Court Opinion

ID: 3046924
Source: CourtListenerOpinion
Date Created: 2015-10-13 23:20:11.634702+00
Date Added: 2024-06-11T07:38:08.276406
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Opinions of the United
2009 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit

2-24-2009

Cynthia Sands v. Sherry Wagner
Precedential or Non-Precedential: Non-Precedential

Docket No. 08-1439

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Recommended Citation
"Cynthia Sands v. Sherry Wagner" (2009). 2009 Decisions. Paper 1827.
http://digitalcommons.law.villanova.edu/thirdcircuit_2009/1827

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                                               NOT PRECEDENTIAL

              UNITED STATES COURT OF APPEALS
                   FOR THE THIRD CIRCUIT

                       _____________

                        No. 08-1439
                       _____________

                     CYNTHIA SANDS

                             v.

          SHERRY K. WAGNER; DONALD W. KLINE II;
       STAT NURSE, INC.; STAT HEALTH SERVICES, INC.;
            GUARDIAN HEALTH SERVICES, INC.;
       TRIAGE STAFFING INC.; GHS HEALTHCARE INC. ;
      NORDIC INVESTMENTS; TIR PARTNERS; GAURDIAN
                 NURSING SERVICES, INC

                         DONALD W
         LINE, II; STAT HEALTH SERVICES, INC; n/k/a
   GUARDIAN HEALTH SERVICES, INC and GHS HEALTHCARE,
        INC n/k/a GUARDIAN NURSING SERVICES, INC,

                         Appellants

                       _____________

                        No. 08-1484
                       _____________

                     CYNTHIA SANDS,
                        Appellant

                             v.

   SHERRY K. WAGNER; DONALD W. KLINE; STAT NURSE INC;
STAT HEALTH SERVICES, INC; GUARDIAN HEALTH SERVICES, INC.;
       GUARDIAN HEALTH SERVICES, INC.;TRIAGE STAFFING INC;
     GHS HEALTHCARE INC, n/k/a GUARDIAN NURSING SERVICES INC;
    GUARDIAN NURSING SERVICES INC; NORDIC INVESTMENTS INC; TIR
                            PARTNERS

                      Appeals from the United States District Court
                         for the Middle District of Pennsylvania
                                    (No. 01-cv-1475)
                        District Judge: Honorable Malcolm Muir

                     Submitted pursuant to Third Circuit LAR 34.1(a)
                                    February 5, 2009

               Before: McKEE , JORDAN and LOURIE,* Circuit Judges,

                                 (Filed: February 24, 2009)

                                  ___________________

                                OPINION OF THE COURT
                                 ____________________

MCKEE, Circuit Judge:

       This consolidated appeal arises from the execution of a Stock Purchase Agreement

and involves two different sets of defendants who are appealing the order of the district

court granting judgment in favor of Plaintiff Cynthia Sands. For the reasons that follow,

       *
        The Honorable Alan D. Lourie, Judge of the United States Court of Appeals for the
Federal Circuit, sitting by designation.

                                              2
we will affirm.

                                             I.

       The district court had diversity jurisdiction pursuant to 28 U.S.C. § 1332. We have

jurisdiction pursuant to 28 U.S.C. § 1291. The final order of the district court was

entered on January 11, 2008. The notice of appeal for defendants Sherry Wagner and

STAT Nurse, Inc. was not filed until February 14, 2008. However, since Donald Kline

and the remaining defendants timely filed an appeal on February 8, the time for filing an

appeal for the remaining parties was enlarged by operation of Fed. R. App. P. 4(a)(3) (“If

one party timely files a notice of appeal, any other party may file a notice of appeal within

14 days after the date when the first notice was filed, or within the time otherwise

prescribed by this Rule 4(a), whichever period ends later.”). Wagner’s appeal was

therefore timely.

                                             I.

       Inasmuch as we write primarily for the parties, we need not discuss the factual or

procedural background except insofar as it may be useful to our brief discussion.

Because of the thoroughness of the district court’s consideration of the issues that have

been raised, we can primarily rely on the district court’s explanation of why the

defendants arguments are not meritorious.

       All defendants argue that Pennsylvania’s “gist of the action” doctrine precludes

Sands’ claims against them. See eToll, Inc. v. Elias/Savion Advertising, Inc., 811 A.2d
3
10, 14 (Pa. Super. 2002) (explaining that the gist of the action doctrine operates to

“preclude[] plaintiffs from re-casting ordinary breach of contract claims [as] tort claims”).

In rejecting the defendants’ attempt to rely on that doctrine in the Defendants’ Motion to

Dismiss, the district court explained:

       The duties allegedly breached in this case expend well beyond the terms of
       the Stock Purchase Agreement entered into between Sands and Wagner.
       None of the Kline Defendants were a party to that agreement. The unlawful
       activities allegedly undertaken by Wagner and the Kline Defendants (i.e.,
       the conspiracy to defraud Sands) comprise an essential, if not the dominant,
       facet of this case. The breach of contract claim relates to Wagner’s failure
       to pay Sands pursuant to the terms of the Stock Purchase Agreement. The
       claims which the Defendants now seek to have dismissed relate to other
       conduct concerning an unlawful agreement between Wagner and Kline to
       start a business essentially identical to Stat Nurse, Inc. [and transferring all
       of Stat Nurse’s assets and customers to the new corporation], thereby
       defrauding Sands from the benefit of her contract with Wagner. The duties
       implicated by that conduct are imposed by social policies, and not by the
       Stock Purchase Agreement.

(App. 234.) We can add little to the court’s explanation and we will therefore affirm the

district court’s rejection of the “gist of the action” doctrine substantially for the reasons

set forth by the district court.

       All defendants also argue that Sands was in material breach of the Stock Purchase

Agreement as a matter of law. The district court explained why defendants’ attempt to

rely on the doctrine of “substantial performance” to establish a material breach of the

stock purchase was mertiless. Once again, we can rely on the district court’s explanation

to resolve that argument on appeal. In its order of July 24, 2007, the court explained:

       As stated above, only a single special verdict question was posed to the

                                               4
       jury. The issue of whether Sands substantially performed the obligations
       imposed upon her by the Stock Purchase Agreement was not presented to
       the jury and no party objected to the failure to present it to the jury. Had
       this issue been raised at the appropriate time (i.e., upon review of the
       special verdict question or after hearing the jury instructions and before
       counsels’ closing arguments), we would have considered tailoring the jury
       instructions and adding any necessary special verdict questions.
               In effect, the Defendants are now attempting to substitute a
       significantly different legal standard into the case. We are of the view that
       their attempt is untimely, inappropriate, and unfairly prejudicial to Sands.
       The Defendants waived their opportunity to litigate the question of Sands’s
       substantial performance when they failed to object to the jury instructions
       and ask that the matter be presented to the jury in a special verdict question.
       Had the matter been raised at that point, Sands could have responded.
       Because the jury has been dismissed, it is now inappropriate and would be
       prejudicial to Sands to attempt to change the governing legal standard.

(App. 218-19.) Moreover, as the district court also explained, the evidence failed to

support defendants’ theory in any event. (App. 219-23.)

       All defendants next argue that the district court erred in allowing the question of

fraud to go to the jury even though the evidence did not support a finding of fraud. In its

January 11, 2008, Order denying defendants’ post-trial motions, the district court ruled

that this position was untenable because it “fails to consider a substantial amount of

evidence.” (App. 14). We agree.

       Kline, Stat Health Services, Inc., n/k/a Guardian Health Services, Inc., and GHS

Healthcare, Inc., n/k/a Guardian Nursing Services, Inc. (the “Kline Defendants”) raise an

objection to the jury charge in the first trial. They claim the district court committed

reversible error when it charged the jury that Sands’ burden of proof on the conspiracy to

defraud was a “preponderance of the evidence” rather than “clear and convincing

                                              5
evidence.” They are correct in pointing out that the charge was erroneous. No

defendants objected to the charge. However, in Beardshall v. Minuteman Press Int’l,

Inc., 664 F.2d 23, 27 (3d Cir. 1981), we held that an error in the instructions regarding the

burden of proof is fundamental, and can entitle a defendant to a new trial even in the

absence of contemporaneous objection. Nevertheless, that does not end our inquiry

because defendants did submit proposed jury instructions. The proposed instructions that

were offered did not include an instruction that conspiracy to defraud must be established

by clear and convincing evidence. We have held that this is “tantamount to invited

error,” and does not require reversal. 2260 Woodley Road Joint Venture v. ITT Sheraton

Corp., 369 F.3d 732, 744 (3d Cir. 2006). Accordingly, although their challenge to this

portion of the jury charge is technically correct, given the “invited error,” it does not

warrant relief.

       Finally, the Kline Defendants argue that it was reversible error for the district court

to refuse Kline’s request for a charge on malice and lack of justification in connection

with the fraud charge. The district court considered that argument in ruling on post-trial

motions. Kline did make this objection at trial, so we review for abuse of discretion,

unless the instruction actually misstates the law, in which case our review is plenary.

Cooper Distributing Co., Inc. v. Amana Refrigeration, Inc., 180 F.3d 542, 549 (3d Cir.

1999). We do not believe this portion of the charge misstated the law, nor do we find that

the district court abused its discretion in refusing Kline’s requests for additional

                                               6
instructions.

       In her pro se brief, Wagner raises the additional argument that the Stock Purchase

Agreement should be considered void ab initio because “STAT Nurse upon sale provided

services that were no longer legal to provide.” She bases this argument on her allegation

that it was improper under various tax laws to treat certain kinds of nurses as

“independent contractors” rather than “employees,” and that Sands allegedly sold her the

business without revealing that the agency was violating these tax laws. We reject this

argument substantially for the reasons articulated by the district court in its January 11,

2008 Order. (See App. 9-11.)

                                             II.

       For the reasons set forth above, the judgment of the district court will be affirmed.

                                              7