907 F. Supp. 2d 673
E.D. Pa.2012Background
- Williamsburg Commons Condominium Association sues State Farm for declaratory judgment, breach of contract, fraudulent misrepresentation, and unjust enrichment; federal diversity jurisdiction exists.
- Policy term 10/19/2009–10/19/2010; sinkhole damage notified June 2010; surveys indicate sinkhole-caused damage.
- Remediation included compaction grouting; Williamsburg and State Farm paid interior and structural repair costs; compensation claimed for remediation costs not paid exceeds $350,000.
- State Farm paid $10,000 under Extension of Coverage, then $107,792.04 for interior damage, and $19,276.21 for structural loss; plaintiff alleges additional unpaid remediation-related costs.
- Prior to amended complaint, court granted partial dismissal/denial; current status is State Farm’s motion to dismiss/strike parts of the amended complaint, including Counts III and IV and certain relief requests.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Fraudulent misrepresentation sufficiency under Rule 9(b)? | Williamsburg alleges misrepresentations in contract language to induce purchase. | State Farm argues lack of particularity and that gist of the action bars tort claim. | Count III dismissed; Rule 9(b) not satisfied and gist of the action doctrine applied. |
| Punitive damages availability and willful/wanton conduct | Plaintiff seeks punitive damages for tort-like conduct. | Punitive damages unavailable for pure contract claims; seeks willful/wanton conduct. | Punitive damages dismissed; references to willful/wanton conduct struck. |
| Unjust enrichment claim viability | Unjust enrichment remains viable alternative remedy. | N/A (no specific contrary position beyond prior strike attempts). | Count IV remains; motion to strike unjust enrichment denied. |
| Requests for attorneys’ fees and other/further relief | Requests for additional relief permissible in declaratory judgments. | Relief beyond declaratory judgment aimed at contract claims should be struck. | Requests for attorneys’ fees dismissed; other/further relief denied in part/denied; declaratory relief remains. |
Key Cases Cited
- Bouriez v. Carnegie Mellon Univ., 585 F.3d 765 (3d Cir.2009) (elements of misrepresentation; pleading standards for fraud in Third Circuit)
- Seville Indus. Mach. Corp. v. Southmost Mach. Corp., 742 F.2d 786 (3d Cir.1984) (gist of the action doctrine; distinguishes contract from tort claims)
- eToll, Inc. v. Elias/Savion Adver., Inc., 811 A.2d 10 (Pa.Super.2002) (gist of the action test; contract-based tort claims raised)
- Sullivan v. Chartwell Inv. Partners, LP, 873 A.2d 710 (Pa.Super.2005) (fraud claims in relation to contract; collateral nature)
- Williams v. Hilton Grp. PLC, 93 Fed.Appx. 384 (3d Cir.2004) (indicia of fraud in inducement versus contract terms; contract vs tort analysis)
- N. Penn. Transfer, Inc. v. Victaulic Co. of Am., 859 F.Supp. 154 (E.D.Pa.1994) (role of Rule 12(f) and scope of strike power; pleading standards)