United States District Court, D. New Jersey
July 11, 2005.
GRANITE STATE INSURANCE COMPANY, A MEMBER COMPANY OF AMERICAN INTERNATIONAL GROUP, INC., and AIG CLAIMS SERVICES, INC., a wholly owned subsidiary of American International Group, Inc., Plaintiffs,
UJEX, INC., UJEX ENTERPRISES, INC., JUSTIN M. SCIARRA, AJAX, INC., AJAX ENTERPRISES, INC., AJEX, INC., STAFF AMERICA, INC., PAUL BROWN AGENCY, PAUL BROWN, HOMESTEAD ASSURANCE BROKERAGE, PAUL HOPKINS, AMERICA'S PEO, THE CURA GROUP, et al., Defendants.
The opinion of the court was delivered by: JEROME SIMANDLE, District Judge
This matter comes before the Court upon the unopposed motion of
Defendant Worldwide Labor Support of Illinois, Inc. ("Worldwide")
to alter or amend this Court's February 7, 2005 Order, pursuant
to Federal Rule of Civil Procedure 59(e) and Local Civil Rule
7.1(i). The issue presented at this time is whether the Court
should decide Worldwide's previous motion for summary judgment.
For the reasons discussed below, Defendant's motion to alter or
amend this Court's prior Order will be granted and the reinstated
unopposed motion for summary judgment of Defendant Worldwide will
be granted as well.
A. Procedural History
Plaintiffs initiated this case by Complaint dated March 12,
2003, which alleged that the Defendants conspired to defraud
Granite State Insurance Company in connection with the procurement of workers' compensation insurance policies at
significantly discounted premiums. Plaintiffs allege that this
fraud was carried out by utilizing employment leasing companies
as a vehicle to apply for workers' compensation coverage and then
misrepresenting on insurance applications the class and number of
employees hired as well as the estimated payroll.
On May 25, 2004, Plaintiffs filed an Amended Complaint, which,
in Count I, seeks a declaration that two workers' compensation
policies of insurance that it issued to Defendants are void ab
initio, as a result of Defendants' fraud.*fn1 The
remaining counts of the Amended Complaint allege federal and
state RICO violations, federal and state fraud claims, conspiracy
claims, negligent misrepresentation, conversion, breach of
fiduciary duty, and breach of contract against the various
Worldwide filed an Answer and Defenses to the Amended Complaint
and a Counterclaim. Count I of Worldwide's Counterclaim alleges
that Worldwide was an insured employer under insurance Policy No.
6742564 ("Policy"), and that Granite breached the insurance contract by refusing to pay any
compensation or medical benefits, to or on behalf of, employees
for whose benefit the Policy was issued ("Claimants") and by
refusing to defend Worldwide against their claims. Count II of
Worldwide's Counterclaim alleges that Worldwide and Claimants are
third party beneficiaries of the Policy and, in that capacity as
well, have been damaged by Granite's failure to defend or pay the
claims made under the Policy.
On November 23, 2004, Worldwide moved for summary judgment,
seeking an order granting judgment in favor of Worldwide and
against Plaintiffs as to Count I of the Amended Complaint;
granting judgment as to liability in favor of Worldwide as to its
Counterclaim and compelling Plaintiffs to provide insurance
coverage to Worldwide and Claimants consistent with the terms of
the Policy; and granting judgment in favor of Worldwide and
against Plaintiffs as to Counts II through XII of the Amended
Complaint. Although Plaintiffs' counsel requested a ten day
extension of the time in which to respond to Worldwide's motion,
which this Court granted counsel in early December 2004, that
motion was ultimately unopposed.
On February 7, 2005, this Court dismissed Plaintiffs' federal
claims and declined to exercise jurisdiction over the remaining
state law claims. The Court thereby dismissed Worldwide's summary
judgment motion without discussing the merits, declining to exercise supplemental jurisdiction over the
state law claims which were at issue therein.
Subsequently, on February 16, 2005, Worldwide filed the instant
motion to amend or alter the Court's Opinion and Order of
February 7, 2005, urging the Court to recognize diversity
jurisdiction over this claim and to decide the merits of the
B. Underlying Facts
The Policy which is the subject of Worldwide's summary judgment
motion (Policy No. 6742564) only afforded coverage for
Worldwide's employees; it does not cover any of the employer
Defendants in this action. Worldwide is a corporation of the
State of Illinois and is in the business of providing skilled
labor to its customers. (Declaration of Wayne Cook at ¶ 2.)
Granite State is a corporation with a principal place of business
in New Jersey, and is doing business in New Jersey. (Amended
Compl. at ¶ 2.) AIG is a corporation with a principal place of
business in New York, and is also doing business in New Jersey.
(Amended Compl. at ¶ 3.)
On August 6, 2001, Worldwide entered into a Service Agreement
("Service Agreement") with America's PEO, a professional employer
organization, also known as an employee leasing company. (Id.
at ¶ 34.) Pursuant to the terms of the Service Agreement,
America's PEO agreed to supply persons to Worldwide to conduct its business. America's PEO was designated
the employer of such personnel for all administrative purposes,
and assumed responsibility on behalf of Worldwide for all
obligations typically imposed on employers under the law. (Cook
Decl., Ex. A.) Worldwide made all necessary payments to America's
PEO under the Service Agreement. (Cook Decl. at ¶ 4.) The Service
Agreement expressly obligation America's PEO to provide and
maintain workers' compensation insurance coverage for the
employees supplied to Worldwide, and to provide Worldwide with
Certificates of Insurance evidencing the issuance of such
policies of insurance. (Cook Dec., Ex. A at ¶ 2b.)
Based on the nature of the work being performed by the
employees supplied to Worldwide, it also was necessary for
America's PEO to provide and maintain insurance coverage for
claims under the United States Longshore and Harbor Workers'
Compensation Act ("Act"). Specifically, certain employees covered
under the Service Agreement were assigned by Worldwide to work at
the Kvaerner Philadelphia Shipyard in Pennsylvania. (Cook Decl.
at ¶ 5; Declaration of M. Karen Thompson, Ex D at #2, 7;
America's PEO's Answer to Worldwide's Crossclaim at ¶ 11.)
America's PEO contracted for the procurement of the required
insurance coverage with Justin Sciarra. (Thompson Decl., Ex. D at
#2.) On August 16, 2001, Justin Sciarra applied for insurance
coverage under the name UJEX Enterprises, Inc. ("UJEX") on behalf of Worldwide. The policy application expressly stated that it was
to cover employees leased for shipbuilding operations at Kvaerner
Philadelphia Shipyard, and otherwise disclosed the nature of the
risk. (Deposition of Susan Pinto at 63-64.)
Susan Pinto, an underwriter employed by AIG, was the AIG
representative who reviewed the application and decided to issue
the policy. (Pinto Depo. at 9.) Granite could not identify any
information on the application for insurance for the policy that
was incorrect or false. (Id. at 110.) The worksite, job duties
and job classification relating to the policy were accurately
represented to Granite. (Id. at 66.) Pinto approved the
issuance of the Policy, which provided coverage for claims under
Pennsylvania's workers' compensation statute and under the Act.
The Policy period was from August 22, 2001 to August 22, 2002.
(Id. at 18-23; 27-28.) Granite admits that the policy
application contained all of the necessary information to enable
it to evaluate the risk, to set the initial premium and to
determine whether to issue the Policy. (Id. at 41, 53, 63-66,
In February 2002, and on various other dates, America's PEO
provided certificates of insurance to Worldwide stating that the
Policy had been issued by Granite to UJEX and America's PEO. The
certificates listed Worldwide as an additional insured under the
Policy. (Cook Decl. at ¶ 6 and Ex. B.) At some point prior to October 26, 2001, at Pinto's request, Granite assigned Safety
Resources, LLC to conduct a physical investigation of the
Kvaerner work site and compile a loss control survey report
("Report") to enable Granite to complete its risk assessment of
the operation and collect underwriting information. (Pinto Depo.
at 20, 56.)
The Report, dated October 26, 2001, expressly noted Worldwide's
role as hiring the skilled laborers who were contracted to work
as shipbuilders at the shipyard. (Pinto Depo. at 70.) Through the
Policy application or the Report prepared by Safety Resources,
LLC, Granite was aware, or should have been aware of the
following: (1) there was an employee leasing operation involved
in the insured's business (Pinto Depo. at 41); (2) one of the
covered locations was to be the Kvaerner ship building site at
Broad Street, Philadelphia, Pennsylvania (Pinto Depo. at 53); (3)
the workers to be covered under the Policy were going to work at
the Kvaerner shipyard, performing shipbuilding operations (Pinto
Depo. at 53, 63); and (4) Worldwide was supplying the labor for
the worksite, including hiring and training the workers (Pinto
Depo. at 77-78.)
The fact that UJEX was listed as an insured on the Policy
application did not have anything to do with how Granite
estimated the degree or the character of the risk nor did it have
anything to do with how Granite fixed the premiums. (Pinto Depo. at 63-64.) Moreover, the fact that UJEX was listed as an insured
on the Policy application did not influence Pinto's judgment as
an underwriter about whether or not to issue the Policy. (Id.
at 64.) Granite admitted that the failure to include Worldwide as
an additional insured on the Policy application did not affect
the hazard that it assumed or the premiums it initially charged.
(Id. at 66.)
On November 19, 2001, Pinto reviewed the Report that she had
requested. (Id. at 70.) Granite did not adjust the premium to
be charged for the Policy as a result of any information
contained in the Report, nor did Granite cancel, terminate or
rescind the Policy as a result of the information contained in
the Report. (Id. at 79.) Granite issued a payment on one claim
under the Policy to Worldwide employee, Orin Kendrick. (Id. at
Justin Sciarra requested that the Policy be cancelled effective
January 21, 2002. (Id. at 86, 95-97, 99; Thompson Decl., Exs. G
and H.) The policy was actually cancelled effective May 1, 2002.
(Pinto Depo. at 86; Thompson Decl., Ex. G.)
Worldwide and America's PEO were insured employers under the
Policy. All premiums assessed by Granite with respect to the
Policy were paid. (Cook Decl. at ¶ 7.) Granite never refunded, or offered to refund, the premiums paid to it for coverage under
the Policy. (Eva Hoffman Depo. at 53.)
Employees of Worldwide and America's PEO who were assigned to
work at the Kvaerner Philadelphia Shipyard in Pennsylvania made
and/or filed state or federal workers' compensation claims
against Worldwide and/or America's PEO for injuries allegedly
sustained in the course of their employment during the Policy
period. With the exception of payment to one employee, Granite,
in conjunction with AIG Claims Services, Inc., refused to defend
Worldwide against such claims or to pay any compensation or
medical benefits to or on behalf of Claimants. (Pls.'s Answer to
Worldwide's Counterclaim at ¶ 6.)
A. Worldwide's Motion to Alter or Amend this Court's Order
1. Applicable Legal Standard
Federal Rule of Civil Procedure 59(e) permits a party to move
"to alter or amend a judgment . . . no later than 10 days after
entry of judgment." Fed.R.Civ.P. 59(e). This rule provides a
conduit through which a party can seek to cure a manifest
injustice. Tecchio v. United States of America, 2004 WL
2827899, at *1 (D.N.J. 2004); P. Schoenfeld Asset Mgmt., LLC v.
Cendant Corp., 161 F. Supp. 2d 349 (D.N.J. 2001) (citing Harsco
Corp. v. Zlotnicki, 779 F.2d 906, 909 (3d Cir. 1985), cert.
denied, 476 U.S. 1171 (1986)). Moreover, "to alter or amend"
has been interpreted to allow the judgment to be vacated. See U.S.
v. Breyer, 41 F.3d 884, 888-89 (3d Cir. 1994). Indeed, it would
be an unreasonably narrow position to hold that a judgment may be
modified and amended only up to the thin line where it amounts to
a vacation of the judgment altogether. See 6A Moore's Federal
Practice, ¶ 59.12 (2d ed. 1982).
In addition, Local Civil Rule 7.1(i) of the United States
District Court, District of New Jersey, governs motions for
reconsideration. The rule requires that the moving party set
forth the factual matters or controlling legal authority that it
believes this Court overlooked when rendering its initial
decision. L. Civ. R. 7.1(i). Whether to grant reconsideration is
a matter within the district court's discretion, but it should
only be granted where such facts or legal authority were indeed
presented but overlooked. DeLong Corp. v. Raymond Int'l, Inc.,
622 F.2d 1135, 1140 (3d Cir. 1980), overruled on other grounds
by Croker v. Boeing Co., 662 F.2d 975 (3d Cir. 1981);
Williams v. Sullivan, 818 F. Supp. 92, 93 (D.N.J. 1993). The
purpose of a motion for reconsideration "is to correct manifest
errors of law or to present newly discovered evidence." Harsco
Corp. v. Zlotnick, 779 F.2d 906, 909 (3d Cir. 1985), cert.
denied, 476 U.S. 1171 (1986).
2. Presence of Diversity Jurisdiction In its February 7, 2005 Opinion and Order, this Court dismissed
Plaintiff's federal claims pursuant to Fed.R.Civ.P. 12(b)(6)
and subsequently dismissed Worldwide's summary judgment motion
without reaching the merits, concluding that it no longer had
subject matter jurisdiction over Count I of Plaintiff's Amended
Complaint or over the claims asserted by Worldwide in its
counterclaim. The Court was mistaken. In fact, although counsel
did not raise the point in its briefing of the summary judgment
motion before the Court, the Court mistakenly failed to
appreciate that diversity jurisdiction exists between Plaintiffs
and Worldwide, making dismissal inappropriate.
When subject matter jurisdiction is predicated upon the
diversity in citizenship between the parties, pursuant to
28 U.S.C. § 1332, and the federal claims are subsequently dismissed,
a court "cannot automatically dismiss the state law claims, but
rather must determine if there is an independent basis of
jurisdiction for such claims." Jaquith v. Newhard, 1993 WL
127212, at *18 (S.D.N.Y. 1993) (citing Connecticut Nat'l. Bank
v. Fluor Corp., 808 F.2d 957, 963 (2d Cir. 1987).
Diversity jurisdiction pursuant to 28 U.S.C. § 1332 clearly
exists here. Granite State is a corporation with a principal
place of business in New Jersey, and is doing business in New
Jersey. (Amended Compl. at ¶ 2.) AIG is a corporation with its
principal place of business in New York, and does business in New Jersey. (Id. at ¶ 3.) Worldwide is a corporation of the State
of Illinois, with its principal place of business in Mississippi.
(Worldwide's Answer to Amended Compl. at ¶ 34.) Moreover, the
amount in controversy exceeds $75,000, representing various
alleged damages to Worldwide. (See Worldwide's Amended Third
Party Compl. at ¶ 8.)
For this reason, therefore, this Court will vacate that portion
of its February 7, 2005 Opinion and Order which dismissed
Worldwide's summary judgment motion without disposition on the
merits, reinstate Worldwide's summary judgment motion and decide
the motion on the merits at this time.
B. Worldwide's Motion for Summary Judgment
Having determined it appropriate to vacate that portion of this
Court's February 7, 2005 Opinion and Order which dismissed
Worldwide's unopposed summary judgment motion without
disposition, the Court now addresses the merits of Worldwide's
1. Standard of Review
On a motion for summary judgment, the court must determine
whether "there is no genuine issue as to any material fact and
that the moving party is entitled to judgment of law." Abraham
v. Raso, 183 F.3d 279, 287 (3d Cir. 1999) (citing Fed.R. Civ.
Proc. 56(c)). A party opposing summary judgment "must do more
than simply show that there is some metaphysical doubt as to material facts." Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 586 (1986). If the nonmoving party fails to
oppose the motion by evidence such as written objection,
memorandum, or affidavits, the court "will accept as true all
material facts set forth by the moving party with appropriate
record support." Anchorage Assocs. v. Virgin Islands Bd. of Tax
Rev., 922 F.2d 168, 175 (3d Cir. 1990) (quoting Jaroma v.
Massey, 873 F.2d 17, 21 (1st Cir. 1989)). If the nonmoving party
has failed to establish a triable issue of fact, summary judgment
will not be granted unless "appropriate" and only if movants are
entitled to a judgment as a matter of law. Fed.R. Civ. Proc.
56(e); see Anchorage Assocs., 922 F.2d at 175.
2. Count I of the Complaint/Worldwide's Counterclaim
Granite seeks, in Count I of its Amended Complaint, to rescind
the Policy and have it declared void ab initio by alleging
that the insureds engaged in fraud in obtaining the Policy. In
New Jersey, an insurer may rescind an insurance policy on the
grounds of equitable fraud only when the insured makes a false
statement in the insurance application that materially affects
either the acceptance of the insurance risk, or the hazard
assumed by the insurer. Parker Precision Products Co. v.
Metropolitan Life Ins. Co., 407 F.2d 1070, 1073 (3d Cir. 1969);
Ledley v. William Penn Life Ins. Co., 651 A.2d 92, 96-97 (N.J.
1995). "A misrepresentation is material if it `naturally and
reasonably influence[d] the judgment of the underwriter in making
the contract at all, or in estimating the degree or character of
the risk, or in fixing the rate or premium." Parker Precision
Products, 407 F.2d at 1073. That is, the misrepresentation is
"material if it is `reasonably related to the estimation of the
risk or the assessment of the premium.'" Booker v. Blackburn,
942 F. Supp. 1005, 1008-09 (D.N.J. 1996). Thus, in seeking to
rescind the Policy based on equitable fraud, Granite must prove:
"(1) a material misrepresentation of a presently existing or past
face; (2) the maker's intent that the other party rely on it; and
(3) detrimental reliance by the other party." First American
Title Ins. v. Lawson, 798 A.2d 661, 667 (N.J.Super.Ct. App
Div. 2002), rev'd in part on other grounds, 827 A.2d 230 (N.J.
Here, discovery has confirmed that there were no material
misrepresentations and, therefore, the Policy cannot be rescinded
as to Worldwide. Through the deposition testimony of its
corporate designees, Granite has admitted that the application
for the Policy did not contain any information that was incorrect
or false. Granite's underwriter, Susan Pinto, admitted that she
had all of the necessary information to evaluate the risk, to set
the initial premium and to determine whether to issue the Policy.
Moreover, Granite also conducted an independent investigation
of the risk and worksite, the results of which were reflected in the Report. The worksite, job duties and job
classification related to the Policy were accurately represented
to Granite. (Pinto Depo. at 66.) After visiting the worksite at
the underwriter's request, Safety Resources, LLC prepared the
Report providing additional detailed information about, and
analysis of, the risk and the hazard to be insured. Thus, by that
time, Granite knew that an employee leasing operation was
involved in the insured's business; one of the covered locations
with the Kvaerner ship building site; the workers were to be
covered at the Kvaerner shipyard were engaged in shipbuilding
operations; and Worldwide was supplying the labor for the
Kvaerner worksite, including hiring and training the workers.
Granite was thus able to assess the risk accurately and
calculate premiums. The fact that UJEX Enterprises was listed as
the applicant for insurance did not materially affect the risk
Granite assumed, or its estimate of the degree or the character
of the risk. It did not affect the premiums, and did not
influence Susan Pinto's judgment as an underwriter about whether
or not to issue the Policy. The failure to include Worldwide as
an additional insured on the policy application cannot be
characterized as a material omission, as it did not affect the
hazard that was being assumed by Granite and did not affect the
premiums it initially charged. Even if this information had
affected the premiums, Granite could have adjusted the premiums, as it reserved the right to do so based on interim audits. UJEX
indeed requested that Granite perform such audits; however, even
after it became aware of Worldwide's role upon receipt of the
Report, Granite performed no audits and did not adjust the
premium to be charged for the Policy as a result of any
information contained in the Report. Granite did not cancel,
terminate or rescind the Policy as a result of the information
contained in the Report. In fact, Granite paid at least one claim
under the Policy.
In addition, Granite is not entitled to rescission because it
never returned, or offered to return, the premiums paid for
coverage under the Policy. A prerequisite to rescission is that
the insurer return the premiums paid. Liebling v. Garden State
Indemnity, 767 A.2d 515, 525 n. 1 (N.J.Super.Ct. App. Div.
2001), certif. denied, 782 A.2d 424 (N.J. 2001) (citing
Merchants Indemnity Corp. v. Eggleston, 179 A.2d 505, 513
(1962) ("When a contract is obtained by fraud, the law grants the
injured party a choice. He may rescind or affirm. If he rescinds,
he must return what he received, here the premium . . .")).
There is nothing in the record to support a claim of equitable
fraud on the part of Worldwide which could justify Granite's
rescission of the Policy. At the time Granite issued the Policy,
it was fully aware of the nature of the risk and the hazard being
assumed. No evidence exists that there were any false statements made that materially affected either the
acceptance of the insurance risk, or the hazard assumed by the
insurer. Granite has admitted the facts and thus, has no legal
basis on which to rescind the Policy. Even assuming Granite has
such a basis, it is prohibited from doing so, as it has not
returned the premiums paid for coverage under the Policy.
Granite is therefore obligated to provide coverage to Worldwide
and Claimants under the Policy. It's continuing refusal to do so
constitutes a breach of contract, entitling Worldwide to a
judgment dismissing Count I of Plaintiff's Amended Complaint and
entering judgment as to liability on Count I of the counterclaim.
The Court, having determined that Worldwide is entitled to
summary judgment on Count I of its counterclaim, need not address
Worldwide's alternative argument that it is entitled to summary
judgment on Count II of that counterclaim. Count I of Plaintiff's
Amended Complaint will be dismissed, as Granite's claim that the
Policy should be declared void ab initio lacks merit.
3. Counts IV-IX of the Complaint
In its Opinion and Order of February 7, 2005, this Court
dismissed Counts II and III of Plaintiff's Amended Complaint as
legally insufficient. In its original motion for summary
judgment, Worldwide joined in the motion of certain co-defendants
to dismiss Counts II through XII of the Complaint. Thus, the Court now turns to the remaining state law claims against
To recapitulate, Granite's Amended Complaint proceeds on the
following remaining claims against Worldwide: New Jersey State
RICO violation (Count IV); New Jersey State RICO conspiracy
(Count V); common law fraud (Count VI); conspiracy to commit
common law fraud (Count VII); and negligent misrepresentation
(Count VIII). As the New Jersey State RICO statute substantially
mirrors the requirements of the federal RICO statute, (see
Maxim Sewerage Corp. v. Monmouth Ridings, 640 A.2d 1216, 1218
(N.J.Super.Ct. Law Div. 1993), Counts IV and V must fail for
the same reasons as set forth with respect to Counts II and III
in this Court's February 7, 2005 Opinion. (See February 7, 2005
Opinion.) The Court will now consider Worldwide's motion with
respect to the sole remaining claims against it, namely the fraud
and negligent misrepresentation claims.
"The five elements of common-law fraud are: (1) a material
misrepresentation of a presently existing or past fact; (2)
knowledge or belief by the defendant of its falsity; (3) an
intention that the other person rely on it; (4) reasonable
reliance thereon by the other person; and (5) resulting damages."
Schenkel v. Flaster, 2002 WL 31831555, at *2 (3d Cir. 2002)
(citing Gennari v. Weichert Co. Realtors, 691 A.2d 350, 367
(N.J. 1997) and Jewish Ctr. of Sussex County v. Whale,
432 A.2d 521, 524-25 (N.J. 1981)). Moreover, it is well settled that the
elements of fraud must be pled with particularity.
In their Amended Complaint, Plaintiffs allege that Defendants
materially misrepresented employment and payroll figures and
employment classification codes in its applications for workers'
compensation insurance. (Amended Compl. at ¶ 125.) However, the
record suggests that the figures Defendants communicated to
Plaintiffs in their applications for insurance were preliminary
and based only on Defendants' best estimates, which, at the time
of their communication to Plaintiffs through insurance
applications, were reasonable. The nature of such estimates
cannot give rise to a claim of common law fraud, as estimates are
inherently imprecise and incapable of absolute exactitude,
representing instead a mere expression of one's opinions as to
what employment and payroll figures will be in the future. Nor
does the record reflect any evidence of an intent to defraud
through such estimations. Indeed, an expression of opinion cannot
form a basis for a common law fraud claim. Daibo v. Kirsch,
720 A.2d 994, 999-1000 (N.J.Super.Ct. App. Div. 1998).
Moreover, Rule 9(b), Fed.R.Civ.P., imposes a heightened
pleading requirement of factual particularity with respect to
allegations of fraud, stating, "In all averments of fraud or
mistake, the circumstances constituting fraud or mistake shall be stated with particularity." Fed.R.Civ.P. 9(b). "Rule 9(b)
requires a plaintiff to plead (1) a specific false representation
[or omission] of material fact; (2) knowledge by the person who
made it of its falsity; (3) ignorance of its falsity by the
person to whom it was made; (4) the intention that it should be
acted upon; and (5) that the plaintiff acted upon it to his
damage." Shapiro v. UJB Financial Corp., 964 F.2d 272, 284 (3d
Cir. 1992) (internal citations omitted). In addition, the Third
Circuit has held that Rule 9(b) requires a plaintiff to identify
the source of the allegedly fraudulent misrepresentation or
omission. See Klein v. General Nutrition Cos., Inc.,
186 F.3d 338, 345 (3d Cir. 1999) ("The complaint fails to attribute the
statement to any specific member of GNC management. Fed.R. Civ.
P. 9(b) requires, at a minimum, that the plaintiff identify the
speaker of allegedly fraudulent statements.")
Here, the Amended Complaint is utterly devoid of the averments
required by Rule 9(b). The pleadings fail to identify the speaker
and the content of the alleged misrepresentations which give
basis to the common law fraud counts. The claim is instead based
only on some falsely deflated employment figures, some
falsely deflated payroll figures, and some false classification
codes, without further details. (Amended Compl. at ¶ 125.) Rule
9(b) prohibits such generalizations and the common law fraud (Count VI) and conspiracy to commit common law
fraud (Count VII) claims must be dismissed.
Finally, this Court finds that the remaining claim against
Defendant Worldwide, specifically, Plaintiffs' negligent
misrepresentation claim (Count VIII), must also be dismissed.
"Negligent representation is `[a]n incorrect statement,
negligently made and justifiably relied upon. . . .' H.
Rosenblum, Inc. v. Adler, 461 A.2d 138, 142-43 (N.J. 1983). `The
actual receipt and consideration of any misstatement remains
central to the case of any plaintiff seeking to prove that he or
she was deceived by the misstatement or omission.' Kaufman v.
i-Stat Corp., 754 A.2d 1188, 1195 (N.J. 2000)." Schenkel v.
Flaster, 2002 WL 31831555, at *2 (3d Cir. 2002). Moreover, a
plaintiff must show that it was a reasonably foreseeable
recipient of the defendant's misrepresentation. Karu v.
Feldman, 574 A.2d 420 (N.J. 1990). Here, Plaintiffs have failed
to allege which communications were incorrect at the time they
were made and how Plaintiffs relied upon those alleged
misrepresentations. Plaintiffs have not demonstrated how the
information contained in the insurance applications at issue were
known to Defendants to be false. Therefore, Plaintiffs' negligent
misrepresentation claim against Defendant Worldwide will also be
dismissed. III. CONCLUSION
For the reasons discussed above, Defendant Worldwide Labor
Support of Illinois, Inc.'s motion to alter or amend this Court's
February 7, 2005 Order will be granted as will Defendant's
reinstated motion for summary judgment. The accompanying Order
will be entered. ORDER
This matter comes before the Court upon Defendant Worldwide
Labor Support of Illinois, Inc.'s motion to alter or amend this
Court's February 7, 2005 Opinion and Order; and the Court having
considered the submissions of Defendant in support thereof and
noting no opposition thereto; and for the reasons set forth in
the Opinion of today's date; and for good cause shown;
IT IS this 11th day of July, 2005 hereby ORDERED that Defendant Worldwide Labor Support of Illinois,
Inc.'s motion to alter or amend this Court's February 7, 2005
Opinion and Order [Docket Item No. 120-1] shall be, and hereby
is, GRANTED; and
IT IS FURTHER ORDERED that this Court's February 7, 2005 Order
shall be, and hereby is, VACATED only as to that portion
which dismissed Defendant Worldwide Labor Support of Illinois,
Inc.'s motion for summary judgment without disposition on the
IT IS FURTHER ORDERED that Defendant Worldwide Labor Support of
Illinois, Inc.'s motion for summary judgment [Docket Item No.
100-1] shall be, and hereby is, REINSTATED; and
IT IS FURTHER ORDERED that Defendant Worldwide Labor Support of
Illinois, Inc.'s motion for summary judgment [Docket Item No.
100-1] shall be, and hereby is, GRANTED; and
IT IS FURTHER ORDERED that summary judgment in favor of
Defendant Worldwide Labor Support of Illinois, Inc., and against
Plaintiffs on all counts of the Amended Complaint shall be, and
hereby is, GRANTED; and
IT IS FURTHER ORDERED that summary judgment in favor of
Defendant Worldwide Labor Support of Illinois, Inc. and against
Plaintiffs as to Defendant's counterclaim shall be, and hereby
is, GRANTED; and IT IS FURTHER ORDERED that Plaintiffs shall provide insurance
coverage to Defendant Worldwide Labor Support of Illinois, Inc.
and Claimants consistent with the terms of Policy No. 6742564,
issued by Granite State Insurance Company; and
IT IS FURTHER ORDERED that this case shall remain closed on the