United States District Court, E.D. Pennsylvania
February 23, 2004.
UNIVERSAL COMPUTER CONSULTING, INC. and UNIVERSAL COMPUTER MAINTENANCE, INC., Plaintiffs,
PITCAIRN ENTERPRISES, INC., et al., Defendants
The opinion of the court was delivered by: JAMES KELLY, Senior District Judge
MEMORANDUM AND ORDER
Following litigation in multiple fora, presently before this Court
are several motions filed by the parties in this matter. Defendants Kean
Company, Kean Pitcairn, Kris Pitcairn and Pitcairn Enterprises, Inc.
d/b/a Pitcairn Motorcars (collectively, the "Defendants")*fn1 have filed
a Motion to Dismiss, to which a Memorandum in Opposition has been filed
by Plaintiffs Universal Computer Consulting, Inc. and Universal Computer
Maintenance, Inc. (collectively, the "Plaintiffs" or "UCC"). Plaintiffs
then filed a Motion for Preliminary Injunction and a Motion for Hearing
Date and Expedited Discovery, to which Defendants have filed responses.
Finally, Plaintiffs filed a
Motion to Confirm Service, to which no response was filed.
These motions arise from a dispute concerning an asset sale by one of
the Defendants, Pitcairn Enterprises, Inc. ("PE"), wherein certain
creditors were paid in full, certain creditors were partially paid and
certain other creditors were not paid at all. In this matter, some of the
Defendants were partially paid while one Defendant and Plaintiffs were
among those creditors not paid by proceeds of the asset sale.
In their Complaint, Plaintiffs allege that the purpose of PE's asset
sale was to evade and frustrate Plaintiffs' attempt to collect on a final
judgment which was entered against Pitcairn Motorcars in the United
States District Court for the Southern District of Texas in April, 2002
(the "federal judgment"), in confirmation of an arbitration award by a
panel of the American Arbitration Association in Houston, Texas in
August, 2001 (the "Texas arbitration"). The federal judgment was
transferred to the Court of Common Pleas for Bucks County for enforcement
against Defendants. Plaintiffs, in the instant suit, contend that
Defendants' conduct surrounding PE's sale of assets give rise to
liability for claims of equitable fraud, unjust enrichment, tortious
interference, and under the Pennsylvania Uniform Fraudulent Transfers Act
("UFTA"), 12 Pa. Cons. Stat. §§ 5101-5110.
The parties' various motions are addressed below.
A. The Parties
Universal Computer Consulting, Inc. and Universal Computer Maintenance,
Inc., are Texas corporations headquartered in Houston, that, among other
things, design and install inventory and spare parts control systems,
including hardware and software, for car dealers.
PE is a Pennsylvania corporation which, until August 5, 2002, owned and
operated a business known as "Pitcairn Motorcars" located at 1862 Lincoln
Highway in Langhorne, Pennsylvania. PE was a franchisee of Volvo of
America and Volkswagen of America. Kean Pitcairn, a Pennsylvania
resident, is the president and sole shareholder of PE. Kris Pitcairn,
also a resident of Pennsylvania, is Kean Pitcairn's wife. Mrs. Pitcairn
is averred to have owned 80% of PE prior to 2002.
In 1989, UCC and PE entered into a series of contracts wherein UCC
would render computer services to PE. The contracts provide for, among
other things, arbitration of disputes before the American Arbitration
Association ("AAA") and recovery of attorneys fees and costs for the
prevailing party in connection with the collection of the award.
B. The Prior Litigation
In 2000, UCC commenced an AAA arbitration in Houston, Texas, alleging
certain breaches of the computer service contract by PE. Following motion
practice before the AAA panel and this Court to dismiss the arbitration,
which motions were denied, the arbitration was held in July 2001.*fn2 In
August 2001, the arbitration panel issued its opinion setting forth an
award in Plaintiffs' favor and providing for 10% annual interest and
attorneys' fees and costs in connection with collecting the award.
In December 2001, Plaintiffs filed a petition to confirm the
AAA award and, on April 16, 2002, the United States District Court
for the Southern District of Texas reduced that award to judgment,
confirming the award, interest and recovery of attorneys' fees and costs.
On August 31, 2002, Plaintiffs transferred the federal judgment from
the Texas district court to the Court of Common Pleas for Bucks County,
docketed at No. 020570, pursuant to the Uniform Enforcement of Foreign
Judgments Act, 42 Pa. Cons. Stat. § 4306. That same day, Plaintiffs
began execution proceedings by filing for a writ of execution.
On November 27, 2002, Plaintiffs filed a Petition for Supplemental
Relief in Aid of Execution. A hearing was held on December 13, 2002, and
Plaintiffs' request for relief was subsequently denied on December 23,
On January 21, 2003, Plaintiffs filed a motion alleging insufficiency
of interrogatory responses by Kean Pitcairn, a conclusion with which,
according to Defendants, Judge Robert J. Mellon appeared to disagree at
the conclusion of the motion hearing on February 7, 2003.
On March 4, 2003, Plaintiffs filed a Motion to Correct Judgment, a
Petition for Hearing on All Pending Motions and a Motion to Modify the
December 23, 2003 Order, all of which were denied on March 19, 2003.
On April 7, 2003, Plaintiffs filed a Motion for Contempt against Kean
Pitcairn, and following a hearing on that motion,
Judge Mellon denied relief on July 7, 2003.*fn3
C. The Asset Purchase
Plaintiffs allege that, in or around April 2002, a bid package for the
assets of PE was circulated and, on May 25, 2002, PE and non-party
R&S Imports, Ltd. ("Buyer"), a Pennsylvania corporation, entered into
an Asset Purchase Agreement to buy substantially all of the assets of PE.
Plaintiffs aver that the sale of assets closed on or about August 5,
2002, and that, after closing, PE's assets were approximately $711,000.00
in cash, a company car and its accounts receivable. Plaintiffs further
aver that the total purchase price for the assets of PE was $8.322
Plaintiffs allege that since the closing, Kean Pitcairn has caused an
amount of $700,000.00 to be transferred to his personal trust and to his
wife, Kris Pitcairn. Plaintiffs allege that neither is a secured creditor
of PE and that both were relieved of contingent liability on personal
guarantees for the corporate debts of PE in the total amount of at least
Plaintiffs also allege that, at closing, Kean Pitcairn's brother,
Torrance, received $900,000.00, and 1862 Associates, in which Kean
Pitcairn has a one-sixth limited partnership interest,
received $1.284 million.
Finally, Plaintiffs allege that, at closing, Buyer entered into a
sub-lease (the "Sub-Lease") with PE for five parcels of real estate upon
which PE had conducted its business. The largest of these five parcels is
owned by 1862 Associates, and another parcel is owned by Kean Pitcairn
and a third party. The Sub-Lease provides for step-ups in rents, which
would result in a "net net" to PE of approximately $7,200.00 per month.
On August 29, 2002, PE assigned its right under the Sub-Lease to
receive a $43,000.00 payment to a newly-formed corporation, Defendant
Kean Company, to which Kean and Kris Pitcairn own all the stock.
Plaintiffs contend that PE received no consideration from Kean Company
for this assignment, and that, as a result of this assignment, Plaintiffs
could not succeed in garnishing this asset of PE.*fn4
D. The Instant Litigation
On or about April 17, 2003, Plaintiffs filed in this Court their
Complaint in Equity alleging Count I Equitable Fraud, Count II Unjust
Enrichment, Count III Tortious Interference and Count IV Uniform
Fraudulent Transfers Act. Plaintiffs seek a decree
from this Court imposing a constructive trust upon the unsecured
proceeds of the sale of the assets of PE, as well as punitive damages.
Defendants move to dismiss Plaintiffs claim for failure to state a claim,
while Plaintiffs move for a preliminary injunction, seeking contribution
in the amount of $549,812.98 from all the Defendants, although the only
Defendant against whom Plaintiffs hold judgment is PE, pending
adjudication of the underlying Complaint.
II. STANDARD OF REVIEW
As a federal court sitting in diversity, we must adjudicate the case in
accordance with applicable state law. Erie Railroad v.
Tompkins, 304 U.S. 64, 78 (1938); Nationwide Mut. Ins. Co. v.
Cosenza, 258 F.3d 197, 202 (3d Cir. 2001). Both parties agree that
Pennsylvania law governs the substance of this dispute. Procedurally,
however, this case is governed by federal law. Hanna v. Plumer,
380 U.S. 460, 473-74 (1965).
The purpose of a motion to dismiss under Federal Rule of Civil
Procedure 12(b)(6) is to test the legal sufficiency of a complaint.
Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993). We
therefore accept all factual allegations in the complaint as true and
give the pleader the benefit of all reasonable inferences that can be
fairly drawn therefrom. Wisniewski v. Johns-Manvilie Corp.,
759 F.2d 271, 273 (3d Cir. 1985). We are
not, however, required to accept legal conclusions either alleged
or inferred from the pleaded facts. Kost, 1 F.3d at 183. In
considering whether to dismiss a complaint, courts may consider those
facts alleged in the complaint as well as matters of public record,
orders, facts in the record and exhibits attached to a complaint.
Shiver v. Levin, Fishbone, Sedan & Berman, 38 F.3d 1380,
1384 n.2 (3d Cir. 1994). A court may dismiss a complaint only if the
plaintiff can prove no set of facts that would entitle him to relief.
Coney v. Gibson, 355 U.S. 41, 45-46 (1957).
Plaintiffs allege that the sole or primary purpose of the asset sale
was to evade and escape PE's liability on the federal judgment, which
liability pre-dates both the signing of the Asset Purchase Agreement and
the closing of the sale, and that all of the assets of the judgment
debtor, including but not limited to the net cash proceeds from the sale,
have been deliberately placed beyond the reach of the Bucks County
Sheriff's execution process. Plaintiffs aver that Defendants have
continued to transfer assets of PE to place them into the hands of third
parties, in contempt of the writ of execution and for the sole purpose of
evading the federal judgment.
Defendants, however, contend that Plaintiffs, who are
unsecured creditors, are attempting to manipulate the facts of a
failed commercial transaction into allegations of tortious conduct.
Defendants further state PE distributed the proceeds of the asset sale
consistent with Pennsylvania law, thus negating any cause of action by
Plaintiffs. Specifically, Defendants contend that, under Pennsylvania
law, all creditors need not be treated equally and that debtors are free
to prefer one creditor over another.
Each of the claims in Plaintiffs' Complaint will be addressed in turn.
A. Equitable Fraud Claim
Defendants argue that Plaintiffs fail to plead fraud with particularity
as required by Federal Rule of Civil Procedure 9(b) and, further, that
their allegations do not substantiate a claim for equitable fraud.
Specifically, Defendants contend that it is difficult to determine which
of the eighty-five paragraphs of allegations Plaintiffs rely upon to
substantiate their allegation of fraud and that Plaintiffs fail to allege
how they relied upon any of the representations made by the Defendants.
UCC responds that they have sufficiently plead equitable fraud, and that
this claim is, in essence, a "creditor's bill" in equity to reach the
debtor's equitable assets, a long-recognized common law cause of action
The purpose of a creditor's bill is to subject the debtor's property,
which has been conveyed away in fraud of creditors, to the claims of the
creditors by setting aside and voiding the fraudulent conveyance.
See White Co. v. Finance Corporation of America, 63 F.2d 168,
169 (3d Cir. 1933); Houseman v. Grossman, 35 A. 736 (Pa. 1896).
This action at common law permits a judgment creditor to bring an action
in equity to reach the debtor's equitable assets. United States v.
Kensington Shipyard & Drvdock Corp., 187 F.2d 709, 712 (3d Cir.
1951). Plaintiffs concede that, to state a claim for equitable fraud,
there must be an allegation of specific fraudulent intent by the debtor.
Rule 9(b) requires that "[i]n all averments of fraud or mistake, the
circumstances constituting fraud or mistake shall be stated with
particularity. Malice, intent, knowledge, and other condition of mind of
a person may be averred generally." Fed.R.Civ.P. 9(b). "Rule 9(b)
requires plaintiffs to plead with particularity the `circumstances' of
the alleged fraud in order to place the defendants on notice of the
precise misconduct with which they are charged, and to safeguard
defendants against spurious charges of immoral and fraudulent behavior."
Seville Industrial Machinery Corp. v. Southmost Machinery
Corp., 742 F.2d 786, 791 (3d Cir. 1984). Allegations of "date, place
or time" fulfill these functions, but Rule 9(b) does not require them.
Id. Thus, plaintiffs are free to use alternative means of
injecting precision and some measure of substantiation into their
allegations of fraud. Id. In this case, Plaintiffs have
satisfied Rule 9(b)'s requirements by setting forth a detailed account of
Defendants' alleged course of conduct since having had judgment entered
against them by the Texas district court. Specifically, Plaintiffs aver
that a judgment was entered against PE and transferred to the Court of
Common Pleas for enforcement, and that, on the eve of an alleged
execution of the judgment, PE sold its assets to the non-party Buyer. The
purpose of Rule 9(b) is to provide notice, not to test the factual
allegations of the claim. Morganroth & Morganroth v. Morris,
McLaughlin & Marcus, P.C., 331 F.3d 406, 414 n.2 (3d Cir. 2003).
Plaintiffs have provided sufficient facts regarding dates and specific
transactions that, when viewed as true, Plaintiffs' claim for a
creditor's bill survives dismissal.
B. Unjust Enrichment and Tortious Interference Claims
Defendants argue that neither unjust enrichment nor tortious
interference applies to Plaintiffs allegations. Plaintiffs respond,
without any legal support, that their claims for unjust enrichment and
tortious interference are best understood as insurance for Plaintiffs
should they be unable to prove specific intent for their equitable fraud
As a preliminary matter, under Pennsylvania law, the quasi-contractual
doctrine of unjust enrichment, an equitable doctrine,
is inapplicable when the relationship between the parties is
founded on a written agreement or express contract. Hershey Foods
Corp. v. Ralph Chapek, Inc., 828 F.2d 989, 999 (3d Cir. 1987). Where
there is an express contract that governs the relationship of the
parties, a party's recovery is limited to the measure provided in the
express contract fixing the value of the services involved. Id.
In this case, it is undisputed that an express contract governed the
relationship of the parties prior to the Texas arbitration, and that,
during that time, Plaintiffs could not have recovered on a claim for
unjust enrichment for any benefits conferred upon Defendants under the
terms of their contract. The Court is aware, however, that Plaintiffs
claims in this action arise from alleged conduct by the Defendants
following the Texas arbitration.
Plaintiffs must demonstrate the following elements for a claim of
unjust enrichment: (1) the plaintiff conferred benefits upon the
defendant; (2) the defendant realized those benefits; (3) the defendant
accepted and retained the benefits under circumstances in which it would
be inequitable for it to retain them without payment of value.
Bunnion v. Consol. Rail Corp., 108 F. Supp.2d 403, 427 (E.D.
Pa. 1999), aff'd, 230 F.3d 1348 (3d Cir. 2000). Plaintiffs'
Complaint fails to provide any indication as to the nature of the
benefits Plaintiffs conferred upon Defendants, except to the extent that
the Complaint incorporates by reference all preceding paragraphs and
that "some or all of the Pitcairn Defendants have been unjustly
enriched as a result of their wrongful and illegal conduct." (Compl.
¶ 95.) Assuming that Plaintiffs are referring to the payments that
Defendants received as a result of PE's Asset Purchase Agreement with
Buyer, the source of such payments was from the sale proceeds of PE's
assets and, as such, it is unclear as to how Plaintiffs have conferred
any benefit upon Defendants. Furthermore, the section of Plaintiffs'
Complaint entitled "Benefits to the Pitcairn Defendants" sets forth no
allegations as to how Plaintiffs have conferred benefits upon Defendants
or how Defendants realized those benefits, if any. Since Plaintiffs fail
to set forth sufficient allegations to state a claim for unjust
enrichment, this claim must be dismissed.
Under Pennsylvania law, a claim for tortious interference with contract
relations requires the existence of three parties, one of which is the
Essential to recovery on the theory of tortious
interference with contract is the existence of
three parties; a tort-feasor who intentionally
interferes with a contract between the plaintiff
and a third person. . . . As a result there
must be a contractual relationship between the
plaintiff and a party other than the defendant.
Maier v. Maretti, 671 A.2d 701, 707
(Pa. Super. 1995). In addition to the requirement of a third party,
Plaintiffs must establish the following: (1) existence of a contractual
relationship; (2) an intent on the part of the defendant to harm the
plaintiff by interfering with that contractual relationship;
(3) the absence of a privilege or justification for such
interference; and (4) damages resulting from the defendant's conduct.
Small v. Juniata College, 682 A.2d 350, 354
(Pa. Super. 1996).
While a contract governed the relationship between the parties before
the Texas arbitration, that very same contract cannot also now form the
basis of Plaintiffs' claim for tortious interference. In the instant
action, Plaintiffs' allegations relate to conduct arising from events
taking place after the Texas arbitration, not from conduct relating to
performance of the computer service contract that previously governed the
parties' relationship. Specifically, Plaintiffs allege that some or all
of the Defendants have wrongfully interfered with Plaintiffs' lawful
attempts to collect judgment. However, attempts to collect on a judgment
do not a contract make, and Plaintiffs otherwise fail to allege that a
contract outside of the original service contract exists between the
parties. Since Plaintiffs fail to allege that a contractual relationship
between the parties currently exists, Plaintiffs are unable to plead all
of the elements of their claim for tortious interference.
Accordingly, even accepting as true Plaintiffs' allegations and all
reasonable inferences therefrom, as we are required to do on a motion to
dismiss, Plaintiffs fail to state claims for unjust enrichment and
tortious interference and, therefore, these claims are dismissed.
C. Pennsylvania Uniform Fraudulent Transfers Act*fn5
Defendants again contend that Plaintiffs have failed to plead fraud
sufficiently and, further, that their allegations cannot state a claim
under the Pennsylvania UFTA. Plaintiffs concede that while their UFTA
claim may be "surplusage" should they prevail on their common law
equitable fraud claim, they argue that they nevertheless state a UFTA
claim. Alternative pleading is permissible pursuant to the Federal Rule
of Civil Procedure 8, which provides, in pertinent part, that "[a] party
may also state as many separate claims or defenses are the party has
regardless of consistency and whether based on legal, equitable, or
maritime grounds." Fed.R.Civ.P. 8(e).
Section 5104 of the Pennsylvania UFTA provides that:
A transfer made or obligation incurred by a debtor
is fraudulent as to a creditor, whether the
creditor's claim arose before or after the
transfer was made or the obligation was incurred,
if the debtor made the transfer or incurred the
(1) with actual intent to hinder, delay or
defraud any creditor of the debtor; or
(2) without receiving a reasonably equivalent
value in exchange for the transfer or obligation,
and the debtor:
(i) was engaged or was about to engage in a
business or a transaction for which the
assets of the debtor were unreasonably
small in relation to the business or
(ii) intended to incur, or believed or
reasonably should have believed that the
debtor would incur, debts beyond the debtor's
ability to pay as they became due.
12 Pa. Cons. Stat. § 5104(a). In determining whether a debtor
had actual intent to hinder, delay or defraud a creditor, Section 5104
permits consideration of a non-exclusive list of eleven "badges of
fraud." See 12 Pa. Cons. Stat. § 5104(b).
Here, Plaintiffs set forth allegations in their Complaint in support of
eight of the eleven badges of fraud: (1) transfer or obligation was to an
insider; (2) debtor retained possession or control of the property
transferred after the transfer; (3) the transfer was concealed; (4)
before the transfer was made, the debtor had been sued; (5) the transfer
was of substantially all of the debtor's assets; (6) the debtor concealed
the assets; (7) the debtor was insolvent; and (8) the transfer occurred
shortly after a substantial debt was incurred. See 12 Pa. Cons.
Stat. § 5104(b)(1)-(11).
Defendants argue that Plaintiffs' focus on preferential transfers to
insiders is not legally sufficient to establish Defendants' intent to
hinder, defraud or delay. Defendants also argue that Plaintiffs have not
substantiated any allegations that the preferred creditors received any
benefit above and beyond the discharge of an actual obligation owing to
the creditors. Moreover, Defendants contend that Plaintiffs' focus on
Defendants' vigorous defense or ongoing litigation is legally
insufficient to establish an intent to hinder, delay or defraud. While
Defendants' arguments, if proven true, would defeat the merits of
Plaintiffs' claims, these arguments would be appropriate for summary
judgment. At this procedural juncture, where Plaintiffs' factual
allegations and all reasonable inferences therefrom must be accepted as
true, we find that Plaintiffs state a claim pursuant to the Pennsylvania
D. Plaintiffs' Motion for Preliminary Injunction
Plaintiffs have not met their burden of demonstrating need for
extraordinary relief in the form of a preliminary injunction.
Specifically, Plaintiffs request that this Court order all of the
Defendants to deposit the amount of $549,812.98, the amount of the
underlying judgment entered against PE alone, in an interest-bearing
escrow account under the sole control of their attorney. It is well-known
that this Court will grant a preliminary injunction only if: (1)
the movant has shown a reasonable probability of success on the merits;
(2) the movant will be irreparably injured by denial of relief; (3)
granting the preliminary relief will not result in even greater harm to
the nonmoving party; and (4) granting the preliminary relief will be in
the public interest. Allegheny Energy, Inc. v. DOE, Inc.,
171 F.3d 153, 158 (3d Cir. 1999).
Plaintiffs rely on the United States Supreme Court decision in
Grupo Mexicano de Desarrollo, S.A. v. Alliance Bond Fund, Inc.,
527 U.S. 308 (1999), as specifically approving preliminary injunctive
relief in this matter. In that case, the Supreme Court held that a
district court lacks authority to issue a preliminary injunction
preventing a debtor from disposing of their assets unless a judgment has
been entered establishing such debt. Id. at 333. In this
regard, the Supreme Court stated:
The rule requiring a judgment was a product, not
just of the procedural requirement that
remedies at law had to be exhausted before
equitable remedies could be pursued, but also
of the substantive rule that a general creditor
(one without a judgment) had no cognizable
interest, either at law or in equity, in the
property of his debtor, and therefore could not
interfere with the debtor's use of that property.
Id. at 319-320 (emphasis added). Plaintiffs argue that
preliminary injunctive relief is appropriate here because they plead a
classic creditor's bill, having alleged that a judgment establishing that
debt has been secured and that a writ of execution has been served on the
The parties do not dispute that Plaintiffs were awarded a judgment by a
Texas district court that was subsequently transferred to the Bucks
County Court of Common Pleas for enforcement on August 30, 2002, and
that, on the same day, Plaintiffs began execution proceedings by filing a
praecipe for writ of execution. It remains disputed, however, whether
Plaintiffs have exhausted all of the legal remedies available to
them by pursuing execution of Defendants' property.
The Honorable Susan Devlin Scott of the Bucks County Court of Common
Pleas issued an opinion on March 14, 2003 addressing this precise point:
There is no indication, however, that Plaintiffs
pursued execution beyond that point [beginning
execution proceedings by filing a praecipe for
writ of execution]. In order to effectuate a levy
of Defendant's assets, Plaintiffs would have
needed to have the writ of execution issued by the
prothonotary delivered to the sheriff and to have
paid the sheriff's [sic] his fee for levying
assets. The docket entries do not reflect that
either of those was done.
Universal Computer Consulting v. Pitcairn Enterprises,
Inc., No. 2002-05720-27-1, slip op. at 2 (Bucks County Common Pleas
Ct., Mar. 14, 2003). Judge Scott concluded:
Although Plaintiffs requested the prothonotary to
issue a writ of execution on August 30, 2002,
there is no indication that Plaintiffs have taken
all of the necessary steps to have the sheriff
levy Defendant's receivables. Until the sheriff
has levied Defendant's receivables, Defendant is
free to do with them as it deems fit.
Id. at 9.
Plaintiffs argue that Defendants' former counsel consented to accept
service by mail of the writ of execution on behalf of Defendants and that
service upon counsel is sufficient to levy on Defendants' property.
Pennsylvania Rule of Civil Procedure 3108 is clear about the proper
procedure for service of a writ of execution:
Service of the writ shall be made by the
sheriff in the case of
(1) tangible personal property, by levy thereon
or, if the property is in possession of a third
person who prevents a levy or fails to make
property of the defendant available to the sheriff
for levy, by serving the third person as
(2) a lien upon real property created under a
mortgage, judgment or otherwise, by serving as
garnishee the mortgagor, judgment or lien debtor,
and the real owner of the real property upon which
the mortgage, judgment or other lien is
secured. . . .
Pa. R. Civ. P. 3108(a)(emphasis added). Plaintiffs have not
demonstrated compliance with this rule for service of a writ of
execution, as further explained in Judge Scott's decision and, moreover,
have provided no indication that proper service pursuant to Pennsylvania
Rule of Civil Procedure 3108 was even attempted. Therefore, Plaintiffs
have not exhausted all legal remedies available to them before seeking
extraordinary relief from this Court, and Plaintiffs' request for a
preliminary injunction must be denied.
E. Plaintiffs' Motion to Confirm Service
Finally, Plaintiffs move for an order from this Court confirming that
service of process was effectuated upon 1862 Associates by way of service
on Defendant Kean Pitcairn, whom Plaintiffs aver is a one-sixth limited
partner of 1862 Associates. By Order dated September 9, 2003, this Court
dismissed 1862 Associates from the instant action for Plaintiffs' failure
to effectuate service of process upon it within 120 days
as required by Federal Rule of Civil Procedure 4(m). Plaintiffs
contend that 1862 Associates is a defendant that wishes not to be
"found." No response has been filed.
Federal Rule of Civil Procedure 4(h) sets forth the manner in which
service must be effectuated upon a partnership, and provides that service
may be made pursuant to the law of the state in which the district court
is located for the service of a summons upon the defendant in an action
brought in the courts of general jurisdiction of the state, or by
delivering a copy of the summons and of the complaint to an officer, a
managing or general agent, or to any other agent authorized to receive
service of process. Fed.R.Civ.P. 4(h)(1).
Pennsylvania Rule of Civil Procedure 423, which sets forth the rule for
service on a partnership, provides, in pertinent part:
Service of original process upon a partnership and
all partners named in the action or upon an
unincorporated association shall be made upon any
of the following persons provided the person
served is not a plaintiff in the action:
(1) any partner, officer or registered agent of
the partnership or association. . . .
Pa. R. Civ. P. 423. Under Pennsylvania partnership law, "[e]very
partner is an agent of the partnership for the purpose of its
business. . . . " 15 Pa. Cons. Stat. § 8321(a).
Plaintiffs aver that Defendant Kean Pitcairn is a partner of 1862
Associates and that service of process was properly effectuated on Kean
Pitcairn. It is unclear, however, whether
Plaintiffs ever served original process on Kean Pitcairn in his
capacity as a partner of 1862 Associates. Plaintiffs appear to argue that
service on Kean Pitcairn is effectively service on the partnership of
1862 Associates, because notice to Kean Pitcairn can be imputed to the
partnership. See Darby v. Philadelphia Transp. Co., 73 F. Supp. 522
(E.D. Pa. 1947). In the interest of justice, since Kean Pitcairn has
already been personally served with original process, and that no
prejudice will result to 1862 Associates, we require only that Plaintiffs
serve original process on Kean Pitcairn, this time specifically naming
him in his capacity as a partner of 1862 Associates. We will,
accordingly, vacate our September 9, 2003 Order dismissing 1862 Lincoln
Highway Associates, L.P. from this matter.
For the foregoing reasons, Defendants' Motion to Dismiss is
GRANTED IN PART and DENIED IN PART, to the extent
that Plaintiffs' claims for unjust enrichment and tortious interference
are dismissed from Plaintiffs' Complaint. All other claims remain before
As Plaintiffs have not demonstrated all of the elements required for
extraordinary relief, Plaintiffs' Motion for Preliminary Injunction is
DENIED. Accordingly, Plaintiffs' Motion for a Hearing Date and
Expedited Discovery is DISMISSED AS
Finally, Plaintiffs' Motion to Confirm Service of Process on 1862
Lincoln Highway Associates, L.P. is GRANTED, and this Court's
September 9, 2003 dismissing 1862 Associates from this action is
VACATED. Defendants 1862 Lincoln Highway Associates, L.P. must,
therefore, answer or otherwise plead within the time required by the
Federal Rules of Civil Procedure, as of the date of this Order.
AND NOW, this ___ day of February, 2004, in consideration of the Motion
to Dismiss filed by Defendants Kean Company, Kean Pitcairn, Kris Pitcairn
and Pitcairn Enterprises, Inc. (collectively, the "Defendants") (Doc. No.
2) and the Memorandum in Opposition thereto filed by Plaintiffs Universal
Computer Consulting, Inc. and Universal Computer Maintenance, Inc.
(collectively, the "Plaintiffs") (Doc. No. 3), IT IS ORDERED
that the Motion to Dismiss is GRANTED IN PART and DENIED
IN PART, to the extent that Count II Unjust Enrichment and Count III
Tortious Interference of Plaintiffs' Complaint are DISMISSED.
All other claims remain before the Court.
In consideration of the Motion for Preliminary Injunction filed by
Plaintiffs (Doc. No. 7) and the Response thereto filed by Defendants
(Doc. No. 10), IT IS ORDERED that the Motion for Preliminary
Injunction is DENIED. Accordingly, Plaintiffs' Motion for
Hearing Date and Expedited Discovery (Doc. No. 8), to which Defendants
filed a response (Doc. No. 9), is DISMISSED AS
In consideration of the Motion to Confirm Service filed by Plaintiffs
(Doc. No. 15), to which no response has been filed, IT IS
ORDERED that the Motion to Confirm Service is GRANTED. IT IS
FURTHER ORDERED that this Court's September 9, 2003 Order dismissing
1862 Lincoln Highway Associates, L.P. from this action is
The Clerk of Court is instructed to re-list 1862 Lincoln Highway
Associates, L.P. as a defendant to this matter.