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Uspro Coatings & Building Restoration, Inc v. Dig-Hp Cherry Hill Operating

February 8, 2011

USPRO COATINGS & BUILDING RESTORATION, INC., PLAINTIFF,
v.
DIG-HP CHERRY HILL OPERATING, LLC ET AL.,
DEFENDANTS.



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

MEMORANDUM

USPro Coatings & Building Restoration, Inc. ("USPro") brings this action against DIGHP Cherry Hill Operating, LLC ("DIG-HP") and Hirschfeld Properties, LLC ("Hirschfeld Properties"), alleging breach of contract against both defendants and tortious interference with contractual relations against Hirschfeld Properties. Before me is Hirschfeld Properties' motion to dismiss all claims against it under Federal Rule of Civil Procedure 12(b)(6). For the reasons set forth below, I will deny Hirschfeld Properties' motion to dismiss the breach-of-contract claims but will grant its motion to dismiss the tortious-interference claim.

I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY*fn1

USPro is in the business of restoring building exteriors and applying coatings to protect their exterior surfaces. (Am. Compl. ¶ 1.) In March 2009, USPro submitted proposals to Hirschfeld Properties for a project in Cherry Hill, New Jersey, which was to include the removal of balcony railings, the repair of balconies as needed, and the application of a balcony sealant system. (Id. ¶ 6.) According to USPro, "[d]uring the proposal and negotiation process, a senior vice president of Hirschfeld Properties touted Hirschfeld Properties' success as a real estate investment firm with enormous financial resources." (Id. ¶ 7.) USPro also investigated Hirschfeld Properties' reputation by, among other things, "reviewing [the company's] website and conducting a search through various court dockets to determine Hirschfeld Properties' propensity for litigation and conflict with its vendors." (Id. ¶ 8.) USPro asserts that Hirschfeld Properties' reputation and financial resources factored into the terms of its proposal as well its ultimate decision to enter into an agreement with Hirschfeld Properties. (Id. ¶¶ 7, 9.)

USPro alleges that Hirschfeld Properties awarded the project to USPro on March 10, 2009, and, according to USPro, the two parties executed an agreement concerning the project, including the amount of compensation to be paid to USPro, on that date. (Id. ¶¶ 10--11.) Hirschfeld Properties authorized USPro to begin work on the project, and USPro agreed to accept Hirschfeld Properties' "forthcoming contract form" and to meet Hirschfeld Properties' request for heightened insurance coverage. (Id. ¶ 12.) According to USPro, the proposed contract that Hirschfeld Properties sent to USPro repeated the terms of the earlier agreement between the two parties, but "Hirschfeld Properties authorized DIG-HP to execute the contract on its behalf." (Id. ¶ 14.)

The contract specified "a three-component balcony sealant system" composed exclusively of products manufactured by Sika Corporation and directed USPro to submit Sika's color charts "for defendants' review and approval." (Id. ¶¶ 16--17.) USPro submitted the color charts, as required, but defendants allegedly refused to select a color from Sika's color charts and Hirschfeld Properties instead ordered USPro to match the color of a mock-up balcony sealed in December 2008, even though "USPro had no hand in sealing the mock-up balcony" and the contract made no reference to that mock-up balcony or to color matching. (Id. ¶¶ 18--21.) The contract set forth a procedure for "extra work or changes," but defendants refused to issue a change order as required by the contract and threatened to withhold payment or terminate the contract if USPro failed to provide such color-matching services. (Id. ¶¶ 22--23.) USPro contends that "[d]efendants' refusal to select a color from [Sika's] color charts made it absolutely impossible for USPro to complete the [p]roject in accordance with the contract." (Id. ¶ 24.)

USPro submitted its first application for payment for work performed, requesting payment of $69,996.00 on April 16, 2009, but USPro received payment of only $53,126.00. (Id. ¶ 25.)

On April 24, 2009, DIG-HP issued a change order, which USPro asserts was negotiated and accepted by Hirschfeld Properties, directing USPro to furnish and install caulking manufactured by Sika in exchange for a payment of $31,280.00. USPro completed the work as requested under the change order, but defendants allegedly failed to pay for such work. (Id. ¶¶ 26--27.)

On May 18, 2009, USPro submitted a second application for work performed, requesting payment of $79,110.00, but, "[d]espite repeated demands, defendants refused to pay for the work performed." (Id. ¶ 28.) USPro submitted its last request for payment on May 20, 2009, requesting payment of $22,121.35, but, according to USPro, "[n]o part of this sum has been paid." (Id. ¶ 29.) USPro asserts that it e-mailed its applications and requests for payment to Hirschfeld Properties and that "[a]t no time did Hirschfeld Properties inform USPro that it would not accept such documents." (Id. ¶ 30.)

Hirschfeld Properties unilaterally terminated the contract on May 31, 2009, and, according to USPro, refused to pay the amounts due to USPro primarily because USPro failed to match the color of the mock-up balcony. (Id. ¶ 31.)

USPro filed this action against DIG-HP and Hirschfeld Properties on April 19, 2010, alleging three breach-of-contract counts against both defendants.*fn2 USPro alleges that defendants breached the contract (1) by failing to select a color from the color charts and demanding that USPro perform extra work or changing the scope of the work to be performed without additional compensation and without a change order, as required by the contract (count I); (2) by failing to pay the amounts due to USPro under its first and second applications for payment (count II); and (3) by failing to pay for work completed pursuant to change orders (count III).

On June 14, 2010, Hirschfeld Properties filed a motion to dismiss the claims against it for lack of subject-matter jurisdiction under Rule 12(b)(1) or, in the alternative, to dismiss for failure to state a claim under Rule 12(b)(6). USPro filed an amended complaint in response to the motion to dismiss on July 2, 2010, adding allegations regarding Hirschfeld Properties' role with respect to the contract as well as allegations supporting this court's subject-matter jurisdiction on the basis of diversity of citizenship.*fn3 USPro also added a claim of tortious interference with contractual relations against Hirschfeld Properties (count V), asserting, in the alternative, that Hirschfeld Properties interfered with USPro's contract with DIG-HP by, among other things, demanding that USPro provide color-matching services not required under the contract and refusing to provide additional compensation for such extra work. Because USPro amended its complaint, on July 7, 2010, I dismissed Hirschfeld Properties' motion to dismiss as moot. Hirschfeld Properties then filed, on July 19, 2010, the current motion to dismiss the claims against it in the amended complaint for failure to state a claim under Rule 12(b)(6).

DIG-HP, however, has not answered USPro's amended complaint, and on November 16, 2010, the clerk ...


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