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HomeMy WebLinkAbout2003-2782 CivilLAND O' LAKES, INC., & DAIRY MARKETING SERVICES, LLC, Plaintiffs CLOUSE TRUCKING, INC. CLOVERLAND DAIRY LIMITED PARTNERSHIP, A Maryland Limited Partnership, J. EDWARD CLOUSE and DANIEL FOX IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 2003-2782 CIVIL TERM CIVIL ACTION - LAW IN RE: PRELIMINARY OBJECTIONS OF DEFENDANTS CLOVERLAND DAIRY LIMITED PARTNERSHIP AND DANIEL FOX BEFORE HESS, GUIDO, JJ. OPINION AND ORDER OF COURT Currently before us are several preliminary objections to plaintiffs' amended complaint filed by defendants Cloverland Dairy Limited Partnership (hereinafter "Cloverland") and Daniel Fox (hereinafter "Fox"). ~ Before we address the objections, we will review the facts as set forth in the complaint. FACTUAL BACKGROUND Plaintiff Land O' Lakes, Inc. operates a dairy processing plant in Mount Holly Springs. It receives truck loads of milk which it turns into products for human consumption. Cloverland was a "handler", or middleman, who arranged getting the raw The preliminary objections involve only those counts involving Plaintiff Land O'Lakes. Therefore, when we use the term "Plaintiff' in our factual recitation, we will be referring to Land O' Lakes. NO. 2003-2782 CIVIL TERM milk from the producers to plaintiff.2 Fox was an employee of Cloverland acting within the scope of his employment. Under federal law all milk intended to be used for human consumption is subject to certain testing procedures. A particular truck load of milk procured by Cloverland failed one of the required tests. The testing lab placed seals on the tank truck indicating that the milk therein was unfit for human consumption. Pursuant to industry custom, it was Cloverland's responsibility to dispose of the condemned milk. Rather than carry out its duty Cloverland, through Fox, removed the seals, falsified documents and caused the milk to be delivered to plaintiff' s plant. Plaintiff commingled 30,000 pounds of the condemned milk with other milk in its storage silo. When it discovered the chicanery that had occurred, plaintiff was required to destroy almost lA million pounds of milk. DISCUSSION Plaintiffs filed a twelve count complaint based upon the above conduct. The complaint was subsequently amended. Defendants Cloverland and Fox have filed five separate preliminary objections involving the first ten counts of the amended complaint. In essence the objections are demurrers to the claim for punitive damages as well as to Count III ("Breach of Implied Duty of Good Faith") Count V ("Breach of Implied Warranty for a Particular Purpose") and the vicarious liability claims contained in Counts VII and IX. In addition, a final objection challenges the specificity of damages pled in each of the first ten counts. The demurrer to Counts V, VII and IX as well as the objection involving specificity are clearly without merit and will be dismissed without : Defendants Clouse Trucking, Inc. and J. Edward Clouse were engaged by Cloverland to actually haul the milk in question. NO. 2003-2782 CIVIL TERM discussion. The remaining objections in the nature of a demurrer will be dismissed for the reasons hereinafter set forth. Standard of Review. The standard to be applied to preliminary objections in the nature of a demurrer was succinctly stated by our Supreme Court as follows: A demurrer can only be sustained where the complaint is clearly insufficient to establish the pleader' s right to relief. For the purpose of testing the legal sufficiency of the challenged pleading a preliminary objection in the nature of a demurrer admits as true all well-pleaded, material, relevant facts, and every inference fairly deducible from those facts. Since the sustaining of a demurrer results in a denial of the pleader's claim or a dismissal of his suit, a preliminary objection in the nature of a demurrer should be sustained only in cases that clearly and without a doubt fail to state a claim for which relief may be granted. County ofA//egheny v. Commonwealth, 507 Pa. 360, 372 490 A.2d 402 408 (1985) (citations omitted). Furthermore, when ruling upon a demurrer, we are limited to a review of the allegations set forth in the complaint. Mellon Bank, N.A.v. Fabinyi, 437 Pa. Super. 559, 650 A.2d 895 (1994). Punitive Damages. Punitive damages may be awarded if it can be shown that defendant' s conduct was "outrageous" resulting from "evil motive" or "reckless indifference to the rights of others." Feldv. Merriam, 506 Pa. 383,395 485 A.2d 742, 747 (1984). Defendants' intentional delivery of milk it knew had been declared unfit for human consumption is certainly sufficient to meet this standard. NO. 2003-2782 CIVIL TERM Breach of Implied Duty of Good Faith. Count III of the amended complaint is founded upon an alleged breach of the obligation of good faith imposed under Section 1203 of the Uniform Commercial Code.3 Defendant argues that a violation of Section 1203 does not give rise to an independent cause of action. They contend that any such claim must be based upon a contract governed by the UCC. Plaintiffs do not disagree. However, they correctly point out that Count II of their amended complaint alleges a breach of contract under the Uniform Commercial Code. Count III incorporates those allegations. Therefore, Count III alleges both a contract under the U.C.C. and a breach of the contract as a result of defendants' failure to comply with the "obligation of good faith" imposed by Section 1203 by intentionally delivering milk that it knew was not fit for human consumption. Those allegations are sufficient to withstand a demurrer. ORDER OF COURT AND NOW, this day of JUNE, 2004, the Preliminary Objections of Defendants' Cloverland Dairy Limited Partnership and Daniel Fox to Plaintiffs' Amended Complaint are DENIED. By the Court, /s/Edward E. Guido Edward E. Guido, J. 3 Section 1203 provides: "Every contract or duty within this title imposes an obligation of good faith in its performance or enforcement." 13 Pa. C.S.A. § 1203. NO. 2003-2782 CIVIL TERM Patrick J. Reilly, Esquire 33 South 7th Street P.O. Box 4060 Allentown, Pa. 18105-4060 For the Plaintiffs John A. Statler, Esquire 320 Market Street P.O. Box 1268 Harrisburg, Pa. 17108-1268 For Clouse Trucking, Inc. and J. Edward Clouse Scott T. Wyland, Esquire 100 North Tenth Street Harrisburg, Pa. 17101 For Cloverland Dairy Limited Partnership and Daniel Fox :sld