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Chanel, Inc. v. Jupiter Group

June 27, 2006

CHANEL, INC., PLAINTIFF,
v.
THE JUPITER GROUP, INC., D/B/A TRIPLE A SECURITY PATROL AND NOW D/B/A VECTOR SECURITY PATROL; AND VECTOR SECURITY, INC., D/B/A TRIPLE A SECURITY PATROL, AND DOES 1-10, DEFENDANTS AND THIRD-PARTY PLAINTIFFS,
GENCO I, INC., GENCO DISTRIBUTION SYSTEM, INC., AND RICHARD M. LIMA, THIRD-PARTY DEFENDANTS,
v.
MICHAEL J. MOFFITT, ADDITIONAL DEFENDANT.



The opinion of the court was delivered by: A. Richard Caputo Date A. Richard Caputo United States District Judge

MEMORANDUM

Presently before the Court is a Motion to Dismiss Genco I, Inc.'s and Genco Distribution System, Inc.'s Third Party Complaint Against Additional Defendant Michael J. Moffitt Pursuant to Rule 12(b)(6). (Doc. 58) Third-Party Defendants filed their brief in opposition to the Motion to Dismiss (Doc. 67) to which Mr. Moffitt replied (Doc.72).

For the reasons that follow, Mr. Moffitt's Motion to Dismiss (Doc. 58) will be granted in part and denied in part. The Court has ancillary jurisdiction over this matter.

BACKGROUND

Third-Party Defendants, Genco I, Inc. and Genco Distribution System, Inc.'s ("Gencos") filed their Third-Party Complaint against Additional Defendant, Michael J. Moffitt, on July 12, 2005. (Doc. 47.) Third-Party Defendants Gencos are corporations with their principal place of business in Pennsylvania. (Id. at¶ 3.)Gencos are in the business of warehousing and "reverse logistics". (Id. at ¶ 10.) In 1997, Chanel and Gencos entered into a Return Center Operating Agreement (the "Return Center Agreement") under which Gencos agreed to establish and operate a return facility in Pittston Township, Luzerne County, Pennsylvania ("Return Facility"). (Id. at ¶ 12) At the Return Facility, products distributed by Chanel ("Distributed Products") are received, inspected and reworked. (Id. at ¶ 13.) After inspection, the Distributed Products were either restored to marketable conditions and shipped back to Chanel or destroyed. (Id.)

In February 1999, Gencos entered into a contract with Third-Party Plaintiffs, Jupiter Group, Inc. ("Jupiter") and Vector Security, Inc. ("Vector"), for security services at the Return Center. (Id. at ¶ 16.) Among other services, Jupiter and Vector were to safeguard the Distributed Products and prevent any unauthorized removals of them from the facility. (Id.)

Plaintiff Chanel alleges that from approximately October 2000 to May 2002, Mr.Moffitt, who was a manager of the Return Center (Id. at ¶ 15), and others improperly removed Distributed Products from the Return Center. (Id. at ¶ 17.) Chanel further alleges that some of these Distributed Products were sold in flea markets in New Jersey, sales from which Mr. Moffitt and others profited. (Id. at ¶ 18.) Once Gencos learned of Mr. Moffitt's role in the improper removal of the Distributed Products, his employment was terminated on June 7, 2002 (retroactively effective as of May 31, 2002) . (Id. at ¶ 24.) Mr. Moffitt was charged with various crimes under the Pennsylvania state law to which he pled nolo contendre. (Id. at ¶ 25.)

Gencos allege that due to Mr. Moffitt's actions, Chanel has prematurely terminated the Return Center Agreement and has sued them for damages. The early termination has allegedly subjected Gencos to costs in excess of $160,000 related to the closure of the Return Center. (Id. at ¶ 32) Chanel is claiming to recover at least $9,500,000.00. (Id. at ¶ 34.) Furthermore, Third-Party Plaintiffs have filed a claim against Gencos for indemnity and contribution, if and to the extent that they are found liable to Chanel. (Id. at ¶ 36.) Gencos, in turn, are suing Mr. Moffitt for the following: Count I - Indemnity/Contribution/Causal Fault Determination; Count II - Breach of Contract; and Count III - Breach of Duty of Good Faith and Fair Dealing. (Id. at 8-10.)

Mr. Moffitt filed a motion to dismiss Gencos' complaint. He argues that his Rule 12(b)(6) motion to dismiss should be granted as: (1) Count I - Gencos' claim for indemnity, contribution and causal fault determination is barred by statute of limitations; (2) Count II -Gencos fail to state a claim for breach of contract; and (3) Count III - Gencos claim for breach of duty of good faith and fair dealing is not an action independent of a breach of contract claim.

This matter is now ripe for disposition.

LEGAL STANDARD

Rule 12(b)(6) of the Federal Rules of Civil Procedure provides for the dismissal of a complaint, in whole or in part, for failure to state a claim upon which relief can be granted.

Dismissal is appropriate only if, accepting all factual allegations in the complaint as true and "drawing all reasonable inferences in the plaintiff's favor, no relief could be granted under any set of facts consistent with the allegations in the complaint." Trump Hotels & Casino Resorts, Inc. v. Mirage Resorts Inc., 140 F.3d 478, 483 (3d Cir. 1998).

In deciding a motion to dismiss, the Court should consider the allegations in the complaint, exhibits attached to the complaint and matters of public record. See Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993). The Court may also consider "undisputedly authentic" documents where the plaintiff's claims are based on the documents and the defendant has attached a copy of the document to the motion to dismiss. Id. The Court need not assume that the plaintiff can prove facts that were not alleged in the complaint, see City of Pittsburgh v. West Penn Power Co., 147 F.3d 256, 263 (3d Cir. 1998), nor credit a complaint's "bald assertions" or "legal conclusions." Morse v. Lower Marion Sch. Dist., 132 F.3d 902, 906 (3d Cir. 1997).

When considering a Rule 12(b)(6) motion, the Court's role is limited to determining whether the plaintiff is entitled to offer evidence in support of the claims. See Scheuer v. Rhodes, 416 U.S. 232, 236 (1974). The Court does not consider whether the plaintiff will ultimately prevail. See id. In order to survive a motion to dismiss, the plaintiff must set forth information from which each element of a claim may be inferred. See Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993). The defendant bears the burden of establishing that the plaintiff's complaint fails to state a claim upon which relief can be granted. See Gould Elecs. v. United States, 220 F.3d 169, 178 (3d Cir. 2000).

DISCUSSION

1. Count I: Contribution/ Indemnity/ Causal Fault ...


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