Established 1958 ~ Hardball Business Litigation & Complex Negotiations

EDPA Finds No Breach of Contract or Bad Faith by Company that Raised Monthly Electricity Rates Following First Month “Teaser” Rate

In Silvis v. Ambit Energy L.P, the Court held that Plaintiff failed to rebut Defendant’s showing that there was no genuine dispute as to any material fact and awarded summary judgment in favor of Defendant. Silvis v. Ambit Energy L.P, 170 F.Supp.3d 754, 759 (E.D. Pa. 2016). Plaintiff contracted with Defendant to supply electricity based on variable rate plan under which she paid a “teaser” rate for the first month and thereon, the rate fluctuated. Plaintiff asserted that Defendant enticed her to switch her supplier. Plaintiff became quickly disappointed after the “teaser” rate expired because her bill would swell during certain months. Ultimately, Plaintiff field a class action alleging breach of contract. Specifically, that Defendant breached its agreements with Plaintiff and the Proposed Class members by charging rates that did not meet contractual obligations.

Under Pennsylvania law, a breach of contract claim includes the following elements: “(1) the existence of a contract, including its essential terms, (2) a breach of a duty imposed by the contract and (3) resultant damages.” Because there was no express provision in the contract requiring Defendant to provide a competitive rate, Plaintiff failed to allege a breach of an express contractual provision. Plaintiff also contended that Defendant breached the implied covenant of good faith and fair dealing by exercising its rate-adjusting discretion in bad faith. The Court explained that, while there is no separate cause of action for breach of the implied covenant of good faith and fair dealing, the Courts instead utilize the good faith duty as an interpretive tool to determine the expectations in the context of a breach of contract claim. Plaintiff did not prevail on this claim because she did not proffer any legitimate evidence of bad faith and in order to survive a motion for summary judgment, Plaintiff must show there is a genuine dispute as to a material fact. Thus, Defendant was awarded summary judgment.

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