IN THE UNITED STATES DISTRICT COURT 

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

TCC Liquidating Corporation : CIVIL ACTION

F/T/D/B/A Triangle Container : NO. 05-1100

Corporation, :

et al., :

Plaintiffs, :

:

v. :

:

Menasha Packaging Company, LLC, :

Defendant. :

MEMORANDUM AND ORDER

NEWCOMER, S.J. August 15, 2005

Presently before the Court is Defendant’s Motion to Dismiss

Count I of Plaintiff’s Complaint, Plaintiffs’ Response, and

Defendant’s Reply. For the reasons stated below, the Court

grants Defendant’s Motion.

I. BACKGROUND

Pursuant to the Asset Purchase Agreement (“the Agreement”),

dated December 2, 2002, Defendant Menasha purchased substantially

all of the assets of Plaintiff Triangle Liquidating Corporation. 

As a result, Menasha also assumed the obligations of the

collective bargaining agreement between Triangle and Local 2-286

of the Paper Allied-Industrial, Chemical, and Energy Workers

International Union (“the Union Agreement”). At the time of

closing, Triangle was a contributing employer to certain welfare

funds that benefitted unionized employees of Triangle. Because

it was responsible for the Union Agreement, Menasha became

obligated to make certain contributions to welfare funds for the

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duration of the Union Agreement. 

As part of the Agreement, Triangle agreed to indemnify

Menasha for the remainder of the term of the Union Agreement if

the yearly increases of the health and welfare benefits of its

Union employees exceeded 15% per year. See Agreement, §

9.6(d)(viii). The parties defined this concept as “Excess

Payment.” See Agreement § 9.6(viii)(C)(1). Essentially, to the

extent that the amount required to be paid by Menasha for the

health and welfare benefits of its union employees exceeded a

predetermined “Designated Amount,” Triangle was required to pay

Menasha the amount by which the actual amount paid exceeded the

Designated Amount. The adjustment is made by multiplying the

stated Designated Amount for a given period by a fraction whose

numerator “is the number of employees covered by the Union

Agreement on the last day of such relevant period” and whose

denominator is “the number of employees covered by the Union

Agreement at the time of closing.” 

At the conclusion of the relevant period, Menasha reported

the amount by which welfare fund contributions deviated from the

Designated Amounts. Triangle then became obligated to pay

Menasha the amount of any contribution that exceeded the

Designated Amount. Menasha sent Triangle a notification letter

in September of 2004, stating that the excess payment was

$142,556.68, and sent Triangle another letter in February 2005

Case 2:05-cv-01100-LP Document 10 Filed 08/15/05 Page 2 of 9
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which said that the excess payment was $151,407.32. Neither

Triangle nor the Shareholders have paid Menasha either amount

because there is a dispute over (1) the number of employees

covered by the agreement at the time of closing, and (2) which

payments should be included in the amount required to be paid. 

II. LEGAL STANDARD

When considering a motion to dismiss, the Court must accept

as true all factual allegations in the complaint and construe all

reasonable inferences to be drawn therefrom in a light most

favorable to the plaintiff. See Abdulhay v. Bethlehem Med. Arts,

L.P., No. 03-CV-04347, 2004 U.S. Dist. LEXIS 5495, at *14 (E.D.

Pa. Mar. 29, 2004). A Rule 12(b)(6) motion should be granted if

“it appears to a certainty that no relief could be granted under

any set of facts which could be proved.” Id. As a general

matter, a district court ruling on a motion to dismiss may not

consider matters extraneous to the pleadings. See In re

Burlington Coat Factory Sec. Lit., 114 F.3d 1410, 1426 (3d Cir.

1996); Pension Benefit Guar. Corp. v. White Consul. Indus., 998

F.2d 1192, 1196 (3d Cir. 1993)(stating that the rationale

underlying Rule 12(b)(6) requires “that a motion to dismiss be

converted to a summary judgment motion if a court considers

matters outside the pleadings”). This Court may examine the

Agreement because Plaintiff has attached it to the complaint as

an exhibit. See United States v. Leuthe, No. 01-203, 2002 U.S.

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Dist. LEXIS 4748, at *4 (E.D. Pa. Mar. 20, 2002)(stating that a

court may consider documents appended or integral to the

pleadings). 

III. DISCUSSION

This Court, sitting in Pennsylvania, must apply

Pennsylvania’s conflict of law rules to determine the substantive

law to be used in this case. See Babn Techs. Corp. v. Bruno, No.

98-3409, 1998 U.S. Dist. LEXIS 14802, at * 9, 10 (E.D. Pa. July

24, 1998). Pennsylvania Courts have adopted § 187 of the

Restatement (Second) of Conflict of Laws, which first requires

the Court to ask whether the Parties’ explicitly have chosen the

relevant law. See id. “Pennsylvania courts generally honor the

intent of the contracting parties and enforce choice of law

provisions in contracts executed by them.” Kruzits v. Okuma

Mach. Tool, 40 F.3d 52, 55 (3d Cir. 1994). In this case it is

undisputed that Pennsylvania law governs the Agreement. Agreement

at § 11 (“This Agreement shall be governed by and construed under

and in accordance with the laws of the Commonwealth of

Pennsylvania.”). As such, the Court will apply Pennsylvania

contract law to the Parties’ dispute.

The determination of whether a contract is ambiguous is a

question of law for the Court to decide. Sanford Inv. Co., Inc.

v. Ahlstrom Mach. Holdings, Inc., 198 F.3d 415, 421 (3d Cir.

1999). Under Pennsylvania law, “it is firmly settled that the

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intent of the parties to the written contract is contained in the

writing itself.” Samuel Rappaport Family P’ship v. Meridian

Bank, 657 A.2d 17, 21 (Pa. 1995). When the language of a

contract is clear, “the focus of interpretation is upon the terms

of the agreement as manifestly expressed, rather than as, perhaps

silently intended.” Fitzpatrick v. Queen, No. 03-4318, 2005 U.S.

Dist. LEXIS 9409, at *23 (E.D. Pa. May 16, 2005)(quoting Steuart

v. McChesney, 444 A.2d 659 (Pa. 1982)). The writing will be

found ambiguous only if “it is reasonable or fairly susceptible

to different constructions and is capable of being understood in

more senses than one.” Bohler-Uddeholm Am., Inc. v. Ellwood

Group, Inc., 247 F.3d 79, 93 (3d Cir. 2001). A contract is not

ambiguous if a court can determine its meaning without any guide

other than a knowledge of the simple facts on which its meaning

depends. Id. In addition, “a contract is not rendered ambiguous

by the mere fact that the parties do not agree on the proper

construction.” Id. There are two disputes in the instant case,

both of which relate to calculating Excess Payments: (1) whether

106 or 123 employees were covered by the Union Agreement at the

time of Closing, and (2) whether the amount required to be paid

by Menasha includes payments made by the Union employees

themselves.

A. Employees Covered by the Union Agreement

Plaintiffs ask the Court to declare that for the purposes of

Case 2:05-cv-01100-LP Document 10 Filed 08/15/05 Page 5 of 9
1

 The basis for their position is their allegation that only the 106

employees who were employed for six months and who were beneficiaries of

welfare funds at the time of closing should be utilized in the fraction to

determine excess payments. 

6

calculating an Excess Payment, the correct number of Union

employees covered under the Union Agreement at the time of

closing was 106 employees, rather than 123 employees.1 (Compl.

at ¶ 29). In § 1 of the Agreement, “Definitions,” it states that

“Excess Payment shall have the meaning specified in § 9.6(d) of

this Agreement.” 

Plaintiffs argue that Defendant is “stealing” the number 123

from § 9.6(d)(vii), which relates to Pension Withdrawal

liability, and applying it improperly to the subsequent Health

Benefits section, 9.6(d)(viii)(c)(1). However, § 9.6(d)(vii)

expressly states that “for the purposes of clarification, 123

employees were covered by the Union Agreement at the time of

closing.” Agreement at § 9.6(d)(vii) . The same phrase -

“covered by the Union Agreement at the time of closing” - is used

in the next section to describe how to calculate Excess Payments. 

Agreement at § 9.6(d)(viii)(c). In describing Excess Payment

calculations, the Agreement does not make any reference to the

number of employees “on whose behalf the employer is required to

pay Health Plan benefits under the Union Agreement.” Id. In

fact, there is no indication that the phrase “covered by the

Agreement at the time of closing” has a meaning different from

what it clearly says. Rather, it is reasonable that in a fully

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integrated document, a phrase in one paragraph within the

“Employees” section would retain its meaning in the adjacent

paragraph. Agreement at § 15 (stating that “there are no

agreements or understandings between the parties other than those

set forth herein”). Plaintiff’s Complaint on this count

therefore must be dismissed.

B. Payments Included in Amount Required to Be Paid

Plaintiffs seek a declaration from the Court that, for the

purpose of calculating Excess Payments, only contributions to the

Welfare Funds that are made by Menasha itself, rather than those

made by employees, may be counted. There is no such distinction

within the language of the Agreement. Although section

9.6(d)(viii)(B) of the Asset Purchase Agreement states that

Triangle will indemnify Plaintiff for “any amount which Purchaser

is required to pay,” in the following paragraph the language is

quite different. Paragraph 9.6(d)(viii)(c)(1), which explains

how to calculate an Excess Payment, states that an Excess Payment

is “the excess of the amount (regardless of how characterized)

required to be paid in the aggregate.” Unlike in paragraph B,

the plain language of paragraph C does not specify whose payments

are to be included because “required to be paid” is not qualified

by “Purchaser.” The language does not suggest that employee

contributions do not count, unlike the prior paragraph. The

Court is obligated to assume, therefore, that the Parties

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intended this difference. As this paragraph, in context, is not

ambiguous, the Court must grant Plaintiff’s Motion. 

IV. CONCLUSION

For the reasons stated above, Defendant’s Motion is granted. 

An appropriate Order follows.

S/ Clarence C. Newcomer 

United States District Judge

Case 2:05-cv-01100-LP Document 10 Filed 08/15/05 Page 8 of 9
IN THE UNITED STATES DISTRICT COURT 

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

TCC Liquidating Corporation : CIVIL ACTION

F/T/D/B/A Triangle Container : NO. 05-1100

Corporation, :

et al., :

Plaintiffs, :

:

v. :

:

Menasha Packaging Company, LLC, :

Defendant. :

O R D E R

AND NOW, on this 15th day of August, 2005, upon

consideration of Defendant’s Motion to Dismiss (Doc. 5),

Plaintiffs’ Response, and Defendant’s Reply, it is hereby ORDERED

that said Motion is GRANTED. Count I of Plaintiffs’ Complaint is

DISMISSED. It is further ORDERED that Defendant’s Motion for

Leave to File a Reply (Doc. 9) is GRANTED.

AND IT IS SO ORDERED. 

 S/ Clarence C. Newcomer 

 United States District Judge

Case 2:05-cv-01100-LP Document 10 Filed 08/15/05 Page 9 of 9