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Answer & Explanation:1. Facts: What are the facts?2. Issues: What are the issues?3. Reasons & Conclusions: What are the reasons and conclusions?4. Relevant Rules of Law: What are the relevant Rules of Law?5. Ambiguity: Does the legal argument contain any significant ambiguity?6. Ethical Norm: What ethical norms are important to the court’s reasoning?7. Legal Analogies: Are the legal analogies appropriate?8. Missing Information: Is there relevant or important missing information?101326403_ARMSTRONG_V._ROHM_HAAS_CO._INC._(D.MASS._2004)_349_F._Supp.2d_71_(D._Mass._2004)_Casetext_1.pdfSample for case analysis.pages.zip
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United States District Court, D. Massachusetts.
349 F. Supp.2d 71 (D. Mass. 2004)
ARMSTRONG V. ROHM HAAS CO., INC.
(D.MASS. 2004)
ROBERT ARMSTRONG AND MARC POTTLE, PLAINTIFFS, V. ROHM AND HAAS COMPANY, INC., DEFENDANT.
∙
ACHUSETTS.
CIVIL ACTION NO. 03-40246-FDS.
∙
OCTOBER 15, 2004.
∙
UNITED STATES DISTRICT COURT, D. MASS-
*72
Robert Armstrong, pro se.
Marc Pottle, pro se.
Richard T. Tucker, Weinstein, Bernstein Burwick, P.C., Dudley, MA, for Plaintiffs.
Timothy P. Van Dyck, Windy L. Rosebush, Edwards Angell, LLP, Boston, MA, for Defendant.
*73
MEMORANDUM AND ORDER
SAYLOR, District Judge.
This is a civil action arising from defendant’s alleged breach of an oral agreement to provide plaintiffs
with “all the work they could handle.” Pending before this Court is defendant’s motion to dismiss under
Fed.R.Civ.P. 12(b)(6) for failure to state a claim upon which relief can be granted.
I. Background
The following facts are as alleged in the complaint.1 (https://casetext.com/#idm565888416-fn1) Plaintiffs
Robert Armstrong and Marc Pottle were employed as ceramic grinders by Morton International, Inc., at
its facility in Spencer, Massachusetts. In 1999 Rohm and Haas Company, Inc., acquired Morton and *2 announced that the Spencer facility would be closed in April 2000.2 (https://casetext.com/#idm566650256-fn2)
Rohm and Haas gave the Morton employees one month to decide whether to transfer to its facility in
Woburn, Massachusetts, or accept a severance package and voluntarily terminate their employment. Employees who chose to transfer to the Woburn facility received an incentive payment larger than that offered as part of the severance package.
1. This recitation of facts is, of course, plaintiffs’ version of events, as set forth in the complaint. The
issue here is the sufficiency of the proposed pleading, not whether the evidence actually supports
those allegations.
2. Rohm and Haas is the only defendant in this action. Counsel for defendant indicated at oral argument that Rohm and Haas has succeeded to all of the obligations and liabilities of Morton, if any, related to this action, and that defendant did not contest plaintiffs’ failure to name Morton as a party.
Armstrong and Pottle wished to remain with the company. Nonetheless, in May 2000, Thomas Payne, the
plant manager of the Spencer facility, suggested that the plaintiffs could make substantially more money
if they resigned, accepted the severance package, and started their own company to handle Rohm and
Haas’ outsourced grinding work. That work, at the time, was being sent to a company called Chand Associates. Payne indicated that the company wished to end its dependence on Chand. In particular, Payne
represented to Armstrong and Pottle that the company would give their new business “all the [outsourced
grinding] work they could handle” and that the company “would like to” give the plaintiffs “all of its outsourced work in ceramic grinding, which had been in the neighborhood of $10,000 per month.”
On July 26, 2000, in reliance on Payne’s representations, Armstrong and Pottle resigned from Rohm and
Haas, accepted the severance package, and entered into separate Agreements and Releases with the company.3 (https://casetext.com/#idm565641776-fn3) In return for the promises made to the plaintiffs if they
signed the Agreement, the plaintiffs agreed to release Morton, and its “successors, parents [and]
sidiaries,” *74
*3
sub-
from any and all manner of claims, demands, actions, causes of action, suits, arbitration proceedings, debts, costs,
judgments, executions, claims and demands of whatsoever nature, direct or indirect, known or unknown, asserted
or unasserted, matured or not matured, which [plaintiffs] . . . ever had, now or hereinafter can, shall or may have
against the [company], from the beginning of time until the present, arising out of or in any manner relating to all
events or circumstances in any way related to [plaintiffs’] employment with [the company] or the separation of
that employment.
3. Because the two contracts are essentially identical, for the sake of convenience the two will be referred to collectively as “the Agreement.”
Agreement ¶ 12. The plaintiffs also agreed to a covenant not to sue, providing that they would not
seek personal equitable or monetary relief by filing, charging, claiming, suing or causing or permitting to be filed
any civil action, suit or legal proceeding in connection with any matter occurring at any time in the past concerning [the plaintiffs’] employment relationship with Morton, up to and including the date of [the] Agreement or involving any continuing effect or [sic] any acts or practices which may have arisen or occurred on or prior to the
date of [the] Agreement.
Agreement ¶ 13.
The Agreement further provides:
[Each plaintiff] acknowledges that he is acting of his own free will, that he has been advised by Morton to consult
an attorney of his choice, that he has had a sufficient opportunity to read the terms of this Agreement, and consult
legal counsel, if desired, and that he fully understands all of the provisions of this Agreement. In addition, [each
plaintiff] acknowledges that neither Morton nor any of its employees, agents, representatives or attorneys have
made any representations concerning the terms of this Agreement other than those contained herein.
Agreement ¶ 19.
Finally, the Agreement also includes an integration provision, which states that “This Agreement contains
the entire agreement of the parties relating to the subject matter herein” and that “[i]t may be changed
only by a written agreement, signed by both parties.” Agreement ¶ 22.
Armstrong and Pottle were given 45 days in which to consider the Agreement before
*4
signing it, but
they expressly waived that right in writing in order to receive their severance checks more quickly. After
their resignations, plaintiffs invested in shop space and tools in order to begin handling the outsourced
work of Rohm and Haas. During the first few months after plaintiffs’ termination, Rohm and Haas gave
them a small amount of work and assured them that it was all the work that was available due to a decrease in production. That trend continued into late 2001 when Pottle accepted a job with Chand Associates due to the lack of work in his new business. Upon commencement of his new position, Pottle discovered that Rohm and Haas was still outsourcing large amounts of grinding work to Chand. When he
and Armstrong confronted Payne with that information, Payne denied that Chand was getting the work.
Based on those facts, the plaintiffs filed a complaint in the Superior Court on July 24, 2003, alleging
claims of: (1) fraudulent inducement, (2) fraud, (3) breach of oral contract, (4) promissory estoppel, and
(5) violation of Mass. Gen. Laws ch. 93A. On November 10, 2003, Rohm and Haas removed the action to
this court and, on November 13, filed the pending motion to dismiss for failure to state a claim upon
*75
which relief can be granted under Fed.R.Civ.P.12(b)(6).
II. Standard of Review
A court may not dismiss a complaint for failure to state a claim under Fed.R.Civ.P. 12(b)(6) “unless it appears, beyond doubt, that the [p]laintiff can prove no set of facts in support of his claim which would entitle him to relief.” Judge v. City of Lowell, 160 F.3d 67, 72 (https://casetext.com/case/judge-v-city-of-lowell#p72)
(1st Cir. 1998) (quoting Conley v. Gibson, 355 U.S. 41, 45-46 (https://casetext.com/case/con-
ley-v-gibson-6051-28#p45)
(1957)). In considering the merits of a motion to dismiss, the court may
look only to the facts alleged in the pleadings, documents attached as exhibits or incorporated by reference in the complaint, and matters of which judicial *5 notice can be taken. Nollet v. Justices of the Trial
Court of Mass., 83 F. Supp. 2d 204, 208 (https://casetext.com/case/nollet-v-justices-of-trial-courts-ofcom-of-ma#p208)
(D. Mass. 2000) aff’d, 248 F.3d 1127 (1st Cir. 2000). Furthermore, the court must
accept all factual allegations in the complaint as true and draw all reasonable inferences in the plaintiff’s
favor. Langadinos v. American Airlines, Inc., 199 F.3d 68, 69 (https://casetext.com/case/langadinos-vamerican-airlines-inc#p69)
III. Analysis
(1st Cir. 2000).
The gravamen of the plaintiffs’ complaint is that they were fraudulently induced to terminate their employment voluntarily, accept a severance package, and start their own business in exchange for defendant’s promise to provide them with “all of the [outsourced grinding] work they could handle” — a promise that the company never intended to keep, and in any event did not keep.
Defendant contends that the entire matter is controlled by the Agreement signed by the plaintiffs when
they left the company, which contains a release, a covenant not to sue, and an integration provision. That
Agreement, however, is not as sweeping as defendant contends. Moreover, plaintiffs have specifically alleged that they were fraudulently induced to enter into the Agreement, which would preclude summary
judgment if plaintiffs can establish that they reasonably relied on the alleged misrepresentation.
Nonetheless, plaintiffs’ claim cannot survive even if plaintiffs can avoid the operation of the Agreement.
Although plaintiffs allege a variety of different theories of recovery, their claim is ultimately dependent
on a single issue: whether the alleged agreement to provide “all of the work they could handle” is legally
enforceable. For the reasons set forth below, this Court concludes that it is not.
Because that promise is not enforceable, plaintiffs cannot prevail on the contract claim. *6 Their claims of
fraud and fraudulent inducement, by which they seek to avoid the effect of the Agreement, likewise fail,
because plaintiffs cannot establish reasonable reliance where the promise at issue was too vague to be enforced. The claim for promissory estoppel fails on similar grounds. Finally, plaintiffs have failed to state a
claim for violation of Mass. Gen. Laws ch. 93A because the instant dispute arose during the parties’ employment relationship.
A. The Effect of the Agreement and Release
As a threshold matter, defendant contends that the complaint should be dismissed in its entirety because
the Agreement contains (1) a release of all claims arising out of plaintiffs’ employment with and separation from the company, (2) a related covenant not to sue, and (3) an integration provision that specifically
provides that there are no other agreements between the parties.
The language contained in the Agreement, however, is neither as comprehensive
*76
nor as clear as
claimed by defendant. Paragraph 12 of the Agreement releases those claims that plaintiffs had “from the
beginning of time until the present, arising out of or in any manner relating to all events and circumstances in any way related to [their] employment with Morton . . . or the separation of that employment.”
It thus does not, by its express terms, release future claims, i.e., those that have not yet accrued.4
(https://casetext.com/#idm565482992-fn4) Put another way, while the alleged oral contract certainly arises out
of and relates to plaintiffs’ employment with Morton, as of the moment the release was signed, plaintiffs
had no claim under that contract, because no breach had yet occurred. *7
4. The release could have been drafted in more comprehensive terms, so as to release the company
from future claims arising out of contract obligations between it and the plaintiffs existing as of the
date of the release. See Radovsky v. Wexler, 273 Mass. 254, 257 (https://casetext.com/case/radovskyv-wexler#p257)
(1930) (“An existing obligation or contract right between parties, although executory and in some respects dependent upon contingencies that might never happen, is one that can be
released”).
The covenant not to sue, in turn, provides that plaintiffs will not file suit “in connection with any matter
occurring at any time in the past concerning [the plaintiffs’] employment relationship with Morton, up to
and including the date of [the] Agreement or involving any continuing effect or [ sic; probably should be
of] any acts or practices which may have arisen or occurred on or prior to the date of [the] Agreement.”
Again, that language would not appear to preclude a suit for a breach of contract that occurred after the
date of the Agreement; such a breach would not be a “continuing effect” of a prior act or practice, but a
new “act” altogether.
As for the integration provision, paragraph 22 states that it “contains the entire agreement of the parties
relating to the subject matter herein.” The “subject matter herein” is plainly plaintiffs’ employment with,
and termination from, the company. While that language would create serious hurdles for plaintiffs if they
attempted to introduce parol evidence that contradicted the terms of the Agreement, it is less clear that it
would prohibit testimony regarding a collateral oral contract.5 (https://casetext.com/#idm565479504-fn5)
There is at least a possibility that the Court, after receipt and review of evidence, could find that the parties entered into both the written Agreement and a collateral oral contract relating to the outsourcing of
work.
5. Under the parol evidence rule, where there is a binding integrated agreement, evidence of prior or
contemporaneous agreements or negotiations may not be considered to vary a term of the written
agreement. Brennan v. Carvel, 929 F.2d 801, 806 (https://casetext.com/case/brennan-v-carvelcorp#p806)
(1st Cir. 1991). Nevertheless, the parol evidence rule does not exclude proof of a prior
oral contract between the parties, which is separate from, or collateral to, and not inconsistent with,
the terms of the written agreement. Id. (“The `collateral agreement rule’ is well established in Massachusetts”); see Durkin v. Cobleigh, 156 Mass. 108, 108-109 (1892). The fact that an agreement is
completely integrated, as the Agreement at issue in this case would appear to be, does not preclude an
attempt to show an entirely separate and distinct contract between the same parties. Brennan, 929
F.2d at 807 (https://casetext.com/case/brennan-v-carvel-corp#p807)
.
In any event, plaintiffs seek to avoid the Agreement in its entirety by pleading that they were fraudulently
induced to enter into it. It is well-settled that, as a general matter, parties may not use contractual language to avoid a claim of fraud in the inducement. Bates v. Southgate,
(https://casetext.com/case/bates-v-southgate#p182)
*8308
Mass. 170, 182-83
(1941); see also McEvoy Travel Bureau, Inc. v.
Norton Co., 408 Mass. 704, 712-13 (https://casetext.com/case/mcevoy-travel-bureau-inc-v-nortonco#p712)
(1990).
Courts have on occasion carved out narrow exceptions to that rule, where the *77 parties are sophisticated
persons or entities represented by counsel, the contract at issue was fully negotiated, and the alleged misrepresentations expressly contradict specific language of the written agreement. See, e.g., McCartin v.
Westlake, 36 Mass. App. Ct. 221,230-33 (https://casetext.com/case/mccartin-v-westlake#p230)
N.E.2d 283 (https://casetext.com/case/mccartin-v-westlake)
630
(1994) (rejecting plaintiffs’ claims of fraud
based on prior oral misrepresentations where the parties’ subsequent written agreements were negotiated
over a period of more than three months, plaintiffs were represented by counsel, changes were made in
the agreements reflecting the understanding of the parties, and the misrepresentations were inconsistent
with various provisions of the agreement, including but not limited to the integration clauses therein).6
(https://casetext.com/#idm565473408-fn6)
6. See also Plumer v. Luce, 310 Mass. 789, 791, 802-05 (https://casetext.com/case/plumer-vluce#p791)
(1942) (rejecting experienced businesswoman’s claim that defendant misrepresented
what he intended to do with plaintiff’s stock where the parties’ written contract expressly stated that
the defendant had no obligation to use the stock in any particular way); Turner v. Johnson Johnson,
809 F.2d 90,97-98 (https://casetext.com/case/turner-v-johnson-johnson#p97)
(1st Cir. 1986) (rejecting plaintiffs’ claims of fraud where “both parties were experienced in business and the contract
was fully negotiated and voluntarily signed” and defendant’s prior oral assertions were inconsistent
with a contract provision that “specifically addressed the particular point at issue”). Some courts, although applying the same factors, have analyzed the issue under the rubric of whether plaintiff has
established reasonable reliance for the purposes of his fraud claim. See, e.g., Pizzeria Uno of
Kingston, Inc. v. Independence Mall Group,1995 WL 419932 at * 6 (Mass.Super.) (no reasonable reliance on alleged fraudulent statements where (1) plaintiffs were sophisticated business people represented by counsel in negotiating the subject leases and (2) the alleged misrepresentations were contradicted by the language of the leases, including the integration clauses therein); Elias Bros. Rest., Inc.
v. Acorn Enter., Inc., 831 F. Supp. 920, 923-26 (https://casetext.com/case/elias-bros-restaurants-vacorn-enter#p923)
(D. Mass. 1993) (no reasonable reliance on plaintiff’s prior oral representations
where (1) the parties negotiated the subject franchise agreements over a two-year period during
which various provisions were deleted, (2) defendant/counterclaimant had been a party to franchise
agreements in the past, and (3) the representations contradicted the language of the integration clause
in the agreements).
Here, plaintiffs are blue-collar machinists who were not represented by counsel during the contract negotiations; although the record is incomplete, it appears that they had limited education and experience in
business affairs and were far from skilled in the art of negotiating contracts. *9 There was apparently little
or no negotiation of the terms of the Agreement. Moreover, while the Agreement contains a standard integration provision, that language does not specifically contradict the alleged agreement to give plaintiffs
“all the work they could handle.”7 (https://casetext.com/#idm565471792-fn7)
7. Compare, e.g., Plumer, 310 Mass. at 801-05 (https://casetext.com/case/plumer-v-luce#p801)
(alleged oral statements and subsequent written agreement both referred directly to the defendant’s
use of plaintiff’s securities); McCartin, 36 Mass. App. Ct. at 225-88 (https://casetext.com/case/mccartin-v-westlake#p225)
(alleged misrepresentations and subsequent franchise agreement and disclosure statement both referred directly to parties’ obligations regarding the franchise arrangement);
Pizzeria Uno,1995 WL 419932 at *5-6 (alleged misrepresentations and subsequent lease agreements
both referred directly to the parties’ obligations under the leases); Elias Bro. Rest., Inc., 831 F. Supp.
at 922-26 (https://casetext.com/case/elias-bros-restaurants-v-acorn-enter#p922)
(alleged misrepresentations and subsequent franchise agreements all referred directly to the parties’ obligations regarding the franchise arrangements); Turner, 809 F.2d at 95-98 (https://casetext.com/case/turner-v-johnson-johnson#p95)
(holding that “plaintiffs may not raise as fraudulent any prior oral assertion inconsistent with a contract provision that specifically addressed a particular point at issue” where defendant’s prior statement and subsequent contract both referred directly to the defendant’s obligation
to market a thermometer).
In sum, plaintiffs are not necessarily precluded by the language of the Agreement from bringing their
claims. Nonetheless, theirs is a hollow victory, because *78 defendant’s alleged promise is too vague to be
enforced as a contract or reasonably relied upon as a fraudulent misrepresentation.
B. The Alleged Contract
The alleged contract at issue, as formulate …
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