Bens Auto v . Teitelbaum, et a l . 08-CV-207-SM 12/15/08 UNITED STATES DISTRICT COURT
DISTRICT OF NEW HAMPSHIRE
Ben’s Auto Body, Inc., Plaintiff
v. Civil N o . 08-cv-207-SM Opinion N o . 2008 DNH 208 Ben Teitelbaum and Patricia A . Kafka, Defendants
O R D E R
In April of 2008, Ben’s Auto Body, Inc. filed a five-count
writ of summons in Rockingham County (New Hampshire) Superior
Court against defendants Ben Teitelbaum and Patricia Kafka, both
of whom are residents of Maine. Defendants then removed the
proceeding, invoking this court’s diversity subject matter
jurisdiction. See 28 U.S.C. §§ 1332, 1441. They now move to
dismiss each of plaintiff’s claims, asserting that none states a
viable cause of action. See Fed. R. Civ. P. 12(b)(6). Plaintiff
objects.
Standard of Review
When ruling on a motion to dismiss under Fed. R. Civ. P.
12(b)(6), the court must “accept as true the well-pleaded factual
allegations of the complaint, draw all reasonable inferences
therefrom in the plaintiff’s favor and determine whether the
complaint, so read, sets forth facts sufficient to justify recovery on any cognizable theory.” Martin v . Applied Cellular
Tech., 284 F.3d 1 , 6 (1st Cir. 2002). Dismissal is appropriate
only if “it clearly appears, according to the facts alleged, that
the plaintiff cannot recover on any viable theory.” Langadinos
v . American Airlines, Inc., 199 F.3d 6 8 , 69 (1st Cir. 2000). See
also Gorski v . N.H. Dep’t of Corr., 290 F.3d 466, 472 (1st Cir.
2002). Notwithstanding this deferential standard of review,
however, the court need not accept as true a plaintiff’s “bald
assertions” or conclusions of law. Resolution Trust Corp. v .
Driscoll, 985 F.2d 4 4 , 48 (1st Cir. 1993) See also Chongris v .
Board of Appeals, 811 F.2d 3 6 , 37 (1st Cir. 1987).
Background
Assuming the allegations set forth in plaintiff’s complaint
are true, the pertinent facts are as follows. In March of 2008,
Sheila Orr brought her vehicle to plaintiff’s shop for repairs.
She then filed a claim under her automobile insurance policy,
which had been issued by AAA Insurance. Defendants, both of whom
are employed by AAA Insurance, were assigned to handle the claim.
Patricia Kafka is an insurance adjuster and Ben Teitelbaum is an
appraiser supervisor.
Plaintiff asserts that the defendants (without specifying
which particular defendant) “stated to M s . Orr that the Plaintiff
2 was overcharging for the repairs by some $850 in labor costs and
that M s . Orr must take her vehicle to another repair shop, namely
George’s Auto Body of Portsmouth, New Hampshire” - an automobile
repair facility with which AAA allegedly had an agreement “for
the repair of motor vehicles at a reduced rate.” Complaint at
paras. 6 and 9. M s . Orr reportedly told defendants that
plaintiff had already begun making the repairs to her car and she
wanted plaintiff to complete them. Defendants allegedly
responded by informing M s . Orr that she “would have to pay the
difference out of her own pocket if she did not take the vehicle
to George’s Auto Body.” Id. at para. 7 . In the end, plaintiff
says “the disputed difference was less than $200.” Id. at para.
8.
Subsequently, plaintiff filed this action advancing five
claims against the two named employees of AAA Insurance: unfair
insurance trade practices, in violation of N.H. Rev. Stat. Ann.
(“RSA”) ch. 417 (count o n e ) ; intentional interference with
contractual relations (count t w o ) ; defamation (count three);
violations of New Hampshire’s Consumer Protection Act, RSA ch.
358-A (count four); and violations of New Hampshire’s Anti-trust
Act, RSA ch. 356 (count five). As noted above, defendants move
to dismiss each of plaintiff’s claims for failure to state a
viable cause of action.
3 Discussion
There are four critical allegations in plaintiff’s brief
complaint that are central to each of plaintiff’s causes of
action. It i s , then, probably appropriate to set them out
verbatim. They are as follows:
On or about March 1 7 , 2008, the Defendants stated to M s . Orr that the Plaintiff was overcharging for the repairs by some $850 in labor costs and that M s . Orr must take her vehicle to another repair shop, namely George’s Auto Body of Portsmouth, New Hampshire.
M s . Orr Protested that she wanted the Plaintiff to repair her vehicle and that the work had already begun; however, the Defendants stated that M s . Orr would have to pay the difference out of her own pocket if she did not take the vehicle to George’s Auto Body.
In truth, the disputed difference was less than $200, and was resolved by the Plaintiff.
Upon information and belief, AAA Insurance [defendants’ employer] has entered into an agreement with George’s Auto Body for the repair of motor vehicles at a reduced rate.
Complaint at paras. 6-9.
I. Count One - Unfair Insurance Practices.
In count one of its complaint, plaintiff asserts that
defendants engaged in unfair insurance trade practices, in
violation of RSA ch. 4 1 7 , “by making untrue and disparaging
statements about Plaintiff, including but not limited to
statements indicating that Plaintiff overcharges for repairs, in
4 order to coerce M s . Orr to use an automobile repair shop other
than Plaintiff.” Complaint at para. 1 4 . Under limited and very
specific circumstances, RSA ch. 417 provides “consumers” with a
private right of action against “suppliers” of insurance who have
caused them harm. See RSA 417:8 (defining “consumer” and
“supplier”) and RSA 417:19 (establishing a limited private right
of action for consumers). Importantly, however, plaintiff is not
a “consumer,” as that term is defined in the act. Plaintiff
concedes as much.
Acknowledging that it lacks any express statutory cause of
action against defendants, plaintiff asserts that RSA ch. 417
provides it with an implied private right of action. But,
plaintiff has failed to point to any language in the statute
itself or its legislative history suggesting that the legislature
intended to create such an implied right of action. See
generally Marquay v . Eno, 139 N.H. 7 0 8 , 714-16 (1995). Moreover,
in a similar case filed by plaintiff against a different
defendant, this court (Barbadoro, J.) has expressly rejected
plaintiff’s assertion that RSA ch. 417 creates an implied private
right of action.
Plaintiff bases Count I and II of its complaint on alleged violations of N.H. Rev. Stat. Ann. § 417:3. While the New Hampshire legislature has authorized consumers to recover damages for violations of § 417:3 in certain circumstances, it did not expressly
5 authorize other private actors to recover damages. Nor has the plaintiff pointed to any evidence that the legislature intended to authorize such actions by implication. Neither the New Hampshire Constitution nor New Hampshire common law authorizes implied private rights of action under such circumstances.
Ben’s Auto Body, Inc. v . Progressive Alliances Ins. Agency, Civ.
n o . 07-cv-417-PB (D.N.H. April 2 4 , 2008) (citation omitted).
Count one of plaintiff’s complaint fails to state a viable
cause of action.
II. Count Two - Intentional Interference with Contractual Relations.
Next, plaintiff asserts that defendants intentionally and
improperly interfered with its ongoing economic relationship with
M s . Orr by making false and disparaging statements designed to
induce M s . Orr to end her business relationship with plaintiff.
Moreover, says plaintiff, defendants’ wrongful conduct likely
caused it to lose “numerous other customers it would have had but
for the intentional, illegal and improper conduct of Defendants.”
Complaint at para. 2 1 .
Count two of plaintiff’s complaint is ambiguous and it is
unclear precisely what cause of action it is advancing, since it
not only addresses plaintiff’s contractual relationship with M s .
Orr, but also claims that plaintiff may have lost other (unknown)
6 customers as a result of defendants’ conduct. As defendants have
noted, “Plaintiff’s claim for tortious interference with business
relationships resembles two torts recognized in New Hampshire:
tortious [or intentional] interference with contractual
relations, and intentional interference with a prospective
contractual relationship.” Defendants’ memorandum (document n o .
4-2) at 7 (citations omitted). That ambiguity was, however,
resolved when, in its objection to defendants’ motion to dismiss,
plaintiff clearly stated that it is advancing a claim for
“intentional interference with contractual relations.”
Plaintiff’s memorandum (document n o . 7-2) at 5 .
To state a viable claim for intentional interference with
contractual relations, plaintiff must allege that it had a
contractual relationship with M s . Orr; that the defendants were
aware of that contractual relationship; that defendants
wrongfully induced M s . Orr to breach her agreement with the
plaintiff; and that any damages claimed were proximately caused
by defendants’ interference with that relationship. See Barrows
v . Boles, 141 N.H. 3 8 2 , 392-93 (1996); Roberts v . General Motors
Corp., 138 N.H. 5 3 2 , 539 (1994); Montrone v . Maxfield, 122 N.H.
724, 726 (1982). In support of their motion to dismiss,
defendants assert that plaintiff has failed to adequately allege:
(1) that they wrongfully induced M s . Orr to breach her agreement
7 with plaintiff or that they “improperly” interfered with
plaintiff’s business relationship with M s . Orr in any way; or (2)
that defendants’ wrongful conduct proximately caused plaintiff to
suffer damages that are properly recoverable under that cause of
action.
Even viewing the factual allegations set forth in the
complaint in the light most favorable to plaintiff and extending
it the full benefit of liberal pleading rules, the court is still
compelled to conclude that the complaint fails to state a viable
cause of action for intentional interference with contractual
relations. Among other deficiencies, the complaint fails to
allege that, as a proximate result of defendants’ allegedly
improper conduct, M s . Orr breached the agreement she had with
plaintiff to perform repairs to her vehicle. To the contrary,
the complaint affirmatively acknowledges that M s . Orr ignored
defendants’ suggestion that she take her vehicle to a different
repair facility and, instead, fulfilled her contractual
obligation to plaintiff by paying for the necessary repairs, in
full. Consequently, count two of the complaint fails to
adequately allege each of the essential elements of a viable
cause of action for intentional interference with contractual
relations.
8 III. Count Three - Defamation.
Next, the complaint asserts that defendants “made false and
defamatory statements concerning Plaintiff to M s . Orr, including
but not limited to statements indicating that Plaintiff
overcharges for repairs and charges for unnecessary labor.”
Complaint at para. 2 5 . In response, defendants say the specific
statement attributed to them - that plaintiff was overcharging
M s . Orr for the repairs by $850 in labor costs - constitutes an
expression of opinion and, therefore, is not actionable. See,
e.g., Thomas v . Telegraph Publishing Co., 155 N.H. 3 1 4 , 338-39
(2007); Nash v . Keene Publishing Corp., 127 N.H. 2 1 4 , 219 (1985).
Defendants also assert that the statement constitutes a
privileged communication between an insurance company and its
insured, specifically authorized by New Hampshire’s statute
governing insurance trade practices. That statute provides that:
Nothing shall prohibit any insurance company, agent or adjuster from providing to such insured person or entity the name of an automobile glass company or automobile repair company with which arrangements may have been made with respect to automobile glass or repair prices or services. If a name is provided, there must be disclosure by the insurance company, agent or adjuster to the insured person or entity that any other automobile glass company or automobile repair company or location may be used at the discretion of the insured person or entity. However, the insurer may limit payment for such work based on the fair and reasonable price in the area by repair shops or facilities providing similar services with the usual
9 and customary guarantees as to materials and workmanship.
RSA 417:4 XX(c).
As a preliminary matter, the court must determine “whether
the language in question could reasonably have been read to
defame the plaintiff.” Duchesnaye v . Munro Enterprises, 125 N.H.
244, 252-53 (1984). See also Thomson v . Cash, 119 N.H. 3 7 1 , 374
(1979) (“The threshold question for this court is whether the
published words are reasonably capable of conveying the
defamatory meaning or innuendo ascribed to them by the
plaintiff.”) (citation omitted). Then, “[o]nce the court has
made this determination about possible meaning and application, a
jury or court as finder of fact must determine whether the
language was actually communicated and understood in the possible
defamatory sense.” Duchesnaye, 125 N.H. at 253.
Here, the operative word in question - “overcharge” - is
capable of several, subtly different meanings. On one hand, a
reasonable audience might plausibly conclude that defendants were
merely pointing out that plaintiff was charging more than his
competitors for comparable services - a fact borne out by the
complaint’s acknowledgment that plaintiff apparently charged M s .
Orr approximately $200 more for the repairs than the price AAA
10 Insurance had negotiated with George’s Auto Body. On the other
hand, however, the word “overcharge” can carry a distinctly
negative connotation, suggesting that the actor is behaving
improperly, unfairly, unscrupulously, and perhaps even illegally.
See, e.g., Dodson v . Morgan Stanley DW, Inc., 2007 WL 3348437 at
*14 (W.D. Wash. Nov. 8 , 2007) (holding that defendant’s statement
that plaintiff was “overcharging” her clients could “reasonably
be interpreted as implying that Plaintiff’s charging practices
were improper and possibly in violation of . . . applicable
law.”). Consequently, depending upon the context in which it was
used - an issue that can be explored in discovery and perhaps
resolved on summary judgment - the word “overcharge” is capable
of defamatory meaning.
It naturally follows, then, that the court cannot conclude
that, as a matter of law, the statement attributed to defendants
constitutes non-actionable opinion. See, e.g., Pease v .
Telegraph Publishing Co., 121 N.H. 6 2 , 65 (1981) (“Whether an
allegedly libelous statement is an opinion or an assertion of
fact is a matter of law to be determined by the trial court in
the first instance. Where, however, an average reader could
reasonably understand the statement in either sense, the issue
may properly be left to the jury’s determination.”) (citations
omitted). Depending upon the context in which that statement was
11 made, it is possible that it could have been understood to imply
the existence of defamatory facts as the basis for the opinion
(e.g., that defendants were aware of facts that prompted them to
conclude that plaintiff was dishonestly, unscrupulously, and/or
unlawfully charging customers more than they were entitled to
charge). See, e.g., Thomas, 155 N.H. at 338-39; Nash, 127 N.H.
at 219.
Finally, while RSA ch. 417 authorizes insurance companies to
inform their insureds of the existence of other repair
facilities, with whom arrangements have been made to complete all
necessary repairs within the amount allotted for such repairs by
the insurer, that statute plainly does not authorize insurers to
utter defamatory statements in the context of such
communications.
Parenthetically, the court notes that, for purposes of
ruling on defendants’ motion to dismiss, it has assumed that one
(or perhaps even both) of the defendants actually used the word
“overcharge” when speaking with M s . Orr. The complaint is not
clear on that point. For example, it does not specifically
attribute the statement to either particular defendant, nor does
it purport to quote the precise language that the defendant(s)
used.
12 IV. Count Four - Violation of the Consumer Protection Act.
Plaintiff’s complaint fails to state a viable claim under
New Hampshire’s Consumer Protection Act, RSA ch. 358-A, because
that statute exempts from its provisions “[t]rade or commerce
that is subject to the jurisdiction of the . . . insurance
commissioner.” RSA 358-A:3 I . But, says plaintiff, its claim
under the Consumer Protection Act should not be precluded because
the statute governing insurance practices does not give it an
adequate remedy (or any remedy at a l l ) . That argument has,
however, been addressed and rejected by the New Hampshire Supreme
Court, which held:
The statutory exemption to the [Consumer Protection] Act, however, does not require that remedies available to aggrieved consumers under qualifying regulatory schemes be identical to those provided in the Act. Rather, it is sufficient that the regulatory scheme protects consumers from fraud and deception in the marketplace in a manner calculated to avoid the same ills as RSA chapter 358-A.
Averill v . Cox, 145 N.H. 3 2 8 , 334 (2000) (citations and internal
punctuation omitted) (emphasis in original).
V. Count Five - Restraint of Trade.
Finally, plaintiff’s complaint fails to state a viable claim
against defendants for restraint of trade, in violation of New
Hampshire’s Anti-trust statute, RSA ch. 356. Among other things,
that statute provides that “[a]ctivities of and arrangements
13 between persons shall be exempt from this chapter if such are
permitted, authorized, approved, required, or regulated by a
regulatory body acting under a federal or state statutory scheme
or otherwise actively supervised by a regulatory agency.” RSA
356:8-a. Plainly, the activities of the defendants and their
employer, AAA Insurance, are supervised and regulated by the New
Hampshire Insurance Commissioner. Moreover, as noted above, the
statute governing insurance practices in New Hampshire
specifically contemplates that insurance companies may engage in
the very conduct of which plaintiff complains - that i s , entering
into arrangements with automotive repair facilities establishing
the amounts that such facilities will charge when services are
provided to one of the company’s insureds. See RSA 417:4 XX(c).
Conclusion
For the foregoing reasons, as well as those set forth in
defendants’ memoranda (documents n o . 4-2 and 9 ) , plaintiff’s
complaint fails to state viable causes of action for violations
of RSA ch. 417 (count o n e ) , intentional interference with
contractual relations (count t w o ) , violation of New Hampshire’s
Consumer Protection Act (count four), and violation of New
Hampshire’s anti-trust statute (count five). Count three of
plaintiff’s complaint, however, is minimally sufficient to state
14 a viable claim for defamation and survive defendants’ motion to
dismiss.
Defendants’ motion to dismiss (document no. 4) is, then,
granted in part and denied in part. Counts 1, 2, 4, and 5 of
plaintiff’s complaint are dismissed for failure to state viable
causes of action. In all other respects, defendants’ motion is
denied.
SO ORDERED.
Steven J. McAuliffe /Chief Judge
December 15, 2008
cc: Earl L. Kalil, Jr., Esq. Christopher E. Ratte, Esq. Daniel E. Will, Esq.