Arroyo v. Regal Builders, LLC

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
ANN ARROYO, :
: C.A. No: K13C-12-028 RBY
Plaintiff, : In and for Kent County
:
v. :
:
REGAL BUILDERS, LLC, REGAL :
CONTRACTORS, LLC, and PALA :
TILE & CARPET CONTRACTORS, INC., :
:
Defendants. :
Submitted: August 2, 2016
Decided: September 20, 2016
Upon Consideration of Defendant Pala Tile & Carpet Contractors, Inc.’s
Motion for Summary Judgment
DENIED
ORDER
Robert C. McDonald, Esquire, Silverman McDonald & Friedman, Wilmington,
Delaware for Plaintiff.
Noel E. Primos, Esquire, Schmittinger & Rodriguez, P.A., Dover, Delaware for
Defendants Regal Builders, LLC, and Regal Contractors, LLC.
Neil J. Levitsky, Esquire, Fox Rothschild, LLP, Wilmington, Delaware for Defendant
Pala Tile & Carpet Contractors, Inc.
Young, J.
Arroyo v. Regal Builders, LLC, et al.
C.A. No.: K13C-12-028 RBY
September 20, 2016
SUMMARY
Plaintiff homeowner brought contract and tort claims against Defendant
general contractor and Defendant subcontractor, alleging that flaws in construction
of her new home resulted in the need to relocate and repair. Defendant subcontractor
now moves for summary judgment on all claims against it based on a lack of privity
of contract and of any direct liability to Plaintiff. Because factual issues remain
relative to the application of the law to the circumstances here presented, Defendant
subcontractor’s motion is DENIED.
Additionally, Defendant contractor filed a response requesting permission to
maintain its cross-claim against Defendant subcontractor. No party has moved to
dismiss Defendant contractor’s claims against Defendant subcontractor. Therefore,
the “request” of Defendant contractor to continue its claim against Defendant
subcontractor is not considered.
FACTS AND PROCEDURES
In December 2011, Ann Arroyo (“Plaintiff”) purchased and took delivery of
a new construction home built by Defendant general contractor Regal Builders, LLC
and Regal Contractors, LLC (combined, “Regal”) with additional tiling and flooring
work done by Defendant subcontractor Pala Tile & Carpet Contractors, Inc. (“Pala”).
In December 2013, Plaintiff filed suit claiming breach of duty/negligence, breach of
contract/negligence, and breach of express and implied warranty against Regal and
Pala. Plaintiff alleges that significant defects in the home discovered during the first
year of ownership necessitated her temporary relocation and repair. Defendant Pala
now moves for summary judgment as to all claims against it.
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Arroyo v. Regal Builders, LLC, et al.
C.A. No.: K13C-12-028 RBY
September 20, 2016
STANDARD OF REVIEW
Pursuant to Superior Court Civil Rule 56, summary judgment is appropriate
when there is no genuine issue of material fact so that the moving party is entitled to
judgment as a matter of law.1 “Summary judgment may not be granted if the record
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 the law to the
circumstances.”2 The court should consider the record in the light most favorable to
the non-moving party.3 The moving party bears the burden of showing that no
genuine issues of material fact exist.4
DISCUSSION
Counsel for Plaintiff, the party against which this Motion is filed, has asserted
that issues of fact remain, contradicting moving Pala’s statement that no issues of
material fact exist. That bare allegation by Plaintiff may be sufficient, in itself, to
preclude a summary judgment dismissal. In this case, there is very little presented to
support either position. Hence, the outcome here will not hinge on that minimal
factor. Rather, the analysis will concern the claims against moving Defendant in the
tort or contractual context.
Pala moves for summary judgment as to the breach of contract claim, alleging
1
Tedesco v. Harris, 2006 WL 1817086, at *1 (Del. Super. June 15, 2006).
2
Id.
3
Id.
4
Moore v. Sizemore, 405 A.2d 679, 680 (Del. Super. 1979).
3
Arroyo v. Regal Builders, LLC, et al.
C.A. No.: K13C-12-028 RBY
September 20, 2016
that no privity of contract exists between Plaintiff and Pala. Pala also moves for
summary judgment as to the breach of duty claim, asserting that no duty runs from
subcontractor to property owner based on a separate contract between owner and
general contractor. Finally, Pala moves for summary judgment on the breach of
express or implied warranty, asserting that it cannot be held liable on this claim.
Pala’s central argument is that no contract or tort liability can attach given Pala’s
status as a subcontractor.
In response, Plaintiff admits that no privity of contract exists between Plaintiff
and Pala. Instead, Plaintiff argues that Pala is accountable to her under third party
beneficiary principles. According to Plaintiff, Pala was required to satisfy Regal’s
obligation under the contract to construct flooring consistent with its own plans and
specifications.
If floors in a house are defective, the whole house is defective, as they are
critical to the very nature of the project contracted for. So the party installing the
floors, if that installation is faulty, is liable over to the home owner in tort, contract,
either or both theories. Delaware case law has long and often recognized such
liability.
Contract Liability
In Oliver B. Cannon and Son, Inc. v. Dorr-Oliver, Inc.,5 a premises owner sued
a subcontractor for property damage caused by its poor workmanship.6 The Delaware
5
336 A.2d 211 (Del. 1975).
6
Id. at 213.
4
Arroyo v. Regal Builders, LLC, et al.
C.A. No.: K13C-12-028 RBY
September 20, 2016
Supreme Court affirmed judgment finding that the subcontractor was liable to both
the general contractor and the owner, holding that the owner was a third party
beneficiary of the subcontract.7 In the subsequent case of Seiler v. Levitz Furniture
Co.,8 the Supreme Court found negligence liability available under third-party
beneficiary principles,9 which concept Plaintiff urges this Court to adopt to find Pala
accountable to Plaintiff as a third party beneficiary of the contract between Pala and
Regal.
Tort Liability
Delaware case law supports recovery by a plaintiff in a negligence action for
economic losses even absent contractual privity with the defendant.10 In Guardian
Construction Co. v. Tetra Tech Richardson, Inc.,11 the Delaware Superior Court
addressed the development of the law and concluded that “privity of contract is not
an indispensable prerequisite to the recovery of economic damages in negligence
cases.”12 Liability may be imposed in favor of a third party beneficiary according to
the following rule:
7
Id. at 215-16.
8
367 A.2d 999 (Del. 1976).
9
Id. at 1007.
10
See, e.g., Martin v. Ryder Truck Rental, 353 A.2d 581 (Del. Super. 1976).
11
583 A.2d 1378 (Del. Super. 1990)
12
Id. at 1386.
5
Arroyo v. Regal Builders, LLC, et al.
C.A. No.: K13C-12-028 RBY
September 20, 2016
where it is the intention of the promisee to secure
performance of the promised act for the benefit of another,
either as a gift or in satisfaction of an obligation to that
person, and the promisee makes a valid contract to do so,
then such third person has an enforceable right under that
contract to require the promisor to perform or respond in
damages.13
In numerous instances, the Court has rejected privity-based limitations to
recovery, concluding that “in an action against a contractor for negligence which
actually results in property damage privity is no longer a prerequisite to suit.”14 The
Court explained this conclusion in detail:
The defendant contractor’s liability is premised upon the
basic rule of negligence and is not dependent on the
existence of privity. The defendant, as any other individual,
has a duty to exercise ordinary care to guard against injury
which flows as a foreseeable consequence of an act. The
existence of a collateral contract...does not negate any
obligations to plaintiff imposed in tort.15
Here, Plaintiff’s claims survive Pala’s Motion for Summary Judgment despite
a lack of privity. Delaware law permits Plaintiff to maintain the contract, warrant, and
tort claims against Pala. Further factual inquiry into the nature and language of the
subcontract between Regal and Pala is desirable in order to determine whether
Plaintiff has enforceable contract rights as a third party beneficiary. In addition, Pala
13
Id. (citations omitted).
14
Travis v. Taralia, 1986 WL 4856, at *4 (Del. Super. Apr. 23, 1986).
15
Id.
6
Arroyo v. Regal Builders, LLC, et al.
C.A. No.: K13C-12-028 RBY
September 20, 2016
may be liable to Plaintiff in tort for property damage alone. Therefore, Pala’s Motion
for Summary Judgment is DENIED. However, Plaintiff may not recover duplicate
contract and tort damages.
CONCLUSION
For the foregoing reasons, Defendant’s Motion is DENIED.
IT IS SO ORDERED.
/s/ Robert B. Young
J.
RBY/lmc
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