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Ppg Industries, Inc v. Generon Igs

January 13, 2011

PPG INDUSTRIES, INC,
PLAINTIFF,
v.
GENERON IGS, INC,
DEFENDANT.



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

MEMORANDUM OPINION AND ORDER OF COURT

Pending before the Court is PLAINTIFF‟S MOTION TO PARTIALLY DISMISS DEFENDANT‟S COUNTERCLAIMS (Doc. No. 15), with memorandum of law in support (Doc. No. 16), and DEFENDANT GENERON IGS, INC.‟S RESPONSE AND OPPOSITION TO PLAINTIFF‟S MOTION & MEMORANDUM TO PARTIALLY DISMISS COUNTERCLAIMS (Doc. No. 19). The issues have been fully briefed and the motion is ripe for disposition. For the reasons that follow, the motion will be denied.

This is a breach of contract action filed by Plaintiff PPG Industries, Inc. ("PPG" or "Plaintiff") against Defendant Generon IGS, Inc. ("Generon" or "Defendant") related to a five (5) year supply agreement for a specialty polymer product commonly referred to as "TBBA" (the "supply agreement"). Plaintiff alleges that Defendant failed to meet its requirements under the supply agreement, specifically by failing to fulfill certain purchase quotas for TBBA as manufactured by Plaintiff. Plaintiff also alleges that the supply agreement was subsequently amended to affect a release of certain claims. Attached to the complaint were two documents, the supply agreement, see Doc. No. 1-2, and correspondence dated March 24, 2008 which purportedly amended the supply agreement and released any potential claims of Defendant that may have accrued to that point in time ("Amendment/Release"), see Doc. No. 1-3.

Defendant answered the complaint with, inter alia, affirmative defenses and five counterclaims related to the supply agreement. Doc. No. 13. In those counterclaims, Defendant asserts three breach of contract claims for: 1) Plaintiff‟s alleged failure to have the TBBA production facility completed by May 31, 2007, as required under the supply agreement (count I); 2) Plaintiff‟s alleged failure to produce and deliver 50,000 pounds of TBBA within a certain trial production period as required under the supply agreement (count II); and, 3) Plaintiff‟s alleged failure to honor a commitment to produce and deliver a particular high performance polymer (count III). Defendant also counterclaims for unjust enrichment (count IV), and fraud in the inducement (count V). Id.

Legal Standard

Federal Rule of Civil Procedure 12(b)(6) 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, a plaintiff has not pleaded "enough facts to state a claim to relief that is plausible on its face," Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), meaning enough factual allegations ""to raise a reasonable expectation that discovery will reveal evidence of‟" each necessary element, Phillips v. County of Allegheny, 515 F.3d 224, 234 (3d Cir.2008) (quoting Twombly, 550 U.S. at 556); see also Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir.1993) (requiring a complaint to set forth information from which each element of a claim may be inferred). In light of Federal Rule of Civil Procedure 8(a)(2), the statement need only ""give the defendant fair notice of what the ... claim is and the grounds upon which it rests.‟" Erickson v. Pardus, 551 U.S. 89, 93, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007) (per curiam) (quoting Twombly, 550 U.S. at 555). "[T]he factual detail in a complaint [must not be] so undeveloped that it does not provide a defendant [with] the type of notice of claim which is contemplated by Rule 8." Phillips, 515 F.3d at 232; see also Airborne Beepers & Video, Inc. v. AT & T Mobility LLC, 499 F.3d 663, 667 (7th Cir.2007).

In deciding a motion to dismiss, a 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). A court need not assume the plaintiff can prove facts that were not alleged in the complaint, see City of Pittsburgh v. W. Penn Power Co., 147 F.3d 256, 263 & n. 13 (3d Cir.1998), or credit a complaint's ""bald assertions‟" or ""legal conclusions‟" Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir.1997) (quoting In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1429-30 (3d Cir.1997)). "While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations." Ashcroft v. Iqbal, --- U.S. ----, ----, 129 S.Ct. 1937, 1950, 173 L.Ed.2d 868 (2009). When considering a Rule 12(b)(6) motion, a court's role is limited to determining whether a plaintiff is entitled to offer evidence in support of the alleged claims. See Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974). The Court does not consider whether a plaintiff will ultimately prevail. See id. A defendant bears the burden of establishing that a plaintiff's complaint fails to state a claim. See Gould Elecs. v. United States, 220 F.3d 169, 178 (3d Cir.2000).

Courts use the same standard in ruling on a motion to dismiss a counterclaim under Federal Rule of Civil Procedure 12(b)(6) as they do for a complaint. See United States v. Union Gas Co., 743 F.Supp. 1144, 1150 (E.D.Pa.1990). In view of the appropriate legal standard, this Court must "accept as true all of the allegations in the [Defendant's counterclaims] and all reasonable inferences that can be drawn therefrom, and view them in the light most favorable to the non-moving party." Rocks v. City of Philadelphia, 868 F.2d 644, 645 (3d Cir.1989).

Legal Analysis

Plaintiff moves to dismiss counterclaims I and II (breach of contract claims), along with the counterclaims alleging unjust enrichment (count IV) and fraud in the inducement (count V). See Doc. No. 16.

A. Counts I and II: Breach of contract counterclaims

Plaintiff contends that counterclaims I and II should be dismissed as being without merit given the Amendment/Release that, according to Plaintiff, releases all claims for those matters which Defendant now claims as a breach. See Doc. No. 16. More specifically, Plaintiff contends:

In the Amendment/Release, . Generon agreed to release PPG from claims related to the readiness of the Production Facility by May 31, 2007 and the Operative Date so long as PPG made the required "Upgrades‟ delineated in the Amendment. . Generon thereafter admitted that the Upgrades it required PPG to accomplish as a condition precedent of the release, (i.e., the precipitation unit and the dryer Temperature Control Unit upgrade) were in fact completed. (reference omitted) Thus, by Generon‟s own admission, the release of its claims against PPG related to the completion of the Production Facility became effective, at the latest, on November 7, 2008.

Doc. No. 16, at § IV.A. The "admission" to which Plaintiff refers is an exchange of correspondence in November 2008, in which Defendant acknowledged that the required upgrades to the plant had been completed. Specifically, Plaintiff references two separate electronic mail communications from Defendant‟s executives to Plaintiff‟s ...


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