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CRA International, Inc. v. Painter

Superior Court of Massachusetts, Suffolk

April 11, 2017

CRA International, Inc.
v.
Donald J. Painter No. 136751

          MEMORANDUM AND ORDER ALLOWING PLAINTIFF'S MOTION FOR JUDGMENT ON THE PLEADINGS AND MOTION TO DISMISS COUNTERCLAIM

          Kenneth W. Salinger, Justice of the Superior Court.

         This lawsuit arises from CRA International, Inc.'s short-lived employment of Donald J. Painter. CRA seeks a declaration that, because Mr. Painter worked for CRA for less than a year, Painter is contractually obligated to repay his $30, 000 signing bonus and a $900, 000 loan, pay all interest that has accrued on that loan, and reimburse CRA for reasonable attorneys fees and expenses incurred to collect that loan. Painter asserts that his employment agreement and promissory note were induced by intentional fraud or negligent misrepresentations and are therefore " invalid" and unenforceable. He also asserts a counterclaim for fraud and seeks leave to amend facts alleged in his counterclaim.

         The Court concludes that CRA is entitled to the dismissal of Painter's counterclaim and that Painter's proposed amendment of his counterclaim would be futile. It also concludes that, given the facts admitted by Painter in his answer and the failure of his fraud in the inducement defense, CRA is entitled to judgment in its favor on its claim for declaratory judgment. The Court will allow CRA's motion for judgment on the pleadings and to dismiss Painter's counterclaim, deny Painter's motion to amend his counterclaim, deny CRA's motion to strike Painter's jury demand as moot, and order the entry of a declaratory judgment in CRA's favor.

         1. CRA's Motion to Dismiss the Counterclaim

         Painter's counterclaim for fraud fails as a matter of law because it does not allege any facts plausibly suggesting that CRA made a false statement of material fact to Painter or that CRA failed to disclose some material information that it had a duty to disclose. See generally Lopez v. Commonwealth, 463 Mass. 696, 701, 978 N.E.2d 67 (2012) (to survive a motion to dismiss under Mass.R.Civ.P. 12(b)(6), a complaint or counterclaim must allege facts that, if true, would " plausibly suggest[ ] . . . an entitlement to relief") (quoting Iannacchino v. Ford Motor Co., 451 Mass. 623, 636, 888 N.E.2d 879 (2008), and Bell A. Corp. v. Twombly, 550 U.S. 544, 557, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). Painter's proposed amendment to his counterclaim would be futile for the same reasons.

         1.1. The Counterclaim Fails to Allege Any Fraud with Particularity

         A claim of fraudulent inducement must be alleged with particularity in accord with Mass.R.Civ.P. 9(b). See VMS Realty Inv., Ltd. v. Keezer, 34 Mass.App.Ct. 119, 119-20, 606 N.E.2d 1352 (1993). This rule " heightens the pleading requirements placed on plaintiffs who allege fraud and deceit." Equipment & Systems for Industry, Inc. v. NorthMeadows Constr. Co., Inc., 59 Mass.App.Ct. 931, 932, 798 N.E.2d 571 (2003) (rescript). Thus, " at a minimum, " Painter must support any claim of fraudulent inducement by specifically alleging " the identity of the person(s) making the" allegedly fraudulent " representation, the contents of the misrepresentation, and where and when it took place, " and must also " specify the materiality of the misrepresentation, [his] reliance thereon, and resulting harm." Id. at 931-32.

         Painter's existing counterclaim is based on two alleged misrepresentations by CRA. Neither is sufficient to support a counterclaim for fraud.

         The allegation that CRA told Painter that CRA had " done recent work with a few major clients in the U.S. oil and gas market" is too vague to support Painter's counterclaim. To state a claim for fraud, a claimant must allege facts plausibly suggesting that the defendant knowingly made a false statement of material fact, that it did so for the purpose of inducing the claimant to act on it, and that the claimant reasonably relied upon that false statement to his detriment. See Masingill v. EMC Corp., 449 Mass. 532, 540, 870 N.E.2d 81 (2007). Vague and general statements cannot constitute an unlawful misrepresentation of fact. Id. at 544 (alleged representation to employee that supervisor will " make you whole" held " too vague" to support a claim for misrepresentation, as a matter of law). It is not reasonable, as a matter of law, to rely upon " vague and indefinite" statements like the one CRA allegedly made regarding recent work. See Martins v. University of Massachusetts Medical School, 75 Mass.App.Ct. 623, 633, 915 N.E.2d 1096 (2009).

         The further allegation that CRA asked Painter to confirm that he would commit himself to working to grow CRA's Marakon oil and gas industry consulting practice for six to seven years cannot support a counterclaim for fraud. Asking a potential employee about his commitment to a business is not a statement of fact and therefore cannot give rise to a claim for fraud. Cf. Sahin v. Sahin, 435 Mass. 396, 403, 758 N.E.2d 132 (2001) (" statements of opinion or belief as to business operations, made without certainty, do not rise to level of statements of fact and do not constitute fraudulent misrepresentations").

         1.2. The Proposed Amended Counterclaim Would be Futile

         Mr. Painter seeks leave to amend his counterclaim in an attempt to bolster the factual premise for his claim of fraud. The Court will deny this motion because the proposed amendment would be futile, in that the amended counterclaim still could not survive a motion to dismiss for failure to state a claim upon which relief can be granted. See generally Johnston v. Box, 453 Mass. 569, 583, 903 N.E.2d 1115 (2009) (" Courts are not required to grant motions to amend prior [pleadings] where 'the proposed amendment . . . is futile.' " (quoting All Seasons Servs., Inc. v. Commissioner of Health & Hosps. of Boston, 416 Mass. 269, 272, 620 N.E.2d 778 (1993)); Thermo Electron Corp. v. Waste Mgmt. Holdings, Inc., 63 Mass.App.Ct. 195, 203, 825 N.E.2d 545 (2005) (affirming denial of motion for leave to assert counterclaim that would have been futile); Mancuso v. Kinchla, 60 Mass.App.Ct. 558, 572, 806 N.E.2d 427 (2004) (if amendment to add claim could not survive motion to dismiss, allowing amendment would be exercise in futility).

         Painter's proposed amended counterclaim would augment the factual allegations underlying his counterclaim in two ways. Neither of these additional categories of allegations would state a viable claim for fraud.

         First, Painter seeks to allege that CRA withheld material information from him. Specifically, the amended counterclaim would allege that CRA failed to disclose that its prior oil and gas consulting clients were all clients of former CRA employees who no longer worked for the company. It would also allege that CRA failed to disclose that its prior oil and gas consulting clients were all clients of former CRA employees who no longer worked for the company. It ...


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