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Martin Gross v. R.T. Reynolds

September 22, 2011

MARTIN GROSS,
PLAINTIFF
v.
R.T. REYNOLDS, ET AL, DEFENDANTS



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

MEMORANDUM

Martin Gross brings this action as an individual and doing business as "The Art I Do" and alleges numerous civil rights violations in connection with his subcontractor work on a construction project at the Harrisburg University of Science and Technology ("Harrisburg University"). The remaining named defendants in this action are R.T. Reynolds, Inc. ("Reynolds"), the general contractor on the project; its officers or employees Ike Sholley, Wayne Spahr, Ron Whisker, Todd Buzard, and Dave Angle (referred to collectively as "the individual Reynolds defendants"); Harrisburg University and its President Eric Darr; Dellanor Young; and Graystone Bank. Mr. Gross alleges civil rights violations against all the defendants and claims Reynolds is liable for breach of subcontract. After all named defendants filed a motion to dismiss his original complaint, Mr. Gross filed an amended complaint and all the defendants thereafter filed motions to dismiss the amended complaint. For the following reasons, I will grant the defendants‟ motions to dismiss Mr. Gross‟ § 1981 and § 1983 claims and I will decline to exercise supplemental jurisdiction over Mr. Gross‟ state law breach of contract claim against Reynolds.

I. BACKGROUND

Reynolds was the general contractor on a building construction project that took place at Harrisburg University. Am. Compl. ¶ 12. Reynolds employs defendants Ike Sholley, Wayne Spahr, Ron Whisker, Todd Buzard, and Dave Angle. Id. at & 7. Mr. Gross, who is African American, and an African American colleague, James White, submitted a bid to Reynolds for painting work on the project. Compl. & 18. Gross now claims Reynolds solicited him for participation in the project, and accepted his bid with no intention to hire him, only to "secure the full benefit of the participation requirements of the bid specifications," which included the use of disadvantaged businesses. Id. at ¶¶ 19, 21. Reynolds hired Dellanor Young, a consultant, to monitor "the disadvantaged business provisions of the bid documents and the contract." Id. at ¶ 15. Reynolds had apprehensions about working with Gross and White, but solicited them for the painting work "because of the advantage Reynolds would gain from using a Harrisburg-based painting contractor on the project." Id. at ¶ 21. Work was to begin in November, 2007. Id. at ¶ 23. Harrisburg University is "a private institution" that receives "extensive federal, state, and/or local funding." Id. at ¶¶ 12, 13. Eric Darr is the President of the Harrisburg University. Id. at ¶ 9.

With respect to the individual defendants, Whisker and Spahr are alleged to have been primarily involved in the solicitation of and negotiations with Mr. Gross on behalf of Reynolds; Defendants Sholley, Buzard, and Angle were "involved in the contract management matters throughout the performance of the contract." Id. at ¶ 17. "Early in the performance of the contract, it became apparent that work delays would not permit [Mr. Gross] to be able to commence and end its work as contemplated by the contract.

Id. at ¶ 24. At some point, Mr. Gross "began to make written and oral complaints to the defendants concerning these setbacks, and the strain they were putting on [him]." Id. at ¶ 29. These communications "involved" Mr. Gross, Buzard, and Angle, and no other specifically named defendants. Id. at ¶ 29. Mr. Gross also attempted to work through Young to remedy the problems caused by the delays. Id. at ¶¶30. Once work finally began on the project in 2008, defendants sabotaged plaintiff's work schedule by granting preferences to non-minority contractors, id. at ¶ 33, and failed to meet contract commitments with plaintiff and other minority subcontractors, id. at ¶ 31. Mr. Gross alleges that it was only when he hired a non-minority foreman that Reynolds, through Sholley, began to work with him to ensure that the contract work was completed. Id. at ¶ 35. Mr. Gross also alleges that Reynolds forced him to enter into a financing agreement with defendant Graystone Bank into which non-minority contractors were not made to enter, id. at ¶¶ 36-37, removed a $30,000 veneer job from plaintiff's contract and gave it to another contractor, id. at ¶ 39, and improperly refused to pay another subcontractor, D.E. Gemmill, for line-painting work, instead referring Gemmill to Mr. Gross for payment, id. at ¶¶ 43-35.

According to the complaint, "all painting work was finally completed . . . in or around April 2009, and, although plaintiff received progress payments under the terms of its subcontract in the approximate amount of the original total contract amount, [he] has not been fully paid all amounts due, inclusive of all change orders[.]" Id. at ¶ 46. He claims he is still owed between $88,000 and $120,000 for work on the project. Id. He alleges the reason for the actions taken against him, including mistreatment in managing his subcontract and holding him to higher-than-industry-standards, is his minority status. Id. at ¶¶ 48, 49.

With respect to Graystone Bank, the amended complaint alleges that it was "through the requirements of plaintiff‟s subcontract with Reynolds" that "The Art I Do was required to enter into a separate financing agreement with defendant Graystone Bank." Am. Compl. ¶ 36. It further alleges that, unlike similarly-situated non-minority contractors, Mr. Gross was "required to grant Graystone a mortgage on [his] personal residence in order to secure the financing" with Graystone. Id. at ¶ 37. He claims this personal mortgage requirement "reflected a discriminatory mindset in dealing with minority subcontractors." Id. Finally, it is alleged that Graystone "has refused to release the lien on plaintiffs‟ property." Id. at ¶ 38.

In Count One of his complaint, Mr. Gross asserts claims against all defendants under 42 U.S.C. §§ 1981 and 1983 for failing to afford him equal protection of the laws and for discriminating against him on the basis of his race. Count Two contains claims against Reynolds alone for breach of contract and breach of the implied duty of good faith and fair dealing.

The bulk of the allegations in the complaint are leveled against Reynolds and the individual Reynolds defendants. In their motion to dismiss, these defendants, along with Harrisburg University, Darr, and Young, assert that the allegations in Gross=s complaint are vague, conclusory, and do not meet the pleading standards of Twombly and Iqbal. More specifically, Reynolds claims that Gross=s contractual claims are barred because Gross admits that he was paid the original contract amount and because other actions he claims constituted breach of the contract -- like Reynolds= removing some work from the subcontract and refusing to pay for additional costs incurred by Gross due to work delays -- were actually permitted under the terms of the contract. All defendants argue that Mr. Gross=s § 1981 claim is unsupported because he fails to adequately allege discriminatory animus and breach of contract. They claim his § 1983 claims are barred because Reynolds, its employees, Harrisburg University, and the rest of the defendants are all private actors. In its motion to dismiss, Graystone Bank claims that Mr. Gross‟ claims are time-barred and that he fails to state a claim upon which relief may be granted.

II. STANDARD OF REVIEW

A motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure examines the legal sufficiency of the complaint. Conley v. Gibson, 355 U.S. 41, 45-46 (1957). The factual allegations must be sufficient to make the claim for relief more than just speculative. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). In determining whether to grant a motion to dismiss, a federal court must construe the complaint liberally, accept all factual allegations in the complaint as true, and draw all plausible inferences in favor of the plaintiff. Id.; see also D.P. Enters. v. Bucks Cnty. Cmty. Coll., 725 F.2d 943, 944 (3d Cir. 1984).

It remains true that the Federal Rules of Civil Procedure do not require a plaintiff to plead in detail all of the facts upon which he bases his claim. Rather, the Rules require "a short and plain statement of the claim showing that the pleader is entitled to relief." FED. R. CIV. P. 8(a)(2). However, the Supreme Court has rejected language in Conley stating that "a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Twombly, 550 U.S. at 561. Rather, a "complaint must allege facts suggestive of [the proscribed] conduct," id. at 564, and it must contain enough factual matters to suggest the required elements of the claim or to "raise a reasonable expectation that discovery will reveal evidence of" those elements. Phillips v. County of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008) (quoting Twombly, 550 U.S. at 556). Neither "bald assertions" nor "vague and conclusory allegations" are accepted as true. See Morse v. Lower Merion School Dist., 132 F.3d 902, 906 (3d Cir. 1997); Sterling v. Southeastern Pennsylvania Transp. Auth., 897 F. Supp. 893 (E.D. Pa. 1995). Courts must first identify those allegations in a complaint that are mere conclusions and are therefore not entitled to the assumption of truth, and next, consider whether the complaint=s factual allegations, which are entitled to a presumption of truth, plausibly suggest an entitlement to relief. Ashcroft v. Iqbal - - U.S. - -, 129 S.Ct. 1937, 1950 (2009).

The Court of Appeals has recently made clear that after Iqbal, "conclusory or "bare-bones‟ allegations will no longer survive a motion to dismiss: "threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.‟ To prevent dismissal, all civil complaints must now set out "sufficient factual matter‟ to show that the claim is facially plausible." Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009) (quoting Iqbal, 129 S.Ct. at 1949).

Courts "may consider an undisputedly authentic document that a defendant attaches as an exhibit to a motion to dismiss if the plaintiff's claims are based on the document." Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993). Because Mr. Gross refers to the subcontract into which he and Reynolds entered throughout his complaint, it is appropriate to consider both the copy of the contract attached as an exhibit to Reynolds‟ motion to dismiss ...


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