IN THE UNITED STATES DISTRICT COURT 

FOR THE EASTERN DISTRICT OF PENNSYLVANIA 

SUNGARD RECOVERY SERVICES L.P.: 

Plaintiff/Counterclaim Defendant, : 

Civil Action (PBT) 

V. NO. 02-4444 

COMCAR INDUSTRIES, INC., 

Defendant/Counterclaim Plaintiff. : 

ORDER 

AND NOW, thrs day of ,2002, upon consideration 

of SunGard Recovery Services LP’s Motion to Dismiss Counts 11, IV and V of the 

Amended Counterclaims of Defendant/Counterclaim Plaintiff Comcar Industries, 

Inc., and the response thereto, it is hereby ORDERED and DECREED that the 

Motion is GRANTED. Counts 111, IV and V of the Amended Counterclaims are 

dismissed with prejudice. 

Plaintiff shall file its Reply and Affumative Defenses to Counts I and I1 of the 

Amended Counterclaims within twenty days of entry of this Order. 

BY THE COURT: 

090079.71 121/21080646vl 

J. 

Case 2:02-cv-04444-PBT Document 9 Filed 11/13/2002 Page 1 of 17
IN THE UNITED STATES DISTRICT COURT 

FOR THE EASTERN DISTRICT OF PENNSYLVANIA 

SUNGARD RECOVERY SERVICES L.P.: 

Plaintiff/Counterclaim Defendant, : 

Civil Action 

V. NO. 02-4444 (PBT) 

COMCAR INDUSTRIES) INC., 

Defendant/Counterclaim Plaintiff. : 

SUNGARD RECOVERY SERVICES LP’S MOTION TO DISMISS 

COUNTS 111, IV AND V OF COMCAR INDUSTRIES, INC.3 

AMENDED COUNTERCLAIM 

For the reasons set forth in the Memorandum of Law file contemporaneously 

herewith, Plaintiff/Counterclaim Defendant SunGard Recovery Services LP, formerly 

known as SunGard Recovery Services Inc. (“SunGard”), pursuant to Federal Rule of 

Civil Procedure 12(b)(6), respectfully moves this Court for entry of an Order 

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Case 2:02-cv-04444-PBT Document 9 Filed 11/13/2002 Page 2 of 17
dismissing with prejudice Counts 111, IV and V of the Amended Counterclaims of 

DefendadCounterclaim Corncar Industries, Inc. 

Dated: November i 3,2002 

I BLANK ROME COMISKY & McCAULEY LLP 

Michael E. Ader, Esquire 

One Logan Square 

Philadelphia, PA 19103 

Telephone: (215) 569-5500 

Facsimile: (215) 569-5555 

Attorneys for Plaintiff SunGard Recovery Services 

LP, foAerly known as SunGard Recoveb Services - lnc. 

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IN THE UNITED STATES DISTRICT COURT 

FOR THE EASTERN DISTRICT OF PENNSYLVANIA 

SUNGARD RECOVERY SERVICES L.P.: 

Plaintiff/Counterclaim Defendant, : 

Civil Action (PBT) 

V. NO. 02-4444 

COMCAR INDUSTRIES, INC., 

Defendant/Counterclaim Plaintiff. : 

SUNGARD RECOVERY SERVICES LP’S MEMORANDUM OF LAW IN 

SUPPORT OF ITS MOTION TO DISMISS COUNTS 111, V AND V OF 

COMCAR INDUSTRIES, INC.’S AMENDED COUNTERCLAIMS 

Plaintiff/Counterclaim-Defendant SunGard Recovery Services LP 

(“SunGard’), by and through its undersigned counsel, respectfully submits this 

Memorandum of Law in Support of its Motion to Dismiss Counts 111, IV and V of 

the Amended Counterclaims of Defendant/Counterclaim Plaintiff Comcar Industries, 

Inc. (“C~mcar’~) for fdure to state a claim upon which relief can be granted. 

PRELIMINARY STATEMENT 

On September 24, 2002, SunGard filed a Motion to Dismiss Comcar’s original 

counterclaims. Comcar staved off dismissal of those claims for fraud and 

misrepresentation by filing Amended Counterclaims. In short, no matter how 

Comcar attempts to recast the facts, the counterclaims, as amended, suffer from core 

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infirmities that cannot be corrected. First, Comcar waited well beyond the applicable 

statute of limitations period to pursue these claims. Thus, the claims for fraud and 

misrepresentation are barred by the two year statute of lirmtations. Second, Comcar is 

effectively asking the Court to ignore the effect of the integration clause in the 

Agreement. Many of the alleged misrepresentations are not found in the Agreement 

itself, but instead are based upon alleged statements made during negotiations. In the 

face of an enforceable integration clause, the Court cannot consider fraud and 

misrepresentation claims based upon alleged statements that pre-dated, but were not 

incorporated into, the written Agreement. Additionally, Comcar’s claims for fraud 

and misrepresentation fail because the balance of the alleged misrepresentations in the 

Counterclaims are promises to do acts in the future. Well-settled law plainly reveals 

that the failure to complete these alleged promises cannot support a claim for fraud or 

misrepresentation. Finally, all of Corncar’s tort claims are barred by the economic loss 

doctrine. 

FACTUAL AND PROCEDURAL BACKGROUND 

As alleged in Corncar’s Amended Counterclaims, prior to May 1999, SunGard 

and Comcar entered into negotiations regarding a contract for SunGard’s disaster 

recovery services. See Answer, Affirmative Defenses and Amended Counterclaims 

(hereinafter “Amended Counterclaims at 7 -”) at 7 4. Comcar had previously 

pleaded in its original Counterclaims, and now realleges in its Amended 

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Counterclaims, that SunGard made certain representations during these negotiations 

prior to the execution of the contract itself. Comcar now 

supplements its factual allegations relating to what it orally told SunGard during the 

negotiations prior to the Agreement - that it sought to develop a disaster recovery 

plan for all of its locations, that it lacked the expertise to do so, and that its employees 

would require training and assistance. Id. at 77 8-10. During these negotiations, 

SunGard allegedly promised to satisfy Comcar’s needs relating to disaster recovery 

services. Id. at 7 11. 

Id. at 77 8-13, 15. 

Comcar alleges that in reliance upon SunGard’s representations, it executed the 

contract on May 13, 1999 (id. at 17) and that the contract itself contained certain 

representations or promises as discussed during the negotiations. Id. at 77 19-22,24- 

28,32, 36,39,42,44. See also 77 53,59, and 66. For example, according to Comcar, 

the agreement obligates SunGard to provide, among other services, a “computer 

based Workshop” for purposes of orientation, a “test plan”, and assistance, gurdance 

and support during a scheduled test of the disaster recovery services. Id. at 77 18-19. 

Comcar alleges that in the fall of 1999, it conducted a test of the dsaster recovery 

services, at which time SunGard failed to fulfill these purported promises to Comcar. 

- Id. at qT 23-28, 37, 40, 43. Comcar further alleges that SunGard had a duty to carry 

out the intended purpose of the agreement and to provide Comcar with the expertise 

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and services that it promised. Id. at 7 45. Comcar has allegedly been damaged as a 

result of SunGard’s breach of the agreement. 

The Contract contained two provisions relevant to this Motion to Dismiss. 

First, the parties agreed that that the contract would be “governed by substantive 

Pennsylvania law.” Amended Counterclaims at Exhibit C $ D(10). Further, the 

parties expressly stated that the contract set forth the entirety of their agreement and 

superceded all prior negotiations: 

Ths Agreement (which includes and incorporates all Schedules 

and Addenda to this Agreement) states the entire understanding 

between the parties with respect to its subject matter, and 

supersedes all prior proposals, negotiations and other written or 

oral communication between the parties with respect to the 

subject matter of this Agreement. . . . 

- Id. at $ D(8). 

ARGUMENT 

Pursuant to FED. R. CIV. P. 12(b)(6), this court should dismiss a claim if it is 

clear “that no relief could be granted under any set of facts that could be proved 

consistent zvitb the aLZgaati0n.r.” Hishon v. 1G-w & SDaulding, 467 U.S. 69, 73, 104 S. Ct. 

2229, 2232 (1984) (citing Conlev v. Gibson, 355 U.S. 41, 45-46, 78 S. Ct. 99, 102 

(1957)) (emphasis added); Piecknick v. Commonwealth of Pennsylvania, 36 F. 3d 

1250 (3d Cir. 1994). In reviewing a motion to dismiss for failure to state a claim under 

Fed.R.Civ.P. 12(b)(6), all allegations in the pleading and all reasonable inferences that 

can be drawn therefrom must be accepted as true and viewed in the light most 

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favorable to the non-moving party.” Sturm v. Clark, 835 F. 2d 1009, 1011 (3rd Cir. 

1987) (citations omitted).’ “The purpose of a 12(b)(6) motion is to test the legal 

sufficiency of’ a claim. Winterberg v. CNA Ins. Co., 868 F. Supp. 713,717 (E.D. Pa. 

1994). Finally, a court may grant a motion to dismiss as to a portion of a pleadmg. 

Elliot v. State Farm Mut. Auto. Ins. Co., 786 F. Supp. 487 (E.D. Pa. 1992). 

A. RULE l2(B)(6) MANDATES DISMISSAL OF COUNTS 111, IV 

AND V OF COMCAR’S COUNTERCLAIMS SINCE THE 

FACE OF A PLEADING SHOWS THE CLAIMS ARE BARRED 

BY THE STATUTE OF LIMITATIONS. 

In a diversity case such as this one, a federal court must apply state substantive 

law, including statutes of limitations. Ciccarelli v. Carey Canadian Mines. Ltd., 757 F. 

2d 548,552 (3d Cir. 1985). The law of this Circuit (the so-called “Third Circuit Rule”) 

permits a limitations defense to be raised by a motion under Rule 12(b)(6) if “the time 

alleged in the statement of a claim shows that the cause of action has not been 

brought within the statute of limitations.” Hanna v. U.S. Veterans’ Admin. Hos~., 514 

F. 2d 1092,1094 (3d Cir. 1975); Bethel v. Jendoco Constr. Corp., 570 F.2d 1168,1174 

(3d Cir. 1978); Cito v. Bridgewater Twp. Police Dep’t, 892 F. 2d 23, 25 (3d Cir. 1989); 

Davis v. Grusemeyer, 996 F. 2d 617, 623 (3d Cir. 1993); Oshver v. Levin, Fishbein, 

Sedran & Berman, 38 F. 3d 1380, 1385 n. 1 (3d Cir. 1994) (“[wlhile the language of 

Needless to say, SunGard does not concede the accuracy of Comcar’s 

allegations, but recognizes that for purposes of the instant Motion the Court is 

required to accept the allegations as true. 

1 

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FED.R.CIV.P. 8(c) indicates that a statute of limitations defense cannot be used in the 

context of Rule 12@)(6) motion to dismiss, an exception is made where the complaint 

facially shows noncompliance with the limitations period and the affmative defense 

clearly appears on the face of the pleading”); Rycoline Prods.. Inc. v. C & W 

Unlimited, 109 F. 3d 883, 886 (3rd Cir. 1997). 

Both SunGard and Comcar specifically acknowledged that the Agreement 

“shall be governed by substantive Pennsylvania law.” Amended Counterclaims, 

Exhibit C at $ D(10). The courts of this Circuit interpret such a contractual choiceof-law provision to govern tort claims attacking the validity of the contract itself. &, 

u., In re Allegheny International, Inc., 954 F. 2d 167, 178 (3d Cir. 1992) (applying 

Pennsylvania choice-of-law provision to claim of fraudulent inducement and stating 

“Pennsylvania law is controlling because the contract says it is to be governed by, and 

construed in accordance with, the laws of the Commonwealth of Pennsylvania” and 

“[s]uch ‘[clhoice of law provisions in contracts will generally be given effect’l)) 

(quoting Pennsylvania. Smith v. Commonwealth Nat’l Bank, 384 Pa. Super. 65, 557 

A.2d 775, 777 (1989); Corestates Bank. N.A. v. Si_rmet Bank, Civ. A. No. 96-3199, 

1996 WL 482909 at *5 n. 3 (Aug. 26,1996) (Yohn, J.) (where tort claims amounted to 

argument that claimant had been fraudulently misled into contract, then contractual 

choice-of-law provision would also apply to tort claims). Cf. PTI Services. Inc. v. 

Quotron Systems, Inc., Civ. A. No. 94-2068, 1995 WL 241411 at * 9 (E3.D. Pa. Apr. 

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19, 1995) (DuBois, J.) (where tort allegations of fraudulent inducement and negligent 

misrepresentation are inextricably intertwined with the formation of the contract, the 

choice of law clause must govern). 

The applicable Pennsylvania statute, 42 Pa. C.S.A. 5 5524(7), provides that 

fraud and negligent misrepresentation claims must be brought in two years from the 

alleged occurrence: 

The following actions and proceedings must be commenced 

within two years: 

(7) Any other action or proceeding to recover damages for 

injury to person or property which is founded on negligent, 

intentional, or otherwise tortious conduct or any other 

action or proceeding sounding in trespass, including deceit 

or fraud, except an action or proceeding subject to another 

lirmtation specified in this subchapter. 

42 Pa. C.S.A. $ 5524(7). See Gurfein v. Sovereign Group, 826 Supp. 890, 917 (ELD. 

Pa. 1993) ($5524(7) applies to claims of fraud, negligent misrepresentation and breach 

of fiduciary duty); Todav’s Exp.. Inc. v. Barkan, 426 Pa. Super. 48, 626 A.2d 187 

(1993) (5 5524(7) applies to fraud and negligent misrepresentation claims).2 

The fact that SunGard’s complaint was fded withm the applicable statutes of 

lirmtations for SunGard’s claims (i.e., withrn four years of the alleged breach of 

contract) cannot save Comcar’s own time-barred counterclaims for fraud and 

negligent misrepresentation. See, w, Harmer v. Hulsev, 321 Pa. Super. 11, 13, 467 

A.2d 867, 868-69 (1983) (“a counterclaim . . . must be raised wihn the time allotted 

for an action under the appropriate statute of limitations . . . That [counter-claimant] 

was either unaware of his potential claim or the two-year limitation, or chose not to 

bring an action untll [plaintiff] sued, does not suffice to toll the statute of 

limitations”). 

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Thus, to the extent Comcar has any valid affirmative claims for fraud, negligent 

misrepresentation, or fraudulent inducement, Comcar was required to bring those 

claims wihn two years. Its own pleading, however, shows that the purported 

misrepresentations occurred in a time period ending May 13, 1999. See Amended 

Counterclaims at 77 6-16. Additionally, by the fall of 1999, Comcar had conducted its 

test of the recovery services and learned of the alleged falsity of the purported 

misrepresentations. Id. The Counterclaims filed in September 2002 - approximately 

a year after the two-year statute of limitations had expired - are time-barred. 

B. THE PAROL EVIDENCE RULE BARS ANY CLAIM BASED 

UPON ALLEGED REPRESENTATIONS MADE BEFORE 

THE EXECUTION OF THE CONTRACT. 

Comcar bases its claims for fraud, negligent misrepresentation and fraudulent 

inducement upon statements allegedly made by SunGard prior to the execution of the 

Agreement. The Agreement, however, contains an integration clause that expressly 

disavows and supersedes any such prior representations: 

This Agreement (which includes and incorporates all Schedules 

and Addenda to this Agreement) states the entire understanding 

between the parties with respect to its subject matter, and 

supersedes all prior proposals, negotiations and other written or 

oral communication between the parties with respect to the 

subject matter of this Agreement. . . , 

- Id. at 5 D(8). 

The law is clear and well-settled that, where such an integrated agreement 

exists, a party cannot use a theory of fraud or misrepresentation to avoid the effect of 

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the parol evidence rule. See, w, 1726 Cherry Street PartnershiD v. Bell Atlantic 

Properties. Inc., 653 A.2d 663, 670 (Pa. Super. 1995) (holding that parties are “barred 

from eliciting parol evidence that they were fraudulently induced into entering the 

Contracts”). As stated in McGuire v. Schneider. Inc., 534 A.2d 115 (Pa. Super. 1987), 

a party cannot justifiably rely upon prior oral representations, yet sign a contract 

denying the existence of those representations.” Cf. Heritage 

Surveyors and Engineers. Inc., 801 A.2d 1248, 1251 (Pa. Super. 2002) (granting 

judgment on the pleadings because parol evidence rule barred plaintiff from relying 

<< 

534 A.2d at 119. 

upon representations preceding execution of integrated contract). 

Under McGuire and 1726 Cherry Street, the parol evidence rule bars Comcar 

from relylng upon any statements, negotiations or representations that preceded the 

execution of the contract to support a claim for fraud and/or misrepresentation. 

Here, SunGard’s alleged representations relating to the services or expertise that it has 

with regard to disaster recovery cannot support a fraud or misrepresentation claim. 

The only promises upon which Comcar can base any claim are the promises set forth 

in the contract itself. In the Amended Counterclaims, to the extent that Counts 111, 

IV, and V are based upon alleged misrepresentations that are not incorporated into 

the Agreement and, thus, these claims must fail. 

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C. COMCAR’S CLAIMS FOR FRAUD AND 

MISREPRESENTATION CANNOT BE BASED UPON 

ALLEGED PROMISES TO TAKE ACTION IN THE FUTURE. 

Under Pennsylvania law, promises of future performance cannot form the basis 

of a misrepresentation claim simply because the promisor has faded to perform. 

Nissenbaum v. Farley, 110 A.2d 230, 233 (Pa. 1955) (“[mlere promises to do 

something made at the time of executing a contract and not statements of existing 

facts which are untrue, do not in themselves constitute fraud though they are not 

subsequently complied with”); Shoemaker v. Commonwealth Bank, 700 A.2d 1003, 

1006 (Pa. Super. 1997) (“[ilt is well established that breach of a promise to something 

in the future is not actionable in fraud”); Bash v. Bell Telephone Co., 601 A.2d 825, 

832 (Pa. Super. 1992) (“an unperformed promise does not give rise to a presumption 

that the promisor intended not to perform when the promise was made”); IG-ause v. 

Great Lakes Holdines. Inc., 387 Pa. Super. 56, 563 A. 2d 1182, 1187 (1989) (oral 

representation that corporation would assume a debt obligation in return for 

moratorium on payments and forbearance of legal action was a promise to do 

something in the future not a basis for fraud claim). 

Close analysis of the alleged misrepresentations in the Agreement reveals that 

Comcar has alleged nothing more than SunGard’s fdure to perform its contractual 

obligations: a failure to provide a “computer based Workshop,” to provide support 

staff, to provide proper equipment or various types of network and Internet access 

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services, &e, G., Amended Counterclaims at TIT[ 20-28, 37, 40. Comcar may have a 

facially valid claim for breach of contract based upon SunGard’s alleged fdures to 

perform these contractual promises, which SunGard denies strenuously. However, 

Comcar has not alleged a claim for fraud, negligent misrepresentation or fraudulent 

inducement. 

For these additional reasons, Counts 111, IV and V of the Amended 

Counterclaims should be dismissed for failure to state a claim upon which relief can 

be granted. 

D. BECAUSE A CONTRACT EXISTS BETWEEN SUNGARD 

AND COMCAR, THE ECONOMIC LOSS DOCTRINE BARS 

THE TORT CLAIMS. 

The economic loss doctrine bars tort claims that are rooted in contract. East 

River Steamship Coq. v. Transamerica Delaval. Inc., 476 U.S. 858, 869-76 (1986) 

(noting that allowing recovery in tort for purely economic damages “fails to account 

for the need to keep [tort law] and contract law in separate spheres and to maintain a 

realistic limitation on damages.”). The rationale for this rule is that tort law was not 

intended to compensate parties for losses suffered as a result of a breach of duties 

assumed only by agreement. See Sun (10.. Inc. v. Badser Desim & Constructors, Inc., 

939 F. Supp. 365,371 (E.D. Pa. 1996) (quoting Palco Linines. Inc. v. Pavex, Inc., 755 

F. Supp. 1269, 1271 (M.D. Pa. 1990)). Unless there is a physical injury or damage to 

property, the contracting parties’ remedies are limited to the contractual benefit of 

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their bargain and cannot be recovered in tort. East River Steamship Corp., 476 U.S. 

at 871-75. Moreover, parties engaging in contractual negotiations have the ability to 

protect themselves through the contractual language. Duquesne Lisht Co. v. 

Westinshouse Electric Cop, 66 F.3d 604,620 (3d Cir. 1995). 

Here, Corncar’s alleged Counterclaims are barred as a matter of Pennsylvania 

law by the “economic loss doctrine.” Palco Linings. Inc., 755 F. Supp. at 1273 

((‘economic losses are not recoverable in tort under Pennsylvania law.”); see also 

Duquesne Lisht Co., 66 F.3d at 620 (quoting Eagle Traffic Control v. Addco, 882 F. 

Supp. 417, 419 (E.D. Pa. 1995)) (declaring that Pennsylvania has not carved out an 

exception to the economic loss doctrine for claims of negligent misrepresentations). 

In this action, the respective interests of the parties are clearly governed by the 

terms of the Agreement. Hence, Corncar’s Counterclaims in tort are simply an effort 

to blur the distinction between contract and tort law, and avoid the limiting language 

in the Agreement between the parties. Accordingly, given the clear and controlling 

law in Pennsylvania precluding the recovery of purely economic losses in tort, 

Comcar’s misrepresentation claim should be dismissed. 

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CONCLUSION 

For the foregoing reasons, SunGard respectfully requests that this Court enter 

an Order dismissing Counts 111, IV and V of the Amended Counterclaims with 

prejudice. 

Dated: November - 1 3,2002 

BLANK ROME COMISKY &McCAULEY LLP 

w es T. Smith, Esquire & 'chael E. Adler, Esquire 

One Logan Square 

PWadelphia, PA 19103 

Telephone: (215) 569-5500 

Facsde: (215) 569-5555 

Attorneys for Plaintiff SunGard Recovery Services 

LP, formerly known as SunGard Recovery Services 

Inc. 

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CERTIFICATE OF SERVICE 

I, Michael E. Adler, hereby certify that on November p, 2002 I caused a true 

and accurate copies of the foregoing Motion to Dismiss Counts 111, IV and V of the 

Amended Counterclaims, with attached Memorandum of Law and proposed Form of 

Order, to be delivered by first-class mail, addressed as follows: 

Susan L. Bucknum, Esquire 

CONRAD O’BRIEN GELLMAN & ROHN, P.C. 

151 5 Market Street, 16th Floor 

Philadelphia, PA 19102 

Michael E. Adler 

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