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Godfrey v. Upland Borough

United States District Court, E.D. Pennsylvania

March 31, 2017

DENISE M. MARUSCO GODFREY AND BYRON J. GODFREY, Plaintiffs,
v.
UPLAND BOROUGH, et al., Defendants.

          MEMORANDUM OPINION

          Rufe, J.

         Before the Court are a slew of motions concerning the Second Amended Complaint of Plaintiffs Denise M. Marusco Godfrey and Byron J. Godfrey. The allegations underlying this case are fairly straightforward: Plaintiffs, husband and wife, are property owners who claim that a sewage line was surreptitiously installed on their property and destroyed its value, and they seek to recover for that loss. But pleading who should be held liable under what theories has proved elusive for Plaintiffs, and so the Court is confronted, as it was with the First Amended Complaint, with a series of motions by Defendants (seeking dismissal, among other things) and a request by Plaintiffs to amend their complaint. For the reasons set forth below, Defendants' motions are granted in part and denied in part, and Plaintiffs will be given a final opportunity to amend their complaint.

         I. BACKGROUND

         A. Underlying Facts

         The Court previously described Plaintiffs' Amended Complaint as follows:

Plaintiffs . . . allege that Defendants Catania Engineering Associates, Inc. (“Catania”), Delaware County Regional Water Control Authority (“DELCORA”), and Upland Borough (“Upland”) conspired to obtain an illegal easement and install water control infrastructure on Plaintiffs' property, causing severe damage to the premises. Plaintiffs also allege that Defendants engaged in fraud to conceal the cause of the damage, and retaliated against Plaintiffs when Plaintiffs discovered the easement and sought redress.[1]

         The allegations in Plaintiffs' Second Amended Complaint are substantially similar.[2]Beginning in 2010, Plaintiffs lived in a house in Upland Borough, Delaware County, which was transferred to them in 2013 by Mrs. Godfrey's sister, Deana L. Marusco, who had owned the property since 1990.[3] Unbeknownst to Plaintiffs or Ms. Marusco, DELCORA had obtained an easement to install and use water control infrastructure on the property in 1991; the easement bore the seal of “Charles J. Catania, ” then-owner of Defendant Catania, as well as what appeared to be Ms. Marusco's signature.[4] Plaintiffs allege that this was a fraud, and that Ms. Marusco's signature was forged by DELCORA or Catania.[5]

         After obtaining the easement, DELCORA and Upland Borough installed storm and sewage-water systems on the property, resulting in high water pressure and flooding.[6] The flooding was manageable until 2004 or 2005, when a plumber broke a valve in the basement and municipal sewage began to flow onto the premises in greater volumes.[7] By the time Plaintiffs moved to the property in 2010, the problems were more severe-the road in front of the premises had been damaged, and on August 14, 2011, “water gushed like a fountain from manholes” in front of the house.[8] On October 1, 2011, Mr. Godfrey complained about the issue at an Upland Borough Council meeting, but was removed from the podium after a few minutes.[9]

         June 2013 marked a turning point for the worse. Another flooding incident occurred, during which “over 12 shop vacs” of storm water and sewage water flooded the premises.[10]Plaintiffs made increasing efforts to address the problems, including contacting Mr. Catania and Edward Mitchell, the Upland Borough Council President, to no avail.[11] Upland's response was a letter to Mrs. Godfrey stating that the problem was caused by a crack in the lateral sewer line on the premises and requiring her to obtain a certification that the sewer line was in working order.[12]

         This, Plaintiffs allege, was a ruse: Defendants knew the problems were caused by the infrastructure they had installed and not by a crack in Plaintiffs' own sewer line, but they maintained that Plaintiffs were to blame in order to cover up their own misdeeds, and they undertook an increasingly nefarious campaign of retaliation against Plaintiffs for attempting to hold them accountable.[13] This culminated with Upland Borough bringing charges against Mrs. Godfrey in October 2013, for failing to obtain a “Certificate of Lateral” for the premises under Upland Borough Ordinance § 150-charges that Plaintiffs allege were baseless, as that ordinance only applies to buyers and sellers of property, not to grantees such as Mrs. Godfrey.[14] After a year of on-and-off proceedings, Mrs. Godfrey was found not guilty.[15]

         Meanwhile, the problems worsened. There were more fountainous outbursts of sewer water, the property continued to suffer damage, and a veritable revolving door of experts confirmed that the issues were caused by the water-control infrastructure installed by Defendants and could not be resolved while it remained in place.[16] After more futile attempts by the Godfreys to get Upland Borough to address the problems-including one incident in which the Upland Borough Council adjourned a meeting early to avoid giving Mrs. Godfrey a platform to air her grievances-Upland Borough condemned the property, leaving Plaintiffs with a valueless, sewage-logged house that they could not sell or live in.[17]

         B. Procedural History

         Plaintiffs filed suit and, after amending their complaint, asserted five claims: (1) First Amendment retaliation against Upland Borough; (2) fraud against all Defendants; (3) malicious prosecution against Upland Borough; (4) violation of the Fourteenth Amendment's Due Process Clause against all Defendants; and (5) a citizen suit under the Clean Water Act (“CWA”) against DELCORA.[18] Not all of these claims survived the first round of briefing. The Court dismissed the fraud and malicious prosecution claims against Upland Borough, because, as a municipality, Upland Borough could not be held liable for intentional torts under Pennsylvania law. The Court also dismissed the CWA claim against DELCORA as barred by a consent decree between DELCORA, the Environmental Protection Agency (“EPA”), and the Pennsylvania Department of Environmental Protection (“PADEP”).[19] The Court allowed Plaintiffs to proceed with the remainder of their claims and ordered them to file a Second Amended Complaint.[20]

         In the Second Amended Complaint, Plaintiffs attempted to remedy the defects in their fraud, malicious prosecution, and CWA claims. To that end, Plaintiffs named five individual employees or officials of Upland Borough, rather than the Borough itself, as Defendants for their fraud and malicious prosecution claims: Thomas Kennedy, Parker Ferguson, Leyland Hunter, Edward Mitchell, and Robert O'Connor. In an attempt to revive their CWA claim, Plaintiffs also alleged that the consent decree did not adequately address the CWA violations for which they sought redress.

         The Upland Defendants (the municipality and its individual officers and employees) then moved to dismiss and for a more definite statement under Federal Rule of Civil Procedure 12(e). DELCORA also moved to dismiss.[21] Catania filed only a motion to strike Plaintiffs' request for counsel fees in association with their fraud claim, and as Plaintiffs have agreed not to seek such fees, that motion will be dismissed as moot.[22]

         In response, Plaintiffs again sought leave to amend their complaint to address Defendants' arguments, and attached a proposed Third Amended Complaint to their motion.[23]Plaintiffs also asked the Court to issue a sweeping order prohibiting Defendants from filing “any more motions to dismiss or to strike.”[24] DELCORA opposed Plaintiffs' motion to amend; Catania did not, but took issue with Plaintiffs' request that Defendants be barred from moving to dismiss or to strike; and the Upland Defendants did not respond.

         II. LEGAL STANDARD

         Under Federal Rule of Civil Procedure 12(e), “[a] party may move for a more definite statement of a pleading to which a responsive pleading is allowed but which is so vague or ambiguous that the party cannot reasonably prepare a response.” “Motions for a more definitive statement are generally disfavored, and are used to provide remedies for unintelligible pleadings rather than as correction for lack of detail.”[25] “Rule 12(e) is directed to the rare case where because of the vagueness or ambiguity of the pleading the answering party will not be able to frame a responsive pleading.”[26] “When presented with an appropriate Rule 12(e) motion . . . the district court shall grant the motion and demand more specific factual allegations from the plaintiff concerning the conduct underlying the claims for relief.”[27]

         Under Federal Rule of Civil Procedure 12(b)(6), dismissal for failure to state a claim upon which relief can be granted is appropriate where a plaintiff's “plain statement” lacks enough substance to show that he is entitled to relief.[28] In determining whether a motion to dismiss should be granted, the court must consider only those facts alleged in the complaint, accepting the allegations as true and drawing all logical inferences in favor of the non-moving party.[29] Courts are not, however, bound to accept as true legal conclusions couched as factual allegations.[30] Something more than a mere possibility of a claim must be alleged; a plaintiff must allege “enough facts to state a claim to relief that is plausible on its face.”[31] The complaint must set forth “direct or inferential allegations respecting all the material elements necessary to sustain recovery under some viable legal theory.”[32]

         Under Federal Rule of Civil Procedure 15(a)(2), leave to amend the complaint should be “freely give[n] when justice so requires.” Amendment may be denied as futile when “the complaint, as amended, would fail to state a claim upon which relief could be granted, ” and is “assessed using the same standard applied in the face of a motion to dismiss under Rule 12(b)(6).”[33]

         III. ANALYSIS

         A. The Upland Defendants' Motions

         1. Motion for a More Definite Statement

         The Upland Defendants move for a more definite statement, arguing that the Second Amended Complaint fails to identify the Defendants against which each cause of action is brought, and ask that the Court order Plaintiffs “to specifically address this issue to avoid any confusion.”[34] This request will be denied. The core facts underlying Plaintiffs' claims are more or less comprehensible despite their haphazard presentation, and the ad damnum clause for each claim lists the Defendants against which that claim is brought. That is sufficient to pass Rule 12(e)'s low bar.[35] To resolve any lingering confusion regarding Plaintiffs' causes of action, only Defendants named in the ad damnum clause following each claim in the Third Amended Complaint will be required to respond to that claim.

         2. Motion to Dismiss

         The Upland Defendants also move to dismiss Plaintiffs' fraud and malicious prosecution claims for failure to state a claim.[36]

         a. Fraud

         The individual Upland Defendants argue that Plaintiffs fail to allege the elements of a fraud claim under Pennsylvania law, which are: “(1) a misrepresentation, (2) material to the transaction, (3) made falsely, (4) with the intent of misleading another to rely on it, (5) justifiable reliance resulted, and (6) an injury proximately caused by the reliance.”[37] Defendants reason as follows: the only misrepresentation Plaintiffs identify is the 1991 fraudulent easement, and Plaintiffs have not alleged that any individual Upland Defendants helped obtain the easement; thus, none of them made a material misrepresentation that Plaintiffs relied upon, and they cannot be held liable for fraud. That argument is compelling insofar as it relates to the 1991 easement, as Plaintiffs do not allege that any of the individual Upland Defendants were involved in its procurement.

         However, Plaintiffs allege that “[t]here were [two] frauds”-the first being the forged easement, and the second being the “attempts to convince Plaintiffs . . . that the sewage water and storm water on their premises was the fault of the laterals or other pipes, ” when in reality it was due to the infrastructure installed by Defendants.[38] In other words, Defendants allegedly defrauded Plaintiffs by misleading them as to the source of the problems, which prevented Plaintiffs from addressing the true cause of the flooding and caused Plaintiffs to incur out-of-pocket losses as they paid experts to examine and attempt to repair their sewer line. These allegations differ somewhat from a run-of-the-mill fraud claim, but they establish the elements of fraud, including a misrepresentation, reasonable reliance, and damages. Plaintiffs' fraud claim is not, at this stage, barred as a matter of law against any Upland Defendant.[39]

         The Court must also determine whether Plaintiffs have stated a fraud claim against the individual Upland Defendants, [40] who argue that Plaintiffs' fraud allegations against them violate Rule 9(b)'s requirement that fraud be pleaded with particularity.[41] “To satisfy [Rule 9(b)], the plaintiff must plead or allege the date, time and place of the alleged fraud or otherwise inject precision or some measure of substantiation into a fraud allegation.”[42]

         i. Thomas Kennedy

         Plaintiffs allege that Mr. Kennedy is a plumber for Upland Borough, and that he played a central role in a scheme to defraud Plaintiffs by representing on several specific dates that Plaintiffs' problems were caused by a crack in their sewer line despite his knowledge to the contrary.[43] Plaintiffs also claim that Mr. Kennedy had pictures showing the alleged crack (which would have tended to prove or disprove that the crack indeed existed), and that he refused to turn them over to Plaintiffs.[44] These allegations are sufficient to state a fraud claim against Mr. Kennedy, as they identify his role in the scheme and the details of his involvement.

         ii. Parker Ferguson

         Plaintiffs allege that Mr. Ferguson is a building inspector for Upland Borough, and that he conspired with Mr. Kennedy and the rest of the Upland Defendants to defraud Plaintiffs regarding the cause of the flooding.[45] Although this scheme may be plausible, Plaintiffs' Second Amended Complaint is bereft of details regarding Mr. Ferguson's involvement in it. Unlike Mr. Kennedy, Plaintiffs have not provided any specific information regarding Mr. Ferguson's misconduct, aside from the vague allegation that he “tried to convince Plaintiffs the problem was on their property, not outside it.”[46] Plaintiffs must provide more particulars regarding Mr. Ferguson if he is to remain in the case, and the fraud claim against him will be dismissed without prejudice.

         iii. Edward Mitchell

         Plaintiffs allege that Mr. Mitchell was the president of the Upland Borough Council, and that he too was part of the conspiracy to defraud Plaintiffs.[47] Mr. Mitchell is in the same boat as Mr. Ferguson-his involvement in the scheme is plausible, but there are too few details in the Second Amended Complaint to sustain a fraud claim against him. The fraud claim against Mr. Mitchell will also be dismissed without prejudice.

         iv. Leyland Hunter

         Plaintiffs allege that Mr. Hunter was a council member for Upland Borough, and that his signature appeared on an orange sign that was placed on Plaintiffs' premises in 2014 and stated that their house was unfit for occupancy.[48] That is not enough to sustain a fraud claim, as it does not show that Mr. Hunter misled Plaintiffs in any way. The other allegations against Mr. Hunter, like those against Mr. Mitchell and Mr. Parker, are vague and conclusory. The fraud claim against Mr. Hunter will also be dismissed without prejudice.

         b. Malicious Prosecution

         Plaintiffs assert a state-law malicious prosecution claim against the individual Upland Defendants based on Mrs. Godfrey's prosecution under a Borough ordinance for failure to obtain a Certificate of Lateral.[49] Under Pennsylvania law, a malicious prosecution claim requires: “(1) the institution of legal proceedings against the plaintiff, (2) without probable cause, (3) with malice, and (4) the proceedings terminated in favor of the plaintiff.”[50]

         Defendants assert that this claim fails because the charges against Mrs. Godfrey were not criminal in nature, but the ordinance under which they were brought suggests that they were. Upland Borough Ordinance § 150 provides that violations will be punished by fines, and that a violator who fails to pay any such fine will “be sentenced to imprisonment for a term not to exceed 30 days.”[51] That makes the ordinance a “Penal Law” under the Pennsylvania Rules of Criminal Procedure, which in turn renders a proceeding to enforce the ordinance a “Criminal Proceeding.”[52] And although Plaintiffs do not address Defendants' argument, they have consistently alleged that Mrs. Godfrey was “prosecuted” and ultimately found “not guilty of all charges, ” which suggests a criminal proceeding.[53] In the absence of any compelling argument regarding why the proceedings should be treated as civil, rather than criminal, Plaintiffs may proceed with their malicious prosecution claim.

         Defendants also argue that because only Mr. Hunter signed the citation, the malicious prosecution claim should be dismissed against the other Defendants. However, “[l]iability for malicious prosecution can also attach when [a] defendant influences a third party to initiate the proceedings.”[54] Here, Plaintiffs allege that the individual Upland Defendants all worked together to gin up the baseless charges against Mrs. Godfrey, which is sufficient to establish a malicious prosecution claim against the individual Upland Defendants. The motion to dismiss will be denied as to this claim.

         B. DELCORA's Motion to Dismiss

         DELCORA argues: (1) that Plaintiffs' fraud claim should be dismissed as barred by the Pennsylvania Tort Claims Act and Plaintiffs should not be granted leave to amend to add as Defendants individual employees and officers of DELCORA who would not be protected by that statute; (2) that the Court lacks jurisdiction over Plaintiffs' Due Process claim under the Younger abstention doctrine; and (3) that Plaintiffs' CWA claim is barred by a consent decree.

         1. Fraud Claim

         In its motion to dismiss the Second Amended Complaint, DELCORA argued that Plaintiffs' fraud claim is barred by the Pennsylvania Tort Claims Act, which provides municipal authorities with immunity for intentional torts.[55] In response, Plaintiffs jettisoned their fraud claim against DELCORA and now seek to amend their complaint to add a fraud claim against three DELCORA employees: Joseph Centrone, Robert A. Powell, and John Sucher. DELCORA, Mr. Centrone, Mr. Powell, and Mr. Sucher all oppose this amendment as untimely. Because there is no dispute that the statute of limitations expired before Plaintiffs sought to add the three individual DELCORA Defendants, the primary issue is whether the new fraud claim against them relates back to Plaintiffs' original, timely Complaint.[56] The individual DELCORA Defendants also argue that even if the claim against them is not time-barred, Pennsylvania law provides them with immunity from Plaintiffs' fraud claim.

         a. Relation Back

         Plaintiffs' fraud claim would be time-barred under Pennsylvania law, which “does not permit a plaintiff to add a new party after the expiration of the applicable statute of limitations.”[57] Defendants argue that this dooms Plaintiffs' claim, reasoning that because the Court exercises supplemental jurisdiction over Plaintiffs' state-law fraud claim, the Court must apply Pennsylvania law to determine whether relation back is appropriate.[58] That is incorrect. “As the Third Circuit has explained . . . the question of relation back is procedural and therefore properly analyzed according to federal practice.”[59] The Federal Rules of Civil Procedure thus govern the Court's analysis.

         Federal Rule of Civil Procedure 15(c)(1) provides that an amended pleading relates back to the date of the original pleading when:

(A) the law that provides the applicable statute of limitations allows relation back;
(B) the amendment asserts a claim or defense that arose out of the conduct, transaction, or occurrence set out-or attempted to be ...

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