D. WARREN JUDGE
the court is a motion by defendants Cynthia Croy and Ralph
Smith to dismiss the complaint as against them. The complaint
filed by plaintiff Maine Ventures Inc. alleges that Maine
Ventures was a creditor of JOM Inc. d/b/a Chipco Inc. and
that the defendants, employees of Chipco, transferred Chipco
funds to themselves at a time when Chipco was insolvent in
violation of the Uniform Fraudulent Transfer Act (UFTA), 14
M.R.S. §§ 3571-82.
purposes of a motion to dismiss, the material allegations of
the complaint must be taken as admitted. Ramsey v. Baxter
Title Co., 2012 ME 113 ¶ 2, 54 A.3d 710. The
complaint must be read in the light most favorable to the
plaintiff to determine if it sets forth elements of a cause
of action or alleges facts that would entitle plaintiff to
relief pursuant to some legal theory. Bisson v. Hannaford
Bros. Co., Inc., 2006 ME 131 ¶ 2, 909 A.2d 1010.
Dismissal is appropriate only when it appears beyond doubt
that the plaintiff is not entitled to relief under any set of
facts that he might prove in support of his claim.
Moody v. State Liquor
& Lottery Commission, 2004 ME 20 ¶
7, 843 A.2d 43. However, a plaintiff may not proceed if the
complaint fails to allege essential elements of the cause of
action. See Potter, Prescott,
Jamieson & Nelson P.A. v.
Campbell, 1998 ME 70 ¶¶ 6-7, 708 A.2d 283.
and Smith allege that dismissal is warranted because the
complaint does not adequately allege fraud with specificity
under M.R.Civ.P. 9(b), because service of process was
insufficient under M.R.Civ.P. 12(b)(4), and because the
complaint fails to state a claim.
respect to defendants' argument based on Rule 9(b), the
complaint by Maine Ventures does not allege common law fraud.
Assuming that Rule 9(b) also applies to a claim alleging a
fraudulent transfer, the court will discuss below whether the
factual allegations underlying the plaintiffs UFTA claim are
stated with sufficient particularity.
respect to defendants' argument based on Rule 12(b)(4),
Croy and Smith are not arguing that they did not receive a
proper summons but are reiterating their argument that the
complaint does not state a claim and does not alleged fraud
with sufficient specificity. Rule 12(b)(4), however, is
addressed to defects in the summons. See 2 C.
Harvey, Maine Civil Practice § 12:10 (2011).
The court does not see any defects in the summonses served on
Croy and Smith.
leaves the issue of whether Maine Ventures has stated a claim
under the UFTA and has done so with sufficient particularity.
The court concludes that, as against Croy and Smith, the
complaint adequately alleges that they received money beyond
their authorized salaries at a time when Chipco was insolvent
and that Chipco therefore did not receive reasonably
equivalent value for their services. This states a claim
under 14 M.R.S. § 3576(1). The court also concludes that the
factual allegations are sufficiently specific. Whether Maine
Ventures can prove its claim is an issue to be determined in
and Smith note that the complaint alleges that the CEO of
Chipco, John Kendall, was not aware of the unauthorized
payments made to defendants. Complaint ¶¶ 17-18.
Croy and Smith argue that Maine Ventures is collaterally
estopped on that issue because Kendall was convicted on eight
criminal charges that were based on his knowledge of and
participation in the alleged scheme. First, Kendall's
convictions are now on appeal. Second, if those convictions
are upheld, the question of whether Maine Ventures is
collaterally estopped by those convictions may depend, at
least in part, on whether Kendall and Maine Ventures are
deemed to be in privity. See Beal v. Allstate Insurance
Co., 2010 ME 20 ¶ 20, 929 A.2d 733 (privity exists
when two parties have a commonality of ownership, control,
and interest in a proceeding).
of whether Kendall's convictions are upheld, if the CEO
of Chipco was aware of and/or authorized illicit payments to
defendants above and beyond the salaries they were nominally
receiving and if Maine Ventures were to be found to be in
privity with or an alter ego of Kendall, there would
potentially be an "unclean hands" defense. This
appears to be what Croy and Smith are arguing in their motion
to dismiss. See Motion to Dismiss dated April 1,
2016 at 5-6. It can also perhaps be argued that if under the
table payments were necessary to retain defendants as Chipco
employees, then Chipco in fact received reasonably equivalent
value. Those issues, however, cannot be determined on the
face of the pleadings.
entry shall be:
motion to dismiss by defendants Croy and Smith is denied. The
Clerk is directed to incorporate this order in the docket by
reference pursuant to Rule 79(a).
 As against defendant Joseph London,
Maine Ventures has also alleged a claim pursuant to §
3576(2) because it has alleged that London was an insider.
The complaint does not allege ...