Doyle v. Hoyle Ins. CV-94-244-SD 03/14/95 UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF NEW HAMPSHIRE
Diana Doyle
v. Civil No. 94-244-SD
Wayne F. Hoyle; Hoyle Insurance Agency
O R D E R
In this diversity action, plaintiff Diana F. Doyle asserts
various state law claims against Hoyle Insurance Agency, Inc.,
and its president, Wayne F. Hoyle, based upon the defendants'
purported failure to obtain insurance for an apartment building
owned by plaintiff in Littleton, New Hampshire.
Presently before the court are defendants' motion for
partial summary judgment, two motions filed by defendants for
protective orders, plaintiff's motion to compel discovery, and
plaintiff's motion for an enlargement of time to produce expert
reports. Also before the court are defendant Wayne F. Hoyle's
motion for leave to file a reply brief and plaintiff's motion for
leave to file a supplemental memorandum, which are herewith
granted. Background
In December of 1992, plaintiff purchased an apartment
building in Littleton, New Hampshire, and retained Donald McStay
to manage the property. McStay's duties included obtaining
insurance coverage for the building.
In order to obtain insurance coverage for the Littleton
property, McStay contacted defendant Wayne F. Hoyle at the Hoyle
Insurance Agency in Wrentham, Massachusetts. Plaintiff alleges
that McStay "acguired a fire loss and liability protection binder
on the Littleton property" from Hoyle that "was effective for one
year, commencing on December 29, 1992." Complaint 55 8-9.
Plaintiff further alleges that "in several conversations with
McStay from December 1993 through February 1994, Defendant Hoyle
assured McStay that a fire loss and liability protection
insurance policy was forthcoming and that the Littleton property
continued to be covered." Id. 5 12.
On February 9, 1994, the Littleton property was destroyed by
fire. After receiving notification of the fire loss, Hoyle
Insurance Agency allegedly advised plaintiff's mortgagee that a
premium notice for an insurance policy on plaintiff's Littleton
property had been mailed to McStay on November 24, 1993, and that
the policy was canceled on January 28, 1994, due to nonpayment of
the premium. Complaint 55 15, 18. Plaintiff alleges that the
2 premium was mailed to the wrong address by the Hoyle Insurance
Agency and that neither plaintiff nor McStay received the premium
notice. Id. 55 15-16.
Plaintiff now brings suit against the defendants for breach
of contract, breach of express warranty, negligence, negligent
and intentional misrepresentation, and violation of the
Massachusetts Consumer Protection Act, M a s s . G e n . L. ch. 93A
(chapter 93A), which prohibits unfair and deceptive trade
practices.
Discussion
A. Defendants' Motion for Partial Summary Judgment
1. Summary Judgment Standard
Under Rule 56(c), Fed. R. Civ. P., summary judgment is
appropriate "if the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to a judgment
as a matter of law."
Summary judgment is a procedure that involves shifting burdens between the moving and the nonmoving parties. Initially, the onus falls upon the moving party to aver "'an absence of evidence to support the nonmoving party's case.'" Garside v. Osco Drug, Inc., 895 F.2d 46, 48 (1st Cir. 1990) (guoting Celotex Corp. v. Catrett, 477 U.S. 317, 325
3 (1986)). Once the moving party satisfies this requirement, the pendulum swings back to the nonmoving party, who must oppose the motion by presenting facts that show that there is a "genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986) (citing Fed. R. Civ. P. 56(e)) . . . .
LeBlanc v. Great American Ins. Co., 6 F.3d 836, 841 (1st Cir.
1993), cert, denied. ___ U.S. , 114 S. C t . 1398 (1994).
When a party fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party bears the burden of proof at trial, there can no longer be a genuine issue as to any material fact: the failure of proof as to an essential element necessarily renders all other facts immaterial, and the moving party is entitled to judgment as a matter of law.
Smith v. Stratus Computer, Inc., 40 F.3d 11, 12 (1st Cir. 1994)
(citing Celotex Corp., supra, 477 U.S. at 322-23).
In determining whether summary judgment is appropriate, the
court construes the evidence and draws all justifiableinferences
in the nonmoving party's favor. Anderson, supra, 477 U.S. at
255.
2. Personal Liability of Wavne F. Hoyle
Defendants move for summary judgment as to plaintiff's
breach of contract, breach of warranty, and unfair trade
practices claims on the ground that defendant Wayne F. Hoyle
4 cannot be held personally liable for said claims because he was
acting in his capacity as a corporate officer and employee of
Hoyle Insurance at all relevant times.1
a. The Contract Claims
Defendant Hoyle Insurance Agency, Inc., has operated as a
Massachusetts corporation since November 5, 1971. See
Certification of Incorporation (attached to Defendants' Motion as
Exhibit B ) . Defendant Wayne F. Hoyle is the President, the
Treasurer, and a stockholder of Hoyle Insurance.
[0]ne of the desirable and legitimate attributes of the
corporate form of doing business is the limitation of the
liability of the owners to the extent of their investment.'"
Ashland Lumber Co. v. Haves, 119 N.H. 440, 441, 402 A.2d 201, 202
(1979) (guoting Peter R. Previte, Inc. v. McAllister Florist,
Inc., 113 N.H. 579, 582, 311 A.2d 121, 123 (1973)). However, New
Hampshire courts have "'not hesitated to disregard the fiction of
the corporation as being independent of those who are associated
with it as stockholders'" when the circumstances of a particular
defendants' motion appears to move for summary judgment on all counts in the complaint, including the tort claims. However, in defendants' reply memorandum, defendants clarify that their motion for partial summary judgment does not include the tort claims. Reply Memorandum at 1. Accordingly, the court limits its discussion herein to plaintiff's contract and chapter 93A claims.
5 case warrant a piercing of the corporate veil. Id. (quoting
Previte, supra, 113 N.H. at 581, 311 A.2d at 123). Such
circumstances have been found to exist where the defendant has
"suppressed the fact of [his] incorporation or misled the
plaintiff as to the corporate assets," Previte, supra, 113 N.H.
at 582, 311 A.2d at 123, or where "the corporate identity has
been used to promote an injustice or fraud on the plaintiffs,"
Terren v. Butler, 134 N.H. 635, 639, 597 A.2d 69, 72 (1991)
(citing Druding v. Allen, 122 N.H. 823, 827, 451 A.2d 390, 393
(1982)) .2
Plaintiff contends that the corporate form should be
disregarded here because Hoyle was conducting his business out of
his home in Wrentham, Massachusetts, and because at no time did
Hoyle "advise" or "alert" McStay "that he was conducting business
with [McStay] merely as an agent for a corporation." Affidavit
of Donald McStay 5 5 (attached to Plaintiff's Objection as
Exhibit A ) .
New Hampshire courts will not disregard the corporate form
2A corporate officer may also "'make himself personally liable . . . for a corporate debt by an express agreement, provided the agreement is supported by valuable consideration.'" Ashland Lumber Co., supra, 119 N.H. at 441, 402 A.2d at 202 (quoting 3A W i l l i a m M. F l e t c h e r , F l e t c h e r 's C y c l o p e d i a o f t h e L a w o f P r i v a t e C o r p o r a t i o n s § 1119 (perm. ed. 1975)) [hereinafter F l e t c h e r 's C y c l o p e d i a o n C o r p o r a t i o n s ]) . However, there is no evidence that such an agreement was made here.
6 "solely because a corporation is a one-man operation." Village
Press v. Stephen Edward Co., 120 N.H. 469, 471, 416 A.2d 1373,
1375 (1980); see also 1 F l e t c h e r 's C y c l o p e d i a on Corporations § 25, at
514 (perm. ed. rev. vol. 1990) ("the close nature of the
corporation is not by itself enough to justify piercing the
corporate veil"). Similarly, the court here finds the fact that
Hoyle operated Hoyle Insurance Agency out of his home does not
warrant a piercing of the corporate veil.
The court further finds that Hoyle's purported failure to
"alert" or "advise" McStay that Hoyle Insurance Agency was
incorporated is not the eguivalent of suppressing the fact of
incorporation. New Hampshire law reguires a showing of
misrepresentation or fraudulent concealment of incorporation. No
such showing has been made by the plaintiff in response to
defendants' summary judgment motion. Indeed, attached to the
affidavit of defendant Wayne F. Hoyle are copies of several
letters between Hoyle Insurance and McStay and Doyle. All of
these letters, including those sent by McStay or Doyle to Hoyle,
clearly identify Hoyle Insurance as "Hoyle Insurance, Inc." or
"Hoyle Insurance Corp." Affidavit of Wayne F. Hoyle, Sr., 55 5-8
(attached to Defendants' Reply Memorandum). Based on the
evidence before it, the court finds that no reasonable jury could
conclude that defendant Wayne F. Hoyle suppressed from plaintiff
7 the fact that Hoyle Insurance was incorporated.
Plaintiff further asserts that defendants' failure to carry
errors and omissions insurance,3 coupled with the agency's likely
undercapitalization, amounts to fraud on the agency's customers.
However, plaintiff maintains that she has been unable to
determine the extent of the agency's undercapitalization because
defendants have delayed the taking of Hoyle's deposition.
Accordingly, plaintiff reguests, under Rule 56(f), Fed. R. Civ.
P., that defendants' motion be refused or continued for
additional discovery on the undercapitalization issue.
Rule 56(f) "describes a method of buying time for a party
who, when confronted by a summary judgment motion, can
demonstrate an authentic need for, and an entitlement to, an
additional interval in which to marshal facts essential to mount
an opposition." Resolution Trust Corp. v. North Bridge Assocs.,
Inc., 22 F.3d 1198, 1203 (1st Cir. 1994) .4 "A litigant who
defendants have stated in response to plaintiff's second set of interrogatories that they were not insured against loss for the damages attributed to them by plaintiff.
4The rule states, in full, that
[s]hould it appear from the affidavits of a party opposing the motion [for summary judgment] that the party cannot for reasons stated present by affidavit facts essential to justify the party's opposition, the court may refuse the application for judgment or may order a continuance to permit affidavits to be obtained or depositions to be taken or discovery to be had or may make such other order as is just. desires to invoke Rule 56(f) must make a sufficient proffer."
Id. This proffer must be "authoritative; it should be advanced
in a timely manner; and it should explain why the party is unable
currently to adduce the facts essential to opposing summary
judgment." Id. "[T]hese reguirements are not inflexible and . .
. district courts are vested with considerable discretion in
their administration. In the exercise of that discretion, one or
more of the reguirements may be relaxed, or even excused, to
address the exigencies of a given case." Id. (citation omitted).
Plaintiff has failed to support her Rule 56(f) reguest with
the reguired affidavit. However, in light of the fact that
plaintiff's failed attempt to depose Hoyle is well documented in
her motion to compel discovery, discussed infra pp. 14-16, the
court will exercise its discretion and overlook this failure.
Plaintiff's reguest is otherwise timely and properly details why
plaintiff is unable to present evidence regarding the defendant
corporation's purported undercapitalization.
Mindful that "[u]nless the movant has been dilatory, or the
court reasonably concludes that the motion is a stalling tactic
or an exercise in futility, it should be treated liberally," id.,
the court herewith grants plaintiff's Rule 56(f) reguest.
Plaintiff shall have 30 days from the date of this order to
Rule 56(f), Fed. R. Civ. P. depose defendant Wayne F. Hoyle and file a renewed response to
defendants' motion for summary judgment. Said response shall be
limited to the question of whether Hoyle should be held
personally liable for breach of contract or warranty because of
the corporation's undercapitalization. If defendants seek to
supplement their motion on this issue, they shall do so within
the same 30-day period.
b. Unfair and Deceptive Trade Practices
In Count I of her complaint, plaintiff asserts a claim for
unfair and deceptive trade practices in violation of chapter 93A.
Defendants move for summary judgment as to said claim, arguing
that defendant Wayne F. Hoyle cannot be held individually liable
for the allegedly deceptive acts of the defendant corporation.5
The court finds that resolution of this issue requires a
determination as to whether plaintiff's chapter 93A claim should
be treated as a tort claim or as a contract claim.
In Count I, plaintiff alleges that defendants, after
5In their reply brief, defendants also argue, under choice- of-law rules, that chapter 93A does not apply to this action. Although defendants reserved the right to object to the application of Massachusetts law to this action in their motion for summary judgment, defendants did not actually argue the choice-of-law issue as a basis for granting summary judgment. Accordingly, plaintiff did not have the opportunity to respond to such an argument in her objection, and the court declines to address the choice-of-law issue herein.
10 agreeing to obtain insurance for plaintiff's Littleton property,
"willfully and knowingly acted in an unfair and deceptive manner
by . . . assuring Plaintiff that the Littleton property was
covered by insurance, when it was not[, and] assuring Plaintiff
that a fire loss and liability insurance policy on the Littleton
property was forthcoming, when it was not." Complaint 5 27. The
remedies sought by plaintiff for this alleged violation of
chapter 93A include compensatory damages, multiple compensatory
damages, attorney's fees, and costs.
The court's review of the allegations contained in Count I
and the remedies sought therein leads the court to conclude that
plaintiff's chapter 93A claim is more akin to her tort claims
than to her contract claims. Accordingly, the court will treat
plaintiff's chapter 93A claim as a tort for the purpose of
determining whether Hoyle can be held individually liable. See,
e.g., Crellin Technologies, Inc. v. Eguipmentlease Corp., 18 F.3d
1, 11 (1st Cir. 1994) (holding that a chapter 93A claim should be
treated as a tort when the "chapter 93A claim and the reguested
remedy are highly analogous to a tort claim and remedy").
"It is well established that an officer of a corporation is
liable for any tort of the corporation in which he participates
or authorizes, even though he was acting for the corporation in
the commission of the tortious activity." Pacific & Atlantic
11 Shippers v. Schier, 109 N.H. 551, 553, 258 A.2d 351, 354 (1969)
See also Bolan v. Paragon Plastics, Inc., 754 F. Supp. 221, 228
(D. Mass. 1990) (holding that corporate officers can be held
liable under chapter 93A for participating in unfair and
deceptive practices). Accordingly, because Wayne F. Hoyle is
alleged to have personally participated in the tortious conduct
that forms the basis of plaintiff's chapter 93A claim, the court
finds that he can be held individually liable for that conduct.
Defendants' motion for summary judgment is therefore denied as to
Count I .
B. The Discovery Motions
The parties have filed a plethora of motions, objections,
and replies regarding the deposition of defendant Wayne F. Hoyle,
Sr., the deposition of Wayne Hoyle, Jr., and the inspection of
Hoyle Insurance Agency's computer files. The court addresses
each discovery dispute in turn.
1. Deposition of Wayne Hoyle, Jr.
On December 27, 1994, plaintiff noticed the deposition of
Wayne Hoyle, Jr.,6 for January 13, 1995, at the offices of
6Wayne Hoyle, Jr., is the son of defendant Wayne F. Hoyle and is an employee of defendant Hoyle Insurance. He is not a party to this action.
12 plaintiff's counsel in Hanover, New Hampshire. See Notice of
Deposition (attached to Defendants' Motion as Exhibit A ) . In
response thereto, defendants filed the instant motion for a
protective order under Rule 26(c), Fed. R. Civ. P.,7 to prevent
the deposition of Wayne Hoyle, Jr., on the ground that he was not
subpoenaed.
Rule 30(a)(1), Fed. R. Civ. P., permits a party to depose
"any person." However, if the person to be deposed is not a
party, his presence at a deposition cannot be compelled by using
a notice of deposition. Instead, the deposing party must
subpoena the nonparty deponent in accordance with Rule 45, Fed.
R. Civ. P.
Plaintiff contends that Wayne Hoyle, Jr.'s deposition was
properly noticed because Hoyle, Jr., should be considered a
"managing agent" of defendant Hoyle Insurance. However, Rule
30(b)(6) does not permit the plaintiff to choose the managing
agent who will speak on a defendant corporation's behalf. See
Rule 30(b) (6), Fed. R. Civ. P.; see also 8A C h a r l e s A. W r i g h t et
al ., Federal Practice and Procedure § 2103 (1994) [hereinafter W r i g h t &
7Rule 26(c) provides in pertinent part that "[u]pon motion by a party or by the person from whom discovery is sought . . . and for good cause shown, the court . . . may make any order which justice reguires to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense
13 M iller] .
A defendant corporation's failure or refusal to name a
specific employee as a managing agent under Rule 30(b)(6) does
not preclude a plaintiff from taking the deposition of such an
employee. However, the presence of such a person at a
deposition, as with any other nonparty, must be obtained by
subpoena rather than by notice of deposition. See Rules 30(a) (1)
and 30(b) (6), Fed. R. Civ. P.; see also 8A W r i g h t & M iller § 2103,
at 36-37.
Accordingly, defendants' motion for a protective order is
granted, and plaintiff's motion to compel the deposition of Wayne
Hoyle, Jr., is denied. If plaintiff wishes to depose Wayne
Hoyle, Jr., she must subpoena him in accordance with Rules
30(a) (1) and 45, Fed. R. Civ. P. With respect to the place of
said deposition, the court refers the parties to the limitations
set forth in Rules 45(b)(2) and 45(c)(3)(A)(ii).
2. Deposition of Defendant Wayne F. Hoyle, Sr.
defendant Wayne F. Hoyle, Sr., for January 12, 1995, at the
offices of plaintiff's counsel in Hanover, New Hampshire. See
Notice of Deposition (attached to Defendants' Motion as Exhibit
A) .
14 Defendant Hoyle Insurance moves for a protective order to
prevent plaintiff from compelling the deposition of Hoyle, Sr.,
in Hanover. Instead, defendant requests that said deposition
take place at the offices of Attorney Introcaso in Manchester,
New Hampshire; at the offices of Attorney O'Leary in Boston,
Massachusetts; or in Wrentham, Massachusetts, where Hoyle
Insurance is located. Defendants' Consolidated Memorandum at 11.
The party issuing a notice of deposition "may unilaterally
choose the place for deposing an opposing party, subject to the
granting of a protective order by the Court pursuant to Rule
26(c), Fed. R. Civ. P., designating a different place." Turner
v. Prudential Ins. Co. of America, 119 F.R.D. 381, 383 (M.D.N.C.
1988) (citing 8 W r i g h t & M iller § 2112, at 403); see also Payton v.
Sears. Roebuck & C o ., 148 F.R.D. 667, 669 (N.D. G a . 1993).
The first basis for defendants' motion is that Wayne F.
Hoyle, Sr., is being deposed under Rule 30(b)(6) as president of
Hoyle Insurance and the deposition of a corporation should
ordinarily be taken at its principal place of business. See 8A
W right & M iller § 2112, at 81-82; Salter v. Upjohn Co., 593 F.2d
649, 651 (5th Cir. 1979) . However, in light of this court's
partial ruling on defendant's motion for summary judgment, supra
pp. 10-12, Wayne F. Hoyle, Sr., remains a defendant in this
action. Further, plaintiff did not notice the deposition of
15 Hoyle Insurance Agency under Rule 30(b)(6); she noticed the
deposition of Wayne F. Hoyle, Sr. Accordingly, the court treats
plaintiff's notice of deposition as naming Hoyle to be deposed in
his individual capacity rather than as an officer designated to
testify on behalf of Hoyle Insurance under Rule 30(b)(6).
The second basis for defendants' motion is that reguiring
Hoyle "to travel well in excess of 100 miles to attend this
deposition places an undue burden on Mr. Hoyle, Sr. as he is
heavily involved in the day to day operation of his small
business." Defendants' Motion at 4.
Acknowledging that Hoyle Insurance is a small, closely held
corporation that reguires defendant Wayne F. Hoyle, Sr.'s daily
attention, and noting that plaintiff has exhibited some
willingness to alter the place of defendant's deposition to
ensure that said deposition take place, the court finds and rules
that the deposition of defendant Wayne F. Hoyle, Sr., shall take
place at the offices of Attorney Introcaso in Manchester, New
Hampshire, at a date and time mutually convenient to the parties
within 30 days of the date of this order.
3. Plaintiff's Notice of Inspection and Copying of Computer
Files
On January 23, 1995, plaintiff noticed the inspection and
16 copying of computer files at Hoyle Insurance relating to this
litigation. On February 2, 1995, plaintiff filed a motion to
compel this inspection.
Defendants object to plaintiff's motion as premature on the
ground that Rule 34(b), Fed. R. Civ. P., gives them 30 days to
serve a written response to plaintiff's reguested inspection.
The court agrees that plaintiff's February 2, 1995, motion to
compel was premature at the time it was filed. However, no other
objection to the inspection has been raised by the defendants,
and plaintiff represents in her reply brief dated February 24,
1994, that no response from defendants had been received as of
that date, which is just over 30 days from the date of the notice
of inspection.
Accordingly, the court will treat plaintiff's reply brief as
a timely renewal of her motion to compel the inspection.
Defendants shall have 10 days from the date of this order to file
an objection thereto or, in the alternative, to arrange for the
inspection to take place within 30 days of the date of this
order.
C. Plaintiff's Motion to Enlarge Time
Plaintiff moves for an enlargement of time to produce expert
reports from March 1, 1995, to June 1, 1995. Defendants pose no
17 objection to this motion. In light of the discovery problems
addressed herein, said motion is granted. Plaintiff shall
disclose her experts and produce the experts' written reports by
June 1, 1995. Defendants shall disclose their experts and the
experts' written reports by September 1, 1995.
Conclusion
For the reasons stated herein, defendants' motion for
partial summary judgment (document 14) is denied as to Count I.
The remainder of the motion shall be ruled on after receipt of
any additional submissions from the parties following the
deposition of defendant Wayne F. Hoyle. Defendants' motion to
file a reply brief (document 22) is granted; defendants' motion
for a protective order regarding Wayne Hoyle, Jr. (document 16)
is granted; defendants' motion for a protective order regarding
defendant Wayne F. Hoyle, Sr. (document 15) is granted;
plaintiff's motion to compel (document 19) is granted in part and
denied in part; plaintiff's assented-to motion for enlargement of
time (document 23) is granted; and plaintiff's motion for leave
to file a supplemental memorandum (document 24) is granted.
SO ORDERED.
Shane Devine, Senior Judge United States District Court
March 14, 1995
18 cc: Sheldon M. Katz, Esq. Anthony L. Introcaso, Esq. Edward P. O'Leary, Esq.