Summary
listing the elements as including a duty to provide accurate information, the supplying of false information, failure to exercise reasonable care in obtaining or communicating the information, and a pecuniary loss caused by justifiable reliance
Summary of this case from Isakov v. Ernst & Young, Ltd.Opinion
C.A. No. 09C-03-024 (RBY).
Submitted: March 4, 2011.
Decided: June 16, 2011.
Upon Consideration of Defendants' Motions for Summary Judgment.
GRANTED IN PART DENIED IN PART.
William D. Fletcher, Jr., Esq., and B. Brian Brittingham, Esq., Schmittinger Rodriguez, P.A., Dover, DE, for Plaintiff.
Colin M. Shalk, Esq., Casarino, Christman and Shalk, Wilmington, Delaware for Defendants Peninsula Adjusting Company, Inc. and Peninsula Insurance Company.
Mary E. Sherlock, Esq., Weber, Gallagher, Simpson, Stapleton, Fires, Newby, LLP, Dover, Delaware for Defendant Rent-A-Man.
OPINION AND ORDER
SUMMARY
This action arises from a house fire at the plaintiff's residence on March 18, 2007. Plaintiff holds a homeowner's insurance policy with Defendant Peninsula Insurance Company ("Peninsula Insurance"), which hired Defendant Peninsula Adjusting Company ("Peninsula Adjusting") as the insurance adjuster for the plaintiff's claim following the fire. Defendant Rent-A Man Services, Inc. ("RAMS"), was hired by the Peninsula Adjusting to perform remediation labor and services on the plaintiff's residence. The plaintiff brings a seventeen count complaint against all three defendants for the alleged inadequate poor workmanship repair of the home. All defendants have filed motions for summary judgment. For the reasons set forth below the motions for summary judgment are DENIED in part and GRANTED in part.
FACTS
On March 18, 2007, the plaintiff's residence (at 38080 St. Georges Road, Delmar, Delaware 19940) was subject to a dwelling fire. The fire, originating in the attic area, was primarily caused by an electrical wiring failure that ignited combustibles. The residence sustained heavy damage and loss as a direct and proximate result of the fire and substantial water damage directly related to the fire loss and the efforts of emergency responders.
Approximately one week after the fire, the plaintiff contacted Peninsula Insurance, the issuer of the residence, which, then, retained the defendant Peninsula Adjusting as the insurance adjuster for the evaluation of the extent of property damage and loss. The plaintiff alleges that Peninsula Insurance originally informed her that the residence was to be demolished and rebuilt pursuant to the policy, but later decided that remediation efforts to the existing structure would be employed.
The plaintiff alleges that Peninsula Adjusting retained RAMS to perform the remediation and restoring of plaintiff's home as the general contractor. The plaintiff also alleges that Peninsula Adjusting retained and authorized all other services related to the restoration of plaintiff's home and personal belongings. The plaintiff further alleges that restoration and repairs remain incomplete and inadequate throughout the home. For example, the plaintiff contends that internal beams were never replaced, but rather painted over. The repair cost figure was $126,466.60.
It is alleged by the defendants that the plaintiff was a very difficult insured to work with. Over the course of the remediation, she fired Service Master on multiple occasions, discharged several electricians, and brought about the replacement of an adjuster. Service Master was the original contractor. However, they were "kicked off the site" for improper behavior and allegedly tossing Plaintiff's mother's contents out of a closet.
RAMS contends that it performed all the repairs set forth in the proposal. After RAMS completed the work on the plaintiff's home, an industrial hygienist, Susan White, obtained and analyzed non-viable sport trap air samples, concluding that there was no visible mold.
In July 2007, Peninsula Adjusting informed the plaintiff that all work was satisfactorily completed, and that plaintiff's dwelling was wholly restored. However, the plaintiff contends that the home remains in substantially the same defective condition as it was presented to her in July 2007.
The plaintiff hired Mike Williams Contracting in September 2010 to inspect the residence. After inspecting the property, the contractor opined that $54,937.49 worth of damage remains uncorrected.
Depositions have been taken of the plaintiff, Shirley Smith; James Joseph O'Donnelle of Peninsula Ins.; Richard Bentz of the Peninsula Adjusting; Jonathan Bradford Conely of Rent-A-Man; Gregory Creed of Rent-A-man; and Lauren Hooker Calhoun of Service Master. Expert discovery was cut off on January 15, 2010. No physicians were identified as witnesses. Plaintiff's answers to discovery failed to identify any medical conditions which the plaintiff claims to have suffered.
The complaint in this matter avers in 77 paragraphs and 16 counts certain allegations against the defendants. The plaintiff has brought the following claims against all the defendants: common law fraud (withdrawn from Peninsula Insurance); negligence and negligently failing to disclose the condition of the home; intentional infliction of emotional distress; and punitive damages. The final three claims of the plaintiff's complaint were brought against all three defendants. They include Delaware common law fraud, negligent reporting, and negligent infliction of emotional distress.
Individually against RAMS, the plaintiff has filed two breach of contract claims, Count V and Count VII. Against Peninsula Adjusting, the plaintiff filed a breach of contract claim, negligence for reporting inaccurate information, and two additional breach of contract claims under Count VIII and Count XV. Against Peninsula Insurance, the plaintiff has brought three counts of breach of contract claims.
STANDARD OF REVIEW
In a motion for summary judgment, the moving party bears the burden of proving "no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Summary judgment is only appropriate when, after viewing all the evidence in a light most favorable to the nonmoving party, the Court finds no genuine issue of material fact. A genuine issue of material fact arises when "any rational trier of fact could infer that plaintiffs have proven the elements of prima facie case by clear and convincing evidence." If a defendant, as the moving party, can establish that there is no genuine issue of material fact, and the defendant is entitled to judgment as a matter of law, the burden will shift to the plaintiff to show the existence of specific facts to support the plaintiff's claim.DISCUSSION
The defendants contend that summary judgment should be granted to a significant number of the causes of action brought by the plaintiff, because the law and the facts of this case do not support the plaintiff's allegations. Defendants contend that, even when the facts are viewed in the light most favorable to the plaintiff, there is nothing in the record indicating that the repairs made the house structurally unsound or that the defendants failed to disclose any damage.The plaintiff contends that the evidence viewed in a light most favorable to the plaintiff indicates that the insurance adjuster at Peninsula Adjusting, Richard Bentz ("Bentz"), made false representations to the plaintiff on which the plaintiff relied. The plaintiff alleges that Bentz falsely communicated that the remediation of fire and water damage to the residence was fully completed and performed in a workmanlike manner, when in fact it was not. The plaintiff alleges the remediation remains incomplete, because the performance was insufficient. Therefore, Plaintiff asserts, there was misrepresentation as to the condition of the residence. The plaintiff contends that RAMS misrepresented the true and actual condition of the home, and falsely communicated the condition to the plaintiff and others. The Court now turns its attention to the counts in the complaint.
A. Count I: Common Law Fraud
The elements of common law fraud are lacking. Those elements include: (1) false representation, usually one of fact made by the defendant; (2) defendant's knowledge or belief that the representation, was false or made with reckless indifference to the truth; (3) an intent to induce plaintiff to act or refrain from acting; (4) the plaintiff's action or inaction taken in justifiable reliance; (5) damages as a result.
Latesco L.P. v. Wayport, Inc., 2009 WL 2246 793, (Del. Ch. June 24, 2009); Stephenson v. Capano Dev., Inc., 462 A.2d 1069, 1074 (Del. 1983).
This count was withdrawn with regard to Peninsula Insurance. The count remains against Peninsula Adjusting and RAMS. The record does not support that the adjuster, Richard Bentz made a false representation or knew a statement was false with the intent to induce the plaintiff. Additionally, the plaintiff has failed to state fraud with particularity as required under Superior Court Civil Rule 9(b). The plaintiff attempts to use generalized allegations based on the fact that the home was not properly repaired. This does not rise to the level of common law fraud. Furthermore, there is nothing in the record to support that a false representation was made. Summary Judgment is granted with respect to this claim as to each Defendant.
B. Count II — Negligent Misrepresentation
Count II states that the defendants "negligently failed to disclose to plaintiff the true and actual condition of the home." The plaintiff contends that the record establishes that the repairs to the residence remain incomplete and unsatisfactorily completed. Hence, the plaintiff contends that Bentz' representations prevented the residence from being repaired in a timely manner. The plaintiff contends that Joe O'Donnell of Peninsula Ins., misrepresented the actual condition of the home upon receipt of complaints from the plaintiff. The plaintiff argues that after several complaints and notices of defective workmanship, Peninsula Insurance took no action to follow up with RAMS and instead submitted payment.
In order to assert a claim for negligent misrepresentation, the following elements must be present: "(1) a pecuniary duty to provide accurate information; (2) the supplying of false information, (3) failure to exercise reasonable care in obtaining or communicating information, and (4) a pecuniary loss caused by justifiable reliance upon the false information." Section 552 of the Restatement (Second) of Torts, adopted by Delaware Courts states:
Atwell v. RHIS, Inc., 2006 WL 2686532 (Del. Super.); see Outdoor Technologies, Inc. v. Allfirst Fin., Inc., 2001 WL 541472 (Del. Super.).
[O]ne who, in the course of his business, professional employment, or in any other transaction in which he has a pecuniary interest, supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information.
Restatement (Second) of Torts § 552.
In Danforth v. Acorn Structures, Inc., the plaintiff's suit for negligent misrepresentation alleged that an agreement signed with the defendant contained defective plans. These plans were used to build the plaintiff's house. The Court there concluded that the plaintiff could recover only by showing "that the defendant supplied the information to the plaintiff for use in business transactions with third parties."
Danforth, 1991 WL 269956 (Del. Super.).
Essentially the plaintiff argues that the defendants knew or should have known the problems with the structural foundation of the home and moisture build-up as a result of the negligent repairs. Based on this record, Count II of the plaintiff's complaint does not allege a separate tort or contract action. The plaintiff is alleging simple negligence, not negligent misrepresentation. As such, the motion for summary judgment is granted with respect to the negligent misrepresentation count.
C. Count III and XI of the plaintiff complaint alleging Emotional Distress
Count III states in one sentence that the defendants' extreme and outrageous actions caused emotional distress. Count XI states that the defendant's negligent actions caused emotional distress. To begin with, Plaintiff cannot recover under a theory of negligent infliction of emotional distress because there is no physical injury. Furthermore, there is no evidence of the necessary intent to support a claim for intentional infliction of emotional distress. Therefore, the record, even at this early stage, cannot support a claim for the emotional distress counts and summary judgment is GRANTED as to these counts.
Mergenthaler v. Asbestos Corp. Of America, 480 A. 2d 647 (Del. 1996).
D. Count IV — Punitive Damages
The plaintiff contends that material issues of fact remain in dispute as to the conduct of the defendants which may give rise to punitive damages. The plaintiff contends that Peninsula Adjusting willfully and recklessly ignored the professional opinions and recommendations of Service Master and SEHS regarding the proper remediation practices. Peninsula Adjusting received several notices of the defective and incomplete measures by RAMS, but failed to take any meaningful action to investigate the concerns.
Punitive damages exist only for wanton, willful or reckless conduct. Specifically, a Defendant's conduct must be "outrageous" because of an "evil motive" or a "conscious indifference to the rights of others." Mere inadvertence, mistake or errors of judgment, which constitute mere negligence, will not suffice to impose punitive damages.
Even in the present record, there is no evidence of willful conduct on the part of the defendants to indicate that punitive damages would be warranted. There is nothing in the record to indicate that any of the defendants displayed or endorsed an "I don't care" attitude. Summary judgment is GRANTED with respect to this claim.
Count VIII — Statutory Fraud
The plaintiff alleges in the complaint that all three defendants violated the Delaware Consumer Fraud Act. The plaintiff does not cite to a specific section of the Delaware Consumer Fraud Act. Rather, she alleges that the defendants violated the Act, by their "concealment, suppression, or omission of the material facts that Plaintiff's dwelling had major defects, alleged to have been remediated but in fact unaddressed and that these defects were prevalent when the dwelling was tendered to Plaintiff as allegedly being wholly remediated." A private cause of action may be brought by a consumer under the Act to recover for losses suffered as a result of fraud or deception under 6 Del. C. § 2513.
6 Del. C. § 2513(a) provides:
(a) 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 the intent that others rely upon such concealment, suppression or omission, in connection with the sale or advertisement of any merchandise, whether or not any person has in fact been misled, deceived or damages thereby, is an unlawful practice.
As a matter of fact and law, there is no evidence of record that the defendants concealed a material fact intending to have the plaintiff rely on its omission or concealment with the intent to induce action or inaction. The repairs are alleged to be unsatisfactory. However, that does not rise to the level of Consumer Fraud. There is no evidence that the defendants knew or advised of any damaged or deteriorated condition or attempted to defraud the plaintiff. Summary Judgment on this count is GRANTED.
Young v. Joyce, 351 A.2d 857 (1975) (Court held that the isolated sale of real estate by its owner doesn't in this case constitute the conduct of trade or commerce); see Nardo v. Guido DeAscansis Sons, Inc, 254 A.2d 254 (Del. Super. 1969) (similarly held that the record was devoid of evidence indicating a fraudulent intent to conceal material facts of the repairs which were not satisfactory).
6 Del. C. § 2532 (a)(12) provides:
(a) A person engaged in a deceptive trade practice when, int eh course of his business, vocation, or occupation, he-(12) engaged in any other conduct which similarly creates a likelihood of confusion or misunderstanding.
E. Count X, IX — Negligence
The plaintiff alleges negligent reporting in count X against all the three defendants; and, in Count IX, the plaintiff alleges the negligent reporting of inaccurate information by Peninsula Adjusting. There are disputed facts in the present record to establish the negligence claims. Thus, summary judgment is DENIED with respect to the negligence causes of action.
E .Counts V, VI, VII, XII, XIII, XIV, XV, XVI — Breach of Contract Claims
The plaintiff contends that the defendants breached their contractual duties to the plaintiff by improperly adjusting and repairing the damage to the home. The plaintiff argues that the defendants failed to evaluate the damage to the residence correctly, failed to ensure its estimation of the labor and services needed to restore the residence, and misrepresented the condition of the home. Therefore, the plaintiff contends Peninsula Insurance and Peninsula Adjusting breached their contractual duties of providing evaluation, estimation and remediation to the residence under contract. Defendants contend that the plaintiff's home was repaired, noting that the plaintiff currently resides in the home. All work is alleged to be complete pursuant to the contract. Defend ants assert, therefore, that there is no evidence that they did not complete the repairs contracted to be repaired. After viewing the evidence in the light most favorable to the plaintiff, the Court finds that genuine issues of material fact exist with regards to the breach of contract claims. Thus, the record supports the elements of a breach of contract cause of action. The motion, as to these counts, is DENIED.
CONCLUSION
For the foregoing reasons summary judgment is GRANTED for Counts I, II, III, IV, VIII, X, XI. Summary judgment is DENIED for the breach of contract and negligence causes of action, Counts V, VI, VII, IX, XII, XIII, XIV, XV, XVI.SO ORDERED this 16th day of June, 2011.