UNITED VAN LINES, LLC et al v. LOHR PRINTING, INC.

Filing 70

OPINION. Signed by Judge Anne E. Thompson on 1/29/2013. (gxh)

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
UNITED VAN LINES, LLC and
MCCOLLISTER’S TRANSPORTATION
SERVICES, INC.,

Civ. No. 11-04761

Plaintiffs,

OPINION

v.
LOHR PRINTING, INC.,
Defendant/Third Party Plaintiff,
v.
CANON, U.S.A., CANON FINANCIAL
SERVICES, INC., CANON BUSINESS
SOLUTIONS, INC., Sonaie LONEY, AND
Rodney R. HELD
Third Party Defendants,
v.
Richard LOHR,
Fourth Party Defendant.

THOMPSON, U.S.D.J.
This matter comes before the Court on two motions to dismiss and a cross-motion to
amend. Third Party Defendants Canon Business Solutions, Inc. (“CBS”) and Canon U.S.A., Inc.
(“CUSA”) have moved to dismiss Defendant and Third Party Plaintiff Lohr Printing, Inc.’s
(“Lohr Printing’s”) Third Party Complaint [Docket Entry # 30] as against CUSA and CBS under
Federal Rule of Civil Procedure 12(b)(6) [45]. Plaintiff McCollister’s Transportation Services,
Inc. (“McCollister’s ”) has also entered a motion to dismiss [49], seeking to dismiss Lohr

1

Printing’s Third-Party Complaint [30] and Third-Party Defendant Canon Financial Services,
Inc.’s (“CFS’s”) Cross-Claims [39] against former McCollister’s employee, Sonaie Loney (“Ms.
Loney”), pursuant to Federal Rules of Civil Procedure 12(b)(2) and 12(b)(6). In response to
these motions, Lohr Printing has cross-moved to file an Amended Counterclaim and Third Party
Complaint. [53].
Pursuant to Federal Rule of Civil Procedure 78(b), the Court has decided the above
motions upon the submissions of the parties and without oral argument. For the reasons included
herein, the Court grants McCollister’s Motion to Dismiss All Claims and Cross-Claims against
Ms. Loney; grants CBS’s Motion to Dismiss All Claims as pertain to CUSA and CBS; and
denies Lohr Printing’s Leave to File an Amended Third-Party Complaint.
BACKGROUND
This matter originates from the damage of certain equipment during transit, and the
subsequent disagreement over indemnification for that damage.
A. Facts as Alleged in Lohr Printing’s First Amended Third Party Complaint
Lohr Printing is in the business of making textbook covers. [30, “First Am. Third Party
Compl.,” at ¶ 50]. Richard C. Lohr, Jr. (“Mr. Lohr”) is the president of Lohr Printing. [Id. at
58]. In the course of its business, Lohr Printing leased a Canon Image Press 60000 VP-4, Serial
Number CWM00081 (the “Printer”) under a CBS service contract in April 2009; the Printer was
leased through and owned by CFS. [Id. at ¶¶ 51-52; 55]. Both CBS and CFS are affiliates of
CUSA. [Id. at ¶ 53]. Mr. Rodney R. Held (“Mr. Held”) was the CBS account representative
(and alleged agent of CFS and CUSA) who sold Lohr Printing the Printer, valued at the time of
leasing at approximately $261,000.00. [Id. at ¶¶ 54, 56]. Lohr Printing alleges that Mr. Held

2

additionally sold Lohr Printing other specialized printers, and that he was familiar with leasing
Canon copiers and printers, and the accompanying lease terms. [Id. at ¶ 56].
In February 2011, Mr. Lohr advised Mr. Held of his intention to relocate the Printer to
the facility of one of its customers, BR Printers, Inc., in Hightstown, New Jersey while it was
still under lease. [Id. at ¶ 58]. In the course of that conversation, Mr. Held offered to assist in
arranging this move. [Id. at ¶ 59]. Mr. Held advised Mr. Lohr that (1) Canon1 had often used
McCollister’s for its shipping needs, (2) McCollister’s was experienced in handling similar
pieces of equipment, and (3) Mr. Held would be able to secure a good price from McCollister’s
for transporting the Printer. [Id. at ¶¶ 60-61].
On February 16, 2011, Mr. Held contacted Ms. Loney, a McCollister’s customer service
coordinator, and requested a quote to move the Printer from Lohr Printing’s facilities in
Florence, Kentucky to Hightstown, New Jersey. [Id. at ¶ 62]. He advised her of the specific
type of machine, its approximate value, and whether Canon technicians should crate the machine
for transport. [Id. at ¶ 63]. Ms. Loney purportedly told him that crating was unnecessary and
that McCollister’s could safely ship the machine after it was broken down into its major
component parts. [Id. at ¶ 64].
After a period of negotiations with Mr. Held as intermediary, [id. at ¶¶ 70-73], Mr. Held
conveyed a shipping price acceptable to Mr. Lohr. [Id. at ¶¶ 75-76]. Ms. Loney then contacted
Mr. Lohr for payment via credit card. [Id. at ¶¶ 77-78]. Lohr Printing contends that none of the
various exchanges between Mr. Held, Ms. Loney, and Mr. Lohr involved any discussion of
liability limits or that the offered quote was given by McCollister’s as an agent for another
carrier, United Van Lines, Inc. (“United”). [Id. at ¶¶ 65, 67, 74, 79].

Lohr Printing interprets the general term “Canon” as referring to CBS, CFS, and CUSA.

1

3

On or about March 29, 2011, a driver in a United truck picked up the Printer at Lohr
Printing’s facility. [Id. at ¶¶ 80-85]. At that time, the Printer was in good working order and had
been broken down into its component parts by Canon technicians as previously directed. [Id. at
¶¶ 81-84]. At the time of pick-up, Lohr was purportedly handed United’s Uniform Bill of
Lading No. 18-2875-1 (“Bill of Lading”) and directed to sign separately a section of the Bill of
Lading entitled “Carrier Liability.” [1, “First Party Complaint,” at ¶ 11]. That section recites in
relevant part: “The shipper declares value of property to be $5.00/LB and hereby releases and
limits value and liability subject to the contract terms and conditions on the reverse hereof, in
addition to all other limitations, rules, regulations, rates and charges in the carrier’s applicable
tariffs or rate schedules which are referred herein.” [Id.]. Lohr Printing does not admit the
above in its Third Party Complaint, but refers to the Bill of Lading as a “document” that Mr.
Lohr was instructed to sign in two places after the Printer was loaded on the truck, and a copy of
which was only handed to Mr. Lohr after signature. [First Am. Third Party Compl. at ¶¶ 88-89].
On April 4, 2011, the Printer was delivered in Hightstown, New Jersey. [Id. at ¶ 91].
Allegedly, it was immediately clear that the Printer had been damaged in transport. [Id. at ¶ 92].
On April 13, 2011, Lohr Printing filed a “Presentation of Claim for Loss and Damages” form
with United and McCollister’s. [Id. at ¶ 95]. Despite various attempts, Lohr Printing was
advised that the machine could not be repaired and was a total loss. [Id. at ¶¶ 97-98]. Lohr
Printing estimates the total estimated value at the time of loss was $ 251,868.00. [Id. at ¶ 112].
B. Procedural History
On August 17, 2011, United and McCollister’s filed a complaint requesting a declaratory
judgment capping United’s liability at $13,000.00 (the value of the Printer at $500.00/lb) under
the interstate Bill of Lading, and relieving McCollister’s of liability pursuant to the Carmack

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Amendment to the Interstate Commerce Act, 49 U.S.C. § 14706. [1]. Lohr Printing filed an
answer asserting various affirmative defenses and counterclaims. [7]. The counterclaims against
United were dismissed. [20].
Thereafter, a Joint Scheduling Order was entered on April 13, 2012. [22]. That Order
indicated that no pleadings could be amended after June 30, 2012, except with leave of the
Court. [Id.]. Lohr Printing filed a Substitution of Attorney on June 11, 2012, [23], and its new
counsel requested and was granted an extension of 15 days (July 15, 2012) to file amended
pleadings. [26]. On July 13, 2012, with a resubmission on July 16, Lohr Printing filed an
amended answer, separate defenses, counterclaim, and third party complaint naming CUSA,
CFS, CBS, Ms. Loney, and Mr. Held as third party defendants. [First Am. Third Party Compl.].
Lohr Printing’s Third Party Complaint contained three counts: (1) Negligence and Breach
of Contract [id. at ¶¶122-27]; (2) Breach of the Implied Covenant of Good Faith and Fair
Dealing, and Equitable Estoppel [id. at ¶¶128-31]; and (3) Legal Fraud, [id. at 132-36]. Lohr
Printing’s Third Party Complaint concluded with a demand for $251,868 with interest (the thenvalue of the damaged Printer), a judgment declaring the lease on the subject printer null and
void, a credit to Lohr Printing for payments made to CFS after the Printer’s damage, and various
other damages. [Id.].
On August 17, 2012, CFS filed an Answer to Lohr Printing’s Third Party Complaint.
[39], and brought its own Third Party Complaint against Mr. Lohr, cross-claims against United,
Ms. Loney, CBS, McCollister’s, and Mr. Held, and a counterclaim against Lohr Printing. [Id.].
On September 7, 2012, CUSA and CBS filed a Motion to Dismiss Lohr Printing’s Third
Party Complaint as against CUSA and CBS under Rule 12(b)(6) for failure to state a claim upon
which relief can be granted. [45]. McCollister’s subsequently filed a Motion to Dismiss Lohr

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Printing’s Third-Party Complaint and Third-Party Defendant Canon Financial Services, Inc.’s
(“CFS’s”) Cross-Claims [39] against former McCollister’s employee, Sonaie Loney (“Ms.
Loney”), pursuant to Rules 12(b)(2) and 12(b)(6). [49]. In response to this and the previous
motion, Lohr Printing has cross-moved to file an Amended Counterclaim and Third Party
Complaint. [53, “Proposed Second Amd. Compl.”].
C. Proposed Second Amended Third Party Complaint
In the proposed Second Amended Complaint, Lohr Printing eliminates its claims against
CUSA, supplements its factual allegations, and makes changes to the content and quantity of the
alleged counts. The counts, as proposed, now allege: (1) Principal/Agent Liability for the
Negligence of United/McCollister’s; (2) Negligence/Breach of Fiduciary Duty; (3) Promissory
Estoppel; (4) Equitable Estoppel; (5) Breach of Contract; (6) Breach of Implied covenant of
Good Faith and Fair Dealing; (7) Legal Fraud; (8) Consumer Fraud; and (9) Discovery
Deposition as to Sonaie Loney only. [Proposed Second Amd. Compl.].
The first eight proposed counts are brought against CFS, CBS, and Mr. Held, and the
ninth count against Ms. Loney. To support the expanded claims, Lohr Printing has elaborated on
Mr. Held’s involvement in shipping the Printer and included information regarding the
Transportation Services Agreement (“TSA”) between Canon and United.
Regarding Mr. Held’s involvement, the proposed Second Amended Complaint alleges
that while Mr. Held was assisting with shipment of the Printer to New Jersey, he was also
helping Lohr Printing obtain a replacement printer for use in Kentucky. [Id. at ¶ 70-71]. It also
cites to Ms. Loney’s affidavits for the proposition that the value of the Printer was never
discussed with Ms. Loney during shipment. [Id. at ¶ 88]. Then, after the shipped Printer was
damaged, Mr. Held allegedly failed to report the damage to CFS. [Id. at ¶ 134]. Moreover, Lohr

6

Printing asserts that although Mr. Held was familiar with the CFS lease terms requiring Lohr
Printing to obtain like equipment to replace the damaged Printer, 2 Mr. Held did not offer to Mr.
Lohr the opportunity to obtain like equipment at its lowest price. [Id.]. Instead, Mr. Held sold
Lohr Printing a new printer to deliver to Lohr Printing’s client in New Jersey. [Id.]. Lohr
Printing further alleges that payments for the replacement printer sent to New Jersey were not
rolled into the lease payments for the damaged Printer; instead Mr. Held, CFS, CBS and Canon
sought to make Lohr Printing Responsible for lease payments on both printers. [Id. at 135-36].
Regarding the TSA, Lohr Printing alleges that based upon Ms. Loney’s affidavits, CBS’s
representatives (and assumedly Mr. Held) knew McCollister’s acted solely as United’s disclosed
household goods agent, and would include a liability limitation. [Id. at ¶ 102].
CBS, CUSA, and McCollister’s (on Ms. Loney’s behalf), have submitted responses to
Lohr Printing’s proposed amendment, arguing that (1) the Court should not permit Lohr Printing
to amend its complaint, as the scheduling order deadline has expired; and (2) that Lohr Printing’s
claims as amended should be dismissed as futile. [54, 55].
DISCUSSION
A. Legal Standard
i.

Motion to Dismiss

A motion under Federal Rule of Civil Procedure 12(b)(6) tests the sufficiency of the
complaint. Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993). The defendant bears the burden
of showing that no claim has been presented. Hedges v. United States, 404 F.3d 744, 750 (3d
Cir. 2005). When considering a Rule 12(b)(6) motion, a district court should conduct a three
2
The Court notes that the loss/damage provision of the attached contract provides that in the
event of loss or damage, CFS elects whether to accept (a) like equipment in a condition
acceptable to CFS, and of which clear title is conveyed to CFS; or (b) pay CFS the remaining
lease balance on the damaged printer. [Proposed Second Amd. Compl., Ex. D at ¶ 14].
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part analysis. See Malleus v. George, 641 F.3d 560, 563 (3d Cir. 2011). “First, the court must
‘take note of the elements a plaintiff must plead to state a claim.’” Id. (quoting Ashcroft v. Iqbal,
56 U.S. 662, 675 (2009)). Second, the court must accept as true all of a plaintiff’s well-pleaded
factual allegations and construe the complaint in the light most favorable to the plaintiff. Fowler
v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009). The court may disregard any
conclusory legal allegations. Id. Finally, the court must determine whether the “facts are
sufficient to show that plaintiff has a ‘plausible claim for relief.’” Id. at 211 (quoting Iqbal, 556
U.S. at 679). Such a claim requires more than a mere allegation of an entitlement to relief or
demonstration of the “mere possibility of misconduct;” the facts pled must allow a court
reasonably to infer “that the defendant is liable for the misconduct alleged.” Id. at 210, 211
(quoting Iqbal, 556 U.S. at 678-79).
ii.

Motion to Amend – Rules 16(b) and 15(a)

Under Federal Rule of Civil Procedure 16(b)(4), a scheduling order “may be modified
only for good cause and with the judge’s consent.” This is a more restrictive standard than its
Rule 15(a) counterpart, discussed below, which counsels liberal leave to amend. Under Rule
16(b), the Court has broad “discretion in determining what kind of showing the moving party
must make in order to satisfy [the Rule]’s good cause requirement.” Phillips v. Greben, Civil
No. 04-5590 (GEB), 2006 WL 3069475, *6 (D.N.J. Oct. 27, 2006). Fundamentally, whether
good cause exists depends upon the diligence of the moving party; “the moving party must show
that despite its diligence, it could not reasonably have met the scheduling order deadline.”
Hutchins v. United Parcel Service, Inc., No. 01 CV 1462 WJM, 2005 WL 1793695 (D.N.J. July
26, 2005). A movant may also demonstrate good cause where it can show that its “delay in filing
the motion to amend stemmed from ‘any mistake, excusable neglect or any other factor which

8

might understandably account for failure of counsel to undertake to comply with the Scheduling
Order.’” Greben, 2006 WL 3069475, *6 (quoting Newton v. Dana Corp. Parish Division, 1995
WL 368172, at *1 (E.D.P.A.1995)). However, a movant must still demonstrate that amendment
would not then be futile under Rule 15(a).
Under Rule 15(a), it is the accepted and encouraged policy that courts should liberally
grant leave to amend pleadings when justice so requires. See Fed. R. Civ. P. 15(a); see also
Foman v. Davis, 371 U.S. 178, 182 (1962); Dole v. Arco Chem. Co., 921 F.2d 484 (3d Cir.
1990). As the Supreme Court set forth in Foman, when the movant’s request to amend is “a
proper subject of relief, he ought to be afforded an opportunity to test his claim on the merits.”
Foman, 371 U.S. at 182.
A court may deny amendment where the moving party has acted in bad faith, with
dilatory motive, or has unduly delayed amendment so as to prejudice the nonmoving party. See
Sikirica v. Nationwide Ins. Co., 416 F.3d 214, 220 (3d Cir. 2005); Lorenz v. CSX Corp., 1 F.3d
1406, 1414 (3d Cir. 1993)). Leave to amend may also be denied where such amendment would
be futile. Phillips v. Cnty. of Allegheny, 515 F.3d 224, 236 (3d Cir. 2008) (citing Grayson v.
Mayview State Hosp., 293 F.3d 103, 108 (3d Cir. 2002)). “‘Futility’ means that the complaint, as
amended, would fail to state a claim upon which relief could be granted.” Shane v. Fauver, 213
F.3d 113, 115 (3d Cir. 2000) (quoting In re Burlington Coat Factor Sec. Lit., 114 F.3d 1410,
1434 (3d Cir. 1997)). The court assesses futility under the same standard as a Rule 12(b)(6)
motion to dismiss. Shane, 213 F.3d at 115.
B. Analysis
Because Lohr Printing’s motion to amend was filed on October 2, 2012, after the July 15,
2012 scheduling order deadline, Lohr Printing must meet the good cause standard set forth in

9

Rule 16(b). CBS, CUSA and McCollister’s argue that Lohr Printing’s motion to amend should
be denied, as Lohr Printing has failed to demonstrate such good cause.
While the Court is conscious of the need to enforce scheduling orders, the Court finds
that where, as here, a party diligently seeks to amend its complaint in order to avoid dismissal on
a Rule 12(b)(6) motion, that party has good cause under Rule 16(b). Cf. Phillips, 515 F.3d at
236 (3d Cir. 2008) (“[I]f a complaint is vulnerable to 12(b)(6) dismissal, a district court must
permit a curative amendment, unless an amendment would be inequitable or futile.”). Here,
Lohr Printing’s motion to amend is in response to two 12(b)(6) motions to dismiss filed after
expiration of the scheduling order deadline. Lohr Printing’s response was diligent: it submitted
the proposed Second Amended Complaint a mere month after the second of the above motions
issued, and less than two months after the first. Thus, the Court finds it appropriate to permit
amendment in this case if it would not be prejudicial or futile.
As prejudice has not been argued, the Court turns to futility. Because the inquiry for
determining the futility of amendment and a 12(b)(6) motion to dismiss are the same, the Court
will analyze the motions to dismiss and the motion to amend concurrently, beginning with the
claims against Ms. Loney. The Court will then review the claims against CUSA and CBS.
i.

McCollister’s Motion to Dismiss the Claims and Cross-Claims against Ms. Loney
McCollister’s has moved to dismiss Lohr Printing’s claims and CFS’s3 cross-claims as to

Ms. Loney,4 on both 12(b)(6) and 12(b)(2) grounds. McCollister’s argues that even if this Court
properly has personal jurisdiction over Ms. Loney (a fact it disputes), any claims against her

3
Note: In some of its subsequent submissions, McCollister’s has referred to “CBS’s” crossclaims against Ms. Loney. [See, e.g., 55]. However, given the initial filing and the fact that CBS
has not filed cross-claims against Ms. Loney, the Court assumes CFS is the intended party.
4
See August 17, 2012 Letter Order acknowledging United and McCollister’s authorization of
their counsel to file a motion to dismiss on behalf of Sonaie Loney. [38].
10

would be preempted by the ICC Termination Act of 1995 (“ICCTA”). [49]. The Court notes
that CFS has, to date, failed to file any opposition to the motion, leaving only Lohr Printing’s
arguments to consider. Lohr Printing does not dispute ICCTA preemption of any claims against
Ms. Loney, [53], but instead insists upon the inclusion of Ms. Loney as a “necessary and
indispensable” party for discovery, to be dismissed prior to trial. [Proposed Second Amd.
Compl. at ¶ 220-224; 53-2 at II].
In reviewing the case law, the Court finds little direct guidance in this area aside from a
handful of cases in New Jersey where, as Lohr Printing proposes, parties have been added for
discovery purposes only. See Rubankick v. Witco Chem. Corp., et al., 576 A.2d 4 (N.J. Sup. Ct.
App. Div. 1990) (noting in a footnote that employer Witco was added as a party for discovery
purposes only); Arcell v. Ashland Chem. Co., Inc., et al., 378 A.2d 53 (N.J. Sup. Ct. 1977)
(granting motion to add party for discovery purposes only based upon equity grounds);
Carpenter, Bennett & Morrisey v. Jones, 485 A.2d 316 (N.J. Sup. Ct. App. Div. 1984)
(permitting party who possessed funds subject to litigation to be named a nominal defendant);
SEC v. Antar, 831 F. Supp. 380 (D.N.J. 1993) (naming as nominal defendants parties who had
received profits from illegal sale of stock so they could be disgorged of their profits); Brodsky v.
Grinnell Haulers, Inc., 827 A.2d 1104 (N.J. Sup. Ct. App. Div. 2003).
In many of the cases relevant to this inquiry, the parties in issue were added because they
either possessed certain property or were privy to unique information necessary for the
advancement of the litigation. See, e.g., Carpenter, 482 A.2d 316; SEC v. Antar, 831 F. Supp
380; Amboy Bancorporation v. Jenkens & Gilchrist, 02-CV-5410, 2007 WL 274683 (D.N.J.
Sept. 14, 2007) (“In some rare circumstances, a nominal defendant might be used to describe a

11

party joined solely because it possesses some knowledge or information that needs to be obtained
through discovery, but that party is dismissed as soon as it provides the discovery requested.”).
While the Court acknowledges that circumstances may call for the naming of a so-called
“nominal” party for discovery purposes only, at best the Court finds this to be an unusual and
rare remedy in federal court. The Court is thus hesitant to exercise this power where there is no
clear showing that the proposed nominal party solely possesses “knowledge of most, if not all
facts relevant to the action brought by plaintiffs,” Arcell, 378 A.2d at 71, or otherwise is in some
possession of property or funds relevant to the action. The Court does not believe Lohr Printing
has adequately shown that Ms. Loney is alone possessor of necessary information for this action,
or shown that ordinary discovery processes will be insufficient. Given the further lack of
opposition from CFS with regards to this matter, the Court grants McCollister’s motion to
dismiss all claims and cross-claims against Ms. Loney, and dismisses Lohr Printing’s claims
against Ms. Loney as futile.
ii.

CBS and CUSA’s Motion to Dismiss with Respect to CUSA
CBS and CUSA have moved to dismiss Lohr Printing’s Third Party Complaint with

respect to CUSA. [45]. Lohr Printing has stated its support for dismissal without prejudice, and
has removed CUSA from its proposed Second Amended Complaint. The Court thus grants CBS
and CUSA’s Motion to Dismiss Claims with respect to CUSA.
iii.

CBS and CUSA’s Motion to Dismiss with Respect to CBS
In its initial motion, CBS moved to dismiss Lohr Printing’s assertions of breach of

contract, breach of the implied covenant of good faith and fair dealing/equitable fraud, and legal
fraud. After Lohr Printing moved to amend its complaint, CBS argued that the proposed
complaint (1) fails to satisfy Rule 8’s requirement of a short and plain statement, (2) contains

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claims previously contradicted by Lohr Printing, and (3) fails to state a claim for which relief can
be granted with regards to CBS. [54 at III.A]. The Court will thus consider each of Lohr
Printing’s proposed eight counts in turn.
1) Principal/agent liability for the negligence of United Van Lines and McCollister’s
Count I of the proposed Second Amended Complaint alleges that CBS is liable for
damages to Lohr Printing proximately caused by United and McCollister’s on a theory of
principal-agent liability. Although the existence of an agency relationship has various
manifestations, the heart of such a relationship involves the control of one party over the other, to
the extent that the other acts on his behalf and with his consent. See Restatement (Second) of
Agency § 1 (1958); Rodriguez v. Hudson County Collision Co., 296 N.J. Super 213, 220 (App.
Div. 1997) (“An agency relationship arises when one party authorizes another to act on its behalf
while retaining the right to control and direct any such acts.”).
The Court agrees with CBS that there is inadequate support for the finding of a principalagent relationship between CBS and United/McCollister’s. Neither the shipping contract, nor the
behavior of the parties (Mr. Held requested and negotiated a shipping price with McCollister’s,
and Mr. Lohr provided payment and supervised the actual day of shipment) suggests the
requisite exercise of control between CBS and United/McCollister’s. Thus, this Court finds that
proposed Count I of the complaint fails to state a claim on which relief can be granted, and is
denied as futile.
2) Negligence/Breach of Fiduciary Duty
Count II of the proposed Second Amended Complaint asserts that Mr. Held, on behalf of
CBS and CFS, acted in a fiduciary capacity for Lohr Printing in terms of assisting with the
Printer’s move to New Jersey, and the subsequent sale of replacement equipment when the

13

Printer was damaged. From this alleged fiduciary capacity, Lohr Printing asserts that Mr. Held
owed various duties to Lohr Printing, including, inter alia, seeking alternate pricing at different
liability limits, informing Lohr Printing that McCollister’s was an agent of United, and advising
CFS of Lohr Printing’s intent to ship the Printer to New Jersey.
After careful review of the alleged facts and surrounding circumstances, the Court finds
insufficient evidence that Mr. Held served Lohr Printing in a fiduciary capacity on behalf of
CBS. “Under New Jersey Law, a . . . fiduciary relationship encompasses all relationships ‘. . . in
which confidence is naturally inspired, or in fact, reasonably exists . . . .” Alexander v. CIGNA
Corp., 991 F. Supp. 427, 437 (D.N.J. 1998), aff’d, 172 F.3d 859 (3d Cir. 1998). While “[t]here
is no invariable rule which determines the existence of a fiduciary relationship . . . there must
exist a certain inequality, dependence, weakness of age, or mental strength, business intelligence,
knowledge of the facts involved, or other conditions, giving to one advantage over the other.”
Id. at 438. However, “fiduciary duties are not imposed in ordinary commercial business
transactions.” Id. at 438 (citing International Minerals and Min. v. Citicorp, North America, 736
F. Supp. 587, 597 (D.N.J.1990): see also Glenside West Corp. v. Exxon Co., U.S.A., 761 F. Supp.
1100, 1116 (D.N.J. 1991); Coca–Cola Bottling Co. of Elizabethtown v. Coca–Cola Co., 696 F.
Supp. 57, 73 (D. Del. 1988), aff'd, 988 F.2d 386 (3d Cir. 1993)).
Here, while Mr. Held may have been Lohr Printing’s principal representative when
purchasing and leasing a printer, there is no evidence indicating that Mr. Held did, in fact,
exercise the type of superiority and control on behalf of CBS over Lohr Printing required to
establish a fiduciary relationship. Indeed, it appears to be a mere arms-length business
transaction, and the request for and provision of aid in shipment of the Printer appears to be an

14

interaction between experienced business people. Thus, this Court finds that proposed Count II
of the complaint fails to state a claim on which relief can be granted, and is denied as futile.
3) Promissory Estoppel
Count III of the proposed Second Amended Complaint sets forth a claim that CBS is
liable to Lohr Printing on a theory of promissory estoppel. According to Lohr Printing, Mr. Held
“made clear and definite promises to Lohr as to how to best move [the] Printer [] to New Jersey,”
[53-2 at VIII.B], and Mr. Held should have reasonably expected Lohr Printing to rely on those
promises. Mr. Held then breached his agreement to assist when he failed to advise Lohr Printing
that McColister’s was an agent of United, that Lohr Printing was bound by the TSA with CBS
with regards to liability limits, and various other failures.
To successfully establish a claim of promissory estoppel, a party must show
(1) a clear and definite promise by the promisor; (2) the promise [was] made with the
expectation that the promisee [would] rely thereon; (3) the promise [did] in fact
reasonably rely on the promise; and (4) detriment of a definite and substantial nature
[was] incurred in reliance on the promise.
Aircraft Inventory Corp. v. Falcon Jet Corp., 18 F. Supp. 2d 409, 416 (D.N.J. 1998)(quoting
Malaker Corp. V. First Jersey Nat’l Bank, 395 A.2d 222, 230 (N.J. Super. Ct. App. Div. 1998).
The Court does not believe that Lohr Printing has satisfactorily pled grounds for
promissory estoppel in this case. First, the Court is hard-pressed to find a clear and definite
promise in the proposed Second Amended Complaint. In paragraph 75, Lohr Printing alleges
that “Held on behalf of CBS, and presumably CFS, made a clear and definite promise that he
would assist Lohr, his longstanding customer, in properly arranging the move of [the] Printer [].”
[Proposed Second Amd. Compl.]. In paragraph 77, Lohr Printing alleges that “Held represented
he would be able to advise Lohr how to move [the] Printer [] to Lohr [Printing]’s customer in
New Jersey and get what was represented to be a good price.” [Id.].

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Even if the above assertions were more than bare-bones allegations of a clear and definite
promise, the Court cannot conclude that Lohr Printing has a plausible claim for relief.
“Determining whether a complaint states a plausible claim for relief [is] . . . a context-specific
task that requires the reviewing court to draw on its judicial experience and common sense.”
Iqbal, 556 U.S. at 663-64 (citations omitted). Based upon the facts pled, Mr. Held may have
realized that Mr. Lohr would rely upon him to refer him to a shipping company, but there is little
support that Mr. Held intended for Mr. Lohr to rely upon him for every aspect of the shipping,
and to make all relevant inquiries. Mr. Held did not finalize shipping by providing payment on
behalf of Mr. Lohr, and he did not supervise the shipping. Even if Mr. Held neglected to inquire
as to liability limits and provide that information to Mr. Lohr, Mr. Lohr still had opportunity to
ask further follow up questions. Such extensive reliance by Lohr Printing on Mr. Held’s promise
to assist in moving the Printer does not seem reasonable. Thus, the Court denies Count III of the
proposed Second Amended Complaint as futile.
4) Equitable Estoppel
Proposed Count IV alleges that CBS should be responsible for damages incurred by Lohr
Printing, or should otherwise pay CFS all monies owed under lease based upon a theory of
equitable estoppel. The doctrine of equitable estoppel is applied “only in very compelling
circumstances, where the interests of justice, morality and common fairness clearly dictate that
course.” Phillips v. Borough of Keyport, 107 F.3d 164, 182 (3d Cir. 1997) (internal quotations
omitted) (quoting Palatine I v. Planning Bd. of Township of Montville, 133 N.J. 546, 628 A.2d
321, 328 (1993)). In order to support a claim of equitable estoppel,
[T]he claiming party must show that the alleged conduct was done, or representation was
made, intentionally or under such circumstances that it was both natural and probable that
it would induce action. Further, the conduct must be relied on, and the relying party must
act so as to change his or her position to his or her detriment.

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Id. (citing Miller v. Miller, 97 N.J. 154 (1984)). The reliance must be in good faith. Id. (citing
Lizak v. Faria, 96 N.J. 482 (1984)).
Lohr Printing asserts that based upon Mr. Held’s representations and conduct, Lohr
Printing did not make further inquiry into (1) whether McCollister’s was an agent of United, (2)
liability limits that would apply to the Printer’s transport, (3) the relevant particulars of the TSA,
(4) whether Lohr Printing would need to independently advise CFS that the Printer was being
shipped by McCollister’s, and (5) whether Lohr Printing would be better off ordering a new
printer to give to its New Jersey customer, instead of sending its own printer and being held
liable for shipment. Lohr Printing concludes this list with the further assertions that Mr. Held
failed to report the loss of the Printer to CFS, and that Mr. Held, CFS, and CBS sought to make
Lohr Printing responsible for lease payments on both the damaged Printer and the printer
purchased by Lohr Printing to replace it.
The Court acknowledges that while Lohr Printing may have a claim against CFS for
equitable estoppel under the First Amended Complaint (insofar as Mr. Held, as an alleged agent
for CFS, may have been obligated to inform CFS of the damage), the Court does not believe
Lohr Printing has sufficiently compelling grounds to bring a claim of equitable estoppel against
CBS. Despite Mr. Held’s promise to assist Mr. Lohr in shipping the Printer, neither Mr. Held
nor CBS agreed to be responsible for shipment. Mr. Lohr had direct contact with Ms. Loney
(McCollister’s representative) when he gave her his credit card information, and had direct
contact with a United driver and the Bill of Lading when said driver came to pick up the Printer.
Any relevant omission with respect to liability limits was not at those moments the result of
CBS’s actions. Thus, proposed Count IV as concerns CBS is dismissed as futile.

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5) Breach of Contract
In proposed Count V of the Second Amended Complaint, Lohr Printing asserts that CBS,
along with Mr. Held and CFS, are liable for all proximately caused damages via breach of
contract. The relevant contracts described therein are the CBS maintenance agreement and an
alleged oral agreement between Mr. Held and Lohr Printing concerning shipment of the Printer.
As for the former, the Court finds no evidence that CBS breached its maintenance contract with
Mr. Held’s offer of assistance in securing Printer shipment, as CBS itself did not ship the Printer.
As for the latter, the Court finds that Lohr Printing has failed to adequately plead the
existence of an oral contract. The touchstones of whether a contract exists are mutual assent and
consideration. While Lohr Printing asserts that Mr. Held received consideration for assisting in
Printer shipment via the increased commission and sales that would result from Lohr Printing’s
need to replace the shipped printer with a new machine, the Court does not find this to be actual
consideration as pled. “[C]onsideration must . . . be valuable in the sense that it is something that
is bargained for in fact.” Borbely v. Nationwide Mut. Ins. Co., 547 F. Supp. 959, 980 (D.N.J.
1981) (citing 1 Corbin on Contracts § 131 (1963)). Here, Lohr Printing has not shown that
bargained for exchange. As CBS points out: whether or not Lohr Printing shipped its current
printer to New Jersey and purchased a replacement, or purchased a new printer to send to its
customer in New Jersey, Mr. Held would receive the benefit of a sale. The pleading does not
support any additional negotiated benefit on the part of Mr. Held. Thus, the Court finds
proposed Count V to be futile with respect to CBS, and grants CBS’s motion to dismiss.
6) Breach of the Implied Covenant of Good Faith and Fair Dealing
Proposed Count VI of the Second Amended Complaint alleges liability on the part of
CBS based upon a breach of the implied covenant of good faith and fair dealing. In New Jersey,

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“every party to a contract is bound by a duty of good faith and fair dealing in both the
performance and enforcement of the contract.” Hassler v. Sovereign Bank, 644 F. Supp. 2d 509,
518 (D.N.J. 2009) (quoting Brunswick Hills Racquet Club, Inc. v. Route 18 Shopping Ctr.
Assocs., 182 N.J. 210, 224 (2005)) (internal citations omitted). “[A] contract must exist between
two parties before a court will infer this covenant.” Grygorcewicz v. Schweitzer-Mauduit Int'l,
Inc., CIV A 08-CV-4370 FLW, 2009 WL 235623, at *2 (D.N.J. Jan. 30, 2009).
First, Lohr Printing appears to assert that an implied covenant of good faith and fair
dealing arose from the alleged oral contract discussed previously between Mr. Held and Lohr
Printing. Given that the Court finds there to be no enforceable oral contract between Mr. Held
and Lohr Printing, the Court will disregard this argument.
Alternatively, Lohr Printing argues that Mr. Held, CBS, and CFS by their conduct
breached the implied covenant of good faith and fair dealing when they failed to disclose, inter
alia, that McCollister’s was an agent of United, applicable liability limits, and Lohr Printing’s
duty to independently advise CFS of its intent to ship the Printer if notice to Mr. Held was
insufficient. Lohr Printing also alleges a breach where the parties’ conduct post damage of the
Printer included a failure to (1) roll payments for the replacement printer into payments
otherwise due on the damaged Printer, and (2) give Mr. Lohr the opportunity to replace the
damaged Printer with less expensive used reconditioned equipment. Finally, Lohr Printing
alleges a breach by CBS and CFS when Mr. Held failed to advise Lohr Printing that instead of
shipping its own printer, Lohr Printing could purchase a printer to be shipped directly to New
Jersey, such that Canon would bear the cost and expense of any damage.
Since the above claims must be analyzed in relation to a contract, the Court considers
them in the context of the CBS maintenance agreement, and finds the alleged actions did not

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violate the spirit of that document. While there is perhaps some argument that CFS has breached
its implied covenant of good faith and fair dealing in terms of its lease agreement through Mr.
Held’s conduct, the Court finds that proposed Count VI as against CBS is futile as amended.
7) Legal Fraud
In proposed Count VII of the Second Amended Complaint, Lohr Printing alleges that
CBS, CFS, and Mr. Held engaged in legal fraud when, with an intent to obtain an unfair
advantage on Lohr Printing in the event the Printer was damaged in transport and to receive
increased sales and monthly lease payments, they breached their duty to advise Lohr Printing of
certain material facts, concerning, among other things, whether McCollister’s was an agent of
United, the liability limitations of the TSA agreement, and Lohr Printing’s duty to investigate
further liability and shipping options. Lohr Printing alleges that as a direct and proximate result
of these omissions, Lohr Printing chose to ship the Printer with McCollster’s, and that, after the
Printer was damaged, Mr. Held failed to alert CFS of said damage such that Lohr Printing was
forced to make lease payments on both the machine it purchased to replace the damaged Printer
and the damaged Printer itself.
In New Jersey, a party wishing to succeed on a claim of legal fraud must show proof that
“the defendant made (1) a material misrepresentation of present or past fact (2) with knowledge
of its falsity (3) with the intention that the other party rely thereon (4) and which resulted in
reasonable reliance by plaintiff.” Lightning Lube, Inc. v. Witco Corp., 4 F.3d 1153, 1182 (3d
Cir. 1993) (citing Jewish Ctr. of Sussex County v. Whale, 86 N.J. 619, 432 A.2d 521, 524
(1981)). “A plaintiff asserting a claim of legal fraud must show that the defendant acted with
scienter but only need prove the elements of fraud by a preponderance of the evidence.” Id.

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As an initial matter, the Court is unconvinced that Lohr Printing has sufficiently pled
scienter on the part of CBS. Lohr Printing argues that scienter may be shown by CBS’s failure
to propose directly shipping a new printer to New Jersey when Lohr Printing first approached
Mr. Held with the idea of shipping the Printer, thus assuming liability for the risk of transport
itself. Lohr Printing also argues that CBS hoped to capitalize on any damage that might result
from the shipment by selling an additional printer to Lohr Printing. The Court finds the former
point moot, as CBS would have had to assume liability for at least one printer shipment
regardless of whether Lohr Printing ordered a printer for direct shipment to its customer in New
Jersey, or sent the customer its own printer and then purchased a replacement. As concerns the
latter, the Court finds this too uncertain an outcome to support an assertion of scienter.
Additionally, the Court does not find that Lohr Printing has sufficiently argued any
material misrepresentation by omission so as to constitute fraud, either before or after the Printer
was damaged. Thus, the legal fraud claim against CBS is dismissed as futile. The Court
declines to consider here whether there may be a valid fraud claim against CFS based upon Mr.
Held’s failure to alert CFS of Lohr Printing’s intent to ship the Printer and its ensuing damage.
8) Consumer Fraud
Lohr Printing attempts to hold CBS liable under the Consumer Fraud Act, N.J.S.A. 56:81 et seq. (“CFA”), by claiming that the shipment was performed in connection with the sale,
rental, distribution, or advertisement of merchandise. [53 at ¶ 215]. Lohr Printing further argues
that a consumer fraud claim attaches because Mr. Held sold Lohr Printing a printer to replace the
one damaged in transit that allegedly was not “like equipment” at the lowest possible price. To
state a consumer fraud claim, a complainant must allege three elements: “(1) unlawful conduct,
(2) an ascertainable loss, and (3) a causal relationship between the defendant’s unlawful conduct

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and the plaintiff’s ascertainable loss.” Int’l Union of Operating Engineers Lcoal No. 68 Welfare
Fund v. Merck & Co., Inc., 192 N.J. 372 (2007) (internal citations omitted).
Here, the Court does not find the pleadings sufficient to support the application of the
CFA to CBS, insofar as Mr. Held’s initial assistance with securing the price quote and ultimate
shipment by McCollister’s was not done in conjunction with the sale/rental/distribution of a
printer, and the further lack of any evidence that Mr. Held’s failure to provide like equipment at
the lowest possible price for a replacement printer constituted unlawful conduct. Thus, the Court
finds that the consumer fraud claims against CBS should be dismissed as futile.
CONCLUSION
For the foregoing reasons, McCollister’s Motion to Dismiss all Claims and Cross-Claims
against Sonaie Loney is granted. Given that the Court has found all proposed counts as against
CBS and CUSA to be futile, and that Lohr Printing’s proposed Second Amended Complaint
included the three counts present in the previous complaint, the Motion to Dismiss All Claims
with respect to CUSA and CBS is granted. Finally, as Lohr Printing’s Motion to Amend was
brought outside of the scheduling order in response to the above motions to dismiss, and the
above motions to dismiss have been granted, Lohr Printing’s Motion to Amend its Counterclaim
and Third Party Complaint is denied. An appropriate order follows.

/s/ Anne E. Thompson
ANNE E. THOMPSON, U.S.D.J.

Dated:

January 29, 2013

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