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Moore v. Lester

Superior Court of Maine, Lincoln

July 1, 2019



          Daniel I. Billings, Justice

         Procedural Background

         Richard Moore (Plaintiff) filed a five count complaint (Complaint) on December 31, 2018. His Complaint alleges: (I) tortious interference; (II) breach of fiduciary duty; (III) breach of contract; (IV) fraud; and (V) negligence. On January 22, 2019, Danny Lester (Defendant) filed a Motion to Dismiss (MTD). A day later, January 23, 2019, Defendant filed his Answer, Affirmative Defenses, and a six-count counterclaim. Plaintiff timely objected to the MTD and Defendant timely replied. On February 11, 2019, Plaintiff filed a Motion for Leave to Amend Complaint (MTA). He requests leave to add additional facts to his existing claims and to allege a sixth count for "fraud/promissory estoppel." Defendant objects to the MTA and argues that amendment is futile because the Complaint would still be subject to dismissal. Defendant filed his Answer to Counterclaim and Affirmative Defenses on February 15, 2019. In response, Defendant filed a Motion to Strike (MTS) the Plaintiff's Answer and Affirmative Defenses as untimely served upon him, for being two days late. In his objection to the MTS, the Plaintiff has moved for an enlargement of time to file his Answer. All are pending before the court.

         Factual Background

         The following facts are taken from the Plaintiff's Complaint and viewed in the light most favorable to him.

         In 2012, Plaintiff and Defendant agreed to purchase Wiscasset Village Antiques (WVA) as a new business venture. Compl. ¶ 1. Both parties put money towards the business for a fifty-percent share of the business. ¶ 4-5. Plaintiff negotiated a lease with the Nicolls Trust, the owner of the building that housed WVA. ¶ 6. Thereafter, the Plaintiff arranged for preparation of the Operating Agreement (OA) and the formation of the limited liability company (LLC), ¶ 8. The parties established WVA, LLC on May 27, 2015. ¶ 9. As a result of Plaintiff's contributions, WVA improved and had greater success than prior years. ¶ 12. Plaintiff purchased a truck for the Defendant's use in the business and WVA, LLC paid the lease, ¶ 11. In the first lease (Original Lease) that the Plaintiff negotiated, he personally guarantied the lease. ¶ 16. When the Original Lease neared its end in May 2018, the Nicolls Trust was not interested in extending the lease term and listed the building for sale. ¶ 18.

         In summer 2018, the Plaintiff approached the Defendant in an attempt to work out an offer where they would both purchase the property that WVA, LLC rented if the Defendant could come up with half of the down payment. ¶ 19. The Defendant responded that it was not plausible for him to come up with the money. ¶ 20. The Plaintiff then told the Defendant that he would likely purchase the building and he would allow the Defendant to buy shares in the future if he wished, ¶ 21. In November 2018, the Nicolls Trust informed the Plaintiff that they had a potential buyer for the building, and subsequently informed him that they received a deposit for the sale of the same. ¶¶ 22-23. As a result, the Plaintiff scouted other properties to move WVA to, and looked at a property with the Defendant on November 14, 2018. ¶¶ 24-25. After this meeting, the Defendant informed the Plaintiff that he was buying the building from the Nicolls Trust, he had created a new S-Corporation to purchase the building, and he was going to evict WVA. ¶ 26-27. Faced with no other options in the situation, Plaintiff was forced sell his shares in WVA, LLC to the Defendant for $20, 000 and payment of the remaining lease on the company truck that WVA purchased for the Defendant. ¶ 28.


         I. Motion to Dismiss

         A motion to dismiss pursuant to M.R. Civ. P. 12(b)(6) "tests the legal sufficiency of the allegations in the complaint, not the sufficiency of the evidence the plaintiffs are able to present." Barnes v. McGough, 623 A.2d 144, 145 (Me. 1993) (internal citations omitted). The court shall "consider the facts in the complaint as if they were admitted." Bonney v. Stephens Mem. Hosp., 2011 ME 46, ¶ 16, 17 A.3d 123, 127. The complaint is viewed "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." Id. (quoting Saunders v. Tisher, 2006 ME 94, ¶ 8, 902 A.2d 830, 832). "Dismissal is warranted when it appears beyond a doubt that the plaintiff is not entitled to relief under any set of facts that he might prove in support of his claim," Id. Claims involving fraud are held to a higher pleading standard and the circumstances constituting it must be pled with particularity. See M.R. Civ. P. 9(b); Bean v. Cummings, 2008 ME 18, ¶¶ 10-11, 939 A.2d 676.

         A. Does Improper Service Require that the Court Grant the MTD?

         Whether actions are legally sufficient to constitute process under M.R. Civ. P. 4 is a question for the court. Maguire Constr., Inc. v. Forster, 2006 ME 112, ¶ 8, 905 A.2d 813. Even if a complaint is not effectively served, the court is not required to dismiss the complaint. See id. ¶ 9. Actual notice is the goal of any form of service, and technical deficiencies do not defeat this goal. Id.; Moores v. Doyle, 2003 ME 105, ¶ 10, 829 A.2d 260; Peoples Heritage Sav. Bank v. White, 1997 ME 204, ¶¶ 3-4, 704 A.2d 318. If service is insufficient, the Law Court reviews the trial court's decision to dismiss the complaint for an abuse of discretion. Maguire Constr., Inc., 2006 ME 112, ¶ 8, 905 A.2d 813, The Defendant correctly argues that the Plaintiff failed to properly serve him because two exhibits that were supposed to be attached to the Complaint were not served upon him, nor was the notice regarding Electronic Service. However, these are technical deficiencies that do not warrant dismissal of the Complaint. Defendant had actual notice of the claims against him and was provided the attached exhibits within days of the Complaint being served upon him. The Defendant is represented by counsel who is familiar with Electronic Service, and has been represented through the events leading up to the instant matter. Insufficient service does not require that the Complaint be dismissed.

         B. What Documents May be Considered in the MTD Under the Moody Exception?

         In support of his MTD, the Defendant attaches Exhibits A through M. He argues that the court may consider these documents under the Moody exception without converting the MTD into a motion for summary judgment. In response, the Plaintiff argues that the Moody exception is narrow and does not allow consideration of the Defendant's exhibits.

         In Moody v. State Liquor & Lottery Commission, the Law Court reviewed the trial court's decision to consider the front and back of an unscratched lottery ticket, and lottery ticket rules and regulations attached to the defendant's motion to dismiss. 2004 ME 20, ¶¶ 4-5, 843 A.2d 43. The trial court determined that when it accepted the facts as alleged in the plaintiff's complaint as true, the contract printed on the lottery ticket was unambiguous and showed that the plaintiff's ticket was non-winning, therefore the defendant did not breach the contract. Id. ¶ 5. The trial court dismissed the breach of contract claim. Id. On appeal, the plaintiff argued that the court erred by considering the documents attached to the motion to dismiss, and that consideration of those documents converted the motion into one for summary judgment. Id. ¶ 6. The defendant responded that it was necessary to consider those documents because they completed the contract that the plaintiff brought into issue, and because the documents were "a matter of public record, which may be judicially noticed in a motion to dismiss." Id.

         In analyzing whether consideration of the documents was proper, the Court began with the general rule that if the trial court turns to materials outside the pleadings, the motion is converted into one for summary judgment. Id. ¶ 8. It then explained that federal courts occasionally look to extraneous documents on a motion to dismiss without treating it as a summary judgment motion. Id. ¶ 9. The Court reasoned that

[t]his narrow exception allows a court to consider official public documents, documents that are central to the plaintiffs claim, and documents referred to in the complaint, without converting a motion to dismiss into a motion for a summary judgment when the authenticity of such documents is not challenged. These documents will merge into the pleadings. The purpose for this exception is that if courts could not consider these documents, a plaintiff with a legally deficient claim could survive a motion to dismiss simply by failing to attach a dispositive document on which it relied.

Id. ¶ 10 (internal citations and quotations omitted). The reason that attached documents generally convert a motion to dismiss into one for summary judgment is concern about the plaintiff having an opportunity to respond to new facts raised by the defendant. Id. ¶ 11. But, when the "document is referenced in the complaint, is central to a plaintiffs claim, or is a public document, the plaintiff should have notice of the contents." Id. So long as the plaintiff does not challenge the authenticity of the aforementioned documents, they may be properly considered on a motion to dismiss without converting it into a motion for summary judgment. Id.

         At the outset, the Plaintiff does not challenge the authenticity of Exhibits A through M. The Defendant correctly maintains that any filings with the State or the court are public records, therefore they will be considered by the court. The Operating Agreement of WVA and its Certificate of Formation were the exhibits attached to the Complaint, so those will also be considered by the court. The Defendant maintains that the other exhibits are central to the Plaintiff's claim/ and points to various Superior Court caselaw that considered operating agreements, releases, and leases on motions to dismiss. The following is a list of the Defendant's exhibits and a discussion about what will be considered by the court.

• Ex. A: Original Lease (January 27, 2016)
• Ex. B: Lease Amendment (undated, but to take effect May 31, 2018)
• Ex. C: WVA LLC Operating Agreement (adopted May 28, 2015)
• Ex. D: Purchase and Sale Agreement (P&S) for Plaintiff's shares of WVA (November 30, 2018)
• Ex. E: Earnest Money Deposit check per the Purchase and Sale Agreement
• Ex. F: Bill of Sale and Assignment of All Rights for WVA (December 14, 2018) (Release)
• Ex. G: WVA Resolution of Members
• Ex. H: Plaintiff's Receipt and Acknowledgement for the Purchase and Sale Agreement (December 14, 2018)
• Ex. I: Bill of Sale for F150 Truck (December 14, 2018)
• Ex. J: Non-Compete Agreement (December 14, 2018)
• Ex. K: WVA Filings with the Maine Secretary of State
• Ex. L: WVA Certificate of Formation (filed May 27, 2015)
• Ex. M: Summons and Proof of Service for current action

         The Plaintiff plainly references the Original Lease, Exhibit A, in his Complaint. ¶¶ 6, 14-16, 18. The court will consider this document. Although the Lease Amendment, Exhibit B, is not directly referenced in the Complaint, it is mentioned in the Plaintiff's allegation of tortious interference, when he states that he and a third party, the Nicolls Trust, "had a valid contract for the lease of the building housing [WVA], LLC." ¶ 31. The Lease Amendment is central to the Plaintiff's tortious interference claim as it amends the contract that was contained in the Original Lease, which was the Plaintiff brought into issue. It will be considered by the court.

         WVA's Operating Agreement/ Exhibit C, and the Certificate of Formation, Exhibit L, are the same exhibits that were attached to the Plaintiff's Complaint and will be taken into account in deciding the MTD. Exhibit K, WVA's filing with the Secretary of State is a public document as is Exhibit M, the Summons and Proof of Service that were filed with this court, and will also be considered.

         The remaining exhibits, D though J, all pertain to the Plaintiff's sale of his shares to the Defendant, and the payoff of the company truck lease. None of these documents are specifically referenced in the Plaintiff's Complaint. He generally references that he sold his shares in WVA, LLC for $20, 000 and the Defendant's payment of the remainder of the lease on the truck, ¶ 28. Regarding his fraud claim, he alleges "financial damage to the Plaintiff including but not limited to the dissolution of the business, loss of shares in the business, .., loss of investment in the business and loss of an occupation." ¶ 52. The Defendant argues that because exhibits D through J show the circumstances and details of the sale and the relationship between the parties, that these should be reviewed by the court under the Moody exception "to evaluate the sufficiency of Plaintiff's allegations." Because these documents are neither public records nor referenced in the Plaintiff's Complaint, the Defendant relies on Moody for the proposition that "a plaintiff with a legally deficient ...

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