Nicholas Malfitano Mar. 7, 2016, 3:49pm


INDIANAPOLIS – An Indiana federal judge has dismissed a complaint against Apex Energy Group of Zionsville, Ind., citing no response from the plaintiffs to the motion to dismiss.

Plaintiff Apex Energy Solutions of Pittsburgh initially filed a lawsuit against defendant Apex Energy Group in the U.S. District Court Western District of Pennsylvania on Feb. 6, 2015, alleging unfair trade practices and breach of contract.

According to the complaint, the defendant sold the plaintiff a window sales business franchise on Feb. 6, 2013. The suit said Apex Energy Group violated trade and consumer protection law and engaged in fraudulent or deceptive conduct and breach of contract, by failing to inform Apex Energy Group of certain franchise disclosures required by FTC regulations.

Apex Energy Solutions sought rescission of the 2013 license agreement, declaratory judgment and additional relief in the form of damages, plus attorney fees and court costs.

On April 7, 2015, the defendant filed a motion to both transfer the litigation to the U.S. District Court for the Southern District of Indiana and dismiss the litigation.

The following month, the litigation received the transfer – and the next December, the plaintiff filed to amend their complaint without responding to the motion to dismiss. Magistrate Judge Matthew P. Brookman denied this request on Feb. 4.

Then on March 1, Judge Sarah Evans Barker ruled to dismiss the plaintiff’s suit, due to their side not responding to the defense motion to dismiss from nearly 11 months before, and separately addressed their claims.

“It is clear from the licensing agreement attached to plaintiff’s complaint that plaintiff entered into the agreement for a business purpose,” Barker said, when Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (UTPCPL) only allows a private right of action for a “person who purchases or leases goods or services for personal, family, or household purposes.”

Therefore, Barker dismissed those counts of the plaintiff’s complaint for failure to state a claim. The plaintiff’s allegations of constructive fraud, fraudulent concealment and breach of contract met a similar fate.

“These claims are based solely on plaintiff’s assertion that defendant had pre-sale franchise disclosure obligations to plaintiff pursuant to the FTC Franchise Rule which it allegedly failed to honor,” Barker said. “We agree with defendant that plaintiff’s fraud claims and breach of contract claim are simply a recast of plaintiff’s claim that defendant violated the FTC’s Franchise Rule in a transaction made for reasons other than primarily for personal, family, or household purposes and thus those counts also fail to state a claim upon which relief can be granted.”

Barker also dismissed count six, relating to the defendant’s alleged violation of the Indiana Deceptive Consumer Sales Act, and ruled all other claims found in the suit as waived.

“Like the FTC’s Franchise Rule and the Pennsylvania UTPCPL, Indiana’s Deceptive Consumer Sales Act applies only to consumer transactions,” Barker said.

“The complaint and its exhibits evidence that the exchange between plaintiff and defendant was not a ‘consumer transaction’ protected by the Indiana Deceptive Consumer Sales Act. Thus, plaintiff fails to state a claim for violation of Indiana’s Deceptive Consumer Sales Act,” Barker added.

Barker concluded by dismissing all claims with prejudice and labeling the plaintiff as directly contributing to their dismissal of their own suit, through their lack of reaction to the defense’s motion to dismiss from last year.

“Plaintiff has had ample time to respond to the motion to dismiss and defend its claims, but has failed to do so...plaintiff continued to ignore the pending motion for almost one year,” Barker said. “Thus, plaintiff has been complicit in the dismissal of its claims.”

The plaintiff is represented by Thomas J. Michael of Thomas J. Michael & Associates in Pittsburgh, and Suzanne Roberts of The Commerce Law Group, in Sewickley.

The defendant is represented by Allison Sarah Cox and Charles E. Reynolds, of Santen & Hughes, in Cincinnati, Ohio.

U.S. District Court for the Southern District of Indiana case 1:15-cv-00751

From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nickpennrecord@gmail.com

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