Griffin v. Schneider ( 1993 )

June 24, 1993 [NOT FOR PUBLICATION]
[NOT FOR PUBLICATION]
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
No. 93-1253
ROSS B. GRIFFIN, ET AL.,
Plaintiffs, Appellants,
v.
HERBERT T. SCHNEIDER,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MAINE
[Hon. Morton A. Brody, U. S. District Judge]
Before
Selya, Cyr and Boudin, Circuit Judges.
Linda Christ, with whom Jed Davis and Jim Mitchell and Jed
Davis, P.A. were on brief, for appellants.
Peter B. Bickerman, with whom Lipman and Katz, P.A. was on
brief, for appellee.
Per Curiam. Plaintiffs, former employees of Insituform
Per Curiam.
of New England, Inc. (Insituform), brought suit in Maine's
federal district court against defendant-appellee Herbert T.
Schneider, the chief executive officer of Insituform. The
plaintiffs filed several complaints in rapid succession, but,
each time, the defendant prevailed on a motion to dismiss. See
Fed. R. Civ. P. 12(b)(6). Following entry of final judgment, the
plaintiffs appealed.1 We affirm.
On appeal, plaintiffs assign error to the district
court's dismissal of four claims.2 We need not dally. We have
repeatedly observed that, when the trial court has handled a
matter appropriately and adequately articulated a sound basis for
its rulings, "a reviewing tribunal should hesitate to wax
longiloquent simply to hear its own words resonate." In re San
Juan DuPont Plaza Hotel Fire Litig., 989 F.2d 36, 38 (1st Cir.
1993). This observation has particular pertinence here: not
only did the magistrate judge and the district judge
satisfactorily explain the reasons why plaintiffs' third amended
complaint fails to state one or more claims upon which relief can
1There is some confusion as to which counts of which
complaints were dismissed. At oral argument in this court,
however, the parties stipulated that the judgment below
terminated all claims against Schneider; and that the operative
complaint, for purposes of this appeal, is plaintiffs' third
amended complaint. We accept the stipulation.
2The third amended complaint asserted nine claims in toto.
Since plaintiffs' brief does not address the remaining five
claims, the dismissal of those claims must stand. See, e.g.,
United States v. Slade, 980 F.2d 27, 30 n.3 (1st Cir. 1992)
(noting that arguments made below, but not renewed on appeal, are
deemed waived).
2
be granted, but also, the case is so idiosyncratic that it
possesses extremely limited precedential value. Accordingly, we
affirm the dismissal of plaintiffs' third amended complaint for
substantially the reasons elucidated below, adding, however,
several brief comments.
I
As to plaintiffs' claims for fraudulent
misrepresentation, tortious interference, and unjust enrichment,
we rely essentially upon the grounds for dismissal identified
both by the magistrate, see Recommended Decision (Sept. 21,
1992), and by the district judge (in the course of adopting the
magistrate's recommendations as to those three counts). See
Order and Memorandum of Opinion (Nov. 2, 1992). We supplement
these offerings by supplying a few embellishments.
1. The fraudulent misrepresentation count (which
presents perhaps the closest question) still fails, after several
opportunities to amend, to allege fraud with the requisite
particularity. See, e.g., Greenstone v. Cambex Corp., 975 F.2d
22, 25-26 (1st Cir. 1992) (discussing need for specific factual
allegations to particularize claims for fraud); Powers v. Boston
Cooper Corp., 926 F.2d 109, 111 (1st Cir. 1991) (discussing
specificity required in pleading fraud); McGinty v. Beranger
Volkswagen, Inc., 633 F.2d 226, 228-29 (1st Cir. 1980) (similar);
see generally Fed. R. Civ. P. 9(b). The order for dismissal is,
therefore, supportable as to this claim.
2. The tortious interference count, which asserts that
3
the defendant wrongly interfered with plaintiffs' contracts of
employment with Insituform, fails as a matter of law. When a
corporate officer acts in his official capacity, his acts, in
law, are acts of the corporation. See, e.g., DeBrecini v. Graf
Bros. Leasing, Inc., 828 F.2d 877, 879 (1st Cir. 1987), cert.
denied, 484 U.S. 1064 (1988). Hence, the weight of authority is
to the effect that a corporate officer can "interfere" with a
corporation's contracts, in a legally relevant sense, only by
conduct undertaken outside, or beyond the scope of, his official
capacity. See, e.g., Michelson v. Exxon Research & Eng. Co., 808
F.2d 1005, 1007-08 (3d Cir. 1987) (holding that a corporate
officer acting in his official capacity could not tortiously
interfere with a corporate contract because corporations act only
through their officers and agents); Rao v. Rao, 718 F.2d 219, 225
(7th Cir. 1983) (ruling that a sole shareholder, officer, and
director of a corporation is not considered to be a separate
entity capable of inducing the corporation to breach its
contracts); American Trade Partners, L.P. v. A-1 Int'l Importing
Enterps., Ltd., 757 F. Supp. 545, 555 (E.D. Pa. 1991) (explaining
that, "[b]y definition, [tortious interference] necessarily
involves three parties," but, when an employee is acting within
the scope of his authority, he and his corporate employer are
considered the same entity); Hickman v. Winston County Hosp. Bd.,
508 So.2d 237, 239 (Ala. 1987) (holding that, unless acting
outside the scope of their employment and with actual malice, the
officers of a corporation cannot be held liable for tortious
4
interferences with contracts to which the corporation is a
party); see also Restatement (Second) of Torts 766. We believe
that the Maine courts would follow this rule. And, here, the
very thesis of plaintiffs' claim is that Schneider, by virtue of
his controlling position in Insituform, caused Insituform to
underpay their wages. This is merely another way of saying that
plaintiffs' claim is premised on Schneider's actions in an
official capacity. Ergo, the lower court appropriately dismissed
the tortious interference count.3
3. The unjust enrichment count founders because
plaintiffs neither explain how the defendant was unjustly
enriched, that is, how Schneider (as opposed to the corporation
that he allegedly controlled) personally benefitted from the
purported underpayment of wages, nor set forth facts from which a
plausible inference of unjust enrichment might be drawn.4 The
defendant's enrichment is, of course, an essential element of the
3We note, moreover, that plaintiffs have failed to plead the
elements of a tortious interference claim. See C.N. Brown Co. v.
Gillen, 569 A.2d 1206, 1210 (Me. 1990) (setting out elements of a
tortious interference claim). In particular, they have failed to
set forth facts tending to show that Schneider, through fraud,
intimidation, or undue influence, procured a breach of the
specified contracts. See id. (requiring demonstration of fraud
or its equivalent to bottom a tortious interference claim).
4A purely conclusory statement, contradicted by the very
facts described in plaintiffs' complaint, cannot satisfactorily
fill this void. See, e.g., Correa-Martinez v. Arrillaga-
Belendez, 903 F.2d 49, 52-53 (1st Cir. 1990) (in passing on Rule
12(b)(6) motion, a court need not credit subjective
characterizations or naked conclusions); Dartmouth Review v.
Dartmouth College, 889 F.2d 13, 16 (1st Cir. 1989) (discussing
when "'conclusions' become 'facts' for pleading purposes");
Chongris v. Board of Appeals, 811 F.2d 36, 37 (1st Cir.), cert.
denied, 483 U.S. 1021 (1987).
5
putative cause of action. See A.F.A.B. Inc. v. Town of Old
Orchard Beach, 610 A.2d 747, 749 (Me. 1992); Hart v. County of
Sagadahoc, 609 A.2d 282, 284 (Me. 1992); 12 Williston, Contracts
1479, at 276 (3d ed. 1970). Hence, absent some meaningful
basis for an allegation that Schneider himself was unjustly
enriched, the count cannot survive.5 See Gooley v. Mobil Oil
Corp., 851 F.2d 513, 515 (1st Cir. 1988) (holding that, to pass
muster under Rule 12(b)(6), a complaint must "set forth factual
allegations, either direct or inferential, respecting each
material element necessary to sustain recovery under [the legal
theory thought to be actionable]").
II
This brings us to count VIII of the third amended
complaint, which charges Schneider, in his capacity as a trustee
of various corporate pension and profit-sharing plans, with
violating a fiduciary duty. With regard to this count, we affirm
the dismissal substantially on the basis of District Judge
Brody's well-reasoned analysis. See Order and Memorandum of
Opinion (Feb. 17, 1993). In the third amended complaint,
plaintiffs aver that "[c]ontributions to . . . the Plans were
based on the level of compensation" actually paid to covered
5The third amended complaint alleges that Schneider was the
"owner" of Insituform and "controlled its operations." However,
as painstakingly explicated by the magistrate, plaintiffs allege
no facts sufficient, under Maine law, to warrant the disregard of
Insituform's corporate identity, the piercing of its corporate
veil, or the imposition of "alter ego liability" on Schneider,
personally. See Recommended Decision (Sept. 21, 1992), at 6-8,
and cases cited therein. Like the district judge, we adopt
Magistrate Judge Beaulieu's reasoning on this point.
6
employees. Insituform apparently funded the plans at this level.
Thus, even if defendant, in his capacity as a trustee, had a
fiduciary obligation to collect required contributions from a
recalcitrant employer a matter on which we do not opine he
did not breach it, for the contributions matched the wages
actually paid. Hence, dismissal is appropriate under existing
circumstances.
Nevertheless, we need go further; the form of the
dismissal gives us pause. The record reflects that plaintiffs
are prosecuting a parallel action against Insituform in the state
courts. There, they allege among other things that the
corporation underpaid their wages. Should they prevail on that
theory, then, presumably, benefit plan contributions would have
to be recomputed based on increased levels of covered
compensation. And if that circumstance eventuated, the defendant
might well be held accountable if he fails to take appropriate
action to recover incremental amounts due to the plans. For this
reason, we think that, unlike the rest of the third amended
complaint, count VIII ought not to have been dismissed with
prejudice. Rather, it should have been dismissed for lack of
ripeness, without prejudice to the plaintiffs' right to bring a
future suit to enforce defendant's fiduciary obligations should
changed circumstances (i.e., a judgment or settlement revising
the historical payroll and an ensuing failure to collect added
contributions to the plans) subsequently justify such an
initiative. We, therefore, direct the district court to modify
7
the final judgment in this single respect.
Affirmed as modified. Costs to appellee.
8