Court Opinion

ID: 9892575
Source: CourtListenerOpinion
Date Created: 2023-10-24 16:09:44.032782+00
Date Added: 2024-06-11T08:24:23.565782
License: Public Domain

IN THE SUPREME COURT OF THE STATE OF DELAWARE

HYETT’S CORNER, LLC,                    §
                                        §     No. 16, 2023
                                        §
             Defendant-Below,           §
             Appellant,                 §     Court Below—Superior Court
                                        §     of the State of Delaware
             v.                         §
                                        §     C.A. No. N19L-06-090
PEARCE & MORETTO, INC.,                 §
                                        §
             Plaintiff-Below,           §
             Appellee.                  §

                          Submitted: September 27, 2023
                          Decided:   October 24, 2023

Before TRAYNOR, LEGROW, and GRIFFITHS, Justices.

                                      ORDER
      This 24th day of October, 2023, after consideration of the parties’ briefs and

the record on appeal, it appears to the Court that:

      (1)    Hyett’s Corner, LLC, a Delaware limited liability company, appeals a

Superior Court bench verdict1 resolving a construction contract dispute. Pearce &

Moretto, Inc., a Delaware corporation, worked for Hyett’s Corner from

approximately 2013 to 2019 on a residential-subdivision development project called

“Windsor South.” Hyett’s Corner, as the project’s developer, hired Pearce &

1
 Pearce & Moretto, Inc. v. Hyett’s Corner, LLC, C.A. No. N19L-06-090, 2022 WL 17986631
(Del. Super. Dec. 22, 2022).
Moretto to perform a wide range of work, including site excavation, site

development, and earthmoving work. When Hyett’s Corner failed to pay certain of

Pearce & Moretto’s invoices, Pearce & Moretto sued Hyett’s Corner, asserting

mechanic’s-lien, breach-of-contract, unjust-enrichment, and Building Payment Act

claims. In its complaint, Pearce & Moretto sought to recover $38,870.

       (2)     Hyett’s Corner counterclaimed, alleging breach of contract, negligence,

breach of implied warranty, conversion, and trover. In its counterclaim, Hyett’s

Corner contended that Pearce & Moretto owed it about $1.292 million both for

certain remedial work and for the misapplication of topsoil that was Hyett’s Corner’s

property. Pearce & Moretto’s principal defense to the counterclaim was that the

parties’ contract allowed for excess topsoil to be buried on site in borrow pits. By

contrast, Hyett’s Corner alleged that removal, or, in the alternative, burial, of the

topsoil amounted to theft.2

       (3)     In its verdict following a three-day bench trial, the court afforded some

relief to both parties—the court found that Pearce & Moretto proved that its unpaid

balance was due, while Hyett’s Corner proved that some of its requested remedial

2
  App. to Answering Br. at B117, B120–21 (counterclaim alleges removal and sale of topsoil to
third parties as the core of its conversion and trover claims); Opening Br. at 43 (as an alternative
argument, Pearce & Moretto’s alleged burial of topsoil contravened the approved contract plans).
The court rejected the “wholesale removal of topsoil theory” and found sufficient evidence to
conclude that the topsoil was permissibly buried on site. Pearce & Moretto, 2022 WL 17986631,
at *2–3.
                                                 2
work, which was necessitated by Pearce & Moretto’s failure to properly spread

topsoil, was warranted.

         (4)    Hyett’s Corner charges the Superior Court with six errors: (i) failing to

consider the deposition testimony of a witness, David Murphy, who was unable to

appear at trial but whose deposition testimony was relevant to the controversy, (ii)

allowing photos into evidence without applying the Superior Court Rule 16(e)

manifest-injustice test, (iii) deeming that spreadsheets, which referred to borrow pits

and which were submitted with the initial bid, were part of the contract, (iv) denying

the conversion and trover claims, (v) granting Pearce & Moretto an award based on

dismissed mechanic’s liens, and (vi) incorrectly calculating Hyett’s Corner’s

award.3 Of these claims, only the sixth has merit.

         (5)    First, we reject the premise—that the trial judge failed to consider the

David Murphy deposition testimony—of Hyett’s Corner’s first argument. Hyett’s

Corner bases its contention on the court’s omission of Murphy’s name from the list

of trial witnesses in its verdict. But the court’s list of witnesses appears to list only

those “who [were] called…to the witness stand.”4 Previously, moreover, at a pretrial

conference, the trial judge made it clear that, absent an objection, if Hyett’s Corner

3
    Opening Br. at 5–6.
4
    Pearce & Moretto, 2022 WL 17986631, at *1.
                                                 3
were to submit the Murphy transcript, the court would consider it.5 Hyett’s Corner

submitted the Murphy deposition transcript as Defendant’s Trial Exhibit No. 4.6

Based on this record, we cannot accept Hyett’s Corner’s inference that the trial judge

did not do what he said he would do.

       (6)     Second, Hyett’s Corner claims that the Superior Court erred when it

considered photographs offered by Pearce & Moretto that were not identified in a

pretrial stipulation signed by the parties in February 2022.7 Hyett’s Corner contends

that the court’s consideration of the photographs amounted to a modification of the

pretrial stipulation and that, under Superior Court Rule 16(e), the stipulation could

be modified “only to prevent manifest injustice.”8 The court’s failure to apply this

standard, according to Hyett’s Corner, was reversible error.9 We disagree.10 Hyett’s

Corner’s argument fails to account for the fact that Rule 16(e)’s manifest-injustice

test applies to final pretrial orders and that the February pretrial stipulation was

never entered as an order of the court.11

5
  See App. to Opening Br. at A19, Dkt. No. 103 at 22 (“If the parties don’t object, you can simply
submit it and I can read it. If somebody objects to that process, you can put somebody on to read.”)
(Nov. 14, 2022 transcript).
6
  Opening Br. at 19.
7
  Id. at 25–27.
8
  See id.
9
  Id.
10
   Phelps v. West, 193 A.3d 717, 2018 WL 3934946, at *7 (Del. Aug. 16, 2018) (TABLE)
(reviewing decision to admit certain evidence under abuse of discretion).
11
   Pearce & Moretto, Inc. v. Hyett’s Corner, LLC, C.A. No. N19L-06-090, 2022 WL 16921748,
at *2 (Del. Super. Nov. 10, 2022); Super. Ct. Civ. R. 16(e).
                                                 4
       (7)    Third, we see no clear error in the finding that the parties intended to

be bound by the spreadsheets.12 The court examined the documentary record and

heard testimony from the parties who negotiated, executed, and carried out the

contract. Sufficient evidence, including the testimony of each of the parties’ project

managers, supports the trial court’s finding.13

       (8)    Fourth, reviewing Hyett’s Corner’s trover and conversion claims de

novo,14 we agree with the Superior Court that they fail: they assume that Pearce &

Moretto was not authorized to use borrow pits to deposit valuable topsoil, but the

spreadsheets, part of the contract, show otherwise.15 Featuring line-item pricing, the

spreadsheets call for borrow pits—places where excess topsoil can be buried—on

three separate pages.16

       (9)    Fifth, we agree that the court erred17 in clothing Pearce & Moretto’s

$38,870 award in the language of a mechanic’s lien, but this error was harmless.18

12
   Pearce & Moretto, 2022 WL 17986631, at *2. In contract formation, whether the parties
intended to be bound is a factual question reviewed for clear error. Eagle Force Holdings, LLC v.
Campbell, 187 A.3d 1209, 1228–30 (Del. 2018).
13
   App. to Answering Br. at B63, B71 (Farrar testimony); B20, B25 (Julian testimony); Pearce &
Moretto, 2022 WL 17986631, at *2 (review of contract bid letter and spreadsheets); Poliak v.
Keyser, 65 A.3d 617, 2013 WL 1897638, at *2 (Del. May 6, 2013) (TABLE) (factfinder can
choose between two permissible views of evidence).
14
   Eagle Force, 187 A.3d at 1228.
15
   App. to Answering Br. at B43–45, B49, B51, B53.
16
   Id. at B49, B51, B53. See also id. at B23 (Julian testimony).
17
   Legal determinations are reviewed de novo. Eagle Force, 187 A.3d at 1228.
18
    See Sears, Roebuck & Co. v. Facciolo, 320 A.2d 347, 350 (Del. 1974) (harmless error
insufficient for reversal).
                                               5
The court did dismiss the mechanic’s lien claims several years earlier,19 but because

Pearce & Moretto met its burden as to its damages20 under its two live claims—

breach of contract and unjust enrichment—either one of which supported the award

in this same amount,21 any error on this point is harmless.

       (10) Finally, we agree with Hyett’s Corner that part of the $27,788.64 award

to Hyett’s Corner was incorrectly calculated.22 For Hyett’s Corner’s proved claim,

the court, relying on the parties’ contract and Hyett’s Corner’s expert’s report, held

that

       [Hyett’s Corner’s] expert indicated to resolve this issue 5016 cubic
       yards of topsoil would be needed. Using the contract unit cost for this
       soil of $4.04 per cubic yard, the Court will award $20,264.64 to
       [Hyett’s Corner] to bring these areas into compliance. There is also a
       need to seed and cover the area at a unit price of $1.50 per cubic yard
       (provided by [Hyett’s Corner’s] expert) which would add an additional
       $7,524.00. As a result, the Court awards the damages to [Hyett’s
       Corner] in the amount of $27,788.64.23

The court’s consideration and rejection of the report’s full $262,468.50 remediation

figure, an amount that Hyett’s Corner says it is due,24 was within the court’s sound

19
   Pearce & Moretto, Inc. v. Hyetts Corner, LLC, C.A. No. N19L-06-090, 2020 WL 532748, at
*1, 4 (Del. Super. Jan. 31, 2020) (dismissing for failure to provide land description under statute).
20
   Pearce & Moretto, 2022 WL 17986631, at *2.
21
   See App. to Answering Br. at B90 (breach of contract: $38,870); id. at B90–91 (quantum
meruit/unjust enrichment: $38,870).
22
   Partly due to factual mistakes, which we review for clear error. Eagle Force, 187 A.3d at 1228.
23
   Pearce & Moretto, 2022 WL 17986631, at *4.
24
   See Opening Br. at 31, 33; Reply Br. at 15; App. to Opening Br. at A402.
                                                 6
discretion.25 For its award regarding the needed topsoil, the court multiplied a

contract price by the report’s area figure,26 which is a reasonable outcome.27 Hence,

this award stands.

       (11) In the second seeding and mulching award, however, the court deviated

from its first approach. The size of the area to be covered by this award is different

from the size of the first area,28 and the court clearly erred in assuming they were the

same.29 And in an apparent transcription error, the court stated that it was drawing

the price, per square yard, from the report, but wrote per cubic yard.30 The first

award—the award for the needed topsoil—of $20,264.64 is reasonable; the

second—the seeding and mulching award—because of its inconsistency and errors,

is not. The second award must be recalculated by multiplying the relevant contract

price and its proper unit measure ($0.26 per square yard)31 with the proper area

25
    By hearing testimony and examining evidence, the court implicitly concluded that Hyett’s
Corner’s request to carry out fulsome remedial activities was not warranted. See Siga
Technologies, Inc. v. PharmAthene, Inc., 132 A.3d 1108, 1130 (Del. 2015) (damages awards
reviewed for abuse of discretion).
26
   Pearce & Moretto, 2022 WL 17986631, at *4.
27
   In a contract-construction action, reasonableness underlies the measure of damages. See Farny
v. Bestfield Builders, Inc., 391 A.2d 212, 214 (Del. Super. June 26, 1978).
28
   App. to Opening Br. at A400, A402; id. at A18 (Dkt. No. 100 at 11) (the 5.12 acres, the No-
Work-LOD (or 5016 cubic yards), are a subset of the 9.17 acres, the entire open space (or 44,383
square yards)).
29
   Pearce & Moretto, 2022 WL 17986631, at *4.
30
   Compare Pearce & Moretto, 2022 WL 17986631, at *4 with App. to Opening Br. at A402.
31
   App. to Answering Br. at B48, B50, B53 (listing “0.26 /sy” under “Seed and Straw Mulch”).
                                               7
(44,383 square yards),32 which yields $11,539.58. This brings the total of both

awards in Hyett’s Corner’s favor to $31,804.22.

         NOW, THEREFORE, IT IS ORDERED that the judgment of the Superior

Court be AFFIRMED IN PART and REVERSED IN PART. We remand to the

Superior Court for the entry of a corrected judgment consistent with this Order.

Jurisdiction is not retained.

                                                      BY THE COURT:

                                                      /s/ Gary F. Traynor
                                                            Justice

32
     App. to Opening Br. at A402 (listing 44,383 square yards).
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