ADEK Tech Sales v. Accord

2002 DNH 019

• Court: District Court, D. New Hampshire
• Decided: January 22, 2002
• Docket: CV-01-388-B
• Status: Published

Opinion

ADEK Tech Sales v. Accord CV-01-388-B 01/22/02 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

ADEK Technical Sales, Inc., and Edward King

v. Civil No. No. 1:Ol-cv-00388-B Opinion No. 2002 DNH 019 Accord Marketing & Sales, Inc., Applied Motion Solutions, Inc., and Robert Dacey

MEMORANDUM AND ORDER

This is a dispute between sellers and marketers of

"industrial and motion control products" (the individual

defendants are officers of the corporate entities with which they

are aligned) that has been removed to federal court on grounds of

diversity jurisdiction, 28 U.S.C. § 1332(a). In their writ of

summons, plaintiffs ADEK Technical Sales, Inc. ("ADEK"), and

Edward King allege that defendants Accord Marketing & Sales, Inc.

("Accord"), Applied Motion Solutions, Inc. ("AMS"), and Robert

Dacey caused them damage by failing to honor the terms of a Joint

Marketing Agreement ("Agreement") which, according to plaintiffs,

ADEK and Accord entered into "for the purpose of cooperating

together with respect to the marketing and sale of electro- mechanical and electronic equipment and related products as

authorized manufacturers' representatives under the name 'AMS

Associates' in an area that included New Hampshire." Writ of

Summons, 1 12. Defendants admit that ADEK has earned and is

entitled to certain funds under the Agreement and a separate

contract entered into by the parties, but allege that all such

funds have either been paid or are subject to set-off and

counterclaim under that separate contract.

Defendants have moved to dismiss Count IV (fraud) and Count

VI (breach of the obligation of good faith and fair dealing

prescribed by N.H. Rev. Stat. Ann. ("R.S.A.") § 382-A:l-203) of

plaintiffs' writ. With respect to Count IV, defendants assert

that the writ does not plead the alleged fraud with the

particularity called for by Fed. R. Civ. P. 9(b). With respect

to Count VI, defendants assert that the Agreement, as it is

described in 5 12 of the writ, is not a "contract" within the

meaning of R.S.A. § 382-A:l-203 (implying an obligation of good

faith into every contract or duty governed by New Hampshire's

Uniform Commercial Code "U.C.C."). Plaintiffs counter that the

heightened pleading standards of Rule 9 (b) do not apply because

the case was originally filed in state court, and that whether

- 2 - the Agreement is a U.C.C. contract "is a matter to be determined

by the trier of fact after trial and not by a pretrial motion to

dismiss." Plaintiffs' responses are not persuasive.

Even if I were assume arguendo that Rule 9 (b) does not

apply. Count IV is subject to dismissal. Under New Hampshire

law, "[a] plaintiff cannot allege fraud in general terms, but

must specifically allege the essential details of the fraud and

the facts of the defendants' fraudulent conduct." Snierson v.

Scruton, 145 N.H. 73, 77 (2000) (citing Proctor v. Bank of N.H.,

123 N.H. 395, 399 (1983)). Count IV of the writ, which asserts

only that "Robert Dacey fraudulently caused the termination of

the Joint Marketing Agreement ... in order to place himself in

a position whereby he could obtain possession of and retain

commissions which rightfully belong to [plaintiffs]," falls well

short of alleging the essential details of the fraud and the

facts of the fraudulent conduct.

Count VI is similarly inadequate. By pleading a violation

of the obligation of good faith read into U .C .C .-governed

contracts, plaintiffs necessarily take the position that the

Agreement is governed by the U.C.C. But it does not appear, at

least from the face of the writ, that the Agreement is a contract

- 3 - of sale, a lease, a negotiable instrument, a contract involving a

bank deposit or collection, a contract to transfer funds, a

letter of credit, a warehouse receipt or bill of lading, a

contract involving an investment security, or a contract

involving a secured transaction. See generally R.S.A. chapter

382-A. That being the case, plaintiffs cannot deflect

defendants' motion with a conclusory assertion that the Agreement

will be found to be a U.C.C. contract by the trier of fact.

For the reasons stated, I grant defendants' motion to

dismiss [document no. 7]. But I do so without prejudice to

plaintiffs filing an amended complaint curing the defects

identified herein.

SO ORDERED.

Paul Barbadoro Chief Judge

January 22, 2002

cc: David C. Engel, Esq. James C. Wheat, Esq.

- 4 -