Duncan v. Garvin ( 2021 )

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
ROBERT M. DUNCAN, :
:
Plaintiff, : K20M-11-022 JJC
:
v. :
:
SHAWN M. GARVIN, in his official :
Capacity, and DELAWARE :
DEPARTMENT OF NATURAL :
RESOURCES AND ENVIRONMENTAL :
CONTROL, an agency of the executive :
Branch of the State of Delaware, :
:
Defendants. :
Submitted: May 17, 2021
Decided: June 21, 2021
MEMORANDUM OPINION & ORDER
Defendants’ Motion to Dismiss – GRANTED in part, DENIED in part
Patrick C. Gallagher, Esquire and Alexis N. Stombaugh, Esquire, Jacobs &
Crumplar, P.A., Wilmington, Delaware, Attorneys for the Plaintiff.
Kayli H. Spialter, Esquire, Deputy Attorney General, State of Delaware
Department of Justice, Wilmington, Delaware, Attorney for the Defendant.
Clark, J.
1
Plaintiff, Robert M. Duncan (“Mr. Duncan”) sues Defendants Shawn M.
Garvin and Delaware’s Department of Natural Resources and Environmental
Control (hereinafter, collectively “DNREC”). In his suit, Mr. Duncan seeks redress
for DNREC’s alleged breach of a release and settlement agreement (the
“Agreement”). The Agreement addresses DNREC’s obligations (1) to release Mr.
Duncan of liability for underground storage tank leaks at Mr. Duncan’s property in
Harrington (the “Site”), (2) to perform corrective action at the Site, and (3) to issue
a “No Further Action” letter (an “NFA”) after DNREC “satisfactorily complet[es]
corrective action at the Site.” As consideration for these promises, Mr. Duncan
agrees to pay DNREC $250,000 when he sells the property.
In Mr. Duncan’s suit, he seeks a writ of mandamus that will compel DNREC
to issue an NFA so he can sell the Site. Alternatively, he sues DNREC for breach
of contract. As a remedy, he requests that the Court issue a declaratory judgment
that specifies DNREC’s obligation to issue an NFA.
This decision addresses DNREC’s motion to dismiss Mr. Duncan’s amended
complaint. In DNREC’s motion, it contends that a writ of mandamus is not available
under the circumstances. It also alleges that Mr. Duncan fails to state a claim in
contract.
For the reasons discussed below, Mr. Duncan inappropriately seeks
mandamus relief because the contractual term Mr. Duncan seeks to enforce is
discretionary on DNREC’s part. Because the writ of mandamus claim must be
dismissed for that reason, the Court need not separately decide whether Delaware
would follow the majority approach that declines to enforce any contractual
obligations against a state agency pursuant to a writ of mandamus.
Mr. Duncan states a claim for breach of contract, however. He does because
(1) his amended complaint places DNREC on fair notice of the claim, and (2) his
claim, as plead, provides a conceivable basis for recovery.
2
I. Facts of Record
The facts cited below are those relevant to DNREC’s motion to dismiss. They
include those facts alleged in Mr. Duncan’s amended complaint, which the Court
accepts as true, and the terms of the Agreement, which is integral to the amended
complaint.
Here, Mr. Duncan owns the Site that hosted a gas station at the intersection of
State Routes 13 and 14 in Harrington. In January 2012, DNREC issued a notice of
violation pertaining to the Site. In that notice, it cited Mr. Duncan and his then lessee
for alleged petroleum releases and other soil and groundwater contamination from
underground storage tanks.
In January 2015, DNREC assumed control of the property and began its study
and planning process. Thereafter, Mr. Duncan and DNREC executed the Agreement
on October 18, 2017. Mr. Duncan agreed to pay DNREC $250,000 when he sells
the property. In exchange, DNREC released its claims against Mr. Duncan and
agreed to issue an NFA to Mr. Duncan after it satisfactorily remediates the Site.
At the time Mr. Duncan entered the Agreement, he had an existing contract to
sell the property. Because of the pending remediation, that sale did not consummate.
Approximately three and one-half years after the parties entered the Agreement,
DNREC has yet to issue an NFA. DNREC’s ongoing refusal to do so causes Mr.
Duncan continuing harm because he has another willing buyer who will not purchase
the property until DNREC issues its NFA.
II. The Parties’ Arguments
Mr. Duncan argues that DNREC’s refusal to issue an NFA violates his
contractual rights. First, as a remedy, he seeks a writ of mandamus to compel
DNREC to meet this alleged obligation. Alternatively, Mr. Duncan contends that
he is entitled to pursue a claim for DNREC’s breach of contract and obtain a
3
declaratory judgment that recognizes the obligation. He contends that although the
contract does not specify when DNREC must issue the letter (other than making it
contingent upon satisfactory completion), DNREC must nevertheless issue it within
a reasonable time. According to Mr. Duncan, DNREC’s failure to complete
remediation for more than three years is unreasonable.
Regarding the motion to dismiss, DNREC first alleges that Mr. Duncan’s writ
of mandamus application is inappropriate. It contends that, in contrast to legal
obligations imposed by statute or regulation, a contractual obligation is not the type
of legal obligation that a writ of mandamus can remedy. This, DNREC argues, is
the case even when a respondent is a government agency. DNREC further contends
that because the Agreement contains a term that requires its satisfaction, a writ of
mandamus is unavailable because a writ may issue to compel only non-discretionary
duties.
Second, DNREC moves to dismiss Mr. Duncan’s breach of contract claim. It
alleges that his amended complaint fails to plead all essential elements of his claim.
Furthermore, DNREC asserts that Mr. Duncan’s amended complaint fails to state a
claim because the Agreement’s plain language provides that DNREC need not issue
an NFA until it is satisfied that it has completed the corrective action. In this regard,
DNREC emphasizes that Mr. Duncan has not alleged that DNREC is satisfied and
thus has not plead the existence of a condition precedent to DNREC’s obligation to
provide an NFA.
III. Superior Court Civil Rule 12(b)(6)’s Standard
When deciding a motion to dismiss for failure to state a claim, the Court must
accept as true all allegations in the complaint.1 The test for sufficiency is a broad
1
Spence v. Funk, 396 A.2d 967, 968 (Del. 1978).
4
one; the complaint will survive the motion to dismiss so long as “a plaintiff may
recover under any reasonably conceivable set of circumstances susceptible of proof
under the complaint.”2 Stated differently, a complaint will not be dismissed unless
it clearly lacks factual or legal merit.3
Furthermore, when examining a Rule 12(b)(6) motion, “[t]he complaint
generally defines the universe of facts that the trial court may consider . . . .” 4 If the
Court looks outside the facts set forth in the complaint, it will generally convert a
motion to dismiss into a motion for summary judgment and the parties will be given
an opportunity to expand the record.5 However, when a document is integral to a
plaintiff’s claim and is incorporated into the complaint, the Court may consider it
for purposes of the motion to dismiss and need not convert the motion to one for
summary judgment.6
III. Analysis
For the reasons discussed below, Mr. Duncan inappropriately seeks a writ of
mandamus because he seeks to enforce a discretionary duty. Regarding his breach
of contract claim, however, his amended complaint provides DNREC fair notice of
his claim and alleges a conceivable basis for recovery.
A. Inappropriateness of Writ of Mandamus
A writ of mandamus is an extraordinary writ that is appropriate only under
limited circumstances.7 Namely, the Court may issue a writ of mandamus to
2
Id. (citing Klein v. Sunbeam Corp., 94 A.2d 385 (Del. 1952)).
3
Diamond State Tel. Co. v. Univ. of Del., 269 A.2d 52, 58 (Del. 1970).
4
In re General Motors (Hughes) S’holder Litig., 897 A.2d 162, 168 (Del. 2006).
5
Id.6
Vanderbilt Income and Growth Assocs., LLC v. Arvida/JMB Managers, Inc., 691 A.2d 609, 613
(Del. 1996).
7
Darby v. New Castle Gunning Bedford Educ. Assoc., 336 A.2d 209, 210 (Del. 1975).
5
“compel lower tribunals, boards, and agencies to perform their official duties.”8
Furthermore, a writ of mandamus is available only where (1) there is no other
remedy available, and (2) the petitioner demonstrates that the governmental body
owes him or her a clear legal right to the performance of a non-discretionary duty.9
Here, Mr. Duncan does not state a claim that justifies a writ of mandamus
because the duty he seeks to enforce is discretionary. The Agreement’s plain
language provides that DNREC need not issue an NFA until it satisfactorily
completes corrective action at the Site. In other words, the Agreement includes a
condition that DNREC be subjectively satisfied before it issues an NFA. It follows
that DNREC holds the discretion to determine when it becomes satisfied. Because
a writ of mandamus is available only to enforce a non-discretionary duty against an
agency, he does not allege a conceivable basis for recovery for that claim.
The parties also dispute an issue that the Court will briefly address but need
not decide because the term sought to be enforced is discretionary. Namely, Mr.
Duncan and DNREC dispute whether the Court could enforce a contractual
obligation upon a public body pursuant to a writ of mandamus. Mr. Duncan argues
yes and DNREC argues no.
While neither the parties nor the Court located Delaware authority addressing
this issue, most jurisdictions find that a writ of mandamus is an inappropriate
mechanism to enforce a contractual obligation against a public entity. For instance,
the United States Supreme Court recognized in New Orleans C. & L.R. Co. v. State
of Louisiana ex. Rel. New Orleans that a writ of mandamus may not be used to
compel a duty arising from a contract; rather, relief pursuant to a writ of mandamus
8
Board of Managers of Delaware Criminal Justice Information System v. Gannett Co., 847 A.2d
1123, 1125 (Del. Super. 2004) (citing Shagrin Gas Co., v. Evans, 418 A.2d 997, 998 (Del. 1980)).
9
Darby, 336 A.2d at 210; 2 WOOLLEY ON DELAWARE PRACTICE 1126, § 1655.
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is available only to enforce a duty arising by law.10 In that regard, a duty arising by
law refers to an obligation imposed by statute, regulation, or prior court order.
The U.S. Supreme Court’s recognition of that limitation aligns with the
approach in most jurisdictions.11 Notably, in those jurisdictions, a writ of mandamus
remains an inappropriate vehicle even when the contractual term must be included
in the contract pursuant to statute or other law.12 In this regard, Mr. Duncan’s claim
even falls short of the circumstances involved in many of these persuasive decisions
because he does not allege that there is a statutory or regulatory duty that required
DNREC to include the NFA term in the Agreement. Because his mandamus claim
rests squarely in contract (without an identified underlying legal duty imposed upon
DNREC to include the NFA term in the Agreement), a writ of mandamus would be
inappropriate for this additional reason. The Court need not separately resolve
whether this mechanism would permit a private party to enforce his or her
contractual rights against an agency if a statute or regulation impressed an obligation
upon that agency to include the term in the contract.
10
157 U.S. 219, 225 (1895) (recognizing that “the remedy by mandamus cannot be invoked to
enforce obligations arising simply from a contract, as distinguished from a duty imposed by law”).
11
See, e.g., Wentzler v. Mun. Ct. of the Pasadena Jud. Dist. et al., 235 Cal. App.2d 128, 132 (Cal.
Dist. Ct. App. 1965) (noting that mandamus is generally not an appropriate remedy to enforce a
contract because contracts are enforceable by civil actions and mandamus is only available when
there are no other adequate remedies); State ex rel. Ricker v. Trenton Jr. Coll. Bd. Of Trustees, et
al., 622 S.W.2d 787, 789 (Mo. Ct. App. 1981) (holding that mandamus is a remedy to enforce a
clear duty rather than one fit to adjudicate claims between parties, and that it is not an appropriate
remedy to enforce a contractual duty or to compel action on an executory contract); The Coach
and Six Restaurant, Inc. v. Public Works Commission, 296 N.E.2d 501, 503 (Mass. 1973)
(confirming that it is well-settled that mandamus is extraordinary and not available when there are
other remedies, and that this well-settled principle makes mandamus relief unavailable to enforce
contractual obligations); City of Huntington v. Huntington Wharf & Storage Co., 83 S.E. 500, 501
(W.Va. 1914) (confirming that mandamus is not appropriate to enforce purely contractual
obligations); but see Law Industries, LLC v. Bd. Of Supervisors of La. St. Univ., 300 So.3d 21, 29
(La. Ct. App. 2020) (providing under Louisiana law that where a writ of mandamus is a remedy
specified for a particular breach of contract by a public body, it may be used to compel payments
due under that public contract).
12
New Orleans C. & L.R. Co., 157 U.S. at 225.
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B. Breach of Contract/Declaratory Judgment Claim
The Court’s decision regarding DNREC’s motion to dismiss Mr. Duncan’s
breach of contract claim turns on notice pleading requirements and the recognition
that DNREC has an implied obligation to act in good faith. Under Delaware’s notice
pleading standards, Mr. Duncan need only provide a short and plain statement
alleging that he is entitled to relief.13
To overcome a motion to dismiss, Mr. Duncan must allege that a valid
contract exists, that DNREC breached an obligation contained in the contract, and
that he suffered harm because of the breach.14 The Court also recognizes that when
a contract fails to specify a time for performance, performance must occur within a
reasonable time.15 In addition, the implied covenant of good faith and fair dealing
is implied in all contracts under Delaware law.16
Here, Mr. Duncan alleged the following in his amended complaint: (1)
DNREC promised to issue an NFA upon satisfactory completion of corrective action
at the Site; (2) DNREC has nevertheless refused to issue an NFA over the past six
years, despite having exclusive control over the Site during that time; and (3)
because DNREC refused and refuses to issue an NFA, Mr. Duncan lost one contract
to sell the Site in 2017 and cannot consummate a pending sale until DNREC issues
an NFA.
These allegations meet notice pleading requirements. Namely, the
Agreement’s terms read in conjunction with the amended complaint include
allegations that when accepted as true support a reasonable inference that DNREC
unreasonably refused to issue an NFA for three and one-half years. That refusal, in
13
Del. Super Ct. Civ. R. 8(a).
14
VLIW Technology, LLC v. Hewlett-Packard Co., 840 A.2d 606, 612 (Del. 2003).
15
See Martin v. Star Pub. Co., 126 A.2d 238, 244 (Del. 1956); see also RICHARD A. LORD, 1
WILLISTON ON CONTRACTS § 4:22 (4th ed. 2021 update).
16
Dunlap v. State Farm Fire and Cas. Co., 878 A.2d 434, 444 (Del. 2005).
8
turn, allegedly caused and continues to cause Mr. Duncan harm. As a result, the
amended complaint provides DNREC fair notice that Mr. Duncan alleges it has no
good faith basis to withhold an NFA. Because Mr. Duncan’s amended complaint
meets notice pleading standards, DNREC’s motion to dismiss Mr. Duncan’s contract
claim must therefore be denied.17
IV. Conclusion
For the reasons discussed, a writ of mandamus is unavailable as a remedy
under the circumstances of this case. As a result, DNREC’s motion to dismiss must
be GRANTED, in part. Mr. Duncan, however, states a claim, for a declaratory
judgment addressing DNREC’s alleged breach of contract. Accordingly, DNREC’s
motion to dismiss must also be DENIED, in part.
IT IS SO ORDERED.
/s/Jeffrey J Clark
Resident Judge, Kent County
17
In its motion to dismiss, DNREC did not challenge the availability of a declaratory judgment
in this case. As a result, for the purposes of this decision, the Court assumes that the remedy is
available as alleged.
9