UNITED STATES DISTRICT COURT
DISTRICT OF NEW HAMPSHIRE
Stephen Gately, Plaintiff
v. Case No. 17-cv-100-SM Opinion No. 2017 DNH 154 Mortara Instrument, Inc., Defendant
O R D E R
Plaintiff, Stephen Gately, filed this suit asserting claims
arising out of his employment by the defendant, Mortara
Instrument, Inc. (“Mortara” or the “Company”). Gately advances
claims for breach of contract, promissory estoppel, violation of
the New Hampshire Consumer Protection Act (“CPA,” or the “Act”),
negligent/fraudulent misrepresentation, violation of the
Whistleblower Protection Act, wrongful discharge, and for
payment of wages. Mortara has moved to dismiss Gately’s breach
of contract, promissory estoppel and CPA claims. The motion is
denied in part, and granted in part.
STANDARD OF REVIEW
When ruling on a motion to dismiss under Fed. R. Civ. P.
12(b)(6), the court must “accept as true all well-pleaded facts
set out in the complaint and indulge all reasonable inferences
1 in favor of the pleader.” SEC v. Tambone, 597 F.3d 436, 441
(1st Cir. 2010). Although the complaint need only contain “a
short and plain statement of the claim showing that the pleader
is entitled to relief,” Fed. R. Civ. P. 8(a)(2), it must allege
each of the essential elements of a viable cause of action and
“contain sufficient factual matter, accepted as true, to state a
claim to relief that is plausible on its face,” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (citation and internal
punctuation omitted).
In other words, “a plaintiff’s obligation to provide the
‘grounds’ of his ‘entitlement to relief’ requires more than
labels and conclusions, and a formulaic recitation of the
elements of a cause of action will not do.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007). Instead, the facts alleged
in the complaint must, if credited as true, be sufficient to
“nudge[] [plaintiff=s] claims across the line from conceivable to
plausible.” Id. at 570. If, however, 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.” Tambone, 597 F.3d at 442.
“Under Rule 12(b)(6), the district court may properly
consider only facts and documents that are part of or
2 incorporated into the complaint; if matters outside the
pleadings are considered, the motion must be decided under the
more stringent standards applicable to a Rule 56 motion for
summary judgment.” Trans–Spec Truck Serv., Inc. v. Caterpillar
Inc., 524 F.3d 315, 321 (1st Cir. 2008) (citing Garita Hotel
Ltd. Partnership v. Ponce Fed. Bank, F.S.B., 958 F.2d 15, 18
(1st Cir. 1992)). “When ... a complaint's factual allegations
are expressly linked to — and admittedly dependent upon — a
document (the authenticity of which is not challenged), that
document effectively merges into the pleadings and the trial
court can review it in deciding a motion to dismiss under Rule
12(b)(6).” Id. (quoting Beddall v. State St. Bank & Trust Co.,
137 F.3d 12, 16–17 (1st Cir. 1998) (additional citations
omitted).
BACKGROUND
Accepting the allegations in the amended complaint as true,
the relevant facts appear to be as follows. Mortara, a
diagnostic cardiology company based in Wisconsin, manufactures
patient monitoring devices that are sold worldwide. Stephen
Gately, a New Hampshire resident, worked as a sales executive in
the field of medical devices (specifically, acute care
monitoring devices) for more than a decade.
3 In the spring of 2016, Gately accepted a position with
General Electric as a Senior Account Manager, covering all GE
healthcare divisions, including its acute care patient
monitoring division. Prior to accepting the position at GE,
Gately interviewed with several potential employers, including
Mortara. After accepting the position with GE, Gately contacted
Mortara’s Chief Operating Officer, Brian Brenegan, to withdraw
his candidacy. Brenegan asked Gately to first speak with
Mortara’s president, Justin Mortara, about working for Mortara
instead of GE.
Two days later, Justin Mortara and Gately spoke by
telephone. They discussed the Company and its ambition to enter
the acute care patient monitoring market. Intrigued, Gately
agreed to visit Wisconsin to tour the Company’s operations, and
meet Justin Mortara and the Company’s other executives in
person.
During his visit, Gately spoke extensively with Mortara
executives about his potential role at the Company. When Gately
explained to Justin Mortara that penetrating the acute care
patient monitoring market would require an investment of between
$15 million and $20 million over several years, Justin Mortara
4 responded that the Company was prepared to make that investment,
and wanted Gately to spearhead those efforts.
The next morning, Gately spoke with Brenegan. Gately
expressed his misgivings about working with some of the
individuals at the Company, but Brenegan assured him that his
concerns would not be a problem because employee roles were
changing within Mortara. Brenegan then asked Gately what it
would take for Gately to turn down the position at GE, and come
to work for Mortara.
Excited by the prospect of building an acute care patient
monitoring division within Mortara, Gately attempted to
negotiate a pay package with Brenegan that would take into
account any reputational damage he might suffer as a result of
withdrawing from the job he had accepted with GE. Gately and
Brenegan ultimately agreed upon a pay package that would
guarantee Gately compensation of $250,000 for each of his first
two years of employment at Mortara, plus performance incentives
and benefits. They also agreed that Gately would work from his
home in New Hampshire. Gately left Wisconsin with a commitment
that he would soon receive an offer letter from Mortara, setting
out the terms of his employment agreement.
5 Six hours later, Mortara sent Gately an offer letter dated
May 2, 2016. Written by Mortara’s Human Resource Director, the
letter described the terms of Gately’s employment package. It
read, in part:
In this role, your annual base salary will be $150,000, with a commission plan designed to generate variable compensation of $100,000 annually, which will be guaranteed for the initial twelve months of your employment by means of a non-recoverable monthly draw. For months 13-24, your variable compensation plan, again targeted to achieve $100,000 on an annual basis, will be paid to you by means of a monthly recoverable draw. You will also receive a $650 per month car allowance, which will be added as taxable income to your bi-weekly paycheck. Mortara will reimburse basic expenses for your home office, and normal out of town business expenses, including vehicle gas reimbursement.
Mortara Instrument has a Phantom Stock Plan which is a deferred compensation vehicle designed for management leadership personnel to share in the growth of the company. Based on the importance of your role in the organization, you will be eligible for consideration to be brought into this plan.
Compl. ¶ 18.
The May 2 letter did not explicitly state that Gately’s
anticipated employment would be “at-will.” While the letter
described Gately’s variable compensation for months 13-24 as a
“monthly recoverable draw,” Brenegan subsequently assured Gately
that his variable compensation for that period was guaranteed at
a minimum of $100,000. Brenegan further explained to Gately
that the phrase “recoverable draw” meant that Gately would be
6 eligible to “recover” additional variable compensation based on
a commission schedule, assuming his sales during the period
supported it. However, Brenegan said, Gately would not be
required to disgorge any draw paid to him during the 13 to 24
month period if his sales fell below target.
Gately accepted Mortara’s offer on May 2, 2016. He
returned a signed copy of the offer letter to Mortara’s Human
Resources Director. Gately then notified GE that he was
withdrawing from the job he had previously accepted. He began
working for Mortara as Vice President for Patient Monitoring
Sales on May 16, 2016.
Within just a few weeks of beginning work at Mortara,
Gately was informed by Brenegan that Mortara was suspending its
push into the acute care patient monitoring market, and had
instituted several organizational changes before Gately’s start
date. Brenegan told Gately that, because Mortara lacked
confidence in its newly assigned Vice President of Sales,
Michael Shultz, Gately was expected to take on an additional
role in the cardiology side of Mortara’s business. Brenegan
told Gately that, while he wanted Gately to “shake things up,”
he also needed Gately to accept Shultz as his boss for the time
being. Compl. ¶ 23. Working for Shultz was a “dramatic change”
7 from the working relationship that Brenegan had described when
the two negotiated Gately’s employment contract. Compl. ¶ 24.
Gately would not have accepted the contract with Mortara under
that condition. Id. However, Brenegan suggested to Gately that
the new assignment was only temporary, and Mortara would soon
commit to investing in an acute care patient monitoring
business, as promised.
In his altered role, Gately soon discovered a troubling
practice by Mortara. The Company manufactured an
electrocardiograph for use in physician offices, sold under the
name “ELI 250c.” The ELI 250c was marketed by the Company as
“portable,” because it was designed to be powered by a built-in,
rechargeable battery. However, the batteries Mortara installed
in the ELI 250c were defective, and failed almost immediately
after their first use. Gately learned that Mortara’s management
refused to acknowledge the defect. Sales staff and customer
support teams were instructed not to reveal the device’s faulty
batteries to customers, but to instead tell customers that the
ELI 205c should only be operated when plugged in to an
electrical power source, notwithstanding its claimed
“portability” attribute.
8 Gately confronted Shultz about the practice. Shultz
responded that Gately should “suck it up,” and do what he was
told. Compl. ¶ 27. Shultz told Gately that senior leadership
at the Company, including Justin Mortara, knew about the defect,
but were unwilling to divert Research and Development resources
to fix it. Id. Gately spoke with a colleague in another
Mortara department about the ELI 250c defect, and his concerns
regarding how the Company was handling the issue. Gately
expressed his discomfort over having to lie to customers about
the problem. Gately’s colleague warned him that he would be
“blackballed” within the Company if he continued to press the
issue. Compl. ¶ 27.
But, Gately’s “fate at Mortara had already been sealed.”
Compl. ¶ 28. Two weeks after his confrontation with Shultz,
Gately was notified that his employment with Mortara was
terminated effective October 28, 2016, six months into his
employment. Gately insisted that he be compensated consistently
with the terms of his employment agreement (i.e., two years of
guaranteed compensation and benefits), but Mortara refused.
On January 9, 2017, some two months after firing Gately,
Mortara announced that it would be acquired by Hill-Rom
Holdings, Inc. (“Hill-Rom”). A wholly owned subsidiary of Hill-
9 Rom, Welch Allyn, Inc., acquired all issued and outstanding
shares of Mortara in exchange for a purchase price of $330
million.
Gately alleges, upon information and belief, that Mortara
conceived of the new acute care patient monitoring division as a
marketing ploy to make itself attractive to a potential buyer.
Mortara then persuaded Gately to abandon his position at GE to
run the division, all the while knowing that the Company had no
intention of actually entering the acute care patient monitoring
market. Once Mortara’s negotiations with Hill-Rom were
substantially complete, Mortara no longer needed to keep up the
façade of building an acute patient care monitoring division.
That, Gately says, combined with his refusal to “suck it up” and
lie to customers about the ELI 250c battery problem, prompted
Mortara to fire him and breach its obligations under the
employment agreement.
Gately filed suit in state court. Mortara timely removed
the action, invoking this court’s diversity jurisdiction, and it
now moves to dismiss.
10 DISCUSSION
As noted above, Mortara moves to dismiss the Counts I, II
and III of Gately’s complaint.1
A. Count I – Breach of Contract
Mortara argues that Gately’s breach of contract claim must
be dismissed because the employment contract between Gately and
Mortara established an “at-will” employment relationship.
Mortara points out that, under both New Hampshire and Wisconsin
law, an employment relationship is presumed to be at-will when
the contract of employment is silent as to term. It contends
that Gately has not pled facts sufficient to overcome that
presumption.
Gately responds that, as alleged, his breach of contract
claim has two components. First, he argues, he has sufficiently
alleged that he was not an at-will employee, and that the
contract provided for a two year term of employment. Second, he
says, regardless of whether he was an at-will employee, Mortara
1 The parties dispute which state’s law applies to Gately’s contract and promissory estoppel claims: Wisconsin or New Hampshire. Mortara argues that Wisconsin’s law applies, but concedes that New Hampshire and Wisconsin law are substantially similar with regard to the issues currently before the court. Accordingly, choice of law issues need not be resolved now. 11 guaranteed his compensation for two years, and then breached
that guarantee by paying him for only six months.
Whether Gately’s discharge constituted a breach of contract
turns on the existence of an enforceable employment agreement.
Gately argues that he has sufficiently alleged that the parties
entered an employment contract for a definite, two-year term.
In support, he relies upon language in the May 2 letter
declaring that his variable compensation would be “guaranteed
for the initial twelve months of [his] employment,” and that,
“[f]or months 13-24,” the “variable compensation plan” would be
paid “by means of a monthly recoverable draw.” Compl. ¶ 18.
That language, Gately says, establishes a 24-month employment
term, consistent with the bargain Gately and Brenegan struck.
As a preliminary matter, “the interpretation of a contract
is an issue of law for this court to resolve.” Dillman v. New
Hampshire Coll., 150 N.H. 431, 434 (2003) (citing Erin Food
Servs. v. 688 Properties, 119 N.H. 232, 235 (1979)). “The court
must first determine whether the writing is a complete
integration of the parties' agreement.” Piascik-Lambeth v.
Textron Auto. Co., No. CIV. 00-258-JD, 2000 WL 1875873, at *8
(D.N.H. Dec. 22, 2000) (citing MacLeod v. Chalet Susse Intl.,
Inc., 119 N.H. 238, 243 (1979)). “The court then interprets the
12 agreement by giving the language its reasonable meaning in light
of the circumstances and context existing at the time of the
agreement and reading the agreement as a whole.” Id. (citing
Keshishian v. CMC Radiologists, 142 N.H. 168, 177 (1997)).
Gately says that, despite the May 2 letter’s description of
his variable compensation for months 13-24 as “monthly
recoverable draw,” Brenegan told him that such compensation was
guaranteed at a minimum of $100,000, and that he would not be
required to disgorge any draw paid to him during that period.
Compl. ¶ 19. But, those allegations are not particularly useful
in determining whether Gately’s employment status was at-will.
In his opposition to Mortara’s motion to dismiss, Gately relies
entirely on the terms of the May 2 letter as fully describing
the employment agreement.
Under New Hampshire law, “the at-will status of an
employment relationship is ‘one of prima facie construction.’”
Smith v. F.W. Morse & Co., 76 F.3d 413, 426 (1st Cir. 1996)
(quoting Panto v. Moore Business Forms, 130 N.H. 730, 739
(1988)). “That is to say, unless an employment relationship
explicitly provides for a definite duration, it is presumed to
be at-will.” Id. (citing Butler v. Walker Power, 137 N.H. 432,
435 (1993)). And, if an “employment contract is silent as to
13 the duration of employment, the employee is at will, despite an
express agreement as to other terms of employment.” Sheeler v.
Select Energy & NEChoice, LLC, No. 03-59-JD, 2003 WL 21735496,
at *7 (D.N.H. July 28, 2003) (citing National Employment Serv.
Corp. v. Olsten Staffing Serv., 145 N.H. 158, 162 (2000)); see
also Piascik-Lambeth v. Textron Auto. Co., 2000 WL 1875873, at
*7 (“When no provision for the duration of employment is made in
a contract, the employment relationship status is presumed to be
at-will.”) (citing Butler, 137 N.H. at 435).
The employment agreement between Gately and Mortara is
plainly silent as to the duration of his employment. Gately,
however, attempts to read a two-year term into the agreement,
based on the agreement’s compensation language. But, generally,
“[a] hiring at so much a day, week, month or year, no time being
specified, is an indefinite hiring, and no presumption attaches
that it was for a day even, but only at the rate fixed for
whatever time the party may serve.” Cloutier v. Great Atl. &
Pac. Tea Co., 121 N.H. 915, 919 (1981) (quoting H.G. Wood, A
Treatise on the Law of Master and Servant § 136, at 283–84 (2d
ed. 1886)); see also Forrer v. Sears, Roebuck & Co., 36 Wis. 2d
388, 393 (1967) (“Generally speaking, a contract for permanent
employment, for life employment, or for other terms purporting
permanent employment, where the employee furnishes no
14 consideration additional to the services incident to the
employment, amounts to an indefinite general hiring terminable
at the will of either party, and a discharge without cause does
not constitute a breach of such contract justifying recovery of
damages. The same is true where the contract of hiring
specifies no term of duration but fixes compensation at a
certain amount per day, week, or month. Although not absolute,
the above stated rule appears to be in the nature of a strong
presumption in favor of a contract terminable at will unless the
terms of the contract or other circumstances clearly manifest
the parties' intent to bind each other.”) (internal citations
Gately construes his agreed-upon compensation over his
first two years of employment as an agreement to retain him for
a definite term of two years. He points out that some courts
have found like provisions consistent with a hiring for a
definite period. See, e.g., Pauza v. The Standard Grp., Inc.,
No. CIV.A. 06-2608 (JAG), 2006 WL 3359421, at *4 (D.N.J. Nov.
20, 2006) (“By setting forth Plaintiff's agreed-upon
compensation in detail through December 31, 2006, the agreement
is certainly consistent with a hiring for a definite period as
opposed to an employment at-will.”) (internal quotations
omitted) (applying New York law).
15 Given the employment agreement at issue here, Gately’s
argument is unconvincing. The offer letter lacks any provision
tending to establish a fixed term of employment or undermine the
at-will presumption. Second, the compensation provisions upon
which Gately relies cannot reasonably be interpreted as
describing a definite term, nor do they give rise to an
ambiguity with regard to Gately’s employment status. That
language relates not to the durational status of Gately’s
employment, but rather to “the incidents of employment such as
compensation and fringe benefits.” Butler, 137 N.H. at 436.
In other words, while the agreement describes Gately’s
compensation over a 24-month period, it is silent as to the
duration of his employment.2 Terms of compensation are distinct
from terms of duration. As the New Hampshire Supreme Court has
noted: “there are contractual elements that exist independently
of, or within, the durational status of the employment
relationship. Regardless of whether an employment relationship
is at-will or tenured, there still exist the incidents to such
2 To the extent Gately might argue that circumstances surrounding the creation of his employment agreement support a finding that the parties intended the contract to be for a two year employment term, he has not sufficiently alleged such circumstances. Indeed, Gately’s allegations do not mention any purported discussion about or negotiation of a two-year employment term between the parties. See Compl. ¶¶ 13-19. 16 employment. These incidental benefits must be considered
separately from the duration itself.” Butler, 137 N.H. at 436.
Nevertheless, relying on Butler v. Walker Power, 137 N.H.
432, Gately contends that, even if his employment is presumed to
have been at-will, he has still stated a claim that Mortara
breached a contract for guaranteed compensation. Gately argues
that the employment agreement “guaranteed” his annual base
salary, plus variable compensation of $100,000, for the initial
12 months; and, for months 13-24, the employment agreement
further guaranteed variable compensation of $100,000.
While it is apparent that Gately’s compensation was clearly
defined, and “guaranteed” in the sense that had he continued in
Mortara’s employment, he would be entitled to be paid as
provided, still, that “guarantee” does not operate as a
guarantee that he would be so compensated whether he worked or
not, nor does it constitute a “guarantee” that he would be kept
on as an employee for the period covered by the defined
compensation formula, as no fixed term was agreed upon and the
at-will presumption governs.
Accordingly, defendant’s motion to dismiss plaintiff’s
breach of contract claim is granted.
17 B. Count II – Promissory Estoppel
Mortara argues that that Gately’s promissory estoppel claim
is based on the same allegations that form his breach of
contract claim. Because the two causes of action are mutually
exclusive, Mortara says, Gately’s promissory estoppel claim must
be dismissed as well.
As a preliminary matter, Federal Rule of Civil Procedure 8
allows a party to assert as many separate claims as it has
“regardless of consistency.” Gately’s promissory estoppel claim
rests on promises other than those memorialized in the
employment agreement, specifically Mortara’s representation that
it was willing and prepared to invest the time and sufficient
money to launch a new acute care patient monitoring division,
which Gately would spearhead.
While the claim may face other hurdles, mutual exclusivity
is not one of them. Mortara’s motion to dismiss that claim is
denied.
C. Count III – Consumer Protection Act
Finally, Mortara contends that Gately’s claim under the New
Hampshire Consumer Protection Act must be dismissed. In support
of that contention, Mortara first argues that Gately’s CPA claim
18 arises from his private employment relationship with the
Company, and therefore lacks the necessary “trade or commerce”
element required by the Act. Second, Mortara argues that Gately
has not sufficiently alleged an “unfair or deceptive act or
practice” prohibited by the Act.
New Hampshire’s Consumer Protection Act, “RSA 358–A:2[,]
provides that ‘[i]t shall be unlawful for any person to use any
unfair method of competition or any unfair or deceptive act or
practice in the conduct of any trade or commerce within this
state.’” Brzica v. Trustees of Dartmouth Coll., 147 N.H. 443,
451 (2002). “‘Trade or commerce’ is defined under the Act as
including ‘the advertising, offering for sale, sale, or
distribution of any services and any property, tangible or
intangible, real, personal or mixed, and any other article,
commodity, or thing of value wherever situated.’” Id. (quoting
RSA 358–A:1, II). Although the statute “casts a wide net,”
Anderson v. Century Prods. Co., 943 F. Supp. 137, 153 (D.N.H.
1996), it does not apply to transactions that are “strictly
private in nature” and are “in no way undertaken in the ordinary
course of a trade or business.” Hughes v. DiSalvo, 143 N.H.
576, 578 (1999) (quoting Lantner v. Carson, 374 Mass. 606, 373
(1978)).
19 The Act “lists thirteen representative categories of
unlawful acts or practices, each dealing with transactions for
the provision of goods or services to consumers.” Roberts v.
Gen. Motors Corp., 138 N.H. 532, 538, 643 A.2d 956, 960 (1994).
However, the Act’s application is not limited “only to these
specific transactions.” Id. In determining which actions not
specifically delineated are covered by the CPA, the New
Hampshire Supreme Court has employed a “rascality” test. ACAS
Acquisitions (Precitech) Inc. v. Hobert, 155 N.H. 381, 401
(2007). “Under the rascality test, the objectionable conduct
must attain a level of rascality that would raise an eyebrow of
someone inured to the rough and tumble of the world of
commerce.” Fat Bullies Farm, LLC v. Devenport, No. 2015-0692,
2017 WL 2325084, at *4 (N.H. May 26, 2017) (quotation omitted).
The New Hampshire Supreme Court has not yet resolved
whether an employer-employee relationship sufficiently affects
trade or commerce. In ACAS Acquisitions, 155 N.H. at 401, the
Court considered whether an employer’s refusal to pay a former
employee’s severance benefits qualified as an unfair act or
practice under the Act. The Court seemingly assumed arguendo
that, under the circumstances presented, the parties’ conduct
adequately implicated “trade or commerce.” The Court then
resolved the dispute by determining that the employer’s conduct
20 did not sufficiently meet the “rascality” test. Noting that the
employer had suspended benefits based on a reasonable belief
that the employee had violated restrictive covenants, the Court
found that such conduct “is not of the same type as that
proscribed by the CPA,” and “suspending benefits until its
obligation to pay . . . is established does not raise an eyebrow
of one inured to the rough and tumble of the world of commerce.”
Id.
Courts in this district, however, have generally held that
the Act does not apply to conflicts arising from employment.
See, e.g., Bartholomew v. Delahaye Grp., Inc., No. CIV. 95-20-B,
1995 WL 907897, at *10 (D.N.H. Nov. 8, 1995); Donovan v. Digital
Equip. Corp., 883 F. Supp. 775, 787 (D.N.H. 1994) (finding that
plaintiff’s relationship with defendant “was, in form and
essence, an employment relationship and, as a result, disputes
arising from it may not be litigated under the New Hampshire
consumer protection act.”). Plaintiff appears to concede that
allegations of an employer-employee dispute would not meet the
“trade or commerce” requirement of the Act. See, e.g., Pl.’s
Br. in Supp. of Obj. to Mot. to Dismiss at 12-13 (arguing that
plaintiff has stated a viable claim under the CPA because he has
alleged more than an “employer-employee dispute”). That
matters, because much of the conduct alleged in Gately’s
21 complaint might be seen as “inextricably linked” to his
employment with Mortara. Donovan, 883 F. Supp. at 786.
Specifically, Gately alleges that Mortara induced him to join
the Company through false promises about entering the acute care
patient monitoring market, and then unfairly terminated his
employment after he expressed concerns about Mortara’s ELI 250e
product.
But, Gately argues, his allegations go beyond an employer-
employee dispute, because he has also alleged that Mortara
engaged in deceptive conduct (representing its intent to enter
the acute patient care monitoring market) in order to increase
the purchase price paid for its stock, using Gately as a pawn in
its deceptive negotiations. Those representations, Gately says,
were false and made to manipulate Gately into joining Mortara,
all in an effort to persuade Hill-Rom that Mortara was prepared
to expand into the acute care monitoring market. It is those
allegations, Gately argues, that implicate trade and commerce
under the statute. And, he says, as a result of that deceptive
conduct, he was injured. In support of his argument, Gately
relies on Campbell v. CGM, LLC, No. 15-CV-088-JD, 2017 WL 78474,
at *12 (D.N.H. Jan. 9, 2017), in which the plaintiff alleged
that the defendant induced him to leave his business and instead
22 work for the defendant, by making false promises of a certain
salary and bonuses.
Given that RSA chapter 358-A “defines who may bring a
private action broadly,”3 Gately could potentially state a CPA
claim. See LaChance v. U.S. Smokeless Tobacco Co., 156 N.H. at
94 (“If we were to conclude, as the defendants urge, that the
legislature intended to allow only those directly injured to
bring suit, we would have to find some way to limit the
statute's scope, most likely by reading the word ‘directly’ into
it, i.e. ‘any person directly injured.’ This is not what the
statute says, and it is not our practice to add words to
statutes.”) (citations omitted). At this early stage, viewing
the complaint in the light most favorable to plaintiff,
accepting his factual allegations as true, and drawing all
reasonable inferences in his favor, Gately’s allegations are
probably (barely) sufficient to satisfy the “rascality” test.
As the court noted in Campbell, 2017 WL 78474, at *12, while “an
3 See Remsburg v. Docusearch, Inc., 149 N.H. 148, 159 (2003). “According to the statute, ‘[a]ny person injured by another’s use of any method, act or practice declared unlawful under this chapter may bring an action for damages.’” Id. (quoting RSA 358-A:10); see also LaChance v. U.S. Smokeless Tobacco Co., 156 N.H. 88, 94 (2007) (“By allowing ‘any person injured’ to bring an action, the plain language of RSA 358–A:10, I does not suggest any legislative intent to limit who may bring a CPA claim to persons sustaining direct injuries.”) (emphasis in original). 23 ordinary breach of contract claim does not show a violation of
the Act, ‘a defendant who induces the plaintiff to enter a
contract based on a knowing misrepresentation of the promisor's
intent to perform under the contract violates the Consumer
Protection Act.’” (quoting Moulton v. Bane, No. 14-CV-265-JD,
2016 WL 1091093, at *12 (D.N.H. Mar. 21, 2016)). See also Derry
& Webster, LLC v. Bayview Loan Servicing, LLC, No. 14-CV-211-PB,
2014 WL 7381600, at *6 (D.N.H. Dec. 29, 2014) (“The New
Hampshire Supreme Court has consistently held that inducing
another to enter a contract based on a knowing misrepresentation
of the promisor's intent to perform under the contract violates
the CPA”) (collecting cases). But see Franchi v. New Hampton
Sch., 656 F. Supp. 2d 252, 266 (D.N.H. 2009) (“broken promises
alone do not rise to the level of rascality where successful
[CPA] claims dwell.”). It may turn out that the evidence
supports only a broken promise based upon a corporate decision
to change direction. But at this stage, while Gately’s
allegations in support of his CPA claim appear weak, they do
withstand defendant’s motion to dismiss. Accordingly, the court
declines, at this stage, to dismiss plaintiff’s CPA claim. The
defendant is, of course, free to revisit the issue at the
summary judgment stage, when the factual record is developed.
24 CONCLUSION
For the foregoing reasons, and for those stated in
defendant’s memorandum in support of its motion, defendant’s
motion to dismiss (document no. 3) is GRANTED in part, as to
plaintiff’s breach of contract claim. Defendant’s motion to
dismiss is otherwise DENIED.
SO ORDERED.
____________________________ Steven J. McAuliffe United States District Judge
August 9, 2017
cc: Jonathan M. Shirley, Esq. James A. McClure, Esq. Christopher P. Banaszak, Esq. Michael J. Gentry, Esq. William C. Saturley, Esq.