Court Opinion

ID: 4209277
Source: CourtListenerOpinion
Date Created: 2017-10-05 04:08:50.544996+00
Date Added: 2024-06-11T14:41:00.103677
License: Public Domain

IN THE COURT OF COMMON PLEAS
FOR THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY

NEXSIS, INC. t/a BENJAMIN,
FRANKLIN PLUMBING,

Plaintiff,

v. C.A. No. CPU4-17-001056
ANDREA ROBINSON, and
LIBERTY MUTUAL
INSURANCE COMPANY,

\./VVVVV"/VVVVV

Defendants.
Douglas A. Shachtman, Esq. of The Shachtman Law Firm,
Attorneyfor Plaintijjp
David L. Baumberger, Esq. of Chrissinger & Baumberger,
Attomeyfor Defendant-Liberty Mutual Ins. Co.

ORDER DENYING PLAINTIFF’S MOTION FOR RE-ARGUMENT

WELCH, J.

On June 30, 2017, this Court held a hearing on Defendant Liberty Mutual Insurance
Company’s Motion to Dismiss for Failure to State a Claim. After legal argument from both parties,
the Court heard rebuttal by defense counsel Who argued, “Again, l don’tthink the approval to an
estimate rises to the level of an intended beneficiary under the insurance policy, as Nexsis claims
it Would.” The Court then responded, “You know What, I agree. I am signing your order.”l The

Court then granted Defendant’s motion.

 

1 While the Court values supportive case law, the record satisfies the Delaware Supreme Court’s admonishment that
a trial court state its reasons on the record “no matter how briefly.” Aa'emski v. Ruth, 229 A.2d 837, 838 n.l (Del.
1967). Accordingly, Plaintiff Was correct to “assume that the Court adopted the argument of Defendant Liberty

Following the Court’s judgment, Plaintiff filed a timely Motion for Re-argument on July
lO, 2017, On July 21, 2017, the Court wrote defense counsel a letter posing a preliminary question
and requesting supplemental briefing On August 7, 2017, defense counsel for Liberty Mutual
apologized for his late reply to the Court’s letter and noted that he would file a response by August
l6, 2017, On August 16, 2017, Liberty Mutual filed its Response to Plaintijj"s Motion for Re-
argument Plaintiff then filed its Reply in Support of Its Motion for Re-argument on August 23,
2017,

ln the case sub judice, Defendant Andrea Robinson (“Robinson”) sought to have repairs
performed to fix a leak in her roof. Robinson contacted her home insurance carrier, Defendant
Liberty Mutual Insurance Company (“Liberty Mutual”) and requested that her home repairs be
covered. Liberty Mutual requested that Robinson send it the repair estimates in order to confirm
that damage to the property surrounding the water leak was related to the water leak, as the water
leak itself was not insured. Robinson sent Liberty Mutual an estimate from Plaintiff Benjamin
Franklin Plumbing (“Plaintiff”) and Liberty Mutual deemed the estimate to be reasonable and
necessary. Liberty Mutual authorized the repairs and paid Robinson directly. Plaintiff then sued
Robinson, alleging that she failed to pay it for the repairs, and Liberty Mutual, claiming that a
contract was created when Liberty Mutual authorized the repairs and issued payment for those

repairs.2

 

Mutual, i.e. that an injured party may not directly sue the tortfeasor’s insurer.” Plaintiff s Motion for Reargument
(“Plaintiff’s Motion”) at l.

2 During the hearing, Plaintiff noted that default judgment had been entered against Defendant Andrea Robinson
(“Robinson”) and that it was investigating options of enforcement Plaintiff is essentially seeking a “second bite of
the apple” and desires this Court to order Liberty Mutual to pay twice because Robinson cashed Liberty Mutual’s
check and failed to pay Plaintiff.

Standard of Review
Pursuant to Court ofCommon Pleas Civil Rule 5 9(e), a Motion for Re-argument is a request
for the Court to reconsider its findings of fact, conclusions of law, or judgment3 “New arguments,
or arguments that could have been raised prior to the Court’s decision, cannot be raised in a motion
for re-argument.”4 Moreover, a Motion for Re-argument is not an opportunity for litigants to
reargue positions the court has previously resolved.5 Motions for Re-argument “will be denied
unless the Court has overlooked a controlling precedent or legal principles, or the Court has
misapprehended the law or facts such as would have changed the outcome of the underlying
decision.”6 “A party seeking to have the trial court reconsider the earlier ruling must demonstrate
newly discovered evidence, a change in the law, or manifest injustice.”7
Parties’ Contentions
In Plaintiff s Motion for Re-argument, Plaintiff reiterates that it either “contracted directly”
with Liberty Mutual by Liberty Mutual “obtaining and approving the repair quote” or,
alternatively, Plaintiff was an intended beneficiary of Liberty Mutual’s promise to pay Robinson
for the repair costs.8 In Defendant’s Response, Liberty Mutual argues that Plaintiff cannot be an
intended beneficiary of the contract between Defendants because there was no specific intent to

create such a right when the contract was created.9 In fact, in its Motion to Dismiss, Liberty Mutual

pointed to the plain language of the contract between Defendants as evidencing a lack of intent,

 

3 Beatty v. Smedley, 2003 WL 23353491, at *2 (Del. Super. Mar. 12, 2003).

4 Citimo."tgnge. Inc. v. Bishop, 2011 WL 1205149, at *1 (Del. Super. Mar. 29, 2011).

5 See id.

6 Beatty, 2003 WL 23353491, at *2.

7 Pariscm v. Cohan, 2012 WL 1066506, at *l (Del. Com. Pl. Mar. 29, 2012).

8 Plaintiff’s Motion at 3.

9 Defendant Liberty Mutual Insurance Company’s Response to Plaintiff’s Motion for Reargument (“Defendant’s
Response”) at 3-4.

“No one will have the right to join us as a party to any action against an ‘insured.”’10 Thus, it
claims Plaintiff is simply an incidental beneficiary, and not an intended one.ll Secondarily, Liberty
Mutual asserts that there are no facts to support Plaintiff’s assertion that a direct contract exists
between Plaintiff and itself.12 Finally, in Plaintiff’ s Reply, Plaintiff claims that Liberty Mutual “is
wrong as to contract law.”13 Plaintiff reasserts that the pled facts_Liberty Mutual insured
Robinson’s residence, Liberty Mutual had an obligation to pay for the repairs, and it reviewed and
approved Plaintiff’ s estimate-are indicative of an intended beneficiary.14
Discussion

Plaintiff s Motion for Re-argument does not allege the existence of newly discovered
evidence or that the Court overlooked controlling precedent. Instead, Plaintiff s arguments imply
that the Court misapprehended the law and/or facts. The Court disagrees and will not order Liberty
Mutual to pay twice.

Plaintiff`s secondary argument_that a contract existed between Plaintiff and Liberty
Mutual based on the latter’s promise to Robinson_is meritless.15 Under Delaware law, a contract
,,16

is defined “as an agreement upon sufficient consideration to do or not to do a particular thing.

“Consideration is a bargained-for-exchange of legal value.”17 In order to create a contract, there

 

10 Defendant Liberty Mutual Insurance Company’s Motion to Dismiss Under Common Pleas Civil Rule 12 for
Failure to State a Claim and Lack of Standing (“Defendant’s Motion to Dismiss”) at 4.

11 See id.

12 See id. at 4.

13 Plaintiffs Reply in Support of Its Motion for Reargument (“Plaintiff’ s Reply”) at 2. The Court will not address
Plaintiff s arguments in its reply brief that Defendant’s original Motion to Dismiss and Response transformed into
summary judgment actions when Defendant attached the homeowner’s policy, as the case law is clear. See
Frabizzio v. Hendry, 2015 WL 7254317, at *2 (Del. Com. Pl. Nov. l6, 2015) (noting an exception where a motion
to dismiss will not convert to a summary judgment motion when the “extrinsic document is integral to a plaintiffs
claim and is incorporated into the complaint by reference”).

14 Plaintist Reply at 3-4.

15 Plaintiff cites no case law for its claim.

16 Howlett v. Zawora, 2012 WL 1205103, at *2 (Del. Com. Pl. Mar. 30, 2012) (citing Rash v. Equitable Trust Co.,
159 A. 839, 840 (Del. Super. 1931)).

17 Harmon v. State, 2010 WL 8250826, at *2 (Del. Super. Sept. 27, 2010) (citing Barnard v. State, 642 A.2d 808, 818
(Del. Super. 1992), afd, 637 A.2d 829 (Del. 1994)).

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must be “mutual assent to the terms of the agreement, also known as the meeting of the minds.”18

“Mutual assent requires an offer and an acceptance wherein ‘a11 the essential terms of the proposal
must have been reasonably certain and definite.”’19 If the meeting of the minds does not occur,
then the contract is unenforceable according to Delaware law.20 Because there is no evidence of a
verbal or written agreement between Plaintiff and Liberty Mutual, proceeding to analyze whether
a breach occurred would be premature.
Plaintiff’ s primary argument is also misplaced. This Court recently addressed the issue of
third-party beneficiaries:
Generally, a stranger to a contract cannot enforce rights under the contract.
However, a non-party may enforce the contract as a third party beneficiary if the
following is established: (1) the contracting parties intended to benefit the third
party; (2) the benefit is intended to be a gift or in satisfaction of a pre-existing
obligation; and (3) the intent to benefit the third party is a material part of the
contracting parties' purpose in entering into the contract. If there is no intent by the
contracting parties to confer a benefit, a third party who receives such a benefit
under the contract is merely an incidental beneficiary with no enforceable rights.21
The Court further states that one “must look to the language of the contract” to decipher the intent
of the parties when they entered into the contract.22

There are no facts here which support that Robinson and Liberty Mutual intended to benefit

Plaintiff when they entered into the subject contract. Indeed, regarding insurance policies and

 

18 Thomas v. Thomas, 2010 WL 1452872, at *4 (Del. Com. Pl. Mar. 19, 2010) (citing Quinones v. Access Labor, 2008
WL 2410170, at *5 (Del. Super. 2008)).

19 See id. (quoting Gleason v. Ney, 1981 WL 88231, at *1 (Del. Ch. 1981)).

20 See Roa’gers v. Erickson Air-Crane Co. L.L.C., 2000 WL 12111577 at *6 (Del. Super. Aug. 17, 2000).

21 Conaway v. New Hope Tile, LLC, No. CPU4-16-002487, at 8-9 (Del. Com. Pl. May 31, 2017) (internal footnotes
omitted). “[N]ot only is it necessary that performance of the contract confer a benefit upon a third person that was
intended, but the conferring of the beneficial effect on such third-party should be a material part of the contract’s
purpose.” Washington House Condo. Ass ’n v. Daystar Sills, Inc., 2015 WL 6750046, at *4 (Del. Super. Oct. 28, 2015)
(internal quotation marks omitted) (quoting Guardian Constr. Co. v. Tetra Tech Richara'son, Inc., 583 A.2d 1378,
1386 (Del. Super. 1990)).

22 See Conaway, No. CPU4-l6-002487, at 9 (citing Bromwich v. Hanby, 2010 WL 8250796, at *2 (Del. Super. July
1, 2010)); accord Pierce Assocs., Inc. v. Nemours Found., 865 F.2d 530, 535-36 (3d Cir. 1989) (finding a general
contractor not to be an intended third-party beneficiary of a sub-contract); Cmty. Ass ’n Underwriters v. Rhodes Dev.
Grp., Inc., 488 Fed. Appx. 547, 552 (3d Cir. 2012) (Rendell, J., concurring) (quoting Scarpitti v. Weborg, 609 A.2d
147, 151 (Pa. 1992)) (agreeing that the intent must be present “‘at the time of contracting”’).

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third-party beneficiaries, the Superior Court has held that the language of a policy preventing direct
actions by third parties indicates “clear” intent not to allow direct actions by third parties.23 The
language thus solidifies that the third party is not an intended beneficiary, but an incidental one.24
Here, the contractual language for liability coverage, which nearly mirrors the language in

Broadway v. Allstate Properly & Casually Insurance Company,25 states:

Suit Against Us. No action can be brought against us unless there has been
compliance with the policy provisions

No one will have the right to join us as a party to any action against an “insured.”

Also, no action with respect to Cover E [Personal Liability] can be brought against

us until the obligation of the “insured” has been determined by final judgment or

agreement signed by us.26
The contract language in this case is unambiguous; Plaintiff is unable to bring suit against Liberty
Mutual as an incidental beneficiary to the contract.

Despite the dispositive contractual language,27 Plaintiff relies on the Chancery Court’s
analogy in Madison Realzy Partners 7, LLC v. AG ISA, LLC to a RESTATEMENT (SECOND) oF
CONTRACTS illustration.28 Under § 302(1)(a), the Restatement suggests the following:

B promises A to pay whatever debts A may incur in a certain undertaking

A incurs in the undertaking debts to C, D and E. lf the promise is interpreted as a

promise that B will pay C, D and E, they are intended beneficiaries under

Subsection (l)(a); if the money is to be paid to A in order that he may be provided
with money to pay C, D and E, they are at most incidental beneficiaries.29

 

23 Broadway v. Allstate Property & Cas. Ins. Co., 2015 WL 4749176, at *5 (Del. Super. Aug. 11, 2015) (intemal
citations omitted).

24 See id.

25 See id. at 6.

26 Defendant’s Motion to Dismiss, Exhibit at 11, 15.

27 See Empire Fire & Marine Ins. Co. v. Miller, 2012 WL 1151031, at *5 (Del. Com. Pl. Apr. 5, 2012) (“In this case,
an extended analysis of whether Empire qualifies as an intended beneficiary under the Ms. Williams-Nationwide
contract is unnecessary because this contract specifically prohibits direct suits by injured parties against
Nationwide.”).

28 Madison Realty Partners 7, LLC v. AG ISA, LLC, 2011 WL 406268 (Del. Ch. Apr. 17, 2001).

29 REsTATEMENT (SECoND) oF CoNTRACTs § 302 cmt. b, illus. 3 (1981).

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30 Yet, theoretical musings are rarely

Plaintiff believes this illustration supports its position.
helpful. Relevant to the case at bar, Maa’ison involved claimed third-party beneficiaries to the
Partnership Agreement (“Agreement”) and beneficiaries to a subsequent contract between an
affiliate and controlling entity of the general partners.31 Madison Realty Partners 7 LLC
(“Madison”), managing general partner of the general partnership, sued AG ISA LLC (“AGGP”),
second general partner responsible for providing all funding, claiming AGGP breached the
Agreement when it failed to notify Madison that it would no longer provide funding.32

Prior to this dispute, Madison contracted with Investment Services of America LLC
(“ISA”) and The Madison Avenue Capital Group 11 LLC (“MACG 11”), affiliates and co-plaintiffs,
to provide personnel and services to the partnership.33 Likewise, Madison Avenue Investment
Partners LLC (“MAIP”), a Madison affiliate, contracted with Angelo Gordon, who held a
controlling interest in AGGP, to require AGGP to satisfy its “obligations” to the partnership under
the Agreement (“Umbrella Contract”).34 ln the defendants’ motion to dismiss, they argued that
the non-signatory plaintiffs to the Agreement, ISA and MACG 11, and to the Umbrella Contract,
Madison, ISA and MACG II, were only incidental beneficiaries to the agreements.35

Regarding the Agreement, the Court found that even though all parties were aware that the

partnership would rely on its Agreement when it came time to pay ISA and MACG 11 for their

 

30 Plaintiff believes Liberty Mutual’s attempt to distinguish Madison on its facts is misplaced because the
“importance of Maa'ison is the court’s recognition of the persuasiveness of the illustration to Restatement § 302, not
the facts of that case.” Plaintiff s Reply at 2. This Court disagrees The “court’s recognition” of the Restatement’s
“persuasiveness” is based on the factual underpinnings of the case itself. The Chancery Court not only discussed the
illustration before delving into the facts, but the court stated as much, “[the illustration’s] analytical framework aids
the Court’s assessment of the third-party beneficiary status of the non-signatory plaintiffs under the Partnership and
the Umbrella Agreements, respectively.” Madison Realty Partners 7, LLC, 2011 WL 406268 at *5.

31 See Madison Realty Partners 7, LLC, 2011 WL 406268 at *l.

32 See id.

33 See id.

34 See id.

33 See id. at *5-6.

services, this simply made ISA and MACG 11 “expected creditors,” not intended beneficiaries36

Similarly, under the Umbrella Contract, even though Madison would receive proceeds as a general
partner when Angelo Gordon caused AGGP to honor its pledge under the Agreement, and ISA
and MACG 11 would receive payments under their service agreements when the partnership
received funding from AGGP, the non-signatory parties were still incidental beneficiaries37

Presumably, the Madison Court inferred that AGGP, as B, promised to provide funding to
the partnership as well as Madison indirectly, collectively A, under the Agreement assuming that
ISA and MACG II would be paid by A under the service agreements Also, under the Umbrella
Contract, Angelo Gordon, as B, would cause AGGP, as A, to continue providing funding to the
partnership, which in turn would provide proceeds to Madison indirectly, as a general partner, and
ISA and MACG ll as “expected creditors.”38

While the present case does not delve into corporate matters, the Restatement’s illustration
applies in a similar manner. Robinson, as A, contacted with B, her home insurance carrier for
Liberty Mutual to pay her for home repair coverage. Robinson, as A, then contracted with Plaintiff,
as C, to provide personnel and services to repair her home. Although not within the quoted
language in Madison, the fulcrum of the illustration is “[i]f the promise is interpreted as a promise
that B will pay C, D and E, they are intended beneficiaries under Subsection (1)(a).”39

In the present case, even though Liberty Mutual authorized the repairs, it did not promise
to pay Plaintiffs directly. Moreover, if one were to closely examine Madison, despite Madison

receiving proceeds indirectly from the other agreements, as the partnership would receive proceeds

from the affiliate service agreements and Umbrella Contract, Madison was still deemed an

 

30 See id. at *5.

37 See id. at *6.

38 See id. at *5-6.

39 RESTATEMENT (SECOND) oF CONTRACTS § 302 cmt. b, illus. 3 (1981).

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incidental beneficiary.40 Therefore, any indirect relationship Plaintiff attempts to establish is
unavailing unless Plaintiff can show that Liberty Mutual intended to pay Plaintiff directly.

The Court turns to E.I. du Pont de Nemours & Company v. MacDermid Printing Solutions,
which also relied on the above illustration, to support this interpretation of Madison. In E.I. du
Pont de Nemours & Co., MacDermid Printing Solutions LLC (“MacDermid”) claimed to be a
third-party beneficiary to a settlement agreement (“Agreement”) between Cortron Corporation
(“Cortron”) and E.l. du Pont de Nemours & Company (“DuPont”), which was intended to resolve
a April 2008 lawsuit pending in the United States District Court for the District of Minnesota.41
The Agreement required Cortron to meet certain criteria of disengagement with the thermal
flexographic printing industry while requiring DuPont to indemnify Cortron from all costs
resulting from potential claims MacDermid would be “expected” to file relating to the settlement
terms42

Additionally, a lawsuit between MacDermid and DuPont was pending in the United States
District Court for the District of New Jersey and a lawsuit between MacDermid and Cortron was
pending in the District Court of Connecticut.43 On July 8, 2014, the Connecticut jury returned a
verdict in MacDermid’s favor, resulting in a nearly sixty-five million dollar judgment against
Cortron.44 DuPont then filed a complaint in the Superior Court of Delaware seeking a declaratory
judgment which prevented MacDermid from suing DuPont relating to the judgment or the

Agreement.45 The next day, on March 4, 2015, MacDermid filed a new action in the Connecticut

District Court (“201 5 Connecticut action”), which was removed to the District Court of Delaware,

 

40 See Madison Realty Partners 7, LLC, 2011 WL 406268 at *5-6.

41 See E.I. du Pont de Nemours & Co. v. MacDermid Printing Solulions, 2017 WL 1217207, at *l (D. Del. Mar. 31,
2017).

42 See id.

43 See id. at *2.

44 See id.

43 See id.

asserting that it was a third-party beneficiary to the Agreement and DuPont breached that
Agreement by not paying the judgment.46

The Delaware District Court held that even though the Agreement was based on “lilture
claims MacDermid may assert once it learned of the [Agreement],” MacDermid remained simply
an “expected” creditor.47 This was because MacDermid was not a “creditor beneficiary” “‘at the

”’48 MacDermid was therefore only an incidental beneficiary as no pre-

time of the contract.
existing duty existed.49 The Delaware District Court quoted the Restatement’s illustration, noting
it “bolstered” its analysis because DuPont did not promise to pay MacDermid, but Cortron in order
for Cortron to satisfy any of MacDermid’s judgments against it.50

Plaintiff is similarly an expected creditor as Liberty Mutual has no pre-existing duty to
Plaintiff. This is especially true when Plaintiff’ s claims were also expectancies similar to

MacDermid’s claims Thus, this Court fails to see how Plaintiff’ s position stands on surer footing

than the plaintiffs in Madison and E.I. du Pont de Nemours & Company.

 

46 See id. The original Connecticut action was appealed to the Second Circuit, which affirmed in part and remanded
in part, the New Jersey action is pending, and the 2015 Connecticut action was dismissed as a result of the Delaware
action. See id.

47 See id. at *4.

48 See id. (quoting Pettit v. Country Life Homes, Inc., 2009 WL 846922, at *3 (Del Super. Mar. 31, 2009)) (noting
that MacDermid was required to be a “donee beneficiary,” which it was not claiming to be, or a creditor beneficiary
under the second prong of the intended beneficiary test).

49 See id.

30 See id.

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Conclusion
Alier consideration of the supplemental briefing and applicable law, the Court hereby
denies the Motion. The Court has not misapprehended the law or facts such that the outcome of
its decision would have been different Plaintiff’s Motion for Re-argument is hereby DENIED.
Each party shall bear their own costs

IT IS SO ORDERED this 2 §§ 111 day of September, 2017.

M/C vach

John K. W/elch, Judge

cc: Ms. Tamu White, Chief Civil Clerk

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