HUNTER ROBERTS CONSTRUCTION GROUP, LLC v. J. RIHL, INC. et al

Filing 21

OPINION. Signed by Judge Noel L. Hillman on 7/9/2013. (tf, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
HUNTER ROBERTS CONSTRUCTION
GROUP, LLC,
Plaintiff,
v.

CIVIL NO. 12-7751(NLH)(AMD)

J. RIHL, INC. d/b/a COSTA &
RIHL MECHANICAL CONTRACTORS,
INC., CITY MECHANICAL, INC.,
JOHN B. RIHL, THOMAS
APICELLA, SAMUEL F. ROSSI,
and MARK WASHINGTON.
Defendants.

OPINION

APPEARANCES:
JOSEPH A. BATTIPAGLIA
DUANE MORRIS LLP
30 SOUTH 17TH STREET
PHILADELPHIA, PA 19103-4196
On behalf of plaintiff
BRETT ADAM BERMAN
JASON C. MANFREY
MICHAEL G. MENKOWITZ
FOX ROTHSCHILD LLP
2000 MARKET STREET
10TH FLOOR
PHILADELPHIA, PA 19103
On behalf of defendants
HILLMAN, District Judge
This case involves claims subcontractors failed to perform
work and pay labor costs, materials, and union dues on construction
projects in New Jersey and Pennsylvania.

Presently before the

Court is the motion of the individual defendants to dismiss
plaintiff’s claims against them.

For the reasons expressed below,

the individual defendants’ motion will be granted.

I.

BACKGROUND

Plaintiff, Hunter Roberts Construction Group, LLC, is a
general contractor and construction manager who hires
subcontractors to supply materials and perform work on projects for
various customers.

Plaintiff entered into nine subcontracts with

defendants, J. Rihl, Inc. d/b/a Costa & Rihl Mechanical
Contractors, Inc. (“Costa”) and City Mechanical, Inc.,1 to perform
HVAC and plumbing work on several construction projects in New
Jersey and Philadelphia, Pennsylvania.

Plaintiff claims that it

made progress payments to defendants based on their representations
that they had paid material suppliers, laborers, subsubcontractors, and the union with the funds they received from
plaintiff.

Plaintiff claims that defendants, however, used the

progress payment funds for other purposes.

As a result, plaintiff

contends that suppliers and contractors have made claims against
plaintiff’s performance and payment bonds, issued by Liberty
Mutual, for defendants’ non-payment, and plaintiff is liable for
the amount Liberty Mutual pays on those bonds.

Additionally,

plaintiff claims that certain material suppliers and contractors
filed liens against the properties and funds for the monies owed to

1

Costa and City Mechanical failed to file an answer or
otherwise respond to plaintiff’s complaint, and pursuant to
plaintiff’s request under Fed. R. Civ. P. 55(a), the Clerk
entered default against these defendants. Plaintiff’s next step
under Rule 55(b) is to seek default judgment.
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them by defendants, and plaintiff will incur costs to have those
liens removed.

Moreover, plaintiff contends that it has directly

paid the suppliers and contractors that defendants failed to pay.
In addition to failing to make proper payments, plaintiff
claims that defendants improperly performed their work, delayed the
progress on the projects, failed to provide adequate staffing, and
failed to provide the necessary materials.

Plaintiff claims that

defendants refused to complete the projects, forcing plaintiff to
hire replacement contractors and purchase materials to complete
defendants’ work.
Based on these allegations, plaintiff has brought suit against
Costa and City Mechanical, as well as John Rihl, CEO of Costa and
Secretary and Treasurer of City Mechanical, Thomas Apicella, VicePresident of City Mechanical, Samuel Rossi, Secretary and CFO of
Costa, and Mark Washington, President of City Mechanical, making
the following claims: Count I (all defendants) - Breach of
Statutory Trust pursuant to Construction Trust Fund Act, N.J.S.A.
2(a):44-148; Count II (all defendants) - Fraudulent Inducement and
Negligent Misrepresentation; Count III (all defendants) - Breach of
New Jersey Consumer Fraud Act; Count IV (all defendants) Conversion; Count V (against Costa) - Breach of Subcontract; Count
VI (against City Mechanical) - Breach of Subcontract; Count VII Federal RICO (all defendants); Count VIII - (all defendants) New
Jersey RICO; Count IX - (individual defendants) - Individual
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liability for participation in wrongful corporate acts.
The individual defendants have moved to dismiss all of
plaintiff’s claims against them for failure to properly state
viable claims.

Plaintiff has opposed the individual defendants’

motion.
II. DISCUSSION
A.

Jurisdiction
Plaintiff’s asserts federal question jurisdiction under 28

U.S.C. § 1331 based on its claim brought under the federal RICO
statute.2
B.

Motion to Dismiss Standard
When considering a motion to dismiss a complaint for failure

to state a claim upon which relief can be granted pursuant to

2

Plaintiff also asserts that diversity jurisdiction pursuant
to 28 U.S.C. § 1332 alleging complete diversity of citizenship
between the parties and an amount in controversy exceeding
$75,000. The Court notes that the parties’ citizenship has not
been pleaded properly, and in the event that the federal RICO
claim is dismissed from the case, the Court may lack subject
matter jurisdiction over the action. See Zambelli Fireworks Mfg.
Co., Inc. v. Wood, 592 F.3d 412, 418 (3d Cir. 2010) (“Federal
courts are courts of limited jurisdiction, and when there is a
question as to our authority to hear a dispute, ‘it is incumbent
upon the courts to resolve such doubts, one way or the other,
before proceeding to a disposition on the merits.’”)(citing
Carlsberg Res. Corp. v. Cambria Sav. & Loan Ass'n., 554 F.2d
1254, 1256 (3d Cir. 1977)); id. (the citizenship of an LLC is
determined by the citizenship of each of its members); 28 U.S.C.
§ 1332(d)(2)(A); see also Tanzymore v. Bethlehem Steel Corp., 457
F.2d 1320, 1324 n.5 (3d Cir. 1972) (“A naked averment that one is
a ‘domiciliary’ or a ‘resident’ of a state is insufficient[;]”
citing Sun Printing & Publishing Ass’n. v. Edwards, 194 U.S. 377,
382, 24 S. Ct. 696, 697 (1904)).
4

Federal Rule of Civil Procedure 12(b)(6), a court must accept all
well-pleaded allegations in the complaint as true and view them in
the light most favorable to the plaintiff.
F.3d 347, 351 (3d Cir. 2005).

Evancho v. Fisher, 423

It is well settled that a pleading

is sufficient if it contains “a short and plain statement of the
claim showing that the pleader is entitled to relief.”
Civ. P. 8(a)(2).

Fed. R.

Under the liberal federal pleading rules, it is

not necessary to plead evidence, and it is not necessary to plead
all the facts that serve as a basis for the claim.
Gulf Oil Corp., 562 F.2d 434, 446 (3d Cir. 1977).

Bogosian v.
However,

“[a]lthough the Federal Rules of Civil Procedure do not require a
claimant to set forth an intricately detailed description of the
asserted basis for relief, they do require that the pleadings give
defendant fair notice of what the plaintiff’s claim is and the
grounds upon which it rests.”

Baldwin Cnty. Welcome Ctr. v. Brown,

466 U.S. 147, 149-50 n.3 (1984) (quotation and citation omitted).
A district court, in weighing a motion to dismiss, asks “‘not
whether a plaintiff will ultimately prevail but whether the
claimant is entitled to offer evidence to support the claim.’”
Bell Atlantic v. Twombly, 550 U.S. 544, 563 n.8 (2007) (quoting
Scheuer v. Rhoades, 416 U.S. 232, 236 (1974)); see also Ashcroft v.
Iqbal, 556 U.S. 662, 684 (2009) (“Our decision in Twombly expounded
the pleading standard for ‘all civil actions’ . . . .”); Fowler v.
UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009) (“Iqbal . . .
5

provides the final nail-in-the-coffin for the ‘no set of facts’
standard that applied to federal complaints before Twombly.”).
Following the Twombly/Iqbal standard, the Third Circuit has
instructed a two-part analysis in reviewing a complaint under Rule
12(b)(6).

First, the factual and legal elements of a claim should

be separated; a district court must accept all of the complaint's
well-pleaded facts as true, but may disregard any legal
conclusions.
1950).

Fowler, 578 F.3d at 210 (citing Iqbal, 129 S. Ct. at

Second, a district court must then determine whether the

facts alleged in the complaint are sufficient to show that the
plaintiff has a “‘plausible claim for relief.’”
Iqbal, 129 S. Ct. at 1950).

Id. (quoting

A complaint must do more than allege

the plaintiff's entitlement to relief.

Id.; see also Phillips v.

Cnty. of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008) (stating that
the “Supreme Court's Twombly formulation of the pleading standard
can be summed up thus: ‘stating . . . a claim requires a complaint
with enough factual matter (taken as true) to suggest’ the required
element.

This ‘does not impose a probability requirement at the

pleading stage,’ but instead ‘simply calls for enough facts to
raise a reasonable expectation that discovery will reveal evidence
of’ the necessary element”).

A court need not credit either “bald

assertions” or “legal conclusions” in a complaint when deciding a
motion to dismiss.

In re Burlington Coat Factory Sec. Litig., 114

F.3d 1410, 1429-30 (3d Cir. 1997).
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The defendant bears the burden

of showing that no claim has been presented.

Hedges v. U.S., 404

F.3d 744, 750 (3d Cir. 2005) (citing Kehr Packages, Inc. v.
Fidelcor, Inc., 926 F.2d 1406, 1409 (3d Cir. 1991)).
Finally, a court in reviewing a Rule 12(b)(6) motion must only
consider the facts alleged in the pleadings, the documents attached
thereto as exhibits, and matters of judicial notice.

S. Cross

Overseas Agencies, Inc. v. Kwong Shipping Grp. Ltd., 181 F.3d 410,
426 (3d Cir. 1999).

A court may consider, however, “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).

If any other

matters outside the pleadings are presented to the court, and the
court does not exclude those matters, a Rule 12(b)(6) motion will
be treated as a summary judgment motion pursuant to Rule 56.

Fed.

R. Civ. P. 12(b).
C.

Analysis
In their motion to dismiss, the individual defendants argue

that plaintiff has failed to sufficiently plead any of its claims
against them.

The individual defendants argue that not only does

plaintiff fail to meet the heightened pleading standard for fraudbased claims required by Federal Civil Procedure Rule 9(b),
plaintiff has not even met the more basic requirements of Rule

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The Court agrees.3

8(a).

Federal Civil Procedure Rule 8(a) provides that a “pleading
that states a claim for relief must contain . . . a short and plain
statement of the claim showing that the pleader is entitled to
relief.”

Fed. R. Civ. P. 8(a)(2).

With regard to claim involving

fraud, the Rules require that “a party must state with
particularity the circumstances constituting fraud or mistake,”
although “[m]alice, intent, knowledge, and other conditions of a
person's mind may be alleged generally.”

Fed. R. Civ. P. (9)(b).

Concomitant with these Rules, the Twombly/Iqbal pleading standard,
as detailed above, requires that a claim must be pled with enough
factual matter to suggest the required elements necessary to prove

3

Because the Court finds that plaintiff’s entire complaint
fails to properly state its claims against the individual
defendants, the Court will not set forth the legal elements for
proving each of those claims. The Court notes, however, that
aside from its federal RICO claim, plaintiff’s claims are based
on New Jersey law. Neither side challenges the application of
New Jersey law, despite plaintiff’s location in New York, and the
defendants’ and projects’ locations in New Jersey and
Pennsylvania. The Court does not find cause to sua sponte
challenge the application of New Jersey law at this time. See
Schiavone Const. Co. v. Time, Inc., 735 F.2d 94 (3d Cir. 1984)
(citation omitted) (declining to sua sponte determine whether the
application of New Jersey law, agreed to by the parties, was
proper); see also Owens v. American Hardware Mut. Ins. Co., 2012
WL 6761818, 3 (D.N.J. 2012) (citing Aetna Sur. and Cas. Co. v.
Sacchetti, 956 F. Supp. 1163, 1168 (D.N.J. 1996) (citing Klaxon
v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941)) (explaining
that when a federal court sits in diversity jurisdiction, the
court must apply the law of the state in which it sits, including
the choice of law rules of the forum state; the Court must
therefore look to New Jersey’s choice of law rules to determine
what law a New Jersey court would apply).
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that claim.
In this case, plaintiff makes allegations against all
defendants collectively, without making any allegations
specifically as to the individually defendants.

Plaintiff alleges

that “Defendants” or “Costa and City Mechanical” acted or failed to
act in various ways, resulting in contract breaches, fraud, and
RICO violations.

Other than naming the individual defendants in

the caption and in the listing of the parties involved, the
complaint fails to articulate the violative conduct allegedly
perpetrated by the four individual defendants, merely naming them
as principals of Costa and City Mechanical.
Even though plaintiff is not required to plead its claims with
intricate detail, Rule 8(a), Rule 9(b), and Twombly/Iqbal all
require plaintiff to provide “some specificity” as to which
defendant committed what harm, and how he did so.

See, e.g.,

Twombly, 550 U.S. at 558 (insisting “upon some specificity in
pleading before allowing a potentially massive factual controversy
to proceed” to an “inevitably costly and protracted discovery
phase”).

This is particularly important in cases involving claims

of fraud and conspiracy.

See, e.g., In re Insurance Brokerage

Antitrust Litigation, 618 F.3d 300, 369-70 (3d Cir. 2010) (citation
omitted) (explaining that “a RICO claim must plead facts plausibly
implying the existence of an enterprise with the structural
attributes identified in Boyle: a shared ‘purpose, relationships
9

among those associated with the enterprise, and longevity
sufficient to permit these associates to pursue the enterprise's
purpose’”); Frederico v. Home Depot, 507 F.3d 188, 200 (3d Cir.
2007) (citations omitted) (“Pursuant to Rule 9(b), a plaintiff
alleging fraud must state the circumstances of the alleged fraud
with sufficient particularity to place the defendant on notice of
the ‘precise misconduct with which [it is] charged.’

To satisfy

this standard, 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.”).
Moreover, in order to hold a corporate officer personally
liable for a tort committed by the corporation, he must be
sufficiently involved in the commission of the tort.
GSI Consultants, Inc., 788 A.2d 268, 272 (N.J. 2002).

Saltiel v.
Under this

“participation theory” of personal liability, a “predicate to
liability is a finding that the corporation owed a duty of care to
the victim, the duty was delegated to the officer and the officer
breached the duty of care by his own conduct.”

Id.

Here, plaintiff has not expressed which individual defendant
committed what wrong.

Thus, when evaluating plaintiff’s complaint

under the motion to dismiss standard, the Court cannot accept the
“allegations in the complaint as true” regarding John Rihl, Thomas
Apicella, Samuel Rossi, and Mark Washington, because the complaint
is devoid of any allegations specifically concerning Rihl,
10

Apicella, Rossi, and Washington.

Without any factual allegations,

the Court cannot then determine whether the individual defendants
were “sufficiently involved” in the torts alleged by plaintiff so
that plaintiff has stated a “plausible claim for relief.”

The lack

of specificity of plaintiff’s claims against the individual
defendants is fatal to its claims.
CONCLUSION
Accordingly, for the reasons expressed above, the individual
defendants’ motion to dismiss plaintiff’s claims against them must
be granted.

Plaintiff’s claims against the individual defendants

are dismissed without prejudice, to plaintiff’s right to file an
amended complaint consistent with the Federal Rules of Civil
Procedure.4
An appropriate Order will be entered.

Date: July 9, 2013
At Camden, New Jersey

s/ Noel L. Hillman
NOEL L. HILLMAN, U.S.D.J.

4

Plaintiff states in its opposition brief that if its
complaint is dismissed against the individual defendants, it
should be afforded the opportunity to amend. Except in civil
rights cases, however, a court is not obligated to afford a
plaintiff the opportunity to amend his complaint, either sua
sponte or following the dismissal of the complaint pursuant to a
motion to dismiss. Fletcher-Harlee Corp. v. Pote Concrete
Contractors, Inc., 482 F.3d 247, 251 (3d Cir. 2007). Plaintiff
must follow Federal Civil Procedure Rule 15.
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