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Eastern Electric Corp. of New Jersey v. Rumsey Electric Co.

April 8, 2010

EASTERN ELECTRIC CORPORATION OF NEW JERSEY
v.
RUMSEY ELECTRIC COMPANY
v.
SIEMENS ENERGY & AUTOMATION, INC.



The opinion of the court was delivered by: Surrick, J.

MEMORANDUM

Defendant/Third-Party Plaintiff Rumsey Electric Company ("Rumsey") filed this third-party action for contribution and indemnification against Third-Party Defendant Siemens Energy & Automation, Inc. ("Siemens"). Presently before the Court is Siemens Energy & Automation, Inc.'s Motion to Dismiss Third-Party Complaint (Doc. No. 15). For the following reasons, the Third-Party Complaint will be dismissed.

I. BACKGROUND

Plaintiff Eastern Electric Corporation ("Eastern") and Defendant/Third-Party Plaintiff Rumsey entered into a series of purchase orders in which Rumsey agreed to provide electrical supplies to Eastern for use in five construction projects: Pennbridge High School, Council Rock High School, Temple Liacouras Walk, Temple Bio-Life, and the Cira Centre. (Doc. No. 1 ¶ 6.) Eastern filed this lawsuit against Rumsey on November 20, 2008, alleging that Rumsey had breached purchase contracts related to these five projects. Count III of Eastern's Complaint alleges that Rumsey failed to deliver a transformer and generator on time for the Temple Liacouras Walk project, thereby causing Eastern to incur additional costs on the project of approximately $209,000. (Id. ¶¶ 26-45.)

Rumsey filed a Third-Party Complaint against Third-Party Defendant Siemens on January 23, 2009. The Third-Party Complaint alleges that Siemens is liable to Rumsey for any liability Rumsey may have to Eastern for its alleged failure to deliver the transformer to Eastern on time for the Temple Liacouras Walk project. (Doc. No. 12 ¶ 4.) The Third-Party Complaint seeks indemnification or contribution from Siemens for the approximately $209,000 in damages that Eastern seeks from Rumsey. (Id. ¶¶ 6-12.) On February 23, 2009, Siemens filed this Motion to Dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted. (Doc. No. 15 at 1.)

II. LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(6) provides that a complaint may be dismissed for "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). In Iqbal, the Supreme Court set forth a two-part analysis that district courts must conduct when reviewing a complaint challenged under Rule 12(b)(6). See Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009) (describing Iqbal'stwo-step inquiry). The district court must first separate "the factual and legal elements of a claim," accepting all of the complaint's well-pleaded facts as true but rejecting legal conclusions. Id. at 210 (citing Iqbal, 129 S.Ct. at 1949); see also Iqbal, 129 S.Ct.at 1949- 50 ("Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice [to state a claim]."). Under this analysis, well-pleaded factual allegations are to be given a presumption of veracity. Iqbal, 129 S.Ct. at 1950. The district court must then "determine whether the facts alleged in the complaint are sufficient to show that the plaintiff has a 'plausible claim for relief.'" Fowler, 578 F.3d at 211 (quoting Iqbal, 129 S.Ct. at 1950). A complaint that merely alleges entitlement to relief, without alleging facts that show entitlement, must be dismissed. Id. A complaint that demonstrates entitlement to relief through well-pleaded facts will survive a motion to dismiss. See id. Given the nature of the two-part analysis, "'[d]etermining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.'" See McTernan v. City of York, 577 F.3d 521, 530 (3d Cir. 2009) (quoting Iqbal, 129 S.Ct. at 1950).

III. DISCUSSION

Rumsey alleges that if it is found liable to Eastern for breach of contract based on its failure to timely deliver the transformer, Siemens is liable to Rumsey for indemnification and contribution.(Doc. No. 12 ¶ 4.) The Third-Party Complaint does not specify why Siemens would be liable to Rumsey for indemnification or contribution, but Rumsey's briefs suggest that Siemens's alleged liability to Rumsey is based on a contract. (See Doc. No. 22 at 2 ("Siemens' primary liability is based upon its failures to perform under agreements with Rumsey.").)

Contribution and indemnification are separate but related doctrines that permit a party who is found liable to another party to pass along some or all of its loss to a third party. Contribution "involves equal apportionment of liability among concurrent tortfeasors."

Richardson v. John F. Kennedy Mem'l Hosp., 838 F. Supp. 979, 989 (E.D. Pa. 1993).Indemnification, on the other hand, "shifts the entire loss from one party to another." Id.

A. Contribution

Count II of Rumsey's Third-Party Complaint seeks contribution from Siemens if Rumsey is found liable to Eastern for breach of the contract to supply the transformer for the Temple Liacouras Walk project. (Doc. No. 12 ΒΆ 4.) However, Pennsylvania law does not recognize a right to contribution in breach of contract cases. See Agere Sys., Inc. v. Adv. Environ. Tech. Corp., 552 F. Supp. 2d 515, 520 (E.D. Pa. 2008) (holding that breach of contract could not form the basis of a contribution claim under Pennsylvania law); Unique Techs., Inc. v. Micro Stamping Corp., No. 02-6649, 2003 WL 21652284, at *3 (E.D. Pa. Apr. 15, 2003) ("Pennsylvania law does not recognize a right to contribution in a breach of contract case." (citing Kemper ...


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