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American Music Theater Festival, Inc., and Joint v. Td Bank

February 16, 2011


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


Presently before the Court is Defendant TD Bank, N.A.'s Motion to Dismiss Plaintiffs' Complaint and to Strike All References to Settlement and Mediation Communications (ECF No. 6). For the following reasons, the Motion shall be converted to a motion for summary judgment under Federal Rule of Civil Procedure 56 in part and ruling shall be reserved in part.


This action arises out of a commercial business relationship between American Music Theater Festival, Inc., and Joint Theater Center, LLC ("Plaintiffs") and TD Bank, N.A., the successor by merger to Commerce Bank/Pennsylvania N.A. (collectively, "Defendant"). In November 2001, Plaintiffs, non-profit entities that operate the Prince Music Theater in Philadelphia, negotiated a $5.3 million tax-exempt loan with Defendant using a mortgage issued against the theater facility as security. Subsequently, in February 2003, Defendant extended a conventional, non-tax exempt loan to Plaintiffs in the amount of $500,000 - later increased to $928,000 - with the theater property again mortgaged as security.

Following a 2007 incident of check forgery by one of Plaintiffs' employees, disputes arose between the parties and several agreements were negotiated to resolve the ongoing issues. Defendants deny the existence of one of these agreements, while Plaintiffs contend that several other of these agreements are the invalid products of fraud and coercion. On November 11, 2008, after disagreements and apparent misunderstandings concerning the amount due on the monthly payments, Defendant declared Plaintiffs to be in default under the tax-exempt and conventional loans. Confession of judgment was subsequently entered against Plaintiffs on both loans in the Philadelphia Court of Common Pleas: on December 23, 2008, on the conventional loan, and on March 18, 2009, on the tax-exempt loan. In February 2009, Defendant filed related foreclosure actions.

Plaintiffs filed a petition to open the confessed judgment on the conventional loan in March 2009. The Court of Common Pleas denied the petition on August 13, 2009, and Defendant thereafter scheduled a sheriff's sale of the theater facility to take place on October 6, 2009. The Court of Common Pleas granted a stay of execution of the judgment pending disposition of Plaintiffs' appeal of its decision to the Superior Court, which appeal is still pending. Plaintiffs allege that despite the stay of the sheriff's sale, Defendant publicly discussed moving forward with such a sale, thereby injuring Plaintiffs' reputation and business.

On January 14, 2010, Plaintiffs commenced this action by filing a complaint against Defendant in the Philadelphia Court of Common Pleas. Plaintiffs' Complaint asserts the following claims against Defendant: Breach of Contract/Duty of Good Faith (Count I)*fn1 ; Promissory Estoppel (Count II); Breach of Fiduciary Duty (Count III); Fraudulent Misrepresentation and Concealment (CountIV); Negligent Misrepresentation (Count V); Conversion (CountVI); Breach of Duties Imposed by the Pennsylvania U.C.C. (CountVII); Interference with Charitable Gifts (Count VIII); Interference with Business Relations (Count IX); and Abuse of Process (Count X).

Defendant removed the case to this Court and filed the instant Motion to Dismiss on March 5, 2010.*fn2 Plaintiffs filed a response in opposition. Defendant then filed a supplemental brief - to which Plaintiffs replied - followed by a second supplemental brief. Defendant's supplemental briefs attached decisions of the Court of Common Pleas that were issued following Defendant's filing of its Motion to Dismiss.


Under Federal Rule of Civil Procedure 12(b)(6), a party may file a motion to dismiss a pleading for "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). When evaluating a Rule 12(b)(6) motion to dismiss, a district court must "accept all factual allegations in the complaint as true, construe the complaint in the light favorable to the plaintiff, and ultimately determine whether plaintiff may be entitled to relief under any reasonable reading of the complaint." Mayer v. Belichick, 605 F.3d 223, 229 (3d Cir. 2010) (citing Phillips v. County of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008)). However, to survive a motion to dismiss, it is not sufficient merely to recite the elements of the cause of action; rather, "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)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. "'This does not impose a probability requirement at the pleading stage, but instead simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of the necessary element.'" Great W. Mining & Mineral Co. v. Fox Rothschild LLP, 615 F.3d 159, 177 (3d Cir. 2010) (quoting Phillips, 515 F.3d at 234) (internal quotation marks omitted). In making this determination, the district court must consider "only the complaint, exhibits attached to the complaint, matters of public record, as well as undisputedly authentic documents if the complainant's claims are based upon those documents." Mayer, 605 F.3d at 230 (citing Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993)).


A. Rooker-Feldman Doctrine*fn3

As a threshold matter, Defendant argues that pursuant to the Rooker-Feldman doctrine, "this Court should not grant relief that would 'require the District Court to find that the state court's legal and factual determinations are erroneous, and thereby render [those] judgment[s] ineffectual.'" (Def.'s Supl. Mem. Supp. Mot. to Dismiss 2, ECF No. 12 (quoting Parks v. Twp. of Portage, No. 10-1938, 2010 U.S. App. LEXIS 13196, at *9 (3d Cir. June 28, 2010)).) As the state courts have now ruled in favor of Defendant in its four collection cases, Defendant argues that if this Court were to rule in favor of Plaintiffs, we would be finding those state court decisions to be erroneous and rendering those judgments ineffectual. (Id.)

Plaintiffs respond that the Rooker-Feldman doctrine is inapplicable in this case. (Pls.' Resp. to Def.'s Supl. ...

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