Sam Mannino Enters., LLC v. John W. Stone Oil Distrib., LLC
| Decision Date | 31 August 2015 |
| Docket Number | Civil Action No. 3:14–6. |
| Citation | 127 F.Supp.3d 318 |
| Parties | SAM MANNINO ENTERPRISES, LLC, Plaintiff, v. JOHN W. STONE OIL DISTRIBUTOR, LLC, Defendant. |
| Court | U.S. District Court — Western District of Pennsylvania |
Michael B. Cohen, Altoona, PA, for Plaintiff.
Christopher P. Deegan, Matthew R. Zwick, Weber Gallagher Simpson Stapleton Fires & Newby LLP, Pittsburgh, PA, Wade P. Webster, Fowler Rodriguez Flint Gray Mccoy & Sullivan, L.L.P., New Orleans, LA, for Defendant.
This action arises from a dispute between Plaintiff Sam Mannino Enterprises, LLC ("Mannino" or "Plaintiff") and Defendant John W. Stone Oil Distributor, LLC ("Stone Oil" or "Defendant") concerning Stone Oil's leasing of certain railcars to Mannino. Plaintiff contends that Defendant is liable for breach of contract, tortious interference with a contractual relationship, and common law fraud. Defendant has filed a counterclaim for the recovery of certain charges allegedly due under the parties' lease agreements.
Presently pending before the Court is Defendant's Motion for Summary Judgment (ECF No. 30) in which Defendant moves that all of Plaintiff's claims be dismissed and moves for partial summary judgment on its counterclaim. For the reasons that follow, the motions at ECF No. 30 will be granted. This matter will be scheduled for trial regarding damages on Defendant's counterclaims.
The Court has jurisdiction over all of the parties' claims pursuant to 28 U.S.C. § 1332, as the parties are of diverse citizenship and the amount in controversy exceeds $75,000 exclusive of interest and costs. Venue is appropriate pursuant to 28 U.S.C. § 1391(b)(2).
Stone Oil is a Louisiana limited liability company that is engaged in the business of, among other things, leasing cargo railcars to lessee companies. (Compl. ¶ 2, ECF No. 12; Answer and Countercl. ¶¶ 2 and 12, ECF No. 25; Decl. of Gordon Bent ¶ 2, ECF No. 311.) Mannino is a Pennsylvania Limited Liability Company doing business under the fictitious name "Investors First Capital." Mannino is engaged in the business of leasing cargo railcars from entities like Stone Oil and then subleasing the railcars to entities that transport rail cargo. (See Pl.'s Br. Opp. Mot. Summ. J. at 2, ECF No. 34.)
Between October and December 2013, Stone Oil leased forty (40) railcars to Mannino on a month-to-month basis.2 (SMF ¶ 1; see Def.'s Mot. to Dismiss, Ex. 1, 2 and 3, ECF Nos. 11–3, 11–4, 11–5; Bent Decl. Ex. E, ECF No. 31–1 at pp. 56–623 .) The December lease covered a rental period "starting approximately 12/01/2013 and ending approximately 12/31/2013." (Bent Decl. Ex. E, ECF No. 31–1, p. 56.) Under the lease, Stone Oil "reserve[d] the right to end this agreement, and have all cars returned ... with a 10 day notice." (Id. ) On December 4, 2013, Mannino sent Stone Oil wired funds in the amount of $124,000 in consideration of a lease for the forty railcars for the months of December, 2013 and January, 2014. Following Stone Oil's receipt of this payment, the December Lease was re-conducted through January, 2014; however, no written lease was signed for January, 2014. (SMF ¶ 4.)
In the meantime, on November 26, 2013, Mannino and Stone Oil had entered into an agreement (hereinafter, the "Commission Agreement") that "contemplated a relationship in which [Mannino would] facilitate a Sub-lease transaction or transactions involving 40 or more tank railcars" directly between Stone Oil and an end user/lessee. According to the "Recital" clauses in the Commission Agreement, Mannino "[had] identified an investment grade Lessee who seeks to lease the tank railcars from [Stone Oil] at a monthly lease payment of nineteen-hundred ($1,900.00) dollars per car ..." (Compl. Ex. 1, ECF No. 1–2.) The agreement provided that Stone Oil would pay Mannino "four hundred ($400.00) dollars per month for each tank railcar leased to the Lessee for the term of the lease and any lease renewals thereafter." (Id. ¶ 1.) Further, these commission payments would be made "within five (5) days of the date that the payment was received by [Stone Oil] from the Lessee." (Id. ¶ 2.)
According to Stone Oil, the terms of the Commission Agreement (Def.'s Mem. Supp. Mot. Summ. J. 3–4, ECF No. 32.) Stone Oil claims that it entered into the Commission Agreement based on representations by Mannino that it would broker leases for Stone Oil's railcars to Procter & Gamble for the price of $1,900 per railcar per month. (See Bent Decl. ¶ 8, ECF No. 31–1 at p. 2; Def.'s Pet. for Decl. Action, Bent Decl. Ex. A, ECF No. 31–1 at p. 6.) Matters between the parties later deteriorated when Mannino sought to effectuate a leasing arrangement with a different sub-lessee, Associated Energy Services ("AES").
On December 18, 2013, Stone Oil's agent, Gordon Bent, sent correspondence to Mannino giving notice that Stone Oil was terminating the November 26, 2013 Commission Agreement. The letter stated:
Stone entered this Agreement under the representation made by you that Procter & Gamble Corporation would be the lessee who rented the tank railcars, but this did not occur. The creditworthiness of a major corporation like Procter & Gamble Corporation was the motivating reason for Stone entering the Agreement, and the offers by you for alternative lessees without similar creditworthiness are not the same, so Stone prefers not to pursue this further.
(Def.'s Mot. to Dismiss. Ex. 4, ECF No. 11–6.)
Bent's correspondence further advised that Stone Oil would not renew its leasing arrangement with Mannino beyond January 2014:
[P]lease be advised that we have accepted the payment of rent from you to re-conduct the attached [December lease], for one month, the month of January 2014, and that notice is furnished that all railcars should be returned to Stone at the expiration of the Lease on January 31, 2014. No further lease will be made after that date. A delivery address for the return of the railcars will be promptly furnished.
(Def.'s Mot. to Dismiss. Ex. 4, ECF No. 11–6.)
The following day, December 19, 2013, Stone Oil filed a state court declaratory judgment action in Jefferson Parish, Louisiana. In its petition, Stone Oil sought a declaration that "all agreements between [Stone Oil and Mannino] are terminated effective January 31, 2014, and that no sums are due by John W. Stone Oil Distributors, LLC to Mannino Enterprises, LLC ..." (Bent Decl. Ex. A, ECF No. 31–1, p. 7; see SMF ¶¶ 12–13.) Immediately after commencing the Louisiana action, Stone Oil furnished a copy of the petition to Mannino's attorney. (SMF ¶ 14; Def.'s Mot. to Dismiss Ex. 6, ECF No. 11–8.)
Despite this notice, Mannino apparently failed to defend the Louisiana action. Consequently, a default judgment was entered against Mannino on March 24, 2014. In relevant part, the judgment declared:
(Bent Decl. Ex. B, ECF No. 31–1 at pp. 14–15.)
In the meantime, Gordon Bent had spoken with a representative of AES by telephone on December 20, 2013. During this conversation, Bent advised AES's representative that the railcar lease with Sam Mannino Enterprises, LLC would not be renewed after January 31, 2014. (Bent Decl. ¶ 4, ECF No. 31–1, p. 1.)
Mannino filed the instant lawsuit against Stone Oil in the Court of Common Pleas of Blair County, Pennsylvania on December 27, 2013. In its complaint, Mannino asserted claims for breach of contract, tortious interference with a contractual relationship, and common law fraud. Stone Oil removed the case to this Court on January 10, 2014. (See Notice of Removal, ECF No. 1.)
Plaintiff's first claim is premised upon Stone Oil's alleged breach of the November 26, 2013 Commission Agreement. According to Plaintiff, the "essence" of that agreement was that forty or more railcars would be leased to an "investment grade" company in exchange for a monthly fee of $1,500. (Compl. ¶ 5.) Plaintiff alleges that, based on the terms of the agreement and certain representations made by Bent, it believed it "had the capacity to enter into a contract with Associated Energy Services ... or any investment grade company for the leasing of up to sixty railcars for a period of time through March 2014." To that end, "Plaintiff sent and Defendant accepted...
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