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METRO AUTO SALES, INC. v. ALFRED STEIN, INC.

Doc. 7

Case 2:05-cv-04721-MMB

Document 7

Filed 01/30/2006

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IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA METRO AUTO SALES Plaintiff, v. ALFRED STEIN, INC. Defendant. : : : : : : : : :

CIVIL ACTION

NO. 05-4721

Baylson, J. MEMORANDUM I. Introduction

January 30, 2006

This case involves a dispute concerning an asset purchase agreement between the parties. Plaintiff MetroAuto Sales, Inc. ("Plaintiff" or "Metro") entered into a contract with Alfred Stein, Inc. ("Defendant" or "Stein"). In this suit, Metro seeks damages for both breach of contract and fraud. An amended complaint was filed on October 13, 2005. Presently before the Court is Defendant's Rule 12(b)(6) Motion to Dismiss the Amended Complaint (Doc. No. 5). For the reasons that follow, the Court will grant the Motion to Dismiss. II. Background A. Procedural Background

Plaintiff Metro filed its original complaint on August 31, 2005 alleging both breach of contract and fraud. Plaintiff filed an amended complaint on October 13, 2005. On October 31, Defendant filed its Motion to Dismiss, and Plaintiff filed a Response on November 10.

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Case 2:05-cv-04721-MMB

Document 7

Filed 01/30/2006

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B.

Allegations in the Amended Complaint

According to the amended complaint, Metro and Stein entered into an asset purchase agreement (the "Agreement") on November 19, 2004. The Agreement stated that Stein would purchase certain assets from Metro to be used in the operation of a Kia and Suzuki dealership in Coatesville, Pennsylvania. At this point, Stein paid Metro, through its escrow agent, a total of $167,500 as part of the execution of the Agreement. On the same date, Plaintiff alleges that Stein entered into a Real Estate Agreement of Sale with Newbourne, LLC, in which Stein agreed to purchase property located in Coatesville contemporaneous with the purchase of certain assets from Metro. Plaintiff claims that at some point after November 19, 2004, Stein stopped payment on the check it had written to Metro. On December 8, 2004, Stein communicated its desire to terminate the Agreement through William L. Landsburg, its attorney and corporate officer. The amended complaint sets forth two causes of action. Count I asserts that Stein breached its contract with Metro by terminating the contract without a justifiable cause. Count II alleges fraudulent misrepresentation. Plaintiff avers that Stein falsely represented its intention to fulfill its contractual obligation, which induced Metro to execute the Agreement. Plaintiff seeks relief in the form of liquidated damages, punitive damages, attorneys' fees and costs, and other relief deemed reasonable and just by the Court. III. Jurisdiction and Legal Standard A. Jurisdiction

This Court has subject matter jurisdiction pursuant to 28 U.S.C.

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