Velazquez

UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF PENNSYLVANIA

EDGARDO VELAZQUEZ,

Plaintiff : CIVIL ACTION NO. 3:25-913

Vv. (JUDGE MANNION)

WAGNER INDUSTRIES, INC., :

Defendants :

MEMORANDUM

Pending before the court is a motion to dismiss the plaintiff's complaint

filed pursuant to Fed.R.Civ.P.12(b)(6) on behalf of defendant Wagner

Industries, Inc. (“Wagner”). (Doc. 30). Upon review of the motion and all

related materials, Wagner's motion to dismiss will be DENIED.

Fed.R.Civ.P. 12(b)(6) provides for the dismissal of a complaint, in

whole or in part, if the plaintiff fails to state a claim upon which relief can be

granted. The moving party bears the burden of showing that no claim has

been stated, Hedges v. U.S., 404 F.3d 744, 750 (3d Cir. 2005), and dismissal

is appropriate only if, accepting all of the facts alleged in the complaint as

true, the plaintiff has failed to plead “enough facts to state a claim to relief

that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544,

570 (2007) (abrogating “no set of facts” language found in Conley v. Gibson,

355 U.S. 41, 45-46 (1957)). The facts alleged must be sufficient to “raise a

right to relief above the speculative level.” Twombly, 550 U.S. at 555. This

requirement “calls for enough fact[s] to raise a reasonable expectation that

discovery will reveal evidence of’ necessary elements of the plaintiffs cause

of action. /d. Moreover, in order to satisfy federal pleading requirements, the

plaintiff must “provide the grounds of his entitlement to relief,” which “requires

more than labels and conclusions, and a formulaic recitation of the elements

of a cause of action will not do.” Phillips v. County of Allegheny, 515 F.3d

224, 231 (3d Cir. 2008) (brackets and quotations marks onittted) (quoting

Twombly, 550 U.S. 544 at 555).

In ruling on a motion to dismiss, the court generally considers the

complaint, exhibits attached to the complaint, and matters cf joublic record.

In re Lengyel, 2014 WL 2003099 (M.D.Pa. May 15, 2014) iciting Mayer v.

Belichick, 605 F.3d 223, 230 (3d Cir. 2010)).

Generally, the court should grant leave to amend a cemplaint before

dismissing it as merely deficient. See, e.g., Fletcher-Harlee Corp. v. Pote

Concrete Contractors, Inc., 482 F.3d 247, 252 (3d Cir. 2007): Grayson v.

Mayview State Hosp., 293 F.3d 103, 108 (3d Cir. 2002); Shane v. Fauver,

213 F.3d 113, 116-17 (3d Cir. 2000). “Dismissal without leeve2 to amend is

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justified only on the grounds of bad faith, undue delay, prejudice, or futility.”

Alston v. Parker, 363 F.3d 229, 236 (3d Cir 2004).

By way of relevant background, Wagner was incorporated under New

Jersey law on April 3, 1989. (Doc. 30-1). Wagner was engaged in the

business of designing and manufacturing industrial machines.

Fast forward to March 19, 2024. On that day, the plaintiff's left arm was

pulled into a shear/slitter machine made for flooring material when he was

attempting to unjam the rollers of the machine at his workplace. The incident

resulted in the plaintiff suffering a degloving injury to his arm. The machine

involved in the incident was designed and manufactured by Wagner.

On August 5, 2024, the plaintiff filed a writ in the Court of Common

Pleas of Philadelphia County against Forbo Flooring, Inc., and Wagner

related to the March 19, 2024, incident. (Doc. 43-4). The writ was served on

Wagner on September 3, 2024. (/d.).

Three weeks later, on September 24, 2024, Wagner voluntarily

initiated its dissolution and began formally winding up its affairs. On that date,

the Treasurer of the State of New Jersey certified that Wagner filed a

Certificate of Pending Dissolution under N.J.S. 14A:12-3. (Doc. 30-2). The

Certificate reflects that Wagner would cease doing business as of that date

and did not intend to recommence business.

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On January 27, 2025, the Treasurer of the State of New Jersey certified

Wagner was dissolved in accordance with the laws of the State. (Doc. 30-3).

Shortly thereafter, by stipulation dated February 27, 2025, the plaintiff's

action in the Court of Common Pleas of Philadelphia County was dismissed

without prejudice. (Doc. 46-1).

On May 23, 2025, the plaintiff filed the instant personal injury action

pursuant to 28 U.S.C. §1332 against a number of companies, including:

Wagner Industries, Inc., Forbo America, Inc., Forbo America Services, Inc.,

Forbo Floor Coverings, Inc., Forbo Flooring, Inc., Forbo Siegling, LLC, Forbo

Group, Forbo Management SA, and Forbo Holdings, Ltd. (Doc. 1). As to

Wagner, the plaintiff brings claims for negligence and strict liability.

On August 4, 2025, Wagner filed the pending motion to dismiss the

plaintiff's complaint. (Doc. 30). In its motion, Wagner argues that, since its

dissolution was completed January 27, 2025, it became a defunct entity

incapable of being sued. Given that this action was commenced on May 23,

2025, approximately four months after its dissolution, Wagner argues that

the plaintiffs claims against it are legally futile and warrant dismissal with

prejudice as a matter of law. The plaintiff has filed a brief in opposition to

Wagner’s motion (Doc. 43-1) to which Wagner filed a reply brief (Doc. 47).

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As indicated, Wagner was incorporated in the State of New Jersey.

Therefore, its capacity to be sued is governed by the laws of that state.

Fed.R.Civ.P. 17(b)(2). The New Jersey Business Corporation Act

(“NJBCA”), N.J.S.A. §14A:1-1, ef seg., governs the methods by which New

Jersey corporations can be dissolved and the requirements to achieve

dissolution. See N.J.S.A. §14A12-1(a)-(h). Under the NJBCA, a

corporation’s completed dissolution is effective upon the filing of a Certificate

of Dissolution, N.J.S.A. §14A:12-8(c), which in this case was filed on January

27, 2025.

While Wagner concedes that it remained subject to suit in between the

filing of its Certificates Pending Dissolution and Dissolution, citing to Global

Landfill Agreement Group v. 280 Dev. Corp., 992 F.Supp. 692 (D.N.J. 1998),

Wagner argues that it ceased being amenable to suit once the Certificate of

Dissolution was filed on January 27, 2025.

In Global, the Global Landfill Agreement Group was held responsible

for cleaning up hazardous substances at a landfill. Global sought contribution

for the costs of cleanup from a number of other parties. One of those parties

was 280 Development Corporation, a former New Jersey corporation that

had dissolved long before the filing of the contribution action. Because 280

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Development Corporation had been dissolved, it sought to be dismissed

from the action arguing that it could no longer be subject to suit.

In considering the matter, the District Court in New Jersey provided:

Plaintiff reads the statute to mean that a corporation can

be sued indefinitely after it has dissolved, wound up its affairs,

and distributed all of its assets. This position is without merit.

Plaintiff has pointed to no authority in New Jersey or in this

district to support the position that a corporation which has

wound up and distributed all of its assets is subject to suit.

Section (2) of the statute is governed by Section (1), which

refers to a dissolved corporation winding up its affairs and

distributing its assets. It is undisputed that a corporation in that

process can sue and be sued. Once the corporation finishes that

process, it ceases to exist. A corporation may not be sued in

perpetuity.

Global, 992 F. Supp. at 695.

In so finding, the Globa/ court looked to a comparable New York

statute, N.Y. Bus. Corp. §1006, which has been interpreted to mean that an

action can only be brought against a dissolved corporation until its affairs are

fully adjusted and its assets distributed. Globa/, 992 F.Supp. at 695 (citations

omitted). Under the New York statute, once the corporation’s affairs are fully

adjusted, the corporation is considered defunct and any suits agaiinst the

company are considered futile. /d. Instead, the only remaining) remedy is to

maintain an action directly against the directors and/or shareholders. /d.

(citations omitted).

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Based upon the similarities between the New Jersey and New York

statutes, the New Jersey District Court interpreted the NJBCA to mean that

“[a] corporation may indeed be sued while it is winding up its affairs, but that

amenability to suit ends when the corporation’s assets have been distributed

and its affairs wound up.” /d. at 695-96. The court noted, however, that this

would not apply in situations where the corporation was dissolved in order to

avoid creditors or potential suits. /d. at n.2.

In his brief in opposition to Wagner’s motion, the plaintiff argues that,

despite Wagner's argument that it is not amenable to suit under the NJBCA,

New Jersey law does not prevent a dissolved corporation from being sued

after dissolution.’ In doing so, the plaintiff looks to a number of cases decided

both before and after Global.

The earliest of the cases relied upon by the plaintiff is Hould v. John P.

Squire & Co., 79 A. 282 (N.J. Sup. Ct. 1911), which interpreted the

predecessor to the NJBCA as allowing suits against corporations after

‘In his responsive materials, the plaintiff indicates that he has not yet

had the opportunity to conduct any discovery of Wagner's business,

purported dissolution, the motivation for the initiation of dissolution 21 days

after it learned it was being sued by the plaintiff, or Wagner's business

activities after dissolution. (Doc. 43-1, p. 2).

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dissolution.* Construing the statute with an indefinite term liberally, the New

Jersey Supreme Court provided that “[t]lo hold otherwise would enable a

corporation to defeat valid causes of action for heavy damages by the simple

expedient of dissolution and organization of a new corporation, taking over

the assets of the old one.” /d. at 283.°

Subsequently, in Newmark v. Abeel, 102 F.Supp. 993 (S.D.N.Y. 1952),

an antitrust action was brought against, among others, L.T.S. Cutter

Corporation, a New Jersey Corporation, which had been dissolved in 1948,

prior to the action having been filed. In addressing the capacity of L.T.S.

Cutter Corporation to be sued, the district court provided:

The capacity of a corporation to sue or be sued in a Federal

Court is ‘determined by the law under which it was organized.’

Rule 17(b) of the Federal Rules of Civil Procedure, 28 U.S.C.A.

Since the defendants are New Jersey corporations, the effect of

dissolution is dependent upon New Jersey law. Sedgwick v.

Beasley, 84 U.S.App.D.C. 325, 173 F.2d 918; Beasley v. Fox, 84

U.S.App.D.C. 327, 173 F.2d 920; Treemond Co. v. Schering

Corporation, 3 Cir., 122 F.2d 702.

2 The language of the statute then provided: “All corporations, whether

they expire by their own limitation or be annulled by the Legislature or be

otherwise dissolved, shall be continued bodies corporate for the purposes of

prosecuting and defending suits by or against them, and of enabling them to

settle and close their affairs, to dispose of and convey their property and to

divide their capital, but not for the purpose of continuing the business for

which they were established.” Corporation Act of 1896, §53, P.L. p. 295.

3 Hould appears to be the only case from a binding New Jersey court

on the issue. See GC/U-Employer Retirement Fund v. Progress Printing Co,

Inc., 2021 WL 3912552, *6 (C.D. Cal. May 10, 2021).

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Section 14:13-4 of the General Corporation Law of New

Jersey, N.J.S.A., provides that all dissolved corporations ‘shall

be continued bodies corporate for the purposes of prosecuting

and defending suits by or against them * * * .’ Under this section,

L.T.S. Cutter Corporation, even though dissolved, is subject for

an indefinite period to all ‘suits at law or in equity, in contract or

tort, or of what nature soever, and whether begun before or after

dissolution.’ Hould v. John P. Squire & Co., 81 N.J.L. 103, 79 A.

282, 283.

Newmark v. Abeel, 102 F. Supp. 993, 994 n.1 (S.D.N.Y. 1952).

Jumping ahead to 1972, the United States District Court for the Eastern

District of Pennsylvania decided Johnson v. Four States Enterprises, Inc.,

355 F.Supp. 1312 (1972). Johnson was a breach of construction contract

action brought against Four States Enterprises, Inc., and its directors. The

action was ultimately dismissed against the directors for lack of diversity.

However, in addressing whether service on a New Jersey registered agent

for the corporation which had previously been dissolved was valid and proper

service, citing to Hould, the court provided that “under New Jersey Law, a

corporation after dissolution may be sued for a cause of action in tort arising

before such dissolution, and process may be served on the registered agent

of the corporation. This Court sees no reason why an action for breach of

contract should abate because of dissolution.” Johnson, 355 F. Supp. at

1319 (citations omitted), aff'd, 495 F.2d 1368 (3d Cir. 1974).

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Later, the Supreme Court of New York considered whether a dissolved

New Jersey corporation, Jenkins Bros., was amenable to suit in an asbestos

personal injury action. See Germain v. A.O. Smith Water Products, 41

Misc.3d 1228(A) (N.Y.S. 2013).4 In doing so, the court noted the language

of the applicable New Jersey Statute, which reads in relevant part:

14A:12-9. Effect of dissolution

(1) Except as a court may otherwise direct, a dissolved

corporation shall continue its corporate existence but shall carry

on no business except for the purpose of winding up its affairs by

(a) collecting its assets;

(b) conveying for cash or upon deferred payments, with or

without security, such of its assets as are not to be disi;iputed in

kind to its shareholders;

(c) paying, satisfying and discharging its debts and other

liabilities; and

(d) doing all other acts required to liquidate its business and

affairs.

(2) Subject to the provisions of subsection 14A:12-9(1),

and except as otherwise provided by court order, the cormoration,

its officers, directors and shareholders shall continue to function

in the same manner as if dissolution had not occurred. In

particular, and without limiting the generality of the foregoing,

(a) the directors of the corporation shall not be dee2med to

be trustees of its assets ...;

4 The plaintiff's counsel in Germain had also named Jenkins Bros. as

a defendant in a number of other asbestos personal injury actions. Germain,

41 Misc.3d at *1 n. 1.

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(b) title to the corporation's assets shall remain in the

corporation until transferred by it in the corporate name;

(c) the dissolution shall not change quorum or voting

requirements for the board or shareholders ...:

(d) shares may be transferred until the record date of the

final liquidating distribution or dividend to shareholders;

(e) the corporation may sue and be sued in its corporate

name and process may issue by and against the corporation in

the same manner as if dissolution had not occurred;

(f) no action brought against any corporation prior to its

dissolution shall abate by reason of such dissolution.

N.J. Rev. Stat. §14A:12-9.

In its motion to dismiss the action in Germain, Liberty Mutual, on behalf

of Jenkins, maintained that, once the winding up of a dissolved corporation

is completed, there is no longer a corporation against which suits may be

commenced. This is the same contention made by Wagner here.

Disagreeing with Liberty Mutual, the court in Germain reasoned:

Liberty Mutual contends that once the winding Up ;orocess

of a dissolved New Jersey corporation is completed there is no

longer a corporation against which suits may be commericed. In

this regard, section (1) of N.J. Stat. §14A:12-9, upori which

Liberty Mutual relies, establishes a finite post-dissolution list of

activities that a dissolved corporation is permitted to undertake

for the purpose of winding up its business. The activities

identified in section (2) of N.J. Stat. §14A:12-9, which incl ude the

ability to sue and be sued as if dissolution had not occurired, are

subject to no such limitation because they do not corstitute the

carrying on of business of the dissolved corporation. Liberty

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Mutual’s interpretation of New Jersey law is that a dissolved

corporation is only amenable to suit until it is finished winding up

its affairs were correct, the ability to sue and be sued would be

included under N.J. Stat. § 14A:12-9(1), not N.J. Stat. § 14A:12-

9(2). Similarly, if all of the activities listed in N.J. Stat. § 14A:12-

9(2) were intended to be limited to the winding up process, the

New Jersey Legislature would have had no reason to draft two

subsections to address this issue.

Germain v. A.O. Smith Water Prods. Co., 41 Misc. 3d 1228(A), 981 N.Y.S.2d

635 (Sup. Ct. 2013), aff'd sub nom. In re New York City Asbestos Litig., 116

A.D.3d 571, 984 N.Y.S.2d 335 (2014).

Setting its reasoning apart from that in Global, wherein the court

pointed to the lack of authority to support a finding that a dissolved

corporation remains amenable to suit even after the winding up of affairs, the

court in Germain first looked to the holding in Hould, supra. |n doing so, the

Germain court pointed out that Hould was cited with approva} in /nt’l Union

of Operating Engineers, Local 68, AFL-CIO v. RAC Atlantic City Holdings,

LLC, 2013 WL 353211 (D.N.J. Jan. 29, 2013), decided years. after Global,

wherein the court found that the New Jersey Legislature did not place any

limitation on suits against dissolved corporations. /d. at *34. The court further

looked to Johnson, supra, a decision affirmed by the Third ‘Circuit, which

found that the NJBCA allows legal actions against a dissolved corporation in

the same manner as if dissolution had not occurred. In fact, the Germain

court provided:

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The majority of courts that have ruled on this issue have agreed

that a New Jersey corporation is amenable to suit even after the

winding up process has been completed. See /n re Krafft-Murphy

Co., 62 A3d 94, 103 (Del. Ch. 2013) (New Jersey “statutorily

provide[s] for the endless continuation of a dissolved

corporation.”); Gilliam v Hi Temp Prods., et al., 260 Mich App 98,

123 (2003) (“Unlike Michigan, California, New Jetsey, and

Alaska have not followed the Model Business Corporation Act

(1984) by establishing time limits for claims against a dissolved

corporation.”); Johnson v Four States Enterprises, Inc., 355 F.

Supp. 1312, 1319 (E.D. Pa. Dec. 13, 1972), aff'd 495 F2d 1368

(3d Cir. 1974) (“under New Jersey Law, a corporation after

dissolution may be sued for a cause of action in tert arising

before such dissolution... .); Dr. Hess & Clark, Inc. v Metalsalts

Corp., 119 F.Supp. 427, 429 (D.N.J. Mar. 4, 1954) (noting that

“New Jersey has, by statute, preserved the right of suit” against

dissolved corporations); Newmark v Abeel, 102 F. Supp. 993 n.1

(S.D.N.Y. Mar. 3, 1952) (dissolved New Jersey corporations are

subject to suit “for an indefinite period”).

Germain, 41 Misc. 3d 1228(A) at *5. Given the line of authority and the plain

meaning of the statute, Germain found that New Jersey Law permitted the

suit against Jenkins, a dissolved corporation. See a/so In re New York City

Asbestos Litigation, 116 A.D.3d 571 (N.Y.S. 2014) (“The plain language of

the New Jersey dissolution statute, which governs here, provides for a

corporation that has been dissolved to ‘sue and be sued ir iits corporation

name’ (N.J. Stat. Ann. §14A:12-9 [2] [e]), and the statute places: no restriction

on how long a dissolved corporation maintains its capacity to bbe sued for its

tortious conduct committed pre-dissolution (see Hould v Johin P. Squire &

Co., 81 N.J.L. 103, 79 A 282 [1911]; International Union of Ove:rating Engrs.,

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Local 68, AFL-CIO v RAC Atlantic City Holdings, LLC, 2013 WL 353211, *10,

2013 U.S. Dist. LEXIS 11413, *34 [D.N.J. 2013]’).

More recently, the issue was addressed by the court in GC/U-Employer

Retirement Fund v. Progress Printing Co, Inc., 2021 WL 3912552 (C.D. Cal.

May 10, 2021). This was an ERISA action brought by the GCIU-Employer

Retirement Fund and its Board of Trustees against, among others, Progress

Printing Co., Inc., which was required to make contributions to the retirement

fund as a signatory to a collective bargaining agreement. Progress was a

New Jersey corporation which had ceased operations in 2011 and was

officially dissolved under New Jersey law in 2012 prior to the ERISA action

being filed.

Relying on Global, supra, Progress sought dismissal of the complaint

on the basis that it had been fully dissolved and lacked the capacity to be

sued. On the other side, the plaintiffs relied upon Germain, supra, to argue

that the NJBCA provides no limitation on the capacity of a dissolved New

Jersey corporation to be sued.

Noting that neither Global nor Germain was binding on the court in the

interpretation of New Jersey law, the court looked to the language of the

statute to determine the motion:

The plain language of sub-section (2)(e) allows a dissolved

corporation to sue and be sued as if dissolution had not occurred,

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with no limitations other than those set forth in section (1).

Section (1) states that a dissolved corporation shall continue its

existence, with no temporal limitation. The only restriction is a

specific prohibition-the dissolved corporation shall carry on no

“pusiness” other than for the purpose of winding up. Suing and

being sued is not “business.” See Germain, 2013 WL 6065986,

at *4 (“The activities identified in section (2) of N.J. Stat. §44A:12-

9, which include the ability to sue and be sued as if dissolution

had not occurred, are subject to no such limitation because they

do not constitute the carrying on of business of the dissolved

corporation.”); see also Business, Black's Law Dictionary (11th

ed. 2019) (defining the term as “[a] commercial enterprise carried

on for profit”). Section (1) does not say that corporate existence

shall continue until it has wound up, or only for the purpose of

winding up. The corporation may not carry on business, except

insofar as it is winding up, but otherwise its legal status exists

even after dissolution-including to sue and be sued. The Global

Landfill court’s conclusion that the corporation “ceases to exist”

once it finishes winding up contradicts the plain language of the

statute. 992 F. Supp. at 695.

GCIU-Emp. Ret. Fund, 2021 WL 3912552, at *4.

Continuing to read subsection (2)(e) in context, the court observed:

Section (2) lists ways in which corporations “shall continue to

function in the same manner as if dissolution had not warred.”

It does not list activities that the corporation may undertake as

part of the winding up process and only until that process is

complete-it provides certain principles of the corporate form that

endure beyond dissolution. One of these principles is that the

corporation can sue and be sued. It would not make sense for

sub-section 2(c), which maintains the corjoration’s quorum and

voting requirements, to last only so long as the corporation is in

the process is winding up. There also would be no need for sub-

sections 2(b) and (d) to specify their own termination conditions

if the entire section was conditioned on the corporation being in

the process of winding up. The fact that these sub-ssections

include time limitations and sub-section (2)(e) does not iss telling.

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If suing and being sued were part of the winding up process, it

would have been listed in section (1), not section (2). See

Germain, 2013 WL 6065986, at *4 (“If Liberty Mutual's

interpretation of New Jersey law is that a dissolved corporation

is only amenable to suit until it is finished winding up its affairs

were correct, the ability to sue and be sued would be included

under N.J. Stat. § 14A:12-9(1), not N.J. Stat. § 14A:12—9(2).”)

Id. at *5.

Although case law on the issue is sparse, the court went on to outline

the case law which more widely accepts the view set forth in Germain, rather

than Global, and noted that the fact that other states’ statutes specify a time

limit for claims against dissolved corporations, while New Jersey’s does not,

further reinforces that amenability to suit is perpetual in New Jersey. /d.

Finally, the court discussed another reason why it found Global's

reasoning to be unpersuasive. In this regard the court provided:

It relies heavily on a case from the Southern District of New York

which it claims interpreted an analogous New York statute. See

992 F. Supp. at 695 (citing Flute v. Rubel, 682 F. Supp. 184, 187

(S.D.N.Y. 1988)). But the New York statute discussed in Flute,

while similar, states that a dissolved corporation “may continue

to function for the purpose of winding up the affairs of the

corporation in the same manner as if the dissolution had not

taken place.” N.Y. Bus. Corp. Law §1006(a) (emphasis added).

Section 14A:12-9(2), by contrast, states that the dissolved

corporation “shall continue to function in the same manner as if

dissolution had not occurred’-omitting the phrase, “for the

purpose of winding up the affairs of the corporation.” In the

former statute, the corporation continues to exist so/e/y for the

purpose of winding up its affairs. The latter contains no such

conditional clause. The New York law also uses the permissive

“may,” suggesting the corporation may choose to end its

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existence, while the New Jersey statute uses the mandatory

“shall.”

Id. (emphasis in original).°

Considering the positions of the parties, with Wagner's reliance

primarily on Global and the plaintiffs on Germain, and the case law as

discussed above interpreting the NJBCA, the court finds the position of the

plaintiff better supported. As a result, Wagner’s motion to dismiss will be

denied. An appropriate order shall issue.

i E. MANNION

United States District Judge

DATE: apoleo

25-913-01

5 In its reply brief, Wagner argues that the rationale applied and

decision reached in Global continue to be followed. (Doc. 47). In doing so,

Wagner cites to Next Millennium Realty, LLC v. Adchem Corp., 2016 WL

1178957 (E.D.N.Y. Mar. 23, 2016), wherein the court addressed whether a

dissolved New York corporation was subject to suit under New York’s

Business Corporation Law. While Wagner argues this law is substantively

identical to the NUBCA at issue in this case, this is the same New York law

which was distinguished in GC/U-Employer Retirement Fund, supra.

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