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Gordon v. Kartri Sales Co., 3:17-cv-00320. (2018)

Court: District Court, M.D. Pennsylvania Number: infdco20181211c56 Visitors: 2
Filed: Nov. 19, 2018
Latest Update: Nov. 19, 2018
Summary: REPORT AND RECOMMENDATION KAROLINE MEHALCHICK , Magistrate Judge . This is a pro se civil action for damages, initiated upon the filing of the original complaint in this matter by Plaintiff Robert Gordon (hereinafter referred to as "Gordon") on February 22, 2017. (Doc. 1). In his initial complaint, Gordon asserted a variety of claims against Kartri Sales Co., Inc. ("Kartri") and Greater Forest City Industries, Inc. ("GFCI"), 1 pursuant to this Court's federal diversity jurisdiction unde
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REPORT AND RECOMMENDATION

This is a pro se civil action for damages, initiated upon the filing of the original complaint in this matter by Plaintiff Robert Gordon (hereinafter referred to as "Gordon") on February 22, 2017. (Doc. 1). In his initial complaint, Gordon asserted a variety of claims against Kartri Sales Co., Inc. ("Kartri") and Greater Forest City Industries, Inc. ("GFCI"),1 pursuant to this Court's federal diversity jurisdiction under 28 U.S.C. § 1332. (Doc. 1). After a lengthy procedural history, Gordon filed an amended complaint with leave of court on March 26, 2018, which stands as the operative pleading in this case. (Doc. 43). Now pending before the Court is Kartri's motion to dismiss and strike portions of the amended complaint, filed on April 3, 2018. (Doc. 44). For the reasons stated herein, the Court respectfully recommends that Kartri's motion be DENIED.

I. BACKGROUND AND PROCEDURAL HISTORY

On February 22, 2017, Gordon, proceeding pro se, filed the initial complaint for monetary damages against Kartri and GFCI.2 (Doc. 1). Kartri filed a motion to dismiss the complaint, along with a supporting brief, on May 4, 2014. (Doc. 13; Doc. 14). Shortly thereafter, the Court received a letter from GFCI indicating that it had entered into a settlement agreement with Gordon (the "Settlement").3 (Doc. 15). The undersigned subsequently issued a Report and Recommendation that recommended Kartri's motion to dismiss be granted.4 (Doc. 25). The District Court declined to adopt the Report and Recommendation and recommitted the matter for further consideration. (Doc. 33; Doc. 34). After construing Gordon's brief in opposition to Kartri's motion to dismiss as seeking leave to amend the original complaint, the undersigned granted Gordon leave to file a curative amended complaint. (Doc. 38; Doc. 39). Gordon filed the amended complaint on March 26, 2018, which remains the operative pleading. (Doc. 43).

In the amended complaint, Gordon avers that from June 2012, until approximately October 2013, he leased a building from Kartri. (Doc. 43, at 2). During this time, Gordon stored certain industrial equipment and machinery (the "Equipment") on the property. (Doc. 43, at 2). Notably, GFCI had a UCC security interest in the Equipment.5 (Doc. 43, at 2). However, on or about October 2013, Gordon avers that Kartri locked him out of the building, without any prior notice or implementation of eviction proceedings, "ostensibly for non-payment of rent." (Doc. 43, at 2). Gordon additionally alleges that, in distraint for the outstanding rent payments, Kartri prevented him from removing his personal property from the premises. (Doc. 43, at 3).

On April 25, 2015, Kartri commenced a civil action against Gordon in the Susquehanna County Court of Common Pleas ("State Court") for breach of the parties' lease agreement.6 (Doc. 43-1, at 15). The State Court entered judgment in favor of Kartri on October 14, 2014, and the parties executed a General Mutual Release Agreement ("Release Agreement") that was made an Order of the Court on March 11, 2015. (Doc. 43, at 3; Doc. 43-1, at 14-15). According to Gordon, he agreed to the terms of the Release Agreement upon the understanding that Kartri would allow him to retrieve his property, including the Equipment, from March 17, 2015 to March 31, 2015 (the "Removal Deadline"). (Doc. 43, at 5). However, Gordon claims that Kartri chained off the building for 57 days, in violation of the Release Agreement, and thereby frustrated his attempts to retrieve the Equipment by the Removal Deadline. (Doc. 43, at 5-6).

Due to the alleged denial of access, Gordon asserts that his State Court attorney, Gerald Orseck ("Attorney Orseck") contacted Kartri's attorney, Benjamin Schnessel ("Attorney Schnessel"), in relation to the matter. (Doc. 43, at 3). Presumably during their conversation, which took place on an unspecified date, Attorney Orseck and Attorney Schnessel orally agreed to extend the Removal Deadline by thirty (30) days, or to April 30, 2015. (Doc. 43, at 3). Notwithstanding this verbal agreement, Gordon alleges that Kartri commenced with liquidating the Inventory on April 1, 2015. (Doc. 43, at 3). At the time of liquidation, Gordon owed approximately $20,000 to GFCI; however, Gordon claims that Kartri sold the Equipment for a "miniscule percentage" of its fair market value and failed to account to him with any money it received. (Doc. 43, at 4). As a result, Gordon complains that Kartri prevented him from applying any proceeds from the sale of the secured Equipment to his outstanding loan balance with GFCI. (Doc. 43, at 4). Gordon further asserts that Kartri either sold or discarded his remaining personal property that had not been retrieved.7

Gordon also alleges, for the first time, that Kartri commenced with demolishing the building on or about March 19, 2015 in an effort to sell the land on which it sat. (Doc. 43 at 4-6). Seemingly in preparation for the demolition, Kartri allegedly used two large forklifts, which belonged to Gordon and remained on the property, to remove his "inventory out of the building and truck it away." (Doc. 43, at 4). Gordon asserts that Kartri completely demolished the building by June 2015, and, when liberally construed, claims that Kartri breached the terms of the Release Agreement by failing to remove his property in a reasonable manner. (Doc. 43, at 6).

Against this backdrop, the amended complaint sets forth two unnamed causes of action resulting from Kartri's alleged "breach of contract, breach of [the] lease agreement, and [breach of the Release Agreement]": (1) damages in the amount of $300,000, being the difference of the Equipment's fair market value and realized sale proceeds ("Count I"); and (2) damages in the amount of $20,000, representing the outstanding balance of Gordon's loan from GFCI ("Count II"). (Doc. 43, at 7). Kartri filed a motion to dismiss the amended complaint, and a motion to strike portions of the pleading, on April 3, 2018. (Doc. 44; Doc. 45). In support of its motion, Kartri argues that Count II should be dismissed under Rule 12(b)(6) as moot, as Gordon admittedly settled and dismissed his claims against GFCI.8 (Doc. 45, at 5). Further, Kartri claims that portions of the amended complaint should be struck pursuant to Rule 12(f), as they seemingly assert new claims that exceed the scope of his original complaint. (Doc. 45, at 5). In response, Gordon appears to concede that Count II is moot, and requests that the Court strike his demand for $20,000 from Kartri. (Doc. 46, at 1; Doc. 49, at 2-3). Gordon further asserts that Kartri's motion to strike should be denied, as he has only "added more provable facts" to the amended complaint, and still relies on the claims for damages set forth in his initial pleading.9 (Doc. 46, at 7).

This motion, having been fully briefed, is now ripe for disposition.

II. DISCUSSION

A. STANDARD OF REVIEW

Rule 12(b)(6) of the Federal Rules of Civil Procedure authorizes a defendant to move for dismissal of a complaint for "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). The United States Court of Appeals for the Third Circuit has noted the evolving standards governing pleading practice in federal court, stating that:

Standards of pleading have been in the forefront of jurisprudence in recent years. Beginning with the Supreme Court's opinion in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), continuing with our opinion in Phillips [v. County of Allegheny, 515 F.3d 224 (3d Cir. 2008)] and culminating recently with the Supreme Court's decision in Ashcroft v. Iqbal, 556 U.S. 662 (2009), pleading standards have seemingly shifted from simple notice pleading to a more heightened form of pleading, requiring a plaintiff to plead more than the possibility of relief to survive a motion to dismiss. Fowler v. UPMC Shadyside, 578 F.3d 203, 209-10 (3d Cir. 2009).

In considering whether a complaint fails to state a claim upon which relief may be granted, the court must accept as true all allegations in the complaint and all reasonable inferences that can be drawn therefrom are to be construed in the light most favorable to the plaintiff. Jordan v. Fox, Rothschild, O'Brien & Frankel, 20 F.3d 1250, 1261 (3d Cir. 1994). However, a court "need not credit a complaint's `bald assertions' or `legal conclusions' when deciding a motion to dismiss." Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir. 1997). Additionally, a court need not assume that a plaintiff can prove facts that the plaintiff has not alleged. Associated Gen. Contractors of Cal. v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983). A plaintiff must provide some factual grounds for relief which "requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555. "Factual allegations must be enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555. In Ashcroft v. Iqbal, 556 U.S. 662 (2009), the Supreme Court of the United States held that, when considering a motion to dismiss, a court should "begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth." Iqbal, 556 U.S. at 679. "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Iqbal, 556 U.S. at 678. In deciding a Rule 12(b)(6) motion, the Court may consider the facts alleged on the face of the complaint, as well as "documents incorporated into the complaint by reference, and matters of which a court may take judicial notice." Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007).

A document filed pro se is "to be liberally construed." Estelle v. Gamble, 429 U.S. 97, 106 (1976). A pro se complaint, "however inartfully pleaded," must be held to "less stringent standards than formal pleadings drafted by lawyers" and can only be dismissed for failure to state a claim 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. Haines v. Kerner, 404 U.S. 519, 520-21 (1972). The Third Circuit has instructed that if a complaint is vulnerable to dismissal for failure to state a claim, the district court must permit a curative amendment, unless an amendment would be inequitable or futile. Grayson v. Mayview State Hosp., 293 F.3d 103, 108 (3d Cir. 2002).

B. MOTION TO DISMISS

First, Kartri moves to dismiss Count II of the amended complaint, with prejudice, as moot. (Doc. 45, at 8-9; Doc. 48, at 1). Specifically, Count II asserts an unnamed cause of action for monetary damages against Kartri "in an amount sufficient to pay the unpaid balance of GFCI's loan to [Gordon] in the approximate sum of $20,000." (Doc. 43, at 7). However, Kartri argues that Gordon previously entered into a settlement agreement with GFCI, and voluntarily dismissed the entity as a defendant. (Doc. 45, at 8). As such, Kartri asserts that Count II is subject to dismissal, as the alleged $20,000 debt Gordon owed to GFCI has since been discharged by way of settlement. (Doc. 45, at 9). In response, Gordon appears to concede this point, and "asks the court to strike [his] demand for $20,000 from [] Kartri for [GFCI] because the claim is moot." (Doc. 46, at 1).

As such, because Gordon voluntarily withdrew Count II of the amended complaint,10 the Court respectfully recommends that Kartri's motion to dismiss be DENIED as MOOT.

C. MOTION TO STRIKE

Kartri also moves to strike portions of the amended complaint pursuant to Rule 12(f) of the FEDERAL RULES OF CIVIL PROCEDURE, on the grounds that certain paragraphs of the pleading violate this Court's prior Order of March 12, 2018. (Doc. 45, at 9). Specifically, Kartri references the undersigned's advisement that the amended complaint must be limited to the claims "as raised in Gordon's original complaint (Doc. 1) and brief in opposition (Doc. 23)." (Doc. 38; Doc. 39; Doc. 45, at 10). In response, Gordon contends that his claim for damages against Kartri ultimately remains unchanged. (Doc. 46, at 7). He further avers that the amended complaint merely includes "more provable facts" with respect to his claims for breach of contract and conversion. (Doc. 46, at 6-7).

Rule 12(f) permits the Court to "strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." "The purpose of a motion to strike is to clean up the pleadings, streamline litigation, and avoid unnecessary forays into immaterial matters." Natale v. Winthrop Res. Corp., 2008 WL 2758238, at *14 (E.D. Pa. 2008) (internal quotation marks omitted). Motions to strike pursuant to Rule 12(f) are generally disfavored "unless the allegations have no possible relation to the controversy and may cause prejudice to one of the parties, or if the allegations confuse the issues in the case." Natale, 2008 WL 2758238, at *14 (quoting River Road Devel. Corp. v. Carlson Corp., Civ. A. No. 89-7037, 1990 WL 69085, at *2 (E.D.Pa. May 23, 1990)). Further, "[w]hen faced with allegations that could possibly serve to achieve a better understanding of plaintiff's claims or perform any useful purpose in promoting the just disposition of the litigation, courts generally deny such motions to strike." Cestra v. Mylan, Inc., No. CIV.A. 14-825, 2015 WL 2455420, at *7 (W.D. Pa. May 22, 2015) (quoting Eisai Co. v. Teva Pharm. USA, Inc., 629 F.Supp.2d 416, 425 (D.N.J. 2009), as amended (July 6, 2009)).

Here, Kartri moves to strike the newly asserted factual allegations as procedurally improper, and argues that certain claims and facts in the operative complaint exceed the scope of the undersigned's grant of leave to amend. (Doc. 45, at 9-10). However, upon review of the amended pleading and brief in opposition (Doc. 43; Doc. 46), the newly asserted factual allegations allow a better understanding of Gordon's claims against Kartri for breach of contract and common law conversion as seemingly raised, albeit vaguely, in the original complaint. See Cestra, 2015 WL 2455420, at *7. Further, the Court's Memorandum, filed in conjunction with its March 12, 2018 Order, also provided that "additional facts [by way of an amended complaint] may be helpful to Gordon, as a pro se litigant, in satisfying the federal pleading standard." (Doc. 38, at 6). As the contested paragraphs focus on the crux of Gordon's claims for conversion and breach of contract, namely Kartri's alleged interference with his attempts to remove the Equipment and other personal property from the building notwithstanding several agreements that existed between the Parties, the Court does not consider the new allegations to be clearly redundant, immaterial, impertinent, or scandalous.

For the aforementioned reasons, it is respectfully recommended that Kartri's motion to strike portions of the amended complaint (Doc. 44) be DENIED.

III. RECOMMENDATION

Based on the foregoing, we recommend that the Court DENY Defendants' Motion to Dismiss and Strike Portions of Plaintiff's Amended Complaint. (Doc. 44). Specifically, we recommend:

1. That the Court DENY Defendant's motion to dismiss Count II of the amended complaint (Doc. 44) as MOOT; 2. That Plaintiff's amended complaint be allowed to proceed as to Count I, which the Court liberally construes as a cause of action against Defendant for common law conversion and breach of contract; and 3. That the Court DENY Defendant's motion to strike portions of the amended complaint (Doc. 44) pursuant to Fed. R. Civ. P. 12(f).

NOTICE

NOTICE IS HEREBY GIVEN that the undersigned has entered the foregoing Report and Recommendation dated November 19, 2018. Any party may obtain a review of the Report and Recommendation pursuant to Rule 72.3, which provides:

Any party may object to a magistrate judge's proposed findings, recommendations or report addressing a motion or matter described in 28 U.S.C. § 636(b)(1)(B) or making a recommendation for the disposition of a prisoner case or a habeas corpus petition within fourteen (14) days after being served with a copy thereof. Such party shall file with the clerk of court, and serve on the magistrate judge and all parties, written objections which shall specifically identify the portions of the proposed findings, recommendations or report to which objection is made and the basis for such objections. The briefing requirements set forth in Local Rule 72.2 shall apply. A judge shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made and may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge. The judge, however, need conduct a new hearing only in his or her discretion or where required by law, and may consider the record developed before the magistrate judge, making his or her own determination on the basis of that record. The judge may also receive further evidence, recall witnesses or recommit the matter to the magistrate judge with instructions.

FootNotes


1. GFCI has since been voluntarily dismissed as a Defendant to this action. (Doc. 42).
2. In the original complaint, Gordon set forth the following unnamed claims against Kartri and GFCI: (1) damages in the amount of $300,000 against Kartri; (2) damages in the amount of $300,000 against GFCI; and (3) damages in the amount of $20,000, being the outstanding balance of an equipment loan Gordon obtained from GFCI, or, alternatively, extinguishing Gordon's financial liability to GFCI. (Doc. 1, at 2-4).
3. GFCI filed a motion to dismiss the complaint on March 13, 2017, which the Court dismissed as moot on May 12, 2017 after receiving notice of the Settlement. (Doc. 5; Doc. 8; Doc. 16). Notably, in opposition to Kartri's motion to dismiss, Gordon also voluntarily "removed" his second and third causes of action because of the Settlement. (Doc. 23, at 1).
4. Notably, in opposition to Kartri's motion to dismiss, Gordon voluntarily "removed" his second and third causes of action in their entirety. (Doc. 23, at 1). As such, the Court solely considered Gordon's first cause of action in its Report and Recommendation.
5. GFCI seemingly acquired the security interest as collateral for a loan Gordon obtained from the entity at an unspecified point in time (the "Loan"). (Doc. 43, at 2).
6. The Court notes that Gordon has submitted copies of State Court records in support of his amended complaint. (Doc. 43-1). These records document the disposition of the following State Court case: Kartri v. BHM Metal Products & Indus., LLC, et al., Docket No. 2014-CV-559 (Susquehanna Cnty. C.C.P.). "In deciding a Rule 12(b)(6) motion, a court must consider only the complaint, exhibits attached to the complaint, matters of public record, as well as undisputedly authentic documents if the complainant's claims are based upon these documents." Mayer v. Belichick, 605 F.3d 223, 230 (3d Cir. 2010); see also Jonas v. Gold, 627 F. App'x 134, 137 n. 4 (3d Cir. 2015) (noting a "District Court [is] entitled to take judicial notice of prior opinions to establish the procedural history of [a] case." (citations omitted). Accordingly, the Court takes judicial notice of the State Court proceedings, and properly considers the records attached to the amended complaint.
7. In addition to the Equipment, Gordon asserts that Kartri prevented him from removing certain personal property, including but not limited to: a menorah that belonged to his mother, a wheel chair that belonged to his father, and several science awards he received in school. (collectively, the "Inventory"). (Doc. 43, at 5).
8. The Court notes that Kartri did not move to dismiss Count I of the amended complaint.
9. The Court recognizes that Gordon's brief in opposition purports to clarify the claims set forth in the amended complaint. (Doc. 46). Specifically, Gordon claims that the amended complaint asserts the following four causes of action against Kartri: "(1) Violation of the [Release Agreement], causing Common Law Conversion, Involuntary Conversion; (2) No access and entr[y] into the building; (3) Distraint (chaining) preventing removal of Inventory (equipment) and personal property; [and] violation of [the] oral agreement extending the removal deadline." (Doc. 46, at 1-2). As this Court has previously advised Gordon, "a complaint is not amended by the arguments proffered in a brief in opposition to a motion to dismiss." Galligani v. N. York Cty. Reg'l Police Dep't, No. 1:10-CV-1136, 2011 WL 3841610, at *2 (M.D. Pa. Aug. 30, 2011); see also Com. of Pa. ex rel. Zimmerman v. PepsiCo, Inc., 836 F.2d 173, 181 (3d Cir. 1988) ("[I]t is axiomatic that the complaint may not be amended by the briefs in opposition to a motion to dismiss."). When liberally construed, Gordon cites to Rule 15 of the FEDERAL RULES OF CIVIL PROCEDURE, and appears to request leave to file a second amended complaint by way of his opposition brief—relief that this Court has previously granted in a similar fashion, in deference to his pro se status. (Doc. 39). However, insofar as Gordon includes novel factual allegations and claims in his responsive briefing to Kartri's motion to dismiss, the Court reiterates that his attempt to amend the operative pleading in such a manner is procedurally improper. See Zimmerman, 836 F.2d at 181 ("It is one thing to set forth theories in a brief; it is quite another to make proper allegations in a complaint."). Nonetheless, although not specifically stated in the amended complaint, the Court liberally construes Gordon's claims for damages (Count I and Count II) as causes of action grounded in common law conversion and breach of contract.
10. The Court notes that even though Gordon voluntarily dismissed Count II of the amended complaint, he appears to challenge Kartri's argument that it should be dismissed with prejudice. (Doc. 49, at 2). Specifically, Gordon argues that he "entered a voluntary dismissal of this action as it relates to defendant GFCI only," and requests that Court "strike [his] demand for $20,000 [without] prejudice from [Kartri] for [GFCI] because the claim is settled and moot." (Doc. 49, at 2). Notwithstanding the somewhat confusing nature of Gordon's argument, as he has withdrawn Count II in his brief in opposition, Kartri's motion to dismiss this claim with prejudice is thereby rendered moot. Accordingly, the Court declines to consider Gordon's argument further.
Source:  Leagle

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