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Solfisburg v. Glenco, Inc.

United States District Court, D. Massachusetts

September 30, 2019

WILLIAM F. SOLFISBURG, Plaintiff,
v.
GLENCO, INC., DAVID BILLINGSLY, P.E., PFS CORPORATION D/B/A PFS TECO, SET CONNECTORS, INC., APEX HOMES OF PA, LLC, and APEX HOMES, INC., Defendants.

          MEMORANDUM & ORDER

          Indira Talwani, United States District Judge.

         Before the court is Defendant Apex Homes of PA, LLC's (“Apex LLC”) Motion to Dismiss Plaintiff's Second Amended Complaint [#45]. Apex LLC argues that the Second Amended Complaint [#43] (“Complaint”) must be dismissed in whole or in part on the grounds: (1) that the Complaint fails to state a claim for successor liability; (2) that paragraph three of the Complaint violates the Federal Rules of Civil Procedure's pleading requirements; (3) that the Complaint fails to join a necessary and indispensable party; and (4) that Plaintiff's claims, with the exception of the claim for breach of warranty, must be dismissed because they are barred by order of the United States Bankruptcy Court for the Middle District of Pennsylvania, the Massachusetts statute of limitations, the Massachusetts “gist of the action” doctrine, and the Massachusetts economic loss doctrine. The court finds that dismissal is not appropriate on any of the grounds presented by Defendant. The motion is, accordingly, DENIED.

         I. Factual Background

         This action arises out of Plaintiff William F. Solfisburg's purchase and installation of a modular home. Plaintiff alleges that he contracted with a general contractor, Sandcastle Group, in August 2012 to build the home. Compl. ¶ 22. Sandcastle hired various other entities to design, install and perform work on the home. Compl. ¶¶ 17-21. Defendant Apex Homes, Inc. (“Apex Inc.”) contracted to build the modular units. Compl. ¶ 25.

         Massachusetts State Building Code (the “Special Regulations”) require that entities can sell modular homes or building components in the Commonwealth only if they have been approved and certified under these regulations which are administered by the Massachusetts Board of Building Regulations and Standards (“BBRS”). Compl. ¶¶ 11-12. At the time Apex Inc. contracted to build the modular units, it was in Chapter 11 bankruptcy proceedings in the United States Bankruptcy Court for the Middle District of Pennsylvania (the “bankruptcy court”). Def.'s Mem., Exh. E [#46-5]. Apex Inc. did not notify the BBRS that of the bankruptcy proceeding or of changes in officers or ownership as a result of the bankruptcy. Compl. ¶ 25.

         The modular unit had structural defects and did not meet the Special Regulations' standards. Compl. ¶¶ 28, 31. Nonetheless, on March 19, 2013, Apex Inc. provided Plaintiff with a signed Certificate of Completion that misrepresented the work done by Apex Inc. Compl. ¶¶ 30-31. The units were delivered to the project site in March 2013. Compl. ¶ 34.

         In May 2014, Apex Inc.'s assets, including customer lists, the name “Apex Homes, ” rights to Apex Inc.'s promotional material, machinery, equipment, inventory, goodwill, licenses, permits, approvals, and intellectual property were purchased by H. Lynn Kuhns, Apex Inc.'s president, on behalf of Ridgeview Modular Housing Group (“Ridgeview”), a Pennsylvania Limited Partnership. See Def.'s Mem., Exh. F ¶ 1.1 [#46-6] (“Asset Purchase Agreement”). The Asset Purchase Agreement provided further that the “Purchaser shall assume responsibility for all obligations of [Apex Inc.] relating to any warranty extended to [Apex Inc.'s] customers and their assignees in existence as of the Closing Date and shall indemnify and hold [Apex Inc.] harmless from any loss, judgment, liability, claim, or cost, whether contingent, liquidated or unliquidated with respect to such assumed warranty.” Id ¶ 1.3(d). After providing notice to creditors in the Chapter 11 case, the bankruptcy court on July 18, 2014, approved the Asset Purchase Agreement, and included the following provision in its Order Approving Sale (“Sale Order”):

[Apex Inc.'s] interest in the Purchase Assets is not subject to any known judgments, liens, encumbrances and other claims (collectively, the “Liens and Claims”) that have not been avoided or are avoidable in whole, or in part, as part of this Chapter 11 case. All persons or entities holding any Liens and Claims in, to or against [Apex Inc.] or the Purchased Assets of any kind or nature whatsoever shall be, and hereby are, forever barred, estopped, and permanently enjoined from asserting, prosecuting, or otherwise pursuing any such Liens and Claims against [the purchaser or its successors].

Def.'s Mem., Exh. G ¶ 5 [#46-7].

         Five days later, on July 23, 2014, H. Lynn Kuhns created Apex LLC. See Def.'s Mem., Exh. D [#46-4]. Ridgeview then sold the assets purchased from Apex Inc. to Apex LLC. See Request for Stay 2 n.1 [#17]. Mr. Kuhns now operates Apex LLC. Compl. ¶ 3(d). Although Apex LLC was not created until 2014, its website traces its business back to 1989, the year Apex Inc. was founded. Compl. ¶ 3(c).

         In or around February 2015, the interior of Mr. Solfisburg's home suffered significant damage after water penetrated the roof. Compl. ¶ 38. Plaintiff retained an engineer to perform an inspection of home and prepare a report documenting discrepancies between the as-built conditions and the specified designs as well as any other sub-standard condition at the home. Id. This report identified numerous defects, including structural and safety issues. Id.; Compl., Exh. A, 5-63 [#43-1].

         Apex LLC subsequently stated to the BBRS that Apex LLC was responsible for the home manufactured by Apex Inc. Compl. ¶ 3(a)-(b).

         As of August 2018, when the Complaint was filed, a permanent certificate of occupancy for the home has not issued and Plaintiff continues to be unable to live in the home. Compl. ¶ 48.

         II. Procedural Background

         Plaintiff initiated this action on February 9, 2018, and filed his Second Amended Complaint [#43] on August 29, 2018. As detailed further below, Plaintiff alleges that Defendant Apex LLC is the successor to, and responsible and liable for the conduct of, Apex Inc. Although Apex Inc. reportedly has been served with the Summons and operative Complaint, see Affidavit of Service [#52], and despite the court extending the deadline for Apex Inc.'s Answer to August 15, 2019, see Elec. Order [#79] adopting Proposed Second Amended Scheduling Order [#78], Apex Inc. has not answered. Apex LLC responded with the pending Motion to Dismiss [#45] which Plaintiff opposed. See Pl's Opp'n [#64].

         III. Discussion

         To survive a motion to dismiss, the well-pleaded facts in a plaintiff's complaint must “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). As the First Circuit has explained, in reviewing a complaint under a Fed.R.Civ.P. 12 motion to dismiss, the court “must distinguish the complaint's factual allegations (which must be accepted as true) from its conclusory legal allegations (which need not be credited).” Cardigan Mountain Sch. v. New Hampshire Ins. Co., 787 F.3d 82, 84 (1st Cir. 2015) (internal citations omitted). The plausible factual allegations, taken as true, must ultimately be able to support the legal conclusion that underlies each claim for relief. Id Although the court ordinarily only considers the complaint's plausible factual allegations on a motion to dismiss, the First Circuit has recognized a narrow exception to this rule for “documents the authenticity of which are not disputed by the parties; for official public records; for documents central to plaintiffs' claim; or for documents sufficiently referred to in the complaint.” Foley v. Wells Fargo Bank, N.A., 772 F.3d 63, 74 (1st Cir. 2014). The court now addresses each of Defendant's assertions for why dismissal is proper under these standards.

         1. Statute of Limitations

         Defendant argues that dismissal is proper for all but the breach of warranty claim under Massachusetts' three-year statute of limitations for tort claims and four-year statute of limitations for the ch. 93A claim. Def's Mem. 16-19 [#46]. Defendant states that the modular units were delivered to Sandcastle by March 2013 and had obvious defects at that time. Id at 17, 18. Thus, Defendant argues, by March 2013, Plaintiff ...


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