GRASSO FOODS, INC. v. WYNN ENVIRONMENTAL SALES COMPANY

Filing 32

OPINION. Signed by Judge Renee Marie Bumb on 7/18/2018. (tf, )

[Docket No. 29]
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
CAMDEN VICINAGE

GRASSO FOODS, INC.,
Plaintiff,

Civil No. 17-6430 (RMB/AMD)

v.

OPINION

WYNN ENVIRONMENTAL SALES CO.,
Defendant.

APPEARANCES:
SHERMAN, SILVERSTEIN, KOHL, ROSE & PODOLSKY, P.A.
By: Jeffrey P. Resnick, Esq.
308 Harper Drive, Suite 200
Moorestown, New Jersey 08057
Attorneys for Plaintiff
MORRIS WILSON, P.C.
By: Seth D. Wilson, Esq.
527 Plymouth Road, Suite 416
Plymouth Meeting, Pennsylvania 19462
Attorneys for Defendant

BUMB, UNITED STATES DISTRICT JUDGE:
Plaintiff, Grasso Foods, Inc. (“Grasso”) brings this suit
alleging that it purchased a defective commercial mist
collection system from Defendant Wynn Environmental Sales
Company (“Wynn Environmental”).

The Amended Complaint asserts

claims for: (1) breach of contract, (2) breach of warranty, (3)
unjust enrichment, (4) breach of the covenant of good faith and

1

fair dealing, and (5) fraud in the inducement of the contract. 1
Wynn Environmental brings the instant Motion to Dismiss pursuant
to Fed. R. Civ. P. 12(b)(6) seeking dismissal of only the breach
of express warranty, unjust enrichment, and fraud in the
inducement claims.

For the reasons stated herein, the motion

will be denied.
I.

FACTUAL BACKGROUND
The Amended Complaint alleges the following facts.

On

October 14, 2014, Grasso’s “representative,” John Maul, emailed
Wynn Environmental inquiring about purchasing “a collection
system designed to catch and eliminate a juice mist.”
Compl. ¶ 11) 2

(Amend.

Just over a week later, on October 22, 2014, “Dick

Wynn of Wynn Environmental,” (Id. ¶ 12) 3 came to “inspect”
Grasso’s plant in Swedesboro, New Jersey. (Id. ¶ 17)

1

The Court exercises diversity of citizenship subject
matter jurisdiction pursuant to 28 U.S.C. § 1332. The parties
are alleged to be citizens of different states and the amount in
controversy is alleged to exceed the statutory minimum.
2

Grasso “slices and individually freezes sweet bell
peppers for the food industry.” (Amend. Compl. ¶ 7)
Presumably, the “juice mist” is a product of the pepper slicing
process.
3

The Amended Complaint does not provide formal titles for
either Mr. Maul or Mr. Wynn. Nor does the Amended Complaint
explain what either person’s duties were during the relevant
time period. The Amended Complaint suffers from other
deficiencies as discussed infra.
2

The following day, October 23rd, Wynn emailed Maul,
allegedly stating “in part,” “I have done some homework and find
that the conductivity of your sorter water should be more than
adequate to be collected with our Smog Hog Industrial,
electrostatic precipitators.”

(Amend. Compl. ¶ 18)

Approximately three months later, on January 26, 2015, Wynn
allegedly stated, in an email to Maul, “[w]e have come up with a
system that will be environmentally friendly to your operation .
. . and rated to collect all of the generated mist; returning
the filtered air back into the plant free of mist.”

(Id. ¶ 19)

On April 14, 2015, Wynn allegedly emailed Maul a “‘formal
proposal.’” (Amend. Compl. ¶ 21)

The Amended Complaint fails to

plead any facts whatsoever concerning the contents of the formal
proposal, or even what the “proposal” was for. 4

According to

Grasso, however, it “agreed in April 2015 to purchase” from Wynn
Environmental “a ‘turn key’ air infiltration system” recommended

4

The Amended Complaint suggests that the parties
contemplated that Wynn would not only sell Grasso a collection
system, but that Wynn would also “ship” and “install” the system
(Amend. Compl. ¶ 23), although Wynn Environmental allegedly
“hired” someone else to install the system. (Id. ¶ 37) It is
not clear whether or not the “formal proposal” included the
sale, shipping, and installation of the collection system.
The Amended Complaint further alleges, “Defendant also
provided a June 17, 2015 Invoice which sets forth the terms of
an agreement.” (Amend. Compl. ¶ 22) Here, again, the
allegations of the Amended Complaint are exceedingly vague. The
Amended Complaint does not allege the contents of the invoice,
or what the invoice was for.

3

by Wynn Environmental.

(Amend. Compl. ¶ 30)

The Amended

Complaint does not allege the type or model of air infiltration
system Grasso ultimately purchased. 5

Nor does the Amended

Complaint allege when the system was installed.
The foregoing deficiencies aside, the Amended Complaint
next pleads that “[u]pon installation, the system recommended
and sold by Wynn Environmental did not work properly.”
Compl. ¶ 31)

(Amend.

In this regard, the Amended Complaint alleges the

following “problems” with the system: (1) “the noise of the
blowers”; (2) “improper draining of the units”; (3) “improper
sealing of the units”; and (4) “damaged mesh filters.”
33, 35)

(Id. ¶¶

Grasso also vaguely alleges that the “air infiltration

system never worked as it should have.”

(Id. ¶ 36)

Sometime in February, 2017, Grasso Foods allegedly “sought
to return the system and demanded a return of the monies it paid
to Wynn Environmental.”

(Amend. Compl. ¶ 38)

Wynn

Environmental allegedly declined to accept the return, proposing
instead, “a design change to the system” for a “‘fair price.’”
(Id. ¶ 41)

The Amended Complaint does not allege what the

proposed design change was, nor how it might, or might not,

5

The Court assumes that an “air infiltration system”
(Amend. Compl. ¶ 30) is the same thing as a “mist collection
system.” (Id. ¶ 11) The Amended Complaint does not plead
whether Grasso purchased a “Smog Hog Industrial electrostatic
precipitator,” which the Amended Complaint appears to indicate
is a mist collection system. (Id. ¶ 18)
4

address Grasso’s problems with the system at issue.

Rather, the

Amended Complaint merely alleges that “the suggested design
change would not affect the performance of the system.”

(Id. ¶

42)
This lawsuit followed.

As set forth above, the Amended

Complaint asserts claims for (1) breach of contract, (2) breach
of warranty, (3) unjust enrichment, (4) breach of the covenant
of good faith and fair dealing, and (5) fraud in the inducement
of the contract.

Wynn Environmental moves to dismiss (2), (3)

and (5).
II.

LEGAL STANDARD
To withstand a motion to dismiss under Federal Rule of

Civil Procedure 12(b)(6), “a complaint must contain sufficient
factual matter, accepted as true, to ‘state a claim to relief
that is plausible on its face.’”

Ashcroft v. Iqbal, 556 U.S.

662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550
U.S. 544, 570 (2007)).

“A claim has facial plausibility when

the plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable for
the misconduct alleged.”

Id. at 663.

“[A]n unadorned, the

defendant-unlawfully-harmed me accusation” does not suffice to
survive a motion to dismiss.

Id. at 678.

“[A] plaintiff’s

obligation to provide the ‘grounds’ of his ‘entitle[ment] to
relief’ requires more than labels and conclusions, and a

5

formulaic recitation of the elements of a cause of action will
not do.”

Twombly, 550 U.S. at 555 (quoting Papasan v. Allain,

478 U.S. 265, 286 (1986)).
In reviewing a plaintiff’s allegations, a district should
conduct a three-part analysis:
First, the court must take note of the elements a
plaintiff must plead to state a claim. Second, the
court should identify allegations that, because they
are no more than conclusions, are not entitled to
the assumption of truth. Third, when there are wellpleaded factual allegations, a court should assume
their veracity and then determine whether they
plausibly give rise to an entitlement for relief.
Malleus v. George, 641 F.3d 560, 563 (3d Cir. 2011) (internal
citations, quotations, and modifications omitted) (quoting
Iqbal, 556 U.S. at 675, 679).
Rule 12(b)(6) requires the district court to “accept as
true all well-pled factual allegations as well as all reasonable
inferences that can be drawn from them, and construe those
allegations in the light most favorable to the plaintiff.”
Bistrian, 696 F.3d at 358 n. 1.

Only the allegations in the

complaint and “matters of public record, orders, exhibits
attached to the complaint and items appearing in the record of
the case” are taken into consideration.

Oshiver v. Levin,

Fishbein, Sedran & Berman, 38 F.3d 1380, 1384 n. 2 (3d Cir.
1994) (citing Chester Cty. Intermediate Unit. v. Pennsylvania
Blue Shield, 896 F.2d 808, 812 (3d Cir. 1990)).

6

A court may

also “consider 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 Ben.

Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196
(3d Cir. 1993).
III. ANALYSIS
A. Breach of Express Warranty
In Count II of the Amended Complaint, entitled “Breach of
Warranty,” Grasso alleges, “Wynn Environmental expressly or
impliedly warranted that its system, which it manufactured,
sold, installed and/or supplied was merchantable and was
reasonably fit for Grasso Foods’ use.”

(Amend. Compl. ¶ 53)

Wynn Environmental moves to dismiss only the express warranty
claim (i.e., not the implied warranty claim), asserting that
“Grasso . . . fails to identify the terms of any express
warranty.”

(Moving Brief, p. 3)

Grasso disagrees, asserting

that the Amended Complaint quotes “various statements” which
Wynn Environmental allegedly made on its website and in “various
emails” to Grasso (see Amend. Compl. ¶¶ 10, 12, 18, 19, 20), and
that these factual allegations are sufficient, at the pleadings
stage, to put Wynn Environmental on notice of the nature of its

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breach of express warranty claim.

Wynn Environmental makes no

argument in reply. 6
While the Amended Complaint’s allegations, as a whole, are
vague, and basic contextual information is lacking in places,
the Court holds that Grasso has just barely pleaded sufficient
facts to put Wynn Environmental on notice as to the nature of
the breach of express warranty claim.

For example, the Amended

Complaint alleges that “Mr. Wynn represented [in an email] that
‘We have come up with a system that will be environmentally
friendly to your operation... and rated to collect all of the
generated mist; returning the filtered air back into the plant
free of mist.’”

(Amend. Compl. ¶ 19)

Snyder v. Farnam Companies, Inc., 792 F. Supp.2d 712
(D.N.J. 2011), upon which both parties exclusively rely,
supports Grasso’s position.

In that case, Judge Martini denied

the defendants’ motion to dismiss the plaintiffs’ breach of
express warranty claim even though the plaintiffs did not plead
any written language that explicitly stated it was warranty.
Rather, Judge Martini held that “[a]t the motion to dismiss
stage, it is enough that Plaintiffs provide more than ‘bald
assertions,’ and identify specific affirmations by Defendant

6

Wynn Environmental has elected not to file a reply brief.
Thus, the Court decides the instant motion based upon Wynn
Environmental’s five-page moving brief and Grasso’s eight-page
opposition brief.
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that could be found to constitute an express warranty.”
722.

Id. at

Here too, Grasso has pleaded at least one specific

affirmation.
Accordingly, Wynn Environmental’s Motion to Dismiss the
breach of express warranty claim will be denied.
B. Fraud in the Inducement
Wynn Environmental asserts that the fraud in the inducement
claim is barred by the economic loss doctrine.

Grasso responds

that the claim is based on “pre-contractual misrepresentations”
which are “extrinsic to the parties’ [] agreement” (Opposition
Brief, p. 7-8), and therefore the economic loss doctrine does
not apply.

Wynn Environmental makes no argument in reply.

Grasso’s position is supported by caselaw.

See Wilhelm

Reuss GmbH & Co KG, Lebensmittel Werk v. E. Coast Warehouse &
Distribution Corp., 2018 WL 3122332, at *5 (D.N.J. June 26,
2018) (“A well-settled exception to the economic loss doctrine
is fraud in the inducement of a contract or an analogous
situation based on pre-contractual misrepresentations.”);
Fischell v. Cordis Corp., 2016 WL 5402207, at *8 (D.N.J. Sept.
26, 2016) (“a well-settled exception to the economic loss
doctrine is fraud in the inducement of a contract.”); Bracco
Diagnostics, Inc. v. Bergen Brunswig Drug Co., 226 F. Supp. 2d
557, 563 (D.N.J. 2002) (“New Jersey federal and state decisions
that have permitted a fraud claim to proceed with a breach of

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contract claim generally appear to have involved a fraud in the
inducement of a contract or an analogous situation based on precontractual misrepresentations.”); see also, G & F Graphic
Services, Inc. v. Graphic Innovators, Inc., 18 F. Supp.3d 583,
591 n.8 (D.N.J. 2014) (“The fraud in the inducement exception
[to the economic loss doctrine] is recognized in a majority of
states.”).
Accordingly, Wynn Environmental’s Motion to Dismiss the
fraud in the inducement claim will be denied.
C. Unjust Enrichment
Lastly, Wynn Environmental argues that “Grasso’s unjust
enrichment claim [] fails because Grasso has pled the existence
of an enforceable contract.”

(Moving Brief, p. 3)

Grasso

responds that the unjust enrichment claim is pled in the
alternative to the breach of contract claim, and that it would
be “premature” at the stage of the case-- i.e., before an Answer
has been filed-- to dismiss the unjust enrichment claim.
(Opposition Brief, p. 6)

Wynn Environmental makes no argument

in reply.
Federal Rule of Civil Procedure 8(d) expressly permits
pleading in the alternative; therefore the fact that Grasso has
pleaded the existence of a contract is not a basis for
dismissing, on a Rule 12(b)(6) motion, an unjust enrichment
claim.

That Grasso, as a matter of law, will not be permitted

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to recover on both claims simultaneously (as opposed to plead
both claims) is an issue that will be addressed, if necessary,
at summary judgment, should this suit progress that far. 7
Accordingly, Wynn Environmental’s Motion to Dismiss the
unjust enrichment claim will be denied.
IV.

CONCLUSION
For the foregoing reasons, Wynn Environmental’s Motion to

Dismiss will be denied.

An appropriate Order shall issue on

this date.

Dated: July 18, 2018

__s/ Renée Marie Bumb______
RENÉE MARIE BUMB
UNITED STATES DISTRICT JUDGE

7

Grasso candidly states that “[i]n the event defendant
agrees that a contract exists, plaintiff’s claim for unjust
enrichment may be moot.” (Opposition Brief, p. 6) If, at
summary judgment, there is no dispute that a valid, enforceable
contract exists, and there appears to be no good faith basis to
further pursue the unjust enrichment claim, the Court expects
that Grasso will dismiss the claim.
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