Roamingwood Sewer & Water Ass'n v. Nat'l Diversified Sales, Inc.

• Citation: 509 F.Supp.3d 198
• Decision Date: 21 December 2020
• Docket Number: Civil No. 1:20-CV-00640
• Parties: ROAMINGWOOD SEWER & WATER ASSOCIATION, Plaintiff, v. NATIONAL DIVERSIFIED SALES, INC., Defendant.
• Court: U.S. District Court — Middle District of Pennsylvania

509 F.Supp.3d 198

ROAMINGWOOD SEWER & WATER ASSOCIATION, Plaintiff,

v.NATIONAL DIVERSIFIED SALES, INC., Defendant.

Civil No. 1:20-CV-00640

United States District Court, M.D. Pennsylvania.

Signed December 21, 2020

Charles J. Kocher, Patrick Howard, Simon B. Paris, Larry Bendesky, Saltz, Mangeluzzi, Barrett & Bendesky, P.C., Philadelphia, PA, for Plaintiff.

Glenn M. Campbell, Post & Schell, P.C., Philadelphia, PA, for Defendant.

MEMORANDUM

JENNIFER P. WILSON, United States District Court Judge

Before the court is Defendant's motion to dismiss and to strike pursuant to Rules 12(b)(6) and 12(f) of the Federal Rules of Civil Procedure. (Doc. 11.) This action was brought by Plaintiff, Roamingwood Sewer & Water Association ("Roamingwood"), to recover damages for, inter alia , the allegedly defective check valves manufactured by Defendant, National Diversified Sales, Inc. ("NDS"), which were installed by Roamingwood as part of a complete sewer system renovation within The Hideout, a residential housing community in the Poconos. (Doc. 1, pp. 1–3.)¹ NDS has moved to dismiss three of the four counts in Roamingwood's complaint, including claims for strict liability, negligence, and violations of Pennsylvania's Unfair Trade Practices and Consumer Protection Law ("UTPCPL").² (Doc. 11.) The court finds that Roamingwood's claims for strict liability and negligence are not barred by the application of Pennsylvania's economic loss doctrine; Roamingwood's UTPCPL claim is neither barred by the language of the UTPCPL nor by the economic loss doctrine; there is a reasonable basis for Roamingwood's damages claim for replacement of the remaining check valves; and paragraphs 14 and 32 of the complaint are not immaterial, impertinent, or scandalous. The court will therefore deny the motion to dismiss and to strike in its entirety. (Doc. 11.)

FACTUAL BACKGROUND AND PROCEDURAL HISTORY

According to its complaint, Roamingwood is a non-profit association tasked with operating the water and sewer system exclusively for the benefit of its members, who are property owners within The Hideout. (Doc. 1, p. 1.) Homes within The Hideout are predominantly used as summer vacation retreats. (Id. at 6.) As originally constructed in the early 1970's, The Hideout utilized a gravity sewer system whereby wastewater flows downhill to a collection area. (Id. at 5–6.) In 2013, Roamingwood, with the authorization of its Board of Directors, decided to completely replace the existing gravity sewer system with a low-pressure sewer system—a $97 million project to be completed in three stages. (Id. at 6–7.)

Low-pressure sewer systems function by grinding solid waste into a slurry that can be transported to a collection area regardless of land grading or groundwater depth. (Id. at 6.) According to Roamingwood, a key component of this system is the check valve which "connect[s] a home's lateral sewer line to the community sewer line underground." (Id. at 7.) A check valve contains an internal flapper that allows sewage to flow out of the home through the lateral sewer, and then closes to prevent sewage from reentering the home's lateral sewer. (Id. ) Roamingwood alleges that if the flapper on the check valve malfunctions, sewage can flow backwards into the lateral sewer, which can cause sewage to back up into the home or cause the lateral sewer line to explode underground. (Id. ) Thus, Roamingwood asserts that the functionality of the check valve is critical to the success of the low-pressure sewer system. (Id. )

In the first two stages of construction, Roamingwood asserts that it used check valves manufactured by King Brothers Industries ("KBI"). (Id. ) At some point before beginning stage three of the project, Roamingwood claims that KBI's business was bought out by NDS. (Id. ) Roamingwood alleges that NDS then changed the design or manufacturing process for KBI's check valves destined for stage three of the project to make them less durable than KBI's original design. (Id. at 7–9.) Roamingwood also alleges that it did not purchase check valves directly from NDS; rather, they were purchased as part of an assembly from Lee Supply Co., Inc., which had purchased them from The Lateral Connection Corporation. (Id. at 7–8.)

NDS's stage-three check valves consist of two plastic pieces welded together on either side of a rubber gasket, which is depicted in the complaint. (Id. at 8.) NDS allegedly represented that these redesigned check valves could withstand up to 200 pounds per square inch ("psi") of working pressure. (Id. at 10.) Roamingwood claims that its sewer system only produced a maximum of 67 psi, and that therefore, the redesigned check valves should have been able to withstand the maximum pressure of Roamingwood's sewer system. (Id. ) Between 2017 and 2019, NDS's redesigned check valves were allegedly installed in 800 stage-three properties. (Id. )

Despite NDS's representations regarding the durability of these check valves, Roamingwood alleges that "between May 27, 2018 and February 12, 2020, 22 NDS check valves failed in identical fashion causing environmental contamination due to the release of raw sewage and damage to property" which required Roamingwood to dig up, remove, and replace the failed check valves. (Id. ) Roamingwood asserts that homeowners affected by defective check valves have brought suit against it for property damage. (Id. (citing Schaub v. Roamingwood Sewer , No. 532-cv-2019 (Wayne Cty.)).) Based on the allegedly uniform nature of the check valve failure, Roamingwood claims that additional failures are likely, and that replacement of all 800 NDS check valves is the prudent approach to avoid future litigation. (Id. at 10, 13.)

Roamingwood asserts that NDS was on notice of its defective flapper design before the stage-three check valves were installed since, in 2016, NDS was subject to a judgment for a check valve failure installed in a residential swimming pool. (Id. at 11 (citing Postil v. National Diversified Sales, Inc., et al. , No. C20151812, 2016 WL 5243139 (Ariz. Ct. App. July 29, 2016)) (verdict, agreement, and settlement).) In addition, in December 2018, after discovering the defect, Roamingwood claims that it also notified NDS of the check valve failures. (Id. ) Roamingwood alleges that on January 29, 2020, the parties engaged Micron, Inc. to conduct a visual and microscopic inspection of 10 failed check valves. (Id. ) This inspection purportedly revealed that the:

weld intended to hold the two white plastic pieces together was incomplete. As a result, during routine use, the white plastic's bond would fail, cause the white plastic parts to separate, and consequently cause the flapper to fail. Once the rubber gasket lost the weight of the plastic, sewage could easily slide back down the lateral into the property.

(Id. at 12.) Roamingwood alleges that NDS no longer manufactures the check valves installed in stage three of Roamingwood's project. (Id. at 11.)

On the basis of these facts, Roamingwood filed a complaint on April 17, 2020. (Doc. 1.) Roamingwood amended its complaint on May 12, 2020, alleging claims for strict liability, breach of the implied warranties of merchantability and fitness for a particular purpose, negligence, and damages under Pennsylvania's UTPCPL. (Doc. 9.) On May 19, 2020, NDS filed the instant motion to dismiss, asserting, inter alia , that Roamingwood's claims for strict liability, negligence, and violation of the UTPCPL fail as a matter of law. (Doc. 11.) On June 2, 2020, Roamingwood filed its brief in opposition. (Doc. 14.) NDS timely filed a reply brief. (Doc. 15.) Thus, this motion is ripe for review.

JURISDICTION

The court has original jurisdiction over this matter pursuant to 28 U.S.C. § 1332 as the parties have complete diversity and the amount in controversy exceeds $75,000. Further, venue is appropriate because the action detailed in the complaint occurred in the Middle District of Pennsylvania.

STANDARD OF REVIEW

A. Motion to Dismiss Under Federal Rule of Civil Procedure 12(b)(6)

In order "[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). A claim is plausible on its face "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (quoting Twombly , 550 U.S. at 556, 127 S.Ct. 1955 ). "Conclusory allegations of liability are insufficient" to survive a motion to dismiss. Garrett v. Wexford Health , 938 F.3d 69, 92 (3d Cir. 2019) (quoting Iqbal , 556 U.S. at 678, 129 S.Ct. 1937–79 ). To determine whether a complaint survives a motion to dismiss, a court identifies "the elements a plaintiff must plead to state a claim for relief," disregards the allegations "that are no more than conclusions and thus not entitled to the assumption of truth," and determines whether the remaining factual allegations "plausibly give rise to an entitlement to relief." Bistrian v. Levi , 696 F.3d 352, 365 (3d Cir. 2012).

B. Motion to Strike Under Federal Rule of Civil Procedure 12(f)

Under Federal Rule of Civil Procedure 12(f), a party can move a district court to "strike from a pleading ... any redundant, immaterial, impertinent, or scandalous matter." This rule is "designed to reinforce the requirement in Rule 8 ... that pleadings be simple, concise, and direct." 5C CHARLES ALAN WRIGHT & ARTHUR R. MILLER , FEDERAL PRACTICE AND PROCEDURE § 1380 (3d ed. 2020 update). To that end, the purpose of any motion to strike should be to "clean up the pleadings, streamline litigation, and avoid the unnecessary forays into immaterial matters." United States v. Educ. Mgmt. Corp. , 871 F. Supp. 2d 433, 460 (W.D. Pa. 2012) (citation omitted).

Motions to...