Fishman Org., Inc. v. Frick Transfer, Inc., CIVIL ACTION NO. 11-4598

• Decision Date: 24 July 2012
• Docket Number: CIVIL ACTION NO. 11-4598
• Parties: FISHMAN ORGANIZATION, INC., Plaintiff, v. FRICK TRANSFER, INC., Defendant.
• Court: U.S. District Court — Eastern District of Pennsylvania

FISHMAN ORGANIZATION, INC., Plaintiff,

v.FRICK TRANSFER, INC., Defendant.

CIVIL ACTION NO. 11-4598

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA

Dated: July 24, 2012

MEMORANDUM

EDUARDO C. ROBRENO, J.

The Fishman Organization ("Plaintiff") brings this diversity action against Frick Transfer ("Defendant") to recover damages caused by the breach of a bailment contract between the parties.Plaintiff moves for summary judgment on the issue of liability.For the reasons that follow, the Court will grant in part and deny in part the Motion for Summary Judgment on Liability.

I.BACKGROUND¹

Defendant operates a moving, storage, and warehouse business in Easton, Pennsylvania.Compl.¶ 6, ECF No. 1;Answer¶ 6, ECF No. 5.Since 1995, Plaintiff, a New York corporation, stored certain goods in Defendant's facilities.Compl.¶ 1;Jerry FishmanDep. 9:21-22, Dec. 6, 2011.

On January 1, 2002, Plaintiff entered into an agreement whereby Defendant would store Plaintiff's goods at Defendant's Wilson Park Distribution Center ("Wilson Park").Warehouse/Distribution Services Agreement (Wilson Park)¶ 2(Jan. 1, 2001)[hereinafter Wilson Park Agreement].The initial term of the agreement commenced on January 1, 2002, and ended on December 31, 2002.Id.¶ 1.After December 31, 2002, the agreement extended on a month-to-month basis "until either party provides to the other a thirty (30) day written notice of its intention to terminate [the agreement]."Id.The parties assigned the risk of loss to Plaintiff as follows:

Fishman shall assume the risk of loss or damage to its goods stored on the premises, and agrees to indemnify and hold Frick and Wilson Park Ltd. and their respective agents, officers, directors, employees and partners, harmless from any loss or expense, other than risk of loss or damage to Goods caused by Frick's negligence and limited to the extent of Frick's insurance.

Id.¶ 5.

On July 29, 2004, Plaintiff purchased 240 cartons of Acqua di Gio Man EDT Spray 100 ml ("the Product") from a distributor in Barcelona, Spain, at a cost of $164,045.42.SeeMot. Summ. J. Ex. B, ECF No. 15.Plaintiff stored the Product at Wilson Park.Seeid.

On June 2, 2006, Defendant notified its warehouse customers by letter that they must remove items stored at Wilson Park, because the warehouse would be renovated for use as a condominium.Mot. Summ. J. Ex. C. Frick Transfer President Paul S. Robison testified that the letter terminated Defendant's warehouse storage arrangements with its customers.RobisonDep. 37:6-16, Dec. 6, 2011.

On September 5, 2006, Defendant notified its warehouse customers by letter that Defendant would operate a new warehouse facility on Tatamy Road in Easton, Pennsylvania ("Tatamy Warehouse").Mot. Summ. J. Ex. D. Defendant explained that its joint venture with WilsonPark, whereby Defendant provided labor and WilsonPark provided storage space, was dissolved and Defendant would now handle all operations at the Tatamy Warehouse.Id.Defendant invited its customers to contact it to relocate their items to its new facility and reminded them that they otherwise must remove any items at Wilson Park by September 29, 2006.Id.

On September 7, 2006, in response to Plaintiff's interest in storage at the Tatamy Warehouse, Defendant sent aproposal to Plaintiff.²Mot. Summ. J. Ex. E. In September 2006, Defendant moved Plaintiff's inventory from Wilson Park to the Tatamy Warehouse.Answer¶ 14.

On May 27, 2010, Wayne Frick, Defendant's employee, received a telephone call from Steven Lewandowski, the brother of an employee, Daniel Lewandowski.FrickDep. 17:23-18:6; 23:4.Steven explained that Daniel stole perfume from pallets in the warehouse and was selling the perfume.Id.at 19:7-19.Frick spoke with Robison, who directed Frick to check Plaintiff's storage room.Id.at 20:5-6.When Frick arrived at Plaintiff's storage room, the gate was shut, there was a chain around the gate, and the lock was on.Id.at 21:2-3.He unlocked the gate and inspected the room.Id.at 21:3-4.Frick noticed two empty pallets in the room but did not notice anything out of the ordinary.Id.at 21:3-23.Defendant did not report the alleged theft to Plaintiff or the police.Id.at 23:12-17.

On September 22, 2010, Diane Fishman, an officer and employee of Plaintiff, arranged with Defendant to access Plaintiff's storage area the following day.³Compl.¶ 16;Answer¶ 16.On September 23, 2010, Diane Fishman discovered that some of the Product was missing and reported the incident to Frick.FrickDep. 23:4-9.At that point, Frick informed Diane Fishman that he received a report that an employee stole some of the Product.Id.at 23:18-24:3.

On June 9, 2011, Daniel Lewandowski pled guilty to receiving stolen property in the Pennsylvania Court of Common Pleas of Northampton County pursuant to a negotiated plea agreement.Answer¶ 19;LewandowskiDep. 36:7-19.Lewandowski testified at his deposition relating to this civil action that from June 2008 to September 2009he removed cases of the Product until none was left.Id.at 22:7-31:8.In each instance, Lewandowski testified that, although a lock was in place on the door to Plaintiff's storage area, the gate was actually unlocked, which allowed him to walk through the front gate to access Plaintiff's storage area.Id.at 17:19-18:2; 25:12-26:4; 29:14-16.Lewandowski further testified that because of problemswith the alarm system, Defendant's agents sometimes turned off the alarm for the day, which sometimes "rolled into weeks where the alarms were not set."Id.at 33:7-8.

II.PROCEDURAL HISTORY

On July 21, 2011, Plaintiff filed a Complaint against Defendant that asserts claims of breach of a bailment contract (Count I), negligent hiring, supervision, and retention (Count II), and negligent notification (Count III).Defendant answered and asserted a single counterclaim for breach of contract based on Plaintiff's failure to pay rent.⁴

On March 22, 2012, Plaintiff moved for summary judgment on the issue of liability.Defendant responded, and Plaintiff replied.The matter is now ripe for disposition.

III.LEGAL STANDARD

Summary judgment is appropriate if there are no genuine disputes of material fact and the moving party is entitled to judgment as a matter of law.Fed. R. Civ. P. 56(a)."A motion for summary judgment will not be defeated by 'the mereexistence' of some disputed facts, but will be denied when there is a genuine issue of material fact."Am. Eagle Outfitters v. Lyle & Scott Ltd., 584 F.3d 575, 581(3d Cir.2009)(quotingAnderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48(1986)).A fact is "material" if proof of its existence or nonexistence might affect the outcome of the litigation, and a dispute is "genuine" if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party."Anderson, 477 U.S. at 248.

The Court will view the facts in the light most favorable to the nonmoving party."After making all reasonable inferences in the nonmoving party's favor, there is a genuine issue of material fact if a reasonable jury could find for the nonmoving party."Pignataro v. Port Auth. of N.Y. & N.J., 593 F.3d 265, 268(3d Cir.2010).While the moving party bears the initial burden of showing the absence of a genuine dispute of material fact, meeting this obligation shifts the burden to the nonmoving party who must "set forth specific facts showing that there is a genuine issue for trial."Anderson, 477 U.S. at 250.

Federal courts sitting in diversity generally apply substantive state law.SeeErie R.R. Co. v. Tompkins, 304 U.S. 64, 78(1938).Here, the parties rely on Pennsylvania law in their written submissions to the Court, which indicates their agreement that Pennsylvania law governs the interpretation ofthe instant bailment contract.Therefore, the Court will apply Pennsylvania law in this case.SeeAdvanced Med., Inc. v. Arden Med. Sys., Inc., 955 F.2d 188, 202 n.8(3d Cir.1992).

IV.DISCUSSION

Under Pennsylvania law, "[a] bailment is a delivery of personalty for the accomplishment of some purpose upon a contract, express or implied, that after the purpose has been fulfilled, it shall be redelivered to the person who delivered it, otherwise dealt with according to his directions or kept until he reclaims it."Price v. Brown, 680 A.2d 1149, 1151(Pa.1996).A contract of bailment may be implied when "the natural and just interpretation of the acts of the parties warrants such a conclusion."Lear Inc. v. Eddy, 749 A.2d 971, 973(Pa. Super. Ct.2000)(internal quotation marks omitted).Here, Plaintiff delivered the Product to Defendant for the purpose of storing the Product at Defendant's Wilson Park location.Plaintiff then directed Defendant to move the Product to the Tatamy Warehouse, where Defendant would continue to store the Product under lock and key.The natural and just interpretation of the parties' conduct warrants the conclusion that the parties created a contract of bailment.Seeid.

Actions arising under common law bailment in Pennsylvania proceed under a burden-shifting framework.Thebailor must first establish a prima facie case by showing "that personalty has been delivered to the bailee, a demand for return of the bailed goods has been made, and the bailee has failed to return the personalty."Price, 680 A.2d at 1152.Upon such a showing, the burden shifts to the bailee to provide evidence that accounts for the loss.Id.If the bailee fails to account for the loss, then the law presumes the bailee failed to exercise the duty of care required by the bailment agreement.Id.However, if the bailee can "show[] that the personalty was lost and the manner in which it was lost, and the evidence does not disclose a lack of due care on [the bailee's] part, then the burden of proof again shifts to the bailor who must prove negligence on the part of the bailee."Id.Thus, although the bailment relationship originates in the law of contract,...