United States District Court, D. Connecticut
ORDER
Michael P. Shea, U.S.D.J.
In this
contract dispute, the plaintiff Wood and Bricks, LLC
(“Wood”) sues TD Development, LLC (“TD
Development”) and its sole member, Todd Clifford
(“Clifford” and collectively, the
“defendants”). (See generally ECF No.
27.) This order addresses the only claim currently scheduled
for trial, Wood's claim against Clifford for tortious
interference, and, finding it legally insufficient, DISMISSES
the claim.
This
case has a convoluted procedural history, but I recount here
only that part of it necessary to explain this order. Wood
filed a verified complaint in Superior Court, Judicial
District of Hartford, against the defendants alleging claims
for (1) breach of contract against TD Development and (2)
tortious interference of contract against Clifford. (ECF No.
1-4 at 3-10.) Defendants removed the case to this Court (ECF
No. 1), and Clifford subsequently moved to dismiss the
tortious interference count against him. (ECF No. 20.)
Clifford argued that a corporate officer acting within the
scope of his authority who causes his company to terminate a
contract is not functionally separate from the corporate
entity, and thus a claim for tortious interference may not
lie against Clifford as TD Development's sole member.
(ECF No. 20-1 at 3-5.) However, after this Court issued an
“amend now or never” order in response to the
motion, Wood filed an amended complaint. (ECF Nos. 21, 27.)
The amended complaint again asserted claims for breach of
contract against TD Development and tortious interference
with contract against Clifford, but also added claims of
conversion, statutory theft, unfair trade practice, and
foreclosure of a mechanic's lien against TD Development.
(ECF No. 27.) Instead of renewing their motion to dismiss,
Defendants simply answered the amended complaint. (ECF No.
30). Neither party filed motions for summary judgment, and
the parties filed their Joint Trial Memorandum on November
15, 2018. (ECF Nos. 201, 214.) On December 3, 2018, Wood
filed a motion for default judgment on all of its claims
against TD Development. (ECF No. 218 at 7-9.) Jury selection
is now scheduled for January 9, 2019. (ECF No. 217.)
Accordingly, and as the parties state in their Joint Trial
Memorandum, “the only claim remaining for trial in this
action is Wood's single claim against Clifford for
tortious interference.” (ECF No. 214 at 1.) Based on
arguments raised by Clifford in his original motion to
dismiss and, now, the joint trial memorandum (ECF No. 214 at
6-7), the Court ordered Wood on December 3, 2018 to show
cause within 10 days, or by December 13, 2018, why that claim
should not be dismissed for failure to state a claim. (ECF
No. 217.) Wood failed to file any response by the date of
this order.[1]
“The
district court has the power to dismiss a complaint sua
sponte for failure to state a claim . . . .”
See Leonhard v. United States, 633 F.2d 599, 609
n.11 (2d Cir. 1980). I take the plaintiff's factual
allegations in the complaint “to be true and draw[] all
reasonable inferences in the plaintiff's favor.”
Harris v. Mills, 572 F.3d 66, 71 (2d Cir. 2009).
“[A] complaint must 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 quotation marks omitted).
“A claim has facial plausibility when the plaintiff
pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged.” Id. A court need not
accept legal conclusions as true and “[t]hreadbare
recitals of the elements of a cause of action, supported by
mere conclusory statements, do not suffice.”
Id. I consider “only the complaint, any
written instrument attached to the complaint as an exhibit,
any statements or documents incorporated in it by reference,
and any document upon which the complaint heavily
relies.” In re Thelen LLP, 736 F.3d
213, 219 (2d Cir. 2013) (citation and subsequent history
omitted).
Under
Connecticut law, “[a] claim for intentional
interference with contractual relations requires the
plaintiff to establish: (1) the existence of a contractual or
beneficial relationship; (2) the defendant's knowledge of
that relationship; (3) the defendant's intent to
interfere with the relationship; (4) that the interference
was tortious; and (5) a loss suffered by the plaintiff that
was caused by the defendant's tortious conduct.”
Rioux v. Barry, 283 Conn. 338, 351 (2007).
Nonetheless, where the defendant is an agent of a contractual
party, the plaintiff must plead that defendant acted outside
the scope of his duty to assert a claim for tortious
interference in the agent's individual capacity:
[I]t is well-settled that the tort of interference with
contractual relations only lies when a third party adversely
affects the contractual relations of two other
parties. There can be no intentional interference with
contractual relations by someone who is directly or
indirectly a party to the contract. The general rule is that
the agent may not be charged with having interfered with a
contract of the agent's principal. An agent acting
legitimately within the scope of his authority cannot be held
liable for interfering with or inducing his principal to
breach a contract between his principal and a third party,
because to hold him liable would be, in effect, to hold the
corporation liable in tort for breaching its own contract. In
other words, an exception to the general rule applies if the
agent did not act legitimately within his scope of duty but
used the corporate power improperly for personal gain.
Metcoff v. Lebovics, 123 Conn.App. 512, 520-21
(2010) (quotation marks, internal citations, and alterations
omitted; emphasis in original). In other words, where a
plaintiff fails to allege facts showing that a contractual
party's agent acted outside of the scope of his duty, the
agent's actions are not distinct from those of the
contractual party and thus the common law bars a tortious
interference claim against the agent in his individual
capacity. See id.[2]
The
Amended Complaint alleges that Clifford is the sole member of
TD Development. (ECF No. 27 at ¶ 2.) In the breach of
contract count, Wood alleges that TD Development breached the
June 16, 2015 Demolition Management & Salvage Agreement
(the “Agreement”) between Wood and TD Development
by “refusing to issue (and/or refusing to allow its
abatement contractor to issue) clearances so that [Wood]
could continue the demolition, generate salvage and salvage
proceeds” on certain buildings to be demolished under
the Agreement, and also by issuing a written notice
purporting to terminate the Agreement and “directing
[Wood] to ‘to leave the main property and the office
building across the street immediately or risk facing
trespass charges.'” (ECF No. 27 at ¶¶
4-5, 12, 14.) The breach of contract count does not include
any allegations concerning Clifford's involvement.
(Id. at 1-6.) The tortious interference count
incorporates those breach of contract allegations and adds
further that “Clifford caused TD to take the wrongful
actions detailed above because of a personal motive to profit
himself and/or to satisfy personal feelings of animus toward
plaintiff and its principal . . ., ” resulting in
damage to Wood. (ECF No. 27 at 10-11.)
The
amended complaint fails to state a claim for tortious
interference against Clifford. It alleges that Wood and TD
Development were the parties to the Agreement, and that
Clifford was the sole member of TD Development. (ECF No. 27
at 1 ¶ 2, 2 ¶ 4.) However, the amended complaint
does not allege what specific actions Clifford took to cause
a breach, or whether Clifford took such actions as an agent
of TD Development-but given the absence of more specific
allegations, it is most plausibly read as such.[3] Cf.
Wellington Sys., Inc. v. Redding Grp., Inc., 49
Conn.App. 152, 168-69 (1998) (affirming grant of summary
judgment on tortious interference claim against principal
stockholders because plaintiff “failed to allege or to
offer any evidence that [stockholders] were not acting
legitimately within the scope of their authority”). The
amended complaint does not allege any facts from which the
Court could conclude that Clifford acted outside the scope of
his agency in causing TD Development to breach the Agreement,
so as to impose individual tort liability on Clifford under
the exception to the common law bar. See Metcoff,
123 Conn.App. at 523 (affirming dismissal of tortious
interference claim where plaintiff made “no allegations
that” decision to refuse to issue stock “[was]
concealed or made at a time, place or manner other than in
the course of the business normally transacted by corporate
management”). In the absence of more specific
allegations, permitting Wood's claim to proceed against
Clifford would have the effect of vitiating liability
protections for members of an LLC under Connecticut law.
See, e.g., Conn. Gen. Stat. § 34-251a(a)
(“A member or manager is not personally liable,
directly or indirectly . . . for a debt, obligation or other
liability of the company solely by reason of being
or acting as a member or manager.”) (emphasis added).
Although Wood's amended complaint included an additional
allegation that Clifford caused TD Development to “take
the wrongful actions [the two breaches of contract] . . .
because of a personal motive to profit himself and/or to
satisfy personal feelings of animus toward plaintiff and its
principal, ” such conclusory allegations of improper
motive alone cannot remove the alleged wrongful actions from
the scope of Clifford's agency. (ECF No. 27 at 10 ¶
22.) See Metcoff, 123 Conn.App. at 523 (rejecting
tortious interference claim that alleged “sinister
motivations [about] conduct taken in the normal course of
corporate management.”).[4] Because, based on the complaint,
Clifford's actions and those of TD Development appear
indistinguishable, the tortious interference claim fails as a
matter of law. Cf. Harp, 266 Conn. at 776 (2003)
(“A basic principle of agency is that a corporation can
act only through the authorized acts of its corporate
directors, officers, and other employees and agents.”).
Accordingly,
Wood has failed to plead a cognizable claim of tortious
interference against Clifford, TD Development's sole
member, for allegedly causing TD Development to breach the
Agreement. This claim is therefore DISMISSED with prejudice,
and the pre-trial conference set for January 3, 2019 and the
jury selection set for January 9, 2018 are hereby CANCELLED.
The Court will rule on the pending motion for default
judgment against TD Development in due course.
IT IS
SO ORDERED.
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Notes:
[1] For this reason, I would also dismiss
Wood's claim against Clifford under Fed.R.Civ.P. 41(b),
as I specifically warned that “[f]ailure to file a
response will result in dismissal of this action.” (ECF
No. 217.) In addition, chambers received an unsolicited,
ex parte e-mail from Clifford on December 14, 2018
informing the Court about a Rule 12(b)(6) motion he was
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