1990). Count II must therefore also be dismissed to the extent it attempts to state a civil cause of action for larceny.

III. Count III

Doyle's cause of action against Thibodeau and Oliva for "intentional and malicious interference" with their advantageous business relationships may not be maintained. The governing principle behind the tort sought to be asserted here is that "one who, without a privilege to do so, induces or otherwise purposely causes a third person ... not to enter into or continue a business relation with another is liable to the other for the harm caused thereby." Owen v. Williams, 322 Mass. 356, 360, 77 N.E.2d 318 (1948). Doyle must plead and prove that the defendants (1) engaged in intentional and willful acts (2) calculated to cause damage to the plaintiffs' lawful business (3) with an unlawful purpose and without right or justification, (4) thereby causing actual damage or loss. Walker v. Cronin, 107 Mass. 555, 562 (1871); Chemawa Country Golf, Inc. v. Wnuk, 9 Mass.App.Ct. 506, 509-10, 402 N.E.2d 1069 (1980).

Doyle apparently alleges that Oliva and Thibodeau wrongfully and with an improper purpose interfered with the business relationship, whether contractual or otherwise, between Hasbro and him, causing the relationship to terminate and Leasing to close its doors. Such a charge may not proceed against Oliva, as no conduct of his is alleged to have occurred after 1989, several years before the remaining defendants supposedly drove Leasing into bankruptcy and then out of business. Furthermore, Thibodeau, Laudon's assistant, cannot be considered a third party interfering with the relationship between his employer, Hasbro, and the plaintiffs. As an alternative grounds for dismissal, the "lawful business" element of the tort is lacking, as Doyle essentially...