2018 WL 2121523

United States District Court, E.D. Pennsylvania.
NEW LEGION COMPANY, INC., Plaintiff,
v.
Jasbir Sing THANDI d/b/a Global Hawk Insurance Company, et al., Defendants.
CIVIL ACTION NO. 18-cv-778
|
Filed 05/08/2018
Attorneys and Law Firms
Lilian Perelshteyn, Law Office of Lilian Perelshteyn, Huntingdon Valley, PA, for Plaintiff.
James A. Wescoe, Weber Gallagher Simpson Stapleton Fires & Newby LLP, Philadelphia, PA, for Defendants.

MEMORANDUM RE: MOTION TO DISMISS
Baylson, District Judge

I. Introduction
*1 On October 8, 2016, a tractor-trailer owned by Plaintiff New Legion Company, Incorporated, was involved in a trucking accident caused by Defendant Alpha Transport, Inc. Thereafter, Plaintiff filed suit against Alpha Transport; Defendant Global Hawk Insurance Company (“Global Hawk”), Alpha Transport’s purported insurer; Defendant Jasbir Singh Thandi, the owner of Global Hawk; Defendant Greet Bala Presad, the claims manager of Global Hawk; and Defendant Jim Kreason, a claims adjuster for Global Hawk, alleging the following causes of action:
I) False Designation of Origin Under the Lanham Act, 15 U.S.C. § 1125(a)
II) Violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law, 73 Pa. Cons. Stat. 201-1, et seq.; and
III) Fraud.
(Compl. ¶¶ 44-57, ECF 1.)

Defendants have now moved to dismiss the Complaint under Rule 12(b)(6) for failure to state a claim. For the reasons that follow, Defendants’ motion to dismiss is GRANTED WITHOUT PREJUDICE.

II. Background
A. The Accident
The following facts are taken as true from Plaintiff’s Complaint. Plaintiff New Legion Company, Incorporated is a Pennsylvania trucking company that hauls freight for customers in tractor-trailers. (Compl. ¶¶ 2, 20.) On October 8, 2016, Defendant Alpha Transport, Inc. caused a motor vehicle accident involving one of Plaintiff’s trailers. (Id. ¶¶ 21-22.) At the scene of the accident, Alpha Transport provided written information from Defendant Jasbir Singh Thandi, an insurance agent, stating that Defendant Global Hawk Insurance Company (“Global Hawk”) was Alpha Transport’s insurance carrier for commercial trucking motor vehicle accidents. (Id. ¶ 23.) On the basis of this information, Plaintiff was led to believe that Global Hawk was a lawful insurance carrier. (Id. ¶ 25.)

Following the accident, Defendant Jim Kreason, a claims adjuster at Global Hawk, contacted the Plaintiff about damages caused by the accident. (Id. ¶¶ 26, 28.) After some back-and-forth, on June 29, 2017, Kreason sent an e-mail to Plaintiff stating “that the amount of Plaintiff’s damages which Global Hawk Insurance Company would pay out” would be $32,000, an amount that Plaintiffs state was an “offer.” (Id. ¶¶ 29-30.) Negotiations continued, and Kreason stated in an e-mail dated August 1, 2017 that Global would not pay Plaintiff more than $32,000. (Id. ¶¶ 30-31.) To date, Plaintiff has not been paid its “acknowledged damage amount.” (Id. ¶ 32.)

B. Trademarks and Licensure
Global Hawk Insurance Company is a federally registered trademark under registration number 4665528 to Singh individually. (Id. ¶ 33.) When Global Hawk commenced business in California in 2004, a trademark application was already pending for a now-dissolved South Carolina corporation with a name and logo identical to Defendant Global Hawk’s. (Id. ¶¶ 18, 38.) This South Carolina corporation, which “became effective” on June 27, 2003 and dissolved on May 4, 2009, filed a trademark application for the name and logo with the United States Patent and Trademark Office at Serial Number 78509344. (Id. ¶ 18.) Plaintiffs assert, upon information and belief, that Global Hawk Insurance Company was a fictitious tradename that was “confusingly similar to an existing name of a lawful company in South Carolina.” (Id. ¶ 40.) Plaintiffs further assert that “[a]s a direct and proximate result of the represntations and trademark of Defendant Global Hawk Insurance Company, the public was led to believe that Global Hawk Insurance Company was a corporation duly organized to underwrite and provide insurance coverage for commercial vehicles and trucks.” (Id. at ¶ 35.)

*2 Neither Singh nor Global Hawk was a licensed insurance company in any state, although its website state that Global Hawk offers commercial auto liability and truck liability insurance coverage services. (Id. ¶ 36.) Plaintiff asserts that Defendants Alpha Transport, Presad, and Kreason knew or should have known that Global Hawk was not operating as a lawful insurance company. (Id. ¶¶ 41-42.) In August 2015, the California Department of Insurance “commenced disciplinary action” against Singh “regarding … his licensure as an insurance broker for selling Global Hawk Insurance when he was not licensed to do so.” (Id. ¶ 43.)

Plaintiff asserts that all Defendants have “acted in concert, combination or conspiracy to mislead or otherwise cause confusion to the Plaintiff that Global Hawk Insurance Company was a lawfully licensed insurance company allowed to underwrite and provide insurance coverage for the motor vehicle that involved damages to Plaintiff’s property.” (Id. ¶ 39.)

III. Procedural History
Plaintiff filed its Complaint in this Court on February 22, 2018. (Compl., ECF 1.) The Complaint asserted three causes of action:
I) False Designation of Origin Under the Lanham Act, 15 U.S.C. § 1125(a)
II) Violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law, 73 Pa. Cons. Stat. 201-1, et seq.; and
III) Fraud.
(Id. ¶¶ 44-57.)

In addition to compensatory and punitive damages and costs, Plaintiff requests injunctive relief barring use of the allegedly infringing trademark, a court order cancelling the registration of the “Global Hawk” trademark and logo to Singh, and a court order imposing an “asset freeze or constructive trust” over “all monies and profits in Defendants [sic] possession which rightfully belong to Plaintiff”; destruction of infringing articles, including termination of Global Hawk’s website. (Id. at 10-11.)

Defendants filed a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6) on March 20, 2018. (Defs.’ Mot. to Dismiss, ECF 8.) Plaintiff filed a memorandum in opposition on April 11, 2018. (Pl.’s Opp. to Defs’. Mot. to Dismiss, ECF 9.) Defendants filed a reply on April 24, 2018. (Defs.’ Reply in Support of Mot. to Dismiss, ECF 10.) The motion to dismiss is now ripe for decision.

IV Legal Standard
In considering a motion to dismiss under Rule 12(b)(6), “we accept all factual allegations as true [and] construe the complaint in the light most favorable to the plaintiff.” Warren Gen. Hosp. v. Amgen, Inc., 643 F.3d 77, 84 (3d Cir. 2011) (internal quotation marks and citations omitted). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim for relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007) ). However, the Court in Iqbal does explain that while factual allegations must be treated as true, legal conclusions do not. Id. “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. at 678 (citing Twombly, 550 U.S. at 555). When considering a motion to dismiss for failure to state a claim, a court may consider “only the complaint, exhibits attached to the complaint, matters of public record, as well as undisputedly authentic documents if the complainant’s claims are based upon these documents.” Hartig Drug Co. Inc. v. Senju Pharm. Co., 836 F.3d 261, 268 (3d Cir. 2016).

V Analysis
A. Lanham Act
Defendants asserts that Plaintiff cannot assert a claim under the Lanham Act because it has failed to plead that it sustained an injury to a commercial interest in sales or business reputation that was proximately caused by Defendants’ misrepresentations. (Defs.’ Mot. to Dismiss at 4, ECF 8.)

*3 Plaintiff, in its Complaint, alleges that the use by Defendant Global Hawk Insurance Company of the name and logo of the South Carolina company led Plaintiff and the public to believe that it was “a corporation duly organized to underwrite and provide insurance coverage for commercial vehicles and trucks,” and constituted a false designation of origin under the Lanham Act, 15 U.S.C. § 1125(a), which provides as follows:
(a) Civil action
(1) Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which—
(A) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person, or
(B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person’s goods, services, or commercial activities,
shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.
15 U.S.C. § 1125(a). The Supreme Court has explained that § 1125(a) “creates two distinct bases of liability: false association, § 1125(a)(1)(A), and false advertising, § 1125(a)(1)(B).” Lexmark Int’l, Inc. v. Static Control Components, Inc., 134 S. Ct. 1377, 1384 (2014). False association claims asserted under § 1125(a)(1)(A) are often referred to as “false designation of origin” claims, see Parks LLC v. Tyson Foods, Inc., 863 F.3d 220, 226 (3d Cir. 2017), and the Court therefore assumes that Plaintiff is proceeding under this subsection of the statute.

In Lexmark, which concerned a counterclaim by a manufacturer of parts for “remanufacturers” of toner cartridges, which in turn competed with the plaintiff, the Supreme Court addressed the requirements for stating a false advertising claim under § 1125(a)(1)(B). The court’s unanimous opinion began by noting a number of general propositions limiting the circumstances under which plaintiffs may avail themselves of a statutory cause of action such as § 1125(a)(1)(B): “the general prohibition on a litigant’s raising another person’s legal rights, the rule barring adjudication of generalized grievances more appropriately addressed in the representative branches, and the requirement that a plaintiff’s complaint fall within the zone of interests protected by the law invoked.” Id. at 1386 (quoting Elk Grove Unified School Dist. v. Newdow, 542 U.S. 1, 12 (2004) ). It identified an additional limitation, causation, later in the opinion: “we generally presume that a statutory cause of action is limited to plaintiffs whose injuries are proximately caused by violations of the statute.” Id. at 1390.

Turning to the Lanham Act, the court first reviewed what types of plaintiffs fell within the “zone of interests” protected by the statute by reviewing a separate section of the statute, 15 U.S.C. § 1127, which states, in relevant part:
The intent of this chapter is to regulate commerce within the control of Congress by making actionable the deceptive and misleading use of marks in such commerce; to protect registered marks used in such commerce from interference by State, or territorial legislation; to protect persons engaged in such commerce against unfair competition; to prevent fraud and deception in such commerce by the use of reproductions, copies, counterfeits, or colorable imitations of registered marks; and to provide rights and remedies stipulated by treaties and conventions respecting trademarks, trade names, and unfair competition entered into between the United States and foreign nations.
*4 15 U.S.C. § 1127. Because the court considered the most relevant statutory consideration in typical false advertising cases to be “protect[ing] persons engaged in [commerce within the control of Congress] against unfair competition” and the term “unfair competition” was understood at common law to injuries to sales and business reputation, the court held that “to come within the zone of interests in a suit for false advertising under § 1125(a), a plaintiff must allege an injury to a commercial interest in reputation or sales.” Lexmark, 134 S. Ct. at 1390 (2014).

The court next addressed proximate cause, construing § 1125(a) to contain a requirement of proximate cause, as it had previously done for many other statutory causes of action. Id. Whether proximate cause exists in the context of a statutory cause of action, the court explained, is essentially a question of “whether the harm alleged has a sufficiently close connection to the conduct the statute prohibits.” Id. In the context of false advertising, the court held that to state a false advertising claim, a plaintiff must allege “economic or reputational injury flowing directly from the deception wrought by the defendant’s advertising,” which “occurs when deception of consumers causes them to withhold trade from the plaintiff.” Id. at 1391. Thus, the court summarized, to state a claim under the Lanham Act for false advertising, “a plaintiff must plead … an injury to a commercial interest in sales or business reputation proximately caused by the defendant’s misrepresentations.” Id. at 1395.

Neither the Third Circuit nor this Court has addressed whether a plaintiff seeking to pursue a false association claim under § 1125(a)(1)(A) must plead an injury to commercial interest in reputation or sales, as Defendant urges is required. Several district courts, applying Lexmark, have extended the requirement of pleading both an injury to commercial interest in sales or business reputation and proximate causation to false association claims under the Lanham Act. See, e.g., UHS of Delaware, Inc. v. United Health Servs., Inc., 227 F. Supp. 3d 381, 403 (M.D. Pa. 2016); Int’l Found. of Employee Ben. Plans, Inc. v. Cottrell, No. CIV. WDQ-14-1269, 2015 WL 127839, at *3 (D. Md. Jan. 7, 2015).

Whether or not a plaintiff pursuing a Lanham Act false association claim must plead harm to a commercial interest in sales or business reputation, it is clear that, as with any statutory cause of action, such a plaintiff must plead specific facts to establish proximate causation, as plausible between the purported false association and the harm to Plaintiff, which Plaintiff did not do in this Complaint. As best this Court can gather, the only damages Plaintiff alleges are from the trucking accident, which cannot be said to have been proximately caused by Defendant Global Hawk Insurance Company’s alleged false association with the South Carolina company of the same name. The Court therefore dismisses Count I without prejudice.

B. Pennsylvania Unfair Trade Practices and Consumer Protection Law
*5 The Pennsylvania Unfair Trade Practices and Consumer Protection Law (UTPCPL) provides a private cause of action to “[a]ny person who purchases or leases goods or services primarily for personal, family or household purposes and thereby suffers any ascertainable loss of money or property, real or personal, as a result of the use or employment by any person of a method, act or practice” prohibited by Section 3 of the UTPCPL. 73 Pa. Cons. Stat. § 201-9.2 (a) (emphasis added). Thus, “[t]o establish a claim under the UTPCPL, a plaintiff must prove: (1) he or she purchased or leased goods or services; (2) the goods or services were primarily for personal, family or household purposes; and (3) the plaintiff suffered an ascertainable loss as a result of the defendant’s unlawful, deceptive act,” as well as “that the loss was caused by his or her justifiable reliance on the deceptive conduct.” Kelly v. Progressive Advanced Ins. Co., 159 F. Supp. 3d 562, 564 (E.D. Pa. 2016).

Defendants assert that because Plaintiff allegedly leased the tractor-trailer to Alpha Trucking for commercial purchases (a fact unmentioned in the Complaint) and the insurance policy at issue was for commercial trucking insurance, Plaintiff falls outside the scope of the statute because the purchase or lease was not for “personal, family or household purposes.” (Defs.’ Mot. to Dismiss at 4-5, ECF 8.) Pennsylvania courts and the Third Circuit have held that parties who made the relevant purchase or lease while for business or commercial purposes may not assert a UTPCPL claim. See, e.g., Balderston v. Medtronic Sofamor Danek, Inc., 285 F.3d 238, 242 (3d Cir. 2002) (doctor could not assert UTPCPL deceptive marketing claim for bone screws he had bought for his professional practice); Trackers Raceway, Inc. v. Comstock Agency, Inc., 400 Pa. Super. 432, 440 (1990) (plaintiff failed to state UTPCPL claim where it purchased an insurance policy “for commercial purposes only”).

It is not at all clear from the Complaint what Plaintiff, a corporation, “purchase[d] or lease[d].” Plaintiff essentially concedes in its opposition to the motion to dismiss that it is pursuing its UTPCPL claim on the basis of Defendant Alpha Transport’s purchase of the allegedly fraudulent insurance, rather than any purchase or lease of its own. See Pl.’s Opp. to Defs’. Mot. to Dismiss, ECF 9 (“it is unclear what was sold to Defendant Alpha Transport”). Moreover, Defendant is correct that Plaintiff states throughout its Complaint that the Global Hawk policy—which was issued to Alpha Transport, a Defendant in this action—was for commercial insurance. Even construing the facts as alleged in the light most favorable to Plaintiff, it cannot be said that whatever purchase or lease Plaintiff might have entered was “primarily for personal, family or household purposes,” or that Plaintiff’s loss (presumably its damages from the accident) was incurred as a result of its justifiable reliance on Global Hawk’s alleged infringing insurance. The Court therefore dismisses Count II without prejudice, with leave to amend.

C. Fraud
Defendants assert that Plaintiff has not pled fraud with sufficient particularity, as required by Rule 9(b). Plaintiff does not mention its fraud claim in its opposition to the motion to dismiss.

To state a claim for fraudulent misrepresentation under Pennsylvania law, a plaintiff must state the following:
(1) a representation; (2) which is material to the transaction at hand; (3) made falsely, with knowledge of its falsity or recklessness as to whether it is true or false; (4) with the intent of misleading another into relying on it; (5) justifiable reliance on the misrepresentation; and (6) the resulting injury was proximately caused by the reliance.
Bouriez v. Carnegie Mellon Univ., 585 F.3d 765, 771 (3d Cir. 2009). Fraudulent misrepresentation claims under Pennsylvania law must be pled with particularity under Rule 9(b). Petruska v. Gannon Univ., 462 F.3d 294, 310 (3d Cir. 2006).

*6 In its Complaint, Plaintiff stated that “[a]t the time Defendants jointly and severally, conveyed or otherwise were in contact with Plaintiff, Defendants made misleading and material misrepresentations with the intent to deceive Plaintiff into believing that Defendants were able to provide lawful insurance coverage for the motor vehicle accident that caused damages to Plaintiff’s personal property.” (Compl. ¶ 55, ECF 1.) It not clear from the Complaint what these “misleading and material misrepresentations” are, who made them, and when. At most, Plaintiff has stated that at the scene of the accident “Defendant Alpha Transport provided written information from” Singh “noting that Defendant Global Hawk Insurance Company was their insurance carrier,” and that it never received the $32,000 that Kreason offered to pay out in an e-mail of June 29, 2017. Under Rule 9(b), this is not enough. Count III is therefore dismissed without prejudice, with leave to amend.

D. Release
Defendants finally assert that the claims brought by Plaintiff are barred by a release purportedly executed between the parties, which Defendants have attached to their motion to dismiss. (Release, Ex. A to Defs.’ Mot. to Dismiss, ECF 8-1.) When considering a motion to dismiss for failure to state a claim, a court may consider “only the complaint, exhibits attached to the complaint, matters of public record, as well as undisputedly authentic documents if the complainant’s claims are based upon these documents.” Hartig Drug Co. Inc. v. Senju Pharm. Co., 836 F.3d 261, 268 (3d Cir. 2016). Defendants fail to establish that the release attached to Defendants’ motion to dismiss qualifies as one of these, and the Court declines to dismiss the Complaint on this ground.

VI Conclusion
Defendants’ motion to dismiss is hereby GRANTED WITHOUT PREJUDICE. An appropriate order follows.

All Citations
Slip Copy, 2018 WL 2121523

2018 WL 2230412

United States District Court, M.D. Pennsylvania.
NATIONAL SPECIALTY INSURANCE COMPANY, Gemini Insurance Company, JWB Logistics Corp., TMD Logistics Corp., and T.B. Choya Express, Inc., Plaintiffs,
v.
TUNKHANNOCK AUTO MART, INC., Defendant.
CIVIL ACTION NO. 3:16-CV-00268
|
Signed 05/16/2018
Attorneys and Law Firms
James Decinti, Pion, Nerone, Girman, Winslow & Smith PC, Harrisburg, PA, John T. Pion, Pion Nerone Girman Winslow & Smith, P.C., Pittsburgh, PA, for Plaintiffs.
Rebecca M. Cantor, William E. Schaefer, Hendrzak & Lloyd, Center Valley, PA, for Defendant.

MEMORANDUM
A. Richard Caputo, United States District Judge
*1 Presently before this Court is a Motion for Summary Judgment filed by Defendant Tunkhannock Auto Mart, Inc. (“TAM”). (Doc. 52). While Plaintiffs’ contribution claim does not rise and fall on the liability assessment of Jesse Prebola, the original plaintiff, TAM is not a joint tortfeasor liable for contribution because TAM did not owe a duty of care to drivers on State Route 29. For this reason, TAM’s Motion for Summary Judgment will be granted.

I. Background
A. The Accident
On October 27, 2010, Thomas W. Punko (“Punko”), a non-party, was driving a tractor trailer on State Route 29 in Eaton Township, Pennsylvania. (Defendant’s Statement of Material Facts (“DSMF”), at ¶¶ 1,3.) Punko was making a delivery to Defendant TAM on behalf of Plaintiffs JWB Logistics Corp. and TMD Logistics Corp. (DSMF, at ¶ 5.) Pursuant to delivery instructions provided to Punko by TAM, Punko was to “pull into the Tunkhannock lot [tractor first], turn around in the rear of the building, and pull out of the parking lot in a forward facing position after making [the] delivery.” (DSMF, at ¶ 9; Plaintiffs’ Statement of Material Facts (“PSMF”), at ¶ 9.) As he had on prior occasions, Punko ignored these instructions. Instead, Punko decided to back into the lot. (DSMF, at ¶ 13.) To do so, Punko positioned the tractor in the center turning lane of State Route 29 facing south and positioned the trailer across the northbound travel lane facing the lot entrance. (DSMF, at ¶¶ 17-18.) In other words, to back up into TAM’s parking lot Punko was required to block the entire northbound lane of State Route 29. (Id.)

Punko noticed headlights approaching his position as he began to back the trailer into the parking lot. (DSMF, at ¶ 19.) Assuming the driver of the car would notice the stopped truck, Punko stopped moving. (DSMF, at ¶ 20.) Unfortunately, the car did not stop and the driver, Jesse Prebola, was seriously injured. Notably, the collision occurred entirely on the northbound travel lane of State Route 29. (DSMF, at ¶ 22.)

As a result of this collision, Deborah Prebola, as guardian of Jesse Prebola, filed a civil suit in Luzerne County (“Prebola Action”) against a number of entities including the instant parties.

B. Settlement
On April 16, 2013, the parties in the Prebola Action participated in a mediation which led to the full and final settlement of Prebola’s claims. (DSMF, at ¶ 31.) At the mediation, Plaintiffs National Specialty Insurance Company and Gemini Insurance Company, on behalf of their insureds–JWB, TMD, and TB Choya—paid the entire settlement amount accepted by Prebola. (PSMF, ¶ 34, Ex. I.) TAM did not contribute to the settlement amount. (Id.) In part, this was because Prebola did not believe that it had a viable claim against Tunkhannock: “there does not appear to be any evidence that the employees of Tunkhannock Auto Mart contributed in any way to the happening of this collision.” (DSMF, at ¶ 32.) Notably, no settlement demand was ever made against TAM. (DSMF, at ¶ 33.)

On May 17, 2013, Prebola signed a Settlement and Release Agreement under which Prebola received a settlement payment of $6,900,000.00 in exchange for releasing all claims against all parties arising out of the accident. (PSMF, at ¶ 34, Ex. I.) While Prebola signed a general release, it is important to note that Tunkhannock never requested inclusion on any release. (DSMF, at ¶ 35.) At this time, Prebola repeated that Tunkhannock was “not contributing toward settlement” because there was “not a reasonable claim against Tunkhannock” as “they had given proper instructions to all of the drivers as to how they should access the premises, and those instructions were, in fact, ignored.” (DSMF, at ¶ 36.)

*2 On June 7, 2013, Prebola executed an Addendum to the Settlement and Release Agreement. The Addendum states in part: “At the time of the Mediation it was fully contemplated by all parties and counsel in attendance that, while the claims of Plaintiffs were being settled, the rights of the settling Defendants as against the non-settling Defendant [TAM] for contribution and or indemnification were being preserved.” (PSMF, at ¶ 34, Ex. J.)

C. Procedural History
On February 16, 2016 Plaintiffs filed a Complaint against TAM for contribution to the settlement detailed above. (Doc. 1.) Plaintiffs filed an Amended Complaint on March 3, 2017. (Doc. 24.) TAM moved to dismiss the Amended Complaint, but that Motion was denied. (Doc. 34.)

Following TAM’s failure to have this action dismissed, it filed a Third-Party Complaint against all other non-contributing defendants in the Prebola Action. (Doc. 37.) This Complaint was dismissed. (Doc. 49.)

TAM has filed a Motion for Summary Judgment. (Doc. 52.) This Motion has been fully briefed and is now ripe for review.

II. Legal Standard
Summary judgment shall be granted “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). “A court may grant a motion for summary judgment if, after it considers all probative materials of record, with inferences drawn in favor of the non-moving party, the court is satisfied that there are no genuine issues of material fact and the movant is entitled to judgment as a matter of law.” Chavarriaga v. N.J. Dep’t of Corrs., 806 F.3d 210, 218 (3d Cir. 2015) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 330 (1986); Brooks v. Kyler, 204 F.3d 102, 105 n.5 (3d Cir. 2000) ). “A fact is ‘material’ under Rule 56 if its existence or nonexistence might impact the outcome of the suit under the applicable substantive law. A dispute over a material fact is ‘genuine’ if ‘a reasonable jury could return a verdict for the nonmoving party.’ ” Santini v. Fuentes, 795 F.3d 410, 416 (3d Cir. 2015) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) ). “In determining whether the dispute is genuine, the court’s function is not to weigh the evidence or to determine the truth of the matter….” American Eagle Outfitters v. Lyle & Scott Ltd., 584 F.3d 587, 581 (3d Cir. 2009) (citing Anderson, 477 U.S. at 248-49).

The moving party bears the initial burden to identify “specific portions of the record that establish the absence of a genuine issue of material fact.” Santini, 795 F.3d at 416 (citing Celotex, 477 U.S. at 323). If this burden is satisfied by the movant, the burden then “shifts to the nonmoving party to go beyond the pleadings and ‘come forward with specific facts showing that there is a genuine issue for trial.’ ” Id. (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) ). The non-movant’s burden is not satisfied by “simply show[ing] that there is some metaphysical doubt as to the material facts.” Chavarriaga, 806 F.3d at 218.

III. Discussion
A. Pennsylvania Uniform Contribution Among Tortfeasors Act:
Under Pennsylvania law, contribution is only available among joint tortfeasors. EQT Prod. Co. v. Terra Servs., LLC, 179 F. Supp. 3d 486, 493 (W.D. Pa. 2016). The Pennsylvania Uniform Contribution Among Tortfeasors Act (“the Act”), 42 Pa. Cons. Stat. Ann. §§ 8321-8327, defines joint tortfeasors as “two or more persons jointly or severally liable in tort for the same injury to persons or property, whether or not judgment has been recovered against all or some of them.” Id. § 8322. Parties may be found jointly liable for an injury “if their conduct ‘causes a single harm which cannot be apportioned … even though [the actors] may have acted independently.’ ” Mattia v. Sears, Roebuck & Co., 531 A.2d 789, 791 (Pa. Super. Ct. 1987) (quoting Capone v. Donovan, 480 A.2d 1249, 1251 (Pa. Super. Ct. 1984) ). “In other words, a party can establish the joint tortfeasor relationship by showing either that both parties acted together to commit the wrong, or that the parties’ independent acts caused a single injury.” U.S. Small Bus. Admin. v. Progress Bank, No. Civ.A. 03-3461, 2004 WL 2980412, at *10 (E.D. Pa. Dec. 22, 2004). The burden is on the party seeking contribution to establish a joint tortfeasor relationship. See id.

*3 In addition to demonstrating the existence of a joint tortfeasor relationship, a party seeking contribution must further demonstrate that it is entitled to seek contribution under the Act. When settlement occurs before the original plaintiff has proven his case at trial, a settling tortfeasor may seek contribution from a non-settling party if the settling tortfeasor: (1) demonstrates that he and the non-settling party are joint tortfeasors with respect to the original plaintiff, (2) has discharged the common liability or paid more than his pro rata share, and (3) has extinguished the liability of the non-settling joint tortfeasor to the original plaintiff by virtue of the settlement. Swartz v. Sunderland, 169 A.2d 289, 291 (Pa. 1961); see 42 Pa. Cons. Stat. Ann. § 8324; see also Progress Bank, 2004 WL 2980412, at *10-*11; Nationwide Mut. Ins. Co. v. Phila. Elec. Co., 443 F. Supp. 1140, 1143 (E.D. Pa. 1977); Mattia, 531 A.2d at 791 (explaining that when a party seeks contribution in a separate action against a purported joint tortfeasor, it “must stand in the shoes of th[e] original plaintiff and prove that the new defendant was a joint tortfeasor in that his tortious conduct also caused the harm at issue”). Furthermore, the settling tortfeasor must prove that the settlement figure was reasonable. Nationwide Mut. Ins. Co., 443 F. Supp. at 1143.

“A joint tortfeasor’s right to contribution is distinct from the original action.” Pa. Nat’l Mut. Cas. Ins. Co. v. Nicholson Constr. Co., 542 A.2d 123, 126 (Pa. Super. Ct. 1988). “The right of contribution is an equitable principle based on the understanding that ‘as between the two tort-feasors [ ] contribution is not a recovery for the tort but the enforcement of an equitable duty to share liability for the wrong done.’ ” Progress Bank, 2004 WL 2980412, at *10 (quoting Puller v. Puller, 110 A.2d 175, 177 (Pa. 1955) ); see also In Re Reading Co., 404 F. Supp. 1249, 1251 (E.D. Pa. 1975) (noting it is “well-settled that in Pennsylvania recovery under the Uniform Contribution [Among Tortfeasors] Act is a recovery in assumpsit or contract rather than in tort”). At bottom, the Act recognizes that “[s]o long as the party seeking contribution has paid in excess of his or her share of liability, it would be inequitable … to deny that party’s right to contribution from a second tortfeasor who also contributed to the plaintiff’s injury.” Svetz v. Land Tool Co., 513 A.2d 403, 407 (Pa. Super. Ct. 1986).

B. Plaintiffs’ Claims Were Not Abandoned:
TAM argues that its Motion for Summary Judgment should be granted because Plaintiffs have failed to satisfy the third requirement under the Act; the settlement did not extinguish a joint liability. To that end, TAM contends that the April 2013 settlement did not extinguish any liability relative to it because “the Prebolas had abandoned any claims against [it.]” (Doc. 53, at 10.) While the statements1 made by Prebola do suggest he abandoned his claim against TAM, that alone does not preclude the instant Plaintiffs from seeking contribution from TAM.

TAM’s argument is without merit because the instant Plaintiffs’ right to contribution does not rise and fall on the original plaintiff’s liability assessment. Instead, following a settlement with a general waiver, contributing defendants have a right to be fully heard on the merits as they attempt to seek contribution from those parties who did not contribute to the settlement. To hold otherwise would prevent a settling party from ever seeking contribution from a joint tortfeasor not named in the original action. This outcome has been rejected by the Pennsylvania Supreme Court. Swarts, 403 Pa. at 226 (“[T]he Uniform Act intends that a case involving joint tortfeasors may be fully heard on the merits, without regard to the position of any of the parties as original defendants or otherwise.”); see also Castillo v. Roger Const. Co., 560 F.2d 1146, 1151 (3d Cir. 1977) (explaining that the Pennsylvania Supreme Court “specifically contemplated litigation in a contribution action over the non-settling tortfeasors liability to the victim.”) Further, the non-settling defendant is not prejudiced in such litigation because “they [ ] still have their day in court with full opportunity to defend against liability and the reasonableness of the amount paid in settlement of the existing claim.”

*4 Therefore, Prebola’s liability assessment will not bind the instant Plaintiffs. Accordingly, TAM’s request for summary judgment on this issue will be denied.

C. Defendant Is Not A Joint Tortfeasor
The Prebola Action, for which Plaintiffs now seek contribution, asserted a negligence claim. It is well settled that a negligence claim requires a plaintiff to show: (1) defendant owed plaintiff a duty of care; (2) defendant breached that duty of care; (3) defendant’s breach caused plaintiff’s injury; and (4) the breach yielded cognizable damages. See, e.g., R.W. v. Manzek, 585 Pa. 335, 346 (2005). In an action for contribution, the contribution-seeking defendant must stand in the shoes of the original plaintiff. See Mattia, 531 A.2d at 791. Stated differently, the instant Plaintiffs must show that TAM was liable to Prebola by establishing the common law elements of negligence. TAM argues that the Plaintiffs’ contribution action must fail because TAM did not owe a duty of care to the injured party, Jesse Prebola. TAM reasons that it did not owe a duty of care to Prebola because it is undisputed that the accident occurred on a state-owned property.

The law in Pennsylvania is clear, “owners of property abutting state highways are not liable to pedestrians or motorists who are injured on the highway.” Newell v. Mont. West, Inc., 154 A.3d 819, 823 (Pa. Super. Ct. 2017). In Allen v. Mellinger, 156 Pa. Commw. 113 (Pa. Commw. Ct. 1993), a plaintiff was injured when her vehicle collided with a truck while it was attempting to make a left turn from a public highway into the parking lot of the defendant’s store. The site where the plaintiff stopped to turn was a dangerous location where several accidents had previously occurred. 156 Pa. Commw. at 115. Nonetheless, the highway was marked with broken double yellow lines indicating that it was an appropriate place to turn. Id. The plaintiff alleged that the defendants breached their duty of care by failing to warn her of the dangerous condition of the road. Id. The court concluded that the defendants, “as abutting landowners, owed no duty to [the plaintiff], … to maintain a public highway in a safe condition.” Id. at 117. The court also observed that it was the exclusive responsibility of the Commonwealth, not private landowners such as the defendants, to erect signs or paint lines indicating where it was safe to turn. Id. at 119 n.6.

The Restatement Second of Torts is similarly instructive. Specifically, § 349 of the Restatement states:
A possessor of land over which there is a public highway or private right of way is not subject to liability for physical harm caused to travelers upon the highway or persons lawfully using the way by his failure to exercise reasonable care:
(a) to maintain the highway or way in safe condition for their use, or
(b) to warn them of dangerous conditions in the way, which although not created by him, are known to him and which they neither know nor are likely to discover.
To date, the Pennsylvania Supreme Court has not explicitly adopted this section of the Restatement, but a number of cases in Pennsylvania have cited this section with approval. For example, in Fazio v. Fegley Oil Co., 714 A.2d 510 (Pa. Commw. Ct. 1998), the plaintiff was injured when she slipped and fell on ice in a public alleyway, which was adjacent to a store operated by the defendants. Id. at 511. The plaintiff alleged that the defendants were liable for her injuries because the contours of their land caused the unreasonable runoff of water into the alleyway. Id. The court disagreed and reaffirmed that under § 349 and Allen, landowners whose property abuts public ways owe no duty to travelers on those thoroughfares. Id. at 514. Further, in Walinsky v. St. Nicholas Ukrainian Catholic Church, 740 A.2d 318 (Pa. Commw. Ct. 1999), the Commonwealth Court again followed § 349. This time it held that a church could not be held liable for injuries sustained by a pedestrian when she slipped on ice while crossing a public street on her way to the church. Id. at 320. Federal courts within the Third Circuit and the Pennsylvania Superior Court have also positively cited Allen and § 349. See, e.g., Garlick v. Trans. Tech Logistics, Inc., 636 Fed.Appx. 108, 114 n.13 (3d Cir. 2015); Cruet v. Certain-Teed Corp., 432 Pa. Super. 554, 561-62 (Pa. Super Ct. 194); Rosas v. O’Donoghue, No. 3-5071, 2005 WL 1993846, at *3-4 (E.D. Pa. Aug. 17, 2005) (collecting cases interpreting § 349).

*5 Here, it is undisputed that the accident occurred wholly on a state-owned highway and not on TAM’s property. Thus, when viewed through the lens of Allen and § 349, one must conclude that TAM did not owe a duty to drivers on State Route 29. Therefore, the instant Plaintiffs, standing in the shoes of Jesse Prebola, cannot establish the requisite elements of a negligence claim. For this reason, TAM is owed judgment in its favor.

IV. Conclusion
For the above stated reasons, TAM’s Motion for Summary Judgment will be granted and judgment will be entered in its favor and against the instant Plaintiffs.

An appropriate order follows.

All Citations
Slip Copy, 2018 WL 2230412

Footnotes

1
For example, prior to the start of mediation, Prebola’s counsel remarked:
“based on the testimony of Mr. Punko we felt compelled to join [TAM] as a defendant in this matter, but based on the subsequent discovery and deposition testimony, we must candidly admit that there does not appear to be any evidence that the employees of Tunkhannock Auto Mart contributed in any way to the happening of this collision.” Further, counsel explained that while TAM was named as a defendant in the action they were “not contributing towards the settlement …, because the Prebolas were satisfied that there was no reasonable claim against [TAM.]”