Norristown On-Site, Inc. v. Reg'l Indus., L.L.C., CIVIL ACTION NO. 19-369
| Decision Date | 10 August 2020 |
| Docket Number | CIVIL ACTION NO. 19-369 |
| Parties | NORRISTOWN ON-SITE, INC., Plaintiff, v. REGIONAL INDUSTRIES, L.L.C., Defendant. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
This dispute arises out of a contract between a staffing company, Norristown On-Site, Inc. d/b/a Centrix Staffing ("Centrix"), and a waste management company, Regional Industries, L.L.C. ("Regional"). Regional stopped paying Centrix's invoices for over six months, claiming that Centrix had been overbilling Regional for hours that had not actually been worked. In response, Centrix filed a Complaint for Confession of Judgment, alleging that pursuant to their contract, Regional owed Centrix the total invoice debt, plus interest and attorney's fees. Regional counterclaimed, alleging breach of contract, fraud, and negligent supervision, and seeking indemnification and punitive damages. Centrix now moves for summary judgment on its request for confession of judgment and on Regional's fraud, negligent supervision, indemnification, and punitive damages counterclaims.1
Centrix is a staffing and job-placement services company with its principal place of business in Philadelphia, Pennsylvania and a branch office in Union City, New Jersey. Regional is a solid waste and recycling limited liability company with its principal place of business in Elizabeth, New Jersey.
On June 6, 2017, Centrix and Regional entered into a two-page contract ("Agreement") for Centrix to provide personnel to perform trash collection services. Pursuant to the Agreement, Centrix agreed to provide Regional with "timesheets or forms" to document time worked and weekly invoices for wages and costs which were payable upon receipt. Interest on overdue invoices was set at the rate of 1.85% per month. Failure to pay by the invoice due date would constitute default, and if default occurred, Centrix was authorized to appear for and confess judgment against Regional in the amount of the debt, with interest, cost of suit, and attorney's fees.2
Centrix began providing Regional with employees shortly after the Agreement was executed. In their timekeeping records, Regional employees Renee Negron and Kenny Winters handwrote the number of hours each Centrix employee worked into a typed form that listed Centrix employees' names; signed the timesheets at the end of the week; and provided copies toone Eugene Graham. Whether Graham was Centrix's independent contractor or employee remains in dispute, as does his process for converting the handwritten forms he received from Regional into a PDF file he submitted via email to Centrix. Centrix employees then inputted the information from Graham's PDF file into its payroll system.
Centrix's Philadelphia office issued the payroll checks to be printed remotely at the Union City office and picked up by Graham. Disputes remain as to how the paychecks were distributed to Centrix employees and whether they were asked for identification when they received their checks.
Centrix's Philadelphia office also generated invoices and sent Regional a copy of the invoice along with the corresponding digital timesheet created by Graham. Centrix's invoices stated that they were due 15 days after the bill close date. Between June 2017 and July 2018, Regional made regular payments on the Centrix invoices.
In July 2018, Regional began noticing discrepancies between its handwritten timesheets and the digital timesheets and invoices Centrix submitted. As one example, for the night shift starting on March 5, 2018, Graham's digital timesheets listed hours worked for Andrew Graham and Fiheem Graham, but Regional's handwritten timesheets did not show any hours worked for them.3 Regional alerted Centrix to the discrepancies. In response, Centrix provided Regional with information for those employees who appeared on Centrix's invoices but who did not appear on the timesheets drafted by Regional. Regional supervisors did not recognize any of those employees' names or photographs, despite Centrix's invoices showing that these employees worked with Regional for months. Ultimately, Regional identified over a dozenCentrix employees who appeared on the invoices submitted by Centrix but not on the timesheets drafted by Regional. Centrix nevertheless denied that it had been overbilling Regional. Regional maintains that the billing discrepancies date back to at least January 2018 and that its internal investigation preliminarily estimated that Centrix overbilled Regional for approximately $261,232.81 by September 2018.
Beginning on August 15, 2018 and through February 1, 2019, Regional stopped making payments on nearly all invoices and still had not paid at the time of this Complaint's filing. Centrix claims it is owed $266,148.45 for what it terms "undisputed and unpaid invoices" for wages, payroll taxes, and insurance for September 5, 2018 through February 1, 2019, plus 1.85% interest, attorney's fees, and costs pursuant to the Agreement.4 Regional maintains that the amounts owed are disputed because Regional was overbilled starting in January 2018, and thus by September 2018, Regional should have been credited for the hundreds of thousands of dollars it had been overbilled by Centrix. Moreover, Regional maintains that Centrix "first materially breached the Agreement by submitting fraudulent invoices to Regional for renumeration[,]" which "precludes Centrix from moving for performance under the Agreement."
On January 24, 2019, Centrix filed its Complaint in Confession of Judgment against Regional for the unpaid invoices. The Court entered an Order confessing judgment. Regional filed a Petition to Strike the Confessed Judgment and alleged counterclaims, followed by an Amended Petition to Strike or, in the Alternative, to Open the Confessed Judgment. Following a hearing, the Court denied Regional's Motion to Strike the Confessed Judgment but granted its Petition to Open the Confessed Judgment.
Summary judgment shall be granted if "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). In reaching this decision, it must be determined "whether the pleadings, depositions, answers to interrogatories, admissions on file, and affidavits show that there is no genuine issue of material fact and whether the moving party is therefore entitled to judgment as a matter of law." Macfarlan v. Ivy Hill SNF, LLC, 675 F.3d 266, 271 (3d Cir. 2012). A disputed issue is "genuine" only if there is a sufficient evidentiary basis on which a reasonable factfinder could find for the non-moving party. Kaucher v. Cty. of Bucks, 455 F.3d 418, 423 (3d Cir. 2006). A factual dispute is "material" only if it might affect the outcome of the suit under governing law. Doe v. Luzerne Cty., 660 F.3d 169, 175 (3d Cir. 2011). In deciding a motion for summary judgment, all evidence and reasonable inferences from the evidence must be taken in the light most favorable to the non-moving party. Macfarlan, 675 F.3d at 271.
Centrix moves for summary judgment on its request for confession of judgment because it argues the amount owed is undisputed; Regional disagrees.
Pennsylvania law governs substantive challenges to a confession of judgment, see F.D.I.C. v. Deglau, 207 F.3d 153, 166 (3d Cir. 2000), which is a "procedure that lets a plaintiff obtain a judgment while skipping almost all the steps in an ordinary litigation." Complete Bus. Sols. Grp., Inc. v. HMC, Inc., 2019 WL 4858273, at *2 (E.D. Pa. Oct. 2, 2019) (citing Pa. R. Civ. P. 2950-2967). "Confession of judgment is a powerful tool, because it effectively prevents the debtor from having his day in court." PNC Bank v. Bolus, 655 A.2d997, 1000 (Pa. Super. 1995).
After the court enters a confession of judgment, the defendant may move to strike or open the judgment. Pa. R. Civ. P. 2959; see also Resolution Tr. Corp. v. Copley Qu-Wayne Assocs., 683 A.2d. 269, 273 (Pa. 1996) ( ). Complete, 2019 WL 4858273, at *2 (citing Resolution, 683 A.2d at 273).
Here, following Centrix's petition and Regional's answer with counterclaims, the Court held a hearing and opened the confessed judgment. In doing so, the Court noted that the question was whether "the amounts at issue in this litigation [are] disputed amounts, or . . . unpaid invoices that were not connected to that discrepancy dispute." Following discovery, this question remains unresolved. Regional maintains the alleged overbilling is "intertwined with the monies sought by Centrix," while Centrix claims the invoices are "undisputed and unpaid."
At its core, the confession of judgment dispute here is actually about a breach of contract. Under Pennsylvania law, a claim for breach of contract requires that a plaintiff establish: "(1) the existence of a contract, including its essential terms, (2) a breach of a duty imposed by the contract, and (3) resultant damages." Ware v. Rodale Press, Inc., 322 F.3d 218, 225 (3d Cir.2003).5 The parties agree that there was a valid contract here, but Regional maintains that Centrix breached the contract first by submitting fraudulent invoices, which...
To continue reading
Request your trial