Opinion
CIVIL ACTION No. 03-CV-1825
January 16, 2004
MEMORANDUM AND ORDER
Presently before the Court is a Motion to Dismiss and for Judgment on the Pleadings filed by Defendant Royal Chevrolet-Oldsmobile-Pontiac-Buick, Inc. ("Royal Chevrolet") requesting dismissal of Plaintiff David Sutton's ("Plaintiff") claims made under the Federal Magnuson-Moss Warranty Improvement Act, Pennsylvania Unfair Trade Practices and Consumer Protection Law, Uniform Commercial Code, and further seeking punitive damages. In the Complaint, Plaintiff, a purchaser of a van from a selling dealership, Royal Chevrolet, alleges,inter alia, that Royal Chevrolet breached its duties to exercise due care and to repair the van in a skilled and workmanlike manner, that the van's defects and nonconformities constitute a breach of Royal Chevrolet's contractual and statutory obligations, and that an award of punitive damages is warranted. Royal Chevrolet answers that, although Plaintiff may have had a valid claim against it at one time, Plaintiff's claims are now barred by a Settlement and Release Agreement (the "Release") that Plaintiff executed in settlement of a previous suit filed in the Philadelphia Court of Common Pleas (the "Common Pleas suit"). In light of the Release, Royal Chevrolet seeks dismissal of Plaintiff's Complaint and also asks that this Court sanction Plaintiff pursuant to Federal Rule of Civil Procedure 11 as it alleges Plaintiff's Complaint is frivolous, vexatious, and filed in bad faith. For the following reasons, Royal Chevrolet's Motion to Dismiss and for Judgment on the Pleadings is DENIED.
I. BACKGROUND
On or about August 22, 2001, Plaintiff purchased a new 2000 Chevrolet Express Conversion van (the "van"), Vehicle Identification Number 1GBFG15M1Y1208647. (Compl. ¶ 4.) As reflected by an invoice, Royal Chevrolet purchased the van from Glaval Corporation ("Glaval") before selling it to Plaintiff. (Compl. Ex. C.) Plaintiff avers that Royal Chevrolet took possession of the van on or about March 29, 2000, sixteen months prior to Plaintiff's purchase. (Compl. Ex. C.) Plaintiff contends that Royal Chevrolet received correspondence from Glaval that Glaval ceased operations three months before Plaintiff's purchase, and that at the time of purchase, despite such prior knowledge of Glaval's ceased operations, Royal Chevrolet represented to Plaintiff that the van was warranted by both General Motors Corporation ("GM") and Glaval. (Compl. ¶ 8.; Pl.'s Mem. in Support of Resp. to Def.'s Mot. at 1-2.)
Glaval's exact business relationship with Royal Chevrolet is not clear. Plaintiff contends that he was made to believe that both GM and Glaval were warrantors of the van.
Plaintiff alleges that problems arose with the van shortly after taking possession of it, so Plaintiff brought it to Royal Chevrolet for automotive service. (Compl. ¶ 9.) Plaintiff further contends that although some of the repairs were covered by GM's warranty, those repairs not covered by GM's warranty would have been covered by Glaval's warranty. (Compl. ¶ 10.) Plaintiff avers that upon taking the van to Royal Chevrolet for service, he learned that repair of certain allegedly defective parts that should have been covered by Glaval's warranty would not be covered because Glaval had ceased operations. (Compl. ¶ 10; Pl.'s Mem. in Support of Resp. to Def.'s Mot. at 2.)
Based in part on the van's allegedly ineffectively repaired parts and unfulfilled warranties, on March 8, 2002, Plaintiff commenced a lawsuit against GM and Glaval in the Philadelphia Court of Common Pleas, captioned, David Sutton v. General Motors Corporation and Glaval Corporation, March Term, 2002 No. 2323, (the "Common Pleas suit"). (Def. Mot. To Dismiss Ex. C.) The Court of Common Pleas scheduled the suit for arbitration, but before the arbitration hearing, Plaintiff signed the Release which resolved all claims between the parties to that suit. (Def. Mot. To Dismiss Ex. F.) The Court of Common Pleas approved the Release by entering an Order to Settle, Discontinue and End the matter before that court. (Def. Mot. To Dismiss Ex. E.)
On March 26, 2003, about a year after initiating the Common Pleas suit, Plaintiff initiated this diversity action by filing a Complaint against Royal Chevrolet only, based upon circumstances surrounding his purchase and Royal Chevrolet's subsequent repairs of the van. (See Compl.) Royal Chevrolet filed its Answer to Plaintiff's Complaint and asserted,inter alia, the affirmative defense of release based upon the aforementioned Release. (Answer Sixth Defense; See Answer Ex. A.)
In the instant motion, Royal Chevrolet contends that the Court need only look to the Release's plain language to dismiss Plaintiff's Complaint because Plaintiff drafted, and contracted for, the Release in such a way as to clearly and unambiguously release and discharge Royal Chevrolet from every claim made by Plaintiff in this matter. In the alternative, Royal Chevrolet argues that Plaintiff's claims are barred by paragraph one of the Release, which provides for the release of any claims "alleged in or to be inferred from" allegations set forth in the Court of Common Pleas suit. (Def.'s Mot. to Dismiss ¶¶ 23-24;See Answer Ex. A.)
II. STANDARD OF REVIEW
As a federal court sitting in diversity, we must adjudicate the case in accordance with applicable state law. Erie Railroad v. Tompkins, 304 U.S. 64, 78 (1938); Nationwide Mut. Ins. Co. v. Cosenza, 258 F.3d 197, 202 (3d Cir. 2001). The parties do not dispute that Pennsylvania law governs the substance of this dispute. Procedurally, however, this case is governed by federal law. Hanna v. Plumer, 380 U.S. 460, 473-74 (1965).
Federal Rule of Civil Procedure 12(c) provides that "[a]fter the pleadings are closed but within such time as not to delay the trial, any party may move for judgment on the pleadings." Fed.R.Civ.P. 12(c). The Court must review a Rule 12(c) motion under the same standard as a motion to dismiss pursuant to Rule 12(b)(6), by accepting the nonmovant's well-plead averments of fact as true and viewing all inferences in the light most favorable to the nonmoving party. Jablonski v. Pan American World Airways, Inc., 863 F.2d 289, 290-91 (3d Cir. 1988); Society Hill Civic Assoc. v. Harris, 632 F.2d 1045, 1054 (3d Cir. 1980); Abbdulaziz v. City of Philadelphia, Civ. A. No. 00-5672, 2001 U.S. Dist. LEXIS 16972, at *4 (E.D. Pa. Oct. 18, 2001). Judgment on the pleadings is appropriate only when the movant establishes, on the face of the pleadings alone, that he is entitled to judgment as a matter of law and "that no material issue of fact remains to be resolved" in order to ensure that "the rights of the nonmoving party are decided as fully and fairly on a rule 12(c) motion, as if there had been a trial." Society Hill Civic Assoc., 632 F.2d at 1054 (citations omitted); Saudi Basic Indus Corp. v. ExxonMobile Corp., 194 F. Supp.2d 378, 390 (D.N.J. 2002) (citations omitted); Pellegrino Food Products Co. v. City of Warren, 136 F. Supp. 391, 399 (W.D. Pa. 2000).
III. DISCUSSION
A. The Pleadings Before the Court
Pursuant to Federal Rule of Civil Procedure 10, a copy of an instrument attached as an exhibit to a pleading is considered a part of that pleading for all purposes. Fed.R.Civ. R. 10(c). Thus, in determining the Motion to Dismiss, the Court will consider any of the pleadings, including the Complaint, the Answer, and any written instruments attached to them.
Attached as an exhibit to Royal Chevrolet's Answer, the Release cites to the pleadings in the Common Pleas suit as a source of some, but not all, of the specific allegations Plaintiff is barred from asserting as the basis for future claims. Thus, the Release must be read in tandem with the complaint in the Common Pleas suit to fully understand the intent of the parties and the scope of the claims released. That the Release references the complaint in the Common Pleas suit as illustrative of the scope of claims released, the complaint shall be deemed incorporated by reference into Royal Chevrolet's Answer. See Pension Benefit Guaranty Corporation v. White Consolidated Industries, 998 F.2d 1192, 1196 (3d Cir. 1993).
Defendant's Answer asserts the defense of release and attaches the Release that by its terms relies on the substance of Plaintiff's complaint in the Common Pleas suit, thus, Plaintiff shall be imputed with notice that these documents may be considered in this Motion to Dismiss and for Judgment on the Pleadings.
Whereas both the Release and the complaint in the Common Pleas suit are written instruments either attached to, or incorporated by reference within, Royal Chevrolet's Answer, pursuant to Rule 10, these documents are properly a part of the Answer and this Motion need not be converted to one for summary judgment. B. The Language of the Release The language of the Release provides, in pertinent part:
The survival of Plaintiff's Complaint before this Court turns on an interpretation of the Release and the Common Pleas complaint read together. Thus, even if Plaintiff's Common Pleas complaint was not incorporated by reference within Royal Chevrolet's Answer, which it is, the Court may consider it because the content thereof is undisputed and the strength of Plaintiff's instant allegations hinges on the content therein. See CitiSteel USA, Inc. v. GE, 78 Fed. Appx. 832, 835 (3d Cir. 2003); see also Ackah v. Hershey Foods Corp., 236 F. Supp.2d 440, 443 (M.D. Pa. 2002).
Public records may also be considered in a motion for judgment on the pleadings without converting it to a motion for summary judgment. See Pension Benefit Guaranty Corporation 998 F.2d at 1197. Since pleadings filed with a court are accessible to the public without qualification and the public can rely on their authenticity, the complaint in the Court of Common Pleas suit shall be considered a public record that is properly before this Court in deciding this instant Motion for Judgment on the Pleadings. Id.
David R. Sutton [Plaintiff] . . . (Hereinafter referred to as "Releasor") . . . in consideration of payment by General Motors Corporation (hereinafter referred to as "Releasee") . . . does . . . hereby release and discharge Releasee, . . . and all other persons, firms or corporations, who are or might be claimed to be liable, of and from any and every claim, demand, right or cause of action for the recovery of damages including, but not limited to those for diminution in value, repair costs, or any other economic or non-economic injuries, losses, breach of warranty and/or damages including any claims for consequential or incidental damages and/or punitive damages, cost of suit and attorneys fees resulting or alleged to have resulted from the promotion, use or sale of, or any defect and/or nonconformities in the design or manufacture or assembly in the aforesaid Vehicle, including but not limited to those alleged in or to be inferred from allegations set forth in any pleading in the matter of David R. Sutton v. General Motors Corporation, in the Court of Common Pleas, Philadelphia County, March Term, 2002, No.: 2323.
(Def.'s Answer Ex. A (emphasis added).)
The Release may be broken down into two parts for analysis: (1) persons and entities released and (2) claims released. As to persons and entities released, Plaintiff releases "all other persons, firms or corporations, who are or might be claimed to be liable." (Def.'s Answer Ex. A.) As to claims released, Plaintiff releases every claim, including ineffective repairs, that stems from the purchase and use of the van, specifically, "any and every claim, demand, right or cause of action for the recovery of damages . . . resulting or alleged to have resulted from the promotion, use or sale of, or any defect and/or nonconformities in the design or manufacture or assembly in the aforesaid Vehicle." (Def.'s Answer Ex. A.) Plaintiff further describes the claims released as those "alleged in or to be inferred from . . . any pleading in the matter of David R. Sutton v. General Motors Corporation, in the Court of Common Pleas, Philadelphia County, March Term, 2002, No.: 2323." (Def.'s Answer Ex. A.) By indicating that any claims alleged in, or inferred from, the Common Pleas suit are barred, a reader is instructed to refer to Plaintiff's pleadings from the Common Pleas suit for guidance.
The Release contains a merger clause stating, "[t]hat no promise, agreement, statement or representation except as herein expressed has been made to or been relied upon by Releasor [Plaintiff] and that this document of three (3) pages contains the entire agreement between Releasor and Releasee." (Answer Ex. A ¶ 2(g).) The Release was supported by consideration in the amount of three thousand dollars ($3,000.00) split evenly between Plaintiff and his attorneys. (Answer Ex. A ¶ 1.) Prior to its execution, the Release was reviewed by Plaintiff's attorneys. (Answer Ex. A ¶ 2(d).)
1. Persons and Entities Released
At this juncture, the parties dispute whether the language "all other persons, firms or corporations who might be claimed liable" necessarily includes Royal Chevrolet who is not specifically discharged of liability in the Release. Royal Chevrolet contends that the adjective "all" describing the persons released presents language that is clear and unambiguous in releasing it from all liability relating to the sale, purchase, and repair of the van. Plaintiff, however, contends that the language of the Release is ambiguous as to Royal Chevrolet's inclusion because if the parties contracting for the Release intended to release Royal Chevrolet, they would have included the specific descriptive term, "authorized dealer" or "franchisee," in the Release.
This Court finds that absent fraud, accident or mutual mistake, the plain language of the broad, sweeping phrase "all other persons, firms or corporations" would normally release the entire cast of potential defendants, including any "authorized dealer" and/or "franchisee" so long as the alleged liability relates to claims outlined by the Release. The mere absence of the specific term "authorized dealer" or "franchisee" from the Release does not necessarily leave the Release susceptible to more than one interpretation as to whether Royal Chevrolet is discharged from liability. However, mutual mistake, established by "clear, precise and convincing" evidence would suffice to undermine the operative language of the parties as expressed in the four corners of the contract. See Easton v. Washington County Ins. Co., 137 A.2d 332, 337 (Pa. 1957).
2. Claims Released
The Release's language bars legal action and recovery regarding "any and every claim" that resulted from, or is alleged to result from, three situations: (1) promotion, (2) use or sale of, or (3) any defect and/or nonconformities in the design or manufacture of the van. (Answer Ex. A.) The Release goes on to illustrate that specific claims under these situations include, but are "not limited to those alleged in or to be inferred from" the Common Pleas suit. This language is sweeping because the allegations found within, or inferred from, the Common Pleas suit are just examples of the claims barred under the Release as claims resulting from the promotion, use or sale of, or any defect and/or nonconformities in the design or manufacture of the van. (Answer Ex. A.) The Release goes on to illustrate specific claims under these situation include, but are "not limited to those alleged in or to be inferred from" The common pleas suit. This language is sweeping because the allegation found within, or inferred from, the common pleas suit are just example of the claim barred under the release as claim resulting from the promotion, use or sale of, or any defect and /or nonconformities in the design or manufacture of the van,(Answer Ex. A ¶ 1.) If, indeed, Royal Chevrolet is a part of the "all other persons, firms or corporations who might be claimed liable," then Plaintiff would be barred under the terms of the Release from pursuing these claims that are specified and inferred from the Common Pleas suit.
C. Mutual Mistake Alleged
Despite our belief that a release may be permissibly sweeping and broad to release any and all parties from any and all claims, Plaintiff brings forth sufficient facts regarding a deliberate exclusion of Royal Chevrolet from the Release that, if true, would constitute mutual mistake. Evans v. Marks, 218 A.2d 802, 805 (Pa. 1966). Although Plaintiff does not argue mutual mistake specifically in his papers before this Court, Plaintiff's Response alleges that both Plaintiff and GM communicated a mutual intention to exclude Royal Chevrolet from the Release and took demonstrable steps to ensure its exclusion. Plaintiff's failure to assert mutual mistake is not fatal to his claim. Price v. Ross, 489 A.2d 252, 253 (Pa.Super. 1985).
Plaintiff contends that Plaintiff and GM, "specifically discussed and agreed that the settlement released only GM from liability." (PL's Mem. in Support of Resp. to Def.'s Mot. at 2.) Plaintiff also contends that GM's standard release agreement contains the term "authorized dealer," and that the parties, through written correspondence, specifically and intentionally removed "authorized dealer" from a draft of the Release. (Pl.'s Mem. in Support of Resp. to Def.'s Mot. at 3.) Plaintiff argues that this term is the specific label for Royal Chevrolet, and by removing this term from the Release, the parties, therefore, intended to exclude the selling dealership, Royal Chevrolet, from the Release.
In accepting the nonmoving Plaintiff's averred facts as true, Plaintiff's claim for mutual mistake survives dismissal, in that Plaintiff has provided sufficient evidence that GM agreed to exclude Royal Chevrolet from the Release when the parties removed the term "authorized dealer" from the Release. See Evans, 218 A.2d at 805.
Ordinarily, evidence of the parties' intentions within an agreement must be gathered from the words contained within the four corners of the document, and parol evidence is inadmissible to modify the written contract:
Where the alleged prior or contemporaneous oral representations or agreements concern a subject which is specifically dealt with in the written contract, and the written contract covers or purports to cover the entire agreement of the parties . . . in the absence of fraud, accident or mistake the alleged oral representations or agreements are merged in or superseded by the subsequent written contract, and parol evidence to vary, modify or supersede the written contract is inadmissible in evidence.Bardwell v. Willis Co., 100 A.2d 102, 104 (Pa. 1953). However, there are sufficient averments of mutual mistake in this matter to look beyond the terms of the Release. Thus, Royal Chevrolet's Motion to Dismiss and for Judgment on the Pleadings is DENIED, and, as a result, Plaintiff's Complaint cannot be deemed frivolous under Rule 11.
ORDER
AND NOW, this ___ day of January, 2004, in consideration of the Motion to Dismiss and for Judgment on the Pleadings filed by Defendant Royal Chevrolet-Oldsmobile-Pontiac-Buick, Inc. ("Defendant") (Doc. No. 3), the Response to Defendant's Motion filed by Plaintiff David Sutton (Doc. No. 7), and Defendant's Supplemental Memorandum in Support of Motion to Dismiss and for Judgment on the Pleadings (Doc. No. 9), it is ORDERED that Defendant's Motion to Dismiss is DENIED.