Two Farms, Inc. v. Davis, Bowen & Friedel, Inc. ( 2018 )

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
TWO FARMS, INC.,
C. A. No. K17C-09-010 NEP
In and for Kent County
Plaintiff,
v.
DAVIS, BoWEN & FRIEDEL,
INC., sILICATO-WOOD
PARTNERSHIP, LLC and DENNIS
sILICATo,
Defendants.
SILICATO-WOOD PARTNERSHIP, LLC,
Third-Party Plaintiff,
v.
STATE OF DELAWARE DEPARTMENT
of TRANSPORTATION,
VVVVVVVVVVVVVVVVVVVVVVVV
Third-Pal“cy Defendant.
OPINION AND ORDER
Submitted: November 14, 2018
Decided: December 19, 2018
T wo Farms, Inc., v. Davis, Bowen & Friedel, Inc., et al
C.A. No. K17C-09-010 NEP
December 19, 2018
Upon Third-Party Defendant’s Motion to Dismiss
GRANTED
Before the Court is the motion of Third-Party Defendant State of Delaware
Department of Transportation (hereinafter “DelDOT”) to dismiss the Third-Party
Complaint of Defendant/Third-Party Plaintiff Silicato-Wood Partnership, LLC
(hereinafter “SWP”). In its Third-Party Complaint, which Was filed on May 24,
2018, SWP asserts claims against DelDOT for (1) Declaratory Judgment, (2)
Tortious Interference With Contract and Business Relations, and (3) Inverse
Condemnation. For the reasons stated herein, DelDOT’s Motion to Dismiss is
GRANTED.
I. Factual and Procedural Background
The facts recited here are those as alleged by SWP in its Third-Party
Complaint.1
In 2008, SWP sought to develop a property located in Milford, Delaware
(hereinalter the “Property”) adjacent to Delaware Route 1. In connection With this
development, SWP and its engineering firm, Defendant Davis, Bowen and Friedel,
Inc., submitted a building site plan (hereinafter the “SWP Subdivision Plan”) to the
City of Milford.
Pursuant to the City of Milford’s process, DelDOT submitted comments
regarding the SWP Subdivision Plan to the City of Milford Development Advisory
Committee. One of the items contained in the DelDOT Comments requested that a
l On a motion to dismiss, all Well-pleaded factual allegations are accepted as true. Savor, Inc. v.
FMR Corp., 812 A.2d 894, 896 (Del. 2002).
T wo Farms, Inc., v. Davis, Bowen & Friedel, Inc., et al
C.A. No. K17C-09-010 NEP
December 19, 2018
note be placed on the SWP Subdivision Plan (hereinafter the “DelDOT Requested
Note”) indicating that the right turn-in entrance (hereinafter the “Right-In Entrance”)
from the access road labeled on the SWP subdivision plan as “the Route l Entrance”
could be modified in the future if traffic conditions warranted. The DelDOT
Requested Note was never placed on the SWP Subdivision Plan.
In 2011, SWP conveyed to Plaintiff Two Farms, Inc. (hereinafter “TFI”), a
portion of the Property known as Lot No. 5 (hereinafter the “TFI Parcel”). The TFI
Parcel was bounded by the Route 1 Entrance and by another roadway known as
“Silicato Parkway,” and the Right-In Entrance led from the Route l Entrance into
the TFI Parcel. SWP has alleged in its Third-Party Complaint that “[f]ee simple title
to Silicato Parkway, the Route 1 Entrance and the Right-In Entrance is vested in
SWP.”
DelDOT has flled a condemnation action against TFI (hereinafter the
“Condemnation Action”) seeking to take certain property interests from TFI for
purposes of the NE Front Street/Route 1 Overpass Project, including the Right-In
Entrance.2 On April 17, 2017, this Court entered a Stipulation and Order of
Possession of Property (hereinafter the “April 17 Order”) granting DelDOT the right
to enter and possess the portion of the TFI parcel sought in the Condemnation
Action, including the Right-In Entrance.3
II. Discussion
On a motion to dismiss, the moving party bears the burden of demonstrating
that “there are no material issues of fact and that he is entitled to judgment as a matter
2 State ofDelaware Department of T ransportation v. T wo Farms, Inc., Del. Super., C.A. No.
K17C-03-012 JJC.
3 Although the Third-Party Complaint does not address the April 17 Order, this Court may take
judicial notice of the April 17 Order pursuant to Delaware Rule of Evidence 202(d)(1)(C) as a
record of this Court, and, indeed, must take judicial notice of the April 17 Order pursuant to D.R.E.
202(d)(2), as DelDOT has requested that the Court do so.
3
T wo Farms, Inc., v. Davis, Bowen & Friedel, Inc., et al
C.A. No. K17C-09-010 NEP
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of law.”4 Upon this Court’s review of a motion to dismiss, “(i) all well-pleaded
factual allegations are accepted as true; (ii) even vague allegations are well-pleaded
if they give the opposing party notice of the claim; (iii) the Court must draw all
reasonable inferences in favor of the non-moving party; and (iv) dismissal is
inappropriate unless the plaintiff would not be entitled to recover under any
reasonably conceivable set of circumstances susceptible of proof.”5
A. SWP’s Declaratory Judgment Claim
ln Count l of its Third-Party Complaint, SWP seeks a declaratory judgment
against DelDOT, arguing that DelDOT’s decision to close the Right-In Entrance is
“arbitrary and capricious.” As noted previously, SWP alleges in its Third-Party
Complaint that it possesses fee simple title to the Right-In Entrance. SWP
contradicts its own pleading in its Answering Brief, however, asserting that SWP
owns only part of the Right-In Entrance, and that TFI owns the rest.
Regardless of who actually possesses fee simple title to the Right-In Entrance,
the Court finds that SWP is not entitled to a declaratory judgment in this case, and
this claim must be dismissed. To the extent that TFI owns part of the Right-In
Entrance, principles of both standing and comity bar SWP’s declaratory judgment
claim. To the extent that SWP, rather than TFI, owns part of the Right-ln Entrance,
SWP’s declaratory judgment claim is not properly brought as a third-party claim in
this action.
In order to establish standing, SWP must show: “(l) an injury in fact; (2) a
causal connection between the injury and the conduct of which [SWP] complains;
4 Daisy Constr. C0. v. W.B. Venables & Sons, Inc., 2000 WL 145818, at *1 (Del. Super. Jan. 14,
2000).
5 Savor, 812 A.2d at 896-97.
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C.A. No. K17C-09-010 NEP
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and (3) that a favorable decision is likely to redress the injury.”6 SWP cannot show
an injury-'in-fact with regard to DelDOT’s taking of TFI’s portion of the Right-ln
Entrance, as SWP had conveyed the TFI parcel, including TFI’s portion of the Right-
In Entrance, to TFI when the Condemnation Action commenced.
More importantly, with regard to comity, this Court has previously entered
the April 17 Order, which grants DelDOT title to TFI’s portion of the Right-In
Entrance, The principle of comity, which provides that a court “should not assume
to disturb another court’s disposition of a controversy unless there are good reasons
for doing so,”7 urges deference for this Court’s entry of the April 17 Order. While
this situation does not involve two different courts, but rather two concurrent actions
in the same court, the considerations underlying the principle apply just as strongly,
if not more so. lt would be inappropriate for the Court to issue an opinion that
contradicts a previous order of this Court, and the Court will not disturb the April 17
Order by allowing relitigation of it.
To the extent that SWP rather than TFI owns part of the Right-In Entrance,
SWP’s declaratory judgment claim is not proper pursuant to this Court’s rules
regarding third-party practice. Superior Court Civil Rule 14(a) allows a defendant,
as a third-party plaintiff, to tile a claim against a non-party “who is or may be liable
to the third-party plaintiff for all or part of the plaintiff s claim against the third-party
plaintif .” Here, TFI has asserted claims against SWP for alleged fraudulent
conduct_specitically, SWP’s concealment from TFI of information regarding the
temporary nature of the Right-In Entrance. In TFI’s Amended Complaint filed on
January 12, 2018, TFI asserted a single count of fraud against SWP, alleging that
6 Cartanza v. DNREC, 2009 WL 106554, at *2 (Del. Ch. Jan. 12, 2009) (citations omitted); see
also Dover Historical Soc ’y v. City of Dover Planning Com ’n, 838 A.2d 1103, 1110 (Del. 2003).
7 Day v. Loucks, 2017 WL 3225921, at *2-3 (Del. Super. July 28, 2017).
5
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SWP “knew that the SR 1 entrance was temporary and therefore knew that [its]
omission of the temporary nature of the entrance was false.” ln TFI’s Second
Amended Complaint filed on October 8, 2018, TFI has brought additional claims
against SWP for breach of contract and for violation of the Consumer Fraud Act,
and both are likewise based upon SWP’s alleged concealment and misrepresentation
of information regarding the temporary nature of the Right-In Entrance.8
As this Court pointed out in its December 26, 2017, decision denying SWP’s
motion to dismiss, TFI has sued SWP for fraudulently inducing TFI to pay greater
than fair market value for the TFI parcel by concealing DelDOT’s communications
about the temporary nature of the Right-In Entrance.9 TFI “seeks damages resulting
from the alleged misrepresentation that the entrance was permanent when it was in
fact temporary_not the loss of the entrance, per se.”l° By contrast, SWP, in its
Third-Party Complaint, seeks a declaratory judgment that DelDOT’s closure of the
Right-In Entrance is “arbitrary and capricious.” Even if this were the case, this
would not mean that DelDOT is liable to SWP for TFI’s fraud-related claims against
SWP.
With its declaratory judgment claim, SWP is attempting to sue DelDOT based
upon SWP’s separate claims against DelDOT, not TFI’s claims against SWP_and
this is improper for a third-party claim under Rule l4(a). In Nesmz``th v. Lynn,11 the
putative third-party plaintiffs, defendants in a mortgage foreclosure action, had
sought to file a third-party claim against the Secretary of the Department of Housing
and Urban Development for failing to require forbearance from foreclosure by the
8 TFI’s Third Amended Complaint, filed on December 7, 2018, adds no additional causes of action
against SWP.
9 T wo Farms, Inc. v. Davis, Bowen & Friedel, Inc., 2017 WL 6606893, at *2-3 (Del. Super. Dec.
26, 2017).
10 Id. at *3.
11 377 A.2d 352 (Del. 1977).
T wo Farms, Inc., v. Davis, Bowen & Friea'el, Inc., et al
C.A. No. K17C-09-010 NEP
December 19, 2018
plaintiff pursuant to the guidelines of a HUD handbook. The Delaware Supreme
Court found such a claim improper:
To implead a third party under Superior Court Civil Rule
14(a), the third party defendant must be one who is or may
be liable to defendant-third party plaintiff for all or part of
the plaintiffs claim against defendant. A separate and
independent cause of action cannot be maintained against
a third party even though arising from the same factual
situation.12
In so holding, the Nesmith Court found persuasive a Fifth Circuit decision
that, in rejecting a similar third-party claim against HUD, noted that “[t]he sole
connection between the two [i.e., the foreclosure action and the attempted third-party
claim against HUD] is the contention that, but for HUD’ s failure to adopt and enforce
adequate regulations, there would have been no foreclosure proceedings.”13
Similarly, the only connection between TFI’s claims against SWP and SWP’s
declaratory judgment claim against DelDOT is the contention that, but for DelDOT’s
decision to close the Right-ln Entrance, TFI would not have sued SWP.
In Sinex v. Bz``shop,14 this Court similarly held that the defendants could not
bring separate and independent claims against various third-party defendants, even
when those claims arose from the same or related factual situations as the plaintiffs’
claims against the defendants. As the Court stated, “separate and independent claims
cannot be the basis for joining third party defendants,” and any such claims must be
brought in separate actions.15
12 Id. at353.
13 Ia'. (quoting Southeast Mortg. C0. v. Mullins, 514 F.2d 747, 750 (5th Cir. 1975)).
14 2005 wL 3007805 (Del. super. oct 27, 2005).
15 Id. at *3.
T wo Farms, Inc., v. Davis, Bowen & Friedel, Inc., et al
C.A. No. K17C-09-010 NEP
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In Petrolane-Northeast Gas Service, Inc. v. Brown,16 the plaintiff, a seller of
liquid petroleum gas, sued the defendants, Who solicited orders for the gas and made
collections, for defaulting on mortgage payments related to certain real estate. The
defendants sought to file third-party claims against hundreds of their gas customers,
who were not parties to the mortgage, for defaulting on their payments to the
defendants This Court held that since the third-party defendants were not liable for
any part of the plaintiffs claim on the mortgage, they could not be brought in as
third-party defendants. By the same token, SWP cannot argue that DelDOT is liable
for any part of SWP’s alleged fraudulent activity toward TFI_indeed, the Third-
Party Complaint does not even assert that DelDOT was aware of the alleged fraud.
In short, SWP’s claim that DelDOT acted arbitrarily and capriciously in
closing the Right-In Entrance is separate from TFI’s claims of fraudulent or
deceptive activity by SWP. The fact that TFI may not have brought its claims against
SWP had it not been for the closing of the Right-In Entrance does not render SWP’s
third-party claim against DelDOT proper, any more than the third-party claims
against HUD were proper in Nesmith. Accordingly, Count I of the Third-Party
Complaint must be dismissed.
B. SWP’s Tortious Interference and Inverse Condemnation Claims
Counts II and lII of the Third-Party Complaint fail as well because they are
separate and independent causes of action. The Court is mindful, of course, that
once a proper third-party claim is stated under Rule 14(a), a third-party plaintiff may
advance any other claims it may have against the third-party defendant pursuant to
16 256 A.2d 462 (Del. super. 1969).
Two Farms, Inc., v. Davis, Bowen & Friea'el, Inc., et al
C.A. No. Kl 7C-09-010 NEP
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Superior Court Civil Rule 18.17 Nevertheless, because none of SWP’s claims against
DelDOT are proper third-party claims, Rule 18 does not apply.
With regard to SWP’s claim for tortious interference with contract and
business relations,18 DelDOT’s alleged interference with SWP’s contract with TFI,
and with SWP’s business relationship with TFI, has nothing to do with TFI’s
allegations of concealment and misrepresentation by SWP. Specifically, SWP has
not alleged that DelDOT was involved in any way with concealing from, or
misrepresenting to, TFI the information about the temporary nature of the Right-In
Entrance. Put another way, SWP makes no claim that DelDOT caused or contributed
to the breach of contract alleged by TFI in its Second Amended Complaint, i.e., the
concealment and misrepresentation previously mentioned.
Finally, even if SWP’s tortious interference claim against DelDOT were not
separate and independent from TFI’s claims against SWP, dismissal of the tortious
interference claim would be warranted because SWP fails to allege any element of
intent on the part of DelDOT: SWP does not allege that DelDOT intentionally
interfered with its contract with TFI, nor does it allege that DelDOT intentionally
interfered with SWP’s prospective business opportunities with TFI.19
17 Falcon Tankers, Inc. v. Litton Sys., 300 A.2d 231, 240 (Del. Super. 1972).
18 The Court rejects SWP’s contention that DelDOT’s motion fails to address SWP’s claim for
interference with business relations. Count ll does not delineate between two separate torts, one
for interference with contract and the other for interference with business relations, nor does it lay
out a clear claim for interference with prospective business relations. In any event, as explained
herein, SWP’s claim for tortious interference does not qualify as a third-party claim.
19 See Anesthesia Services, P.A. v. Tracy Winters, M.D., 2013 WL 3352672, at *5 (Del. Super.
June 27, 2013) (tortfeasor must have knowledge of contract with which it is interfering and of fact
that it is interfering with performance of contract); Malpiea'e v. Townson, 780 A.2d 1075, 1099
(Del. 2001) (intentional interference with prospective business opportunities must be shown).
9
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C.A. No. K17C-09-010 NEP
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Tuming to Count III, the inverse condemnation count,zo this claim, again, has
nothing to do with TFI’s fraud claims against SWP. SWP alleges that DelDOT has
improperly deprived it of property interests by closing the Right-ln Entrance and by
trespassing on SWP’s property. This count does not allege that DelDOT is liable for
any fraudulent conduct by SWP against TFI. Therefore, this claim must also be
dismissed.
III. Conclusion
A proper third-party complaint brings in a third party who is or may be liable
for all or part of the plaintiffs claims against the defendant/third-party plaintiff
That is not the case here. SWP’s claims against DelDOT are separate and
independent from TFI’s allegations of fraudulent conduct by SWP.
WHEREFORE, for the foregoing reasons, DelDOT’s Motion to Dismiss
SWP’s Third-Party Complaint is GRANTED.
IT IS SO ORDERED.
/s/ Noel Eason Primos
Judge
NEP/sz
oc. Prothonotary
20 Inverse condemnation “is a shorthand description of the manner in which a landowner recovers
just compensation for a taking of his property when condemnation proceedings have not been
instituted.” Brana'ywine Transmission Servs., Inc. v. Justice, 1991 WL 35695, at *l (Del. Super.
Mar. 7, 1991). The issues to be decided in an inverse condemnation claim are whether or not a
taking has occurred without just compensation and, if so, what compensation is owed. Ia'.
10