929 F. Supp. 2d 460
W.D. Pa.2013Background
- Crown and Powhatan entered a five-year exclusive sales agency agreement in May 2004.
- Under the agreement Crown earned a $2.50 per ton commission after Powhatan’s coal deliveries were paid.
- First production/sale under the agreement occurred on July 27, 2006, with Powhatan’s major customers Sun Coke, U.S. Steel, and Dofasco already in place.
- Crown alleges Powhatan failed to pay $404,896.74 in outstanding invoices and unpaid commissions for 2011.
- Powhatan counterclaims include breach of contract, unjust enrichment, and fraudulent misrepresentation, and it alleges Crown amended the contract in August 2007 to appoint Taplin as Crown’s agent.
- Crown contends the amendment is invalid due to a written-modification clause and lack of consideration, and moves to dismiss Powhatan’s counterclaims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the August 2007 amendment was valid despite a written-modification clause | Powhatan supports amendment as parol modification with consideration | Crown argues modification must be in writing per clause and lacks consideration | Amendment plausibly valid; parol modification with consideration may occur; dismissal denied on this ground |
| Whether Powhatan’s breach of contract and damages claims survive after amendment | Powhatan alleges Crown failed to perform duties after Taplin’s departure and amendment | Crown asserts no breach or unambiguous failure to perform under original terms | Claims survive; plausible breach and damages theory under amended terms remain for discovery |
| Whether unjust enrichment can lie where a written contract exists | Powhatan says Crown benefited from commissions despite Crown’s alleged non-performance | Unjust enrichment barred by written contract; ownership of contract controls | Dismissed without prejudice; may be reinstated if equitable basis emerges |
| Whether the fraudulent misrepresentation claim is barred by the gist of the action doctrine | Powhatan alleges Crown induced continued payments by misrepresenting Taplin’s appointment | Gist of the action doctrine bars tort claims duplicative of contract | Dismissed; fraud claim barred as restatement of contract dispute |
| What damages theories apply to Powhatan’s contract claims (expectation, reliance, restitution) | Powhatan seeks reliance damages for costs incurred under the contract | Damages either too uncertain or misaligned with contract terms; dependence on contract | Damages remain for fact-finder; both reliance and expectation frameworks may be considered; restitution discussed but not imposed |
Key Cases Cited
- Knight v. Gulf Refining Co., 311 Pa. 357 (Pa. 1933) (modification of written contract by subsequent agreement valid with consideration)
- Friday v. Regent Improv. Co., 199 A. 914 (Pa. 1938) (contract modification may be oral if supported by consideration)
- Pellegrene v. Luther, 169 A.2d 298 (Pa. 1961) (parol evidence allowed to prove modification not displaced by writing rule)
- Wagner v. Graziano Constr. Co., 136 A.2d 82 (Pa. 1957) (modification can occur despite no-written-modification clause)
- First Nat’l Bank v. Lincoln Nat’l Life Ins. Co., 824 F.2d 277 (3d Cir. 1987) (modification by parol evidence where supported by clear, convincing evidence)
- Cohen v. Sabin, 307 A.2d 845 (Pa. 1973) (consideration required; performance of already-dutyful acts is not consideration)
- Pennsy Supply, Inc. v. Am. Ash Recycling Corp. of Pa., 895 A.2d 595 (Pa.Super.2006) (consideration and forbearance concepts; compromise can furnish consideration)
- eToll, Inc. v. Elias/Savion Advertising, Inc., 811 A.2d 10 (Pa.Super.2002) (gist of the action doctrine applied to fraud in performance of contract)
- Werwinski v. Ford Motor Co., 286 F.3d 661 (3d Cir. 2002) (economic loss and gist-of-the-action framework in PA)