Sam Mannino Enterprises, LLC v. John W. Stone Oil Distributor, LLC
Sam Mannino Enterprises, LLC v. John W. Stone Oil Distributor, LLC
Opinion of the Court
MEMORANDUM OPINION
I. Introduction
This action arises from a dispute between Plaintiff Sam Mannino Enterprises, LLC (“Mannino” or “Plaintiff’) and Defendant John W. Stone Oil Distributor, LLC (“Stone Oil” or “Defendant”) concerning Stone Oil’s leasing of certain rail-cars to Mannino. Plaintiff contends that Defendant is liable for breach of contract, tortious interference with a contractual relationship, and common law fraud. Defendant has filed a counterclaim for the recovery of certain charges allegedly due under the parties’ lease agreements.
Presently pending before the Court is Defendant’s Motion for Summary Judgment (ECF No. 30) in which Defendant moves that all of Plaintiffs claims be dismissed and moves for partial summary judgment on its counterclaim. For the reasons that follow, the motions at ECF No. 30 will be granted. This matter will be scheduled for trial regarding damages on Defendant’s counterclaims.
II. Jurisdiction and Venue
The Court has jurisdiction over all of the parties’ claims pursuant to 28 U.S.C. § 1332, as the parties are of diverse citizenship and the amount in controversy exceeds $75,000 exclusive of interest and costs. Venue is appropriate pursuant to 28 U.S.C. § 1391(b)(2).
III. Factual and Procedural Background
Stone Oil is a Louisiana limited liability company that is engaged in the business
Between October and December 2013, Stone Oil leased forty (40) railcars to Man-nino on a month-to-month basis.
In the meantime, on November 26, 2013, Mannino and Stone Oil had entered into an agreement (hereinafter, the “Commission Agreement”) that “contemplated a relationship in which [Mannino would] facilitate a Sub-lease transaction or transactions involving 40 or more tank railcars” directly between Stone Oil and an end user/lessee. (SMF ¶6; Compl. Ex. 1, “Recitals” Clause, ECF No. 1-2.) According to the “Recital” clauses in the Commission Agreement, Mannino “[had] identified an investment grade Lessee who seeks to lease the tank railcars from [Stone Oil] at a monthly lease payment of nineteen-hundred ($1,900.00) dollars per car ...” (Compl. Ex. 1, ECF No. 1-2.) The agreement provided that Stone Oil would pay Mannino “four hundred ($400.00) dollars per month for each tank railcar leased to the Lessee for the term of the lease and any lease renewals thereafter.” (Id. ¶ 1.) Further, these commission payments would be made “within five (5) days of the date that the payment was received by [Stone Oil] from the Lessee.” (Id. ¶ 2.)
According to Stone Oil, the terms of the Commission Agreement “contemplated that the existing month-to-month lease of the 40 railcars by Mannino would change to an arrangement whereby Stone Oil would lease the 40 railcars directly to an end user, with Mannino simply pocketing a
On December 18, 2013, Stone Oil’s agent, Gordon Bent, sent correspondence to Mannino giving notice that Stone Oil was terminating the November 26, 2013 Commission Agreement. The letter stated:
Stone entered this Agreement under the representation made by you that Procter & Gamble Corporation would be the lessee who rented the tank railcars, but this did not occur. The creditworthiness of a major corporation like Procter & Gamble Corporation was the motivating reason for Stone entering the Agreement, and the offers by you for alternative lessees without similar creditworthiness are not the same, so Stone prefers not to pursue this further.
(Def.’s Mot. to Dismiss. Ex. 4, ECF No. 11-6.)
Bent’s correspondence further advised that Stone Oil would not renew its leasing arrangement with Mannino beyond January 2014:
[P]lease be advised that we have accepted the payment of rent from you to re-conduct the attached [December lease], for one month, the month of January 2014, and that notice is furnished that all railcars should be returned to Stone at the expiration of the Lease on January 31, 2014. No further lease will be made after that date. A delivery address for the return of the railcars will be promptly furnished.
(Def.’s Mot. to Dismiss. Ex. 4, ECF No. 11-6.)
The following day, December 19, 2013, Stone Oil filed a state court declaratory judgment action in Jefferson Parish, Louisiana. (Compl. ¶ 12; Answer and Countercl. ¶ 12.) In its petition, Stone Oil sought a declaration that “all agreements between [Stone Oil and Mannino] are terminated effective January 31, 2014, and that no sums are due by John W. Stone Oil Distributors, LLC to Mannino Enterprises, LLC ...” (Bent Decl. Ex. A, ECF No. 31-1, p. 7; see SMF ¶¶ 12-13.) Immediately after commencing the Louisiana action, Stone Oil furnished a copy of the petition to Mannino’s attorney. (SMF ¶ 14; Def.’s Mot. to Dismiss Ex. 6, ECF No. 11-8.)
Despite this notice, Mannino apparently failed to defend the Louisiana action. Consequently, a default judgment was entered against Mannino on March 24, 2014. In relevant part, the judgment declared:
1. That the Agreement made November 26, 2013 between John W. Stone Oil Distributor, LLC and Sam Man-nino Enterprises, LLC (d/b/a Investors First Capital) for the lease of 40 railroad tank cars terminated effective January 31, 2014 and that no sums are due or owed by John W. Stone Oil Distributor, LLC to Sam Mannino Enterprises, LLC under the Agreement, or for any breach thereof;
2. That the Agreement to lease railcars dated September 9, 2013 for the lease term beginning December 1, 2013 and ending December 31, 2013, as re-conducted and extended*324 through January 31, 2014, by John W. Stone Oñ Distributor, LLC, as lessor, in favor of Sam Mannino Enterprises, LLC (d/b/a Investors First Capital), as lessee, covering 40 railcars terminated effective January 31, 2014 and that no sums or damages are due by John W. Stone Oü Distributor, LLC to Sam Manni-no Enterprises, LLC under the Lease, or for any breach thereof;
3. That John W. Stone Oh Distributor, LLC did not breach either of the aforesaid agreements with Sam Mannino Enterprises, LLC and owes no further obligations or sums to Sam Mannino Enterprises, LLC thereunder ...
(Bent Decl. Ex. B, ECF No. 31-1 at pp. 14-15.)
In the meantime, Gordon Bent had spoken with a representative of AES by telephone on December 20, 2013. During this conversation, Bent advised AES’s representative that the railcar lease with Sam Mannino Enterprises, LLC would not be renewed after January 31, 2014. (Bent Decl. ¶ 4, ECF No. 31-1, p. 1.)
Mannino filed the instant lawsuit against Stone Oil in the Court of Common Pleas of Blair County, Pennsylvania on December 27, 2013. In its complaint, Mannino asserted claims for breach of contract, tor-tious interference with a contractual relationship, and common law fraud. Stone Oil removed the case to this Court on January 10, 2014. (See Notice of Removal, ECF No. 1.)
Plaintiffs first claim is premised upon Stone Oil’s alleged breach of the November 26, 2013 Commission Agreement. According to Plaintiff, the “essence” of that agreement was that forty or more railcars would be leased to an “investment grade” company in exchange for a monthly fee of $1,500. (Compl. ¶ 5.) Plaintiff alleges that, based on the terms of the agreement and certain representations made by Bent, it believed it “had the capacity to enter into a contract with Associated Energy Services ... or any investment grade company for the leasing of up to sixty railcars for a period of time through March 2014.” (Id. ¶ 6; see id. ¶¶ 14-16, 20-22.) To that end, “Plaintiff sent and Defendant accepted wired funds in the amount of $124,000 in consideration of a lease for forty railcars for the months of December[ ] 2013, and January 2014” (Id. ¶ 8), and those railcars were then sublet by Mannino to AES. In addition, Plaintiff entered into a sublease with AES for an additional twenty (20) railcars, for which Plaintiff accepted payment and wired $31,000 to Stone Oil on December 6, 2013. (Id. ¶¶ 9-10, 18, 22.)
In Count II of the complaint, Plaintiff alleges tortious interference with a contractual relationship based on Bent’s December 20, 2013 communication with a representative of AES. According to the complaint,
Defendant on the aforementioned date[ ] intentionally made a tortious statement to Associated Energy by telling them that Plaintiff did not have the Authority to sublease to them. This statement*325 was made for the purpose of interfering with the existing contract between Plaintiff and Associated Energy. It is also believed that Defendant is trying to lease the same cars to another company at an increased price.
(Comply 28.) Plaintiff claims that it has had “an extensive history of successful business dealings with Associated Energy and Defendant’s action(s) has severely strained the working relationship between Plaintiff and Associated Energy.” (Id. ¶ 29.) In addition, “Associated Energy has demanded immediate reimbursement from. Plaintiff for railcars they have paid for, but not received.” (Id. ¶ 30.)
Count III of the complaint asserts a claim for common law fraud. This claim is based on Defendant’s purported representation that it had twenty additional railcars that it was willing to lease to Plaintiff, which then allegedly induced Plaintiff to contract with AES for the subleasing of the additional twenty cars, accept payment for the railcars from AES, and forward the payment to Stone Oil. (Compl.¶¶ 33-36.) Despite having accepted payment for the 20 railcars, Stone Oil has refused to either produce the ears or refund the payment. (Id. ¶ 34.)
Stone Oil admits that it is currently holding Mannino’s lease payment for the twenty additional railcars
Following a period of discovery, Stone Oil filed the pending motion for summary judgment (ECF No. 30), together with its supporting brief (ECF No. 32) and Concise Statement of Material Facts (ECF No. 31), on November 12, 2014. Mannino filed its brief in opposition to the Defendant’s motion (ECF No. 34) on January 2, 2015. Thereafter, Stone Oil filed its reply brief (ECF No. 35).
Stone Oil seeks judgment on all of Man-nino’s claims based on the judgment previously entered in the Louisiana state court declaratory action. Secondarily, Stone Oil argues that Mannino has failed to adduce evidence in support of each of its claims. Finally, Stone Oil contends that it is entitled to partial summary judgment on its counterclaim for recovery of empty mileage charges. Based on the filings of record and the parties’ respective briefs, the Court finds that the issues raised in Defendant’s motion have been sufficiently
IY. Standard of Review
Summary judgment is appropriate only where there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a); Melrose, Inc. v. Pittsburgh, 613 F.3d 380, 387 (3d Cir. 2010). Issues of fact are genuine “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); see also McGreevy v. Stroup, 413 F.3d 359, 363 (3d Cir. 2005). Material facts are those that will affect the outcome of the trial under governing law. Anderson, 477 U.S. at 248, 106 S.Ct. 2505. The Court’s role is “not to weigh the evidence or to determine the truth of the matter, but only to determine whether the evidence of record is such that a reasonable jury could return a verdict for the nonmov-ing party.” Am. Eagle Outfitters v. Lyle & Scott Ltd., 584 F.3d 575, 581 (3d Cir. 2009). “In making this determination, ‘a court must view the facts in the light most favorable to the nonmoving party and draw all inferences in that party’s favor.” Farrell v. Planters Lifesavers Co., 206 F.3d 271, 278 (3d Cir. 2000) (quoting Armbruster v. Unisys Corp., 32 F.3d 768, 777 (3d Cir. 1994)).
The moving party bears the initial responsibility of stating the basis for its motion and identifying those portions of the record that demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). If the moving party meets this burden, the party opposing summary judgment “may not rest upon the mere allegations or denials of the ... pleading,” but “must set forth specific facts showing that there is a genuine issue for trial.” Saldana v. Kmart Corp., 260 F.3d 228, 232 (3d Cir. 2001) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 n. 11, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)) (ellipsis in the original). “For an issue to be genuine, the nonmovant needs to supply more than a scintilla of evidence in support of its position — there must be sufficient evidence (not mere allegations) for a reasonable jury to find for the nonmovant.” Coolspring Stone Supply, Inc. v. Am. States Life Ins. Co., 10 F.3d 144, 148 (3d Cir. 1993).
V. Discussion
A. Plaintiffs Claims
1. Breach of Contract
Count I of the complaint is premised upon Stone Oil’s' alleged breach of the November 26, 2013 Commission Agreement. Stone Oil argues that this claim is barred by the doctrine of res judicata because the matter was already litigated in the Louisiana state court declaratory judgment action. Mannino denies that the Louisiana judgment has any preclusive effect. Accordingly, the Court must determine as a threshold matter whether the prior Louisiana judgment bars Plaintiffs breach of contract claim.
Pursuant to the Full Faith and Credit Act, a federal court must give a state court judgment the same preclusive effect it would be given by the court that rendered the judgment. 28 U.S.C. § 1738 (1988)
Under Louisiana’s res judicata statute,
Here, Mannino expressly concedes that elements (2) through (4) are present — that is, the Louisiana judgment is final, both the Louisiana action and this lawsuit involve the same identical parties, and the claims asserted by Plaintiff in this case existed at the time the Louisiana judgment was rendered. In addition, with regard to element (5), it is clear that Plaintiffs breach of contract claim arose out of the same transaction or occurrence that was the subject matter of the Louisiana litigation (i.e., the Commission Agreement) and Plaintiff implicitly concedes as much. (See Pl.’s Br. Opp. Mot. Summ. J. 11, ECF No. 34 (arguing that “Mannino’s claims — particularly the claims as to tortious interference and fraud ... are only peripherally related to the claim that was the subject of the declaratory judgment action in Louisiana.”).)
Nevertheless, Plaintiff contends that the doctrine of res judicata is inapplicable because the first element — the existence of a valid judgment — is not present. Specifically, Plaintiff argues that AES was an indispensable party to the Louisiana action and, because AES was not joined therein, the judgment rendered by the Louisiana court is null and void. See Hernandez v. State, ex rel. Dep’t of Transp. and Devel., 841 So.2d 808, 817 (La.Ct.App. 2002) (joinder of interested parties is an
When declaratory relief is sought under Louisiana law, “all persons shall be made parties who have or claim any interest which would be affected by the declaration, and no declaration shall prejudice the rights of persons not parties to the proceeding.” La.Code Civ. Proc. Ann. art. 1880. Issues as to indispensable parties are governed by Article 641 of the Louisiana Code of Civil Procedure, which provides that:
A person shall be joined as a party in the action when either:
(1) In his absence complete relief cannot be accorded among those already parties.
(2) He claims an interest relating to the subject matter of the action and is so situated that the adjudication of the action in his absence may either:
(a) As a practical matter, impair or impede his ability to protect that interest.
(b) Leave any of the persons already parties subject to a substantial risk of incurring multiple or inconsistent obligations.
La.Code Civ. Proc. Ann. art. 641.
“A person should be deemed needed for just adjudication only when absolutely necessary to protect substantial rights.” Branch v. Young, 136 So.3d 343, 350 (La.Ct.App. 2014) (citing Indus. Cos., Inc. v. Durbin, 837 So.2d 1207, 1217 (La. 2003)). In determining whether a party should be joined, the court should make a factual analysis of all the interests involved. Id. (citing Gibbs v. Magnolia Living Ctr., Inc., 870 So.2d 1111, 1116 (La.Ct.App. 2004), unit denied, 877 So.2d 146 (La. 2004)).
Plaintiff argues that AES, “as a party to the sub-lease with Mannino and ultimate beneficiary of the leased rail cars, was an indispensable party to the declaratory judgment action filed by Stone. Having entered into a sub-lease with Mannino and having remitted payment for sixty (60) cars, Associated Energy had an absolute interest in the outcome of the litigation.” (Pl.’s Br. Opp. Mot. Summ. J. 9, ECF no. 34.)
This Court does not agree. As Defendant points out, AES was not a party to either the November 26, 2013 Commission Agreement or the December, 2013 lease agreement between Stone Oil and Mannino that was re-conducted through January, 2014. These were the only two contractual agreements at issue in the Louisiana declaratory judgment action. Moreover, there is no evidence of record establishing that the parties mutually intended that AES would be a third-party beneficiary of the Commission Agreement with contractual rights therein. Under a stipulation pour autrui, a contracting party may “stipulate a benefit for a third person,” who must then “manifest[ ] his intention to avail himself of the benefit.” La.Civ.CodeAnn. 1978.
The Louisiana Supreme Court has identified “three criteria for determining whether the contracting parties have provided a benefit to a third party: 1) the stipulation for a third party is manifestly clear; 2) there is certainty as to the benefit provided the third party; and 3) the benefit is not a mere incident of the contract between the promisor and the promissee.” Canal/Claiborne, Ltd. v. Stonehedge Devel, LLC, 156 So.3d 627, 633 (La. 2014). There is no evidence before the Court which could arguably satisfy these criteria.
= Consequently, AES does not fit within the statutory definition of an indispensable party relative to the Louisiana declaratory judgment action. AES had no enforceable rights as to the contracts at issue in the Louisiana action because it was neither a
AES also did not become an indispensable party to the Louisiana litigation simply by virtue of its sub-lease with Manni-no. To be sure, AES’s sublease with Mannino may have resulted in AES having a pecuniary interest in the Louisiana court’s adjudication of the parties’ respective rights and obligations under the Commission Agreement; however, there is no evidence to suggest that AES’s sublease with Mannino could have given AES legal rights under the Commission Agreement or the December, 2013 lease agreement between Stone Oil and Mannino. See Canal/Claiborne, Ltd., 156 So.3d. at 632-33 (sublease of certain real property constituted a new contract that was separate and distinct from the original lease between the sublessor and the property owner; there was no privity of contract between sublessee and property owner). In sum, AES had no legal interests that were directly adjudicated or affected by the Louisiana action, and AES’s absence from that lawsuit did not impair or impede its ability to protect any legal interests it had under its sublease with Mannino. Accordingly, the Court concludes that AES was not an indispensable party to the Louisiana action, and the doctrine of res judica-ta therefore bars Plaintiff from prosecuting its breach of contract claim in this case.
Plaintiff nevertheless contends that its breach of contract claim is not barred by the Louisiana judgment because that judgment, by its terms, declares that the November 26, 2013 Commission Agreement terminated “effective January 31, 2014.” Plaintiff maintains that, prior to January 31, 2014, and while the agreement was still in effect, Stone Oil breached its duty of good faith and fair dealing under the agreement by unilaterally contacting AES and/or by allegedly “stringing Plaintiff along” when it lacked any intention of honoring the sublease between Mannino and AES. Relatedly, Plaintiff posits that Stone Oil breached the Commission Agreement’s “confidentiality” clause by unilaterally contacting AES without Plaintiff’s consent.
This line of argument is unavailing for several reasons. First, these are not the breach of contract theories that Plaintiff actually pled in its complaint. (See Compl. ¶ 24 (alleging that “Defendant is in Breach of Contract by attempting to retrieve the leased railcars, and failing to provide the additional twenty railcars for which they have been paid in advance”).) Second, these newly asserted breach of contract theories arise out of the same transaction that served as the subject matter of the Louisiana litigation and, because they could have been (but were not) asserted in that litigation, they are now barred by the doctrine of res judicata. See La. Rev. Stat.
Even if res judicata did not bar Plaintiffs breach of contract claim, the Court would still conclude that the claim fails as a matter of law. To state a claim for breach of contract under Pennsylvania law,
Similarly, nothing in the Commission Agreement establishes an unconditional duty on the part of Stone Oil to lease sixty railcars to AES. Although the Commission Agreement references the existence of an intended “investment grade” end user/lessee,'that entity is not identified in the agreement, and the term is therefore ambiguous. “Where the contract terms are ambiguous and susceptible of
To the extent Plaintiff seeks an award of its expectation damages, this claim also fails as a matter of law. As Defendant correctly notes, no commission payment ever became due under the express terms of the Commission Agreement because, according to the Agreement, Mannino would be paid a commission only when “payment was received” by Stone Oil from an actual end-user lessee. Mannino’s principal acknowledged in deposition that no lease was ever consummated between Stone Oil and an end user. (See Samuel P. Mannino Dep. at 20:12-17, ECF No. 31-2, at p. 6.) Because Stone Oil never actually received any payments from an end-user lessee, Mannino never earned the right to a commission payment under the terms of the agreement.
In light of the foregoing considerations, this Court finds that no genuinely disputed issue of material exists as to Plaintiffs breach of contract claim. Accordingly, summary judgment will be entered against Mannino as to Count I of the complaint.
2. Tortious Interference With a Contractual Relationship
In Count II of the complaint, Plaintiff asserts a claim for tortious interference with a contractual relationship. According to the complaint, Stone Oil interfered with a sublease agreement that existed between Mannino and AES when Bent made contact with AES’s agent on December 20, 2014.
Defendant argues that Count II is barred by the doctrine of res judicata because the tortious interference claim could and should have been asserted in connection with the Louisiana litigation, but was not. In addition, Defendant contends that Mannino has failed to proffer evidence to support this claim. Plaintiff counters that the tortious interference claim is only “peripherally” related to the subject matter of the Louisiana action 'and, therefore, is not barred by the Louisiana judgment. In addition, Plaintiff contends that the record supports the existence of genuine issues of material fact relative to each of the elements of its tortious interference claim.
Louisiana’s res judicata statute bars any claim that existed at the time the first judgment was rendered if the claim in question arose out of the same “transaction or occurrence” that served as the subject matter of the first action. See La.Rev.Stat. Ann. § 13:4231; Penton, 169 So.3d at 745-46. Relatedly, Louisiana’s Code of Civil Procedure provides that a defendant “shall assert in a reconventional demand [i.e., counterclaim] all causes of action that he may have against the plaintiff that arise out of the transaction or occurrence that is the subject matter of the principal action.” La.Code Crv. Proc. Ann. art. 1061.
The appellate courts of Louisiana have explained the “transaction or occurrence” concept in various ways. In Hy-Octane Investments, Ltd. v. G & B Oil Prods., Inc., 702 So.2d 1057 (La.Ct.App. 1997), the court observed that:
Black’s Law Dictionary defines “transaction” as, inter alia, “a broader term than ‘contract,’ ” and “a group of facts so connected together as to be referred to by a single legal name; as a crime, a contract, a wrong.” Among the definitions of “transaction or occurrence” found in 42 Words and Phrases, Supp. p. 201 (1997), is “whether pertinent facts of different claims are so logically related that issues of judicial economy and fairness mandate that all issues be tried in one suit.” The federal courts have given the words “transaction or occurrence” a broad and liberal interpretation in order to avoid a multiplicity of suits. All logically related events entitling a person to institute legal action against another generally are regarded as comprising a “transaction or occurrence.” Lasa Per L'Industria Del Marmo Soc. Per Azioni v. Alexander, 414 F.2d 143 (6th Cir. 1969).
In North Am. Treatment Sys., Inc., 943 So.2d 429, 440 (La.Ct.App. 2006), the court described the “basic methodology of the [res judicata] transactional analysis” as follows:
(1) When a valid and final judgment rendered in an action extinguishes the plaintiffs claim pursuant to the rules of merger or bar [citations omitted], the claim extinguished includes all rights of the plaintiff to remedies against the defendant with respect to all or any part of the transaction, or series of connected transactions, out of which the action arose.
(2) What factual grouping constitutes a “transaction”, and what groupings constitute a “series”, are to be determined pragmatically, giving weight to such considerations as whether the facts are related in time, space, origin, or motivation, whether they form a convenient trial unit, and whether their treatment as a unit conforms to the parties’ expectations or business understanding or usage. (Emphasis supplied.) Restatement (2nd) of Judgments § 24 (1982).
In its legal sense, a “transaction” has been defined as “[t]he act or an instance of conducting business or other dealings; esp., the formation, performance, or discharge of a contract,” “something performed or carried out; a business agreement or exchange,” or even “any activity involving two or more persons.” Black’s Law Dictionary 1535 (8th ed. 2004). An “occurrence” is understood to be “[s]omething that happens or takes place; specif., an accident, event, or continuing condition that results in personal injury or property damage that is neither expected nor intended from the*333 standpoint of an insured party.” Id. at 1109.
In this case, the Court concludes that Plaintiffs claim for intentional interference with a contractual relationship arose from the same transaction or occurrence that served as the subject matter of the Louisiana declaratory judgment action. In the Louisiana case, the underlying “transactions” were: (a) the lease agreement between Stone Oil and Mannino for the leasing of forty railcars and (b) the Commission Agreement, which contemplated a future relationship whereby Man-nino would broker a direct lease between Stone Oil and an end user/lessee. The “occurrence” which gave rise to the Louisiana litigation was Stone Oil’s termination of both agreements, via Bent’s December 18, 2013 correspondence, based on Manni-no’s efforts to substitute AES as the end-user of the subject railcars in lieu of Proctor & Gamble. After Mannino threatened a lawsuit, Stone Oil sought, and received, a judgment from the Louisiana court declaring, essentially, that it had properly terminated the agreements and owed no further sums or leasing obligations to Mannino. In Count II of the instant complaint, Man-nino asserts a claim for tortious interference based on Bent’s December 20 communication to AES that Stone Oil’s lease of railcars to Mannino would not be renewed after January 31, 2014. Count II thus arises from Bent’s contemporaneous communication of the very occurrence that gave rise to the Louisiana lawsuit. Furthermore, the injury which Plaintiff claims as a result of Bent’s communication is its inability to sublease additional railcars to AES beyond the forty that were subleased through the end of January 2014. Because Plaintiffs tortious interference claim arises from the same transaction and occurrence that was litigated in the Louisiana action, and because it was not asserted in that action, the claim is now barred.
Even if Count II was not barred by res judicata, however, summary judgment would still be appropriate because Plaintiff has failed to produce evidence supportive of the necessary elements of its claim. To maintain a successful claim for intentional interference with a contractual relationship, the plaintiff must establish: (1) the existence of a contractual relationship between the itself and a third party; (2) an intent on the part of the defendant to harm the plaintiff by interfering with that contractual relationship; (3) the absence of privilege or justification on the part of the defendant; and (4) the occasioning of actual damage as a result of the defendant’s conduct. Walnut St. Assocs., Inc. v. Brokerage Concepts, Inc., 982 A.2d 94, 98 (Pa.Super.Ct. 2009), aff'd 610 Pa. 371, 20 A.3d 468 (2011).
Here, Plaintiff has failed to establish actual interference with a contractual relationship. At bottom, the alleged “tor-tious interference” concerns Stone Oil’s unwillingness to supply twenty additional railcars to Mannino prior to January 31, 2014 and/or its unwillingness to supply any railcars thereafter. Mannino claims that Stone Oh’s conduct interfered with its existing sublease agreement(s) with AES. Mannino has not provided a copy of the subject sublease(s) between itself and AES
To the extent Mannino is claiming that Stone Oil interfered with its ability to sublease twenty additional railcars to AES, the claim at Count II still fails as a matter of law. At most, Stone Oil’s conduct interfered with Mannino’s ability to obtain twenty additional railcars from Stone Oil; however, Mannino has not established that it had an unconditional right to lease twenty additional railcars from Stone Oil. The December 2013 lease agreement references only Stone Oil’s agreement to lease forty railcars. (See Bent. Decl. Ex. E, ECF No. 31-1 at p. 56.) Although Plaintiff alleged in its complaint that Stone Oil agreed on December 6, 2013 to lease an additional twenty railcars (see Compl. ¶), Plaintiff has failed to come forward with evidence that could establish a modification of the December, 2013 lease agreement as alleged in the complaint. Plaintiffs unsupported allegations are insufficient at this stage of the proceedings. See Transamerica Occidental Life Ins. Co. v. Total Sys. Inc., 513 Fed.Appx. 246, 249 (3d Cir. 2013) (“a nonmoving party may not rely on ‘unsupported allegations in his memorand[a] and pleadings ... to repel summary judgment’ ”) (quoting Schoch v. First Fidelity Bancorporation, 912 F.2d 654, 657 (3d Cir. 1990)) (alteration and ellipsis in the original). Thus, the Court finds as a matter of law that the December, 2013 lease agreement did not confer upon Mannino an unconditional right to obtain twenty additional railcars from Stone Oil. Similarly, the Commission Agreement did not confer upon Mannino an unconditional right to obtain twenty additional railcars from Stone Oil. As the Court noted in its discussion of Count I, the Commission Agreement contemplated a future arrangement whereby Stone Oil would lease railcars directly to an end user (not to Mannino), and this never came to pass.
In light of the foregoing, Mannino has failed to establish any right or entitlement to obtain additional railcars from Stone Oil beyond the forty railcars that were leased to it through the end of January, 2014. It follows as a matter of law that Stone Oil’s conduct vis-á-vis AES did not constitute tortious interference with Mannino’s contractual relationship or result in actionable injury to Mannino.
3. Common Law Fraud
Plaintiffs third cause of action is for fraud. The basis for this claim is Stone Oil’s alleged representation to Mannino that “it had twenty additional railcars it was willing to lease to Plaintiff.” (Compl. ¶ 33.) Plaintiff avers that Defendant accepted payment for the additional railcars but refused to produce the railcars or refund the money. (Id. ¶ 34.) Plaintiff further claims that it detrimentally relied on Defendant’s misrepresentations by entering into a sublease with AES for the additional twenty railcars. (Id. ¶ 35.) Stone Oil claims that this cause of action, like the others, is barred by the Louisiana judgment and is otherwise unsupported by the evidence of record.
The Court agrees that Count III is barred by the Louisiana judgment. As noted, the “chief inquiry” for res judicata purposes is “whether the second action asserts a cause of action which arises out of the transaction or occurrence that was
In addition, Plaintiffs fraud claim is unsupported by the evidence of record. In Pennsylvania, common law fraud involves six elements: “1) a representation; 2) which is material to the transaction at hand; 3) made falsely, with knowledge of its falsity or recklessness as to whether it is true or false; 4) with the intent of misleading another into relying on it; 5) justifiable reliance on the misrepresentation; and 6) the resulting injury was proximately caused by the reliance.” Gibbs v. Ernst, 538 Pa. 193, 647 A.2d 882 (1994). Here, Plaintiff has failed to present any evidence to support its allegation that Stone Oil made materially false representations which Plaintiff relied upon to its detriment. Although Plaintiff purports to cite to “Exhibit '13’ ” in support of its fraud claim (see Pl.’s Br. Opp. Mot. Summ. J. at 14, ECF No. 34), the Court is unable to find any such exhibit in the record at hand. Consequently, Plaintiff has offered nothing more than unsupported allegations of fraud, which, as the Court has already noted, are insufficient as a matter of law at the summary judgment stage. See Kimbleton v. White, 608 Fed.Appx. 117, 120 (3d Cir. 2015) (the party opposing summary judgment must present more than just “mere allegations, general denials, or ... vague statements” to show the existence of a genuine issue of material fact) (citing Quiroga v. Hasbro, Inc., 934 F.2d 497, 500 (3d Cir. 1991)). Furthermore, in the absence of some evidence establishing the nature of the allegedly false representation(s), no basis exists from which a fact-finder could reasonably infer that Plaintiffs detrimental reliance on the allegedly false representation was justifiable. Accordingly, summary judgment will be entered at Count III of the complaint.
B. Defendant’s Counterclaim for Recovery of Empty Mileage Charges
As noted, Defendant has asserted a counterclaim for the recovery of “empty mileage” charges. As set forth in the declaration of Gordon Bent, Rampart Range Corporation, one of the true owners of the railcars in question, issued an invoice to Stone Oil for “empty mileage” charges that were incurred on the railcars leased to Mannino during the months of October, November, and December, 2013. (Bent Decl. ¶ 12.) According to Bent, $66,889.00 of these charges are attributable to Mannino’s use of the railcars. (Id.) Another one of the true owners of the railcars, GATX Corporation, similarly issued an invoice to Stone Oil for “empty mileage” charges incurred on the railcars leased to Mannino during the same period. (Id. ¶ 13.) According to Bent, $15,430 of these charges are attributable to Manni-no’s use of the railcars. (Id.) Stone Oil has paid these charges and now seeks to recover the foregoing amounts from Mannino. (Id. ¶¶ 12-13.) Bent asserts that Mannino has also incurred additional “empty mileage” charges for which Stone Oil. has not, as yet, received invoices. (Id. ¶ 14.)
The Court finds that no genuine issue of material fact exists as to Stone Oil’s counterclaim for reimbursement of the “empty mileage” charges incurred by Mannino.
VI. Conclusion
For the reasons stated above, Defendant’s motion for summary judgment will be granted as to all claims in the complaint. In addition, Defendant’s motion for partial summary judgment will be granted as to its counterclaim for recovery of empty mileage charges.
An appropriate order follows.
ORDER OF COURT
AND NOW, this 31 day of August, 2015, upon consideration of Defendant’s Motion for Summary Judgment (ECF No. 30), and in accordance with the accompanying Memorandum Opinion,
IT IS HEREBY ORDERED that Defendant’s Motion for Summary Judgment is GRANTED as to all counts in the Complaint. Judgment will be entered in favor of Defendant, and against Plaintiff, accordingly.
IT IS FURTHER ORDERED that Defendant’s motion for partial summary judgment on its counterclaim is GRANTED, and Plaintiff shall be liable to Defendant for all “empty mileage” charges incurred by Plaintiff under the lease agreements between the two parties, in a precise amount to be determined at trial.
. The court’s recitation of the facts is taken partly from Stone Oil’s Statement of Material Facts (ECF No. 31, hereinafter, "SMF”). Be
. The railcars in question were not actually owned by Stone Oil but, rather, were leased by Stone Oil from the true owners and then sublet to Mannino. (See Bent Decl. ¶¶ 12-13, ECF No. 31-1 at pp. 3-4.) For the sake of simplicity and to avoid confusion, the Court will refer to the transaction between the parties as a "lease” rather than a "sublease.”
. Page citations in Document No. 31-1 refer to the official CM/ECF pagination appearing in the header of the document.
. Elsewhere in the complaint, Plaintiff alleges that it wired $62,000 to Stone Oil on December 6, 2013. (Compl. ¶ 22.) For present purposes, the discrepancy is not material.
. In its counterclaim, Stone Oil avers that the amount of the deposit it is holding is $28,000 (Countercl. ¶ 6) rather than $31,000, as alleged by Plaintiff. (Compl. ¶ 18.) Once ' again, the Court views this discrepancy as immaterial for present purposes.
. As set forth in the uncontested declaration of Gordon Bent, an "empty mileage fee” is a fee charged to the owner of the railcars by the railroad over which the cars are travelling. (Bent Decl. ¶ 11, ECF No. 31-1 at p. 3.) Railroads typically charge the railcar owner for the mileage that is travelled by loaded railcars; however, railroads do not generally charge for the mileage that is travelled by empty railcars, unless the empty cars travel in excess of 106% of the mileage covered by the loaded railcars. (Id.) Thus, railroads typically allow a 6% safe harbor in order to accommodate a limited amount of excess "empty mileage.” (Id.) Once this 6% safe harbor is exceeded, an "empty mileage fee” is charged. (Id.)
. Section 1738 implements the Full Faith and Credit Clause, U.S. Const, art. IV, and says in relevant part:
[The records and judicial proceedings of any court of any State, Territory or Possession] shall have the same full faith and credit in every court within the United States and its Territories or Possessions as they have by law or usage in the courts of such State, Territory or Possession from which they are taken.
. Louisiana law on res judicata is set forth in La.Rev.Stat. Ann. § 13:4231, which states:
Except as otherwise provided by law, a valid and final judgment is conclusive between the same parties, except on appeal or other direct review, to the following extent:
(1)If the judgment is in favor of the plaintiff, all causes of action existing at the time of final judgment arising out of the transaction or occurrence that is the subject matter of the litigation are extinguished and merged in the judgment.
(2) If the judgment is in favor of the defendant, all causes of action existing at the time of final judgment arising out of the transaction or occurrence that is the subject matter of the litigation are extinguished and the judgment bars a subsequent action on those causes of action.
(3) A judgment in favor of either the plaintiff or the defendant is conclusive, in any subsequent action between them, with respect to any issue actually litigated and determined if its determination was essential to that judgment.
. Although Plaintiff cites to "Exhibit 13” in support' of its allegation, the Court has been unable to locate this exhibit in the record. (See Pl.’s Br. Opp. Mot. Summ. J. at 13, ECF No. 34 (citing “Plaintiff’s Exhibit ’13’ ” in support of its argument that "Stone further breached its duly of good faith and fair dealing by stringing Mannino along when it apparently had no intention of honoring a sublease between Mannino and Associated Energy”)-)
. The Court notes that, under the Commission Agreement:
[t]he formation, operation, and performance of [the] Agreement shall be governed, construed, performed, and enforced in accordance with the substantive laws of either [Pennsylvania or Louisiana] without regard to its conflict of laws rules.”
(Compl. Ex. 1 ad 7, ECF No‘. 1-2.)
. See also La.Code Civ. Proc. Ann. art. 425(a) (addressing “Preclusion by judgment” and stating that "[a] party shall assert all causes of action arising out of the transaction or occurrence that is the subject matter of the litigation”).
. Plaintiff seeks to establish the existence of the sublease by judicial admission and by reference to Plaintiff's "Exhibit 14.” The Court has not been able to locate the referenced exhibit in the record.
Reference
- Full Case Name
- SAM MANNINO ENTERPRISES, LLC v. JOHN W. STONE OIL DISTRIBUTOR, LLC
- Status
- Published