UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF NEW HAMPSHIRE 

Harbour Capital Corporation 

v. Case No. 08-cv-506-PB 

 Opinion No. 2011 DNH 019 

Allied Capital Corporation, et al. 

 

MEMORANDUM AND ORDER 

Harbour Capital Corporation (“Harbour”) has filed a 

complaint against Allied Capital Corporation (“Allied”) and 

Financial Pacific Company (“Financial Pacific”) alleging 

tortious interference with contractual relations and unfair 

trade practices under New Hampshire Revised Statutes Annotated 

(“RSA”) § 358-A:2. Financial Pacific moves to dismiss the 

complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) 

and Allied seeks judgment on the pleadings pursuant to Federal 

Rule of Civil Procedure 12(c). Harbour objects. For the 

reasons set forth below, both motions are granted in part and 

denied in part. 

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I. BACKGROUND 

Harbour, a New Hampshire corporation, is in the business of 

equipment leasing and financing throughout the United States. 

Allied Capital, headquartered in Washington D.C., is a provider 

of debt and equity financing to private and middle market 

companies.1 Financial Pacific Company, a commercial finance 

company, is a subsidiary of Allied. Financial Pacific Leasing, 

LLC (“FinPac”), a direct provider of commercial equipment 

leases, is itself a wholly owned subsidiary of Financial 

Pacific. Allied also owns a controlling interest in DCC 

Holdings, whose wholly owned subsidiary, Direct Capital 

Corporation (“Direct Capital”), competes with Harbour in the 

business of equipment leasing and financing. 

 On August 2, 2001, Harbour and FinPac entered into a Broker 

Agreement. Under the agreement, Harbour referred lease 

transactions to FinPac in exchange for a commission. The 

agreement was terminable at-will by either party upon thirty 

 1    On April 1, 2010, Allied merged with Ares Capital 

Corporation. Because the merger post-dated all relevant dates 

in this litigation, I will continue to refer to the defendant as 

“Allied.”  

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(30) days’ notice. Over the next seven (7) years the agreement 

was mutually profitable for both parties.2 

 In April 2007, Harbour commenced litigation against Direct 

Capital and others in Rockingham Superior Court. A little over 

a year later, on July 24, 2008, Chris Broom, a director of 

Direct Capital, exchanged emails with John Fruehwirth, an Allied 

and Financial Pacific director, regarding Harbour Capital’s 

ongoing business relationship with FinPac.3 Three months later, 

on October 16, 2008, the FinPac board, comprised of directors 

associated with Allied and Direct, unanimously agreed to 

recommend that FinPac terminate its Broker Agreement with 

Harbour.4 After informing Chip Kelley, the President of Harbour 

Capital, that it was terminating the brokerage relationship, 

Terey Jennings, the Senior Vice President FinPac, sent a followup letter in which Jennings noted that “[w]e [FinPac] are being 

instructed by our parent company, Allied Capital, to discontinue 

our relationship with Harbour Capital Corporation. This is due 

 

2

    Harbour was the number eight broker nationwide for FinPac. 

   3

   The exact details of the conversation are not clear. 

4  

  Allied had previously asked FinPac to terminate its 

relationship with Harbour, but FinPac had not done so.  

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to ongoing legal issues Harbour Capital is having with another 

one of the companies owned by Allied Capital.” 

 Feeling that it had been unfairly punished by Allied for 

its litigation against Direct, Harbour brought suit against 

Allied in this court on December 8, 2008, claiming that Allied 

had tortuously interfered with its contractual relations with 

FinPac and engaged in unfair trade practices by instructing 

FinPac to terminate its relationship with Harbour. Financial 

Pacific was later added as a defendant after Allied notified 

Harbour that it considered Financial Pacific a necessary party. 

II. STANDARD OF REVIEW 

 To survive a motion to dismiss under Rule 12(b)(6), the 

plaintiff must make factual allegations sufficient to “state a 

claim to relief that is plausible on its face.” Bell Atl. Corp. 

v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially 

plausible when it pleads “factual content that allows the court 

to draw the reasonable inference that the defendant is liable 

for the misconduct alleged. The plausibility standard is not 

akin to a ‘probability requirement,’ but it asks for more than a 

sheer possibility that a defendant has acted unlawfully.” 

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Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (citations 

omitted). In deciding such a motion, I must accept all wellpleaded factual allegations in the complaint as true, drawing 

all reasonable inferences in the plaintiff’s favor. Alt. 

Energy, Inc. v. St. Paul Fire & Marine Ins. Co., 267 F.3d 30, 33

(1st Cir. 2001). An inference that a plaintiff asks the court 

to draw from pleaded facts will not fall short under the 

plausibility test merely because “other [] undisclosed facts may 

explain the sequence better.” Sepulveda-Villarini v. Dep’t of 

Educ. of P.R., Nos. 08-2283, 09-1801, 2010 WL 5093220, at *4 

(1st Cir. Dec. 10, 2010). 

 “The standard for evaluating a Rule 12(c) motion for 

judgment on the pleadings is essentially the same as that for 

deciding a Rule 12(b)(6) motion.” Pasdon v. City of Peabody, 

417 F.3d 225, 226 (1st Cir. 2005). The court again views the 

facts contained in the pleadings in the light most favorable to 

the nonmovant and draws all reasonable inferences in his favor. 

Zipperer v. Raytheon Co., 493 F.3d 50, 53 (1st Cir. 2007), cert. 

denied, 128 S. Ct. 1248 (2008). Judgment on the pleadings is 

proper “only if the uncontested and properly considered facts 

conclusively establish the movant's entitlement to a favorable 

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judgment.” Id. (quoting Aponte-Torres v. Univ. of P.R., 445 

F.3d 50, 54 (1st Cir. 2006)). 

III. ANALYSIS

A. Intentional Interference With Contractual Relations 

Counts I and III of Harbour’s Amended Complaint allege that 

Allied and Financial Pacific tortuously interfered with 

Harbour’s contractual relations with FinPac. To prove an 

intentional interference claim, Harbour must establish that: (1) 

it had an economic relationship with FinPac; (2) Allied and 

Financial Pacific knew of the contractual relationship; (3) 

Allied and Financial Pacific intentionally and improperly 

interfered with this relationship; and (4) Harbour was damaged 

as a result of the interference. See Singer Asset Fin. Co. v. 

Wyner, 937 A.2d 303, 312 (N.H. 2007). 

Defendants argue that Harbour’s intentional interference 

claims fail because the pleadings do not support Harbour’s 

contention that defendants acted “improperly” when they directed 

Harbour to terminate its contract with FinPac. I reject this 

argument because it is based on an insufficiently deferential 

reading of Harbour’s complaint. 

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Defendants correctly note that a parent corporation 

ordinarily will not be deemed to have improperly interfered with 

an at-will contract between a subsidiary and a third party if 

the parent causes the contract to be terminated to protect the 

parent’s interests from being harmed by the contract. See 

Restatement (Second) of Torts § 769 (1979).5 The complaint in 

this case alleges, however, that the defendants improperly 

interfered with the contract and pleads facts that plausibly 

support the conclusion that defendants acted solely to punish 

Harbour rather than to protect their own interests.6 A parent 

corporation is not free to terminate a subsidiary’s contracts 

solely to punish a business competitor. See Restatement 

(Second) of Torts § 769 cmt. e (1979)(noting that conduct 

directed for the “gratification of [one’s] ill will” is 

improper). Because Harbour’s complaint can plausibly be 

construed to support its contention that defendants acted with 

an improper motivation when they directed FinPac to terminate 

 

5     By its terms, Section 769 applies only to prospective 

contractual relations. The Restatement, however, treats an atwill contract as a prospective contractual relation. See 

Restatement (Second) of Torts § 766 cmt. g (1979). 

6   The complaint alleges that the contract between Harbour and 

FinPac was mutually profitable and that the contract was 

terminated because of Harbor’s lawsuit against Direct Capital.

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the contract, defendants are not entitled either to dismissal 

for failure to state a claim or judgment on the pleadings with 

respect to their intentional interference claims. See 

Sepulveda-Villarini, 2010 WL 5093220, at *3. 

B. RSA § 358-A:2 

In Counts II and IV of its Amended Complaint, Harbour 

alleges that Allied and Financial Pacific violated New 

Hampshire’s Consumer Protection Act (“CPA”), RSA § 358-A:2, by 

“instructing FinPac to discontinue its relationship with Harbour 

Capital due to the ongoing legal issues Harbour Capital is 

having with Direct Capital.” Am. Compl. ¶¶ 47, 58. As with its 

tort claims, Harbour’s CPA claims are based on allegations that 

Allied and Financial Pacific instructed FinPac to terminate its 

relationship with Harbour in retaliation for the Habour/Direct 

Capital litigation. Allied and Financial Pacific both argue 

that the alleged action fails to qualify as an “unfair or 

deceptive act or practice” under the statute. 

RSA § 358-A:2 makes it “unlawful for any person to use any 

unfair method of competition or any unfair or deceptive act or 

practice in the conduct of any trade or commerce within this 

state.” N.H. Rev. Stat. Ann. § 358-A:2 (2004). The statute 

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then delineates a non-exhaustive list of specified acts deemed 

to be unfair or deceptive. See id. For conduct not captured by 

the enumerated categories, the New Hampshire Supreme Court has 

indicated that it must either “be of the same type as that 

proscribed in the enumerated categories,” State v. Sideris, 951 

A.2d 164, 168 (N.H. 2008), or “attain a level of rascality that 

would raise an eyebrow of someone inured to the rough and tumble 

of the world of commerce,” State v. Moran, 861 A.2d 763, 765

(N.H. 2004). In addition, the New Hampshire Supreme Court also 

looks “to the federal courts’ interpretation of the Federal 

Trade Commission Act (FTCA) for guidance.” Moran, 861 A.2d at 

766. “Although RSA 358-A:2 is broadly worded, not all conduct in 

the course of trade or commerce falls within its protection.” 

Barrows v. Boles, 687 A.2d 979, 986 (N.H. 1996). 

 As previously noted, at the heart of Harbour’s Amended 

Complaint is the allegation that Allied and Financial Pacific 

acted with an improper motive, namely retaliation for the 

Harbour/Direct Capital litigation, when they instructed FinPac 

to terminate its at-will relationship with Harbour. Based on 

this illicit motive, Harbour contends that the otherwise lawful 

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termination of an at-will agreement should be considered an 

unfair or deceptive trade practice. 

The termination of an at-will agreement, even with the 

motive alleged, does not, without more, amount to an unfair 

trade practice under RSA § 358:A-2. It is clearly evident, and 

Harbour does not argue otherwise, that the alleged conduct does 

not meet any of RSA § 358:A-2’s enumerated categories. See N.H. 

Rev. Stat. Ann. § 358:A-2. Nor is it analogous to any of those 

categories.7 See Sideris, 951 A.2d at 168. Recognizing this 

challenge, Harbour ostensibly focuses its argument on the more 

enigmatic FTCA standard. Even here, however, Harbour fails to 

offer any authority or explain how the alleged conduct qualifies 

as an unfair or deceptive act. 

 In order to determine whether actions are unfair or 

deceptive under the FTCA one must ask: 

(1) Whether the practice, without necessarily having 

been previously considered unlawful, offends public 

policy as it has been established by statutes, the 

 

7    Neither does Harbour adequately argue that the alleged actions 

would qualify under the rascality test. Instead, after 

restating the facts alleged in its Amended Complaint, Harbour 

merely asserts in a conclusory fashion that “[t]hese allegations 

easily satisfy the rascality test under New Hampshire law.” 

This is not sufficient. See Bell Atlantic v. Twombly, 550 U.S. 

544, 561 (2007).   

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common law, or otherwise-whether, in other words, it 

is within at least the penumbra of some common-law, 

statutory or other established concept of unfairness; 

(2) whether it is immoral, unethical, oppressive, or 

unscrupulous; [and] 8 (3) whether it causes substantial 

injury to consumers (or competitors or other 

businessmen). 

Moran, 861 A.2d at 766. 

Harbour has failed to offer any proof that the alleged 

conduct “offends public policy as it has been established by 

 

8   Harbour contends that they need only meet one of these factors 

to be successful. It is not entirely clear whether the three 

FTCA factors should be considered in the conjunctive or the 

disjunctive. See FAMM Steel, Inc. v. Sovereign Bank, 571 F.3d 

93, 107 (1st Cir. 2009) (using conjunctive); Mass. Eye and Ear 

Infirmary v. QLT Phototherapeutics, Inc., 412 F.3d 215, 243 (1st 

Cir. 2005) (using conjunctive); but see Chroniak v. Golden 

Inv. Corp., 983 F.2d 1140, 1146 (1st Cir. 1993) (using 

disjunctive). Based on the language surrounding the applicable 

test, the better reading is to read the factors in the 

conjunctive. See Statement of Basis and Purpose of Trade 

Regulation Rule 408, Unfair or Deceptive Advertising in Labeling 

of Cigarettes in Relation to the Health Hazards of Smoking, 29 

Fed. Reg. 8324, 8355 (July 2, 1964) (“[i]f all three factors are 

present, the challenged conduct will surely violate Section 5 

even if there is no specific precedent for proscribing it. The 

wide variety of decisions interpreting the elusive concept of 

unfairness at least make[] clear that a method of selling is 

exploitive or inequitable if it is exploitive or inequitable and 

if, in addition to being morally objectionable, it is seriously 

detrimental to consumers or others.”)(emphasis added). 

Additionally, requiring only one of the factors be met would 

lead to an overly broad reading, as any practice causing 

substantial injury would be covered, whether it is 

deceptive/unfair or not. As a result, I apply these factors in 

the conjunctive. 

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statutes, the common law, or otherwise.” See id. Put simply, 

the contract between Harbour and FinPac was terminable at-will. 

Therefore, the agreement was terminable for almost any reason or 

no reason at all. See Porter v. City of Manchester, 849 A.2d 

103, 113-14 (N.H. 2004)(explaining New Hampshire law regarding 

analogous at-will employment contracts). Additionally, Financial 

Pacific and Allied generally have the right to pick and choose 

those with whom they will do business. Serpa Corp. v. McWane, 

Inc., 199 F.3d 6, 16 (1st Cir. 1999)(“a refusal to deal, without 

a showing of monopolistic purpose or concerted effort to hinder 

free trade, is not an unfair trade practice under G.L.C. 93A 

[the Massachusetts Consumer Protection Act], and is therefore 

not actionable”)(quoting PMP Assocs., Inc. v. Globe Newspaper 

Co., 321 N.E.2d 915, 919 (Mass. 1975); Chase v. Dorais, 448 A.2d 

390, 391 (N.H. 1982)(noting that the New Hampshire Supreme Court 

turns to the “well developed body of law” construing the 

analogous Massachusetts Consumer Protection Act). At best, 

Harbour has alleged an ill-willed termination of an at-will 

agreement, an action which does not generate an unfair trade 

practices claim without additional facts implicating public 

policy concerns that are absent from Harbour’s complaint. See 

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Porter, 849 A.2d at 114; Hobin v. Coldwell Banker Affiliates, 

Inc., 744 A.2d 1134, 1141 (N.H. 2000)(affirming dismissal of RSA 

§ 358-A claim where the defendant exercised option permitted 

under agreement); Barrows, 687 A.2d at 986 (“[t]he defendants’ 

conduct simply falls within the rough edges of commercial 

lending”). 

While Harbour cites a panoply of authorities, it fails to 

adequately allege that Allied and Financial Pacific’s conduct 

amounted to an unfair trade practice under RSA § 358-A:2, as 

opposed to simple “selfish bargaining and business dealings” 

that would not “raise an eyebrow of someone inured to the rough 

and tumble world of commerce.” Barrows, 687 A.2d at 986-87. As 

a result, Harbour’s RSA § 352-A:2 claims are dismissed. 

IV. CONCLUSION 

 For the foregoing reasons, I grant Allied’s motion for 

judgment on the pleadings (Doc. No. 65) and Financial Pacific’s 

motion to dismiss (Doc. No. 30) as to Counts II and IV 

respectively and deny their motions as to Counts I, III and V9

. 

 9

  Count V is a claim for “Enhanced Compensatory Damages.” 

“Such damages are termed ‘liberal compensatory damages,’ and are 

available only in exceptional cases.” Aubert v. Aubert, 529 

A.2d 909, 914 (N.H. 1987). One such exception is when there is 

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SO ORDERED. 

/s/Paul Barbadoro 

Paul Barbadoro 

United States District Judge 

February 3, 2011 

cc: William E. Christie, Esq. 

 Steven M. Gordon, Esq. 

 Michael Himes, Esq. 

 James F. Ogorchock, Esq. 

 John-Mark Turner, Esq. 

 

 

“ill will, hatred, hostility, or evil motive on the part of the 

defendant.” Id. Defendants’ challenge to this count has not 

been adequately briefed and I decline to take it up at the 

present time. 

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