Brandow Chrysler Jeep Co. v. Datascan Technologies
Docket: Nos. 08-4308, 08-4384
Court: Court of Appeals for the Third Circuit; September 25, 2009; Federal Appellate Court
Brandow Chrysler Jeep Co. and its affiliates (collectively "Brandow") appealed a District Court decision that granted summary judgment in favor of DataScan Technology. Brandow contended that the District Court improperly used extrinsic evidence to interpret a release agreement and wrongly determined that no reasonable juror could find DataScan grossly negligent. In a cross-appeal, DataScan argued that the District Court erred in denying its motion for sanctions as moot. The Court affirmed the District Court's ruling, referencing its prior opinion and additional reasoning.
The case's background includes Brandow's long-term floor plan financing relationship with PNC Bank, which required regular audits of vehicle inventory. DataScan began conducting these audits for PNC in 2001. Following a discovery of discrepancies in Brandow's inventory in 2004, PNC and Brandow negotiated additional loans in exchange for personal guarantees and a release of claims against PNC. This release, signed on November 15, 2004, cleared PNC and its agents from all claims, provided PNC could be liable. DataScan, as PNC's agent under an Audit Agreement from 1998, was indemnified by PNC for losses not resulting from its gross negligence.
Brandow's complaint, removed to the District Court in 2006, alleged DataScan failed to meet industry audit standards and did not share required information, leading to significant financial losses. The District Court dismissed several claims, including breach of contract and professional negligence, and later ruled DataScan fell under the release as a "consultant," supporting its summary judgment motion.
The District Court ruled that if DataScan exhibited gross negligence or willful misconduct, the Release would not apply; however, it found no evidence of such behavior and granted DataScan’s motion regarding breach of fiduciary duty and negligent misrepresentation claims. Brandow appealed this summary judgment on October 17, 2008, focusing on the applicability of the Release, while not contesting the dismissal of the intentional misrepresentation or breach of contract claims. Under Pennsylvania law, the writing of a contract reflects the parties' intent, and the court should not look beyond it unless there's ambiguity. The District Court defined "consultant" using standard dictionary definitions and relevant case law, determining that DataScan’s auditing work involved specialized knowledge and constituted professional services. Brandow failed to demonstrate that DataScan acted with gross negligence, as the evidence presented did not show a deviation from the standard of care. The court noted that DataScan was permitted to rely on Brandow’s representations under their contract. Consequently, the District Court's decisions were affirmed, including the dismissal of the intentional misrepresentation claim for lack of a valid basis and the moot status of other motions. The court held jurisdiction under 28 U.S.C. 1332 and 28 U.S.C. 1291, and the summary judgment ruling was subject to plenary review.
