United States District Court, D. Massachusetts
ERROL RICK, Assignee of COMFORT BEDDING AND FURNITURE, INC., Plaintiff,
PROFIT MANAGEMENT ASSOCIATES, INC. d/b/a PROFIT MANAGEMENT PROMOTIONS and/or PROFIT MANAGEMENT ASSOCIATES EAST, INC.; MICHAEL J. EGAN, as President and Individually; JOHN “HECTOR” MUSTAFA, Individually; and RONALD COOPER, Individually, Defendants.
MEMORANDUM OF DECISION AND ORDER ON MOTION FOR LEAVE
TO FILE SECOND AMENDED COMPLAINT
Gail Dein United States Magistrate Judge
Memorandum of Decision and Order dated March 13, 2017, this
court dismissed plaintiff's amended complaint (Docket No.
34), but granted him permission to seek leave to file a
second amended complaint to address the deficiencies in Count
I (breach of contract) and Count II (violation of Mass. Gen.
Laws ch. 93A). Count III, which purported to state a claim
for intentional misrepresentation/fraud, was dismissed with
prejudice as it raised claims which were time-barred. See
Rick v. Profit Mgmt. Assoc., Inc., 241 F.Supp.3d 215 (D.
Mass. 2017). Thereafter, the plaintiff filed a motion for
leave to file a second amended complaint (Docket No. 60),
although the proposed amended complaint, at the
plaintiff's request, was subsequently amended. (Docket
No. 74). The defendants have opposed the motion.
For the reasons detailed herein, the proposed second amended
complaint, as amended, states a claim for unfair and
deceptive acts or practices against the defendant Ronald
Cooper. The remaining counts, however, still fail to state a
claim upon which relief can be granted. The motion for leave
to file the second amended complaint (Docket Nos. 60 &
74) is ALLOWED IN PART and DENIED IN PART accordingly.
STATEMENT OF FACTS
the proposed second amended complaint is premised on the
first amended complaint, this court will assume the
reader's familiarity with its earlier decision. By way of
an overview, the pro se plaintiff, Errol Rick, was
the former President and 50% owner of Comfort Bedding and
Furniture, Inc. (“Comfort Furniture”), a company
that was liquidated pursuant to a Chapter 7 Bankruptcy
Proceeding in the United States District Court, District of
Massachusetts (No. 11-42740-MSH). He brings this action by
virtue of an assignment from Comfort Furniture authorized by
the Bankruptcy Court dated January 20, 2014.
about February 24, 2011, Comfort Furniture entered into a
Sales Promotion Agreement with Profit Management Associates,
Inc. d/b/a Profit Management Promotions (“PMP”)
pursuant to which PMP was to conduct a high impact
promotional sale on behalf of Comfort Furniture for 60 days,
commencing on March 24, 2011. Problems arose virtually
immediately. By April 18, 2011, Comfort Furniture served PMP
with a Notice and Demand letter pursuant to Mass. Gen. Laws
First Amended Complaint
commenced this action on March 24, 2015 against PMP. The
complaint was subsequently amended to add the individual
defendants, Michael Egan, John “Hector” Mustafa,
and Ronald Cooper (collectively, the “Individual
Defendants”), to the claims originally brought against
PMP, namely breach of contract, fraudulent misrepresentation,
and violation of Mass. Gen. Laws ch. 93A. PMP never filed a
responsive pleading. The Individual Defendants contend that
PMP is no longer in business, although the plaintiff contends
that it is continuing to do business under various other
names. A default has been entered against PMP.
Individual Defendants moved to dismiss all the counts of the
complaint. This court dismissed Count I - breach of contract
- on the grounds that the contract was between “Profit
Management Associates East, Inc., d/b/a Profit Management
Promotions (‘PMP'), and Comfort Bedding &
Furniture, Inc.” and the Individual Defendants were not
parties to the agreement. Rick, 241 F.Supp.3d at
222. The court noted that while the complaint hinted at
theories of piercing the corporate veil of PMP, or successor
corporate liability, those theories had not been articulated.
Id. As this court ruled, “[w]hile there may be
a theory for holding the individual defendants, and other
Profit Management entities, liable under the Agreement, it
has not been pleaded in the complaint. Therefore, Count I
will be dismissed without prejudice.” Id.
III of the first amended complaint purported to state a claim
of “intentional misrepresentation/fraud.” In
addition to finding that the complaint “fail[ed] to
delineate the role of each defendant in connection with the
alleged fraudulent misrepresentations” and otherwise
failed to allege fraud with particularity, this court found
that the claim was barred by the statute of limitations, as a
result of which any amendment would be futile. Id.
at 223-24. Consequently, Count III was dismissed with
prejudice. Id. at 224-25.
II of the first amended complaint purported to state a claim
under Mass. Gen. Laws ch. 93A. Rick alleged that the
defendants had committed “unfair and deceptive acts and
practices in connection with the promotional sale by making
misrepresentations, misappropriating funds and failing to
properly allocate funds, among other things.”
Id. at 225. This court dismissed this Count against
the Individual Defendants, without prejudice, because the
allegations were “insufficient to state a claim against
the individual defendants for their own personal
wrongdoing” and failed to “state a basis for
disregarding the corporate entity.” Id.
Second Amended Complaint
proposed second amended complaint (Docket No. 74)
(“SAC”), Rick has added various factual
allegations, which will be discussed in more detail below.
Similarly, he has sought to add six new parties: National
Furniture Liquidators, National Furniture Liquidators of
Pennsylvania and National Furniture Liquidators, L.L.C., all
of which are Pennsylvania corporations whose president is the
defendant Egan; A Plus Promotions L.L.C. and PMP Sales,
L.L.C., which are New ...