Court Opinion

ID: 9916616
Source: CourtListenerOpinion
Date Created: 2024-01-10 02:50:46.472046+00
Date Added: 2024-06-11T13:25:38.439844
License: Public Domain

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 STATE OF MAINE                                                        SUPERIOR COURT
 CUMBERLAND, ss                                                        CIVIL ACTION
                                                                       DOCKET NO. PORSC-CV-22-287

 RYAN L. HAYNES,

                  Plaintiff,

                  v.

 SARAH N. MOPPIN, ESQ.;
 MATTHEW J, LAMOURIE, ESQ.;                                            COMBINED ORDER
 DAVID B. VANSLYKE, ESQ.;                                              ON PENDING MOTIONS
 PRETI, FLAHERTY, BELIVEAU &
 PACHIOS, CHARTERED, LLP;                                                                     STATE OF MAINE
 ALM ORTHO, INC.; and                                                                     Cumberland, ss, Clerk's Office
 PAULA. DEJULIIS
                                                                                               MAR O8 2023 \'.1bf-M
                  Defendants,
                                                                                            RECEIVED
 Before the Court are the following pending motions, which it addresses in this Combined Order: 1

              (1) Plaintiffs Motion for Attaclnnent;
              (2) Defendant Van Slyke's Motion to Dismiss
              (3) Defendant LaMourie's Motion to Dismiss
              (4) Plaintiffs Motion for Sanctions Against Attorney Aamn Burns
              (5) Defendant ALM 01iho's Motions to Strike Plaintiffs Reply Memorandum
              (6) Plaintiffs Motion for Sanctions Against Attorney Elizabeth Fontugne

          The Court held a hearing on February 7, 2023 and heard argument on the Motion for

 Attachment, the Motions to Dismiss, and the Motions for Sanctions. Plaintiff was self-represented.

 Defendants Moppin, LaMourie, Van Slyke, and Preti Flaherty were represented by Attorney Gerald

. 1 Also pending are the following motions, which the Court does not address at this time: Defendants DeJuliis and ALM
  Ortho' s Motion to Quash Subpoena to Baker) Newman, & Noyes and Plaintiff's two Motions in Limine. ln addition, the
following requests remain pending: Defendants' Request for a Case Management Conference, by letter November 14, 2022;
Plaintiffs agreement to that requested conference, by letter November 16, 2022; Plaintiffs Request for an in-person,
recorded 26(g) discovery hearing, by Jette!' December 9, 2022; Defendant DeJuliis's Request for a 26(g) hearing, by letter
March 3, 2023; and Defendants Moppin, LaMourie, Van Slyke, and Preti's request for a 26(g) hearing, by letter February 2,
2023. Plaintiff also filed a letter with the clerk on Februmy 7, 2023 alleging Attorney Bums violated the Maine Rules of
Professional Conduct.

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Petrnccelli. Defendant ALM Ortho was represented by Attorney Aaron Burns, and Defendant DeJuliis

was represented by Attorney David Johnson.

Background

Plaintiff alleges the following facts in his Complaint:

        Plaintiff Ryan Haynes worked at Defendant ALM Ortho, Inc., a Maine-based company

incorporated under Delaware law, as a Senior Vice President of Business Development. Pl.'s

Comp!. 11 !, 16. He was a director and officer of the company, as were Defendants Paul DeJuliis

and Brian McLaughlin. 11. Haynes invested $30,000 in the company. 1 1. DeJuliis is the chief

financial officer, secretary, treasurer, a director, and a shareholder of ALM Ortho. 1 17. He

controls the financial books at ALM Ortho. Id.

       Haynes, DeJuliis, and McLaughlin started ALM Ortho in summer 2020 as an orthopedic

implant company that would operate in Maine. 119. To form the company, DeJuliis hired

Defendant Attorney Sara Moppin of Preti Flaherty. 120. Defendant Attorney Matthew

LaMourie, another attorney at Preti Flaherty, was also involved in the ALM Ortho matter. 112-7,

12-13. Defendant David Van Slyke is a managing attorney at Preti Flaherty. 1 14. DeJuliis was

the ALM Ortho corporate officer delegated by Preti Flaherty to share communications between

the law firm and Haynes. 137.

       A Confirmation of Engagement Letter (also "Engagement Letter" or "Letter") described

the terms of Preti Flaherty's representation of ALM 01tho and that Preti Flahe1ty was not

representing the officers individually. 130. Moppin failed to prnvide Haynes with the

Engagement Letter and never explained to him that she was representing the company rather

than Haynes personally. 1 5. Instead, she provided the Letter to DeJuliis who did not share it

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with Haynes. 1f 27. Moppin drafted several business contracts under Delaware law, and she had

Haynes sign the documents, although he did not understand them. 1f 3. Haynes did not know that

Moppin is not admitted to practice law in Delaware. 1f 2 l. At the time he signed, Haynes believed

Moppin was representing him individually- not only the company. 1f 6. Until after his

termination from ALM Ortho when he was given access to and read the Confirmation of

Engagement Letter, Haynes believed Moppin and Preti Flaherty were representing the founders

of ALM Ortho individually.1f1f 6, 20, 79-81.

       Moppin was aware that DeJuliis had violated his fiduciary duty to shareholders by

shifting money out of the company before valuing Haynes's 500,000 shares in ALM 01tho,

representing a third of the company equity, at only $3,655. 1f1f 4, I 04-115, 146-148. DeJuliis

manipulated the ALM Ortho balance sheet by adding a $60,000 expense titled "Loan from

Shareholder" to weaken company equity.1f1f l l 6-l l 9. DeJuliis also added a $82,667 product

development cost and a $36,000 management fee without any suppotting records.1f1f l20-123.

According to a document from Moppin titled "ALM 01iho Managemel'lt Fees. to Fusion,"

DeJuliis paid himself $52,000 in management fees, directly to his company Fusion Management,

without any company record, contract, or agreement.1f 124. According to bank statements, the

amount paid to Fusion Management was actually $59,000.1f 125. DeJuliis also added an interest

cost of $16,500 and a gross wages expense of $7,650.03, without any supporting agreement,

contract, or records, to a profit and loss statement to increase debt.1fif 127-129.

       These alterations contributed to the low valuation of ALM Ortho, and the low payout

Haynes was offered for his shares. 1f 131. Moppin informed Haynes that the shareholders had

committed to fund up to $350,000 in capital contributions, but these funds were not included in

the valuation, which was performed by Shields & Co., Inc. if1f 132-135. Meanwhile, DeJuliis

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represented to investors that the company was valued at a minimum of $3,000,000. ,r 144. Both

Moppin and LaMourie were aware that the info1mation given to Shields & Co. when it valued

Haynes's shares was artificially low. ,r 150. In reality, ALM Ortho's value was higher than the

amount at which it was formally valued. ,r 144. To date, Haynes has not been paid for his shares

or received any other money from ALM 01iho. ,r 151.

        After Haynes had been terminated, DeJuliis hired Gerald Savage to take over Haynes's

position for a salary estimated at $250,000, ,r 3. Moppin was aware of the hiring arrangement

with Savage but failed to respond to document requests from Haynes. ,r 74. Moppin encouraged

DeJuliis and ALM Ottho to refrain from paying Haynes so ALM Ortho could afford to pay

Savage and Preti Flaherty's legal fees. ,r 8. She also directed DeJuliis to refrain from having      l
shareholder or director meetings while Haynes was employed by ALM Ortho. ,r 39.

       Moppin drafted the ALM 01tho Shareholders Agreement dated October 15, 2020,
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including complicated portions that Haynes did not understand and were not explained to him. ,r,r

40-43. The agreement included a noncompete clause and that clause was not disclosed to Haynes

before signing. ,r,r 43-45. Moppin also included a forfeiture of rights provision that was haimful

to Haynes's financial interests and which Haynes did not understand. ,r 49. These provisions

enabled DeJuliis to remove Haynes and justify not paying Haynes his salary. ,r 50. The

Shareholder Agreement also enabled an appraiser to opine on the value of the company and

thereby affect stock value. ,r 51. On October 7, 2021, Moppin sent Haynes a letter threatening

him by referring to language in a non-disparagement clause and a confidentiality clause in ,the

Shareholder Agreement he had signed. ,r 48.

       On July 21, 2021, DeJuliis gave Haynes a letter titled "Cessation of Service with ALM

01iho Inc.," which terminated his service as an employee without cause. ,r 60. DeJuliis

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 terminated Haynes's employment so that the company could pay a low price for Haynes's

shares, benefitting DeJuliis. 'if 97. Moppin was aware that supporting DeJuliis in this act

constituted representation ofDeJuliis in his individual capacity. 'il'if 98, 102. On July 26, 2021,

Haynes requested records from Moppin. 'if 62. LaMourie responded explaining that he had been

retained by ALM 01iho, DeJuliis, and McLaughlin to respond to the record requests. 'if 63.

Moppin replied to Haynes's email requesting more information about the purpose of the requests

and alleging that his request appeared to be adverse to the interests of the company. 'if 65. Citing

Delaware Code Title 8, Chapter l, § 220, Haynes requested "contracts and other documents

pe1taining to transactions involving in excess of $1,000 .... " 'if 68. Moppin failed to provide any

contracts in response to that request and did not provide the Engagement Letter between ALM

Ortho and Preti Flaherty. 'i['if 70-71.

        Concerned that Moppin was withholding information, Haynes emailed Moppin,

LaMourie, and Van Slyke on September 15, 2021 stating that they had neglected to provide the

ALM Ortho bank statements, the employment agreement with Savage, and contracts between

ALM Ortho and Fusion Management. 'if 73. On September 24, 2021, Moppin received a letter

from Haynes requesting contracts relating to transactions over $1,000 including with DeJuliis,

Savage, Preti Flaherty, and Shields & Co. 'i['if 75-76. Moppin replied that the requests received

were not proper under Delaware law, but she sent some documents, which included the

Engagement Letter. Haynes had not seen the Engagement Letter before because it, and the fact

that Preti Flahe1ty had not represented Haynes personally, had been concealed from him. 'i['if 77­

79.

       Haynes's salary was set at $185,000 per year by oral agreement with DeJuliis and

McLaughlin at the company office in Scarborough on September 29, 2020. 'if 155. After

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receiving the letter terminating his employment, Haynes emailed DeJuliis on July 21, 2021,

advising that he had not been paid wages and requesting payment by that coming Friday. 1159.

The following day DeJuliis replied, stating that no wages were due because Haynes was a co­

founder, not an employee. 1 160. On July 26, 2021, Moppin emailed Haynes instructing him to

direct all future communications to her instead of DeJuliis or McLaughlin. After a request from

Haynes for his personnel files and the reason for his termination, LaMourie stated that Haynes

was terminated for his failure to satisfy expectations associated with pre-revenue sales and

marketing activities, contradicting the previous no-cause termination letter. 1 163. Instead of

paying Haynes his salary, ALM Ortho paid Gerald Savage, Haynes's replacement, a $250,000

salary. 11167-168. Moppin hid ALM Ortho's payments to Savage from Haynes. 1 169. ALM

Ortho also gave Savage 750,000 shares, which Haynes claims were his shares. 1 170. ALM

01tho does not have employment records regarding Haynes. 1 172.

        lnnegotiations, 2 ALM Ortho, through counsel Moppin and LaMourie, conceded that

Haynes had been an employee who had started working for ALM Ottho July 31, 2020.11172­

173. They also conceded that at a minimum wage level, Haynes had earned $25,503.40 for his

services. 1175. When Haynes rejected that offer, they offered $50,000, $100,000, and $120,000.

11176-178, 180. Some of these offers included categorizing some ofHaynes's earnings as

independent contract work rather than employee work, which Haynes claims is illegal under 26

M.R.S. § 591-A.     n 7, 56-57, 176, 181. According to Haynes, this offer constituted !mowing and
intentionally violation of the law by !tying to force Haynes to help ALM Ortho avoid payment of

 2 Defendants al'gue the following facts from the Complaint contain inadmissible evidence under M.R. Evid,

 408(a)(l) because they include statements "offering ... a valuable consideration in compromising or attempting to
 compromise the claim" and are offered "to prove or disprove the validity or amount of a disputed claim or to
 impeach by a prior.inconsistent statement or a contradiction." The rulings on the Motions below do not depend on
 these challenged facts.

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        taxes., 191. When the dispute between Haynes, DeJuliis, and ALM 01iho appeared, Moppin

        continued to represent DeJuliis and ALM Ortho rather than withdrawing. , 8. Haynes asse1is that

        a conflict of interest initially arose because Haynes's investment in ALM Ortho was used to pay

        Preti Flaherty's legal fees for their representation of ALM Ortho and DeJuliis., 87. On October

        13, 2021, Haynes emailed Moppin asking if she had a conflict of interest, and she replied on

        October 21 that Preti Flahet1y was no longer representing ALM 01iho. ,, 84-85.

               Defendants deny many of the above allegations, and in paiiicular, they claim there was

        never an agreement to pay Haynes a salary.

               Plaintiff brings the following twelve counts in his Complaint:

   I.      As to Defendants Moppin, LaMourie, and Preti Flahe11y, a declaratory judgment stating that
           Defendants violated Maine Rules of Professional Conduct 1.7 and 1.13(e), and the 4 M.R.S.
           § 806 attorney's oath and stating that Moppin and LaMourie were representing Defendant
           DeJuliis individually, violating the Confirmation of Engagement letter;
  II.      As to Defendants Moppin, LaMourie, and Preti Flahet1y, attorney malpractice based on
           Plaintiff's belief they were representing him and not only ALM Otiho as a business entity;
 lll.      As to Defendants Moppin, LaMourie, and Preti Flaherty, fraudulent concealment, based on
           failure to disclose the terms of the Engagement Letter with ALM 01tho with the intention of
           affecting Plaintiffs actions;
 IV.       As to Defendants Moppin, LaMourie, Van Slyke, and Preti Flaherty, fraudulent inducement
           based on allowing Plaintiff to sign corporate agreements for ALM Ortho without warning
           him that he should obtain his own attorney;
  V.       As to Defendants Moppin, LaMourie, Van Slyke, and Preti Flahe11y, aiding and abetting a
           breach of fiduciary duty based on their knowingly allowing DeJuliis to breach his fiduciaiy
           duties as a cotporate officer and director at ALM Otiho by wrongfully devaluing the
           company and failing to pay Plaintiff a salal)';
 VI.       As to Defendants Moppin, LaMourie, Van Slyke, and Preti Flaherty, negligent
           misrepresentation based on failing to exercise reasonable care or competence in obtaining or
           communicating information to Plaintiff in his transactions with Defendants;
VII.       As to Defendants Moppin, LaMourie, Van Slyke, and Preti Flahe11y, unjust enrichment based
           on retention of legal fees supplied by Plaintiff;
VIII.      As to Defendants ALM Ortho and DeJuliis, failure to pay wages under 26 M.R.S. §§ 626,
           626-A;
 IX.       As to Defendants ALM Ortho and DeJuliis, breach of contract based on failure to pay salary;
  X.       As to Defendants ALM Ortho and DeJuliis, quantum meruit based on work performed
           without payment;                                             ·
 XI.       As to Defendants ALM Ortho and DeJuliis, failure to provide personnel file under 26 M.R.S.
           § 631 based on creation of documents and failure to provide tbem to Plaintiff; and

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XII.      As to Defendant DeJuliis, breach of fiduciary duty based on position as director and officer
          of ALM Ortho.

       Legal Standards and Discussion

          A. Plaintiff's Motion/or Attachment and Motion to Strike by DeJuliis and ALM Ortho

              1. Motion to Strike

              First, the Comt considers the Motion to Strike brought by DeJuliis and ALM 01tho. Defendants

       DeJuliis and ALM Ortho request this Cou1t strike Plaintiffs Reply statement to Plaintiffs Motion for

       Attachment and attached exhibits. The Court grants the Motion to Strike.

              Defendants move to strike on the grounds that the Reply introduces new matters, asse1ts unsworn

       facts, and discusses inadmissible settlement negotiations under M.R. Evid. 408(a). In opposition, Haynes

       repeats that he was an employee and Defendants' attorneys had admitted so. See PL's Opp'n to Defs.'

       Mot. Strike 2. He also argues the Motion to Strike is an improper suneply and that motions to strike are

       only authorized in response to pleadings, citing M.R. Civ. P. 12(f).

              Rule 4A governing attachments authorizes a party opposing an attachment to file

       "material in opposition as required by Rule 7(c)," M.R. Civ. P. 4A(c), but it contains no

       discussion ofa reply. Because Rule 4A directly references a motion and opposition, but does not

       speak to a reply, it is unlikely that the Rule intends to allow a reply. At least one other Superior

       Court decision has come to this conclusion. Phillips v. Labombard, No. CV-14-154, 2014 Me.

       Super. LEXIS 194, at *4 n.1 (Nov. 7, 2014).

              If a reply were allowed, the parties agree that under Rule 7(e), it would only be permitted

       to the extent it addresses issues initially raised in the opposition. The Court concludes that only

       some of the assettions in the Reply are responsive to the Opposition and that those statements

       already appeared in the Motion. Therefore, they are not "strictly confined to replying to new

       matter raised in the opposi[tion]." M.R. Evid. 7(e). Moreover, Haynes offers the statements,

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which appear to be from settlement negotiations, to show that Defendants or Defendants'

attorneys have admitted that Haynes was an employee. This offer appears improper under M.R.

408(a). For the above reasons, the Court finds that Plaintiffs Reply is improper and grants the

Motion to Strike.

           As to Plaintiffs argument that Defendants' Motion to Strike is actually an improper

surreply, the Court disagrees. While Rule 12(f) allows motions to strike in response to pleadings,

there is no indication that a motion to strike is limited to pleadings. Defendants' Motion to Strike

is allowed under M.R. Civ, P. 7(b)( 1), as "an application to the court for an order ... stat[ing] with

patticularity the grounds therefor and the tule or statute invoked., .. " Here, the Defendants

properly cite several grounds for their Motion to Strike, including M.R. Civ. P. 7(e), M.R. Evid.

408(a), and M.R. Civ. P. 4A(c), (i), and 4B(c), (i). Therefore, the Court concludes the Motion to

Strike is proper.

        2. Motion for Attachment

       Next, the Court considers the Motion for Attachment, which it denies for the following

reasons.

       Maine Rules of Civil Procedure 4A and 4B govern attachment and tmstee process.

"[R]eal estate, goods and chattels and other property may , , . be attached and held to satisfy the

judgment for damages and costs which the plaintiff may recover." M.R. Civ. P. 4A(a). With

some exceptions, trustee process may be used to secure satisfaction of a judgment for damages

and costs. M.R. Civ. P. 4B(a). Trustee process may be served only if attachment on trustee

process has been approved for a specified amount by order of the court. M.R. Civ. P. 4B(c).

       "Because prejudgment attachment may operate harshly upon the party against whom it is

sought, there must be strict compliance with the procedures prescribed by legislation and

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 implemented by comt rnles." Wilson v. De/Papa, 634 A.2d 1252, 1254 (Me. 1993) (citations

omitted). An order of attachment may only be issued "upon a finding by the court that it is more

likely than not that the plaintiff will recover judgment, including interest and costs, in an amount

equal to or greater than the aggregate sum of the attachment and any liability insurance, bond, or

otber security, and any prope1ty or credits attached by other writ of attachment or by trustee

process shown by the defendant to be available to satisfy the judgment." M.R. Civ. P. 4A(c).

        The court bases its determination on "the merits ofthe complaint and the weight and

credibility of the supp01ting affidavits," Porrazzo v. Karofsky, 1998 ME 182, if 7,714 A.2d 826.

Affiants must "set forth specific facts sufficient to warrant the required findings[,] and

[affidavits] shall be upon the affiant's own lmowledge, information or belief; and, so far as upon

information and belief, shall state that the affiant believes this information to be true." M.R. Civ.

P. 4A(i). In considering the motion, the court reviews and assigns weight to the affidavit

evidence in the same marmer as with other evidence. Wilson, 634 A.2d at 1254. Arguments of

counsel or prose litigants cannot substitute for the required sworn statements of relevant facts.

Id.

        Based on the contents of Plaintiff's Motion and affidavit, the success of the Motion

depends on whether there was a valid agreement to pay Plaintiff a salary. Plaintiffs affidavit

asserts that "[b ]ased on a verbal agreement with the other two principals in the company,

Defendant Paul A. DeJuliis and Brian R. McLaughlin, my salary was set at $185,000 per year."

In response, Defendants provide two affidavits claiming not only that this agreement was never

made, but also describing other conversations that indicated Haynes was not to be paid a salary.

In one such conversation, Defendants claim to have offered Haynes a draw from potential future

income rather than a salary.

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        Because Defendants' affidavits provide significantly more detail and several pieces of

evidence refuting Plaintiffs claim, they cany more weight. The Court concludes that Haynes has

not shown that he is more likely than not to succeed in any amount on his claim that he is owed a

salary. To be clear, however, Plaintiff may continue to press this salary claim, along with other

related arguments that he is entitled under the law to be fairly and justly compensated by the

company. However, on the record before the Cou1i, the Motion for Attachment is denied.

    B. D~fendants Van S/yke 'sand LaMourie 's Motions to Dismiss

        Defendants Van Slyke and LaMourie both move to dismiss on the grounds that Haynes is

entitled to no relief against them under any legal theory. M.R. Civ. P. 12(b)(6). On a motion to

dismiss under M,R, Civ. P. 12(b)(6), tl1e court views the complaint "in the light most favorable

to the plaintiff to determine whether it sets forth elements of a cause of action or alleges facts

that would entitle the plaintiff to relief pursuant to some legal theory." Moody v. State Liquo1· &

Lotte,y Comm 'n, 2004 ME 20, ,r 7, 843 A.2d 43, "[F]acts are not adjudicated, but rather there is

an evaluation of the allegations in the complaint in relation to any cause of action tl1at may

reasonably be inferred from the complaint." Saunders v. Tisher, 2006 ME 94, ,r 8, 902 A.2d 830.

The court should dismiss a claim only "when it appears beyond a doubt that the plaintiff is not

entitled to relief under any set of facts" that may be proven to support plaintiffs action. Id.

        L Van Slyke Motion

       Haynes brings four counts against Van Slyke, the managing pa1iner at Preti Flaherty.

Haynes argues that Van Slyke failed to respond to an email from Haynes alleging that Attorney

Moppin had not provided Haynes all the records he had requested and tl1at Van Slyke should

have informed him that Preti Flaherty was not representing Haynes personally. Haynes does not

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otherwise allege that Van Slyke was involved with Haynes or ALM 01tho.

       Van Slyke claims that Haynes has no viable claim against him for fraudulent inducement,

negligent misrepresentation, aiding and abetting a breach of fiduciary duty, unjust emichment, or

under any other theory of law. Haynes responds that Van Slyke violated the 4 M.R.S. § 806

attorney oath. He also cites to Me. R. Prof. Conduct 5.1, "Responsibilities of Pa1tners, Managers,

and Supervisors," and argues that the Law Cowt has indicated that managing attorneys may be

liable for the acts of their subordinates.

        Van Slyke's only participation in the ALM 01tho matter alleged in the Complaint was

refening the email he received from Haynes to Preti Flaherty's general counsel, Elizabeth

Olivier. Van Slyke is charged with knowing ofMoppin's alleged ethical violations, but even so,

the record shows that Van Slyke engaged in remedial behavior by referring the matter to Olivier.

Van Slyke received the email from Haynes on September 15, 2021, and Preti Flahe1ty ultimately

withdrew from the representation on October 21, 2021. There is no allegation that the situation

Haynes complained about was becoming worse with time or that Van Slyke should have checked

in again with Olivier. Based on the allegations in the Complaint, the Cou1t concludes Van

Slyke's reaction to Haynes's email is not actionable.

        The CoU!t also concludes Van Slyke is not vicariously liable for behavior of other Preti

Flahetty attorneys. While an employer may be liable for an employee's actions when the

employee's conduct was within the scope of employment or the employee acted with authority,

see Picher v. Roman Catholic Bishop ofPortland, 2009 ME 67, ,r 32, 974 A.2d 286, a supervisor

is not vicariously liable for actions of his supervisees. Because it concludes Plaintiff had failed to

allege facts showing Van Slyke could be liable to Plaintiff, the Comt grants Van Slyke's Motion

to Dismiss.

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       2. LaMourie Motion

       The Complaint alleges that Attorney LaMourie, Of Counsel for Preti Flaherty, stated that

Haynes would be properly classified as an employee of ALM 01tho for purposes of his unpaid

wage claim. Other than that c011"espondence, LaMourie argues the rest ofHaynes's al1egations

against him are based on inadmissible settlement communications. See Def. LaMourie's Mtn.

Dismiss 3 (listing the allegations drawn from settlement communications). LaMourie also argues

that Haynes cannot link his losses to LaMourie's actions and that LaMourie was not involved
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with ALM Ortho until after Haynes stopped working there.

       Whether LaMourie was involved with ALM Ortho while Haynes worked there is

disputed. Haynes' Counts I - VII involve allegations that LaMourie coordinated with Moppin,

DeJuliis, and ALM 01tho to cheat Haynes out of his salary and his $30,000 investment in the

company. PL's CompL 12. Haynes also claims that LaMourie was involved in appointing

DeJuliis as the "gatekeeper" of legal information shared between Preti Flahe1ty and ALM 01tho,

137, and that LaMourie "dealt with [Haynes] through Defendant DeJuliis by directing Defendant

DeJuliis to have [Haynes] sign corporate paperwork of Defendant ALM Ortho," 1~ 7, 35, Under

Haynes's version of the facts, LaMourie was representing ALM 01tho and its shareholders along

with Moppin and therefore is potentially liable for major allegations such as the failure to

disclose that the organization was the client, the alleged withholding of the material information

in the Engagement Letter, and the representation ofDeJuliis and McLaughlin individually

against the terms of the Engagement Letter. In addition, Haynes claims that LaMourie is

involved in the retention of the money ALM 01tho still owes him. Accepting the facts alleged in

the Complaint as true, the Court denies LaMourie's Motion to Dismiss.

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    C. Plaintiff's Motions for Sanctions Against Attorneys Burns and Fontugne

         Plaintiff has moved for Rule 11 sanctions against Attorney Aaron Burns, who represents

Defendant ALM Ortho, and against Attorney Elizabeth Fontugne, who represents Defendants

Moppin, LaMourie, Van Slyke, and Preti Flaherty. For the following reasons, the Comi denies

both Motions.

        1. Sanctions Against Atty. Burns

        Haynes argues that Attorney Blll'ns violated Rule 11 when he signed ALM Ortho's

Answer, which denies Haynes's allegation at Paragraph 171 of the Complaint. Paragraph 171 of

the Complaint reads,

        On July 30, 2021, Defendant LaMourie, Esq. responded to my personnel file
        request from Defendant ALM Ortho, stating the following: "ALM Ortho, Inc.
        concedes that Mr. Haynes satisfies the definition of employee. Notwithstanding
        that fact, however, there are no personnel records that pertain to Mr. Haynes
        which would correspond to the statutory definition set forth in 26 M.RS.A. §
        631." In other words, Defendant LaMourie, Esq. concedes that Defendant ALM
        Ortho was in violation of Maine law by not keeping statutorily required
        employment records.

Haynes takes issue with Def~ndants' denial of this fact, claiming that it should have been

admitted to prevent delay. ALM 01tho claims it denied the assertion because the asse1tion relied

on inadmissible evidence, the substance of a settlement communication. M.R. Evid. 408(a).

       M.R. Civ. P. ll(a) reads:

       The signature of an attorney or patty constitutes a representation by the signer that
       the signer has read the pleading or motion; that to the best of the signer's
       knowledge, information, and belief there is good ground to suppmi it; and that it
       is not interposed for delay .... If a pleading or motion is signed with intent to
       defeat the purpose of this rule, the court, upon motion or upon its own initiative,
       may impose upon the person who signed it, upon a represented party, or upon
       both, an appropriate sanction.

The Court concludes that Rule 11 sanctions are not warranted here, where ALM 01tho denied

the allegation because of evidentiary rules and strategy, and not for an improper purpose. The

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Court denies this Motion for Sanctions against Attorney Burns.

       2. Sanctions against Atty. Fontugne

        Haynes argues that Attorney Fontugne should be sanctioned because Moppin's Answer

to Plaintiffs Complaint failed to admit that Haynes had not received the Confirmation of

Engagement Letter given to ALM Ortho by Preti Flaherty. The relevant assertions in the

Complaint are the following:

       Defendant Moppin, Esq. drafted a "Confirmation of Engagement" letter dated
       August 14, 2020, which she gave to Defendant DeJuliis, regai-ding legal services
       for Defendant ALM Ortho. In the engagement letter Defendant Moppin, Esq.
       stated a material fact that she was only representing Defendant ALM Ortho; [and]
       At the time, Defendant Moppin, Esq. failed to disclose the engagement letter to
       me, which contained material information that I needed to know such as the terms
       of her engagement and whom she was representing.

Pl.'s Comp!.~~ 27-28. Defendant Moppin's Answer reads,

       Denied that Mr. Haynes was unaware that Preti Flaherty represented only ALM
       Ortho, as he reviewed, discussed, and approved the offer of representation later
       set forth in the Conformation of Engagement Letter with his colleagues on August
       13, 2020, the day before ALM Ortho engaged Preti Flaherty as legal counsel; and
       further saying that it was plainly understood by all concerned, within the Preti
       Flaherty law firm as well as within ALM Ortho, that Mr. DeJuliis was the
       representative of ALM Ortho designated to handle all communications with ALM
       Ottho' s counsel.

Answer to Pl.'s Comp!.~ 28.

       With regard to denying assertions in a Complaint,

      Denials shall fairly meet the substance of the averments denied. When a pleader
      intends in good faith to deny only a pa1t or a qualification of an averment, the
      pleader shall specify so much of it as is true and material and shall deny only the
      remainder. Unless the pleader intends in good faith to controvert all the averments
      of the preceding pleading, the pleader may make denials as specific denials of
      designated averments or paragraphs, or the pleader may generally deny all the
      averments except such designated averments or paragraphs as the pleader
      expressly admits; but, when the pleader does so intend to controve1t all its
      averments, the pleader may do so by general denial subject to the obligations set
      forth in Rule 11.

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                                                                   (

M.R. Civ. P. 8(b).

        Haynes argues that Moppin did not show him the Letter and should not be able to claim

that he knew its contents. In her Opposition, Fontugne illustrates how the denial is based on

Moppin's disagreement with Plaintiffs asse1tion that he had not seen the letter and was missing

material information. This denial is proper under Rule 8. Therefore, the Cou1t denies the Motion

for Sanctions against Attorney Fontugne.

Conclusion

        In sum, the Court grants the Motion to Strike, denies the Motion for Attachment, grants

Van Slyke's Motion to Dismiss, denies LaMourie's Motion to Dismiss, and denies both Motions

for Sanctions.

The entry is:

       Plaintiffs Motion for Attachment is DENIED. Defendants ALM 01tho and

       DeJuliis's Motion to Strike is GRANTED. Defendant Van Slyke's Motion to

       Dismiss is GRANTED. Defendant LaMourie's Motion to Dismiss is DENIED.

       Plaintiffs Motion for Sanctions against Attorney Burns and Motion for Sanctions

       against Elizabetb Fontugne are both DENIED.

       Because no Scheduling Order has been issued, and there remain pending a

       number of discoveiy disputes, the Comt shall schedule a Zoom conference with

       Mr. Haynes and Counsel of Record as soon as possible.

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                      i
                      \

The Clerk is directed to enter this Order on the docket by incorporating it by reference.

M.R. Civ. P. 79(a).

DATE                                                   SUPERJOR COURT JUSTICE
                                                          . M. Michaela Murphy

                                                         Entered on the Docket:_ 01~        Bf 3
                                                                                             0
                                                                                                 2.

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