Court Opinion

ID: 2759000
Source: CourtListenerOpinion
Date Created: 2014-12-09 22:05:15.701501+00
Date Added: 2024-06-11T11:27:00.401401
License: Public Domain

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37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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