OLDCASTLE PRECAST, INC. v. RIDGEWOOD, INC. et al
Filing
27
MEMORANDUM AND OPINION. SIGNED BY HONORABLE ROBERT F. KELLY ON 9/13/13. 9/13/13 ENTERED & E-MAILED.(fdc)
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
____________________________________
:
OLDCASTLE PRECAST, INC.,
:
:
Plaintiff,
:
CIVIL ACTION
:
v.
:
:
No. 12-6270
VPMC, LTD,
:
JOSEPH R. GAMBONE, JR.,
:
MICHAEL A. GAMBONE,
:
AUDREY GAMBONE, co-executor of the :
ESTATE OF ANTHONY R. GAMBONE, :
SR., MICHAEL A. GAMBONE,
:
co-executor of the ESTATE OF
:
ANTHONY R. GAMBONE, SR.,
:
GEORGE J. FALCONERO, co-executor
:
of the ESTATE OF ANTHONY
:
GAMBONE, SR., SANDRA LEE
:
GAMBONE, co-executor of the ESTATE :
OF ANTHONY GAMBONE, SR., and
:
SHARON ANAPOSIKY, co-executor of
:
the ESTATE OF JOHN GAMBONE, SR., :
:
Defendants. :
____________________________________:
MEMORANDUM
ROBERT F. KELLY, Sr. J.
SEPTEMBER 13, 2013
Presently before the Court is Defendants, VPMC, Ltd., Joseph R. Gambone, Jr., Michael
A. Gambone, Audrey Gambone, George J. Falconero, Sandra Lee Gambone, and Sharon
Anaposiky’s (collectively, “Defendants”), Renewed Motion to Dismiss pursuant to Federal Rule
of Civil Procedure 12(b)(7), and Plaintiff, Oldcastle Precast, Inc.’s (“Oldcastle”), Response. For
the following reasons, the Motion is granted in part and denied in part.
I.
BACKGROUND1
Oldcastle filed a Complaint against the Defendants on November 6, 2012, and an
Amended Complaint on January 7, 2013. (Doc. Nos. 1, 7). In the Amended Complaint,
Oldcastle asserted claims against the Estate of John Gambone, Sr., the Estate of Anthony
Gambone, Sr., and Joseph R. Gambone, Jr. (collectively, referred to as the “VPMC Principals”,
and Michael A. Gambone (“Michael Gambone”) for fraud, negligent misrepresentation),
conversion, civil conspiracy, and alter ego/participation. Oldcastle alleged a claim solely against
Michael Gambone for tortious interference with a contractual relationship. Oldcastle further
averred a claim against VPMC, Ltd. (“VPMC”), the VPMC Principals, and Michael Gambone
for quantum meruit/unjust enrichment, and claims solely against the VPMC Principals for breach
of contract of the First Modification Agreement, and promissory estoppel.
Defendants filed a Motion to Dismiss on January 24, 2013. Oldcastle filed a Response on
February 21, 2013, and Defendants filed a Reply on March 15, 2013. (Doc. Nos. 12-13.) On
April 12, 2013, this Court ordered counsel for the parties to answer specific questions posed
solely for the purpose of this Court’s consideration regarding the issue of whether Ridgewood,
Inc. (“Ridgewood”) and Gambone Development Company (“GDC”) are indispensable parties to
this action. Specifically, we asked the parties to identify the officers and principals of
Ridgewood, GDC, GAC, and VPMC for the period from December 5, 2005, through December
2011. (Doc. No. 14.) In addition, we requested the parties to describe the business relationship
between any and/or all of these parties, and to name any lawsuits initiated by Oldcastle against
1
A complete procedural and factual history of this matter is set forth in this Court’s previous
Memorandum Opinion. See Oldcastle Precast, Inc. v. VPMC, Ltd., No. 12-6270, 2013 WL 1952090, at
*1 (E.D. Pa. May 13, 2013).
2
Ridgewood, GDC, or any Defendant in this action in the Bucks County Court of Common Pleas
involving the property involved in this case, including the status of such suits. (Id.) Both parties
responded on April 26, 2013. Defendants reported that on July 26, 2012, Oldcastle, through its
current counsel, commenced an action in the Bucks County Court of Common Pleas against
Ridgewood, GDC, and all Defendants named in the Amended Complaint (the “July 2012
Litigation”). (Id.) As noted, Oldcastle commenced the instant action on November 6, 2012,
against these same Defendants, and on November 7, 2012, Oldcastle, through its current counsel,
filed complaints for confession of judgments in Bucks County against Ridgewood and GDC
under separate docket numbers. (Id.) On November 27, 2012, Oldcastle filed a Praecipe to
Discontinue the July 2012 Litigation, and on December 12, 2012, Ridgewood and GDC each
filed a Petition to Open Confessed Judgment. (Id.) Apparently, these Petitions in Bucks County
are currently pending.2
On May 13, 2013, we filed a forty-two page Memorandum and
Order granting the Motion to Dismiss in part and denying it in part. See Oldcastle Precast Inc.,
2013 WL 1952090 at *1. In accordance with our Memorandum, as to Michael Gambone, we
granted Defendants’ Motion to Dismiss for conversion and civil conspiracy, and denied the
Motion as to fraud, negligent misrepresentation, tortious interference with a contractual
2
Defendants state in this instant Motion that on August 6, 2013, Judge Susan Devlin Scott of the
Bucks County Court of Common Pleas heard argument on the petitions to open the confessed judgments.
(Defs.’ Renewed Mot. to Dismiss at 2, n.2.) Defendants assert that Judge Scott stated at this hearing that
if this “Court [federal court] brings Ridgewood and GDC back into this first-filed federal litigation,” she
is “likely to defer to this Court on the issue of Ridgewood and GDC’s alleged breaches.” (Id.) Oldcastle
responds that Defendants have mischaracterized Judge Scott’s statements. (Pl.’s Reply at 2.) Oldcastle
asserts that “Judge Scott expressed a desire to wait for this Court to rule upon the Renewed Motion
before deciding the Petitions to Open, and nothing more.” (Id.) Oldcastle adds that Judge Scott never
suggested that the issues of breach should be decided by this Court, and, if anything, suggested that the
issues have already been decided. (Id.) However, neither party provided a transcript of this hearing, and
thus, we do not know exactly what was stated by Judge Scott.
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relationship, quantum meruit, and alter ego/participation. (Id.) As to the VPMC Principals, we
granted the Motion for fraud, negligent misrepresentation, conversion, civil conspiracy, and
quantum meruit. We denied the Motion as to the claims for breach of contract, alter ego, and
promissory estoppel. The Motion to Dismiss against VPMC on the quantum meruit cause of
action was granted, but the Motion to Dismiss the executor Defendants was denied. Regarding
the issue of whether Ridgewood and GDC are indispensable parties to this action, because
Oldcastle asserted that it needed more discovery to understand the “ownership structure and
financial organization” of Ridgewood, GDC, GAC, and VPMC, we did not decide this issue at
that time and gave Oldcastle additional time for discovery. (Id. at *23.) We further determined
that Defendants could renew their Motion to Dismiss pursuant to Federal Rule of Civil Procedure
12(b)(7) after they complied with further discovery requests from Oldcastle. (Id.)
Defendants filed a Motion for Reconsideration and Clarification on May 28, 2013. (Doc.
No. 19.) Oldcastle filed a Response on June 14, 2013, and included in this Response its own
Motion for Reconsideration. (Doc. No. 20.) In its Response, Oldcastle voluntarily agreed to
dismiss its alter ego and participation claims against the VPMC Principals and Michael
Gambone. (Id.) Accordingly, on July 26, 2013, we dismissed these claims, and denied the
Motion for Reconsideration. (Doc. No. 24.) We also denied Oldcastle’s own Motion for
Reconsideration. (Id.) In addition, we ordered that Defendants shall have fourteen days to renew
their Motion to Dismiss solely on the issue of “indispensable parties.” (Id.) On August 9, 2013,
Defendants filed this instant Renewed Motion (Doc. No. 25), and on August 19, 2013, Oldcastle
filed its Response.
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II.
STANDARD OF REVIEW
In reviewing a motion brought under Federal Rule of Civil Procedure 12(b)(7), the court
must accept the allegations in the complaint as true and draw all reasonable inferences in favor of
the non-moving party. See Pittsburgh Logistics Sys., Inc. v. C.R. England, Inc., 669 F. Supp. 2d
613, 618 (W.D. Pa. 2009) (citing Jurimex Kommerz Transit G.M.B.H. v. Case Corp., 65 F.
App’x 803, 805 (3d Cir. 2003)). To prevail on a motion to dismiss pursuant to Fed. R. Civ. P.
12(b)(7), Defendants must show that Oldcastle has failed to join a party under Federal Rule of
Civil Procedure 19. Rule 19 specifies the circumstances in which the joinder of a particular party
is compulsory. See Gen. Refractories Co. v. First State Ins. Co., 500 F.3d 306, 312 (3d Cir.
2007). Rule 19(a)(1) states:
A person who is subject to service of process and whose joinder will not
deprive the court of subject-matter jurisdiction must be joined as a party if:
(A) in that person’s absence, the court cannot accord complete relief among
existing parties; or (B) that person claims an interest relating to the subject
of the action and is so situated that disposing of the action in the person’s
absence may: (i) as a practical matter impair or impede the person’s ability
to protect the interest; or (ii) leave an existing party subject to a substantial
risk of incurring double, multiple, or otherwise inconsistent obligations
because of the interest.
Fed. R. Civ. P. 19(a)(1).
Under Rule 19(a)(1), a court first asks whether complete relief may be accorded to those
persons named as parties to the action in the absence of the unjoined party. See Janney
Montgomery Scott, Inc. v. Shepard Niles, Inc., 11 F.3d 399, 405 (3d Cir. 1993) (citing Fed. R.
Civ. P. 19(a)(1)). A Rule 19(a)(1) inquiry is limited to whether the district court can grant
complete relief to the persons already parties to the action. Id. The effect a decision may have
on the absent party is immaterial. Id. (citing Field v. Volkswagenwerk AG, 626 F.2d 293, 301
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(3d Cir. 1980)). “If the party is indispensable, then the action cannot go forward.”3 Janney, 11
F.3d at 405.
III.
DISCUSSION
We first note that, in their original Motion to Dismiss, Defendants argued that this entire
action should be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(7) because
Ridgewood and GDC are indispensable parties to this action. However, in this current Renewed
Motion, Defendants only assert that “Ridgewood and GDC must be brought back into this
litigation,” and have not argued for dismissal of the entire action. (Defs.’ Renewed Mot. to
Dismiss at 4.)
Defendants have always argued that Oldcastle admitted that Ridgewood and GDC are
indispensable parties by suing them in its initial Complaint. (Defs.’ Mot. to Dismiss at 33.)
Defendants continue to assert that Ridgewood and GDC unquestionably have an interest in the
claims because Oldcastle cannot possibly succeed against any Defendants unless Oldcastle
proves that Ridgewood is in default of the Note and that GDC is in default of the Guaranty. (Id.)
Therefore, Defendants argue that Ridgewood and GDC are “indispensable parties given that this
Court is being requested to impose a multi-million dollar debt on each of them, jointly and
severally, and make a judicial declaration that would affect all three companies.” (Id.)
3
As we noted in our earlier Memorandum Opinion, Ridgewood and GDC’s joinder in this case is
feasible because this joinder would not deprive this Court of subject matter jurisdiction. Oldcastle is a
corporation organized under the laws of the State of Washington with its principal place of business in
Washington. (Am. Compl. ¶ 1.) Oldcastle avers in its Amended Complaint that Defendants either have
their principal places of business in Pennsylvania or are citizens of Pennsylvania. In addition, in its
initial Complaint, it averred that both Ridgewood and GDC have their principal places of business at the
same address in East Norriton, Pennsylvania. (Compl. ¶¶ 2-3.) Defendants do not dispute these
averments. Thus, diversity of citizenship is complete and joinder is feasible. See Oldcastle Precast, Inc.
2013 WL 1952090, at *21 n.13.
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Oldcastle responds that, although it admits that Ridgewood and GDC have interests
relating to the subject of the action, their abilities to protect such interests are neither impaired or
impeded by their absence because these “interests are being litigated in two separate actions in
Bucks County in which Oldcastle has obtained judgment by way of confession against
Ridgewood and GDC for defaults under the Note and the Guaranty.” (Pl.’s Resp. Mot. to
Dismiss at 28.) Oldcastle argues that the issues of whether Ridgewood was in default of the Note
and that GDC was in default of the Guaranty have already been decided, and that has been
entered in Oldcastle’s favor as to both issues.4
Defendants assert that Ridgewood and GDC’s fundamental involvement in this matter is
made clear by Oldcastle’s own allegations in its Amended Complaint, which makes them
indispensable parties to this action. We agree, and note that Oldcastle has averred in its
Amended Complaint that: (1) as of the maturity of the mortgage note (the “Note”), Ridgewood
breached the Note by making interest-only payments, but failed to pay any amount of the
principal to Oldcastle (Am. Compl. ¶ 21); (2) Ridgewood failed to pay the principal and any
other amount due Oldcastle under the Note by the modified maturity date of August 3, 2008 (Id.
¶ 32); (3) Ridgewood breached the Second Modification Agreement by failing to sell the
property at issue and pay the Note by March 3, 2011 (Id. ¶¶ 40-41); (4) GDC guaranteed
Ridgewood’s loan obligation that Ridgewood has failed to repay (Id. ¶ 19); (5) GDC breached
the guaranty to pay Oldcastle when Ridgewood failed to pay the principal balance when initially
due on November 3, 2007 (Id. ¶ 21); (6) GDC breached the First Modification Agreement, in
4
However, there is no dispute that Defendants filed to have the confessed judgments opened in
the Bucks County Court of Common Pleas, and that such petitions are currently pending in that Court.
See footnote 2.
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which “GDC reaffirmed their obligations under the Loan Documents, including GDC’s guaranty
of Ridgewood’s obligations to Oldcastle under the Loan Documents” (Id. ¶ 30); and, (7) GDC
breached the Second Modification, in which it reaffirmed their obligations under the “Loan
Documents.” (Id. ¶¶ 36-37.)
Moreover, in response to our April 12, 2013 Order requiring Defendants to identify the
Officers and Principals of Ridgewood, GDC, GAC, and VPMC from December 5, 2005 through
December 2011 (Doc. No. 14), Defendants acknowledge that all of these entities have certain
officers, directors, and shareholders in common. (Doc. No. 15.) Defendants state that, for
example, Defendants Michael Gambone and Joseph Gambone, Jr. are current officers and
directors of Ridgewood, GDC, and VPMC. (Id.) Defendant Sharon Anaplosky is a current
officer and director of VPMC and Ridgewood along with Michael Gambone and Joseph
Gambone, Jr. (Id.) Joseph Gambone, Jr. is an officer of all four entities. (Id.) In addition, all of
Ridgewood’s shareholders are also shareholders of VPMC.5 (Id.)
It is apparent from the information submitted by Defendants regarding the relationship of
the parties that both named individual Defendants, Joseph Gambone, Jr. and Michael Gambone,
and named deceased Defendants, Anthony Gambone, Sr., and John Gambone, Sr., are or were, at
relevant times, either officers, directors, and/or shareholders of Ridgewood, GDC, GAC, and
VPMC. Thus, it is also apparent to this Court that given the interrelationships between the
individual Defendants and these four entities that any attempt to ascertain the liability among
them would be difficult, if not impossible, without Ridgewood and GDC being parties to this
5
We note that Oldcastle has not asserted in its Response to this Renewed Motion that it has found
any information during the course of the additional discovery that is in dispute with the information
Defendants have submitted regarding the relationship of the parties.
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action. As stated above, under Federal Rule of Civil Procedure 19(a)(1), a court first asks
whether complete relief may be accorded to those persons named as parties to the action in the
absence of the unjoined party. See Janney, 11 F.3d at 405. For the reasons discussed above, we
find that complete relief in this action could not be afforded to the parties in the absence of
Ridgewood and GDC. Accordingly, we find that Ridgewood and GDC are indispensable parties
to this case. We, thus, deny Defendants’ Renewed Motion to Dismiss, but order Oldcastle to
amend its Complaint and add Ridgewood and GDC as Defendants.
An appropriate Order follows.
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