Free Response to Motion - District Court of Delaware - Delaware


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Case 1:05-cv-00300-JJF Document 166-7 Filed O2/14/2007 Page 1 014
EXHIBIT F

1997 WL 720463 . a 9 1 of 4
Case 1:05-cv-00300-JJF Document 166-7 Filed 02/14/2007 Page 2 of)4g
Not Reported in A.2d, 1997 WL 720463 (DeI.Super.)
Only the Westlaw citation is currently available.
UNPUBLISHED OPINION. CHECK COURT RULES BEFORE CITING.
Superior Court of Delaware.
Stephen P. GALVAGNA, T/A G & G Applicators, Plaintiff,
v.
MARTY MILLER CONSTRUCTION, INC., A Corporation of the State of Maryland, and Robert W. Hall and
Janet D. Hall, His Wife, Defendants.
No. CIV. A. 96L-01-015.
Sept. 19, 1997.
James F._\Na@@, Esquire, Tunnell & Raysor, Georgetown, DE, for plaintiff.
Richard E. Berl, Jr., Esquire, Berl & Jones, Georgetown, DE, for defendants, Robert W. Hall and Janet
D. Hall.
Marty Miller, Berlin, MD, pro se.
MEMORANDUM OPINION
GRAVES, J.
*1 This is an action which plaintiff Stephen P. Galvagna, t/a G & G Applicators ("PIaintiff") has filed
against Marty Miller Builders, Inc. ("Builders") as well as Robert W. Hall and Janet D. Hall (collectively
referred to as "the Owners"). The complaint contains the following claims: a mechanics' lien claim; an
in personam claim against Builders based upon contract; and an in personam claim against the
Owners based upon quantum meru/t, or unjust enrichment. Pending before the Court is the motion of
the Owners to dismiss the complaint against them on the ground that Plaintiff has no cause of action
against them.
FACTS
Builders, as general contractor, contracted with the Owners to build a commercial structure ("the
structure") for the Owners near Fenwick Island, Delaware. The structure is a one—story steel
fabricated building divided into three separate units containing approximately 10,000 square feet.
After Owners and Builders entered into their contract, Plaintiff and Builders entered into an oral
contract which provided that Plaintiff was to provide labor and materials to the structure. In
connection therewith, Plaintiff installed tile, which included a decorative border defendant Robert W.
Hall picked out, in the portion of the structure known as American Health & Fitness Center. The
amount owed Plaintiff for labor and materials supplied is $7,220.00. Builders has not paid Plaintiff.
Furthermore, the Owners have not paid either Builders or Plaintiff the sums allegedly due and owing.
The principal of Builders, Marty Miller, agrees that Builders owes Plaintiff the sums alleged to be due
and owing. However, he alleges that the Owners have not paid him, and that is the reason why he
has not paid Plaintiff. The Owners argue they had no contract with Plaintiff, and Plaintiff should seek
to recover the sums due and owing it from Builders.
In the Court's file on this action, there is a letter dated April 18, 1997, from the principal of Builders
stating:
I completed the building and the next day the HaII's [sic] were open and doing business. I have been
forced to close my corporation due to no money available. I have liquidated all assets to help pay off
outstanding debts and legal fees and still have some remaining ···· I have no money to hire an
attorney here.
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1997 W The procedural aspects of this case require review. Plaintiff has its in personam claims against
Builders and the Owners. The mechanics' lien claim is barred due to PIaintiff's failure to include in the
complaint the existence of, and the time of recording of, a first construction mortgage. 6{ui/dersj
Choice, Inc. v. l/enzon, ,Del.Supr.,,672 A.2d (1995). Builders has asserted a counterclaim against
Plaintiff and a cross—cIaim against the Owners. An arbitrator heard this matter. He entered a
judgment in P|aintiff's favor and against Builders on the in personam claim. He also entered a
judgment in the Owner's favor and against Plaintiff in connection with PIaintiff's in personam claim
against the Owners. He entered judgment in the Owners' favor and against Builders on BuiIders'
cross-claim, and judgment in PIaintiff's favor and against Builders on Builders' counterclaim. Plaintiff
filed a demand for trial de novo, which stated as follows:
*2 PIaintiff—CIaimant, by and through counsel, hereby requests a Trial de Novo in the above-
captioned action from the undated Arbitrator's Order filed with the Court on November 12, 1996, with
respect to the judgment entered in favor of defendants Hall and against Plaintiff-Claimant, if a request
for a trial de novo can be made with respect to only a part of the Arbitrator's findings, or from the
entire order entered in the above-captioned matter if so required.
In their briefing on the pending summary judgment motion, Plaintiff and Owners indicate that the
only matter remaining in this action is Plaintiff's claim against the Owners. The indication is that the
claims of, and involving, Builders are resolved. The general rule is that absent an agreement on the
part of all parties otherwise, all claims in a case are subject to the trial de novo; i.e., the entire
proceeding continues intact. In this case, a pretrial scheduling conference was held where all the
parties were present thereat, and a scheduling order was entered. There is no indication from that
proceeding that the only matter on appeal is the judgment in favor of the Owners and against
Plaintiff. Consequently, the entire case is before the Court as a result of the demand for a trial de
novo. However, the only matter which this Court now addresses is the Owners' pending motion for
summary judgment.
DISCUSSION
Summary judgment may be granted only when no issues of material fact exist, and the moving party
bears the burden of establishing the non—existence of material issues of fact. Moore v. Sizemore,
Del.Supr., 405 A.2d_679, 680 (1979). Once the moving party meets its burden, then the burden shifts
to the non-moving party to establish the existence of material issues of fact. Idgcat 681... Where the
moving party produces an affidavit or other evidence sufficient under Super. Ct. Civ. R. 56 in support
of its motion and the burden shifts, then the non—moving party may not rest on its own pleadings, but
must provide evidence showing a genuine issue of material fact for trial. Super. Ct. Civ. R. 56(e);
Ce/otex Corp. v.. Catrett, 477 U.S. 31%.32.2-23, 106 .$lCt. 2548, 9.1. L,ECl...2d 265 (1986). If, after
discovery, the non-moving party cannot make a sufficient showing of the existence of an essential
element of his or her case, then summary judgment will be granted. Bgrkhart v. Davies, Del.Sui;L,
602 A.2d 56, 59 (1.991), cert. den., 50.4 U.S. 912, 112 S.Ct. 194.6., 118 L.Ed.2d.5.51 (1992.); Ce/otex
Corp. v. Catrett, supra. If, however, material issues of fact exist or if the Court determines that it
does not have sufficient facts to enable it to apply the law to the facts before it, then summary
judgment is inappropriate. Eberso/e v. Lowengrub, DeI.Supr., 180 A.2d 467, 470 (1962).
In their motion, the Owners argue that because Plaintiff, a materialman, did not have a direct
contract with them, then Plaintiff is not entitled to an in personam judgment against them. Plaintiff
argues that in this case, where the Owners would be unjustly enriched because they never have paid
anyone for the labor and materials Plaintiff supplied, then Plaintiff is entitled to recover pursuant to
theories of quantum meruit or restitution.
*3 Although Plaintiff has not argued entitlement to recover based upon a third—party beneficiary
status, I will address that issue first. In construction matters, the parties generally craft their
contracts to insulate the owner from the subcontractor; the owner and general contractor deal with
one another while the general contractor and subcontractor deal with one another. Pierce Associates,
@.1/. Nen@;s@r1@t/gn. 3rd Cir.,,8Q_li.2d 530, 535-39 (1988), cert. den., 42 U.S._907, 109
S.Ct. 3218 (1989). The contracts generally do not allow for the subcontractor to be considered a
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1997 W 720463 . c 3 0f4
Ease 1:05-cv-00300-JJF Document 166-7 Filed 02/14/2007 Page 4 owlg
third-party beneficiary of the contract between the contractor and the owners. Id. Only when the
contract explicitly states that it intends for the subcontractor to be a third-party beneficiary do the
courts allow the subcontractor to sue the owner based upon a third—party beneficiary status. Id.
A review of the contract submitted in this matter shows that there is no third—party beneficiary status
bestowed upon Plaintiff in the contract between Builders and the Owners which gives it the right to
seek payment of the sums due and owing it. Consequently, Plaintiff is not a third-party beneficiary of
the contract between Builders and the Owners. Id. For the same reasons, the Owners are not third-
party beneficiaries of the contract between Builders and Plaintiff. Id.
I now turn to the law addressing the issue of whether a subcontractor may bring a claim based upon
quantum meruit, or implied contract. In Cohen v. De/mar Drive—In Theatre, Del.Super., 84 A.2d 597,
598 (1951) (" Cohen "), the Superior Court held:
3. A materialman, as subcontractor, may not recover a personal judgment against a property owner
in the absence of a contract between them [Citations omitted.]
4. A materialman who, as a subcontractor, furnishes materials upon the order and credit of a general
contractor or of another sub—contractor, cannot recover in an action in personam against the owner
upon the basis of implied contract arising from the receipt and acceptance of the benefit of the
materials furnished. [Citations omitted.]
The Superior Court followed this rule in Wi//iam M. Young Company v. Bacon, DeI.Super., C.A. No.
89L-JA2, Graves, J. (May 1, 1991) (" Young "). The Court held that based upon Cohen, the
subcontractor could not recover against the owners of the property who had paid the general
contractor. Plaintiff argues that Young is distinguishable because in this case, the Owners have not
paid Builders, and the Owners would be unjustly enriched if Plaintiff is not allowed to pursue them.
Other pertinent cases to examine are Chrys/er Corp. v. Airtemp Corp., DeI.Super., 426 A.2d 845
(1980) and Gi/bane Building Company v. Nemours Foundation, D.Del., 606_F.Supp. 995 (1985). In
the case of Chrys/er Corp. v. Airtemp Corp., 426 A.2d at 853-36, the Superior Court held that it would
not consider a quantum meruit theory to find a third—party beneficiary liable unless there existed an
inability to recover under the underlying or express contract or it would be unconscionable for the
third—party beneficiary to retain the benefits. Similarly, in Gi/bane Building Cgmpany v, Nemours
Foundation, 606 F.Supp. at_1007—08, the Delaware District Court granted the owner's summary
judgment motion against the subcontractors because there were no allegations that the
subcontractors would be unable to recover from the general contractor on the express contract or
that the owner had failed to pay the general contractor for the services the subcontractors rendered
thereby unjustly enriching the owner.
*4 Here, in light of the letter from Builders' principal indicating Builders has closed down and
liquidated its assets, it may well be that Plaintiff cannot recover from Builders. Furthermore, Plaintiff
and Builders have alleged that the Owners have not paid Builders for the services and material
Plaintiff supplied. The Owners have not disputed this allegation, and it is accepted as true for
summary judgment purposes. Based upon what is before the Court in this summary judgment
proceeding, it is reasonable to conclude that the Owners may be unjustly enriched by the labor and
materials which Plaintiff provided. Consequently, I hold that on the facts of this case, Plaintiff is
entitled to pursue against the Owners the in personam claim based upon quantum meruit.
For the foregoing reasons, the Owners' motion for summary judgment is denied.
ITIS SO ORDERED.
Del.Super.,1997.
Galvagna v. Marty Miller Construction, Inc.
Not Reported in A.2d, 1997 WL 720463 (Del.Super.)
END OF DOCUMENT
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