Oldcastle Precast, Inc. v. VPMC, Ltd., CIVIL ACTION No. 12-6270

OLDCASTLE PRECAST, INC., Plaintiff,

v. VPMC, LTD, JOSEPH R. GAMBONE, JR., MICHAEL A. GAMBONE,AUDREY GAMBONE, co-executor of the ESTATE OF ANTHONY R. GAMBONE, Sr.,MICHAEL A. GAMBONE, co-executor of the ESTATE OF ANTHONY R. GAMBONE, SR.,GEORGE J. FALCONERO, co-executor of the ESTATE OF ANTHONY GAMBONE, SR.,SANDRA LEE GAMBONE, co-executor of the ESTATE OF ANTHONY GAMBONE, SR.,and SHARON ANAPOSIKY, co-executor of the ESTATE OF ANTHONY GAMBONE, SR., Defendants.

CIVIL ACTION No. 12-6270

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA

MAY 13, 2013

MEMORANDUM

ROBERT F. KELLY, Sr. J.

Presently before the Court is Defendants, VPMC, Ltd., Joseph R. Gambone, Jr., Michael A. Gambone, Audrey Gambone, George J. Falconero, Sandra Lee Gambone, and Sharon Anaposiky's (collectively, "Defendants"), Motion to Dismiss Plaintiff's Amended Complaint, Plaintiff, Oldcastle Precast, Inc.'s ("Oldcastle"), Response, and Defendants' Reply. For the following reasons, Defendants' Motion will be granted in part and denied in part.

I. BACKGROUND

Oldcastle is a corporation organized under the laws of the State of Washington. (Am. Compl. ¶ 1.) Defendant, VPMC, Ltd. ("VPMC"), is a Pennsylvania corporation with a principal place of business in East Norriton, Pennsylvania. (Id. ¶ 2.) Defendants, Joseph Gambone, Jr., and Michael A. Gambone ("Michael Gambone"), are citizens of Pennsylvania, and Michael Gambone is a co-executor of the Estate of Anthony R. Gambone, Sr. ("Estate of Anthony Gambone"). (Id. ¶¶ 3-4, 6.) Defendant, Audrey Gambone, is a citizen of Pennsylvania and co-executor of the Estate of Anthony Gambone. (Id. ¶ 5.) Defendant, George J. Falconero, is a citizen of Pennsylvania and a co-executor of the Estate of Anthony Gambone. (Id. ¶ 7.) Defendants, Sandra Lee Gambone and Sharon Anaposiky, are citizens of Pennsylvania, and a co-executors of the Estate of John A. Gambone, Sr. ("Estate of John Gambone"). (Id. ¶¶ 8-9.)

Oldcastle avers that in 2005 it owned approximately 20.68 acres of property located in Bucks County, Pennsylvania (the "Property"), and that on December 9, 2005, it entered into an agreement of sale (the "Agreement of Sale") with Gambone Acquisition Company ("GAC"), whereby GAC agreed to pay Oldcastle $2,800,000 ("Purchase Price"), in exchange for title to the Property. (Id. ¶¶ 12-13.) On November 3, 2006, GAC entered into an assignment agreement, whereby GAC assigned its rights and obligations under the Agreement of Sale to Ridgewood, Inc. ("Ridgewood"). (Id. ¶ 14.) Ridgewood paid $1,400,000 in cash to Oldcastle, and borrowed from Oldcastle the remaining $1,400,000 to purchase the Property. (Id. ¶ 15.) On November 3, 2006, Ridgewood executed a mortgage note (the "Note"), that was secured by a mortgage (the "Mortgage"). (Id. ¶ 16.) Pursuant to the Note, Ridgewood promised to pay Oldcastle the principal amount of $1,400,000 (the "Principal"), together with the interest rate of six percent(6%) through November 3, 2007. (Id.) In addition, under the Note, all unpaid principal amounts and other amounts payable under the Note became due on or before November 3, 2007 (the "Maturity Date"). (Id. ¶¶ 17-18.) On or about November 3, 2006, Gambone Development Company ("GDC") executed a guaranty (the "Guaranty"), whereby GDC guaranteed to Oldcastle, the "full and prompt payment of all sums and charges . . . payable by [Ridgewood], its successors and assigns, under the Loan. " (collectively, the Note, the Mortgage, and the Guaranty will be referred to as the "Loan Documents"). (Id. ¶ 19; Ex. E.) The Guaranty contains a confession of judgment provision whereby GDC authorized any court to confess or enter judgment against it for all sums due under the terms of the Note in the event of a default under any of the documents securing Oldcastle's loan to Ridgewood. (Id. ¶ 20, Ex. E at ¶ 12.)

As of November 3, 2007, the Maturity Date under the Note, Ridgewood had solely made interest-only payments, and had failed to pay any of the Principal to Oldcastle. (Id. ¶ 21.) On December 5, 2007, Oldcastle entered into a modification of the Note (the "First Modification Agreement") with Ridgewood, GDC, John A. Gambone, Sr., Anthony R. Gambone, Sr.,¹ and John R. Gambone, Jr. (collectively, the Estate of John Gambone, the Estate of Anthony Gambone, and Joseph R. Gambone, Jr. will be referred to as the "VPMC Principals"). The VPMC Principals were also the Directors of VPMC. (Id. ¶¶ 22-23; Ex. F.) Pursuant to the First Modification Agreement, Oldcastle agreed to extend the Maturity Date of the Note until August 3, 2008, and Ridgewood agreed to make monthly payments to Oldcastle in the amount of $14,000, for the period of December 3, 2007, until August 3, 2008. (Id. ¶ 24.) Under the FirstModification Agreement, the VPMC Principals represented that they were principals and directors of VPMC, a company that owned a property known as the Shops at Blue Bell (the "Shops"). (Id. ¶ 25.) The VPMC Principals also represented that they believed the sale of the Shops would generate sufficient funds to pay all amounts owed to Oldcastle under the Loan Documents on the settlement date of the Shops. (Id. ¶ 26.) The First Modification Agreement states in relevant part:

The VPMC Principals (i) have a reasonable belief that the [Shops] will be sold on or before August 3, 2008, (ii) have a reasonable belief that the net proceeds from a sale of the Shops will result in sufficient funds to pay [Oldcastle] all amounts that are due and owing under the Loan Documents, (iii) will use best efforts to cause VPMC to sell the [Shops] on or before August 3, 2008, and (iv) hereby covenant and agree that on the settlement date of the sale of the [Shops] they will cause sufficient funds to be transferred by wire transfer to an account of [Oldcastle] in order to pay to [Oldcastle] all amounts that are due and owing under the Loan Documents.

(Id.; Ex. G at ¶ 2.3.)

Oldcastle asserts that Michael Gambone is the President of VPMC and, though he did not sign the First Modification Agreement, he participated in the negotiation of this Agreement, and he knew that the VPMC Principals had bound VPMC to this financial commitment to Oldcastle. (Id. ¶¶ 28-31.) Ridgewood failed to pay the Principal and any other amount due Oldcastle under the Loan Documents on or before the modified Maturity Date. (Id. ¶ 32.)

On January 5, 2009, Oldcastle entered into a second modification of the Note with Ridgewood and GDC (the "Second Modification Agreement"). (Id. ¶ 33; Ex. H.) Oldcastle avers that the VPMC Principals were not parties to this Agreement, and this Agreement does notcontain any indication that it displaced or superseded the First Modification Agreement. (Id.) Under the Second Modification Agreement, Ridgewood represented that it had entered into an agreement with the Central Bucks School District to sell the Property for at least $2,500,000, and that as a result of the sale of the Property, it would receive funds sufficient to pay Oldcastle at least $772,000, and would be able to repay the additional sum of $328,000 from the proceeds of a loan it expected to obtain. (Id. ¶¶ 35-36.) Ridgewood further promised to pay this combined sum of $1,100,000 to Oldcastle on or before March 3, 2009, as a repayment of principal under the Note. (Id. ¶ 36.) Furthermore, Oldcastle asserts that Ridgewood and GDC reaffirmed their obligations under the Loan Documents, including the First Modification Agreement. (Id.; Ex. G ¶ 1.9.)

On December 23, 2010, VPMC sold the Shops to a third-party for approximately $22,840,000. (Id. ¶ 42.) Oldcastle claims that none of the Defendants notified Oldcastle about the sale of the Shops, and none of the proceeds from the sale were applied toward the repayment of Ridgewood's debt owed to Oldcastle. (Id. ¶ 43.) Oldcastle maintains that it first discovered that VPMC had sold the Shops, and had failed to apply any of the proceeds toward the repayment of Ridgewood's debt owed to it, on or about December 2011. (Id. ¶ 45.) Oldcastle states that "throughout the process of negotiating the First Modification Agreement and thereafter, the VPMC Principals and Michael A. Gambone acted in their individual capacities, representing, among other things, that they could, and would, sell the Shops and use the proceeds from the sale to pay Oldcastle in full in [sic] to satisfy Ridgewood's loan obligations, as required by the First Modification Agreement." (Pl.'s Resp. Mot. to Dismiss at 5.) Oldcastle contends that, at the time of these representations, the VPMC Principals and Michael Gambone knew or should haveknown of the falsity of the representations intending for Oldcastle to rely upon their misrepresentations. (Id. ¶¶ 5-6.) Instead, the VPMC Principals and Michael Gambone sold the Shops for their own personal benefit and kept or spent the proceeds of the sale of the Shops for their own benefit. (Id.)

Oldcastle filed a Complaint against the Defendants on November 6, 2012² , and an Amended Complaint on January 7, 2013. (Doc. Nos. 1, 7). In the Amended Complaint, Oldcastle asserts claims against the VPMC Principals and Michael A. Gambone for fraud (Count I), negligent misrepresentation (Count II), conversion (Count IV), civil conspiracy (Count V), and alter ego/participation (Count VIII). Oldcastle alleges a claim solely against Michael Gambone for tortious interference with a contractual relationship (Count III). Oldcastle further avers a claim against VPMC, the VPMC Principals, and Michael Gambone for quantum meruit/unjust enrichment (Count VII), and claims solely against the VPMC Principals for breach of contract of the First Modification Agreement (Count VI), and promissory estoppel (Count IX). Defendants filed the instant Motion to Dismiss on January 24, 2013. Oldcastle filed a Response on February 21, 2012, and Defendants filed a Reply on March 15, 2013. (Doc. Nos. 9, 12-13).

Defendants assert in their Motion to Dismiss that Oldcastle's claims both in tort and contract are barred by...