CB Lewes, LLC v. Brightfields, Inc. ( 2020 )

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
CB LEWES, LLC, a Delaware limited
liability company
and
C.A. No. 820C-06-001 RFS
COASTAL TIDE PARTNERS, a
Delaware limited liability company and
sole member of CB LEWES, LLC,
Plaintiffs,
BRIGHTFIELDS, INC.,
a Delaware corporation,
Defendant.
ORDER
Submitted: 9/17/2020
Decided: 10/29/2020
Stephen A. Venzie, Esq. and Edward Seglias, Esq., 500 Delaware Ave, Suite 730,
Wilmington, DE 19801, Attorneys for Plaintiffs.
Walter J. O’Brien, Esq., 1013 Centre Road, Suite 210, Wilmington, DE 19805, Attorney
for Defendant.
I. INTRODUCTION
Before the Court is Brightfields, Inc.’s (“Defendant”) Motion to Dismiss Counts I, II, and
III of the complaint filed by CB Lewes, LLC (“CB Lewes”) and Coastal Tide Partners, LLC
(“Coastal Tide”’) (collectively, the “Plaintiffs”). For the reasons that follow, Defendant’s motion
is GRANTED.
Il. FACTUAL AND PROCEDURAL HISTORY
CB Lewes, LLC (“CB Lewes”) and Coastal Tide Partners, LLC (“Coastal Tide”)
(collectively, the “Plaintiffs”) filed a complaint in this Court seeking damages related to work
performed by Brightfields, Inc.
Defendant is a service company, providing consulting, evaluation, investigation, and
remediation services focusing on cleanup and redevelopment of contaminated properties.
The current matter arises out of the development of a site known as “Jackson Pit”. In
addition to Jackson Pit, the development included certain adjacent land (Jackson Pit and the
adjacent land, collectively “the Site”). The Site is located in Lewes, Delaware. In September
2013, CB Lewes acquired Jackson Pit and entered into an agreement, referred to as the
Brownsfield Development Agreement (“the Agreement”), with the Delaware Department of
Natural Resources and Environmental Control (“DNREC”) with plans of redeveloping the Site
for residential use.
CB Lewes retained Defendant to investigate and test the Site and to submit the required
reports to DNREC in accordance with the Agreement and consult CB Lewes on issues that
required remediation.
In September 2013, Defendant created and distributed a description of proposed
excavation pits that Defendant would test to determine the amount of debris that needed to be
remediated, along with contamination concerns.
Plaintiffs allege there were deficiencies in Defendant’s reports, consequently causing
additional costs to remediate the Site in accordance with the Agreement. More specifically,
Plaintiffs allege the amount of debris which required removal “far exceeded” Defendant’s
estimates set forth in the reports.! Additionally, Plaintiffs allege the costs were almost four-times
higher than the costs Plaintiffs anticipated based on what Defendant had determined throughout
the reports.”
Plaintiffs filed a complaint in this Court, bringing the following counts: (I) negligence;
(ID) professional negligence; (III) negligent provision of information; and (IV) breach of contract.
Plaintiffs allege Defendant owed a duty of reasonable care and failed to act with such care in
performing their work. Further, Plaintiffs argue Defendant’s employees are professionals,
maintaining professional licenses, and Defendant agreed to provide its professional consulting
services to Plaintiffs as set forth in their agreement. Plaintiffs allege Defendant failed to act with
the requisite professional care, breaching their professional duties owed to Plaintiffs resulting in
Plaintiffs’ damages. Plaintiffs further allege Defendant failed to exercise reasonable care and
provided misrepresentations in its information, which Plaintiffs relied on when requesting cost
proposals from contractors.
Defendant has moved for dismissal of Counts I, II, and III. That motion is now before the
Court.
HI. PARTIES’ CONTENTIONS
Defendant argues the economic loss doctrine prevents Plaintiffs from seeking recovery
under both contract and tort theories; therefore, Defendant moves for dismissal of the three
claims sounding in tort. Defendant further argues the exception for information suppliers under
the economic loss doctrine does not apply to Defendant. Defendant contends the courts have
characterized Delaware’s application of the exception as narrow.
'PL.’s Compl. at ¥ 50.
2 1d. 455,
Plaintiffs oppose Defendant’s motion to dismiss arguing the economic loss doctrine
would not apply because Defendant owed Plaintiffs a duty independent of their contractual duty.
Further, Plaintiffs argue Defendant is the type of information supplier contemplated by the
exception to the economic loss doctrine. Plaintiffs also argue Rule 8 of the Superior Court Rules
of Civil Procedure allows for alternative statements of claims; therefore, dismissal would be
inappropriate.
IV. DISCUSSION
Dismissal pursuant to Superior Court Civil Rule 12(b)(6) is appropriate where a plaintiff
would not be entitled to relief under any set of conceivable set of circumstance susceptible of
proof under the complaint.’ In considering a motion to dismiss, all well-pleaded allegations in
the complaint must be accepted as true.‘
Defendant moves for dismissal citing the economic loss doctrine. “The economic loss
doctrine is a judicially created doctrine that prohibits recovery in tort where a product has
damaged only itself (i.e., has not caused personal injury or damage to other property) and, the
only losses suffered are economic in nature.’”* The doctrine has been extended to be considered
in other areas where a product is not involved.° The economic loss doctrine prohibits certain
claims in tort where overlapping claims based in contract adequately address the injury alleged.’
As this Court stated in Brasby v. Morris, there is no reason to extend tort law into areas that can
be adequately governed by contract law; therefore, if Plaintiffs’ tort claims do not fall under an
3 Resolve Funding LLC v. Buckley Prop. Servs. LLC, 2018 WL 4613593, at *1 (Del. Super. Ct. Sept. 24, 2018)
(citing Spence v. Funk, 396 A.2d 967 (Del. 1978)).
4 American Ins. Co. v. Material Transit, Inc., 446 A.2d 1101 (Del. Super. Ct. 1982).
> Brasby v. Morris, 2007 WL 949485, at *6 (Del. Super. Ct. Mar. 29, 2007) (citing Marcucilli v. Boardwalk
Builders, Inc., 1999 WL 1568612, at *4 (Del. Super. Ct. Dec. 22, 1999) (citation omitted)).
6 See Millsboro Fire Co. v. Constr. Mgmt. Servs., Inc., 2006 WL 1867705, at *2 (Del. Super. Ct. June 7, 2006).
T Brasby, 2007 WL 949485, at *6.
exception to the economic loss doctrine, Defendant’s motion to dismiss the relevant counts will
be granted.
Plaintiffs contend the economic loss doctrine does not apply to the present case because
Defendant owed a duty of care specific to a professional engineer, which is separate and
independent from their contract obligation. Further, Plaintiffs contend Defendant falls under the
exception as a party who, in the course of its business, supplies false information to the other
party for use in business transactions.
For Plaintiffs to assert both a tort claim and a contract claim, Plaintiffs must allege
Defendant breached a duty independent of the contract.® Plaintiffs put forward, in support of
their breach of contract claim, that Defendant breached its duties under the agreement by failing
to adequately delineate the debris and study the conditions of the Site.
The Court finds Defendant’s alleged conduct is specifically covered by the allegations
made by Plaintiffs’ breach of contract claim. In the complaint, Plaintiffs allege Defendant agreed
to provide professional environmental consulting services to CB Lewes and such services were
paid for.’ Plaintiffs further allege Defendant failed to act with the requisite professional care in
providing their services.!° Plaintiffs make essentially identical allegations in bringing their
breach of contract claim.!!
Based on Plaintiffs’ complaint, the Court finds the agreement covers Plaintiffs’ claims
that Defendant failed to adhere to the necessary duty of care, providing invalid information;
therefore, the challenged counts fall directly under the economic loss doctrine.
8 McKenna v. Terminex Intern. Co., 2006 WL 1229674 at *2 (Del. Super. Ct. 2006).
° Pl.’s Compl. at J 65.
10 Td at { 68.
"! Td. at ¢ 89-91,
The Court must now determine whether Plaintiffs claims fall under the exception to the
economic loss doctrine.
The Restatement (Second) of Torts § 552 provides that:
One who, in the course of his business, profession or employment, or in any other
transaction in which he has a pecuniary interest, supplies false information for the
guidance of others in their business transactions is subject to liability for
pecuniary loss caused to them by their justifiable reliance upon the information, if
he fails to exercise reasonable care or competence in obtaining or communicating
the information.
To maintain a cause of action under § 552, a plaintiff must prove: 1) defendant supplied
the information to plaintiff for use in business transactions with third parties; and 2) defendant is
in the business of supplying information.!* The exception is narrow, and requires a case-by-case
analysis.'? “In Delaware, only surveyors and those expressly in the business of supplying
information such as accountants, financial advisors, and title searchers, can be liable in tort for
purely economic losses.”4
According to the allegations in the complaint, Defendant was contracted to investigate
and test the site, submit reports to DNREC and consult with CB Lewes on issues of remediation
prior to development. The Court finds the present case similar to the contracts analyzed in
Riverbend Cmty, LLC v. Green Stone Eng’g, LLC.'° In Riverbend, the defendants were retained
to produce designs for property that would assist the plaintiffs in obtaining preliminary site
approval.'® The defendants were retained to “provide designs, plans, and drawings for specific
components” in construction of a property. The court in Riverbend determined the defendants’
'2 Delaware Art Museum v. Ann Beha Architects, Inc., 2007 WL 2601472, at *2 (D. Del. Sept. 11, 2007).
'3 Id. See also Kuhn Const. Co. v. Ocean & Coastal Consultants, Inc., 844 F. Supp. 2d 519, 527 (D. Del. 2012).
‘4 Millsboro Fire Co. v. Constr. Mgmt. Servs., Inc., 2006 WL 1867705, at *3 (Del. Super. Ct. June 7, 2006).
'5 2012 WL 1409013, at *5 (Del. Super. Ct. Apr. 4, 2012), aff'd, 55 A.3d 330 (Del. 2012).
16 Td at *5,
information was ancillary to the finished construction.'’ The court concluded that the services
provided by the defendants were not that of “information suppliers” and the plaintiffs’
negligence claims were barred by the economic loss doctrine. !®
Similarly, in Millsboro Fire Co. v. Construction Management Service, Inc., the court
declined to extend the economic loss doctrine exception to engineers and architects who provide
plans in connection to a construction project.!? The court there concluded that such information
did not fall within the exception and was information incidentally supplied.”°
Here, Defendant provided reports and plans in connection to redevelopment of the Site.
The Court finds Defendant in the present case to be analogous to the defendants retained in
Riverbend and Millsboro Fire Co.', concluding Defendant does not fall into the recognized
exception of the economic loss doctrine.
Lastly, the Plaintiffs, in opposition of Defendant’s motion to dismiss, argue Rule 8(e)
allows pleading alternative theories of recovery. Delaware courts have recognized a claimant
“cannot assert both negligence and breach of contract claims based on the same conduct because
tort claims and breach of contract claims are not alternative theories of recovery for the same
acts.”?? Such allegations violate the economic loss doctrine.” Plaintiffs properly brought their
breach of contract claim before the Court; however, the tort claims brought by Plaintiffs are
barred by the economic loss doctrine. Therefore, Counts I, IJ, and III are dismissed.
17 Td.
'8 Td. at *6.
'° 2006 WL 1867705 at *3 (Del.Super.).
20 Id.*! The defendants in the mentioned cases supplied information in connection to construction, which the Court finds
analogous to providing information in connection to redevelopment of the Site.
2 Edelstein v. Goldstein, 2011 WL 721490, at *7 (Del. Super. Ct. Mar. 1, 2011).
23 Id.V. CONCLUSION
As this Court stated in Brasby, “[t]here exists no reason to extend tort law into areas that
can be adequately governed by contract law.”** The Court finds the present allegations are
governed by the contract between CB Lewes and Defendant. Therefore, considering the
foregoing, Defendant’s Motion to Dismiss Counts I, II, and III of Plaintiffs’ complaint is
Ri¢hard F. Stokes, Judge
GRANTED.
IT IS SO ORDERED.
ce: Prothonotary’s Office
4 Brasby v. Morris, 2007 WL 949485, at *7.