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American Food and Vending Corporation v. Full Service Vending Company

July 5, 2011

AMERICAN FOOD AND VENDING CORPORATION, PLAINTIFF
v.
FULL SERVICE VENDING COMPANY, D/B/A FULL SERVICE FOODS GROUP, DEFENDANT



The opinion of the court was delivered by: Judge Munley

MEMORANDUM

Before the court is defendant's motion to dismiss. Having been fully briefed, the matter is ripe for disposition.

Background

This case arises from defendant's alleged interference with contracts possessed by the plaintiff to provide vending services to businesses. Plaintiff American Food and Vending Corporation ("AFVC") alleges that on July 17, 2009 it entered into a five-year contract with Novapak Corporation to provide vending services for Novapak's facitility in Hazleton, Pennsylvania. (Amended Complt. (Doc. 15) (hereinafter "Amend. Complt.") at ¶ 8). On November 9, 2009, Novapak informed AFVC that the company would not honor that contract because the employee who signed it did not have authority to bind the company to such a contract. (Id. at ¶ 9). The person who signed the contract in July 2009 informed plaintiff in November 2009 that the contract would not be honored. (Id. at ¶ 10).

On November 16, 2009, AFVC filed a demand for arbitration with the American Arbitration Association. (Id. at ¶ 11). Plaintiff filed this demand pursuant to the terms of the alleged contract, and sought $35,000 in damages, plus interest, costs, and fees. (Id.). Full Service Vending began providing vending services to Novapak. The next day, counsel for AFVC sent a letter to David A. Mandella of Defendant Full Service Vending Group ("Full Service") advising him that plaintiff would bring an action against Full Service for intentional interference with a the contract if Full Service were complicit in any breach of contract by Novapak. (Id. at ¶ 12). On November 27, 2009, Novapak's counsel wrote plaintiff's counsel to inform him that Novapak would not honor the contract. (Id. at ¶ 13). This correspondence indicated that a copy had been sent to defendant's counsel as well, even though Full Service was not a party to the contract between plaintiff and Novapak. (Id. at ¶¶ 14-15). AFVC removed its machines form Novapak at the company's request on December 3, 2009. (Id. at ¶ 16). On August 19, 2010 an arbitrator issued in award of $40,329 in AFVC's favor on the breach-of-contract claim. (Id. at ¶ 17). Novapak has not paid any portion of the award to AFVC. (Id. at ¶ 19).

Plaintiff alleges that Full Service "induced Novapak to terminate its contract with AFVC by promising to pay for and/or reimburse Novapak for its attorney's fees, costs, and any adverse judgment" from the arbitration. (Id. at ¶ 20). Plaintiff contends that Full Service paid Novapak's portion of the arbitration fees and costs. (Id. at ¶ 21). In addition, Full Service allegedly paid for and/or provided legal counsel to Novapak in connection with the arbitration. (Id. at ¶ 22). Moreover, Novapak negotiated or signed an agreement with Full Service for the provision of vending services during the term of Novapak's contract with plaintiff. (Id. at ¶ 23). Full Service has been providing vending services to Novapak since Novapak asked plaintiff to remove its machines form the Novapak facility. (Id. at ¶ 24). Finally, plaintiff alleges that Full Service was aware of the contractual relationship AFVS had with Novapak and "intentionally, purposefully and with the sole intent to injure and/or the specific intent to harm AFVC's contractual relationship," encouraged, persuaded or induced Novapak to breach the contract. (Id. at ¶ 25).

Plaintiff also alleges that on May 17, 2010 AFVC signed a contract with Altadis, USA ("Altadis") for the provision of vending services at Altadis facilities in McAdoo, Pennsylvania. (Id. at ¶ 28). This contract superseded a previous contract between the parties executed in November 2005. (Id. at ¶ 29). Altadis agreed to this new contract in exchange for plaintiff's provision of a free company party for Altadis employees. (Id.). Plaintiff paid for this party, held in July 2010. (Id.).

On October 19, 2010, Altadis informed AFVC that it would not honor its contract with AFVC. (Id. at ¶ 30). On October 31, 2010, AFVC removed its machines from Altadis property at Altadis's request. (Id. at ¶ 31). Plaintiff alleges that Full Service induced Altadis to terminate its relationship with AFVC. (Id. at ¶ 32). Full Service allegedly promised to reimburse Altadis for any attorney's fees, costs, and adverse judgment that arose from the termination of the AFVC-Altadis contract. (Id.). Altadis and Full Service had negotiated an agreement during the term of plaintiff's contract with Altadis. (Id. at ¶ 33). Full Service has provided vending services to Altadis since AFVC removed the machines from Altadis property. (Id. at ¶ 34). Plaintiff alleges that Defendant Full Service was aware of the contractual relationship between AFVC and Altadis and nevertheless persuaded and/or induced Altadis to breach the contract with the intent of injuring the plaintiff. (Id. at ¶ 35). Full Service was not a party to the contract between plaintiff and Altadis. (Id. at ¶ 36).

Plaintiff likewise alleges that AFVC entered into a three-year contract with the Berwick Hospital Center ("BHC ') on August 28, 2007. (Id. at ¶ 39). BHC had always expressed to plaintiff its satisfaction with the company's services prior to September 21, 2009. (Id. at ¶ 40). BHC had never expressed an intent not to renew the contract between the parties or otherwise discontinue contractual and business relations with AFVC. (Id.). On September 21, 2009, BHC notified plaintiff that BHC would terminate the contract between the companies within sixty days due to BHC's dissatisfaction with plaintiff's services. (Id. at ¶ 41). Plaintiff alleges that this cancellation was a breach of contract. (Id. at ¶ 42). Plaintiff also contends that BHC cooperated with defendant to manufacture grounds to breach the contract between BHC and AFVC. (Id. at ¶ 43). Defendant allegedly agreed to pay BHC's attorney's fees and any judgment that arose from this matter, and purposefully interfered with the contractual relationship between plaintiff and BHC with an intent to injure plaintiff. (Id. at ¶¶ 43, 47). Defendant was not a party to the agreement between BHC and plaintiff. (Id. at ¶ 48). Plaintiff alleges that BHC also signed a service contract with defendant during the term of the AFVC/BHC contract. (Id. at ¶ 44). Plaintiff removed its machines from BHC at BHC's request on December 21, 2010. (Id. at ¶ 45). Defendant has since provided BHC with vending machine services. (Id. at ¶ 46).

Plaintiff filed a complaint in this matter on December 20, 2010. (Doc. 1). After being served with the complaint, defendant filed a motion to dismiss. (Doc. 7). Plaintiff responded to this motion by seeking leave of court to file an ameded complaint. (Doc. 11). The court granted this motion on February 8, 2011 and denied the motion to dismiss as moot. (Docs. 13, 14). Plaintiff filed its amended complaint on February 14, 2011. (Doc. 15).

The amended complaint contains three counts. Count I is a claim for tortious interference with existing contractual relationships. Plaintiff alleges defendant improperly interfered with its contracts with Novapak, Altadis and BHC. Cout II is a claim for tortious interference with prospective contractual relationships. Plaintiff alleges defendant interfered with contractual relationships AFVC reasonably expected would continue after the expiration of the existing contracts. Count III is a claim for civil conspiracy.

After being served with the amended complaint, defendant filed the instant motion to dismiss. The parties then briefed the issues, bringing the case to its present posture.

Jurisdiction

Plaintiff is a New York corporation with its principal place of business in that state. Defendant is a New Jersey Corporation with its principle place of business in that state. The amount in controversy exceeds $75,000. As such, the court has jurisdiction pursuant to 28 U.S.C. ยง 1332. The court is sitting in diversity, and therefore the substantive law of Pennsylvania shall apply. Chamberlain ...


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