Etman et al v. Greater Grace World Outreach, Inc.

Filing 12

DECISION AND ORDER granting Deft's 8 Motion to Dismiss. Signed by Senior Judge Thomas J. McAvoy on 2/22/18. (sfp, )

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
-------------------------------SCOTT D. ETMAN and PTARMIGAN ETMAN,
Plaintiffs,
v.

1:17-CV-473

GREATER GRACE WORLD OUTREACH, INC,
Defendant.
-------------------------------THOMAS J. McAVOY
Senior United States District Judge

DECISION and ORDER
Before the Court is Defendant's Motion to Dismiss, dkt. # 8. The parties have briefed
the issues and the Court has determined to decide the matter without oral argument.
I.

Background
This case concerns injuries suffered by Plaintiff Scott Etman on May 1, 2017, at a

“Spring Rally” hosted by Defendant Greater Grace World Outreach, Inc (“Greater Grace”), a
Maryland Corporation. See Complaint, Dkt. #1.1 Plaintiffs’ Complaint alleges that Scott

The Court has laid out the facts as alleged in the Plaintiffs’ Complaint, as such
alleged facts are those which the Court is to consider in deciding whether to grant the
Defendant’s motion. Plaintiffs’ briefing alleges a number of additional facts not provided in
the Complaint. These additional facts include the issue dispositive to this claim: the
nature of the contract that Plaintiffs assert gives rise to a cause of action not barred by the
statute of limitations. The Court has made use of those documents, which decide this
case, in the interest of judicial efficiency. Plaintiffs are reminded, however, that the legal
standard described below requires the Court to evaluate for legal sufficiency of the
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Etman served as an Associate and Youth Pastor at Greater Grace Church in Malta, New
York, and that the church in Malta “was and is a local, indigenous church affiliated” with
Greater Grace. Id. at ¶ 5.
Plaintiffs allege that on May 4, 2013 Scott Etman was an attendant at the Spring
Rally, an event sponsored by Greater Grace and conducted annually at Camp Canadensis,
in Pennsylvania. Id. at ¶ 10. Etman was part of the adult supervision for a church youth
group from his own congregation. Id. at ¶ 11. Etman participated in one of the activities at
Camp Canadensis, a rock-climbing wall. Id. Etman fell 32 feet from that wall due to no
fault, carelessness or negligence on his part. Id. at ¶ 12. He suffered injuries, including a
T10 vertebral compression fracture and related soft tissue swelling. Id. at ¶ 13.
Plaintiffs’ Complaint raises two counts. Count I alleges that “[a]s a contractual result
of the duty of care responsibilities assumed by Defendant . . . all duty of care claims made
by Plaintiff . . . are directly recoverable against Defendant.” Id. at ¶ 17. Count II, raised by
Plaintiff Ptarmigan Etman, Scott Etman’s spouse, alleges loss of consortium as a result of
Scott Etman’s injuries. Id. at ¶ 20. Plaintiffs seek damages in excess of $500,000.
Upon being served with the Complaint, Defendant filed the instant motion to dismiss.
Defendant argues that Plaintiffs’ claims sound in tort, even though they are cast as contract
claims, and that the statute of limitations has run, whether New York or Pennsylvania law
applies. Plaintiffs responded, bringing the case to its present posture.
II.

LEGAL STANDARD
The Defendant has filed a motion to dismiss Plaintiffs’ claims pursuant to Federal

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Complaint, not the factual allegations made in the briefing opposing a motion to dismiss.
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Rule of Civil Procedure 12(b)(6). Defendant argues that Plaintiffs have not stated a claim
upon which relief could be granted, even if all factual allegations in the complaint were
proved true. In addressing such motions, the Court must accept “all factual allegations in
the complaint as true, and draw[] all reasonable inferences in the plaintiff’s favor.” Holmes
v. Grubman, 568 F.3d 329, 335 (2d Cir. 2009). This tenet does not apply to legal
conclusions. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “Threadbare recitals of the
elements of a cause of action, supported by mere conclusory statements, do not suffice.”
Id. at 678. “To survive a motion to dismiss, a complaint must contain sufficient factual
matter, accepted as true, to state a claim to relief that is plausible on its face.” Id. (quoting
Bell Atl. v. Twombly, 550 U.S. 544, 570 (2007)). 2
III.

ANALYSIS
Defendant offers several grounds for dismissing the Complaint. The Court will

address them in turn, as appropriate.
A.

Applicable Statute of Limitations

This is a diversity action, with venue in New York. The cause of action arose in
Pennsylvania. The parties argue that Pennsylvania substantive law applies to this case and
New York’s choice of law rules apply to determine the statute of limitations. The Court
agrees. “Where jurisdiction rests upon diversity of citizenship, a federal court sitting in New
York must apply the New York choice-of-law rules and statute of limitations.” Stuart v.
American Cyanamid Co., 158 F.3d 622,626 (2d Cir.1998). “New York courts generally
The Court notes that Plaintiffs cite to Pennsylvania law as the standard for deciding
a motion to dismiss in federal court. Plaintiffs cite inapplicable law; the Court decides a
motion to dismiss brought pursuant to Federal Rule of Civil Procedure 12(b) by using
federal law.
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apply New York’s statutes of limitations, even where the injury giving rise to the action
occurred outside of New York.” Stuart, 158 F.3d 622 at 627. “This general rule, however, is
subject to a traditional statutory exception, New York’s borrowing statute, CPLR § 202.” Id.
“[A] cause of action accruing without the state cannot be commenced after the expiration of
the time limited by the laws of either the state or the place without the state where the cause
of action accrued, except that where the cause of action accrued in favor of a resident of
the state the time limited by the laws of the state shall apply.” CPLR § 202. In other words,
“New York courts will apply either the statute of the state where the cause of action accrued
or the New York statute, whichever is shorter.” Evans v. Hawker-Siddeley Aviation, Ltd.,
482 F. Supp. 547,549 (S.D.N.Y. 1979). “If plaintiff’s claim has expired under either statute,
the claim is barred.” Evans, 482 F. Supp. at 549.
In the end, deciding the question of which State’s statute of limitations to apply in this
case is immaterial. The incident giving rise to the cause of action occurred on May 4, 2013.
Plaintiff filed his complaint with the court on May 2, 2017—a few days shy of four-years
following the incident. Pennsylvania imposes a two-year statute of limitations on tort claims,
42 Pa. C.S. § 5524(2), and a four-year statute of limitations on contract claims. 42 Pa. C.S.
§ 5525(a). New York State uses a three-year statute of limitations on tort claims, CPLR §
214, and a six-year statute of limitations for breach of contract. CPLR § 213(2). In short, if
this is a tort case, Plaintiffs filed their claim outside the statute of limitations in both
Pennsylvania and New York. If Plaintiffs’ claim is a contract action, then their Complaint is
timely whether applying New York or Pennsylniai rules. The timeliness of Plaintiffs’ claims
thus turn on whether this matter is a tort action or a contract action.
B.

First Cause of Action
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Defendant argues that Plaintiffs’ first claim, which Plaintiffs label a contract claim,
fails to state a claim, and is in any case actually a tort claim. Plaintiffs respond that they
seek to raise a contract claim based on Scott Etman’s status as a third-party beneficiary of
the underlying contract in this case.
Evaluated as a contract claim, Plaintiffs fail to allege facts sufficient to make their
right to relief plausible. In Pennsylvania, a contract claim has three elements: “‘(1) the
existence of a contract, including its essential terms, (2) a breach of a duty imposed by the
contract and (3) resultant damages.” J.F. Walker Co., Inc. v. Excalibur Oil Group, Inc., 792
A.2d 1269, 1271 (Pa. Super. 2002) (quoting Williams v. Nationwide Mut. Ins. Co., 750 A.2d
881, 884 (Pa. Super. 2000)) (internal citations and quotations omitted). Plaintiffs’ Complaint
alleges that their “damage claims arise under the terms, representations and indemnity
provisions of a certain ‘Lease Agreement’ (the “Agreement”) entered in by Defendant[.]”
Complt. at ¶ 1. That Agreement permitted Greater Grace “temporary use and occupancy of
recreational facilities located in Pennsylvania” for the youth gathering. Id. The Complaint
further alleges that Plaintiff Scott Etman “comprised part of an intended class of individuals
to receive actionable relief from Defendant . . . in the event that he [suffered] an accident or
injury” during the youth gathering. Id. at ¶ 2. The Complaint further alleges that Defendant
is liable for Etman’s injuries due to its assumption of a duty to Scott Etman and “indemnity
shifting provisions made effective under the Agreement terms.” Id. at ¶ 15.
Making all inferences in Plaintiffs’ favor, these allegations do not make plausible the
existence of an agreement that would implicate the Defendant in any liability for Plaintiffs’
injuries and thus constitute a contract claim. Plaintiffs do not allege all the relevant terms of
any contract in question. They do not provide the Court with a copy of the contract that
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allegedly benefits Etman. Only the documents attached to Defendant’s brief provide a copy
of this contract. See Exh. 1 to Defendant’s Motion, dkt. # 8-2. “The law of this
Commonwealth makes clear that a contract is created where there is mutual assent to the
terms of a contract by the parties with the capacity to contract.” Shovel Transfer & Storage
v. Pa. Liquor Control Bd., 559 Pa. 56, 62-63 (Pa. 1999). T he Complaint does not even
identify the other party to the agreement that allegedly contains a provision making
Defendant liable for any injuries suffered by third parties like the Plaintiff, though the Court
likely could infer from the Complaint that the alleged contract was with Camp Canadensis.
The Complaint fails to describe clearly the purpose of the underlying agreement, nor do the
Plaintiffs point to any specific provisions that make Defendant liable to third parties like the
Plaintiffs. The Plaintiffs’ briefing argues that Plaintiff Scott Etman was an intended thirdparty beneficiary of the agreement and cites to the agreement, but the pleading does not
allege sufficient facts to make that status plausible. Plaintiff’s factual averments concerning
the existence of a contract are mere statements of a legal theory of liability, and are
therefore insufficient. “Threadbare recitals of the elements of a cause of action, supported
by mere conclusory statements, do not suffice” to make a claim plausible. Iqbal, 556 U.S.
at 678. The Court could grant the motion to dismiss based on this defective pleading alone,
but would likely allow Plaintiffs to re-plead the action and allege the existence of a contract.
Even accepting the Plaintiffs’ briefing, rather than their pleading, as an attempt to
allege the facts sufficient to survive a motion to dismiss, the Court finds that Plaintiffs have
not stated a valid contract claim. Plaintiffs’ theory is that Scott Etman was a third-party
beneficiary of the contract in question, a lease agreement between Defendant and Camp
Canadensis. “To qualify as a third party beneficiary, (1) the recognition of the beneficiary’s
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right must be appropriate to effectuate the intention of the parties, and (2) the performance
must satisfy an obligation of the promisee to pay money to the beneficiary, or the
circumstances indicate that the promise intends to give the beneficiary the benefit of the
promised performance.” Guy v. Liederbach, 459 A.2d 744,751 (Pa. 1983); R ESTATEMENT
(SECOND) OF CONTRACTS § 302.
Here, there is no dispute as to the validity of the Lease agreement. Therefore, the
Court must focus on the second element of a breach of contract claim, because the
Defendant asserts it had no obligations to Plaintiff under the Lease agreement. Case law
indicates that “an intended beneficiary can recover for breach of contract even though the
actual parties to the contract did not express an intent to benefit the third party.” Sovereign
Bank v. BJ’s Wholesale Club, Inc., 533 F.3d 162,168 (3d Cir. 2010). Absent a showing that
the Plaintiff is an intended third party beneficiary, however, Plaintiffs cannot recover under
breach of contract theory. Pennsylvania Liquor Control Board v. Rapista, Inc., 371 A.2d
178 (Pa. 1976) (appellant’s claim seeking recovery of third party’s damages was dismissed
because the third-party was not an intended beneficiary of the appellant). The phrase
“appropriate to effectuate the intentions of the parties” serves as a “general condition [that]
restricts the application of the second part of the test, which defines the intended
beneficiary as either a creditor beneficiary or a donee beneficiary.” Guy, 459 A.2d at 751.
The Court concludes the Lease agreement did not confer any benefit on the Plaintiff.
The plain language of the Lease indicates the existence of an indemnification agreement
between the Defendant and the Camp. The Lease provides that:
It is agreed by the parties that Lessor shall not be responsible f or any damage to
individuals or personal property at the facility, and Group leader shall report all
accidents or injuries promptly to the Lessor’s manager. The Group accepts full
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responsibility for such injuries or damage, unless caused by the gross negligence of
Lessor, its agents, servants or employees.
Lease Agreement, at ¶ 7. This language does not make Etman a third-party beneficiary of
the lease agreement. Instead, the Agreement shifts any liability for acts of negligence from
the Camp to the Defendant. In other words, if Etman sued the Camp and prevailed on a
negligence claim, the Camp would have a cause of action for contribution against
Defendant. Etman would receive no benefit from the Lease Agreement on such a claim.
The Agreement simply explains who would be responsible for damages if Etman prevailed
on a tort claim against either party to the Agreement.
Where there is no benefit to the Scott Etman, he cannot be designated as a thirdparty beneficiary because he is not an intended benef iciary. Therefore, Etman is an
incidental beneficiary and is not entitled to recovery for breach of contract against either
party to the agreement.3 The motion to dismiss will be granted on this basis, but the Court
will also consider the gist-of-the-action doctrine because dismissal on that basis implicates
the statute of limitations and could be a dismissal without leave to re-plead.
Defendant also relies on the gist-of-the-action doctrine to seek dismissal of the
contract claim as a tort claim mislabeled as a contract claim for the purpose of avoiding an
expired statute of limitations. As the Pennsylvania Supreme Court has explained: “the mere
existence of a contract between two parties does not, ipso facto, classify a claim by a
contracting party for injury or loss suffered as a result of action of the other party in

Scott Etman fits the definition of an incidental beneficiary. “An incidental
beneficiary is a beneficiary who is not an intended beneficiary.” RESTATEMENT (SECOND) OF
CONTRACTS, § 302(2). “An incidental beneficiary acquires no right of action against either
party to the agreement.” Mowrer v. Poirier & McLane Corp., 382 Pa. 2,7 (1955).
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performing the contract as one for breach of contract.” Bruno v. Erie Ins. Co., 630 Pa. 79,
114 (Pa. 2014). The gist-of-the-action doctrine serves “to maintain the conceptual
distinction between breach of contract claims and tort claims.” eToll, Inc. v. Elias/Savion
Adver., 811 A.2d 10, 14 (Pa. Super. 2002). W hile tort and contract claims “‘derive from a
common origin, distinct differences . . . have developed at common law.’” Id. (quoting Bash
v. Bell Tel. Co., 601 A.2d 825, 829 (Pa. Super. 1992)). “T ort actions lie for breaches of
duties imposed by law as a matter of social policy, while contract actions lie only for
breaches of duties imposed by mutual consensus agreements between particular
individuals.” Id. (internal citations omitted). Contract claims exist when “‘the parties’
obligations are defined by the terms of the contracts’” and do not rely on “‘the larger social
policies embodied by the law of torts.’” Id. (quoting Bohler-Uddeholm Am., Inc. v. Ellwood
Group, Inc., 247 F.3d 79, 104 (3d Cir. 2001)). 4
Courts applying Pennsylvania law have found that the gist-of-the-action doctrine can
be used to bar an action brought as a breach-of-contract claim that “sounds in tort.”

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Pennsylvania’s Commonwealth Court has explained the difference this way:
this Court employs a “misfeasance/nonfeasance” test for determining
whether an action sounds in tort or in contract. “If there is ‘misfeasance,’
there is an improper performance of the contract in the course of which
breathes a duty imposed by law as a matter of social policy. In such
instances, the ‘gist’ of the plaintiff’s action sounds in tort and the contract
itself is collateral to the cause of action.” “On the other hand, if there is
‘nonfeasance,’ the wrong attributed to the defendant is solely a breach of the
defendant’s duty to perform under the terms of the contract. In such
instances, the ‘gist’ of the plaintiff’s action sounds in contract, and the
plaintiff would not have a cause of action but for the contract.”

Harleysville Homestead, Inc. v. Lower Salford Twp. Auth., 980 A.2d 749, 753 (Pa.
Cmmwlth. 2009) (quoting Meyer v. Community College of Beaver County, 965 A.2d 406
(Pa. Cmmwlth. 2009)).
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Seidner v. Finkleman, 2016 Phila. Ct. Com. Pl. LEXIS 378 at *36 (Oct. 4, 2016). Under
those circumstances, courts apply the torts statute of limitations rather than the contract
one. Id. In New York Cent. Mut. Ins. Co. v. Edelstein, 637 Fed.Appx. 70 (3d Cir. 2016), for
instance, the Third Circuit Court of Appeals found that a malpractice claim against a lawyer
was founded in a social duty rather than a contractual promise and therefore constituted a
tort rather than a contract claim. Id. at 74. As a result, plaintiff’s claim was “untimely
because the action was filed outside of the two-year” torts statute of limitations in
Pennsylvania. Id.
This case is like Edelstein, and Plaintiffs’ claim sounds in tort. In Pennsylvania,
negligence requires a showing of “a duty, breach of that duty, a causal relationship between
the breach and the resulting injury and actual loss.” Campo v. St. Luke’s Hosp., 755 A.2d
20, 24 (Pa. Super. 2000). Plaintiffs’ Complaint describes Scott Etman’s injuries as resulting
from a fall while rock climbing “without any fault, carelessness or negligence attributable to
his actions, either in whole or in part.” Complt. at ¶ 12. The Complaint further alleges that
Defendant “assumed all duty of care for, and claims owed to, Plaintiff, Scott D. Etman,
otherwise attributable to the actions and/or admissions of the recreational facility
owner/operator or any other third parties.” Id. at ¶ 15. Plaintiffs allege that “[a]s a
contractual result of the duty of care responsibilities assumed by” Defendant, “all duty of
care claims made by Plaintiff, Scott D. Etman, upon his injuries and damages described
herein, are directly recoverable against Defendant[.]” Id. at ¶ 17. These allegations are
unrelated to any breach of an obligation under a contract, but instead point to breaches of a
general obligations to observe a duty of care to members of the general public like Etman.
Defendant–and really, the unnamed operators of the facility–breached the general social
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policy that requires operators of potentially dangerous facilities to take due care in
protecting those who use them. Plaintiff’s claim sounds in negligence, not contract.
The damages Plaintiffs seek underscore that this claim is not a contract claim. “The
purpose of damages in a breach of contract case is to return the parties to the position they
would have been in but for the breach.” Pittsburgh Const. Co. v. Griffith, 834 A.2d 572, 580
(Pa. Super. 2003). Tort damages, on the other hand, “[attempt] to put an injured person in
a position as nearly as possible equivalent to his position prior to to the tort.” R EST. 2D OF
TORTS § 901, Comment a. Plaintiffs describe Scott Etman’s damages as “severe attendant
physical manifestations and limitations[.]” Id. at ¶ 14. He “is prevented and will continue to
be prevented from performing his normal daily activities, routines and obtaining the full
enjoyment of life, has sustained and will continue to sustain loss of earning capacity, and
has incurred and will continue to incur expenses for medical treatment, therapy and incur
future expenses for medical interventions.” Id. Plaintiffs seek damages of $500,000 on the
contract claim. Such damages do not seek to restore Etman to the place he would have
been in but for the breach of a contract, but instead seek to put him in the place he was
prior to his injuries. Plaintiffs’ claim is a tort claim under the gist-of-the-action doctrine. The
statute of limitations has run in both New York and Pennsylvania on any tort claims in this
case, and the motion to dismiss will be granted with prejudice.
C.

Loss of Consortium

Plaintiffs bring a loss of consortium claim on behalf of Ptarmigan Etman, Scott
Etman’s spouse. “Pennsylvania courts have long held that an action for loss of consortium
is derivative.” Scattaregia v. Shin Shen Wu, 495 A.2d 552, 553 (Pa. Super. 1985). Since “a
loss of consortium action has been viewed as derivative its success . . . has always been
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dependent upon the injured spouse’s right to recover.” Id. at 554. As Scott Etman has no
right to recover in this case, his spouse does not either. The second cause of action will
also be dismissed with prejudice.
IV.

CONCLUSION
For the reasons stated above, the Defendant’s motion to dismiss, dkt. # 8, is hereby

GRANTED and the action is dismissed with prejudice. The Clerk of Court is directed to
CLOSE the case.

IT IS SO ORDERED.
Dated:February 22, 2018

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