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JML Industries, Inc. v. Pretium Packaging

January 5, 2007

JML INDUSTRIES, INC., PLAINTIFF,
v.
PRETIUM PACKAGING, LLC, DEFENDANT.



The opinion of the court was delivered by: Judge Caputo

MEMORANDUM

Presently before the Court is Defendant Pretium Packaging, LLC's Motion for Reconsideration (Doc. 103) of its Motion for Summary Judgment (Doc. 86) as to Plaintiff JML Industries, Inc.'s breach of contract claim. For the reasons set forth below, the Court will deny Defendant's Motion for Reconsideration.

BACKGROUND

On October 25, 2004, Plaintiff filed a complaint in the Court of Common Pleas, Luzerne County, for breach of contract and promissory estoppel. (Doc. 1-3.) Plaintiff alleged that Defendant had breached its oral contract to purchase LEGO lids manufactured by Plaintiff.*fn1 (Id.) On November 24, 2004, that action was removed by Defendant to this Court pursuant to 28 U.S.C. § 1441 based on diversity of citizenship. (Doc. 1-1.) Defendant then filed a counterclaim against Plaintiff (Doc. 2), as well as a motion to dismiss Plaintiff's complaint (Doc. 3) on the ground that Plaintiff's claims were barred by the Pennsylvania Statute of Frauds, 13 PA. CONS. STAT. ANN. § 2201(a).

On December 14, 2004, Plaintiff filed a motion for immediate specific performance. (Doc. 8.) On January 14, 2005, the Court denied Plaintiff's motion. (Doc. 23.) The Court also denied Defendant's motion to dismiss as it pertained to Plaintiff's breach of contract claim, but granted Defendant's motion as to Plaintiff's promissory estoppel claim, holding that such a claim was precluded by the Pennsylvania Statute of Frauds, 13 PA. CONS. STAT. ANN. § 2201(a). (Doc. 23.) Plaintiff then filed an Amended Complaint on March 7, 2005. (Doc. 28.)

On May 1, 2006, Defendant filed a Motion for Summary Judgment (Doc. 86), arguing that Plaintiff could not satisfy all the requisite elements of a breach of contract claim. Specifically, Defendant contended that Plaintiff, which allegedly submitted a price quote at odds with the pricing structure agreed to by the parties, had not performed its own obligations under the contract, precluding recovery for breach of contract. (Def.'s Mem. of Law at 3-4; citing Gundlach v. Reinstein, 924 F. Supp. 684, 688 (E.D. Pa. 1996) and Pierce v. Montgomery County Opportunity Bd., 884 F. Supp. 965, 970 (E.D. Pa. 1995)). In furtherance of this contention, Defendant offered affidavits, deposition testimony and documentary evidence in order to establish that Plaintiff had failed to comply with the pricing structure that had been agreed to by the parties. (See Def.'s Statement of Material Facts ¶¶ 12-15.) Plaintiff opposed Defendant's motion for summary judgment, denying that it had failed to comply with their oral contract. (See Pl.'s Reply ¶¶ 12-15, 19.) Defendant then replied, asserting that Plaintiff had failed to put forth any evidence of record that would enable it to survive summary judgment, and noting that a non-moving party such as Plaintiff cannot avoid summary judgment by merely denying properly supported factual statements of the moving party. (See Def.'s Reply Br. 5-10; citing Easton v. Bristol-Myers Squibb Co., 289 F. Supp. 2d 604, 609 (E.D. Pa. 2003) and Technographics, Inc. v. Mercer Corp., 777 F. Supp. 1214, 1215 (M.D. Pa. 1991)).

On October 25, 2006, the Court entered a Memorandum and Order denying Defendant's motion for summary judgment on Plaintiff's breach of contract claim. (Doc. 102.) Therein, the Court compared the five elements cited by the Gundlach court,*fn2 that need to be established to recover for breach of contract, to the three element test used by the Superior Court of Pennsylvania,*fn3 concluding that the third element cited in Gundlach -- that the plaintiff has complied with the contract and performed its own obligations under it -- is redundant and subsumed within the first and second elements of the test used by the Superior Court of Pennsylvania. (Doc. 102 at 6-7.) That is, the Court reconciled the third element cited in Gundlach with the three part Superior Court test by deducing that, if a plaintiff has failed to perform its own obligations under the contract, the plaintiff is in breach and the defendant's obligation to perform under the contract is excused. (Id.) As such, a defendant, by not performing, has not breached a duty imposed by the contract and is therefore not liable for breach. (Id.) Thus, the Court interpreted Defendant's argument, that Plaintiff could not establish the third element cited in Gundlach, as essentially asserting that Plaintiff had breached the contract, thereby excusing Defendant's performance. (Id.)

In addition, the Court viewed Plaintiff's alleged breach of the contract -- submitting a price quote that contravened the pricing structure the parties had agreed to and then allegedly refusing to lower its prices after being requested to do so by Defendant -- as an alleged anticipatory breach of the contract because of the installment nature of the oral contract allegedly entered into by the parties.*fn4

The Court then held that the issue of whether Plaintiff anticipatorily breached the LEGO lid supply contract was a factual issue that was in dispute, and, thus, summary judgment as to Plaintiff's breach of contract claim was inappropriate. (Id. at 7.)

On November 20, 2006, Defendant filed its Motion for Reconsideration of its Motion for Summary Judgment. (Doc. 103.)*fn5 Defendant argues the Court committed clear errors of fact and law in denying its motion for summary judgment as to Plaintiff's breach of contract claim.

As for the alleged factual error, Defendant asserts that there was no evidence in the record pertaining to the price quote -- aside from Plaintiff's merely denying Defendant's Statement of Material Facts -- to create a factual dispute that would preclude summary judgment.

Defendant also points out two clear errors of law allegedly committed by the Court. First, Defendant avers that the Court erred in failing to apply the five element standard which the Gundlach court set forth as comprising a breach of contract claim. Second, Defendant contests the standard for anticipatory breach of contract which the Court applied -- i.e., that there must be a definite and unconditional repudiation of a contract by a party in order to constitute anticipatory breach of contract. Defendant states that the Court should have applied the standard for anticipatory breach set forth in the Pennsylvania Uniform Commercial Code, 13 PA. CONS. STAT. ANN. § 2610, because the alleged oral contract dealt with the sale of goods.

LEGAL STANDARD

The denial of a motion for summary judgment is an interlocutory order. Bines v. Kulaylat, 251 F.3d 381, 384 (3d Cir. 2000). As such, Rules 59(e) and 60(b) of the Federal Rules of Civil Procedure do not apply to this motion, as those Rules only provide for reconsideration of a final judgment. Dayoub v. Penn-Del Directory Co., 90 F. Supp. 2d 636, 637 (E.D. Pa. 2000). However, a district court retaining jurisdiction over a case "possesses inherent power over interlocutory orders, and can reconsider them when it is consonant with justice to do so." Mohammad v. Kelchner, No. 03-CV-1134, 2005 WL 1138468, at *2 (M.D. Pa. Apr. 27, 2005) (Munley, J.) (quoting United States v. Jerry, 487 F.2d 600, 605 (3d Cir. 1973)). "Furthermore, because the court's prior order did not dispose of every claim before the court, it is 'subject to revision at any time before the entry of judgment ...


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