Court Opinion

ID: 2811280
Source: CourtListenerOpinion
Date Created: 2015-06-24 18:03:50.526202+00
Date Added: 2024-06-11T11:30:20.371222
License: Public Domain

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

                   IN AND FOR NEW CASTLE COUNTY

DELPHI PETROLEUM,                          )
                                           )
            Plaintiff,                     )
                                           )
                                           ) C.A. No. N12C-02-302 FWW
                  v.                       )
                                           )
MAGELLAN TERMINALS                         )
HOLDINGS, L.P.                             )
                                           )
            Defendant.                     )

                           Submitted: April 24, 2015
                            Decided: June 23, 2015

                     Upon Defendant’s Motion to Dismiss
                   GRANTED, in part, DENIED, in part.
            Upon Defendant’s Motion for Partial Summary Judgment
                   GRANTED, in part, DENIED, in part.
             Upon Plaintiff’s Motion for Partial Summary Judgment
                     DENIED, in part, MOOT, in part.

                           OPINION AND ORDER

Marc S. Casarino, Esquire, White and Williams, LLP, 824 N. Market St., Suite
902, P.O. Box 709, Wilmington, Delaware, 19899-0709; Peter J. Mooney, Esquire
(argued), White and Williams, LLP, 1650 Market Street, One Liberty Place, Suite
1800, Philadelphia, Pennsylvania 19103-7395, Attorneys for Plaintiff.

Herbert W. Mondros, Esquire, Margolis Edelstein, 300 Delaware Avenue, Suite
800, Wilmington, Delaware 19801; David E. Keglovits, Esquire (argued) and Erin
K. Dailey, Esquire, GableGotwals, 1100 ONEOK Plaza, 100 West Fifth Street,
Tulsa, Oklahoma 74103-4217, Attorneys for Defendant.

WHARTON, J.
                               I.     INTRODUCTION

      Before the Court are Magellan’s Motion to Dismiss and Motion for Partial

Summary Judgment and Delphi’s Motion for Partial Summary Judgment with

regard to a commercial contract and fraud dispute concerning operations at a

marine terminal located at the Port of Wilmington in Delaware (“Terminal”). The

parties request that the Court resolve several issues to narrow the scope of the

dispute in anticipation of trial. In Magellan’s Motion to Dismiss, Magellan seeks

dismissal of Counts III, IV and V of the Second Amended Complaint (“SAC”),

which all allege fraud. In Magellan’s Motion for Partial Summary Judgment,

Magellan requests that the Court determine that 1) Delphi cannot produce evidence

such that a reasonable trier of fact could find that Magellan breached certain

contract provisions; 2) Count II of the SAC for breach of the implied covenant of

good faith and fair dealing fails as a matter of law; and 3) Delphi is not entitled to

consequential damages as a matter of law. In Delphi’s Motion for Partial

Summary Judgment, Delphi requests that the Court determine that 1) Magellan

owes Delphi $421,603.06 for overbilling of heating charges under the 2005

Agreement; 2) Delphi has no responsibility to Magellan for heating charges under

the 2011 Agreement; 3) Magellan breached the 2011 Agreement by denying

Delphi the right to deliver product to the terminal by truck; 4) Delphi’s

responsibility for tank cleaning is limited to removing product and waste that can

                                           2
be removed by shovel and broom; and 5) Magellan’s Amended Counterclaim fails

for lack of factual support.

      The Court applies Super. Ct. Civ. R. 12(b)(6) to Magellan’s Motion to

Dismiss and Super. Ct. Civ. R. 56(c) to Magellan’s Motion for Partial Summary

Judgment and Delphi’s Motion for Partial Summary Judgment. Applying the

Motion to Dismiss standards, the Court finds that 1) Delphi failed to state a claim

for which relief can be granted as to Count III of the SAC; 2) it is premature to

determine whether the statute of limitations precludes recovery under Count IV of

the SAC; and 3) Delphi has adequately pleaded a cause of action under Count V of

the SAC.

      Applying Super. Ct. Civ. R. 56(c) to Magellan’s Motion for Partial

Summary Judgment, the Court finds that 1) no reasonable trier of fact could find

that a breach of contract occurred based upon Magellan’s conduct alleged in

¶¶8(k),(d),(o) and (a) of the SAC and that factual issues remained as to ¶¶8(p) and

(e) of the SAC; 2) Count II of the SAC for breach of the implied covenant of good

faith and fair dealing is limited; and 3) the Court cannot find that Delphi is not

entitled to consequential damages as a matter of law.

      Applying Super. Ct. Civ. R. 56(c) to Delphi’s Motion for Partial Summary

Judgment, the Court finds that 1) there is a factual dispute regarding whether

Magellan owes Delphi $421,603.06 for overbilling of heating charges under the

                                           3
2005 Agreement; 2) the Court cannot rule as a matter of law that Delphi has no

responsibility to Magellan for heating charges under the 2011 Agreement; 3)

Magellan did not breach the 2011 Agreement by denying Delphi the right to

deliver product to the terminal by truck; 4) the Court cannot grant the relief Delphi

requests regarding responsibility for tank cleaning based upon its prayer; and 5)

Magellan identified the factual basis of its Amended Counterclaim.

         Therefore, Magellan’s Motion to Dismiss is GRANTED, in part, and

DENIED, in part; Magellan’s Motion for Partial Summary Judgment is

GRANTED, in part, and DENIED, in part; and Delphi’s Motion for Partial

Summary Judgment is DENIED, in part, and MOOT, in part.

                               II.   PROCEDURAL CONTEXT

         Delphi, a Delaware corporation, buys and sells petroleum products.

Magellan, a Delaware limited partnership, operates a marine terminal in

Wilmington, Delaware (“Terminal”) to store and handle petroleum products.

Delphi and Magellan executed several contracts through which Magellan agreed to

provide Delphi with services at the Terminal and Delphi agreed to pay Magellan

certain fees. Delphi and Magellan executed a Terminalling Agreement on

September 1, 2005 (“2005 Agreement”). 1 Delphi and Magellan entered into a

second Terminalling Agreement that was executed by Delphi on May 13, 2011 and

1
    SAC, D.I. 165, at Ex. A.

                                           4
by Magellan on May 16, 2011 (“2011 Agreement”). 2 Delphi and Magellan

executed the Flush Oil Agreement on March 1, 2007. 3

       On February 29, 2012, Delphi filed a Complaint against Magellan for breach

of contract, negligence, conversion and unjust enrichment related to the 2005 and

2011 Agreements. 4 On October 23, 2013, the Court approved the parties’

stipulation to file an Amended Complaint. 5 The Amended Complaint contained

counts for breach of contract, breach of the implied covenant of good faith and fair

dealing, conversion, unjust enrichment and fraud.6 The Court granted Magellan’s

Motion to Dismiss the Amended Complaint with respect to the conversion, unjust

enrichment and fraud counts 7 and the Court denied Delphi’s Motion for

Reconsideration of the Order.8 On December 22, 2014, Delphi filed a Motion for

Leave to File Second Amended Complaint. 9 On January 16, 2015, both parties

filed Motions for Partial Summary Judgment 10 By Order dated January 20, 2015,

the Court granted Delphi’s Motion for Leave to File Second Amended Complaint,

which revived Delphi’s fraud claims. 11 On February 2, 2015, Delphi filed the SAC

2
  Id. at Ex. B.
3
  Id. at Ex. C.
4
  See Compl., D.I. 1.
5
  See Oct. 23, 2013 Order, D.I. 39.
6
  Am. Compl., D.I. 33.
7
  See May 2, 2014 Order, D.I. 67.
8
  See Aug. 1, 2014 Order, D.I. 99.
9
  D.I. 137.
10
   D.I. 155 (Magellan); D.I. 156 (Delphi).
11
   See Jan. 20, 2015 Order, D.I. 164.

                                             5
alleging breach of contract, breach of the implied covenant of good faith and fair

dealing and three claims for fraud.12 On February 17, 2015, Magellan filed a

Motion to Dismiss the three fraud claims in the SAC. 13 The parties appeared

before the Court for oral argument on April 24, 2015 on Magellan’s Motion to

Dismiss, Magellan’s Motion for Partial Summary Judgment and Delphi’s Motion

for Partial Summary Judgment.

                            III.    STANDARD OF REVIEW

       A.     Super. Ct. Civ. R. 12(b)(6).

       Super. Ct. Civ. R. 12(b)(6) provides for dismissal of a complaint for “failure

to state a claim upon which relief can be granted.” When examining the complaint

for purposes of a motion to dismiss, the Court accepts all well-pleaded facts as

true 14 and draws all inferences in the light most favorable to the plaintiff. 15 If the

Court finds that the “plaintiff may recover under any reasonably conceivable set of

circumstances susceptible of proof under the complaint,” the motion will be

denied.16

       B.     Super. Ct. Civ. R. 56(c).

       Super. Ct. Civ. R. 56(c) provides that summary judgment is appropriate

where there is “no genuine issue as to any material fact” and “the moving party is
12
   See generally SAC.
13
   See Def.’s Mot. to Dismiss, D.I. 175.
14
   Loveman v. Nusmile, 2009 WL 847655, at *2, (Del. Super. Mar. 31, 2009).
15
   Savor, Inc. v. FMR Corp., 2001 WL 541484, at *1 (Del. Super. Apr. 24, 2001).
16
   Spence v. Funk, 396 A.2d 967, 968 (Del. 1978).

                                              6
entitled to a judgment as a matter of law.” When considering a motion for

summary judgment, the Court’s function is to examine the record to determine

whether genuine issues of material fact exist “but not to decide such issues.” 17 The

moving party bears the initial burden of demonstrating that the undisputed facts

support his claims or defenses.18 If the moving party meets its burden, then the

burden shifts to the non-moving party to demonstrate that there are material issues

of fact to be resolved by the ultimate fact-finder. 19 Summary judgment will be

granted if, after viewing the record in the light most favorable to the non-moving

party, no genuine issues of material fact exist and the moving party is entitled to

judgment as a matter of law.20 If the record reveals that material facts are in

dispute, or if the factual record has not been developed thoroughly enough to allow

the Court to apply the law to the factual record, then summary judgment is

inappropriate.21

                      IV.     MAGELLAN’S MOTION TO DISMISS

       In the SAC, Delphi added, inter alia, three additional counts alleging fraud:

Count III- Fraudulent Concealment of Overbilling of Heating Charges; Count IV –

17
   Merrill v. Crothall-Am., Inc., 606 A.2d 96, 99-100 (Del. 1992).
18
   Moore v. Sizemore, 405 A.2d 679, 681 (Del. 1979).
19
   Brzoska v. Olson, 668 A.2d 1355, 1364 (Del. 1995).
20
   Merrill, 606 A.2d at 99-100.
21
   See Cook v. City of Harrington, 1990 WL 35244, at *3 (Del. Super. Feb. 22, 1990) (“Summary
judgment will not be granted under any circumstances when the record indicates . . . that it is
desirable to inquire more thoroughly into the facts in order to clarify the application of law to the
circumstances.”).

                                                 7
Fraudulent Billing of Tank Cleaning Charges; and Count V – Fraud in the

Inducement. 22 Magellan moves to dismiss Delphi’s three fraud claims contained in

the SAC. Magellan asserts that Counts V and III fail to state a claim upon which

relief may be granted pursuant to Super. Ct. Civ. R. 12(b)(6) and that Count IV is

barred by the statute of limitations.

       A.     Delphi has Sufficiently Pleaded Fraud in Count V of the SAC.

       In Count V, the SAC provides that “Magellan emailed Delphi that it

‘agreed[d] with your [Delphi’s] two changes dealing with improvement costs and

truck receipt language’” 23 and that the “statement agreeing to the ‘truck receipt

language’ was a false representation.”24 The SAC also states that “[Tony] Bogle, a

key person in the negotiation of the 2011 Agreement and a Magellan employee

implicated in the tank heating fraud, admitted that when Magellan said Delphi

could deliver oil by truck, Magellan knew that it would not allow Delphi to deliver

product by truck.”25 In deposition testimony, Tony Bogle testified: “Q: So you

know when you – when this email went out, that if Delphi tried to deliver by truck,

Magellan would refuse? A: Yes.26 The SAC also provides that one week after the

2011 Agreement was executed, “[Tony] Bogle wrote himself a memo detailing the

reasons he would give Delphi for denying Delphi the right to deliver to the
22
   See SAC, at ¶¶ 17-66.
23
   Id. at ¶ 50.
24
   Id. at ¶ 53.
25
   Id. at ¶ 57.
26
   Id. (quoting Bogle Dep., Ex. L to SAC at 69:19-22).

                                               8
[Terminal], notwithstanding Magellan had agreed to Delphi’s truck receipt

language…”27

       Additionally, the SAC states that “Magellan made its false representation

with the intent to induce Delphi to sign the 2011 Agreement,” 28 that “[i]n

executing the 2011 Agreement, Delphi justifiably relied on Magellan’s statement

and the inclusion of the delivery by truck provision into the contract,” 29 and that

“Delphi has sustained damages…as a result of Delphi’s reliance of Magellan’s

fraudulent statement and representations.”30

       Magellan argues that Delphi has not made out a prima facie claim for

fraudulent inducement regarding the Truck Clause because Delphi has not pleaded

that it reasonably relied upon extra-contractual representations by Magellan. 31

Magellan asserts that the alleged misrepresentation that Magellan was “in

agreement with [Delphi’s proposed] changes [to the 2011 Terminalling

Agreement] dealing with…truck receipt language” is not a misrepresentation but a

matter of interpretation.32 Magellan also argues that Delphi’s “fraud claim is

27
   Id. at ¶ 58.
28
   Id. at ¶ 55.
29
   Id. at ¶ 65.
30
   Id. at ¶ 66.
31
   Def.’s Mot. to Dismiss at 2.
32
   Id. at 2-3.

                                           9
merely an attempt by Delphi to ‘bootstrap’ its breach of contract claims into fraud

claims. 33

       Delphi argues that it sufficiently pleaded all of the elements of fraud. Delphi

asserts that “a claim for fraud can co-exist with a breach of contract claim so long

as the fraud claim is based on a promise or misrepresentation collateral or

extraneous to the terms of the agreement.” 34 Delphi contends that “the May 13,

2011 e-mail chain described in ¶¶48-51 [of the SAC] is indisputably separate from

and collateral to the parties’ Agreement.” 35

       “The general elements of common law fraud under Delaware law are: (1)

defendant's false representation, usually of fact, (2) made either with knowledge or

belief or with reckless indifference to its falsity, (3) with an intent to induce the

plaintiff to act or refrain from acting, (4) the plaintiff's action or inaction resulted

from a reasonable reliance on the representation, and (5) reliance damaged the

[plaintiff].” 36

       Super. Ct. Civ. R. 9(b) requires a plaintiff to plead fraud with

“particularity.” 37 “The entire purpose of Rule 9(b) is to put the defendant on notice

so that he can adequately prepare a defense.” 38 “The ‘circumstances’ which must

33
   Id. at 2.
34
   Pl.’s Resp. in Opp’n to Def.’s Mot. to Dismiss, D.I. 184, at 5.
35
   Id.
36
   Browne v. Robb, 583 A.2d 949, 955 (Del. 1990).
37
   Id.
38
   Id.

                                                 10
be stated with particularity under Rule 9(b) refer to ‘the time, place, and contents

of the false representations, as well as the identity of the person making the

misrepresentation and what he obtained thereby.’” 39

       Delphi pleads that “Magellan emailed Delphi that it ‘agreed[d] with your

[Delphi’s] two changes dealing with improvement costs and truck receipt

language’” 40 and that the “statement agreeing to the ‘truck receipt language’ was a

false representation.”41 The SAC also pleads that “[Tony] Bogle, a key person in

the negotiation of the 2011 Agreement and a Magellan employee implicated in the

tank heating fraud, admitted that when Magellan said Delphi could deliver oil by

truck, Magellan knew that it would not allow Delphi to deliver product by truck.” 42

The SAC alleges that “Magellan made its false representation with the intent to

induce Delphi to sign the 2011 Agreement,” 43 that “[i]n executing the 2011

Agreement, Delphi justifiably relied on Magellan’s statement and the inclusion of

the delivery by truck provision into the contract,” 44 and that “Delphi has sustained

damages…as a result of Delphi’s reliance on Magellan’s fraudulent statement and

representations.”45 Delphi has alleged all of the elements of common law fraud

39
   Nutt v. A.C. & S., Inc., 466 A.2d 18, 23 (Del. 1983)(quoting Autrey v. Chemtrust Indus. Corp.,
362 F. Supp. 1085, 1092 (D. Del. 1973)).
40
   SAC at ¶ 50.
41
   Id. at ¶ 53.
42
   Id. at ¶ 57.
43
   Id. at ¶ 55.
44
   Id. at ¶ 65.
45
   Id. at ¶ 66.

                                               11
with particularity. Therefore, the Court finds that Delphi has adequately made out

a prima facie case of fraud.

       Additionally, the Court finds Magellan’s “bootstrapping” argument

unpersuasive. Delaware courts have permitted a claim for fraud and breach of

contract claim when the fraud claim is based on a “promise collateral or extraneous

to the terms [of] an enforceable agreement in place between the parties.” 46 In

MicroStrategy Inc. v. Acacia Research Corp., 2010 WL 555045, Court of

Chancery explained that “a plaintiff ‘cannot ‘bootstrap’ a claim of breach of

contract into a claim of fraud merely by alleging that a contracting party never

intended to perform its obligations.’” 47 However, the court acknowledged that

              …statements of future intent can be “fraudulent
              misrepresentations” sufficient to form the basis of a
              fraudulent inducement claim only where the Complaint
              alleges particularized facts that allow the Court to infer
              that, at the time the promise was made, the speaker had
              no intention of keeping it. “Indeed, ‘[s]tatements of
              intention ... which do not, when made, represent one's
              true state of mind are misrepresentations known to be
              such and are fraudulent.48

       The Court finds that Delphi has sufficiently alleged that Magellan had no

intention of allowing delivery by truck to the Terminal at the time the alleged

promise to allow delivery by truck to the Terminal was made. Delphi quotes the

46
   IOTEX Comm’n v. Defries, 1998 WL 914265, at *5 (Del. Ch. Dec. 21, 1998).
47
   MicroStrategy Inc. v. Acacia Research Corp., 2010 WL 555045, at *17 (Del. Ch. Dec. 30,
2010)(internal citations omitted).
48
   Id. at *15 (internal citations omitted).

                                             12
deposition testimony of Tony Bogle for the proposition that Magellan knew before

adding the truck receipt language to the contract that Magellan would not actually

allow Delphi to deliver by truck to the terminal; specifically, Delphi alleges that

Tony Bogle testified: “Q: So you know when you – when this email went out, that

if Delphi tried to deliver by truck, Magellan would refuse? A: Yes. 49

Additionally, Delphi alleges that Tony Bogle wrote a memo to himself one week

after the 2011 Agreement was memorialized that detailed the reasons that he would

give to Delphi as to why Magellan would deny Delphi’s truck deliveries at the

Terminal.50 Based upon these allegations, a finder of fact could find that, at the

time the promise was made, the speaker had no intention of keeping the alleged

promise to allow Delphi to deliver by truck to the Terminal. Because the Court

finds that Delphi has met the pleading requirements under Super. Ct. Civ. R.

12(b)(6) and Super. Ct. Civ. R. 9(b) to state a claim for fraudulent inducement,

Magellan’s Motion to Dismiss Count V is DENIED.

         B.      Delphi has Failed to Plead Fraud in Count III of the SAC.

         As part of its breach of contract claim, in ¶8(u) of the SAC, Delphi alleges

that “Magellan overbilled Delphi by at least $580,000 between 2005-11 for the fuel

consumed to heat Delphi’s oil tanks, and then concealed its overcharges. Delphi

confirmed Magellan’s overbilling in December, 2014.” In addition, in Count III,

49
     SAC at ¶ 57 (quoting Bogle Dep., Ex. L to SAC at 69:19-22).
50
     See id. at ¶ 58.

                                                13
the SAC states, in relevant part, that “Magellan did not reveal the more than

$580,000 overbill when it answered, under oath, Interrogatory No. 35 of Delphi's

Second Set of Interrogatories and falsely alleged that it had corrected every error in

its billings to Delphi.” 51 Additionally, the SAC provides that “Magellan knew that

it had overcharged Delphi…for heating over the period from 2007 through 2010” 52

and that “Magellan billed Delphi for heating charges on a monthly basis under the

2005 Agreement and Delphi paid all those charges.” 53 Paragraph 8(r) of the SAC

provides that “Magellan tendered to Delphi inaccurate invoices…and Delphi has

paid Magellan sums not actually due by relying on the accuracy of the invoices and

is entitled to be refunded all amounts overpaid.” Delphi claims damages in excess

of $580,000.54

       Magellan argues that Delphi has failed to state a claim for fraud in Count III

of the SAC. Magellan asserts that Delphi’s claim fails because Delphi has not

alleged that Magellan “made any affirmative representation, or took any action, to

prevent Delphi from learning that it was being billed for heating oil according to

measurements from meters that Delphi claims were erroneous.” 55 Magellan also

51
   Id. at ¶ 33.
52
   Id. at ¶ 22.
53
   SAC at ¶ 20.
54
   Id. at ¶ 25.
55
   Def.’s Mot. to Dismiss at 4.

                                          14
asserts that “Delphi does not allege that it took any action, or refrained from taking

any action, in reliance on any representation or concealment by Magellan.” 56

       Delphi argues that it has properly alleged a claim for fraudulent concealment

because pleading fraud is not limited to identifying misrepresentations; fraud may

also be pleaded by asserting the defendant deliberately concealed facts or remained

silent when faced with a duty to speak.57 Delphi contends that the SAC

sufficiently provides that Magellan “committed fraud by concealing that it

overcharged and then kept more than $580,000 of Delphi’s money, while at the

same time representing to Delphi that ‘it had corrected every error in its billings’

and demanding that Delphi pay Magellan additional money and interest.58 Delphi

argues that it “acted in reliance on the accuracy of Magellan’s 72 detailed monthly

heating bills…paid all of them in full and thereby fell victim to Magellan’s overbill

of $580,000 and subsequent concealment.” 59

       The Delaware Supreme Court has held that “[f]raud does not consist merely

of overt misrepresentations. It may also occur through deliberate concealment of

material facts.”60 Here, Delphi alleges that Magellan concealed the overbilling and

that Magellan overtly misrepresented that it had corrected every error in its billings

56
   Id.
57
   Pl.’s Resp. in Opp’n to Def.’s Mot. to Dismiss at 2.
58
   Id.
59
   Id.
60
   Stephenson v. Capano Dev., 462 A.2d 1069, 1074 (Del. 1983).

                                             15
to Delphi. 61 Delphi also alleges that “Magellan knew that it had overcharged

Delphi more than $420,000 for heating over the period from 2007 through 2010.”62

Therefore, Delphi has satisfied the first two elements of the cause of action

regarding alleging a false representation and knowledge of the falsity of the

representation.

       Where Delphi fails in its allegations is in not alleging 1) that Magellan made

the false representations with the intent to induce Delphi to take some action or

refrain from taking action; or 2) that Delphi took some action in reasonable

reliance on the false representations. Delphi has not pleaded that Magellan

intended to induce Delphi to act or refrain from acting based upon the alleged

concealment. Exhibit D to the SAC is the January 21, 2011 letter from Alan Cosby

to Tony Bogle, both Magellan representatives, that contains the chart that Delphi

relies upon to allege overbilling.63 The chart covers the time period from 2007

through 2010. 64 Based upon that email and chart, at most, Delphi has pleaded that

Magellan discovered the alleged overbilling that occurred between 2007 and 2010

on January 21, 2011 and formed the intent to induce on that date. However, there

are no well-pleaded facts in the SAC to support Delphi’s assertion that Magellan

had the intent to induce Magellan to act or refrain from acting after that date.

61
   SAC at ¶ 33.
62
   Id. at ¶ 22.
63
   SAC at Ex. D.
64
   SAC at Ex. D.

                                          16
       Delphi must also plead that Delphi took action in reasonable reliance on

Magellan’s alleged concealment after January 21, 2011. Delphi alleges that

“Magellan billed Delphi for heating charges on a monthly basis under the 2005

Agreement and Delphi paid all those charges” 65 and that “Magellan tendered to

Delphi inaccurate invoices…and Delphi has paid Magellan sums not actually due

by relying on the accuracy of the invoices and is entitled to be refunded all

amounts overpaid.”66 However, those assertions address what action Delphi took

in response to receiving allegedly inflated invoices but do not address Delphi’s

actions in response to the alleged concealment of overbilling that occurred after

January 21, 2011. Delphi has failed to plead with particularity that it did anything

in reliance on Magellan’s alleged concealment of the overbilling after January 21,

2011. Instead, Delphi asserts only that Magellan did not unilaterally credit

Delphi.67 The SAC is silent as to Delphi’s actions as a result of the alleged

concealment.

65
   SAC at ¶ 20.
66
   Id. at ¶ 8(r).
67
   See SAC at ¶¶ 29-32:

              29. Magellan did not credit Delphi the more than $580,000 overbill
              when it filed its counterclaims in this litigation.
              30. Magellan did not credit Delphi the more than $580,000 overbill
              when accounting for what Delphi allegedly owed.
              31.Magellan did not credit Delphi the more than $580,000 overbill
              when claiming Delphi owed more than $300,000 in interest on
              amounts allegedly owed Magellan.

                                             17
          Similarly, Delphi alleges that the overt misrepresentation that Magellan had

corrected all of its billing errors occurred in response to discovery in December

2013. 68 However, Delphi does not allege that Magellan intended to induce Delphi

to take any action in response to the overt misrepresentation. Furthermore, Delphi

does not allege that Delphi took action in reasonable reliance on the overt

misrepresentation.

          Because the Court finds that Delphi has not pleaded that Magellan intended

to induce Delphi to take some action or refrain from taking action based upon

alleged fraudulent statements and that Delphi has not pleaded that Delphi did

anything in reasonable reliance upon Magellan’s alleged fraudulent statements,

Delphi has failed to make out a prima facie claim of common law fraud and

Magellan’s Motion to Dismiss Count III is GRANTED.

          C.        Dismissal of Count IV is Premature.

          In Count IV, the SAC states that “Magellan fraudulently billed Delphi for

tank cleaning charges that were Magellan’s responsibility and purposefully altered

bills to conceal the fact that it was passing off its charges to Delphi.”69 The SAC

also provides that “Magellan overbilled Delphi for the costs relating to the cleaning

of tanks leased to Delphi in violation of Clauses 2.7 and 2.8 of Schedule A of the

                    32. Magellan did not credit Delphi the more than $580,000 overbill
                    when it held Delphi’s product hostage under an invalid
                    warehouseman’s lien…
68
     Id. at ¶ 10.
69
     Id. at ¶ 36.

                                                   18
2005 Agreement”70 and that “Magellan breached Clauses 2.7 and 2.8 of Schedule

A of the 2005 Agreement by arranging for tank cleaning services to be performed

in a manner to minimize the costs of the cleaning for which Magellan was

responsible and maximize the costs for which Delphi was responsible.”71

       Magellan argues that Count IV for Fraudulent Billing of Tank Cleaning

Charges is barred by the statute of limitations. Magellan asserts that the three-year

statute of limitations has run because the underlying invoices that Delphi relies

upon to support its claim were issued between 2007 and 2010.72 Magellan

contends that Delphi knew of the invoices in September 2013, if not earlier, when

it filed its First Amended Complaint that included a similar allegation. 73

       Delphi argues that the three-year statute of limitations is tolled by the Time

of Discovery Rule. Specifically, Delphi asserts that the “concealment and fraud”

provision of the Rule applies because Magellan “deceitfully altered cleaning

bills.”74 Delphi alternatively claims that the “inherently unknowable and

blamelessly ignorant” provision of the Rule applies. Delphi contends that it was

“not aware that Magellan was altering its bills, rendering false invoices or

colluding with the third party contractor to create fictitious charges” until Magellan

70
   Id. at ¶ 8(f).
71
   Id. at ¶ 8(g).
72
   Def.’s Mot. to Dismiss at 3.
73
   Id.
74
   Pl.’s Resp. in Opp’n to Def.’s Mot. to Dismiss at 3.

                                                19
produced documents during discovery in 2014 and Delphi deposed Magellan

witnesses in November and December 2014. 75

          The statute of limitations for claims for fraud is three years under 10 Del. C.

§ 8106.76 However, the statute of limitations may be tolled by the Time of

Discovery Rule under specific circumstances.77

                 Generally, a cause of action in tort “accrues” at the time
                 the tort is committed.... Ignorance of the cause of action
                 will not toll the statute [of limitations], absent
                 concealment or fraud, or unless the injury is inherently
                 unknowable and the claimant is blamelessly ignorant of
                 the wrongful act.... In the latter circumstance, the statute
                 of limitations begins to run upon the discovery of facts
                 “constituting the basis of the cause of action or the
                 existence of facts sufficient to put a person of ordinary
                 intelligence and prudence on inquiry which, if pursued,
                 would lead to the discovery” of such facts. 78

75
     Id. at 4.
76
     See 10 Del. C. § 8106:

                No action to recover damages for trespass, no action to regain
                possession of personal chattels, no action to recover damages for
                the detention of personal chattels, no action to recover a debt not
                evidenced by a record or by an instrument under seal, no action
                based on a detailed statement of the mutual demands in the nature
                of debit and credit between parties arising out of contractual or
                fiduciary relations, no action based on a promise, no action based
                on a statute, and no action to recover damages caused by an injury
                unaccompanied with force or resulting indirectly from the act of
                the defendant shall be brought after the expiration of 3 years from
                the accruing of the cause of such action…
77
   Boerger v. Heim, 965 A.2d 671, 674 (Del. 2009).
78
   Id. (quoting Coleman v. Pricewaterhousecoopers, LLC, 854 A.2d 838, 842 (Del. 2004)).

                                             20
       In Thomas v. Capano Homes Inc., 2015 WL 1593618, the Court recently

denied a Motion to Dismiss where the parties disagreed as to when the statute of

limitations began to accrue. The Court held that

              “[T]he Court will not adjudicate contested issues of fact
              on a motion to dismiss, nor will it deem a pleading
              inadequate under Rule 12(b)(6) simply because a
              defendant presents facts that appear to contradict those
              plead by the plaintiff.” It is premature for the Court to
              dismiss Plaintiffs' claim as time-barred because, without
              discovery, it is unclear when the statute of limitations
              began to accrue, and whether the statue of limitations is
              tolled by the Time of Discovery Rule.79

       The parties have engaged in extensive discovery; however, the limited facts

contained in the pleadings are unclear as to when the statute of limitations began to

accrue and if the Time of Discovery Rule tolls the statute of limitations. In the

SAC, Delphi contends that “Magellan fraudulently billed Delphi for tank cleaning

charges that were Magellan’s responsibility and purposefully altered bills to

conceal the fact that it was passing of its charges to Delphi.” 80 Additionally,

Delphi alleges that “Magellan overbilled Delphi for the costs relating to the

cleaning of tanks leased to Delphi in violation of Clauses 2.7 and 2.8 of Schedule

A of the 2005 Agreement”81 and “Magellan breached Clauses 2.7 and 2.8 of

Schedule A of the 2005 Agreement by arranging for tank cleaning services to be

79
   Thomas v. Capano Homes Inc., 2015 WL 1593618, at *2 (Del. Super. Apr. 2, 2015)(quoting
Doe 30’s Mother v. Bradley, 58 A.3d 429, 445 (Del. Super. Mar. 29, 2012)).
80
   SAC at ¶ 36.
81
   Id. at ¶ 8(f).

                                            21
performed in a manner to minimize the costs of the cleaning for which Magellan

was responsible and maximize the costs for which Delphi was responsible.” 82

          Although Magellan argues that the underlying invoices cover the time period

from 2007 through 2010, the pleadings do not establish a timeframe such that the

Court can determine if the claim is barred by the statute of limitations. Therefore,

Magellan’s Motion to Dismiss Count IV is DENIED.

               V.     MAGELLAN’S MOTION FOR PARTIAL SUMMARY
                                    JUDGMENT

          Magellan’s request for summary judgment can be grouped into three parts

for purposes of the Court’s analysis: there are six arguments involving breach of

contract analysis, an argument concerning breach of the implied covenant of good

faith and fair dealing and an argument regarding damages.

          Magellan’s seeks summary judgment on some of Delphi’s breach of contract

claims on the grounds that: 1) Delphi’s claim in ¶8(k) of the SAC that Magellan

breached the PSA fails as a matter of law; 2) Delphi cannot produce evidence from

which a reasonable trier of fact could find that Magellan breached the 2005

Agreement by failing to account for 1,100 barrels discharged from the vessel

Asphalt Victory as alleged in ¶8(d) of the SAC; 3) Delphi cannot produce evidence

from which a reasonable trier of fact could find that Magellan’s refusal to accept

product from the vessel Asphalt Seminole was a breach of the 2005 Agreement as

82
     Id. at ¶ 8(g).

                                           22
alleged in ¶8(o) of the SAC; 4) Delphi cannot produce evidence from which a

reasonable trier of fact could find that Magellan breached the 2011 Agreement by

failing to credit Delphi for product in the Conectiv pipeline as alleged in ¶8(p) of

the SAC; 5) Delphi cannot produce evidence from which a reasonable trier of fact

could find that Magellan’s refusal to allow delivery of fuel by truck to the

Terminal constitutes a breach of the 2011 Agreement as alleged in ¶8(e) of the

SAC; and 6) Delphi cannot produce evidence from which a reasonable trier of fact

could find that Delphi is entitled to recover the alleged loss of 5,000 barrels under

the 2005 Agreement as alleged in ¶8(a) of the SAC.

      Magellan also seeks summary judgment on Count II of the SAC for breach

of the duty of good faith and fair dealing because Magellan argues that Count II

fails as a matter of law. Magellan requests summary judgment to enforce Clause

4.2 of Schedule A of the 2005 and 2011 Agreements, the limitation of damages

provision, arguing that Delphi is not entitled to consequential damages per the

plain terms of the Agreements.

      A.     Breach of Contract Claims

      Magellan’s first six arguments concern subsections of ¶8 of the SAC. The

common prayer for relief is that the Court determine that Delphi cannot produce

evidence from which a reasonable factfinder could find that Magellan breached

various provisions of the Agreements. Although Magellan, in its Opening Brief,

                                          23
frequently frames the issue as a “failure to state a claim,” the Court will examine

the factual record before it on summary judgment.

          To prevail on a claim for breach of contract, a plaintiff must show that a

contract existed, that the contract obligation was breached and that Plaintiff

suffered damages as a result of the breach. 83 For purposes of summary judgment,

Super. Ct. Civ. R. 56(c) “mandates the entry of summary judgment…against a

party who fails to make a showing sufficient to establish the existence of an

element essential to that party's case, and on which that party will bear the burden

of proof at trial.” 84 Consequently, if the factual record reveals that Delphi has not

made a showing as to an element of a breach of contract claim, the Court will grant

summary judgment, but if the factual record supports every element, summary

judgment will be denied.

             1.      The Undisputed Facts Establish that Delphi’s Claim Under ¶8(k)
                     of the SAC is Time-Barred.

          In ¶8(k) of the SAC, Delphi alleges that it suffered damages when

             Magellan breached Clause 1.1(c) of a certain September 1,
             2005 Purchase and Sale Agreement by failing to negotiate in
             its new lease with the Diamond State Port Corporation
             (“Port”) a clause reimbursing Delphi for $800,000 of costs
             incurred by Delphi’s subsidiary, Delaware Terminal
             Company (“DTC”) and by failing to notify Delphi, before
             executing its new agreement with the Port, that such a clause
             had not been included in the new lease. Delphi would have

83
     Interim Healthcare, Inc. v. Spherion Corp., 884 A.2d 513, 548 (Del. Super. 2005).
84
     Burkhart v. Davies, 602 A.2d 56, 59 (Del. 1991).

                                                 24
              received $400,000 had the clause been included in the new
              lease. DTC’s rights to the reimburse[sic] were assigned to
              Delphi.

          Delphi sold the Terminal to Magellan through the execution of a Purchase

and Sale Agreement (“PSA”) in 2005. Clause 1.1(c) of the PSA provides that

              …[Delphi] has a claim under the Dock Lease for Eight
              Hundred Thousand US Dollars ($800,000) against the
              [Port]… for reimbursement of costs incurred by [Delphi] in
              the construction of a mooring structure in or about 2001 (the
              "Reimbursement Claim"). The Port and [Delphi] entered
              into a Memorandum of Understanding on October 19, 2001
              in which the Port agreed that [Delphi] would be entitled to
              deduct Eight Hundred Thousand Dollars ($800,000.00) in
              settlement of the Reimbursement Claim from rental
              payments that [Delphi] would owe the Port under a [New
              Dock Lease] agreement…Should the New Dock Lease
              between the Port and [Delphi] not be finalized prior to the
              Effective Date [of the PSA], Magellan shall not negotiate
              with the Port to exclude [the Reimbursement Claim] from
              any New Dock Lease that [Magellan] may consummate with
              the Port. 85

          A new dock lease between Delphi and the Port was not finalized prior to the

effective date of the PSA. On April 7, 2008, Magellan notified Delphi via letter

that “[t]he Port has refused to include the [Reimbursement Claim] language or to

provide any alternative settlement proposal concerning the Reimbursement Claim”

in the new dock lease between Magellan and the Port.86 The new dock lease

85
     Def.’s Opening Br., D.I. 155, at Ex. 4.
86
     Id. at Ex. 8.

                                               25
between Magellan and the Port does not contain the Reimbursement Claim but

provides a $36,000 monthly rent reduction to Magellan.87

       Magellan argues that Delphi’s claim in ¶8(k) of the SAC is barred by the

statute of limitations because Delphi was notified on April 7, 2008 that the new

dock lease between the Port and Magellan did not include the $800,000 credit to

Delphi.88 Magellan claims that Delphi’s deadline to file a claim was April 7, 2011

based upon the three-year statute of limitations and that Delphi did not file a claim

until February 29, 2012.89 Magellan also argues that the Memorandum Of

Understanding provided that Magellan and the Port would present the proposed

$800,000 credit to Delphi to their respective boards of directors for consideration

and the undisputed facts are that the Port’s board of directors rejected the

provision.90 Magellan alternatively argues that Delphi cannot prove that Magellan

breached the PSA by negotiating with the Port to exclude the $800,000 credit or

that the Port proposed an alternative settlement that triggered Magellan’s duty to

notify Delphi of the alternative arrangement. 91 Additionally, Magellan asserts that

the parties agreed that if the $800,000 credit was not included in the new dock

87
   Pl.’s Answ. Br., D.I. 172, at Ex. 7.
88
   Def.’s Opening Br., at 7.
89
   Id.
90
   Id. at 8.
91
   Id. at 7-8.

                                          26
lease between Magellan and the Port and no alternative settlement was presented,

Delphi’s sole remedy is against the Port.92

        Delphi argues that the Time of Discovery Rule tolls the running of the

statute of limitations for the claim where the injury is “inherently unknowable” and

the plaintiff is “blamelessly ignorant” or for “concealment or fraud.” 93 Delphi

claims that it did not know of the terms of the new dock lease until June 2013. 94

Delphi contends that “Magellan struck a side deal for reduced rent instead of

negotiating in good faith to keep the $800,000 reimbursement clause in the

agreement on behalf of Delphi as required.” 95 Delphi claims that the alleged side

deal was for a $36,000 per year reduction in rent, that the alleged side deal was

concealed from Delphi and that “[i]t is a fair inference that the Port and Magellan

agreed to the reduced rent in exchange for Magellan giving up to $800,000

reimbursement clause.” 96 Delphi also argues that whether or not the Port’s board’s

approval of the $800,000 credit was required and whether or not the Port’s board

rejected the $800,000 credit provision are questions of fact that cannot be answered

merely by “self-serving affidavits alone” produced by Magellan. 97

92
   Id. at 8.
93
   Pl.’s Answ. Br., at 9.
94
   Id.
95
   Id. at 3 (Italics in original).
96
   Id. at 6.
97
   Id. at 7-8.

                                          27
       The statute of limitations for breach of contract claims under 10 Del. C. §

8106 is three years.98 Generally, the statute begins to run when the injury occurs

or, stated differently, when the contract has been breached. 99 The Court applies the

Time of Discovery Rule to breach of contract claims for situations where the injury

is “inherently unknowable” and the plaintiff is “blamelessly ignorant.”100

However, “actual discovery [of the injury] commences the running of the statute;

so will any change in circumstances that renders the injury no longer inherently

unknowable, or the ignorance of the [plaintiff] no longer blameless.” 101

       Delphi asserts that it could not have known that the Reimbursement Claim

was not included in the New Dock Lease because Magellan refused to give Delphi

a copy of the New Dock Lease “until Magellan’s June 2013 document

production.” 102 However, the record reflects that on April 7, 2008, Magellan

notified Delphi via letter that “[t]he Port has refused to include the

[Reimbursement Claim] language or to provide any alternative settlement proposal

concerning the Reimbursement Claim.” 103 Therefore, Delphi “actually

discovered” that the Reimbursement Claim was not included in the New Dock

Lease on April 7, 2008. At that point, Delphi was on notice of a possible breach of

98
   See supra note 76.
99
   Ruger v. Funk, 1996 WL 110072, at *2 (Del. Super. Jan. 22, 1996).
100
    Id.; see also Marcucilli v. Boardwalk Builders, Inc., 2002 WL 1038818, at *4 (Del. Super.
May 16, 2002)(“The time of discovery rule applies to breach of contract claims.”).
101
    Ruger, 1996 WL at *2.
102
    Pl.’s Answ. Br., at 7.
103
    Def.’s Opening Br., at Ex. 8.

                                               28
contract action and had a duty to investigate. Instead, Delphi did nothing until

February 29, 2012 when it initiated this lawsuit.

          Delphi’s argument that Magellan negotiated a “side deal” with the Port to

obtain reduced rent and concealed the “side deal” from Delphi may have been

sufficient to toll the statute of limitations if Delphi had presented any facts to

establish that the alleged “side deal” exists. Instead, Delphi merely argues that the

fact that Magellan received a $36,000 monthly rent reduction in the New Dock

Lease combined with the fact that the New Dock Lease excluded the

Reimbursement Claim creates “a fair inference that the Port and Magellan agreed

to the reduced the [sic] rent in exchange for Magellan giving up the $800,000

reimbursement clause.” 104 The Court cannot find that Delphi’s bald assertions

regarding the alleged “side deal” create a genuine dispute of material fact.

Therefore, the Court finds that a claim for breach of contract based upon ¶8(k) of

the SAC is time-barred. Consequently, the Court need not address the parties’

additional arguments. Magellan’s Motion for Partial Summary Judgment is

GRANTED.

              2.      The Undisputed Facts Show that Delphi Suffered No Damages as a
                      Result of the Conduct Alleged in ¶8(d) of the SAC.

          In ¶8(d) of the SAC, Delphi alleges that Delphi suffered damages when

104
      Pl.’s Answ. Br., at 6.

                                            29
           Magellan failed to properly perform the services it was
           obligated to perform under the 2005 Agreement and failed to
           properly control the discharge of, and accurately gauge the
           quantity discharged from, the vessel “Asphalt Victory” in
           December 2010. These failures resulted in the quantity of
           the discharge from this vessel to be overstated by more than
           1,100 barrels.

       Delphi concedes that Kildair, the entity from which Delphi purchased oil in

December 2010, has not yet billed Delphi for the $90,000 Delphi contractually

owes Kildair but asserts that Kildair may bill Delphi before 2016 based upon the

statute of limitations that governs that contract. 105 A bill of lading indicates that

Magellan received 166,024 barrels of product at the Terminal on behalf of Delphi

for the December 2010 delivery. 106

       Magellan argues that Delphi cannot recover under ¶8(d) of the SAC for

breach of contract because Delphi has suffered no damages. 107 Magellan asserts

that Delphi concedes that it did not pay for the alleged overstatement of barrels

discharged from the Asphalt Victory in December 2010 but that Delphi merely has

a “risk of paying the ship for the 1,100 barrels.” 108 Magellan argues that such

speculative damages are insufficient to survive a motion for summary judgment. 109

105
     Id. at 13.
106
    See id., at Ex. 11.
107
     Def.’s Opening Br., at 10.
108
     Id.
109
     Id. at 11.

                                           30
        Delphi argues that it has suffered damages as a result of the alleged

overstatement of barrels discharged to the Asphalt Victory. 110 Delphi admits that

“Kildair has not yet billed Delphi for the additional $90,000 but…Kildair has until

the end of 2016 to bring a claim [against Delphi].” 111 However, Delphi argues that

it has already suffered damages in the amount of $26,147.25. 112 Delphi asserts that

its contract with Kildair specifies that Delphi pays only for the actual quantity of

barrels Delphi receives, which registered at 166,024 barrels for the December 2010

delivery. 113 Delphi contends that Delphi should have only paid Kildair for 164,637

barrels because Magellan determined a month or more after the delivery that the

quantity of barrels received by Delphi was overstated by 1,387 barrels because of

an issue with the pipeline.114 Delphi asserts that, as a result of Magellan’s failure

to accurately gauge the quantity of barrels Delphi received in December 2010,

Delphi paid Kildair for the quantity of barrels listed on the Bill of Lading which

was 166,024.115 Delphi asserts that the difference between the Bill of Lading

amount and the amount Delphi should have paid results in Delphi’s overpayment

to Kildair for $26,147.25. 116

110
    Pl.’s Answ. Br., at 13.
111
    Id.
112
    Id.
113
    Id.
114
    Id.
115
    Id.
116
    Id. at 14.

                                           31
       When the factual record reveals that plaintiff has suffered no damages as a

result of an alleged breach of contract, summary judgment is appropriate. 117

Plaintiff’s damages must be actual and cannot be “merely speculative or

conjectural.”118 The Delaware Court of Chancery has held that damages based on

possible future liability are merely speculative.119 This Court agrees.

       For purposes of this Motion, the Court must bifurcate Delphi’s claim for

damages and examine separately the $90,000 portion not yet paid to Kildair and

the $26,147.25 portion allegedly paid to Kildair. First, as to the $90,000, Delphi

concedes that Kildair has not yet billed Delphi in that amount but asserts that

Kildair may bill Delphi before 2016 based upon the statute of limitations

controlling that contract. However, the Court would merely be speculating as to

Kildair’s actions regarding its decision to pursue that claim against Delphi.

Therefore, the Court cannot find that there is evidence that Delphi has incurred that

portion of the damages.

       Second, as to the alleged $26,147.25 that Delphi paid to Kildair, no evidence

is before the Court to conclude that Delphi actually paid that amount. The only

fact Delphi presented to the Court is a bill of lading that indicated that Magellan

received 166,024 barrels of product at the Terminal on behalf of Delphi on the date

117
    Burkhart, 602 A.2d at 59.
118
    Laskowski v. Wallis, 205 A.2d 825, 826 (Del. 1964).
119
    See Kuroda v. SPJS Holdings, L.L.C., 971 A.2d 872, 883 (Del. Ch. 2009)(holding that
potential future liability for income taxes that have not been incurred is “speculative harm”).

                                                32
in question. 120 There is no evidence such as a wire transfer, receipt or check

showing that Delphi actually paid Kildair any amount of money for the quantity of

barrels listed on the bill of lading. Delphi instead relies upon its own bare

assertions contained in its Response Brief which are insufficient to create a factual

dispute.121 Therefore, there are no facts from which the Court can find that Delphi

suffered damages as a result of a breach of contract and Magellan’s Motion for

Partial Summary Judgment as to ¶8(d) of the SAC is GRANTED.

           3.     The Undisputed Facts Establish that Magellan did not Breach
                  Clause 2.2 of Schedule A of the 2005 Agreement.

       In ¶8(o) of the SAC, Delphi alleges that Delphi suffered damages when

           Magellan breached the 2005 Agreement by refusing to allow
           the discharge of the vessel “Asphalt Seminole” in February
           2010 even though the product met, and Delphi had in
           addition prearranged to have the product professionally
           treated at Delphi’s expense to further guarantee that the
           product would meet, the quality requirements detailed in
           Clause 2.2 of the 2005 Agreement, resulting in the
           incurrence of demurrage and additional freight charges.

Clause 2.2 of Schedule A of the parties’ 2005 Agreement provides that

           [i]f Magellan receives non-conforming Product: (a)
           Customer will bear the cost of any additional services
           required, in the reasonable opinion of Magellan, to receive,
           deliver, store, handle or blend the non-conforming Product;
           (b) Magellan may halt delivery at any time, including during
           the course of delivery, and refuse to continue to receive non-
120
   See Pl.’s Answ. Br., at Ex. 11.
121
    See Balzereit v. Hocker’s Superthrift, Inc., 2012 WL 3550495 at *1 (Del. Super. Jul. 24,
2012)(“Merely bare assertions or conclusory allegations do not create a genuine issue of material
fact.”).

                                               33
              conforming Product; and (c) Magellan may require
              Customer to remove any non-conforming Product received
              at the Terminal within thirty (30) days of delivery of the
              non-conforming Product.

          The 2005 Agreement specifies the following quality limitations on product

being delivered to the Terminal:

Specification                                  Limitation
Maximum Product Deliver Temperature            150º F
Minimum Heavy Oil Delivery                     30º F above Pour Point
Temperature:
Maximum Product Viscosity:                     500SSF at 122º F
Maximum Product Pour Point:                    90º F
Maximum Hydrogen Sulfide (H2S)                 2 PPM
Content in Liquid Phase of Product:
Maximum Hydrogen Sulfide (H2S)                 100 PPM in any one tank of delivery
Content in Vapor Space:                        vessel and 50 PPM volumetrically
                                               correct weighted average in the vapor
                                               space of all tanks of delivery vessel

          A “Certificate of Analysis” contains a laboratory certification that the

“Vessel Composite” level of H2S measured 200 parts per million for the February

2010 delivery from the Asphalt Seminole.122 A “Hydrogen Sulfide Monitoring

Report” for the February 2010 delivery from the Asphalt Seminole showed that

temperature readings taken at various locations on the vessel all indicated that the

product temperature exceeded 150º F. 123 Counsel for Delphi acknowledged that

the “Certificate of Analysis” indicated that the H2S levels exceeded the contract

122
      See Def.’s Opening Br., at Ex. 14.
123
      See id., at Ex. 17.

                                             34
specifications but presented the Court with a conflicting report that showed that the

H2S levels complied with the contract specifications. 124 Counsel for Delphi also

conceded that the reports measuring the product temperature showed that the

temperature exceeded 150º F. 125

          Magellan seeks summary judgment on ¶8(o) of the SAC because Magellan

argues that it had the right to reject non-conforming product under the 2005

Agreement. 126 Magellan asserts that the 2005 Agreement provides that Magellan

may reject nonconforming product for delivery and further defines nonconforming

product as having H2S levels in the vapor space of the vessel’s cargo that exceed

100 parts per million in any one tank of delivery vessel. 127 Magellan contends that

it rightfully rejected delivery from the Asphalt Seminole when the H2S levels in

the vapor space of the Asphalt Seminole were reported to range between 100 parts

124
      See Tr., D.I. 193, at 71: 6-7.
125
      See Tr. at 71:22-72:7 which provides:

                 THE COURT: Where it reports H2S readings of port, starboard
                 and center of the vessel and it says “add,” and then there is a
                 number after that, which appears to be a temperature…

                 MR. MOONEY: Yes, sir.

                 THE COURT: And those temperatures are all over 150 degrees?

               MR. MOONEY: Those temperatures are by one or two degrees
               over, 152 degrees.
126
    Def.’s Opening Br., at 12.
127
    Id. at 11.

                                               35
per million and 200 parts per million.128 Additionally, Magellan asserts that the

report showed that the product temperature exceeded the maximum specified in the

2005 Agreement which gave Magellan an additional basis upon which to reject the

delivery. 129

       Delphi argues that Magellan wrongfully rejected the delivery from the

Asphalt Seminole because the product met the specifications contained in the 2005

Agreement. 130 Delphi asserts that the on board inspection of the vessel “showed

that the product on board the Asphalt Seminole fully complied with the limitations

contained in the 2005 Agreement” but acknowledges that another test conducted at

the inspector’s laboratory showed that the vapor concentration was higher than

what the contract permitted. 131 Delphi asserts that it was not obligated to report the

results of the second test to Magellan but did so to inform Magellan that it had

arranged for a third-party to treat the product at the dock to “assure that the product

would have an H2S concentration in the vapor phase of zero when stored in

Magellan’s Terminal.” 132 Delphi also asserts that Magellan’s rejection was never

justified because “there was a policy in existence in October 2010 that a vessel

could deliver product with 100 ppm H2S in vapor or 20 ppm in liquid, but it had to

128
    Id.
129
    Id.
130
    Pl.’s Answ. Br., at 15-16.
131
    Id. at 16.
132
    Id. at 17.

                                          36
be treated” and that Magellan had previously used the same third-party treatment

firm that was to treat the Asphalt Seminole. 133

       Where there are no facts to support Delphi’s contention that Magellan

breached the 2005 Agreement by wrongfully rejecting the February 2010 product

delivery to the Terminal by the Asphalt Seminole, summary judgment is

appropriate. 134 Magellan presented a “Certificate of Analysis” in which the level

of H2S measured 200 parts per million for the February 2010 delivery from the

Asphalt Seminole.135 Additionally, Magellan presented a “Hydrogen Sulfide

Monitoring Report” for the February 2010 delivery from the Asphalt Seminole that

showed that temperature readings taken at various locations on the vessel all

indicated that the product temperature exceeded 150º F. 136 At oral argument,

Counsel for Delphi acknowledged that the “Certificate of Analysis” indicated that

the H2S levels exceeded the contract specifications but presented the Court with a

conflicting report that showed that the H2S levels complied with the contract

specifications. 137 However, Counsel for Delphi also conceded that the reports

measuring the product temperature showed that the temperature exceeded 150ºF. 138

133
    Id.
134
    Burkhart, 602 A.2d at 59.
135
    See Def.’s Opening Br., at Ex. 14.
136
    See id., at Ex. 17.
137
    See Tr. at 71: 6-7.
138
    See supra note 125.

                                          37
          Based upon the facts in the record, the Court finds that it is undisputed that

the product delivered to the Terminal by the Asphalt Seminole in February 2010

was non-conforming product because the temperature exceeded the contractual

limitations. Therefore, the Court finds that the undisputed facts show that

Magellan did not breach Clause 2.2 of Schedule A of the 2005 Agreement when it

rejected the delivery from the Asphalt Seminole in February 2010. Delphi cannot

recover under ¶8(o) of the SAC and Magellan’s Motion for Partial Summary

Judgment is GRANTED.

              4.     The Facts Pertaining to ¶8(p) of the SAC are Disputed.

          A ten-inch pipeline runs between the Terminal and a power plant that was

owned by Conectiv at the time of the allegation contained in ¶8(p) of the SAC. For

various reasons, Magellan determined that the pipeline needed to be purged and

discovered that the pipeline still contained some product. Magellan did not know

whether the product belonged to Delphi before it searched its records. Magellan

discovered a document titled “Delaware Terminal Company Hourly Rate Sheet,”

dated “12/17/04” and states “T[ank]-12 to Conective [sic]” in the top left corner.139

Karen Peterson, a Delphi representative, testified 140 in response to the question

“Do you know whether that product [in the pipeline] belonged to Delphi?” that

139
      Def.’s Opening Br., at Ex. 20.
140
      Relevant excerpts of the deposition can be found in Def.’s Opening Br., at Ex. 16.

                                                  38
“[she] believe[d] at that time it belonged to Conectiv.” 141          Based upon this

information, Magellan transferred the product to Conectiv.

       In excerpts from email communications between Magellan representatives,

Paul Hafner indicated that “[the product] belongs to [Conectiv]” while Tony Bogle

indicated that “[a coworker] asked about Delphi’s product in the 10” [Conectiv]

line” and Mark Roles stated that “[i]t might be Delphi’s product.” 142 Additionally,

Alan Cosby’s June 11, 2009 email summarizing a meeting with Delphi indicates

that Magellan contacted Delphi about purging the pipeline and noted that “Delphi

loses the rights to the DOT 10” line in Sept 2010” and that “staff remembers this

product belonging to Conectiv not Delphi.” 143

       Paragraph 8(p) of the SAC alleges that “Magellan breached the 2005

Agreement by failing to properly credit Delphi for approximately 2,000 barrels of

No. 2 oil in the pipeline to Conectiv’s power plant in Edgemoor, Delaware.”

       Magellan argues that Delphi’s claims under ¶8(p) of the SAC fails as a

matter of law because Conectiv, and not Delphi, owned the pipe when the alleged

transfer happened.144 Magellan asserts that in 2010, when Magellan needed to

treat a ten-inch pipeline at the terminal, it discovered product still contained in the

141
    Peterson Dep. at 186: 19-22.
142
    Pl.’s Answ. Br., at Ex. 14.
143
    Id. at Ex. 15.
144
    Def.’s Opening Br., at 13.

                                           39
pipeline.145 Magellan claims that it searched its records and determined that the

product contained in the pipeline belonged to Conectiv so Magellan transferred the

product to Conectiv.146 Magellan asserts that it “discovered a transfer order

showing that the product in the line had been transferred to Conectiv” and that

“Delphi representative Karen Peterson admitted that the product belonged to

Conectiv at the time of the transfer.” 147

       Delphi argues that there is a genuine issue of material fact in dispute.

Specifically, Delphi contends that ownership of the pipeline is disputed for

purposes of this Motion.148 Delphi asserts that Magellan misconstrues the “transfer

order” and contends that the document does not establish that Conectiv owned the

product in the pipeline but rather covered testing of the pipeline. 149 Additionally,

Delphi contends that email communications between Magellan representatives

establish that the product in the pipeline belonged to Delphi at the time of the

transfer. 150

145
    Id.
146
    Id. at 13-14.
147
    Id. at 13.
148
    Pl.’s Answ. Br., at 18-19.
149
    Id. at 19.
150
    See Pl.’s Answ. Br., at 18 (“Bogle responded that ‘[t]here may be a potential issue…when I
met with Ron [Gumbaz] last week …he asked about Delphi’s product in the 10” Delmarva
[Conectiv] line.’”; “Bogle’s supervisor further commented: ‘It might be Delphi’s product.’”;
“Alan Cosby, Magellan’s Wilmington area supervisor, also admitted to having been informed by
Domenic DiPiero, Delphi’s President, that the product was owned by Delphi.”)(internal citations
omitted).

                                              40
       Where a genuine dispute of material facts exists, summary judgment is not

appropriate. 151 If Magellan meets its burden on summary judgment, Delphi must

show that there are material issues of fact in dispute.152 It is not enough for Delphi

to assert the existence of a disputed fact.153 The alleged disputed fact must be one

which affects the outcome of the case. 154

       Magellan relies on the document, titled “Delaware Terminal Company

Hourly Rate Sheet,” for the proposition that it represents a transfer of ownership of

product from Delphi to Conectiv because the document states “T[ank]-12 to

Conective [sic].” Additionally, Karen Peterson, a Delphi representative, testified

in response to the question “Do you know whether that product belonged to

Delphi?” that “[she] believe[d] at that time it belonged to Conectiv.” 155 Therefore,

Magellan has presented factual information to establish that Conectiv, and not

Delphi, owned the product in the pipeline at the time of the transfer. Therefore, the

burden shifts to Delphi to show the existence of a material factual dispute.

       Delphi identifies facts that show that the product contained in the pipeline

belonged to Delphi at the time of the transfer. Excerpts from email

communications between Magellan representatives illustrate the dispute: Paul

Hafner indicated that “[the product] belongs to [Conectiv]” while Tony Bogle
151
    Super. Ct. Civ. R. 56(c).
152
    Brzoska, 668 A.2d at 1364.
153
    Id.
154
    Id.
155
    Peterson Dep. at 186: 19-22.

                                          41
indicated that “[a coworker] asked about Delphi’s product in the 10” [Conectiv]

line” and Mark Roles stated that “[i]t might be Delphi’s product.” 156 Additionally,

Alan Cosby’s June 11, 2009 email summarizing a meeting with Delphi indicates

that Magellan contacted Delphi about purging the pipeline and noted that “Delphi

loses the rights to the DOT 10” line in Sept 2010” and that “staff remembers this

product belonging to Conectiv not Delphi.” 157

          Based upon the factual record, the Court finds that a genuine issue of

material fact exists because whether Delphi owned the product contained in the

10” pipeline at the time of the transfer alleged in ¶8(p) of the SAC would affect the

outcome of the claim. Therefore, summary judgment is not appropriate and

Magellan’s Motion is DENIED.

              5.      The Undisputed Facts Show that Delphi is Not Entitled to Relief
                      for Breach of Contract as Alleged in ¶8(a) of the SAC.

          In ¶8(a) of the SAC, Delphi alleges, in part, that

                   [i]n January 2012 Magellan refused to allow Delphi to
                   deliver No. 6 oil to the Terminal by truck resulting in
                   Delphi losing the supply of approximately 26,000 barrels
                   of No. 6 oil. In May 2012, Magellan again refused to
                   allow Delphi to deliver No. 6 oil to the Terminal by
                   truck, and Delphi consequently lost the supply of 24,000
                   barrels of No. 6 oil. These refusals constituted breaches
                   of Clause 2.1(a) of Schedule A of the 2011 Agreement…

156
      Pl.’s Answ. Br., at Ex. 14.
157
      Id. at Ex. 15.

                                              42
      During the negotiation phase of the 2011 Agreement, on May 13, 2011, Delphi

proposed the language contained in Clause 2.1(a) of Schedule A of the 2011

Agreement in an email to Magellan.158 The email stated: “[p]lease see revised

draft. Delphi had the right to, and did, deliver to the terminal by truck in the

original agreement and needs that in this agreement…” 159 On the same day,

Magellan responded to Delphi’s proposal via email that it “[a]greed with

[Delphi’s] two changes dealing with improvement costs and truck receipt

language.”160 Delphi executed the 2011 Agreement that day. 161

      Clause 2.1(a) of Schedule A of the 2011 Agreement provides that

               [r]eceipt and deliveries of Product from the Terminal via
               truck will be made to a Carrier in accordance with the
               Terminal’s operating procedures and in accordance with
               this        Schedule        A,        Section      2.4…

      Clause 2.4 of Schedule A of the 2011 Agreement provides various Terminal

      operating guidelines. Clause 2.4 provides that “Customer may request the

      ability to load trucks with Heavy Oil at the Terminal…” 162 Clause 2.9 of

      Schedule A of the 2011 Agreement provides that “Magellan will maintain two

158
    SAC at Ex. J.
159
    Id.
160
    Id. at Ex. K.
161
    Id. at ¶4.
162
    Clause 2.4 of Schedule A of the 2011 Terminalling Agreement.

                                             43
      (2) positions for the loading of Heavy Oil from tanks 3,4,8,17 and 18…”. 163

      Additionally, Clause 4.1(b) of Schedule A of the 2011 Agreement provides that

               If Customer is unable to load Heavy Oil at the Back
               [Truck] Rack…If Customer is unable to load Heavy Oil
               at a single (1) position of the Back [Truck] Rack…If
               Customer is unable to load Heavy Oil at the slower of the
               two truck loading positions at the Back [Truck]
               Rack…. 164

         Magellan argues that, as a matter of law, the language contained in Clause

2.1(a) of Schedule A of the 2011 Agreement does not give Delphi the right to

deliver products by truck to the Terminal. 165 Magellan asserts that the 2011

Agreement provides that

               …‘[r]eceipt and deliveries of Product from the Terminal
               via truck will be made to a Carrier in accordance with
               the Terminal’s operating procedures and in accordance
               with this Schedule A, § 2.4....’ (Ex. 1 at Schedule A,
               § 2.1(a) (emphasis added).) Section 2.4, in turn, contains
               no provisions regarding the unloading of trucks at the
               Terminal, and instead addresses only the loading of
               product onto trucks for delivery from the Terminal, as
               contemplated in § 2.1. 166

Magellan further asserts that parol evidence shows that the Terminal was not

equipped to handle deliveries to the Terminal by truck. 167 Magellan contends that

“Magellan proposed an Amendment to the 2011 Agreement that would allow

163
    Clause 2.9 of Schedule A of the 2011 Terminalling Agreement.
164
    Clause 4.1(b) of Schedule A of the 2011 Terminalling Agreement.
165
    Def.’s Opening Br., at 15.
166
    Id. at 18.
167
    Id.

                                             44
delivery to the Terminal by truck once certain modifications to the Terminal are

made… but Delphi refused to enter into such an amendment.” 168

       Magellan alternatively argues that if the Court determines that 2.1(a) of

Schedule A of the 2011 Agreement affords Delphi the right to deliver product to

the terminal by truck, Delphi has suffered no recoverable damages by Magellan’s

alleged failure to allow delivery by truck. 169 Magellan contends that Section 4.2 of

Schedule A of the Terminalling Agreements limits damages and provides that

‘“[n]either party will be liable for other party’s lost profits, lost business

opportunities, or other indirect, special, incidental, punitive, or consequential

damages in connection with this Agreement.”’ 170 Magellan contends that Delphi

has identified “only two specific opportunities it claims it had to purchase product

for delivery to the Terminal by truck.” 171 Magellan asserts that “[r]egarding the

first alleged lost opportunity, in January 2012, Delphi never bid to purchase the

product in question, nor did Delphi offer the product for sale to another party.” 172

Magellan also asserts, as to the second alleged lost opportunity, “Delphi purchased

and immediately sold the product directly to a third party, without putting the

product in storage.” 173

168
    Id.
169
    Id.
170
    Id. at 18-19 (quoting Clause 4.2 of Schedule A of 2005 and 2011 Agreements).
171
    Id.
172
    Id.
173
    Id. at 18.

                                              45
       Delphi argues that “the 2011 Agreement permits Delphi to deliver product to

the Terminal by truck because the 2011 Agreement and extrinsic evidence

shows[sic] that the parties agreed and intended that Delphi would have the truck

delivery right.”174 Additionally, Delphi asserts that Magellan knew that Delphi

required that the 2011 Agreement contain the right to deliver product to the

Terminal by truck and that Magellan fraudulently induced Delphi into entering into

the 2011 Agreement. 175 Delphi claims that “[s]ummary judgment on this claim

should be denied since at minimum there is an issue as to what the parties intended

as to the inclusion of the truck receipt language in the 2011 Agreement.” 176

       Issues of contract interpretation are matters of law for the Court to decide. 177

When interpreting a contract, the Court gives priority to the parties’ intentions as

reflected within the four corners of the document. 178 “In upholding the intentions

of the parties, a court must construe the agreement as a whole, giving effect to all

provisions therein.” 179 “Delaware law adheres to the objective theory of contracts,

i.e., a contract's construction should be that which would be understood by an

objective, reasonable third party.” 180

174
    Pl.’s Answ. Br., at 20.
175
    Id. at 20-22.
176
    Id. at. 23.
177
    Klair v. Reese, 531 A.2d 219, 222 (Del. 1987).
178
    GMG Capital Investments, LLC v. Athenian Venture Partners I, L.P., 36 A.3d 776, 779 (Del.
2012).
179
    E.I. du Pont de Nemours and Co., Inc. v. Shell Oil Co., 498 A.2d 1108, 1113 (Del. 1985).
180
    Osborn ex rel. Osborn v. Kemp, 991 A.2d 1153, 1159 (Del. 2010).

                                             46
       Clear and unambiguous language will be given its “ordinary and usual

meaning.”181 “When a contract's plain meaning, in the context of the overall

structure of the contract, is susceptible to more than one reasonable interpretation,

courts may consider extrinsic evidence to resolve the ambiguity.” 182 However,

              [a] contract is not rendered ambiguous simply because
              the parties do not agree upon its proper construction.
              Rather, a contract is ambiguous only when the provisions
              in controversy are reasonably or fairly susceptible of
              different interpretations or may have two or more
              different meanings. Ambiguity does not exist where a
              court can determine the meaning of a contract without
              any other guide than a knowledge of the simple facts on
              which, from the nature of language in general, its
              meaning depends. 183

       Although the Clause contains the word “deliveries,” the remainder of the

Clause contemplates only moving product away from the Terminal. Parsing out

the language, it is apparent to the Court that “receipt of Product from the Terminal

via truck” means that Delphi is receiving product at the Terminal in its trucks to be

taken away from the Terminal. Additionally, it is equally as apparent to the Court

that “delivery of Product from the Terminal via truck” means that Delphi is

transporting the product that it loaded onto its trucks at the Terminal to another

location not at the Terminal.

181
    AT&T Corp. v. Lillis, 953 A.2d 241, 252 (Del. 2008).
182
    Salamone v. Gorman, 106 A.3d 354, 374 (Del. 2014).
183
    Rhone–Poulenc Basic Chemicals Co. v. American Motorists Ins. Co., 616 A.2d 1192, 1195–
96 (Del.1992).

                                            47
       Other provisions of the 2011 Agreement support the Court’s interpretation

of Clause 2.1(a). Clause 2.4 of Schedule A of the 2011 Agreement provides

various Terminal operating guidelines. Clause 2.4 specifies the procedure for

removing product from the Terminal by truck but does not provide an operating

procedure for delivering product to the Terminal by truck. 184 Likewise, Clause 2.9

of Schedule A of the 2011 Agreement provides a procedure for loading product

from specific tanks but does not provide a provision for delivering product to the

tanks. 185 Additionally, Clause 4.1(b) of Schedule A of the 2011 Agreement

contemplates limitations of liability for situations in which Delphi cannot load

product onto trucks but does not provide for the same limitations if Delphi cannot

deliver product by truck. 186 Therefore, in the context of the overall structure of the

2011 Agreement, Clause 2.1(a) is not susceptible to more than one meaning.

       The Court finds that the contract, as written, objectively reflects that the

parties’ intention was for Delphi to only receive product from the Terminal via

truck. Consequently, the Court will not consider the parties’ negotiations or other

184
    See Clause 2.4 of Schedule of the 2011 Agreement (“Customer may request the ability to load
trucks with Heavy Oil at the Terminal…”).
185
     See Clause 2.9 of Schedule of the 2011 Agreement (“Magellan will maintain two (2) positions
for the loading of Heavy Oil from tanks 3,4,8,17 and 18…”).
186
     See Clause 4.1(b) of Schedule of the 2011 Agreement:

              If Customer is unable to load Heavy Oil at the Back [Truck]
              Rack…If Customer is unable to load Heavy Oil at a single (1)
              position of the Back [Truck] Rack…If Customer is unable to load
              Heavy Oil at the slower of the two truck loading positions at the
              Back [Truck] Rack…

                                              48
extrinsic evidence. Moreover, unless Delphi can show that Magellan acted

fraudulently or in bad faith, Clause 4.2 of Schedule A of the 2005 and 2011

Agreements prevents Delphi from recovering consequential damages. 187

Magellan’s Motion for Partial Summary Judgment is GRANTED.

              6.     It is Desirable to Further Develop the Factual Record Regarding
                     Whether or Not Magellan Failed to Exercise Due Care as Alleged
                     in ¶8(e) of the SAC.

          In ¶8(e) of the SAC, Delphi alleges that

              [o]n various dates, Magellan breached Clause 4.2 of
              Schedule A of the 2005 Agreement by failing to exercise
              reasonable care to safeguard Delphi’s product in storage
              and/or in the gauging of the quantity of the receipts and
              deliveries of Delphi’s product, resulting in the loss of more
              than 5,000 barrels of Delphi’s produce in excess of the loss
              allowance provided Magellan in such Clause.

Section 4.2 of Schedule A of the 2005 Terminalling Agreement provides that

              Magellan will only be liable to Customer for damaged, lost,
              or destroyed Product to the extent that the damage, loss or
              destruction is caused by the failure of Magellan to use
              reasonable care in the storage and handling of the Product.
              Without limiting the foregoing, Magellan will only be liable
              for losses of Heavy Oil…in excess of 0.25% of the quantity
              of Heavy Oil…discharged at the Terminal in the Quarter in
              which the loss occurred…

          In an email to another Magellan employee, Brett Hunter, Magellan’s

representative, stated that “I don’t believe that we’ve had one quarter since the start

187
      See infra Part V.C.

                                             49
of the [2005] contract where we’ve had net gains in Delphi’s tankage.” 188 In an

April 7, 2011 email to Delphi, Tony Bogle, a Magellan representative, stated, with

regard to process improvements made to reduce the overall product loss, that the

           process improvements/changes include:

           Install [sic] new gauge and float on flush oil tank
           Install new thermometer on flush oil tank
           Calibrate thermometer quarterly
           Reduce volume of over flush
           Mix the flush oil tank before and after a product move to obtain a
           uniform temperature. 189

       Magellan argues that the record is void of any factual support for the lack of

reasonable care alleged in by Delphi in ¶8(e) of the SAC. 190 Magellan claims that

“[t]he 2005 Agreement provides that Magellan ‘is not an insurer’ of Delphi’s

product, and is responsible only for losses in excess of 0.25%, and then only if the

losses are caused by Magellan’s failure to use due care.”191 Magellan contends

that there are no facts that show that Magellan “was negligent in the handling or

measurement of [Delphi’s] product.”192

       Delphi argues that the factual record establishes that Magellan regularly lost

quantities of Delphi product in excess of the 0.25%. 193 Delphi asserts that

Magellan acknowledged responsibility for the alleged excess losses while the
188
    Pl.’s Answ. Br., at Ex. 24.
189
    Id. at Ex. 27.
190
    Def.’s Opening Br., at 19.
191
    Id. (quoting Clause 4.2 of Schedule A of the 2005 Agreement).
192
    Id.
193
    Pl.’s Answ. Br., at 24.

                                              50
product was in Magellan’s custody and care. 194 Delphi contends that “when losses

exceeded .25% …, the excess was due to Magellan’s lack of care in storing,

gauging, and handling Delphi’s product…Among the reasons for the product

shortages were Magellan’s failure to mix the tanks, failure to calibrate

measurement equipment, and use of outdated gauges and floats in the tanks.” 195

Delphi claims that Magellan failed to use due care when discovered various causes

of product loss and applied remedial measures to its own tanks but did not apply

the same measures to Delphi tanks until much later.196

       The process improvements may be evidence to ultimately persuade a

factfinder whether or not Magellan’s behavior prior to the implemented

improvements constituted lack of due care; however, the Court cannot find that the

implementation of the improved process indicates, as a matter of law, that

Magellan either exercised or failed to exercise due care in storing or handling

Delphi’s product. Moreover, what is “reasonable” behavior that constitutes “due

care” is a highly factual determination. Therefore, the Court finds that “it is

desirable to inquire more thoroughly into the facts in order to clarify the

application of law to the circumstances.”197 Magellan’s Motion for Partial

Summary Judgment is DENIED.

194
    Id.
195
    Id. at 25.
196
    Id. at 25-26.
197
    Cook, 1990 WL 35244, at *3.

                                          51
          B.      Count II of the SAC for Claims for Breach of the Implied
                  Covenant of Good Faith and Fair Dealing is Limited.

          Magellan argues to exclude specific allegations pertaining to Count II of the

SAC because Magellan asserts that claims for breach of the implied covenant of

good faith and fair dealing cannot be based upon conduct governed by an express

contractual provision. 198 In Magellan’s Opening Brief, Magellan created a chart 199

that identifies forty-nine specific allegations contained in either ¶8 of the SAC or in

Delphi’s responses to Magellan’s Second Set of Interrogatories.200 The first

column is titled “Delphi’s Allegations” and the second column is titled

“Corresponding Express Contractual Provision.” In the first column, Magellan

identifies the various allegations raised by Delphi and in the second column,

Magellan identifies by clause and/or section number the provision for which

Magellan alleged expressly governed the allegation. Magellan argues that the

identified allegations can be resolved by express contractual provisions of the 2005

and 2011 Agreements such that a claim for breach of contract and a claim for

breach of the implied covenant of good faith and fair dealing cannot co-exist.201

          Delphi acknowledges that claims based upon the implied covenant of good

faith and fair dealing are not viable where the matter is expressly covered by

198
      Def.’s Open. Br., at 20.
199
      The Court will not replicate Magellan’s chart which can be found in Def.’s Opening Br., 21-
30.
200
      Id. at 21-30.
201
      Id. at 20-21.

                                                 52
contractual terms. 202 At oral argument, Delphi conceded that all but the following

subsections of ¶8 of the SAC are governed by express contractual provisions:

¶¶8(c), (n), (q), (r), (u), (v) and (w).203 However, Delphi asserts that “[w]here there

is no ‘specific language governing the implied obligation,’ Delaware courts will

permit claims for both express and implied breaches to move forward even when

there is general contractual language covering the implied obligations.” 204 Delphi

contends that “it is the burden of the movant to cite a ‘specific provision’ in the

agreement which governs the injuries allegedly suffered.”205 Delphi argues that

Magellan has not identified specific contractual provisions that govern ¶¶8(c), (n),

(q), (r), (u), (v) and (w) but merely relies upon general contractual provisions. 206

202
      Pl.’s Answ. Br., at 27.
203
      See Tr. at 61:3-12:

                  MR. MOONEY: And, specifically, we have identified the claims
                  in 8(c) where Magellan used our product to flush their pumps, the
                  claim in 8(n) where we allege that Magellan improperly
                  contaminated our product, the claim in 8(q), which is another
                  contamination claim, the claim in 8(u), which is overbilling for oil
                  used to heat the tanks, (v) is overcharged for cleaning, and (w),
                  which is that they forced Delphi on threat of a warehouseman's lien
                  to send it $2 million in collateral.

               So those are the claims that we are citing to support the notion that
               the Court may not find that these -- specifically that Magellan's
               conduct specifically breached contractual terms that govern that
               kind of conduct, but that the conduct, nonetheless, breached its
               covenant of good faith and fair dealing.
204
    Pl.’s Answ. Br., at 27 (quoting Alltrista Plastics, LLC v. Rockline Indus., Inc., 2013 WL
5210255, at *7 (Del. Super. Sept. 4, 2013)).
205
    Id.
206
    Id. at 28.

                                                  53
      At oral argument, counsel for Delphi acknowledged on the record that

Delphi agrees with Magellan’s representation of the law as to this matter. 207 “The

‘implied covenant of good faith and fair dealing involves…inferring contractual

terms to handle developments or contractual gaps that…neither party

anticipated’” 208 or to “fill gaps in the contract’s provisions.” 209 The implied

covenant of good faith and fair dealing cannot be invoked when the contract

addresses the specific conduct at issue. 210 The burden is on the movant to cite a

specific provision of the agreement which governs the allegation. 211

      Because Delphi acknowledges that only ¶¶8(c), (n), (q), (u), (v) and (w) of

the SAC allege conduct to support claims for breach of the implied covenant of

good faith and fair dealing, the Court’s discussion is limited to whether Magellan

has met its burden to cite a specific provision of the contract that governs those six

subsections. The Court’s findings are as follows:

      - As to ¶8(c), regarding Magellan’s alleged improper use of Delphi’s

          product, and ¶8(v), regarding alleged inappropriate tank cleaning

207
    Tr. at 61:20-62:2 (“THE COURT: First of all, do you agree on the law? MR. MOONEY: I
think we do.”).
208
    Nationwide Emerging Managers, LLC v. Northpointe Holding, LLC, 112 A.3d 878, 896 (Del.
2015)(quoting Nemec v. Shrader, 991 A.2d 1120, 1125 (Del. 2010)).
209
    Alltrista, 2013 WL 5210255 at *7.
210
    Nationwide, 112A.3d at 896.
211
    See Alltrista, 2013 WL 5210255 at *7 (“[Defendant] cites no specific provision in the
[contract] that [Defendant] alleges would govern the injury suffered by [Plaintiff].”).

                                            54
           charges, of the SAC,212 the Court finds that the express terms of the

           contract do not govern the conduct alleged. Therefore, Delphi is not

           precluded from pursuing a claim for breach of the implied covenant of

           good faith and fair dealing based upon the allegations contained therein.

       - As to ¶¶8(n) and (q), relating to alleged instances of tank contamination,

           of the SAC,213 the Court finds that Magellan did not address the conduct

           at issue in its submissions to the Court and, therefore, has not identified

           any express contractual provision that would preclude a claim for breach

           of the implied covenant of good faith and fair dealing.

212
    ¶ 8(c) provides that “Magellan improperly used Delphi’s product during the term of the 2005
Agreement and during the term of the 2011 Agreement to flush the pumps at the heavy oil truck
loading rack.
¶ 8(v) provides that “Magellan disguised and altered contractor invoices, which included
inappropriate tank cleaning charges such as water washing, and then passed these inaccurate
invoices to Delphi.”
213
    ¶ 8(n) provides:
                Magellan contaminated Delphi’s product in Tank 17 in September,
                2011 when Magellan required Delphi to take back a portion of the
                product that Magellan had borrowed from Delphi, at a time when
                Delphi did not have a suitable tank available to accept such
                product, thereby causing contamination to the product already in
                the tank into which such product was placed. Delphi incurred
                costs for inspection, and mixing and transfer charges, and suffered
                the downgrade of the product used to cure the contamination.
¶ 8(q) provides: “On June 7, 2011, Magellan improperly transferred higher sulfur
into a Delphi tank containing lower sulfur oil, thereby contaminating it. Magellan
thereafter agreed to pay Delphi $16,957.82 for such contamination but has failed
and refused to make payment.”

                                              55
       - As to ¶8(u) of the SAC, 214 the Court finds that the express terms of the

           contract do not entirely control the allegation. The contract terms control

           to the extent that Magellan allegedly overbilled Delphi for heating costs.

           However, the contract does not govern to the extent of the alleged

           concealment of overbilling. Therefore, a claim for breach of the implied

           covenant of good faith and fair dealing may proceed with respect to the

           alleged concealment of overbilling.

       - As to ¶8(w) of the SAC, 215 Second Amended Complaint, the Court finds

           that the express terms of the contract do not apply to the entire claim.

           The express provisions of the contract control whether the

           warehouseman’s lien Magellan allegedly imposed is valid under the 2005

           and 2011 Agreements; however, the express terms of the contract do not

           govern to the extent that Magellan allegedly failed to credit a known

           overbilling issue. Therefore, Delphi’s claim for breach of the implied

214
    ¶ 8(u) provides that “Magellan overbilled Delphi by at least $580,000 between 2005-11 for
the fuel consumed to heat Delphi’s oil tanks, and then concealed its overcharges. Delphi
confirmed Magellan’s overbilling in December, 2014.”
215
    ¶ 8(w) provides:

              Magellan forced Delphi to make $2,065,942.02 in collateral
              deposits in response to Magellan’s threatened and actual
              imposition of an invalid warehouseman’s lien on Delphi’s product,
              which was not permitted under the 2005 or 2011 Agreements,
              exceeded any legitimate amount owed, and failed to credit Delphi
              with amounts Magellan knew it had overbilled Delphi.

                                              56
             covenant of good faith and fair dealing is limited to the alleged failure to

             credit a known overbill.

        Therefore, Count II of the SAC for Breach of the Duty of Good Faith and

Fair Dealing is limited by the aforementioned findings of fact and Magellan’s

Motion for Partial Summary Judgment is GRANTED, in part, and DENIED, in

part.

        C.      The Court Cannot Find that Clause 4.2 of Schedule A of the 2005
                and 2011 Agreements is Enforceable as a Matter of Law or that it
                Applies to Claims Under Count II of the SAC.

        Delphi and Magellan are sophisticated business entities. 216 The 2005 and

2011 Agreements govern the commercial relationship between Delphi and

Magellan.217 The 2005 and 2011 Agreements each contain provisions waiving the

parties’ rights to recover “lost profits, lost business opportunities, or other indirect,

special, incidental, punitive, or consequential damages in connection with this

Agreement.” 218

        Magellan argues that the limitation of liability provision contained in Clause

4.2 of Schedule A of the 2005 and 2011 Agreements is enforceable under

Delaware law. 219 Magellan urges the Court to “rule as a matter of law that Delphi

is not entitled to recover ‘lost profits, lost business opportunities, or other indirect,

216
    SAC at ¶¶ 1-2.
217
    See generally, SAC at Ex. A; Ex. B.
218
    Clause 4.2 of Schedule A of the 2005 and 2011 Agreements.
219
    Def.’s Opening Br., at 31.

                                             57
special, incidental, punitive, or consequential damages in connection with [the

Agreements].’” 220 Additionally, Magellan asserts that, to the extent that the Court

denies its Motion and allows Delphi to pursue claims for breach of the implied

covenant of good faith and fair dealing, damages related to those claims also are

limited by the terms of Clause 4.2 of Schedule A of the 2005 and 2011 Agreements

because the parties did not carve out an exception for instances of bad faith. 221

Magellan does not argue that Clause 4.2 of Schedule A of the 2005 and 2011

Agreements is enforceable as to any of Delphi’s fraud claims that survive

Magellan’s Motion to Dismiss. 222

       Delphi argues that Clause 4.2 of Schedule A of the 2005 and 2011

Agreements is not fully enforceable because Delphi has pleaded instances of fraud

that are outside of the contract.223 Delphi also asserts that the Court recognizes an

exception to the rule that limitations of liability clauses are generally

enforceable.224 Delphi contends that the Court will set aside limitations of liability

clauses for fraudulent or bad faith breaches of contract. 225 Delphi also asserts that

the limitation of damages clause is unconscionable because “[b]y intentionally

breaching the Agreements with the intent of relying on the limitation provision to

220
    Id. (quoting Clause 4.2 of Schedule A of 2005 and 2011 Agreements).
221
    Id.
222
    Def.’s Reply Br., D.I. 182, at 15.
223
    Pl.’s Answ. Br., at 30.
224
    Id. at 32-33.
225
    Id.

                                             58
escape accountability for its misconduct, Magellan has unfairly taken advantage of

Delphi.”226 Finally, Delphi asserts that it is entitled to rescission or disgorgement

because “Magellan’s breach of the 2011 Agreement by refusing to permit Delphi

to deliver product to the terminal by truck substantially frustrated Delphi’s

principal purpose in making the agreement – use of the terminal to store its

product.” 227

       In its Answering Brief, Delphi requested the equitable remedies of

disgorgement and rescission for the first time in this litigation. The Court finds the

request inappropriate. Additionally, even it were a proper request, the Court found

that Clause 2.1(a) of Schedule A of the 2011 Agreement did not give Delphi the

right to deliver product to the Terminal via truck.228 Therefore, the Court cannot

find that Magellan’s alleged actions to refuse delivery of product to the Terminal

via truck substantially frustrated Delphi’s principal purpose in making the 2011

Agreement.

       There is no dispute that damages recovered under Counts IV and V of the

SAC are not limited by Clause 4.2 of Schedule A of the 2005 and 2011

Agreements because the Counts allege fraudulent conduct. 229 However, the issue

is whether the Court carves out a “bad faith” exception to the damages limitation
226
    Id. at 33-34.
227
    Id. at 34.
228
    See supra Part V.A.5.
229
    Had the Court not dismissed Count III of the SAC in §V.A.2, supra, the limitation of liability
clause would not be enforceable as to that Count.

                                                59
clause as it pertains to the contractual claims in Count I of the SAC and the implied

covenant of good faith and fair dealing claims in Count II of the SAC.

       Generally, limitation of liability clauses that preclude consequential damages

are enforceable under Delaware law. 230 The Delaware Court of Chancery explains

that

              Delaware upholds the freedom of contract and enforces
              as a matter of fundamental public policy the voluntary
              agreements of sophisticated parties. Delaware law
              generally elevates contract law over tort to allow parties
              to order their affairs and bargain for specific results, to
              the point where Delaware law enforces contractual
              provisions that eliminate the possibility of any tort
              liability short of actual fraud based on explicit written
              contractual representations.231

Recently, in eCommerce Indus., Inc. v. MWA Intelligence, Inc., 2013 WL 5621678,

that Court of Chancery held that even a bad faith breach of contract would not

invalidate a limitation of liability provision. 232 The eCommerce court determined

that “there does not appear to be any Delaware precedent for striking a limitation

on contractual liability because of a party's willful or bad faith breach of the

contract.”233 The court reasoned that

              a limitation on liability will be set aside due to willful
              misconduct or bad faith involved contractual provisions
              that purported to limit tort liability, which is liability
230
    eCommerce Indus., Inc. v. MWA Intelligence, Inc., 2013 WL 5621678, at *45 (Del. Ch. Sept.
30, 2013).
231
    NACCO Indus., Inc. v. Applica Inc., 997 A.2d 1, 35 (Del. Ch. 2009).
232
    eCommerce, 2013 WL 5621678, at *45.
233
    Id.

                                             60
              arising from breach of a duty that does not arise under
              contract…Had the parties desired to carve out an
              exception to the [contract’s] limitation of liability
              provision for instances of bad faith or willful breach, they
              could have done so, but they did not. 234

        The case law from the Superior Court carves out an exception for bad faith

breaches of contract in specific instances. 235 For example, in J.A. Jones Const. Co.

v. City of Dover, 372 A.2d 540, in the context of interpreting a construction

contract provision that did not specifically carve out an exception for bad faith, the

Court observed that “[e]ven if a contract purports to give a general exoneration

from ‘damages,’ it will not protect a party from a claim involving its own fraud or

bad faith.” 236

       In Data Mgmt. Internationale, Inc. v. Saraga, 2007 WL 2142848, the Court

recognized an exception for conversion, an intentional tort. 237 In that case, the

Court commented that “[clauses purporting to exonerate a party from liability for

its own negligence] can be enforced in commercial leases negotiated in an arm's-

length transaction, but the parties' intent to provide immunity from even simple

negligence must be stated clearly and unequivocally in order to be enforceable.” 238

The corollary to that seems to be that where the intent to exonerate a party from

234
    Id.
235
    Id.
236
    J.A. Jones Const. Co v. City of Dover, 372 A.2d 540, 545 (Del. Super. 1977). J.A. Jones, 372
A.2d at 545.
237
    Id.
238
    Id.

                                               61
liability for its own negligence is not clearly and unequivocally stated, there is no

immunity for that party’s negligence. However, “[i]t has been repeatedly

recognized that the issue of whether limitation provisions are enforceable under the

contractual relations of the parties and the nature of the contractual performance

are matters which generally should not be decided on the pleadings or on summary

judgment.” 239

          It appears to the Court that the law required to resolve this issue is not

absolute and that there seems to be a spectrum of behavior for which the Court

may invalidate limitations of damages clauses depending upon the particular facts

of the parties’ conduct. It is undisputed that parties cannot absolve themselves for

their own conduct amounting to fraud. However, as to claims that fall somewhere

short of fraud, such as claims for bad faith, the Court must undergo a factual

analysis that is premature on summary judgment. Therefore, the Court cannot rule

as a matter of law that the limitations of damages clause is enforceable and that it

applies to claims for breach of the implied covenant of good faith and fair dealing.

Magellan’s Motion for Partial Summary Judgment is DENIED as to the limitation

of damages provision.

239
      Id. at 553.

                                              62
         VI.    DELPHI’S MOTION FOR PARTIAL SUMMARY JUDGMENT

      In Delphi’s Motion for Partial Summary Judgment, Delphi requests that the

Court address five issues. Delphi asserts that there are no genuine issues of

material fact and that Delphi is entitled to judgment as a matter of law on the

following claims: 1) Magellan owes Delphi $421,603.06 for overbilling of heating

charges under the 2005 Agreement; 2) Delphi has no responsibility to Magellan for

heating charges under the 2011 Agreement; 3) Magellan breached the 2011

Agreement by denying Delphi the right to deliver product to the terminal by truck;

4) Delphi’s responsibility for tank cleaning is limited to removing product and

waste that can be removed by shovel and broom; and 5) Magellan’s Amended

Counterclaim.

          A.      Facts Regarding Magellan’s Alleged “Overbill” are not Well
                  Developed.

          In light of the Court’s decision to dismiss Delphi’s Count III for fraudulent

overbilling, what remains is Delphi’s contract claim regarding the alleged

overbilling. Delphi moves for summary judgment on its contract claim that

Magellan overbilled Delphi $421,603.06 in tank heating charges from 2007

through 2010 under the 2005 Agreement and requests leave to supplement the

amount plus interest based upon a chart prepared by Magellan employees. 240

Delphi argues that the chart establishes that Magellan overbilled Delphi for heating

240
      Pl.’s Opening Br., at 5.

                                             63
costs between 2007 and 2010. 241 Delphi claims that deposition testimony of

Magellan employees establishes that the chart was prepared in the ordinary course

of business by a Magellan employee and asserts that there are no facts to

undermine the accuracy of the chart.242 Delphi contends that the chart and

deposition testimony together establish that Delphi suffered damages in the amount

of $421,603.03 from 2007 through 2010 as a result of Magellan’s overbilling for

heating costs.243 In its Reply Brief, Delphi asserts that the statute of limitations is

tolled because the conditions were inherently unknowable and Delphi is

blamelessly ignorant or, alternatively, that Magellan concealed the overbilling. 244

        Magellan argues that the chart does not conclusively establish that Magellan

overbilled Delphi for heating costs from 2007 through 2010. 245 Magellan asserts

that, at most, the chart shows that “meters and hand gauging generated different

measurements, not that one was better or correct, or even that the two were

measuring the same thing at the same time.” 246 Magellan contends that Magellan

should be permitted to introduce evidence at trial as to “what product was

consumed, and what impact (if any) any discrepancy in measurement actually had

241
    Id.
242
    Pl.’s Reply Br., D.I. 185, at 4.
243
    Pl.’s Opening Br., at 5.
244
    Pl.’s Reply Br., at 6.
245
    Def.’s Resp. Br., D.I. 171, at 4.
246
    Id. at 3.

                                           64
on customer billing.” 247 Additionally, Magellan asserts that the parties agreed to

tolling agreements for claims that arose between September 2011 and the filing of

the lawsuit but that the statute of limitations bars earlier claims to recover heating

bills that were issued and paid before September 2008 based upon the three-year

statute of limitations for breach of contract claims under Delaware law. 248

       For economy, the Court will not repeat the previously stated law regarding

breach of contract claims and the statute of limitation that can be found at §V.A,

supra. The question for the Court is whether the chart and deposition testimony

relied upon by Delphi are undisputed material facts that support each element of a

claim for breach of contract. Because neither party disputes that a valid contract

exists, the inquiry for the Court is focused on whether the chart and deposition

testimony support the elements of breach and damages. As a preliminary matter,

the Court agrees with Magellan that Delphi’s prayer for relief is limited to

$421,603.06 for purposes of this Motion.249

       The chart was prepared by Stu Horsey, a deceased Magellan employee. 250

In the first column, the chart lists “Heat Charges by Meter” and in the second

column, the chart lists “Heat Charges by Tank Gauge.” 251 The third column is

247
    Id. at 4.
248
    Id. at 5.
249
    See Tr. at 94: 12-18 (arguing that at most, Delphi can ask the Court to award it the specific
amount in the chart on summary judgment).
250
    Hafner Dep., at 35:6-7.
251
    Pl.’s Opening Br. at Ex. D.

                                                 65
titled “Overbill.”252 When asked during a deposition “What does overbill mean

here?” Paul Hafner, a Magellan representative, testified “I’m assuming it’s the

difference between the two numbers, charges between…the meters and tank

gauges.”253 Additionally, Paul Hafner testified that the tank gauge was a more

reliable measure and that it was his understanding that customers, including

Delphi, were billed based upon the higher meter reading. 254

       However, the Court still has concerns regarding the content of the chart and

its meaning. The label “Overbill” is one employee’s characterization of the

difference between the amounts contained in the first two columns. Because the

chart itself and the individual who created the chart cannot be cross-examined, the

Court is wary of accepting this employee’s conclusion as an undisputed fact.

Rather, the Court finds “that it is desirable to inquire more thoroughly into the facts

in order to clarify the application of law to the circumstances.” 255

       Moreover, the Court finds that the claim may be barred by the statute of

limitations. The chart covers years 2007 through 2010. Ordinarily, breach of

contract claims must be raised within three years of the injury and Delphi did not

sue Magellan until February 29, 2012. However, Delphi contends that “Magellan

never notified Delphi of the overbilling and Delphi first discovered it when

252
    Id.
253
    Hafner Dep., at 37:21-24.
254
    Id. at 36:20-24; 38:1-3.
255
    Cook, 1990 WL 35244, at *3.

                                           66
reviewing Magellan’s 35,000 page 2014 document production.” 256 Delphi asserts

that the conditions of the alleged overbilling were “inherently unknowable” and

Delphi is “blamelessly ignorant” or, alternatively, that Magellan concealed the

overbilling such that Delphi could not know about it.257 There are no facts which

inform the Court about when Delphi discovered or was on notice of the alleged

overbilling other than a claim in Delphi’s Reply Brief that “Delphi did not discover

Magellan’s overbilling practice until it found Magellan’s spreadsheet and

correspondence detailing these overcharges among the 35,000 documents

Magellan produced in March 2014” 258 without reference to the record.

Consequently, the record is unclear regarding when the statute of limitations began

to run.

        Based upon the Court’s desire to inquire more into the factual information

contained in the chart as well as the factual information regarding commencement

of the statute of limitations, the Court cannot find that Delphi has presented

undisputed facts to support the elements of its breach of contract claim. Therefore,

Delphi’s Motion for Partial Summary Judgment is DENIED.

        B.      The Court Cannot Determine, As a Matter of Law, that Delphi
                has No Liability or Heating Charges Under the 2011 Agreement.

        Clause 2.10(e) of Schedule A of the 2011 Agreement provides that

256
    Pl.’s Opening Br., at 5.
257
    Pl.’s Reply Br., at 6.
258
    Id.

                                          67
               Magellan will only use the heaters that exist on the
               Effective Date, or the replacements thereof during the
               Term of the Agreement, to heat the Tankage unless
               Customer agrees otherwise in writing.

       Tankage is defined as “the tankage allocated to Customer in Section V of

this Agreement.”259 Section V of the 2011 Agreement refers to six specific tanks

allocated to Delphi, the tank capacities and the type of product the tanks contain. 260

       Magellan admitted that it used the same heaters to heat Delphi’s tank as it

used to heat Magellan’s other customers’ tanks.261 Ronald Gumbaz, a Delphi

representative, admitted in deposition testimony 262 that Delphi has some

responsibility for heating costs under the 2011 Agreement. 263

       Delphi argues that Magellan breached Clause 2.10(e) of Schedule A and

Schedule C of the 2011 Agreement regarding heating charges. 264 Delphi asserts

that Clause 2.10(e) of Schedule A and Schedule C of the 2011 Agreement provides

259
    Clause 1.16 of Schedule A of the 2011 Agreement.
260
    Section V of the 2011 Agreement.
261
    Def.’s Answ. to SAC, D.I. 174, at ¶8(b).
262
    Relevant excerpts from Ronald Gumbaz’s deposition can be found in Def.’s Resp., at Ex. 3.
263
    See Gumbaz Dep., at 35:13-23:

               [Ronald Gumbaz]: [Delphi] do[es]n’t want any liability for the
               heating bills that Magellan has sent us under the 2011 agreement.

               BY MS. DAILEY: Q. You don’t think [Delphi] should pay for
               heating at all [under the 2011 Agreement]?

               A. I think [Delphi] should pay something for heating. I think that
               if somebody would calculate accurately how much it cost[sic] to
               heat [Delphi] tanks in accordance with [Delphi’s] instructions, that
               it would be a cost that [Delphi] should pay.
264
    Pl.’s Opening Br., at 10-11.

                                               68
that Magellan was to use certain heaters to heat six Delphi tanks only (and not

other customers’ tanks) to ensure that the heating charges for Delphi would be

accurate.265 Delphi asserts that because Magellan used the specified heaters to heat

other customers’ tanks, Magellan’s heating charges to Delphi are “completely

unsupportable” because there was no way to allocate the heating costs accurately

between Delphi and the other customers. 266 Delphi requests that the Court enter an

Order declaring that “[Delphi] has no liability for heating charges assessed by

Magellan under the 2001 Agreement.” 267

       Magellan argues that Clause 2.10(e) of Schedule A of the 2011 Agreement

does not give Delphi the exclusive right to use the heaters for only Delphi tanks. 268

Magellan argues that the Clause “constitutes Magellan’s agreement to use only the

then-existing heaters (or their same model replacements) to heat Delphi’s product,

unless Delphi agrees a different heater can be used. This is not a limitation on

Magellan’s right to use those heaters for other customers’ products.” 269 Magellan

asserts that Delphi representatives admitted in deposition testimony that Delphi

265
    Id.
266
    Id. at 11.
267
    Pl.’s Opening Br., at 12.
268
    Def.’s Resp. Br., at 6.
269
    Id.

                                          69
“should pay something for heating.” 270 At oral argument, Magellan asserted that

that admission alone defeats Delphi’s prayer for relief. 271

       Based upon Delphi’s prayer for relief, the question before the Court is a

narrow one: Do the undisputed facts establish that Delphi “has no liability for

heating charges assessed by Magellan under the 2011 Agreement?” The Court

need not decide the meaning of Clause 2.10(e) of Schedule A of the 2011

Agreement to resolve that question because Ronald Gumbaz, a Delphi

representative, admitted in deposition testimony that Delphi has some

responsibility for heating costs under the 2011 Agreement. 272 Therefore, the Court

cannot rule as a matter of law that Delphi has no responsibility to pay for heating

charges under the 2011 Agreement and Delphi’s Motion for Partial Summary

Judgment is DENIED.

       C.     The Court Previously Determined that Clause 2.1(a) of Schedule
              A of the 2011 Agreement Does Not Give Delphi the Right to
              Deliver Product to the Terminal by Truck.

       In light of the Court’s decision that Clause 2.1(a) of the Schedule A of the

2011 Agreement does not give Delphi the right to delivery product to the Terminal

by truck,273 Delphi’s Motion for Partial Summary Judgment is DENIED.

270
    Id. at 8.
271
    See Tr. at 102: 4-6 (“Delphi’s own representative’s testimony is at odds with the summary
judgment relief it seeks”).
272
    See supra note 263.
273
    See supra Part V.A.5.

                                               70
          D.     Delphi’s Prayer for Relief is Improper Regarding Clause 2.8 of
                 Schedule A of the 2011 Agreement.

          Under the heading “Tank Condition,” Clause 2.8 of Schedule A of the 2005

and 2011 Agreements provides, part, that: “At [Delphi’s] expense, Magellan will

remove the remaining Product and waste from the tank that can be removed by

shovel and broom…”

          In Delphi’s Opening Brief, Delphi’s prayer for relief states that Delphi

                 seeks a ruling that Delphi is not responsible for the entire
                 cleaning of the tank and that Clause 2.8 means what it
                 clearly states: that Delphi pays the cost of removing the
                 remaining product and waste that can be removed by
                 shovel and broom. Magellan would be responsible for
                 any additional tank cleaning it desired, including water
                 washing.274

Counsel for Delphi acknowledged at oral argument that Clause 2.8 is a point of

heated dispute between the parties:

          THE COURT: …What are you asking with respect to the tank
          cleaning? Are you asking for summary judgment, or are you
          just asking for declaratory judgment?

          MR. MOONEY: Well, a declaration that the language of 2.8
          means that Delphi is responsible for removing product and
          waste such as can be removed by shovel and broom because
          that’s a point of heated dispute.275

          Delphi argues that it is entitled to summary judgment regarding the extent of

its liability for tank cleaning charges. Delphi contends that “Magellan has taken

274
      Id.
275
      Tr. at 92: 4-12 (emphasis added).

                                             71
the unsupportable position that Delphi is responsible for all costs of removing

product and waste from the tanks, which is at odds with the plain language of

Clause 2.8.”276 Delphi asserts that it is only responsible for what can be removed

by “shovel and broom.” 277

       Magellan argues that the issue is not appropriate for summary judgment

because there is more than one clause which governs tank cleaning responsibilities

and reading one clause in isolation ignores the rest of the Agreement. 278 Magellan

contends that the meaning of the language contained in Clause 2.8 is a “deeply

factually-intensive dispute.”279 Additionally, Magellan asserts that Delphi’s prayer

for relief “is not a product of undisputed facts. There are no facts to support

[Delphi’s] request [for relief].” 280

       The Court finds that Delphi’s prayer for relief requesting that the Court

determine that “Clause 2.8 means what it clearly states” is undermined by

Counsel’s admission at oral argument that the issue is a “point of heated dispute.”

Therefore, the Court cannot grant the relief Delphi requests. Delphi’s Motion for

Partial Summary Judgment is DENIED.

276
    Pl.’s Opening Br., at 16.
277
    Id.
278
    Def.’s Resp. Br., at 14.
279
    Tr. at 108: 5-6.
280
    Tr. at 105: 14-106:3.

                                          72
       E.      The Parties Agree that Magellan has Identified the Basis for its
               Amended Counterclaim.

       On February 16, 2015, Magellan filed an Answer to Plaintiff’s Second

Amended Complaint and Affirmative Defenses.281 The Answer contained

Magellan’s Amended Contingent Counterclaim that requested payment of certain

invoices and alleged, in part, that

               6. Delphi wired payment to Magellan and then, after the
               funds were received by Magellan, claimed the payments
               were made under protest. Delphi also has attempted to
               characterize the payment as “collateral” and has sought
               to recover the payment made.

               7. If Delphi’s payment is determined by the Court to be
               unconditional (as Magellan believes it should be), then
               no amount is currently due from Delphi. However, if
               Delphi’s payment is determined to be merely “collateral”
               or “contingent” then Delphi has breached the parties’
               Agreements in the amount not unconditionally paid. 282

       Delphi moves for summary judgment on Magellan’s Amended Counterclaim

for failure to make payments because Delphi asserts that Magellan has not

identified the factual basis to support the Amended Counterclaim. 283 Delphi

asserts that the Amended Counterclaim “does not specify the amount allegedly

owed by Delphi and does not attach any alleged unpaid invoices.” 284 Delphi

contends that it “will be unfairly prejudiced if Magellan is permitted to submit its

281
    D.I. 174.
282
    Id. at ¶¶6-7.
283
    Pl.’s Opening Br., at 17.
284
    Id.

                                          73
unsupported and conclusory allegations of non-payment at trial since Magellan has

refused to provide information that would enable Delphi to verify Magellan’s

contentions.”285

        Magellan claims that it provided Delphi with sufficient factual information

to support its Amended Counterclaim. Magellan asserts that “Magellan produced

all invoices that are the subject of Magellan’s counterclaim. Magellan also

produced Brett Hunter as a corporate representative for deposition, and he testified

extensively to the unpaid invoices that form the basis of Magellan’s

counterclaim.” 286

        At oral argument, Magellan identified on the record the invoices that are at

issue for purposes of the Amended Counterclaim. 287 Delphi acknowledged on the

record that the identification of the invoices by Magellan was sufficient to clarify

the factual basis of Magellan’s Amended Counterclaim. 288 Therefore, Delphi’s

Motion for Partial Summary Judgment is MOOT.

285
    Id. at 19.
286
    Def.’s Resp. Br., at 17.
287
    Tr. at 111: 4-5 (“MR. KEGLOVITS: All of [the unpaid invoices discussed at the first
deposition] if it is collateral. None of [the unpaid invoices discussed at the first deposition] if it
is a payment.”).
288
    See Tr. at 112: 17-113: 1:

                THE COURT: …for the limited purpose of what is before the
                Court now on a partial motion for summary judgment, on that
                contingent counterclaim, you know what you are talking about
                now and that goes away; am I right?

                MR. MOONEY: I think so, Your Honor.

                                                  74
                                 VII. CONCLUSION

      Regarding Magellan’s Motion to Dismiss, the Court finds that 1) Delphi

failed to state a claim for which relief can be granted as to Count III of the SAC; 2)

it is premature to determine whether the statute of limitations precludes recovery

under Count IV of the SAC; and 3) Delphi has adequately pleaded a cause of

action under Count V of the SAC. Therefore, Magellan’s Motion to Dismiss is

GRANTED as to Count III of the SAC; DENIED as to Count IV of the SAC; and

DENIED as to Count V of the SAC.

      As to Magellan’s Motion for Partial Summary Judgment, the Court finds

that 1) no reasonable trier of fact could find that a breach of contract occurred

based upon Magellan’s conduct alleged in ¶8(k),(d),(o) and (a) of the SAC and that

factual issues remained as to ¶8(p) and (e) of the SAC; 2) Count II of the SAC for

breach of the implied covenant of good faith and fair dealing is limited; and 3) the

Court cannot find that Delphi is not entitled to consequential damages as a matter

of law. Therefore, Magellan’s Motion for Partial Summary Judgment is

GRANTED as to ¶8(k),(d),(o) and (a) of the SAC; DENIED as to ¶8(p) and (e);

GRANTED, in part, and DENIED, in part, as to Count II of the SAC; and

             THE COURT: As a summary judgment claim.

             MR. MOONEY: As a summary judgment claim.

                                          75
DENIED as to the enforceability of Clause 4.2 of Schedule A of the 2005 and

2011 Agreements.

      Regarding Delphi’s Motion for Partial Summary Judgment, the Court finds

that 1) there is a factual dispute regarding whether Magellan owes Delphi

$421,603.06 for overbilling of heating charges under the 2005 Agreement; 2) the

Court cannot rule as a matter of law that Delphi has no responsibility to Magellan

for heating charges under the 2011 Agreement; 3) Magellan did not breach the

2011 Agreement by denying Delphi the right to deliver product to the terminal by

truck; 4) the Court cannot grant the relief Delphi requested regarding responsibility

for tank cleaning based upon its prayer; and 5) Magellan identified the factual basis

of its Amended Counterclaim. Therefore, Delphi’s Motion for Partial Summary

Judgment is MOOT as to Magellan’s Amended Counterclaim; and DENIED as to

the remainder of Delphi’s arguments.

IT IS SO ORDERED.

                                       _____________________
                                       /s/Ferris W. Wharton, Judge

                                         76