ROBERT D. MARIANI, District Judge.
Presently before the Court is Magistrate Judge Carlson's Report and Recommendation ("R&R"), (Doc. 96), on Defendant's Motion for Summary Judgment, (Doc. 56). The subject of the R&R is a lawsuit that began in March of 2017, when Plaintiff, Crestwood Membranes, Inc., d/b/a i2M ("i2M"), filed a Complaint against Defendant, Constant Services, Inc. ("CSI"). The Complaint stems from a business relationship in the pool liner industry and alleges four causes of action: Count I, "Copyright Infringement;" Count II, "Breach of Contract;" Count III, "Breach of Warranty;" and Count IV, "Negligence in Performance of Contract." (Doc. 1 at ¶¶ 30-48).
Previously, i2M moved for summary judgment on the copyright infringement claim. (Doc. 23). In aseparate R&R not currently before the Court, Magistrate Judge Carlson recommended denying i2M's motion on the basis that disputes of fact remain about the availability of certain defenses that may insulate CSI from liability. (Doc. 95). Over i2M's objections, this Court adopted the R&R in full and denied i2M's Motion for Summary Judgment. (Doc. 104).
The subject of the R&R currently before this Court is CSI's Motion for Summary Judgment, (Doc. 56). In its Motion, CSI moved for summary judgment on all four of i2M's claims. The R&R made two recommendations concerning CSl's Motion. First, consistent with the prior R&R, the R&R recommended denying CSl's Motion as it concerns the copyright infringement claim. (Doc. 96 at 28). Neither party has objected to this recommendation, and the Court will adopt it. Second, after finding that i2M's filings failed to comply with Local Rule 56.1, the R&R recommended that this Court strike i2M's Response to CSI's Motion for Summary Judgment and order i2M to file a new response that complies with the local rules. (Id. at 29). Both parties have objected to this recommendation. Specifically, i2M has denied that it did not comply with Local Rule 56.1, and CSI has objected to giving i2M a "second bite at the apple."
While the R&R correctly points out that it is in this Court's discretion to take such a course of action, the Court notes that i2M has objected to being given such an opportunity. (Doc. 99 at 1). Thus, the Court will not adopt this recommendation, but instead resolve the remainder of CSl's motion on the parties' filings. For the reasons that follow, the Court will grant in part and deny in part CSl's Motion for Summary Judgment.
In accordance with Local Rule 56.1, CSI submitted a Statement of Material Facts in Support of its Motion for Summary Judgment, (Doc. 57), as to which it contends that there is no genuine dispute for trial. Despite its arguments to the contrary, the R&R correctly conclude that i2M's Response to CSI's Statement of Material Facts, (Doc. 72), did not comply with Local Rule 56.1. Although i2M cited to various sections of deposition testimony to support its averments, it failed to either attach any of those depositions to its Response or its Brief in Opposition, or inform the Court where those depositions could be found in the record. In an attempt to resolve this issue, the Court issued an Order with the following instructions:
(Doc. 105) (emphasis original).
Nevertheless, i2M disregarded this Court's instructions and instead filed a new Response, (Doc. 106). This new Response admitted previously denied statements, denied previously admitted statements, and was accompanied by depositions which i2M relied on but which were not previously found in the record. Accordingly, in resolving the instant Motion, the Court has disregarded i2M's attempt, without leave of the Court, to supplement the record. Consequently, the Court has deemed admitted any statement in i2M's original Response, (Doc. 72), which does not rely by citation on evidence in the record at the time that the briefing on the summary judgment motion was completed. With that in mind, the following facts are undisputed unless noted otherwise:
CSI is a printing company that specializes in printing on flexible PVC plastics, such as vinyl pool liners. (Doc. 57 at ¶¶ 1-2), CSl's customers provide CSI with the material to print on and CSI applies ink to that material. (Id. at ¶ 5). CSI, however, does not manufacture any of the materials it prints on. (Id.). i2M, one of CSI's customers, does manufactures pool liner vinyl. (Id. at ¶¶ 16, 50, 90, 104),
Eventually, end user customers complained that the pool liners' seams would separate and that patterns would fade, (Doc. 57 at ¶¶ 40,82). Christopher Hackett, i2M's owner, testified that the seam separation and fading issues were a result of CSI's printing practices. (Id. at ¶¶ 15, 30, 82). Despite this contention, there was ahistory of CSI complaining about the quality of vinyl that i2M provided for to it for printing. (ld. at ¶¶ 84-87).
Through summary adjudication. the court may dispose of those claims that do not present a "genuine dispute as to any material fact." Fed. R. Civ. P. 56(a). "As to materiality, . . . . [o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Uberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L. Ed. 2d 202 (1986).
The party moving for summary judgment bears the burden of showing the absence of agenuine issue as to any material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L. Ed. 2d 265 (1986). Once such a showing has been made, the non-moving party must offer specific facts contradicting those averred by the movant to establish a genuine issue of material fact. Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 888, 110 S.Ct. 3177, 111 L. Ed. 2d 695 (1990). Therefore, the non-moving party may not oppose summary judgment simply on the basis of the pleadings, or on conclusory statements that afactual issue exists. Anderson, 477 U.S. at 248. "A party asserting that a fact cannot be or is genuinely disputed must support the assertion by citing to particular parts of materials in the record . . . or showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." Fed. R. Civ. P. 56(c)(1)(A)-(B). In evaluating whether summary judgment should be granted, "[t]he court need consider only the cited materials, but it may consider other materials in the record." Fed. R. Civ. P. 56(c)(3). "Inferences should be drawn in the light most favorable to the non-moving party, and where the non-moving party's evidence contradicts the movant's, then the non-movant's must be taken as true." Big Apple BMW, Inc. v. BMW of N. Am., Inc., 974 F.2d 1358,1363 (3d Cir. 1992), cert. denied 507 U.S. 912, 113 S.Ct. 1262, 122 L. Ed. 2d 659 (1993).
However, "facts must be viewed in the light most favorable to the nonmoving party only if there is a `genuine' dispute as to those facts." Scott v. Harris, 550 U.S. 372, 380, 127 S.Ct. 1769, 167 L. Ed. 2d 686 (2007). If a party has carried its burden under the summary judgment rule,
Id. (internal quotations, citations, and alterations omitted).
CSI has moved for summary judgment on i2M's claims for breach of contract, breach of implied warranties, and negligent performance of a contract. Specifically, CSI argues that judgment should be entered in its favor on all of the claims because there are no genuine disputes of material fact for trial, the negligent performance of a contract claim is barred by the gist of the action doctrine, and the implied warranty claim fails because CSI is not a merchant or seller of goods. The Court will address each of CSI's arguments in turn.
CSI argues that three of i2M's claims are based on the same underlying allegation, namely that CSI's printing on i2M supplied vinyl caused the printed patterns to fade and seams to separate. (Doc. 61 at 15). CSI then argues that all of these claims fail for the same reason: there is insufficient proof that the problems with the vinyl were caused by CSI. (Id. at 15-16). i2M's response, in full, is as follows:
(Doc. 71 at 4).
As an initial matter, the Court notes that i2M's response contains no citations to any authority or even to the record.
As CSI admits, "[w]ith regard to issues of fading and seam separation, Mr. Hackett testified that it was CSI's printing practices, and them alone, that led to those issues for end use customers." (Doc. 57 at ¶ 82). Indeed, Mr. Hackett testified that U[b]ased on the third-party testing we have done, based on the experts we have in-house," i2M determined that the seam separation and fading issues were the result of CSI's printing. (Doc. 57-3 at 33-34). CSI goes on to argue that this contention is otherwise unsupported in the record and that the problem was actually due to i2M's vinyl. (Doc. 57 at ¶¶ 83-87). In essence, however, this is an attempt by CSI to get this Court to make a credibility determination as to the testimony of Mr. Hackett and weigh the evidence. But, as this Court has often noted, on summary judgment "`the court must draw all reasonable inferences in favor of the nonmoving party, and it may not make credibility determinations or weigh the evidence.'" Guidotti v. Legal Helpers Debt Resolution, L.L.C., 716 F.3d 764, 772 (3d Cir. 2013) (quoting Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150, 120 S.Ct. 2097, 147 L. Ed. 2d 105 (2000)); see also Anderson, 477 U.S. at 255. Consequently, the Court will deny CSl's Motion for Summary Judgment on this basis.
Next, CSI argues that the gist of the action doctrine bars i2M's claim for negligent performance of a contract. (Doc. 61 at 10). The gist of the action doctrine provides that an alleged tort claim against a party to a contract, based on the party's actions undertaken in the course of carrying out a contractual agreement, is barred when the gist or gravamen of the cause of action stated in the complaint, although sounding in tort, is, in actually a claim against the party for breach of its contractual obligations.
Bruno v. Erie Ins. Co., 106 A.3d 48,53 (Pa. 2014) (footnotes omitted). The doctrine has a long and somewhat muddled history in the Commonwealth, as related at length by the Pennsylvania Supreme Court in the recent case Bruno v. Erie Insurance Company, 106 A.3d at 60-68. Out of this history, two guiding principles with respect to the application of the gist of the action doctrine can be distilled and are laid out by the Pennsylvania Supreme Court in Bruno. First,
Id. at 68 (internal citation omitted). Thus, the Pennsylvania Supreme Court set up a "duty-based demarcation" for deciding whether or not the gist of the action doctrine bars a particular tort claim, reaffirming this distinction "as the touchstone standard for ascertaining the true gist or gravamen of a claim pled by a plaintiff in a civil complaint." Id. at 69.
The Pennsylvania Supreme Court in Bruno then went on to add an important corollary to this framing of the gist of the action standard, setting out the second guiding principle of the opinion. The highest court in the Commonwealth "has long recognized that a party to a contract may be found liable in tort for negligently performing contractual obligations and thereby causing injury or other harm to another contracting party." Id. at 69. As aconsequence,
Id. at 70.
Here, CSI argues that the doctrine bars i2M's claim for negligent performance of a contract because it is based on CSl's failure to perform a contractual obligation. (Doc. 61 at 11-12). i2M's response, in full, is that uCSI's argument that i2M's negligent performance of contract claim is barred by Pennsylvania's `gist of the action' doctrine (CSI Br. at 10-13) was considered and rejected by the Court in its Order of February 17, 2016. Under the law of the case doctrine, that Order stands." (Doc. 71 at 4). i2M is wrong on its second point. While this Court did reject CSl's argument regarding the gist of the action doctrine in CSI's Motion to Dismiss, the Court specifically held "[w]hile discovery or trial might prove that [CSI] cannot be held liable in tort, the Court cannot so determine at this early stage of the litigation." Crestwood Membranes, Inc. v. Constant Services, Inc., 2016 WL 659105, at *5 (M.D. Pa. 2016). This Court, therefore, left open the possibility that the gist of the action doctrine may bar i2M's claim in a later stage of litigation.
Recognizing this, CSI argues that, in contrast with Bruno, "there is no fact supporting that CSI was negligent for acts or omissions occurring apart from . . . its contractual obligation . . . The contention of i2M is that CSI was negligent because it did not fulfill its contractual obligation to print inks on pool liners for i2M." (Doc. 75 at 11-12). It is true that if i2M alleged that CSI failed to print anything on the vinyl, i2M would be alleging that CSI failed to complete a contractual duty and thus could not maintain an action sounding in tort against CSI. This, however, is not the case here. Instead, as CSI has recognized, there is testimony in the record that it was CSl's printing practices that allegedly lead to the injury. (Doc. 57 at ¶ 82). i2M's claim is not that CSI did not print inks on pool liners for it; it was the manner in which CSI did so that i2M claims gave rise to its injury. Thus, it was not the failure to fulfill a contractual obligation that forms the basis of i2M's claim, but CSl's alleged negligent workmanship in performing the contractual obligation. This renders this case indistinguishable from Zell v. Arnold, 2 Pen. &W. 292 (Pa. 1830).
In Bruno, the Pennsylvania Supreme Court summarized Zell in the following manner:
Here, as in Zell, the contention is not that CSI failed to perform a contractual obligation; it is that CSI performed its contractual obligations in adeficient manner. Thus, the cause of action here arises not directly from a breach of a contractual obligation but from "an alleged breach of [CSI]'s separate `collateral' duty to perform a contractual obligation with skill and diligence." Id. at 63. As such, the negligence claim is not barred by the gist of the action doctrine and this Court will deny CSl's Motion for Summary Judgment on this claim.
Lastly, CSI argues that i2M's implied warranty claims fail as a matter of law because CSI is not a "merchant" or a seller of "goods." (Doc. 61 at 13). The implied warranties of "merchantability and fitness for a particular purpose[] arise by operation of law under the Uniform Commercial Code (UCC), 13 Pa. C.S.A. §§ 2314, 2315, and serve to protect buyers from loss where goods purchased are below commercial standards or unfit for the buyer's purpose." Turney Media Fuel, Inc. v. Toll Bros., Inc., 725 A.2d 836, 840 (Pa. Super. Ct. 1999). Specifically, Article 2 of the Pennsylvania UCC provides that "a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind." 13 Pa. C.S.A. § 2314(a). Additionally,
[w]here the seller at the time of contracting has reason to know:
13 Pa. C.S.A. § 2315. Thus, "[u]nder awarranty of fitness for a particular use, the seller warrants that the goods sold are suitable for the special purpose of the buyer, while a warranty of merchantability is that the goods are reasonably fit for the general purposes for which they are sold." Pritchard v. Liggett & Myers Tobacco Co., 295 F.2d 292, 296 (3d Cir. 1961).
Both warranties are only implied in contracts governed by Article 2 of the Pennsylvania UCC. See Turney Media Fuel, Inc., 725 A.2d at 840. "Article 2 of the UCC governs transactions involving products or `goods,' thus before the protections of the warranties attach there must be asale of goods." Id.; see also Stephenson v. Greenberg, 617 A.2d 364, 368 (Pa. Super. Ct. 1992). "`Goods' means all things (including specially manufactured goods) which are movable at the time of identification to the contract for sale other than the money in which the price is to be paid, investment securities . . . and things in action." 13 Pa. C.S. A. § 2105(a). "Under this definition, `goods' must be `(1) athing, (2) existing, and (3) movable. . . .'" Gall by Gall v. Allegheny Cty. Health Dep't, 555 A.2d 786, 789 (Pa. 1989) (alteration original) (quoting Helvey v. Wabash Cty. REMC, 278 N.E.2d 608, 610 (Ind. Ct. App. 1972)). "When the transaction involves predominantly the rendition of services, the fact that tangible movable goods may be involved in the performance of services does not bring the contract under the Code." Whitmer v. Bell Tel. Co. of Pa., 522 A.2d 584, 587 (Pa. Super Ct. 1987).
Additionally, the implied warranty of merchantability is only implied in a contract when "the seller is a merchant with respect to goods of that kind." 13 Pa. C.S.A. § 2314(a). The Pennsylvania USS defines "merchant" as
A person who:
13 Pa. C.S.A. § 2104.
CSI argues that it is neither a "merchant," nor a supplier of "goods," and therefore Article 2 of Pennsylvania's UCC does not apply and there is no implied warranty of merChantability or fitness for a particular purpose in its contracts with i2M. (Doc. 61 at 14-15). i2M's response, in full, is that "CSI's argument that i2M's implied warranty of merchantability/fitness claim fails because CSI is not a `merchant' is a fact-intensive contention and is not subject to disposition on a motion for summary judgment." (Doc. 71 at 4).
There are several deficiencies with i2M's argument. First, i2M has offered no citation to any authority for its assertion that the determination of whether someone is a "merchant" cannot be decided as a matter of law on summary judgment. In fact, contrary to i2M's assertion, courts have previously found it appropriate to decide on summary judgment whether a party is a "merchant." See, e.g., Gavula v. ARA Servs., Inc., 756 A.2d 17, 21 (Pa. Super. Ct. 2000) ("A person selling substantial corporate assets to another corporation therefore is not a `merchant' for purposes of awarranty of merchantability.") Second, i2M does not offer any citation to facts in the record which indicate that CSI is a "merchant." Third, i2M's argument does not address CSI's second argument that CSI does not sell "goods."
Here, i2M has brought a cause of action based on breaches of implied warranties, not express warranties. (Doc. 1 at ¶¶ 40-44). Pennsylvania law, however, will only imply warranties of merchantability and fitness for aparticular purpose into contracts if the contracts fall under the purview of Article 2 of Pennsylvania's UCC. See Tumey Media Fuel, Inc., 725 A.2d at 840. The undisputed facts, however, show that CSI provided services to i2M, not goods, and, therefore, the transactions are not governed by the UCC. Specifically, the undisputed facts show that CSI is a printing company that specializes in printing on materials such as pool liners. (Doc. 57 at ¶¶ 1-2). CSI does not manufacture any pool liners, but instead CSI's customers, such as i2M, provide CSI with the material to print on and CSI applies ink to that material. (Id. at ¶¶ 5,16,50,90,104).
i2M has not directed this Court to asingle fact in the record from which this Court could infer that its contracts with CSI were for "goods" and not for printing services. Indeed, i2M's complaint even states that "CSI impliedly warranted to i2M that the printing seNices i2M ordered from CSI and paid for would be merchantable." (Doc. 1 at ¶ 41) (emphasis added). It goes on to state that "CSI breached its implied warranty of merchantability by printing i2M vinyl swimming pool liner film in a manner that has caused fading or seam separation problems." (ld. at ¶ 42) (emphasis added). As CSI has established that it is undisputed that it provided printing services to i2M, and i2M has not shown any disputes of fact concerning whether its contracts with CSI were for "goods" as that term is defined in the UCC, i2M's warranty claims fail as a matter of law.
Accordingly, the Court will grant CSI's Motion for Summary Judgment as it pertains to i2M's warranty claims.
For the reasons stated above, the Court will adopt Magistrate Judge Carlson's Report and Recommendation in part, (Doc. 96), and grant in part and deny in part CSI's Motion for Summary Judgment. To be clear, although the Court is denying CSI's Motion for Summary Judgment in part, that denial is in spite of the wholly inadequate brief filed by i2M. Instead, i2M's Brief in Opposition has only functioned to waste the Court's resources and disrespect the summary judgment process as envisioned by Federal Rule of Civil Procedure 56. A separate Order follows.
