1Coronado, who did not respond to the original complaint,

was defaulted on October 13, 2005, and has not participated in

any of the motion practice in this case.

2After receiving an extension of time to think about it, the

defendants decided not to oppose the Archdiocese’s motion for

leave to file its amended complaint. See Defs.’ Notice Assent

Mot. Amend. The Archdiocese argues that, in doing so, the moving

UNITED STATES DISTRICT COURT FOR THE 

DISTRICT OF NEW HAMPSHIRE

Archdiocese of San Salvador

and Archbishop Fernando

Saenz LaCalle

v. Civil No. 05-cv-237-JD

Opinion No. 2006 DNH 102

FM International, LLC et al.

O R D E R

Through this action, the Archdiocese of San Salvador and its

Archbishop (collectively, the “Archdiocese”) seek to recover more

than $1 million in disaster relief funds allegedly

misappropriated by the defendants: FM International, LLC

(“FMI”); two of its managers, Thomas D. McCarron and Gary

Friedrich; its reputed agent, Mauricio Coronado; and Foreign

Motors of Durham, Inc., another corporation formed by McCarron.1

McCarron, Friedrich, and Foreign Motors (collectively, the

“moving defendants”) have moved to dismiss the Archdiocese’s

amended complaint, filed in response to this court’s previous

order dismissing portions of the original complaint in this

action.2 See 2006 DNH 026, 2006 WL 437493 (D.N.H. Feb. 23,

Case 1:05-cv-00237-JD Document 60 Filed 09/07/06 Page 1 of 29
defendants “effectively waived their right to seek dismissal of

[the] Amended Complaint.” Opp’n Mot. Dismiss at 3 n.2. The

Archdiocese does not provide any authority supporting its view

that assenting to a motion for leave to amend a pleading effects

a waiver of the right to challenge it under Rule 12. Indeed, in

expressing their assent to the motion to amend, the defendants

“reserve[d] all rights with respect to objecting to the substance

of the amended complaint.” Defs.’ Notice Assent Mot. Amend. ¶ 3.

The Archdiocese’s waiver argument is unpersuasive.

3FMI does not join in the instant motion to dismiss and has

filed an answer to the amended complaint.

2

2006). The Archdiocese objects to the motion to dismiss; the

moving defendants have filed a reply to the objection; and the

Archdiocese, with the requisite leave of court, has filed a surreply.3 The Archdiocese’s request for oral argument on the

motion is denied. See L.R. 7.1(d) (“the court shall decide

motions without oral argument”).

The defendants have also moved to strike one of the

allegations from the amended complaint under Rule 12(f) of the

Federal Rules of Civil Procedure. The plaintiffs object, and the

defendants have filed a reply to the objection. The plaintiffs

have duly filed a sur-reply.

Background

With the exception of some added detail, the significance of

which lies at the heart of the instant motion to dismiss, the

facts alleged in the amended complaint are the same as those in

its antecedent and will therefore be repeated here only to the

Case 1:05-cv-00237-JD Document 60 Filed 09/07/06 Page 2 of 29
3

extent they are material to the pending motions. FMI appointed

Coronado its “exclusive legal representative for all of Central

and South America, excluding Ecuador,” in August 2000, and gave

him signatory power over its bank account (the “FMI account”). 

Am. Compl. ¶ 13. In early 2002, Coronado told representatives of

the Archdiocese about “a program to increase the funds available

for disaster relief, including food aid, by a factor of 10”–-if

the Archdiocese provided FMI with $500,000, it would receive $5

million to use in aid. Id. ¶ 14.

On or about February 28, 2002, representatives of the

Archdiocese met with Coronado in Miami, where they agreed to wire

$500,000 to the FMI account. The Archdiocese did so that same

day. Also at this meeting, the “lead representative of the

Archdiocese” signed a “‘Non-Circumvention & Non-Disclosure

Agreement,’ written in English, which mandated secrecy,” at the

urging of “the Defendants.” Am. Compl. ¶ 15. The amended

complaint, like its predecessor, alleges that McCarron attended

this meeting. Id.; see also Compl. ¶ 15.

In its response to an interrogatory propounded by McCarron,

however, the Archdiocese does not identify him among the

participants in the meeting of February 28, 2002. Nor does it

place him at another alleged meeting between representatives of

the Archdiocese and Coronado’s “associates” the next day, when

the Archdiocese was persuaded to wire an additional $500,000 to

Case 1:05-cv-00237-JD Document 60 Filed 09/07/06 Page 3 of 29
4

the FMI account as part of the same program. Am. Compl. ¶ 16. 

Instead, the Archdiocese’s interrogatory answer states that

“[s]ome time later, . . . McCarron arrived in Florida”–-and not

in Miami, but in Fort Lauderdale, where he subsequently met with

some of the same people who had attended the Miami meetings. 

Opp’n Mot. Strike at 4. At this meeting, McCarron presented a

written agreement “to be signed by FM International and COMFIN,”

an organization whose relationship to this matter is unclear from

the materials presently before the court. Id. A representative

from each party executed the agreement, the significance of which

is also unclear at the moment. 

Though the Archdiocese expected to receive the return on its

investment within a month, the funds never materialized, despite

repeated promises by Coronado during the summer of 2002 that the

Archdiocese would receive its money shortly. The original

complaint alleged simply that “the Defendants” had begun to draw

down the funds in the FMI account “within days” of the

Archdiocese’s deposits and that, over the next few months,

“[t]ransfers totaling approximately $999,000, were made to and by

. . . Coronado, McCarron, Friedrich, FM International, and

Foreign Motors” so that only about $1,000 remained in the account

by the end of July 2002. Compl. ¶ 19.

The original complaint asserted six numbered counts against

the defendants: (I) breach of contract, (II) fraud, (III)

Case 1:05-cv-00237-JD Document 60 Filed 09/07/06 Page 4 of 29
4The court determined that the Archdiocese had sufficiently

pled an agent-principal relationship between Coronado and FMI. 

2006 WL 437493, at *9. 

5

common-law conversion and violation of Florida’s “civil theft”

statute, Fla. Stat. Ann. § 772.11, (IV) violations of both the

Florida and New Hampshire consumer protection statutes, id. §

501.204 and N.H. Rev. Stat. Ann. (“RSA”) § 358-A:2, (V) replevin,

and (VI) civil conspiracy. The original complaint also sought to

pierce FMI’s corporate veil to hold McCarron and Friedrich

individually liable for the company’s alleged wrongdoing on the

grounds that they “failed to follow corporate formalities, and to

observe the separateness of . . . [FMI], and because that

corporation existed as a sham to further the fraudulent

activities of its principals.” Compl. ¶¶ 23, 27, 31, 34, 37, 41.

In its prior order, the court dismissed the fraud and

consumer protection claims as to FMI and the moving defendants

because the Archdiocese had failed to plead fraud against them

with particularity, 2006 WL 437493, at *7-*9, and the conspiracy

claim because it could not succeed in the absence of any fraud,

id. at *10. The court ruled that the Archdiocese had not

sufficiently alleged a basis for piercing FMI’s corporate veil so

as to attribute Coronado’s fraudulent activities to the moving

defendants.4 Id. at *9-*10. Based on this conclusion, the court

also dismissed the moving defendants from the breach of contract

claim on limitations grounds, because Coronado’s statements

Case 1:05-cv-00237-JD Document 60 Filed 09/07/06 Page 5 of 29
5The court also dismissed count V of the original complaint,

claiming replevin, on the ground that it failed to state a claim

for relief. The Archdiocese has omitted that count from its

amended complaint.

6In July, 2002, an additional $5,381.49 from the joint

account was deposited into the FMI account. Am. Comp. ¶¶ 19(q)-

(r))). The joint account was then closed. 

6

tolling the statute could bind FMI, but not its owners, in the

absence of a valid veil-piercing claim.5 Id. at *5. In

particular, the court determined that the allegation that “the

defendants” withdrew funds from the FMI account did not satisfy

Rule 9(b) because it “provide[d] no clue as to which of the

defendants might have made which withdrawals, in what amount, at

what particular time, or for what purpose.” Id. at *10. 

Through the amended complaint, the Archdiocese attempts to

correct this problem by individually identifying the alleged

transactions that depleted the FMI account. First, on March 5,

2002, McCarron allegedly withdrew $500,000, from the account and

deposited it into another account held jointly by him and

Friedrich (the “joint account”). Although at least $475,000 was

later returned to the FMI account from the joint account in the

form of two large transfers, each of these transfers coincided

with a transfer in the same or a similar amount from the FMI

account to Coronado.6 Am. Compl. ¶¶ 19(j)-(k). In addition to

these transfers, Coronado also received $180,020 directly from

the FMI account, id. ¶ 19(b), while $150,020 was credited to an

Case 1:05-cv-00237-JD Document 60 Filed 09/07/06 Page 6 of 29
7The amended complaint does not say what ultimately happened

to these sums.

7

associate of his, Reglio Bonis, id. ¶ 19(g), and $7,500 was paid

“to a law firm, apparently for the settlement of a delinquency

incurred by Olga and Jorge Coronado, who are believed to be

Coronado’s parents.” Id. ¶ 19(l). Each of these transfers was

executed by McCarron.

Meanwhile, on March 6, 2002, McCarron moved $100,020 from

the FMI account to an investment account he maintained. Am.

Compl. ¶ 19(c). On March 20, 2002, he wrote a check on the FMI

account for $2,500 to the same bank that held FMI’s account; he

wrote a check to different bank, also on the FMI account, for

$15,000, on July 31, 2002.7 Id. ¶ 19(t). McCarron also

deposited $10,000 into the FMI account in the form of a personal

check that same day. Id. ¶ 19(s).

For his part, Friedrich made two cash withdrawals from the

FMI account, totaling $17,104, within two weeks of the

Archdiocese’s deposit. Id. ¶¶ 19(d)-(e). On July 16, 2002,

Friedrich deposited $15,000 in funds, apparently originating from

a personal account, into the FMI account, but, that same day,

transferred $16,000 “into an account held in the name of Lespan

SA, with a further credit to a Mondale Trading Ltd. Account.” 

Id. ¶¶ 19(o)-(p). The amended complaint does not further

identify these entities or their connection with Friedrich or any

Case 1:05-cv-00237-JD Document 60 Filed 09/07/06 Page 7 of 29
8On July 31, 2002, Friedrich deposited into the FMI account

a check McCarron had written him for $1,145.59, though the

amended complaint does not identify the account on which the

check was drawn. Am. Compl. ¶ 19(u).

8

of the other defendants.8 

 Money also passed between FMI and Foreign Motors, or other

entities with names similar to FMI’s. McCarron wrote Foreign

Motors a check for $30,000 on FMI’s account on March 20, 2002,

Am. Compl. ¶ 19(f), and, conversely, wrote FMI two checks on

Foreign Motors’s account, the first for $10,000 on April 5, 2002,

and the second for $1,500 on June 24, 2002. Id. ¶¶ 19(i), (m). 

FMI also received $2,508.16 from “FM International LLC DAS” on

July 8, 2002, and $63.17 from “FM International LLC Guatemala” on

July 26, 2002. Id. ¶¶ 19(n), (r)))). 

Based on these transactions, the Archdiocese asserts that

McCarron and Friedrich “treat[ed] the account of [FMI] as their

personal bank account,” removed funds from the FMI account “into

their personal accounts, for personal gain, temporarily and

permanently,” used the account to pay personal expenses, and

moved money between the FMI account and Foreign Motors. Am.

Compl. ¶¶ 22(a)-(d), 26(a)-(d), 30(a)-(d), 33(a)-(d), 37(a)-(d). 

The Archdiocese therefore charges that McCarron and Friedrich

“failed to follow corporate formalities, and to observe the

separateness of [FMI] . . . .” Id. ¶¶ 22, 26, 30, 33, 37. The

Archdiocese also identifies the specific transfers between the

Case 1:05-cv-00237-JD Document 60 Filed 09/07/06 Page 8 of 29
9

FMI account and the moving defendants’ personal accounts, as well

as to Coronado or those close to him, as among the fraudulent

acts and unfair and deceptive practices allegedly perpetrated by

the defendants. Id. ¶¶ 24, 32.

Discussion

I. The Motion to Strike

Pursuant to Rule 12(f) of the Federal Rules of Civil

Procedure, the moving defendants seek to strike the allegation in

the amended complaint that McCarron attended the February 28,

2002, meeting in Miami. Am. Compl. ¶ 15. Rule 12(f), in

relevant part, allows the court to “order stricken from any

pleading . . . any redundant, immaterial, impertinent, or

scandalous matter.” The defendants suggest that the allegation

is “scandalous” because it underlies the Archdiocese’s fraud

claim against McCarron, as to which “[t]he consequences,

reputational and otherwise, are profound.” Mem. Supp. Mot.

Strike at 6. While the accusations of fraud certainly have the

potential to injure McCarron’s reputation, the motion to strike

does not target those accusations in toto, but the narrow claim

that McCarron attended the February 28 meeting. As the court

noted in its prior order, McCarron’s mere presence at the meeting

does not tie him to any of the allegedly fraudulent statements

Coronado made there or otherwise connect him to the scheme

Case 1:05-cv-00237-JD Document 60 Filed 09/07/06 Page 9 of 29
10

described in the complaint. 2006 WL 437493, at *7 n.11.

“Scandalous pleadings for the purpose of Rule 12(f) are

those which reflect cruelly upon the defendant’s moral character,

use repulsive language, or detract from the dignity of the court

. . . .” Nault’s Auto. Sales, Inc. v. Am. Honda Motor Co., 148

F.R.D. 25, 31-34 (D.N.H. 1993) (internal quotation marks

omitted); see also 2 James Wm. Moore et al., Moore’s Federal

Practice § 12.37[3], at 12-100.3–-12-100.4 (3d ed. 1997 & 2005

supp.). The allegation placing McCarron at the February 28

meeting does not approach this standard. Cf. Alvarado-Morales v.

Digital Equip. Corp., 843 F.2d 613, 617-18 (1st Cir. 1988)

(approving order striking allegations likening defendants to

“Chinese communists in Korea” engaged in “brainwash” and

“torture”). Although McCarron may take humbrage at the

allegation, “it is not enough that the matter offends the

sensibilities of the objecting party if the challenged

allegations describe acts or events that are relevant to the

action.” Gitto v. Worcester Tel. & Gazette Corp. (In re Gitto

Global Corp.), 422 F.3d 1, 12 (1st Cir. 2005).

The moving defendants have not questioned the relevance of

the February 28 meeting to the Archdiocese’s claims. Instead,

they argue that the court should strike the allegation placing

McCarron there as “patently false” in the face of the

Archdiocese’s interrogatory answer. Generally, however, a

Case 1:05-cv-00237-JD Document 60 Filed 09/07/06 Page 10 of 29
9As Wright and Miller explain, while the former version of

Rule 11 authorized the striking of “sham” pleadings, Rule 12(f)

does not. 5C Wright & Miller, supra, § 1383, at 472 & n.9. 

11

statement’s mere falsity does not justify striking it from a

pleading; it must also fit within one of the categories of

objectionable matter enumerated by Rule 12(f). See Boyd v.

United States, 861 F.2d 106, 109 (5th Cir. 1988); Manuel v.

Lucenti, 2004 WL 2608355, at *3 (N.D. Ill. Nov. 16, 2004); 

5C Charles Alan Wright & Arthur R. Miller, Federal Practice &

Procedure § 1382, at 449 (3d ed. 2004).

This court’s decisions in R & J Tool, Inc. v. Manchester

Tool Co., 2001 DNH 9, 2001 WL 274820 (D.N.H. Jan. 10, 2001), and

Berke v. Presstek, Inc., 188 F.R.D. 179 (D.N.H. 1998), cited by

the moving defendants, are not to the contrary. While the court

in R & J Tool denied a motion to strike one of the plaintiff’s

claims because the defendant “ha[d] not pointed to any evidence

in support of its view that [the] claim [was] “‘false and sham,’”

the court in no way endorsed “false and sham” as a sufficient

showing for relief under Rule 12(f). 2001 DNH 9, 2001 WL 274820,

at *5; accord 5C Wright & Miller, supra, § 1383, at 472-73. In

fact, as the court’s use of quotation marks indicates, the phrase

“false and sham” was the defendant’s, not the court’s.9

In Berke, the court largely denied a motion to strike the

complaint’s characterizations of a consent decree between the

Securities and Exchange Commission and one of the defendants,

Case 1:05-cv-00237-JD Document 60 Filed 09/07/06 Page 11 of 29
12

concluding that the decree was “sufficiently related to

plaintiffs’ claims” and that the “defendants ha[d] not shown any

possible prejudice” from the references. 188 F.R.D. 180-81. The

court nevertheless struck–-as “patently false”--the plaintiffs’

allegations that the defendant had consented to the findings of

fact set forth in the decree, which was attached to the complaint

and specifically stated that the defendant had neither admitted

nor denied the findings. Id. While this course of action

arguably supports striking allegations because they are “patently

false,” that phrase does not aptly describe the claim here that

McCarron attended the February 28 meeting, which is unsupportable

only in light of the subsequent interrogatory answer. The

allegations struck from the complaint in Berke, in contrast, were

directly contradicted by an exhibit attached to the complaint

itself, making their falsity readily apparent, i.e., “patent.” 

Accord Bradley v. Chiron Corp., 136 F.3d 1317, 1324-25 (Fed. Cir.

1998) (affirming order striking allegations in second amended

complaint as false because they “called into question the

recitations in the first amended complaint”).

Berke therefore does not support striking an allegation set

forth in a pleading but later contradicted by information gleaned

through discovery, as the moving defendants seek to do here. As

the Archdiocese points out, this approach “would require

plaintiffs in every case to continuously seek leave to amend

Case 1:05-cv-00237-JD Document 60 Filed 09/07/06 Page 12 of 29
10In their reply memorandum, the moving defendants suggest

that the Archdiocese may have violated its duty under Rule

11(b)(3) to conduct an “inquiry reasonable under the

circumstances” as to the accuracy of the challenged allegation,

because what happened at the February 28 meeting is “a fact

uniquely known” to the Archdiocese. Reply Mem. Opp’n Mot. Strike

at 5. The moving defendants, however, do not seek relief under

Rule 11, and, in fact, concede that the rule does not require the

Archdiocese to delete the offending allegation in this instance. 

Id. at 6. Instead, the moving defendants argue that the

Archdiocese has derogated from its “‘duty under the rule not to

persist with the contention’” by opposing the motion to strike

it. Id. (quoting Fed. R. Civ. P. 11 advisory committee’s note

(1993)). So far as the court can tell, however, the Archdiocese

has argued against striking the allegation not because of its

accuracy, but because, inter alia, Rule 12(f) simply does not

authorize such relief. That argument does not amount to a

violation of Rule 11–-in fact, it is correct.

13

their pleadings as new or contradictory facts come to light

during discovery.” Opp’n Mot. Strike at 9. Neither Rule 12(f)

nor the Federal Rules of Civil Procedure in general contemplate

such a requirement,10 which would in many cases add considerably

and senselessly to the expense and length of litigation. The

allegation that McCarron attended the February 28 meeting is

simply not “redundant, immaterial, impertinent, or scandalous”

within the meaning of Rule 12(f), nor is it “patently false” in

the sense that it flatly contradicts other portions of the

Archdiocese’s pleadings. Cf. Nault’s Auto. Sales, 148 F.R.D. at

31-34 (striking allegations of perjury and other crimes as “not

only unsubstantiated” but lacking “reasonable basis upon which

such charges could be responsibly made” when brought). The

motion to strike is denied.

Case 1:05-cv-00237-JD Document 60 Filed 09/07/06 Page 13 of 29
14

II. The Motion to Dismiss

As they did in their motion to dismiss the original

complaint, the moving defendants argue that the Archdiocese has

failed to plead its claims for fraud with the particularity

demanded by Rule 9(b) of the Federal Rules of Civil Procedure. 

Specifically, the moving defendants argue that the amended

complaint fails to allege any particular statements by any of

them which might support the Archdiocese’s claims for common-law

fraud and consumer protection act violations, or any basis for

disregarding FMI’s corporate form so as to hold the moving

defendants themselves liable for Coronado’s alleged wrongs. 

These wrongs include the promises Coronado allegedly made to the

Archdiocese, during the summer of 2002, on which it relies to

toll the statute of limitations on its breach of contract claim. 

Finally, the moving defendants argue that, once the fraud claim

is dismissed, the Archdiocese’s conspiracy claim cannot survive

for want of an underlying tort. The court will address these

contentions in order.

A. Whether Rule 9(b) Applies to the Archdiocese’s Claims

At the outset, the Archdiocese argues that the strictures of

the Rule 9(b) do not apply to its claims to pierce FMI’s

corporate veil or for violations of the New Hampshire and Florida

Case 1:05-cv-00237-JD Document 60 Filed 09/07/06 Page 14 of 29
11In its sur-reply on the instant motion to dismiss, the

Archdiocese protests that it is “not bound” by its arguments on

the prior motion, particularly because it has since amended its

complaint. Sur-reply at 3-4 n.2. Whatever the merits of this

contention, the court ruled in the prior order that Rule 9(b)

applied to the veil-piercing and consumer protection claims, and

is therefore hesitant to revisit that ruling here. See, e.g.,

Harlow v. Children’s Hosp., 432 F.3d 50, 55 (1st Cir. 2005). 

Nevertheless, given the early stage of the litigation, the court

will give full consideration to the Archdiocese’s new argument. 

15

consumer protection statutes. In opposing the motion to dismiss

the original complaint, however, the Archdiocese conceded that

Rule 9(b) did apply to those claims, and the court agreed.11 See

2006 WL 437493, at *7, *9. Now, in opposing the instant motion

to dismiss, the Archdiocese maintains that Rule 9(b) applies only

to veil-piercing and consumer protection claims which arise out

of fraud and fraud alone. According to the Archdiocese, its

veil-piercing claim also relies on the moving defendants’ alleged

use of FMI “as a ‘sham corporation’ to promote injustice against

Plaintiffs by stealing their money,” Opp’n Mot. Dismiss at 5 n.4,

while its consumer protection claim “alleges unfair methods of

competition, unconscionable acts or practices, and/or unfair and

deceptive acts or practices . . . , not merely fraudulent acts

alone.” Id. at 10 n.4.

These strained characterizations of the Archdiocese’s claims

are unconvincing. As the circuit has made clear, “where fraud

lies at the core of the action, Rule 9(b) applies.” Hayduk v.

Lanna, 775 F.2d 441, 443 (1st Cir. 1985); see also Shaw v.

Case 1:05-cv-00237-JD Document 60 Filed 09/07/06 Page 15 of 29
16

Digital Equip. Corp., 82 F.3d 1194, 1223 (1st Cir. 1996) (“It is

the allegation of fraud, not the title of the claim that brings

the policy concerns underlying Rule 9(b) to the forefront.”)

(internal quotation marks, bracketing, and ellipse omitted). 

This principle holds even for causes of action that do not count

fraud among their essential elements, so long as the plaintiff

elects to “allege a unified course of fraudulent conduct and rely

entirely on that course of conduct as the basis of a claim.” 

Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1103-04 (9th Cir.

2003) (citing Shaw among like authorities).

The Archdiocese has chosen that path here. The gravamen of

the amended complaint is that Coronado induced the Archdiocese to

wire $1 million to the FMI account through misrepresentations

about an investment program, and that these misrepresentations

should be imputed to the moving defendants because they used the

funds from the account to enrich themselves. Indeed, the amended

complaint itself characterizes the suit as an action “to recover

funds in excess of $1.0 million that were fraudulently received

by the Defendants from the Plaintiffs on the false pretense that

the Defendants would return those funds to the Plaintiffs 

. . . .” Am. Compl. ¶ 1 (emphases added). Furthermore, the

Archdiocese seeks to disregard FMI’s corporate form on the theory

that it “existed as a sham corporation to further the fraudulent

activities of its principals,” id. ¶¶ 22, 26, 30, 33, 37, and

Case 1:05-cv-00237-JD Document 60 Filed 09/07/06 Page 16 of 29
12As the moving defendants note in their reply, the amended

complaint contains no allegations directed at the use of FMI to

promote “injustice” or specifying any “unfair” or

“unconscionable” acts or practices, apart from the fraud itself. 

17

alleges that the defendants committed consumer protection

violations through specified “deceptive acts and practices,”

including Coronado’s misrepresentations.12 Id. ¶ 32. The veilpiercing and consumer protection claims, then, sound in fraud,

triggering Rule 9(b)’s elevated pleading standard.

B. Whether the Amended Complaint Satisfies Rule 9(b)

The Archdiocese also maintains that, in any event, the

expanded allegations in the amended complaint meet the

requirements of the rule. Rule 9(b) mandates that “[i]n all

averments of fraud . . . , the circumstances constituting fraud 

. . . shall be stated with particularity.” As the court noted in

its previous order, this standard “‘usually requires the claimant

to allege at a minimum the identity of the person who made the

fraudulent statement, the time, place, and content of the

misrepresentation, the resulting injury, and the method by which

the misrepresentation was communicated.’” 2006 WL 437493, at *7

(quoting 2 Moore, supra, § 9.03[1][b], at 9-18 (footnote

omitted)). Furthermore, under Rule 9(b), “‘[i]f a claim involves

multiple defending parties, a claimant may not usually group all

claimed wrongdoers together in a single set of allegations. 

Case 1:05-cv-00237-JD Document 60 Filed 09/07/06 Page 17 of 29
13The parties appear to agree that the veil-piercing claim

is governed by the law of New Hampshire, as the state of FMI’s

incorporation. See Goya Foods, Inc. v. Unanue, 233 F.3d 38, 43

n.4 (1st Cir. 2000) (noting that state of incorporation “may well

supply the presumptively applicable legal regime for veil

piercing claims”); 1 William Meade Fletcher, Fletcher Cyclopedia

of Private Corporations § 41.90, at 696-97 (rev. ed. 1999). 

18

Rather, the claimant must make specific and separate allegations

against each defendant.’” Id. (quoting 2 Moore, supra, 

§ 9.03[1][f], at 9-25 (footnote omitted)). 

1. The Veil-Piercing Claim

The moving defendants argue that the Archdiocese has failed

to state a claim to disregard FMI’s corporate form in accordance

with Rule 9(b) because the amended complaint does not “allege

with sufficient particularity that McCarron and Friedrich used

FMI as an instrument of fraud on the plaintiffs.” Mem. Supp.

Mot. Dismiss at 5. As the parties recognize, in New Hampshire,

“the corporate veil may be pierced by finding that the corporate

identity has been used to promote an injustice or fraud on the

plaintiffs.”13 Terren v. Butler, 134 N.H. 635, 639 (1991); see

also, e.g., LaMontagne Builders, Inc. v. Bowman Brook Purchase

Group, 150 N.H. 270, 274 (2003); Gautschi v. Auto Body Discount

Ctr., Inc., 139 N.H. 457, 462 (1995). 

The Archdiocese argues that the moving defendants’ alleged

withdrawals and transfers from the FMI account, following the

deposit of its $1 million investment there, amount to use of the

Case 1:05-cv-00237-JD Document 60 Filed 09/07/06 Page 18 of 29
19

“corporate form to perpetrate fraud or injustice against

Plaintiffs, by diverting the [Archdiocese’s] funds to [the moving

defendants’] own use.” Opp’n Mot. Dismiss at 6. The moving

defendants protest that the alleged transactions fail to buttress

the veil-piercing claim because “[t]here is nothing inherently

suspect about lawful withdrawals and deposits from a bank

account.” Mem. Supp. Mot. Dismiss at 6. In ruling on a motion

to dismiss for failure to state a claim, however, the court must

“assume the truth of all well-pleaded facts and indulge all

reasonable inferences that fit the plaintiff’s stated theory of

liability.” Brown v. Credit Suisse First Boston Corp. (In re

Credit Suisse First Boston Corp.), 431 F.3d 36, 45 (1st Cir.

2005) (internal quotation marks omitted).

The amended complaint alleges that, within one week of the

arrival of the Archdiocese’s $1 million in the FMI account, the

moving defendants had transferred out more than $782,000,

including more than $600,000 to other accounts held personally by

them. While they later shifted $475,000 from one of those

accounts back to FMI in the form of two large deposits, each of

those transactions coincided with a transfer of a similar amount

to Coronado, who also received $180,020, and whose associate and

parents received an additional $225,000 and change, directly from

the FMI account.

The timing, size, and circular nature of these and the other

Case 1:05-cv-00237-JD Document 60 Filed 09/07/06 Page 19 of 29
20

alleged transactions support the inference that FMI assisted in

the fraud by serving as a vehicle for the distribution of its

proceeds among the other defendants. These allegations therefore

suffice to state a claim for piercing the corporate veil under

New Hampshire law. In Terren, for example, the New Hampshire

Supreme Court affirmed a verdict imposing individual liability on

two defendants who served as the sole shareholders and directors

of a corporation formed to develop a condominium project which

suffered from construction defects. 134 N.H. at 636-37. During

the two-year period coinciding with the plaintiffs’ initial

complaints over the defects, the individual defendants paid

themselves $343,585 in compensation and $335,526 in other

benefits from the corporation, leaving just $100,000 in assets. 

Id. Based in part on this evidence, the court upheld the trial

judge’s finding “that the substantial depletion of corporate

assets by defendants . . . after being advised that defects

existed in the project provides a sufficient basis to find that

defendants . . . used the corporate entity to promote an

injustice and/or a fraud on the plaintiffs.” Id.

Likewise, McCarron and Friedrich made some $999,000 in

alleged withdrawals and transfers from the FMI account to

accounts controlled or held for the benefit of themselves or

their codefendants during a six month period, leaving only $1,000

of the $1 million initially deposited by the Archdiocese. These

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14At various points in their briefing on the motion to

dismiss, the moving defendants suggest that a “misrepresentation”

to the plaintiff by a shareholder in the defendant entity

constitutes an essential element of piercing the corporate veil. 

See Mem. Supp. Mot. Dismiss at 7; Reply at 7-8. They do not

provide any authority for this proposition, which is at odds with

the flexible notion of veil-piercing developed in New Hampshire. 

See, e.g., Peter R. Previte, Inc. v. McAllister Florist, Inc.,

113 N.H. 579, 582 (1973) (noting that court has disregarded

corporate form “[i]n a variety of situations”). Whether proof of

a misrepresentation is necessary to recover on the Archdiocese’s

claims for common-law fraud or consumer protection violations is

discussed infra at section II.B.

21

transactions, also like those in Terren, occurred at a time when

the moving defendants at least arguably should have known that a

third party was likely to have a claim to the money. The

allegations of the amended complaint therefore adequately support

the inference that FMI was “used to promote an injustice or fraud

on the plaintiffs” as required to state a veil-piercing claim

under New Hampshire law.14 Terren, 134 N.H. at 635; see also

Bartholomew v. Delahaye Group, Inc., 1995 WL 907897, at *11

(D.N.H. Nov. 8, 1995) (denying motion to dismiss veil-piercing

claim based on allegation of commingling personal and corporate

assets). There are, of course, other reasonable inferences, such

as the moving defendants’ theory that they “were duped–-much as

the Archdiocese claims to have been–-by the dishonest Coronado 

. . . .” Mem. Supp. Mot. Dismiss at 6. As just discussed,

however, the court must draw all reasonable inferences from the

facts alleged in favor of the Archdiocese at this stage.

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22

Finally, the moving defendants argue that the Archdiocese

has failed to state a basis for disregarding FMI’s corporate form

with the specificity required by Rule 9(b) because the amended

complaint does not allege the purpose of any of the particular

transactions. In pressing this contention, the moving defendants

rely heavily on the court’s prior ruling that the original

complaint failed to plead common-law fraud with the detail

demanded by Rule 9(b) because it “provide[d] no clue as to which

of the defendants might have made which withdrawals, in what

amount, at what particular time, or for what purpose.” 2006 WL

437493, at *10 (emphasis added).

As just discussed, however, by including the rest of the

details of each transaction in its amended complaint, the

Archdiocese has alleged particular facts sufficient to support

the inference that their purpose was to distribute the proceeds

of the claimed fraud. Rule 9(b) demands no more. See, e.g., Bd.

of Trs. of Teamsters Local 863 Pension Fund v. Foodtown, Inc.,

296 F.3d 164, 172-73 (3d Cir. 2002) (ruling that veil-piercing

claim satisfied Rule 9(b) where plaintiffs “enumerat[ed]

[defendants’] actions, consisting of diverting funds, fictitious

invoices and kickbacks, inject[ing] some measure of

substantiation into their allegations of fraud . . . .”)

(internal quotation marks omitted). The amended complaint states

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15As a result, the statute of limitations does not require

dismissal of the Archdiocese’s breach of contract claim at this

stage, because Coronado’s alleged promises, which serve to toll

the running of the limitations period, can be attributed to the

moving defendants if FMI’s corporate form is disregarded. 

Cf. 2006 WL 437493, at *5. 

23

a claim to pierce FMI’s corporate veil with the specificity

required by Rule 9(b).15

2. The Fraud, Consumer Protection, and Conspiracy

Claims

The moving defendants also assert that the amended complaint

fails to state claims for common-law fraud or violations of the

New Hampshire or Florida consumer protection acts because it does

not attribute any fraudulent statements directly to them. The

Archdiocese rejoins that such allegations are inessential to

these claims, now that the amended complaint “adequately

specifie[s] the moving Defendants’ particular role in the fraud”

through its recitation of their alleged withdrawals and transfers

from the FMI account. Sur-reply at 4-5.

a. The Fraud Claim

The Archdiocese provides no authority for its view that a

party can incur liability for common-law fraud without itself

making fraudulent statements. Generally, “[t]o establish fraud,

the plaintiff must prove that the defendant made a fraudulent

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16As they did with the veil piercing claim, the parties

appear to assume that New Hampshire law controls the fraud claim. 

The court notes that Florida law is to like effect. See Checkers

Drive-In Rests., Inc. v. Tampa Checkmate Food Servs., Inc., 805

So. 2d 941, 944 (Fla. Dist. Ct. App. 2001) (reversing judgment

against corporate officer on fraud claim for lack of evidence of

misrepresentations attributable to him individually).

24

representation for the purpose or with the intention of causing

the plaintiff to act upon it.” Proctor v. Bank of N.H., N.A.,

123 N.H. 395, 399 (1983) (emphasis added); see also, e.g.,

Alternative Sys. Concepts, Inc. v. Synopsys, Inc., 374 F.3d 23,

30 n.5 (1st Cir. 2004) (applying New Hampshire law).16 While the

Restatement of Torts extends liability for the tortious acts of

another to a party who “knows that the other’s conduct

constitutes a breach of duty and gives substantial assistance or

encouragement to the other so to conduct himself,” Restatement

(Second) of Torts § 876(b) (1979), the New Hampshire Supreme

Court has not yet considered whether to adopt that rule. Cf.

Invest Almaz v. Temple-Inland Forest Prods. Corp., 243 F.3d 57,

82-83 (1st Cir. 2001) (noting district court’s prediction that

New Hampshire would recognize tort of aiding and abetting breach

of fiduciary duty akin to § 876(b), but not passing on

correctness of prediction, which had not been appealed).

In any event, the amended complaint does not allege that the

moving defendants gave Coronado “substantial assistance or

encouragement” in defrauding the Archdiocese. Rather, in support

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25

of the fraud claim, the amended complaint states that the

defendants “conspired to, and did in fact, defraud the

Plaintiffs” and that “[e]ach of the defendants participated in or

received proceeds of [the] fraudulent activity and is liable,

jointly and severally, for the fraud that was perpetrated.” Am.

Compl. ¶¶ 24-25. These allegations suffice to state a claim for

civil conspiracy, which, as the Archdiocese recognizes “is ‘a

device through which vicarious liability may be imposed upon all

who commonly plan . . . the wrongdoers’ acts.’” Opp’n Mot.

Dismiss at 11 (quoting Rice v. Wal-Mart Stores, Inc., 2003 DNH

166, 2003 WL 22240349, at *5 (D.N.H. Sept. 30, 2003)); see also

Univ. Sys. of N.H. v. United States Gypsum Co., 756 F. Supp. 640,

652 (D.N.H. 1991); Restatement (Second) of Torts § 876(a) (1979). 

As just noted, however, the Archdiocese does not explain how the

moving defendants’ alleged “participation” in “fraudulent

activity” could make them directly liable for fraud when they did

not themselves make any fraudulent statements. The amended

complaint therefore fails to state a claim for common-law fraud

against any of the moving defendants. Accordingly, the motion to

dismiss that claim as to the moving defendants is granted.

b. The Consumer Protection Claims

The Archdiocese’s claims for violations of the New Hampshire

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26

and Florida consumer protection statutes require a slightly

different analysis. The New Hampshire Supreme Court has

expressly held that this state’s “Consumer Protection Act does

not contain a specific provision that allows individuals to be

held liable for the acts of the ‘corporate’ entity absent

application of the veil-piercing doctrine.” Unit Owners Ass’n of

Summit Vista Lot 8 Condo. v. Miller, 141 N.H. 39, 44 (1996). 

Based on this observation, the court in Unit Owners reversed a

judgment holding a trustee individually liable under RSA 358:A-2

to plaintiffs who had bought condominiums from the trust, despite

upholding the court’s finding that he “materially participated in

the disposition of the condominium units in his individual

capacity” without disclosing what he knew about their inadequate

drainage system. Id. at 43-44. Unit Owners thus stands in

opposition to the majority rule that, “[a]s in tort law,

corporate officers are liable for any unfair or deceptive

practice in which they were directly involved.” Dee Pridgen,

Consumer Protection and the Law § 4:39 (1986 & 2005 supp.)

(footnote omitted); see also, e.g., Nader v. Citron, 360 N.E.2d

870, 875 (Mass. 1977); New York ex rel. Koppell v. Empyre

Inground Pools, 642 N.Y.S.2d 344, 347 (N.Y. App. Div. 1996).

Florida, however, follows the majority rule. See Anden v.

Litinsky, 472 So. 2d 825, 826-27 (Fla. Dist. Ct. App. 1985)

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27

(recognizing that corporate officer could be liable under Fla.

Stat. Ann. § 501.204 as “direct participant in the deceptive and

unfair practices visited upon” plaintiffs who contracted with

corporation); Rollins v. Heller, 454 So. 2d 580, 582 (Fla. Dist.

Ct. App. 1984) (similar). The amended complaint alleges that the

moving defendants directly participated in unfair or deceptive

acts or practices in violation of Fla. Stat. Ann. § 501.204 by

making the series of withdrawals and transfers from the FMI

account which drained it of the Archdiocese’s money. Am. Compl.

¶ 32. These allegations therefore suffice to state a claim for

consumer protection violations under the rule followed in

Florida. See Nader, 360 N.E.2d at 875 (refusing to dismiss

consumer protection claim arising out of corporate officer’s

having “commingled and spent the plaintiff’s funds” on deposit

with corporation). Furthermore, as the court has determined in

assessing the veil-piercing claim, the detailed list of

transactions set forth in the amended complaint pleads the

Florida consumer protection claim with the requisite

particularity. See Part II.B.1, supra.

The amended complaint, however, does not state a claim

against the moving defendants under RSA 358-A:2, because even a

corporate officer’s “material participation” in unfair or

deceptive acts does not amount to a violation of the statute by

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17Instead, the Archdiocese argued only that the conspiracy

claim survived because its original complaint sufficiently stated

an underlying claim for fraud.

28

him personally. Unit Owners, 141 N.H. at 43-44. The motion to

dismiss Count IV of the amended complaint, asserting violations

of both the New Hampshire and Florida consumer protection acts,

is therefore granted as to the claim under RSA 358:A-2 but denied

as to the claim under Fla. Stat. Ann. § 501.204.

c. The Conspiracy Claim

Finally, the moving defendants argue that the Archdiocese’s

conspiracy claim fails because the amended complaint fails to

state a claim for the underlying tort of fraud. In its order on

the first motion to dismiss, the court accepted this argument,

which the Archdiocese had not contested.17 2006 WL 437493, at

*10. Now, however, the Archdiocese argues that the moving

defendants can be liable for conspiring with Coronado to defraud

it even if they did not make any fraudulent statements

themselves. Opp’n Mot. Dismiss at 11-12. As previously noted,

this theory states a claim for civil conspiracy under New

Hampshire law. Part II.B.2.a, supra; see also Jay Edwards, Inc.

v. Baker, 130 N.H. 41, 47 (1987). And, for the reasons stated in

upholding the veil-piercing claim, the conspiracy to commit fraud

is pled with the specificity required by Rule 9(b). The moving

defendants’ motion to dismiss the conspiracy claim is denied.

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29

 

Conclusion

For the foregoing reasons, the moving defendants’ motion to

dismiss the amended complaint (document no. 38) is GRANTED as to

Count II insofar as it seeks to hold them directly liable for

common-law fraud and as to Count IV insofar as it asserts a

violation of RSA 358:A-2. The motion is otherwise DENIED. The

moving defendants’ motion to strike (document no. 49) is DENIED.

SO ORDERED.

____________________________

Joseph A. DiClerico, Jr.

United States District Judge

September 7, 2006

cc: Thomas H. Hannigan, Jr., Esquire

Gordon J. MacDonald, Esquire

Annmarie A. Tenn, Esquire

David A. Vicinanzo, Esquire

Case 1:05-cv-00237-JD Document 60 Filed 09/07/06 Page 29 of 29