AT&T Corp. v. Carrier Corp.

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
AT&T CORP., )
)
Plaintiff, ) C.A. No. N14C-05-206 FSS
)
v. )
)
CARRIER CORPORATION, and )
NATIONAL H.V.A.C. SERVICE, )
LTD., L.P., )
)
Defendant )
Submitted: December 28, 2015
Decided: January 19, 2016
Upon Consideration of Defendant’s Motion to Dismiss
Based on Superior Court Civil Rule 12(b)(6).
DENIED.
Upon Consideration of Defendant’s Motion for Leave to File a Third Party
Complaint.
GRANTED.
OPINION
Nicholas D. Mozal, Ross Aronstam & Moritz LLP, Wilmington, DE, Attorney for
Plaintiff.
Armand J. Della Porta, Marshall Dennehey Warner Coleman & Goggin,
Wilmington, DE, Attorney for Defendant Carrier Corporation.
Michael J. Logullo, Rawle & Henderson LLP, Wilmington, DE, Attorney for
Defendant National HVAC Service, Ltd., L.P.
MEDINILLA, J.
[THE TEXT OF THE OPINION WILL BEGIN ON THE NEXT PAGE]
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INTRODUCTION
Plaintiff asserts claims for breach of express warranty and negligence
against Defendant National H.V.A.C. Service (“National HVAC”), and negligent
manufacturing against Defendant Carrier Corporation (“Carrier”) as a result of
improper equipment installation by National HVAC that caused damage to
Plaintiff’s work equipment. National HVAC asks this Court to consider its Motion
to Dismiss under Superior Court Civil Rule 12(b)(6) and alternatively seeks leave
to file a third-party complaint. For the reasons set forth below, National HVAC’s
Motion to Dismiss under Superior Court Civil Rule 12(b)(6) is DENIED and its
Motion for Leave to File a Third-Party Complaint is GRANTED.
FACTUAL AND PROCEDURAL HISTORY
Plaintiff owned and maintained commercial space located at 215 N. Orange
Street, Wilmington, Delaware, in connection with its business. Plaintiff purchased
two new HVAC systems that were manufactured by Carrier from National HVAC.
Plaintiff’s property manager, Johnson Controls, Inc. (“Johnson Controls”)
coordinated with National HVAC for the purchase and installation on behalf of
Plaintiff. National HVAC installed the HVAC systems on June 16, 2012.
Subsequent to the purchase and installation of the HVAC system, Plaintiff alleges
that as a result of an improper installation by National HVAC, water damage was
caused to Plaintiff’s network equipment.
3
Plaintiff’s filed a Complaint on May 23, 2014, and an Initial Trial
Scheduling Order was entered on September 16, 2014. 1 Plaintiff provided a draft
of its Amended Complaint to Defendants on March 30, 2015 but did not file its
Motion for Leave to File Amended Complaint until June 4, 2015. The Motion for
Leave to File Amended Complaint was granted on June 24, 2015 and Plaintiff filed
its Amended Complaint on the same day. National HVAC’s Motion to Dismiss
under 12(b)(6) and its Motion for Leave to File Third-Party Complaint
subsequently followed. On January 5, 2016, this Court heard Defendant’s Motion
to Continue Trial and Amend Trial Scheduling Order, whereby Defendants, and to
some extent Plaintiff, agreed that a new trial date was likely going to be needed.
With a looming March 2016 trial date, the request for a new trial date was made in
the face of the perfect storm: the retirement of the trial judge, undecided pending
dispositive motions, and the need for additional discovery. This Court granted
Defendant’s Motion to Continue Trial and Amend Trial Scheduling Order and the
parties agreed that no oral arguments were needed on the current motions before
the Court. Having considered all written submissions, the two pending motions are
decided, accordingly.
1
J. Silverman issued the prior scheduling order and ruled on prior motions in this case. Only the current motions
were assigned to this trial judge upon the retirement of J. Silverman.
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STANDARD OF REVIEW
For purposes of a motion to dismiss under Delaware Superior Court Civil
Rule 12(b)(6), all well-pleaded allegations in the complaint must be accepted as
true. 2 Even vague allegations are considered well-pleaded if they give the
opposing party notice of a claim; the Court must draw all reasonable inferences in
favor of the non-moving party. 3 A complaint will not be dismissed for failure to
state a claim unless it appears to a certainty that under no set of facts which could
be proved to support the claim asserted would the plaintiff be entitled to relief. 4
Superior Court Civil Rule 12(b)(6) for Failure to State a Claim
National HVAC argues that the claim for Breach of Warranty should be
dismissed as a matter of law because the contract was not signed until after the
event in question. It claims that the contract was only signed due to
misrepresentation on the part of Plaintiff, and, therefore, the contract is invalid and
unenforceable. Citing to Rodgers v. Erickson Air-Crane Company, it asks this
Court to hold that contracts which are procured by misrepresentation, which are
never contemplated or discussed prior to the work being undertaken and
2
Barni v. Kutner, 76 A.2d 801 (Del. 1950); Plant v. Catalytic Constr. Co., 287 A.2d 682 (Del. Super. Ct. 1972),
aff’d, 297 A.2d 27 (Del.).
3
In re Gen. Motors (Hughes) S’holder Litig., 897 A.2d 162, 168 (Del. 2006) (quoting Savor, Inc. v. FMR Corp., 812
A.2d 894, 896-97 (Del. 2002)).
4
Klein v. Sunbeam Corp., 94 A.2d 385 (Del. 1952).
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completed, and for which there is no new consideration, fail as a matter of law.5
This Court is not persuaded that Rodgers applies to this case.
The Rodgers decision only dismissed certain claims, in part, on a motion for
summary judgment. As Plaintiff points out, the claims that were dismissed did not
allege fraud or misrepresentation. Those claims survived. As such, that Court
found that a genuine issue of material fact existed as to whether a party was
fraudulently induced to sign the agreement and denied the motion for summary
judgment. 6 Although this motion was not converted to one for summary judgment,
and this Court does not consider extrinsic evidence in its ruling, where allegations
of misrepresentation are alleged in this case, dismissal is inappropriate.
This Court is guided by Appriva Shareholder Litigation Co. v. EV3, Inc.,
wherein the Supreme Court held that a trial court may not, on a Rule 12(b)(6)
motion to dismiss, “choose between two differing reasonable interpretations of
ambiguous provisions.”7 Here, there are differing, factually reasonable,
interpretations of this agreement that remain to be decided. Whether National
HVAC breached the terms of the agreement and whether Plaintiff procured this
contract through misrepresentation are also still in dispute.
5
Rodgers v. Erickson Air-Crane Co. L.L.C., 2000 WL 1211157 (Del. Super. Aug. 17, 2000).
6
Id.
7
Appriva Shareholder Litigation Co. v. EV3, Inc., 937 A.2d 1275, 1291 (Del. 2007).
6
While National HVAC claims that the contract did not exist when the
incident occurred, Delaware law holds that parties are able to ratify their agreement
even after performance of the contract. 8 Whether the contract was effective before
the contract was dated is not to be decided as a matter of law under Rule 12(b)(6).
Therefore, it is inappropriate for this Court to dispose of this case at this time. 9
As to the breach of warranty claim, National HVAC argues that the warranty
claim is barred by 6 Del. C. §2704 where the clear language of the statute makes
the indemnity impermissible as statutorily unenforceable and void because it arises
out of the maintenance, repair, and/or replacement of appurtenances to a building.
Carrier contends that the statute does not make all such indemnity clauses
unenforceable, but rather, only those which purport to indemnify the indemnitee
against the indemnitee’s own negligence. 10 Carrier and Plaintiff argue that
Plaintiff is entitled to indemnity because the incident was caused by the negligence
of National HVAC. Assuming the allegations of negligence against National
HVAC are taken as true, then the indemnity claim also survives Defendant’s
Motion to Dismiss under Rule 12(b)(6).
8
Rodgers, 2000 WL 1211157, at *5; Sweetman v. Strescon Indus., Inc., 389 A.2d 1319, 1322 (Del. Super. Ct. 1978)
(“When a party executes a contract which is effective on a prior date the party establishes its contractual obligations
as of the prior date.”).
9
See Green Plains Renewable Energy, Inc. v. Ethanol Holding Co., LLC, 2015 WL 590493, at *6 (Del. Super. Ct.
Feb. 9, 2015)(“Contract interpretation issues involving factual disputes, are more appropriately resolved through
summary judgment, or at trial.”)
10
Volair Contractors, Inc. v. AmQuip Corp., 829 A.2d 130, 134 (Del. 2003) (“But the public policy statute is not
implicated because the indemnification is not implicated because the indemnification is not for [the party’s own]
negligence.”); Patton v. 24/7 Cable Co., LLC, 2013 WL 1092147, at *3 (Del. Super. Ct. Jan. 30, 2013) (when
provision “purports to insulate a party from his own liability by requiring indemnification from another party, such
language is prohibited by 6 Del. C. §2704(a)”).
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Leave to File Third-Party Complaint
Plaintiff’s property manager, Johnson Controls, coordinated with National
HVAC for the purchase and installation on behalf of Plaintiff. National HVAC
seeks leave to add Johnson Controls as a third party defendant for their role in this
case as the manager of the building. Plaintiff argues that the request is untimely
and that National HVAC should have added Johnson Controls earlier. Based on
the procedural history of this case, this Court suggests it is not necessary to
determine what party, if any, gets credited for the delays. Instead, the
considerations are whether there is prejudice to the plaintiff, the complication of
issues in the trial, the timeliness of the motion to implead, the merit of substance of
the third party complaint, and additional expenses to the parties.11 Although
Plaintiff argues that there is little value added by bringing in Johnson Controls as a
third party, even less harm is done to Plaintiff by granting Defendant’s request.
Where the damages sought have been amended from a little over $300,000 to over
$1 million, and Johnson Controls’ role became more critical following discovery,
this Court finds that it is appropriate to grant National HVAC’s Motion for Leave
to File a Third Party Complaint.
Finally, National HVAC argues that Count II should be dismissed because
Plaintiff has failed to procure an expert on the issues of negligence and causation.
11
See Burris Foods, Inc. v. Deloitte & Touche, 1991 WL 215896, at *4 (Del. Super. Ct. Sept. 26, 1991).
8
Both Carrier and Plaintiff dispute whether an expert is necessary. Because this
Court has granted Defendant’s Motion to Continue Trial and Amend Trial
Scheduling Order, as well as Defendant’s Motion to File a Third Party Complaint,
this Court will not address dismissal as to Count II at this juncture. Further, since
Plaintiff requested, during oral arguments, that it would seek leave to obtain
experts if Defendant’s Motion to File a Third Party Complaint was granted,
Plaintiff is strongly cautioned that it retain expert(s) if it plans to admit evidence
that addresses issues not within the common knowledge of laymen.
For the reasons stated above, National HVAC’s Motion to Dismiss under
Superior Court Civil Court Rule 12(b)(6) is DENIED and its Motion for Leave to
File a Third Party Complaint is GRANTED.
IT IS SO ORDERED.
/s/ Vivian L. Medinilla
Judge Vivian L. Medinilla
cc: Prothonotary
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