Hranec Sheet Metal, Inc. v. Metalico Pittsburgh, Inc.
107 A.3d 114
| Pa. | 2014Background
- Hranec Sheet Metal (Plaintiff) manufactures ductwork and kept large, new coils of stainless steel and aluminum on-site; several employees stole coils and sold them as scrap.
- Metálico (Defendant) operates a scrap/recycling facility and purchased the stolen coils on multiple occasions (allegedly 22 transactions between Sept. 2010 and May 2011) for large cash sums.
- Plaintiff sued for conversion, negligence per se (under the Scrap Material Theft Prevention Act), and concerted tortious conduct (aiding/abetting) after attaching purchase records to its complaint.
- The trial court sustained Metálico’s preliminary objections (demurrers) and dismissed the second amended complaint for failure to state a claim.
- On appeal the Superior Court reviewed the pleading-stage record (all well-pleaded facts taken as true) and reversed: it found prima facie claims for conversion, concerted tortious conduct (Restatement §876), and negligence per se under the Scrap Act.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Conversion — whether pleading that Metálico purchased stolen goods states a claim | Purchase of stolen chattels from thieves establishes conversion; Plaintiff attached purchase records. | Metálico argued lack of causal connection/duty and good-faith purchase defenses. | Reversed: Allegations and records that Metálico purchased the stolen coils suffice at pleading stage; good-faith purchase does not defeat conversion. |
| Causation — whether fencing the goods caused continuing thefts | Repeated purchases and cash payments encouraged more thefts; prior purchases caused subsequent thefts. | Metálico contended no causal link between its purchases and the initial thefts. | Reversed: Allegations permit a reasonable inference that Metálico’s conduct encouraged continued thefts and was a proximate cause. |
| Concerted tortious conduct (Restatement §876) — whether Metálico acted in concert or gave substantial assistance | Metálico’s repeated cash purchases, failure to comply with statutory safeguards, and intentional ignorance show concert/knowing assistance. | Metálico claimed lack of agreement, lack of knowledge, and absence of actionable concerted conduct. | Reversed: Plaintiff stated a prima facie §876 claim — facts support inference Metálico knew or should have known and substantially assisted the thieves. |
| Negligence per se under the Scrap Material Theft Prevention Act — whether statutory violations create civil liability | The Act protects owners of valuable metal and applies to Metálico; Metálico violated identification/commercial-account provisions and those violations proximately caused the loss. | Metálico argued the Act does not give rise to a private cause of action and/or that no proximate cause/duty exists. | Reversed: Court held the Act’s purpose protects a specific group, applies to Metálico, alleged statutory violations exist, and those violations plausibly proximately caused plaintiff’s injury. |
Key Cases Cited
- L.B. Foster Co. v. Charles Caracciolo Steel & Metal Yard, Inc., 777 A.2d 1090 (Pa. Super. 2001) (purchaser of stolen scrap can be liable for conversion even if a good-faith purchaser)
- Sovereign Bank v. Valentino, 914 A.2d 415 (Pa. Super. 2006) (Pennsylvania accepts Restatement §876 interpretations for concerted tortious conduct)
- McKeeman v. CoreStates Bank, N.A., 751 A.2d 655 (Pa. Super. 2000) (definition and intent principles for conversion)
- Mahan v. Am-Gard, Inc., 841 A.2d 1052 (Pa. Super. 2003) (elements and limits of negligence per se)
- Richmond v. McHale, 35 A.3d 779 (Pa. Super. 2012) (standard of review for preliminary objections/demurrers)