PRICE et al v. GATOR LAUREL PARTNERS, LLLP et al
MEMORANDUM AND ORDER. For the reasons stated in the Memorandum and Order filed herewith, the Wavie & Janes Defendants' Motion for Summary Judgment Relative to the Cross Claim filed by the Gator Laurel Defendants (Doc. 70 ) is GRANTED insofar a s it relates to the Gator Laurel Defendants' contractual indemnity claim against the Wavie & Janes Defendants and the common law indemnity claims against Bodes and Wallace individually. The motion is DENIED insofar as it relates to the Gator Laurel Defendants' common law indemnity claim against Wavie & Janes Emporium. Signed by Judge Cathy Bissoon on 9/25/2017. (kg)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
DIANA PRICE, et al.,
GATOR LAUREL PARTNERS, LLLP,
Civil Action No. 15-715
Judge Cathy Bissoon
MEMORANDUM AND ORDER
Pending before the Court is a motion for partial summary judgment (Doc. 70) filed on
behalf of Defendants Wavie & Janes Emporium, LLC, Jeff Wallace, and Terry Bodes
(collectively, the “WJE Defendants” or “Cross-claim Defendants”) relative to the cross-claim
asserted by Defendants Gator Laurel Partners, LLLP, Gator Laurel Flea Market, LLC, and Gator
Laurel Mall, LLC (collectively, the “GL Defendants” or “Cross-claim Plaintiffs”). For the
reasons that follow, the WJE Defendants’ motion will be GRANTED in part and DENIED in
A. BACKGROUND 1
Defendant Gator Laurel Partners, LLLP (“GL Partners”) is a Florida limited liability
limited partnership. Doc. 1, ¶5; Doc. 25, ¶5. Defendant Gator Laurel Mall, LLC (“GL Mall”) is
a Florida limited liability company that, at times pertinent hereto, was the general partner of GL
The following facts are undisputed, unless otherwise indicated. Where disputed, the facts are
presented in the light most favorable to the GL Defendants, the non-movants.
Partners. Doc. 1, ¶7; Doc. 25, ¶7. Defendant Gator Laurel Flea Market, LLC (“GL Flea
Market”) also is a Florida limited liability company. Doc. 1, ¶6; Doc. 25, ¶6.
Since August 1, 2008, GL Partners has owned property known as the Laurel Mall,
located in Fayette County, Pennsylvania. Doc. 78-4 at 3-4; Doc. 1, ¶13; Doc. 25, ¶13. The
Laurel Mall is a flea market consisting of approximately 190 booths. Doc. 71 ¶1; Doc. 77, ¶1.
At times relevant to this litigation, GL Partners, GL Flea Market and/or GL Mall operated,
managed and/or maintained the Laurel Mall property. Doc. 1, ¶13; Doc. 25, ¶13.
Defendants Jeff Wallace (“Wallace”) and Terry Bodes (“Bodes”) are residents of Fayette
County, Pennsylvania. Doc. 1, ¶¶ 9-10; Doc. 40, ¶¶9-10. On November 12, 2009, Bodes filed
an application with the Pennsylvania Department of State to register a retail store business under
the fictitious name “Trail Town Peddlers.” Doc. 73-4 at 2-3; Doc. 71, ¶5; Doc. 77, ¶5. The
application was granted on November 16, 2009 and, thereafter, Wallace and Bodes conducted
business at the Laurel Mall under the name “Trail Town Peddlers.” Doc. 71, ¶5; Doc. 77, ¶¶5,
Defendant Wavie & Janes Emporium, LLC (“WJE”), is a Pennsylvania limited liability
company that was formed on May 29, 2013. Doc. 73-4 at 4. Bodes is WJE’s sole member and
Wallace is an operator/employee of the company. Doc. 77 at ¶12; Bodes Dep. at 9:2-15, 10:1811:12 (Doc. 78-9).
On June 8, 2013, while Plaintiffs Diana and Charles Price (“Plaintiffs”) were walking in
the corridor of the Laurel Mall, Diana Price (hereafter, at times, “Diana”) rounded a pillar and
tripped over a wooden pallet that was located just outside a store allegedly bearing the signage
“Wavie & Janes Emporium.” Doc. 71, ¶10; Doc. 77, ¶10; D. Price Dep. at 17:3-20, 20:17-21
(Doc. 73-7); C. Price Dep. at 12:2-25, 18:9-17 (Doc. 78-7). Immediately after Diana tripped and
fell, a young male came out of Wavie & Janes Emporium, grabbed the wooden pallet, and took it
back inside the store. D. Price Dep. at 20:12-21; C. Price Dep. at 27:2-16, 28:5-19. Upon
picking up the pallet, the young male allegedly remarked, “[T]his thing has been here for a
month and nobody else has ever tripped over it.” C. Price Dep. at 27:13-16.
Plaintiffs later filed suit against the GL Defendants and the WJE Defendants for damages
allegedly sustained by Plaintiffs as a result of Diana’s fall. The complaint (Doc. 1) set forth
separate claims against the GL Defendants and the WJE Defendants both for negligence and for
loss of consortium. It also included a claim against Bodes and Wallace in their individual
capacities, based on the theory that WJE is the “alter ego” of “either or both of the Defendants,
Terry Bodes and Jeff Wallace.” Doc. 1, ¶48. 2
On October 2, 2015, the GL Defendants answered the complaint and asserted crossclaims against the WJE Defendants for indemnification and contribution. See Doc. 25. In their
answer to the cross-claims, the WJE Defendants state, among other things, that WJE never
operated a store at the Laurel Mall. Doc. 40 at 20 (“First Affirmative Defense”). The WJE
Defendants acknowledge that Wallace and Bodes previously rented store space from the GL
Defendants at the Laurel Mall using the trade name “Trail Town Peddlers”; however, they
maintain that this business ceased to exist – and that Wallace and Bodes vacated the leasehold –
no later than April 2013. Id. at 20-21 (“Second Affirmative Defense” and “Third Affirmative
Defense”). Consequently, the WJE Defendants contend that Plaintiffs and the GL Defendants
According to the WJE Defendants, “[t]he Plaintiffs have agreed to dismiss Jeff Wallace and
Terry Bodes in their individual capacities as the protections of the Limited Liability Company
inure to the benefit of the individual defendants and discovery has revealed that no cognizable
claim for ‘Piercing the Corporate Veil’ has been made by the Plaintiffs.” WJE Defs.’ Br. Supp.
Mot. Summ. J. at 4, Doc. 72. Because the Court is unable to verify the accuracy of the WJE
Defendants’ representation from the public docket, the Court will not presently credit the
representation or allow it to inform any aspect of the analysis set forth herein.
have sued the wrong parties. Id. at 21 (“Third Affirmative Defense”). They deny that the GL
Defendants have any basis, either contractually or under common law, for obtaining contribution
or indemnification from them. Id. at 21 (“Fifth Affirmative Defense”).
In February 2017, the WJE Defendants filed the pending motion for summary judgment
and supporting materials relative to the GL Defendants’ cross-claim. Doc. Nos. 70-73. In their
motion, the WJE Defendants challenge only the GL Defendants’ claims for indemnification. See
Doc. 70, ¶¶4-7. 3 They argue that the GL Defendants have no right to obtain indemnification,
either contractually or under common law. Doc. Nos. 70 and 72.
The GL Defendants filed their opposition materials on March 24, 2017. Doc. Nos. 74-78.
Based on these filings, the motion of the WJE Defendants is ripe for adjudication.
B. ANALYSIS 4
“[U]nder Pennsylvania law, 5 indemnity is available only (1) where there is an express
contract to indemnify, or (2) where the party seeking indemnity is vicariously or secondarily
The WJE Defendants make no mention of the cross-claim for contribution, nor do they
acknowledge a distinction between the two theories. Because the parties have not joined issue
on the sufficiency of the GL Defendants’ contribution claim, the Court will not address the
matter at this juncture.
Summary judgment is appropriate if the moving party establishes “that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R.
Civ. P. 56(a). A dispute is “genuine” only if there is a sufficient evidentiary basis for a
reasonable jury to find for the non-moving party, and a fact is “material” only if it might affect
the outcome of the action under the governing law. See Sovereign Bank v. BJ's Wholesale Club,
Inc., 533 F.3d 162, 172 (3d Cir. 2008) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
248 (1986)). In ruling on the pending motion for summary judgment, the Court must view the
facts, and any reasonable inferences arising therefrom, in the light most favorable to the nonmoving party. See Moody v. Atlantic City Bd. of Educ., 2017 WL 3881957, at *1 n.1 (3d Cir.
Sept. 6, 2017) (citing Hugh v. Butler Cty. Family YMCA, 418 F.3d 265, 266-67 (3d Cir. 2005)).
As a federal court sitting in diversity, this Court must apply the substantive law of the state in
which it sits, Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78 (1938), including its choice of law
rules, Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941). In this case, the parties
liable for the indemnitor’s acts.’” Bank v. City of Phila., 991 F. Supp. 2d 523, 530 (E.D. Pa.
2014) (quoting Allegheny Gen. Hosp. v. Philip Morris, Inc., 228 F.3d 429, 448 (3d Cir. 2000))
(additional internal quotation marks and citations omitted). “If there is no express contract to
indemnify, then the party seeking indemnity must rely on the second option—common law
indemnification.” Id. (quoting Allegheny Gen. Hosp., 228 F.3d at 448). A right of common law
indemnification arises when a defendant’s liability “‘arises not out of its own conduct, but out of
a relationship that legally compels the defendant to pay for the act or omission of a third party.’”
Id. (quoting Morris v. Lenihan, 192 F.R.D. 484, 489 (E.D. Pa. 2000)). “The common law right
of indemnity ‘enures to a person who, without active fault on his own part, has been compelled,
by reason of some legal obligation, to pay damages occasioned by the initial negligence of
have implicitly agreed that Pennsylvania law governs the disputed cross-claim, as they discuss
only Pennsylvania law in their respective briefs. Accordingly, the Court need not engage in a
choice-of-law analysis. See Schiavone Constr. Co. v. Time, Inc., 735 F.2d 94, 96 (3d Cir. 1984))
(where parties implicitly agreed that New Jersey law governed their defamation case, district
court applied New Jersey law in its analysis, and New Jersey had an interest in the outcome of
the litigation, Court of Appeals found “no cause sua sponte to challenge that choice of law”); 84
Lumber Co., L.P. v. Bryan Const. Co., 2011 WL 666209, at *5 (W.D. Pa. Feb.14, 2011) (“In this
case, the parties do not dispute that Pennsylvania law applies to this case, and the Court need not
engage in a choice of law analysis.”); Tyler v. King, 496 A.2d 16, 21 (Pa. Super. Ct. 1985)
(“[P]arties may bind themselves, even by a statement made in court, on matters relating to
individual rights and obligations, so long as their stipulations do not affect the court's jurisdiction
or due order of business.”).
Regardless, the Court finds no reason to apply different law to the facts of this case. As a
general matter, “Pennsylvania courts give effect to choice of law provisions when the state
selected enjoys a substantial relationship to the parties or the transaction and the application of
the law is not contrary to the public policy of another state with a stronger interest in the
transaction.” Verizon Commc'ns Inc. v. Pizzirani, 462 F. Supp. 2d 648, 655 (E.D. Pa. 2006)
(citing Kruzits v. Okuma Mach. Tool, Inc., 40 F.3d 52, 55 (3d Cir. 1994)) (footnote omitted). In
this case, Pennsylvania has a substantial connection to the parties and the underlying events
because Diana Price’s accident occurred in Pennsylvania, and both the GL Defendants and the
WJE Defendants conducted business here. Neither the GL Defendants nor the WJE Defendants
have alleged that the application of Pennsylvania law would contravene the public policy of
another state having a stronger interest in this case. Accordingly, the disputed cross-claim will
be analyzed under Pennsylvania law.
another, and for which he himself is only secondarily liable.’” Id. (quoting Morris, 192 F.R.D. at
Here, the WJE Defendants appear to concede the existence of genuine disputes about
whether they operated a store at the Laurel Mall under the trade name “Waivie & Janes
Emporium” at the time of Diana Price’s trip and fall and whether negligence can be vicariously
imputed to WJE by virtue of actions taken by the store’s employees. The evidence shows that
WJE was formally organized as a limited liability company on May 29, 2013, shortly before the
date of Diana Price’s accident. Both Plaintiffs testified that they observed WJE signage in place,
and WJE employees present in the store, on the day in question. Plaintiffs’ testimony supports
the additional inference that the obstacle on which Diana tripped – i.e., an object she described as
a “wooden pallet” – was the property of WJE and had been situated just outside of the store at
the time of Diana’s fall. In light of these facts, a jury could reasonably conclude that: (i) the
WJE Defendants maintained a presence at the Laurel Mall under the trade name “Waivie &
Janes Emporium” during the time frame in question, and (ii) WJE employees were responsible
for placing the wooden pallet in the location where Diana Price tripped.
The question becomes whether the GL Defendants have established any basis for their
indemnification claim against the WJE Defendants. In this case, the GL Defendants’ contractual
indemnification claim is predicated entirely upon a “license agreement” that was purportedly
executed for the benefit of GL Partners by Wallace in his capacity as “President” of an
unidentified entity. See Doc. 73-2. Paragraph 10 of the agreement sets forth an
“indemnification/ hold harmless” clause, which states:
Licensee hereby agrees to indemnify, defend and hold harmless the Licensor, its
owner, partners, authorized agents, managing agent, mortgagee, contractors, and
each tenant and licensee of the Shopping Center from and against any and all
claims (including personal injuries and death), damages, injuries, actions, costs,
fees, penalties, interest or expenses of any kind or nature, whatsoever, and/or
other expenses (including reasonable attorney’s fees) and cost due to or arising
out of or in connection with the use or occupancy of the Premises, the Shopping
Center, or any part or facility thereof by the Licensee, his agents, members,
partners, associates, contractors, servants, invitees, and employees.
Doc. 73-2 at 9, ¶10.
For several reasons, the Court finds the licensing agreement ineffectual in terms of
transferring a duty of indemnification to any of the WJE Defendants. To begin, it is clear that
Wallace could not have executed the purported licensing agreement on behalf of WJE, since the
document was signed on November 12, 2008 and WJE did not exist as a legal entity until May
29, 2013. The agreement, by its own terms, is “personal to Licensee and may not be transferred
or assigned by Licensee . . . .” Doc. 73-2 at 10, ¶14. Indeed, the GL Defendants appear to
concede that the licensing agreement has no binding effect on WJE because it was not a party to
Additionally, the Court finds that the “licensing agreement” cannot support a contractual
right of indemnification against Bodes or Wallace because it is unenforceable under basic tenets
of Pennsylvania contract law. “The elements of an enforceable contract under Pennsylvania law
are: (1) a manifestation of an intent to be bound by the terms of the agreement, (2) sufficiently
definite terms, and (3) an agreement supported by adequate consideration.” Szymanski v.
Sacchetta, 2012 WL 246249, at *4 (E.D. Pa. Jan. 26, 2012) (citing Johnston the Florist, Inc. v.
TEDCO Constr. Corp., 657 A.2d 511, 516 (Pa. Super. Ct. 1995)). For purposes of evaluating
whether sufficiently definite contractual terms exist, Pennsylvania courts follow the Restatement
(Second) of Contracts. See Reed v. Pittsburgh Bd. of Pub. Educ., 862 A.2d 131, 135 (Pa.
Commw. Ct. 2004). Section 33 of the Restatement provides that:
(1) Even though a manifestation of intention is intended to be understood as an
offer, it cannot be accepted so as to form a contract unless the terms of the contract
are reasonably certain.
(2) The terms of a contract are reasonably certain if they provide a basis for
determining the existence of a breach and for giving an appropriate remedy.
() The fact that one or more terms of a proposed bargain are left open or uncertain
may show that a manifestation of intention is not intended to be understood as an
offer or as an acceptance.
Restatement (Second) of Contracts § 33 (1981). “‘[T]ime or manner of performance, and price
or consideration are essential terms of an alleged bargain, and must be supplied with sufficient
definiteness for a contract to be enforceable.’” Hearbest, Inc. v. Adecco USA, 2014 WL
7183478, at *5 (W.D. Pa. Dec. 16, 2014) (quoting Great N. Ins. Co. v. ADT Sec. Servs., Inc.,
517 F. Supp. 2d 723, 736 (W.D. Pa. 2007)); see Lombardo v. Gasparini Excavating Co., 123
A.2d 663, 666 (Pa. 1956) (essential terms of a contract include, inter alia, the “time or manner of
performance, price to be paid, or the like.”).
In this case, the essential terms of the licensing agreement are insufficiently clear, and the
document does not evidence the parties’ intention to enter into an enforceable contract. For one
thing, the agreement fails to specify the entity on whose behalf Wallace, as “President,”
supposedly executed the document. And even if the Court assumes that “Trail Town Peddlers” –
or Wallace himself -- is the “Licensee,” the agreement still fails to meet the standard of
enforceability because it does not identify the “premises” being “licensed,” the term of the
licensing period, the price to be paid as a “license fee,” or the “permitted use” of the premises.
Under these circumstances, the written agreement provides an insufficient basis for determining
either the existence of a breach or the appropriate remedy. On its face, the document cannot
reasonably be viewed as manifesting an objective contractual intent on the part of Wallace,
“Trail Town Peddlers,” or any other entity.
Apart from these defects, the “licensing agreement” fails to satisfy Pennsylvania’s statute
of frauds, which provides that any lease of real property for a term of more than three years must
be made in writing and must be signed by both of the contracting parties. See 68 Pa. Stat.
§250.202. Although the “licensing agreement” bears the signature of Wallace, as “President” of
an undisclosed “Licensee,” it is not signed by any agent of GL Partners, the purported
“Licensor.” 6 Thus, even if the agreement were otherwise enforceable as to its substantive terms,
it would not be enforceable beyond the three-year period after it was signed by Wallace. See
Flight Sys., Inc. v. Elec. Data Sys. Corp., 112 F.3d 124, 129 (3d Cir. 1997) (court noting that,
although “[t]he statute of frauds does not void contracts relating to land that fail to comply with
its requirements,” it “renders unenforceable the durational term of those contracts”). That threeyear period terminated well before the date on which Diana Price was injured.
In sum, even if WJE actually occupied space in the Laurel Mall on June 8, 2013, and
even if WJE, through its agents, was vicariously responsible for the placement of the obstacle
that caused Diana Price’s fall, the 2008 “license agreement” has no legal effect vis-a-vis the WJE
Defendants in terms of providing the GL Defendants a contractual right of indemnification.
Accordingly, to the extent that the GL Defendants’ indemnification claim is predicated on
provisions in the licensing agreement, the claim fails as a matter of law.
Of course, under Pennsylvania law, parties can also be bound under the terms of an oral
contract. “In the case of oral contracts, courts must look to surrounding circumstances and
course of dealing between the parties in order to ascertain their intent.” Legendary Art, LLC v.
Godard, 888 F. Supp. 2d 577, 585 (E.D. Pa. 2012) (internal quotation marks and citation
In their brief, the GL Defendants argue that “[t]he Agreement . . . contains a counterparts clause
indicating that the agreement may be executed in several counter parts, each of [which] shall be
deemed an original, therefore the page containing the Lessor’s signature may be shown on
another counterpart.” GL Defs.’ Mem. Opp. Mot. Summ. J. at 4, Doc. 75. This speculative
assertion – that a signed counterpart to the agreement may exist somewhere – does not amount to
a genuinely disputed issue concerning the existence of a fully executed licensing agreement.
omitted). Here, the GL Defendants contend that “the mere fact that the parties maintained [their]
business relationship for 4-1/2 years creates a very long history or [c]ourse of [p]erformance,
from which meaning to the terms of the agreement may be proved during testimony at the time
of trial.” GL Defs.’ Mem. Opp. Mot. Summ. J. at 4, Doc. 75.
While this may be true, it is the GL Defendants’ burden, at this stage of the proceedings,
to produce evidence indicative of a genuinely disputed issue concerning its right to contractual
indemnification. As noted, Pennsylvania requires the existence of an express contractual right to
indemnity. See Bank, 991 F. Supp. 2d at 530 (noting that, under Pennsylvania law, “indemnity
is available only (1) where there is an express contract to indemnify, or (2) where the party
seeking indemnity is vicariously or secondarily liable for the indemnitor’s acts”) (internal
quotation marks and citation omitted). Moreover, “[a]n indemnification agreement ‘must be
construed strictly and the contract must state the intention of the parties with the greatest
particularity.’” Krueger Assocs., Inc. v. ADT Sec. Sys., 11 F. Supp. 2d 634, 636 (E.D. Pa. 1998)
(quoting Valhal Corp. v. Sullivan Assoc., Inc., 44 F.3d 195, 202 (3d Cir.1995)), aff'd sub nom.
Krueger Assocs., Inc. v. Am. Dist. Tel. Co. of Pa., 247 F.3d 61 (3d Cir. 2001). “Any ambiguity
in the contract must be construed against the party seeking indemnification.” Id. (citing Valhal
Corp., 44 F.3d at 202). In this case, there is no evidence before the Court to suggest that the
parties engaged in a course of dealing pursuant to which the WJE Defendants expressly agreed to
indemnify GL Partners under the type of circumstances that are present here.
In sum, the Court finds that there are no genuinely disputed issues of material fact
relative to the GL Defendants’ contractual indemnification claim. As a matter of law, the GL
Defendants have established no basis in contract for obtaining indemnification from the WJE
Defendants, and summary judgment will therefore be entered on that aspect of the cross-claim.
Absent a contractual right of indemnification, the GL Defendants must rely on a common
law right of indemnification. “‘[T]he common law right of indemnity is not a fault sharing
mechanism between one who was predominantly responsible for an accident and one whose
negligence was relatively minor.’” Holbrook v. Woodham, 2009 WL 365681, at *9 (W.D. Pa.
Feb. 13, 2009) (quoting Sirianni v. Nugent Bros., Inc., 506 A.2d 868, 871 (Pa.1986)). “‘Rather,
it is a fault shifting mechanism, operable only when a defendant who has been held liable to a
plaintiff solely by operation of law, seeks to recover his loss from a defendant who was actually
responsible for the accident which occasioned the loss.’” Id. (quoting Sirianni, supra).
In their motion, the WJE Defendants contend that no facts have been presented that
would render them liable for indemnification at common law. See Doc. 70, ¶7(b). Their brief
does not expound on this point, except to note the well-established rule in Pennsylvania that:
where the owner of real estate leases various parts thereof to several tenants, but
retains possession and control of the common passage-ways and aisles which are
to be used by business invitees of the various tenants, the obligation of keeping the
common aisles safe for the business invitees is imposed upon the landlord and not
upon the tenants, in the absence of a contrary provision in the lease or leases.
WJE Defs.’ Br. Supp. Mot. Summ. J. at 6, Doc. 72 (quoting Leary v. Lawrence Sales Corp., 275
A.2d 32, 34 (Pa. 1971)). Under Pennsylvania law, the question of liability is premised primarily
on possession and control, as opposed to simply ownership. Stuski v. Phila. Auth. for Indus.
Dev., 162 A.3d 1196, 1203 (Pa. Commw. Ct. 2017).
Here, the Court is not persuaded that the foregoing rule absolutely bars the GL
Defendants’ common law indemnity claim because the record, at least in its present state,
supplies a reasonable basis for finding only secondary liability on the part of GL Partners. Under
Pennsylvania law, “secondary as distinguished from primary liability rests upon a fault that is
imputed or constructive only, being based on some legal relation between the parties, or arising
from some positive rule of common or statutory law or because of a failure to discover or correct
a defect or remedy a dangerous condition caused by the act of the one primarily responsible.”
Builder Supply Co. v. McCabe, 77 A.2d 368, 328 (Pa. 1951). Based on the record before the
Court, a jury could reasonably infer that agents of WJE created a dangerous condition in the
common area of the Laurel Mall, making any liability on the part of the GL Defendants
secondary to that of WJE. See Scampone v. Highland Park Care Ctr., LLC, 57 A.3d 582, 597
(Pa. 2012) (“The corporation, as principal, assumes the risk of individual agents' negligence
under the theory of vicarious liability.”) (citing authority).
Moreover, genuine issues of fact exist on this record as to whether the GL Defendants
actually retained control over the area in which Diana Price fell. Under Pennsylvania law, the
question of control over leased premises is a factual one ordinarily reserved to the jury.
Fitzpatrick v. Consol. Rail Corp., 1991 WL 61114, at *3 (E.D. Pa. Apr. 16, 1991) (citing
Farmers Export Co., Inc. v. Energy Terminals, Inc., 673 F. Supp. 715, 718 (E.D.Pa.1987). See
also Pratt v. Scott Enters., 218 A.2d 795, 797-98 (Pa. 1966) (whether landlord was in control
over area of plaintiff’s injury was “strictly a question of fact” that was properly submitted to the
jury); Pierce v. Phila. Housing Auth., 486 A.2d 1004, 1007-08 (Pa. Super. Ct. 1985) (language in
lease agreement, together with other evidence in the record, supported an inference of
defendant’s possession and control over stairway on which plaintiff was injured and
corresponding duty to keep the stairways in good repair, making directed verdict in favor of the
defendant inappropriate). The wording of a lease agreement is a significant factor in resolving
the question of control. Fitzpatrick, 1991 WL 61114, at *3 (citing Farmers Export Co., Inc., 673
F. Supp. at 718). Accordingly, covenants stipulating that one party shall repair or maintain the
premises or maintain personal possession are “strong indicia of control.” Id.
For the reasons discussed, the Court has determined that the 2008 licensing agreement
signed by Wallace is unenforceable as against the WJE Defendants. Nevertheless, the record
suggests that, at the time of Diana Price’s accident, WJE and GL Partners were operating under
some type of oral or implied lease agreement. Unfortunately, the terms of that agreement are not
clear because there is scant evidence in the record concerning the parties’ course of conduct as it
relates to possession and control over the area where Diana Price tripped and fell. While there is
evidence indicating that the GL Defendants hired an independent contractor to generally
maintain the common areas of the mall, see Doc. 78-4 at 5, there is also evidence to suggest that
that the obstacle on which Diana Price tripped had remained in place for as long as a month prior
to her accident, suggesting that WJE may have exercised some degree of control over the area
immediately in front of its store. See C. Price Dep. at 27:13-16. There also is some ambiguity in
the record concerning the precise description and location of the obstacle in question. One fact
witness, Gail Haug, described the obstacle as a “shepherd’s hook” and testified that it was placed
partly inside the WJE Defendants’ store, protruding into the corridor. See Haug Dep. at 54:9-21,
Doc. 78-6. In short, because the evidence gives rise to unresolved factual issues concerning the
precise location of the obstacle and the parties’ respective duties, if any, to Diana Price, the
Court cannot resolve the common law indemnity claim as a matter of law, at least to the extent
the claim is directed against WJE.
Insofar as the common law indemnity claim is directed at Bodes and Wallace personally,
the WJE Defendants contend that summary judgment is appropriate because WJE’s structure as a
limited liability company protects Bodes and Wallace from individual liability and no grounds
exist for piercing the company’s “corporate veil.” This argument is well-taken.
Under Pennsylvania law, WJE’s structure as a limited liability company generally shields
Wallace and Bodes from personal liability. See 15 Pa. Cons. Stat. Ann. §8818(a) (“A limited
liability company is an entity distinct from its member or members.”); Id. §8834(a) (“A member
or manager is not personally liable, directly or indirectly, by way of contribution or otherwise,
for a debt, obligation or other liability of the company solely by reason of being or acting as a
member or manager.”); see also Commwealth Dep’t of Envtl. Protection v. Trainer Custom
Chem. LLC, 204 F. Supp. 3d 814, 826 (E.D. Pa. 2016) (“As a general rule, members of a limited
liability company or shareholders of corporations are ‘not personally liable to perform corporate
obligations.’”) (quoting Kaplan v. First Options of Chicago, Inc., 19 F.3d 1503, 1520-21 (3d Cir.
1994)) (internal footnote omitted). Because there is no indication in the record that either
Wallace or Bodes were personally involved in placing the “pallet” in the location where Diana
Price tripped, neither Wallace nor Bodes can be held liable under a “participation theory” of
negligence. See Jackson v. Burlington Coat Factory, 2017 WL 3534983, at *3 (E.D. Pa. Aug.
17, 2017) (noting Pennsylvania’s recognition of the “participation theory,” pursuant to which “a
corporate officer/manager can be held personally liable for participating in the tortious activity of
the company, but only where the manager ‘specifically direct[s] the particular act to be done or
participate[s], or cooperate[s] therein’”) (quoting Wicks v. Milzoco Builders, Inc., 470 A.2d 86,
90 (Pa. 1983))(alterations in the original); Get-Er-Done Drilling, Inc. v. US Crossing Unlimited,
LLC, 2017 WL 2936745, at *6 (W.D. Pa. July 10, 2017) (discussing Pennsylvania’s
participation theory and observing that it applies in the context of limited liability companies).
Nor have the GL Defendants pointed to any evidence that would support piercing WJE’s
“corporate veil.” 7 In Pennsylvania, there is a strong presumption against piercing the corporate
veil. See Lumax Indus., Inc. v. Aultman, 669 A.2d 893, 895 (Pa. 1995) (“[T]he general rule is
that a corporation shall be regarded as an independent entity even if its stock is owned entirely
by one person.”). Nonetheless, there are certain situations where piercing the veil is
countenanced in Pennsylvania – namely, when it is determined that “‘the corporation is an
artifice and a sham to execute illegitimate purposes and [an] abuse of the corporate fiction and
immunity that it carries.’” Kaplan, 19 F.3d at 1521 (quoting Wheeling-Pittsburgh Steel Corp. v.
Intersteel, Inc., 758 F. Supp. 1054, 1058 (W.D. Pa. 1990)) (alteration in the original). No clear
test exists for determining when piercing the corporate veil is appropriate, although certain
factors are relevant, such as undercapitalization, failure to adhere to corporate formalities,
substantial intermingling of corporate and personal affairs and use of the corporate form to
perpetuate a fraud. See Advanced Tel. Sys., Inc. v. Com-Net Prof'l Mobile Radio, LLC., 846
A.2d 1264, 1278 (Pa. Super. Ct. 2004). “[A] court inquires, inter alia, whether corporate
formalities were observed and corporate records kept, whether officers and directors other than
the dominant shareholder actually function, and whether the dominant shareholder has used the
assets of the corporation as if they were his or her own.” 12 Summ. Pa. Jur. 2d Business
Relationships § 1:27 (2d ed.) (citing Fletcher-Harlee Corp. v. Szymanski, 936 A.2d 87 (Pa.
Super. Ct. 2007), appeal denied, 956 A.2d 435 (2008) and cert. denied, 129 S. Ct. 1581 (2009)).
“The corporate form will be disregarded only when the entity is used to defeat public
“Pennsylvania courts have found that the veil of an LLC may be pierced to the same degree as
that of a corporation.” Partners Coffee Co., LLC v. Oceana Servs. & Prods. Co., 700 F. Supp. 2d
720, 736 (W.D. Pa. 2010) (citing Advanced Tel. Sys. v. Com–Net Prof'l Mobile Radio, LLC,
846 A.2d 1264, 1281, n. 11 (Pa. Super. Ct. 2004)); Schwab v. McDonald (In re LMcD, LLC),
405 B.R. 555, 560 (Bankr. M.D. Pa. 2009).
convenience, justify wrong, protect fraud, or defend crime.” Mosaica Educ., Inc. v. Pa.
Prevailing Wage Appeals Bd., 925 A.2d 176, 184 (Pa. Commw. Ct. 2007) (citing First Realvest,
Inc. v. Avery Builders, Inc., 600 A.2d 601, 604 (Pa. Super. Ct. 1991)).
Here, the GL Defendants have offered no persuasive justification for piercing WJE’s
“corporate veil.” Their only argument is that the WJE Defendants are, in effect, attempting to
nullify the indemnification clause of the 2008 licensing agreement without providing the GL
Defendants notice or the opportunity to protect their interests. According to the GL Defendants,
“[s]uch a position unjustly deprives [them] of the rights and protections mutually agreed to by
Jeff Wallace as President and partner in Trial Town Peddlers with Mr. Bodes and who is
admittedly and simultaneously, an employee/operator of Waive & Jane’s Emporium LLC.” GL
Defs.’ Mem. Opp. Mot. Summ. J. at 7, Doc. 75. As previously discussed, however, the Court
has determined that the 2008 “licensing agreement” lacks the indicia of an enforceable contract.
Because Pennsylvania recognizes a strong presumption against piercing WJE’s corporate veil,
and because the GL Defendants have failed to adduce evidence that could support reasonable
grounds for doing so, the Court will grant the WJE’s motion for summary judgment as it relates
to the indemnity claims against Bodes and Wallace in their individual capacities.
For the reasons stated above, the W&J Defendants’ Motion for Summary Judgment
Relative to the Cross Claim filed by the Gator Laurel Defendants (Doc. 70) is GRANTED
insofar as it relates to the GL Defendants’ contractual indemnity claim against the WJE
Defendants and the common law indemnity claims against Bodes and Wallace individually. The
motion will be DENIED insofar as it relates to the GL Defendants’ common law indemnity
claim against WJE.
IT IS SO ORDERED.
September 25, 2017
United States District Judge
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