Another day, another breach of contract case alleging “fraud in the inducement, unjust enrichment, and tortious interference with contractual and business relationships.” Sheinman Provisions, Inc. v. Nat’l Deli, LLC, 2008 U.S. Dist. LEXIS 54357 (E.D.Pa. 2008). Here’s what inevitably happens:
Based upon the parties’ pleadings and the Court’s own review of the contract at issue, we find that the Asset Rental Agreement is a fully integrated contract, which contains an express provision stating that in entering the Asset Rental Agreement, neither party has relied on any claims, representations or warranties made by the other, except as expressly set forth therein. Therefore, the parole evidence rule squarely applies here because Plaintiff is seeking to offer evidence of representations made prior to the execution of the Asset Rental Agreement to contradict an express provision thereof. As it is well established that “fully integrated contracts preclude fraudulent inducement claims,” this claim will be dismissed as barred by the parole evidence rule. Because the fraudulent inducement claim is defeated by the parole evidence rule, we do not need to address Defendant’s arguments based on the gist of the action doctrine and Rule 9(b).
In this case, the agreement at issue is a fully integrated contract and, by its terms, it governs the entire relationship of the parties. Therefore, we disagree with Plaintiff’s argument that Rule 8(d)(2) allows pleading in the alternative in this case. Rule 8 only allows alternative claims to be plead if all of the claims are sufficient on their own. Here, even if the breach of contract claim fails, the unjust enrichment claim is still insufficient because Pennsylvania law prohibits unjust enrichment claims where a contract governs the relationship of the parties, as is the case here. The bar to this type of claim is not altered when unjust enrichment is plead in the alternative to an unsuccessful breach of contract claim as the relationship of the parties is still governed by a valid contract, and therefore, there is no reason to apply the quasi-contract doctrine of unjust enrichment. Plaintiff’s unjust enrichment claim will be dismissed.
Sheinman’s tortious interference claim alleges almost identical facts: that Defendant intentionally interfered with Plaintiff’s business and contractual relationships to cause its customers, vendors and suppliers to discontinue purchasing from Plaintiff and deal directly with Defendant. Following the Third Circuit’s holding in Chemtech, we find that the duties allegedly breached by Defendant were not imposed as a matter of social policy, but rather flowed from the Asset Rental Agreement. Therefore, the gist of the action doctrine bars Plaintiff’s tortious interference claim here as the duties allegedly breached were grounded in the contract between the parties.
Ouch! Those all look like pleading problems: if you’re doing to allege claims outside breach of contract, make sure the facts you allege can support them — the claims can’t simply be naked alternatives to your breach of contract. From looking at the facts (a wholly integrated contract only breached in a few, but important, ways), I really don’t see how the plaintiffs could have pulled it off.
I can’t blame the plaintiffs for trying, though: if they had not alleged these claims, and then evidence later revealed they should have, the defendants would have inevitably cried foul with the statute of limitations, and probably would have won, since the amendment would have been for entirely new claims. It was largely a waste of everyone’s time, but unless defense counsel’s in the mood for a tolling agreement (hint: they’re not), you don’t have a choice.
Hate the game, not the players.