Hamann v. Carpenter

United States Court of Appeals
For the First Circuit
No. 19-1075
THOMAS HAMANN,
Plaintiff, Appellant,
v.
STUART A. CARPENTER; COPLEY MOTORCARS CORPORATION;
LESLIE H. WEXNER,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Allison D. Burroughs, U.S. District Judge]
Before
Thompson, Kayatta, and Barron,
Circuit Judges.
George W. Kramer for appellant.
Matthew S. Zeiger, with whom Zeiger Tigges & Little LLP,
Robert R. Berluti, and Berluti McLaughlin & Kutchin LLP were on
brief, for appellees.
September 5, 2019
KAYATTA, Circuit Judge. Thomas Hamann alleges that he
was denied the fruits of a profitable exclusive-seller agreement
for the sale of a 1953 Ferrari automobile when defendant Stuart
Carpenter caused the breach of that agreement by threatening
economic harm to the other party to the contract. Hamann brought
this suit, including claims of tortious interference with an
advantageous business relationship, tortious interference with an
existing contract, and violations of Massachusetts's Consumer
Protection Law, Mass. Gen. Laws ch. 93A, § 11, in the U.S. District
Court for the District of Massachusetts. The district court
dismissed with prejudice Hamann's claims, reasoning that Hamann
had failed to plausibly allege an improper motive underlying
Carpenter's interference with Hamann's contract and concluding
that Carpenter's alleged improper means of interfering with that
contract amounted to nothing more than "[t]ough negotiating." We
now reverse in part and affirm in part that decision.
I.
Because the district court dismissed Hamann's complaint
on a Rule 12(b)(6) motion to dismiss, we take the nonconclusory,
nonspeculative facts contained in the complaint as true and draw
all reasonable inferences from those facts in Hamann's favor. See
Barchock v. CVS Health Corp., 886 F.3d 43, 48 (1st Cir. 2018).
At issue in this appeal is a rare 1953 Ferrari 375MM
Pininfarina Spyder ("the Ferrari"), a highly sought-after prize
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for the car enthusiast with the means to afford the significant
bounty needed to acquire one. Emilio Gnutti, an Italian collector
who originally owned the Ferrari, agreed to sell the car to
Vincenzo Scandurra, an Italian national living in Monaco who
intended to resell it (presumably at a profit). Scandurra paid
Gnutti a large deposit for the Ferrari. But because Scandurra did
not have enough cash to complete the purchase, he found himself
under significant pressure to find a buyer so as not to forfeit
the deposit. So, Scandurra hired Hamann, a buyer and seller of
high-end vehicles in Connecticut, as his exclusive agent to find
a buyer for the Ferrari and agreed to pay Hamann a commission for
his work.
Hamann first offered to sell the Ferrari to Stuart
Carpenter, owner of Copley Motorcars Corporation and agent of
billionaire Leslie Wexner, for $15 million. In extending that
offer, Hamann informed Carpenter that Hamann was the exclusive
seller of the Ferrari. Carpenter declined Hamann's offer, noting
that "he did not have any interest in said Ferrari . . . , nor
would Wexner." Hamann then secured a bid of $10.5 million for the
Ferrari from a different party, Dana Mecum. Scandurra gave Hamann
the green light to sell the Ferrari to Mecum at that price. Hamann,
as agent for Mecum, then entered into an agreement with Scandurra
for the purchase of the Ferrari and sent Scandurra a €2 million
deposit.
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Two days later, Hamann learned that Wexner (through
Carpenter and other agents) had contacted Gnutti directly and
offered to purchase the Ferrari for €9 million (roughly equivalent
to $12.5 million at that time, according to the complaint).
Scandurra informed Hamann that he would have to back out of their
agreement and sell the Ferrari to Carpenter and Wexner because
Carpenter had threatened to "go directly to Gnutti and interfere
with Scandurra's relationship with Gnutti" if Scandurra refused
Carpenter's offer. If Carpenter made good on this threat,
Scandurra feared, he would lose out on the opportunity to sell the
other cars in Gnutti's collection.
Hamann immediately emailed Carpenter, reminding him that
Hamann was the exclusive seller of the Ferrari and informing him
that the Ferrari was "under contract with a deposit on the way."
Carpenter eventually responded, stating that "he didn't have the
feeling that [Hamann] had the exclusive sales rights to [the
Ferrari]" and noting that "seven other dealers would have offered
him the car after [Hamann] for the same price."
Scandurra executed the sale to Carpenter and Wexner.
After transferring proceeds from the sale to Gnutti and paying
other commissions, Scandurra informed Hamann that he would not be
able to pay him a commission.
Hamann did not sue Scandurra for his breach of their
agreement. Instead, Hamann sued Carpenter, Copley Motorcars
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Corporation, and Wexner, as Carpenter's principal, for tortious
interference with an advantageous business relationship, tortious
interference with an existing contract, and violations of
Massachusetts's Consumer Protection Law, Mass. Gen. Laws ch. 93A,
§ 11. After giving Hamann an opportunity to amend his complaint,
the U.S. District Court for the District of Massachusetts concluded
that Hamann had failed to plausibly allege any impermissible motive
or means of interference with Hamann's business relationships or
existing contracts. See Hamann v. Carpenter, No. 17-cv-11292-ADB,
2019 WL 181284, at *5 (D. Mass. Jan. 11, 2019). Accordingly, the
court dismissed his suit. Id. This timely appeal followed.
II.
We address, in order, Hamann's two common law
tortious-interference claims, followed by his statutory
Massachusetts Chapter 93A claim.
A.
Under Massachusetts law, a plaintiff bringing a claim of
tortious interference with a contractual relationship must prove
that "(1) he had a contract with a third party; (2) the defendant
knowingly interfered with that contract . . . ; (3) the
defendant's interference, in addition to being intentional, was
improper in motive or means; and (4) the plaintiff was harmed by
the defendant's actions." O'Donnell v. Boggs, 611 F.3d 50, 54
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(1st Cir. 2010) (quoting Harrison v. NetCentric Corp., 744 N.E.2d
622, 632 (Mass. 2001)).
The defendants' primary line of attack -- both below and
on appeal -- trains on the third element: whether Carpenter's
motive or his means of inducing the breach of Hamann's contract
was "improper." The district court also homed in on this element.
The court found Hamann's allegations of improper motive too
conclusory, and it deemed Carpenter's alleged threat to interfere
with Scandurra's relationship with Gnutti to be nothing more than
"[t]ough negotiating," not amounting to an improper interference.
Hamann, 2019 WL 181284, at *4.
On the former point, we agree. Massachusetts courts
will find the improper motive element met when a defendant exhibits
"'actual malice' or 'a spiteful, malignant purpose, unrelated to
[a] legitimate corporate interest.'" Tuli v. Brigham & Women's
Hosp., 656 F.3d 33, 43 (1st Cir. 2011) (quoting King v. Driscoll,
638 N.E.2d 488, 494–95 (Mass. 1994)); see also Cavicchi v. Koski,
855 N.E.2d 1137, 1142 (Mass. App. Ct. 2006) ("[E]vidence of
retaliation or ill will toward the plaintiff will support the
claim."). On the other hand, the mere desire to benefit oneself
or one's principal will not suffice. See United Truck Leasing
Corp. v. Geltman, 551 N.E.2d 20, 24 (Mass. 1990).
Hamann's complaint does manage to claim that "[a]t all
relevant times herein, Carpenter bore ill will and spite toward
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Hamann, and personally communicated that to [him]." But we concur
with the district court that this allegation, standing alone, is
too cursory and too conclusory to cross the plausibility threshold.
Hamann was well positioned to know of any facts that would
plausibly support a finding of Carpenter's ill will towards him
rather than a conclusion that Carpenter was motivated merely by
his desire to procure the Ferrari for his principal. Yet, Hamann
alleges no such facts to support his otherwise too-conclusory
parroting of the improper-motive element. See Ocasio-Hernández v.
Fortuño-Burset, 640 F.3d 1, 12 (1st Cir. 2011) ("A plaintiff is
not entitled to 'proceed perforce' by virtue of allegations that
merely parrot the elements of the cause of action." (quoting
Ashcroft v. Iqbal, 556 U.S. 662, 680 (2009))); SEC v. Tambone, 597
F.3d 436, 442 (1st Cir. 2010) ("If the factual allegations in the
complaint are too meager, vague, or conclusory to remove the
possibility of relief from the realm of mere conjecture, the
complaint is open to dismissal."); Bell Atl. Corp. v. Twombly, 550
U.S. 544, 555 (2007)).
On the district court's latter point, however, we
disagree. The district court is generally correct that hard
bargaining and lawful competition generally do not amount to
impermissible interference under Massachusetts law. See, e.g.,
Cook & Co. Ins. Servs. v. Volunteer Firemen's Ins. Servs., 657 F.
App'x 1, 2 (1st Cir. 2016) ("[C]ompetitive infighting, though
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sometimes unattractive, is not per se unlawful"); Am. Private Line
Servs., Inc. v. E. Microwave, Inc., 980 F.2d 33, 36 (1st Cir. 1992)
("By courting Cable & Wireless with low prices and atypical
services, EMI simply engaged in lawful competition to renew its
already existing contract with Cable & Wireless."); Melo-Tone
Vending, Inc. v. Sherry, Inc., 656 N.E.2d 312, 315 (Mass. App. Ct.
1995) ("For competition and for the rough and tumble of the world
of commerce, there is tolerance, even though the fallout of that
rough and tumble is damage to one of the competitors." (citations
omitted)); see also Restatement (Second) of Torts § 768 cmt. a
(Am. Law Inst. 1979) [hereinafter Restatement] (explaining that
competition does not necessarily amount to impermissible
interference with a prospective contractual relation). This is
primarily true, however, when a plaintiff alleges an interference
with a prospective contract or business relationship. Existing
contracts, by contrast, seem to receive greater solicitude, enough
so that competitive conduct inducing the breach of such a contract
might be actionable in at least some circumstances. See United
Truck Leasing Corp., 551 N.E.2d at 23 n.6 ("The existence of a
contract, and not just the existence of a prospective relationship,
might be a factor in determining whether particular intentional
conduct was improper."); see also Shafir v. Steele, 727 N.E.2d
1140, 1143 (Mass. 2000) (recognizing that sections 776 and 766B of
the Second Restatement of Torts "reflect the law of
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Massachusetts"); Restatement, supra, § 767 cmt. j ("[G]reater
protection is given to the interest in an existing contract than
to the interest in acquiring prospective contractual relations,
and as a result permissible interference is given a broader scope
in the latter instance.").
In his complaint, Hamann alleges that Carpenter
knowingly interfered with Hamann's existing exclusive-seller
agreement with Scandurra by incentivizing Scandurra to breach that
existing agreement. Whether such economic pressure is improper
"depends on the attending circumstances, and must be evaluated on
a case-by-case basis." G.S. Enters., Inc. v. Falmouth Marine,
Inc., 571 N.E.2d 1363, 1370 (Mass. 1991). In performing that
evaluation, Massachusetts courts look to:
[T]he circumstances in which [the pressure] is exerted,
the object sought to be accomplished by the actor, the
degree of coercion involved, the extent of the harm that
it threatens, the effect upon the neutral parties drawn
into the situation, the effects upon competition, and
the general reasonableness and appropriateness of this
pressure as a means of accomplishing the actor's
objective.
Restatement, supra, § 767 cmt. c.
The pressure alleged here went beyond offering Scandurra
more money. It included a threat to interfere with Scandurra's
relationship with a third party in a manner that would cause
Scandurra actual harm. And it caused an apparent loss to yet
another third party, Mecum. Moreover, the precise details
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surrounding Carpenter's alleged threat are likely to be in the
exclusive possession of the defendants and Scandurra. We have
declined to require plaintiffs to assemble such additional detail
at the motion-to-dismiss stage under analogous circumstances, see,
e.g., Am. Sales Co. v. Warner Chilcott Co. (In re Loestrin 24 Fe
Antitrust Litig.), 814 F.3d 538, 552 (1st Cir. 2016), and we
decline to do so here as well.
In short, Hamann's specific allegation that Carpenter
threatened Scandurra with the destruction of another important
business relationship with a third party so as to induce Scandurra
to breach his existing agreement with Hamann to the detriment of
yet another third party suffices to make out a plausible claim
that Carpenter engaged in impermissible interference under
Massachusetts law. This "create[s] a reasonable expectation that
discovery may yield evidence of [Carpenter's] allegedly tortious
[interference]." García–Catalán v. United States, 734 F.3d 100,
103 (1st Cir. 2013).
The defendants also assert that Hamann's complaint
should be dismissed on the alternative basis that Hamann has failed
to plausibly allege that Carpenter's conduct caused him any
damages. The defendants argue that because Scandurra collected
more money for the Ferrari by selling it to Carpenter and Wexler,
the defendants actually "made it more likely that Hamann would be
paid a commission." "If there was not enough of the $12.5 million
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sales proceeds left over to pay Hamann," they reason, "then it
would have been mathematically impossible for Hamann to receive
any commission if the sale [to Mecum] had gone through at
$10.5 million." Accordingly, they conclude that Carpenter's
alleged inducement of Scandurra's breach could not have caused
Hamann's loss of commission because he would not have received one
had there been no breach.
Perhaps. But perhaps not. At this stage of the
litigation we can accept only the plausible allegation that, as
Scandurra's exclusive sales agent, Hamann would have been due a
commission from Scandurra and he would have received that
commission had the sale to Mecum closed and had Scandurra otherwise
honored Hamann's alleged rights as the exclusive agent for the
sale of the Ferrari. And as the intermediary between Mecum and
Scandurra, Hamann certainly would have been well positioned to
protect his alleged right to that commission had the sale of the
Ferrari gone through. In any event, given the allegations in the
complaint, we cannot conclude that it is implausible that Hamann
would have received at least some commission had Scandurra honored
his alleged agreement with Hamann. Accordingly, we decline to
affirm the district court's dismissal of Hamann's complaint on
this alternative basis. See Morales-Villalobos v. Garcia-Llorens,
316 F.3d 51, 55 (1st Cir. 2003) ("[F]actual matter[s] . . . can
hardly be resolved on the face of the complaint.").
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None of this is to say that Hamann will prevail on this
claim. Whether his case advances beyond mere plausibility will
likely turn on a necessarily fact-intensive inquiry -- one that is
best resolved on a full record, either on a motion for summary
judgment or, if warranted, at trial. For pleading purposes,
though, it is enough that his allegations "remove the possibility
of relief from the realm of mere conjecture." Tambone, 597 F.3d
at 442; Twombly, 550 U.S. at 555.
B.
We turn now to what Hamann variously calls his claim for
tortious interference with an "advantageous business relationship"
and tortious interference with a "business expectancy." This
labeling of the claim causes some initial confusion because, under
Massachusetts law, the tort of interference with an advantageous
business relationship apparently includes within its ambit the
tort of wrongful interference with an existing contract, and
Massachusetts courts "have not consistently distinguished between
the two torts." United Truck Leasing Corp., 551 N.E.2d at 23 n.6;
see also Blackstone v. Cashman, 860 N.E.2d 7, 12 (Mass. 2007)
(defining the tort, in the employment context, as interference
with "a present or prospective contract or employment
relationship"). Having already addressed Carpenter's alleged
interference with Hamann's existing contract with Scandurra, we
consider Hamann's attempt to allege an additional tort of
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interference only as it might bear on an advantageous business
relationship other than that contract. To prevail on this latter
tort, Hamann must show that "(1) he had an advantageous
relationship with a third party (e.g., a present or prospective
contract or [business] relationship); (2) the defendant knowingly
induced a breaking of the relationship; (3) the defendant's
interference with the relationship, in addition to being
intentional, was improper in motive or means; and (4) the plaintiff
was harmed by the defendant's actions." Blackstone, 860 N.E.2d at
12–13.
Hamann's complaint leaves unclear what prospective
contract or business relationship he premises this latter claim
upon. The complaint states that the Ferrari was "under contract
with a deposit on the way" at the time of Carpenter's alleged
interference, potentially indicating that the contract for the
sale of the Ferrari from Scandurra to Mecum had yet to be
finalized. So, perhaps this is the business relationship or
expectancy that he has in mind. Even were we to construe Hamann's
allegation in this way, however, we would be left only with a
prospective deal (between Mecum and Scandurra) to which Hamann
himself was not a party, prospective or otherwise. Moreover,
Hamann's complaint contains no allegation that any interference
with that prospective deal was the relevant cause of any damages.
Rather, on this score, Hamann's complaint states only that "[a]s
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a result of the wrongful interference with [Hamann's] contract as
exclusive agent for the sale of [the Ferrari], [Hamann] lost a
commission of €550,000" (emphasis added). Accordingly, the
complaint's reference to the alleged agreement between Mecum and
Scandurra, while it may play a role in establishing causation or
in calculating damages due from the interference with the alleged
exclusive-seller agreement, provides no independent footing for
this tortious-interference claim. See Tech Plus, Inc. v. Ansel,
793 N.E.2d 1256, 1262 (Mass. App. Ct. 2003) ("[A] plaintiff
[can]not recover on a claim for tortious interference with
advantageous relationships where she ha[s] failed to show that she
ha[s] suffered any pecuniary loss as a result of the defendant's
actions."); see also Carroll v. Xerox Corp., 294 F.3d 231, 241
(1st Cir. 2002) ("[W]e are free to affirm [a dismissal] on any
basis supported by the record.").
For the foregoing reasons, Hamann's complaint provides
too little clarity and too little substance to preserve his common
law claims other than his principal claim that Carpenter and those
who might be vicariously responsible for his torts (i.e., Copley
Motorcars Corporation and Wexner) are liable for tortiously
causing Scandurra to breach his exclusive-seller agreement with
Hamann.
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C.
As the defendants correctly point out, Massachusetts's
Consumer Protection Law provides that "[n]o action shall be brought
or maintained under [§ 11 of chapter 93A] unless the actions and
transactions constituting the alleged unfair method of competition
or the unfair or deceptive act or practice occurred primarily and
substantially within the commonwealth." Mass. Gen. Laws ch. 93A,
§ 11. The defendants aver that we should dismiss Hamann's
Chapter 93A claim for Hamann's failure to allege that the
defendants' tortious conduct occurred "primarily and substantially
within Massachusetts."
Hamann's complaint does not include any factual
allegation linking Carpenter's tortious conduct to Massachusetts.
Instead, it unhelpfully observes that "[a]t all relevant times
herein, Carpenter has engaged in business within the State of
Connecticut, buying, selling, and leasing cars." And on appeal,
Hamann provides no response to the defendants' assertion that we
should dismiss his Chapter 93A claim on this basis. Accordingly,
we deem any argument Hamann may have had on this score waived.
See Doherty v. Merck & Co., 892 F.3d 493, 501 (1st Cir. 2018).
III.
Whether the evidence will result in a verdict for Hamann,
or even survive a motion for summary judgment, we cannot say at
this juncture. As is often the case with the notice pleading
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allowed by Federal Rule of Civil Procedure 8(a), many questions
remain. What exactly were the terms of the alleged exclusive-
seller agreement? What exactly did Carpenter say to Scandurra?
And what would have happened but for that communication? We now
decide only that Hamann has plausibly pleaded that Carpenter harmed
Hamann by tortiously interfering with a contract between Hamann
and Scandurra. We therefore reverse the district court's dismissal
of Hamann's claim of tortious interference with a contractual
relationship and remand for further proceedings consistent with
this opinion. However, we affirm the district court's dismissal
of Hamann's other tort and Chapter 93A claims. Costs are awarded
to Thomas Hamann.
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