Warren v. Preti, Flaherty, Beliveau & Pachios, LLC

CourtSupreme Judicial Court of Maine (US)
Decision Date12 May 2012
Docket NumberDocket No.: BCD-CV-11-28

LLC, and KW ENTERPRISES, INC., Plaintiffs,
P.A., and ACE HARDWARE CORP., Defendants

Docket No.: BCD-CV-11-28


Dated: January 4, 2012
Dated: May 12, 2012

Location: Portland


This Order addresses Defendant Ace Hardware Corp.'s motion to dismiss the amended complaint pursuant to Rule 12(b)(6) of the Maine Rules of Civil Procedure, and the subsequent motion of Plaintiffs Kaile R. Warren, Jr., Rent-A-Husband LLC, Rent-A-Husband Enterprises, LLC, and KW Enterprises, Inc. to amend their complaint for a second time.

Defendant Ace's motion to sever the claims against it from those against the other two defendants, citing M.R. Civ. P. 20 and 21 is addressed in a separate order. The court held oral argument on all pending motions in this case on October 12, 2011.

Ordinarily Ace's motion to dismiss would be addressed before the Plaintiffs' subsequent motion to amend, but that motion was directed to Plaintiffs' first amended complaint, which would be superseded if Plaintiffs' motion to amend were granted. Accordingly, the court focuses initially on the motion to amend, solely to determine whether leave to amend would be

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granted, without reference to the substantive sufficiency of the claims in the proposed second amended complaint. Then the court addresses the motion to dismiss, the question being whether any of the counts relating to Ace in either the first amended complaint or the proposed second amended complaint should be dismissed for failing to state a viable claim for relief against Ace.

1. The Standard for Granting Leave to Amend

After a responsive pleading is served, a plaintiff may amend its complaint "only by leave of court or by written consent of the adverse party; and leave shall be freely given when justice so requires." M.R. Civ. P. 15(a); see also Efstathiou v. Aspinquid, Inc., 2008 ME 145, ¶ 21, 956 A.2d 110, 118.1 "Whether to allow a pleading amendment rests with the court's sound discretion." Holden v. Weinschenk, 1998 ME 185, ¶ 6, 715 A.2d 915, 917 (quoting Diversified Foods, Inc. v. First Nat'l Bank of Boston, 605 A.2d 609, 616 (Me. 1992)).

Courts should freely allow an amendment to a complaint except for bad faith, dilatory tactics, or undue delay resulting in prejudice to the opponent. Longley v. Knapp, 1998 ME 142, ¶ 19, 713 A.2d 939, 945. However, where "a proposed amended complaint would be subject to a motion to dismiss, the court is well within its discretion in denying leave to amend." See Glynn v. City of S. Portland, 640 A.2d 1065, 1067 (Me. 1994).

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The proposed amended complaint does not add any claims against any of the defendants; it purports instead to clarify what the Plaintiffs claim to be the connections between the asserted actions of the several defendants. Only Defendant Ace opposes the Plaintiffs' proposed amendment, on the ground that granting the motion to amend would be futile in light of its motion to dismiss pursuant to M.R. Civ. P. 12(b)(6). But for that contention, the court would grant the motion to amend, because it has been timely made and does not cause any cognizable prejudice to any party. Therefore, the analysis turns to Ace's motion to dismiss to determine whether any of the counts against Ace should be dismissed.

2. Ace's Motion to Dismiss

The counts pertaining to Ace are as follows:

Count V: Defamation
Count VI: False Light
Count VII: Negligent Misrepresentation
Count VIII: Intentional Misrepresentation
Count IX: Intentional Infliction of Emotional Distress as to Plaintiff Warren2
Count X: Negligent Infliction of Emotional Distress as to Plaintiff Warren
Count XI: Vicarious Liability
Count XII: Punitive Damages
Count XIII: Economic Damages for Restitution
Count XIV: Promissory Estoppel

"In reviewing [] a motion to dismiss, [the court] consider[s] the facts in the complaint as if they were admitted." Bonney v. Stephens Mem. Hosp., 2011 ME 46, ¶ 16, 17 A.3d 123, 127. The court will "'examine the complaint in the light most favorable to the plaintiff to determine whether it sets forth elements of a cause of action or alleges facts that would entitle the plaintiff to relief pursuant to some legal theory.'" Id. (quoting Saunders v. Tisher, 2006 ME 94, ¶ 8, 902 A.2d 830, 832). '"Dismissal is warranted when it appears beyond a doubt that the plaintiff is not entitled to relief under any set of facts that he might prove in support of his claim.'" Id.

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The Maine Rules of Civil Procedure incorporate principles of notice pleading. See e.g., Burns v. Architectural Doors & Windows, 2011 ME 61, ¶ 21, 19 A.3d 823, 829. Rule 8 calls for "1) a short and plain statement of the claim showing that the pleader is entitled to relief and (2) a demand for judgment for the relief which the pleader seeks." M.R. Civ. P. 8; see also Bean v. Cummings, 2008 ME 18, ¶ 8, 939 A.2d 676, 679 (discussing pleading requirements in light of recent United States Supreme Court decisions, and noting that Rule 9(b) identifies certain claims that require a heightened pleading standard such as fraud or mistake). Notice pleading requires the plaintiff to provide the opposing party with "fair notice of the claim." Polk v. Town of Lubec, 2000 ME 152, ¶ 18, 756 A.2d 510, 514 (quoting E.N. Nason, Inc. v. Land-Ho Dev. Corp., 403 A.2d 1173, 1177 (Me. 1979)).3

With that framework in mind, the analysis turns to the specific counts of the complaint.

Count V: Defamation

The Plaintiffs allege that Ace made defamatory statements to the investigators in State of Maine Office of Securities and the Maine Attorney General's Office during the pendency of the criminal investigation against them. They allege that the statements were related to the "scope and extent of the relationship between [the parties]; the success of the Rent-A-Husband tested partnerships; and [] Ace's interest in obtaining an ownership stake in Rent-A-Husband including, but not limited to, statements claiming Ace [] did not have a longstanding working partnership with Rent-A-Husband; that the Rent-A-Husband testing was not that successful;

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and that Defendant Ace was not seriously interested in a buy-in or buy-out of Rent-A-Husband and did not represent to Plaintiffs that it was." (Compl. ¶ 163.) Ace claims that the statements were not defamatory, and further argues that they were absolutely privileged as they were made during a judicial proceeding.

In order to survive a motion to dismiss, a complaint for defamation must allege the following elements: a false and defamatory statement concerning another; an unprivileged publication to a third party; fault amounting at least to negligence on the part of the publisher; and actionability irrespective of special harm or the existence of special harm caused by the publication. Cole v. Chandler, 2000 ME 104, ¶ 5, 752 A.2d 1189, 1193; Vahlsing Christina Corp. v. Stanley, 487 A.2d 264, 267 (Me. 1985).

The Law Court has stated:

Any person has a qualified privilege to make statements to law enforcement or regulatory agencies regarding the conduct of others, where the person making the statement believes in good faith that the statement is true and indicates that a statutory standard administered by the agency may have been violated.

Truman v. Browne, 2001 ME 182, ¶ 15, 788 A.2d 168, 172. This conditional privilege, however, is lost where the defendant abuses the privilege. Lester, 596 A.2d at 69; see also Cole, 2000 ME 104, ¶ 7, 752 A.2d at 1194 (noting that "[w]hether the defendant abused his privilege is a question of fact"|j and o^nce it is determined that the defendant is entitled to the privilege, the burden shifts to the plaintiff "to come forward with evidence that could go to a jury that [the defendant] abused the privilege") (citing Rippett v. Bemis, 672 A.2d 82, 87 (Me. 1996) and Gautschi v. Maisel, 565 A.2d 1009, 1011 (Me. 1989)).

As "[a] motion to dismiss a complaint for failure to state a claim should not be granted if the pleading alleges facts which would entitle the plaintiff to relief upon some theory, or if it avers every essential element of a claim," see Vahlsing Christina Corp. v. Stanley, 487 A.2d 264, 267 (Me. 1985). Whether Ace's allegedly defamatory statements were privileged is a question

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of fact. Because the Plaintiffs have alleged the elements of a defamation claim, Ace's motion must be denied as to Count V.

Count VI: False Light

Plaintiffs also allege that Ace made statements that portrayed them in a false light with the public.

One who gives publicity to a matter concerning another that places the other before the public in a false light is subject to liability to the other for invasion of his privacy, if (a) the false light in which the other was placed would be highly offensive to a reasonable person, and (b) the actor had knowledge of or acted in reckless disregard as to the falsity of the publicized matter and the false light in which the other would be placed. Restatement (Second) of Torts § 652E (1977).

Cole v. Chandler, supra, 2000 ME 104, ¶ 17, 752 A.2d at 1197.


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