Maine

Warning: The following opinion is provided for purposes of discussion only. We have not Shepardized™ this opinion, and do not know the subsequent disposition of this case nor whether the effect of the opinion has been overruled or superceded by other law.

Official Unsecured Creditors Committee v. General Motors Corp.,
No. 94-94-B-H (D.Me. 08/17/1995)

UNITED STATES DISTRICT COURT DISTRICT OF MAINE

Civil No. 94-94-B-H

August 17, 1995

OFFICIAL UNSECURED CREDITORS COMMITTEE,
PLAINTIFF

V.

GENERAL MOTORS CORP., ET AL.,
DEFENDANTS

The opinion of the court was delivered by: David M. Cohen United States Magistrate Judge

RECOMMENDED DECISION ON DEFENDANTS' MOTIONS FOR SUMMARY JUDGMENT, DEFENDANT GENERAL MOTORS CORPORATION'S MOTION TO DISMISS AND DEFENDANT GENERAL MOTORS ACCEPTANCE CORPORATION'S MOTION TO STRIKE PLAINTIFF'S DEMAND FOR JURY TRIAL

This case requires the court to determine whether General Motors Corporation ("GM") and its wholly owned subsidiary, General Motors Acceptance Corporation ("GMAC"), acted unlawfully in connection with the business failure of two Waterville, Maine automobile dealerships. The plaintiff is the Official Unsecured Creditors Committee appointed by the U.S. Bankruptcy Court for the District of Maine to represent unsecured creditors of Joseph Motor Company and Joseph Subaru, both of which sought relief pursuant to Chapter 11 of the Bankruptcy Code in 1992. In its 24-count second amended complaint ("complaint"), the plaintiff alleges breach of fiduciary duties to both the debtors and their creditors, breach of contract, breach of a common-law duty of good faith and fair dealing, intentional interference with contractual relations, common-law conversion, fraud, negligent misrepresentation and civil conspiracy. The complaint also asserts claims arising under the civil provisions of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961 et seq., and the Automobile Dealers' Day in Court Act, 15 U.S.C. § 1221 et seq., as well as claims of fraudulent and preferential transfers pursuant to the Bankruptcy Code, 11 U.S.C. § 101 et seq. The plaintiff also asserts state-law statutory claims pursuant to a provision of Maine's Uniform Fraudulent Transfer Act, 14 M.R.S.A. § 3571 et seq., and chapter on regulation of business practices among motor vehicle manufacturers, distributors and dealers, 10 M.R.S.A. § 1171 et seq. The complaint also includes separate counts seeking equitable subordination of the defendants' rights to those of the unsecured creditors, and seeking to fix liability in the defendants for state sales taxes owed by the debtors.

Pending before the court are GM's motion to dismiss (Docket No. 13), GMAC's motion to dismiss and to strike the plaintiff's request for jury trial (Docket No. 14), GM's motion for summary judgment (Docket No. 68) and GMAC's motion for summary judgment (Docket No. 71). *fn1 To the extent that the dismissal motions rely on Fed. R. Civ. P. 12(b)(1), they have been withdrawn in light of the court's having revoked the prior reference in this case to the Bankruptcy Court. See Report of Status Conference and Order (Docket No. 81). Further, GMAC has indicated that its motion to dismiss is otherwise subsumed by its subsequent motion for summary judgment, with the exception of the jury trial issue raised in the dismissal motion. Id. The court has also determined that the motions to dismiss shall be treated as motions to dismiss the second amended complaint. Id.

I. Summary Judgment Standards

Summary judgment is appropriate only if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). The party moving for summary judgment must demonstrate an absence of evidence to support the nonmoving party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). In determining whether this burden is met, the court must view the record in the light most favorable to the nonmoving party and "give that party the benefit of all reasonable inferences to be drawn in its favor." Ortega-Rosario v. Alvarado-Ortiz, 917 F.2d 71, 73 (1st Cir. 1990). Once the moving party has made a preliminary showing that no genuine issue of material fact exists, "the non-movant must contradict the showing by pointing to specific facts demonstrating that there is, indeed, a trialworthy issue." National Amusements, Inc. v. Town of Dedham, 43 F.3d 731, 735 (1st Cir.) (citing Celotex, 477 U.S. at 324), cert. denied, 132 L. Ed. 2d 255 (1995); Fed. R. Civ. P. 56(e); Local Rule 19(b)(2). A fact is "material" within the meaning of Rule 56(c) if it may affect the outcome of the case; a dispute is "genuine" only if trial is necessary to resolve evidentiary disagreement. Ortega-Rosario, 917 F.2d at 73.

II. Factual Context

The relevant facts, viewed in the light most favorable to the plaintiff as the non-moving party, can be summarized as follows. *fn2

a. The Parties and Their Relationships

The plaintiff is the Official Unsecured Creditors Committee appointed by the U.S. Bankruptcy Court for the District of Maine to represent unsecured creditors of the bankruptcy estate of two automobile dealerships, Joseph Motor Company and Joseph Subaru. Complaint (Docket No. 82) ¶ 2; GMAC Answer (Docket No. 110) ¶ 2; GM Answer (Docket No. 112) at ¶ 2. Defendant GM is a Delaware corporation with its principal place of business in Detroit, Michigan. Affidavit of John S. Bellaver ("Bellaver Aff.") (Docket No. 70) at ¶ 2. Defendant GMAC, a New York corporation which also has its principal place of business in Detroit, is a wholly owned subsidiary of GM. Complaint ¶ 3; GM Answer ¶ 3; GMAC Answer ¶ 3.

GMAC is engaged in the business of financing automobiles and other motor vehicles for dealers who sell, lease and service products manufactured by GM. Bellaver Aff. ¶ 3. GMAC does not provide financing to all GM dealers, and GM dealers are free to obtain financing from any source. Id. GM and GMAC maintain separate payrolls, books and records; the two companies conduct separate directors' meetings and maintain separate corporate minutes of those meetings. Id., ¶¶ 4, 6. GMAC's executives and management team exercise independent day-to-day control over the company, which has its own employees, sales staff and branch offices to maintain contact with the dealers to whom it provides financing. Id., ¶¶ 5, 7, 9. The GMAC branch offices do not share facilities, personnel, space or equipment with GM or its car and truck divisions, which consist of Buick, Chevrolet, GMC Truck, Oldsmobile and Pontiac. Id. at ¶ 9 and Exh. A thereto at 48. The business of GMAC is managed by its 14-member board of directors, a majority of whom are GMAC executives; the GMAC board is separate from that of GM. Id., ¶ 4. GMAC prepares its own annual reports and other filings as required by the Securities Exchange Act of 1934. Id., ¶ 6.

GMAC receives certain legal services from GM's legal department. Id., ¶ 8. The attorneys in GM's legal department who are assigned to its finance and insurance practice area essentially devote all of their time to providing legal advice to GMAC and Motors Insurance Corporation, GMAC's insurance subsidiary. Id. These attorneys do not provide any services to GMAC other than legal advice and representation. Deposition of General Motors Corporation by John S. Bellaver ("Bellaver Dep.") at 37. GMAC reimburses GM for these legal services. Bellaver Aff. ¶ 8. In representing GMAC on matters involving insolvent or potentially insolvent dealers, the GM attorneys consider not just the traditional financial issues that would confront a lender in such situations, but also take into consideration the effect their actions will have on GM as a supplier of automobiles to the dealer or dealers in question. Exh. 2 to Bellaver Dep. at 2 (to be found at Vol. V, Tab 118 of Appendix to Plaintiff's Responses to Defendants' Motions for Summary Judgment ("Plaintiff's Appendix"). *fn3 Indeed, one of GMAC's official corporate missions is to assist in the sale of GM products. Deposition of Harry W. Yergey ("Yergey Dep.") at 315-16. And, at least in certain circumstances, GMAC exerts control over the shipment of new GM vehicles to dealerships that finance their new car inventory through GMAC. Deposition of Ernest Caraway ("Caraway Dep.") at 262; Deposition of Donald H. Marden ("Marden Dep.") at 156, 161.

Joseph Motor Company and Joseph Subaru were both located in Waterville Maine; their president, and the owner of the real estate upon which they were situated, was Herbert W. Joseph, Sr. ("Joseph"). Complaint ¶ 8; GMAC Answer ¶ 8; GM Answer ¶ 8. Elias Joseph, father of Herbert Joseph Sr., founded Joseph Motor Company in 1945; the younger Joseph started working at the dealership in 1954 and ultimately became president of both of the Waterville Joseph dealerships. Deposition of Herbert W. Joseph, Sr. ("Joseph Dep."), Vol. I at 10-11, 27. Joseph Motor Company operated as a Buick, Oldsmobile and GMC Truck dealer, pursuant to an agreement with GM, prior to its bankruptcy filing in 1992. Id. at 11; Vol. II at 90-92. Joseph Subaru operated as a Subaru dealer. Id., Vol. I at 11-12.

During the period relevant to this litigation, GM was engaged in a corporate business plan known as "Project 2000." Id., Vol. III at 123; Deposition of General Motors Corporation by R. James Smith ("Smith Dep.") at 103. Among the elements of Project 2000 was an assessment of the number of GM dealers that would be appropriate from a marketing and competitive standpoint for each geographic area in the country. Id. at 105. Another aspect of the plan was a determination of which specific location or locations are the optimum ones for GM dealerships within a geographic area. Id. at 147. Pursuant to Project 2000, GM determined that Waterville should go from three to two GM dealerships, id. at 145, that the local Chevrolet and Pontiac dealerships occupied the optimal geographic locations in the Waterville area, id. at 170, and that the location of Joseph Motor Company was not considered optimal, id. at 171.

b. Prelude to a Financial Crisis at the Joseph Dealerships

In May 1988 Joseph purchased an Oldsmobile and GMC Truck dealership located in Corinna, Maine. Joseph Dep., Vol. I at 12; Vol. II at 132. In August of that year, Joseph purchased a Buick dealership in Portland, Maine owned by John Haverty. Id., Vol. I at 13, 25; Vol. II at 145, 148. Joseph obtained a $1.3 million loan from GMAC to finance the purchase of the Portland dealership, to provide additional working capital for the Corinna dealership, and to pay off existing indebtedness in connection with the real estate used by the Waterville dealerships. Exh. 1 to Joseph Dep. at 1 (Tab 35); Deposition of GMAC by Elmer C. Sanders, Jr. ("Sanders Dep.") at 232; Exh. A to Affidavit of E.C. Sanders ("Sanders Aff."), Appendix to General Motors Acceptance Corporation's Motion for Summary Judgment ("GMAC's App.") Vol. II. Securing this loan were a first mortgage on the real estate occupied by the Waterville dealerships and owned by Joseph, and guarantees for the full amount of the loan from both Joseph Motor Company and Joseph Subaru. Complaint ¶ ¶ 12-13; GMAC Answer ¶ ¶ 12-13; Exh. 1 to Joseph Dep. (Tab 35) at 2; Exhs. B and C to Sanders Aff. (GMAC's App., Vol. II).

Joseph first learned of the availability of the Corinna dealership when an employee of GM's Oldsmobile division called Joseph to encourage him to make the purchase. Joseph Dep., Vol. I at 54. Joseph decided to purchase the Portland Buick dealership after receiving a letter from Buick Motor Division, a unit of GM, that the dealership had a "planning potential" of 825 new car sales per year. Id., Vol. III at 8-9. A Buick official told Joseph that there was no reason why sales at the dealership should not be twice what they had been under the previous owners, given that the economy in greater Portland was flourishing at the time. Id., Vol. II at 150, 155. In general, Joseph relied heavily on the representations made to him by, and the advice he received from, the automobile manufacturers with whom he did business. Id., Vol. III at 19. Although Joseph understood that "business is business," he "always relied on the factory as a company like you would rely on a personal friend." Id. It took only two weeks for Joseph to obtain the necessary approvals from GM and GMAC to purchase the Portland dealership; this was an unusually short period of time. Id., Vol. I at 55.

Economic conditions in Portland began to deteriorate after Joseph bought the Buick dealership, and the dealership was never able to meet the level of sales that had been predicted by Buick. Id., Vol. III at 7; Sanders Dep. at 239. It was the unprofitability of the Buick dealership that ultimately brought about the financial downfall of the Joseph automobile businesses. Joseph Dep., Vol. III at 32-33. At some point in either the last quarter of 1989 or the first quarter of 1990, both Joseph Motor Company and Joseph Subaru became insolvent. Deposition of Mark G. Filler ("Filler Dep.") at 61-63. By the spring of 1990, GMAC was aware that Joseph Motor Company and Joseph Subaru were experiencing financial difficulties. Exhs. 116, 121, 122 and 123 to Sanders Dep. (Tabs 40, 42-44).

Joseph borrowed another $600,000 from GMAC in July 1990; again, Joseph Motors and Joseph Subaru each guaranteed the full amount of the loan. Exh. 4 to Joseph Dep. (Tab 46); Exh. D to Sanders Aff. (GMAC's App., Vol. II). Originally, officials at the GMAC branch office in Portland recommended against making another loan to Joseph; this recommendation was overruled as the result of the intervention of Robert Ogden, an executive at GM, and another GM employee identified in the record as Bud Moore. *fn4 Sanders Dep. at 414-15, 526-27; Yergey Dep. at 143-55, 332; Exh. 121 to Sanders Dep. at 2 (Tab 42); Exh. 123 to Sanders Dep. at 2 (Tab 44); Exh. 131 to Sanders Dep. at 7-8 (Tab 47); Joseph Dep., Vol. III at 45-46; Exh. 12 to Caraway Dep. at 7 (Tab 73). Ogden also urged Joseph to place his trust in GMAC, assuring Joseph that he could count on GMAC to "be there for you." Joseph Dep., Vol. III at 47-48. In connection with the 1990 loan, Joseph Motor Company assigned to GMAC the right to receive payment directly from GM on the "open accounts" that Joseph Motor Company had with GM. Exh. F to Sanders Aff. (GMAC's App., Vol. II). A dealership's open accounts consist of net balances payable by GM to the dealer in connection with the sale of automobile parts, warranty work performed by the dealer, and manufacturer's rebates, etc. Sanders Dep. at 206-207.

Concurrent with the 1990 loan transaction, Joseph Motor Company and Joseph Subaru entered into wholesale security agreements with GMAC, pursuant to which GMAC provided wholesale financing (also referred to as "floor plan" financing) for the dealerships' inventory of new vehicles for retail sale. Exhs. 148 (Tab 49) and 149 (GMAC's App., Vol. II) to Sanders Dep.; Exhs. G and H to Sanders Aff. (GMAC's App., Vol. II); Sanders Dep. at 6. Approximately a year later, GMAC undertook floor plan financing of the dealerships' inventory of used cars as well. Sanders Dep. at 407; Exh. 9 to Sanders Dep. (GMAC's App., Vol. II). Floor plan financing involves the lender advancing the purchase price of the vehicle to the manufacturer, with the dealer paying back the lender when the vehicle is sold; the lender retains a purchase money security interest in the vehicle and all proceeds from the sale of that vehicle until the lender is paid. Exh. 148 to Sanders Dep. (Tab 49).

Notwithstanding the loan consummated in 1990, financial difficulties at the Joseph dealerships continued. In January 1991 a GMAC official noted that "[w]e have a case here of no $and all players are aware." Exh. 23 to Sanders Dep. at 2 (Tab 55). In March a GMAC report described the situation with the Joseph dealerships as "critical," noting that "it appears the assets of Mr. Joseph have been substantially exhausted." Exhs 3 and 4 to Caraway Dep. (Tabs 59, 63). GMAC began conducting weekly audits at Joseph Motor Company and Joseph Subaru. Exh. 9 to Caraway Dep. (Tab 68). At some point in 1991, GMAC approved Joseph's request for a six-month moratorium on payments of principal by Joseph and his dealerships. Caraway Dep. at 266. Principal payments in connection with both the $1.3 million loan from 1990 and the $600,000 loan from 1991 ceased as of May 1991. Exh. 191 to Sanders Dep. at 2, 7 (Tab 36). GMAC extended the payment moratorium for another six months in December 1991. Exh. 50 to Sanders Dep. (GMAC's App., Vol. II). Joseph and the dealerships ceased making interest payments on the loans as of October 1991 and no further payments were made thereafter. Exh. 191 to Sanders Dep. at 2-3, 7-8 (Tab 36). GMAC agreed to the second six-month moratorium because it believed its own exposure to losses would be less if the dealerships stayed in business. Yergey Dep. at 378.

c. July 1991: The Crisis Erupts

In July 1991, Joseph contacted GMAC to advise that certain checks issued by his dealerships to GMAC would be returned by the bank because of insufficient funds. Caraway Dep. at 226. Such an event (i.e., the sale of a vehicle by a dealership when the dealership is unable or unwilling to pay the financial institution and cause the release of the institution's security interest in the vehicle) is commonly referred to, in the record and apparently throughout the industry, as a sale of vehicles "out of trust." GMAC reacted to these out-of-trust sales in at least three ways. First, it called GM and caused shipments of new cars to the dealerships to cease. Joseph Dep., Vol. II at 14. Second, GMAC suspended the dealerships' wholesale lines of credit, which meant that the dealerships could not acquire additional new cars. Exh. 9 to Caraway Dep. at 2 (Tab 68). Finally, GMAC dispatched personnel to Joseph Motor Company and Joseph Subaru to conduct an inventory audit to determine whether any vehicles had been sold by the dealerships without payment to GMAC as required by the floor plan financing agreements. Caraway Dep. at 231-33; Sanders Dep. at 261. The audit revealed that the Joseph dealerships had sold as many as 16 cars without paying GMAC for them. Exh. 11 to Caraway Dep. (Tab 81). As a consequence, GMAC placed one of its employees on the premises of the dealerships to assure that GMAC collected funds for each vehicle sold by the dealerships. Caraway Dep. at 231, 239; Sanders Dep. at 262. This person is referred to in the record, and apparently in industry parlance, as a "keeper" or a "babysitter." See Caraway Dep. at 162; Deposition of Edward Oliver ("Oliver Dep.") at 61.

At the onset of this crisis, GMAC officials assured Joseph that as soon as he came up with the cash to cover the cars his dealerships had sold without making the required payments to it, GMAC would go back to "business as usual" in its dealings with him. Joseph Dep., Vol. I at 81-82. This assurance came only days after Ernest Caraway, GMAC's Portland-based control branch manager, had concluded that Joseph's dealerships "will not survive or at least cannot survive in their present structure." Exh. 8 to Caraway Dep. (Tab 67). As a condition for returning to business as usual, Joseph was required to present GMAC with a certified check for a sum in excess of $100,000. Joseph Dep., Vol. I at 176. Joseph raised the money by taking out a mortgage on a personal residence. Id. at 178. He then presented a certified check to Caraway on July 30, whereupon Caraway told Joseph that, in fact, GMAC would not be returning to business as usual. Id. at 82, 87; Caraway Dep. at 330-31. Caraway stated that GMAC would not restore the dealerships' floor plan financing until Joseph raised additional capital and showed GMAC a business plan. Joseph Dep., Vol. I at 87. Indeed, GMAC did not restore the dealerships' credit, permitting them to acquire more new vehicles, until the two sides successfully negotiated a workout agreement several weeks later. Id. at 98-99.

Subsequent to the July 1991 incident, GMAC made a practice of holding the certificates of origin and titles for the vehicles being sold by the dealerships, releasing the documents only upon receipt of funds from the dealership in payment for the vehicles. Deposition of Penny Hawkins ("Hawkins Dep."), Vol. I at 37-40; 130. GMAC would not accept a check from the dealerships unless the check was certified. Id., Vol. II at 15. It was the keeper's practice to take all of the sales proceeds for the vehicles in question, even if some of the money provided by the purchaser had been paid as sales tax. Joseph Dep., Vol. II at 43-44, 57. The keeper was instructed to perform his work in an inconspicuous manner so as not to alert the public to his presence. Caraway Dep. at 186-87; Sanders Dep. at 62; Deposition of Jay F. Williams ("Williams Dep.") at 136. The GMAC keeper did not participate in the management of either dealership. *fn5 Caraway Dep. at 187.

Other actions taken by GMAC imposed significant new burdens on the Joseph dealerships. GMAC discontinued the practice of allowing the dealerships to write checks against their accounts with GMAC. Joseph Dep., Vol. II at 35. GMAC refused to accept checks from the dealerships' retail customers unless a dealership employee travelled to the issuing bank to have the check certified. Id., Vol. III at 145. Officials of GMAC's Portland office would frequently call the dealerships' accounting manager and quiz her about details of the businesses' financial transactions, and would examine the dealerships' checking account records every three or four weeks. Id., Vol. II at 17-18. These demands became so time consuming for the accounting manager that she complained to Joseph she was spending three-quarters of her time dealing with GMAC and did not have time to do her bookkeeping tasks. Id. at 19. GMAC also required a copy of the dealerships' bank statements each month. Id. at 18. If one of the Joseph dealerships wanted to engage in a "dealer swap" with a non-GM dealership, GMAC insisted that the non-GM dealer pay for the vehicle it was acquiring in advance -- making it difficult for the Joseph dealerships to engage in this kind of transaction. Id., Vol. I at 101-02.

GMAC also began exercising its right, as set forth in the 1990 loan agreement, to receive directly from GM any payments due the dealerships on their open accounts with GM. Id. at 78; Marden Dep. at 169-70. Neither Joseph nor his attorney, Donald Marden, complained to GM about the legality of this action. Id. at 170-71; Joseph Dep., Vol. III at 106. Although the overall share of the two dealerships' revenues received by GMAC actually declined -- from 80 to 90 percent before July to between 75 and 80 percent thereafter, Filler Dep. at 156 -- this phenomenon was, at least in part, a function of continued restrictions GMAC placed on the dealerships' ability to order new cars from the manufacturers and the fact that GMAC required payment from the dealerships by certified check, which imposed an additional expense on the dealerships. Joseph Dep., Vol. II at 15-16, 73-74, Vol. III at 91- 93. The moratorium on new car shipments to the dealerships was lifted after a month, but the limits GMAC placed on the dealerships' inventory was so severe that people wondered whether the dealerships were going out of business. Id., Vol. II at 15. Each time one of the dealerships intended to order any new cars, specific permission from GMAC was necessary. Id. at 16.

GMAC also made a practice during this period of conducting daily audits at the Joseph dealerships. Id., Vol. I at 179. These audits involved GMAC officials examining not just records of the dealerships' vehicle inventory and their transactions with GMAC, but also of all checks issued by the dealerships. Id. at 173-74, 178-79. Because GMAC insisted on payment for all vehicles before releasing them, it became difficult for the dealerships to sell cars with retail financing from sources other than GMAC. Id., Vol. II at 38, 40. GMAC also made a practice of not returning funds due one of the dealerships when, at the end of the day, the audit revealed a balance in the dealership's favor. Hawkins Dep., Vol. I at 44. Instead, these funds would be applied to balances owned to GMAC by one of the other Joseph dealerships. Id. at 45.

The actions taken by GMAC at the time it installed a keeper on the dealerships' premises were taken solely to protect GMAC's interests; GMAC officials did not consider it their duty to act in a manner that would protect the interests of the dealerships' other creditors or even to assure that the dealerships had enough money to stay in business. Yergey Dep. at 357-58; Sanders Dep. at 298.

In August 1991, Joseph's accountant provided him with financial statements of the dealerships for the two-year period ending December 31, 1990. Exh. 17 to Deposition of Clinton Strout ("Strout Dep.") (GMAC's App., Vol. III). According to the financial statement prepared for Joseph Motor Company, the dealership had incurred a net loss of $272,065 during 1990, and its liabilities exceeded assets by $156,788. Exh. 5 to Strout Dep. at 14 (GMAC's App., Vol. III). The report therefore expressed "substantial doubt about the Company's ability to continue as a going concern." Id. Similarly, the financial statement prepared for Joseph Subaru noted losses of $411,284 in 1989 and $266,288 in 1990, stated that as of December 31, 1990 the dealership's assets exceeded its liabilities by $570,498, and therefore expressed "uncertainty about the Company's ability to continue as a going concern." Exh. 6 to Strout Dep. at 13 (GMAC's App., Vol. III).

d. September 1991: The Workout Agreement

In September 1991, GMAC concluded a written "Workout and Interim Financing Agreement" with Joseph and other members of his family on behalf of themselves and the dealerships. Joseph Dep., Vol. I at 95-97 and Exh. 10 thereto (Tab 84). Attorney Marden represented Joseph during the negotiations leading up to this agreement; Joseph received advice and explanations from Marden as to the terms and implications of the agreement. Marden Dep. at 105-07; Joseph Dep., Vol. I at 89-90, 96-97; Vol. III at 83. Joseph also received advice from a certified public accountant, Clinton Strout, and a personal business adviser, Tom Barton. Marden Dep. at 31-32; Strout Dep. at 28-30, 59. No GM officials were involved in the negotiation of the workout agreement. Marden Dep. at 165-68; Joseph Dep., Vol. III at 78. However, Joseph wrote to an official at Buick during the negotiations to complain about GMAC's "tactics," particularly the limits GMAC had placed on his ability to acquire more inventory of new cars. Exh. 9 to Joseph Dep. (Tab 78). And the initial draft of the workout agreement itself came from an attorney in the GM legal department. Marden Dep. at 73. In fact, this attorney, Frani B. DeJaco, was involved in the final negotiations with Marden over the specific language in the agreement. Marden Dep. at 110- 14 and Exhs. 12-13, 15 thereto (GMAC App., Vol. II). There were also discussions between GM attorney John Bellaver and Elmer C. Sanders, Jr., GMAC's Portland-based assistant control branch manager, about what Sanders agreed at his deposition were "business points to be included in the workout arrangement with Mr. Joseph and his dealerships." Sanders Dep. at 421.

The workout agreement included an acknowledgement by the Joseph family signatories that "there exists no fiduciary relationship or other special or trust relationship" between them and GMAC, and that the obligors would waive certain rights they may have enjoyed as of the date of the agreement. *fn6 Exh. 10 to Joseph Dep. at 5-6 (Tab 84). As part of the agreement, Joseph Motor Company, Joseph Subaru and Champion Oldsmobile-GMC Truck, Inc. (the Corinna dealership) each conveyed to GMAC a security interest in the dealership's "general intangibles," including "any and all of [its] rights, title or interest in any Manufacturer Dealer Sales and Service Agreement." Exh. 11 to Joseph Dep. (Tab 85). In other words, GMAC took a security interest in the franchises themselves. Marden Dep. at 83. GMAC presented these provisions to Joseph as non-negotiable. Id. at 80-83 and Exh. 6 thereto (GMAC's App., Vol. II). It was the perception of Joseph's attorney that GMAC's position during the workout negotiation was that "as long as Herb Joseph gave up every single legal right he ever had to represent his interests with respect to this transaction, [then] somehow he'd get some cars again." Marden Dep. at 80.

In concluding the workout agreement with Joseph, GMAC did not focus on whether it would be in the best interests of Joseph and his dealerships to remain in business; rather, GMAC agreed to the workout plan because it considered the plan to be in the best interests of GMAC. Caraway Dep. at 326. This was not, however, the way in which control branch manager Caraway presented GMAC's position to Joseph through his attorney. Caraway told Joseph's attorney that his job was to help Joseph sell cars, to keep "old line" dealers like Joseph in business, and to do what he could to see Joseph and his family through the financial crisis. Marden Dep. at 99.

GMAC did not regard the workout agreement as effecting any major change in the actual terms of its lending relationship with Joseph and his dealerships. During negotiations, Caraway wrote his supervisor that "these workout agreements are usually made up of 50% recital, 40% `if this happens then this happens' and 10% substance with respect to credit lines, additional securities, etc." Exh. 11 to Caraway Dep. at 2 (Tab 81).

Despite the workout agreement, there was considerable sentiment within GMAC that the Joseph dealerships could not survive and bankruptcy was inevitable. See id. This view persisted into the fall of 1991, when Caraway wrote this message about Joseph Motor Company to one of his superiors: "The dealer's prospects are dim, however we should attempt to keep the dealership functioning since it offers the best chance to minimize our risk. The dealer's financial condition has not improved since the workout agreement was signed." Exh. 15 to Caraway Dep. (Tab 89). Less than a month later, a GMAC credit analyst expressed similar sentiments, in writing, as the analyst recommended against the second six-month payment moratorium granted by GMAC. Exh. 16 to Caraway Dep. at 3 (Tab 90). The control branch manager advised the executive office of GMAC in February 1992 that the only way to keep Joseph's businesses from collapsing would be to work with him to sell the Corinna dealership and to merge Joseph Motor Company with another local GMC dealership. Exh. 17 to Caraway Dep. at 2 (Tab 97). By March 1992 another GMAC employee who analyzed Joseph Motor Company's financial condition concluded, flatly: "The dealership will not survive." Exh. 18 to Caraway Dep. at 1 (Tab 94); see also Exh. 53 to Sanders Dep. at 2 (Tab 98) (containing February warning by GMAC employee that "we are near the end"). In April, the control branch manager sent a briefing letter to a new supervisor in which he confided that there continued to be no improvement at the Joseph dealerships and, "candidly, we have worked to keep the dealer open during the wintertime to avoid maintaining buildings and grounds, reduce the number of previous model year vehicles, and, hopefully, see some fresh money in the form of an investor or buyer." Exh. 19 to Caraway Dep. at 2 (Tab 103). As to the possibility of new investors or an outright sale of the dealerships, Caraway was "not optimistic" because he considered Joseph to be "not a savvy car person" who found negotiation difficult and was sentimentally attached to his family business. Exh. 62 to Sanders Dep. at 2 (Tab 105). Another GMAC employee recommended foreclosure in June. Exh. 64 to Sanders Dep. at 8 (Tab 106). Elsewhere Caraway referred to Joseph's potential efforts to raise additional capital as "futile." Exh. 11 to Caraway Dep. at 2 (Tab 81).

At the time of the workout agreement and thereafter, GMAC was fully aware, as a result of its ongoing audits of the Joseph dealerships, that significant amounts were owed by the dealerships to their other creditors, including family members, insurance companies, Fleet Bank and the State of Maine, the latter for sales tax. See, e.g., Exh. 13 to Caraway Dep. at 4 (Tab 72) (showing $1,411,747 owing to creditors, with another $133,704 owed to the state in sales tax, all as of the end of July 1991, pursuant to GMAC audit completed in September). When Joseph reminded Caraway in the winter of 1992 that his dealerships were $150,000 in arrears on their sales tax payments, Caraway told Joseph that it is GMAC that furnishes him his inventory and it is therefore more important for Joseph to pay GMAC than the State of Maine. Joseph Dep., Vol. II at 70-71; Exh. 52 to Sanders Dep. (Tab 99).

GMAC recommended that Joseph consolidate his operations by selling the dealerships he had purchased in Corinna and Portland. Joseph Dep., Vol. III at 30-31. Joseph sold his Corinna dealership back to its previous owner in 1991 or 1992. Id. at 30. However, GM's Oldsmobile division initially refused to approve this dealership transfer, and during this delay the price the previous owner was willing to pay for the dealership fell by $100,000. Id. at 40. Joseph also sold the Portland dealership in 1992 and transferred its debts to Joseph Motor Company. Id. at 21, 24-27.

e. August 1992: The Bankruptcy

Joseph worked to keep his remaining dealerships in business until August 11, 1992, the date on which Joseph Motor Company and Joseph Subaru filed Chapter 11 bankruptcy petitions. Joseph Dep., Vol. I at 119-20; Exh. 3 to Marden Dep. at 3 (Tab 116). Among these efforts were discussions with another automobile dealer about a sale of the Joseph dealerships. Joseph Dep., Vol. III at 126. Joseph sought additional investors for the dealerships. Id. at 67, 111-12, 148-49, 151. He retained an outside firm, Decision Development Group, in an effort to raise capital and restructure the businesses. Id. at 149-51. During this period, the dealerships made an effort to pay their trade creditors on a C.O.D. basis. Id. at 129. Some of these creditors, however, went unpaid. Id., Vol. I at 104. GMAC continued to provide floor plan financing through the date of the bankruptcy filing. Sanders Dep. at 348.

The event that triggered the bankruptcy filing was the decision by the Maine Bureau of Taxation to revoke the dealerships' sales tax license. Exh. 3 to Marden Dep. at 3 (Tab 116). Joseph continued his efforts to sell his dealerships following the bankruptcy filing, and actually negotiated a purchase and sale agreement with an Augusta, Maine GM dealer named Jim Davis. Marden Dep. at 179; Joseph Dep., Vol. II at 9-10. The agreement was contingent on the receipt of GMAC financing by Davis. Id., Vol. III at 113. Davis intended to operate the business at its existing Waterville location. Id. at 122. Joseph sent GM's Oldsmobile division a copy of the buy-sell agreement he had reached with Davis. Id. at 112. Despite initial indications from GMAC that it would look favorably on the Davis proposal, the company ultimately rejected his bid for financing and the deal collapsed. Id. at 113; Marden Dep. at 180-83. Thereafter, GM approved a plan by Davis to purchase the Chevrolet dealership that was operating elsewhere in Waterville. Smith Dep. at 196; Joseph Dep., Vol. II at 10.

III. Sufficiency of the RICO Allegations in the Complaint Against GM

In its motion to dismiss, GM contends that the plaintiff is not entitled to relief on its RICO claims because they do not allege the requisite predicate acts with sufficient particularity as required by Fed. R. Civ. P. 9(b), because the plaintiff lacks standing to bring RICO claims, and because the claims do not sufficiently allege a RICO conspiracy or a pattern of racketeering activity. To evaluate these contentions, I look only to the allegations in the complaint itself, accepting the well-pleaded facts as true and drawing any reasonable inferences in favor of the plaintiff. See Miranda v. Ponce Federal Bank, 948 F.2d 41, 43 (1st Cir. 1991).

The plaintiff asserts six distinct RICO claims. Count XVIII alleges a violation of 18 U.S.C. § 1962(a), which in relevant part provides that it is

unlawful for any person who has received any income derived, directly or indirectly, from a pattern of racketeering activity . . . to use or invest, directly or indirectly, any part of such income, or the proceeds of such income, in acquisition of any interest in, or the establishment or operation of, any enterprise which is engaged in, or the activities of which affect, interstate or foreign commerce.

Count XVIII alleges that GM and GMAC constitute an "enterprise" within the meaning of section 1962(a), and that they derived income from a pattern of racketeering activity that included bankruptcy fraud and the intentional use of the U.S. mails and/or interstate wire communications. Complaint ¶¶ 223-26. Count XIX asserts a violation of section 1962(b), which declares in relevant part that it is "unlawful for any person through a pattern of racketeering activity . . . to acquire or maintain, directly or indirectly, any interest in or control of any enterprise which is engaged in, or the activities of which affect, interstate or foreign commerce." Count XIX alleges that GM and GMAC acquired an interest in and/or control of Joseph Motor Company and Joseph Subaru through a pattern of racketeering activity. Id. at ¶ 237. Count XX asserts a violation of section 1962(c), which in relevant part declares that it is unlawful "for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity . . . ." It is alleged in Count XX that Joseph Motor Company and Joseph Subaru are an enterprise within the meaning of section 1962(c), and that GM and GMAC conducted and/or participated in the activities of the enterprise through a pattern of racketeering activity. Id. at ¶¶ 249, 251. Finally, Counts XXI to XXIII allege, with reference to the wrongful acts asserted in the previous three RICO counts, that GM and GMAC engaged in a conspiracy to commit RICO violations, itself a violation of RICO pursuant to section 1962(d).

GM's contention that the plaintiff lacks standing to bring the RICO claims is easily addressed. Creditors of a bankrupt corporation generally do not have standing to sue under the civil RICO provisions. Manson v. Stacescu, 11 F.3d 1127, 1130 (2d Cir. 1993), cert. denied, 13 L. Ed. 2d 206 (1994). This is because "[t]he creditor generally sustains injury only because he has a claim against the corporation. The creditor's injury is derivative of that of the corporation and is not caused proximately by the RICO violations." Id. The plaintiff here, however, is not a creditor of the bankrupt dealerships but a committee of creditors with specific authority from the Bankruptcy Court to pursue these claims as assignee of the bankruptcy estate of the dealerships. See Complaint ¶ 2; GMAC Answer ¶ 2; GM Answer ¶ 2. As such, the plaintiff stands in the shoes of the two dealerships that were allegedly injured by racketeering activities of the defendants.

GM next contends that it is entitled to dismissal of all the RICO claims against it because the plaintiff has failed to plead the alleged acts of fraud with the particularity required by Fed. R. Civ. P. 9(b). It is well established in this circuit that this heightened pleading requirement applies in cases alleging mail and wire fraud pursuant to RICO. Feinstein v. Resolution Trust Corp., 942 F.2d 34, 42 (1st Cir. 1991). There is no reason to suppose that the requirement does not apply when the allegations embrace bankruptcy fraud as well. "As in any other fraud case, the pleader is required to go beyond a showing of fraud and state the time, place and content of the alleged . . . communications perpetrating that fraud." Id. (citation and internal quotation marks omitted); see also Serabian v. Amoskeag Bank Shares, Inc., 24 F.3d 357, 361 (1st Cir. 1994); New England Data Servs., Inc. v. Becher, 829 F.2d 286, 289 (1st Cir. 1987).

The plaintiff responds that it has adequately pleaded its RICO allegations, citing case law noting that RICO liability requires two or more predicate acts that are related to one another and either amount to or pose a threat of continued criminal activity. This begs the question of whether the plaintiff has complied with Rule 9(b). The predicate acts cited in the complaint involve fraud, and must themselves be pleaded with particularity before the court may even analyze whether the acts are sufficiently suggestive of a pattern of racketeering activity.

In analyzing whether the defendant had met the particularity requirement, it is especially noteworthy that the court finds itself analyzing the plaintiff's Second Amended Complaint, signed on October 28, 1994 -- more than six months after the commencement of this action in April 1994. Discovery was well under way at the time of the drafting of the Second Amended Complaint. The court originally established a discovery deadline of October 31, 1994, see Scheduling Order (Docket No. 21), but later extended it to January 31, 1995, see Amended Scheduling Order (Docket No. 42). The plaintiff initially asserted its RICO claims in its First Amended Complaint, dated May 27, 1994 and filed with the court four days later. See First Amended Complaint (Docket No. 8). A review of the allegations material to the RICO claims in the First Amended Complaint reveals that they are nearly identical to, and certainly pleaded with the same degree of particularity as, the allegations in the Second Amended Complaint. The plaintiff chose not to redraft its RICO claims in any significant manner, although GM had filed its motion to dismiss in June and, thus, the plaintiff was on notice that the sufficiency of its pleadings was under attack.

I make these observations because the First Circuit, in both Feinstein and Becher, was careful to temper its application of Rule 9(b) in the RICO context by pointing out that in certain circumstances a plaintiff submitting an insufficiently pleaded RICO complaint should be given an opportunity to conduct additional discovery and submit an amended complaint. See Feinstein, 942 F.2d at 43, citing Becher, 829 F.2d at 290. This is so in light of "the apparent difficulties in specifically pleading mail and wire fraud as predicate acts." Id. at 290. "[W]here the plaintiff was not directly involved in the alleged transaction[s], the burden on the plaintiff to know exactly when the defendants called each other or corresponded with each other, and the contents thereof, is not realistic." Id. at 291. Thus, because the plaintiff in Becher

provided an outline of the general scheme to defraud and established an inference that the mail or wires was used to transact this scheme[,] requiring the plaintiff to plead the time, place and contents of communications between the defendants, without allowing some discovery, in addition to interrogatories, seems unreasonable. Id.

Unlike Becher, this is not a case in which the plaintiff was thwarted in its efforts to conduct discovery on its RICO claims, or in which requests to amend the complaint met with any resistance. Accordingly, either the Second Amended Complaint suffices or it does not.

I conclude that it does not, at least insofar as the complaint seeks to implicate GM. The allegations in the complaint involving GM can only be described as both sparse and vague. After outlining a series of allegedly wrongful acts by GMAC, the section of the complaint presenting allegations common to all claims avers that

GMAC undertook the above-referenced actions both on its own behalf and as an agent of GM. On information and belief, GM was aware of, deliberated on, consented to and participated in GMAC's control and domination of Debtors' businesses, including the financing[,] inventory and operating constraints placed on Debtors' businesses by GMAC. These deliberations and discussions between employee[s] in GM's and GMAC's Detroit, Michigan; New York, New York; and South Portland, Maine offices occurred from July 1991 through the Debtors['] bankruptcy cases via written, mailed reports, memos, correspondence and via telephone communications. Complaint ¶ 82.

It is also alleged that for the 18 months preceding the bankruptcy filings, "GM and GMAC made misrepresentations to, withheld material information from and held out false hopes to the Debtors, Mr. Joseph and the unsecured creditors that the dealerships were in business, could survive and satisfy creditors." Id., ¶ 91. The allegations in the RICO claims themselves are equally vague. It is alleged that "during August and September of 1991, through the means of telephone conversations and communications by mail by and among GM and GMAC employee[s], GM and GMAC formulated a plan to take complete control of the Debtors['] business for their sole benefit . . . ." Id., ¶ 227(f). After accusing two GMAC employees of making certain false representations to Joseph, the complaint asserts that these communications "facilitated GMAC's and GM's continuing improper receipt of substantially all of the Debtors' revenues." Id. The complaint then alleges that

between September of 1991 and September of 1992, through the means of telephone conversations and communications by mail, Mr. Joseph inquired of GM officials in Detroit whether GM intended to put the Debtors out of business, given their operating restrictions, and GM officials falsely informed Mr. Joseph that GM and GMAC wanted to assist and support the Debtors and did not want to shut them down. In fact, GM and GMAC had formulated a plan to prop up the Debtors' insolvent dealerships and pull out virtually all revenues for GMAC's and GM's benefit and to the direct detriment of the Debtors and their other unsecured creditors. Id., ¶ 227(h).

It is alleged that between July 1991 and August 1992, on a regular basis, GMAC wrongfully intercepted checks from GM representing open account payments of $20,000 to $30,000 per month to Joseph Motor for warranty work, servicing, rebates and dealer hold-back payments, and applied the vast majority of these open account payments against Joseph's notes and the Wholesale Agreement. GM mailed these open account payments owed to Joseph Motors directly to GMAC with knowledge that GMAC wrongfully endorsed the checks to its own accounts, pursuant to the fraudulent scheme noted above. Id., ¶ 227(i).

Finally, "on information and belief," it is alleged that GMAC and GM engaged in similar activities involving three unrelated dealerships in Maine, a Florida dealership and other unspecified dealers in other states during the past ten years. Id., ¶¶ 228-30. Only the allegation that GM wrongfully mailed certain checks to GMAC can be understood as stating with any particularity the time, place and content of the communications constituting the RICO violation. But, as the complaint makes clear, it is not alleged that these actions themselves were fraudulent but were, rather, taken pursuant to a "fraudulent scheme." And, as to GM's role in the hatching of the allegedly fraudulent scheme, the complaint is devoid of the required details. Accordingly, GM is entitled to dismissal of the RICO claims against it. *fn7

IV. Standing of the Plaintiff to Pursue Certain Claims

Another threshold issue requires the court's attention, this one raised by GM in its summary judgment motion. GM contends that the plaintiff, as a committee of unsecured creditors appointed pursuant to section 1102 of the Bankruptcy Code, lacks standing to pursue claims on behalf of individual creditors. According to GM, the plaintiff cannot recover anything in connection with its claim that the defendants breached fiduciary duties to the dealerships' creditors (Count III) and its claim of intentional interference with contractual relations (Count X). GM also takes the position that certain damages asserted by the plaintiff in connection with other claims are also not recoverable by the unsecured creditors' committee because they are damages that could only be recovered by individual creditors pressing independent claims against the bankruptcy estate.

The powers and duties of an unsecured creditors committee appointed in connection with a Chapter 11 bankruptcy reorganization proceeding are set forth in 11 U.S.C. § 1103. In relevant part, such a committee is empowered to

(1) consult with the trustee or debtor in possession concerning the administration of the case;

(2) investigate the acts, conduct, assets, liabilities, and financial condition of the debtor, the operation of the debtor's business and the desirability of the continuance of such business, and any other matter relevant to the case or to the formulation of a plan;

(3) participate in the formulation of a plan, advise those represented by such committee of such committee's determination as to any plan formulated, and collect and file with the court acceptances or rejections of a plan;

(4) request the appointment of a trustee or examiner under section 1104 of this title; and

(5) perform such other services as are in the interest of those represented. 11 U.S.C. § 1103(c).

Such a committee's authority to litigate is derived from the "other services" provision of subsection (c)(5), and requires leave of the Bankruptcy Court. In re STN Enters., 779 F.2d 901, 904 (2d Cir. 1985). Such leave has been granted here.

In such circumstances, the creditors committee is pinch-hitting for the debtor itself and/or a bankruptcy trustee. See B. Weintraub & A. Resnick, Bankruptcy Law Manual (1986) at 8-63 (noting that litigation by creditors committees is appropriate where the debtor-in-possession is unwilling or unable to litigate directly). Accordingly, I agree with GM that the case law delineating which types of claims a bankruptcy trustee has standing to pursue should also govern the question of when a creditors committee has standing to litigate.

The Seventh Circuit distinguishes between "general" claims, which the trustee may pursue, and "personal" claims, which may be asserted only by individual creditors. See Steinberg v. Buczynski, 40 F.3d 890, 893 (7th Cir. 1994); Koch Refining v. Farmers Union Central Exch., Inc., 831 F.2d 1339, 1348 (7th Cir. 1987), cert. denied, 485 U.S. 906 (1988); see also In re Aluminum Mills Corp., 132 B.R. 869, 884 (Bankr. N.D. Ill. 1991); Begier v. Price Waterhouse, 81 B.R. 303, 305 (E.D.Pa. 1987). "A cause of action is `personal' if the claimant himself is harmed and no other claimant or creditor has an interest in the cause." Koch Refining, 831 F.2d at 1348.

The point is simply that the trustee is confined to enforcing entitlements of the [debtor]. He has no right to enforce entitlements of a creditor. He represents the unsecured creditors of the [debtor] . . . . [T]here is a difference between a creditor's interest in the claims of the [debtor] against a third party, which are enforced by the trustee, and the creditor's own direct -- not derivative -- claim against the third party, which only the creditor himself can enforce. Steinberg, 40 F.3d at 893.

I find this analysis persuasive, and further conclude that it bars the plaintiff from asserting the intentional interference with contract claim as well as the claim that the defendants breached a fiduciary duty to the creditors of the debtors. Even if more than one creditor -- or, indeed, an entire class of creditors -- could assert such claims, they are still personal in nature and not within the purview of the creditors committee. See In re Continental Airlines, Inc., 57 B.R. 839, 841 (Bankr. S.D. Tex. 1985) (creditors committee may not assert "class action"-type claim on behalf of creditors). *fn8 The plaintiff's specific claim for sales tax liability is likewise a claim that is personal to the state of Maine and therefore not a proper one for the plaintiff to pursue. *fn9

V. The Plaintiff's Fraud Allegations

Having disposed of these preliminary issues, I now turn to the substance of the defendants' contentions that the undisputed facts in this proceeding support judgment in their favor as a matter of law on all remaining claims. Ground zero of this dispute is the plaintiff's contention that GM and GMAC defrauded the dealerships by saying one thing, i.e., that they would do their best to preserve these dealerships and Joseph's GM franchises, while doing another, i.e., seeking to precipitate the demise of the dealerships in a manner that would limit the defendants' financial exposure and further GM's "Project 2000" plan to eliminate one of the three Waterville-based GM dealerships. Both defendants contend that the summary judgment record entitles them to a finding of no fraud, and that many of the plaintiff's claims fail as a result.

In Maine, the elements of common-law fraud are (1) a false representation (2) of a material fact (3) with knowledge of its falsity or in reckless disregard of whether it is true or false (4) for the purpose of inducing another to act in reliance upon it, and (5) the plaintiff justifiably relies upon the representation as true and acts upon it to [the plaintiff's] damage. F.D.I.C. v. S. Prawer & Co., 829 F. Supp. 439, 445 (D. Me. 1993); accord Guiggey v. Bombardier, 615 A.2d 1169, 1173 (Me. 1992).

Maine law also provides that a party is liable for negligent misrepresentation "if in the course of [its] business [it] supplies false information for the guidance of others in their business transactions, and the other party justifiably relies upon it to [its] pecuniary detriment." Id. Thus, false representation is an element common to both fraud and negligent misrepresentation. Id. And "no actionable fraud claim can arise absent an active concealment or a duty arising from a confidential or fiduciary relationship." Guiggey, 615 A.2d at 1173.

GM takes the position that it never made any false statement of material fact upon which the debtors could reasonably have relied. GMAC contends that any statements it made to the debtors were either true or merely expressions of opinion that are not actionable because they are not statements of fact, and that the record establishes a lack of reliance on any statements it made. The plaintiff takes the opposite view, further contending that GMAC had fiduciary obligations to the debtors and that GM is liable for GMAC's statements because GMAC was GM's agent.

There is no shortage of evidence in the record that various individual employees of GMAC came to believe, prior to consummation of the workout agreement, that Joseph Motor Company and Joseph Subaru could not survive their financial crisis. The record also demonstrates that these officials held this view emphatically, and put it in writing so that others in the company would have the benefit of their warning. I further believe that a factfinder could reasonably infer from this evidence that GMAC as a whole believed these dealerships were facing certain financial ruin. I agree with GMAC, however, that to the extent it held this belief it was not a material fact but rather an opinion about events likely to occur in the future. Thus, GMAC's opinion of the dealerships' prospects is not a "fact" for purposes of fraud under Maine law. See Schott Motorcycle Supply, Inc. v. American Honda Motor Co., 976 F.2d 58, 65 (1st Cir. 1992). The only exception is when the relationship of the parties is such that circumstances justify the reliance by one on the opinions of the other. See Wildes v. Pens Unlimited Co., 389 A.2d 837, 840 (Me. 1978) (opinion actionable as fraud because plaintiff "at the mercy of the defendant"). No such circumstances existed here; Joseph was an experienced car dealer who had the benefit of accounting, business and legal advice and, presumably, access to the relevant financial and sales data from the dealerships.

Moreover, absent from the record is anything from which a factfinder could conclude that GMAC ever actually misrepresented to Joseph or anyone else at the dealerships GMAC's views about the longterm viability of the debtors. At most, GMAC can be understood to have advised Joseph that it would do what it could to see the dealerships through their crisis. If anything, such representations are fully consistent with a view that the dealerships were financially doomed and that the best way out of the mess for all concerned would be for Joseph to sell his businesses to another dealer or dealers.

Nor do I find any obligation on the part of GMAC to disclose to the debtors the "fact" that GMAC, or at least some of its employees, held pessimistic views about the dealerships' future. The Law Court has never held that a creditor-debtor relationship is a fiduciary one or otherwise includes any affirmative duty to disclose information. First NH Banks Granite State v. Scarborough, 615 A.2d 248, 250 (Me. 1992) (no fiduciary duties where "[n]othing suggests that a greater relationship existed" between debtor and creditor); see also Campbell v. Machias Sav. Bank, 865 F. Supp. 26, 37 (D. Me. 1994). Of course, GMAC was not just a major creditor of the dealerships; it was a secured creditor that acted in a highly aggressive manner to protect its security interest in the dealerships' vehicle inventories. But, contrary to the assertion of the plaintiff, nothing in the record suggests that Joseph "placed [his] trust in [a creditor financial institution's] superior knowledge" when making an important business decision, Morris v. Resolution Trust Corp., 622 A.2d 708, 712 (Me. 1993), or that the nature of the relationship was such that the court could infer the existence of a partnership between GMAC and the dealerships, thus creating fiduciary obligations, Dalton v. Austin, 432 A.2d 774, 777 (Me. 1981). Under Maine law, "[a] good working relationship between two parties . . . is not sufficient evidence for a finding of the existence of the special legal obligations of a confidential relation." Reid v. Key Bank of S. Maine, Inc., 821 F.2d 9, 17 (1st Cir. 1987). All the more so here, where relations between GMAC and the dealerships were at best strained once GMAC installed its "keeper" at the dealerships.

I conclude that GMAC did not commit fraud against the debtors as a matter of Maine law. *fn10 Accordingly, it is not necessary to take up the plaintiff's contention that GMAC acted as GM's agent. The plaintiff further contends, however, that GM itself made false statements to the debtors that amount to actionable fraud. In its memorandum of law, the plaintiff does not specify which statements made by GM meet the definition of fraud. The record reflects that the only GM official involved in the workout negotiations was a staff attorney; to the extent that she was not simply representing GMAC on this occasion, the record reflects that she engaged in arm's length discussions with counsel for the debtors and made no misrepresentations. Other than that, the only GM statements reflected in the record are the 1988 prediction that the Portland Buick dealership would sell 825 new cars per year, and the assurance two years later from GM executive Ogden that Joseph should place his trust in GMAC because it would "be there" for him. The former is precisely the kind of opinion statement that the First Circuit determined in Schott Motorcycle Supply is not actionable as fraud under Maine law. The latter also carries the aura of an opinion that was delivered in the context of a sales pitch; Ogden, after all, was seeking to persuade Joseph that henceforth he should use a GM subsidiary as his major lender. While the record amply reflects the fact that Joseph reposed special trust in the advice of GM, this is an insufficient basis from which to infer the existence of a fiduciary relationship. Accordingly, in the absence of anything to suggest that Ogden was actively concealing relevant information from the dealerships, his statement cannot serve as the basis for a fraud claim. And, in the absence of anything from which a factfinder could conclude that either defendant made false representations, the plaintiff's claim for negligent misrepresentation also fails. *fn11

VI. The RICO Claims on Their Merits

GMAC also contends that the lack of deception is also fatal to the plaintiff's RICO claims. In the circumstances of this case, this issue becomes central because the plaintiff must establish at least two "predicate acts" of "racketeering activity" as that term is defined in 18 U.S.C. § 1961; such activity consists of certain specified state or federal crimes including mail fraud in violation of 18 U.S.C. § 1341 and wire fraud in violation of 18 U.S.C. § 1343 as well as "any offense involving fraud connected with a case under [the Bankruptcy Code]." 18 U.S.C. § 1961(1); McEvoy Travel Bureau, Inc. v. Heritage Travel, Inc., 904 F.2d 786, 790-91 (1st Cir.), cert. denied, 498 U.S. 992 (1990).

Although conceding that the scope of actionable fraud under RICO is broader than that of common-law fraud, GMAC maintains that the record supports a finding that it engaged in no scheme to deceive the dealerships and that GMAC is accordingly entitled to judgment on the RICO claims. The plaintiff contends that the record suggests the defendants engaged in