Southersby Dev. Corp. v. Twp. of S. Park

• Decision Date: 17 April 2015
• Docket Number: Civil Action No. 14-1248
• Parties: SOUTHERSBY DEVELOPMENT CORPORATION, Plaintiff, v. TOWNSHIP OF SOUTH PARK, MICHAEL G. WARGO, in his individual and official capacity, HERBERT, ROWLAND & GRUBIC, INC., AND SCOTT SWANSINGER, Defendants.
• Court: U.S. District Court — Western District of Pennsylvania

SOUTHERSBY DEVELOPMENT CORPORATION, Plaintiff, v. TOWNSHIP OF SOUTH PARK, MICHAEL G. WARGO, in his individual and official capacity, HERBERT, ROWLAND & GRUBIC, INC., AND SCOTT SWANSINGER, Defendants.

Civil Action No. 14-1248

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA

April 17, 2015

Judge Nora Barry Fischer

MEMORANDUM OPINION

I. Introduction

Presently before the Court are two Motions to Dismiss filed by Defendants Township of South Park ("the Township") and Michael Wargo ("Wargo") (collectively "Township Defendants"), (Docket No. 32), and Defendants Herbert, Rowland & Grubic, Inc. ("HRG") and Scott Swansinger's ("Swansinger") (collectively "HRG Defendants"), (Docket No. 36). The Township and HRG Defendants submitted briefs in support, (Docket Nos. 33, 42), and Plaintiff filed Responses and Briefs in opposition, (Docket Nos. 42-45). The HRG Defendants then filed a Reply. (Docket No. 48).

The Court has heard Argument from the parties, (Docket No. 52), and already dismissed Plaintiff's RICO claims by Memorandum Order, (Docket No. 59). The Motions otherwise are ripe for disposition.

II. Relevant Facts¹

This matter involves a dispute between the real estate developer Plaintiff, the Township and its manager, Wargo, the engineering firm HRG, and its engineer-in-training, Swansinger. Plaintiff owns real property in the Township known as the Della Strada subdivision, which was purchased to be developed and then sold as individual lots for profit. (Docket No. 28 at ¶¶ 11-12). Plaintiff is developing Della Strada in two phases: Phase 1 and Phase 2. (Id. at ¶ 11).

Plaintiff and the Township are parties to two agreements, the Subdivision Development Agreement ("SDA") and the Erosion Sedimentation Control and Storm Water Facilities Maintenance and Monitoring Agreement ("ECA"), both of which were negotiated with the assistance of counsel. (Id. at ¶¶ 27, 37); (Jan. 12, 2015 Trans. at 6:6-7:1).² Paragraphs 19 and 24 of the SDA, Paragraph 5d of the ECA, and Township Ordinance 118.60.3 require Plaintiff to post a cash escrow with the Township. (Docket No. 28 at ¶ 29). The Township, as escrow agent, was to use the funds for payment of inspection services rendered by the Township Engineer, Swansinger. (Id. at ¶¶ 18, 27). Neither Swansinger nor HRG are parties to either agreement, but HRG represents the Township, and Swansinger is designated as the Township Engineer. (Id. at ¶ 18).

As this Court has previously written, the central disputes here include fee disputes for alleged excess billing by HRG and the Township Solicitor, Paul Gitnik, Esq. ("Gitnik"), and conflicting interpretations of Pennsylvania's Municipal Planning Code. (Docket No. 59 at 9). Plaintiff contends that Swansinger falsified digital photographs to support his fraudulent and/or excess bills. (Docket No. 28 at ¶ 224). In turn, it claims that the Township Defendants approved the fraudulent invoices and facilitated payment from the escrow account over its objections. (Id.at ¶ 229). Further, Plaintiff alleges that the Township Defendants actively concealed said fraudulent scheme by withholding the identified invoices despite Plaintiff's demands for same and creating false escrow activity statements. (Id. at ¶¶ 230-31).

Plaintiff's remaining claims include violations of its substantive due process, Equal Protection, and First Amendment rights under the Pennsylvania and United States Constitutions. (Docket No. 28). It also alleges state fraud, civil conspiracy, breach of contract, negligence, unjust enrichment, breach of fiduciary duty, and aiding and abetting claims. (Id.). The HRG Defendants moved to dismiss all of the federal question claims and request that this Court remand the state law claims to state court. (Docket Nos. 36, 37, 48). The Township Defendants seek dismissal of all claims other than the breach of contract claims. (Docket Nos. 32, 33). For the reasons discussed below, the Motions are denied, in part, and granted, in part.

III. Standard of Review

A motion to dismiss pursuant to FED.R.CIV.P. 12(b)(6) challenges the legal sufficiency of a complaint. The Supreme Court of the United States has held that "a plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)) (alterations in original).

The Court must accept as true all well-pleaded facts and allegations and must draw all reasonable inferences therefrom in favor of the plaintiff. See Iqbal, 556 U.S. at 678-79; Twombly, 550 U.S. at 555. As the Supreme Court made clear in Twombly, however, the "factual allegations must be enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555. The Supreme Court has subsequently broadened the scope of this requirement, stating that "only a complaint that states a plausible claim for relief survives a motion todismiss." Iqbal, 556 U.S. at 679 (citing Twombly, 550 U.S. at 556). This standard requires showing "more than a sheer possibility that a defendant has acted unlawfully." Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556). "Where a complaint pleads facts that are 'merely consistent with' a defendant's liability, it 'stops short of the line between possibility and plausibility of entitlement to relief." Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 557). "This 'plausibility' determination will be 'a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.'" Fowler v. UPMC Shadyside, 578 F.3d 203, 211 (3d Cir. 2009) (quoting Iqbal, 556 U.S. at 679).

After Iqbal, the United States Court of Appeals for the Third Circuit explained that a district court must conduct the following analysis to determine the sufficiency of a complaint:

First, the court must "tak[e] note of the elements a plaintiff must plead to state a claim." Second, the court should identify allegations that, "because they are no more than conclusions, are not entitled to the assumption of truth." Finally, "where there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement for relief."

Santiago v. Warminster Twp., 629 F.3d 121, 130 (3d Cir. 2010) (quoting Iqbal, 556 U.S. at 675, 679); see also Burtch v. Milberg Factors, Inc., 662 F.3d 212, 221 (3d Cir. 2011), cert. denied, 132 S.Ct. 1861 (Apr. 2, 2012); Malleus v. George, 641 F.3d 560, 563 (3d Cir. 2011).

Twombly and Iqbal have not changed the other pleading standards for a motion to dismiss pursuant to FED.R.CIV.P. 12(b)(6), and the requirements of FED.R.CIV.P. 8 must still be met. See Burtch, 662 F.3d at 220. Rule 8 requires a showing, rather than a blanket assertion, of entitlement to relief, and "contemplates the statement of circumstances, occurrences, and events in support of the claim presented and does not authorize a pleader's bare averment that he wants relief and is entitled to it." Twombly, 550 U.S. at 555 n.3 (internal alterations, citations, and quotations omitted). The Supreme Court has explained that a complaint need not be "a model ofthe careful drafter's art" or "pin plaintiffs' claim for relief to a precise legal theory" so long as it states "a plausible 'short and plain' statement of the plaintiff's claim." Skinner v. Switzer, 562 U.S. 521 (2011); see also Matrixx Initiatives, Inc. v. Siracusano, 131 S.Ct. 1309, 1322 n.12 (2011) (emphasizing that "to survive a motion to dismiss, respondents need only allege 'enough facts to state a claim to relief that is plausible on its face'") (quoting Twombly, 550 U.S. at 570)). With respect to allegations of fraud, "a party must state with particularity the circumstances constituting fraud or mistake." Fed. R. Civ. P. 9(b).

In deciding a Rule 12(b)(6) motion to dismiss, the Court generally may consider "only the allegations in the complaint, exhibits attached to the complaint, matters of public record, and documents that form the basis of a claim." Lum v. Bank of Am., 361 F.3d 217, 222 n.3 (3d Cir. 2004). A court may, however, "look beyond the complaint to matters of public record, including court files and records, decisions of government agencies and administrative bodies, and documents referenced in the complaint or essential to a plaintiff's claim which are attached to either the [c]omplaint or the defendant's motion." Spence v. Brownsville Area Sch. Dist., 2008 WL 2779079, at *3 (W.D. Pa. July 15, 2008) (citing Pension Benefit Guar. Corp. v. White Consol. Indus., 998 F.2d 1192, 1196 (3d Cir. 1993)).

IV. DISCUSSION

A. Constitutional Claims

Plaintiff sets forth claims pursuant to 42 U.S.C. § 1983 for alleged violations of: substantive due process; equal protection of the laws; and retaliation for invoking protections secured by the First Amendment. (Docket No. 28). It also brings parallel claims under the Pennsylvania Constitution. (Id.). The HRG and Township Defendants move to dismiss all of the constitutional claims. (Docket Nos. 32, 33, 36, 37).

Section 1983 provides that "every person who, under color of [state law] subjects, or causes to be subjected, any . . . person within the jurisdiction [of the United States] to the deprivation of any rights . . . secured by the Constitution and laws, shall be liable to the party injured in an action at law [or] suit in equity." 42 U.S.C. § 1983. In other words, section 1983 does not create substantive rights but provides a vehicle by which violation of rights created by the Constitution or federal law may be vindicated. Baker v. McCollan, 443 U.S. 137, 144 n. 3 (1979); Morse v. Lower Merion School Dist., 132 F.3d 902, 907 (3d Cir. 1997). To state a claim under 42 U.S.C. § 1983, a plaintiff must meet two threshold requirements: 1) the alleged misconduct was committed by a person acting under...