Danganan v. Guardian Protection Services, 052120 FED3, 19-2545

Docket Nº:19-2545
Opinion Judge:SCIRICA, Circuit Judge
Party Name:JOBE DANGANAN, ON BEHALF OF HIMSELF AND ALL OTHERS SIMILARLY SITUATED, Appellant v. GUARDIAN PROTECTION SERVICES
Attorney:Michael D. Donovan Donovan Litigation Group James M. Pietz Counsel for Appellant Michael A. Iannucci Laura E. Vendzules Blank Rome Counsel for Appellee
Judge Panel:Before: SHWARTZ, SCIRICA, and RENDELL, Circuit Judges
Case Date:May 21, 2020
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit

JOBE DANGANAN, ON BEHALF OF HIMSELF AND ALL OTHERS SIMILARLY SITUATED, Appellant

v.

GUARDIAN PROTECTION SERVICES

No. 19-2545

United States Court of Appeals, Third Circuit

May 21, 2020

NOT PRECEDENTIAL

Argued: February 3, 2020

On Appeal from the United States District Court for the Western District of Pennsylvania (D.C. Civil No. 2-15-cv-01495) District Judge: Honorable Cynthia R. Eddy

Michael D. Donovan Donovan Litigation Group James M. Pietz Counsel for Appellant

Michael A. Iannucci Laura E. Vendzules Blank Rome Counsel for Appellee

Before: SHWARTZ, SCIRICA, and RENDELL, Circuit Judges

OPINION [*]

SCIRICA, Circuit Judge

Plaintiff Jobe Danganan signed up for home-security services with Defendant Guardian Protection Services-locking himself into a three-year commitment based on the terms of the agreement. When he moved and sold his house, Guardian continued to bill him. Danganan paid for four months of service after his move and then filed consumer protection claims against Guardian, alleging fraudulent and deceptive trade practices. The trial court dismissed for failure to state a claim. Because the clear terms of the agreement authorized Guardian to continue to seek payment after Danganan moved and did not constitute deceptive conduct on which Danganan could justifiably rely, we will affirm.

I.

On April 23, 2013, Danganan and Guardian entered into an Authorized Dealer Sales and Monitoring Agreement that would provide Danganan home security services in his Washington, D.C. home. In the Agreement, Danganan agreed to pay a "Monthly Services Fee" of $44.95. Supp. App. 195. The Monthly Services Fee would be recurring every month throughout the three-year initial term of the Agreement.1

The Agreement states that Danganan's "obligations . . . continue even if [he] sell[s] or leave[s] the Premises." Supp. App. 198. (emphasis added). It only allows Danganan to terminate the Agreement within three days of execution. Danganan was, however, permitted to transfer the Agreement to "someone who purchases or rents [his] Premises" if Guardian "approve[s] the transfer in writing." Id.

In September 2014, Danganan moved from Washington, D.C. to San Francisco. In November 2014, he sold his Washington, D.C. home. He then provided Guardian with written and verbal notice of his desire to cancel his service. On November 17, 2014, Guardian wrote a letter "confirm[ing] [Danganan's] request that the 24-hour monitoring of [his] security system be discontinued" and stating Guardian would "no longer respond to any signals received from [Danganan's] alarm system effective 11/18/14." Supp. App. 47. The letter also stated-in bold-that "[t]his document serves only to provide information regarding service provided and does not alter any of the terms or conditions of the existing monitoring agreement in any way." Id.

Guardian continued to bill Danganan after service had been discontinued, and Danganan complained. On January 21, 2015, Guardian sent another letter "confirm[ing] [Danganan's] request that the 24-hour monitoring of [his] security system be discontinued" and stating that Guardian would be stopping service. Supp. App. 51. In bold, the letter informed Danganan that Guardian was "not intend[ing] to terminate [the] existing agreement" and that "all terms and conditions, including [Danganan's] financial obligation under [the] monitoring agreement, continue to be in full force and effect." Id. (emphasis added). After service was discontinued, Danganan paid four months' worth of fees, until Guardian stopped billing.

On June 9, 2015, Danganan filed a class action complaint against Guardian in the Philadelphia Court of Common Pleas. He brought claims under the Pennsylvania Unfair Trade Practices and Consumer Protection Law, 73 P.S. §§ 201-1-201-9.2, and the Pennsylvania Fair Credit Extension Uniformity Act, 73 P.S. § 2270.1, et seq. Guardian removed the action to federal court in the Eastern District of Pennsylvania, and the case was transferred to the Western District of Pennsylvania.

On June 13, 2019, the trial court granted a motion to dismiss, finding that Danganan failed to allege that he justifiably relied on Guardian's alleged deceptive conduct and that Guardian's alleged conduct caused a loss.[2] Danganan now appeals.

II.3

Danganan raises two counts: one under the Pennsylvania Unfair Trade Practices and Consumer Protection Law ("UTPCPL") and one under the Pennsylvania Fair Credit Extension Uniformity Act ("FCEUA"). He contends Guardian violated the UTPCPL by engaging in fraudulent or deceptive conduct by requiring him to continue to pay for services after he moved from, and sold, his home-and that such payment amounted to an unlawful contractual penalty. He also contends Guardian violated the FCEUA by attempting to collect money not owed under the Agreement because Guardian had cancelled service. Both of Danganan's claims ultimately fail because the Agreement clearly states that Danganan's financial obligations would continue after he moved or sold his home, and therefore, Guardian did not act fraudulently or deceptively by continuing to bill Danganan for payments he owed under the Agreement. Consequently, Danganan did not justifiably rely on any deceptive conduct.[4]

A.

Danganan's claim under the UTPCPL fails because he does not allege he justifiably relied on deceptive or fraudulent conduct by Guardian. The UTPCPL prohibits unfair or deceptive trade practices and lists specific types of conduct that are inherently deceptive. 73 P.S. § 201-3. Danganan, however, brings his UTPCPL claim under the "catch-all" provision that generally prohibits "fraudulent or deceptive conduct which creates a likelihood of confusion or of misunderstanding." Id. § 201-2(4)(xxi). To state a claim under the "catch-all" provision, a private plaintiff must plead justifiable reliance on the alleged deceptive conduct. Toy v. Metro. Life Ins. Co., 928 A.2d 186, 201-02 (Pa. 2007); see Hunt v. U.S. Tobacco Co., 538 F.3d 217, 221 (3d Cir. 2008). Justifiable reliance requires a plaintiff to "show that he justifiably bought the product in the first place (or engaged in some other detrimental activity) because of the [fraudulent or deceptive conduct]." Hunt, 538 F.3d at 222 n.4 (citing Weinberg v. Sun Co., Inc., 777 A.2d 442, 446 (Pa. 2001)).

Danganan does not allege justifiable reliance on deceptive conduct because the Agreement's terms are clear. He does not allege he relied on any statement by Guardian that he could move and sell his home and not continue to pay. There is no "presumption of reliance," see Hunt, 538 F.3d at 227, and Danganan has not pleaded that he relied on any conduct by Guardian other than the terms of the Agreement itself, which stated that "[Danganan's] obligations . . . continue even if [Danganan] sell[s] or leave[s] the Premises." Supp. App. 198.

The clear terms are controlling. See Ins. Adjustment Bureau, Inc. v. Allstate Ins. Co., 905 A.2d 462, 468-69 (Pa. 2006) ("When the terms of a contract are clear and unambiguous, the intent of the parties is to be ascertained from the document itself."). Danganan moved from his home in September 2014 and sold his home in November 2014. He then tried to cancel the Agreement and stop his obligations-an action prohibited by the clear terms. Danganan has not alleged...

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