Hamann v. Carpenter

937 F.3d 86

• Court: Court of Appeals for the First Circuit
• Decided: September 5, 2019
• Docket: 19-1075P
• Status: Published

Opinion

United States Court of Appeals For the First Circuit

No. 19-1075

THOMAS HAMANN,

Plaintiff, Appellant,

v.

STUART A. CARPENTER; COPLEY MOTORCARS CORPORATION; LESLIE H. WEXNER,

Defendants, Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Allison D. Burroughs, U.S. District Judge]

Before

Thompson, Kayatta, and Barron, Circuit Judges.

George W. Kramer for appellant. Matthew S. Zeiger, with whom Zeiger Tigges & Little LLP, Robert R. Berluti, and Berluti McLaughlin & Kutchin LLP were on brief, for appellees.

September 5, 2019 KAYATTA, Circuit Judge. Thomas Hamann alleges that he

was denied the fruits of a profitable exclusive-seller agreement

for the sale of a 1953 Ferrari automobile when defendant Stuart

Carpenter caused the breach of that agreement by threatening

economic harm to the other party to the contract. Hamann brought

this suit, including claims of tortious interference with an

advantageous business relationship, tortious interference with an

existing contract, and violations of Massachusetts's Consumer

Protection Law, Mass. Gen. Laws ch. 93A, § 11, in the U.S. District

Court for the District of Massachusetts. The district court

dismissed with prejudice Hamann's claims, reasoning that Hamann

had failed to plausibly allege an improper motive underlying

Carpenter's interference with Hamann's contract and concluding

that Carpenter's alleged improper means of interfering with that

contract amounted to nothing more than "[t]ough negotiating." We

now reverse in part and affirm in part that decision.

I.

Because the district court dismissed Hamann's complaint

on a Rule 12(b)(6) motion to dismiss, we take the nonconclusory,

nonspeculative facts contained in the complaint as true and draw

all reasonable inferences from those facts in Hamann's favor. See

Barchock v. CVS Health Corp., 886 F.3d 43, 48 (1st Cir. 2018).

At issue in this appeal is a rare 1953 Ferrari 375MM

Pininfarina Spyder ("the Ferrari"), a highly sought-after prize

- 2 - for the car enthusiast with the means to afford the significant

bounty needed to acquire one. Emilio Gnutti, an Italian collector

who originally owned the Ferrari, agreed to sell the car to

Vincenzo Scandurra, an Italian national living in Monaco who

intended to resell it (presumably at a profit). Scandurra paid

Gnutti a large deposit for the Ferrari. But because Scandurra did

not have enough cash to complete the purchase, he found himself

under significant pressure to find a buyer so as not to forfeit

the deposit. So, Scandurra hired Hamann, a buyer and seller of

high-end vehicles in Connecticut, as his exclusive agent to find

a buyer for the Ferrari and agreed to pay Hamann a commission for

his work.

Hamann first offered to sell the Ferrari to Stuart

Carpenter, owner of Copley Motorcars Corporation and agent of

billionaire Leslie Wexner, for $15 million. In extending that

offer, Hamann informed Carpenter that Hamann was the exclusive

seller of the Ferrari. Carpenter declined Hamann's offer, noting

that "he did not have any interest in said Ferrari . . . , nor

would Wexner." Hamann then secured a bid of $10.5 million for the

Ferrari from a different party, Dana Mecum. Scandurra gave Hamann

the green light to sell the Ferrari to Mecum at that price. Hamann,

as agent for Mecum, then entered into an agreement with Scandurra

for the purchase of the Ferrari and sent Scandurra a €2 million

deposit.

- 3 - Two days later, Hamann learned that Wexner (through

Carpenter and other agents) had contacted Gnutti directly and

offered to purchase the Ferrari for €9 million (roughly equivalent

to $12.5 million at that time, according to the complaint).

Scandurra informed Hamann that he would have to back out of their

agreement and sell the Ferrari to Carpenter and Wexner because

Carpenter had threatened to "go directly to Gnutti and interfere

with Scandurra's relationship with Gnutti" if Scandurra refused

Carpenter's offer. If Carpenter made good on this threat,

Scandurra feared, he would lose out on the opportunity to sell the

other cars in Gnutti's collection.

Hamann immediately emailed Carpenter, reminding him that

Hamann was the exclusive seller of the Ferrari and informing him

that the Ferrari was "under contract with a deposit on the way."

Carpenter eventually responded, stating that "he didn't have the

feeling that [Hamann] had the exclusive sales rights to [the

Ferrari]" and noting that "seven other dealers would have offered

him the car after [Hamann] for the same price."

Scandurra executed the sale to Carpenter and Wexner.

After transferring proceeds from the sale to Gnutti and paying

other commissions, Scandurra informed Hamann that he would not be

able to pay him a commission.

Hamann did not sue Scandurra for his breach of their

agreement. Instead, Hamann sued Carpenter, Copley Motorcars

- 4 - Corporation, and Wexner, as Carpenter's principal, for tortious

interference with an advantageous business relationship, tortious

interference with an existing contract, and violations of

Massachusetts's Consumer Protection Law, Mass. Gen. Laws ch. 93A,

§ 11. After giving Hamann an opportunity to amend his complaint,

the U.S. District Court for the District of Massachusetts concluded

that Hamann had failed to plausibly allege any impermissible motive

or means of interference with Hamann's business relationships or

existing contracts. See Hamann v. Carpenter, No. 17-cv-11292-ADB,

2019 WL 181284, at *5 (D. Mass. Jan. 11, 2019). Accordingly, the

court dismissed his suit. Id. This timely appeal followed.

II.

We address, in order, Hamann's two common law

tortious-interference claims, followed by his statutory

Massachusetts Chapter 93A claim.

A.

Under Massachusetts law, a plaintiff bringing a claim of

tortious interference with a contractual relationship must prove

that "(1) he had a contract with a third party; (2) the defendant

knowingly interfered with that contract . . . ; (3) the

defendant's interference, in addition to being intentional, was

improper in motive or means; and (4) the plaintiff was harmed by

the defendant's actions." O'Donnell v. Boggs, 611 F.3d 50, 54

- 5 - (1st Cir. 2010) (quoting Harrison v. NetCentric Corp., 744 N.E.2d

622, 632 (Mass. 2001)).

The defendants' primary line of attack -- both below and

on appeal -- trains on the third element: whether Carpenter's

motive or his means of inducing the breach of Hamann's contract

was "improper." The district court also homed in on this element.

The court found Hamann's allegations of improper motive too

conclusory, and it deemed Carpenter's alleged threat to interfere

with Scandurra's relationship with Gnutti to be nothing more than

"[t]ough negotiating," not amounting to an improper interference.

Hamann, 2019 WL 181284, at *4.

On the former point, we agree. Massachusetts courts

will find the improper motive element met when a defendant exhibits

"'actual malice' or 'a spiteful, malignant purpose, unrelated to

[a] legitimate corporate interest.'" Tuli v. Brigham & Women's

Hosp., 656 F.3d 33, 43 (1st Cir. 2011) (quoting King v. Driscoll,

638 N.E.2d 488, 494–95 (Mass. 1994)); see also Cavicchi v. Koski,

855 N.E.2d 1137, 1142 (Mass. App. Ct. 2006) ("[E]vidence of

retaliation or ill will toward the plaintiff will support the

claim."). On the other hand, the mere desire to benefit oneself

or one's principal will not suffice. See United Truck Leasing

Corp. v. Geltman, 551 N.E.2d 20, 24 (Mass. 1990).

Hamann's complaint does manage to claim that "[a]t all

relevant times herein, Carpenter bore ill will and spite toward

- 6 - Hamann, and personally communicated that to [him]." But we concur

with the district court that this allegation, standing alone, is

too cursory and too conclusory to cross the plausibility threshold.

Hamann was well positioned to know of any facts that would

plausibly support a finding of Carpenter's ill will towards him

rather than a conclusion that Carpenter was motivated merely by

his desire to procure the Ferrari for his principal. Yet, Hamann

alleges no such facts to support his otherwise too-conclusory

parroting of the improper-motive element. See Ocasio-Hernández v.

Fortuño-Burset, 640 F.3d 1, 12 (1st Cir. 2011) ("A plaintiff is

not entitled to 'proceed perforce' by virtue of allegations that

merely parrot the elements of the cause of action." (quoting

Ashcroft v. Iqbal, 556 U.S. 662, 680 (2009))); SEC v. Tambone, 597

F.3d 436, 442 (1st Cir. 2010) ("If the factual allegations in the

complaint are too meager, vague, or conclusory to remove the

possibility of relief from the realm of mere conjecture, the

complaint is open to dismissal."); Bell Atl. Corp. v. Twombly, 550

U.S. 544, 555 (2007)).

On the district court's latter point, however, we

disagree. The district court is generally correct that hard

bargaining and lawful competition generally do not amount to

impermissible interference under Massachusetts law. See, e.g.,

Cook & Co. Ins. Servs. v. Volunteer Firemen's Ins. Servs., 657 F.

App'x 1, 2 (1st Cir. 2016) ("[C]ompetitive infighting, though

- 7 - sometimes unattractive, is not per se unlawful"); Am. Private Line

Servs., Inc. v. E. Microwave, Inc., 980 F.2d 33, 36 (1st Cir. 1992)

("By courting Cable & Wireless with low prices and atypical

services, EMI simply engaged in lawful competition to renew its

already existing contract with Cable & Wireless."); Melo-Tone

Vending, Inc. v. Sherry, Inc., 656 N.E.2d 312, 315 (Mass. App. Ct.

1995) ("For competition and for the rough and tumble of the world

of commerce, there is tolerance, even though the fallout of that

rough and tumble is damage to one of the competitors." (citations

omitted)); see also Restatement (Second) of Torts § 768 cmt. a

(Am. Law Inst. 1979) [hereinafter Restatement] (explaining that

competition does not necessarily amount to impermissible

interference with a prospective contractual relation). This is

primarily true, however, when a plaintiff alleges an interference

with a prospective contract or business relationship. Existing

contracts, by contrast, seem to receive greater solicitude, enough

so that competitive conduct inducing the breach of such a contract

might be actionable in at least some circumstances. See United

Truck Leasing Corp., 551 N.E.2d at 23 n.6 ("The existence of a

contract, and not just the existence of a prospective relationship,

might be a factor in determining whether particular intentional

conduct was improper."); see also Shafir v. Steele, 727 N.E.2d

1140, 1143 (Mass. 2000) (recognizing that sections 776 and 766B of

the Second Restatement of Torts "reflect the law of

- 8 - Massachusetts"); Restatement, supra, § 767 cmt. j ("[G]reater

protection is given to the interest in an existing contract than

to the interest in acquiring prospective contractual relations,

and as a result permissible interference is given a broader scope

in the latter instance.").

In his complaint, Hamann alleges that Carpenter

knowingly interfered with Hamann's existing exclusive-seller

agreement with Scandurra by incentivizing Scandurra to breach that

existing agreement. Whether such economic pressure is improper

"depends on the attending circumstances, and must be evaluated on

a case-by-case basis." G.S. Enters., Inc. v. Falmouth Marine,

Inc., 571 N.E.2d 1363, 1370 (Mass. 1991). In performing that

evaluation, Massachusetts courts look to:

[T]he circumstances in which [the pressure] is exerted, the object sought to be accomplished by the actor, the degree of coercion involved, the extent of the harm that it threatens, the effect upon the neutral parties drawn into the situation, the effects upon competition, and the general reasonableness and appropriateness of this pressure as a means of accomplishing the actor's objective.

Restatement, supra, § 767 cmt. c.

The pressure alleged here went beyond offering Scandurra

more money. It included a threat to interfere with Scandurra's

relationship with a third party in a manner that would cause

Scandurra actual harm. And it caused an apparent loss to yet

another third party, Mecum. Moreover, the precise details

- 9 - surrounding Carpenter's alleged threat are likely to be in the

exclusive possession of the defendants and Scandurra. We have

declined to require plaintiffs to assemble such additional detail

at the motion-to-dismiss stage under analogous circumstances, see,

e.g., Am. Sales Co. v. Warner Chilcott Co. (In re Loestrin 24 Fe

Antitrust Litig.), 814 F.3d 538, 552 (1st Cir. 2016), and we

decline to do so here as well.

In short, Hamann's specific allegation that Carpenter

threatened Scandurra with the destruction of another important

business relationship with a third party so as to induce Scandurra

to breach his existing agreement with Hamann to the detriment of

yet another third party suffices to make out a plausible claim

that Carpenter engaged in impermissible interference under

Massachusetts law. This "create[s] a reasonable expectation that

discovery may yield evidence of [Carpenter's] allegedly tortious

[interference]." García–Catalán v. United States, 734 F.3d 100,

103 (1st Cir. 2013).

The defendants also assert that Hamann's complaint

should be dismissed on the alternative basis that Hamann has failed

to plausibly allege that Carpenter's conduct caused him any

damages. The defendants argue that because Scandurra collected

more money for the Ferrari by selling it to Carpenter and Wexler,

the defendants actually "made it more likely that Hamann would be

paid a commission." "If there was not enough of the $12.5 million

- 10 - sales proceeds left over to pay Hamann," they reason, "then it

would have been mathematically impossible for Hamann to receive

any commission if the sale [to Mecum] had gone through at

$10.5 million." Accordingly, they conclude that Carpenter's

alleged inducement of Scandurra's breach could not have caused

Hamann's loss of commission because he would not have received one

had there been no breach.

Perhaps. But perhaps not. At this stage of the

litigation we can accept only the plausible allegation that, as

Scandurra's exclusive sales agent, Hamann would have been due a

commission from Scandurra and he would have received that

commission had the sale to Mecum closed and had Scandurra otherwise

honored Hamann's alleged rights as the exclusive agent for the

sale of the Ferrari. And as the intermediary between Mecum and

Scandurra, Hamann certainly would have been well positioned to

protect his alleged right to that commission had the sale of the

Ferrari gone through. In any event, given the allegations in the

complaint, we cannot conclude that it is implausible that Hamann

would have received at least some commission had Scandurra honored

his alleged agreement with Hamann. Accordingly, we decline to

affirm the district court's dismissal of Hamann's complaint on

this alternative basis. See Morales-Villalobos v. Garcia-Llorens,

316 F.3d 51, 55 (1st Cir. 2003) ("[F]actual matter[s] . . . can

hardly be resolved on the face of the complaint.").

- 11 - None of this is to say that Hamann will prevail on this

claim. Whether his case advances beyond mere plausibility will

likely turn on a necessarily fact-intensive inquiry -- one that is

best resolved on a full record, either on a motion for summary

judgment or, if warranted, at trial. For pleading purposes,

though, it is enough that his allegations "remove the possibility

of relief from the realm of mere conjecture." Tambone, 597 F.3d

at 442; Twombly, 550 U.S. at 555.

B.

We turn now to what Hamann variously calls his claim for

tortious interference with an "advantageous business relationship"

and tortious interference with a "business expectancy." This

labeling of the claim causes some initial confusion because, under

Massachusetts law, the tort of interference with an advantageous

business relationship apparently includes within its ambit the

tort of wrongful interference with an existing contract, and

Massachusetts courts "have not consistently distinguished between

the two torts." United Truck Leasing Corp., 551 N.E.2d at 23 n.6;

see also Blackstone v. Cashman, 860 N.E.2d 7, 12 (Mass. 2007)

(defining the tort, in the employment context, as interference

with "a present or prospective contract or employment

relationship"). Having already addressed Carpenter's alleged

interference with Hamann's existing contract with Scandurra, we

consider Hamann's attempt to allege an additional tort of

- 12 - interference only as it might bear on an advantageous business

relationship other than that contract. To prevail on this latter

tort, Hamann must show that "(1) he had an advantageous

relationship with a third party (e.g., a present or prospective

contract or [business] relationship); (2) the defendant knowingly

induced a breaking of the relationship; (3) the defendant's

interference with the relationship, in addition to being

intentional, was improper in motive or means; and (4) the plaintiff

was harmed by the defendant's actions." Blackstone, 860 N.E.2d at

12–13.

Hamann's complaint leaves unclear what prospective

contract or business relationship he premises this latter claim

upon. The complaint states that the Ferrari was "under contract

with a deposit on the way" at the time of Carpenter's alleged

interference, potentially indicating that the contract for the

sale of the Ferrari from Scandurra to Mecum had yet to be

finalized. So, perhaps this is the business relationship or

expectancy that he has in mind. Even were we to construe Hamann's

allegation in this way, however, we would be left only with a

prospective deal (between Mecum and Scandurra) to which Hamann

himself was not a party, prospective or otherwise. Moreover,

Hamann's complaint contains no allegation that any interference

with that prospective deal was the relevant cause of any damages.

Rather, on this score, Hamann's complaint states only that "[a]s

- 13 - a result of the wrongful interference with [Hamann's] contract as

exclusive agent for the sale of [the Ferrari], [Hamann] lost a

commission of €550,000" (emphasis added). Accordingly, the

complaint's reference to the alleged agreement between Mecum and

Scandurra, while it may play a role in establishing causation or

in calculating damages due from the interference with the alleged

exclusive-seller agreement, provides no independent footing for

this tortious-interference claim. See Tech Plus, Inc. v. Ansel,

793 N.E.2d 1256, 1262 (Mass. App. Ct. 2003) ("[A] plaintiff

[can]not recover on a claim for tortious interference with

advantageous relationships where she ha[s] failed to show that she

ha[s] suffered any pecuniary loss as a result of the defendant's

actions."); see also Carroll v. Xerox Corp., 294 F.3d 231, 241

(1st Cir. 2002) ("[W]e are free to affirm [a dismissal] on any

basis supported by the record.").

For the foregoing reasons, Hamann's complaint provides

too little clarity and too little substance to preserve his common

law claims other than his principal claim that Carpenter and those

who might be vicariously responsible for his torts (i.e., Copley

Motorcars Corporation and Wexner) are liable for tortiously

causing Scandurra to breach his exclusive-seller agreement with

Hamann.

- 14 - C.

As the defendants correctly point out, Massachusetts's

Consumer Protection Law provides that "[n]o action shall be brought

or maintained under [§ 11 of chapter 93A] unless the actions and

transactions constituting the alleged unfair method of competition

or the unfair or deceptive act or practice occurred primarily and

substantially within the commonwealth." Mass. Gen. Laws ch. 93A,

§ 11. The defendants aver that we should dismiss Hamann's

Chapter 93A claim for Hamann's failure to allege that the

defendants' tortious conduct occurred "primarily and substantially

within Massachusetts."

Hamann's complaint does not include any factual

allegation linking Carpenter's tortious conduct to Massachusetts.

Instead, it unhelpfully observes that "[a]t all relevant times

herein, Carpenter has engaged in business within the State of

Connecticut, buying, selling, and leasing cars." And on appeal,

Hamann provides no response to the defendants' assertion that we

should dismiss his Chapter 93A claim on this basis. Accordingly,

we deem any argument Hamann may have had on this score waived.

See Doherty v. Merck & Co., 892 F.3d 493, 501 (1st Cir. 2018).

III.

Whether the evidence will result in a verdict for Hamann,

or even survive a motion for summary judgment, we cannot say at

this juncture. As is often the case with the notice pleading

- 15 - allowed by Federal Rule of Civil Procedure 8(a), many questions

remain. What exactly were the terms of the alleged exclusive-

seller agreement? What exactly did Carpenter say to Scandurra?

And what would have happened but for that communication? We now

decide only that Hamann has plausibly pleaded that Carpenter harmed

Hamann by tortiously interfering with a contract between Hamann

and Scandurra. We therefore reverse the district court's dismissal

of Hamann's claim of tortious interference with a contractual

relationship and remand for further proceedings consistent with

this opinion. However, we affirm the district court's dismissal

of Hamann's other tort and Chapter 93A claims. Costs are awarded

to Thomas Hamann.

- 16 -