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William Howe v. Lc Philly

April 15, 2011

WILLIAM HOWE
PLAINTIFF,
v.
LC PHILLY, LLC AND KEVIN HOLOHAN DEFENDANTS.



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

OPINION

I. INTRODUCTION

On October 18, 2010, Plaintiff William Howe filed a Complaint against Defendants, alleging that both Defendants engaged in the following acts: (1) breach of contract; (2) violation of Pennsylvania Wage Payment and Collection Law; (3) fraudulent misrepresentation; (4) negligent misrepresentation; and (5) punitive damages, all arising from an employment dispute. (Doc. No. 1.) On December 30, 2010, Defendants LC Philly, LLC ("LC Philly") and Kevin Holohan ("Holohan") (together "Defendants") filed a Motion to Dismiss Plaintiff's Complaint seeking dismissal of the breach of contract claim against Defendant Holohan and dismissal of the fraudulent misrepresentation, negligent misrepresentation, and punitive damages claims in their entirety, pursuant to Federal Rule of Civil Procedure 12(b)(6).*fn1 (Doc. No. 2.) On February 16, 2011, the Court heard oral argument on the Motion, and the matter has been fully briefed by the parties (see Doc. Nos. 1, 2, 6, 8).

For reasons that follow, the Court will deny Defendants' Motion in its entirety.

II. BACKGROUND

On November 15, 2008, Defendant Holohan made a written offer to Plaintiff to "partner with me to open and manage multiple Little Ceasars*fn2 [sic] franchise stores in the Philadelphia metropolitan area."*fn3 (Id. ¶ 9.) At that time, Plaintiff was residing and working in Michigan. (Id. ¶ 8.) On December 30, 2008, Plaintiff accepted the offer and signed the contract. (Doc. No. 1 ¶ 12.) Plaintiff then underwent Little Caesars Enterprises management training in Michigan. In February 2009, Plaintiff moved to Phoenixville, Pennsylvania, and began to fulfill his obligations under the contract. (Id. ¶¶ 13-15.) In October 2009, Plaintiff informed Holohan that he would be attending a funeral and would be away from the restaurant for several days. (Id. ¶¶ 16-17.) When Plaintiff returned, Holohan terminated Plaintiff's employment. (Id. ¶ 20.) In response to his termination, Plaintiff filed the instant Complaint. As noted above, Defendants have moved for a partial dismissal of the Complaint under Federal Rule of Civil Procedure 12(b)(6).

III. LEGAL STANDARD

The motion to dismiss standard under Federal Rule of Civil Procedure 12(b)(6) has been the subject of recent examination, culminating with the Supreme Court's Opinion in Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009). After Iqbal it is clear that "threadbare recitals of the elements of a cause of action, supported by mere conclusory statements do not suffice" to defeat a Rule 12(b)(6) motion to dismiss. Id. at 1949; see also Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007). Applying the principles of Iqbal and Twombly, the Third Circuit in Santiago v. Warminster Twp., No. 10-1294, 2010 WL 5071779 (3d Cir. Dec. 14, 2010), set forth a three-part analysis that a district court in this Circuit must conduct in evaluating whether allegations in a complaint survive a 12(b)(6) motion to dismiss. 2010 WL 5071779, at *4; see also Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009) (applying the principles of Iqbal and articulating the 12(b)(6) analysis as a two-part test).

"First, the court must 'tak[e] note of the elements a plaintiff must plead to state a claim.' Second, the court should identify allegations that, 'because they are no more than conclusions, are not entitled to the assumption of truth.' Finally, 'where there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement for relief.'" Santiago v. Warminster Twp., 2010 WL 5071779, at *4 (quoting Iqbal, 129 S. Ct. at 1947-50). A complaint must do more than allege a plaintiff's entitlement to relief, it must "show" such an entitlement with its facts. Fowler, 578 F.3d at 210-11 (citing Phillips v. County of Allegheny, 515 F.3d 224, 234-35 (3d Cir. 2008)). "Where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged -- but it has not 'shown' -- 'that the pleader is entitled to relief.'" Iqbal, 129 S. Ct. at 1950. The "plausibility" determination is a "context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id.

IV. DISCUSSION

A. Defendants' Motion To Dismiss Breach Of Contract Claim Against Holohan Defendants move to dismiss the breach of contract claim against Holohan because they allege that he is not a party to the contract and "no person can be sued for breach of contract unless he is a party to the contract." Donahue v. Custom Mgmt. Corp., 634 F. Supp 1190, 1200 (W.D. Pa. 1986). Therefore, according to Defendant, Plaintiff has failed to plead a claim for breach of contract against Holohan. Because the Court finds that Plaintiff has plausibly pled that Holohan is a party to the contract, Defendants' Motion to Dismiss this claim will be denied.

This case is before the Court based on diversity of citizenship jurisdiction and the claims are therefore governed by Pennsylvania law. Under Pennsylvania law, the elements of a breach of contract claim include: (1) the existence of a contract, including its essential terms; (2) a breach of a duty imposed by the contract; and (3) resultant damages. Gorski v. Smith, 812 A.2d 683, 692 (Pa. Super. Ct. 2002) (citing Corestates Bank v. Cutillo, 723 A.2d 1053, 1058 (Pa. Super. Ct. 1999)). Defendants do not allege that Plaintiff has failed to plead the elements of a breach of contract. In fact, Defendants have not moved to dismiss the breach of contract claim against LC Philly, which is based on the same facts. Defendants only claim that Holohan is not a party to the contract and therefore the claim against him for its breach cannot stand.

The Court must determine whether the facts as pled, plausibly give rise to an entitlement for relief -- that is, whether it is plausible, based on the facts alleged in the Complaint, that Holohan is a party to the contract. Construing the Complaint liberally, accepting all factual allegations in the Complaint as true, and drawing all reasonable inferences in favor of Plaintiff, the Complaint does contain sufficient facts to plausibly establish that Holohan is a party to the contract.

The contract is drafted in the form of an email to Plaintiff from Holohan. The email was apparently printed out and signed by Holohan.*fn4 (See Doc. No. 1, Exhibit ("Ex.") A.) Under Holohan's signature, his name is printed without any reference to his position in LC Philly or even to LC Philly at all. Thus, there is no indication that Holohan signed the contract only in his capacity as a representative for LC Philly. In fact, the contract is replete with language that refers to Holohan personally. The contract refers to an "opportunity to partner with me," states that "I look forward to working with you," and provides "You and I will draft the specific details of the manager position," and "It is my intention to open a new store every six months." (Id.) (emphasis added). These ...


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