Kahalas v. Schiller

164 F.Supp.3d 241

Howard M. Kahalas, PC, Plaintiff,

v.Marc J. Schiller, Defendant.

Civil Action No. 15-13255-NMG

United States District Court, D. Massachusetts.

Signed February 18, 2016

Valentin D. Gurvits, Matthew Shayefar, Boston Law Group LLP, Newton Centre, MA, for Plaintiff.

Richard M. Zielinski, Alana Van Der Mude, Goulston & Storrs, Boston, MA, for Defendant.

MEMORANDUM & ORDER

GORTON, United States District Judge.

This dispute is internecine. It arises from allegations that one attorney intentionally and maliciously defamed another law firm so that its client would retain a third attorney to represent her in a personal injury action.

Pending before the Court is defendant attorney's motion to dismiss the complaint or, in the alternative, to require a more definite statement. For the reasons that follow, the motion to dismiss will be allowed, in part, and denied, in part, and the motion to require a more definite statement will be denied.

I. Background

The Court accepts as true the following allegations by plaintiff Howard M. Kahalas, PC (“plaintiff” or “Kahalas, PC”) for the purpose of resolving the motion to dismiss.

Plaintiff is a law firm specializing in personal injury litigation and a Massachusetts professional corporation with its principal office in Boston, Massachusetts. Lisa Aronson (“Aronson”), Steven Bergel (“Bergel”) and Howard Kahalas (“Kahalas”) are attorneys who work at the firm.

Non-party Kathleen Tuscano (“Kathleen”) is an individual who sustained serious injuries in a motor vehicle accident in March, 2015 that left her in a coma and unable to communicate. Plaintiff had purportedly represented Kathleen in an unrelated claim for personal injuries caused by an earlier motor vehicle accident in July, 2006.

Members of Kathleen's family include her parents, John and Patricia Tuscano (“John and Patricia”), her brother, Jake Tuscano (“Jake”) and her long-term boyfriend, Justin Behling (“Behling”). Prior to the March, 2015 accident, Behling and Kathleen lived together in a house owned by Behling's uncle. The complaint does not name any of Kathleen's family as parties to the instant action.

Defendant Marc J. Schiller (“defendant” or “Schiller”) is Behling's uncle. He is also an attorney who resides in New Hampshire.

Plaintiff claims that, shortly after the March, 2015 accident, associates of the firm communicated with members of Kathleen's family and agreed to represent Kathleen on a contingency fee basis in her new claim for personal injuries. Attorneys Aronson and Bergel attended a meeting with John, Patricia, Jake and Behling at the hospital where Kathleen received treatment. Plaintiff alleges that Attorney Bergel formed “a close and intimate personal relationship” with Kathleen's family and frequently visited and communicated with them to discuss Kathleen's condition and the family's needs.

Attorney Bergel met with the Tuscano family in early May, 2015 when he heard Kathleen speak for the first time. One day later, Attorneys Bergel and Kahalas met with John, Jake and the defendant at plaintiff's law office where Bergel and Kahalas answered defendant's questions concerning Kathleen's case. Plaintiff suggests that the meeting lasted less than an hour and that John, Jake and defendant spoke privately after the meeting for about an hour.

Plaintiff complains that “communications between [it] and the Tuscano family noticeably chilled” after the meeting and that John later informed Attorney Bergel that defendant “was not impressed with the meeting”. Plaintiff avers that it later received an e-mail from Jake that questioned its experience, qualifications and litigation strategy. Shortly thereafter plaintiff was notified that the Tuscano family had retained another attorney to represent Kathleen on her personal injury claim.

In August, 2015, plaintiff filed a complaint in Massachusetts Superior Court asserting that defendant “slandered [it] to the Tuscano family” in order to induce the family to retain another attorney to replace it as counsel on the personal injury claim. It alleges that defendant's actions constituted 1) intentional interference with its contractual relationship with Kathleen, 2) intentional interference with its advantageous business relationship with her, 3) defamation and 4) unfair business practices under M.G.L. c. 93A, §§ 2 and 11 (“Chapter 93A”). Defendant duly removed the action to this Court on diversity grounds and filed the pending motion to dismiss the complaint or, in the alternative, to require a more definite statement.

II. Motion to dismiss

A. Legal standard

To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). In considering the merits of a motion to dismiss, the Court must accept all factual allegations in the complaint as true and draw all reasonable inferences in the plaintiff's favor. Santiago v. Puerto Rico , 655 F.3d 61, 72 (1st Cir.2011). Threadbare recitals of the legal elements, supported by mere conclusory statements, do not suffice to state a cause of action. Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). A complaint does not state a claim for relief where the well-pled facts fail to warrant an inference of any more than the mere possibility of misconduct. Id. at 679, 129 S.Ct. 1937.

B. Application

1. Intentional interference with contractual relations

To assert a claim of intentional interference with contractual relations, plaintiff must allege that 1) it had a contract with a third party, 2) defendant knowingly induced that third party to violate the contract, 3) the interference was intentional and improper in motive or means and 4) plaintiff was harmed by defendant's actions. G.S. Enters., Inc. v. Falmouth Marine, Inc. , 410 Mass. 262, 272, 571 N.E.2d 1363 (1991).

Plaintiff alleges in Count 1 that defendant intentionally interfered with its contractual relations because 1) plaintiff had an agreement with Kathleen whereby it would represent her in exchange for “millions of dollars in legal fees” if her claim was successful, 2) defendant knew about the agreement and intentionally slandered plaintiff to Kathleen so that she would terminate the agreement and retain another attorney, 3) defendant “received financial compensation for referring the Tuscano case to another attorney” which rendered his interference intentional, malicious and improper in motive and means and 4) defendant caused plaintiff to lose an opportunity to earn “millions” in legal fees.

Defendant moves to dismiss for failure to state a claim because the complaint 1) “accuses” him of slander without identifying the statement at issue or explaining how such a statement was defamatory, 2) “baldly” asserts that he received financial compensation without describing the nature, amount or impropriety of that compensation and thus 3) does not allege malicious conduct or improper motive or means.

Defendant further contends that, rather than alleging a valid contract between plaintiff and Kathleen, the complaint asserts that a contract existed between plaintiff and other members of Kathleen's family without also alleging that a) those members were authorized by guardianship, power of attorney or otherwise to retain an attorney on Kathleen's behalf or b) Kathleen ratified the agreement after she regained consciousness. Plaintiff responds that “the question of contract formation or contract validity is a question of fact” which cannot form the basis for the dismissal of a complaint, citing Crellin Techs., Inc. v. Equipmentlease Corp. , 18 F.3d 1, 7 (1st Cir.1994).

Plaintiff's reliance on the Crellin decision is misplaced. In Crellin , the First Circuit Court of Appeals held that

so long as the evidence does not point unerringly in a single direction but is capable of supporting conflicting inferences, the question of whether a contract has been formed between two parties is a question of fact to be determined by the factfinder.

Id. Here, however, plaintiff's allegations are not “capable of supporting conflicting inferences” because it wholly fails 1) to assert that members of the Tuscano family were authorized to contract with it on Kathleen's behalf or that Kathleen later ratified the contract or 2) to present factual allegations in support of its claim that it had a contract with Kathleen. Plaintiff's conclusory statements that it had a contract with Kathleen solely by virtue of its purported contract with members of her family do not satisfy the pleading standards set forth in Twombly and Iqbal .

Accordingly, the complaint does not properly allege the first element of a claim of intentional interference with contractual relations and defendant's motion to dismiss Count 1 will be allowed.

2. Intentional interference with advantageous business relationship

A claim of intentional interference with an advantageous business relationship must assert that 1) plaintiff had a business relationship or anticipated a contract of economic benefit, 2) defendant knew of the relationship, 3) defendant interfered with the relationship through an improper motive or means and 4) plaintiff suffered a loss of advantage as a direct result of defendant's conduct. Am. Private Line Servs., Inc. v. E. Microwave, Inc. , 980 F.2d 33, 36 (1st Cir.1992).

To satisfy the third element, plaintiff must allege “wrongfulness beyond the interference itself.” James L. Miniter Ins. Agency, Inc. v. Ohio Indem. Co. , 112 F.3d 1240, 1250 (1st Cir.1997) (citing United Truck Leasing Corp. v. Geltman , 406 Mass. 811, 816, 551 N.E.2d 20 (1990) ). Such improper conduct may exist if a party “used threats, misrepresented any facts [or] defamed anyone” in the course of the interference. Geltman , 406 Mass. at 817, 551 N.E.2d 20. Plaintiff need not, however, establish that the improper interference was also malicious, unless the claim is raised...