Simply Snackin, Inc. v. Distribs

SIMPLY SNACKIN, INC. andJASON ISANBERG, Plaintiffs, v. S-L DISTRIBUTORS andSNYDER'S-LANCE, Defendant.

Civil No. 1:17-CV-0381

UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA

December 6, 2017

Judge Sylvia H. Rambo

MEMORANDUM

In this diversity action, Plaintiff asserts claims for breach of contract, tortious interference with contractual relations, and civil conspiracy. Presently before the court is Defendants' motion to dismiss the amended complaint for failure to state a claim. (Doc. 52.) For the reasons set forth below, the court will grant Defendants' motion in part and deny it in part.

I. Background

For purposes of disposition of the instant motion to dismiss, the court has carefully reviewed the amended complaint and will, as required when deciding a motion to dismiss, accept as true all well-pleaded factual allegations and view them in the light most favorable to Plaintiff.

A. Facts

On or about February 22, 2015, Plaintiff, Simply Snackin, Inc.¹ ("Simply Snackin"), a New York corporation, entered into a Distributor Agreement (the "Agreement") with S-L Distribution Company, Inc. ("S-L"), a corporation with offices located in both New York and Pennsylvania. (Doc. 49, ¶¶ 3, 6, 10.) Under the Agreement, Simply Snackin was granted: a) the exclusive right to sell Snyder's of Hanover or Lance chips and other snack products (collectively, "Products") to specified supermarkets and retail outlets in Westchester County, New York (the "Territory"), and b) the non-exclusive right to sell Products to other current or potential customers in the Territory. (Id. at ¶ 10; Doc. 52-3, Arts. 3(A), 3(B).) Three of the stores in Simply Snackin's Territory were owned and operated by Stop & Shop, specifically Stop & Shop supermarkets designated as 501, 502, and 591. (Doc. 49, ¶ 11.) Under the Agreement, Plaintiff was required to periodically visit the stores in its distribution route, restock Products as needed, and credit the stores for any expired or damaged inventory either not stocked or removed from the shelves. (Id. at ¶ 10; Doc. 52-3 at Arts. 5(A), 5(C).)

In the event that Simply Snackin breached the Agreement by failing to service customers within the Territory, the Agreement states that:

If Distributor fails to maintain satisfactory services or fails to meet the requirements of its customers within the Territory, to any segment or part of the Territory, to any Authorized Outlet or to any other store or retail outlet within the Territory, and such failure is not remedied within five (5) days after receipt of written notice thereof from S-L, in addition to any other lawful remedies S-L may have under this Agreement or otherwise, S-L may deem the Territory, the segment or part, the Authorized Outlet or the other store or retail outlet within the Territory to be abandoned and may make other arrangements for the sale of Products thereto.

(Doc. 52-3 at Art. 13A.)

Article 15(B)(2) of the Agreement also provides:

In the event of any other breach of this Agreement or the terms hereof by Distributor, S-L shall provide Distributor with five (5) business days written notice of the breach within which time Distributor must cure the breach to S-L's reasonable satisfaction. If Distributor fails to cure such breach within said five (5) day period, this Agreement and Distributor's rights with respect to the Territory may be immediately terminated by S-L without further notice.

(Id. at Art. 15(B)(2)).

Plaintiff duly performed its obligations for almost a year without incident or complaint. (Doc. 49, ¶ 12.) On or about February 20, 2016, Jason Isanberg ("Isanberg"), the president and sole owner of Simply Snackin, was servicing Stop & Shop store 501. (Id. at ¶ 15.) While Isanberg was still in the store, a complaint was made that uncredited Products were discovered among cardboard boxes bound for destruction. (Id. at ¶ 17.) The grocery manager, after consulting the storemanager, told Isanberg "not to worry about it." (Id. at ¶ 18.) Plaintiff left the Product in question, which was allegedly in saleable condition, and left the store. (Id.) The complainant also reported the incident, along with prior similar incidents, to Stop & Shop's security arm. (Id.) Stop & Shop subsequently communicated this to Snyder's-Lance² ("Snyder's") and barred Plaintiff from servicing the store. (Id. at ¶ 20.)

On February 23, 2016, Simply Snackin was "admonished" and barred from servicing store 501. (Id. at ¶¶ 19, 20.) This was communicated to Simply Snackin via email by John Walsh ("Walsh"), allegedly the zone manager of Snyder's for Westchester County and other areas in New York state. (Id. at ¶¶ 14, 20.) Subsequent calls and emails from Simply Snackin to Walsh were unreturned. (Id. at ¶ 20.) Ultimately, Simply Snackin was "summarily barred" in writing by Walsh and one Andy Semenza from store 501 and the two other Stop & Shop stores. (Id.) Simply Snackin nevertheless continued to service its distribution route and contacted Stop & Shop store management, who did not object to Simply Snackin continuing to service its stores. (Id.)

On February 29, 2016, Simply Snackin was barred from the warehouse and not permitted to buy any Products. (Id.) Additionally, Simply Snackin's handheld computer was deactivated on the same day. (Id.) Plaintiff alleges that Defendantsdid not provide any assistance in resolving the situation with Stop & Shop despite its obligation to do so under Article 21 of the Agreement. (Id. at ¶ 26.) Article 21 states:

Distributor shall receive, and promptly investigate and handle, all complaints received from its customers or prospective customers and in so doing shall seek to protect the goodwill of the Products. All complaints received by Distributor which cannot be readily remedied by Distributor shall be promptly reported in writing, to S-L and thereafter S-L and Distributor will seek to work jointly together to reasonably remedy any such complaint. In the event that Distributor is unable to receive such complaints, or in the event that Distributor's customers contact S-L directly regarding complaints, then S-L will communicate said complaint to Distributor, so that Distributor may address the complaint as promptly as possible.

(Doc. 52-3 at Art. 21).

B. Procedural History

On May 9, 2017, Defendants filed a motion to dismiss the complaint for failure to state a claim, and a brief in support thereof. (Docs. 40 & 41.) Plaintiffs responded by submitting a document entitled "Affidavit in Opposition." (Doc. 47.) On June 15, 2017, the court deemed Plaintiffs' response to Defendants' motion to dismiss to be an amended complaint. (Docs. 48 & 49.) On July 12, 2017, Defendants filed a motion to dismiss the amended complaint for failure to state a claim, along with a brief in support thereof. (Docs. 52 & 53.) On the same day, Plaintiffs submitted a document entitled "Objections to Motion or in the Alternative Request for a [Briefing] Schedule." (Doc. 54.) On July 18, 2017, thecourt denied both Plaintiffs' objection to inadequate notice and request for an extension of time. (Doc. 55.)

Plaintiffs timely filed a brief in opposition to Defendants' motion to dismiss on July 25, 2017. (Doc. 56.) On August 8, 2017, Defendants filed a reply. (Doc. 61.) Thus, the motion has been fully briefed and is ripe for disposition.

II. Legal Standard

Defendants move to dismiss Plaintiff's Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). For a complaint to survive dismissal, it "must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). The plaintiff's short and plain statement of the claim must "give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Twombly, 550 U.S. at 555 (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)).

In evaluating the sufficiency of a complaint, a court must accept all well-pleaded factual allegations as true and draw all reasonable inferences in favor of the non-moving party. See Phillips v. Cty. of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008). "Factual allegations must be enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555. Further, "[a] pleading that offers 'labels and conclusions' or 'a formulaic recitation of the elements of a cause ofaction will not do.' Nor does a complaint suffice if it tenders 'naked assertion[s]' devoid of 'further factual enhancement.'" Iqbal, 556 U.S. at 678 (internal citations omitted) (citing Twombly, 550 U.S. at 555, 557). However, this "'does not impose a probability requirement at the pleading stage,' but instead 'simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of' the necessary element." W. Penn Allegheny Health Sys. Inc. v. UPMC, 627 F.3d 85, 98 (3d Cir. 2010) (quoting Phillips, 515 F.3d at 234). When conducting this inquiry, the court considers "the allegations in the complaint, exhibits attached to the complaint[,] and matters of public record." Schmidt v. Skolas, 770 F.3d 241, 249 (3d Cir. 2014) (quoting Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993)). The court may "also consider 'undisputedly authentic' documents where the plaintiff's claims are based on the documents and the defendant has attached a copy of the document to the motion to dismiss." See Vicky M. v. Ne. Educ. Intermediate Unit, 486 F. Supp. 2d 437, 449 (citing Pension Benefit Guar. Corp., 998 F.2d at 1196).

The court has jurisdiction over this matter on the basis of diversity of citizenship pursuant to 28 U.S.C. § 1332. In order for jurisdiction to exist, each defendant must be a citizen of a different state from each plaintiff. Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 373 (1978). As a federal court sitting in diversity, the court must apply the choice of law ...