# Reserve Real Estate Group, Inc. v. Precision Wound Care LLC

> District Court, M.D. Pennsylvania · June 30, 2025

URL: https://www.frixlaw.com/law-library/cases/11087123

## Case

- **Court:** District Court, M.D. Pennsylvania
- **Decided:** June 30, 2025
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/11087123

## How later opinions describe it (automated extraction)

- observing that “punitive damages are available for tort claims”

## Opinion text

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA

RESERVE REAL ESTATE GROUP, : CIVIL ACTION NO. 1:25-CV-641
INC. d/b/a MEDTEK SOLUTION, :
: (Judge Neary)
Plaintiff & :
Counterclaim :
Defendant :
:
v. :
:
PRECISION WOUND CARE LLC, :
and GARY RYAN, as managing :
member and individually, :
:
Defendants, :
Counterclaim :
Plaintiffs & :
Third-Party :
Plaintiffs :
:
v. :
:
GABE DIETRICH and SOPHIA :
MATSANGAKIS, :
:
Third Party :
Defendants :

MEMORANDUM

This case arises from a hotly disputed contract termination between
companies working in the wound care industry. Plaintiff and counterclaim
defendant Reserve Real Estate Group d/b/a MedTek Solution (“MedTek”) and third
party defendants Gabe Dietrich and Sophia Matsangakis (collectively, the “MedTek
Parties”) move: (1) to dismiss the first amended counterclaims and third party
complaint (the “FAC”) filed by defendants, counterclaim plaintiffs, and third-party
plaintiffs Precision Wound Care LLC (“Precision”) and Gary Ryan (collectively, the
“Precision Parties”), (2) to strike certain paragraphs of the FAC as well as the FAC’s
request for punitive damages and references to allegedly “malicious, willful,

wanton, and reckless” conduct, and (3) to stay discovery pending resolution of these
motions. (Docs. 53, 63, 66). Additionally, in their reply brief, the MedTek parties
challenge this courts subject matter jurisdiction on the basis of Federal Rule of Civil
Procedure 17. (Doc. 83). The court, concluding it has subject matter jurisdiction
over the counterclaims, will grant in part and deny in part the MedTek Parties’
motion to dismiss, will deny the motion to strike, and will deny the motion to stay
discovery as moot.

I. Factual Background & Procedural History

a. Complaint and FAC
As alleged in the complaint,1 MedTek is the fictious name of a Pennsylvania
corporation that assists medical equipment manufacturers with locating medical
providers who need the manufacturers’ products and with selling those products to
the providers. (Doc. 2-1 ¶¶ 12-14). The manufacturer and provider contract directly
with each other, the manufacturers ship the products directly to the providers, and
the providers pay the manufacturers directly, with MedTek providing contract
management services and receiving a referral commission from the manufacturers.
(Id. ¶¶ 13-15). Typically, the providers pay for the products through reimbursements

1 The court includes the allegations from MedTek’s complaint only for the
purpose of providing context to the dispute. The allegations are not considered for
purposes of the pending motion to dismiss.
from insurance companies, Medicare, or Medicaid, though they are obligated to pay
for the products regardless of the reimbursement status. (Id. ¶¶ 18-19). As is also
typical in the industry, MedTek relies on sales representatives who are independent

contractors to solicit providers and then sell the manufacturers products to the
providers on behalf of MedTek. (Id. ¶¶ 20-21). MedTek regularly communicates with
the sales representatives to ensure timely payment is made to the manufacturers, as
MedTek receives a commission from the manufacturer, and in turn pays a
commission to the sales representatives. (Id. ¶¶ 23-25).
Gabe Dietrich is the president of MedTek and Sophia Matsangakis is its
managing partner. (Id. ¶¶ 10-11). On August 9, 2024, MedTek entered into an

independent contractor agreement with the Andelle Group LLC, a Wyoming
company that also operates in the wound care industry and is owned and managed
by Gary Ryan. (Id. ¶¶ 26-27). On October 3, 2024, MedTek entered into an
independent contractor agreement with Precision, a Delaware limited liability
company also owned and managed by Ryan, and signed by Ryan, which superseded
the agreement between MedTek and Andelle. (Id. ¶¶ 28-29). Under the terms of the

agreement, Precision would sell and market products from manufacturers with
whom MedTek had a relationship in exchange for a commission. (Id. ¶ 31). The
October 3 agreement included, among other provisions, that the parties agreed to
comply with all applicable laws and that “no part of the Fees, pricing, or
consideration paid hereunder is intended for the recommending or arranging for
impermissible referral of business or the ordering of items or services; nor are the
payments intended to induce illegal referrals of business.” (Id. ¶¶ 36-37).
On February 7, 2025, Dietrich sent an email to Ryan regarding provider

accounts that had past due balances owed to manufacturers and inquired as to
when the providers would pay. (Id. ¶¶ 42-43). Dietrich followed up with Ryan by
email on February 12, 2025, inquiring about specific accounts with past due
balances. (Id. ¶ 44). The next day, Ryan allegedly responded that each provider
intended to pay and that he “would also be willing to make some good faith
payments/escrow on [the providers’] behalf if it is a manageable amount as I have
confidence in the providers as well.” (Id. ¶ 45). Dietrich responded on February 19,

2025, that Ryan’s suggested payments on the providers’ behalf “would be a
compliance violation and completely unacceptable. MedTek would need to
terminate our contract immediately if there were any such activities taking place or
we were made aware of such activities.” (Id. ¶ 46). Ryan indicated that it was “an
idea, not fully thought out at all or discussed with anyone else.” (Id. ¶ 47). However,
MedTek alleges it uncovered that Ryan had indeed made this offer directly to one

provider, and on March 17, 2025, it terminated its agreement with Precision. (Id. ¶¶
48-49). Additionally, the termination letter sent from MedTek to Precision stated
that “[d]ue to the nature of this termination and in accordance with the terms of
your Agreement, no further commissions or payments will be due or owing to your
company.” (Id. ¶ 58).
On March 18, 2025, Ryan emailed all Precision sales representatives
informing them of the contract termination due to an alleged violation of law, that
MedTek was withholding commissions owed to them, and that MedTek and Sophia
“have essentially stolen from us.” (Id. ¶¶ 65-68). Since then, Ryan has allegedly
contacted Precision sales representatives and told them not to work for MedTek

and has told providers they do not have to pay the manufacturers. (Id. ¶¶ 71-77).
MedTek filed a writ of summons in the Court of Common Pleas of
Cumberland County on March 24, 2025. (Doc. 2-1 at ECF 4). On April 9, 2025,
MedTek filed a complaint in the same court. (Doc. 2-1 at ECF 8-45). Precision
removed the case to this court on April 10, 2025. (Doc. 2). MedTek alleges nine
state-law claims against the Precision Parties: (1) breach of contract, (2) breach of
covenant of good faith and fair dealing, (3) unjust enrichment (in the alternative), (4)

tortious interference with contract, (5) tortious interference with prospective
contractual relations, (6) negligence (in the alternative), (7) defamation/libel, (8)
misappropriation of trade secrets under Pennsylvania Uniform Trade Secrets Act,
and (9) permanent injunctive relief.2 (Doc. 2-1 ¶¶ 83-184).
The Precision Parties then filed an answer, counterclaims, and a third-party
complaint against MedTek, Dietrich, and Matsangakis. (Doc. 14). On May 22, 2025,

the Precision Parties filed the FAC. (Doc. 53). As relevant to the pending motions,

2 MedTek filed a motion (Doc. 7) for preliminary injunction on April 10, 2025,
but later requested (Doc. 37) to withdraw that motion, which the court granted on
May 8, 2025. (Doc. 41).
the allegations in the FAC present a starkly different picture underlying the
formation of the October 3 contract, its termination, and subsequent events.
According to the Precision Parties, Reserve Real Estate was incorporated in

Pennsylvania on August 3, 2023, and registered MedTek Solution as a fictious name
on July 26, 2024. (Doc. 53 ¶¶ 19, 23). This is despite the complaint stating that
Dietrich and Matsangakis have been doing business as MedTek for three to four
years and that Matsangakis has held herself out to the public as the managing
partner of MedTek since mid to late 2019. (Id. ¶¶ 24-26). Dietrich and Matsangakis
used MedTek, a fraudulent company, to conduct business in the wound care
industry, including to contract with Precision. (Id. ¶ 27). They did so to avoid

liability and risk while advancing their personal interests, and comingled personal
funds with the nonexistent MedTek entity. (Id. ¶ 30).
Ryan has been involved in the wound care industry since 2023, and is the sole
owner of two companies, Andelle Group LLC, and Precision. (Id. ¶¶ 34-35). Ryan
found success in the industry and Precision hired numerous sales representatives
who benefited from Precision’s provider contacts. (Id. ¶¶ 36-37). In May 2024,

Dietrich and Matsangakis approached Ryan about contracting to sell products to
providers. (Id. ¶ 39). Dietrich and Matsangakis represented to Ryan that they owned
a company with significant experience in the wound care industry and had
numerous relationships with manufacturers offering favorable commissions. (Id. ¶
40). They did not inform Ryan that MedTek was a fake company with little sales,
and that MedTek did not employ anyone who sold products. (Id.)
Following negotiations, in June 2024, Ryan received a contract from MedTek

that he executed on behalf of Andelle, and which Matsangakis executed on behalf of
the nonexistent MedTek. (Id. ¶ 42). Ryan was immediately successful, and in August
2024, Ryan and Matsangakis executed a second contract between MedTek and
Andelle, which expanded the number of products to sell providers and superseded
the previous contract. (Id. ¶¶ 43-45). In October 2024, MedTek entered into an
independent contractor agreement with Precision, which superseded the previous
contract between MedTek and Andelle, and with any obligations now being owed to

Precision. (Id. ¶¶ 46-47). The October 2024 contract provided that Precision would
be paid a commission based on a commission schedule and on the quantity of
products sold each month, with payment to Precision occurring within ten days of
MedTek’s receipt of payment from the manufacturers. (Id. ¶¶ 52-54). The contract
contains termination provisions, providing that either party may terminate the
contract with or without cause by giving the other thirty days prior written notice.

(Id. ¶ 55). “Cause” is not defined, though for terminations without cause, the
contract states that MedTek shall pay Precision “any amounts owed under Section
3(a) hereof as of the date of termination or expiration.” (Id. ¶¶ 56-57).
Precision claims it was MedTek’s top performing independent contractor,
selling tens of millions of products on MedTek’s behalf. (Id. ¶¶ 58, 61). Precision
often waited months to receive its commission following a sale, as providers
typically waited to receive a reimbursement before paying. (Id. ¶ 59). MedTek
looked for ways to get out of paying commissions to increase its own profit margins.
(Id. ¶ 62). Precision provides examples of its sales representatives who sold millions
of dollars in product and for whom MedTek withheld or still owes commissions to

Precision. (Id. ¶¶ 63-68).
On March 17, 2025, Dietrich emailed Ryan stating that MedTek was
terminating the October 2024 agreement because Ryan “engaged in behavior that is
in violation of federal regulatory provisions” and which violated the agreement. (Id.
¶¶ 69-70). The alleged violation did not occur, as Ryan did not make a payment to a
provider or even offer to pay a provider, and this violation was a pretext to
terminate the agreement and get out of paying Precision the millions of dollars in

commissions it was owed. (Id. ¶¶ 71-76). Around the same time, the MedTek parties
began attempting to steal Precision’s sales representatives by communicating
directly with them and stating that the Precision Parties could not be trusted, that
the contract was terminated for compliance violations, and that MedTek would pay
commissions directly. (Id. ¶¶ 77-105). The Precision Parties believe that the MedTek
Parties have also communicated similarly disparaging comments to providers and

manufacturers. (Id. ¶ 106).
The Precision Parties raise seven counterclaims: (1) breach of contract; (2)
breach of the covenant of good faith and fair dealing; (3) violations of the
Pennsylvania Commissioned Sales Representative Act (“PCSRA”); (4) fraud; (5)
tortious interference with existing contractual relations; (6) defamation; and (7)
unjust enrichment (in the alternative). (Id. at ECF 52-64, ¶¶ 98-168).
After the MedTek Parties filed motions to dismiss, strike, and stay discovery,

(Docs. 43, 46), the Precision Parties filed the FAC, which raised the same seven
claims contained in their original pleading. (Doc. 53). The MedTek Parties renewed
their motions. (Docs. 63, 65)
b. The MedTek Parties’ Emergency Letter
During the briefing of their motions, the MedTek Parties filed an emergency
letter under seal on the docket. (Doc. 70). In the letter, the MedTek Parties sought
an emergency stay of all proceedings because they discovered that Gary Ryan is a

pseudonym, and that Ryan’s real name is Karen Kazaryan. (Id.) Kazaryan was
previously convicted in federal court in California of offenses unrelated to this
matter, has been released from incarceration, and was not under court supervision
at any time relevant to this suit. See Case No. 2:13-CR-56-GHK, Central District of
California. The Precision Parties responded under seal and provided the court with
a copy of a name change decree from the Los Angeles County Superior Court dated

May 29, 2025, approving a change from Karen Kazaryan to Gary K. Ryan and of a
social security card bearing the name “Gary K. Ryan” issued on May 30, 2025. (Doc.
74). The MedTek Parties argue that, because Gary Ryan was not Ryan’s name at the
time of the filing of the counterclaim, he does not have standing to bring the
counterclaim and that this court lacks jurisdiction over it. (Doc. 70).
Briefing has completed, (Docs. 64, 66, 77, 79, 83, 84), and the matters are ripe

for the court’s disposition.
II. Legal Standard

a. Subject Matter Jurisdiction
Subject matter jurisdiction is a federal court’s authority to hear a case.
Generally, subject-matter jurisdiction arises through the assertion of a federal
question or through the diversity of the parties. If a case, as presented by the
plaintiff, does not meet the requirements of subject-matter jurisdiction or if it is
otherwise barred by law, then the court must dismiss the plaintiff's action.
Importantly, the court has “an independent obligation to determine whether
subject-matter jurisdiction exists even in the absence of a challenge from the
defendant.” Arbaugh v. Y&H Corp., 546 U.S. 500, 514 (2006). Federal courts cannot

exercise jurisdiction where Congress has not given it, even if all parties assume
subject matter jurisdiction exists. Hartig Drug Co. Inc. v. Senju Pharm. Co. Ltd., 836
F.3d 261, 267 (3d Cir. 2016).
b. Motion To Dismiss
Rule 12(b)(6) of the Federal Rules of Civil Procedure provides for the
dismissal of complaints that fail to state a claim upon which relief may be granted.

When ruling on a motion to dismiss under Rule 12(b)(6), the court must “accept all
factual allegations as true, construe the complaint in the light most favorable to the
plaintiff, and determine whether, under any reasonable reading of the complaint,
the plaintiff may be entitled to relief.” Phillips v. County of Allegheny, 515 F.3d 224,
233 (3d Cir. 2008) (quoting Pinker v. Roche Holdings, Ltd., 292 F.3d 361, 374.7 (3d

Cir. 2002)). In addition to reviewing the facts contained in the complaint, the court
may also consider “exhibits attached to the complaint, matters of public record, as
well as undisputedly authentic documents if the complainant’s claims are based
upon these documents.” Mayer v. Belichick, 605 F.3d 223, 230 (3d Cir. 2010) (citing
Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d
Cir. 1993)).
Federal notice and pleading rules require the complaint to provide “the

defendant fair notice of what the . . . claim is and the grounds upon which it rests.”
Phillips, 515 F.3d at 232 (alteration in original) (quoting Bell Atl. Corp. v. Twombly,
550 U.S. 544, 555 (2007)). To test the sufficiency of the complaint, the court conducts
a three-step inquiry. Santiago v. Warminster Township, 629 F.3d 121, 130 (3d Cir.
2010). In the first step, “the court must ‘tak[e] note of the elements a plaintiff must
plead to state a claim.’” Id. at 130 (alteration in original) (quoting Ashcroft v. Iqbal,

556 U.S. 662, 675 (2009)). Next, the factual and legal elements of a claim must be
separated; well-pleaded facts are accepted as true, while mere legal conclusions
may be disregarded. Id. at 131-32; see Fowler v. UPMC Shadyside, 578 F.3d 203,
210-11 (3d Cir. 2009). Once the court isolates the well-pleaded factual allegations, it
must determine whether they are sufficient to show a “plausible claim for relief.”
Iqbal, 556 U.S. at 679 (citing Twombly, 550 U.S. at 556). A claim is facially plausible
when the plaintiff pleads facts “that allow[] the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at
678. If the court concludes that a complaint should be dismissed, it “must permit a
curative amendment, unless an amendment would be inequitable or futile.”

Phillips, 515 F.3d at 236.
c. Motion To Strike
Under Federal Rule of Civil Procedure 12(f), the court may strike from a
pleading “any redundant, immaterial, impertinent, or scandalous matter.” FED. R.
CIV. P. 12(f). District courts have “considerable discretion” in resolving a Rule 12(f)
motion. Krisa v. Equitable Life Assurance Soc’y, 109 F. Supp. 2d 316, 319 (M.D. Pa.
2000) (quoting N. Penn. Transfer, Inc. v. Victaulic Co. of Am., 859 F. Supp. 154, 158
(E.D. Pa. 1994)). In general, such a motion will be denied unless the allegations are

severely prejudicial to one of the parties and unrelated to the plaintiff’s claims. Id.;
see also 5C CHARLES ALAN WRIGHT ET AL., FEDERAL PRACTICE & PROCEDURE § 1382
(3d ed. 2016). A party is prejudiced when the challenged pleading “confuses the
issues” or places an undue burden on the responding party. Karpov v. Karpov,
307 F.R.D. 345, 348 (D. Del. 2015).
d. Motion To Stay Discovery
Whether to stay discovery is within the court’s discretion. Commonwealth v.
Navient Corp., 348 F. Supp. 3d 394, 401 (M.D. Pa. 2018). A stay of discovery may be

appropriate “while evaluating a motion to dismiss where, if the motion is granted,
discovery would be futile,” Mann v. Brenner, 375 F. App’x 232, 239 (3d. Cir. 2010)
(collecting cases), and that “a stay is proper where the likelihood that such motion
may result in a narrowing or an outright elimination of discovery outweighs the
likely harm to be produced by the delay.” 19th Street Baptist Church v. St. Peters
Episcopal Church, 190 F.R.D. 345, 349 (E.D. Pa. 2000). Nevertheless, “[t]here is
nothing in the Federal Rules of Civil Procedure that mandates that discovery should

not proceed before a motion to dismiss is decided.” Navient Corp., 348 F. Supp. 3d
at 401(emphasis added).
III. Discussion
The MedTek Parties seek to dismiss the FAC on numerous grounds,
including subject matter jurisdiction, to strike numerous paragraphs of the FAC as

well as the FAC’s request for punitive damages and references to allegedly
“malicious, willful, wanton, and reckless” conduct, and to stay discovery pending
the resolution of these motions. (Docs. 63, 65).
a. Rule 17 and Subject Matter Jurisdiction
As an initial matter, the MedTek Parties challenge this court’s subject matter
jurisdiction in their reply brief, arguing that the court lacks subject matter
jurisdiction over Ryan’s counterclaim because Federal Rule of Civil Procedure 17

requires that “[a]n action must be prosecuted in the name of the real party in
interest,” FED. R. CIV. P. 17(a)(1), and Gary Ryan was named Karen Kazaryan at the
time the counterclaim was filed. (Doc. 83). Their logic follows that Ryan lacks
standing to bring the counterclaim, and this court lacks subject matter jurisdiction.
A review of Rule 17’s other provisions that go uncited in the MedTek Parties’
reply brief reveals the evident nonjurisdictional nature of Rule 17. Section (c) of
Rule 17 states that a “court may not dismiss an action for failure to prosecute in the
name of the real party in interest until, after an objection, a reasonable time has
been allowed for the real party in interest to ratify, join, or be substituted into the
action. After ratification, joinder, or substitution, the action proceeds as if it had

been originally commenced by the real party in interest.” FED. R. CIV. P. 17(c). If
Rule 17 implicated the court’s subject matter jurisdiction, dismissal could neither
require a prior objection nor the opportunity to fix the defect. Instead, numerous
courts to have considered the issue have found that Rule 17 concerns the merits
rather than jurisdiction. See Int’l Transp. Mgmt. Corp. v. Brooks Fitch Apparel
Grp., LLC, 2022 WL 102252 * 10 (D. N.J. Jan. 10, 2022) (collecting cases).
Here, Karen Kazaryan was the real party in interest3 at the time the

counterclaim was filed in the name of pseudonym Gary Ryan. The MedTek Parties
objected, and pursuant to Rule 17(c), Ryan provided information that his name was
legally changed from Karen Kazaryan to Gary Ryan, thereby ratifying that Ryan is
the real party in interest bringing the counterclaim. The court thus rejects the
challenge to its subject matter jurisdiction.
b. Motion To Dismiss

i. Veil Piercing
The FAC seeks to pierce the corporate veil to allege claims against Reserve
Real Estate, Dietrich, and Matsangakis. (Doc. 53 at 21-37). The MedTek Parties
argue that such veil-piercing is improper here where the Precision Parties have

3 Even if the court agreed that Ryan could not bring the counterclaim under
the name Gary Ryan, Precision is also a counterclaim and third-party plaintiff, so
the counterclaim would proceed with Precision as the sole party.
failed to allege that MedTek failed to follow corporate formalities, where Reserve
Real Estate operates under the fictious name “MedTek Solution,” and where the
Precision Agreement binds MedTek and Precision, not Dietrich and Matsangakis

individually. (Doc. 64 at 8-22). The Precision Parties respond that it only seeks to
pierce the corporate veil with respect to its breach of contract and breach of the
covenant of good faith and fair dealing claims and that the MedTek Parties have
used the corporate form purposefully and with the intent to commit fraud against
the Precision Parties. (Doc. 79 at 12-20).
Piercing the corporate veil “allow[s] a court to disregard the corporate form
and assess one corporation’s liability against another.” Commonwealth v. Golden

Gate Nat’l Senior Care LLC, 194 A.3d 1010, 1034 (Pa. 2018). Pennsylvania law
affords a strong presumption against piercing the corporate veil. Lumax Indus., Inc.
v. Aultman, 669 A.2d 893, 895 (Pa. 1995). Certain “specific, unusual circumstances
[may] call for an exception.” Zubik v. Zubik, 384 F.2d 267, 273 (3d Cir. 1967). These
circumstances include where doing so would “prevent fraud, illegality, or injustice,
or when recognition of the corporate entity would defeat public policy or shield

someone from liability for a crime,” id. at 272, or where “one in control of a
corporation uses that control, or uses the corporate assets, to further his or her own
personal interests,” Ashley v. Ashley, 393 A.2d 637, 641 (Pa. 1978).
Rather than existing as an independent cause of action, a request to pierce
the corporate veil “is a means of imposing liability established in an underlying
cause of action, such as tort or breach of contract, against another.” Golden Gate,
194 A.3d at 1035. Under an alter ego theory, courts in our circuit examine the
following factors to determine whether veil-piercing is appropriate: “gross
undercapitalization, failure to observe corporate formalities, nonpayment of
dividends, insolvency of debtor corporation, siphoning of funds from the debtor

corporation by the dominant stockholder, nonfunctioning of officers and directors,
absence of corporate records, and whether the corporation is merely a facade for
the operations of the dominant stockholder.” Pearson v. Component Tech. Corp.,
247 F.3d 471, 484–85 (3d Cir. 2001). Mere “averments reciting elements of the veil-
piercing test, without any supporting facts, constitute legal conclusions. Even under
a notice pleading standard, as interpreted in Twombly, such averments cannot
support a veil-piercing claim.” Cent. Transp., LLC v. Atlas Towing, Inc., 884

F.Supp.2d 207, 217 (E.D. Pa. 2012) (quoting Shenango Inc. v. Am. Coal Sales Co.,
No. 06–149, 2007 WL 2310869, at *4 (W.D. Pa. Aug. 9, 2007).
The Precision Parties fail to meet their “notoriously difficult” burden of
alleging that MedTek operates as “little more than a legal fiction” concocted by
Reserve Real Estate, Dietrich, and Matsangakis. Pearson, 247 F.3d at 485. True, the
FAC does include allegations of some of the factors considered in the alter-ego

analysis—for example, MedTek’s alleged undercapitalization and comingling of
funds (Doc. 53 ¶¶ 30, 113)—but the Precision Parties have not “pled the quantum of
facts necessary to give rise to the reasonable inference that the alter ego test could
be satisfied. 18 KT.TV, LLC v. Entest Biomedical, Inc., No. 3:11-CV-244, 2011 WL
5374515, at *9 (M.D. Pa. Nov. 7, 2011). For example, while the Precision Parties
argue that MedTek is undercapitalized or commingles funds, they do not allege
“facts that would provide a reasonable basis” to support these allegations. J.B. Hunt
Transp., Inc. v. Liverpool Trucking Co., No. 1:11-CV-1751, 2013 WL 3208586, at *3
(M.D. Pa. June 24, 2013). Put simply, the Precision Parties’ “averments cannot
support a veil-piercing claim.” Cent. Transp., LLC, 884 F.Supp.2d at 217. Therefore,

to the extent that the Precision Parties seek to pierce the corporate veil with respect
to their breach of contract and breach of the covenant of good faith and fair dealing
claims, the court holds that they are unable to do so.4
ii. Breach Of Contract
The Precision Parties claim that “MedTek materially breached its
contractual obligations to Precision under the Precision Agreement by: (a) failing to
pay commissions and compensation owed to Precision prior to terminating the
Precision Agreement; (b) failing to pay commissions and compensation owed to

Precision at the time it terminated the Precision Agreement; (c) wrongfully
terminating the Precision Agreement and falsely claiming it was a ‘for cause’
termination; and (d) making misrepresentations under the Agreement.” (Doc. 53 ¶
118). The MedTek Parties seek to dismiss the breach of contract claim against
MedTek, arguing that the Precision Parties fail to allege a duty contained in the
Precision Agreement they have breached. (Doc. 64 at 24-27).
A breach of contract claim under Pennsylvania law requires “(1) the

existence of a contract, including its essential terms; (2) a breach of a duty imposed
by the contract; and (3) resultant damages.” City of Allentown v. Lehigh Cty. Auth.,

4 The remaining counterclaims concern statutory, tort, or equitable claims,
which are not implicated by veil piercing, and are therefore permitted to continue
against Dietrich and Matsangakis.
222 A.3d 1152, 1157 (Pa. Super. Ct. 2019) (quoting Reformed Church of Ascension v.
Theodore Hooven & Sons, Inc., 764 A.2d 1106, 1109 (Pa. Super. Ct. 2000)). The party
alleging contractual breach may recover, “unless the contract provided otherwise,

whatever damages he suffered, provided (1) they were such as would naturally and
ordinarily result from the breach, or (2) they were reasonably foreseeable and
within the contemplation of the parties at the time they made the contract, and (3)
they can be proved with reasonable certainty.” Ferrer v. Trs. of Univ. of
Pennsylvania, 825 A.2d 591, 610 (Pa. 2002) (quoting Taylor v. Kaufhold, 84 A.2d 347,
351 (Pa. 1951)).
The Precision Parties have plausibly alleged a breach of the Precision

Agreement. First, there is no dispute that a contract exists between the parties.
Second, the Precision Parties allege that MedTek breached several of its duties
contained in the Precision Agreement, including, among other things, “failing to
pay commissions and compensation owed to Precision prior to terminating the
Precision Agreement.” (Doc. 53 ¶ 118). Third, the Precision Parties also plausibly
allege damages resulting from MedTek’s alleged breach—for example, the

“commissions and compensation” aforementioned. (Id.). Therefore, MedTek’s
motion to dismiss this claim will be denied.
iii. Breach Of The Covenant Of Good Faith And Fair Dealing
The FAC alleges a breach of the covenant of good faith and fair dealing. (Doc.
53 ¶¶ 121-147). But Pennsylvania law “does not allow an action for breach of the
covenant of good faith and fair dealing separate from a breach of contract claim.”
Landan v. Wal-Mart Real Est. Bus. Tr., 775 F. App’x 39, 42 (3d Cir. 2019); Burton v.
Teleflex Inc., 707 F.3d 417, 432 (3d Cir. 2013) (“under Pennsylvania law, a ‘claim for
breach of the implied covenant of good faith and fair dealing is subsumed in a
breach of contract claim.’”) (quoting LSI Title Agency, Inc. v. Evaluation Servs.,

Inc., 951 A.2d 384, 391-92 (Pa. Super. Ct. 2008)). Therefore, because the Precision
Parties also bring a breach of contract claim, their breach of the covenant of good
faith and fair dealing claim will be dismissed insofar as it is pleaded as a separate
claim. As this case proceeds, the Precision Parties’ arguments on the dismissed
claim may “be addressed in connection with [their] surviving breach of contract
claim.” Davis v. Wells Fargo, 824 F.3d 333, 352 (3d Cir. 2016).
iv. PCSRA
The FAC alleges that MedTek “violated the PCSRA by failing to timely pay

commissions to Precision.” (Doc. 53 ¶ 157). The MedTek Parties argue that the FAC
does not plausibly allege that the MedTek Parties are “principals” or that Precision
is a “sales representative” as defined by the PCSRA and that the Precision
Agreement clearly provides that the Precision Parties are not entitled to the
commissions. (Doc. 64 at 29-30).
The PCSRA mandates that a “principal shall pay a sales representative all
commissions due at the time of termination within 14 days after termination” and

“all commissions that become due after termination within 14 days of the date such
commissions become due.” 43 P.S. §§ 1473–74. Commission is defined as
“[c]ompensation accruing to a sales representative for payment by a principal, the
rate of which is expressed as a percentage of the dollar of orders or sales.” 43 P.S. §
1471. A principal “(1) [e]ngages in the business of manufacturing, producing,
importing or distributing a product for sale to customers who purchase such
products for resale,” “(2) [u]tilizes sales representatives to solicit orders for such
product,” and “(3) [c]ompensates sales representatives, in whole or in part, by

commission.” Id. A sales representative “contracts with a principal to solicit
wholesale orders from retailers rather than consumers and who is compensated, in
whole or in part, by commission.” Id. However, an individual “who places orders or
purchases for his own account for resale or one who is an employee of a principal”
does not qualify as a sales representative. Id. And termination under the PCSRA is
defined as “[t]he end of services performed by the sales representative for the
principal,” which “includes any action that concludes the relationship of the

parties.” Id.
The Precision Parties have plausibly stated a PCSRA claim. The FAC alleges
both that the MedTek Parties are principals who “engage in the business of
distributing skin substitute products for sale to providers who purchase such
products for resale; they utilize Precision, a sales representative, to solicit orders for
such products; and they compensate Precision by commission,” and that Precision

is a sales representative who “contracts with the MedTek Parties to solicit
wholesale orders of skin substitute products from providers rather than consumers
and is compensated by commission” and “is not an employee of MedTek Parties.”
(Doc. 53 ¶¶ 153, 155). While the allegations here straddle the line between well-
pleaded facts and mere legal conclusions, they are sufficient to state a PCSRA claim
at this stage.
v. Fraudulent Inducement
The FAC alleges that “[t]he MedTek Parties made numerous material
misrepresentations and deliberate omissions to Ryan prior to the signing of the
Andelle Agreement and the Precision Agreement with the intent that Ryan and his

companies would rely on these representations.” (Doc. 53 ¶ 161). The MedTek
Parties argue that the fraud claim should be dismissed because (1) the parol
evidence rule does not permit the use of extrinsic evidence to demonstrate
fraudulent inducement, (2) this claim is barred by the gist of the action doctrine,
and, (3) fraud has not been pled with specificity in violation of Federal Rule of Civil
Procedure 9. (Doc. 64 at 34-46).
Fraudulent inducement under Pennsylvania law requires “1) a false

representation; 2) materiality; 3) scienter; 4) justifiable reliance; and 5) damage as a
proximate result.” Piper v. Am. Nat’l. Life Ins. Co., 228 F. Supp. 2d 553, 559 (M.D.
Pa. 2002). Federal Rule of Civil Procedure 9(b) requires a party alleging fraud to
“state with particularity the circumstances constituting fraud or mistake.” FED. R.
CIV. P. 9(b). Therefore, allegations of fraud must be supported “‘with all of the
essential factual background that would accompany the first paragraph of any
newspaper story—that is, the who, what, when, where and how of the events at

issue.’” U.S. ex rel. Moore & Co., P.A. v. Majestic Blue Fisheries, LLC, 812 F.3d 294,
307 (3d Cir. 2016) (quoting In re Rockefeller Ctr. Props., Inc. Sec. Litig., 311 F.3d
198, 217 (3d Cir. 2002)).
The Precision Parties have not met Rule 9(b)’s heightened pleading standard.
True, the FAC alleges a series of “material misrepresentations and deliberate
omissions,” (Doc. 53 ¶ 162), but these allegations lack “the who, what, when, where
and how of the events at issue.” In re Rockefeller Ctr. Props., Inc. Sec. Litig., 311
F.3d at 217. The failure to provide such specificity is fatal to the Precision Parties’

fraudulent inducement claim, and it is therefore dismissed.
vi. Tortious Interference
The FAC alleges that the MedTek Parties tortiously interfered with
Precision’s contractual relations with its sales representatives by, among other
things, “defaming the Precision Parties; lying about the termination of the
Precision Agreement; [and] falsely claiming the Precision Parties committed
unlawful acts” in order to, among other things, poach these representatives and
diminish Precision’s ability to pay these representatives and fund the instant

litigation. (Doc. 53 ¶¶ 170-180).
The MedTek Parties contend that this claim should be dismissed for three
reasons. First, they argue that the Precision Parties’ failure to append the FAC with
a copy of the contracts with sales representatives results in their failure to
adequately plead such contractual relations exist. (Doc. 64 at 46-47). Second, the
FAC fails to allege whether the sales representatives were employees or
independent contractors; if they were the latter, and absent a non-compete

agreement, the alleged communications were permissible under the Precision
Agreement. (Id. at 47-48). And third, “any of the alleged contact between MedTek
and its principals with Precision’s sales representatives would be privileged or
justified and could not constitute tortious interference.” (Id. at 48-49).
To state a claim of tortious interference with contractual relations under
Pennsylvania law, a party must demonstrate “(1) the existence of a contractual, or
prospective contractual relation between the complainant and a third party; (2)

purposeful action on the part of the defendant, specifically intended to harm the
existing relation, or to prevent a prospective relation from occurring; (3) the
absence of privilege or justification on the part of the defendant; and (4) the
occasioning of actual legal damage as a result of the defendant's conduct.” CGB
Occupational Therapy, Inc. v. RHA Health Servs. Inc., 357 F.3d 375, 384 (3d Cir.
2004) (quoting Crivelli v. General Motors Corp., 215 F.3d 386, 394 (3d Cir. 2000)).
With respect to privilege, a plaintiff must show “not only that a defendant acted

intentionally to harm the plaintiff, but also that those actions were improper.”
Salsgiver Commc’ns, Inc. v. Consol. Commc’ns Holdings, Inc., 150 A.3d 957, 964 (Pa.
Super. Ct. 2016) (quoting Empire Trucking Co., Inc. v. Reading Anthracite Coal Co.,
71 A.3d 923, 934 (Pa. Super. Ct. 2013)).
The MedTek Parties’ arguments are insufficient to warrant dismissal. First,
they fail to provide any support for the claim that a failure to attach the contracts

with which a party has allegedly interfered is fatal to a tortious interference claim at
the motion to dismiss stage. Conversely, the FAC sufficiently alleges such contracts
exist and contains, among other things, an alleged screenshot of a text message
from Dietrich to a sales representative asking to see the contract between Precision
and the sales representative. (Doc. 53 ¶ 82). Second, whether the sales
representatives were employees of Precision or independent contractors, and the
purported lack of a non-compete agreement on the permissibility of the MedTek
Parties’ communications under the Precision Agreement, are questions of fact that
are improper to decide on a motion to dismiss. And third, the FAC sufficiently
alleges that the MedTek Parties’ communications were both intentional and

improper. For example, the Precision Parties contend that the MedTek Parties
were “falsely claiming and wrongfully advising sales representatives that they never
had an executed agreement with Precision in order to entice them to leave
Precision.” (Id. ¶ 174). Therefore, this claim survives a motion to dismiss.
vii. Defamation
The FAC alleges that the MedTek Parties made numerous defamatory
statements to sales representatives, manufacturers, and providers that Precision
was engaged in compliance violations and unlawful activities. (Doc. 53 ¶¶ 106, 181-

194). The MedTek Parties argue that the FAC’s defamation claim must be dismissed
because these alleged statements are true (a defense to defamation), expressions of
opinion (which cannot be defamatory), or, at the very least, are privileged. (Doc. 64
at 49-52).
To bring a claim for defamation under Pennsylvania law, a plaintiff must
prove “(1) the defamatory character of the communication; (2) its publication by the
defendant; (3) its application to the plaintiff; (4) an understanding by the reader or

listener of its defamatory meaning; (5) an understanding by the reader or listener of
an intent by the defendant that the statement refers to the plaintiff; (6) special harm
resulting to the plaintiff from its publication; and (7) abuse of a conditionally
privileged position.” 42 Pa. C.S. § 8343(a). A defamatory statement “tends to harm
an individual’s reputation so as to lower him or her in the estimation of the
community or deter third persons from associating or dealing with him or her.”
Moore v. Cobb–Nettleton, 889 A.2d 1262, 1267 (Pa. Super. Ct. 2005) (citation
omitted). A mere statement of opinion, however, is not defamatory. Id.

The FAC adequately alleges a defamation claim. At this stage, it is not
possible to assess the truth of the allegedly defamatory statements; whether the
Precision Parties, in fact, have engaged in compliance violations and unlawful
activities is a quintessential factual issue. Similarly, these factual matters cannot, by
definition, be matters of opinion. And whether communications between the
MedTek Parties, Precision’s sales representatives, manufacturers, and providers
are privileged is also a question of fact. Therefore, the allegations contained in the

FAC sufficiently plead a defamation claim at the motion to dismiss stage.
viii. Unjust Enrichment
The FAC pleads unjust enrichment in the alternative if the Precision
Agreement is invalid or unenforceable. (Doc. 53 ¶¶ 195-199). A plaintiff alleging
unjust enrichment must demonstrate “benefits conferred on defendant by plaintiff,
appreciation of such benefits by defendant, and acceptance and retention of such
benefits under such circumstances that it would be inequitable for defendant to
retain the benefit without payment of value.” Gutteridge v. J3 Energy Grp., Inc., 165

A.3d 908, 917 (Pa. Super. Ct. 2017) (citation omitted). Put differently, the party
claiming unjust enrichment “must show that the party against whom recovery is
sought ‘either wrongfully secured or passively received a benefit that it would be
unconscionable for her to retain.’” Torchia ex rel. Torchia v. Torchia, 499 A.2d 581,
582 (Pa. Super. Ct. 1985) (quoting Roman Mosaic & Tile Co. v. Vollrath, 313 A.2d
305, 307 (Pa. Super. Ct. 1973)). This determination turns “on the unique factual
circumstances of each case.” Gutteridge, 165 A.3d at 917 (citation omitted).
The MedTek Parties argue “[t]he Precision Parties have not alleged an
improper benefit conferred on either MedTek, Dietrich and/or Matsangakis.”5 (Doc.

64 at 54). That is belied by the FAC, which alleges that the benefit is the “many
millions of dollars of revenue” that the Precision Parties allegedly conferred upon
the MedTek Parties, that MedTek has allegedly “failed and refused to pay Precision
the amounts Precision is owed and will be owed as commissions,” and that the
MedTek Parties’ acceptance and retention of this benefit is inequitable such that
the Precision Parties should “receive the amounts [they] are owed and will be

owed.” (Doc. 53 ¶¶ 197-199). Whether these allegations prove to be true will be
uncovered later in this case, but they are sufficient to allege an unjust enrichment
claim at the pleading stage. The MedTek Parties’ motion to dismiss this claim,
therefore, is denied.
ix. Leave to Amend
Federal Rule of Civil Procedure 15 governs the filing of amended pleadings.
See FED. R. CIV. P. 15(a). Rule 15(a) contemplates amendment of an existing
pleading and is intended “to enable a party to assert matters that were overlooked

5 The MedTek Parties also argue that the unjust enrichment claim cannot
stand against Dietrich and Matsangakis because they were not parties to the
Precision Agreement. (Doc. 64 at 53). But this circular argument fails on its face
because unjust enrichment is pled to the extent that the Precision Agreement is
invalid or unenforceable. (Doc. 53 at ¶ 196). If there is no valid and enforceable
contract, then it is of no moment that Dietrich and Matsangakis did not sign that
contract so long as they were unjustly enriched at the Precision Parties’ expense.
or were unknown” when the original pleading was filed. Garrett v. Wexford Health,
938 F.3d 69, 82 (3d Cir. 2019) (quoting 6 CHARLES ALAN WRIGHT & ARTHUR R.
MILLER, FEDERAL PRACTICE AND PROCEDURE § 1473 (3d ed. 2019)).

Under Federal Rule of Civil Procedure 15, leave to amend should be freely
given “when justice so requires.” FED. R. CIV. P. 15(a)(2). Circumstances that weigh
against granting leave include undue delay, bad faith or dilatory motive, repeated
failure to cure deficiencies by amendments previously allowed, undue prejudice to
the opposing party, and futility. See Foman v. Davis, 371 U.S. 178, 182 (1962).
Amendment is considered futile if the pleading, “as amended, would fail to state a
claim upon which relief could be granted.” In re Burlington Coat Factory Sec. Litig.,

114 F.3d 1410, 1434 (3d Cir. 1997). Rule 15 aims to offer the “‘maximum opportunity
for each claim to be decided on its merits rather than on procedural technicalities.’”
United States v. Thomas, 221 F.3d 430, 435 (3d Cir. 2000) (quoting 6 CHARLES ALAN
WRIGHT, ARTHUR R. MILLER & MARY KAY KANE, FEDERAL PRACTICE & PROCEDURE §
1471 (2d ed.1990) (2000 Supp.)).
a. Fraudulent Inducement
The Precision Parties will be granted leave to amend their fraudulent
inducement claim. True, the FAC currently fails to plead “the who, what, when,

where and how of the events at issue.” In re Rockefeller Ctr. Props., Inc. Sec. Litig.,
311 F.3d at 217. But it appears that the Precision Parties will be able to amend their
counterclaim to contain this information such that granting leave to amend will not
be futile. See In re Burlington Coat Factory Sec. Litig., 114 F.3d at 1434. And,
notwithstanding the MedTek Parties’ arguments to the contrary, the parol evidence
rule does not bar the use of extrinsic evidence to prove this fraudulent inducement
claim, nor is this claim barred by the gist of the action doctrine.
Consider first the parol evidence rule, which typically “prevents the use of

extrinsic evidence to nullify, modify, or augment the terms of a contract.”
SodexoMAGIC, LLC v. Drexel Univ., 24 F.4th 183, 213 (3d Cir. 2022). Where the
parol evidence rule applies, “the writing constitutes the agreement between the
parties, and its terms and agreements cannot be added to nor subtracted from by
parol evidence.” Yocca v. Pittsburgh Steelers Sports, Inc., 854 A.2d 425, 436 (Pa.
2004) (quoting Gianni v. Russell & Co., 126 A. 791, 792 (Pa. 1924)). This rule does not
apply, however, in the case of fraud. Id. Extrinsic evidence may be used to support a

claim for fraudulent inducement of integrated contracts6 because such evidence is
being used “to prove a precontractual misrepresentation or concealment – not to
alter or vary the terms of the contract.” SodexoMAGIC, 24 F.4th at 213. This is so
unless the contract contains a so-called “fraud-insulating” clause which “prevent[s]
a party from satisfying the justifiable-reliance element of a fraudulent inducement
claim.” Id. Examples of such clauses include, among other things, “a no-reliance

clause, through which a party expressly disclaims reliance on another party’s
precontractual representations.” Id. at 214. Where the contract contains a fraud-

6 See Restatement (Second) Contracts § 209(1) (“An integrated agreement is a
writing or writings constituting a final expression of one or more terms of an
agreement.”).
insulating clause, the parol evidence rule “precludes fraudulent inducement claims
that depend on a precontractual misrepresentation.” Id.
Here, the parol evidence rule’s fraud exception applies because the Precision

Parties seek to “to prove a precontractual misrepresentation or concealment – not
to alter or vary the terms of the contract.” SodexoMAGIC, 24 F.4th at 213. The sum
of the Precision Parties’ allegations is that the MedTek Parties made a series of
material misrepresentations and omissions that induced them into entering an
agreement they otherwise would not have. (Doc. 53 ¶¶ 161-162, 164). Nor does the
Precision Agreement contain a fraud-insulating clause. SodexoMAGIC, 24 F.4th at
214. Therefore, extrinsic evidence may be used to prove the Precision Parties’

fraudulent inducement claim.
Nor would the gist of the action doctrine bar the Precision Parties’ fraudulent
inducement claim. “Arising out of the concern that tort recovery should not be
permitted for contractual breaches[,]” Addie v. Kjaer, 737 F.3d 854, 865 (3d Cir.
2013), “the [gist of the action] doctrine is designed to maintain the conceptual
distinction between breach of contract claims and tort claims.” eToll, Inc. v.

Elias/Savion Advertising, Inc., 811 A.2d 10, 14 (Pa. Super. Ct. 2002). This policy-
based doctrine addresses “the concern that tort recovery should not be permitted
for contractual breaches” by “preclud[ing] tort suits for the mere breach of
contractual duties unless the plaintiff can point to separate or independent events
giving rise to the tort.” Addie, 737 F.3d at 865-866 (internal citations omitted). This
analysis turns on the nature of the allegations contained the plaintiff’s complaint.
Bruno v. Erie Ins. Co., 106 A.3d 48, 68 (Pa. 2014). If these allegations indicate a
breach of a duty “created by the parties by the terms of the contract,” then the
claim exists as a breach of that contract. Id. But if these allegations indicate a
breach “of a broader social duty owed to all individuals, which is imposed by the

law of torts and, hence, exists regardless of the contract,” then the underlying claim
“must be regarded as a tort.” Id. The “mere existence of a contract between two
parties does not, ipso facto, classify a claim . . . as one for breach of contract.” Id. at
69.
The gist of the action doctrine does not apply to the Precision Parties’
fraudulent inducement claim. This claim does not seek judicial remedy for breach
of the Precision Agreement—the FAC alleges a separate breach of contract claim—

but rather seeks recourse for the harms they have allegedly suffered as a result of
the MedTek Parties’ material misrepresentations and omissions absent which they
would not have contracted with the MedTek Parties. (Doc. 53 ¶¶ 161-162, 164, 166).
This is a quintessential tort claim which exists outside of the contract between the
parties. Bruno, 106 A.3d at 68.
Further, the MedTek Parties have failed to demonstrate that the Precision

Parties’ inadequate fraud allegations were caused by “undue delay, bad faith or
dilatory motive,” nor would the MedTek Parties be unduly prejudiced by granting
such leave to amend. See Foman, 371 U.S. at 182. Permitting the Precision Parties
to amend their fraud claim will further the purpose of Rule 15 to allow for
disposition of this issue on the merits. See Thomas, 221 F.3d at 435.
b. Veil-Piercing
Similarly, the Precision Parties will be granted leave to amend their veil-
piercing theory. The Precision Parties have not, though plausibly could, meet their
“notoriously difficult” burden of alleging that MedTek operates as “little more than

a legal fiction” concocted by Reserve Real Estate, Dietrich, and Matsangakis at the
time of the Precision Contract. Pearson, 247 F.3d at 485.
c. Motion To Strike
The MedTek Parties move to strike paragraphs 1, 2, 5, 7, 8, 10, 27, 28, 29, 30,
31, 41, 62, 63, 64, 77, 110-115, and 123-128 of the FAC as well as the FAC’s request for
punitive damages and references to allegedly “malicious, willful, wanton, and
reckless” conduct. (Doc. 63 at ECF 3-4; Doc. 64 at 55-58).
Federal Rule of Civil Procedure 12(f) provides that “[t]he court may strike

from a pleading an insufficient defense or any redundant, immaterial, impertinent,
or scandalous matter. Doing so, however, is a “drastic remedy” which courts
generally disfavor. Homesite Ins. Co. of Midwest v. Geaith, No. 1:22-CV-1664, 2023
WL 362387, at *1 (M.D. Pa. Jan. 30, 2023); see also Fiorentino v. Cabot Oil & Gas
Corp., 750 F. Supp. 2d 506, 509 (M.D. Pa. 2010) (“Relief under Federal Rule of Civil
Procedure 12(f) is generally disfavored, and will be denied unless the allegations
have no possible relation to the controversy and may cause prejudice to one of the

parties, or if the allegations confuse the issues in the case.”). The moving party
bears the burden of demonstrating “that the challenged matter should be stricken.”
Roamingwood Sewer & Water Ass’n v. Nat’l Diversified Sales, Inc., 509 F. Supp. 3d
198, 204 (M.D. Pa. 2020). Immaterial matter under Rule 12(f) “is that which has no
essential or important relationship to any claims for relief.” Wagner v. Holtzapple,
101 F. Supp. 3d 462, 488 (M.D. Pa. 2015). A pleading contains impertinent matters if
those matters “consist[] of statements that do not pertain, and are not necessary, to

the issues in question.” Id. And scandalous matter “casts a derogatory light on
someone, uses repulsive language, or detracts from the dignity of the court.” Id.
These standards make clear that the motion to strike is improper. The
MedTek Parties did not cite any caselaw to support their assertion that the
paragraphs enumerated above should be stricken. (Doc. 64 at 56-57). Rather, they
merely recite that these paragraphs contain immaterial, impertinent, and
scandalous matters. (See id.) This is not enough to carry the burden of

demonstrating that Rule 12(f)’s “generally disfavored” and “drastic remedy” is
warranted for these paragraphs. See Roamingwood Sewer & Water Ass’n, 509 F.
Supp. 3d at 204; Fiorentino, 750 F. Supp. 2d at 509; Homesite Ins. Co., 2023 WL
362387, at *1.
The MedTek Parties’ motion to strike the FAC’s request for punitive
damages and references to allegedly “malicious, willful, wanton, and reckless”

conduct also fails. They argue that these claims sound in contract, not tort, and thus
punitive damages are inapplicable. (Doc. 64 at 58). That is wrong. Fraudulent
inducement, tortious interference, and defamation are all tort claims for which
punitive damages may be awarded under Pennsylvania law. See Williamsburg
Commons Condo. Ass’n v. State Farm Fire & Cas. Co., 907 F. Supp. 2d 673, 679
(E.D. Pa. 2012) (observing that “punitive damages are available for tort claims”).
With respect to their request to strike the FAC’s references to allegedly “malicious,
willful, wanton, and reckless” conduct, the Medtek Parties have not demonstrated
that these references are immaterial, impertinent, or scandalous, and therefore this
request to strike is denied as well.

d. Motion To Stay Discovery
The MedTek Parties have moved to stay discovery pending the disposition of
their motion to dismiss the FAC. (Doc. 65). Because this memorandum and the
corresponding order of today’s date resolves the motion to dismiss, the MedTek
Parties’ motion to stay discovery is denied as moot.
IV. Conclusion
For the reasons stated above, the court will grant in part and deny in part
the motion to dismiss, will deny the motion to strike, and will deny the motion to

stay discovery as moot. The Precision Parties will be granted leave to amend. An
appropriate order will follow.
/S/ KELI M. NEARY
Keli M. Neary
United States District Judge
Middle District of Pennsylvania

Dated: June 30, 2025

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/11087123. Public record. Not legal advice.