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CERTIFICATE OF SERVICE
Thereby certify that I/have caused a copy of the foregoing pleading to be served on the
following counsel by first class mail and email on April 13, 2021:
William A. Zucker, Esq., Daniel S. Pariser, Esq. Michael Pineault, Esq.
Nicholas W. Allen, Esq. Jocelyn A. Wiesner, Esq. Anderson & Kreiger LLP
McCarter & English, LLP Amold & Porter 50 Milk Street, 21st Floor
265 Franklin Street 601 Massachusetts Ave. N.W. Boston, MA 02109
Boston, MA 02110-3113 Washington, DC 20001-3743
/s/Daniel P. Tighe
Daniel P. Tighe
Moreover, despite Elizabeth \Grady’s current characterizations, the FAC does not identify any
actual statements about sales, morale, or Cynosure’s historical results at all.4 Elizabeth Grady
broad pronouncements otherwise — see Opp. at 7 (“the FAC identifies with detail, for example,
the sales data and revenue numbers made by Defendants, and why the data and projections were
not true when presented by Cynosure”) are not supported by the FAC. In fact, the allegations
cited in the Opposition ({{ 33, 44 and 45, see Opp. at 7) allege only that Thornal knew that
Hologic was “in the course of deciding to divest itself of Cynosure” and that Hologic announced
it was selling Cynosure without notice to Elizabeth Grady. Conclusory allegations cannot defeat
a motion to dismiss, Jannacchino v. Ford Motor Co., 451 Mass. 623, 636 (2008), and that is
especially true when the complaint alleges fraud against an individual >
KEVIN THORNAL
By his attorneys,
4s/Daniel P. Tighe
Peter E. Gelhaar, BBO 188310
Daniel P. Tighe, BBO # 556583
DONNELLY, CONROY & GELHAAR, LLP
260 Franklin Street, Suite 1600
Boston, MA 02110
Date: April 13, 2021 617-720-2880
4 The only numbers recited in the FAC relate to projections. (See FAC 27,28.)
Elizabeth Grady’s arguments about reliance (Opp. at 9) and ch. 93A (Opp. at 12) are addressed
in Thornal’s opening brief.
Rule 9(b) challenge. Thornal does not argue that officers are always immune to claims for fraud.
But in this case, that is beside the point because Elizabeth Grady has failed to identify even a
|
single actionable statement ade by Thornal as required by Rule 9(b).
B. The Opposition Does Not Explain How the Challenged Statements are
Untrue,
The gist of Elizabeth Grady’s claim is that Cynosure misrepresented what would happen
if Elizabeth Grady entered into a contract with Cynosure. See e.g. FAC § 23 (“with Cynosure’s
support [not Thornal’s], Elizabeth Grady would achieve at least the same level of sales...” ); 25
(“Cynosure,” not Thornal, pledged that it “would be the driving force to bring in new business,”
“would create custom advertisements,” and “would use its national brand recognition and
marketing experience...”). Those are obviously statements about the future and they are only
actionable if Elizabeth Grady can allege facts.to show that Cynosure had no intention of
fulfilling its commitments or had no good faith basis for the projections. See e.g. Wildlands Tr. of
Se. Massachusetts, Inc., No. SUCV201601432BLS2, 2017 WL 6949714 at *5 (dismissing
complaint that “failsto identify a misstatement of existing fact, or to allege that it was made by
the defendant with knowledge;as to its falsity at the time that it was made.””).>
The Opposition tries|to argue that these statements about the future were untrue because
at the time the statements were made, Cynosure was in “‘internal financial disarray” (Opp. at 8),
that Cynosure’s sales had been “disappointing” (id. at 2) and that “morale was at an all-time
low.” (Id.) But Elizabeth Grady fails to explain what historical sales or the “morale” of
Cynosure employees have to do with the statements that Cynosure is alleged to have made.
3In its original complaint, Elizabeth Grady tellingly identified these statements as part of a “sales
pitch.” (Compl. { 27.) It removed that characterization from the First Amended Complaint,
presumably to avoid the well-established principal that a sales talk preceding a contract is not
actionable.
Massachusetts, Inc. v. Cedar Hill Retreat Ctr., Inc., No. SUCV201601432BLS2, 2017 WL
6949714, at *5 (Mass. Super. Nov. 15, 2017) (dismissing complaint which “fails to allege who
made this prediction (except|in the most general way)...”); Abraham Properties, Inc. v. Eng'g
Design Consultants, Inc., No. CIV.A. 06-04830-A, 2008 WL 1114869, at *6 (Mass. Super. Mar.
26, 2008) (dismissing fraud claim which “does not identify the specific person who made the
misrepresentations. . . .”); Paparella v. Idrecod Inv. S.p.A., No. 9401190, 1995 WL 1146158, at
*2-3 (Mass. Super. Oct. 6, 1995) (dismissing claim that defendant had witnessed allegedly
fraudulent Presentation; “mere allegations of fraud[,] averments to conditions of mind, or
referrals to plans and schemes are too conclusional to satisfy the particularity requirement, no
matter how many times such accusations are repeated.”)
To prop up its argument, the Opposition engages in some sleight-of-hand, referring
generally to paragraphs 33, 40, 41, 44 and 45 of the FAC. (Opp at 5.) But those allegations do
not even refer to statements, much less statements made by Thornal. Paragraph 33 alleges that
“upon information and belief,” Thornal knew that Hologic was “in the course of deciding to
divest itself of Cynosure.” The other paragraphs catalog Elizabeth Grady’s various grievances
about alleged post-contract conduct. See also § 40 (Cynosure provided little marketing support);
{41 (Cynosure did not make Elizabeth Grady a “vendor of choice”); [44-45 (Hologic
announced sale of Cynosure sho [SEC-prohibited] advance notice to Elizabeth Grady).
That leaves Elizabeth Grady to argue generally that “personal involvement by a corporate
officer in an alleged tort — including fraud —can expose that individual officer to liability.” Opp
at 6, citing Chesterton Cap. LLC v. Holley 2017 WL 6209189, at *14 (D. Mass. Dec. 8, 2017).
While that point of law is generally true, it does not refute Thornal’s argument that a plaintiff
must plead a corporate officer's personal involvement with particularity in order to survive a
.
x
for purposes of this motion that Cynosure’s sales were “disappointing” or that “morale” was low,
it does not follow that statements about Elizabeth Grady’s future were untrue”
1 The Opposition/Makes Arguments That are Not Supported by the FAC.
According to Elizabeth Grady’s opposition brief, “Thornal was a central figure in the
fraud” because he “presented the Cynosure business to Elizabeth Grady as successful and
expanding,” while he knew that sales were “significantly disappointing” and that “morale was at
an all-time low.” (Opp. at 2.) The Opposition refers casually to Thornal’s “presentations and
representations, 2, multiple misrepresentations,” (id. at 5) and “factual representations” (id. at 7).
But tellingly, all of those characterizations are offered without citation to the FAC. In
fact, throughout its brief, Elizabeth Grady does not quote even a single allegation in the FAC.
This is because there are no allegations in the FAC to support the assertion that Thornal
“presented” anything or made a single “representation.” The FAC alleges only that Thornal
“reviewed and approved” a presentation (id. at { 18). It claims that “Cynosure” (not Thornal)
stated “that with Cynosure’s support, Elizabeth Grady would achieve at least the same level of
sales of services to new customers and others as shown by its national sales data.” (Id. at { 23.)
See also FAC { 23 (“Cynosure’s presentation focused specifically on....”); {24 (“Cynosure held
.
itself out as....”); {26 (“Cynosure also provided” financial information); {27-(“Cynosure
specifically stated that through the services provided....”); and {28 (“Cynosure also
provided....”)(emphasis added in each). This kind of allegation does not satisfy Rule 9(b)’s
requirements as they apply to the claims against Thornal. See e.g. Wildlands Tr. of Se.
?In addition to the arguments advanced by Thornal, Elizabeth Grady’s claims also fail for the
reasons explained by Cynosure in its motion to dismiss, including among other things, the terms
of the parties’ contract and the implausibility of Elizabeth Grady’s claim that Cynosure entered
into a revenue-sharing agreement with Elizabeth Grady with the intention of losing money.
2
520 J
2
COMMONWEALTH OF SSACHUSETTS
MIDDLESEX, SS SUPERIOR COURT DEPARTMENT
OF THE TRIAL COURT
ELIZABETH GRADY FACE FIRST INC.
d/b/a THE ELIZABETH GRADY
COMPANY,
CIVIL ACTION NO. 2081-CV-02967
Plaintiff,
Vv.
CYNOSURE, INC., and
KEVIN THORNAL, RECEIVED
4/13/2021 ME
Defendants.
KEVIN THORNAL’S REPLY IN SUPPORT OF HIS MOTION TO DISMISS
Elizabeth Grady’s Opposition to Kevin Thornal’s Motion to Dismiss (“Opposition” or
“Opp.”) takes many liberties ith the allegations of the First Amended Complaint (“FAC”), but
it cannot save the claims from lat least two fatal defects. First, the allegations in the complaint
(and not Elizabeth Grady’s current characterizations of them) do not attribute any statement to
Thornal as is required by Rule 9(b). Elizabeth Grady alleges only that Thornal was part of a
group of Cynosure employees who made a presentation. Second, Elizabeth Grady still does not
point to any factual allegations|which show that Cynosure’s presentation -- which explained the
benefits that Elizabeth Grady might realize in the future -- were untrue.'! Even accepting as true
'TIn the FAC, Elizabeth Grady alleged that Cynosure’s stated expectations about the Elizabeth
Grady relationship were untrue|because at the time they were made; Cynosure’s parent
corporation — Hologic, Inc. -- was considering a sale of its interests in Cynosure. (See FAC J
33.) The defendants’ opening briefs noted how one thing had nothing to do with the other. The
Opposition seems to have abandoned the Hologic-sale theory. See Opp at n. 6.
1
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CERTIFICATE OF SERVICE Thereby certify that I/have caused a copy of the foregoing pleading to be served on the following counsel by first class mail and email on April 13, 2021: William A. Zucker, Esq., Daniel S. Pariser, Esq. Michael Pineault, Esq. Nicholas W. Allen, Esq. Jocelyn A. Wiesner, Esq. Anderson & Kreiger LLP McCarter & English, LLP Amold & Porter 50 Milk Street, 21st Floor 265 Franklin Street 601 Massachusetts Ave. N.W. Boston, MA 02109 Boston, MA 02110-3113 Washington, DC 20001-3743 /s/Daniel P. Tighe Daniel P. Tighe Moreover, despite Elizabeth \Grady’s current characterizations, the FAC does not identify any actual statements about sales, morale, or Cynosure’s historical results at all.4 Elizabeth Grady broad pronouncements otherwise — see Opp. at 7 (“the FAC identifies with detail, for example, the sales data and revenue numbers made by Defendants, and why the data and projections were not true when presented by Cynosure”) are not supported by the FAC. In fact, the allegations cited in the Opposition ({{ 33, 44 and 45, see Opp. at 7) allege only that Thornal knew that Hologic was “in the course of deciding to divest itself of Cynosure” and that Hologic announced it was selling Cynosure without notice to Elizabeth Grady. Conclusory allegations cannot defeat a motion to dismiss, Jannacchino v. Ford Motor Co., 451 Mass. 623, 636 (2008), and that is especially true when the complaint alleges fraud against an individual > KEVIN THORNAL By his attorneys, 4s/Daniel P. Tighe Peter E. Gelhaar, BBO 188310 Daniel P. Tighe, BBO # 556583 DONNELLY, CONROY & GELHAAR, LLP 260 Franklin Street, Suite 1600 Boston, MA 02110 Date: April 13, 2021 617-720-2880 4 The only numbers recited in the FAC relate to projections. (See FAC 27,28.) Elizabeth Grady’s arguments about reliance (Opp. at 9) and ch. 93A (Opp. at 12) are addressed in Thornal’s opening brief. Rule 9(b) challenge. Thornal does not argue that officers are always immune to claims for fraud. But in this case, that is beside the point because Elizabeth Grady has failed to identify even a | single actionable statement ade by Thornal as required by Rule 9(b). B. The Opposition Does Not Explain How the Challenged Statements are Untrue, The gist of Elizabeth Grady’s claim is that Cynosure misrepresented what would happen if Elizabeth Grady entered into a contract with Cynosure. See e.g. FAC § 23 (“with Cynosure’s support [not Thornal’s], Elizabeth Grady would achieve at least the same level of sales...” ); 25 (“Cynosure,” not Thornal, pledged that it “would be the driving force to bring in new business,” “would create custom advertisements,” and “would use its national brand recognition and marketing experience...”). Those are obviously statements about the future and they are only actionable if Elizabeth Grady can allege facts.to show that Cynosure had no intention of fulfilling its commitments or had no good faith basis for the projections. See e.g. Wildlands Tr. of Se. Massachusetts, Inc., No. SUCV201601432BLS2, 2017 WL 6949714 at *5 (dismissing complaint that “failsto identify a misstatement of existing fact, or to allege that it was made by the defendant with knowledge;as to its falsity at the time that it was made.””).> The Opposition tries|to argue that these statements about the future were untrue because at the time the statements were made, Cynosure was in “‘internal financial disarray” (Opp. at 8), that Cynosure’s sales had been “disappointing” (id. at 2) and that “morale was at an all-time low.” (Id.) But Elizabeth Grady fails to explain what historical sales or the “morale” of Cynosure employees have to do with the statements that Cynosure is alleged to have made. 3In its original complaint, Elizabeth Grady tellingly identified these statements as part of a “sales pitch.” (Compl. { 27.) It removed that characterization from the First Amended Complaint, presumably to avoid the well-established principal that a sales talk preceding a contract is not actionable. Massachusetts, Inc. v. Cedar Hill Retreat Ctr., Inc., No. SUCV201601432BLS2, 2017 WL 6949714, at *5 (Mass. Super. Nov. 15, 2017) (dismissing complaint which “fails to allege who made this prediction (except|in the most general way)...”); Abraham Properties, Inc. v. Eng'g Design Consultants, Inc., No. CIV.A. 06-04830-A, 2008 WL 1114869, at *6 (Mass. Super. Mar. 26, 2008) (dismissing fraud claim which “does not identify the specific person who made the misrepresentations. . . .”); Paparella v. Idrecod Inv. S.p.A., No. 9401190, 1995 WL 1146158, at *2-3 (Mass. Super. Oct. 6, 1995) (dismissing claim that defendant had witnessed allegedly fraudulent Presentation; “mere allegations of fraud[,] averments to conditions of mind, or referrals to plans and schemes are too conclusional to satisfy the particularity requirement, no matter how many times such accusations are repeated.”) To prop up its argument, the Opposition engages in some sleight-of-hand, referring generally to paragraphs 33, 40, 41, 44 and 45 of the FAC. (Opp at 5.) But those allegations do not even refer to statements, much less statements made by Thornal. Paragraph 33 alleges that “upon information and belief,” Thornal knew that Hologic was “in the course of deciding to divest itself of Cynosure.” The other paragraphs catalog Elizabeth Grady’s various grievances about alleged post-contract conduct. See also § 40 (Cynosure provided little marketing support); {41 (Cynosure did not make Elizabeth Grady a “vendor of choice”); [44-45 (Hologic announced sale of Cynosure sho [SEC-prohibited] advance notice to Elizabeth Grady). That leaves Elizabeth Grady to argue generally that “personal involvement by a corporate officer in an alleged tort — including fraud —can expose that individual officer to liability.” Opp at 6, citing Chesterton Cap. LLC v. Holley 2017 WL 6209189, at *14 (D. Mass. Dec. 8, 2017). While that point of law is generally true, it does not refute Thornal’s argument that a plaintiff must plead a corporate officer's personal involvement with particularity in order to survive a . x for purposes of this motion that Cynosure’s sales were “disappointing” or that “morale” was low, it does not follow that statements about Elizabeth Grady’s future were untrue” 1 The Opposition/Makes Arguments That are Not Supported by the FAC. According to Elizabeth Grady’s opposition brief, “Thornal was a central figure in the fraud” because he “presented the Cynosure business to Elizabeth Grady as successful and expanding,” while he knew that sales were “significantly disappointing” and that “morale was at an all-time low.” (Opp. at 2.) The Opposition refers casually to Thornal’s “presentations and representations, 2, multiple misrepresentations,” (id. at 5) and “factual representations” (id. at 7). But tellingly, all of those characterizations are offered without citation to the FAC. In fact, throughout its brief, Elizabeth Grady does not quote even a single allegation in the FAC. This is because there are no allegations in the FAC to support the assertion that Thornal “presented” anything or made a single “representation.” The FAC alleges only that Thornal “reviewed and approved” a presentation (id. at { 18). It claims that “Cynosure” (not Thornal) stated “that with Cynosure’s support, Elizabeth Grady would achieve at least the same level of sales of services to new customers and others as shown by its national sales data.” (Id. at { 23.) See also FAC { 23 (“Cynosure’s presentation focused specifically on....”); {24 (“Cynosure held . itself out as....”); {26 (“Cynosure also provided” financial information); {27-(“Cynosure specifically stated that through the services provided....”); and {28 (“Cynosure also provided....”)(emphasis added in each). This kind of allegation does not satisfy Rule 9(b)’s requirements as they apply to the claims against Thornal. See e.g. Wildlands Tr. of Se. ?In addition to the arguments advanced by Thornal, Elizabeth Grady’s claims also fail for the reasons explained by Cynosure in its motion to dismiss, including among other things, the terms of the parties’ contract and the implausibility of Elizabeth Grady’s claim that Cynosure entered into a revenue-sharing agreement with Elizabeth Grady with the intention of losing money. 2 520 J 2 COMMONWEALTH OF SSACHUSETTS MIDDLESEX, SS SUPERIOR COURT DEPARTMENT OF THE TRIAL COURT ELIZABETH GRADY FACE FIRST INC. d/b/a THE ELIZABETH GRADY COMPANY, CIVIL ACTION NO. 2081-CV-02967 Plaintiff, Vv. CYNOSURE, INC., and KEVIN THORNAL, RECEIVED 4/13/2021 ME Defendants. KEVIN THORNAL’S REPLY IN SUPPORT OF HIS MOTION TO DISMISS Elizabeth Grady’s Opposition to Kevin Thornal’s Motion to Dismiss (“Opposition” or “Opp.”) takes many liberties ith the allegations of the First Amended Complaint (“FAC”), but it cannot save the claims from lat least two fatal defects. First, the allegations in the complaint (and not Elizabeth Grady’s current characterizations of them) do not attribute any statement to Thornal as is required by Rule 9(b). Elizabeth Grady alleges only that Thornal was part of a group of Cynosure employees who made a presentation. Second, Elizabeth Grady still does not point to any factual allegations|which show that Cynosure’s presentation -- which explained the benefits that Elizabeth Grady might realize in the future -- were untrue.'! Even accepting as true 'TIn the FAC, Elizabeth Grady alleged that Cynosure’s stated expectations about the Elizabeth Grady relationship were untrue|because at the time they were made; Cynosure’s parent corporation — Hologic, Inc. -- was considering a sale of its interests in Cynosure. (See FAC J 33.) The defendants’ opening briefs noted how one thing had nothing to do with the other. The Opposition seems to have abandoned the Hologic-sale theory. See Opp at n. 6. 1