PHILADELPHIA – A federal court in Philadelphia has dismissed claims of fraud and conversion against an event planning company tasked with operating a campground in the city during the visit of Pope Francis last fall.
U.S. District Court for the Eastern District of Pennsylvania Judge Timothy J. Savage ruled March 2 that Endless Summer Productions’s lawsuit against Scott Mirkin and Event by Scott Mirkin, Inc. (which does business as ESM Productions, Inc.) would have its fraud and conversion claims dismissed from the complaint, leaving only a breach of contract count intact.
The suit between the parties originated from a contract for the management and operation of a campground in connection with the recent Papal visit to Philadelphia, from Sept. 24 to Sept. 28. After the early stages of the project were completed, the sponsor cancelled the campground program.
Plaintiff Endless Summer claims it is contractually owed money for work performed and expenses paid prior to cancellation, while also demanding consequential and punitive damages. However, Savage said the evaluating criteria of the gist of the action doctrine under state law would bar most of the claims brought by Endless Summer against the defendants.
“Pennsylvania’s gist of the action doctrine precludes a plaintiff from bringing what is actually a breach of contract claim as a tort claim,” Savage said. “When the parties’ obligations are defined by the terms of a contract and not by duties imposed by social policies, a plaintiff may assert only a contract claim.”
Savage explained Endless Summer’s fraud claims and the conversion claim are “predicated on the breach of a duty that arises from the agreement, not from a social duty imposed by society”, and “not independent of the contract.”
Savage added since the alleged fraudulent acts occurred in the course of the performance of the contract, the gist of the action doctrine effectively bars Endless Summer’s tort claims.
“Because Endless Summer’s fraud and conversion claims are precluded by the gist of the action doctrine, Counts II, III and IV of the amended complaint will be dismissed,” Savage said. “Because the only remaining cause of action is for breach of contract, we shall strike the demand for punitive damages and dismiss the amended complaint as to Mirkin.”
According to Savage, Mirkin himself was dismissed from the litigation because he himself was not a party to the contract and cannot be held personally liable, while punitive damages are not eligible for recovery in a breach of contract action, and were thus likewise dismissed.
Further proceedings will be exclusively related to Endless Summer’s breach of contract claim.
The plaintiff is represented by Carmelo T. Torraca of Cooper Levenson April Niedelman & Wagenheim, in Atlantic City, N.J.
The defendant is represented by Raymond A. Quaglia of Ballard Spahr, in Philadelphia.
U.S. District Court for the Eastern District of Pennsylvania case 2:15-cv-06097
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nickpennrecord@gmail.com