Scarano v. Community Corrections CV-00-414-B 07/19/01
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
D r . Gerard Scarano
v. Civil No. 00-414-B Opinion No. 2001 DNH 133 Community Corrections Corporation, Inc. and John J. Clancy
MEMORANDUM AND ORDER
Dr. Gerard Scarano brings this diversity action against his
former employer. Community Corrections Corporation, Inc., and its
President, John J. Clancy. Dr. Scarano claims that he was fired
in retaliation for revealing potential violations of state law to
New Hampshire authorities.
I have before me defendants' motions for judgment on the
pleadings, (Doc. Nos. 6, 7). For the reasons discussed herein, I
grant defendants' motions in part and deny them in part. I. BACKGROUND1
On February 24, 1998, Dr. Scarano and Community Corrections
Corporation, Inc. ("CCC") entered into a contract pursuant to
which CCC agreed to employ Dr. Scarano for three years as the
Director of the Otter Brook facility, a residential treatment
facility for adolescents involved in the criminal justice system.
CCC agreed to pay Dr. Scarano an annual salary of $70,000, and
bonuses of up to an additional $150,000 over the three-year
period. CCC also agreed to pay Dr. Scarano 10% of Otter Brook's
selling price if CCC sold the facility during the term of the
contract.
Dr. Scarano began work as the director of Otter Brook on or
about April 1, 1998. At a time not indicated in the complaint,
he contacted certain unnamed New Hampshire officials to discuss
potential violations of unspecified state laws occurring at Otter
Brook. On May 14, 1999, CCC terminated Dr. Scarano's contract.
Dr. Scarano initiated this litigation on August 31, 2000.
1 I take the background facts from plaintiff's complaint ("Cplt."), (Doc. No. 1).
- 2 - II. STANDARD OF REVIEW
The standard for reviewing a motion for judgment on the
pleadings is essentially the same as the standard for reviewing a
Rule 12(b)(6) motion to dismiss for failure to state a claim upon
which relief can be granted. See Collier v. City of Chicopee,
158 F.3d 601, 602 (1st Cir. 1998); Cooper v. Thomson Newspapers,
Inc., 6 F. Supp. 2d 109, 112 (D.N.H. 1998) . Accordingly, in
reviewing such a motion I accept all of the nonmoving party's
well-pleaded factual averments as true and draw all reasonable
inferences in his favor. United States v. U.S. Currency,
$81,000.00, 189 F.3d 28, 33 (1st Cir. 1999) (citing Int'1 Paper
Co. v. Town of Jav, 928 F.2d 480, 482 (1st Cir. 1991)); Feliciano
v. State of Rhode Island, 160 F.3d 780, 788 (1st Cir. 1998)
(citations omitted). "Judgment on the pleadings under Rule 1 2 (c)
may not be entered unless it appears beyond a doubt that the
nonmoving party can prove no set of facts in support of her claim
which would entitle her to relief." Feliciano, 160 F.3d at 788;
Int'1 Paper C o ., 928 F.2d at 482-83. Although the standard for
judgment on the pleadings is liberal, it is not meaningless. The
standard does not require "that a court must (or should) accept
every allegation made by the complainant, no matter how
- 3 - conclusory or generalized." United States v. AVX Corp., 962 F.2d
108, 115 (1st Cir. 1992); see also Washington Legal Found, v.
Massachusetts Bar Found., 993 F.2d 962, 971 (1st Cir. 1993)
("Because only well-pleaded facts are taken as true, we will not
accept a complainant's unsupported conclusions or interpretations
of law.").
I apply this standard in reviewing defendants' motions for
judgment on the pleadings.
Ill. DISCUSSION
Dr. Scarano asserts claims for: (1) breach of contract; (2)
retaliatory discharge; (3) tortious interference with contractual
relations; (4) breach of fiduciary duty; and (5) an accounting.2
Defendants move for judgment on the pleadings on all but the
breach of contract claim. I address each contested claim in
2 In Counts II and III of his complaint. Dr. Scarano alleges that CCC and Clancy misrepresented their intent to perform their contractual obligations. On February 15, 2001, I granted defendants' motion for a more definite statement, (Doc. No. 8), with regard to these claims. Dr. Scarano has not amended his complaint or otherwise responded to my order. Defendants have moved to strike both counts and Dr. Scarano has also failed to respond to that motion. Accordingly, I grant defendants' motion to strike Counts II and III of the complaint, (Doc. No. 16) .
- 4 - turn.
A. Wrongful Termination
Dr. Scarano claims that Clancy caused CCC to fire him in
retaliation for his decision to contact state officials about
actual and potential violations of laws and regulations at Otter
Brook. He also contends that he was fired to silence him
"regarding his knowledge of financial and other improprieties
involving a public official employed by CCC." Cplt. I 10.
To prove wrongful termination in New Hampshire, a plaintiff
must establish two elements: "one, that the employer terminated
the employment out of bad faith, malice, or retaliation; and two,
that the employer terminated the employment because the employee
performed acts which public policy would encourage or because he
refused to perform acts which public policy would condemn."
Short v. School Admin. Unit No. 16, 136 N.H. 76, 84 (1992)
(citing Cloutier v. Great Atlantic & Pacific Tea Co., Inc., 121
N.H. 915, 921-922 (1981)). "The public policy contravened by the
wrongful discharge can be based on statutory or nonstatutory
policy." Cillev v. New Hampshire Ball Bearings, Inc., 128 N.H.
401, 406 (1986) (citation omitted). The determination of whether
a public policy exists "calls for the type of multifaceted
- 5 - balancing process that is properly left to the jury in most
instances." Cloutier, 121 N.H. at 924.
Dr. Scarano's complaint offers no details about either: (1)
the name or type of authorities contacted; or (2) the nature of
the alleged infractions at Otter Brook. While these deficiencies
are problematic, they are not dispositive at this stage because I
cannot say that Dr. Scarano could prove no set of facts which
would allow him to prevail on this claim. See Feliciano, 160
F.3d at 788. If Dr. Scarano can produce evidence that CCC
discharged him in retaliation for his decision to contact the New
Hampshire authorities and that public policy encourages such
behavior, he would be entitled to judgment in his favor.
Accordingly, I deny the motions for judgment on the
pleadings as to this claim.
B. Tortious Interference
Dr. Scarano claims that Clancy's actions and omissions made
it impossible for him to satisfy his contractual obligations.
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Scarano v. Community Corrections CV-00-414-B 07/19/01
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
D r . Gerard Scarano
v. Civil No. 00-414-B Opinion No. 2001 DNH 133 Community Corrections Corporation, Inc. and John J. Clancy
MEMORANDUM AND ORDER
Dr. Gerard Scarano brings this diversity action against his
former employer. Community Corrections Corporation, Inc., and its
President, John J. Clancy. Dr. Scarano claims that he was fired
in retaliation for revealing potential violations of state law to
New Hampshire authorities.
I have before me defendants' motions for judgment on the
pleadings, (Doc. Nos. 6, 7). For the reasons discussed herein, I
grant defendants' motions in part and deny them in part. I. BACKGROUND1
On February 24, 1998, Dr. Scarano and Community Corrections
Corporation, Inc. ("CCC") entered into a contract pursuant to
which CCC agreed to employ Dr. Scarano for three years as the
Director of the Otter Brook facility, a residential treatment
facility for adolescents involved in the criminal justice system.
CCC agreed to pay Dr. Scarano an annual salary of $70,000, and
bonuses of up to an additional $150,000 over the three-year
period. CCC also agreed to pay Dr. Scarano 10% of Otter Brook's
selling price if CCC sold the facility during the term of the
contract.
Dr. Scarano began work as the director of Otter Brook on or
about April 1, 1998. At a time not indicated in the complaint,
he contacted certain unnamed New Hampshire officials to discuss
potential violations of unspecified state laws occurring at Otter
Brook. On May 14, 1999, CCC terminated Dr. Scarano's contract.
Dr. Scarano initiated this litigation on August 31, 2000.
1 I take the background facts from plaintiff's complaint ("Cplt."), (Doc. No. 1).
- 2 - II. STANDARD OF REVIEW
The standard for reviewing a motion for judgment on the
pleadings is essentially the same as the standard for reviewing a
Rule 12(b)(6) motion to dismiss for failure to state a claim upon
which relief can be granted. See Collier v. City of Chicopee,
158 F.3d 601, 602 (1st Cir. 1998); Cooper v. Thomson Newspapers,
Inc., 6 F. Supp. 2d 109, 112 (D.N.H. 1998) . Accordingly, in
reviewing such a motion I accept all of the nonmoving party's
well-pleaded factual averments as true and draw all reasonable
inferences in his favor. United States v. U.S. Currency,
$81,000.00, 189 F.3d 28, 33 (1st Cir. 1999) (citing Int'1 Paper
Co. v. Town of Jav, 928 F.2d 480, 482 (1st Cir. 1991)); Feliciano
v. State of Rhode Island, 160 F.3d 780, 788 (1st Cir. 1998)
(citations omitted). "Judgment on the pleadings under Rule 1 2 (c)
may not be entered unless it appears beyond a doubt that the
nonmoving party can prove no set of facts in support of her claim
which would entitle her to relief." Feliciano, 160 F.3d at 788;
Int'1 Paper C o ., 928 F.2d at 482-83. Although the standard for
judgment on the pleadings is liberal, it is not meaningless. The
standard does not require "that a court must (or should) accept
every allegation made by the complainant, no matter how
- 3 - conclusory or generalized." United States v. AVX Corp., 962 F.2d
108, 115 (1st Cir. 1992); see also Washington Legal Found, v.
Massachusetts Bar Found., 993 F.2d 962, 971 (1st Cir. 1993)
("Because only well-pleaded facts are taken as true, we will not
accept a complainant's unsupported conclusions or interpretations
of law.").
I apply this standard in reviewing defendants' motions for
judgment on the pleadings.
Ill. DISCUSSION
Dr. Scarano asserts claims for: (1) breach of contract; (2)
retaliatory discharge; (3) tortious interference with contractual
relations; (4) breach of fiduciary duty; and (5) an accounting.2
Defendants move for judgment on the pleadings on all but the
breach of contract claim. I address each contested claim in
2 In Counts II and III of his complaint. Dr. Scarano alleges that CCC and Clancy misrepresented their intent to perform their contractual obligations. On February 15, 2001, I granted defendants' motion for a more definite statement, (Doc. No. 8), with regard to these claims. Dr. Scarano has not amended his complaint or otherwise responded to my order. Defendants have moved to strike both counts and Dr. Scarano has also failed to respond to that motion. Accordingly, I grant defendants' motion to strike Counts II and III of the complaint, (Doc. No. 16) .
- 4 - turn.
A. Wrongful Termination
Dr. Scarano claims that Clancy caused CCC to fire him in
retaliation for his decision to contact state officials about
actual and potential violations of laws and regulations at Otter
Brook. He also contends that he was fired to silence him
"regarding his knowledge of financial and other improprieties
involving a public official employed by CCC." Cplt. I 10.
To prove wrongful termination in New Hampshire, a plaintiff
must establish two elements: "one, that the employer terminated
the employment out of bad faith, malice, or retaliation; and two,
that the employer terminated the employment because the employee
performed acts which public policy would encourage or because he
refused to perform acts which public policy would condemn."
Short v. School Admin. Unit No. 16, 136 N.H. 76, 84 (1992)
(citing Cloutier v. Great Atlantic & Pacific Tea Co., Inc., 121
N.H. 915, 921-922 (1981)). "The public policy contravened by the
wrongful discharge can be based on statutory or nonstatutory
policy." Cillev v. New Hampshire Ball Bearings, Inc., 128 N.H.
401, 406 (1986) (citation omitted). The determination of whether
a public policy exists "calls for the type of multifaceted
- 5 - balancing process that is properly left to the jury in most
instances." Cloutier, 121 N.H. at 924.
Dr. Scarano's complaint offers no details about either: (1)
the name or type of authorities contacted; or (2) the nature of
the alleged infractions at Otter Brook. While these deficiencies
are problematic, they are not dispositive at this stage because I
cannot say that Dr. Scarano could prove no set of facts which
would allow him to prevail on this claim. See Feliciano, 160
F.3d at 788. If Dr. Scarano can produce evidence that CCC
discharged him in retaliation for his decision to contact the New
Hampshire authorities and that public policy encourages such
behavior, he would be entitled to judgment in his favor.
Accordingly, I deny the motions for judgment on the
pleadings as to this claim.
B. Tortious Interference
Dr. Scarano claims that Clancy's actions and omissions made
it impossible for him to satisfy his contractual obligations.
To prove tortious interference with contractual relations in
New Hampshire, a plaintiff must show that: (1) the plaintiff had
an economic relationship with a third party; (2) the defendant
knew of this relationship; (3) the defendant intentionally and
- 6 - improperly interfered with this relationship; and (4) the
plaintiff was damaged by such interference. Jav Edwards, Inc. v.
Baker, 130 N.H. 41, 46 (1987) (per curiam).
A defendant's employer will not be deemed to be a third
party for purposes of a tortious interference claim if the
employee was acting within the scope of his employment when he
engaged in the conduct that gives rise to the claim. See
Alexander v. Fujitsu Bus. Communication Svs., Inc., 818 F. Supp.
462, 469-70 (D.N.H. 1993); Soltani v. Smith, 812 F. Supp. 1280,
1296-97 (D.N.H. 1993) .
Dr. Scarano charges that Clancy fired him in retaliation for
having contacted New Hampshire officials to discuss concerns
about Otter Brook. Cplt. 1 10. He also charges that Clancy
acted with malice, ill-will and spite. Dr. Scarano, however,
provides no specific support for these allegations. Furthermore,
he has not alleged that Clancy acted outside the scope of his
employment when he discharged Dr. Scarano. See Aversa v. United
States, 99 F.3d 1200, 1210 (1st Cir. 1996) ("An act is within the
scope of employment under New Hampshire law if it was authorized
by the employer or incidental to authorized duties; if it was
done within the time and space limits of the employment; and if
- 7 - it was actuated at least in part by a purpose to serve an
objective of the employer."). Indeed, the complaint suggests
that Clancy discharged Dr. Scarano in order to protect and
further CCC's interests. Because Clancy was acting in
furtherance of CCC's interests, CCC cannot be deemed a third
party for purposes of Dr. Scarano's tortious interference claim.
_____ Accordingly, I grant the motion for judgment on the
pleadings with regard to this claim.
C. Breach of Fiduciary Duty by CCC
Dr. Scarano claims that CCC breached its fiduciary duty
towards him when it terminated his contract. He alleges that he
and CCC were partners and co-venturers in the establishment of
Otter Brook. See N.H. Rev. Stat. Ann. § 304-A:6 (2000) (defining
"partnership"). Therefore, Dr. Scarano claims that CCC owed him
the "fiduciary duties of care, loyalty, and full disclosure."
Cplt. 5 12.
Even when viewed in the light most favorable to Dr. Scarano,
the complaint offers no support for his claim that he and CCC
were partners. See U.S. Currency, $81,000, 189 F.3d at 33.
Instead, the pleadings simply suggest an employee-employer
relationship existed in which CCC agreed to "employ Dr. Scarano for a period of three years as Director" of Otter Brook. Cplt. 1
2. Dr. Scarano's conclusory assertions that a partnership
existed are not sufficient to sustain his claim.3 See AVX C o r p .,
962 F .2d at 115.
Accordingly, I grant defendants' motion for judgment on the
IV. CONCLUSION
For the foregoing reasons, I deny defendants' motions for
judgment on the pleadings, (Doc. Nos. 6, 7), with regard to Dr.
Scarano's wrongful termination claim and grant their motions with
regard to Dr. Scarano's tortious interference, breach of
fiduciary duty, and action for an accounting claims. I also
grant defendants' motion to strike Counts II and III of the
complaint, (Doc. No. 16).
SO ORDERED.
Paul Barbadoro Chief Judge July 19, 2001
3 Because I dismiss Dr. Scarano's breach of fiduciary duty claim, I also dismiss his derivative claim for an accounting.
- 9 - cc: Richard E. Fradette, Esq. William P. Yonce, Esq.
- 10 -