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Forcine Concrete & Construction Co., Inc. v. Manning Equipment Sales & Services

June 14, 2010

FORCINE CONCRETE & CONSTRUCTION CO., INC., PLAINTIFF,
v.
MANNING EQUIPMENT SALES & SERVICES, ET AL., DEFENDANTS.



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

OPINION

This action arises out of an attempt by plaintiff Forcine Concrete & Construction Co. ("Forcine"), a Pennsylvania corporation, to sell one of its laser screeds (the "Machine"). Forcine has filed suit against (1) Manning Equipment Sales & Services ("MES&S"), a Michigan corporation, (2) John Manning, the president of MES&S and a resident of Michigan, (3) MES&S employees Patty Clemons and James Winters,*fn1 both Michigan residents, (4) Somero Enterprises, Inc. ("Somero"), a Delaware corporation previously headquartered in New Hampshire and currently headquartered in Florida, and (5) Somero employee Myron Hillock, a Michigan resident. Plaintiff contends in Counts I and II that defendants violated the Pennsylvania Unfair Trade Practices and Consumer Protection Law ("UTPCPL"). Count III of Forcine's complaint claims that each of the defendants committed fraud against each of the defendants, while Counts IV and V allege that MES&S breached an oral contract and committed conversion, and Count VI seeks to allege civil conspiracy against Manning, Winters, Clemons, and Hillock. Defendants filed motions to dismiss the complaint for failure to state a claim on which relief may be granted, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. This case was subsequently stayed after MES&S entered bankruptcy proceedings, but this court granted plaintiff's motion to lift the stay as to all parties except MES&S on March 16, 2010. The motions to dismiss are therefore ripe for determination as to all parties but MES&S.*fn2

A. Background

The allegations as set out in the complaint are as follows: In May of 2007, Forcine purchased two new laser screeds from Somero. Shortly thereafter, Forcine called Somero to express interest in selling the Machine and spoke with Myron Hillock. Hillock, working in concert with MES&S, offered Forcine an "artificially low" sale price -- $45,000 -- for the Machine, and recommended that Forcine contact MES&S for a quick sale at a better price. Compl. ¶¶ 13-14. Forcine then spoke with James Winters at MES&S, who asked about the condition of the Machine. Forcine recommended that Winters call "Matt," a different Somero representative, who informed Winters that the Machine "was in excellent shape." Id. ¶¶ 17-18. After this conversation, Winters "agreed to sell the Machine" on Forcine's behalf "in exchange for a five[ ]percent . . . commission." Id. ¶ 19. In June 2007, Winters told Forcine that MES&S had a purchaser for the Machine and that Forcine would receive between $70,000 and $75,000 for the sale. Forcine "agreed to allow MES&S to sell the Machine," and in June 2007, MES&S picked up the Machine. Id. ¶¶ 23, 25.

Over the following months, Forcine spoke several times to Winters, who said each time that the Machine had been sold but continually gave Forcine different reasons as to why Forcine could not be paid forthwith. Initially, sometime in June 2007, Winters told Forcine that MES&S "had received a deposit on the Machine, but could not immediately pay Forcine," because the Machine "was sold as 'part of a package deal.'" Id. ¶¶ 28, 31. Winters said he would ask John Manning to confirm the sale price. Four weeks later, Winters stated that the Machine "was sold to a foreign company," but that "MES&S was 'waiting for the Machine to be funded.'" Id. ¶ 35. Winters said he would talk to John Manning and call Forcine back with the sale price. Several days later, Forcine called Winters again and was told "'John Manning will have to talk to you, it's his deal.'" Id. ¶ 38.

Forcine then expressed frustration to Hillock, who replied that he would call John Manning regarding Forcine's concerns. Manning called Forcine in December of 2007 and stated that "the Machine had been sold" but that "MES&S hadn't been paid yet." Id. ¶ 48. Manning promised to send a check and "call Forcine back with the full sale information." Id. ¶ 49. Forcine did receive a check for $45,000, but MES&S cancelled the check "before Forcine could cash it." Id. ¶ 52. Forcine then called MES&S and offered to fly Manning and Winters to Philadelphia to discuss the sale. Patty Clemons informed Forcine that Manning would be in the area after Christmas 2007 and would meet with Forcine then, but Manning never arranged a meeting.

"On January 14, 2008, MES&S told Forcine the Machine had sold" for $60,000. Id. ¶ 59. Forcine asked to have the Machine returned, but "MES&S told Forcine that the Machine was in South America and could not be returned." Id. ¶¶ 60-61. Forcine has not received any payment from MES&S.

B. Legal Standard

In order to survive a motion to dismiss for failure to state a claim, a complaint needs to include only "'a short and plain statement of the claim showing that the pleader is entitled to relief,' in order to 'give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.'" Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). While a complaint "requires more than labels and conclusions" or a "formulaic recitation of the elements of a cause of action," "detailed factual allegations" are unnecessary. Twombly, 550 U.S. at 555. Rather, plaintiffs must simply plead "enough facts to state a claim to relief that is plausible on its face." Id. at 570. In reviewing a 12(b)(6) motion, "the facts alleged [in the complaint] must be taken as true and a complaint may not be dismissed merely because it appears unlikely that the plaintiff can prove those facts or will ultimately prevail on the merits." Phillips v. County of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008). "[R]easonable inferences" are also drawn in favor of the plaintiff. Id.

Allegations of fraud are governed by the heightened pleading standard of Federal Rule of Civil Procedure 9(b).

In order to satisfy Rule 9(b), plaintiffs must 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. Plaintiffs may satisfy the requirement by pleading the date, place or time of the fraud, or through alternative means of injecting precision and some measure of substantiation into their allegations of fraud. Plaintiffs also must allege who made a misrepresentation to whom and the general content of the misrepresentation.

Lum v. Bank of Am., 361 F.3d 217, 223-24 (3d Cir. 2004) (internal citations and quotation marks omitted). A claim satisfies the requirements of Rule 9(b) if (1) it adequately delineates the acts and transactions constituting fraud to apprise defendants fairly of the claim, and (2) its allegations are sufficiently clear to enable defendants to answer. Jairett v. Montauk First. Sec. Corp., 203 F.R.D. 181, 186 (E.D. Pa. 2001).

C. Fraud

Forcine alleges that each of the defendants committed fraud. To establish fraud under Pennsylvania law,*fn3 a plaintiff must demonstrate the existence of six elements: "(1) a representation; (2) which is material to the transaction at hand; (3) made falsely, with knowledge of its falsity or recklessness as to whether it is true or false; (4) with the intent of misleading another into relying on it; (5) justifiable reliance on the misrepresentation; ...


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