Thayer Corp. v. Reed

• Decision Date: 11 July 2011
• Docket Number: 2:10-cv-00423-JAW
• Parties: THAYER CORPORATION, Plaintiff, v. DAVID REED, Defendant.
• Court: U.S. District Court — District of Maine

THAYER CORPORATION, Plaintiff, v. DAVID REED, Defendant.

2:10-cv-00423-JAW

UNITED STATES DISTRICT COURT DISTRICT OF MAINE

Dated: July 11, 2011

ORDER ON CROSS-MOTIONS TO DISMISS

The separation of an employee from employment is sometimes like a contested divorce. Here, what was once a mutually beneficial relationship has deteriorated into mutual recrimination, accusations of illegal activity, and allegations of multiple violations of statutory, tort and contract law. Faced with pleadings bristling with causes of action, each side demands dismissal of most opposing counts. The Court dismisses some counts against the president of the employer in his individual capacity but concludes the pleadings otherwise withstand the initial challenges.

I. STATEMENT OF FACTS

A. Procedural History

On October 15, 2010, Thayer Corporation filed a seven count complaint against David Reed, alleging violations of the Stored Communications Act (SCA), 18 U.S.C. § 2701 et seq. (Count I); the Wiretap Act (WA), 18 U.S.C. § 2510 et seq. (Count II); the Computer Fraud and Abuse Act of 1986 (CFAA), 18 U.S.C. § 1001 et seq. (Count III); unlawful interception of wire and oral communications in violationof 15 M.R.S. § 711 (Count IV); fraud (Count V); invasion of privacy (Count VI); and breach of fiduciary duty (Count VII). Compl. (Docket # 1). Mr. Reed answered and counterclaimed against Thayer Corp. and its president, Daniel Thayer, alleging that he is owed back wages, that the conduct underlying Thayer Corp.'s allegations was undertaken in good faith to recover those wages, that Thayer Corp. made threats and filed suit in retaliation, and that Thayer Corp.'s actions would "dissuade a reasonable worker from reporting unlawful activity" (Counterclaim I); that Thayer Corp. violated Maine's Wage Payment Statute, 26 M.R.S. §§ 621-A, 626 (Counterclaim II), violated the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq. (Counterclaim III), breached their contract (Counterclaim IV), and violated the Maine Whistleblower Protection Act (MWPA), 26 M.R.S. § 831 et seq., and the Maine Human Rights Act (MHRA), 5 M.R.S. § 4551 et seq. (Counterclaims V and VI). Answer and Third-Party Compl. Against Daniel Thayer (Docket # 7) (Answer and Third-Party Compl.).

Along with his Answer, Mr. Reed moved to dismiss the Complaint and to stay the case. Mot. to Dismiss and Stay Pending Completion of Maine Human Rights Commission Proceeding (Docket # 8) (Def.'s Mot.). Thayer Corp. and Mr. Thayer responded with their own motion to dismiss and opposition to Mr. Reed's motion. Thayer Corp. and Daniel Thayer's Mot. to Dismiss Certain Countercls. and Third-Party Claims. (Docket # 12) (Pl.'s Mot.); Opp'n to Def.'s Mot. to Dismiss (Docket # 14) (Pl.'s Opp'n). Mr. Reed responded to Thayer Corp. and Mr. Thayer's motion and replied to Thayer Corp.'s response. Opp'n to Mot. to Dismiss Certain Countercls.and Third-Party Claims (Docket # 15) (Def.'s Opp'n); Reply to Opp'n to Mot. to Dismiss (Docket # 16) (Def.'s Reply). Thayer Corp. and Mr. Thayer replied to Mr. Reed's opposition to their motion. Reply to Reed's Opp'n to Thayer Corp. and Daniel Thayer's Mot. to Dismiss Certain Countercls. and Third-Party Claims (Docket # 17) (Pl.'s Reply).

B. The Dispute

This case presents a heated row between Thayer Corporation and its former Chief Financial Officer (CFO), David Reed. Neither side disputes that on July 16, 2010, Mr. Reed's employment ended. Compl. ¶ 5; Answer and Third-Party Compl. ¶ 5. The events surrounding Mr. Reed's departure are highly contested. Thayer Corp. says that Mr. Reed "was entrusted with the job of determining what bonuses were earned by whom" with reference to a compensation formula, but that when calculating his own bonus "he fraudulently altered the formula used." Compl. ¶ 9. In 2009 Thayer Corp.'s president, Daniel Thayer, questioned Mr. Reed's bonus calculation, and Mr. Reed later reduced his bonus to $11,824—an amount that Thayer Corp. alleges was still as much as $10,000 too high. Compl. ¶¶ 12-13.

Thayer Corp. says that later, when Mr. Reed's employment ended, beginning on July 17, 2010 and extending through at least July 23, 2010, Mr. Reed began surreptitiously forwarding emails belonging to Thayer Corp.'s Human Resources managers to his own private email address. Compl. ¶ 18. Thayer Corp. alleges that Mr. Reed also transferred its cellular telephone account to his personal account and that he held the account hostage until Thayer Corp. capitulated to his demand for a severance package. Compl. ¶¶ 22, 24.

Mr. Reed, meanwhile, views the redirection of the emails as an innocent mistake by his cellular telephone provider. Mr. Reed says that when he realized he was receiving Thayer Corp.'s emails, he contacted the company to correct the error. Answer and Third-Party Compl. ¶¶ 8-9. Furthermore, in addition to denying the substance of Thayer Corp.'s allegations, Mr. Reed countersued for payment of wages. According to Mr. Reed, he had an agreement with Thayer Corp., which it breached by paying him $7,121 less than the agreed $18,000. Answer and Third-Party Compl. ¶¶ 5-6. Mr. Reed says that when he made a written demand to Thayer Corp. for payment of the $7,121, Thayer Corp. responded "by threatening to send naked pictures of a woman allegedly found on Reed's email to his wife and pornography from Reed's computer to the general public and by filing a seven-count lawsuit against him in federal court." Answer and Third-Party Compl. ¶¶ 11-12.

II. ANALYSIS

A. Legal Standard

In ruling on a motion to dismiss, the Court "must assume the truth of all well-plead facts and give the plaintiff [or counterclaimant] the benefit of all reasonable inferences therefrom." Genzyme Corp. v. Fed. Ins. Co., 622 F.3d 62, 68 (1st Cir. 2010); accord Sanchez v. Pereira-Castillo, 590 F.3d 31, 41 (1st Cir. 2009), Alt. Energy, Inc. v. St. Paul Fire & Marine Ins. Co., 267 F.3d 30, 33 (1st Cir. 2001). To survive a motion to dismiss, the non-moving party must allege "sufficient facts to show that he has a plausible entitlement to relief." Shancez, 590 F.3d at 41. (citing Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009).

In Ocasio-Hernandez v. Fortuno-Burset, 640 F.3d 1 (1st Cir. 2011), the First Circuit explained the Supreme Court's recent refinements to the 12(b)(6) analysis. It advised that "a court should employ a two-pronged approach" in resolving a motion to dismiss. Ocasio-Hernandez, 640 F.3d at 12. First, it should identify and disregard statements in the complaint that merely offer "legal conclusions couched as fact" or "threadbare recitals of the elements of a cause of action." Id. (quoting Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949-50 (2009) and Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal punctuation omitted)). Second, a court should treat non-conclusory allegations in the complaint as true, "even if seemingly incredible." Id. (citing Iqbal, 129 S. Ct. at 1951)). "If the factual content, so taken, 'allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged,' the claim has facial plausibility." Id. (quoting Iqbal, 129 S. Ct. at 1949)). Legal conclusions are not entitled to the presumption of truth granted to factual allegations. Id. at *7. In conducting this two-pronged approach, a court should keep in mind that "evaluating the plausibility of a legal claim is a 'context-specific task that requires the reviewing court to draw on its judicial experience and common sense.'" Id. (quoting Iqbal, 129 S. Ct. at 1950)).

B. Mr. Reed's Motion to Dismiss and to Stay

1. Timing

The Court first addresses whether Mr. Reed's Rule 12(b)(6) motion to dismiss is untimely, mandating its dismissal without consideration of his arguments. Citing Rule 12(b), Thayer Corp. says that "[t]he Motion to Dismiss in Doc. No. 8must be denied given that a responsive pleading (an answer and third-party complaint) has already been filed." Pl.'s Opp'n at 2. In reply, Mr. Reed says that the Rule "does not prohibit Reed from filing an answer simultaneously with a motion to dismiss," notes that his Answer asserted the affirmative defense of a failure to state a claim upon which relief can be granted, and quotes the Rule that "[n]o defense or objection is waived by joining it with one or more other defenses or objections in a responsive pleading or in a motion." Def.'s Reply at 1.

Although Thayer Corp. is literally correct that the Answer was filed before the Motion to Dismiss—the notices of electronic filing show the Answer and Motion were uploaded on August 4, 2011 at 3:45 p.m. and 3:48 p.m. respectively—the Court rejects Thayer Corp.'s punctilious view of the filing requirements as hyper-technical and wrong.

First, Mr. Reed's Answer lists as his first affirmative defense, "Plaintiff's Complaint fails to state a claim against Defendant upon which relief can be granted." Answer and Third-Party Compl. at 7. "Thus, his so-called motion to dismiss only brought forward for hearing and decision a defense he had timely raised." New Hampshire Motor Transp. Motor Ass'n v. Rowe, 324 F. Supp. 2d 231, 234 n.2 (D. Me. 2004) (rejecting the argument that a post-answer Rule 12(b)(6) motion was waived under Rule 12(b) as untimely).

Second, Rule 12(h)(2), provides that a failure to state a claim upon which relief can be granted may be made by any pleading allowed under Rule 7(a), by amotion under Rule 12(c), or at trial.¹ Fed. R. Civ. P. 12(h)(2). "Rule[] 12(h)(2) . . . prolong[s] the life of certain defenses," and allows the defense of a failure to state a claim on which relief can be granted to be made until trial. Kontrick v. Ryan, 540 U.S. 443, 459 (2004) (noting that "a defense based on . . . [a] 'failure to state a claim upon which relief can be granted,' . . . could be raised, at the latest, 'at the trial on the merits'"); Coyne v. City of Somerville, 972 F.2d 440, 445-46 (1st Cir. 1992) (finding that Rule 12(h)(2) allowed inclusion of a Rule 12(b)(6) defense that...