Court Opinion

ID: 5134141
Source: CourtListenerOpinion
Date Created: 2021-12-10 20:03:00.052775+00
Date Added: 2024-06-11T08:23:42.029548
License: Public Domain

IN THE SUPREME COURT OF THE STATE OF DELAWARE

 ICATECH CORPORATION and                       §
 EMPRESAS ICA, S.A.B. DE. C.V.,                §
                                               §           No. 121, 2021
       Defendants and Counterclaim             §
       Plaintiffs Below,                       §           Court Below – Superior Court
       Appellants,                             §           of the State of Delaware
                                               §
        v.                                     §
                                               §           C.A. No. N17C-09-163
 PAUL V. FACCHINA, SR., individually           §
 and as Sellers’ Representative,               §
                                               §
       Plaintiff and Counterclaim              §
       Defendant Below,                        §
       Appellee.                               §

                               Submitted: October 27, 2021
                                Decided: December 9, 2021

Before SEITZ, Chief Justice; TRAYNOR and MONTGOMERY-REEVES, Justices.

                                          ORDER

       After careful consideration of the parties’ briefs and the record on appeal, and after

oral argument, it appears to the Court that:

       (1)    On June 28, 2013, Appellant ICATech Corporation (“ICATech”),

bought Facchina Companies, a portfolio of construction companies, from Appellee

                                               1
Paul V. Facchina, Sr., with Appellant Empresas ICA acting as a guarantor.1 The

transaction closed on April 14, 2014.2

      (2)    The sale was executed through a purchase and sale agreement (the

“SPA”) in which Facchina made a number of representations.3 In particular, and at

issue in this case, Facchina represented that Facchina Companies had not “taken any

action or entered into or authorized any Contract or transaction other than in the

ordinary course of business and consistent with past practice that has not already

been disclosed hereunder” since December 31, 2012. 4

      (3)    On January 24, 2013, Facchina Construction of Florida (“FCF”), one

of the Facchina Companies, entered into a contract to construct the Grove at Grand

Bay (the “Grove”), a high-rise condominium in Florida.5 An amendment to this

contract was signed on May 30, 2013.6

      (4)    FCF had an operational policy of assigning the concrete work for its

construction projects to only one subcontractor.7 To do otherwise is referred to in

the construction industry as “breaking up” that portion of the work. For the Grove

project, an FCF employee broke up the concrete work between three separate

1
  Opening Br. 1.
2
  Id.
3
  App. to Opening Br. A0624-55 (hereafter “A_”).
4
  A0630.
5
  A0431-62; Opening Br. 2.
6
  A1186-87.
7
  Facchina Constr. Litigs., 2020 WL 6363678, at *8 (Del. Super. Ct. Oct. 29, 2020).
                                           2
subcontractors, in spite of the operational policy and Facchina’s express instruction

to the employee not to break up the concrete portion of the project.8 The Grove

project experienced numerous scheduling delays and performance difficulties in

relation to the concrete work.9

      (5)    In June 2018, the Appellants brought a fraud claim against Facchina.10

The Appellants allege that Facchina committed fraud by representing that the

Facchina Companies had been operating in the ordinary course of business despite

knowing FCF had broken up the concrete work for the Grove project in violation of

its operational policy.11 In other words, the Appellants allege that Facchina knew

FCF was operating outside the ordinary course of business, but Facchina knowingly

represented otherwise in the SPA in order to fraudulently induce them into buying

Facchina Companies.12

      (6)     In order to prove common law fraud, a plaintiff must show: (a) a false

representation of a material fact, (b) knowledge that the representation was false or

made with reckless indifference to its truth, (c) intent for the plaintiff to rely on the

8
  Id.; Answering Br. 10.
9
  A1528 at 58:14-21.
10
   Answering Br. 7.
11
   Opening Br. 25-40.
12
   Id.
                                           3
fraudulent    misrepresentation,       (d)   justifiable    reliance    on    the   fraudulent

misrepresentation, and (e) damages as a result of the fraudulent misrepresentation.13

       (7)    After reviewing the record, we conclude that the Appellants did not

prove fraud. We reach this ruling based solely on the Appellants’ inability to prove

the second element of the fraud claim—that Facchina knew the representation was

false or made with reckless indifference to its truth.

       (8)    The Superior Court weighed the evidence, assessed the credibility of

the witnesses, and concluded that, even if the representation was false, Facchina did

not know the FCF employee had broken up the concrete work for the Grove project

until after the closing of the sale of Facchina Companies to the Appellants. 14 This

finding was based on evidence in the record.15 Appellants, however, point to other

evidence in the record, arguing that it shows that Facchina knew the concrete work

for the Grove project had been broken up before closing.16 In particular, Appellants

claim that Facchina reviewed three documents connected with the Grove project that

show the project’s concrete work had been broken up.17 They believe that “Facchina

could not possibly have reviewed these three documents without recognizing that

13
   See Harman v. Masoneilan Int’l., Inc., 442 A.2d 487, 499 (Del. 1982); Restatement (Second) of
Torts § 525 (Am. L. Inst. 1977).
14
   Facchina Constr. Litigs., 2020 WL 6363678, at *15.
15
   Id.
16
   Opening Br. 31.
17
   Id.
                                               4
the concrete work had been broken-up.”18          Nothing in the record confirms

Appellants’ assumption.19 But even if the evidence identified by the Appellants

could suggest that Facchina knew FCF’s concrete work had been broken up,

“‘[w]here there are two permissible views of the evidence, the factfinder’s choice

between them cannot be clearly erroneous.’”20 Thus, the Superior Court did not err

in determining that Appellants failed to show that Facchina knew the representation

was false or made with reckless indifference to its truth.

      (9)    Because showing each element of fraud is necessary to a successful

claim, the Appellants’ inability to satisfy this element is dispositive. Accordingly,

the Court affirms the Superior Court’s holding that the Appellants failed to prove

fraud on this limited basis. We do not address the Appellants’ remaining arguments.

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

AFFIRMED.

                                        BY THE COURT:

                                        /s/ Tamika R. Montgomery-Reeves
                                                      Justice

18
   Id.
19
   Oral Argument at 9:28-13:08 (Oct. 27, 2021),
https://livestream.com/accounts/5969852/events/9878242/videos/226912168/player.
20
   RBC Cap. Mkts., LLC v. Jervis, 129 A.3d 816, 849 (Del. 2015) (quoting Bank of N.Y.
Mellon Tr. Co., N.A. v. Liberty Media Corp., 29 A.3d 225, 236 (Del. 2011)).
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