Latuska et al v. Sethuraman et al

MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM

W.D. Pa.September 12, 2016

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA JOHNSTOWN DIVISION RICHARD F. LATUSKA and ANNETTE E. LATUSKA, Plaintiffs, vs. VENKAT SETHURAMAN, NAHEED SHAHID, and BUREAU VERITAS NORTH AMERICA, INC., Defendants. Case No. 3:15-cv-208-KRG Judge Kim R. Gibson MOTION TO DISMISS CERTAIN MATTERS IN FIRST AMENDED COMPLAINT Defendant Bureau Veritas North America, Inc. ("Bureau Veritas") moves to dismiss Count VII of the Plaintiffs' First Amended Complaint in its entirety under Fed.R.Civ.P. 12(b)(6) and further moves to dismiss the claim for punitive damages in Count V and the claim for attorneys' fees in Counts V and VI. 1. Plaintiffs filed the original Complaint in this matter on or about July 13, 2015. (ECF No. 1). In response, Bureau Veritas tiled a Motion to Dismiss on September 1, 2015 for the same reasons as stated above, i.e., to dismiss Count VII in its entirety and dismiss certain damage claims in Counts V and VI. (ECF No. 9). 2. First, the Motion to Dismiss alleged that the Plaintiffs lacked standing to sue under the Pennsylvania Unfair Trade Practices and Consumer Protection Law, 73 P.S. §§ 201-1-201- 9.2, because that law grants standing only to plaintiffs who actually leased or purchased good or services from the defendant in question, and the Plaintiffs did not plead that they leased or {CLIENT WORK/34991/0024 H 1243461:1) Case 3:15-cv-00208-KRG Document 70 Filed 09/12/16 Page 1 of 8 purchased anything from Bureau Veritas. Case law holds that plaintiffs may not sue under the UTPCPL on the basis of a lease or purchase made by a third party. 3. Second, the Motion to Dismiss alleged that Counts V and VI fail to state a claim to the extent Plaintiffs' seek attorneys' fees because those counts do not cite any contract, statute, or legal principle that would override the rule under Pennsylvania law that attorneys' fees are not available from adverse parties in the absence of a an express statutory allowance, a clear agreement by the parties, or some other established exception. 4. Third, the Motion to Dismiss alleged that Counts V and VI did not plead facts showing outrageous behavior, evil motive, or reckless indifference. Consequently, Counts V and VI failed to plead behavior justifying the award of punitive damages, and Counts V and VI should be dismissed to the extent they seek punitive damages'. 5. On July 29, 2016, the Court issued a Memorandum Opinion granting Bureau Veritas' Motion to Dismiss. (ECF No. 66). 6. Regarding Bureau Veritas' request to dismiss Count VII of the Complaint regarding the UTPCPL, the Court stated, "The question here is whether Mr. and Ms. Latuska `purchase[d] . . . goods or services' within the meaning of the statute. Based upon relevant case law interpreting this statute, the Court concludes that they did not." (ECF No. 66, p. 10). 7. The Court went on to say that "Mr. and Mrs. Latuska have failed to allege that they purchased any goods or services from Bureau Veritas North America, Inc. . . . Mr. and Ms. Latuska have failed to allege that they had 'any commercial dealings with the defendant.' (citation omitted) . . . Specifically, Mr. and Ms. Latuska have not alleged that they had to 'give up something of significant value in order to consummate the transaction.' (citation omitted) . . . The original Motion to Dismiss requested the dismissal of punitive damages in Counts V and VI of the Complaint, but the only request for punitive damages against Bureau Veritas was in Count V, not Count VI. {CLIENT WORK/34991/0024 H1243461:1 } 2 Case 3:15-cv-00208-KRG Document 70 Filed 09/12/16 Page 2 of 8 Thus, in accordance with well-settled law, standing does not extend to Mr. and Ms. Latuska." (ECF No. 66, 0.12). 8. The Court concluded, "Because Mr. and Ms. Latuska have failed to allege that they purchased goods or services from, or had any commercial dealings with, Bureau Veritas North America, Inc., the Court will grant Bureau Veritas North America, Inc.'s motion to dismiss Count VII of Mr. and Ms. Latuska's complaint." (ECF No. 66, p.13). 9. With regard to the request to dismiss the claims for punitive damages, the Court stated, "Accepting the allegations of Mr. and Ms. Latuska's complaint as true, this Court finds that Mr. and Ms. Latuska have not alleged sufficient facts to establish a plausible claim for punitive damages against Bureau Veritas North America, Inc. While the facts alleged support Mr. and Ms. Latuska's claims for intentional misrepresentation and negligence, they do not rise to the level of outrageous conduct required under Pennsylvania law to warrant punitive damages. Rather, Mr. and Ms. Latuska's allegations regarding their request for punitive damages are conclusory statements and not factual averments sufficient to state a plausible claim for relief." (ECF No. 66, pp. 16-17). 10. The Court concluded, "Based upon the allegations in the complaint, Mr. and Mrs. Latuska have failed to satisfy the pleading requirements of the rules of procedure to set forth a plausible claim for relief for punitive damages in Counts V and VI against Bureau Veritas North America, Inc. The Court will therefore grant Defendants' motion to dismiss the punitive damages claim in Counts V and VI of the complaint." (ECF No. 66, p. 17). 11. With regard to the request for attorneys' fees, Plaintiffs argued in their Brief in Opposition to the Motion to Dismiss that pursuant to Section 908(2) of the Restatement (Second) of Torts, "while not statutorily authorized as independent taxable costs in the Courts for {CLIENT WORK/3499I/0024 H1243461 1} Case 3:15-cv-00208-KRG Document 70 Filed 09/12/16 Page 3 of 8 intentional misrepresentation and negligence, it is appropriate to consider attorney[s'] fees expended . . . as an element of the compensatory losses and punitive damages award." (ECF No. 13, pp. 18-19). 12. The Court concluded that "because Mr. and Ms. Latuska have conceded that attorneys' fees and costs are recoverable only as an element of an award for punitive damages, and because the Court will dismiss Mr. and Ms. Latuska's claim for punitive damages in Counts V and VI, the Court will also dismiss their claims for attorneys' fees and costs in Counts V and VI." (ECF No. 66, p. 18). 13. Although the Court granted Bureau Veritas' Motion to Dismiss, the Court entered an Order permitting Plaintiffs 21 days to amend the complaint to cure the defects raised by Bureau Veritas' Motion to Dismiss. (ECF No. 66, pp. 20-21). 14. On August 22, 2016, Plaintiffs filed a First Amended Complaint. (ECF No. 68). 15. Notably, none of the defects raised by Bureau Veritas in the Motion to Dismiss and upheld by the Court in the Memorandum Opinion were addressed by Plaintiffs. In fact, the wording of every paragraph in the First Amended Complaint is nearly identical to that in the original Complaint, and both documents even have the same number of paragraphs. 16. The only changes to the Fact section of the Complaint was to paragraphs 38, 39, and 41, and those minor changes dealt with updates to averments that had occurred since the filing of the original complaint. For example, Paragraph 38 was changed from "Plaintiffs are not expected to be able to reside in their property until Fall, 2015" to "Plaintiffs were not able to return to their property until May, 2016." (ECF No. 68, p. 7). None of these changes addressed the defects raised by Bureau Veritas and the Court or have anything to do with Bureau Veritas. (CLIENT WORK/34991/0024 H1243461:1) 4 Case 3:15-cv-00208-KRG Document 70 Filed 09/12/16 Page 4 of 8 17. Remarkably, not one single change was made to Counts V and VI in the First Amended Complaint. Thus, Plaintiffs have again failed to allege sufficient facts to support claims for attorneys' fees and punitive damages, and Bureau Veritas reasserts its contention that claims for punitive damages and attorneys' fees in the First Amended Complaint should be dismissed for the reasons set forth at length in the Brief accompanying this Motion. 18. Additionally, the only change made to Count VII was that Plaintiffs removed the request for attorneys' fees from the ad damnum clause, which was not even a defect raised by Bureau Veritas or the Court pertaining to this Count.2 If the Plaintiffs were able to plead sufficient facts to support a claim under the UTPCPL (which is denied), they would be entitled to attorneys' fees, so this modification to Count VII does not make sense. (ECF No. 68, p. 22). 19. Thus, because Plaintiffs have again failed to allege that they purchased goods or services from, or had any commercial dealings with, Bureau Veritas, it reasserts its contention that Count VII of the First Amended Complaint should be dismissed in its entirety for the reasons set forth at length in the Brief accompanying this Motion. 20. Bureau Veritas is also requesting that Plaintiffs be precluded from further amending the First Amended Complaint due to their repeated failure to cure any of the deficiencies raised by Bureau Veritas and the Court, and the fact that any further amendment would be futile. Factors that weigh against amendment include "undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc." Foman v. Davis, 371 U.S. 178, 182 (1962). (Emphasis added). 2 It should also be noted that in the prayer for relief at the end of the First Amended Complaint, Plaintiffs changed the amount of damages against all Defendants from $50,000 to $75,000. (ECF No. 68, p. 22). {CLIENT WORK/34991/0024 H1243461:1) 5 Case 3:15-cv-00208-KRG Document 70 Filed 09/12/16 Page 5 of 8 21. Amendment is futile "if the amended complaint would not survive a motion to dismiss for failure to state a claim upon which relief could be granted." Alvin v. Suzuki, 227 F.3d 107, 121 (3d Cir. 2000). A district court may therefore "properly deny leave to amend where the amendment would not withstand a motion to dismiss." Centifanti v. Nix, 865 F. 2d 1422, 1431 (3d Cir. 1989); Davis v. Holder, 994 F. Supp. 2d 719, 727 (W.D. Pa. 2014). 22. Based on the foregoing arguments, Bureau Veritas asserts that Plaintiffs should be precluded from further amending the First Amended Complaint because they have repeatedly failed to cure deficiencies by amendments previously allowed, and any amendment would be futile since it has already been determined by this Court that these claims would not survive a motion to dismiss for failure to state a claim upon which relief could be granted. 23. Plaintiffs have wasted the time, money and resources of the Parties and the Court by failing to address any of the defects raised in the Motion to Dismiss and Memorandum Opinion, and therefore, any further amendments should be denied. 24. For these reasons, which are explained at length in the Brief accompanying this Motion, this Honorable Court should dismiss Count VII of the Complaint in its entirety under Fed.R.Civ.P. 12(b)(6), dismiss the claims for attorneys' fees and punitive damages in Count V, dismiss the claim for attorneys' fees in Counts V and VI, and preclude Plaintiffs from further amending the First Amended Complaint. Respectfully submitted, Date: September 12, 2016 /s/ Matthew J. Lautman Samuel H. Simon PA I.D. No. 85503 ssimon@hh-law.com Matthew J. Lautman PA I.D. No. 90390 (CLIENT WORK/34991/0024 H1243461:1} 6 Case 3:15-cv-00208-KRG Document 70 Filed 09/12/16 Page 6 of 8 lautmanmjghh-law.corn Houston Harbaugh, P.C. Three Gateway Center 401 Liberty Avenue, 22nd Floor Pittsburgh, PA 15222-1005 Phone: (412) 281-5060 Fax: (412) 281-4499 {CLIENT WORK/34991/0024 H 1243461 1} 7 Case 3:15-cv-00208-KRG Document 70 Filed 09/12/16 Page 7 of 8 CERTIFICATE OF SERVICE The undersigned hereby certifies that a true and correct copy of the foregoing filing was served via the ECF system upon the counsel of record below on September 12, 2016. Matthew B. Taladay, Esq. Hanak, Guido and Taladay 528 Liberty Boulevard P.O. Box 487 DuBois, PA 15801 mbtaladay@verizon.net (Counsel for Plaintiffs) Kurt Fernsler, Esquire Babst Calland Two Gateway Center 603 Stanwix Street Pittsburgh, PA 15222 kfernsler@babstcalland.com (Counsel for Defendant, Lezzer Truss Systems, Inc.) Ronald J. Chleboski, Jr., Esq. Samantha L. Brutout, Esq. Dingess, Foster, Luciana, Davidson & Chelboski, LLP 20 Stanwix Street PNC Center, 3rd Floor Pittsburgh, PA 15222-2312 rchleboski@dfllegal.com sbrutout@dfflegal.com (Counsel for Venkat Sethuraman and Naheed Shahid) Jay L. Edelstein, Esquire Edelstein Law, LLP 230 South Broad Street, Suite 900 Philadelphia, PA 19102 jedelstein@edelsteinlaw.com (Counsel for Third-Party Defendant, MiTek USA, Inc. f/k/a MiTek Industries, Inc.) /s/ Matthew J. Lautman Matthew J. Lautman {CLIENT WORK/34991/0024 H I 243461:1) Case 3:15-cv-00208-KRG Document 70 Filed 09/12/16 Page 8 of 8 IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA JOHNSTOWN DIVISION RICHARD F. LATUSKA and ANNETTE E. LATUSKA, Plaintiffs, vs. VENKAT SETHURAMAN, NAHEED SHAHID, and BUREAU VERITAS NORTH AMERICA, INC., Defendants. Case No. 3:15-cv-208-KRG Judge Kim R. Gibson ORDER OF COURT AND NOW, this day of , 2016, upon consideration of the Motion To Dismiss Certain Matters in First Amended Complaint filed by Defendant, Bureau Veritas North America, Inc., that Motion is hereby GRANTED and: (1) Count VII of the Plaintiffs' First Amended Complaint is dismissed in its entirety, (2) the claim for punitive damages in Count V is dismissed; (3) the claims for attorneys' fees in Counts V and VI are dismissed; and (4) Plaintiffs are precluded from further amending the First Amended Complaint. By the Court, , J. (CLIENT WORK/34991/0024 H1243461:1) Case 3:15-cv-00208-KRG Document 70-1 Filed 09/12/16 Page 1 of 1