C. MINOT DOLE, Plaintiff-Appellant, v. WILLIAM ADAMS, Defendant-Appellee.
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED AND DECREED that the judgment of the district court be AFFIRMED.
C. Minot Dole (“Dole”) appeals from an order of the United States District Court for the District of Vermont (Murtha, J.) dismissing his claim alleging fraud in connection with a real estate investment transaction in violation of the Vermont Consumer Fraud Act (“VCFA”), Vt. Stat. Ann. tit. 9, §§ 2451 et seq.1 We review de novo the grant of judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c). Morris v. Schroder Capital Mgmt. Int'l, 445 F.3d 525, 529 (2d Cir. 2006). We assume the parties' familiarity with the underlying facts, the procedural history, and the issues presented for review.
The VCFA prohibits “[u]nfair methods of competition in commerce and unfair or deceptive acts or practices in commerce.” Vt. Stat. Ann. tit. 9, § 2453. The district court held that Dole's claim failed because the transaction at issue -- Dole's purchase and leaseback of seventeen properties in Texas from a company called DIS Partners -- was not “in commerce.” We agree for substantially the same reasons stated in the district court's opinion. See Dole v. Adams, 2015 WL 2184130, at *3, 2015 U.S. Dist. LEXIS 62820, at *6-9 (D. Vt. May 11, 2015).
At least two features of the transaction combine to take it outside the scope of “in commerce” as that term is used in the VCFA. First, DIS Partners did not extend its real estate investment offer to the public at large. See Foti Fuels, Inc. v. Kurrle Corp., 195 Vt. 524, 536 (2013) (“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.” (internal quotation marks and alterations omitted)). Rather, the offer was made available to a limited group of “Accredited Investors” (defined by their high net worth or income) through a “Confidential Private Placement Memorandum.” Second, the transaction was tailored to meet Dole's particular tax need to find a suitable like-kind exchange for a building he owned, and it featured special lease terms and separately negotiated promissory notes. See id. at 537-38 (finding the “in commerce” element unmet in part because of the transaction's “high level of customization”). Given the relatively private and individualized nature of the transaction, the alleged fraudulent conduct did not “have a potential harmful effect on the consuming public, and thus [did not] constitute a breach of a duty owed to consumers in general.” Id. at 536.
Accordingly, we hereby AFFIRM the judgment of the district court.
FOR THE COURT:
CATHERINE O'HAGAN WOLFE, CLERK
1. The statute was renamed after Dole initiated the instant action and is now known as the Vermont Consumer Protection Act.