United States District Court, E.D. Pennsylvania
[Copyrighted Material Omitted]
For PETER ACCURSO, Plaintiff, Counter Defendant: ERIC GAVIN MARTTILA, LEAD ATTORNEY, MCNAMARA BOLLA & PANZER, DOYLESTOWN, PA.
For INFRA-RED SERVICES, INC., ROOFING DYNAMICS GROUP, LLC, ROOFING DYNAMICS, INC., BRIAN LAND, Defendants, Counter Claimants: JULIE BETH NEGOVAN, LEAD ATTORNEY, MELISSA E. SCOTT, KUTAK ROCK LLP, PHILADELPHIA, PA.
For AUDREY STREIN, Defendant, Counter Claimant: JULIE BETH NEGOVAN, MELISSA E. SCOTT, LEAD ATTORNEYS, KUTAK ROCK LLP, PHILADELPHIA, PA.
For ROOFING DYNAMICS, INC., INFRA-RED SERVICES, INC., BRIAN LAND, ROOFING DYNAMICS GROUP, LLC, Counter Claimants: MELISSA E. SCOTT, KUTAK ROCK LLP, PHILADELPHIA, PA.
GENE E.K. PRATTER, United States District Judge.
This action arises from the termination of Peter Accurso's employment with Infra-Red
Services, Inc., Roofing Dynamics Group, LLC, and Roofing Dynamics, Inc. Brian Land and Audrey Strein have moved for partial judgment on the pleadings (Docket No. 14) as to Mr. Accurso's breach of contract, breach of partnership agreement, and civil conspiracy claims against them. The Court will grant the Motion in part and deny it in part.
I. RELEVANT BACKGROUND
Mr. Accurso worked for Infra-Red Services, Inc. (" Infra-Red" ), to market and sell roofing services and products. Pursuant to his September 2004 " Independent Contractor Agreement" (hereinafter, " Contract," Docket No. 10-2) with Infra-Red and, Mr. Accurso asserts, Mr. Land, Mr. Accurso was entitled to certain compensation to culminate in his vesting " as a 50/50 partner," upon fulfillment of certain conditions, either by creation of " a full partnership agreement or a (re) incorporation creating 50/50 shareholder status between Company and Contractor." Contract Schedule B, § 1.B (Docket No. 10-3). Because these conditions were met (as, Mr. Accurso contends, Mr. Land acknowledged), the contractual partnership provision was triggered and Mr. Accurso " was thereafter entitled to 50% of the [Company's] net income." Compl. ¶ 25.
At some point before March 28, 2008, Mr. Land " unilaterally hired his significant other, Defendant Strein, with whom he was then residing . .., and agreed to pay her based upon leads generated as well as a percentage of the net profits." Compl. ¶ 26. In 2008 and again in 2011, Mr. Land and Ms. Strein, insisting that they suspected Mr. Accurso of diverting business opportunities from the corporate Defendants, required Mr. Accurso to submit to polygraph examinations, and he complied. And in August 2011, Mr. Land and Ms. Strein " formed Defendant Roofing Dynamics Group, LLC, . . . without the input and/or knowledge of Plaintiff Accurso," as part of their fraudulent conspiracy to " force Plaintiff Accurso out of the Company, in order to wrongfully deprive him of the vested partnership interest which he held, and to improperly divert to themselves those monies which were due and owing to Plaintiff Accurso, for their mutual personal benefit." Compl. ¶ 34.
Further, in late 2011, Mr. Land " made numerous comments" to Mr. Accurso about Mr. Accurso's " facial disfigurement which had been caused by [his] Bell's palsy, complained about its potential adverse impact upon customers, and openly joked about his condition with business customers and associates." Compl. ¶ 35. Finally, in January 2012, Richard Berlinger, then counsel for the Defendants-to-be, notified Mr. Accurso that his employment and business relationship with the Defendants was immediately terminated based on the Defendants' claim, which Mr. Accurso contends is false, that Mr. Accurso had improperly diverted business opportunities from the Defendants ( see Compl. Ex. C, Docket No. 10-3).
In his Amended Civil Action Complaint (hereinafter " Complaint," Docket No. 10),
Mr. Accurso brings claims for breach of contract, breach of the partnership agreement, violation of the Pennsylvania Wage Payment and Collection Law, violation of the federal Employee Polygraph Protection Act, unjust enrichment, intentional infliction of emotional distress, and civil conspiracy. As a result of his wrongful termination, Mr. Accurso claims, he has been deprived of his half-share of more than $800,000 in income collected by the Defendants. And, consequently, he has been unable to maintain his medical insurance or " timely obtain reasonable and necessary medical treatment to address his chronic, debilitating and life-threatening conditions," Compl. ¶ 46, including his non-Hodgkin lymphoma.
Arguing that they cannot be held personally liable for the actions of, or their actions as agents of, their corporations, Mr. Land and Ms. Strein now move for judgment on the pleadings with regard to Counts II (breach of contract), III (breach of partnership agreement), and VII (civil conspiracy) of Mr. Accurso's Complaint. The gravamen of these challenged Counts is that the Defendants breached the 2004 Contract between Mr. Accurso, on the one hand, and Defendants Infra-Red and Mr. Land, on the other; and, further, that Mr. Land and Ms. Strein conspired to deprive Mr. Accurso of the monies he was due under this Contract and the partnership agreement it created, as well as, presumably, intentionally inflict emotional distress through their " fraudulent representations" and " bad faith and outrageous conduct" involved in " wrongfully terminating [Mr. Accurso's] employment, partnership and business relationship." Compl. ¶ 80. Mr. Accurso responds that, for several reasons, he can sue Mr. Land and Ms. Strein individually.
II. STANDARD OF REVIEW
The standard for evaluating a motion for judgment on the pleadings under Federal Rule of Civil Procedure 12(c) for failure to state a claim is the same as the familiar standard used for evaluating a motion to dismiss under Rule 12(b)(6). E.g., Turbe v. Gov't of V.I., 938 F.2d 427, 428 (3d Cir. 1991); Revell v. Port Auth., 598 F.3d 128, 134 (3d Cir. 2010) (citing Turbe, 938 F.2d at 428); Shelly v. Johns-Manville Corp., 798 F.2d 93, 97 n.4 (3d Cir. 1986). In fact, because " Rule 12(h)(2) provides that '[a] defense of failure to state a claim upon which relief can be granted' may be advanced in a motion for judgment on the pleadings under Rule 12(c)," the distinction between a motion under 12(b)(6) and a motion under 12(c) " is purely formal." Westcott v. City of Omaha, 901 F.2d 1486, 1488 (8th Cir. 1990).
A Rule 12(b)(6) motion to dismiss tests the sufficiency of a complaint. Although Rule 8 of the Federal Rules of Civil Procedure requires only " a short and plain statement of the claim showing that the pleader is entitled to relief," Fed.R.Civ.P. 8(a)(2), " in order to 'give the defendant fair notice of what the . . . claim is and the grounds upon which it rests,'" Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (citation omitted) (alteration in original), the plaintiff must provide " more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do," id.
To survive a motion to dismiss--or a motion for judgment on the pleadings--the plaintiff's complaint must plead " factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). Specifically, " [f]actual allegations must be enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555. The question is not whether the claimant " will ultimately prevail . . . but whether his complaint [is] sufficient to cross the federal court's threshold." Skinner v. Switzer, 562 U.S. 521, 131 S.Ct. 1289, 1296, 179 L.Ed.2d 233 (2011) (citation and internal quotation marks omitted). Thus, assessment of the sufficiency of a complaint (or pleading) is " a context-dependent exercise" because " [s]ome claims require more factual explication than others to state a plausible claim for relief." W. Penn Allegheny Health Sys., Inc. v. UPMC, 627 F.3d 85, 98 (3d Cir. 2010).
In evaluating the sufficiency of a complaint (or pleading), the Court adheres to certain well-recognized parameters. For one, the Court " must consider only those facts alleged in the complaint and accept all of the allegations as true." ALA, Inc. v. CCAIR, Inc., 29 F.3d 855, 859 (3d Cir. 1994); see also Twombly, 550 U.S. at 555 (stating that courts must " assum[e] that all the allegations in the complaint are true (even if doubtful in fact)" ). The Court may consider undisputedly authentic exhibits attached to the complaint (or pleading) for this purpose. E.g., Pension Ben. Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993); Mayer v. Belichick, 605 F.3d 223, 230 (3d Cir. 2010) (" [A] 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 these documents." ). The Court must also accept as true all reasonable inferences emanating from the allegations, and view those facts and inferences in the light most favorable to the nonmoving party. Rocks v. City of Philadelphia, 868 F.2d 644, 645 (3d Cir. 1989); see also Revell, 598 F.3d at 134; Jablonski v. Pan Am. World Airways, Inc., 863 F.2d 289, 290-91 (3d Cir. 1988). But that admonition does not demand that the Court ignore or discount reality. The Court " need not accept as true unsupported conclusions and unwarranted inferences," Doug Grant, Inc. v. Greate Bay Casino Corp., 232 F.3d 173, 183-84 (3d Cir. 2000) (citations and internal quotation marks omitted), and " the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice," Ashcroft, 556 U.S. at 678; see also Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir. 1997) (explaining that a court need not accept a plaintiff's " bald assertions" or " legal conclusions" (citations omitted)).
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Defendants contend that " [a] dismissal pursuant to Rule 12(c) is with prejudice. " Mot. 8 (emphasis in original). Not so. Although " after an answer has been filed" --as at the judgment on the pleadings stage--" the plaintiff may amend only with leave of court or the written consent of the opposing party," Shane v. Fauver, 213 F.3d 113, 115 (3d Cir. 2000) (citing Fed.R.Civ.P. 15(a)), " [t]he court should freely give leave when justice so requires," Fed.R.Civ.P. 15(a)(2); accord Shane, 213 F.3d at 115. In the Rule 12(b)(6) context, this precept dictates that " a district court must permit a curative amendment, unless an amendment would be inequitable or futile." Phillips v. County of Allegheny, 515 F.3d 224, 236 (3d Cir. 2008); see also, e.g., Andela v. Am. Ass'n for Cancer Research, 389 F.App'x 137, 142 (3d Cir. 2010) (per curiam) (" This Court has held that, when a complaint is vulnerable to dismissal on the pleadings, 'a district court must permit a curative amendment, unless an amendment would be inequitable or futile.'" (quoting Phillips, 515 F.3d at 236) (Rule 12(c) context)).
The courts in the cases Defendants cite did not hold (or even suggest) otherwise. Those courts simply observed that the district courts below had dismissed the pleadings with prejudice, not that such outcomes were or are categorically required. Much to the contrary, as noted above, a court granting a motion for judgment on the pleadings (under Federal Rule of Civil Procedure 12(c), not 56) should freely grant leave to amend pursuant to Rule 15(a)(2). E.g., Hayden v. Paterson, 594 F.3d 150, 160-61 & n.9 (2d Cir. 2010). As is clear from the cases cited above and in the margin, dismissal of claims upon a motion for judgment on the pleadings can be with prejudice, if amendment would be futile, but there certainly is no categorical rule that judgment on the pleadings is per se with prejudice.
Mr. Land and Ms. Strein's basic position is that they cannot be held personally liable for the actions of the corporate Defendants for any breach, by the latter, of a contract or partnership agreement with Mr. Accurso. And, further, Mr. Land and Ms. Strein argue, absent valid breach of contract or partnership claims against them, Mr. Accurso cannot maintain his civil conspiracy claim against them. Additionally, they assert that Mr. Accurso's civil conspiracy claim must fail because agents of the same corporation cannot, as a matter of law, conspire amongst themselves. But in their Motion, Mr. Land and Ms. Strein have not challenged Mr. Accurso's claims, ostensibly leveled at all Defendants, for violation of the federal Employee Polygraph Protection Act (Count I), violation of the Pennsylvania Wage Payment and Collection Law (Count IV), unjust enrichment (Count V), or intentional infliction of emotional distress (Count VI).
Mr. Accurso counters that he seeks to hold Mr. Land and Ms. Strein liable for the alleged breaches of contract and partnership agreement not individually, but, rather, on any and all of the theories that (1) Mr. Land voluntarily " undertook [the Contract's] legal obligations from the outset--as evidenced by his own words in an Agreement which he prepared," Mem. Opp. 10 (Docket No. 17); (2) Mr. Land and Ms. Strein " participated" in the breaches; and/or (3) the corporate veil should be pierced to allow his claims of breach to reach Mr. Land and Ms. Strein. For the following reasons, the Court will grant Defendants' Motion in part and deny it in part. The Court will dismiss Mr. Accurso's breach of contract and breach of partnership claims without prejudice to revive them with viable corporate veil-piercing allegations, but will, for present purposes, permit Mr. Accurso's civil conspiracy claim to proceed as based, potentially, on his as-yet unchallenged claim of intentional infliction of emotional distress.
A. Breach of Contract and Breach of Partnership Agreement
As explained below, the Court holds that Mr. Accurso cannot proceed with his breach of contract or breach of partnership agreement claims under any of the theories he advances. His voluntary undertaking and " participation theory" arguments for Mr. Land and Ms. Strein's individual liability must be dismissed with prejudice, because amendment would be futile, but the Court will permit Mr. Accurso to seek leave to amend his Complaint with respect to his veil piercing allegations.
1. Alleged Voluntary Undertaking of the Contract's Obligations
As the Court noted above and earlier in this litigation, see Feb. 10, 2014 Order 2 n.
2 (Docket No. 9), the Court may examine the relevant Contract in assessing Mr. Accurso's breach of contract and breach of partnership claims. And as the Court also observed before, see id., that Contract binds " the Company," Infra-Red Services, and is signed by Mr. Land, " President" ...