Immaculata Univ. v. Hess Corp.

J-S68042-14
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
IMMACULATA UNIVERSITY, : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
Appellant :
:
v. :
:
HESS CORPORATION, :
:
Appellee : No. 1021 EDA 2014
Appeal from the Order entered on March 6, 2014
in the Court of Common Pleas of Delaware County,
Civil Division, No. 12-2346
BEFORE: ALLEN, JENKINS and MUSMANNO, JJ.
MEMORANDUM BY MUSMANNO, J.: FILED DECEMBER 09, 2014
Immaculata University (“the University”) appeals from the Order
granting Hess Corporation’s (“Hess”) Motion for Judgment on the Pleadings
and dismissing with prejudice the University’s Complaint, which averred
Hess’s vicarious liability under the Pennsylvania Public Utility Code (“the
Code”) for the fraudulent conduct of Celeren Corporation (“Celeren”).1 We
affirm.
In 2008, the University entered into an Energy Advantage Program
Agreement (“Agreement”) with Celeren, under which Celeren agreed that it
would “be and otherwise act as … the sole energy procurement consultant,
1
Celeren is an intermediary that was not made a party to this lawsuit.
According to the University’s Complaint, Celeren filed for bankruptcy
protection. Complaint at ¶ 27. Thus, the University, one of 210 creditors of
Celeren, has no recourse to recover from Celeren. Id. at 27-31. The
bankruptcy action is currently pending in the United States Bankruptcy Court
for the District of Delaware. Id. at 27 n.1.
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agent, aggregator, broker, supplier and/or energy marketer, as such terms
are defined by applicable federal and state laws…” on behalf of the
University, in exchange for a fixed monthly payment. Agreement at Article
2.1. Celeren indicated to the University that it had executed an agreement
with Hess, under which Hess would supply natural gas to the University in
return for Celeren’s transfer of the University’s monthly bill payments to
Hess.
The University submitted monthly payments totaling $146,116.63 to
Celeren between February and April 2008, but Celeren did not forward those
payments to Hess. Celeren failed to notify the University that it did not
transfer the payments to Hess. During the period of delinquency, Celeren
entered into forbearance and/or payment agreements with Hess and other
utility service providers, but did not tell the University about those
agreements. Eventually, Hess requested payment from the University for
the natural gas it supplied during those months, which the University paid.
In March 2013, the University filed a Complaint against Hess, alleging
that Hess is liable to the University for Celeren’s fraudulent acts pursuant to
the licensed natural gas supplier (“NGS”) regulations under the Code. The
University also alleged that Hess failed to notify it of Celeren’s failure to pay,
resulting in the University’s continued payments to Celeren. Hess filed an
Answer to the Complaint with New Matter. The University filed a Reply to
Hess’s New Matter.
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Subsequently, Hess filed a Motion for Judgment on the Pleadings,
averring that it could not be liable for Celeren’s fraudulence under the Code,
and that the action was barred by the applicable statute of limitations. The
trial court granted Hess’s Motion for Judgment on the Pleadings and
dismissed the University’s Complaint with prejudice. The University filed a
timely Notice of Appeal and a court-ordered Pennsylvania Rule of Appellate
Procedure 1925(b) Concise Statement of Matters Complained of on Appeal.
On appeal, the University raises the following questions for our review:
I. Whether the trial court abused its discretion and committed an
error of law by granting [Hess’s] Motion for [Judgment on the
Pleadings] where genuine issues of fact exist[?]
II. Whether the trial court abused its discretion and committed
an error of law by finding no disputed issues of fact because the
pleadings indicate that there is a disputed issue of fact, i.e.,
whether Celeren is a nontraditional marketer or marketing
services consultant as defined in 52 Pa. Code §§ 62.102 and
62.114[?]
III. Whether the trial court abused its discretion and committed
an error of law by failing to grant [the University] leave to
amend its Complaint[?]
Brief for Appellant at 4.
Our scope of review on an appeal from the grant of
judgment on the pleadings is plenary. Entry of judgment on the
pleadings is permitted under Pennsylvania Rule of Civil
Procedure 1034, which provides that after the pleadings are
closed, but within such time as not to unreasonably delay trial,
any party may move for judgment on the pleadings. A motion
for judgment on the pleadings is similar to a demurrer. It may
be entered when there are no disputed issues of fact and the
moving party is entitled to judgment as a matter of law. In
determining if there is a dispute as to facts, the court must
confine its consideration to the pleadings and relevant
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documents. On appeal, we accept as true all well-pleaded
allegations in the complaint.
Consolidation Coal Co. v. White, 875 A.2d 318, 325 (Pa. Super. 2005)
(internal quotation marks and citations omitted).
Because the University’s first two claims are related, we will address
them together. The University argues that the trial court committed an error
of law by granting Hess’s Motion for Judgment on the Pleadings because
there was a genuine issue of material fact. Brief for Appellant at 12.
Specifically, the University contends that there is a genuine issue of material
fact regarding whether Celeren could be classified as a “nontraditional
marketer” or a “marketing services consultant” under the Code, and
therefore would be liable to the University. Id. at 13. The University also
notes that this is a case of first impression, and the only available
interpretation of the relevant sections of the Code arises from an
administrative decision of the Public Utilities Commission (“Commission”).
Id. at 14-15.
At the time the Complaint was filed, the Code defined the terms
“marketing services consultant” and “nontraditional marketer,” as follows:
§ 62.101. Definitions
***
Marketing services consultant—A commercial entity, such as a
telemarketing firm or auction-type website, or energy
consultant, that under contract to a licensee or a retail customer,
may act as an agent to market natural gas supply services to
retail gas customers for the licensee or may act as an agent to
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recommend the acceptance of offers to provide service to retail
customers. A marketing services consultant:
(i) Does not collect natural gas supply costs directly
from retail customers.
(ii) Is not responsible for the scheduling of natural
gas supplies.
(iii) Is not responsible for the payment of the costs
of the natural gas to suppliers, producers, or [natural
gas distribution companies].
***
Nontraditional marketer—A community-based organization, civic,
fraternal or business association, or common interest group that
works with a licensed supplier as an agent to market natural gas
supply services to its members or constituents. A nontraditional
marketer:
(i) Conducts its transactions through a licensed NGS.
(ii) Does not collect revenues directly from retail
customers.
(iii) Does not require its members or constituents to
obtain its natural gas service through the
nontraditional marketer or a specific licensed NGS.
(iv) Is not responsible for the scheduling of natural
gas supplies.
(v) Is not responsible for the payment of the costs of
the natural gas to its suppliers or producers.
52 Pa. Code § 62.101 (2013).
Additionally, section 62.102 of the Code provides for an NGS’s liability
for the fraudulence of certain other actors as follows:
§ 62.102. Scope of licensure
***
(d) A nontraditional marketer is not required to obtain a license.
The licensed NGS shall be responsible for violations of 66
Pa.C.S.[A.] (relating to the Public Utility Code), and applicable
regulations of this title, orders and directives committed by the
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nontraditional marketer and fraudulent, deceptive or other
unlawful marketing or billing acts committed by the
nontraditional marketer.
(e) A marketing services consultant is not required to obtain a
license. The licensed NGS shall be responsible for violations of
66 Pa.C.S.[A.] and applicable regulations of this title, orders and
directives committed by marketing services consultant and
fraudulent, deceptive or other unlawful marketing or billing acts
committed by the marketing services consultant.
52 Pa. Code § 62.102(d), (e) (2013).2
Here, the parties do not dispute that Hess is a licensed NGS. However, upon
review of the relevant statutory provisions, we conclude that, Celeren cannot
be classified as a nontraditional marketer or a marketing services consultant
under the Code. The University’s Complaint itself indicates that, under the
Agreement, Celeren was to remit the University’s payments to Hess. See
Trial Court Opinion, 7/9/14, at 9; see also 52 Pa. Code § 62.101 (2013).
Additionally, Celeren did not conduct its transactions through Hess. See
Trial Court Opinion, 7/9/14, at 10; see also 52 Pa. Code § 62.101 (2013).
Thus, there is no issue of fact regarding Celeren’s classification under the
2
We note that sections 62.101 and 62.102 were amended in July 2014.
However, the new statutory language does not change our analysis in this
case.
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Code.3
We additionally note that the trial court considered the case of Rama
Constr., Inc. t/a Ramada Inn Int’l Airport v. Hess Corp., Docket No. C-
2008-2058200, which took place in 2008 before Administrative Law Judge
David A. Salapa for the Commission. See Trial Court Opinion, 7/7/14, at 6-
7. The Rama case had similar facts to this case, as both Celeren and Hess
were parties to that action. See Rama Constr. at 1-3. Judge Salapa
concluded that Celeren was not a nontraditional marketer or a marketing
services consultant under section 62.101 because Rama’s Complaint alleged
that Celeren collected money from Rama. Id. at 11. Thus, Judge Salapa
concluded, Hess, as a licensed NGS, was not responsible for Celeren’s
fraudulent conduct under section 62.102(d), (e). Id. We, like the trial
court, find that the Commission’s interpretation of the Code is persuasive in
this case. Based on the foregoing, we conclude that the trial court properly
granted Hess’s Motion for Judgment on the Pleadings.
In its third claim, the University argues that the trial court erred by
refusing to grant the University leave to amend its Complaint. Brief for
3
The University also indicates that section 62.114(e) may implicate Hess’s
liability. See 52 Pa. Code § 62.114(e) (2013) (stating “a licensee is
responsible for any fraudulent, deceptive or other unlawful marketing or
billing acts performed by the licensees, its employees, agents or
representatives. A licensee shall inform consumers of State consumer
protection laws that govern the cancellation or rescission of natural gas
supply contracts.”). The University has not demonstrated through any
pertinent analysis that Hess is liable for Celeren’s actions under section
62.114(e). See Pa.R.A.P. 2119(a).
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Appellant at 15. The University claims that its amended Complaint would
not result in surprise or prejudice to Hess. Id.
Rule 1033 of the Pennsylvania Rules of Civil Procedure
allows a party to amend his or her pleadings with either the
consent of the adverse party or leave of the court. Leave to
amend lies within the sound discretion of the trial court and the
right to amend should be liberally granted at any stage of the
proceedings unless there is an error of law or resulting prejudice
to an adverse party.
Werner v. Zazyczny, 681 A.2d 1331, 1338 (Pa. 1996) (internal citation
marks and quotations omitted). “There may, of course, be cases where it is
clear that amendment is impossible and where to extend leave to amend
would be futile. However, the right to amend should not be withheld where
there is some reasonable possibility that amendment can be accomplished
successfully.” Hill v. Ofalt, 85 A.3d 540, 557 (Pa. Super. 2014).
Here, the University has not specified how it wishes to amend its
Complaint. The University has not indicated that it wishes to provide a
factual amendment or add a new theory of liability. See, e.g., Brief for
Appellee at 21 (stating that “the University still has not set forth how it
would amend or refine its Complaint to change the facts concerning Celeren
so that either a law student or a Senior Judge would conclude Celeren was a
nontraditional marketer or a marketing services representative.”). Thus, the
trial court did not abuse its discretion in denying leave to amend the
Complaint where the University did not show that there is a possibility that
the amendment can be accomplished successfully.
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Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 12/9/2014
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