United States District Court, W.D. Washington,

at Seattle.

STUCCO AND CONSTRUCTION MATERIALS, INC., Plaintiff,

v.

TRANS-NET, INC., a Washington corporation, Defendant.

No. C08-1299RSM.

 

Feb. 11, 2010.

 

ORDER ON MOTION FOR SUMMARY JUDGMENT

 

RICARDO S. MARTINEZ, District Judge.

 

This matter is before the Court for consideration of defendant’s motion for summary judgment, Dkt. # 63. Plaintiff has opposed the motion. The Court has fully considered the parties’ memoranda and exhibits and for the reasons set forth below, shall grant the motion.

 

FACTUAL BACKGROUND

 

This case arises from damage to a shipment of 684 pails of acrylic polymer that were transported in a container from Knoxville, Tennessee to Odessa, Ukraine in May and June of 2008. Plaintiff Stucco and Construction Materials, Inc. (“SCMI”) filed this action pursuant to the Carriage of Goods by Sea Act, 46 U.S.C. § 30701, et seq., (“COGSA”) and general maritime law, alleging that defendant Trans-Net, Inc., (“Trans-Net”) failed to properly transport and deliver the cargo in good condition. Trans-Net now moves for summary judgment, asserting that plaintiff can not meet its burden of proof on the evidence available in this case. In opposition to the motion, plaintiff has filed declarations which will be discussed in detail below.

 

The undisputed facts show that SCMI contracted with Trans-Net, a non-vessel operating common carrier, for shipment of the pails of polymer compound by sea from a container yard in Charleston, South Carolina to a container yard in Odessa, Ukraine. Declaration of Inna Bullock, Dkt. # 65, ¶ 6. Trans-Net also agreed to requisition an empty forty-foot “HQ” container to Perma-Chink Systems, Inc., in Knoxville, Tennessee, where the pails of polymer would be loaded. Id. Trans-Net was not involved in actually loading the container with the pails of polymer. Trans-Net did agree to arrange for transport of the loaded container to the container yard at Charleston, and booked this transport with Transportation Specialists, a truckingcompany. Id. The loaded container was picked up in Knoxville on May 9, 2008 and delivered to the container yard in Charleston, South Carolina. Id.

 

The sea waybill issued by Trans-Net indicates that the cargo was to be transported “FCL CY/CY.” Declaration of Inna Bullock, Dkt. # 65, Exhibit A. Defendant explains that this means “full container load, container yard to container yard.” Id., ¶ 8. The container was to be transported by sea by the steamship company CMA CGM. Id. The waybill indicates that the container was loaded aboard the vessel Lahore Express on May 17, 2008. Id., Exhibit A. The final destination listed on the Trans-Net waybill is Odessa, Ukraine. Id. Trans-Net was not informed that the container would be transported onward by truck from the Port of Odessa to Kiev, and did not arrange for this transport. Id., ¶ 9.

 

The container arrived at Odessa and was discharged from the vessel on June 12, 2008. Id., ¶ 10 and Exhibit D. The seals were observed that same day. Id. On June 28, 2008, the container left the yard by truck for Kiev. Id., ¶ 10. On July 2, 2008, after arrival in Kiev, the container was opened and inspected, and the cargo inside was found to be damaged. An expert assessment determined that the buckets of polymer, which had been packaged on wooden trays bound with plastic tape, had “tipped toward the driver’s cabin,” such that all but twenty-nine of the 684 buckets were damaged, leaking, broken, or so badly deformed that they were empty. Id., Exhibit F, p. 4. The opinion of the expert who conducted the assessment was that the damage “happened as a result of an external influence (falling, braking) which have [sic] caused an excessive tipping of the container toward the front wall.” Id., p. 3. He or she specifically noted that the container was “filled not to its full capacity with transportation packages containing plastic buckets with lids.” Id., p. 4.

 

This document, the “container history” is in both Russian and English.

 

Plaintiff filed this action seeking damages from Trans-Net for the damaged cargo. Trans-Net now moves for summary judgment on the basis that SCMI cannot make a prima facie case under COGSA.

 

DISCUSSION

 

a. Legal standard

 

Summary judgment should be rendered “if the pleadings, discovery and disclosure material on file, and any affidavits show there is no genuine issue as to any material fact and that the movant is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c). An issue is “genuine” if “a reasonable jury could return a verdict for the nonmoving party” and a fact is material if it “might affect the outcome of the suit under the governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The evidence is viewed in the light most favorable to the non-moving party. Id. “[S]ummary judgment should be granted where the nonmoving party fails to offer evidence from which a reasonable jury could return a verdict in its favor.” Triton Energy Corp. v. Square D Co., 68 F.3d 1216, 1221 (9th Cir.1995). It should also be granted where there is a “complete failure of proof concerning an essential element of the non-moving party’s case.”   Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). “The mere existence of a scintilla of evidence in support of the non-moving party’s position is not sufficient” to prevent summary judgment.   Triton Energy Corp., 68 F.3d at 1221.

 

b. Analysis

 

By its terms, COGSA applies “to all contracts for carriage of goods by sea to or from ports in the United States in foreign trade.” 46 U.S.C. § 1312 (1982). The term “contract of carriage” includes only those “contracts of carriage covered by a bill of lading or any similar document of title, insofar as such document relates to the carriage of goods by sea, including any bill of lading or any similar document as aforesaid issued under or pursuant to a charter party from the moment at which such bill of lading or document of title regulates the relations between a carrier and a holder of the same.” Id. § 1301(b).

 

Under COGSA, a shipper has the burden of proving that the cargo was damaged while in the custody of the carrier (i.e., loaded in good condition, discharged in damaged condition). 46 U.S.C. §§ 1302, 1303; American Home Assur. Co. v. American President Lines, Ltd., 44 F.3d 774, 777 (9th Cir.1994). Once such evidence has been received, a prima facie case has been shown and the burden of proof shifts to the carrier to establish that the loss came under a statutory exception to COGSA. Taisho Marine & Fire Ins. v. M/V Sea-Land Endurance, 815 F.2d 1270, 1274-75 (9th Cir.1987). Sections 4(2) and 4(4) of COGSA provide a number of exceptions to the imposition of liability on the carrier, such as acts of God, acts of war, and other causes arising without the actual fault of the carrier. 46 U.S.C. §§ 1304(2), 1304(4). If the loss does not fall within one of the enumerated exceptions, then the carrier is subject to liability under COGSA.

 

The evidence presented by the parties in the summary judgment motion fails to establish that the goods were discharged from the ship at Odessa in damaged condition. Plaintiff has presented declarations from two witnesses in the Ukraine, namely the director of Ukr-eksimtrans, the truckingcompany which transported the cargo from the Port of Odessa to the warehouse at Kiev, and the manager of that warehouse. Declaration of A.M. Komarov, Dkt. # 69; Declaration of B.V. Semenchenko, Dkt. # 70. Both state in their declarations that no damage to the shipment occurred during their companies’ handling of the cargo; neither during transport from Odessa to Kiev, nor during warehousing in Kiev; and no damage to the cargo inside the container was observed until it was opened by customs officials. Id. Specifically, the director of the truckingcompany states that

 

[o]n or about June 27, 2008, Ukr-eksimtrans received container CAXU 4866960 (“the Container”) at the Odessa Commercial Sea Port for surface carriage and delivery in Kiev, Ukraine.

 

The surface transportation of the Container and all subsequent activities while the Container was within Ukr-eksimtrans’ custody proceeded normally and without incident or mishap through delivery of the container to a warehouse operated by Global Logistics. No damage was inflicted to the Container or its contents while the Container was within Ukr-eksimtrans’ custody on June 27, 2008 and June 28, 2008.

 

No reports of any mishap were issued by Ukr-eksimtrans or its personnel. If damage or any other mishap had transpired while the container was within Ukr-eksimtrans’ custody, a report would have been issued in accordance with our standard operating procedure. No such reports were issued.

 

Declaration of B.V. Semenchenko, Dkt. # 70, ¶¶ 2-4.

 

Similarly, the manager of Global Logistics, the warehouse, states,

 

On or about June 28, 2008, Global Logistics received container CAXU 4866960 (“the Container”) from truckingcompany Ukr-eksimtrans at Global Logistics warehouse facility located in Kiev, Ukraine

 

The storage of the Container and all subsequent activities while the Container was within Ukr-eksimtrans’ [sic] custody proceeded normally and without incident or mishap between June 28, 2009[sic] and June 30, 2008. No damage was inflicted to the Container or its contents while the Container was within Global Logistics’ custody.

 

No reports of any mishap were issued by Global Logistics or its personnel. If damage or any other mishap had transpired while the container was within Global Logistics’ custody, a report would have been issued in accordance with our standard operating procedure. No such reports were issued.

 

While the Container was at the Global Logistics warehouse in Kiev, Ukrainian customs officials opened the container on June 30, 2008 in my presence and the presence of personnel from Sheet & Mech. At that time, we discovered that the Container’s contents were damaged.

 

Declaration of A..M. Komarov, Dkt. # 69, ¶¶ 2-5.

 

Plaintiff has also filed a declaration of Daniel Johnson, Technical Sales Manager for Stuc-O-Flex International, Inc., the company that loaded the container. Mr Johnson reviewed the company’s records for loading of the container, and reviewed photographs of the condition of the container’s contents when it was opened in Kiev. Mr. Johnson states that in his capacity as Technical Sales Manager, he is “familiar with the weight and dimension characteristics of the cargo.” Declaration of Daniel Johnson, Dkt. # 68, ¶ 4. He further states that he is “knowledgeable based on experience with the force that would be required to move the 21 tons of freight within the container to the degree demonstrated in post-delivery photographs.” Id. He then concludes,

 

The movement and damage depicted in the post-delivery photographs could only have been caused by a tremendous force inconsistent with road transit absent an accident sufficient to severely damage the truck. Historically road transit shipments never encounter this type or severity of damage.

 

It is not surprising that no outside damage to the container was noted at the Port of Odessa or elsewhere before delivery to the purchaser. No outside impact to the container would be necessary to cause this damage. Rather, it could have been caused by its back end falling downwards while its front end remained suspended, or similar mechanism while being loaded on to or unloaded off from the ocean carrying vessel.

 

Id., ¶¶ 5, 6.

 

Defendant has moved to strike Mr. Johnson’s testimony in ¶¶ 2, 4, and 5 of his declaration as representing expert opinion which he is not qualified to give, and ¶ 6 as pure speculation. Mr. Johnson was never identified as an expert witness and he has never been qualified as such. The foundation for his opinions regarding forces within the container has not been stated. He was not personally present at either the loading or the unloading of the container, so he cannot testify from personal experience. His speculative statement that the damage could have occurred by “the back end falling downward” is contrary to the opinion of the expert who actually examined the cargo and found that the damage resulted from falling or braking, either of which caused excessive tipping of the container toward the front wall, not backwards. Further, the Court notes that Mr. Johnson’s declaration omits the fact observed by the expert in Kiev, that the container was not filled to capacity. This would be an important factor in the assessment of forces necessary to cause the damage.

 

The Court finds that Mr. Johnson is not qualified as an expert and his opinions represent mere speculation. Defendant’s motion to strike ¶¶ 2, 4, 5, and 6 of his declaration shall accordingly be GRANTED.

 

The remaining declarations filed by plaintiff fail to meet the burden under COGSA of demonstrating that the cargo was received in good condition by Trans-Net and discharged in a damaged condition. American Home Assur. Co. v. American President Lines, Ltd., 44 F.3d at 777. Since no one opened the container and inspected the cargo at the container yard at the Port of Odessa, where the container was discharged from Trans-Net’s care, there is no evidence whatsoever that the damage was present at that time. The declarations of the truckingcompany manager and warehouse manager fail to create a genuine factual issue as to that crucial point. As plaintiff’s failure to demonstrate that the cargo was discharged in damaged condition means that it has failed to make a prima facie case under COGSA, summary judgment shall be granted as to this claim.

 

The declaration of the truckingcompany manager also fails to conclusively establish that no hard braking event occurred during transport of the container from Odessa to Kiev, as it is not based on personal knowledge but simply a review of the records. However, the Court’s ruling on summary judgment is based solely on the absence of evidence of any damage at the time of discharge, not on the absence of evidence regarding what might have occurred later. The Court declines to apply the “Last Carrier Rule” as suggested by defendant. This maritime rule establishes a presumption of liability upon the last carrier when a through bill of lading is issued. The Madow Company v. S.S. Liberty Exporter, 569 F.2d 1183, 1186 (2nd Cir.1978). A through bill of lading is a single document governing the transshipment of goods through the hands of more than one common carrier. See, e.g., AIG Europe, S.A. v. M/V MSC Lauren, 940 F.Supp. 925 (E.D.Va., 1996). The truckingcompany here was not on a through bill of lading.

 

Summary judgment shall also be granted as to plaintiff’s claim under general maritime tort law. Defendant asserts that this claim is preempted by COGSA and plaintiff has not argued otherwise.

 

CONCLUSION

 

Defendant’s motion for summary judgment (Dkt.# 63) is GRANTED and this action is DISMISSED. The Clerk shall enter judgment in favor of defendant in this matter.

United States District Court,

W.D. Pennsylvania.

BROCIOUS TRUCKING, INC., Plaintiff,

v.

BFL, INC., et al., Defendants.

Civil Action No. 09-741.

 

Feb. 11, 2010.

 

MEMORANDUM AND ORDER

 

CATHY BISSOON , United States Magistrate Judge.

 

By consent of the parties, the undersigned sits as the District Judge in this case. See Consent forms (Docs. 23 & 24).

 

I. MEMORANDUM

 

For the reasons that follow, Defendants’ Motions to Dismiss (Docs. 50 & 53) will be denied, without prejudice to Defendants’ renewal of their arguments on summary judgment, as appropriate.

 

BACKGROUND

 

In this diversity action, Plaintiff alleges that BFL, Inc. (“BFL”) and Indiana Capital & Leasing, Inc. (“Indiana Capital”) breached multiple contracts concerning their purchase of Plaintiffs’ trucking business and related assets. See generally 2d Am. Com pl. (Doc. 43) at ¶ 30-70. The Corporate Defendants made some payments under the contracts, but fell behind and eventually ceased making payments. See generally id. at ¶ 71.

 

BFL and Indiana Capital will, at times, be referred to collectively as “the Corporate Defendants.”

 

In January, 2008, the parties entered a Master Settlement Agreement (at times, “the Agreement”) to resolve all outstanding claims regarding their underlying contracts. See id. Thereafter, the Corporate Defendants failed to make payments under the Master Settlement Agreement, and Plaintiff brings breach of contract claims against the Corporate Defendants, and their sole shareholders, Terry Wallace (“Wallace”) and William M. Grojean (“Grojean”; collectively, “the Individual Defendants”). See generally id. at Count I (un-numbered in original); cf. also id. at ¶¶ 7-8 (Wallace is president of BFL and owns 45% of its stock, and Grojean owns remaining 55%) and id. at ¶¶ 9-10 (Wallace is president of Indiana Capital, and he and Grojean co-own company).

 

Plaintiff also claims that the Corporate and Individual Defendants and Riverside Transport, Inc. (“Riverside”) violated the Pennsylvania Uniform Fraudulent Transfers Act, 12 Pa. Cons.Stat. § 5101, et seq. See 2d Am. Compl. at Counts II-III. Plaintiff alleges that, shortly after the Master Settlement Agreement was entered, the Corporate and Individual Defendants transferred BFL’s assets to Riverside, a company owned by Grojean, to avoid payments under the Agreement. See generally id. at ¶¶ 100, 138. In connection with their allegations of fraud, Plaintiff also states claims against Wallace and Grojean for civil conspiracy. See id. at Count IV.

 

ANALYSIS

 

A. The Individual Defendants’ Motion to Dismiss (Doc. 50)

 

WRFIvLVPLV Wallace and Grojean first argue that they are not subject to personal jurisdiction in this Court. See Individ. Defs.’ Br. (Doc. 51) at 6-9.

 

Plaintiff avers, and the Individual Defendants do not dispute, that Wallace appeared in Pennsylvania to execute the Master Settlement Agreement. Compare 2d Am. Compl. at ¶ 26 (Agreement “w[as] negotiated and signed in the Western District of Pennsylvania”) with Aff. of T. Wallace (filed as Ex. 1 to Doc. 51) (admitting to having “contact[s] with Pennsylvania … related to this transaction”). Although Wallace attempts to invoke the “fiduciary shield” doctrine, under which individuals acting solely within corporate capacities are excused from personal jurisdiction, Pennsylvania federal courts have raised questions regarding the applicability and scope of that doctrine. See, e.g., Kontonotas v. Hygrosol Pharm. Corp., 2009 WL 3245421,& n .1 (E.D.Pa. Oct. 5, 2009) (“the fiduciary shield doctrine has never been used by Pennsylvania state courts”; “due process does not require” it; and each defendant?s “contacts with Pennsylvania [must] be assessed individually,” in light of “[the person’s] degree of control over [the corporation], and the extent to which he stood to gain personally”) (citations and internal quotations omitted); cf. also Bragg v. Linden Research, Inc., 487 F.Supp.2d 593, 602 (E.D.Pa. May 30, 2007) (“[t]he applicability of [the] so called fiduciary shield doctrine is in dispute,” and “neither the Pennsylvania Supreme Court nor the Third Circuit has squarely addressed [its] applicability”) (citations and internal quotations omitted). At a minimum, Plaintiff is entitled to discovery regarding Wallace’s contacts with Pennsylvania before the Court reaches his jurisdictional challenge. See, e.g., Masselli v. Total Luxury Group, Inc., 2008 WL 4126556,(D.N.J. Aug.29, 2008) (indicating that, despite potential application of fiduciary shield doctrine, “the interest of justice” dictated that plaintiffs should enjoy discovery regarding jurisdiction); compare also Patterson v. Olivet Int’l, Inc., 2009 WL 4722807,(W.D.Pa. Dec.2, 2009) (exception to fiduciary shield doctrine exists where “a corporate agent [is alleged to be] personally liable for torts committed in a corporate capacity”) (citation omitted) with discussions infra (addressing Plaintiff’s allegation that Wallace and Grojean participated in fraudulent transfer of BFL’s assets to Riverside).

 

Grojean’s direct contacts with the forum appear more attenuated. Cf. Aff. of W. Grojean (attached as Ex. 2 to Doc. 51) at ¶ 6 (Defendant’s contacts were limited to three visits to Pennsylvania over past twenty-five years, as agent of Riverside, none of which exceeded forty-eight hours). Nevertheless, Plaintiff alleges that Grojean, like Wallace, participated in a fraudulent transfer, and federal courts have found such conduct sufficient to confer personal jurisdiction under the “effects test.” See, e.g., Gambone v. Lite Rock Drywall, 2008 WL 2875949,(3d Cir. Jul.25, 2008) (affirming finding of personal jurisdiction where defendant participated in fraudulent conveyance, for purpose of avoiding payments owed to Pennsylvania plaintiff, thereby “expressly aim[ing]” conduct at forum) (citation to binding, published authority omitted). For all of these reasons, the Individual Defendants have not demonstrated their entitlement to dismissal at this juncture based on lack of personal jurisdiction.

 

Defense counsel next argue that Wallace and Grojean are not liable under the Master Settlement Agreement because Wallace signed the document on behalf of the Corporate Defendants, not individually. See Individ. Defs.’ Br. at 10-12. Although the Agreement generally appears to limit putative liability to the Corporate Defendants, Paragraph 26 of the Agreement, entitled “Binding Effect,” states:

 

This Agreement shall be binding on, and inure to the benefit of, all of the [p]arties hereto, as well as all of their predecessors, successors, assigns, shareholders, directors, officers, employees, agents, representatives, consultants, attorneys, heirs, executors, and administrators, as well as any corporation, partnership, or other entity into which any party hereto may merge or with which any party hereto may be consolidated or sold.

 

Master Stlmt. Agreement (attached as Ex. I to 2d Am. Compl.) at ¶ 26 (emphasis added).

 

The Individual Defendants were the sole shareholders of BFL and Indiana Capital, and Defense counsel have failed to demonstrate that the Master Settlement Agreement is free of ambiguity regarding Wallace and Groj ean’s potential liability. See generally DMP Ltd. P’ship v. Caribou Coffee Co., Inc., 2009 WL 2750257,(W.D.Pa. Aug.26, 2009) (“[a] contract is ambiguous if it is reasonably susceptible [to] different constructions,” and “ambiguous [contracts] are interpreted by the finder of fact”) (citations and internal quotations omitted).

 

Although the Court will deny Defendant Riverside’s Motion to Dismiss on independent grounds, see discussion in text, infra, Plaintiff also may argue that Riverside is liable under the Master Settlement Agreement. Compare id. at ¶ 26 (Agreement binding on Corporate Defendants, “as well as any corporation, partnership, or other entity into which [they] may merge or with which [they] hereto may be consolidated or sold” ) (emphasis added) with Def. Riverside’s Br. (Doc. 54) at 5 (“BFL is clearly out of business as a truckingcompany,” and, in December, 2008, “B FL … sold all of its assets to Riverside”).

 

The Individual Defendants next argue that Plaintiff’s contract claims cannot survive Pennsylvania’s statute of frauds regarding suretyships. See Individ. Defs.’ Br. at 12-13 (citing and quoting 33 Pa. Cons.Stat. § 3); see also generally Baron v. Pritzker, 2001 WL 1855054, n. 16 (Pa.Comm.Pls. Mar. 6, 2001) (identifying 33 Pa. Cons.Stat. § 3 as “[t]he suretyship statute of frauds”). In relevant part, the statute reads:

 

No action shall … charge the defendant … to answer for the debt or default of another, unless the agreement upon which such action [is] brought … [is] in writing, and signed by the party to be charged therewith, or [by] some other person by him authorized.

 

33 Pa. Cons.Stat. § 3 (emphasis added).

 

To the extent that Wallace and Grojean may be personally liable under the Master Settlement Agreement, Defense counsel have not demonstrated that the suretyship statute applies. Compare Packaging Eng’g, L LC v. Werzalit of America, Inc., 2008 WL 4889654, * 4 (W.D.Pa. Nov.12, 2008) (“[w]henever the main purpose and object of the promisor is, not to answer for another, but to subserve some pecuniary or business purpose of his own, involving either a benefit to himself, or damages to the other contracting party, his promise is not within the [suretyship] statute”) (citation to quoted source omitted) with Master Stlmt. Agreement at ¶ 26 (Agreement is “binding on, and inure[s] to the benefit of, all of the [p]arties[‘] … shareholders, directors, [and] officers”). The Agreement does not establish a suretyship, and the Individual Defendants have identified no legal basis for invoking 33 Pa. Cons.Stat. § 3.

 

Even if the suretyship statute somehow applies, Wallace signed the Master Settlement Agreement. See Master Stlmt. Agreement at 18. To the extent that Wallace may be personally liable, his signature satisfies the statute of frauds’ signed-writing requirement. As to Grojean, the Agreement specifically stated that the parties “represent[ed] and warrant[ed] that all necessary authorizations” were obtained in support of the Agreement. See id. at ¶ 29 (entitled, “Warranties and Representations of Authority”) (emphasis added).

 

Finally, the Individual Defendants argue that Plaintiff’s fraudulent transfer claims fail because the Pennsylvania Uniform Fraudulent Transfers Act (“PUFTA”) cannot be invoked against non-transferees. See Individ. Defs.’ Br. at 13-14; see also id. at 4 (asserting that sale of B FL to Riverside was between those two entities alone). In support of this theory, Defense counsel cites the non-binding opinion in In re Total Containment, Inc., 335 B.R. 589 (Bankr.E.D.Pa.2005). See Individ. Defs.’ Br. at 13-14.

 

The Individual Defendants’ argument fails, however, to account for other decisions contemplating putative liability against non-transferees under “piercing of the corporate veil” and/or “alter-ego” theories. In Pennsylvania, “[t]here is no definitive test for piercing the corporate veil.” Plastipak Packaging, Inc. v. DePasquale, 2003 WL 22120971,(3d Cir. Sept.12, 2003) (citation to Pennsylvania law omitted). “[T]he corporate veil may be pierced whenever necessary to avoid injustice,” and “courts apply a totality of the circumstances test.” Id. (citation and internal quotations omitted). Relevant factors include: failure to observe corporate formalities; non-payment of dividends; insolvency of the debtor corporation; siphoning of funds from the corporation by dominant shareholders; the non-functioning of other officers and directors; absence of corporate records; whether the corporation is a mere facade for the operations of a common shareholder or shareholders; and gross undercapitalization. Id. (citation to quoted source omitted).

 

Here, Plaintiff has stated sufficient veil-piercing allegations to survive a motion under Federal Rule of Civil Procedure 12(b)(6). Compare, e.g., 2d Am. Compl. at ¶¶ 11-12 (BFL and Indiana Capital were “under the complete and unchecked control” of Wallace and Grojean, “who [made] all business, binding, and day-to-day operation decisions”) with discussion immediately supra (relevant factors include “non-functioning of other officers and directors,” and “whether the corporation is a mere facade for the operations of a common shareholder or shareholders”); see also generally Orion Power Midwest, L.P. v. American Coal Sales Co., 2008 WL 4462301, * 1 (W.D.Pa. Sept.30, 2008) (“the veil-piercing test is based on a fact-intensive, multi-factor test which [often,] of necessity[,] leads to … discovery”); Grunblatt v. Unum Provident Corp., 270 F.Supp.2d 347, 352 (E.D.N.Y.2003) (veil-piercing “is typically a fact specific inquiry not amenable to resolution [on] a motion to dismiss”) (citation and internal quotations omitted).

 

Furthermore, the undersigned is persuaded by the state and federal court decisions that have left unquestioned the assertion of fraudulent transfer claims against officers/shareholders who, although not formally transferors/transferees, are alleged to be the alter-egos of their corporations. See, e.g., Fletcher-Harlee Corp. v. Szymanski, 936 A.2d 87, 102 (Pa.Super.2007) (affirming judgment entered against individual defendant, after bench trial, where defendant allegedly was liable under both PUFTA and piercing of corporate veil doctrine); Eliotex, SRL v. Riccelli, 2007 WL 2119212,(W.D.Pa. Jul.20, 2007) (individual liability alleged under PUFTA where defendants “helped [their corporations] hide assets”); In re Myers, 334 B.R. 136, 140 (E.D.Pa.2005) (addressing piercing of corporate veil where individuals transferred all assets of two corporations to another “with the intent to defraud” creditor), aff’d,491 F.3d 120 (3d Cir.2007).

 

Notably, the only decision cited by the Individual Defendants in support of dismissal, Total Containment, makes no reference to piercing the corporate veil. See id.

 

For all of the reasons stated above, the Individual Defendants have failed to demonstrate their entitlement to dismissal at this stage in the proceedings.

 

The Individual Defendants’ only other request for dismissal, regarding civil conspiracy, is based on the purported insufficiency of Plaintiff’s underlying fraud claims. See Individ. Defs.? Br. at 14-15. The Court has reached a contrary conclusion, and, therefore, Defendants’ argument regarding Plaintiff’s civil conspiracy claims is summarily rejected.

 

B. Defendant Riverside’s Motion to Dismiss (Doc. 53)

 

Riverside argues that Plaintiff has failed to plead its fraudulent transfer claims with specificity, as required under Federal Rule 9(b). See Def. Riverside’s Br. at 3-5. The Court of Appeals for the Third Circuit, however, has recognized that Rule 9(b) may be relaxed when the relevant “factual information is peculiarly within the defendant’s knowledge or control.” See EP Medsystems, Inc. v. EchoCath, Inc., 235 F.3d 865, 882 (3d Cir.2000) (citation to quoted source omitted).

 

Plaintiff alleges, among other things, that: the Individual Defendants, in combination, own both BFL and Riverside; within months of BFL entering the Master Settlement Agreement, BFL began transferring monies to Riverside; Riverside thereafter operated BFL “as an alter ego of itself”; Riverside has used Plaintiff’s assets, post-sale to BFL, in furtherance of Riverside?s business operations; the sale of BFL to Riverside has left the former unable to fulfill its financial obligations to Plaintiff; and BFL transferred its assets to Riverside to avoid payments under the Master Settlement Agreement. See 2d Am. Com pl. at ¶¶ 98-106, 119.

 

As in Medsystems, “[i]t is difficult to see how [Plaintiff] could … ple[ad] fraud or scienter with more specificity” before having the opportunity to conduct discovery. Id., 235 F.3d at 882. Plaintiff does not present “a cookie cutter complaint’ or a class action [for securities fraud] brought by shareholders with an insignificant interest” in the dispute. See id. at 881. Rather, Plaintiff has brought “an individual action, based on a transaction” that purportedly affects to its ability to collect monies due under the Master Settlement Agreement. Cf. id.

 

The heightened specificity requirements in Federal Rule 9(b) are intended to “give defendants notice of the claims against them, provide an increased measure of protection for their reputations, and reduce[ ] the number of frivolous suits brought solely to extract settlements.” Key Equity Investors, Inc. v. Sel-Leb Marketing Inc., 2007 WL 2510385,n. 5 (3d Cir. Sept.6, 2007) (citation to quoted, binding authority omitted). Plaintiff’s pleadings offend none of these principles, and Riverside’s Motion to Dismiss will be denied.

 

For essentially the same reasons stated above regarding Federal Rule 9(b), Riverside?s arguments under Twombly/Iqbal likewise are rejected.

 

Consistent with the discussions above, the Court enters the following:

 

II. ORDER

 

The Individual Defendants’ Motion to Dismiss (Doc.50) is DENIED, without prejudice to renewal on summary judgment; and Defendant Riverside’s Motion to Dismiss (Doc.53) is DENIED.

 

IT IS SO ORDERED.