Racheal Conaway and Timothy Conaway v. New Hope Tile, LLC

IN THE COURT OF COMMON PLEAS FOR THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
RACHEAL CONAWAY )
and TIMOTHY CONAWAY, )
)
Plaintiffs, )
)
v. ) C.A. No. CPU4-16-002487
)
NEW HOPE TILE, LLC and ) SPEED DOCKET
MICHAEL CZERWINSKI T/A NEW )
HOPE TILE, LLC & CONSTRUCTION, )
)
Defendants. )
Submitted: March 8, 2017
Decided: May 31, 2017
Douglas A. Shachtman, Esquire Kevin S. Mann, Esquire
The Shachtman Law Firm Cross & Simon, LLC
1200 Pennsylvania Avenue, Ste. 302 1105 N. Market Street, Ste. 901
Wilmington, DE 19806 Wilmington, DE 19801
Attorney for Plaintiffs Attorney for Defendants
DECISION AFTER TRIAL
SMALLS, C.J.
The matter before the Court involves an alleged breach of contract arising from a
general contractor’s agreement for renovations on a house. Racheal Conaway (“Racheal”) 1
and Timothy Conaway (“Timothy”) (collectively, “Plaintiffs”) entered into a contract with
New Hope Tile, LLC (“New Hope”) and Michael Czerwinski, trading as New Hope Tile
LLC & Construction, (“Czerwinski”) (collectively, “Defendants”) to renovate Plaintiffs’
master bathroom and powder room. Plaintiffs allege Defendants failed to complete the
work in accordance with the terms of the contract and in a workmanlike manner.
Additionally, Plaintiffs allege the electrical and plumbing work was not performed by
licensed personnel and Defendants did not have such licenses to perform the work.
On March 8, 2017, the Court held trial on the matter. The evidence consisted of
testimony from Henry White (“White”),2 Racheal, and Czerwinski. The parties also
submitted documentary evidence for the Court to consider. At the conclusion of trial, the
Court reserved decision. This is the Court’s decision after trial.
FACTS3
This dispute involves a contract for renovations to a private residence located at 2301
Capital Trial, Newark, DE 19702. Timothy is the recorded owner of the property, but does
not live there. Timothy’s daughter, Racheal, resides at the property along with Timothy’s
elderly mother, Elizabeth. Czerwinski is a general contractor, who has been employed in the
residential construction business since 1986. Czerwinski created New Hope Tile in 1996,
1 The Court does not intend any disrespect by the use of first names. However, because two of the parties
share the same last name, it is necessary to use first names so as to avoid confusion.
2 White is the owner of Henry W. White, Inc., a Delaware general contracting company. White has been a
licensed general contractor in the State of Delaware since 1984. The Court finds White to be a credible
expert witness with regard to the professional standards of a general contractor.
3 The Court has found the facts of this matter by a preponderance of the evidence, based upon all of the
evidence introduced at trial and the reasonable inferences therefrom.
2
and formed New Hope Tile, LLC in 2008. New Hope Tile, LLC has two employees,
including Czerwinski who is the owner and chief operating officer.
Racheal, with the approval of Timothy, sought to renovate the property’s master
bathroom and powder room. The master bathroom is used by Racheal, while Elizabeth uses
the powder room. In February 2016, Racheal contacted New Hope to request a bid for the
proposed renovations. Czerwinski meet with Racheal at the property, and the parties
entered into a written contract where New Hope would perform the renovations for
$4,925.00.4 The agreement included an eighteen month warranty on installation.5 The work
to be performed under the agreement, as set forth in the invoice, is as follows:
“[R]emove and replace all walls in [powder room]; haul away to dump; supply
new drywall and finish; homeowner will paint; also install [vinyl] floor supplied
by you;
Install new toilet, new vanity, and new light; also new plumbing for sink faucet
all supplied by you for [powder room];
[R]emove all walls and ceiling in upstairs [master] bathroom, walls have tile;
also remove mud floor and tile; haul all to dump;
[Supply] and [install] new drywall on walls and ceiling finish for paint;
homeowner will paint;
Frame up new about 48 inch shower and tile homeowner to supply tile; we
supply all building materials;
Center drain and replace diverter (water control supplied by you); also hook
up sink and toilet supplied by you;
[M]ake shower pan on floor; we supply everything except tile;
[F]rame up shelves on other side of shower we supply everything; and
4 See Plaintiffs’ Exhibit 2.
5 See id.
3
Install of new [vinyl] floor, new vanity, (you supply) and new door (we supply
door) at entrance”6
During the course of the renovations, New Hope billed Racheal three additional amounts
for further repairs to the master bathroom and powder room. These additional repairs
included: (1) replacing the door to the powder room; (2) removing the drop ceiling and
drywall in the powder room; (3) installing insulation behind the walls in the powder room;
(4) removing mold in the master bathroom; (5) removing rotting floor in the master
bathroom; and (6) installing a ceiling fan and shower seat in the master bathroom.7 New
Hope charged Racheal $3,260.00 for these additional repairs, for which she paid in full. All
of the renovations were performed by Czerwinski, except for repairs to the master
bathroom’s ground-fault interrupter which were performed by a licensed electrician.
Pursuant to the terms of the contract, New Hope was to finish the bathroom walls
for Plaintiffs to paint. Racheal testified that when Plaintiffs went to paint the bathrooms,
they inspected Defendants’ work and noticed several defects. These defects included a “hole
under the sink, hole in floor, [the sink leaked], spackling was incomplete and not sanded,
molding around the window [and] caulking not [completed] . . . shelves were never sanded
so that they could be painted, cuts in drywall that [were] never spackled, and the [powder
room’s] heat register [did] not fit.”8 Also, Defendants did not install the ceiling fan in the
master bathroom.9 On March 21, 2016, Racheal summarized her complaints in an email and
requested Czerwinski address the outstanding issues.10
6 Plaintiffs’ Exhibit 3.
7 See Plaintiffs’ Exhibits 4-6.
8 Plaintiffs Exhibit 8.
9 See id.
10 See id.
4
On March 22, 2016, Czerwinski, on behalf of New Hope, emailed Racheal stating
that New Hope was sorry that Plaintiffs were unhappy with the renovations.11 Czerwinski
explained that when New Hope contracted to get the walls ready for paint they “mean put
two coats of spackle that’s it. No sanding [or] touch up no anything, those are part of the
painting [procedure] I made that clear.”12 Nevertheless, Czerwinski stated that Defendants
were willing to patch the hole under the sink and repair any leaks.13
Czerwinski subsequently met with Plaintiffs at the property to address their
complaints. Racheal invited her cousin to attend the meeting because of his prior experience
with home renovations. Racheal’s cousin identified several issues with Defendants’
renovations that were either completed improperly or were incomplete. Racheal testified
that Czerwinski became defensive and argumentative when she questioned his work.
Ultimately, Czerwinski stated he would return in May to install the ceiling fan for the master
bathroom and make some minor repairs; however, Defendants never returned to install the
ceiling fan or make the promised repairs.
On May 15, 2016, Racheal testified that she emailed Czerwinski stating that she was
unhappy with the work done by Defendants.14 In addition to her original grievances,
Racheal indicated Defendants failed to remove the old ceiling in the master bathroom, the
master bathroom shower tiles were installed unevenly, and the door casing to the powder
room was never completed.15 Furthermore, Racheal indicated in the email that she would
pursue legal action, unless she was refunded $6,229.00. The next day, Defendants
11 See Plaintiffs’ Exhibit 9.
12 See id.
13 See id.
14 See Plaintiffs’ Exhibit 10.
15 See id.
5
responded stating they completed all of the renovations in accordance with the terms of the
contract. Defendants further urged Racheal to “drop this ridiculous claim,” or they would
file a counter-claim for work New Hope performed for free.16
On June 26, 2016, Racheal hired Henry W. White, Inc. (“HWI”) to inspect work
done by Defendants in the master bathroom and powder room. Following HWI’s
inspection of the powder room, it reported that: (1) New Hope did not remove the old base
trim, but instead butted a new drywall to it; (2) New Hope failed to install insulation behind
the old base trim, because it was never removed; (3) New Hope failed to have the walls
finished for painting; (4) New Hope never finished installing the door casing; and (5) New
Hope reinstalled Plaintiffs’ old light fixture instead of a new one.
HWI’s inspection of the master bathroom revealed and reported that: (1) New Hope
failed to remove the old mud floor and ceiling; (2) New Hope failed to install the shower
drain in the center, and instead installed the shower drain on a slope, towards the end of the
shower; (3) New Hope failed to install the shelves; (4) New Hope failed to remove all of the
rotted floor around the toilet; (5) New Hope damaged the toilet flange when trying to
remove the rotted floor around the toilet; (6) New Hope incorrectly wired the ground-fault
interrupter;17 (7) New Hope’s installation of the shower door was out of plumb; and (8) New
Hope never installed a shower seat and ceiling fan. Additionally, HWI stated New Hope
cracked a section of galvanized pipe when Czerwinski installed the drain to the master
bathroom shower, which caused water to leak onto Plaintiffs’ dining room ceiling.
See id.
16
Although the repairs to the ground-fault interrupter were done by an electrician, White attributed them to
17
New Hope.
6
Furthermore, upon review of New Hope’s invoices, HWI stated New Hope charged Racheal
for additional repairs that were already provided for under the terms of the original invoice,
including replacing the drain in the master bathroom and purchasing a dumpster for trash
removal.
HWI estimated it would cost $1,145.00 to repair Defendants’ renovations to the
powder room, and $8,828.71 to repair the master bathroom. Additionally, HWI determined
it would cost $500.00 to repair the water damage to the master bathroom. Based upon this
report, Racheal hired HWI who subsequently completed the repairs to the property.
PARTIES’ CONTENTIONS
It is the Plaintiffs’ contentions that Defendants did not complete the renovations in
accordance with the terms of their contract, and the work that was completed was done in a
non-workmanlike manner. Plaintiffs also contend some of the proposed renovations
included electrical and plumbing work that required licensed craftsmen, and Defendants
were not licensed to make such repairs. Accordingly, Plaintiffs bring causes of action for (1)
breach of contract; (2) breach of warranty; (3) consumer fraud; (4) deceptive practices in
consumer contracts; (5) negligence; and (6) common law fraud.
Defendants contend they completed the renovations in accordance with the terms of
the contract and raise a number of affirmative defenses. Defendants also argue the
substance of this litigation involves an alleged breach of contract, and Plaintiffs cannot bring
an action sounding in tort for claims under contract. Furthermore, because Plaintiffs are
suing to enforce rights under the Racheal-New Hope Contract, Defendants argue Timothy
lacks standing because he is not a party to the original contract. Defendants also contend
7
Czerwinski is not a proper party to this litigation. Defendants maintain New Hope Tile,
LLC & Construction is a separate and distinct entity, i.e. New Hope. Defendants contend at
all relevant times Czerwinski acted in his official capacity as owner and chief operating
officer of New Hope. Furthermore, Defendants maintain Czerwinski never intended to be
personally liable for work performed on behalf of New Hope. For these reasons,
Defendants argue the Court must dismiss Czerwinski as a party to this litigation and enter
judgment if it finds liability only as to New Hope.
DISCUSSION
During the trial, the Court sat as the sole trier of fact. Therefore, it is the Court’s
responsibility to assess the credibility of the testifying witnesses and, where there is a conflict
in the testimony, to reconcile these conflicts, “if reasonably possible[,] so as to make one
harmonious story.”18 In doing so, the Court takes into consideration the demeanor of the
witnesses, their apparent fairness in giving their testimony, their opportunities in hearing and
knowing the facts about which they testified, and any bias or interest they may have
concerning the nature of the case.19
In civil cases, the claimant bears the burden to prove each and every element of its
claim by a preponderance of the evidence.20 The party on which the greater weight of the
evidence is found is the side on which the preponderance of the evidence exists. 21
As a preliminary matter, the Court will first address whether Timothy and Czerwinski
are proper parties to the proceedings. Generally, a stranger to a contract cannot enforce
18 Nat’l Grange Mut. Ins. Co. v. Nelson F. Davis, Jr., et. al., 2000 WL 33275030, at *4 (Del. Com. Pl. Feb. 9, 2000).
19 See State v. Westfall, 2008 WL 2855030, at *3 (Del. Com. Pl. Apr. 22, 2008).
20 See Reynolds v. Reynolds, 237 A.2d 708, 711 (Del. 1967).
21 See id.
8
rights under the contract.22 However, a non-party may enforce the contract as a third party
beneficiary if the following is established: (1) the contracting parties intended to benefit the
third party; (2) the benefit is intended to be a gift or in satisfaction of a pre-existing
obligation; and (3) the intent to benefit the third party is a material part of the contracting
parties' purpose in entering into the contract.23 If there is no intent by the contracting
parties to confer a benefit, a third party who receives such a benefit under the contract is
merely an incidental beneficiary with no enforceable rights.24
In order to determine whether a non-party can enforce a contract as a third party
beneficiary, the Court must look to the language of the contract.25 The relevant contract in
this matter does not mention Timothy, either by name or general reference. Although a
third party beneficiary need not be specifically named or referenced in a contract, the
contracting parties must intend to confer a benefit to a third party, and that intention must
be a material part of the contract’s purpose.26 Upon review of the relevant contract, I find
that Racheal and New Hope did not intend to confer a benefit to Timothy when they
entered into a contract for renovations to the property. Timothy is merely an incidental
beneficiary, who benefits from the Racheal-New Hope Contract by having renovations done
to a property he owns.27 As such, Timothy does not acquire any rights to enforce the
22 See St. Search Partners, L.P. v. Ricon Int'l, L.L.C., 2005 WL 1953094, at *2 (Del. Super. Aug. 1, 2005).
23 See Ellis v. Tri State Realty Assocs. LP, 2015 WL 993438, at *6 (Del. Super. Feb. 27, 2015).
24 See id.
25 See Bromwich v. Hanby, 2010 WL 8250796, at *2 (Del. Super. July 1, 2010).
26 See Guardian Const. Co. v. Tetra Tech Richardson, Inc., 583 A.2d 1378, 1386 (Del. Super. 1990).
27 By contrast, Elizabeth would be an intended third party beneficiary to the Racheal-New Hope Contract. A
material consideration in Racheal and New Hope entering into the contract was to confer a benefit onto
Elizabeth, i.e. a newly renovated powder room.
9
contract. Therefore, Timothy cannot bring a cause of action based upon the Racheal-New
Hope Contract, and as such his claims must and are dismissed.
Furthermore, Timothy cannot bring a cause of action based upon negligence. In
order for Timothy to prevail on a claim of negligence, he would have to satisfy the elements
of negligence: duty, breach, causation, and harm.28 In this case, there are no facts which
would demonstrate how Timothy suffered any harm caused by Defendants. Any damage to
the property caused by Defendants’ renovations was ultimately repaired by HWI, at no cost
to Timothy. Timothy has failed to show continued damages as a result of Defendants’
conduct; therefore, Timothy cannot succeed on a claim of negligence. Additionally, in order
to prevail on a claim based upon common law fraud, Timothy would have to establish the
fact that Defendants made a misrepresentation of material fact to Timothy.29 However, the
record reflects the only communications between the parties regarding the renovations
occurred between Defendants and Racheal. There is no evidence that Defendants made any
statements, yet alone false statements, to Timothy; therefore, I find no basis for a claim
based upon common law fraud. Consequently, because Timothy cannot bring a valid claim
based upon tort or contract, he is not a proper party to this litigation.
With regard to Czerwinski, a review of the documents indicates he signed the initial
contract as “New Hope Tile LLC & Construction.” In these documents, Czerwinski is
referred to in his official capacity as the owner of New Hope, a Delaware limited liability
company. Under Delaware’s Limited Liability Company Act,
28See Hudson v. Old Guard Ins. Co., 3 A.3d 246, 250 (Del. 2010).
29See CHS Theaters, LLC v. Nederlander of San Francisco Associates, 2015 WL 1839684, at *21 (Del. Ch. Apr. 21,
2015).
10
“the debts, obligations and liabilities of a limited liability company, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the limited liability company, and no member or manager of a
limited liability company shall be obligated personally for any such debt,
obligation or liability of the limited liability company solely by reason of being
a member.”30
An exception to the steadfast rule exists when a member of a limited liability company signs
a contract on his own behalf, rather than for the company.31
Turning to the matter before the Court, the facts support the conclusion that
Czerwinski was acting in his official capacity as owner and chief operating officer of New
Hope when he signed the contract and performed the renovations to Plaintiffs’ property.
Plaintiffs have failed to provide the Court with sufficient evidence to suggest Czerwinski can
be held personally liable for actions taken on behalf of New Hope. Therefore, because
Czerwinski was acting as an agent for a disclosed principal— i.e. New Hope— only the
principal may be held liable for a breach of contract.32 Accordingly, all claims brought
against Czerwinski are dismissed.33
I. Breach of Contract
In order for Racheal to prevail on a claim for breach of contract, she must establish
by a preponderance of the evidence that: (1) a contract existed between the parties; (2) the
defendant breached an obligation imposed by the contract; and (3) the plaintiff suffered
30 6 Del. C. § 18-303.
31 See Thomas v. Hobbs, 2005 WL 1653947, at *2 (Del. Super. Apr. 27, 2005).
32 See Harris v. Dependable Used Cars, Inc., 1997 WL 358302, at *1 (Del. Super. Mar. 20, 1997).
33 Even assuming arguendo that Plaintiffs presented adequate evidence to warrant an inquiry as to whether
Czerwinski can be held personally liable under an alter ego or “corporate veil piercing” theory, in Delaware
such action is not within the jurisdiction of this Court. See Winner Acceptance Corp. v. Return on Capital Corp.,
2008 WL 5352063, at *5 (Del. Ch. Dec. 23, 2008); see also Hobbs, 2005 WL 1653947, at *2.
11
damages as a result of the breach.34 Delaware adheres to the objective theory of contracts,
meaning a contract should be viewed in the light of an objective and reasonable third party.35
There are two written agreements; therefore, it is undisputed that a contract existed between
Racheal and New Hope.
On consideration of the testimony and the documents submitted at trial, I find that
New Hope breached its obligations under the Racheal-New Hope Contract. New Hope’s
invoices listed work it was to perform in connection with the renovations. Racheal
introduced as part of her case-in-chief photographs depicting New Hope’s completed work.
These photographs reveal several instances where New Hope did not perform its obligations
under the contract. For example, New Hope failed to remove the ceiling and mud floor in
the master bathroom, failed to install a shower seat and ceiling fan in the master bathroom,
and failed to remove the old base trim in the powder room.
Racheal’s witness, White, also testified regarding the professional standards of a
general contractor. White testified that he reviewed New Hope’s invoices and inspected the
work performed, and found several instances where New Hope’s renovations were not
completed in accordance with the terms of the parties’ contract. For instance, New Hope
failed to have the walls finish for paint, partially installed a door casing, and reinstalled
Plaintiffs’ old light fixture instead of a new one. White also testified that New Hope did not
install the shower drain in the master bathroom according to the contract; failed to remove
all the rotten wood in the master bathroom; and incorrectly wired the master bathroom’s
34 See Gregory v. Frazer, 2010 WL 4262030, *1 (Del. Com. Pl. Oct. 8, 2010); VLIW Technology, LLC v. Hewlett-
Packard, Co., 840 A.2d 606, 612 (Del. 2003).
35 See Brace Indus. Contracting, Inc. v. Peterson Enters., Inc., 2016 WL 6426398, at *6 (Del. Ch. Oct. 31, 2016).
12
ground-fault interrupter. This testimony in conjunction with the photographs of the work
proved by the preponderance that the work was incomplete, substandard, and, in part, not
provided, and as such New Hope breached its obligations under the contract.
Furthermore, the Racheal-New Hope Contract contained a provision where New
Hope provided an eighteen month guarantee on installation. New Hope completed the
renovations in mid-March 2016. As discussed supra, there were several defects in New
Hope’s work. On March 21, 2016, Racheal notified New Hope of the defects, and requested
New Hope make the necessary repairs. To date, New Hope has not made any attempt to
correct the defects in its renovations. Therefore, the evidence proves by the preponderance
that New Hope breached its contractual warranty on installation.
The Court heard testimony from Racheal and White that the total cost for HWI to
correct New Hope’s defective and incomplete work was $10,473.71.36 However, HWI’s
repairs included painting the powder room and master bathroom, which New Hope had no
obligation under the contract. White testified that he charged Racheal approximately
$150.00 to paint the powder room and $250.00 to paint the master bathroom. Because New
Hope never had an obligation to paint these rooms, Racheal cannot recover these sums.
Therefore, as a result of New Hope’s breach of contract, I award damages of $10,073.71.
II. Breach of the Implied Warranty of Good Quality and Workmanship
Delaware law recognizes an implied warranty of good quality and workmanship.37
This Court has previously held that this implied warranty attaches to contracts for
36 This represents $1,145.00 for the powder room, $8,828.71 for the master bathroom, and $500.00 for the
additional repairs to the master bathroom.
37 See Bye v. George W. McCaulley & Son Co., 76 A. 621, 622 (Del. Super. 1908).
13
renovations to a home.38 Under the implied warranty of good quality and workmanship, the
law presumes a person who holds himself out as a competent contractor to perform labor,
will possess the requisite skill to perform such labor.39 In essence, the law requires
contractors to perform their labor in a skillful and workmanlike manner.40 A contractor will
be in breach of this implied warranty if he fails to “display[] the degree of skill or knowledge
normally possessed by members of [his] profession or trade.”41 However, this implied
warranty only applies to latent defects, and not to those that are obvious or discoverable by a
reasonable inspection.42 Moreover, a “good faith attempt to perform a contract, even if the
attempted performance does not precisely meet the contractual requirement is considered
complete if the substantial purpose of the contract is accomplished.”43
Turning to the matter sub judice, I find that the evidence proved by the preponderance
thereof that New Hope breached the implied warranty of good quality and workmanship.
During the course of the renovations, Czerwinski represented he was a competent
contractor to perform the proposed renovations. Plaintiffs’ expert witness, White, testified
to the professional standards of a general contractor in Delaware. As discussed supra, there
were several visible defects in New Hope’s renovations. However, White testified that there
were also several latent defects in New Hope’s work that were not discoverable until HWI
began repairing New Hope’s work. These latent defects included an improperly wired
38 See Afilipoaei v. Fruehauf, 2013 WL 5970491, at *1(Del. Com. Pl. Oct. 31, 2013); Marcano v. Dendy, 2007 WL
1493792, at *1 (Del. Com. Pl. May 22, 2007).
39 See Casale Constr., LLC v. Best Stucco LLC, 2014 WL 1316150, at *4 (Del. Super. Mar. 28, 2014) (quoting Bye
v. George W. McCaulley & Son Co., 76 A. 621, 622 (Del. Super. 1908).
40 See id.
41 Afilipoaei, 2013 WL 5970491, at *2.
42 See Duncan v. JBS Const., LLC, 2016 WL 1298280, at *3 (Del. Com. Pl. Mar. 31, 2016).
43 Nelson v. W. Hull & Family Home Improvements, 2007 WL 1207173, at *5 (Del. Com. Pl. Mar. 9, 2007)
(quoting Del. Civ. Pattern Jury Instructions § 19.18 (1998)).
14
ground-fault interrupter, a damaged toilet flange, and the partial removal of rotting floor in
the master bathroom. White further testified that when New Hope installed the shower
drain in the master bathroom, New Hope cracked a section of galvanized pipe, which caused
water damage to Plaintiffs’ dining room ceiling. White, as a general contractor, testified that
New Hope did not complete its work in a workmanlike manner.
Defendants did not present sufficient evidence to rebut Plaintiffs’ assertions of non-
workmanlike renovations. Furthermore, the photographs presented at trial show defects in
the work and insufficient performance by New Hope, which leads this Court to conclude
that New Hope breached its implied warranty of good quality and workmanship. Therefore,
I find in favor of Racheal on this claim.
III. Consumer Fraud
Racheal also alleges New Hope violated 6 Del. C. § 2513(a), a subsection of the
Delaware Consumer Fraud Act (“DCFA”). The DCFA was enacted to “protect consumers and
legitimate business enterprises from unfair or deceptive merchandising practices in the
conduct of any trade or commerce in part or wholly within the State.”44 To bring a cause of
action under the DCFA, the plaintiff must allege: “(1) the defendant engaged in conduct
which violated the statute; (2) the plaintiff was a ‘victim’ of the unlawful conduct; and (3) a
causal relationship exists between the defendant’s unlawful conduct and the plaintiff’s
ascertainable loss.”45 Section 2513(a) of the DCFA defines an unlawful practice as:
The act, use or employment by any person of any deception, fraud, false
pretense, false promise, misrepresentation, or the concealment, suppression,
or omission of any material fact with intent that others rely upon such
44 6 Del. C. § 2512.
45 Teamsters Local 237 Welfare Fund v. AstraZeneca Pharm. LP, 136 A.3d 688, 693 (Del. 2016).
15
concealment, suppression or omission, in connection with the sale, lease or
advertisement of any merchandise, whether or not any person has in fact been
misled, deceived or damaged thereby, is an unlawful practice.46
The DCFA differs from common law fraud in three ways: (1) the defendant need not
intend to make the misrepresentation or omission of material fact, but has to intend the
plaintiff rely on his omission or misrepresentation; (2) an unlawful practice is committed
regardless of actual reliance by the plaintiff; and (3) defendant’s misrepresentations need to
be made with the intent to induce action or inaction by the plaintiff, but plaintiff does not
need to prove actual intent.47 In all other aspects, “the statute must be interpreted in light of
established common law definitions and concepts of fraud and deceit.”48
In the instant matter, Racheal alleges New Hope violated the DCFA by making
misrepresentations as to the work New Hope was contracted to perform. Upon review of
the evidence before the Court, I find that Racheal has failed to demonstrate how New Hope
made a misrepresentation of a material fact in connection with the sale of the proposed
renovations. Racheal contends New Hope made a misrepresentation by proposing work
New Hope never intended to complete. However, Delaware Courts have held a “breach of
contract claim cannot be turned into a fraud claim simply by alleging that the other party
never intended to perform.”49
Racheal’s secondary argument is that New Hope violated the DCFA by
misrepresenting the fact that Czerwinski was licensed, experienced, and competent to
perform the renovations. This includes the proposed electrical and plumbing work, which
46 6 Del. C. § 2513(a).
47 See Teamsters Local 237 Welfare Fund, 136 A.3d at 693.
48 Id.
49 Hiller & Arban, LLC v. Reserves Mgmt., LLC, 2016 WL 3678544, at *4 (Del. Super. July 1, 2016).
16
Racheal insists must be performed by professionals licensed in those fields. However,
Racheal has failed to provide the Court with evidence that the proposed renovations to the
master bathroom and powder room required a licensed electrician or plumber.
Furthermore, Czerwinski testified that he did use an electrician for some of the electrical
work performed, and Racheal has failed to provide evidence to rebut his testimony.
Moreover, there is no evidence on record that Defendants made a misrepresentation as to
Czerwinski’s qualifications prior to the parties entering into the contract. Accordingly, the
Court finds in favor of New Hope on Racheal’s consumer fraud claim.
IV. Deceptive Practices in Consumer Contracts
Racheal’s remaining argument is that New Hope engaged in deceptive practices, in
violation of Title 6, Chapter 27, Subchapter IV of the Delaware Code governing consumer
contracts. Under this statute, a merchant engages in a deceptive practice when that
merchant: (1) distorts or obscures the terms, conditions or meaning of the contract or
creates a likelihood of confusion or misunderstanding by the use of unintelligible words,
phrases or sentences; or (2) omits information required by law to be disclosed in contracts
with consumers.50 A merchant who is found to engage in a deceptive practice “shall be
liable to the consumer in an amount equal to treble the amount of actual damages proved,
plus reasonable attorney’s fees.”51
To determine whether a consumer contract complies with the statute, the Court must
take into consideration the following factors: (1) whether the contract’s cross-references are
confusing; (2) whether the contract’s sentences are unreasonably long or complex; (3)
50 6 Del. C. § 2732.
51 6 Del. C. § 2734.
17
whether the contract contains double negatives and exceptions to exceptions; (4) whether
the contract’s sentences and sections are in a confusing or illogical order; (5) whether the
contract contains words with obsolete meaning or words that differ in their legal meaning
from their ordinary meaning; and (6) whether the contract’s conditions, exceptions, and
protections for consumers are given equal prominence when compared to the contract’s
main provisions.52
Racheal asserts that New Hope violated the Act by misrepresenting the work to be
done, and using misleading language as to the extent of work New Hope intended to
perform. However, when considering the above mentioned factors, the Court fails to see
how New Hope’s contract amounts to deceptive practices. The Racheal-New Hope
Contract, and New Hope’s supplemental invoices, do not contain any cross-references, any
words that are obsolete, or any unreasonably long or complex sentences. The documents do
have some grammatical errors, but these errors do not create a level of confusion sufficient
for a finding of deceptive practice. Although New Hope’s invoices could have gone into
greater detail outlining every action New Hope intended to perform with regard to Plaintiffs’
renovations, the Court cannot consider brevity a deceptive practice. Accordingly, the Court
finds in favor of New Hope on this allegation.
V. Affirmative Defenses
New Hope has raised a number of affirmative defenses to Racheal’s claims. New
Hope argues Racheal’s claims are barred under the doctrine of laches and by the statute of
limitations. Both the statute of limitations and the doctrine of laches function as time bars
52 6 Del. C. § 2733.
18
to lawsuits. In Delaware, an action for breach of contract must be brought within three
years from the date that the cause of action accrued.53 In the matter sub judice, the events
which gave rise to this litigation occurred in 2016, which is also the same year Plaintiffs
brought this action. Accordingly, I find that the statute of limitations defense is inapplicable.
Moreover, while the statute of limitations operates as a time-bar to actions at law, the
doctrine of laches applies only to actions in equity.54 The instant matter is an action at law;
therefore, New Hope cannot raise the equitable defense of laches.
New Hope also raises the defense of accord and satisfaction. In order to prevail on
the defense, a litigant must show: “(1) that a bona fide dispute existed as to the amount
owed that was based on mutual good faith; (2) that the debtor tendered an amount to the
creditor with the intent that payment would be in total satisfaction of the debt; and (3) that
the creditor agreed to accept the payment in full satisfaction of the debt.”55 The party
asserting the affirmative defense of accord and satisfaction bears the burden of proof to
show that an accord and satisfaction has been reached.56 Turning to the matter before the
Court, New Hope has failed to demonstrate that a bona fide dispute existed between the
parties as to the amount owed. In fact, the evidence shows that Racheal paid all the amounts
owed under the renovation contract, and her only dispute concerns the quality of the work
and not the amount owed. Accordingly, New Hope’s accord and satisfaction defense must
fail.
53 See 10 Del. C. § 8106.
54 See Whittington v. Dragon Grp., L.L.C., 991 A.2d 1, 8 (Del. 2009).
55 Acierno v. Worthy Bros. Pipeline Corp., 693 A.2d 1066, 1068 (Del. 1997).
56 See Wilmington Stevedores, Inc. v. Steel Suppliers, Inc., 511 A.2d 2 (Del. 1986).
19
Lastly, New Hope contends Racheal failed to mitigate her damages under the
contract. In Delaware, if it is feasible to do so, a party is generally obligated to mitigate
damages.57 “[A] party cannot recover damages for loss that he could have avoided by
reasonable efforts.”58 In other words, “the injured party has a duty to minimize . . . its costs
and losses.”59 Generally, the duty to mitigate damages arises after a defendant has breached
its duty to a plaintiff.60 As discussed supra, Racheal hired HWI to correct New Hope’s
mistakes. I find that Racheal’s hiring of HWI is a reasonable effort to mitigate her damages.
Accordingly, New Hope’s defense based upon a failure to mitigate damages also fails.
CONCLUSION
For all the foregoing reasons, I find New Hope in breach of contract and in breach
of the implied warranty of good quality and workmanship, and enter judgment in favor of
Racheal in the amount of $10,073.71, plus costs and interest until paid.
IT IS SO ORDERED.
_________________________________
Alex J. Smalls,
Chief Judge
Conaway-OP May 31 2017
57 See John Petroleum, Inc. v. Parks, 2010 WL 3103391, at *6 (Del. Super. June 4, 2010).
58 Id. (citing West Willow-Bay Court, LLC v. Robino-Bay Court Plaza, LLC, 2009 WL 458779, at *4 (Del. Ch. Feb.
23, 2009).
59 John Petroleum, Inc., 2010 WL 3103391, at *6.
60 See McKinley v. Casson, 80 A.3d 618, 627 (Del. 2013).
20