Lilly Software v , Blue Ridge Design CV-00-093-JD 04/20/01
UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF NEW HAMPSHIRE
Lilly Software Associates, Inc.
v. Civil N o . 00-93-JD
Opinion N o . 2001 DNH 077
Blue Ridge Designs, Inc.
O R D E R
Lilly Software Associates, Inc. brings claims against Blue
Ridge Designs, Inc. arising from the parties’ failed business
relationship. Blue Ridge moves to dismiss, or in the
alternative, for judgment on the pleadings, with respect to
Lilly’s claims of defamation and intentional interference with
prospective contractual relations. Lilly objects.
Discussion
As a preliminary matter, Blue Ridge raises a procedural
question as to whether its motion is properly treated as a motion
to dismiss, pursuant to Federal Rule of Civil Procedure 12(b)(6),
or a motion for judgment on the pleadings, pursuant to Rule
12(c). A Rule 12(b)(6) motion may be filed as a responsive
pleading before answering the complaint, while a 12(c) motion is
filed after answering when the pleadings are closed. See, e.g.,
Monell v . Best Personnel Sys., Inc., 127 F. Supp. 2d 4 8 , 50
(D.P.R. 2000). The confusion in this case is that Blue Ridge
answered the initial complaint but has not answered the amended
complaint. In that circumstance, the motion is properly treated
as a motion to dismiss pursuant to Rule 12(b)(6). See, e.g., Doe
v . Savine Parish Sch. Bd.,
24 F. Supp. 2d 655, 658 (W.D. La.
1998).
When considering a motion to dismiss pursuant to Rule
12(b)(6), the court takes all well-pleaded facts in the complaint
as true and draws all reasonable inferences in the plaintiff’s
favor. See Mass. Sch. of Law at Andover, Inc. v . Am. Bar Ass’n,
142 F.3d 2 6 , 40 (1st Cir. 1998). The court does not credit legal
conclusions or “‘subjective characterizations or conclusory
descriptions of a general scenario which could be dominated by
unpleaded facts.’” Murphy v . United States,
45 F.3d 520, 522
(1st Cir. 1995) (quoting Coyne v . City of Somerville,
972 F.2d
440, 444 (1st Cir. 1992)). To avoid dismissal, the plaintiff
must allege facts as to each element of an actionable legal
theory. See Berner v . Delahanty,
129 F.3d 2 0 , 25 (1st Cir.
1997).
A. Defamation
Blue Ridge moves to dismiss Lilly’s defamation claim,
arguing that because Lilly alleges that Blue Ridge made
derogatory statements about Lilly’s business or property, rather
2
than about personal conduct or character, the cause of action
should be construed as injurious falsehood rather than
defamation.1 Blue Ridge cites no New Hampshire law in support of
its theory that defamation does not pertain to false and
defamatory statements in a business context.2 In contrast, the
New Hampshire Supreme Court relied on the tort of defamation, not
injurious falsehood, in a business context in Indep. Mech.
Contractors, Inc. v . Gordon T . Burke & Sons, Inc., 138 N.H. 110,
118 (1993). Blue Ridge has failed to show that under New
Hampshire law business defamation must be brought as a claim for
injurious falsehood.
Blue Ridge contends, in a footnote, that Lilly’s allegations
are insufficient to state a claim of defamation. Blue Ridge does
not, however, address the elements of defamation under New
Hampshire law. Instead, Blue Ridge again argues that Lilly’s
allegations do not permit Blue Ridge to determine whether Lilly
1
Blue Ridge argues that the tort of injurious falsehood
includes elements of intentional harm and knowledge or reckless
disregard in contrast to defamation which is premised on
negligence.
2
Courts in other jurisdictions have distinguished between
causes of action for injurious falsehood and defamation based on
the Restatement (Second) of Torts § 623A (1977). See, e.g.,
Bankwest v . Fid. & Deposit Co., 63 F.3d 974, 981 (10th Cir.
1995); Jorgensen v . Mass. Port Auth.,
905 F.2d 515, 525-26 (1st
Cir. 1990) (discussing Massachusetts l a w ) .
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is alleging defamation or injurious falsehood.
Lilly alleges its claims as defamation under New Hampshire
law, not injurious falsehood. Under New Hampshire law, “[t]o
establish defamation, there must be evidence that a defendant
failed to exercise reasonable care in publishing, without a valid
privilege, a false and defamatory statement of fact about the
plaintiff to a third party.” Indep. Mech. Contractors, Inc., 138
N.H. at 118. Lilly alleges that Blue Ridge “made false
statements of fact about Lilly and Lilly’s software to Five
Rivers and Murray, both third parties and potential Lilly
customers,” that those statements injured Lilly’s reputation and
were made without a valid privilege and without exercising
reasonable care. Am. Compl. ¶¶ 42-45. Lilly also alleges that
the statements were made during the summer of 2000 when
representatives of Five Rivers were visiting Blue Ridge and in
the course of a telephone call between Blue Ridge and
representatives of Murray. See id. ¶¶ 19-20. To the extent Blue
Ridge’s motion may be interpreted to challenge Lilly’s defamation
claim under New Hampshire law, the defamation allegations cover
the essentials of such a claim.3
3
It is far from clear that Blue Ridge raised the question of
whether the defamation claim is sufficiently alleged under New
Hampshire law to meet the pleading requirements of Federal Rule
of Civil Procedure 8 ( a ) . See, e.g., Cruz-Erazo v . Rivera-
4
B. Intentional Interference with Prospective Contractual
Relations
Blue Ridge argues that Lilly’s claim of intentional
interference with prospective contractual relations must be
dismissed due to Lilly’s failure to allege that it had a
contractual agreement with a third party and that Blue Ridge
either intentionally or improperly interfered with such an
agreement. Under New Hampshire law, to state a claim for
intentional interference with contractual relations a plaintiff
must allege: “(1) the plaintiff had an economic relationship
with a third party; (2) the defendant knew of this relationship;
(3) the defendant intentionally and improperly interfered with
this relationship; and (4) the plaintiff was damaged by such
interference.” Demetracopoulos v . Wilson, 138 N.H. 371, 373-74
(1994) (internal quotation marks and emphasis omitted). When the
claim is for intentional interference with prospective
contractual relations, “the court has limited actionable claims
to those situations in which the plaintiff ‘seeks relief for the
defendants’ interference with already existing relationships that
give rise to a reasonable expectation of economic advantage.’
Heritage Home Health, Inc. v . Capital Region Health Care Corp.,
Montanez,
212 F.3d 617, 622 n.3 (1st Cir. 2000); Higgins v . New
Balance Athletic Shoe, Inc.,
194 F.3d 252, 260 (1st Cir. 1999).
5
N o . 95-558-JD, slip op. at 10-11, 1996 WL 655793 (D.N.H. Oct.1,
1996) (quotation marks omitted).” Preyer v . Dartmouth Coll.,
968
F.Supp. 2 0 , 26 (D.N.H. 1997).
Blue Ridge argues, relying on Montrone v . Maxfield, 122 N.H.
724, 726 (1982), that in the context of prospective contractual
relations, the plaintiff must show that it had a binding
contractual agreement. Contrary to Blue Ridge’s argument,
however, the plaintiff in Montrone was in the process of
contracting to buy real estate when a broker introduced a new
buyer to the seller, inducing the seller to sell the property to
the new buyer. See
id. at 725. The court concluded that the
plaintiff had shown sufficient evidence of a contractual
relationship, but had not shown that the broker wrongfully
interfered in that relationship. See
id. at 726. Similarly, in
Baker v . Dennis Brown Realty,
121 N.H. 640, 644 ((1981), the
court affirmed the plaintiff’s verdict based on her offer to buy
real estate although the seller had not yet accepted her offer.
In Preyer, the plaintiff’s application for a permanent
position with Dartmouth College Dining Services, after her
temporary position expired, was denied allegedly due to racial
animus. See Preyer, 968 F. Supp. at 2 2 . This court denied the
defendant’s motion to dismiss her intentional interference claim,
concluding, in part, that the plaintiff’s allegations that the
6
defendant prevented her from obtaining the permanent position,
for which she had applied, were sufficient. See id. In Heritage
Home Health, Inc., 1996 WL 655793, this court summarized the
relationship necessary for a claim of intentional interference
with prospective contractual relations as “a promise, or the
reasonable expectation of a promise, creating a duty recognized
by law.”
Id. at * 3 .
In this case, Lilly alleges that during the spring and
summer of 2000, it was negotiating with two Tennessee companies,
Five Rivers Electronic Innovations, LLC and Murray, Inc., to sell
software and related services. In July, Lilly made a specific
proposal to Five Rivers for a package of software, licenses, and
services. Soon after, a competitor took representatives from
Five Rivers to visit Blue Ridge, which was using the competitor’s
products, where Lilly believes Blue Ridge made false and
defamatory statements about Lilly and Lilly’s software. Lilly
also alleges that after Lilly made a specific proposal for the
sale of a package of Lilly products and services to Murray, Blue
Ridge made false and defamatory statements about Lilly to
representatives of Murray during a telephone call set up by the
same competitor. See Am. Compl. ¶¶ 19-20.
Since Lilly alleges that it made a promise to each company
to sell specific products and services at a certain price, much
7
like the offers to buy property in Montrone and Baker and the
employment application in Preyer, Lilly has sufficiently alleged
an existing relationship with each that was likely to result in
economic advantage. In addition, it may be reasonably inferred
from Lilly’s allegations that Blue Ridge intentionally made false
and defamatory statements to Lilly’s prospective customers on
behalf of Lilly’s competitor for the purpose of luring the
customers away from Lilly. Therefore, Blue Ridge’s motion to
dismiss this claim is denied.
Conclusion
For the foregoing reasons, the defendant’s motion to dismiss
(document n o . 26) is denied.
SO ORDERED.
Joseph A . DiClerico, Jr.
District Judge
April 2 0 , 2001
cc: Richard C . Nelson, Esquire
David S . Godkin, Esquire
Michael C . Harvell, Esquire
James D. Myers, Esquire
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