Clark v. Applied Cardiac Sys.
| Decision Date | 16 March 2022 |
| Docket Number | 21cv1123 |
| Parties | BRENT CLARK, MD, Plaintiff, v. APPLIED CARDIAC SYSTEMS INC., Defendant. |
| Court | United States District Courts. 3th Circuit. United States District Courts. 3th Circuit. Western District of Pennsylvania |
MEMORANDUM ORDER DISMISSING/REMANDING CASE FOR LACK OF SUBJECT MATTER JURISDICTION
This is a diversity of citizenship action grounded in state law and centered upon an alleged breach of contract, with subsequently added tort, fraud, and equitable claims. Pro Se Plaintiff, Brent Clark, M.D., a Pennsylvania resident, is a former doctor, and Defendant, Applied Cardiac Systems, Inc. a medical device company domiciled in California, with whom Plaintiff had previously contracted with for the purchase of a medical device, called an External Counter-Pulsation (ECP) for use in his now defunct medical practice. Plaintiff could no longer use the ECP, due to his incarceration on a criminal conviction before this Court on which he was serving jail time.[1] The parties brokered a deal, the terms of which are in dispute, whereby Defendant would sell the ECP device on medical “consignment” in the secondary market, to a third party, and Defendant would pay Plaintiff a commission based upon this sale. Defendant sold the device for $20, 000.00, the net proceeds of the sale were $4, 252.44, and Defendant mailed Plaintiff a check for $1, 000.00 to his former medical office, but unfortunately either was not received or not cashed by Plaintiff.
Boiled down to its essence, Plaintiff contends that he is owed 30 percent of the sale price of the device (roughly $6, 000.00), while Defendant counters that the agreement between the parties entitled him to 20 percent of the commission fee (roughly $850.00 and Defendant sent him a check for slightly more, $1, 000.00). To wit, the nexus of this dispute centers upon a delta of approximately $5, 000.00.
Because Plaintiff is Pro Se, and a sophisticated and intelligent party, and because this contractual dispute appears to be well-founded, in an abundance of caution, the Court permitted Pro Se Plaintiff to amend his Complaint three (3) times, since August 24, 2021, when his Original Complaint case was filed. Plaintiff commenced this litigation with a breach of contract claim, and with each amendment, he added state law claims, namely, fraudulent misrepresentation, promissory estoppel, unjust enrichment, [2] and an alleged violation of the Pennsylvania Unfair Trade Practice and Consumer Protection Law (UTPCPL). Plaintiff seeks numerous other damages, none of which would “legally” meet the jurisdictional threshold of $75, 000.00, which is required in order for this Court to maintain and exercise diversity jurisdiction in this matter.
Federal court are of limited jurisdiction and this Court is compelled to satisfy itself, sua sponte, even where the issue is not fully raised, whether jurisdiction is appropriate. Unfortunately, Plaintiff's state law claims (either individually or combined) do not pass jurisdictional muster, and thus, this Court lacks subject matter jurisdiction over this case. The Court will therefore grant Defendant's Motion to Dismiss pursuant to Rule 12(b)(1), will deny as moot/decline to rule upon Defendant's Motion to Dismiss pursuant to Rule 12(b)(6), and will remand this case to the state court, where Plaintiff may properly pursue his cause of action.
On August 24, 2021, Plaintiff filed a Complaint against Defendant, claiming Defendant breached a contract entered into by the parties. (Doc. 1).
On September 10, 2021, prior to Defendant responding to Plaintiff's Complaint, Plaintiff filed an Amended Complaint, asserting breach of contract, promissory estoppel, and fraudulent misrepresentation claims against Defendant. (Doc. 6).
On September 23, 2021, Defendant filed its answer to Plaintiff's Amended Complaint. (Doc. 10). On October 28, 2021, Defendant filed an Errata with respect to its Answer, to attach an exhibit referenced in the Answer, which had not been filed. (Doc. 16).
On November 5, 2021, Plaintiff filed a Motion to file a second amended complaint and attached his proposed amended complaint to his motion. (Doc. 21). Prior to the Court ruling on Plaintiff's Motion to amend, on November 29, 2021, Plaintiff, without seeking leave of Court, filed a second Amended Complaint. (Doc. 31). This amended complaint was a different amended complaint than the amended complaint attached to Plaintiff's Motion to amend (Doc. 21). On November 30, 2021, the Court ordered this second Amended Complaint, filed without the Court's permission, stricken from the record. (Doc. 32).
On December 1, 2021, Plaintiff filed a Motion to file a Third Amended Complaint and the Court granted his Motion. (Doc. 34 and Doc. 35). On December 2, 2021, Plaintiff filed his Third Amended Complaint. (Doc. 35).
On December 16, 2021, Defendant filed the pending Motion to Dismiss, and supporting brief, brought pursuant to Federal Rules of Civil Procedure 12(b)(6) and 12(b)(1). (Doc. 38, Doc. 39). On January 3, 2022, Plaintiff filed his Response to Defendant's Motion to Dismiss. (Doc. 43). Also, now pending is a Motion for Protective Order and to Extend Deadlines filed by Defendant filed on March 2, 2022 (Doc. 44) and Response thereto (Doc. 46).
Federal Rule of Civil Procedure 9 requires that “[i]n alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.” Fed.R.Civ.P. 9. A fraud claim under Pennsylvania common law, [3] consists of the following six elements: “(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.” 7-Eleven, Inc. v. Upadhyaya, 926 F.Supp.2d 614, 626 (E.D. Pa. 2013) (quoting Bortz v. Noon, 729 A.2d 555 (Pa. 1999)). Thus, “[t]he essence of fraud is a misrepresentation fraudulently uttered with the intent to induce the action undertaken in reliance upon it, to the damage of its victim.” Presbyterian Med. Ctr. v. Budd, 832 A.2d 1066, 1072 (2003).
Plaintiff's fraud claim is premised upon certain terms contained in the parties' December 21, 2017 consignment agreement, as well as a No. of statements made to Plaintiff by Louis Manera (“Manera”), in emails Manera sent to Plaintiff between February, 2018 and, 2020, which Plaintiff has attached to his Third Amended Complaint. (Doc. 36, Doc. 36-1). Manera is identified in these in emails, as Defendant's Vice President Marketing. (Doc. 36, ¶¶ 35-51, Doc. 36-1 at 27).
The terms in the December 21, 2017 consignment agreement, which Plaintiff asserts were fraudulent misrepresentations made by Defendant to Plaintiff relative to Plaintiff's ECP Device are: (1) “ACS will provide Cardiovascular Specialists with payment within 30 days of collecting the funds from the sale of the unit;” and (2) “ACS will pay 30% of the total sale price depending on appraised value of systems upon return to ACS.” (Doc. 36 at ¶¶ 35, 37).
The statements made to Plaintiff by Defendant, which Plaintiff posits were fraudulent misrepresentations are: (1) Manera's statement in a February 12, 2018 email, in response to Plaintiff's February 8, 2018 email query, “any proceeds from the ECP machine yet/, ” “[n]othing yet . . . I will keep you posted though!;” (2) Manera's statement to Plaintiff on August 3, 2020, after Plaintiff stated to Manera in a June 16, 2020 email, “[i]f you have not sold my ECP machine, I want it back, ” that Plaintiff's CPT Device had been found, and that and (3) unspecified statements made by Manera to Plaintiff in the emails Manera sent to Plaintiff that are attached to Plaintiff's Third Amended Complaint as Exhibits. (Id. at ¶¶ 39-40, 45, 47, Doc. 36-1 at 10-11, 19, 21).
Plaintiff also alleges that he justifiably relied on Manera's misrepresentation that pursuant to the December 2017 consignment agreement, Plaintiff would be paid his 30% share of the total sale price of the ECP Device within 30 days of its sale. (Id. at ¶ 43).
Plaintiff further alleges that when Manera made his “[n]othing yet . . . I will keep you posted though!” statement on February 12, 2018: (1) the ECP Device had already been sold, (2) Manera had received a $4, 000.00 commission on the sale of the ECP Device; and (3) Manera's misrepresentation was made intentionally so that Plaintiff would not know about the sale of the ECP Device, and Defendant would not have to pay Plaintiff his 30% share of the ECP Device's sale price. (Doc. 36 at ¶¶ 39-42).
Plaintiff further alleges that he suffered damages as a result of Manera's misrepresentations and utterance [“[n]othing yet . . . I will keep you posted though!”] in that Plaintiff lost his 30% share from the consignment sale of the ECP Device. (Id. at ¶ 44).
Plaintiff also alleges that when Manera made his statement on August 3, 2020, he knew the utterance was false, and intended for Plaintiff to not insist, as demanded on June 6, 2020, on the return of his ECT Device. (Id. at ¶ 49).
Plaintiff also alleges that he reasonably relied on Manera's fraudulent misrepresentations made between February 12, 2018 and August 3, 2020 by not retaking possession of his ECT device for...
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