UNITED VAN LINES, LLC et al v. LOHR PRINTING, INC.
Filing
92
OPINION filed. Signed by Judge Anne E. Thompson on 3/4/2014. (kas )
NOT FOR PUBLICATION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
OPINION
Plaintiffs,
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 Rodney Held’s (hereinafter, “Mr. Held’s”) motion
to dismiss. (Doc. No. 75). Lohr Printing, Inc. (hereinafter, “Lohr Printing”) opposes the motion.
(Doc. No. 76). The Court has issued the Opinion below based upon the written submissions and
without oral argument pursuant to Federal Rule of Civil Procedure 78(b). For the reasons stated
herein, the motion is granted.
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BACKGROUND
In April 2009, Lohr Printing leased a Canon Image Press 60000 VP-4 (the “Printer”)
under a Canon Business Solutions (“CBS”) service contract; the Printer was leased through and
owned by Canon Financial Services (“CFS”). (Id. at ¶¶ 51-52; 55). Both CBS and CFS are
affiliates of Canon USA. (Id. at ¶ 53). Mr. Held, a CBS account representative and alleged
agent of CFS and CUSA, has sold Lohr Printing several printers. (Id. at ¶¶ 54, 56).
In February 2011, Lohr Printing advised Mr. Held of its intention to relocate the Printer
to another facility. (Id. at ¶ 58). Mr. Held offered to assist in getting a price quote for shipping.
(Id. at ¶ 59). Mr. Held advised Lohr Printing of the following: (1) Canon often used
McCollister’s Transportation Services, Inc. (hereinafter, “McCollister’s”); (2) McCollister’s is
experienced in handling this kind of equipment; and (3) Mr. Held would secure a good price for
Lohr Printing. (Id. at ¶¶ 60-61).
On February 16, 2011, Mr. Held contacted Ms. Loney, a customer service coordinator for
McCollister’s to request a quote on the Printer’s transportation. (Id. at ¶ 62). Mr. Held and Ms.
Loney discussed the machine’s characteristics and the need to crate the machine for transport.
(Id. at ¶ 63). Ms. Loney purportedly told Mr. Held that crating was unnecessary. (Id. at ¶ 64).
After a period of negotiations in which Mr. Held was the intermediary, Mr. Held
conveyed the shipping price to Lohr Printing. (Id. at ¶¶ 75-76). Ms. Loney then contacted Lohr
Printing directly for payment. (Id. at ¶¶ 77-78). Lohr Printing contends that the parties never
discussed liability limits or the fact that McCollister’s was actually an agent for another carrier,
United Van Lines, Inc, (hereinafter, “United”). (Id. at ¶¶ 65, 67, 74, 79).
On March 29, 2011, United picked up the Printer at Lohr Printing’s facility. (Id. at ¶¶ 8085). At the time of pick-up, Lohr Printing was handed a “document,” which its employee was
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instructed to sign. (Doc. No. 30 at ¶¶ 88-89). This document allegedly limited the liability of
the shipping company to a value below the Printer’s value. (Id.). Lohr Printing signed the
document and contends that it was not aware of the limitation. (Id.).
On April 4, 2011, the Printer was delivered in a damaged state. (Id. at ¶¶ 91-92). On
April 13, 2011, Lohr Printing filed a “Presentation of Claim for Loss and Damages” form with
United and McCollister’s. (Id. at ¶ 95). Lohr Printing estimates the total value of loss to be
$251,868.00. (Id. at ¶ 112). In response to the above incident, Lohr Printing brought the
following claims against Mr. Held: (1) Negligence; (2) Breach of Contract; (3) Breach of
Implied Covenant of Good Faith and Fair Dealing; (4) Breach of Fiduciary Duty; and (5) Legal
Fraud and Consumer Fraud.
DISCUSSION
The Court will first discuss the applicable legal standard before examining each claim.
1. Legal Standard
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-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 wellpleaded 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
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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 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. 678-79).
2. Negligence
“In order to sustain a common law cause of action in negligence, a plaintiff must prove four
core elements: ‘(1) [a] duty of care, (2) [a] breach of [that] duty, (3) proximate cause, and (4)
actual damages.’” Brunson v. Affinity Fed. Credit Union, 199 N.J. 381, 400 (2009) (quotations
and citations omitted). As a threshold issue, a plaintiff must show that the defendant owes a duty
to the plaintiff. Strachan v. JFK Memorial Hospital, 109 N.J. 523 (1988). The determination of
whether a duty of care exists is “quintessentially a question of law for the court.” Highlands Ins.
Co. v. Hobbs Grp., LLC, 373 F.3d 347, 351 (3d Cir. 2004). Foreseeability and fairness are two
key concepts a court should apply to determine whether a duty exists. Highlands Ins. Co. v.
Hobbs Grp., LLC., 373 F.3d 347, 352 (3d Cir. 2004); see also Griesenback Ex. Rel. Kuttner v.
Walker, 199 N.J. Super. 132, 136 (App. Div. 1985) (defendant has duty of care if he creates an
unreasonable risk of foreseeable harm or policy considerations demand it). Courts should weigh
the “relationship of the parties, nature of the risk, and the public interest in the proposed
solution.” Jerkins v. Anderson, 101 N.J. 285, 295 (2007); Goldberg v. Housing Auth. of Newark,
38 N.J. 578, 583 (1962).
Here, Lohr Printing argues that Mr. Held owed a duty because Mr. Held initiated contact
with McCollister’s, obtained a quote, discussed the nature of the item being moved, and vouched
for McCollister’s. (Doc. No. 76 at 5). Lohr Printing also alleges that Mr. Held and the Canon
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companies stood to gain from a good relationship with Lohr Printing in the form of more
business. (Doc. No. 76 at 5).
Balancing all of the factors, the Court finds that Mr. Held did not owe Lohr Printing a
duty. See Call v. Czaplicki, 2010 WL 3724275, *10 (D.N.J. Sept. 16, 2010) (public policy does
not always require referring party to scrutinize qualifications). While Mr. Held did assist in the
process, Lohr Printing interacted with representatives of both United and McCollister’s prior to
entering the agreement, paid the shipping company directly, and was free to make its own
inquiries. Mr. Held’s act of confirming and negotiating the quote, an action that includes
inquiring into insurance and shipping procedures, did not create a foreseeable risk that Lohr
Printing would limit the mover’s liability or that the moving company would negligently harm
the Printer. Furthermore, given the relationship between Mr. Held and Lohr Printing in the
transaction at issue, public policy does not require imposing a duty here. In fact, it would seem
to offend notions of fairness to impose a duty on Mr. Held in this instance. See Highlands, 373
F.3d at 352 (fairness is a “key” element of the duty analysis). Accordingly, the Court finds that
Mr. Held did not owe a duty. In the absence of duty, the negligence claim is dismissed.
3. Breach of Contract and Breach of Implied Covenant of Good Faith and Fair Dealing
“To establish a breach of contract claim, a plaintiff has the burden to show that the parties
entered into a valid contract, that the defendant failed to perform his obligations under the
contract and that the plaintiff sustained damages as a result.” Murphy v. Implicito, 392 N.J.
Super. 245, 265 (App. Div. 2007). Therefore, a threshold issue is whether the plaintiff can show
a contract exists.
An essential component of a contract is consideration. Boberly v. Nationwide Mus. Ins. Co.,
547 F. Supp. 959, 980 (D.N.J. 1981). “[C]onsideration must . . . be valuable in the sense that it is
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something that is bargained for in fact.” Borbely v. Nationwide Mut. Ins. Co., 547 F. Supp. 959,
980 (D.N.J. 1981) (citation omitted). Though Lohr Printing alleges that Mr. Held received
consideration in the form of the increased commission that would result from Lohr Printing’s
need to replace the Printer it was shipping, this argument does not prove a bargained for
exchange. As this Court has already held, whether or not Lohr Printing shipped its current
printer and purchased a replacement, or purchased a new printer to send to its customer, Mr.
Held would receive the benefit of a sale. Thus, the pleading does not support any additional
negotiated benefit on the part of Mr. Held.
The Court now turns to the related issue of the implied covenant of good faith and fair
dealing. “[E]very 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) (quotations omitted). “[A] contract must exist between two parties before a
court will infer this covenant.” Grygorcewicz v. Schweitzer-Mauduit Int'l, Inc., 2009 WL 235623
*2 (D.N.J. Jan. 30, 2009). Since no contract existed between Mr. Held and Lohr Printing, the
claim for breach of implied covenant of good faith and fair dealing is dismissed.
4. Breach of Fiduciary Duty
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, 427 (D.N.J. 1998) (citations and quotations omitted). 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.”
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Id. at 438. Therefore, “fiduciary duties are not imposed in ordinary commercial business
transactions.” Id. at 438.
The Court finds insufficient evidence that Mr. Held served Lohr Printing in a fiduciary
capacity. While Mr. Held appears to be Lohr Printing’s principal representative in the purchase
and lease of printers and has more knowledge on the subject than Lohr Printing, there is no
evidence indicating that Mr. Held exercised the type of superiority and control required to
establish a fiduciary relationship. This finding is consistent with the law of the case as it relates
to the alleged fiduciary relationship. (See Doc. No. 72). Accordingly, the breach of fiduciary
duty claim is dismissed.
5. Fraud and Consumer Fraud
In New Jersey, a party wishing to succeed on a claim of legal fraud must prove 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.
Lohr Printing argues that Mr. Held is liable because he failed to do the following: (1)
disclose that “McCollister’s [would] claim[] a liability limitation after a price was agreed upon to
ship the subject printer;” (2) disclose that “limited liability applied prior to shipment;” (3)
“offer[] alternative rates” on shipping; and (4) “pick[] up the Printer before the bill of lading was
shown to [Lohr].” (Doc. No. 30 at ¶ 133).
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These claims fail because Mr. Held did not owe a duty to disclose in these instances, these
alleged issues occurred after Mr. Held had gotten a price quote, and do not satisfy the scienter
requirement.
A party “has no duty to disclose information to another party in a business transaction unless
a fiduciary relationship exists between them, . . . the transaction itself is fiduciary in nature, or
. . . one party ‘expressly reposes a trust and confidence in the other.” N.J. Econ. Dev. Auth. v.
Pavonia Restaurant, Inc., 319 N.J. Super 435, 446 (App. Div. 1998). As discussed previously,
Lohr Printing failed to allege a fiduciary relationship between Lohr Printing and Mr. Held.
Moreover, the alleged actions occurred after Mr. Held’s involvement in the transaction ended.
See Chatlos Systems, Inc. v. National Cash Register Corp., 479 F.Supp. 738, 749-50 (D.N.J.
1979) (“statements as to future or contingent events . . . do not constitute misrepresentations”).
Finally, Lohr Printing failed to satisfy the scienter requirements for fraud claims. (See Doc. No.
72 at 21). Lohr Printing claims that Mr. Held misled with “the intent to obtain an unfair
advantage on defendant in the event the Printer was damaged in transport.” (Doc. No. 50 at ¶
134). As this Court has already held, any allegation that Mr. Held intended “to capitalize on any
damage that might result from the shipment by selling an additional printer to Lohr” is “too
uncertain an outcome to support an assertion of scienter.” (Doc. No. 72 at 21).
In accordance with reasons above, the fraud and consumer fraud claims are dismissed.
CONCLUSION
For the reasons set forth above, the motion to dismiss, (Doc. No. 75), is granted.
/s/ Anne E. Thompson
Date: 3/4/14
ANNE E. THOMPSON, U.S.D.J.
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