Court Opinion

ID: 194801
Source: CourtListenerOpinion
Date Created: 2011-02-07 02:25:25+00
Date Added: 2024-06-11T08:17:00.390219
License: Public Domain

June 24, 1993         [NOT FOR PUBLICATION]
                      [NOT FOR PUBLICATION]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