Pearce v. Duchesneau Group, Inc.
| Citation | 392 F.Supp.2d 63 |
| Decision Date | 08 September 2005 |
| Docket Number | No. CIV.A. 04-11409-NG.,CIV.A. 04-11409-NG. |
| Parties | Desiree PEARCE, Plaintiff, v. THE DUCHESNEAU GROUP, INC., David Michael Duchesneau, Brant P. McGettrick, Defendants. |
| Court | U.S. District Court — District of Massachusetts |
Sara B Davis, Matthew J. Tuttle, Perkins Smith & Cohen LLP, Boston, MA, for Desiree Pearce, plaintiff.
Derek C. Anderson, Jason C. Moreau, Murphy & Michaels, LLP, Boston, MA, Debbie G. Evans, Pete S. Michaels, Michaels & Ward, LLP, Boston, MA, for The Duchesneau Group, Inc., Brant P. McGettrick, Esq David M. Duchesneau, Defendants.
ORDER granting in part and denying in part [5] Motion to Dismiss, adopting Report and Recommendations [22] there having been no objections filed.
REPORT AND RECOMMENDATION ON DEFENDANTS' MOTION TO DISMISS AND, IN THE ALTERNATIVE, FOR A MORE DEFINITE STATEMENT (# 5)
I. Introduction
This matter is before the Court on the defendants' motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6), and, in the alternative, for a more definite statement pursuant to Fed.R.Civ.P. 12(e). The plaintiff, Desiree Pearce ("Pearce"), originally filed this action in state court on March 9, 2004. The defendants, the Duchesneau Group, Inc. (the "Company"), David Michael Duchesneau ("Duchesneau"), and Brant P. McGettrick ("McGettrick") (collectively referred to hereinafter as "defendants"), removed this case to federal court pursuant to 28 U.S.C. §§ 1441 and 1446 and federal diversity jurisdiction. Pearce alleges, among other things, that the defendants failed to advise her properly in investing her retirement savings, and failed to advise her of the details of her investment transaction. She asserts in her complaint (# 1) the following causes of action: Count I, Breach of Contract; Count II, Breach of the Covenant of Good Faith and Fair Dealing; Count III, Breach of Fiduciary Duty; Count IV, Violation of Chapter 93A of the Massachusetts General Laws; Count V, Violation of Massachusetts Securities Laws; Count VI, Fraud; Count VII, Control Person Liability Under Massachusetts Securities Laws; and Count VIII, Respondent Superior.
On July 23, 2004, the defendants filed their Motion to Dismiss and, in the Alternative, Motion for a More Definite Statement (# 5) along with a Memorandum of Law in support of that motion (# 6). The defendants move to dismiss all counts except Count IV, which alleges violations of Mass.Gen. L. c. 93A. In response, Pearce filed her Opposition to Defendants' Motion to Dismiss, or in the Alternative, Motion for a More Definite Statement (# 10). The defendants have filed a Reply Memorandum of Law (# 21) and Pearce has filed a Sur-Reply Memorandum of Law (# 17). The motion has thus been fully briefed, and is now ripe for disposition.
III. The Facts
The facts are those as alleged by the plaintiff in her complaint (# 1). Pearce is a resident of Florida. (# 1 ¶ 1). Duchesneau was the principal and the president of the Company, which was, at all relevant times, located in Weston, Massachusetts. (# 1 ¶¶ 12-3). McGettrick was, at all relevant times, an unregistered investment advisor employed by the Company. (# 1 ¶ 14).
In or about February 2000, Pearce was referred to the Company as possible investment advisors to manage her retirement funds. (# 1 ¶ 5). Pearce spoke with McGettrick at the Company and informed him that she had limited investment experience and wanted her funds to be invested conservatively. (# 1 ¶¶ 6-7). Pearce explained to McGettrick that she needed an investor who would regularly monitor her account and McGettrick assured her that he would monitor her account and would choose investments in accordance with her conservative objectives. (# 1 ¶¶ 9-10). McGettrick represented himself to be "a knowledgeable and experienced investment advisor" capable of providing professional expertise and advice. (# 1 ¶ 6). McGettrick recommended that Pearce split her SEP IRA funds into two managed accounts: Insight Capital Management's ("Insight Capital") Non-Diversified Aggressive Growth Portfolio and TCW Asset Management's ("TCW") Small Cap Growth Fund. (# 1 ¶ 11). McGittrick assured Pearce that these were conservative investments and that he would monitor the investments to ensure against losses. Relying on that statement, Plaintiff transferred her SEP IRA funds to the defendants with a balance of $321,580.77. (# 1 ¶ 13).
Unbeknownst to Pearce, the Company was not a licensed broker/dealer and therefore could not purchase or sell securities on her behalf. (# 1 ¶ 14). Instead, the Company sent Pearce several forms to sign in order to open a Salomon Smith Barney ("SSB") brokerage account. (# 1 ¶ 15). The Company did not disclose to Pearce certain details about her investment account, to wit: that both funds had wrap fees that included management fees and transaction costs (# 1 ¶ 16); that she would pay commissions and fees to the funds themselves in addition to those due to SSB, McGettrick and the Company (# 1 ¶ 17); and that independent managers of the funds made all the decisions concerning her investments, without any regard for Pearce's conservative objectives. (# 1 ¶ 18). She also avers that McGettrick failed to disclose that he had been certified as a financial planner for only one month at the time he first spoke to Pearce. (# 1 ¶ 23).
Pearce further alleges that, along with the defendants' failure to disclose the intricacies of her investment account, both the TCW and Insight Capital funds were not conservative investments because they were comprised of technology companies and other companies with small capitalization levels. (# 1 ¶ 19). According to the complaint, "[t]hese volatile and concentrated investments exposed Ms. Pearce to unnecessarily high levels of risk, significantly higher than she informed McGettrick she was willing to accept." (# 1 ¶ 21).
Pearce alleges that the defendants failed to monitor the funds regularly as promised and that when Pearce asked the defendants about a decline in her account they "actively encouraged" her to keep her money in the two funds. (# 1 ¶¶ 22, 24). In or about June 2001, Pearce contacted Duchesneau about a further decline in her account and he informed her that McGettrick was no longer with the Company. (# 1 ¶ 26). Duchesneau reaffirmed that McGittrick's initial recommendations were appropriate given Pearce's conservative objectives. (# 1 ¶ 27). On November 20, 2001, Pearce closed her account; she had, however, "lost the vast majority of her retirement funds." (# 1 ¶ 30).
III. Discussion
Educadores Puertorriquenos en Accion et al. v. Hernandez, 367 F.3d 61, 66 (1st Cir.2004). "This statement must `give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests.'" Id. (quoting Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). Thus, "[g]reat specificity is ordinarily not required to survive a 12(b)(6) motion." Alternative System Concepts, Inc. v. Synopsys, Inc., 374 F.3d 23, 29 (1st Cir.2004) (internal quotations and citations omitted.) "Given the Federal Rules' simplified standard for pleading, `[a] court may dismiss a complaint only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations.'" Swierkiewicz v. Sorema N.A., 534 U.S. 506, 514, 122 S.Ct. 992, 998, 152 L.Ed.2d 1 (2002) (quoting Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984)).
The Federal Rules of Civil Procedure permit a party to move for a more definite statement pursuant to Fed.R.Civ.P. Rule 12(e) when a complaint "is so vague or ambiguous that a party cannot reasonably be required to frame a responsive pleading ...." Fed.R.Civ.P. 12(e). "Courts do not invoke Rule 12(e) frequently and more often dismiss such complaints with leave to amend." Fease v. Town of Shrewsbury, 188 F.Supp.2d 16, 17 (D.Mass.2002) (citation omitted). Generally, 12(e) motions are not favored because the Federal Rules of Civil Procedure permit notice pleading and ample pretrial discovery procedures, see Haghkerdar v. Husson College, 226 F.R.D. 12, 13-14 (D.Me.2005) (and cases cited), and parties ought not employ the motion as a substitute for discovery. See Fed.R.Civ.P. 12(e), Advisory Committee Notes to 1946 Amendment. Thus, a court properly grants a Rule 12(e) motion "only when a party is unable to determine the issues he must meet." Haghkerdar, 226 F.R.D. at 14 (internal quotations and citation omitted.)
The defendants argue that dismissal is warranted on the breach of contract claim because the plaintiff has not identified the contract that forms the basis of her claim, and has not specified whether the contract was written or oral. In addition, the defendants argue that the plaintiff has not sufficiently pled "consideration" supporting the contract.
"A breach of contract complaint must allege (1) the existence of a valid and binding contract; (2) that plaintiff has complied with the contract and performed his own obligations under it; and (3) breach of the contract causing damages." Persson v. Scotia Prince Cruises, Ltd., 330 F.3d 28, 34 (1st Cir.2003) (citing 5 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1235, at 268-70 (2d ed.2002)). The plaintiff has alleged the following:
By offering financial and advisory services for a fee to Ms. Pearce, by agreeing and representing to provide such services to Ms. Pearce, by accepting and maintaining Ms. Pearce's...
To continue reading
Request your trial
-
In re Access Cardiosystems, Inc.
...`knew that the prediction [opinion, judgment, expectation, or future intention] was false when it was made." Pearce v. Duchesneau Group, 392 F.Supp.2d 63, 74 (D.Mass.2005) (quoting Lawson v. Affirmative Equities, Co., L.P., 341 F.Supp.2d 51, 65 (D.Mass.2004)) (citing Starr v. Fordham, 420 M......
-
Wang v. Xinyi Liu, Yuanlong Huang, Zhaonan Wang, Bling Entm't, LLC
...however, because Yiming has pled under a provision that does not provide a right of action. See, e.g., Pearce v. Duchesneau Grp., Inc., 392 F.Supp.2d 63, 76 (D. Mass. 2005) ("The problem for the plaintiff is that there is no private right of action under Mass. Gen. L. c. 110A, § 101"); Feno......
-
Hill v. State St. Corp.
...the defendant acted with the required state of mind." 15 U.S.C. § 78u-4(b)(2) (emphasis added); see also Pearce v. Duchensneau Group, Inc., 392 F. Supp. 2d 63, 72 (D. Mass. 2005) (explaining that Rule 9(b) is satisfied by an averment of "who, what, where, and when of the allegedly false or ......
-
Bergeron v. Ridgewood Securities Corp.
...the maker never intended to carry out the promise or knew that the prediction was false when it was made.'" Pearce v. Duchesneau Group, Inc., 392 F.Supp.2d 63, 74 (D.Mass.2005). As detailed above, the record supports an inference that Swanson's promise of interest payments was knowingly fal......