Martin v. Mooney

448 F.Supp.3d 72

Timothy MARTIN

v.Susan E. MOONEY; et al.

Civil No. 19-cv-00323-LM

United States District Court, D. New Hampshire.

Signed March 3, 2020

Charles G. Douglas, III, Douglas Leonard & Garvey PC, Concord, NH, for Timothy Martin.

William D. Pandolph, Sulloway & Hollis PLLC, Concord, NH, for Susan E. Mooney, et al.

ORDER

Landya McCafferty, United States District Judge This dispute arises from an employment relationship gone awry. Plaintiff Timothy Martin was the administrator at a continuing care retirement community. His employer fired him and sent a memorandum to community residents stating that Martin had been "terminated ... because of a pattern of unprofessional conduct." Doc. no. 1-1. A local newspaper subsequently learned Martin had been fired and published two front-page stories about Martin's termination. Martin alleges that his former employer, its President, and the employer's controlling entity are liable for privacy violations, defamation, and breach of contract. He also alleges that the employer's President, Dr. Mooney, is personally liable for intentional infliction of emotional distress.

Defendants move to dismiss, arguing that the employer's controlling entity cannot be held liable for the alleged misconduct, and that all claims should be dismissed against all defendants because Martin's claims lack facial plausibility. See Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). Martin objects. For the following reasons, the court dismisses the employer's controlling entity as a defendant. As to Martin's claims against the remaining defendants, the court grants the motion in part and denies it in part.

STANDARD OF REVIEW

Under Rule 12(b)(6), the court must accept the factual allegations in the complaint as true, and draw all reasonable inferences from those facts in the plaintiff's favor. Foley v. Wells Fargo Bank, N.A., 772 F.3d 63, 71, 75 (1st Cir. 2014). The court may also consider documents attached to the complaint and documents expressly incorporated into it. Id. at 72. The court must then "determine whether the factual allegations in the plaintiff's complaint set forth a plausible claim upon which relief may be granted." Id. at 71 (internal quotation marks omitted). A claim is facially plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678, 129 S.Ct. 1937. However, a pleading "that offers labels and conclusions or a formulaic recitation of the elements of a cause of action will not do." Id. (quotations omitted).

BACKGROUND

The following facts are taken from Martin's complaint and the attached documents. In August 2014, defendant Alice Peck Day Memorial Hospital hired Martin to administer a 63-unit continuing care retirement community called The Woodlands. Defendant Dr. Susan E. Mooney is the President of Alice Peck Day Memorial Hospital ("Hospital"). Defendant Alice Peck Day Lifecare Center, Inc. ("Lifecare"), a subsidiary of Alice Peck Day Hospital, owns and operates both The Woodlands and Harvest Hill, a 76-unit residential assisted living facility. Defendant Dartmouth-Hitchcock Health ("DHH") is the "controlling entity" of the Hospital and Lifecare. Doc. no. 1 at ¶ 6.

On February 15, 2018 Dr. Mooney terminated Martin.¹ That same day, she sent a memorandum to the 139 units at The Woodlands and Harvest Hill informing residents that Martin had been "terminated as the Administrator of The Woodlands because of a pattern of unprofessional conduct."

Doc. no. 1-1 (hereinafter "the Memo").

Two days later, the Valley News, a local newspaper, published a front-page story stating that Martin had been "fired" due to "a pattern of unprofessional behavior." Doc. no. 1-3 at 1. The article quoted a Hospital spokesperson who confirmed that Martin was no longer employed at The Woodlands but declined to comment on the reasons for Martin's departure, stating: "Per our policy, we will not comment any further about a personnel matter." Doc. no. 1-3 at 1. The personnel records page of the Hospital employee handbook states that: the Hospital "considers personnel files to be confidential"; access to personnel files is restricted; and information contained in a personnel file will only be released in limited circumstances. Doc. no. 1-2.

One week later, the Valley News published a second front-page story about Martin's termination stating Martin had been fired for "a pattern of unprofessional conduct." Doc. no. 1-3 at 2. The second article also reported that three of Martin's former co-workers had complained to management about Martin in 2015 after Martin purportedly initiated physical contact with a teenage co-worker.

Martin alleges that because of the "massive news involving the ‘Me Too’ movement," individuals who read or learned about the Memo were left to "wrongly assume the ‘unprofessional conduct’ phrase could only mean sexual assault or sexual harassment of female employees." Doc. no. 1 at ¶19. Martin contends defendants' actions have caused him public embarrassment, humiliation, and loss of income in his field.

In March 2019, Martin brought this action alleging four claims against all defendants: (I) Invasion of Privacy by Public Disclosure of Private Facts; (II) Invasion of Privacy by Intrusion Upon Seclusion; (III) Defamation; and (IV) Breach of Contract. Martin brings one additional claim against Dr. Mooney: (V) Intentional Infliction of Emotional Distress. Martin seeks compensatory and enhanced compensatory damages as well as attorney's fees and costs. The defendants move to dismiss, arguing both that Martin's claims lack facial plausibility and that DHH cannot be held liable for the purported misconduct. See Iqbal, 556 U.S. at 678, 129 S.Ct. 1937.

DISCUSSION

Before reaching the motion to dismiss on a claim-by-claim basis, the court first considers DHH's liability as a parent corporation.

I. DHH's Liability as a Parent Corporation

The court first considers whether DHH can be held liable in this case. Martin does not allege DHH directly committed any wrongdoing. Rather, Martin asserts DHH is liable because DHH is the "controlling entity" of the Hospital and Lifecare (doc. no. 1 at ¶ 6) and has the power to control the Hospital's board of trustees, approve the Hospital's budget, and terminate the Hospital's CEO.

"It is a general principle of corporate law deeply ingrained in our economic and legal systems that a parent corporation ... is not liable for the acts of its subsidiaries." United States v. Bestfoods, 524 U.S. 51, 61, 118 S.Ct. 1876, 141 L.Ed.2d 43 (1998) (quotation omitted); see also Leeman v. Boylan, 134 N.H. 230, 235-36, 590 A.2d 610 (1991) (holding a parent corporation is not vicariously liable solely because it owns a subsidiary). Nor does a parent company's "control" over a subsidiary, which may include "election of directors, the making of by-laws ... and the doing of all other acts incident to the legal status of stockholders," extend subsidiary liability to the parent company. See Bestfoods, 524 U.S. at 62, 118 S.Ct. 1876. In limited situations, a parent company may be held liable for the acts of its subsidiary; for example, if the corporate form is being used to accomplish a wrongful purpose such as fraud. Id.

Martin's complaint does not allege wrongdoing by DHH or include facts that support a reasonable inference that the corporate relationship between DHH and the Hospital is being used to accomplish a wrongful purpose. Therefore, the court dismisses all claims against DHH because the court cannot reasonably infer that DHH is liable for the alleged misconduct. See Iqbal, 556 U.S. at 678, 129 S.Ct. 1937.

II. Motion to Dismiss Counts I-V

The defendants have moved to dismiss each of Martin's five claims. The court considers each claim in turn.

A. Count I: Public Disclosure of Private Facts

In Count I, Martin alleges that defendants violated his privacy, and are liable for public disclosure of private facts, because Dr. Mooney informed residents that Martin had been terminated "because of a pattern of unprofessional conduct." Doc. no. 1 at ¶ 28. Under New Hampshire law, a party is liable for public disclosure of private facts if it (1) "gives publicity," (2) to "a matter concerning the private life of another," (3) when the matter publicized "would be highly offensive to a reasonable person," and (4) the matter is "not of legitimate concern to the public." Lovejoy v. Linehan, 161 N.H. 483, 486, 20 A.3d 274 (2011) (quoting Restatement (Second) of Torts § 652D ). Defendants move to dismiss, arguing Martin's complaint fails to plausibly allege the four elements of a public disclosure of private facts claim. The court addresses each element of this tort claim below.

1. Publicity

"Publicity" means making a matter public "by communicating it to the public at large, or to so many persons that the matter must be regarded as substantially certain to become one of public knowledge." Karch v. BayBank FSB, 147 N.H. 525, 535, 794 A.2d 763 (2002) (quotation omitted). Whether a disclosure of a private matter has become one of public knowledge "does not, as a matter of law, depend on the number of people told" and "is a conclusion best reached by the trier of fact." Id.

Defendants argue that Dr. Mooney did not "publicize" the Memo because she only sent it to the community residents, and not to the general public. Martin counters that Dr. Mooney's distribution of the Memo made it "substantially certain" that the information about Martin's termination would become public knowledge, as it indeed did, because Dr. Mooney sent the memo to over 100 people and it was foreseeable and predictable that one of them would disclose the Memo to the press.

In Karch, the New Hampshire Supreme Court held an employee had plausibly alleged the publicity element of a Public Disclosure of Private Facts claim when the employee's complaint alleged that the employer shared...