Reese v. Pook & Pook, LLC.

Decision Date27 January 2016
Docket NumberCIVIL ACTION NO. 14-5715
Citation158 F.Supp.3d 271
CourtU.S. District Court — Eastern District of Pennsylvania
Parties Carter P. and Sarah Reese (Husband and Wife), Plaintiffs v. Pook & Pook, LLC., Ron Pook, Debra Pook, James Pook, Jay Lowe, Connie & Jay Lowe Antiques, Mike Caffarella, Jamie Shearer, Maine Antique Digest, S. Clayton Pennington, Kate Pennington, and Lita Solis-Cohen, Defendants.

Joseph A. O'Keefe, O'Keefe, Miller & Thielen, P.C., Fleetwood, PA, for Plaintiffs.

David J. Shannon, Jonathon E. Cross, Marshall Dennehey Warner Coleman & Goggin, Stephen J. Shapiro, Schnader Harrison Segal & Lewis, Philadelphia, PA, Mark E. Lovett, Brubaker Connaughton Goss & Lucarelli LLC, Lancaster, PA, John L. Senft, Sentft Law Firm, LLC, York, PA, Bernard J. Kubetz, Eaton Peabody, Bangor, ME, Erica M. Johanson, Eaton Peabody, Portland, ME, for Defendants.

MEMORANDUM

STENGEL, District Judge.

I. INTRODUCTION

Presently pending are multiple Motions by the named Defendants in this Lanham Act and antitrust action to dismiss the Amended Complaint (“AC”) of Plaintiffs Carter P. (Reese) and Sarah Reese (collectively the Reeses).1 For the reasons that follow, I grant the pending Motions, save for several common law claims against Defendants Jay Lowe2 and Mike Caffarella.

II. STANDARD OF REVIEW

A motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim upon which relief can be granted examines the sufficiency of the complaint. Conley v. Gibson , 355 U.S. 41, 45–46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). Following the Supreme Court decisions in Bell At. Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) and Ashcroft v. Iqbal , 556 U.S. 662, 679, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009), pleadings standards in federal actions have shifted from simple notice pleading to a more heightened form of pleading, requiring a plaintiff to plead more than the possibility of relief to survive a motion to dismiss under Fed. R. Civ. P. 12(b)(6). Fowler v. UPMC Shadyside , 578 F.3d 203, 210–211 (3d Cir.2009) ; see also Phillips v. County of Allegheny , 515 F.3d 224, 230 (3d Cir.2008). Therefore, when presented with a motion to dismiss for failure to state a claim, district courts conduct a two-part analysis. First, the factual and legal elements of a claim are separated. The court must accept all of the complaint's well-pleaded facts as true but may disregard legal conclusions. Iqbal , 556 U.S. at 679, 129 S.Ct. 1937. Second, a district court must determine whether the facts alleged in the complaint are sufficient to show that the plaintiff has a “plausible claim for relief.” Id. In other words, a complaint must do more than allege the plaintiff's entitlement to relief. A complaint has to “show” such an entitlement with its facts. Id. ; see also Phillips , 515 F.3d at 234–235. “Where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not ‘show[n]‘that the pleader is entitled to relief.’ Iqbal , 556 U.S. at 679, 129 S.Ct. 1937.

Under Federal Rule of Civil Procedure 8(a)(2), a pleading must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” As the Court held in Twombly , the pleading standard Rule 8 announces does not require “detailed factual allegations,” but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation. Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 (quoting Twombly , 550 U.S. at 555, 127 S.Ct. 1955 ). A pleading that offers “labels and conclusions” or “a formulaic recitation of the elements of a cause of action will not do.” Twombly , 550 U.S. at 555, 127 S.Ct. 1955. Nor does a complaint suffice if it tenders “naked assertion[s] devoid of “further factual enhancement.” Id. at 557, 127 S.Ct. 1955.

A motion to dismiss pursuant to Rule 12 (b)(1) for “lack of jurisdiction over the subject matter” is governed by a different standard. Because the motion goes to our jurisdiction, i.e., the very power to hear the case, there is substantial authority that the court is free to weigh the evidence and satisfy itself as to the existence of its power to hear the case. Mortensen v. First Fed. Sav. and Loan Ass'n , 549 F.2d 884, 891 (3d Cir.1977). There is no presumptive truthfulness attached to plaintiff's allegations, the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims, the plaintiff has the burden of proof that jurisdiction does in fact exist. Id.

III. FACTUAL ALLEGATIONS

The Reeses are collectors of antique toys. (AC ¶ 4.) On October 2, 2012, they filed a Chapter 11 bankruptcy petition in the United States Bankruptcy Court for the Eastern District of Pennsylvania. (Id. ¶¶ 44-45.) As part of the bankruptcy proceeding, the Reeses were required to sell a portion of their toy collection. (Id. ¶ 46.) Defendant Pook & Pook, LLC (P&P) was approved by the Bankruptcy Court as the auctioneer to sell the collection. (Id. ¶ 47.) P&P and the Bankruptcy Estate of Carter Reese and Sarah Reese entered into an agreement for the sale of the toys. (ECF 26 Ex. B.3 ) The agreement was approved by the Bankruptcy Court. (Id. Ex. C.) Defendants Ron Pook, Debra Pook, and James Pook (collective “the individual Pook Defendants) are principals of P&P. (AC ¶¶ 20-22.) None of the individual Pook Defendants were parties to the agreement. There is no allegation in the AC that the Reeses obtained permission from the Bankruptcy Court to file the pending claims against P&P.

The Reeses allege that Carter Reese and Ron Pook agreed that the toy collection would be sold in several different sales, owing to the great volume being offered (AC ¶ 49), and Carter would be involved in the sale preparations to identify objects and review pre-sale estimates. (AC ¶ 51.) They allege that this did not happen and, despite their disapproval, P&P retained Defendants “Caffarella and, thus, Lowe,” as experts to assist the auction sale. (AC ¶ 53-54.) Although the auction resulted in proceeds of approximately $560,000, the Reeses assert that the toys should have “fetched a far greater amount.” (Id. ¶ 80.) They contend that the poor result was caused by the improper presentation of the toys at the auction. They assert that the staging of the sale was deliberately flawed to diminish the value of the toys: toys were presented in piles with no effort to match parts into complete toys, parts of various two– and three-part toys were not matched, allowing, for example, the front end of one horse-drawn toy to go in one box lot with the back end placed in a different lot. (Id. ¶¶ 56-60.) As a result, on-line and phone bidders had no opportunity to identify boxes of mismatched objects and could not know the contents of any lot or where various parts could be found. (Id. ¶¶ 61-62.) They allege that this benefited Lowe, who knew where the mismatched parts were located in the different lots, and that he bid accordingly for the items he wanted, won them at depressed prices, reassembled them, and placed them for resale at significant markup at his own business. (Id. ¶¶ 63-75.) The Reeses allege that Lowe had previously disparaged their collection at the James Julia Auctions in Maine, where he worked on commission basis gathering collections for auction, then bought dozens of lots to resell. (Id. ¶¶ 83-85.) Plaintiffs also assert that the P&P catalogue of the Reese sale prominently promoted fake antiques called “newtiques,” created by Lowe using original parts from antique toys and placing them on new toys, further disparaging the quality of toys in the Reese collection. (Id. ¶¶ 87-109.) They also allege that, after the auction, P&P sent an employee, Jamie Shearer, to the Reninger Antique Mall to criticize the collection as “junk.” (Id. ¶¶ 115-117.)

Lita Solis-Cohen is the senior editor of the Maine Antique Digest (MAD). (Id. ¶ 15.4 ) She authored an article, “Pook's First Toy Auction,” for the December 2013 MAD issue (“the Article). (Id. ¶ 129.) The first sentence read in part that P&P “will sell any collection that comes along.” (Id. ¶ 130.) She went on to write, relying on information allegedly from Lowe, that:

Everyone in the toy world seemed to know the major cosignor [sic, in AC] was Carter Reese, a longtime collector who bought toys that he loved before collectors got hung up on condition. It didn't matter to him if the toy had replaced figures, was repainted, or if much of the paint was missing. If the toy had charm and was cheap, he bought it.

(Id. ¶ 131.) She stated that [t]he consensus was that many of the toys that Pook offered brought all they were worth...’ because, in the words of Jay Lowe, ‘condition is king.’ (Id. ¶ 132.) Plaintiffs allege that these statements were published with actual malice and/or with reckless disregard for the truth as a “puff piece” for Lowe and his newtiques. (Id. ¶¶ 133-135.)

The AC contains eleven counts: (1) civil conspiracy against P&P, the individual Pook Defendants, Caffarella and Lowe; (2) violation of the Lanham Act, 15 U.S.C. § 1125 for false commercial advertising in the placement of Lowe's newtique on the cover of the sale catalogue and the negative commentary in MAD about the quality of the collection;5 (3) common law unfair competition, coextensive with the Lanham Act claim; (4) violation of section one and two of the Sherman Act;6 (5) commercial disparagement/trade defamation against MAD and Lowe for which they seek inter alia the publication of a corrective article; (6) a claim pursuant to Restatement (Second) of Torts § 652E for false light against MAD and Lowe; (7) common law “injurious falsehood” against MAD and Lowe; (8) breach of fiduciary duty against P&P, the individual Pook Defendants and Caffarella; (9) negligence;7 (10) breach of contract, breach of the duty of good faith and fair dealing, and “dishonesty in fact” against P&P and the...

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