Reserve Real Estate Group, Inc. v. Precision Wound Care LLC
1:25-cv-00641
| M.D. Penn. | Jun 30, 2025Background
- The case involves a contract dispute between MedTek Solution (Plaintiff) and Precision Wound Care LLC and Gary Ryan (Defendants) regarding an agreement for sales commissions in the wound care industry.
- MedTek terminated its agreement with Precision, alleging a compliance violation by Precision, and refused to pay further commissions.
- Precision counterclaimed, alleging wrongful contract termination to avoid commissions, misleading statements about MedTek’s legitimacy, and tortious acts including defamation and interference.
- The defendants (Precision) raised claims for breach of contract, breach of covenant of good faith, statutory violations, fraud, tortious interference, defamation, and unjust enrichment.
- MedTek moved to dismiss the counterclaims, strike certain allegations and punitive damages, and stay discovery; it also challenged jurisdiction based on the real party in interest rule (Rule 17) due to a name change by Gary Ryan.
- The court ruled on these motions, resolving jurisdiction, substantive, and procedural challenges.
Issues
| Issue | Plaintiff’s Argument | Defendant’s Argument | Held |
|---|---|---|---|
| Subject Matter Jurisdiction (Rule 17) | Gary Ryan’s name change voids standing/jurisdiction | Name change ratified; real party in interest | Jurisdiction exists; Rule 17 is nonjurisdictional |
| Veil Piercing | No sufficient pleading of facts; improper as to individuals | Fraud and misuse of corporate form justify veil-piercing | Dismissed; insufficient facts alleged |
| Breach of Contract | No specific duty breached under agreement | Failure to pay commissions and wrongful termination | Survives; breach claim plausibly stated |
| Good Faith and Fair Dealing | Separate claim not allowed under PA law | Good faith breach is distinct | Dismissed as standalone; subsumed under contract claim |
| PCSRA Statutory Claim | Not a statutory principal/agent relationship | Precision qualifies as sales rep; MedTek as principal | Claim survives pleading stage |
| Fraudulent Inducement | Not pled with specificity; barred by parol evidence/gist rule | Made material misreps to induce agreement | Dismissed; leave to amend granted |
| Tortious Interference | No contracts attached; reps not defined; privilege exists | Interference with contracts to steal reps, harm business | Claim survives; facts sufficiently alleged |
| Defamation | Truth/opinion/privilege defense | Made false, reputation-harming statements | Survives; fact issues not appropriate for dismissal |
| Unjust Enrichment | No improper benefit to individuals | Plaintiffs conferred benefit; nonpayment is inequitable | Survives; plausible claim |
| Motion to Strike | Challenged various paragraphs as immaterial, impertinent | Allegations are relevant to claims | Denied; drastic remedy not warranted |
| Motion to Stay Discovery | Discovery should pause pending motion decision | Opposed | Moot (issue resolved by memorandum) |
Key Cases Cited
- Arbaugh v. Y&H Corp., 546 U.S. 500 (Rule 17 issues are nonjurisdictional and can be cured)
- Twombly, 550 U.S. 544 (Pleading standard for plausibility at motion to dismiss stage)
- Ashcroft v. Iqbal, 556 U.S. 662 (Sets out plausibility standard for pleadings)
- Lumax Indus., Inc. v. Aultman, 669 A.2d 893 (Strong presumption against piercing the corporate veil in Pennsylvania)
- Pearson v. Component Tech. Corp., 247 F.3d 471 (Establishes factors for veil-piercing analysis)
- City of Allentown v. Lehigh Cty. Auth., 222 A.3d 1152 (Elements for breach of contract under PA law)
- Bruno v. Erie Ins. Co., 106 A.3d 48 (Explains the gist of the action doctrine)
- CGB Occupational Therapy, Inc. v. RHA Health Servs. Inc., 357 F.3d 375 (Elements for tortious interference under PA law)
- Moore v. Cobb–Nettleton, 889 A.2d 1262 (Standard for defamation under Pennsylvania law)
- Foman v. Davis, 371 U.S. 178 (Standards for granting leave to amend pleadings)