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Sershen v. Cholish

February 29, 2008


The opinion of the court was delivered by: Judge Caputo


Presently before the Court is Defendant Stillwater Environmental Services' Motion to Dismiss (Doc. 22.). Because Plaintiff has not alleged action under of color of state law sufficiently to withstand a motion to dismiss, because Defendant has not put forth arguments regarding the state law conspiracy claim, and because Plaintiff has sufficiently alleged that Stillwater acted intentionally or with wanton disregard for her rights in connection with her claims brought pursuant to state law, I will grant in part and deny in part Defendant's motion. The Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 1331 and 1367.


The background of this case was discussed in detail in my Memorandum and Order of October 26, 2007 (Doc. 19), which granted in part and denied in part the Motion to Dismiss (Doc. 14) of Defendants Eugene Cholish, J. Scotty Lemoncelli, Bob Harvey, and the Borough of Archbald. Defendant Stillwater Environmental Services, which did not join in that motion, now moves to dismiss the claims against it in Counts Fourteen (XIV) and Seventeen (XVII) of Plaintiff Mary Sershen's Complaint (Doc. 1) as well as the claims against it for punitive damages. (See Doc. 22.)

Plaintiff's Complaint brings constitutional and common law claims against the Defendants, arising from the demolition of a home she owned but no longer occupied (the Eynon Property), without her knowledge or consent, after it had been burned in a fire and declared unsafe, and related events. (See Mem. & Order, Doc. 19.) She alleges that in August 2006, when Defendant zoning officer Lemoncelli began soliciting bids for razing the property, Defendant Stillwater Environmental Services, Inc. ("Stillwater") submitted a bid and was later awarded the contract. (Id. at 4-5.) She alleges that between August 19 and August 26, 2006, Stillwater demolished the dwelling on the Eynon Property, and no Defendant made any attempt to contact her to inform her of the demolition. (Id. at 5.) She alleges that when she encountered Stillwater workers on her property on August 19, 2006, they "did not have any paperwork to prove they had authority to tear down the dwelling." (Compl., Doc. 1 ¶ 37.)

In Count Fourteen (XIV), brought pursuant to 42 U.S.C. § 1983, Plaintiff alleges that Stillwater engaged in a taking of Plaintiff's property, under color of state law, without just compensation and thus deprived her of due process rights under the Fifth and Fourteenth Amendments to the United States Constitution. (Id. ¶¶ 121-24.) In Count Seventeen (XVII), Plaintiff alleges Stillwater and all other Defendants except the Borough engaged in a civil conspiracy "to engage in unlawful conduct, i.e., depriving Sershen of her federal constitutional and civil rights and state common law rights, by engaging in the aforesaid conduct." (Id. ¶¶ 134-35.) She seeks compensatory and punitive damages in each of these claims, and also seeks punitive damages from Stillwater based on two (2) Counts that Stillwater does not presently move to dismiss: Counts XV (Conversion and Destruction of Property) and XVI (Negligent Demolition). (Id. at 31.)

Stillwater moves to dismiss Counts XIV and XVII on the ground that, as a private contractor, it did not act under color of state law and cannot have deprived Plaintiff of any rights guaranteed by the Constitution, and moves to dismiss all claims for punitive damages on the ground that "[t]here are no facts or allegations contained within the Complaint to suggest that Stillwater's conduct rose to a level warranting punitive damages." (Br. in Supp., Doc. 23, at 2-3.) This motion is fully briefed and ripe for disposition.


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 as true all the facts alleged in the complaint, Plaintiff has not plead "enough facts to state a claim to relief that is plausible on its face," Bell Atlantic Corp. v. Twombly, 550 U.S. ----, 127 S.Ct. 1955, 1960, 167 L.Ed.2d 929 (2007), or alleged "facts sufficient to raise a right to relief above the speculative level." Broadcom Corp. v. Qualcomm Inc., 501 F.3d 297, 317 (3d Cir. 2007). In light of Federal Rule of Civil Procedure 8(a)(2), specific facts are not necessary; the statement need only "give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Erickson v. Pardus, --- U.S. ----, 127 S.Ct. 2197, 2200, 167 L.Ed.2d 1081 (2007) (per curiam). "[T]he factual detail in a complaint [must not] be so sketchy that the complaint does not provide the type of notice of the claim to which the defendant is entitled under Rule 8." Airborne Beepers & Video, Inc. v. AT&T Mobility LLC, 499 F.3d 663, 667 (7th Cir. 2007).

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), cert. denied, 510 U.S. 1042 (1994). 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 Merion 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).


I. Action Under Color of State Law

Plaintiff's claim against Stillwater in Count XIV and part of her claim in Count XVII are brought pursuant to 42 U.S.C. § 1983, under which, every person who, under color of state law, subjects another to the deprivation of any federal right shall be liable to the party injured. One may be liable under § 1983 only for conduct "fairly attributable to the State," that is, for a deprivation "caused by the exercise of some right or privilege created by the State or by a rule of conduct imposed by the state ..." and "the party charged with the deprivation must be a person who may fairly be said to be a state actor." Lugar v. Edmondson Oil Co., 457 U.S. 922, 937 (1982). A nominally private entity is a state actor "when it is controlled by an agency of the State, when it has been delegated a public function of the State, when it is entwined with governmental policies, or when government is entwined in its management or control." Benn v. Universal Health Sys., Inc., 371 F.3d 165, 171 (3d Cir. 2004) (internal citations and quotation marks omitted). Also, "a challenged activity may be state action when it results from the State's exercise of coercive power, when the State provides significant encouragement, either overt or covert, or when a private actor operates as a willful participant in joint activity with the State or its agents." Id. (internal citations and quotation marks omitted). Additionally, "a finding that a private party acted in a conspiracy with state officials would satisfy several of these tests." Smith v. Wambaugh, 29 F. Supp. 2d 222, 226 (M.D. Pa. 1998).

A. State Action Determinations at Motion to Dismiss Stage

In opposition to Defendant's motion, Plaintiff points to Stacey v. City of Hermitage. In Stacey, like in the instant case, landowners sued both municipal defendants and a private business that was awarded a contract to demolish their home, which had been declared a public nuisance. 178 Fed. Appx. 94, 97-98, 101 (3d Cir. 2006) (not precedential). The company moved to dismiss the claims against it for violation of the landowners' property rights based on the demolition, on the ground that it was not a state actor. See id. at 101. The court, however, held that "[a]bsent any evidence of the relationship between Sereday [the company] and the City ... lack of state action does not provide a basis for dismissal. This argument is more appropriately raised in a motion for summary judgment, as was the case in Black by Black v. Indiana Area Sch. Dist., 985 F.2d 707 (3d Cir. 1993), which Sereday relies upon in support of its motion." Id.

In Black, however, where the Third Circuit Court of Appeals affirmed summary judgment in favor of a bus company that contracted with the state, the company's officer, and its employee on the grounds that they were not state actors, the court gave no particular emphasis to the fact that it was reviewing a motion for summary judgment rather than a motion to dismiss. See 985 F.2d at 709-11. And indeed, courts within this Circuit have granted motions to dismiss for failure to adequately allege state action. See, e.g., Schneider v. Arc of Montgomery County, 497 F. Supp. 2d 651, 659 (E.D. Pa. 2007) (decided after Stacey case; granting motion to dismiss § 1983 claim against nonprofit corporation that received State funding and engaged in care, education, and support of the developmentally disabled for failure to adequately allege state action; expressly rejecting argument that such a decision must wait until a summary judgment motion). The Schneider court stated that "[n]umerous courts, including this Court, have granted motions to dismiss section 1983 actions because the defendants were not state actors." Id. (citing Jackson v. Metro. Edison Co., 419 U.S. 345 (1974) (affirming grant of motion to dismiss); Leshko v. Servis, 423 F.3d 337 (3d Cir. 2005) (same); Cmty. Med. Ctr. v. Emergency Med. Servs. of Ne. Pa., Inc., 712 F.2d 878 (3d Cir. 1983) (same); also citing cases from district courts). The court stated that plaintiff's argument that dismissal on state action grounds was premature "might have merit if she presented to the Court how allowing her to take discovery might develop facts what would allow her to sufficiently allege that Defendants are state actors. However, she has made no ...

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