Kilnapp Enterprises, Inc. 
Massachusetts State Automobile Dealers Association & others. 
December 7, 2015.
action commenced in the Superior Court Department on March
motion to dismiss was heard by Judith Fabricant, J.
J. Jacobs for the plaintiff.
Rose, Sr., for Fisher & Phillips LLP & another.
F. Radke for Massachusetts State Automobile Dealers
Rubin, Maldonado, & Massing, JJ.
N.E.3d 34] Rubin, J.
is an action for defamation brought by Kilnapp Enterprises,
Inc., doing business as Real Clean (Real Clean), which
describes itself as " a broker for automobile detailing
and reconditioning between service providers and automobile
ships."  Real Clean brought this action against
the Massachusetts State Automobile Dealers Association
(MSADA) for its published statements concerning an
investigation by the United States Department of Labor (DOL)
into the practices of automobile detailing "
brokers" including Real Clean. The complaint not only
asserts a claim for defamation but also includes several
other related counts that will be described more fully below.
It names as a defendant not only MSADA but also the author of
the published statements, Attorney Joseph Ambash, and his law
firm, Fisher & Phillips LLP. The defendants brought a
motion to dismiss under Mass.R.Civ.P. 12(b)(6), 365 Mass. 754
(1974), which was allowed. Real Clean appeals.
the materials properly considered by the judge in the
Superior Court demonstrate that Real Clean will be unable to
prove that the defendants' statements were materially
false under the applicable standard, which requires
demonstration that actionable statements have been made with
knowledge of their falsity or in reckless disregard of their
truth or falsity, we affirm the judgment dismissing all of
Real Clean's claims.
review of the allowance of a motion to dismiss is de novo.
Glovsky v. Roche Bros. Supermkts.,
Inc., 469 Mass. 752, 754, 17 N.E.3d 1026 (2014). For
purposes of reviewing the allowance of a motion to dismiss we
must, of course, take all the allegations in the
plaintiff's operative complaint, here the amended and
verified complaint filed on May 7, 2014, as true.
Iannacchino v. Ford Motor Co., 451
Mass. 623, 636, 888 N.E.2d 879 (2008), citing Bell A.
Corp. v. Twombly, 550 U.S. 544, 555,
127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). While the original
complaint has seven documents appended to it, including a
January 2, 2014, letter from Real Clean's counsel,
Stephen Gordon, to the executive vice-president of [47 N.E.3d
35] MSADA (Gordon letter) and Ambash's response thereto,
the amended complaint replaced the Gordon letter with an
affidavit from Real Clean's general manager.
Nevertheless, the amended complaint still appended the
response to the Gordon letter and contained allegations
referring to the existence of the Gordon letter. A reviewing
court, like the judge initially evaluating and ruling upon a
motion to dismiss, is entitled to consider materials not
appended to the complaint, but referenced or relied upon in
the complaint. See Harhen v.
Brown, 431 Mass. 838, 839-840, 730 N.E.2d 859
(2000), citing Shaw v. Digital Equip.
Corp., 82 F.3d 1194, 1220 (1st Cir. 1996);
Marram v. Kobrick Offshore Fund,
Ltd., 442 Mass. 43, 45 n.4, 809 N.E.2d 1017 (2004). We
recite the facts as alleged in the complaint, supplemented by
that factual information contained in these filings that were
properly considered by the trial judge.
Clean describes itself as a company that "
connect[s]" automobile dealerships with "
independent contractors" who provide automobile
detailing and reconditioning services (service providers).
According to the complaint, Real Clean has formed
relationships with hundreds or thousands of automobile
dealerships in Massachusetts and New England and is one of
the largest brokers of automobile detailing and
reconditioning services in the Commonwealth. In 2013, the DOL
was conducting an investigation into potential violations of
wage and hour laws by Real Clean and others in the automobile
detailing business. The complaint and other documents
properly before the judge indicate that with respect to Real
Clean, the DOL investigation focused on two relationships.
First, it focused on whether Real Clean in fact employed the
individuals nominally employed by the service providers
(detailers), and thus owed them overtime pay. Second, it
focused on whether the relationships Real Clean brokered --
between the dealerships and the service providers -- in fact
amounted to employment relationships between the dealerships
and the detailers, and whether therefore the dealerships owed
the detailers overtime pay. According to the Gordon letter,
the DOL " advised Real Clean that the DOL felt that Real
Clean owed many individual detailers overtime pay."
According to the complaint, " [the DOL] has attempted to
tie the dealership[s] to the independent contractors ... who
employ the detailing and reconditioning personnel." In
April, 2013, Real Clean met with the DOL and provided
materials purporting to refute the DOL's conclusions.
Between the time of those meetings and at least the time of
the Gordon letter, no enforcement actions were brought
against Real Clean. Nonetheless, according to the Gordon
letter, the DOL did visit automobile dealers, including some
who are Real Clean customers, and assessed amounts claimed to
be due from the dealers, some of whom paid the assessment.
November, 2013, MSADA published a newsletter featuring an
article written by defendant Ambash entitled " Alert:
DOL Cracking Down on Dealers Using Real Clean." A nearly
identical article appeared on MSADA's Web site on
November 13, 2013, where it was entitled " DEALER ALERT:
U.S. DEPARTMENT OF LABOR CONTINUES AUDITS OF AND ACTIONS
AGAINST DEALERS AND REAL CLEAN." The text of the first
of these articles is as follows:
" We have learned that the Department of Labor has
approached several dealers in the past couple of weeks and
demanded payment of overtime for detailers working for Real
Clean (Kilnapp Enterprises). The amounts range from a few
thousand to tens of thousands of dollars. In some cases the
DOL has [47 N.E.3d 36] asked the dealer to pay
'liquidated damages,' meaning a penalty equal to the
total back pay owed.
" This is a serious situation for dealers who have
relationships with Real Clean, and it will only get worse.
" As we have previously reported, the DOL has been
visiting dealerships for months, demanding to interview
dealership employees and Real Clean employees. Their primary
objective has been to tie the dealerships to Real Clean, in
order to claim that the dealership is a 'joint
employer' of the Real Clean personnel. After the DOL
completes its investigation, which typically also covers
[Fair Labor Standards Act] compliance for the dealership
employees, the DOL schedules a 'closing conference'
and demands backpay and overtime it claims is owed both to
any dealership employees who were improperly paid, as well as
to employees of Real Clean.
" The dealers, of course, do not employ any of the Real
Clean employees directly, nor do they supervise or control
their work. Under the brokerage arrangement with Real Clean,
the dealer pays a fee directly to Real Clean for detailing or
reconditioning each car, and Real Clean is ...