CURTISS-WRIGHT CORPORATION v. RODNEY HUNT COMPANY
OPINION. Signed by Judge Susan D. Wigenton on 2/18/2014. (nr, )
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
RODNEY HUNT COMPANY, INC.,
Civil Action No. 13-2799 (SDW)(MCA)
February 18, 2014
WIGENTON, District Judge.
Before the Court is Defendant Rodney Hunt Company, Inc.’s (“Defendant”) Motion to
Dismiss the Amended Complaint pursuant to Fed. R. Civ. P. 12(b)(6).
This Court has
jurisdiction over this action pursuant to 28 U.S.C. § 1332. Venue is proper in this District
pursuant to 28 U.S.C. § 1391(b).
This Court, having considered the parties’ submissions,
decides this matter without oral argument pursuant to Federal Rule of Civil Procedure 78. For
the reasons discussed below, Defendant’s Motion to Dismiss is denied, in part, with respect to
the breach of contract claim, and granted, in part, with respect to the claims for consumer fraud,
negligence, fraud, and fraudulent concealment.
Curtiss-Wright Corporation (“Plaintiff”) is a New Jersey company that designs and
manufactures technologies used in “defense, power generation, oil and gas, commercial
aerospace, and general industrial markets.” (Am. Compl. ¶ 4; Pl. Opp. 16.) EMD is a division
within Plaintiff located in Pennsylvania and is involved in designing and manufacturing complex
electromechanical equipment. (Am. Compl. ¶ 5; Def. Br. 19.) In 1994, EMD was owned by
Westinghouse Corporation (“Westinghouse”). (Am. Compl. ¶ 8.)
Defendant is a Massachusetts corporation involved in the water power and control
industries. (Id. ¶ 1.)
In 1994, EMD entered into a contract with Defendant to purchase a Rotovalve Cone
Valve (the “valve”) to be delivered on or before February 10, 1995. (Id. ¶ 8.) The valve was to
be installed in EMD’s K-Loop testing facility which was used for the production testing of
coolant pumps. (Id. ¶ 10.) EMD’s K-Loop testing facility and its component parts “were
required to be free of any detrimental materials, including lead” because such materials would
require rigorous cleaning and could damage the steel and steel alloys. (Id. ¶¶ 11-12.) Plaintiff
alleges that at the time of contracting, Defendant knew or should have known that the K-Loop
facility and valve could not contain lead. (Id. ¶ 13.) Additionally, the manufacturing plans for
the valve did not contain any lead parts or materials. (Id. ¶ 14.)
Plaintiff alleges that Defendant intentionally included a lead ring or disc within the valve
while it was being manufactured. (Id. ¶ 15.) Plaintiff further alleges that “there is no plausible
way that [Defendant] would not have been aware that it was installing a lead component into the
[valve].” (Id. ¶ 16.) Because the lead ring or disc was enclosed inside the interior casing of the
valve, Plaintiff claims that EMD had no way of knowing that there was lead contained in the
valve. (Id. ¶ 17.)
Defendant delivered the valve to Plaintiff in February 1995. (Id. ¶ 18.) For years, the KLoop and valve operated without any problems. (Id. ¶ 19.) On December 2, 2008, EMD
installed a coolant pump into the K-Loop facility for production testing. (Id. ¶ 21.) On January
6, 2009, the pump’s motor unit was disassembled and EMD personnel discovered three pieces of
foreign material in the pump’s thermal barrier. (Id. ¶¶ 22-23.) The foreign materials were
analyzed and found to contain lead. (Id. ¶ 24.)
On or about March 27, 2009, the K-Loop and valve failed.
(Id. ¶ 31.)
disassembling the valve, multiple pieces of foreign material appearing to be a ring or disc were
found in the valve. (Id. ¶ 32.) The foreign elements in the valve were identified to be lead, tin,
antimony, and copper. (Id. ¶ 33.) In or around May 2009, Defendant’s representatives indicated
to Plaintiff that there was no reason for lead to be in the valve sold to EMD, but that other valves
manufactured at the time of sale contained lead. (Id. ¶ 34.)
On March 25, 2013, Plaintiff filed its Complaint in the Superior Court of New Jersey,
Morris County Law Division alleging breach of contract and negligence. On May 1, 2013, the
case was removed to this Court based on diversity of citizenship. Defendant moved to dismiss
the Complaint on May 22, 2013. On June 10, 2013, Plaintiff filed an Amended Complaint
adding allegations and new causes of action for fraudulent concealment, common law fraud, and
a violation of the New Jersey Consumer Fraud Act (“CFA”) and Defendant withdrew his initial
Motion to Dismiss. On July 12, 2013, in response to the Amended Complaint, Defendant filed a
Motion to Dismiss.
Motion to Dismiss Pursuant to Fed. R. Civ. P. 12(b)(6)
The adequacy of pleadings is governed by Fed. R. Civ. P. 8(a)(2), which requires that a
complaint allege “a short and plain statement of the claim showing that the pleader is entitled to
relief.” This Rule “requires more than labels and conclusions, and a formulaic recitation of the
elements of a cause of action . . . . Factual allegations must be enough to raise a right to relief
above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal
citations omitted); see also Phillips v. Cnty. of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008)
(stating that Rule 8 “‘requires a ‘showing’ rather than a blanket assertion of an entitlement to
relief’” (quoting Twombly, 550 U.S. at 555 n.3)).
In considering a Motion to Dismiss under Fed. R. Civ. P. 12(b)(6), the Court must
“‘accept all factual allegations as true, construe the complaint in the light most favorable to the
plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff
may be entitled to relief.”’ Phillips, 515 F.3d at 231 (quoting Pinker v. Roche Holdings Ltd.,
292 F.3d 361, 374 n.7 (3d Cir. 2002)). However, “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 v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 555). If the “wellpleaded facts do not permit the court to infer more than the mere possibility of misconduct,” the
complaint should be dismissed for failing to show “‘that the pleader is entitled to relief’” as
required by Rule 8(a)(2). Id. at 679 (quoting FED. R. CIV. P. 8(a)(2)).
According to the Supreme Court in Twombly, “[w]hile a complaint attacked by a Rule
12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff’s obligation to
provide the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than labels and conclusions,
and a formulaic recitation of the elements of a cause of action will not do.” 550 U.S. at 555
(third alteration in original) (internal citations omitted) (quoting Papasan v. Allain, 478 U.S. 265,
286 (1986)). The Third Circuit summarized the Twombly pleading standard as follows: “‘stating
. . . a claim requires a complaint with enough factual matter (taken as true) to suggest’ the
required element.” Phillips, 515 F.3d at 234 (alterations in original) (quoting Twombly, 550
U.S. at 556).
In Fowler v. UPMC Shadyside, the Third Circuit directed district courts to conduct a twopart analysis. 578 F.3d 203, 210 (3d Cir. 2009). First, the court must separate the factual
elements from the legal conclusions. Id. The court “must accept all of the complaint’s wellpleaded facts as true, but may disregard any legal conclusions.” Id. at 210-11 (citing Iqbal, 556
U.S. at 678). Second, the court must determine if “the facts alleged in the complaint are
sufficient to show that the plaintiff has a ‘plausible claim for relief.’” Id. at 211 (quoting Iqbal,
566 U.S. at 679).
“In other words, a complaint must do more than allege the plaintiff’s
entitlement to relief. A complaint has to ‘show’ such an entitlement with its facts.” Id. (citing
Phillips, 515 F.3d at 234-35).
Heightened Pleading Standard under Fed. R. Civ. P. 9(b) for Fraud Claims
Fed. R. Civ. P. 9(b) requires that “[i]n alleging fraud or mistake, a party must state with
particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and
other conditions of a person’s mind may be alleged generally.” Fed. R. Civ. P. 9(b). Plaintiffs
“alleging fraud must state the circumstances of the alleged fraud[ulent act] with sufficient
particularity to place the defendant on notice of the ‘precise misconduct with which [it is]
charged.’” Park v. M&T Bank Corp., No. 09-cv-02921, 2010 WL 1032649, at *5 (D.N.J. Mar.
16, 2010) (citing Lum v. Bank of America, 361 F.3d 217, 223-24 (3d Cir. 2004)). Plaintiffs can
satisfy this standard by alleging dates, times, places, and other facts with precision. Park, 2010
WL 1032649, at *5.
As a preliminary matter, the parties dispute which state law applies to all of the claims at
issue. A federal court sitting in diversity jurisdiction must apply the forum state’s choice-of-law
rules. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496-97 (1941); Robeson Indus. Corp.
v. Hartford Acc. & Indem. Co., 178 F.3d 160, 165 (3d Cir. 1999). New Jersey courts apply the
two-pronged “most significant relationship” test of the Restatement (Second) of Conflict of
Laws. P.V. v. Camp Jaycee, 197 N.J. 132, 142-43 (2008).
The first prong of the analysis requires courts to examine the substance of the potentially
applicable laws to determine if an actual conflict exists. Id. (citing Lebegern v. Forman, 471
F.3d 424, 430 (3d Cir. 2006)). If there is no actual conflict, the analysis ends and the law of the
forum state applies. See Rowe v. Hoffman–La Roche, Inc., 189 N.J. 615, 621 (2007). If a
conflict does exist, the court must then determine which jurisdiction has the “most significant
relationship” to the claim. Camp Jaycee, 197 N.J. at 136; Grossbaum v. Genesis Genetics Inst.,
LLC, 489 F. App’x 613, 616 (3d Cir. 2012) (noting that “[i]f an ‘actual conflict’ exists between
the laws of jurisdictions with ties to a case, New Jersey applies the ‘most significant relationship’
test set forth in the Restatement (Second) of Conflict of Laws”).
A. Breach of Contract Claim
Plaintiff argues that Massachusetts law applies to the breach of contract claim because
the contract contains a choice-of-law provision specifying that Massachusetts law applies. (Pl.
Opp. 13-14.) Central to Plaintiff’s argument is that Massachusetts law allows for the tolling of
the statute of limitations based on fraudulent concealment. (Id. at 18.) Plaintiff notes that New
Jersey law similarly allows for tolling of the statute of limitations for fraudulent concealment.
Defendant argues that no conflict exists with respect to Plaintiff’s breach of contract
claim because New Jersey, Pennsylvania, and Massachusetts have all adopted the UCC,
including the applicable four-year statute of limitations. (Def. Br. 8.) Defendant acknowledges
that both Massachusetts and New Jersey law provide for tolling of the statute of limitations based
on fraudulent concealment. (Def. Reply 2-4.) As it relates to the choice-of-law provision,
Defendant argues that the resulting contract terms and conditions—including the choice-of-law
provision—were proposed by Plaintiff and Defendant “accepted those terms and conditions in
lieu of its own.” (Def. Reply 7.)
Under New Jersey law, a contractual choice of law provision will be upheld unless doing
so would violate its public policy. Instructional Sys., Inc. v. Computer Curriculum Corp., 130
N.J. 324, 341 (1992). Here, the contract unequivocally states that “[t]his contract shall be
governed by the laws of the Commonwealth of Massachusetts.” (Dkt. 13-1, Declaration of Ryan
Milun (“Milun Decl.) Ex. A, at 2.) Although Defendant argues that Plaintiff “insisted upon its
own terms,” Defendant nonetheless accepted these terms when entering into the contract. (See
Def. Reply 1.)
Moreover, Defendant does not provide any viable arguments as to why
Massachusetts law—as provided in the choice-of-law provision—should not apply. Thus, this
Court finds that Massachusetts law applies to the breach of contract claim.
B. Negligence, Common Law Fraud, and Consumer Fraud Claims
Both parties recognize that an actual conflict of law exists with respect to Plaintiff’s
claims for negligence and common law fraud under Pennsylvania, Massachusetts, and New
Jersey law—namely with respect to the statute of limitations period. Under Pennsylvania law,
the statute of limitations for negligence and common law fraud is two years from the date of
injury. 42 Pa. Con. Stat. § 5524. Under Massachusetts law, the statute of limitations for
negligence and common law fraud is three years from the date of injury. M.G.L. ch. 260 § 2A.
Under New Jersey law, the statute of limitations for negligence is two years and common law
fraud is six years. N.J.S.A. §§ 2A:14-1, 2.
Additionally, an actual conflict of law exists with respect to Plaintiff’s consumer fraud
claim under Pennsylvania law and New Jersey law.
Under Pennsylvania’s Unfair Trade
Practices and Consumer Protection Law (“UTPCPL”), a private right of action only applies for
purchasers of goods “primarily for personal, family, or household purposes.”
Commonwealth Land Title Ins. Co., 684 F. Supp. 2d 595, 618 (E.D. Pa. 2010). However, New
Jersey’s CFA allows recovery for the sale of goods or services purchased for commercial or
business purposes. See Debra F. Fink, D.M.D., MS, PC v. Ricoh Corp., 365 N.J. Super. 520, 571
(Ch. Div. 2003).
Because an actual conflict of law exists for all of these claims, this Court will undergo a
choice-of-law analysis on an issue-by-issue basis. See Camp Jaycee, 197 N.J. at 143. Under the
“most significant relationship” test, “the law of the state of the injury is applicable unless another
state has a more significant relationship to the parties and issues.” Id. Courts consider the
following contacts in their analysis: “(a) the place where the injury occurred, (b) the place where
the conduct causing the injury occurred, (c) the domicil[e], residence, nationality, place of
incorporation[,] and place of business of the parties, and (d) the place where the relationship, if
any, between the parties is centered.” Restatement (Second) of Conflict of Laws § 145 (1971).
Pursuant to the Restatement, with respect to negligence claims, “the local law of the state
where the injury occurred [applies] . . . unless . . . some other state has a more significant
relationship under the principles stated in § 6 to the occurrence, the thing and the parties, in
which event the local law of the other state [applies].” Id. § 147. The factors that courts should
consider in determining the applicable state law include:
(a) the needs of the interstate and international systems,
(b) the relevant policies of the forum,
(c) the relevant policies of other interested states and the relative interests of those states
in the determination of the particular issue,
(d) the protection of justified expectations,
(e) the basic policies underlying the particular field of law,
(f) certainty, predictability[,] and uniformity of result, and
(g) ease in the determination and application of the law to be applied.
Id. § 6.
Defendant argues that Pennsylvania law should apply to Plaintiff’s negligence because it
has the most significant relationship to the claims at issue. (Def. Br. 15.) In support, Defendants
point to the fact that Plaintiff was injured in Pennsylvania, EMD is located in Pennsylvania, the
valve was shipped to Pennsylvania, and the valve was used in Pennsylvania. (Id. at 17-18.)
Plaintiff argues that it is premature to decide which state law applies to the non-contract
claims because discovery is necessary to determine which state has the most significant interest.
(Pl. Opp. 15.) In response to Defendant’s argument that Pennsylvania law applies, Plaintiff
contends that both New Jersey and Massachusetts have significant interests as well. (Id. at 16.)
In support of applying New Jersey law, Plaintiff argues that it is a New Jersey resident, EMD
was a division of Plaintiff at the time the damage occurred and was discovered, and Plaintiff
started an insurance coverage action in New Jersey to recover damages for lead in the K-Loop
and reactor coolant pump. (Id. at 16-17.)
This Court finds that there is sufficient information to conclude that Pennsylvania has the
most significant relationship to the parties and issues in this matter. Specifically, Pennsylvania is
the location where EMD is located, where the valve was used, and where the injury occurred. In
considering the factors set forth in the Restatement § 6, no state has a greater interest or more
significant contacts than Pennsylvania. New Jersey’s only significant contact with this action is
that Plaintiff is located there. Similarly, Massachusetts’s only contact is that the valve was
manufactured there. Based on the Amended Complaint and the parties’ briefs, this Court finds
that Pennsylvania law applies to the negligence claim.
2. Fraud and Consumer Fraud
For purposes of choice-of-law determination, courts undergo the same analysis for fraud
and consumer fraud claims. Section 148 of the Restatement sets forth the following factors for
courts to consider in determining which state law applies for fraud claims:
(a) the place, or places, where the plaintiff acted in reliance upon the defendant’s
(b) the place where the plaintiff received the representations,
(c) the place where the defendant made the representations,
(d) the domicil[e], residence, nationality, place of incorporation and place of
business of the parties,
(e) the place where a tangible thing which is the subject of the transaction
between the parties was situated at the time, and
(f) the place where the plaintiff is to render performance under a contract which
he has been induced to enter by the false representations of the defendant.
Restatement (Second) of Conflict of Laws § 148.
Defendant argues that most of the factors favor applying Pennsylvania law including the
place where EMD received and relied on Defendant’s alleged misrepresentations and where the
valve was situated. (Def. Br. 20.) Defendant acknowledges that certain factors favor applying
Massachusetts law; for instance, the alleged misrepresentations were made in Massachusetts and
Defendant is located there. (Id.) Defendant notes that no factor favors applying New Jersey law
except that EMD’s parent company is headquartered in New Jersey.
As with the
negligence claim, Plaintiff states that a choice-of-law determination for the fraud claim is
premature. (Pl. Opp. 15-17.)
In reviewing the factors articulated in the Restatement, this Court finds that Pennsylvania
has the most significant relationship to the fraud claims at issue. As Defendant correctly pointed
out, the valve was shipped to EMD in Pennsylvania, the valve was used in Pennsylvania, and
EMD relied on Defendant’s alleged misrepresentations in Pennsylvania. Moreover, the sole tie
to New Jersey—Plaintiff’s headquarters—is not sufficient to overcome the several factors
favoring Pennsylvania. See Montich v. Miele USA, Inc., 849 F. Supp. 2d 439, 449 (D.N.J.
2012) (“A majority of courts in this District have held that the mere fact that a company is
headquartered in New Jersey or ‘that unlawful conduct emanated from New Jersey’ will not
supersede the numerous contacts with the consumer’s home state for purposes of determining
which state has the most significant relationship.”).
Contrary to Plaintiff’s argument, the
determination of which law applies to the fraud claim is not premature. Between the Amended
Complaint and the parties’ briefs, there are sufficient facts to conclude that Pennsylvania law
applies to the fraud claims. Because Pennsylvania law applies, this Court will analyze Plaintiff’s
consumer fraud claim under Pennsylvania’s UTPCPL. See Maniscalco v. Brother Int’l (USA)
Corp., 709 F.3d 202, 211 (3d Cir. 2013) (affirming application of South Carolina law rather than
New Jersey law for consumer fraud claim based on review of Restatement factors).
Breach of Contract
As this Court previously determined, Massachusetts law will apply to the breach of
contract claim. Massachusetts has adopted the Uniform Commercial Code (“UCC”), including
the statute of limitations provision. M.G.L. ch. 106, § 2-725. Pursuant to § 2-725, the statute of
limitations in contracts for sale “must be commenced within four years after the cause of action
has accrued.” Id. Section 2-725 further provides that “[a] cause of action accrues when the
breach occurs, regardless of the aggrieved party’s lack of knowledge of the breach.”
However, “[t]his section does not alter the law on tolling the statute of limitations.” Id.
Under Massachusetts law, the statute of limitations may be tolled upon a showing of
fraudulent concealment where “the wrongdoer [ ] ‘concealed the existence of a cause of action
through some affirmative act done with intent to deceive.’” Puritan Med. Ctr., Inc. v. Cashman,
413 Mass. 167, 175 (1992); see Callahan v. Wells Fargo & Co., 747 F. Supp. 2d 247, 253 (D.
Mass. 2010). “Once fraudulent concealment is established, the limitations period is tolled until
plaintiffs actually become aware of the operative facts. Mere suspicion of fraud is insufficient to
end the tolling period.” Massachusetts Eye & Ear Infirmary v. QLT Phototherapeutics, Inc., 412
F.3d 215, 242 (1st Cir. 2005) (internal citations omitted).
Although Plaintiff alleges only one count for breach of contract in its Amended
Complaint, Plaintiff avers in its opposition brief that there are two separate breaches of contract
at issue. (Pl. Opp. 17-22.) According to Plaintiff, the first breach of contract was Defendant’s
improper inclusion of lead within the valve at the time it was manufactured. (Id. at 17.) Plaintiff
asserts that the second breach of contract related to the improper release of lead into the K-Loop
test facility and the coolant pump which occurred after March 2009 and was discovered in May
2009. (Id. at 22.)
A. First Breach of Contract
Defendant argues that Plaintiff cannot maintain a breach of contract claim relating to the
allegedly improper inclusion of lead in the valve because the statute of limitations has run. (Def.
Br. 9.) Defendant contends that Plaintiff’s breach of contract claim accrued at the time of the
alleged breach which was “during the manufacture of the valve, which was completed no later
than early 1995, when the valve was shipped to EMD’s facility in Pennsylvania.”
Defendant thus argues that the statute of limitations expired in 1999, based on the UCC’s fouryear statute of limitations.
Next, Defendant contends that Plaintiff’s allegations of
fraudulent concealment are insufficiently pled, given the requirement to plead fraud with
particularity. (Id. at 10, 12.) Furthermore, Defendant asserts that “because the alleged improper
manufacture of the valve is the basis for the underlying breach of contract claim, it cannot also
serve as the predicate for the alleged fraudulent concealment.” (Id. at 12.)
Plaintiff argues that Defendant’s alleged fraudulent concealment of lead within the valve
properly tolled the statute of limitations. (Pl. Opp. 18.) Plaintiff points to allegations in the
Amended Complaint in support of its argument that Defendant engaged in fraudulent
concealment. (Id. at 18-21.)
Based on the Amended Complaint and parties’ briefs, this Court finds that there is
insufficient information to make an appropriate decision as to whether the statute of limitations
was tolled based on fraudulent concealment. Discovery is needed to determine more details
regarding the nature of Defendant’s alleged fraudulent concealment and when Plaintiff
reasonably should have known or discovered the alleged breach. Accordingly, Defendant’s
motion to dismiss with respect to the first breach of contract claim is denied.
B. Second Breach of Contract
Plaintiff alleges that Defendant “breached the separate requirement in the Westinghouse
terms and conditions that the K-[L]oop testing facility and reactor coolant pumps must be free
from detrimental materials, including lead.” (Pl. Opp. 22.) Plaintiff maintains that this occurred
after March 2009 and was discovered in May 2009. (Id.) According to Plaintiff, as the initial
Complaint was filed on March 25, 2013, this breach of contract claim was timely filed. (Id.)
Plaintiff further argues that the Westinghouse terms were ancillary to the contract for the sale of
goods and thus the UCC is inapplicable. (Id.)
Defendant argues that “the alleged injury (i.e., the release of lead material into the KLoop) in 2009” cannot be a separate breach of contract because it occurred “14 years after
[Defendant] had any contact with the allegedly defective valve.” (Def. Reply 4.) Furthermore,
Defendant asserts that any breach relating to the requirement to comply with applicable laws,
codes, and standards would have occurred at the time the product was manufactured. (Id. at 5.)
Additionally, Defendant contends that the Westinghouse terms were incorporated by reference
and became a part of the parties’ agreement. (Id. at 4-5.)
This Court agrees with Defendant. Despite Plaintiff’s creative attempt to articulate a
second breach of contract, it essentially involves the same facts and the same contract as the first
breach of contract claim. As Defendant noted, the Westinghouse terms were a part of the
agreement involving the sale of the valve and these terms did not create a separate contract or
ancillary obligations. To the extent this Court will consider Plaintiff’s injuries and discovery of
lead in May 2009, it will be in tandem or within the context of the first breach of contract claim.
No second breach of contract claim can be sustained in this case.
Negligence and Common Law Fraud Claims
As this Court previously concluded, Pennsylvania law will apply to Plaintiff’s claims for
negligence and common law fraud. Under Pennsylvania law, if “the defendant committed a tort
in the course of carrying out a contractual agreement, Pennsylvania courts . . . determine whether
the ‘gist’ [ ] of it sounds in contract or tort; a tort claim is maintainable only if the contract is
‘collateral’ to conduct that is primarily tortious.” Sunquest Info. Sys., Inc. v. Dean Witter
Reynolds, Inc., 40 F. Supp. 2d 644, 651 (W.D. Pa. 1999); see Advanced Tubular Products, Inc.
v. Solar Atmospheres, Inc., 149 F. App’x 81, 84 (3d Cir. 2005) (noting that under Pennsylvania’s
“gist of the action” doctrine, “a plaintiff is barred from bringing a tort claim when such a claim is
merely another way of stating the party’s breach of contract claim or when the success of such a
claim is wholly depend[e]nt upon the terms of the contract”). “The important difference between
contract and tort claims is that the latter lie from the breach of duties imposed as a matter of
social policy while the former lie from the breach of duties imposed by mutual consensus.”
Greenspan v. ADT Sec. Servs. Inc., 444 F. App’x 566, 570-71 (3d Cir. 2011) (citing Hart v.
Arnold, 884 A.2d 316, 339 (Pa. Super. Ct. 2005)).
In the instant matter, Defendant argues that the only obligations it owed to EMD
stemmed from the parties’ contract. (Def. Br. 24.) Defendant further argues that it had “no
independent social duty to refrain from making a valve containing lead.”
Plaintiff’s claims for negligence and fraud arise from the parties’ contractual relationship,
Defendant contends that these claims are barred by the “gist of the action” doctrine. (Id.)
This Court finds that Plaintiff’s claims for negligence and common law fraud warrant
dismissal based on the “gist of the action” doctrine. As Defendant correctly noted, but for the
parties’ contract, the alleged fraud would not have taken place. Here, Plaintiff’s claims for
negligence and common law fraud are merely another way of stating Plaintiff’s breach of
contract claim. Thus, they are dismissed. As these claims are dismissed based on the “gist of the
action” doctrine, it is unnecessary for this Court to reach the merits of the statute of limitations
arguments with respect to these claims.
Under the UTPCPL, “[a]ny person who purchases or leases goods or services primarily
for personal, family or household purposes and thereby suffers any ascertainable loss of money
or property. . . may bring a private action.” 73 Pa. Stat. Ann. § 201-9.2. In other words, only
purchasers of goods “primarily for personal, family, or household purposes” have a private right
of action under the UTPCPL. Coleman v. Commonwealth Land Title Ins. Co., 684 F. Supp. 2d
595, 618 (E.D. Pa. 2010). “Whether a purchase is primarily for household purposes and a cause
of action under the UTPCPL is available depends on the purpose of the purchase, not the type of
product purchased.” Id.
In this case, it is undisputed that EMD’s purchase of the valve from Defendant was for
business purposes. Under the UTPCPL, Plaintiff does not have a private cause of action against
Defendant. Thus, this claim is dismissed.
For the reasons stated above, Defendant’s Motion to Dismiss is DENIED, in part, with
respect to the breach of contract claim, and GRANTED, in part, with respect to the claims for
fraudulent concealment, negligence, fraud, and consumer fraud.
s/Susan D. Wigenton, U.S.D.J.
cc: Madeline Cox Arleo, U.S.M.J.
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