Bevill v. Sprint

2005 DNH 070

• Court: District Court, D. New Hampshire
• Decided: April 25, 2005
• Docket: 04-CV-406-SM
• Status: Published

Opinion

Bevill v . Sprint 04-CV-406-SM 04/25/05 UNITED STATES DISTRICT COURT

DISTRICT OF NEW HAMPSHIRE

Robert T . Bevill, Plaintiff

v. Civil N o . 04-cv-406-SM Opinion N o . 2005 DNH 070 Sprint Communications Co., L.P., Defendant

O R D E R

Pro se plaintiff, Robert Bevill, brings this diversity

action against Sprint Communications Company, L.P. (“Sprint”),

seeking damages for alleged acts of fraud, negligent

misrepresentation, and theft of proprietary information and trade

secrets. Sprint moves to dismiss all claims in Bevill’s

complaint, asserting that he has named the incorrect defendant,

Bevill lacks standing to assert those claims, and, in any event,

even if the proper party were advancing those claims, they are

barred by principles of res judicata and collateral estoppel.

Bevill objects. For the reasons set forth below, Sprint’s motion

to dismiss is granted. 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., Inc., 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) (“The issue presently before u s , however, is not

what the plaintiff is required ultimately to prove in order to

prevail on her claim, but rather what she is required to plead in

order to be permitted to develop her case for eventual

adjudication on the merits.”) (emphasis in original).

Notwithstanding this deferential standard of review,

however, the court need not accept as true a plaintiff’s “bald

assertions” or conclusions of law. See Resolution Trust Corp. v .

2 Driscoll, 985 F.2d 4 4 , 48 (1st Cir. 1993) (“Factual allegations

in a complaint are assumed to be true when a court is passing

upon a motion to dismiss, but this tolerance does not extend to

legal conclusions or to ‘bald assertions.’”) (citations omitted).

See also Chongris v . Board of Appeals, 811 F.2d 3 6 , 37 (1st Cir.

1987).

Here, in support of its motion to dismiss, Sprint relies on

a number of documents that were filed in substantially similar

litigation initiated by Bevill in the United States District

Court for the District of Kansas (e.g., the complaint, various

pleadings, the transcript of a judicial hearing, and a court

order), as well as filings made in Bevill’s personal bankruptcy

proceeding. Typically, a court must decide a motion to dismiss

exclusively upon the allegations set forth in the complaint (and

any documents attached to that complaint) or convert the motion

into one for summary judgment. See Fed. R. Civ. P. 12(b). There

i s , however, an exception to that general rule:

[C]ourts have made narrow exceptions for documents the authenticity of which are not disputed by the parties; for official public records; for documents central to plaintiffs’ claim; or for documents sufficiently referred to in the complaint.

3 Watterson v . Page, 987 F.2d 1 , 3 (1st Cir. 1993) (citations

omitted). See also Beddall v . State S t . Bank & Trust Co., 137

F.3d 1 2 , 17 (1st Cir. 1998). Since Bevill does not dispute the

authenticity of the documents on which Sprint relies, the court

may properly consider those documents without converting Sprint’s

motion into one for summary judgment.

Background

Beginning in late 1998, Bevill began negotiating with Sprint

(or one of its affiliates or subsidiaries) to supply certain

services to assist Sprint (or, again, one of its affiliates or

subsidiaries) in providing Internet access to military personnel

on various military bases in the United States. Subsequently, on

August 1 , 2000, The Bevill Company, a Delaware corporation (“BC-

Delaware”), entered into a “Master Services Agreement” with

Sprint/United Management Company, a Kansas Corporation (“SUMC”).

Bevill executed that contract on behalf of BC-Delaware, in his

capacity as president and chief executive officer. See Exhibit 5

to defendant’s memorandum.

4 The record suggests that, before the contract was executed,

BC-Delaware had been dissolved by the Delaware Secretary of

State. Accordingly, when Bevill signed the contract with SUMC,

ostensibly on behalf of BC-Delaware, that corporation was no

longer in existence. In an effort to explain that situation,

Bevill poses two somewhat conflicting scenarios. First, he

claims to have executed the contract with the intent to assign

all rights under it to a yet-to-be-created company by the same

name, which he intended to incorporate (and subsequently did

incorporate) in the State of New Hampshire - The Bevill Company,

Inc. (“BC-New Hampshire”). The record i s , however, devoid of any

suggestion that Bevill and/or BC-Delaware ever assigned his/its

rights under the contract to BC-New Hampshire.

Alternatively, Bevill suggests that the contract simply

contained a typographical error and improperly recited the state

of incorporation for the Bevill Company as Delaware, rather than

New Hampshire. In other words, says Bevill, the contract

identified a Delaware company that once existed, but had been

dissolved, when it should have identified a yet-to-be created New

Hampshire Company. The United States District Court for the

5 District of Kansas appears to have adopted this interpretation of

the relevant events.

At the time of the Agreement’s execution, [BC- Delaware’s] incorporation was inoperative and, in effect, the company was nonexistent. Also at that time, M r . Bevill was acting as the incorporator or promoter of the to-be-formed New Hampshire corporation. True to the intent, a few weeks later M r . Bevill incorporated [BC-New Hampshire] under the laws of New Hampshire. [BC-New Hampshire] then undertook acts consistent with performance under the Agreement, including leasing equipment and installing circuitry on military bases. The court finds that [BC-New Hampshire] ratified and adopted the contract by undertaking a portion of the performance thereunder.

The Bevill Company, Inc. v . Sprint/United Mngt. Co., 2004 WL

2278582 (D. Kan. Sept. 2 , 2004).

Between August 1 , 2000 and November 2 , 2001, Bevill claims

that he (presumably as an employee or agent of BC-New Hampshire)

provided SUMC with services valued at more than $500,000.00. On

October 2 3 , 2001, SUMC informed Bevill that it was terminating

its contract with BC-Delaware (the corporate entity with which it

believed it had contracted). When SUMC subsequently learned that

BC-Delaware was not in existence at the time Bevill executed the

contract on its behalf, SUMC notified Bevill of that additional

6 basis for terminating the contract. See Exhibit 1 to defendant’s

memorandum.

Approximately one year later, on November 1 , 2002, Bevill

says he filed suit against SUMC in the United States District

Court for the District of Kansas (the “Kansas case”). 1 In that

suit, BC-New Hampshire alleged that SUMC breached the parties’

contract by improperly terminating i t . In the alternative, BC-

New Hampshire sought damages on a quantum meruit theory of

recovery. The court concluded that SUMC had terminated the

contract in compliance with its termination provisions, and held

that BC-New Hampshire was not entitled to damages under a quantum

meruit theory. Accordingly, it denied BC-New Hampshire’s request

for injunctive relief and granted SUMC’s motion for summary

judgment. That decision is now on appeal to the Court of Appeals

for the Tenth Circuit.

1 That suit was actually brought by BC-New Hampshire, an entity of which Bevill says he is the “alter ego.” The fact that Bevill says that h e , rather than the corporation, “brought suit” in Kansas, illustrates one of the pervasive problems in this case : Bevill’s apparent confusion between his own legal rights and obligations and those of the distinct corporate entities he has created.

7 Undeterred, Bevill filed this litigation, alleging that

Sprint, while not a party to the contract between SUMC and the

Bevill Company, was the real party in interest. Moreover, Bevill

claims that two Sprint employees were active in the contract

negotiations and negligently misrepresented material facts and

fraudulently induced him (presumably on behalf of one of the two

corporate entities known as the Bevill Company) to enter into the

contract with SUMC. Bevill says he discovered the fraud on

November 9, 2001 (approximately one week after he filed the

Kansas case) and, therefore, asserts that his current claims have

been brought within the pertinent limitations period.

Sprint, on the other hand, asserts that Bevill has named the

wrong defendant in this suit, pointing out that it was never a

party to the underlying contract. Moreover, Sprint asserts that

any claims arising out of the contract (or its formation) belong

to the corporate entity that actually entered into the contract,

not M r . Bevill himself. Finally, says Sprint, in light of the

prior Kansas litigation, the claims Bevill seeks to advance in

this case are barred by the doctrine of res judicata and

principles of collateral estoppel.

8 Discussion

Despite Bevill’s assertion that he is the “alter ego” of

both the New Hampshire and Delaware corporations, he lacks

authority to pursue claims in his individual capacity that belong

to those corporate entities. I f , as Bevill claims, one of those

corporations was fraudulently induced to enter into the contract

with SUMC, then the corporation itself, and not Bevill, is the

proper party to bring suit. As the Court of Appeals for the

First Circuit has observed, “[T]he [alter ego] doctrine is

thought to be equitable in nature. Consequently, it can be

invoked only where equity requires the action to assist a third

party.” Intergen N.V. v . Grina, 344 F.3d 1 3 4 , 149 (1st Cir.

2003) (citation and internal punctuation omitted) (emphasis

supplied). See also Mass. Carpenters Cent. v . A.A. Bldg.

Erectors, Inc., 343 F.3d 1 8 , 21-22 (1st Cir. 2003) (observing

that the alter ego doctrine is “a tool to be employed when the

corporate shield, if respected, would inequitably prevent a party

from receiving what is otherwise due and owing from the person or

persons who have created the shield.”) (emphasis supplied).

9 Here, by asserting that he is the “alter ego” of the New

Hampshire and Delaware corporate entities, Bevill seems to

suggest that he has disregarded the corporate form to such a

degree that it would, under appropriate circumstances, be lawful

to pierce the corporate veil(s) and impose upon him personal

liability for what would traditionally be viewed as corporate

obligations. That may or may not be accurate. But, this much

can be said with confidence: Bevill cannot invoke the alter ego

doctrine in an effort to personally assert claims or causes of

action which, in reality, belong to the corporation(s). See,

e.g., McCarthy v . Azure, 22 F.3d 3 5 1 , 363 (1st Cir. 1994) (“As

appellant is not even arguably an innocent third party

disadvantaged by someone else’s blurring of the line between a

corporation and the person who controls i t , but, rather, is

himself the one who is claimed to have obscured the line, he

cannot be permitted to use the alter ego designation to his own

behoof.”).

So it is in this case. As the party who admittedly blurred

the line between the corporations and himself, Bevill cannot

invoke the corporate alter ego doctrine in an effort to impose

10 liability on Sprint (or its employees, corporate parents, or

affiliates). In short, Bevill lacks standing to assert claims on

behalf of either BC-Delaware or BC-New Hampshire. Accordingly,

defendant’s motion to dismiss must be granted.

Parenthetically, the court notes that even if Bevill were

permitted to amend his complaint to add a party-plaintiff at this

point, such an amendment would be futile. Presumably, the way to

cure the defect in his complaint would be to add as plaintiffs

one or both of the corporate entities over which he exercises

control (to the extent they are still in existence). But, if he

were to do s o , the claims to be asserted by those entities (e.g.,

fraudulent inducement and negligent misrepresentation) would be

barred by principles of collateral estoppel and res judicata,

given the outcome of previous litigation in the United States

District Court for the District of Kansas.

Conclusion

For the forgoing reasons, as well as those set forth in

defendant’s memorandum of law, defendant’s motion to dismiss

11 (document n o . 11) is granted. The Clerk of Court shall enter

judgment in accordance with this order and close the case.

SO ORDERED.

Steven J. McAuliffe Chief Judge

April 2 5 , 2005

cc: Robert T . Bevill, pro se Mark D. Hinderks, Esq. R. Matthew Cairns, Esq.