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Transystems Corporation v. Hughes Associates, Inc.

United States District Court, M.D. Pennsylvania

November 24, 2014

TRANSYSTEMS CORPORATION, Plaintiff,
v.
HUGHES ASSOCIATES, INC., Defendant.

MEMORANDUM OPINION

MARTIN C. CARLSON, Magistrate Judge.

I. Statement of Facts and of The Case

This case, which comes before us for resolution of a motion to dismiss, is a contract and contract indemnification action which arises out of an Air National Guard base hangar construction project. According to the well-pleaded facts in the plaintiff's complaint on October 1, 2008, Kinsley Construction Company ("Kinsley") was awarded a contract to construct the this Air National Guard hangar. (Doc. 1, ¶6.) Kinsley then retained the plaintiff, TranSystems, to serve as fire protection consultant for the purposes of designing and installing a fire suppression system within the hangar. ( Id., ¶7.) TranSystems in turn, hired the defendant, Hughes, as a sub-consultant to design the fire suppression system for the hangar. ( Id., ¶8.) TranSystems alleges that Hughes failed to perform its engineering functions under the contract in a timely and professionally competent manner. ( Id., ¶¶15-16.) As a result TranSystems was unable to perform its contractual obligations to Kinsley. (Id.) Consequently, Kinsley removed TranSystems from this project and filed claims against TransSystems alleging that the fire suppression system designs were improper and resulted in delays. On August 17, 2012, Kinsley and TranSystems settled all claims related to this matter. As part of this settlement, TranSystems specifically retained the right to pursue Hughes based on its role in causing Kinsley's damages. (Doc. 1, ¶¶18-19.)

Cast against this factual background TranSystems brings two claims against Hughes. First, TranSystems alleges that Hughes breached its contract with the plaintiff by, in part, "[f]ailing to provide designs in accordance with the skill and care required of its profession." ( Id., ¶23.c.) In addition, TranSystems brings a claim of contractual indemnity against Hughes arising out of this allegedly deficient performance of professional services under the agreement between these parties. ( Id., ¶¶26-29.)

TranSystems filed this complaint against Hughes on August 6, 2014. (Doc. 1.) Following service of the complaint, Hughes moved to dismiss this complaint on October 10, 02014. (Doc. 10.) Citing the language of TranSystems' complaint, which couched this contractual dispute in terms of a breach resulting from Hughes "[f]ailing to provide designs in accordance with the skill and care required of its profession, " (Doc. 1, ¶23.c), Hughes contends in its motion to dismiss that the complaint should be dismissed because TranSystems had failed to timely file a certificate of merit with respect to these claims which alleged that Hughes failed to meet the level of skill and care required in the profession, as required under Pennsylvania state practice by Rule 1042.3 of the Pennsylvania Rules of Civil Procedure.

Within six days of the filing of this motion, on October 16, 2014, TranSystems responded to this motion to dismiss by filing a certificate of merit certifying "that an appropriate licensed professional has supplied a written statement to the undersigned that there is a basis to conclude that the care, skill or knowledge exercised or exhibited by Hughes Associates, Inc. in the above-captioned action in the practice relating to their contract with TranSystems Corporation that is the subject of the instant Complaint, fell outside acceptable professional standards and that such conduct was a cause in bringing about the harm." (Doc. 12.) Thus, the deficiency cited by Hughes in its motion to dismiss has now been fully addressed by TranSystems, and was addressed within 71 days of the filing of this lawsuit.

Notwithstanding this fact, the parties have continued to litigate this matter, in part because defendant Hughes contends that a dismissal of this action for failure to comply with Rule 1042.3 may, in turn, bar this complaint under the applicable statute of limitations. TranSystems contests this suggested assertion of the statute of limitations, and argues that this motion to dismiss should be denied in light of its current compliance with Rule 1042.3.

For the reasons set forth below, the motion to dismiss will be denied.

II. Discussion

A. Motion to Dismiss-Standard of Review

A motion to dismiss tests the legal sufficiency of a complaint. Rule 12(b)(6) of the Federal Rule of Civil Procedure provides for the dismissal of a complaint, in whole or in part, if the plaintiff fails to state a claim upon which relief can be granted. The moving party bears the burden of showing that no claim has been stated, Hedges v. United States, 404 F.3d 744, 750 (3d Cir. 2005), and dismissal is appropriate only if, accepting all of the facts alleged in the complaint as true, the plaintiff has failed to plead "enough facts to state a claim to relief that is plausible on its face, " Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). The facts alleged must be sufficient to "raise a right to relief above the speculative level." Twombly, 550 U.S. 544, 555. This requirement "calls for enough fact[s] to raise a reasonable expectation that discovery will reveal evidence" of necessary elements of the plaintiff's cause of action. Id. at 556. Furthermore, in order to satisfy federal pleading requirements, the plaintiff must "provide the grounds of his entitlement to relief, " which "requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Phillips v. County of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008) (brackets and quotation marks omitted) (quoting Twombly, 550 U.S. at 555).

In practice, consideration of the legal sufficiency of a complaint entails a three-step analysis: "First, the court must tak[e] note of the elements a plaintiff must plead to state a claim.' Iqbal, 129 S.Ct. at 1947. Second, the court should identify allegations that, because they are no more than conclusions, are not entitled to the assumption of truth.' Id. at 1950. 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.' Id." Santiago v. Warminster Tp., 629 F.3d 121, 130 (3d Cir. 2010).

As the court of appeals has observed: "The Supreme Court in Twombly set forth the plausibility' standard for overcoming a motion to dismiss and refined this approach in Iqbal. The plausibility standard requires the complaint to allege enough facts to state a claim to relief that is plausible on its face.' Twombly, 550 U.S. at 570, 127 S.Ct. 1955. A complaint satisfies the plausibility standard when the factual pleadings allow[] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.' Iqbal, 129 S.Ct. at 1949 (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955). This standard requires showing more than a sheer possibility that a defendant has acted unlawfully.' Id . A complaint which pleads facts merely consistent with' a defendant's liability, [] stops short of the line between possibility and plausibility of "entitlement of relief."'" Burtch v. Milberg Factors, Inc., 662 F.3d 212, 220-21 (3d Cir. 2011) cert. denied, 132 S.Ct. 1861, 182 L.Ed.2d 644 (U.S. 2012).

In considering a motion to dismiss, the court generally relies on the complaint, attached exhibits, and matters of public record. Sands v. McCormick, 502 F.3d 263, 268 (3d Cir. 2007). The court may also consider "undisputedly authentic document[s] that a defendant attached as an exhibit to a motion to dismiss if the plaintiff's claims are based on the [attached] documents." Pension Benefit Guar. Corp. v. White Consol. Indus., 998 F.2d 1192, 1196 (3d Cir. 1993). Moreover, "documents whose contents are alleged in the complaint and whose authenticity no party questions, but which are not physically attached to the pleading, may be considered." Pryor v. Nat'l Collegiate Athletic Ass'n, 288 F.3d 548, 560 (3d Cir. 2002); see also, U.S. Express Lines, Ltd. v. Higgins, 281 F.3d 382, 388 (3d Cir. 2002) (holding that "[a]lthough a district court may not consider matters extraneous to the pleadings, a document integral to or explicitly relied upon in the complaint may be considered ...


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