Josh Manheimer v. Our Court Tennis Club

VERMONT SUPREME COURT Case No. 23-AP-092
109 State Street
Montpelier VT 05609-0801
802-828-4774
www.vermontjudiciary.org

Note: In the case title, an asterisk (*) indicates an appellant and a double asterisk (**) indicates a cross-
appellant. Decisions of a three-justice panel are not to be considered as precedent before any tribunal.

ENTRY ORDER

AUGUST TERM, 2023

Josh Manheimer* v. Our Court Tennis Club } APPEALED FROM:
et al. }
} Superior Court, Windsor Unit,
} Civil Division
} CASE NO. 22-CV-01274
Trial Judge: Timothy B. Tomasi

In the above-entitled cause, the Clerk will enter:

Plaintiff appeals the civil division’s dismissal of his amended complaint for failure to
state a claim upon which relief may be granted. We affirm.

In his original complaint, plaintiff alleged the following. For over twenty years, plaintiff
was a member of defendant Our Court Tennis Club, a Vermont nonprofit corporation located in
White River Junction. In January 2022, the Club’s board of directors sent plaintiff a letter
demanding that he pay $10,860 for unpaid guest fees going back seven years. Defendant Judith
Jackson, the board president, and defendant Steven Maker, the Club’s secretary, signed the letter.
The letter stated the Club’s intent to expel plaintiff from the Club if he did not pay. The board
provided no invoices or documents to substantiate the amount demanded. In April 2022, the
board suspended plaintiff from playing tennis at the Club. Plaintiff then filed this lawsuit.

Plaintiff’s legal claims are based on the core allegation that the Club and its board falsely
accused him of owing unpaid guest fees and improperly suspended him from the Club. In his
original complaint, plaintiff asserted violations of the Consumer Protection Act (CPA),
intentional infliction of emotional distress (IIED), civil extortion, and breach of a nonprofit-
board member’s statutory duty of care and loyalty under 11B V.S.A. § 8.30. The complaint
named defendants Jackson and Maker for only the IIED and civil extortion claims; the CPA and
breach-of-statutory-duty claims were against the Club.

Defendants filed a motion to dismiss, which plaintiff opposed. The trial court granted
defendants’ motion and dismissed all four claims of the original complaint under Vermont Rule
of Civil Procedure 12(b)(6) for failure to state a claim. It concluded that: (1) this dispute
between private parties did not meet the “in commerce” requirement of the CPA, so the CPA did
not apply; (2) the alleged conduct did not rise to the level of “outrageous” or “extreme” as
required for IIED; (3) Vermont does not recognize a civil cause of action for extortion; and
(4) plaintiff sued the wrong party—the Club instead of any individual directors—as to his claim
that corporate officers breached their statutory duties. However, the court granted leave for
plaintiff to amend and refile his complaint.

Plaintiff filed an amended complaint alleging essentially the same core underlying facts
but somewhat different claims. * The amended complaint included three total claims. He again
asserted a claim under the CPA, but for the first time included citations to federal civil-rights
cases to support his proposition that the Club “behaves as a public club and is therefore a public
accommodation” for which “the public has an overriding interest in being protected by [f]ederal
and [s]tate laws.” Plaintiff also asserted a claim for “civil conspiracy” as to all individual
defendants. He alleged that these board members “willfully planned and plotted how to extract a
large sum of money” from him by recommending that he not seek legal counsel, secretly
surveilling Club members to catch those who did not pay guest fees, and fabricating the amount
of money that they claimed plaintiff owed. Finally, plaintiff asserted against the individual
defendants a claim of breach of fiduciary duty pursuant to 11A V.S.A. § 8.30. He sought a
declaration that he owes no money to the Club; compensatory and treble damages for emotional
distress and pain and suffering; as well as court costs and attorney’s fees.

Defendants moved to dismiss the amended complaint, which plaintiff opposed. The court
granted defendants’ motion and dismissed the complaint in its entirety for failure to state a claim.
It reasoned that the CPA claim as re-pled still did not satisfy the “in commerce” requirement of
the statute and plaintiff failed to explain how the “private club” exemption in the federal public-
accommodation statute, on which he relied, would apply to Vermont’s consumer-protection
statute. The court also concluded that Vermont does not recognize a “civil conspiracy” claim,
but even if it did, plaintiff failed to allege any underlying tort or criminal activity in furtherance
of the alleged conspiracy, so the claim would fail as a matter of law. As to the breach-of-duty
claim, the court noted that in the original complaint plaintiff had cited the nonprofit-corporations
statute, 11B V.S.A. § 8.30, but in the amended complaint he deleted all references to that statute
and replaced them with citations to the for-profit-corporations statute, 11A V.S.A. § 8.30. The
court explained that defendants argued clearly in their motion to dismiss that plaintiff had cited
the wrong statute and that the for-profit-corporations statue was inapplicable to the Club because
it was a nonprofit entity; however, plaintiff failed completely to address this argument in his
opposition filing. Nor did he seek to amend his complaint to change the reference from 11A
back to 11B. Thus, the court concluded that the change in statute was intentional, and plaintiff
failed to state a viable claim for breach of fiduciary duty.

On appeal, plaintiff challenges the court’s dismissal of all three claims in his amended
complaint. We review de novo the trial court’s dismissal of a complaint under Civil Rule
12(b)(6). Birchwood Land Co. v. Krizan, 2015 VT 37, ¶ 6, 198 Vt. 420. Pursuant to Rule
12(b)(6),

we assume that the facts pleaded in the complaint are true and
make all reasonable inferences in the plaintiff’s favor and will
conclude that a party fails to state a claim only when it is beyond

*
Plaintiff named the same defendants as in his original complaint but added three more
individual defendants—Rebecca Foulk, Carol Williams, and Tom Muttitt. He alleged that all
five individual defendants were members of the Club’s board of directors. However, it does not
appear that he served the complaint on these individuals and the civil division did not add them
to the caption. Plaintiff does not address this issue on appeal.
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doubt that there exist no facts or circumstances that would entitle
the plaintiff to relief.

Sutton v. Purzycki, 2022 VT 56, ¶ 20 (quotation omitted).

Plaintiff argues that, contrary to the trial court’s analysis, the allegations of the amended
complaint meet the “in commerce” requirement of the CPA, so it was error to dismiss his CPA
claim. The CPA prohibits “unfair or deceptive acts or practices in commerce.” 9 V.S.A.
§ 2453(a). As we have explained:

[T]he “in commerce” requirement narrows the [CPA’s]
application to prohibit only unfair or deceptive acts or practices
that occur in the consumer marketplace. To be considered “in
commerce,” the transaction must take place in the context of an
ongoing business in which the defendant holds himself out to the
public. Further, the practice must have a potential harmful effect
on the consuming public, and thus constitute a breach of a duty
owed to consumers in general. By contrast, transactions resulting
not from the conduct of any trade or business but rather from
private negotiations between two individual parties who have
countervailing rights and liabilities established under common law
principles of contract, tort and property law remain beyond the
purview of the statute.

Foti Fuels, Inc. v. Kurrle Corp., 2013 VT 111, ¶ 21, 195 Vt. 524 (quotations, citations, and
alterations omitted).

Here, plaintiff claims that the Club’s attempts to collect an allegedly false debt from him
occurred “in commerce.” We disagree. As the trial court aptly summarized:

[The parties’ dispute] concerned rules and agreements between the
Club and one of its members as to guest fees, and whether such
fees were incurred by that particular member. The conduct alleged
had no impact on the nonmember public. Nor did it concern any
alleged misrepresentations to plaintiff at any time prior to when he
was [a] member of the organization, i.e., when he even potentially
may have been a “consumer.”

Plaintiff’s amended complaint does not allege that the Club breached any “duty owed to
consumers in general.” Id. Whether or not plaintiff actually owes the fees the Club seeks to
collect depends wholly on the proper interpretation of rules established through the contractual
relationship created by plaintiff’s paid membership with the Club, and whether plaintiff in fact
violated those rules.

Plaintiff’s assertion that the Club markets itself to the general public to attract new
members does not change this analysis. He has not alleged that the Club marketed or advertised
in a deceiving way. That any person may offer to pay the Club’s annual fee and thereby seek to
become a member does not transform a dispute about Club rules into a transaction occurring in
the consumer marketplace. Likewise, plaintiff’s contention that guest fees are paid by non-
members is unpersuasive. He has not joined nonmembers as plaintiffs, alleged that the Club’s

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rules bind nonmembers or that the Club deceived nonmember guests, or explained how the
pursuit of a debt against a member constitutes harm to a nonmember cognizable under the CPA.

Plaintiff also cites Vermont’s Consumer Protection Rules concerning fraudulent-debt
practices. See Debt Collection, Rule CF 104, Code of Vt. Rules 06 031 004,
http://www.lexisnexis.com/hottopics/codeofvtrules. These do not alter the core provisions of the
CPA or somehow create an exception to the “in commerce” requirement, and thus do not help
plaintiff.

We are unpersuaded by plaintiff’s citation to United States v. Lansdowne Swim Club,
894 F.2d 83 (3d Cir. 1990), a case involving the federal Civil Rights Act of 1964. That case
analyzed whether the defendant swimming club was a “private club,” and therefore exempt from
the racial-discrimination provisions of Title II of the Civil Rights Act, or was instead a “public
accommodation” falling within the meaning of the Act. Id. at 85. Plaintiff here contends that the
Club fails to meet the multi-factor test for the “private club” exception to the Civil Rights Act,
but he does not explain why this test or any of the federal civil-rights framework should apply to
Vermont’s consumer-protection statute or how this body of law informs a proper interpretation
of the CPA’s “in commerce” requirement. His discussion of other civil-rights cases in the
amended complaint also fails to provide such an explanation. Contrary to plaintiff’s suggestion,
the trial court did not rule, and we do not hold, that the Club is exempt from compliance with the
CPA for all actions it may take. We merely conclude that, even assuming all the facts averred by
plaintiff are true, he has not made out a claim that the Club violated the CPA by pursuing a debt
against him for alleged unpaid guest fees.

Plaintiff also raises several challenges to the trial court’s dismissal of his claim for breach
of statutory fiduciary duty. He concedes that the statute he cited in his amended complaint, 11A
V.S.A. § 8.30, is not applicable to the Club because it is a nonprofit organization. But he
contends that despite citing the wrong statute—11A V.S.A. § 8.30 instead of 11B V.S.A.
§ 8.30—his claim for breach of fiduciary duty met the standard of Vermont Rule of Civil
Procedure 8 and should not have been dismissed under Rule 12(b)(6). Plaintiff did not preserve
this argument for appeal. See Bull v. Pinkham Eng’g Assocs., 170 Vt. 450, 459 (2000)
(“Contentions not raised or fairly presented to the trial court are not preserved for appeal.”).
Defendants clearly and explicitly raised this issue in their motion to dismiss the amended
complaint, arguing that the claim should be dismissed because plaintiff cited Title 11A instead of
Title 11B. Plaintiff opposed the motion to dismiss but did not address this argument and did not
seek to amend the complaint again to correct this reference. See Pharmacists Mut. Ins. Co. v.
Myer, 2010 VT 10, ¶ 18, 187 Vt. 323 (declining to address argument for reversing grant of
motion to dismiss because appellant waived argument by failing to raise it below in opposition to
motion). Even after the trial court dismissed the claim on this basis, noted plaintiff’s failure to
respond to defendants’ argument, and concluded that plaintiff’s citation to the for-profit-
corporation statute must have been intentional, plaintiff did not request leave to amend, move for
reconsideration, or seek other similar relief. See State v. Equinox House, Inc., 134 Vt. 59, 63
(1975) (noting post-judgment remedies if amendment is sought). Thus, he had several
opportunities to bring his argument before the trial court and opted instead to raise it for the first
time on appeal.

Notably, plaintiff appears to concede that the argument was not preserved, as he contends
that it was “plain error” for the court to have dismissed his claim. In civil matters, we evaluate
unpreserved arguments for plain error only under exceptional circumstances—where the claimed
error implicates fundamental rights, or a liberty interest is at stake in a quasi-criminal or hybrid

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civil-criminal probation hearing. Follo v. Florindo, 2009 VT 11, ¶ 16, 185 Vt. 390. None of
these circumstances is present here. We will not address this argument for the first time on
appeal.

Plaintiff alternatively argues that, even if the claim was properly dismissed, the court
should have given him leave to file another amended complaint to replead the claim or the
opportunity to file a more definite statement under Civil Rule 12(e), or it should have considered
the claim to be tried by implied consent under Vermont Rule of Civil Procedure 15(b). But
plaintiff did not seek any such relief or raise any of these contentions below, so we will not
consider them. Bull, 170 Vt. at 459.

We note that even though the trial court invited plaintiff to file an amended complaint
following dismissal of his original complaint, it acted well within its discretion to not provide a
third opportunity for plaintiff to plead his claim and to dismiss the amended complaint with
prejudice. Leave to amend a complaint “shall be freely given when justice so requires,”
V.R.C.P. 15(a), but the trial court has discretion in granting or denying leave, Colby v. Umbrella,
Inc., 2008 VT 20, ¶ 4, 184 Vt. 1. Here, plaintiff cited the nonprofit statute multiple times in his
original complaint, and the trial court dismissed the claim with the opportunity to replead only
because he had named the Club as a defendant for this claim instead of individual directors. For
reasons that plaintiff still has not explained, in his amended complaint he deleted all references to
Title 11B and replaced them with Title 11A, despite maintaining that the Club is a nonprofit
organization. Plaintiff had ample opportunity to correct this error—in particular, when
defendants explicitly pointed it out in their motion to dismiss. “[A]lthough pro se litigants
receive some leeway from the courts, they are still bound by the ordinary rules of civil
procedure,” Zorn v. Smith, 2011 VT 10, ¶ 22, 189 Vt. 219 (quotation omitted), the most basic of
which includes responding to arguments raised against them. See V.R.C.P. 7(b)(4) (“Any party
opposed to the granting of a written dispositive motion . . . shall file a memorandum in
opposition thereto . . . .”). Under these circumstances, the trial court did not abuse its discretion
by dismissing plaintiff’s breach-of-fiduciary-duty claim with prejudice.

Plaintiff additionally argues that, by dismissing his amended complaint with prejudice,
the trial court improperly denied him the right to discovery and of due process. There is no
absolute right to discovery in every case. The purpose of discovery is to gather facts, but if the
law does not support a plaintiff’s claim even assuming all factual allegations are true, then it is
appropriate to grant a motion to dismiss claims before discovery. See Powers v. Off. of Child
Support, 173 Vt. 390, 395 (2002) (“The purpose of a motion to dismiss is to test the law of the
claim, not the facts which support it.”).

The trial court also did not violate plaintiff’s due-process rights. “[T]he fundamental
requirement of due process is the opportunity to be heard at a meaningful time and in a
meaningful manner.” Stone v. Town of Irasburg, 2014 VT 43, ¶ 27, 196 Vt. 356. Plaintiff had
multiple opportunities to plead his claims against defendants and to oppose defendants’
arguments for dismissal. He has identified no specific way in which the trial court denied him a
meaningful opportunity to be heard or otherwise violated his due-process rights.

Finally, we turn to plaintiff’s civil-conspiracy claim. He provides several reasons why
the trial court erred by dismissing this claim, but he raised none of them below. His opposition
to defendants’ motion to dismiss did not address this claim specifically at all, and he thus failed
to preserve his appellate arguments. Bull, 170 Vt. at 459. In any event, we are satisfied that
dismissal was proper. Assuming without deciding that Vermont still recognizes an independent

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claim for civil conspiracy, plaintiff has not alleged the requisite elements. To make out a claim
for conspiracy, a plaintiff must allege the existence of “a combination of two or more persons to
effect an illegal purpose, either by legal or illegal means, or to effect a legal purpose by illegal
means.” Boutwell v. Marr, 71 Vt. 1, 42 A. 607, 609 (1899). In a civil action, even if there is an
illegal purpose, “there can be no recovery unless illegal means were employed.” Id. Plaintiff
has alleged no illegal means that defendants employed to pursue the debt against him; thus, the
claim must fail. To the extent this reasoning differs from the trial court’s rationale, we note that
we may affirm on any appropriate ground. Bock v. Gold, 2008 VT 81, ¶ 4, 184 Vt. 575 (mem.).

We have considered all of the arguments discernible in plaintiff’s brief and conclude that
they are all without merit.

Affirmed.

BY THE COURT:

Paul L. Reiber, Chief Justice

William D. Cohen, Associate Justice

Nancy J. Waples, Associate Justice

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