Washington House Condominium Association of Unit Owners v. Daystar Sills, Inc. ( 2017 )

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
THE WASHINGTON HOUSE )
CONDOMINUM ASSOCIATION )
OF UNIT OWNERS, On Its Own )
Behalf and On Behalf of Multiple )
Unit Owners, and WILLIAM E. )
MONTGOMERY, and TAMARA )
A. MONTGOMERY, Individually, )
)
Plaintiffs, )
v. ) C.A. No. N15C-01-108 WCC CCLD
)
DAYSTAR SILLS, INC., a )
Delaware Corporation, DAVID N. )
SILLS, IV, WASHINGTON )
HOUSE PARTNERS, LLC, a )
Delaware Limited Liability )
Company, ARCHITECTURAL )
CONCEPTS, P.C., a Pennsylvania )
Corporation, AVALON )
ASSOCIATES OF MARYLAND, )
INC., a Maryland Corporation, and )
ENVIRONMENTAL )
STONEWORKS, LLC, a Delaware )
Limited Liability Company, )
)
Defendants. )
Submitted: March 10, 2017
Decided: August 8, 2017
Environmental Materials, LLC d/b/a Environmental Stoneworks' Motion to
Dismiss Daystar Sills, Inc.'s Crossclaims – DENIED
Daystar Sills, Inc. and David N. Sills, IV’s Motion for Summary Judgment –
DENIED
David N. Sills, IV’s Motion for Summary Judgment – DENIED
Architectural Concepts, P.C.’s Motion for Summary Judgment –DENIED
Washington House Partners, LLC’s Motion to Amend Crossclaim –
GRANTED
MEMORANDUM OPINION
Elizabeth Wilburn Joyce, Esquire, Seton C. Mangine, Esquire, Pinckney,
Weidinger, Urban & Joyce LLC, 3711 Kennett Pike, Suite 210, Greenville, DE
19807. Attorneys for Plaintiffs.
Victoria K. Petrone, Esquire, George T. Lees III, Esquire, Logan & Petrone, LLC,
One Corporate Commons, 100 W. Commons Blvd., Suite 435, New Castle, DE
19720. Attorneys for Defendants Daystar Sills, Inc. and David N. Sills, IV.
Roger D. Landon, Esquire, Lauren A. Cirrinicione, Esquire, Murphy & Landon,
1011 Centre Road, # 210, Wilmington, DE 19805. Attorneys for Defendants David
N. Sills, IV and Washington House Partners, LLC.
Patrick M. McGrory, Esquire, Tighe & Cottrell, P.A., 704 N. King Street, Suite
500, P.O. Box 1031, Wilmington, DE 19899. Attorney for Defendant Architectural
Concepts, P.C.
David L. Baumberger, Esquire, Chrissinger & Baumberger, Three Mill Road, Suite
301, Wilmington, DE 19806. Attorney for Defendant Avalon Associates of
Maryland, Inc.
Gaston Loomis, Esquire, Delany McBride, P.C., 1000 N. West Street, Suite 1200,
Wilmington, DE 19801. Attorney for Defendant Environmental Stoneworks, LLC.
CARPENTER, J.
2
I. FACTUAL & PROCEDURAL BACKGROUND
This litigation arises from the allegedly defective design and construction of
The Washington House Condominium (“Washington House” or “the
Condominium”). Located on Main Street in Newark, Delaware, the Washington
House contains fifty-four residential units and four commercial units, two of which
are owned by the University of Delaware.1
Construction of the Condominium concluded in the fall of 2008. It was not
long before the Washington House was plagued by water infiltration issues, among
other problems. The Condominium was eventually discovered to contain systemic
design and construction defects, which resulted in, most notably, the failure and
progressive detachment of the building’s exterior masonry veneer. On January 14,
2015, Washington House Condominium Association (“WHCA”), an
unincorporated association of unit owners, and individual unit owners William and
Tamara Montgomery (collectively, “Plaintiffs”) filed the instant action against
Defendants, each of whom allegedly played a role in the defective design,
construction, and repair of the Condominium.
1
Compl. ¶ 1.
3
A. The Washington House Project
Defendant Daystar Sills, Inc. (“Daystar”) is a Delaware corporation engaged
in the business of constructing and developing commercial and residential
buildings. Defendant David N. Sills, IV (“Mr. Sills”) is Daystar’s President and
sole stockholder. Mr. Sills also co-owns and manages Defendant Washington
House Partners, LLC (“WHP”).2 Mr. Sills formed WHP in 2006 for purposes of
purchasing the property upon which the Washington House was built.3
Once WHP acquired the land for the Washington House project, it hired
Daystar, as “Contractor,” to build the Condominium.4 In this regard, Daystar
would be responsible for reviewing architectural plans, soliciting bids, hiring
subcontractors, and scheduling, producing, and invoicing work for the project,
among other things.5 In its contract with WHP, Daystar promised to “direct and
supervise” the construction of the Washington House “using [its] best skill and
attention.”6
Daystar hired Defendants Architectural Concepts, P.C (“AC”), Avalon
Associates of Maryland, Inc. (“Avalon”), and Environmental Stoneworks, LLC
2
Mr. Sills is a 50% member of WHP. Pls.’ Ex. 606 § 1.7.
3
Compl. ¶ 22.
4
Daystar Sills, Inc. and David N. Sills, IV’s [hereinafter Daystar Defs.] Mot. for Summ. J., Ex.
A. The WHP-Daystar contract reflected that the Condominium was to be completed within 720
days of the commencement of construction.
5
See Deposition of David N. Sills, IV [hereinafter Sills Dep.] (June 30, 2016) at 37:13-23.
6
See Daystar Defs.’ Mot. for Summ. J., Ex. A.
4
(“ESW”) in connection with the project. AC, an architectural firm, was retained in
2006 to prepare the design plans and specifications used to construct the
Condominium. Avalon was hired as a project manager in February 2007.
Avalon’s project management obligations were fulfilled by the company’s sole
owner, Roger Edward Leonard, Jr. (“Mr. Leonard”). Sometime in 2008, Mr.
Leonard was hired by Daystar directly, such that he began performing his
management services as a Daystar employee. Finally, Daystar subcontracted with
ESW to install the Condominium’s exterior masonry veneer.
AC’s original design plans for the Washington House specified that the
building would be constructed with a “full brick” exterior. However, sometime in
late spring/early summer 2007, Mr. Sills approved the decision to use “thin brick”
veneer in place of the full brick for cost and time-saving purposes. The design
change was apparently discussed at a May 2007 meeting among AC and Daystar
representatives. 7 AC representatives expressed concerns about using thin brick for
a project like the Washington House. Daystar nevertheless sought to move
forward with the thin brick system and AC modified its plans accordingly. AC’s
revised plans, dated June 13, 2007, were approved by the city on July 9, 2007.
7
Pls.’ Ex. 624.
5
Mr. Sills and Leonard collaborated in selecting the manufacturer of the thin
brick product ultimately used on the Condominium: non-party Marion Ceramics,
Inc. This decision was apparently made despite the fact that, at the time, Marion
Ceramics did not provide manufacturer installation instructions for their thin brick
product. Pursuant to the August 20, 2007 subcontract, ESW was hired by Daystar
to install the product on the building’s exterior façade.8
On February 22, 2008, Michael Cihlar (“Mr. Cihlar”) of AC emailed Mr.
Leonard. The email indicates that AC “continually expressed [its] concern” to
Daystar “regarding the appropriateness of exterior thin brick on a building subject
to freeze/thaw in the North East climate.”9 Mr. Cihlar explained that, despite
further research, AC could not locate one “organization, institute, agency, or
company that will stand behind a thin brick assembly as a whole in this climate.” 10
As a result, AC informed Daystar that it was “proceeding at [its] own risk” and
advised that Daystar continue its due diligence and carefully monitor the
installation of the veneer to ensure “the ability of movement, flashing, and
drainage of the system.”11
8
Pls.’ Ex. 653.
9
Pls.’ Ex. 659.
10
Id.
11
Id.
6
Mr. Leonard forwarded Mr. Cihlar’s email to Mr. Sills, and also passed on
AC’s concerns to ESW. ESW assured Daystar that the exterior veneer would be
installed according to ESW’s standards and that ESW would have the
manufacturer certify the installation.12 It does not appear ESW ever retrieved any
certification from the manufacturer about ESW’s internal installation procedures.
Nevertheless, Mr. Sills allegedly insisted construction move forward as planned in
order to keep the project on schedule.
B. The Declaration & Code of Regulations
On October 17, 2008, with construction nearly completed, Mr. Sills signed
and recorded a Declaration Establishing a Plan for Condominium Ownership
(“Declaration”) on WHP’s behalf pursuant to Delaware’s Unit Property Act.13
WHP also adopted and recorded a Code of Regulations (“the Regulations”)
governing matters such as the use, occupancy, management, and operation of the
Condominium.14 The Regulations established the WHCA, through which the unit
owners would be responsible for “administering the Condominium.” 15 Although
“the affairs of the Condominium” would ultimately be controlled by “the Council,”
12
Pls.’ Ex. 661A.
13
See 25 Del. C. §§ 2201-2246.
14
Daystar Defs.’ Mot. for Summ. J., Ex. G [hereinafter COR].
15
COR at 2.
7
which possesses “all of the powers and duties necessary for the administration
of…the Condominium.”16
WHP, as Declarant for the Condominium, had the power to designate the
members of the Council during the “Developer Control Period.”17 The Developer
Control Period would last until 80% of the Condominium’s residential units were
purchased from WHP, at which point the power to elect Council members would
be turned over to the unit owners. WHP named Mr. Sills the original and sole
member of the Council during the Developer Control Period.18 Control and
operation of the Washington House would not be fully turned over to a unit-owner-
elected Council until January 19, 2012, as discussed further infra (the
“Turnover”).19
Once the Condominium’s governing documents were filed and recorded,
WHP began selling units at the Washington House, with the first unit purchased on
October 23, 2008. More than half of the residential units would be sold within the
Condominium’s first year.
16
Id. at 2, 5.
17
Id. at 35.
18
Compl. ¶ 22.
19
Id. ¶ 33. According to Plaintiffs, prior to this time, “all decisions regarding oversight,
inspection, evaluation, maintenance and repair of the condominium common elements, and all
decisions regarding the dissemination of information regarding the same, were made by David
Sills.” Id. ¶ 37.
8
C. The ESW-Daystar Action
Daystar was ultimately dissatisfied with ESW’s work on the Washington
House’s exterior. In an email dated November 14, 2008, Mr. Sills told ESW that
the work “look[ed] horrible” and characterized his predicament as a “no win”
situation:
I have a poor job that has been torn down, re-done, and is still a poor job. If I
re-do it again it affects people that have moved into the building and it
affects sales and marketing. Do you want me to put a value on that? If I let
you do it I have no confidence you could actually make it look good and the
cost to the project would exceed any monies you think you are due. If I do
nothing than it looks…bad. 20
Having not been paid for its services, ESW filed a mechanics' lien action
against Daystar and WHP on January 30, 2009. Washington House unit owners
were notified in February of 2009 that Daystar was “involved in a payment dispute
with the subcontractor that installed the stone and brick work on the exterior of the
building” and was “actively defending the claim through its attorneys.”21 The
letter, signed by Mr. Sills, assured the owners that no action on their behalf was
necessary and that Daystar would “indemnify all homeowners and the
condominium from the proceeding.”22
20
Pls.’ Ex. 686.
21
Daystar Defs.’ Mot. for Summ. J., Ex. I.
22
Id.
9
On April 9, 2009, Daystar filed a counterclaim against ESW for breach of
contract, breaches of express and implied warranties, and negligence. Daystar
claimed the cast stone veneer ESW installed was “uneven, unsightly,” and
unacceptable.23 Daystar alleged that the veneer appeared “to be rolling and/or
lumpy,” exhibited “uneven joints,” was missing caulk and bricks, contained
inconsistent brick patterns and joints, and was otherwise deficient. 24
The dispute ultimately went to arbitration.25 Daystar retained experts to
evaluate the Condominium’s exterior,26 and cited to their reports its arbitration
submissions. In its Closing Arbitration Brief, submitted December 6, 2011,
Daystar claimed $1.4 million in damages as a result of ESW’s failure to “install
flashing and a weep system,” as required under the Subcontract, and “to correct
deficiencies in its work,” and emphasized the recommendation of its expert that the
veneer be entirely removed and replaced.27
The Arbitrator issued an Order awarding Daystar $400,000.00 on January 6,
2012.28 The only information the unit owners received about the ESW-Daystar
Action was that contained in the February 2009 notice letter. While Mr. Sills’
letter indicated Daystar was actively defending a subcontractor’s claim for
23
Pls.’ Ex. 696A.
24
Id.
25
Pls.’ Ex. 733 (Arbitration Agreement entered November 16, 2011).
26
Pls.’ Exs. 717, 1005.
27
Pls.’ Ex. 1005.
28
The judgment against ESW was satisfied on March 2, 2012.
10
payment, the unit owners were not aware of Daystar’s negligence counterclaim, the
expert reports, or the outcome of the 2012 Arbitration.
D. Issues Experienced by Washington House Unit Owners
The record reflects that, beginning in 2009, unit owners had experienced
various water leak issues.29 These issues were often noted at meetings of the
Washington House unit owners (“Owners’ Forum”).30 Unit owners would inform
Daystar about any issues, and Daystar employees would undertake all repairs.31
Daystar fixed water intrusion problems occurring in individual units, and
throughout the Condominium.32 Daystar repeatedly assured the unit owners it
would remedy all of the leaks. Accordingly, the owners perceived the leaks as
minor “punch list” or maintenance items.33
In 2010, the unit owners began discussing the Turnover and establishment of
an owner-controlled Council.34 One of the unit owners’ “primary concerns” was
having the building inspected. The purpose of the inspection was apparently to
identify: (1) “items that do not meet code (if any)” to address prior to the Turnover
and (2) “items that homeowners need to be aware of so that they can be addressed
29
Chase Aff. ¶ 4; Daystar Defs.’ Mot. for Summ. J., Exs. M, T.
30
Daystar Defs.’ Mot. for Summ. J., Ex. O at 5.
31
Id., Exs. M, T.
32
Chase Aff. ¶ 5 (claiming Daystar “remedied the leak” in Chase’s unit). Daystar
representatives, including Sills, apparently “repeatedly promised” that all leaks would be
remedied. Id. ¶ 6.
33
Id. ¶ 7.
34
Daystar Defs.’ Mot. for Summ. J., Ex. J.
11
in future years and budgeted based on priority of need and funds available at the
time.”35 Unit owner Pamela Bobbs (“Ms. Bobbs”) obtained a proposal from Alpha
Engineering, Inc. (“Alpha”) to conduct the inspection. The inspection would be
delayed, however, as, at the time, WHP and Mr. Sills controlled the Council, as
well as WHCA’s records and funds. Under these circumstances, the unit owners
felt “it did not seem necessary to obtain a building inspection from a third party
until the transition to an owner-elected Council.”36
In 2010 and 2011, the owners continued to discuss the leaking issues. Unit
owner John Piper experienced water leak issues almost immediately upon moving
into the Washington House in 2009, and at the October 2010 Owners’ Forum,
residents were advised to “watch for similar problems.”37 At the January 2011
Owners’ Forum, unit owners noted “property damage” concerns, including
“sections of the garage ceiling fire retardant crumbling…related to larger water
leak issues” and “unresolved leak problems.” Owners with outstanding problems
were advised to write to Mr. Sills directly.38 All issues reported were recorded in a
consolidated spreadsheet, which the unit owners maintained for purposes of
35
Id., Ex. L (April 2010 meeting summary).
36
Chase Aff. ¶ 8.
37
Daystar Defs.’ Mot. for Summ. J., Exs. M, N, O.
38
Id., Ex. Q at 3.
12
“tracking the issues.”39 At the August 2011 meeting, the unit owners discussed
water leaks in the foyer and stairwells and noted that “nothing on the building
issues list seems to have been done.”40 As of October 2011, there had been “no
action regarding the leaks.”
In November 2011, the owners revisited their plan to have the building
inspected. According to the meeting summary, at that time, there was “nothing in
the budget to cover the cost of the building inspection.” Attendees agreed that,
pending Alpha’s confirmation, the inspection would be delayed until funds were
available but that it would be “prudent” to ensure the inspection was accomplished
before Mr. Sills was “out of the picture.”41 The November 2011 meeting summary
also briefly notes that “[s]ome of the building stone work need[ed] to be repaired”
and Mr. Persak indicated that this issue was on “the list.”42 In December 2011, Mr.
Sills assured the owners he would review their list of issues throughout the
building and “address all of them.”43
The Turnover took place on January 19, 2012 and a unit owner- elected
Council assumed control of the Condominium. Initially, Mr. Sills refused to
39
Id. Indeed, at the February 17, 2011 meeting, owners were reminded to register any issues
experienced in their units with unit owner Bob Persak so that their “composite list” remained “up
to date” and “in an effort to identify possible ‘cross-unit’ problems.” Id., Ex. S at 1.
40
Id., Ex. X at 1.
41
Id., Ex. Z at 2.
42
Id. at 3.
43
Id., Ex. BB.
13
“recognize” the Turnover and relinquish control of the Condominium’s financial
records and bank accounts to the owner-elected Council. Upon threat of legal
action, WHP and Mr. Sills turned over the requested information and authority in
March 2012.
On April 24, 2012, Mr. Persak, as Vice President of the Council, wrote to
Mr. Sills on WHCA’s behalf to notify him of “apparent defects related to the
construction of the Washington House” and the Council’s belief that Mr. Sills, as
the developer of the Condominium, was “legally responsible for the correction of
the[] problems.”44 Mr. Persak attached a “summary report” based on a survey of
unit owners regarding the “water incursion problems.”45
E. Inspections of the Condominium
Alpha’s inspection of the Washington House took place on May 29, 2012.
Alpha inspected only the Condominium’s common areas, including the roof,
exterior, corridors, elevators, etc. Alpha observed the exterior of the building to
assess “the general condition of the foundation and super structure.”46 The walls
and foundation were also inspected “to determine the general condition and to
identify any major structural deficiencies that require costly repair.”47
44
Id., Ex. DD.
45
Id.
46
Id., Ex. EE at 2.
47
Id.
14
Concerning the brick and stone veneer, Alpha’s report provides that “[a]part
from a missing stone and broken light lens, the exterior stone and brick appear in
good condition.”48 However, upon “close examination,” Alpha observed “minor
cracks.” Alpha also noted “very obvious” separation between the sundeck
supports “likely due to differential settlement,” which it advised “should be
watched for further advancement.” Alpha recommended corrective measures with
respect to the exterior rainwater management, including adding gutters to the
balconies and providing a catch basin.49 Alpha also suggested further investigation
of a leak in the deck above the parking garage in order to determine the appropriate
repair.50
In January 2014, the Council engaged a new property manager for the
Condominium: Aspen Property Management, Inc. (“Aspen”). Aspen hired Cogent
Building Diagnostics (“Cogent”) to conduct a more thorough evaluation of the
Washington House in August 2014. Cogent’s inspection apparently revealed
serious and systemic construction defects at the Condominium. 51 According to the
Complaint, the building’s walls, brick exterior, roofing, and drainage systems,
among other things, were negligently designed, constructed, installed, and/or
48
Id. at 3.
49
Id. at 3, 6.
50
Id. at 6.
51
Pls.’ Answ. Br. in Opp’n to Daystar Defs.’ Mot. for Summ. J. at 12.
15
repaired.52 With regard to the walls and exterior veneer, the alleged defects
included:
a. Improper and insufficient attachment of the metal lath base under exterior
brick veneer using non-code-complaint nails pneumatically driven into non-
structural sheathing…resulting in lath which lacks proper support and has
separated from the building face causing overlying exterior masonry veneer
to pull away…and…fall from the building…;
b. Failure to install and/or improper installation of flashing and closures in
exterior brick veneer walls,… resulting in water damage to the wall system
and the occupied spaces of the building…;
c. Improper sealing and blockage of…water drainage pathways above
windows, thus exacerbating …water damage…[to] exterior walls;
d. Failure to install and/or improper installation of sufficient expansion and
control joints in exterior masonry veneer… causing… bricks on the outside
of the building bulging and protruding away from the…veneer walls, fully
detaching from the mortar base, and falling off the building;
e. …[I]nstallation of…veneer mortar base with insufficient thickness…;
f. Improper repairs to localized areas of brick veneer, wherein new lath was
attached using unacceptable nailing methods and was not wired together
with original lath to provide continuous wall support;
g. Improper installation of adhered dry stack manufactured stone
veneer…over concrete masonry unit (“CMU”) walls without continuous
coverage of the CMUs, without water barriers or waterproofing, and without
control or expansion joints, causing water intrusion into the building, water
damage to the stone veneer, and water pocketing, resulting in stones
detaching from…the building following normal freeze-thaw cycles;
…
j. Failure to install control/expansion joints and other closures in parking
garage concrete surfaces, resulting in extensive concrete cracking and
damage to deck pans; 53
52
Compl. ¶¶ 68-69. These defects allegedly “have, in turn, resulted in real and personal property
damage, including…water damage, water infiltration into walls and interior, occupied spaces,
rusty and/or protruding drywall fasteners, water stains, warped hardwood flooring, water
damaged carpet and furniture, premature deterioration, structural instability, and unsafe
conditions[.]” Id. ¶ 70.
53
Id. ¶ 68 (a)-(g), (j). See also id. ¶ 68 (l), (n), (p).
16
As for defects discovered in the Condominium’s drainage systems and roofing, the
Complaint alleges:
h. Failure to provide sufficient surface drainage or proper drainage
provisions at roofs, balconies, patios and walkways, including inadequate
surface slope, insufficient and/or misplaced drain locations, irregular surface
definition, and unnecessary routing of roof run-off water onto these surfaces
resulting in ponding of water, water intrusion under doors and walls into
occupied spaces, and damage to interior spaces and mechanical equipment;
i. Improper roof design and drainage and ice/snow fall protection that
exposes passers-by to avoidable water exposure and potential harm;
…
m. Installation of heavily-sloped, raised metal…roofing far above ground
level without any means of preventing ice and snow from falling a great
distance…, thus posing a safety threat to people and property below;
…
o. Improper installation of membrane roofs, resulting in excessive water
ponding…[and] premature roof leaks;
…
k. Failure to provide proper waterproofing and drainage provisions in the
parking garage, resulting in drains backing up into the garage, water seeping
through and around garage walls, leaking at drains, piping and unsealed
penetrations through the concrete decking and damage to corrugated metal
flooring supports;54
In September 2014, the City of Newark issued a Notice of Violation stating
that the exterior was constructed in violation of applicable building codes and the
54
Id. ¶ 68 (h)-(i), (m), (o), (k). The Complaint also alleges other defects in the building’s
ventilation, insulation, and piping:
q. Failure to install and/or provide insulation and ventilation in confined interstitial
spaces between upper floor units and patio areas resulting in ceiling damage;
r. Insufficient warm air distribution and/or inadequate insulation and air sealing, resulting
in excessively cold indoor air temperatures and drafts during winter weather; and
s. Installation of fire protection system water pipes adjacent to drywall rather than in the
center of walls that has consequently resulted in the pipes being punctured causing water
damage.
See id. ¶ 68 (q)-(s).
17
manufacturer’s installation instructions.55 The Notice required the erection of
safety barriers and scaffolding around the entire building perimeter, in addition to
the removal, repair, and replacement of the exterior masonry veneer.56 The
WHCA was responsible for implementing these corrective measures at a
substantial cost to the unit owners.
E. The Instant Litigation
Plaintiffs filed this litigation on January 14, 2015 seeking recovery of
damages including “costs of repair, costs of remediation, costs of temporary [and]
emergency protection for the public way, expectation damages, costs of
displacement, loss of use, loss of value, and other consequential damages.” 57 The
Complaint, as filed, asserted seven counts against Mr. Sills, Daystar, WHP, AC,
Avalon, and ESW. 58
Plaintiffs have since voluntarily dismissed several counts of the Complaint,59
and just recently settled their dispute with Avalon. Additionally, Plaintiffs’ claims
against ESW were dismissed on October 28, 2015, pursuant to a ruling by this
Court granting ESW’s Motion to Dismiss the Complaint. The Court found that
55
Id. ¶¶ 2, 72.
56
Id. ¶ 67.
57
Id. ¶ 92.
58
The seven counts set forth in the Complaint, as filed, include: (I) Negligence; (II) Breach of
Contract; (III) Breach of Express and Implied Warranty; (IV) Violation of Buyer Property
Protection Act; (V) Breach of Duty in the Organization and Pre–Turnover Control of the
Association; (VI) Negligent Repair; and (VII) Breach of Contract—Third Party Beneficiary
59
Plaintiffs voluntarily dismissed Counts II, III, V, and VII in full.
18
Plaintiffs’ claims against ESW were barred by res judicata as a result of the 2012
Arbitration and judgment.60 Ultimately, what remains are Plaintiffs’ claims for (1)
negligence against AC, Daystar, Mr. Sills, and WHP; (2) negligent repair against
Daystar, Mr. Sills, and WHP; and (3) violation of the Buyer Property Protection
Act against WHP.
Crossclaims for contribution and/or indemnification have also been filed
among the Defendants. At the time of the Court’s October 2015 decision, there
were Crossclaims pending against ESW. That ruling did not address the then-
pending Crossclaims,61 and additional claims were filed against ESW thereafter.
Daystar filed its Answer to the Complaint and Crossclaims seeking “contribution
and/or indemnification” and “contractual indemnification” from ESW on
February 1, 2016.62 AC cross-claimed for contribution from each co-Defendant
and ESW on February 18, 2016. 63
60
Washington House Condo. Ass'n of Unit Owners v. Daystar Sills, Inc., 2015 WL 6750046, at
*2, 6-7 (Del. Super. Ct. Oct. 28, 2015). Motions to Dismiss the Complaint had also been filed on
behalf of AC, Daystar, and Sills, which were argued before this Court in addition to ESW’s
Motion in July 2015. As reflected in its October 2015 opinion, the Court denied dismissal with
regard to Plaintiffs’ claims against Daystar, Sills, and AC.
61
On March 4, 2015, Avalon filed an Answer to the Complaint along with Crossclaims against
each co-Defendant for contribution and indemnification. On April 20, 2015, Mr. Sills and WHP
filed their respective Answers and Crossclaims for contribution and/or indemnification from AC,
Avalon, and ESW.
62
Daystar Sills, Inc.’s Answ. and Crosscls. ¶¶ 151-71.
63
While ESW did answer crossclaims of some of the Defendants, it does not appear to have ever
answered those filed on behalf Avalon or AC.
19
There are five motions presently before the Court. ESW has moved to
dismiss Daystar’s Crossclaims. Three Motions for Summary Judgment have been
filed on behalf of: (1) Defendants Daystar and Mr. Sills (“Daystar Defendants”);
(2) Mr. Sills in his capacity as co-manager of WHP;64 and (3) AC. Lastly, WHP
has moved to amend its Crossclaim against ESW. 65 This is the Court’s decision
on those Motions.
II. MOTION TO DISMISS CROSSCLAIMS
On April 21, 2016, ESW moved to dismiss Daystar’s Crossclaims pursuant
to Delaware Superior Court Civil Rule 12(b)(6). 66 Under Rule 12(b)(6), the Court
may grant dismissal for “failure to state a claim upon which relief can be
granted.”67 In deciding a motion to dismiss, the Court must view the record in a
light most favorable to the non-moving party and accept as true the well-pleaded
allegations of Daystar’s Crossclaims.68 The Court will grant a motion to dismiss
64
Mr. Sills is represented by two different sets of counsel in this case. At argument, one of his
attorneys explained this dual-representation: “Sills is being represented by two different
insurance companies. One…is paying for his defense as to WHP, and then [the second] is
paying for his defense as to Daystar.” Hearing Tr. (Jan. 18, 2017) at 66: 12-23.
65
Avalon had also moved for summary judgment; however, Plaintiffs have since settled with
Avalon, thereby rendering its Motion moot.
66
The parties argued their respective positions before the Court and, since settlement discussions
and mediation was progressing, the Court reserved decision on ESW’s Motion. While partially
successful, the mediation has not resolved the instant dispute. Perhaps the determinations made
by the Court will kick-start additional discussions among the parties.
67
See Super. Ct. Civ. R. 12(b)(6).
68
See Furnari v. Wallpang, Inc., 2014 WL 1678419, at *3 (Del. Super. Ct. Apr. 16, 2014) (citing
Greenly v. Davis, 486 A.2d 669, 670 (Del. 1984)); Great Lakes Chem. Corp. v. Pharmacia
Corp., 788 A.2d 544, 548 (Del. Ch. 2001) (citing In re USACafes, L.P. Litig., 600 A.2d 43, 47
(Del. Ch. 1991)).
20
only where “it appears with reasonable certainty that, under any set of facts that
could be proven to support the claims asserted, the [claimant] would not be entitled
to relief.”69
ESW argues Daystar’s Crossclaims must be dismissed as “procedurally
defective” because they were filed after Plaintiffs’ claims against ESW had already
been dismissed. Additionally, ESW maintains Daystar’s claims, together with
“[a]ll cross claims against ESW,” should be dismissed as barred by the doctrine of
res judicata.70 Finally, ESW requests the imposition of costs and attorneys’ fees
because “Daystar’s Crossclaims, brought months after Plaintiffs’ claims have been
dismissed and years after an arbitration award between ESW and Daystar, [are]
vexatious and unfairly burdensome.”71 Daystar, WHP, Mr. Sills, Avalon, and AC
have each opposed ESW’s Motion and Plaintiffs filed a limited objection.
The issue before the Court is essentially whether, given the 2012 Arbitration
and the Court’s previous ruling dismissing Plaintiffs’ claims against ESW, the
cross claims asserted against ESW for contribution and/or indemnification should
remain part of the litigation. The Court will first address the procedural
69
See Furnari, 2014 WL 1678419, at *3 (quoting Clinton v. Enterprise Rent–A–Car Co., 977
A.2d 892, 895 (Del. 2009)).
70
ESW’s Omnibus Reply Br. ¶ 2.
71
ESW’s Mot. to Dismiss Crosscls. ¶¶ 3, 22.
21
appropriateness of Daystar’s Cross Claim, before turning to ESW’s res judicata
contentions.
A. Is Daystar’s Claim Against ESW “Procedurally Defective?”
Daystar filed its Crossclaim on February 1, 2016, seeking contribution
and/indemnification from ESW pursuant to 10 Del. C. § 6301, et seq., as well as
contractual indemnification under a subcontract agreement between the parties.72
In its pleading, Daystar acknowledged the Court’s October 2015 decision and the
curious procedural posture of the litigation, but asserted it was “required to assert
its claim over against ESW” herein “for purposes of jury apportionment and
application of the Uniform Contribution Among Tortfeasors Law….”73 Otherwise,
Daystar claims that it would “risk[] being precluded from having the jury allocate
the percentage liability of ESW and the Court then reducing any subsequently
entered verdict by the percentage liability allocated ESW, based upon the prior
finding of liability and award of damages against ESW.”74 This is particularly
critical to the other Defendants as ESW was the subcontractor who installed the
faulty masonry work and, but for the Arbitration award and the Court’s October
2015 ruling, would be in a position where significant liability could be found.
72
Daystar Sills, Inc.’s Answ. and Crosscls. ¶¶ 151-71.
73
Id. ¶¶ 156, 161.
74
Id. ¶ 161.
22
Because Plaintiffs’ claims against ESW were dismissed over three months
before Daystar filed its Crossclaim against ESW, ESW argues Daystar’s claims are
“procedurally defective” and should be dismissed.75 While ESW cites no rule or
authority in support of this contention, the Court would think Superior Court Civil
Rule 13(g) an appropriate starting point:
Cross-Claim Against Coparty. A pleading may state as a cross-claim
any claim by one party against a coparty arising out of the transaction
or occurrence that is the subject matter either of the original action or
of a counterclaim therein, or relating to any property that is the subject
matter of the original action. Such cross-claim may include a claim
that the party against whom it is asserted is or may be liable to the
cross-claimant for all or part of a claim asserted in the action against
the cross-claimant.76
Like its federal counterpart, Superior Court Civil Rule 13(g) allows a party
to file cross claims against “co-parties.”77 In this regard, courts have held that “[a]
cross-claim cannot be asserted against a party who was dismissed from the action
previous to the assertion of the cross-claim.”78 That said, “dismissal of the original
complaint as to one of the defendants named therein does not operate as a
75
ESW Mot. to Dismiss Crosscls. ¶ 16.
76
Del. Super. Ct. Civ. R. 13(g).
77
See id.; Fed. R. Civ. P. 13. See also Samoluk v. Basco, Inc., 1989 WL 135703, at *1–2 (Del.
Super. Ct. Nov. 3, 1989) (acknowledging that federal cases interpreting Rule 13 are “helpful”
because Delaware’s version is “substantially the same as” the Rule 13 under the Federal Rules).
78
See Wake v. United States, 89 F.3d 53, 63 (2nd Cir.1996) (emphasis added) (quoting Glaziers
& Glassworkers Union v. Newbridge Secs., 823 F. Supp. 1188, 1190 (E.D.Pa.1993)).
23
dismissal of a cross-claim filed against such defendant by a co-defendant.”79 In
other words, where a Crossclaim is properly filed against a co-party, “[it] [will] not
cease to be so because the party to whom they were addressed subsequently ceased
to be a co-party.”80
There is no dispute that the Crossclaims filed against ESW prior to the
October 28, 2015 dismissal ruling were “properly filed.” The Crossclaims of Mr.
Sills, and WHP against then-Defendant ESW fall squarely within Rule 13(g) and
were thus unaffected by the Court’s subsequent ruling dismissing Plaintiffs’ claims
against ESW. At the time Daystar filed its Crossclaims, however, ESW remained
in the litigation solely as a Crossclaim-Defendant.81 The issue then becomes
whether Daystar and ESW could be considered “co-parties” for purposes of Rule
13(g).
The term “co-party” is not defined in the Rules. As other courts have
recognized, the term would clearly seem to exclude non-parties and opposing
parties.82 Indeed, as Rule 13(g) governs claims made among co-parties, Rule 14
79
See Samoluk, 1989 WL 135703, at *1–2 (citing Aetna Ins. Co. v. Newton, 398 F.2d 729, 734
(3d Cir. 1968)).
80
See id. (quoting Frommeyer v. L. & R. Const. Co., 139 F. Supp. 579, 586 (D.N.J. 1956)).
81
It seems this would be the case with regard to AC’s Crossclaim as well. AC filed its
Crossclaim for contribution against Defendants, including ESW, over two weeks after Daystar.
Interestingly, ESW does not seem to challenge the procedural appropriateness of AC’s claims.
82
See Luyster v. Textron, Inc., 266 F.R.D. 54, 57 (S.D.N.Y. 2010) (“It seems clear that a coparty
against whom a party can cross-claim is neither a non-party nor a party it formally opposes….”)
(citing 6 Wright, Miller & Kane, Federal Practice & Procedure § 1431, at 233–35).
24
addresses claims of a defending party against non-parties and Rule 13(a) provides
for counterclaims against opposing parties.83 While some courts have construed
“co-party” as referring to a party of “like status,” others interpret the term more
broadly to include “any party that is not an opposing party.”84
Ultimately, the Court finds the more broad interpretation of “co-party”
appropriate under the circumstances of this case. ESW was undoubtedly still a
party to the litigation at the time Daystar filed its Crossclaim and only from that
point forward could the two parties be classified as formally opposing one
another.85 While the Court recognizes that Crossclaims are more commonly
invoked among co-Defendants or co-Third Party Defendants, ESW has not raised
83
See Del. Super. Ct. Civ. R. 13(a) (“A pleading shall state as a counterclaim any claim
which…the pleader has against any opposing party….”) (emphasis added); Del. Super. Ct. Civ.
R. 14(a) (“At any time after commencement of the action a defending party, as a third-party
plaintiff, may cause a summons and complaint to be served upon a person not a party to the
action who is or may be liable to the third-party plaintiff for all or part of the plaintiff's claim
against the third-party plaintiff.”) (emphasis added).
84
See Luyster, 266 F.R.D. at 58 (“In multiparty actions, courts have disagreed regarding whether
parties on the same side, but not at the same level, of an action are ‘coparties’ that may cross-
claim against each other.”) (citing John D. Bessler, Note, Defining “Co–Party” Within Federal
Rule of Civil Procedure 13(g): Are Cross–Claims Between Original Defendants and Third–Party
Defendants Allowable?, 66 IND. L.J. 549 (1991) and Arthur F. Greenbaum, Jacks or Better to
Open: Procedural Limitations on Co–Party and Third–Party Claims, 74 MINN. L. REV. 507
(1990)); Murray v. Haverford Hosp. Corp., 278 F. Supp. 5, 6-7 (E.D. Pa.1968) (dismissing cross-
claims of defendants against third party defendant upon finding Rule 13(g) “contemplated
that…cross-claims should be asserted against parties having like status, such as, co-defendants”);
Earle M. Jorgenson Co. v. T.I. U.S., Ltd., 133 F.R.D. 472, 474-75 (E.D. Pa. 1991) (favoring
construction of “co-party” as “mean[ing] any party that is not an opposing party”).
85
See Earle M. Jorgenson Co., 133 F.R.D. at 475 (“‘Opposing parties’…are parties that formally
oppose each other on a pleaded claim, such as plaintiffs and original defendants, or third-party
plaintiffs and the third-party defendants they have joined. Inasmuch as defendant…and third-
party defendant…are not such opposing parties, [the] cross-claim is proper under Rule 13(g).”).
25
any authority to persuade the Court to find that ESW and Daystar, as co-
Crossclaim Defendants or as Defendant and Crossclaim Defendant, are not “co-
parties” for purposes of Rule 13(g).86
Nor is the Court convinced that dismissal on that basis would adhere to the
requirement that the Delaware Superior Court Rules “be construed and
administered to secure the just, speedy and inexpensive determination of every
proceeding.”87 As Daystar points out, “the filing of a cross-claim is a prerequisite
to the apportionment of liability between joint tort-feasors based upon relative
degrees of fault.”88 Further, “the general policy behind allowing cross-claims is to
86
See Luyster, 266 F.R.D. at 62 (“[S]uch construction ‘comports with the structure of the federal
rules, which envision three types of claims that may be asserted by defendants’: Rule 13(a)
counterclaims against opposing parties, Rule 14(a) third-party claims against non-parties, and
Rule 13(g) cross-claims against coparties.”) (quoting Georgia Ports Auth. v. Construzioni
Meccaniche Industriali Genovesi, S.P.A., 119 F.R.D. 693, 695 (S.D. Ga. 1988) (adopting broad
definition of “co-party” and concluding that “[c]ertainly, the relationship between an original
defendant and a third-party defendant fits somewhere into [the] framework” provided by Rules
13(a), 13(g), and 14 such that characterizing the relationship as that of co-parties “appear[ed] to
be the logical choice”)).
87
Del. Super. Ct. Civ. R. 1.
88
See Ikeda v. Molock, 603 A.2d 785, 787 (Del. 1991) (“The conclusion that 10 Del.C. Ch. 63
requires a cross-claim to be filed before a jury may determine relative degrees of fault is further
supported by the proposition that juries should not determine matters which are not litigated
before them.”). In Ikeda, the Supreme Court of Delaware considered the Superior Court’s denial
of a defendant’s motion to amend his pleadings to include crossclaims against two co-
defendants, both of whom had settled with the plaintiff just prior to trial, and refusal to give a
joint tortfeasor instruction to the jury. The Court found the Superior Court's decision denying the
defendant “the right to file the cross claims caused him significant prejudice[:]” “[a] judgment of
$925,000 was rendered against him, whereas, St. Francis and Dr. Naik settled for a much smaller
sum” and the defendant “was unable to reduce the judgment by the potential damages which the
jury could attribute to the negligence of St. Francis and Dr. Naik.” Id. As a result, the
defendant’s “monetary responsibility…might be disproportionate to the injuries caused by his
negligence[,]” an outcome the provisions of title 10, chapter 63 of the Delaware Code were
designed to avoid. Id.
26
avoid multiple suits and to encourage the determination of the entire controversy
among the parties before the court with a minimum of procedural steps.”89 As a
result, courts often interpret Rule 13(g) “liberally in order to settle as many related
claims as possible in a single action.”90 Importantly, because ESW remained in the
litigation and had not filed a Crossclaim against Daystar, the options of asserting
any claim for indemnification and contribution as a counterclaim or in a third party
complaint were simply unavailable to Daystar. Indeed, “[i]f a defending party
cannot file a cross-claim against another party on the same side, but not at the same
level, of an action, then the Rules are silent regarding how such a claim might be
brought.”91
It appears granting ESW’s request for dismissal of the Crossclaims as
“procedurally defective” would result in multiple actions being pursued, create
unnecessary procedural hurdles, and further complicate this already complex
litigation. To facilitate this outcome would clearly “run[] contrary to the purposes
of Rules 13 and 14, and the mandate of Rule 1”92 and could lead to a verdict where
fault is unfairly apportioned. As such, ESW’s Motion to Dismiss Daystar’s claims
as procedurally barred is DENIED.
89
See Luyster, 266 F.R.D. at 62-63 (quoting 6 Wright et al., Federal Practice & Procedure §
1431, at 229-30).
90
See id.
91
See id.
92
See id.
27
B. Are the Crossclaims Against ESW Barred by Res Judicata?
Next, ESW urges the Court to dismiss “any and all crossclaims” against it
according to the doctrine of res judicata. Res judicata will bar a claim where the
party raising the doctrine can show satisfaction of the following five-part test:
(1) the original court had jurisdiction over the subject matter and the parties;
(2) the parties to the original action were the same as those parties, or in
privity, in the case at bar; (3) the original cause of action or the issues
decided was the same as the case at bar; (4) the issues in the prior action
must have been decided adversely to the appellants in the case at bar; and (5)
the decree in the prior action was a final decree.93
The prior action upon which ESW relies is the 2012 Arbitration among
ESW, Daystar, and WHP.94 The 2012 Arbitration involved Daystar’s counterclaim
alleging negligence against ESW for the defective masonry work it completed on
the Condominium. There, Daystar sought to recover the cost to correct, repair, and
replace ESW's deficient work.
In October 2015, this Court found res judicata precluded Plaintiffs’ claim
for negligence as against ESW as a result of the 2012 Arbitration. The Court
reasoned:
Daystar and ESW consented to having the matter arbitrated and agreed to
resolve all disputes and matters in controversy. The parties further agreed
that the arbitration would be a final adjudication. … Plaintiffs are in privity
93
LaPoint v. AmerisourceBergen Corp., 970 A.2d 185, 192 (Del. 2009) (quoting Dover
Historical Soc’y, Inc. v. City of Dover Planning Comm’n, 902 A.2d 1084, 1092 (Del. 2006)).
94
“Valid and final arbitration awards are given the same effect as a court's judgment under the
doctrine of res judicata.” Mehiel v. Solo Cup Co., 2007 WL 901637, at *5 (Del. Super. Ct. Mar.
26, 2007) (citing Cooper v. Celente, 1992 WL 240419, at *6 (Del. Super. Ct. Sept. 3, 1992)).
28
with Daystar….Daystar pursued a claim against ESW for negligent
workmanship in the construction of the stone veneer of the Condominium
which is the same complaint Plaintiffs have with ESW.95
According to ESW, the Court’s res judicata reasoning applies with even greater
force to Daystar’s Crossclaims because Daystar was a party to the 2012
Arbitration.96 ESW contends application of the doctrine is further warranted
because the Crossclaims and the 2012 Arbitration “both involve” Daystar’s
assertions of “negligence/negligent workmanship and breach of contract…against
ESW for its masonry work at the Condominium” and the 2012 Arbitration was
decided adversely to ESW.97
In the present litigation, Daystar asserts two Crossclaims against ESW. In
the first,98 Daystar seeks contribution and indemnification, “as applicable and
allowed by law,” from ESW “who has already been determined to be liable for the
harms alleged by Plaintiffs….”99 Daystar demands that, should Plaintiffs prevail on
their negligence claim, “liability be apportioned against all Defendants, including
95
Washington House Condo. Ass'n of Unit Owners, 2015 WL 6750046, at *6-7 (“Thus, the
Court is satisfied that the original cause of action was the same as the current claim. Daystar's
counterclaim in the ESW–Daystar Action alleged negligence against ESW for the defective
masonry work it completed on the Condominium. Daystar sought to recover the cost to correct,
repair, and replace ESW's deficient work. The present case also seeks recovery for ESW's
negligent workmanship in its masonry construction on the Condominium. Plaintiffs' claim that
the current defects were discovered after the judgment was entered in the ESW–Daystar Action
does not preclude res judicata.”).
96
ESW’s Mot. to Dismiss Crosscls. ¶ 19.
97
Id. ¶ 20.
98
Daystar Sills, Inc.’s Answ. and Crosscls. ¶¶ 151-65.
99
Id. ¶ 163.
29
Cross-Claim Defendant ESW[,]…for contribution” according to “each co-
defendant’s pro rata share” of fault and that any verdict entered be reduced “by the
percentage negligence the jury finds attributable to the negligent conduct of
ESW.”100 Daystar’s second claim seeks contractual indemnification from ESW
based on the ESW Subcontract.101 The Subcontract obligated ESW to indemnify
and hold harmless Daystar, “[t]o the fullest extent permitted by law,” “from and
against claims, damages, lawsuits, losses and expenses, including but not limited to
attorneys’ fees” arising from ESW’s work on the Condominium “but only to the
extent caused by [ESW’s] negligent acts or omissions….” Daystar claims it has
and will continue to incur costs and attorney’s fees in connection with this
litigation and that ESW has not, to date, honored its obligations under the
Subcontract.102
In response to ESW’s Motion to Dismiss, Daystar argues res judicata is
inapplicable because neither indemnity nor contribution were litigated or
adjudicated in the 2012 Arbitration. In support of its position, Daystar cites
LaPoint v. AmerisourceBergen Corp. In LaPoint, the Delaware Supreme Court
held that res judicata could not bar a claim for indemnification where the issue of
indemnification had not been raised or “adjudicated” in the prior Chancery
100
Id. ¶¶ 162, 165.
101
Id. ¶ 166.
102
Id. ¶¶ 166-68, 171.
30
action.103 The Court recognized that “[c]ontractual rights that are triggered and
pursued after the initial action is filed…are not barred by res judicata because a
prior judgment ‘cannot be given the effect of extinguishing claims which did not
even then exist.’”104 The LaPoint Court emphasized that the record in that case
“reflect[ed] that the events necessary to support an indemnification claim had not
occurred before the conclusion of the proceedings in the Chancery Action” and
“[t]hose facts were not, and could not have been, known to the plaintiffs in the
second action at the time of the first action.”105
Here, like in LaPoint, there is simply no indication that Daystar’s
entitlement to indemnification or contribution had been raised in connection with
the 2012 Arbitration. Nor could the issues of contribution and indemnification
have been addressed at the 2012 Arbitration, given the apparent absence of third-
party claims against Daystar at that time. Rather, the 2012 Arbitration was
intended solely to resolve the parties’ direct claims against one another for money
damages. Plaintiffs did not discover the allegedly defective construction until
103
See LaPoint, 970 A.2d at 192 (“The record reflects that the Bridge Stockholder
Representatives did not raise the indemnification claim in the Court of Chancery. Since the
indemnification claim was not ‘adjudicated’ in the prior Chancery Action, we hold the
indemnification claim in the Superior Court was not barred by that element of res judicata.”).
104
See id. at 194 (quoting Lawlor v. Nat'l Screen Serv. Corp., 349 U.S. 322 (1955)) (“ABC's
refusal to indemnify the Bridge Stockholder Representatives after the condition precedent to that
right had been satisfied (the Court of Chancery's determination that ABC had breached the
agreement) gave rise to a second independent cause of action under the Merger Agreement.”).
105
See id. at 195.
31
2014 and did not commence the instant litigation until January 2015. It was not
until this point in time that Daystar’s claims for contribution and indemnification
first arose. Like the Chancery action in La Point, the Order issued in connection
with the 2012 Arbitration will not “be given the effect of extinguishing claims
which did not even then exist.”106 ESW’s Motion to Dismiss Daystar’s
Crossclaims based on the doctrine res judicata is therefore DENIED. The Court
will also deny ESW’s request for attorney’s fees and costs.
Finally, ESW’s Motion is denied to the extent it requests dismissal of
crossclaims filed by other Defendants. Throughout its briefs, ESW argues that res
judicata bars “any and all crossclaims” against it because the “remaining
Defendants…are ‘in privity’ with Plaintiff[s]” and all share “the same apparent
interest: to find ESW was negligent, and have ESW pay its fair share of the
loss.”107 While the Court suspects that this assertion is flawed for a number of
reasons, it is sufficient to deny the Motion on the same basis articulated above: the
Defendants’ contribution and indemnification claims against ESW were not, nor
could have been, adjudicated in the 2012 Arbitration.
106
See id. at 194. See also 10 Del. C. § 6302(b) (“A joint tortfeasor is not entitled to a money
judgment for contribution until he or she has by payment discharged the common liability or has
paid more than his or her pro rata share thereof.”).
107
ESW’s Reply Br. ¶¶ 1-2.
32
III. MOTIONS FOR SUMMARY JUDGMENT
The Court will grant summary judgment pursuant to Delaware Superior
Court Civil Rule 56 “if the pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that the moving party is entitled to a
judgment as a matter of law.”108 In reviewing a Rule 56 motion, the Court must
consider the facts in a light most favorable to the non-moving party.109 The Court
will deny summary judgment where the record before it “reasonably indicates that
a material fact is in dispute or ‘if it seems desirable to inquire more thoroughly into
the facts in order to clarify the application of law to the circumstances.’”110
A. Daystar Sills, Inc. & David Sills
The claims that remain against Daystar and Mr. Sills include Count I
(Negligence) and Count VI (Negligent Repair). Daystar and Mr. Sills (in his
capacity for Daystar) contend they are entitled to summary judgment because: (1)
all claims against Mr. Sills, individually, must fail because he was acting at all
relevant times in his corporate capacity and, alternatively, because Plaintiffs have
not produced expert testimony specific to his standard of care; (2) Count I of the
108
Super. Ct. Civ. R. 56(c).
109
See Alabi v. DHL Airways, Inc., 583 A.2d 1358, 1361 (Del. 1990).
110
See Comet Sys., Inc. S’holders' Agent v. MIVA, Inc., 980 A.2d 1024, 1029 (Del. Ch. 2008)
(quoting Ebersole v. Lowengrub, 180 A.2d 467, 470 (Del.1962)).
33
Complaint (Negligence) is barred by the statute of limitations; and (3) WHCA
lacks standing because it filed and pursued this litigation in a manner inconsistent
with the Association’s Code of Regulations. Defendant WHP has filed a Notice of
Adoption with respect to the lack of standing argument.111
1. David Sills
Mr. Sills is represented by two different sets of counsel in this case. One law
firm is representing him in conjunction with Daystar and the other is defending
him in his capacity as co-manager of WHP.112 As a result, two separate Motions
for Summary Judgment have been filed implicating Mr. Sills. Both Motions assert
essentially the same two grounds in support of summary judgment: (1) Mr. Sills
cannot be held personally liable for the alleged negligence of WHP and Daystar;
and (2) Plaintiffs have failed to identify an expert specific to Mr. Sills’ individual
negligence. The Court will address these issues, as they relate to both entities,
collectively in turn.
a. Personal liability
Generally, an officer cannot be held liable for the actions of a corporation
merely by virtue of his or her corporate position. However, under the “personal
111
D.I. 242. WHP’s Notice of Adoption purports to adopt this defense as made in the Motions
of both Daystar and AC. However, from what the Court can tell, AC has not argued for
dismissal based on WHCA’s noncompliance with the Code of Regulations.
112
See Def. David N. Sills’ (In His Capacity for Washington House Partners, LLC) Reply Br. in
Supp. of Mot. for Summ. J. at 2; Hearing Tr. (Jan. 18, 2017) at 66: 12-23.
34
participation doctrine,” an officer who “directly participates in…tortious conduct”
may face personal liability even if he or she was “acting on behalf of the
corporation.”113 The doctrine aims to prevent corporate officers from escaping tort
liability simply because the officer’s actions were taken “in the name of the
corporation.”114 For an officer-defendant to be held liable, “it must be for acts of
their own, and not merely for acts or omissions of the Corporation.”115 Allegations
of “nonfeasance or the omission of an act which a person ought to do” are
insufficient.116 Rather, the officer must be alleged to have acted affirmatively by
“directing, ordering, ratifying, approving or consenting to the tort” to face personal
liability.117
Here, it is clear Mr. Sills not only possessed significant control over but was
in fact Daystar, WHP, and the Washington House project. Daystar is wholly-
113
See Yavar Rzayev, LLC v. Roffman, 2015 WL 5167930, at *6 (Del. Super. Ct. Aug. 31, 2015)
(emphasis added). See also Ayers v. Quillen, 2004 WL 1965866, at *3 (Del. Super. Ct. June 30,
2004) (“A director, officer, or agent is not liable for torts of the corporation merely because of
his office; he is liable for torts in which he has participated or which he has authorized or
directed.”) (citing 19 C.J.S. Corporations § 544 (1990)); St. James Recreation, LLC v. Rieger
Opportunity P’rs, LLC, 2003 WL 22659875, at *2 (Del. Ch. Nov. 5, 2003) (“The default rule in
American law is that corporate officials may be held individually liable for their tortious conduct
even if they were acting officially for the corporation in committing the tort.”).
114
See Brandt v. Rokeby Realty Co., 2004 WL 2050519, at *9 (Del. Super. Ct. Sept. 8, 2004)
(quoting Heronemus v. Ulrick, 1997 WL 524127, at *2 (Del. Super. Ct. July 9, 1997)).
115
See Gassis v. Corkery, 2014 WL 3565418, at *5 (Del. Ch. July 21, 2014) (“Under agency
principles, a corporation is liable for the acts of its officers and directors, but acts taken by the
corporate principal are not automatically imputed to its agents.”), aff'd, 113 A.3d 1080 (Del.
2015).
116
Brandt, 2004 WL 2050519, at *10; Heronemus, 1997 WL 524127, at *2-3.
117
See Gassis, 2014 WL 3565418, at *5; Heronemus, 1997 WL 524127, at *2.
35
owned by Mr. Sills and he serves as President of the construction company. When
asked about the management of Daystar, Mr. Sills responded that he “pretty much
run[s] the whole thing.”118 Mr. Sills also formed WHP for the sale and
management of the project.119 It would appear Mr. Sills used his control over these
entities to cause WHP to hire Daystar as general contractor for the Washington
House project, to name himself the sole Council member during the Developer
Control Period, and to direct all repair and property management work to Daystar.
All major decisions relating to the construction of the Condominium were made by
Mr. Sills, and he signed all contracts, subcontracts, and payment applications on
behalf of Daystar and WHP.
While these facts alone are incapable of establishing liability under the
personal participation doctrine, Plaintiffs have alleged sufficient facts supporting
that Mr. Sills personally “directed, ordered, ratified, approved, or consented to”
Daystar’s negligent construction and repair of the Condominium. Significantly,
Mr. Sills approved the decision to direct AC’s modification of its design plans for
the exterior façade from full brick to thin brick veneer. Mr. Sills also apparently
participated in selecting the thin brick product ESW ultimately installed on the
building’s exterior. While it is unclear whether Mr. Sills knew or should have
118
Sills Dep. (June 30, 2016) at 9:23-24, 10:1-3.
119
Compl. ¶ 22.
36
known the risks of using the thin brick system prior to directing the change to AC’s
drawings,120 he was aware of AC’s concerns with the veneer by February 2008 at
the latest. At that time, Mr. Cihlar explained that AC had “continually expressed
[its] concern…regarding the appropriateness of exterior thin brick” on a building
like the Washington House, which is “subject to freeze/thaw in the North East
climate.”121 AC’s email emphasized the lack of support and guidance for utilizing
thin brick assembly in such a climate, and advised that Daystar carefully monitor
the installation of the veneer to ensure “the ability of movement, flashing, and
drainage of the system.”122 Despite warnings, Mr. Sills directed that the project
proceed and apparently even attempted to expedite ESW’s installation of the
veneer.123 These facts, if proven, are exactly the kind that should and do prevent
120
There was apparently a meeting between Daystar and AC representatives in May 2007, before
any modification was made to the original design plans, during which AC first expressed its
concern about employing the thin brick system. In particular, Michael Cihlar of AC testified that
he expressed concern over the lack of research and testing on the masonry veneer product and
the corresponding absence of industry standards and information as to the product’s long-term
performance. See Cihlar Dep. at 37-39. It is unclear, however, if Mr. Sills was present at this
meeting. See generally Panansewicz v. Jennings, 2014 WL 1270014, at *4 (Del. Super. Ct. Jan.
27, 2014) (finding issue of fact as to whether defendants “were aware or should have been aware
through reasonable inspection” of defective condition when the record contained
inconsistencies).
121
Pls.’ Ex. 659. The email is addressed to J.R. Leonard, who was employed by Daystar at the
time. Leonard then forwarded the email to Mr. Sills. Pls.’ Ex. 661A.
122
Pls.’ Ex. 659.
123
In response to the concerns of Daystar’s project manager that the schedule for completing
construction was “aggressive” and “unattainable,” Mr. Sills was apparently adamant that the
project push forward and ordered that Leonard impose pressure on ESW to complete the
masonry work as quickly as possible. Leonard Dep. 160-61, 184, 236-37; Pls.’ Ex. 671
(Leonard’s April 2008 email to ESW). ESW representatives testified consistently, stating ESW
was urged to “just get it done” because WHP was anxious to start selling the units. Abrogast
Dep. at 122-27, 213.
37
individual officers from escaping liability and clearly distinguish the instant case
from those in which Delaware Courts have refused to impose personal liability.124
The Motion for Summary Judgment filed on behalf of Mr. Sills in his capacity for
Daystar will be DENIED.
With regard to WHP, Plaintiffs also argue Mr. Sills should be held
personally liable for WHP’s negligence in selling units to purchasers without
disclosing known defects and/or failing to adequately remedy the defects. These
allegations, without more, are insufficient to invoke the personal participation
124
See T.V. Spano Bldg. Corp. v. Dep't of Nat. Res. & Envtl. Control, 628 A.2d 53 (Del. 1993);
Brandt, 2004 WL 2050519, at *10. In T.V. Spano, both the residential real estate development
corporation, TVSBC, and its corporate officer, Mr. Spano, were sued for improperly disposing of
hazardous construction waste. See T.V. Spano, 628 A.2d at 55. TVSBC employed a
subcontractor to clear and dispose of trees, brush, and other matter from the land on which it
planned to develop a residential community. See id. Decisions as to the disposal of the pre-
construction debris were made at a meeting attended by TVSBC staff and the subcontractor, but
not Mr. Spano personally. See id. Mr. Spano visited the construction site weekly and personally
observed the disposal of the waste. See id. Despite Mr. Spano’s “broad, general authority” over
the real estate project and “direct knowledge of the disposal trenches,” the Court found he could
not be held liable because there was no evidence to suggest Mr. Spano ratified or otherwise
approved of the disposal plan. See id. at 55, 62. Rather, those decisions were clearly made by
TVSBC’s attorneys, the subcontractor, and the New Castle County officials. See id. at 55.
Similarly, in Brandt, the Court refused to find the defendant-realty company’s president
personally liable for the plaintiff’s mold-induced injuries because there was no evidence the
president “took any affirmative actions which harmed [the plaintiff].” Brandt, 2004 WL
2050519, at *10. The president’s knowledge “about health complaints” was “insufficient for
liability,” and the plaintiff did not show either that the president “was the one who ordered or
approved of any of Service's work regarding the heat pumps.” See id. Unlike those cases, this
matter involves tortious acts and conduct directed and consented to by Mr. Sills. See
Heronemus, 1997 WL 524127, at *2 (citing Steinke v. Beach Bungee, Inc., 105 F.3d 192 (4th
Cir. 1997) (finding personal liability where officers alleged to have known of equipment issues,
rejected recommendation to hire engineer, installed knew system despite warnings it was
unsuitable, attempted to physically conceal warnings, and affixed false license to the
machinery)).
38
doctrine. Personal liability cannot be assessed absent “active negligence” and a
corporate agent’s knowledge of defects and failure to warn or correct those defects
will generally be considered acts of nonfeasance. 125 That said, the Court is not in
a position to grant Mr. Sills’ Motion as it finds that there remain disputed issues of
facts that prevent summary judgment. For example, there is evidence suggesting
that Mr. Sills actively directed that disclosures of defects not be provided to
purchasers. It appears Mr. Sills made other questionable decisions based upon the
financial pressures that were occurring with the project. This evidence may either
directly or circumstantially suggest this was a deliberate and conscious decision by
Mr. Sills and WHP to mislead others and that this conduct was approved and
ratified by Mr. Sills. Therefore, Mr. Sills’ liability in this regard will have to await
resolution at trial. As such, the Motion as to Mr. Sills and WHP will also be
DENIED.
b. Expert testimony
General negligence claims usually do not require expert testimony.126
Where professionals are involved, however, the applicable standard of care must
125
See Brandt, 2004 WL 2050519, at *10 (“Claims based on the failure to warn, inspect or
repair, or implement and supervise indoor air quality programs for common areas affected by
mold are acts of nonfeasance.”); Heronemus, 1997 WL 524127, at *3 (finding “failure to warn,
failure to provide safety spotters and failure to test the game…claims of nonfeasance”).
126
See, e.g., Yancy v. Tri State Mall Ltd. P'ship, 2014 WL 2538805, at *3 (Del. Super. Ct. May
29, 2014). See also Robelen Piano Company v. DiFonzo, 169 A.2d 240, 244-5 (Del.1961) (“The
standard of care required of all defendants in tort actions is that of a reasonably prudent man.
That standard, however, is not a definite rule easily applicable to every state of facts. The details
39
typically be established through the use of an expert.127 The exception to this rule is
when a lay person would be as competent as an expert to judge whether or not the
particular conduct created an unreasonable risk.128 “For example, the fact that
people cut corners is commonly known and does not require expert testimony in a
faulty landscaping design case.”129
In this case, Plaintiffs have identified two experts, each of whom detail the
construction and design defects and opine as to WHP, AC, and Daystar’s
negligence as the project developer, architect, and contractor. There does not
appear to be any testimony pertaining to Mr. Sills, individually. According to
Defendants, Plaintiffs were required to engage an expert to opine specifically as to
his standard of care and summary judgment is warranted as a result of their failure
to proffer such testimony. Plaintiffs respond that their claims against Daystar and
WHP is amply supported by expert testimony, and that, because their claim against
of the standard, of necessity, must be formulated in each particular case in light of its peculiar
facts. In each case the question comes down to ‘what a reasonable man would have done under
the circumstances.’ In close or doubtful cases, ... that question is to be determined by the jury.”).
127
See Seiler v. Levitz Furniture Co. of E. Region, Inc., 367 A.2d 999, 1008 (Del. 1976).
128
See Oliver v. Bancroft Const. Co., 2011 WL 5042389, at *1 (Del. Super. Ct. Oct. 21, 2011).
129
Brandt, 2004 WL 2050519, at *5 (citing Ward v. Shoney's, Inc., 817 A.2d 799, 803
(Del.2003)). “Jurors know that different dimensions of steel compromise the structural integrity
of buildings and do not need specialized testimony to show that buildings may collapse from a
defect of this nature. Likewise, common sense would permit a fact finder to decide an architect
had notice of flooding when advised that his proposed building was two feet lower than recent
flooding.” Id. (citing City of New York v. Turner- 31 Murphy Co., 452 S.E.2d 615, 618
(S.C.Ct.App.1994) and Seiler v. Levitz Furniture, Co., 367 A.2d 999, 1008 (Del.1976) (finding
architect’s mistake so apparent as to obviate need for expert testimony to establish “benchmark
by which his standard of care is measured”)).
40
Mr. Sills is for general negligence, rather than professional negligence, no further
expert testimony is required.130
The Court is confident that no further expert testimony is required as to Mr.
Sills. Any factual information potentially falling outside the common knowledge of
the jury would seem to be adequately addressed by the expert testimony as to
general construction and oversight of the project, especially given Mr. Sills
relationship with WHP and Daystar. Summary judgment is therefore DENIED.
2. Statute of Limitations
Plaintiffs filed this litigation on January 14, 2015. Daystar and Mr. Sills
contend summary judgment should be granted as to Count I (Negligence) because
the claim is barred by the applicable statute of limitations set forth in 6 Del. C. §
8106.131
130
Pls.’ Answ. Br. in Opp’n to David N. Sills, IV’s Mots. for Summ. J. at 31-32.
131
10 Del. C. § 8106 (providing that “no action to recover damages caused by an injury
unaccompanied with force or resulting indirectly from the act of the defendant shall be brought
after the expiration of 3 years from the accruing of the cause of such action”). Plaintiffs have
also asserted a claim for Negligent Repair against Daystar, Mr. Sills, and WHP. Defendants
have not sought summary judgment for failure to comply with the statute of limitations on the
Negligent Repair claim. Additionally, it is worth noting that WHP has not joined Daystar and
Mr. Sills to the extent their Motion seeks summary judgment based on the statute of limitations,
possibly because WHP is the Declarant for the Condominium and Delaware’s Uniform Common
Interest Ownership Act provides an extended limitations period for actions against a Declarant.
See 25 Del. C. §§ 18-311(c), 18-321 (“…[A]ny statute of limitation affecting the association's
right of action against a declarant under this chapter is tolled until the period of declarant control
terminates. A unit owner is not precluded from maintaining an action contemplated by this
section because that person is a unit owner or a member or officer of the association.”). See also
id. § 81-119 (making listed provisions applicable to certain condominium properties recorded
under UPA subject to condominium governing documents).
41
Under the statute, Plaintiffs were required to file their negligence claim
within “3 years from the accruing of the cause of such action.”132 A cause of
action “accrues” at the time of the alleged wrongful act, “even if the plaintiff is
ignorant of the cause of action.”133 With respect to claims sounding in negligence,
“the wrongful act” will generally refer to “the time of the injury” for accrual
purposes.134
Count I asserts a claim for negligence against all Defendants in connection
with the development, design, and construction of the Condominium. The parties
appear to agree that this cause of action accrued in October of 2008, when
construction of the Condominium was completed and the Declaration and
Regulations were recorded. While the Court is not convinced that this is the
correct date, it will accept it for purposes of this Motion. As the present litigation
was filed in January 2015, over six years from the project’s completion, using the
2008 date, Plaintiffs must establish that the statute of limitations was tolled until at
least January 2012 in order to avoid the time bar. 135
132
10 Del. C. § 8106(a) (emphasis added).
133
See In re Dean Witter P'ship Litig., 1998 WL 442456, at *4 (Del. Ch. July 17, 1998), aff'd,
725 A.2d 441 (Del. 1999).
134
See Silverstein v. Fischer, 2016 WL 3020858, at *4 (Del. Super. Ct. May 18, 2016) (“The
‘wrongful act’ is a general concept that varies depending on the nature of the claim at issue….
The cause of action for negligence accrues at ‘the time of the injury.’”).
135
See In re Dean Witter P'ship Litig., 1998 WL 442456, at *6 (explaining that it is the burden of
the party raising tolling to establish that a tolling doctrine applies).
42
The statute of limitations may be tolled where the facts underlying a cause of
action “were so hidden that a reasonable plaintiff could not timely discover
them.”136 Where tolling applies, the statutory period will be suspended until the
plaintiff possessed “inquiry notice” of its claim.137 A party is deemed to have
inquiry notice when he or she “discovers the facts constituting a basis for the cause
of action, or knows facts sufficient ‘to put a person of ordinary intelligence ... on
inquiry, which, if pursued, would lead to the discovery of such facts.”138
According to Plaintiffs, the statutory period was tolled up until “the summer
of 2014 when WHCA received advice from its professionals that there were
serious construction and design defects at the condominium, in particular with the
exterior veneer.”139 In support of this position, Plaintiffs advance three theories of
tolling: (1) the doctrine of inherently unknowable injuries; (2) fraudulent
concealment; and (3) equitable tolling.
The doctrine of inherently unknowable injuries tolls the running of the
statute of limitations “while the discovery of the existence of a cause of action is a
practical impossibility.”140 The discovery rule requires Plaintiffs to demonstrate
136
See id. at *5.
137
See id. at *8 (stating that inquiry notice exists when a plaintiff is “objectively aware of the
facts giving rise to the wrong”) (emphasis in original).
138
See Russum v. Russum, 2011 WL 4731120, at *2 (Del. Super. Ct. Sept. 28, 2011) (quoting
Wal–Mart Stores, Inc. v. AIG Life Ins. Co., 860 A.2d 312, 319 (Del. 2004)).
139
See Pls.’ Answ. Br. in Opp’n to Daystar Sills, Inc.’s Mot. for Summ. J. at 12.
140
See In re Dean Witter P'ship Litig., 1998 WL 442456, at *5 (emphasis added).
43
that there were no observable factors which would provide notice of their injury
and that they were blamelessly ignorant of the wrongful acts or omissions and
injury complained of.141
In contrast to the discovery rule, fraudulent concealment requires a showing
that the defendant engaged in an “affirmative act of concealment” to “put the
plaintiff off the trail or inquiry” and prevent the plaintiff “from gaining knowledge
of the facts.” 142 Two elements must be present in order to toll the statute of
limitations: (1) the defendant “acted in an affirmative manner to conceal the cause
of action from Plaintiffs,” and (2) the defendant “[knew] about the alleged
wrong.”143
Finally, the statutory period may be tolled under the theory of equitable
tolling. Delaware Courts recognize three contexts in which equitable tolling may
apply: “(1) where the defendant misled the plaintiff, (2) where the plaintiff was
prevented from asserting his rights in some extraordinary way, and (3) where the
plaintiff has timely asserted his rights mistakenly in the wrong forum.” 144
“[R]easonable reliance on the competence and good faith of those who have
141
See id.
142
See id.
143
See Lavender v. Koenig, 2017 WL 443696, at *4 (Del. Super. Ct. Feb. 1, 2017) (citing Wright
v. Dumizo, 2002 WL 31357891, at *3 (Del. Super. Ct. Oct. 17, 2002)).
144
See Owens v. Carman Ford, Inc., 2013 WL 5496821, at *3 (Del. Super. Ct. Sept. 20, 2013)
(noting that Delaware state courts recognize the same three scenarios in which equitable tolling
may appropriately be applied as the U.S. District Court of Delaware and Third Circuit Court of
Appeals).
44
assumed a legal responsibility toward a plaintiff” may justify application of the
equitable tolling doctrine.145
Here, Plaintiffs claim the construction defects at the Washington House,
especially with regard to the failure of the exterior veneer, were “latent defects,
hidden behind the walls of the building.”146 Plaintiffs insist the WHCA was
diligent in seeking to determine whether any significant problems existed at the
property, as evidenced by their retention of Alpha to inspect the property soon after
the Turnover. Plaintiffs emphasize Alpha’s May 2012 inspection report, which
recommended only minor repairs to the building and opined that “the exterior
stone and brick appear in good condition.”147 Thus, at that time, WHCA had no
reason to believe that the Condominium contained significant design and
construction defects. Plaintiffs claim their ability to discover their cause of action
was further frustrated by the Daystar Defendants fraudulent concealment of known
defects and information pertaining to their counterclaim against ESW, such as the
expert reports submitted at arbitration. Finally, Plaintiffs claim equitable tolling
principles apply here because Plaintiffs reasonably relied on the good faith and
145
See In re Dean Witter P'ship Litig., 1998 WL 442456, at *8 (“But, the trusting plaintiff still
must be reasonably attentive to his interests…. Thus, even where defendant is a fiduciary, a
plaintiff is on inquiry notice when the information underlying plaintiff's claim is readily
available.”).
146
Pls.’ Answ. Br. in Opp’n to Daystar Sills, Inc.’s Mot. for Summ. J. at 13.
147
Chase Aff., Ex. C at 3.
45
competence of the Defendants in their various positions of authority and trust and
“were misled [by Defendants] as to the need to assert their rights in court.”148
Construing the record in a light most favorable to Plaintiffs, the Court finds
the defects contained within the walls of the Condominium may reasonably be
characterized as “inherently unknowable,” at this stage, for purposes of
determining whether the discovery rule may apply to toll the statute of
limitations.149 Daystar even acknowledged in its December 2011 arbitration
briefing that it was “unknown what damage lurks inside the walls currently” as a
result of ESW’s negligent installation of the exterior, and that, only upon retaining
experts and consultants and performing invasive testing on one of the units, was
mold and water damage within the walls revealed.150
148
Pls.’ Answ. Br. in Opp’n to Daystar Sills, Inc.’s Mot. for Summ. J. at 27.
149
See Bromwich v. Hanby, 2010 WL 8250796, at *5 (Del. Super. Ct. July 1, 2010) (“Plaintiffs
allege they could not have discovered the buried foundation defects until May of 2007. When
Plaintiffs knew or should have known of the alleged wrong is a question of fact that precludes
the granting of summary judgment on Count III.”); Council of Unit Owners of Sea Colony E.,
Phase III Condo., on Behalf of Ass'n of Owners v. Carl M. Freeman Assocs. Inc., 1988 WL
90569, at *5 (Del. Super. Ct. Aug. 16, 1988) (“[T]he alleged construction and design defects in
the exterior wood panels and concrete structures are inherently unknowable as they could not be
discovered without the assistance of an inspection by a specialist. Both plaintiff and defendants
needed experts to determine the cause of the wall and concrete deterioration. Therefore, the
discovery rule will apply.”) (internal citation omitted). See also Young & McPherson Funeral
Home, Inc. v. Butler's Home Improvement, LLC, 2015 WL 4656486, at *2 (Del. Super. Ct.
Aug. 6, 2015) (denying motion to dismiss negligence action to the extent the claim was premised
on defective “construction work in the interior of the walls, chimney, and roof” because the
discovery rule tolled the statute of limitations until 2013 when plaintiffs were first informed by
the City Code Enforcement Department that defendants did not replace the roof and underlying
damage “as promised” but simply added new tiles to hide the deficiencies).
150
Pls.’ Ex. 1005 at 7.
46
Even if the discovery rule applies, Daystar Defendants argue the record
irrefutably shows that Plaintiffs were on inquiry notice of “the leaks and
construction issues of which they complain since 2009.”151 Defendants emphasize
that Daystar issued a notice in February 2009 about the mechanics lien filed by
ESW, that the pleadings related to Daystar’s counterclaim were publicly available
in April 2009, and that the record shows certain owners began experiencing water
intrusion issues in their individual units as early as 2009, with the leaking problems
raised at the Owners Forum beginning in 2010. According to Defendants, at the
very latest, the statute of limitations began to run in 2011. In particular,
Defendants point to March 2011, when unit owners Drs. Piper and Tuttle consulted
an architect (Jim Cherry of AC), leak consultant, and environmental specialist
about the water intrusion issues in their unit, portions of brick were removed in the
process, and it was discovered that the leaking was coming from above and
causing deterioration “in part due to inadequate flashing…[and] because there is no
expansion joint between floors 3 and 4 next to the towers.”152 At the October 2011
Owners Forum, Ms. Tuttle reported that she had met with “the architect,” AC
regarding the issues with her unit, and that AC was “concerned about what is under
151
Daystar Defs.’ Mot. for Summ. J., at 36.
152
Id., Ex. T.
47
the brick” because if the flashing is not properly done, “there are concerns about
the strength of the barrier between the Tyvek and porous brick.”153
However, Plaintiffs have provided sufficient evidence to show that the
Association stood in a unique relationship with both Mr. Sills and Daystar,
whereby the WHCA was in fact, until at least January 19, 2012, only Mr. Sills. As
such, in essence Mr. Sills is arguing for dismissal over a date which only he had
control over. There is no question that before January of 2012 the homeowners
were aware they had some leakage issues but nothing to suggest the extent of
issues subsequently discovered. Throughout 2011 and into March 2012, Mr. Sills
agreed to address all problems reflected on the Association’s building issues list
related to building and construction.154 The unit owners, none of whom appear to
have any background in or specialized knowledge of construction, thus reasonably
perceived the issues to fall into the category of “punch list” items not uncommon
in new construction.
While Daystar appears to have corrected some of the conditions reported by
the Association, it is undisputed that Daystar never took any action to remediate
the building’s defective exterior veneer. By 2011, Daystar knew based on the
expert reports it submitted at arbitration that the faulty brick veneer would need to
153
Daystar Defs.’ Reply Br., Exs. NN, OO at 177.
154
Pls.’ Exs. 1020, 1017, 1019.
48
be removed and replaced. Daystar did not use the arbitration award to execute the
recommended remedial measures, nor did Daystar or Mr. Sills ever once inform
the Association about the exterior’s defective design and installation. Given the
Daystar Defendants knowledge of the true extent of the defects and what it would
take to repair those defects, their assurances to unit owners and implementation of
temporary solutions to the water intrusion and other related issues could be
construed as affirmative conduct intended to lead Plaintiffs off the trail of inquiry.
This is a complex case, involving latent defects and the actions of a number
of parties taken in varying capacities. Further, while the record indicates that a
handful of owners experienced leaks in their individual units as early as 2009,
Plaintiffs have insisted that this litigation is about damage to the Condominium’s
common elements, namely, the building’s defective exterior.155 Alpha’s May 2012
inspection reported that the exterior appeared in good condition. It appears the first
external indication that the exterior could contain serious defects surfaced in 2013,
when the owners noticed the bricks had started to bulge. Given these facts, the
complicated nature of the defects, allegations of concealment, the roles, duties, and
conduct of Daystar and Mr. Sills, the Court is unwilling to find at this juncture that
the Plaintiffs possessed sufficient notice, based on isolated leaking issues and the
mechanics lien notice, that the Condominium’s exterior was defectively designed
155
Hearing Tr. (Jan. 18, 2017) at 31:16-21.
49
and constructed. Construing the record in a light most favorable to the Plaintiffs,
reasonable knowledge and notice of the deficiencies occurred in August of 2014
when the Cogent inspection was performed. Assuming this begins the running of
the statute of limitations, the litigation was filed timely.156
3. Standing of WHCA
The Daystar Defendants next contend this litigation should be dismissed
because Plaintiff WHCA lacked authority to file and maintain this action under the
Code of Regulations. Defendant WHP joins the Daystar Defendants in asserting
this position.157 The Court can only characterize this claim as a true “Hail Mary.”
The basis for Defendants’ argument is the WHCA’s failure to adhere to
Article V, Section 17 of the Code of Regulations. The Code provides that the
decision to initiate legal proceedings “in connection with any dispute, claim, cause
of action or proceeding arising out of or under or in connection with the
Declaration, the Code of Regulations or the Declaration Plan” must be made “by a
resolution duly adopted at a properly noticed regular or special meeting of the
Association held for such purpose.”158 If such proceedings are commenced and do
not conclude “within one (1) year of the date of such resolution, the continued
156
At the earliest, the obligation to explore further did not occur until the owners took ownership
of the condominium association on January 19, 2012.
157
D.I. 242.
158
COR at Art. V § 17.
50
prosecution…must be reaffirmed annually at a special meeting held of the
Association.”159
While Plaintiffs do not dispute WHCA’s noncompliance with these rules,
they claim summary judgment should be denied because: (1) Article V, Section 17
does not apply to this lawsuit because this action is not an internal dispute; (2)
WHP waived its right, while a unit owner, to object to the litigation and/or
WHCA’s noncompliance with the Code; (3) the Defendants have no right to
redress under the WHCA’s Code of Regulations; and (4) the unit owners
overwhelmingly support this lawsuit.
Although the Court is not convinced by Plaintiffs’ argument concerning the
applicability of Section 17 to this litigation, which originally included claims for
violations of the Code of Regulations and Declaration, it is persuaded that the
purpose of Section 17 and the Regulations would not be served by allowing
persons outside of the agreement to invoke protections intended for the benefit of
unit owners. These Defendants either never were, or no longer are, unit owners.
The Defendants’ interests in defeating this lawsuit are clearly inimical to the
interests of the unit owners. Neither the Regulations nor the Unit Property Act
159
See id. (“If the continued prosecution…is not reaffirmed, the action shall be discontinued and
the Council shall have no further authority to act as the attorney-in-fact for the Association in the
further prosecution or defense of such Legal Proceedings.”).
51
contemplates the ability of outsiders to intrude upon the authority of the Council as
Defendants are attempting to do here.
Moreover, WHP was a unit owner for roughly seven months following
commencement of this litigation. WHP never objected to this litigation or sought to
enforce WHCA compliance with internal regulations prior to selling its last
Condominium unit in August 2015160 In fact, its silence and inaction continued
throughout Rule 12 briefing in the instant action.161
Finally, the affidavits submitted confirm that, to date, no unit owners have
objected to the lawsuit.162 Given this information, and the absence of any
persuasive authority entitling outsiders to summary relief based on internal
condominium association regulations, Defendants’ Motion must be DENIED.
B. Architectural Concepts
Count I of the Complaint seeks to hold AC liable, as the architect on the
project, for the Washington House’s allegedly negligent design. Various
160
As a unit owner, WHP received due notice of all meetings, through the notices posted at
Washington House, and also by emails to Mr. Sills, as a managing member of WHP. From
September 9, 2014, through August 27, 2015 — the sale date of the last WHP-owned unit — all
email meeting notices sent to David Sills were left unopened, except for the notice of a Council
meeting on August 11, 2015. WHP did not attend any of those meetings.
161
See New Castle Cnty. v. Pike Creek Recreational Servs., LLC, 82 A.3d 731, 751 (Del. Ch.
2013), aff'd, 105 A.3d 990 (Del. 2014) (finding voluntary and intentional waiver of right to
object to proposed development plan by County’s inaction); Mizel v. Xenonics, Inc., 2007 WL
4662113, at *7 (Del. Super. Ct. Oct. 25, 2007) (explaining that acquiescence arises when party
knows rights and material facts but remains inactive, recognizes complained of act, or leads other
party to believe act has been approved despite subsequent repudiation).
162
Swan Aff. ¶ 8 (stating that the Council also receives messages of approval concerning the
lawsuit on a regular basis).
52
Defendants have asserted crossclaims against AC for indemnification. In the
instant Motion, AC requests summary judgment be granted in its favor on the
grounds that: (1) Plaintiffs’ negligence claim and Defendants’ crossclaims are
barred by the doctrine of collateral estoppel; (2) WHCA’s claim for negligence is
untimely; and (3) no evidence has been proffered to support any causal connection
between AC’s alleged acts or omissions and the Condominium’s defective façade.
For the foregoing reasons, AC’s Motion will be DENIED.
1. Collateral Estoppel
In 2010, AC filed a lawsuit against Daystar and WHP for nonpayment and
WHP counterclaimed, arguing WHP incurred significant costs directly due to AC’s
failure to coordinate and remedy errors and inconsistencies in its plans (the “AC-
WHP Action”). In particular, WHP alleged AC’s plans were “not constructable”
and that WHP had to redesign “the entire front elevation of the project.”163 WHP
claimed that AC was required to provide plans “free from defects” in a timely
manner, and that its failure to do so constituted breach of contract.164 The parties
apparently settled their dispute and the claims were dismissed with prejudice by
stipulation in January 2013.
163
Pls.’ Ex. 1026, ¶ 5.
164
Id. ¶¶ 6-7.
53
As a result of the AC-WHP Action, AC contends Plaintiffs’ negligence
claim and Defendants’ crossclaims against AC are barred by collateral estoppel. A
party raising collateral estoppel bears “the burden of showing that the issue whose
relitigation he seeks to foreclose was actually decided in the first proceeding.”165
Thus, the test applied for purposes of collateral estoppel requires: “(1) a question
of fact essential to the judgment (2) be litigated and (3) determined (4) by a valid
and final judgment.”166
Generally, “a dismissal with prejudice has the effect of a final adjudication
on the merits.”167 However, there is a distinction “between the concept a final
adjudication on the merits and the actual litigation of facts.”168 Delaware courts
have recognized that “a dismissal with prejudice is not a determination of the facts
of the case by the Court but is as binding upon the parties as such a final decree
would be.”169 While a dismissal with prejudice lacking specific factual
165
See CompuCom Sys., Inc. v. Getronics Fin. Hldgs. B.V., 2012 WL 4963314, at *2 (D. Del.
Oct. 16, 2012) (quoting Proctor v. Delaware, 2007 WL 2229013 (Del. Aug. 2, 2007)) (emphasis
added).
166
See HealthTrio, Inc. v. Margules, 2007 WL 544156, at *9 (Del. Super. Ct. Jan. 16, 2007)
(quoting Taylor v. State, 402 A.2d 373 (Del.1979)).
167
See Fields v. Frazier, 2005 WL 3193820, at *2 (Del. Super. Ct. Nov. 21, 2005) (citing
Salavaara v. SSP Advisors, I.P., 2003 WL 23190391 (Del. Ch. Dec. 22, 2003)). Thus, where
parties “voluntarily dismissed the action, knowing that they either received the full relief to
which they were legally entitled, or that they waived their rights to seek further relief, the
dismissal is tantamount to a judgment on the merits.” Id.
168
See Spectris Inc. v. 1997 Milton B. Hollander Family Trust, 997 N.Y.S.2d 101 (N.Y. Sup.
2014) (discussing Delaware law) (emphasis added), aff'd, 138 A.D.3d 626, 31 N.Y.S.3d 469
(N.Y. App. Div. 2016)
169
See Rochen v. Huang, 1989 WL 5160, at *1 (Del. Super. Ct. Jan. 13, 1989).
54
determinations may bar the parties to that action from re-asserting the dismissed
claims against one another, the doctrine of collateral estoppel concerns the re-
litigation of the factual issues underlying those claims.170 Indeed, “the public
policy surrounding…collateral estoppel is to require a definitive end to litigation
when each of the parties has had a full, free and untrammeled opportunity to
present all of the facts pertinent to the controversy.”171
The Delaware Superior Court Judge’s order granting stipulated dismissal of
the AC-WHP Action with prejudice supplies absolutely no basis for this Court to
apply the doctrine of collateral estoppel. Again, collateral estoppel aims to
“preclude[] a redetermination of facts actually litigated and determined in a prior
proceeding.”172 Here, there is no indication that the facts and/or issues relevant to
the question of AC’s negligence were actually considered and determined in the
AC-WHP Action. While the policy rationale for application of collateral estoppel
“is forceful where the merits of the case have previously been considered[,]” this
force is necessarily lacking where, as here, the “litigation is concluded by a
170
See id.
171
See Fox v. Christina Square Assoc., L.P., 1994 WL 146023, at *4 (Del. Super. Ct. Apr. 5,
1994) (citing Coca-Cola v. Pepsi-Cola Co., 172 A. 260 (Del. Super. Ct. 1934)).
172
See Belfint, Lyons, & Shuman v. Potts Welding & Boiler Repair, Co., 2006 WL 2788188, at
*3 (Del. Super. Ct. Aug. 28, 2006) (citing James v. Tandy Corp., 1984 WL 8256, at *4 (Del. Ch.
Nov. 1, 1984)). See also Meso Scale Diagnostics, LLC v. Roche Diagnostics GmbH, 62 A.3d 62,
89-90 (Del. Ch. 2013) (“[A] judgment in one cause of action is conclusive in a subsequent and
different cause of action as to a question of fact actually litigated by the parties and determined
in the first action.” (quoting E.B.R. Corp. v. PSL Air Lease Corp., 313 A.2d 893, 894-95
(Del.1973))).
55
stipulation of dismissal and the merits have not been considered.”173 In addition,
Defendants’ crossclaims for indemnification and contribution did not exist at the
time of the AC-WHP Action, and as a result, are not barred by collateral estoppel.
Accordingly, AC’s Motion for Summary Judgment based on the doctrine of
collateral estoppel is denied.
2. Statute of Limitations
AC also advances a statute of limitations argument in support of its Motion
for Summary Judgment. AC does not appear to contest claims of the Montgomery
Plaintiffs on this basis; rather, it argues WHCA’s negligence action is time-barred.
Once again, claims for negligence are subject to the three-year statute of
limitations set forth in 10 Del. C. § 8106.
AC performed architectural services in connection with the Washington
House between 2006 and 2008. The Condominium was substantially completed in
October of 2008. Applying § 8106, WHCA was required to file its negligent
design claim against AC prior to October 2011. Because Plaintiffs did not initiate
this litigation until January 14, 2015, the WHCA’s claims are time-barred unless it
can show that tolling applies. Plaintiffs rely on many of the same tolling arguments
173
See Fox, 1994 WL 146023, at *4.
56
discussed above with regard to the Daystar Defendants’ Motion.174 According to
Plaintiffs, “AC contributed significantly to the circumstances that justify tolling the
statute of limitations until Plaintiffs were on inquiry notice in 2014.”175
AC responds that, even if a tolling could be established here, the evidence
shows WHCA was aware of the facts underlying its claims well before it filed this
litigation. AC emphasizes many of the same facts and circumstances raised by the
Daystar Defendants in support of its position, including that individual unit owners
experienced leak issues in 2009, the ESW mechanics’ lien notice and publicly
available counterclaim pleadings, and discussions of retaining an inspector and
water intrusion problems among WHCA members in 2010 and 2011. AC even
goes so far as to argue that the WHCA had notice of its claims against AC in 2008-
2009, by virtue of David Sills’ knowledge of the Condominium’s defective
exterior, which is evidenced by Mr. Sills’ email to ESW about his dissatisfaction
with their work and pleadings and documents related to the ESW-Daystar dispute,
among other things. AC characterizes WHP, Daystar, and WHCA as “artificial
entities,” all of which must be charged with any knowledge possessed by their
agents. According to AC, because David Sills was clearly aware of the defects in
174
Pls.’ Answ. Br. in Opp’n to AC’s Mot. for Summ. J. at 4 (incorporating arguments from
Plaintiffs’ brief in opposition to Daystar Defendants’ Motion for Summary Judgment on the
issue of tolling).
175
Id.
57
2008, his knowledge and actions must be imputed to the WHCA, given his then-
capacity as the sole member of the governing Council.
The Court disagrees. The relationship between the Condominium owners
and Mr. Sills and his various entities created or used for the project was not a
harmonious one with clear lines of communication and a commonality of interest.
In fact, the Court believes it is likely the evidence will show that Mr. Sills
attempted to hide any potential defects he had been alerted to and to minimize
those concerns to the unit owners. To find that Mr. Sills’ knowledge was shared or
imputed to the owners would simply be wrong.
Like the Court’s earlier findings, it has determined that the statute was tolled
until August of 2014 and thus AC’s statute of limitations argument must fail.
3. Causation
Finally, AC argues it is entitled to summary judgment because there is no
evidence that any breach of a duty owed by AC caused the alleged defective
installation of the masonry façade.
To prove negligence, Plaintiffs must establish duty, breach, causation, and
harm.176 With regard to causation, Delaware recognizes “the traditional ‘but for’
definition of proximate cause.”177 An act or occurrence is a “proximate cause” if
176
See, e.g., Jones v. Crawford, 1 A.3d 299, 302 (Del. 2010).
177
See id. (citing Wilm. Country Club v. Cowee, 747 A.2d 1087, 1097 (Del. 2000)).
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it, “‘in natural and continuous sequence, unbroken by any efficient intervening
cause, produces the injury and without which the result would not have
occurred.’”178 An intervening act will not automatically break the continuous
sequence of events. However, if the act “was not reasonably foreseeable, the
intervening act supersedes and becomes the sole proximate cause of the plaintiff's
injuries, thus relieving the original tortfeasor of liability.”179
An architect is obligated “to perform with reasonable care the duties for
which he [or she] contracts.”180 Here, AC agreed to provide Daystar “a complete,
coordinated, set of Architectural Construction Documents, suitable for use in
gaining approvals, your use in obtaining sub-contractor bids, acquiring permits,
and executing construction.”181 AC also agreed to provide “Construction
Administration Services” upon request. The record reflects that AC, albeit
reluctantly, revised its plans to incorporate thin brick at Daystar’s request. The
revised plans, dated June 13, 2007, were submitted and approved by city building
code officials in July 2007. According to Plaintiffs, the plans failed to include
sufficient details regarding weather-resistant cladding, proper flashing, and weep
measures.
178
See Duphily v. Delaware Elec. Co-op., Inc., 662 A.2d 821, 829 (Del. 1995) (quoting Culver,
588 A.2d at 1097) (emphasis in original).
179
See id.
180
See Seiler, 367 A.2d at 1007 (quoting Bloomsburg Mills, Inc. v. Sordoni Constr. Co., 164
A.2d 201, 203 (Pa. 1960)).
181
AC’s Mot. for Summ. J., Exhibit A.
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AC’s “lack of causation” argument is essentially that, even if its plans were
negligently drafted as Plaintiffs suggest, the undisputed evidence establishes that
ESW did not rely on anything provided by AC in installing the thin-brick and
masonry veneer.182 In particular, AC cites the testimony of ESW representatives
that the installation was accomplished using ESW’s own internal installation
instructions, specifications, and experience.183
There is no dispute ESW was negligent in installing the Condominium’s
thin-brick exterior. However, “there may be more than one proximate cause of an
injury.”184 Although AC would have the Court believe that ESW never so much as
reviewed AC’s plans, the ESW-Daystar Subcontract indicates otherwise. The
Subcontract incorporated by reference certain “Contract Documents,” including
AC’s architectural drawings. 185 ESW represented that it carefully examined and
“fully understood” all “Contract Documents.”186 ESW agreed to “fulfill and follow
the Contract Documents strictly”187 and warranted “to the owner, Contractor, and
architect” that its work would “conform to the requirements of the Contract
182
AC Mot. for Summ. J at 31; Hearing Tr. (Jan. 18, 2017) at 104:18-23.
183
AC’s Mot. for Summ. J., Ex. N at 230-31, 263-64.
184
See Jones, 1 A.3d at 302 (quoting Culver, 588 A.2d at 1097).
185
AC’s Mot. for Summ. J., Ex. O at Art. II, Art. XIX. The Subcontract also incorporated a
document entitled “Daystar Sills, Inc. Specifications, Quality Requirements, and Scopes for
Stone and Thin Brick.” Id.
186
Id. at Art. I.
187
Id. at Art II.
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Documents.”188 Moreover, the experts retained in connection with this litigation
appear to agree that AC’s plans contained inconsistencies and omitted key details
regarding weather-resistant exterior cladding, proper flashing, weep measures,
etc.189 If proven AC was negligent in omitting this information and that, without
such details, the risk that ESW would improperly install the exterior veneer was
foreseeable.
Issues of causation are rarely suitable for summary disposition.190 There are
inconsistencies in the record regarding the role of AC’s plans in the construction of
the Condominium and the extent to which intervening causes may have impacted
their potential liability. While the Court would certainly think the conduct of
Daystar and ESW would reflect greater culpability and may be shown to have
superseded AC’s role in this mess, given the fact that AC apparently warned
Daystar against the flawed design, it is an issue for the jury to determine. Thus, the
extent to which AC’s conduct caused Plaintiffs’ damages cannot be resolved by
summary judgment and the Motion is denied.
188
Id. at Art. V (emphasis added). See also id. at Art III (agreeing ESW’s work would “meet the
drawings, specifications, Subcontract and other Contract Documents”). ESW ultimately
subcontracted out the task of installing the veneer. Nevertheless, ESW warranted in its
Subcontract with Daystar that “[a]ll subcontracted work [would] be performed in accordance
with the Contract Documents.” See id. at Art. XIII (“This Subcontract shall be incorporated into
all tier subcontracts.”).
189
Pls.’ Exs. 1006-1010.
190
See, e.g., Perez-Melchor v. Balakhani, 2006 WL 3055852, at *5 (Del. Super. Ct. Oct. 26,
2006).
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III. MOTION TO AMEND CROSSCLAIM
WHP has also moved for leave to file an Amended Crossclaim pursuant to
Superior Court Civil Rule 15. The decision to permit or deny an amendment is left
to the discretion of the trial judge. In exercising that discretion, the Court will
“weigh[] the desirability of ending the litigation on its merits against possible
prejudice or surprise to the other side.”191
As is, WHP’s Crossclaim, filed in conjunction with its Answer to Plaintiffs’
Complaint on April 20, 2015, seeks “indemnification and/or contribution” against
AC, Avalon, and ESW. WHP’s proposed amendment would add an additional
basis for indemnification against ESW based upon contract, rather than tort.
Specifically, WHP relies on the ESW Subcontract. According to WHP, “[t]hrough
discovery, it became clear that the contract between Daystar…and ESW included a
clause, which requires ESW to ‘indemnify and hold harmless, the owner…’ i.e.
WHP, from and against all claims, damages, lawsuits, losses and expenses….”192
The contract between Daystar and ESW also apparently required ESW to name
WHP as an additional insured on its Commercial General, Business Automobile
and Professional Liability insurance policy.
191
See Vichi, 85 A.3d at 759 (internal quotation marks omitted).
192
WHP’s Mot. to Amend ¶ 3, Ex. 2 at Art. VII.
62
ESW opposes the Motion, contending: (1) WHP’s proposed Amended
Crossclaim is subject to res judicata based on the ESW-Daystar Arbitration; (2)
ESW was dismissed from this litigation, per the Court’s October 28, 2015 decision,
such that there is no direct claim by Plaintiffs against ESW and WHP’s Crossclaim
is procedurally defective; (3) WHP knew of the subcontract upon which it seeks
amendment for several years prior to filing its Motion and ESW would be
prejudiced by the amendment; and (4) the contractual indemnification claim WHP
seeks to include has not been “tried by express or implied consent of the parties.”
This Court has already rejected the first two contentions ESW advances
here, as detailed further in its decision denying ESW’s Motion to Dismiss
Crossclaims. In sum, the Court finds no merit in ESW’s res judicata argument or
in its position on the procedural appropriateness of the Crossclaims. 193 While the
Court finds it highly doubtful that WHP just recently became aware of the
Subcontract language it relies upon here, it does not see how ESW would be
prejudiced by the amendment sought. ESW was a party to the Subcontract and it
knew of the provisions contained therein. Letters supplied by counsel indicate that
ESW was aware, since May 2016, that WHP intended to pursue indemnification
under the language of the Subcontract.194
193
See supra Section II.
194
WHP’s Mot. to Amend Crosscl., Exs. 3-4.
63
Finally, as for the issue of consent, the Court finds subsection (b) of Rule 15
simply is not applicable. That section does not apply to pretrial amendments but
relates to confirming the pleadings to the evidence presented at trial. The request
here is controlled by Rule 15(a) which reflects such motions should be freely
granted when the interest of justice requires. Given the culpability of ESW in the
construction deficiencies alleged in this matter, the Court finds fairness requires
allowing the amendment to occur. As such, WHP’s Motion to Amend Crossclaim
is GRANTED.
IV. CONCLUSION
This decision resolves all outstanding Motions in this litigation. Trial is set
to begin on November 8, 2017 with jury selection on November 2, 2017. The
Court suggests that the parties reengage with the mediator previously used to
determine whether settlement is now appropriate.
IT IS SO ORDERED.
/s/ William C. Carpenter, Jr.
Judge William C. Carpenter, Jr.
64