Opinion
Civil Action No. 04-1770.
August 17, 2004
MEMORANDUM
Plaintiff, Merrell Garaguso, Inc. ("MG"), brought this action for breach of contract, quantum meruit, breach of contract for wrongful termination, and damage to business reputation against Defendant, Sunoco, Inc. ("Sunoco"). Defendant has moved to dismiss Count IV of the Complaint, damage to business reputation, pursuant to Federal Rule of Civil Procedure 12(b)(6) ("Rule 12(b)(6)") for failure to state a claim upon which relief may be granted. Defendant's Motion is granted.
I. BACKGROUND
MG is a New Jersey construction company involved in performing concrete, masonry and related sitework for more than forty years. On or about April 22, 2003, MG entered into a written contract with Sunoco to construct concrete foundations for pipe racks at Sunoco's Marcus Hook refinery in Delaware County for $581,297.00. On or about July 11, 2003, the parties executed an addendum raising the contract price to $601,397.00. (Compl. ¶ 11). At or about the time the parties signed the contract, MG received Sunoco's safety and security requirements. (Compl. ¶ 15). MG describes these requirements as Sunoco's "campaign of petty harassment and over-zealous safety enforcement designed to effect a wrongful termination of MG." (Compl. ¶ 17). MG worked at Sunoco's site until they were terminated on June 27, 2003. MG claims the work it performed at Sunoco's plant totaled $405,294.00, but only received $87,195.00 in compensation. (Compl. ¶ 20). MG seeks to recover the balance of $318,099.00 for the work it performed on the project.
The Complaint states this addendum was executed on July 11, 2003, however, the contract was terminated on June 27, 2003.
In Count I of the Complaint, MG claims Sunoco's refusal to pay MG the $318,099.00 balance owed is a material breach of their contract. In Count II, MG asserts a quantum meruit claim, alleging Sunoco received the benefit of the value of labor and materials MG provided. Sunoco never fully compensated MG for its services and, consequently, was unjustly enriched to MG's detriment. In Count III, MG claims Sunoco's wrongful termination is a breach of the contract without cause. In Count IV, MG claims Sunoco damaged MG's business reputation because this was the only project in MG's forty-year history the company was fired.
II. DISCUSSION
Claims should be dismissed under Rule 12(b)(6) only if "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957). In deciding a Rule 12(b)(6) motion, the court must accept as true all well-pleaded allegations of fact and any reasonable inferences that may be drawn therefrom in the plaintiff's Complaint. Nami v. Fauver, 82 F.3d 63, 65 (3d Cir. 1996). The Court must determine whether "under any reasonable reading of the pleadings, the plaintiff may be entitled to relief." Nami, 82 F.3d at 65. Although the court must construe the Complaint in the light most favorable to the plaintiff and must draw all reasonable inferences in the plaintiff's favor, it need not accept as true legal conclusions or unwarranted factual inferences. Ford v. Schering-Plough Corp., 145 F.3d 601, 604 (3d Cir. 1998).
In addition, a Rule 12(b)(6) motion may be granted as to portions of a complaint. Elliott v. State Farm Mutual Auto Ins. Co., 786 F. Supp. 487 (E.D. Pa. 1992) ( citing Decker v. Massey-Ferguson, Ltd., 681 F.2d 111, 115 (2d Cir. 1982); Fielding v. Brebbia, 399 F.2d 1003, 1006 (D.C. Cir. 1968)). A Complaint, or any claim included therein, is properly dismissed as a matter of law where there is no cognizable theory to establish a cause of action. Fed.R.Civ.P. 12(b)(6).
When a plaintiff alleges that the defendant committed a tort in the course of carrying out a contractual agreement, Pennsylvania courts examine the claim and determine whether the `gist' or gravamen of it sounds in contract or tort. Pennsylvania's "gist of the action" doctrine precludes the recasting of breach of contract claims into tort claims. eToll, Inc. v. Elias/Savion Advertising, Inc., 811 A.2d 10 (Pa.Super.Ct. 2002). A tort claim is maintainable only if the contract is collateral to conduct that is primarily tortious. Sunquest Information Systems, Inc. v. Dean Witter Reynolds, Inc., 40 F. Supp.2d 644, 651 (W.D.Pa. 1999); see also USX Corp. v. Prime Leasing, Inc., 988 F.2d 433 (3d Cir. 1993) (dismissing tort claim when same conduct was basis for breach of contract claim). "[T]he important difference between contract and tort actions is that the latter lie from the breach of duties imposed as a matter of social policy while the former lie [from] the breach of duties imposed by mutual consensus." Phico Ins. Co. v. Presbyterian Med. Serv. Corp., 444 Pa. Super. 221, 229, 663 A.2d 753, 757 (Pa.Super.Ct. 1995) (citing Bash v. Bell Telephone Co., 411 Pa. Super. 347, 601 A.2d 825 (Pa.Super.Ct. 1992)).
Sunoco claims Count IV of MG's Complaint, damage to business reputation, fails as a matter of law. Sunoco alleges the claim sounds in tort, but is based on the same acts that give rise to the breach of contract claims. Such a claim violates the "gist of the action" doctrine. Sunoco also alleges MG's claim for damage to business reputation is an incidental consequence to the alleged breach of contract, rather than a basis for a tort claim.
MG, on the other hand, claims the nature of Count IV is Sunoco intentionally attempted to harm MG by terminating it from the project. MG alleges it was Sunoco's intent to stigmatize MG in the construction community as an incompetent contractor. MG argues this type of claim is grounded in a breach of duty imposed as a matter of social policy, rather than a breach of duty grounded in mutual consensus.
Count IV of Plaintiff's Complaint is a contract based claim recast as a tort claim. MG's claim for damage to business reputation arises from Sunoco's alleged breach of contract between the parties. Based on Counts I, II and III of the Complaint, it is clear the gist of MG's action is based in contract, not in tort. In Count I, MG alleges it performed its work properly, however, Sunoco breached the contract by not properly compensating MG. In Count II, MG raises a quantum meruit claim. MG states Sunoco received the benefit of the value of the labor and materials MG provided, but has not paid for these goods and services. In Count III, MG claims there was a breach of contract for wrongful termination because Sunoco enforced its safety provisions in a biased manner in order to justify terminating MG. Consequently, MG's tort claim in Count IV is collateral to its breach of contract claims. As MG's action is squarely based in contract and Count IV violates the "gist of the action" doctrine, I enter the following:
ORDER
AND NOW, this day of August, 2004, Defendant's Motion to Dismiss Count IV of Plaintiff's Complaint Pursuant to Federal Rules of Civil Procedure 12(b)(6) (Docket No. 2) is GRANTED.