Opinion
C.A. No. 07C-01-045 WLW.
Submitted: May 18, 2007.
Written Decision: May 22, 2007.
Upon Defendant's Motion to Dismiss.
Denied.
Sean M. Lynn, Esquire of Hudson Jones Jaywork Fisher, Dover, Delaware; attorneys for the Plaintiffs.
Ronald W. Hartnett, Jr., Esquire of Reger Rizzo Kavulich Darnall, LLP, Wilmington, Delaware; attorneys for the Defendant.
ORDER
Before the Court is a motion to dismiss filed by the Defendant, G G Construction, Inc., against the Plaintiffs, Nicholas and Jessica Fedirko. The Defendant filed the motion pursuant to Superior Court Civil Rule 12(b)(7) for the Plaintiffs' failure to join a party under Rule 19. For the following reasons, the motion is denied without prejudice as ordered by the Court on May 18, 2007.
FACTS
On May 12, 2005, Jessica Fedirko entered into a contract ("the Contract") with the Defendant to perform various repairs to a property located at 43 East Division Street, Dover, Delaware 19901. The Contract valued the work at $15,000, and stated that half of the contract price was due at signing and the balance was due upon completion of the work. On the same day that the contract was signed, Keith Penawell, through his company, Quality Lawn Care and Home Repair, wrote a check to the Defendant in the amount of $7,500. At the time the Contract was signed, Mr. Penawell was engaged to Ms. Fedirko; subsequently the two have separated.
Following payment, the Defendant's employees began the contracted for repairs to the property. After two or three days of work, however, the Defendant's employees left the property and did not return. Eventually, Ms. Fedirko made several unsuccessful phone calls to the Defendant's CEO, Glenn S. Lowman, to determine why performance under the Contract had ceased. Mr. Lowman replied that the Defendant no longer intended to finish the contracted for work and stated that the $7,5000 down payment would be returned. To date, the Defendant has not returned the down payment to the Plaintiffs.
In addition to the Defendant's failure to complete the work pursuant to the Contract, the Plaintiff has stated that some of the work that was completed was not performed correctly. The Defendant's employees removed a spare bathroom and closet on the first floor of the property in contravention of the Plaintiffs' directions. Furthermore, the Defendant's employees cracked the foundation of the home resulting in $23,000 in damage. The Defendant's failure to complete the work required by the Contract left the property exposed to the elements, causing mildew and warping.
On December 16, 2005, Ms. Fedirko filed a complaint against the Defendant in Justice of the Peace Court #16. A default judgment was entered against the Defendant on March 3, 3006. The Defendant filed a Motion for a New Trial. When the Motion was heard on June 20, 2006, the J.P. Court treated it as a motion to vacate the default judgment and the motion was denied. On July 22, 2006, the prior entries of default judgment were vacated and the matter was scheduled for trial on December 14, 2006. The Plaintiffs requested the matter be dismissed without prejudice because the damages arising from the Contract exceeded the jurisdiction of the J.P. Court. The motion was granted on December 8, 2006.
On January 26, 2007, the Plaintiffs filed a complaint against the Defendant in Superior Court. The Plaintiffs alleged three counts: breach of contract, negligent performance of duties owed to the Plaintiffs and breach of implied warranties. On March 8, 2007, the Defendant filed the Motion to Dismiss currently before the Court.
PARTIES' CONTENTIONS
The Defendant contends that the Complaint must be dismissed because of the Plaintiffs' failure to join a party under Superior Court Civil Rule 19. The Defendant argues that Keith Penawell, Ms. Fedirko's ex-fiancé, is a party to the Contract and, in his absence, complete relief cannot be accorded among those already parties. As such, the Defendant maintains that Mr. Penawell is an indispensable party. Therefore, the Defendant asserts that without Mr. Penawell's participation, dismissal is demanded.The Plaintiffs respond to the Defendant's Motion by presenting the Court with a document titled Assignment of Contractual Rights. Pursuant to the Assignment, the Assignor, Mr. Penawell, agrees to assign all of his "right, title, and interest, including the right to pursue a civil action against G G Construction, Inc.," to the Assignees, the Plaintiffs. The Plaintiffs assert that based on the Assignment of Contractual Rights, they have not failed to join an indispensable party and the Defendant's Motion should be denied.
STANDARD OF REVIEW
Superior Court Civil Rule 12(b)(7) provides that a Court may dismiss a plaintiff's claim for failing to join a party pursuant to Superior Court Civil Rule 19. In order to determine whether a plaintiff has failed to join a party pursuant to Rule 19, the Court undertakes a two pronged inquiry. First, the Court inquires whether the party is a necessary party under Rule 19(a). A party is necessary if:
Graham v. State Farm Mut. Ins. Co., 2006 WL 1600949, at *1 (Del.Super.).
To the extent Delaware Courts have not addressed the mechanics of Rule 19, the Court refers to federal sources. See Wolhar v. General Motors Corp., 712 A.2d 464, 469 (Del.Super. 1997) ("Construction of federal rules is generally persuasive in the construction of Superior Court Civil Rules.").
Janney Montgomery Scott, Inc. v. Shepard Niles, Inc., 11 F.3d 399, 404 (3d Cir. 1993).
Id. ("The present version of Rule 19 does not use the word "necessary." It refers to parties who should be joined if feasible. The term necessary in referring to a Rule 19(a) analysis harks back to an earlier version of Rule 19. It survives in case law at the price of some confusion.").
"(1) in the person's absence complete relief cannot be accorded among those already parties, or (2) the person claims an interest relating to the subject of the action and is so situated that the disposition of the action in the person's absence may (I) as a practical matter impair or impede the person's ability to protect that interest or (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of the claimed interest."
Id. (quoting Federal Rule of Civil Procedure 19(a), which Delaware Superior Court Civil Rule 19(a) tracts word for word.).
If the party is necessary, it must be joined if feasible to do so. It is not feasible to join a party when the party is not subject to service of process and joining the party would deprive the Court of subject matter jurisdiction. If the party is necessary and joinder is feasible, then the Court shall order that the person be made a party. If the person should join the action as a plaintiff but refuses to do so, the person may be made a defendant, or, in a proper case, an involuntary plaintiff. The Rule does not provide for dismissal at this stage.
Id.
Delaware Superior Court Civil Rule 19(a).
Id.
Id.
John Hancock Property Cas. Co. v. Hanover Ins. Co., 859 F.Supp. 165, 168 (E.D. Pa. 1994).
Second, if the party is "necessary" under Rule 19(a), but joinder is not feasible, then the Court must determine whether "in equity and good conscience the action should proceed among the parties before it, or should be dismissed, the absent party being thus regarded as indispensable." In making this assessment, the Court is to consider the following factors:
Janney Montgomery Scott, Inc., 11 F.3d at 404.
Delaware Superior Court Civil Rule 19(b).
(1) to what extent a judgment rendered in the person's absence might be prejudicial to the person or those already parties; (2) the extent to which, by protective provisions in the judgment, by the shaping of relief, or other measures, the prejudice can be lessened or avoided; (3) whether a judgment rendered in the person's absence will be adequate; and (4) whether the plaintiff will have an adequate remedy if the action is dismissed for nonjoinder.
Id. See also, Graham, 2006 WL 1600949, at *1.
When presented with a Rule 12(b)(7) motion, the Court places an initial burden on the party raising the defense to show that the person who was not joined is needed for a just adjudication. "However, when an initial appraisal of the facts reveals the possibility that an unjoined party whose joinder is required under Rule 19 exists, the burden devolves on the party whose interests are adverse to the unjoined party to negate this conclusion and a failure to meet that burden will result in the joinder of the party or dismissal of the action."
John Hancock Property Cas. Co., 859 F.Supp. at 168.
7 Federal Practice and Procedure Civ. 3d § 1609. See also, Boles v. Greeneville Housing Authority, 468 F.2d 476, 478 (6th Cir. 1972).
When presented with such a motion, the Court "will consider all well-pleaded facts in the complaint and accept them as true." In viewing the facts, the Court must draw "all reasonable inferences in favor of the non-movant." The Court may consider documents that are "integral to the plaintiff's claim and incorporated in the complaint" in deciding a motion to dismiss.
AT T Corp. v. Clarendon America Ins., 2006 WL 2685081, at *3 (Del.Super. 2006).
Id.
DISCUSSION
Turning to the facts of the case sub judice, the Court finds that the Defendant cannot meet its initial burden to demonstrate that the absent party, Mr. Penawell, is needed for a just adjudication of the action. In response to the Defendant's Motion, the Plaintiffs obtained from Mr. Penawell an Assignment of Contractual Rights. By this Assignment, Mr. Penawell gave up all his rights to file a lawsuit based on any claim arising from the Contract. Instead, he assigned these rights to the Plaintiffs. As such, neither clause (1) nor clause (2) of Rule 19(a) can be met in this instance. Mr. Penawell, thus, is not a necessary party. Because the Court has concluded that Mr. Penawell is not a necessary party pursuant to Rule 19(a), it need not consider whether he is an indispensable party under Rule 19(b). Therefore, there is no need for Mr. Penawell to be joined in this matter for a just adjudication to occur.
Additionally, this conclusion is supported by federal case law on the issue of joinder in cases where a contract for an assignment of rights has been signed. Generally, an assignor of rights and liabilities under a contract is not needed for a just adjudication of a suit brought by the assignee. This is especially true when, as in this case, the assignor is not even a proper party because he has lost the right to bring an independent action on the contract by virtue of the assignment. One exception to the general rule is where the validity of the assignment itself is at issue; however, that exception has not been raised by the Parties in the Motion presently before the Court.
7 Federal Practice and Procedure Civ. 3d § 1613; See also, Refac Financial Corp. v. Patlex Corp., 879 F.Supp. 468 (E.D. Pa.1995).
Id.; See also, On-Line Technologies v. Perkin Elmer Corp., 141 F.Supp.2d 246, 254 (D. Conn. 2001); Borough of Nanty-Glo to Use of Westinghouse Credit Corp. v. Fireman's Fund Ins. Co., 250 F.Supp. 329, 330 (D. Pa. 1966) ("An assignor is generally neither a real party in interest nor an indispensable party.")
Id.; See also, deVries v. Weinstein Intern. Corp., 80 F.R.D. 452, 456 (D. Minn. 1978).
Accordingly, the Defendant's Motion to Dismiss Plaintiffs' Complaint is denied without prejudice.
IT IS SO ORDERED.