BUTCHER v. GENERAL MOTORS COMPANY et al

Filing 83

MEMORANDUM OPINION. Signed by Judge Mark R. Hornak on 2/27/15. (bdb)

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF PENNSYLVANIA

THOMAS BUTCHER,
Plaintiff,

v.
GENERAL MOTORS COMPANY;
GENERAL MOTORS, LLC;
VAUXHALL, INC.,
Defendants.

)

)
)
)
)
)
)
)
)

Civil Action No. 2: 14-cv-00353
Judge Mark R. Hornak

*************************

THOMAS BUTCHER,
Plaintiff,
v.

ALLSTATE INSURANCE CO.,
Defendant.

)
)
)
)
)
)
)
)
)

Civil Action No. 2:14-cv-01652
Judge Mark R. Hornak

MEMORANDUM OPINION

Mark R. Hornak, United States District Judge
This case is the story of a general release. The Plaintiff, Thomas Butcher, would
like it to be about more than that: He wants this action to be about an allegedly defective airbag
in his Saturn Astra. But because he signed a broad release that released all claims arising out of
the car accident which would be the basis of his product liability claim, Mr. Butcher is barred

from proceeding with this lawsuit.

The claims raised in his related case against Allstate

Insurance Companyl are barred for similar reasons. Each action will be dismissed.

I.

BACKGROUND
On February 17,2012, Mr. Butcher was in a car accident. The other driver was Sharon

Byerly, who was insured by Allstate Insurance Company. Mr. Butcher was driving a Saturn
Astra. Mr. Butcher alleges that the Astra's airbag malfunctioned-that it did not deploy, causing
him significant injuries.
Mr. Butcher retained James Datillo as his lawyer, who agreed to represent him in his
lawsuit against Mrs. Byerly. It later became clear that Mrs. Byerly's insurance policy with
Allstate had a policy limit of $15,000 for bodily injury. Mr. Datillo stopped representing Mr.
Butcher, who continued to negotiate with Allstate representatives. Eventually, Allstate agreed to
pay $15,000 to Mr. Butcher in exchange for his signing a general Release of All Claims
("Release"). According to its terms, the Release "forever discharge [s] ... any other person, firm
or corporation ... from any and all claims, demands, damages, costs, expenses, loss of services,
actions and causes of action ..." in connection with the February 17,2012 accident. ECF No.
69-1, at 2. The Release Mr. Butcher signed also states that no representations induced Mr.

Butcher to sign the Release:
To procure payment of the said sum, I hereby declare that I am more than 18 years of age
that no representations about the nature and extent of said injuries, disabilities or damages
made by any physician, attorney or agent of any party hereby release[ d], nor any
representations regarding the nature and extent of legal liability or financial responsibility
of any of the parties released have induced us to make this settlement.

Id.
On February 14, 2014, Mr. Butler filed this action in the Court of Common Pleas of
Allegheny County. Defendants removed to this Court on March 18,2014. Defendant Vauxhall,
I

Butcher v. A llstate Insurance Company, Civil Action No.2: 14-cv-O 1652.

2

Inc. was voluntarily dismissed from the case on November 5,2014. ECF No. 62. Thereafter, the
Court granted Defendant General Motors Company's Motion to Dismiss for lack of personal
jurisdiction without prejudice, see ECF Nos. 4, 37, and 66, for reasons stated on the record at the
oral argument of February 24, 2015. That leaves two Defendants: General Motors LLC and
Allstate Insurance Company. For the reasons that follow, Mr. Butcher's claims against each of
these parties fail.

II.

STANDARD OF REVIEW
To survive a motion to dismiss under Fed. R. Civ. P. 12(b)(6), a complaint must allege

"enough facts to state a claim for relief that is plausible on its face." Bell Atlantic Corp. v.

Twombly, 550 U.S. 544, 570 (2007). "Threadbare recitals of the elements of a cause of action,
supported by mere conclusory statements, do not suffice." Ashcroft v. Iqbal, 556 U.S. 662, 663
(2009). In short, a motion to dismiss should be granted if a party does not allege facts which
could, if established at trial, entitle him to relief. See Fowler v. UPMC Shadyside, 578 F.3d 203,
210 (3d Cir. 2009)
Summary judgment is proper if there is no genuine issue of material fact and if, viewing
the facts in the light most favorable to the nonmoving party, the moving party is entitled to
judgment as a matter of law. See Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317
(1986).
A district court may convert a motion to dismiss into a motion for summary judgment
pursuant to Fed. R. Civ. P. 12(d), which provides:
If, on a motion under Rule 12(b)(6) or 12(c), matters outside the pleadings are presented
to and not excluded by the court, the motion must be treated as one for summary
judgment under Rule 56. All parties must be given a reasonable opportunity to present all
the material that is pertinent to the motion.

3

The Third Circuit has explained that under Rule 12(d), "a district court properly converts a
motion to dismiss into a motion for summary judgment if (l) the materials submitted go outside
of the pleadings and are not excluded by the court and (2) the parties had adequate notice of the
district court's intention to convert." Brown v.

III.

u.s. Steel Corp., 462 F. App'x 152, 155 (3d Cir.

DISCUSSION
A.

General Motors LLC's Motion to Dismiss

Mr. Butcher faces a problem. The language of the Release he signed with Allstate is a
general release. As a result, the release of claims is broad: "I do hereby release and forever
discharge ... any other person, firm or corporation ... from any and all claims, demands,
damages, costs, expenses, loss of services, actions and causes of action ..." arising out of the
February 17,2012 accident. ECF No. 69-1, at 2. By its terms, it covers all Defendants and
claims in 14-353, and no party has argued otherwise. See Buttermore v. Aliquippa Hasp., 561
A.2d 733, 735 (Pa. 1989).
Mr. Butcher's efforts to manufacture ambiguity in that contract fail. It is not ambiguous.
Ambiguity in a contract is defined as the presence of language that is "reasonably susceptible of
different constructions and capable of being understood in more than one sense." Murphy v.
Duquesne Univ. O/The Holy Ghost, 777 A.2d 418,429-30 (Pa. 2001) (internal quotation marks

omitted). Mr. Butcher points to the fifth paragraph of the Release agreement, which states:
I further understand that such liability as I mayor shall have incurred directly or
indirectly, in connection with or for damages arising out of the accident to each person or
organization, release and discharge of liability herein, and to any other person or

2 At the oral argument on September 9,2014, the Court authorized discovery on issues related to the circumstances
of the Release. Based on that discovery, at argument on February 24,2015, the Court asked whether any party
objected to the Court's conversion of any Rule 12(b)(6) Motion into a Motion for Summary Judgment, and all
parties stipulated on the record that they did not object to such conversion.

4

organization, is expressly reserved to each of them, such liability not being waived,
agreed upon, discharged nor settled by the release.
ECF No. 69-1, at 2. Mr. Butcher argues that this is ambiguous. According to him, it could mean
that he was not waiving his right to sue other parties. His confusion in reading this section, he
says, demonstrates its ambiguity. Mr. Butcher's contention does not hold water. To the Court,
which is charged with interpreting and analyzing any contract in the first instance, Murphy, 777
A.2d at 430; Great American Insurance Co. v. Norwin School District, 544 F.3d 229, 243 (3d
Cir. 2008), there is only one way to read this paragraph, and that is as a statement that other
parties are not releasing or discharging any claims they may have against Mr. Butcher. There is
no ambiguity here.
The Release is also an integrated document in that the Release states in clear terms that
"no representations ... of any of the parties released have induced us to make this settlement."

~

Id As a result, the parol evidence rule applies. Yocca v. Pittsburgh Steelers Sports, Inc., 854
A.2d 425,436 (Pa. 2004). This means that evidence of prior representations is not admissible.

Id Mr. Butcher tries to get around this by claiming that the Release was the product of fraud,
mutual mistake, or accident. ECF No. 74, at 10. See Yocca, 854 A.2d at 437 (explaining that an
exception to the parol evidence rule exists "where a party avers that a term was omitted from the
contract because of fraud, accident, or mistake"). None of these theories succeeds.
First, Mr. Butcher says that he is alleging fraud in the execution of the Release, but he is
actually alleging fraudulent inducement. See, e.g., ECF No. 74, at 16 (Plaintiff arguing that the
"Allstate representative fraudulently misrepresented the protections and preservation of
Plaintiffs product liability claims"). As the Yocca court explained:
Notably, while parol evidence may be introduced based on a party's claim that there was
a fraud in the execution of the contract, i.e., that a term was fraudulently omitted from the
contract, parol evidence may not be admitted based on a claim that there was fraud in the

5

inducement of the contract, i,e" that an opposing party made false representations that
induced the complaining party to agree to the contract.

Yocca, 854 A,2d at 439 n.26 (citing HCR Contractors v. Liberty Place Hotel Assocs" 652 A,2d
1278, 1280 (Pa. 1995». In the past, this Court has addressed claims of fraudulent inducement in
the context of the parol evidence rule and concluded that the parol evidence rule has two
requirements: "( 1) that the written agreement contains terms which directly deal with the subject
matter of the alleged oral representation; and (2) represents the entire contract between the
parties, particularly where the written agreement also contains an integration clause." Palermo

Gelato, LLC v, Pino Gelato, Inc., No.12·931, 2013 WL 3147312, at *4 (W.D. Pa. June 19,2013)
(internal quotation marks omitted). Those two requirements are met here. Since the parol
evidence rule applies, allegations of fraudulent inducement are barred. See also Charlton v.

Gallo, No. 09·2447, 2010 WL 653155, at *4 (E.D. Pa. Feb, 19,2010) ("Where a party claims

~

fraud in the inducement and the written contract is fully integrated, the parol evidence rule works
to bar evidence of any representations made about any matter covered by the agreement prior to
the contract's execution.").
Second, Mr. Butcher says that ifhis fraud argument fails, then the Court should find that
the Release is the product of mutual mistake or accident. 3 "Mutual mistake exists where both
parties to a contract are mistaken as to the existing facts at the time of execution ...." Holt v.

Dep'[ ofPublic Welfare, 678 A,2d 421,423 (Pa. Commw. Ct. 1996). The mistake must be
mutual. Roth v. Old Guard Ins. Co., 850 A,2d 651,653 (Pa. Super. 2004) (citations omitted) ("A
unilateral mistake, which is not due to the fault of the party not mistaken, but to the negligence of
the one who acted under the mistake, cannot be a basis for refusing to enforce the release
according to its terms."). To make out mutual mistake, the party asserting it faces a high burden:
3 Aside from using the term "accident" in the title of this portion of his brief, Mr. Butcher does not actually allege
the presence of any accident as to the Release in this case, so the Court need not address that term.

6

"to obtain reformation of a contract because of mutual mistake, the moving party is required to
show the existence of the mutual mistake by evidence that is clear, precise and convincing."

Holmes v. Lankenau Hosp., 627 A,2d 763, 767-68 (1993); see also Anderson v. Liberty Lobby,
Inc., 477 U.S. 242,244 (1986) (holding that the "clear and convincing" standard must be
considered on a motion for summary judgment). "As a general rule, parol evidence may also be
introduced to demonstrate the existence of mutual mistake." In re Leach, No.1 0-449,2010 WL
3038794, at *4 (W.D. Pa. July 30, 2010).
Because the Court may treat General Motors LLC's Motion as one for summary
judgment, the Court may view evidence outside of the pleadings in deciding whether mutual
mistake exists here. The Court concludes that, under the heightened standard, Mr. Butcher has
not presented clear, precise, and convincing evidence of mutual mistake. Rather, the evidence
shows that, if a mistake was made at all, it was his unilateral mistake. Mr. Butcher has not
submitted clear, precise, and convincing evidence that Virginia Fletcher, the Allstate
representative who handled Mr. Butcher's claim with Allstate, intended to provide him with
anything other than a general release. She gave the following deposition testimony:
Q: Okay. Now, by sending that release, I believe you said earlier it was a general
release and a release of all claims is what you called it at Allstate. Right?
A: Yes.
Q: Did you intend to release, as the release states, any other firm - I want to quote the
release to make sure I'm stating it exactly right. Did you intend for the parties to
discharge John and Sharon Byerly and any other person, firm or corporation
charged or chargeable with responsibility or liability in connection with the
accident?
A: Yes, that was my intention.

Q: Okay. And is it your understanding that General Motors would be included in the
definition as stated there?

7

A: Yes, it would be.
ECF No. 69-4, at 20. Later in the deposition, Ms. Fletcher testified that nothing in the claim file
history indicates that Mr. Butcher or anyone else ever mentioned the subject of a joint tortfeasor
4

release. Id. at 23. Had such a conversation taken place, Ms. Fletcher says it would have been
included in the claim file history. Id. Moreover, Ms. Fletcher explained that joint tortfeasor
releases are available on the computer program used at Allstate much in the way that general
releases are available and that she has used them in other cases. Id. at 24.
While it is true that "[e]ven if one party to the contract denies the existence of a mistake,
the other party may still show there was a mutual mistake," In re Leach, 2010 WL 3038794, at
*3 (citing Bollinger v. Cent. Pa. Quarry Stripping & Constr. Co., 229 A.2d 741,742 (Pa. 1967)),
Mr. Butcher has not presented the kind of clear, precise, and convincing evidence that would
controvert the testimony of Ms. Fletcher. Mr. Butcher points to his own deposition testimony in
which he claims that Ms. Fletcher told him that the fifth paragraph of the Release preserved his
right to bring an additional product liability action against a party who might have been
responsible for the alleged airbag malfunction. ECF No. 74-5, at 11-12.

He also cites the

deposition testimony of his wife, Sherry Butcher, who claims that Ms. Fletcher told her during a
telephone conversation that the Release only released Allstate and would not bar a later product
liability suit against another party by Mr. Butcher. ECF No. 74-6, at 3.
But the testimony of the Butchers does not establish mutual mistake because it does not
demonstrate, by clear, precise, and convincing evidence, that Ms. Fletcher thought she was
sending ajoint tortfeasor release when she was really sending a general release. Importantly, on
top of all that is Mr. Butcher's affirmation in the Release that he never relied on any
4 Mr. Butcher makes some contentions about not having had access to the entire claims file, but the record reflects
that it was made available to his lawyer, if they would stipulate that its provisions did not waive the attorney-client
privilege. ECF No. 80-1. It does not appear that Mr. Butcher's lawyer ever responded.

8

representations of anyone about the Release when he signed it. Thus, he cannot now rely on just
such a pre-execution representation by Ms. Fletcher to make out a "mutual" mistake. Thus, for
all these reasons, this argument fails.
Finally, the deposition of James Datillo, Mr. Butcher's former lawyer, does not support a
finding of mutual mistake. Instead, Mr. Datillo explains in his deposition that he told Mr.
Butcher to have an attorney review the Release to make sure that it was a joint tortfeasor release.
ECF No. 74-2, at 7. Despite this urging, Mr. Butcher confesses that, while he spoke to "about a
half a dozen other attorneys," he never had even one of them review the Release. ECF No. 69-2,
at 9. Mr. Butcher claims that, after doing his own independent internet research, but without
consulting an attorney, he "was pretty well greased, and [] thought [he] knew enough to make a
decision to sign it or not." Id And sign it he did, and none of this constitutes clear, precise, and
convincing evidence that Ms. Fletcher was mistaken about the content of the Release, which is
what Mr. Butcher would need to show to prove mutual mistake.
Mr. Butcher has not met his burden to avoid the effect ofthe Release. Viewing the
evidence in the light most favorable to the nonmoving party, Mr. Butcher simply has not
demonstrated either an ambiguity in the Release, or a factual issue as to a mutual mistake by the
clear, precise, and convincing evidence required by Pennsylvania law. The Motion to Dismiss of
General Motors LLC is granted.

B.

Allstate Insurance, Inc. 's Motion to Dismiss

In the related case, Mr. Butcher brings three (3) claims against Allstate in his Amended
Complaint: (1) negligence and gross negligence, (2) common law fraud, fraud in the inducement,
and fraudulent misrepresentation, and (3) violations of the Pennsylvania Unfair Trade Practices

9

and Consumer Protection Law ("UTPCPL"). Allstate's Motion to Dismiss will be granted on all
three (3) claims for the following reasons.
The negligence claim fails because Allstate did not owe a duty to Mr. Butcher. See Gibbs
v. Ernst, 647 A.2d 882, 890 (1994) ("Any action in negligence is premised on the existence of a
duty owed by one party to another."). Despite Mr. Butcher's attempt to manufacture a duty
running from Allstate (Ms. Byerly's insurer, not his) to him, it is clear that "the duty to negotiate
a settlement in good faith arises from the insurance policy and is owed to the insured, not to a
third-party claimant." Strutz v. State Farm Mut. Ins. Co., 609 A.2d 569,571 (Pa. Super.
Ct. 1992); see also Johnson v. Beane, 664 A.2d 96, 101 n.3 (Pa. 1995) (explaining that the
insurer's "duty to act in good faith in the investigation, negotiation, and settlement of the claim
runs only to [the insured],,).
The fraud claims fail for similar reasons to those discussed earlier in this Opinion. s Mr.
Butcher has premised his fraud claims on alleged misrepresentations made by Allstate through
Ms. Fletcher. But the Release Mr. Butcher signed says that no representations induced the
parties to enter into the agreement. ECF No. 69-1, at 2. See Blumenstock v. Gibson, 811 A.2d
1029,1036 (Pa. Super. Ct. 2002) ("[A] party cannot justifiably rely upon prior oral
representations yet sign a contract denying the existence of those representations."). This
principle, and the parol evidence rule, bar the consideration of the alleged misrepresentations that
Mr. Butcher necessarily relies on for his claims of fraud. Palermo Gelato, 2013 WL 3147312, at

*4.

5 The Court may consider the Release at the Motion to Dismiss stage because, even though "release" is an
affirmative defense, "the law of this Circuit (the so-called 'Third Circuit Rule') permits an affirmative defense to be
raised by a motion under Rule 12(b){6) in certain circumstances." PPG Indus., Inc. v. Generon IGS, Inc., 760 F.
Supp. 2d 520, 525 (W.D. Pa. 2011).

10

Mr. Butcher's UTPCPL claims, 73 P.S. § 201-1 et seq., fail because he is not in a class
protected by that statute. As explained by the Third Circuit, the UTPCPL "contemplates as the
protected class only those who purchase goods or services, not those who may receive a benefit
from the purchase." Gemini Physical Therapy & Rehab" Inc. v. State Farm Mut. Auto. Ins. Co.,
40 F.3d 63, 65 (3d Cir. 1994) (holding that, although the plaintiff "may have been indirectly
injured," the plaintiff was "not a purchaser or consumer of goods or services under the CPL and
therefore has no private right of action under the statute"); see also Branche v. Wells Fargo
Mortgage Co., No. 11-468,2013 WL 5954730, at *5 (M.D. Pa. Nov. 6, 2013) (holding that

"Plaintiff lacks standing to sue under the UTPCPL, and Defendant is entitled to summary
judgment" because the plaintiff did not purchase services from the defendant) (citing Gemini, 40
F.3d at 65). Quite simply, "[t]o recover under the CPL, the party must have made a
'purchase ... primarily for personal, family or household purposes.'" Directv, Inc. v. Carter,
No. 4-2657, 2005 WL 119577, at *2 (E.D. Pa. Jan. 20,2005) (quoting Balderston v. Medtronic
Sofamor Danek, Inc., 285 F.3d 238, 240 (3d Cir.2002»). Mr. Butcher is not, by any stretch, the

purchaser of any consumer goods or services from Allstate, and therefore, Mr. Butcher does not
have standing to pursue a claim under the UTPCPL. Allstate's Motion to Dismiss must be
granted.
IV.

CONCLUSION
Because the Court concludes that Mr. Butcher's claims against General Motors LLC are

barred by the Release he signed, General Motors LLC's Motion to Dismiss (or, in the alternative,
Motion for Summary JUdgment) will be granted. Furthermore, because Mr. Butcher's claims
against Allstate fail to state a claim upon which relief can be granted, Allstate's Motion to
Dismiss will be granted.

11

An appropriate Order will be entered.

Mark R. Hornak
United States District Judge
Dated: February 27,2015
cc:

All counsel of record

12