Katen & Sons, Inc. et al v. Allegheny Trucks, Inc. et al

Filing 62

MEMORANDUM-DECISION AND ORDER: that Allegheny's motion for summary judgment (Dkt. No. 49 ) is Granted; that the Amended Complaint (Dkt. No. 15 ) is dismissed with prejudice; and that the Clerk is respectfully directed to enter Judgment accordingly and close this case.Signed by Judge Brenda K. Sannes on 09/28/2018. (hmr)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
KATEN & SONS, INC. and EDWARD C. KATEN,
Plaintiffs,

3:16-cv-01124 (BKS/DEP)

v.
ALLEGHENY TRUCKS, INC.,
Defendant.
Appearances:
For Plaintiffs:
Ronald R. Benjamin
Law Office of Ronald R. Benjamin
126 Riverside Drive, P.O. Box 607
Binghamton, NY 13902
For Defendant:
Elizabeth A. Weill
Goldberg, Segalla LLP
1700 Market Street, Suite 1418
Philadelphia, PA 19103
Hon. Brenda K. Sannes, United States District Judge:
MEMORANDUM-DECISION AND ORDER
I.

INTRODUCTION
This litigation arises from the sale of an allegedly defective truck by Defendant

Allegheny Trucks, Inc. (“Allegheny”) to Plaintiffs Katen & Sons, Inc. and Edward C. Katen
(“Katen”). On March 19, 2018, the Court granted in part Allegheny’s motion to dismiss several
claims asserted in the Amended Complaint, leaving only Katen’s claims for breach of contract
and fraudulent concealment/inducement remaining. (Dkt. No. 52). Allegheny now moves for

summary judgment on those remaining claims, (Dkt. No. 49), which Katen opposes, (Dkt. No.
57). For the reasons that follow, Allegheny’s motion for summary judgment is granted.
II.

FACTS 1
Edward C. Katen is the owner and sole employee of Katen & Sons, Inc., (Dkt. No. 57-12,

¶ 1), a demolition waste disposal company, (Dkt. No. 49-4, at 12). Katen contacted Allegheny, a
truck dealer located in Altoona, Pennsylvania, (Dkt. No. 15, ¶ 3), sometime in September 2013
after he saw their advertisement in Truck Trader magazine for a 2011 International 4400 SBA
4x2 truck. (Dkt. No. 49-3, ¶¶ 2–5; Dkt. No. 49-4, at 16–17, 19; Dkt. No. 57-12, ¶¶ 2–5). On
September 18, 2013, before the parties signed the contract, Plaintiff obtained a quote from a
company called Hacker’s Packers regarding potential modifications to the truck. (Dkt. No 49-3,
¶ 6; 49-5, at 2). On October 2, 2013, Katen met with Allegheny sales manager Dan Williams;
Katen claims that Williams told him that “the Truck would be ‘perfect’ for his needs.” (Dkt. No.
49-3, ¶ 8). Katen agreed to purchase the truck and the parties signed a contract the same day. (Id.
¶ 12). The contract’s “Terms and Conditions” state, in their entirety:
Purchaser agrees that this Order includes all of the terms and
conditions on both pages hereof, 2 that this Order cancels and
supersede[s] any prior agreement and as of the date hereof
comprises the complete and exclusive statement of the terms of the
agreement relating to the subject covered hereby, that this order
shall not become binding until accepted by dealer or his authorized
represent[ative]. Purchaser by his execution of this Order

1

Where possible, the facts have been drawn from Allegheny’s statement of material facts (Dkt. No. 49-3, at 6–8),
Plaintiff’s response thereto, (Dkt. No. 57-12, at 2–4), and the attached exhibits, depositions, and affidavits to the
extent that they would be admissible as evidence. Undisputed material facts supported by the record are taken from
the moving party’s statement of material facts, whereas disputed material facts supported by the record are taken
from the nonmoving party’s submissions. Where facts stated in a party’s statement of material facts are supported by
testimonial or documentary evidence, and denied with only a conclusory statement by the other party or not denied
at all, the Court has found such facts to be true. See L.R. 7.1(a)(3); Fed. R. Civ. P. 56(e).
2
Despite this reference to “both pages” of the contract within the document’s “Terms and Conditions,” the copy of
the contract accompanying Allegheny’s motion to dismiss consists of one page only. (Dkt. No. 49-6, at 2). Katen
does not contend that the contract, as attached to Allegheny’s motion, is incomplete.

2

acknowledges that he has read its terms and conditions and has
receive[d] a true copy of this order.
(Dkt. No. 49-6, at 2 (emphasis omitted)). The parties agree that no other contracts are at issue in
this case, (Dkt. No. 49-3, ¶ 14), and that the contract does not include express provisions that the
truck was “in good working order,” “fit for operating,” or “fit for Plaintiff’s rolling-off service,”
(id., ¶¶ 17–19). 3
According to Katen, “[o]n the very first day [he] took possession of the truck[,] the
engine light came on, he lost power to the engine, and the truck had to be towed back to the
shop.” (Dkt. No. 57-12, at 2). Katen claims that the truck has required extensive repairs and that,
as of April 30, 2018, it had been “off the road being repaired” for a total of 209 days since the
day he purchased it. (Id.). Katen asserts that he has “incurred expenses in the amount of
$13,075.00 for repairs on the truck, and lost earnings in the amount of $153,650.00 as a result of
the truck being off the road.” (Id.).
III.

STANDARD OF REVIEW
Under Federal Rule of Civil Procedure 56(a), summary judgment may be granted only if

all the submissions taken together “show that there is no genuine issue as to any material fact and
that the moving party is entitled to judgment as a matter of law.” Celotex Corp. v. Catrett, 477
U.S. 317, 322 (1986); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–48 (1986).
The moving party bears the initial burden of demonstrating “the absence of a genuine issue of
material fact.” Celotex, 477 U.S. at 323. A fact is “material” if it “might affect the outcome of
the suit under the governing law,” and is genuinely in dispute “if the evidence is such that a
reasonable jury could return a verdict for the nonmoving party.” Anderson, 477 U.S. at 248; see

3
Although they dispute the materiality of the fact, the parties do not dispute that, after taking delivery, Katen had a
third party modify the truck by “adding a tarping device to cover the containers” hauled, adding “a hook to haul the
containers onto the truck,” and shortening the frame. (Dkt. No. 57-7, ¶ 4; Dkt. No. 49-3, ¶ 15).

3

also Jeffreys v. City of New York, 426 F.3d 549, 553 (2d Cir. 2005) (citing Anderson). The
movant may meet this burden by showing that the nonmoving party has “fail[ed] to make a
showing sufficient to establish the existence of an element essential to that party’s case, and on
which that party will bear the burden of proof at trial.” Celotex, 477 U.S. at 322; see also Selevan
v. N.Y. Thruway Auth., 711 F.3d 253, 256 (2d Cir. 2013) (summary judgment appropriate where
the nonmoving party fails to “‘come forth with evidence sufficient to permit a reasonable juror to
return a verdict in his or her favor on’ an essential element of a claim” (quoting In re Omnicom
Grp., Inc. Sec. Litig., 597 F.3d 501, 509 (2d Cir. 2010))).
If the moving party meets this burden, the nonmoving party must “set out specific facts
showing a genuine issue for trial.” Anderson, 477 U.S. at 248, 250; see also Celotex, 477 U.S. at
323–24; Wright v. Goord, 554 F.3d 255, 266 (2d Cir. 2009). “When ruling on a summary
judgment motion, the district court must construe the facts in the light most favorable to the nonmoving party and must resolve all ambiguities and draw all reasonable inferences against the
movant.” Dallas Aerospace, Inc. v. CIS Air Corp., 352 F.3d 775, 780 (2d Cir. 2003). Still, the
nonmoving party “must do more than simply show that there is some metaphysical doubt as to
the material facts,” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986),
and cannot rely on “mere speculation or conjecture as to the true nature of the facts to overcome
a motion for summary judgment,” Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 12 (2d Cir.1986)
(quoting Quarles v. Gen. Motors Corp., 758 F.2d 839, 840 (2d Cir. 1985)). Furthermore, “[m]ere
conclusory allegations or denials . . . cannot by themselves create a genuine issue of material fact
where none would otherwise exist.” Hicks v. Baines, 593 F.3d 159, 166 (2d Cir. 2010) (quoting
Fletcher v. Atex, Inc., 68 F.3d 1451, 1456 (2d Cir. 1995)).

4

IV.

DISCUSSION
A.

Breach of Express Contract

In its motion for summary judgment, Allegheny argues that Katen’s claim for breach of
an express contract “suffer[s] from unavoidable flaws” because it is premised solely on Katen’s
allegation that the October 2, 2013 contract “provided that the Truck was in good working order
and fit for the use of operating in the use of plaintiff’s” business. (Dkt. No. 49-3, at 8–9 (quoting
Dkt. No. 15, ¶ 14)). Under New York law, the elements of a breach of contract claim are: “(1)
the existence of an agreement, (2) adequate performance of the contract by the plaintiff, (3)
breach of contract by the defendant, and (4) damages.” Harsco Corp. v. Segui, 91 F.3d 337, 348
(2d Cir. 1996). 4 “A claim for breach of contract must allege, at a minimum, the terms of the
contract, each element of the alleged breach and the resultant damages.” Kaplan v. Aspen Knolls
Corp., 290 F. Supp. 2d 335, 337 (E.D.N.Y. 2003); see also Sackin v. TransPerfect Glob., Inc.,
278 F. Supp. 3d 739, 750 (S.D.N.Y. 2017) (“In adjudicating express contract claims, ‘[a] court
cannot supply a specific obligation the parties themselves did not spell out.’” (alteration in
original) (quoting Wallert v. Atlan, 141 F. Supp. 3d 258, 286 (S.D.N.Y. 2015)); Wolff v. Rare
Medium, Inc., 210 F. Supp. 2d 490, 494 (S.D.N.Y. 2002) (explaining that a breach of contract
claim “must identify the specific provision of the contract that was breached as a result of the
acts at issue”), aff’d, 65 F. App’x 736 (2d Cir. 2003).
Here, Katen acknowledges the contract at issue “does not have a specific provision that
the truck was to be provided in good working order,” (Dkt. No. 49-3, at ¶ 18), “fit for
operating[,] or fit for Plaintiff’s rolling-off service,” (id. ¶ 19). Because the express terms of the

4

Although the October 2, 2013 contract was created in Altoona, Pennsylvania, the parties’ submissions proceed
under the assumption that New York law applies. (Dkt. No. 49-3, at 8; Dkt. No. 57-12, at 15). “Where the parties so
assume, the Court need not address choice of law sua sponte.” Henneberry v. Sumitomo Corp. of Am., No. 04-cv2128, 2005 WL 991772, at *5 n.3, 2005 U.S. Dist. LEXIS 7475, at *14 n.3 (S.D.N.Y. Apr. 27, 2005).

5

contract that Allegheny is alleged to have breached do not exist, Katen’s claim for breach of an
express contract fails as a matter of law.
B.

Implied Covenant of Good Faith and Fair Dealing

Having conceded that there was no breach of any express provision of the contract, Katen
now argues that Allegheny breached the contract because it breached the covenant of good faith
and fair dealing implicit in “every contract made in the state of New York” that forbids a
contracting party from “depriv[ing] the other of the right to receive the benefits of the contract.”
(Dkt. No. 57-12, at 14).
The Amended Complaint does not allege a breach of the implied covenant of good faith
and fair dealing, nor does it contain any allegation that might be fairly construed as stating such a
claim. Indeed, the Amended Complaint merely refers to express provisions within the contract,
alleging that Allegheny “breached the agreement entered into . . . which provided that the truck
was in good working order and fit for the use of operating in the use of the plaintiff’s commercial
truck rolling-off service.” (Dkt. No. 15, ¶ 14 (emphasis added)). Further, the Amended
Complaint does not mention a duty of good faith and fair dealing—it does not even allege that
Plaintiff acted in bad faith. 5
“[I]t is inappropriate to raise new claims for the first time in submissions in opposition to
summary judgment.” Bonnie & Co. Fashions v. Bankers Tr. Co., 170 F.R.D. 111, 119 (S.D.N.Y.
1997) (rejecting the plaintiff’s argument that its breach of contract claim “fairly encompassed” a
claim for breach of implied covenant of good faith and fair dealing); see also Rojo v. Deutsche
Bank, 487 F. App’x 586, 588 (2d Cir. 2012) (concluding that claim for breach of duty of good
faith and fair dealing was “waived” where plaintiff “mentioned that claim for the first time in his
5

Because Katen’s claims for, inter alia, breach of implied and express warranty were previously dismissed, (Dkt.
Nos. 13, 52), and not re-alleged in the Amended Complaint, (Dkt. No. 15), the Court need not address what
obligations such other theories may impose upon a contracting party.

6

memorandum of law in opposition to summary judgment”). Accordingly, because Katen “never
alleged (nor sought to allege) a breach of the implied covenant of good faith and fair dealing at
any point during the course of this . . . litigation, it cannot now seek to support its case under
such a theory.” Compania Embotelladora Del Pacifico, S.A. v. Pepsi Cola Co., 650 F. Supp. 2d
314, 324 (S.D.N.Y. 2009) (citing Augienello v. Coast-to-Coast Fin. Corp., 64 F. App’x 820, 822
(2d Cir. 2003) (rejecting plaintiff’s argument that defendants breached implied covenant of good
faith and fair dealing “even if [they] did not violate the express terms of the contracts,” on the
basis that the complaint failed to make “any mention of a duty of good faith and fair dealing, or
allegation that the defendants breached such a duty”)).
C.

Fraudulent Inducement

Allegheny moves for summary judgment with regard to the claims for fraudulent
inducement and fraudulent concealment on the grounds that Katen has failed to adduce evidence
sufficient to raise an issue of fact as to the requisite elements of such a claim. (Dkt. No. 49-3, at
16–23). “Under New York law, in order to prove fraudulent inducement, a plaintiff must show:
(i) the defendant made a material false representation, (ii) the defendant intended to defraud the
plaintiff thereby, (iii) the plaintiff reasonably relied upon the representation, and (iv) the plaintiff
suffered damage as a result of such reliance.” Maxim Grp. LLC v. Life Partners Holdings, Inc.,
690 F. Supp. 2d 293, 306 (S.D.N.Y. 2010) (internal quotation marks omitted). Finally, the
elements of any claim for fraud “must be shown by clear and convincing evidence.” Crigger v.
Fahnestock and Co., Inc., 443 F.3d 230, 234 (2d Cir. 2006).
Katen asserts that Allegheny Sales Manager Dan Williams told him that the truck would
be “perfect for his needs,” and that he relied upon this statement in deciding whether to enter into
the contract to purchase the truck. (Dkt. No. 57-12, ¶ 9). Even assuming that such a statement
does not constitute “mere puffery,” as Katen contends, (Dkt. No. 57-12, at 5), he has not adduced
7

any evidence indicating that Williams intended to defraud him at the time Williams allegedly
made the material false representation. 6 “A plaintiff’s claim of fraudulent inducement can be
sustained without reference to direct evidence of fraudulent intent if plaintiff pleads and provides
evidence of facts that support a ‘strong inference that the defendants possessed the requisite
fraudulent intent.’” Enzo Biochem, Inc. v. Johnson & Johnson, No. 87-cv-6125, 1992 WL
309613, at *11, 1992 U.S. Dist. LEXIS 15723, *35 (S.D.N.Y. Oct. 15, 1992) (quoting Cosmas v.
Hassett, 886 F.2d 8, 12–13 (2d Cir. 1989)). Such “[i]ntent to decieve must be shown by evidence
of ‘guilty knowledge or willful ignorance.’” Century Pac., Inc. v. Hilton Hotels Corp., 528 F.
Supp. 2d 206, 222 (S.D.N.Y. 2007) (quoting Schwartz v. Newsweek, Inc., 653 F.Supp. 384, 390
(S.D.N.Y.1986)), aff’d, 354 F. App’x 496 (2d Cir. 2009).
Here, Katen concedes that he has no “direct proof that Williams knew of the problems
and defects with this truck.” (Dkt. No. 57-12, at 6). Instead, he argues that his failure to adduce
evidence—direct or indirect—of Williams or Allegheny’s intent to defraud is “of no moment,
because the issue is whether or not Williams should have known of the problems with the truck.”
(Dkt. No. 57-12, at 7 (emphasis added)). Katen cites to no caselaw in support of this proposition,
which conflicts with the principle that, under New York law, a fraud claim “demands a high
order of proof” and requires plaintiff to prove “a misrepresentation which the defendant knew to
be false . . . by clear and convincing evidence.” Bikoff v. Dowling, No. 16-cv-5478, 2018 WL
3979592, at *2, 2018 U.S. Dist. LEXIS 140924, at *3–4 (S.D.N.Y. Aug. 20, 2018) (emphasis
added) (citations omitted). In any event, the articles and litigation documents attached to Katen’s
papers in opposition do not even support Katen’s contention that Williams “should have known”
of the alleged defect, because they all postdate Williams’ alleged misrepresentation on October
6
This is perhaps unsurprising because, as Allegheny notes, (Dkt. No. 49-3, at 19), Katen’s counsel conducted no
depositions, posed no interrogatories, and served no document requests during the course of discovery, (Dkt. No.
27).

8

2, 2013. (Dkt. Nos. 57-1 (July 11, 2014), 57-2 (May 19, 2017), 57-3 (Jan. 9, 2015), 57-4 (Aug.
14, 2017), 57-5 (Mar. 31, 2016), 57-6 (Mar. 31, 2016)).
Thus, “even giving every favorable inference that might arise at trial to Plaintiffs as nonmovants, no reasonable finder of fact could find from the evidence put forward the requisite
fraudulent intent.” Century Pac., Inc., 528 F. Supp. 2d at 227–28. Accordingly, Katen has failed
to adduce evidence sufficient to raise an issue of material fact as to his fraudulent inducement
claim, and Allegheny is entitled to summary judgment.
D.

Fraudulent Concealment

The requisite elements of a claim for fraudulent concealment are substantially identical as
those for fraudulent inducement described above, with the added requirement that a plaintiff
must show that the defendant had a duty to disclose the information withheld. Bermuda
Container Line Ltd. v. Intl. Longshoremen’s Ass’n, AFL-CIO, 192 F.3d 250, 258 (2d Cir. 1999)
(explaining that, under New York law, a fraudulent concealment claim must show that: “(1) the
defendant failed to disclose material information that he had a duty to disclose, (2) the defendant
intended to defraud the plaintiff thereby, (3) the plaintiff reasonably relied upon the
representation, and (4) the plaintiff suffered damage as a result of such reliance” (internal
citations and quotations omitted)). Even assuming that Allegheny did have a duty to disclose
material information, Katen has failed to adduce any evidence indicating that Allegheny intended
to defraud him by withholding information that the truck was defective for the same reasons
described above. Accordingly, Allegheny is entitled to summary judgment on Katen’s claim for
fraudulent concealment. 7

7
In light of this ruling, the Court need not address the parties’ arguments regarding whether Katen is able to
establish the damages element of the asserted claims without expert testimony.

9

V.

CONCLUSION
For these reasons, it is hereby
ORDERED that Allegheny’s motion for summary judgment (Dkt. No. 49) is

GRANTED; and it is further
ORDERED that the Amended Complaint (Dkt. No. 15) is dismissed with prejudice; and
it is further
ORDERED that the Clerk is respectfully directed to enter Judgment accordingly and
close this case.
IT IS SO ORDERED.
Dated: September 28, 2018
Syracuse, New York

10