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Always In Service, Inc v. Supermedia Services - East

March 5, 2012

ALWAYS IN SERVICE, INC., PLAINTIFF,
v.
SUPERMEDIA SERVICES - EAST, INC., F/K/A IDEARC MEDIA SERVICES -- EAST, INC., ET AL., DEFENDANTS.



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

OPINION

I. INTRODUCTION

Before the Court is Defendants' Motion to Dismiss Plaintiff's Amended Complaint Pursuant to Federal Rule of Civil Procedure 12(B)(6). (Doc. No. 15.) Plaintiff's claims arise out of an advertising relationship with Defendants, during which Plaintiff spent considerable sums of money for telephone book advertising and internet marketing services. (Doc. No. 13.) The commercial relationship lasted for over two years. (Id. ¶ 21.)

On June 23, 2011, Plaintiff filed an Amended Complaint against Defendants. (Doc. No. 13.) Plaintiff asserts two claims against Defendants: Count I alleges a breach of contract claim and Count II alleges claims of fraudulent inducement, deceit and misrepresentation. (Id. ¶¶ 51-69.) On July 13, 2011, Defendants filed the instant Motion to Dismiss Plaintiff's Amended Complaint Pursuant to Federal Rule of Civil Procedure 12(B)(6). (Doc. No. 15.) On September 28, 2011, a hearing was held on Defendants' Motion to Dismiss. (Doc. Nos. 11 and 12.)

Following the hearing, the parties submitted supplemental briefing. (Doc. Nos. 22-24.) For reasons discussed below, the Court will deny Defendants' Motion to Dismiss Plaintiff's Amended Complaint.*fn1

II. FACTUAL BACKGROUND

Plaintiff, Always in Service, Inc. ("AIS"), formerly known as Al Best Locksmith, is a business formed by three individuals in 2007, specializing in locksmith and other home improvement services. (Doc. No. 13 ¶ 7.) Defendants SuperMedia Services -- East, Inc., f/k/a Idearc Media Services -- East, Inc., SuperMedia LLC, t/a SuperMedia, f/k/a Idearc Media LLC, and SuperMedia Inc., f/k/a/ Idearc Inc. (collectively "Defendants"), are an advertising conglomerate whose publications include the Verizon Yellow Pages. (Doc. No. 13 ¶¶ 2-4; Doc. No. 15 ¶ 1.) Defendants also provide internet marketing services. (Doc. No. 13 ¶ 26.) Plaintiff AIS alleges that, from the middle of 2007 through October 2010, it paid for advertising with Defendants. (Id. ¶ 23.)

Plaintiff AIS initially advertised in Defendants' telephone books. Thereafter, it began advertising through Defendants' internet marketing services, referred to as "pay-per click" services. (Id. ¶¶ 12, 26.) At some point Plaintiff cancelled the "pay-per click" services. Plaintiff alleges that to continue advertising with Defendants in their telephone books, it was required to pay a $2,000 per month management fee. (Id. ¶ 30.) On October 14, 2010, the Pennsylvania Attorney General filed a complaint against Plaintiff AIS and its individual officers, alleging violations of the Pennsylvania Unfair Trade Practices and Consumer Protection Law.*fn2 (Id. ¶ 43.) Thereafter, Plaintiff AIS commenced the instant civil litigation.*fn3 (Doc. No. 1.)

Plaintiff's breach of contract claim is predicated on numerous oral contracts that it contends were created every time Defendants offered, and Plaintiff accepted, changes in the advertising program. Plaintiff alleges that the parties agreed to more than 2,000 verbal contracts for advertising services, internet marketing services and management fees.*fn4 (Doc. No. 13 ¶¶ 12, 21, 25, 26, 30, 31; Doc. No. 22 at 2-5.) According to Plaintiff's Amended Complaint, the terms of these oral contracts were established almost exclusively by verbal representations between the parties, but were occasionally documented by artwork, proofs, renewal pricing and discount package spreadsheets, and advertisements in the phone books, as well as emails and notes. (Doc. No. 13 ¶ 54.) Plaintiff initially attached an Advertising Agreement to its original complaint as "representative of the various agreements entered into between the parties." (Doc. No. 1 ¶ 41.) The Advertising Agreement is an unsigned, undated two page document containing general "Terms and Conditions." (Doc. No. 1, Ex. A.) The "Terms and Conditions" include the following provisions:*fn5

1. Order. By signing below or by Recorded Oral Agreement (herein so called), you authorize us to publish the Ads listed in this Agreement in the applicable Publications and/or Electronic Platform, and to provide the Services listed in this Agreement.

19. Governing Law. You agree that this Agreement will be governed by and construed in accordance with, and all matters relating to or arising under this Agreement will be governed by, Texas law without reference to the laws relating to conflicts of laws. (Id.) Neither this Advertising Agreement nor any other document, however, are attached to the Amended Complaint. (Doc. No. 13; Doc. No. 15 ¶ 10.) No evidence of any "Recorded Oral Agreement" as required by the Advertising Agreement is referred to in the Amended Complaint. (Doc. No. 13.)

According to this Complaint, Plaintiff AIS first met with representatives of Defendants, Joseph Albert and his then supervisor, Victoria Jackson, in the middle of 2007. (Doc. No. 13 ¶ 12.) The parties then entered into a verbal agreement for Plaintiff to purchase advertising in Defendants' telephone books that were published in Montgomery County, Pennsylvania. (Id.) The initial advertisement contained color imaging over two pages of the telephone book, referred to by Plaintiff as a "double truck" advertisement. (Id. ¶ 13.) Plaintiff avers that the "double truck" advertisements cost nearly $500 per month and that Plaintiff AIS was required to pay substantial costs up front. (Id. ¶¶ 14-15.) During the parties advertising relationship, Plaintiff purchased over time telephone book advertisements from Defendants to be published in hundreds of communities throughout Pennsylvania and five other states. (Id. ¶ 20.) During this time, Joseph Albert stopped working for SuperMedia and representative Keith Cohen, in conjunction with manager Geoff Fitzgibbons, began to sell advertising to Plaintiff. (Id. ¶ 21.)

The verbal terms agreed upon by the parties regarding telephone book advertising include: Plaintiff AIS's obligation to purchase print advertisements in exchange for their publication by Defendants (Doc. No. 13 ¶ 20); a promise by Defendants to place Plaintiff AIS's advertisements in a prominent position within the telephone books (id. ¶ 34); Defendants' promise to provide a certain number of telephone books in each geographic area (id. ¶ 50(d)); and Defendants' agreement to provide AIS with free direct mailing advertisements (id. ¶ 50(h)).

At an unspecified time during this relationship, Defendants informed Plaintiff AIS that they would not continue telephone book advertising unless Plaintiff also purchased internet marketing services, referred to as "pay-per click" advertising. (Id. ΒΆ 26.) The cost of the "payper click" services was approximately $15,000 per month. (Id.) The verbal terms of the "pay-per click" agreements include: assurances by Defendants that "pay-per click" advertising would yield a definite amount of internet customers, Defendants' agreement to tailor the "pay-per click" marketing services to achieve the most relevant results in terms of ...


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